Quarterly Report • Sep 21, 2012
Quarterly Report
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2012 1st Half Year Report
| Jun-12 | Jun-11 | Var. | |
|---|---|---|---|
| Balance Sheet and Results (million euro) | |||
| Net Assets | 40,223 | 38,557 | +4.3% |
| Net Loans | 28,318 | 29,554 | -4.2% |
| Customers' Resources | 27,218 | 26,727 | +1.8% |
| Own Funds + Minority Interests + Subordinated Liabilities | 2,112 | 2,145 | -1.5% |
| Net Interest Income (excludind dividends) | 282.2 | 292.6 | -3.6% |
| Fees and Other Income | 176.8 | 179.3 | -1.4% |
| Operating Income | 539.3 | 403.1 | +33.8% |
| Net Operating Income | 304.8 | 152.2 | +100.3% |
| Income Before Taxes & Minority Interests | 64.0 | 63.5 | +0.8% |
| Consolidated Net Income | 52.1 | 61.8 | -15.6% |
| Ratios | |||
| ROE | 7.5% | 6.0% | +1.6 p.p. |
| ROA | 0.3% | 0.3% | -0.1 p.p. |
| Efficiency Ratio (including depreciation) | 43.5% | 62.3% | -18.8 p.p. |
| Solvency Ratio* | 10.9% | 10.3% | +0.6 p.p. |
| Tier I* | 10.9% | 10.4% | +0.5 p.p. |
| Core Capital * | 9.5% | 9.1% | +0.4 p.p. |
| Non Performing Loans (+ 90 days) Ratio | 2.85% | 1.76% | +1.1 p.p. |
| NPL and Doubtful Loans Ratio | 2.89% | 1.78% | +1.1 p.p. |
| Credit at Risk Ratio | 4.03% | 2.27% | +1.8 p.p. |
| NPL Coverage (+ 90 days) | 100.7% | 112.1% | -11.3 p.p. |
| NPL and Doubtful Loans Coverage Ratio | 99.6% | 111.0% | -11.4 p.p. |
| Credit at Risk Coverage Ratio | 71.4% | 90.9% | -19.5 p.p. |
| Loan to Deposit Ratio** | 131.2% | 145.3% | -14.1 p.p. |
| Rating | |||
| short term FitchRatings |
F3 | F1+ | |
| long term | BBB- | AA | |
| short term Moody´s |
NP | P-2 | |
| long term | Ba1 | A3 | |
| short term Standard & Poor´s |
B | A-3 | |
| long term | BB | BBB- | |
| short term DBRS |
R-1L | - | |
| long term | AL | - | |
| Other Data | |||
| Employees | 5,670 | 5,784 | -114 |
| Employees in Portugal | 5,620 | 5,730 | -110 |
| Branches | 684 | 730 | -46 |
| Total Branches and Corporate Centers in Portugal | 659 | 689 | -30 |
* With results net of dividend payout ** calculated according to the definitions in "Memorandum of Understanding"
Governing Bodies
| Chairman | António Manuel de Carvalho Ferreira Vitorino |
|---|---|
| Deputy Chairman | António de Macedo Vitorino |
| Secretary | António Miguel Leonetti Terra da Motta |
| Board of Directors | |
| Chairman | Matias Pedro Rodriguez Inciarte |
| Directors | António José Sacadura Vieira Monteiro |
| Carlos Manuel Amaral de Pinho | |
| Eduardo José Stock da Cunha | |
| João Baptista Leite | |
| José Carlos Brito Sítima | |
| José Urgel Moura Leite Maia | |
| José Manuel Alves Elias da Costa | |
| Luís Filipe Ferreira Bento dos Santos | |
| Pedro Aires Coruche Castro e Almeida | |
| Board of Auditors | |
| Chairman | Luís Manuel Moreira de Campos e Cunha |
| Members | Mazars & Associados, S.R.O.C. |
| Ricardo Manuel Duarte Vidal Castro | |
| Alternate | Pedro Alves Guerra |
| Auditors | |
| Deloitte & Associados, S.R.O.C., S.A. | |
| Executive Committee | |
| Chairman | António José Sacadura Vieira Monteiro |
| Members | João Baptista Leite |
| José Carlos Brito Sítima | |
| José Manuel Alves Elias da Costa | |
| José Urgel Moura Leite Maia | |
| Luís Filipe Ferreira Bento dos Santos | |
| Pedro Aires Coruche Castro e Almeida | |
| Company Secretary | |
| Office holder | António Miguel Leonetti Terra da Motta |
| Alternate | Luís Manuel Batista Figueiredo |
(*) Co-Directors to the Executive Committee
Notes:
(1) Nuno Manuel da Silva Amado renounced office on 27/01/12
(2) Miguel de Campos Pereira de Bragança renounced Office on 11/02/12
The external economic conditions remained subjedt to increased uncertainty, especially in Europe, due to the worsening of the sovereign debt crisis in the euro area. The successive shock waves have materialized into higher uncertainty, which is adversely impacting economic activity, through lower private consumption and investment. Those shock waves have spread not only from the European periphery to the core, but also to other economic areas, such as Asia.
Data relative to the second quarter, in the euro area, confirm the recessionary state of the economy, with GDP contracting 0.4% year-on-year. Germany, which so far had been relatively immune to the European crisis is showing clearer signs of contagion, as activity (including exports) decelerate and business confidence falls to the lowest levels since 2009.
Contagion spread further still in the first quarter, as the crisis expanded into Spain and Italy, as reflected in higher yields demanded by investors in the various public debt auction, both short and long term.
Tensions aggravated in Spain following the Government's simultaneous announcement of a higher budgetary deficit for 2011, as a result of spending slippages at the level of the autonomous communities, as well as of a slower adjustment in 2012.
Later, and following the increase in non-performing loans at Bankia Bank (itself the result of the merger of various savings banks – cajas de ahorros) it was decided to conduct a stress test to the whole Spanish financial system. The exercise, conducted by Roland Berger and Oliver Wyman estimated the capital needs of the system between 51 and 62 billion euros, which falls within the 100 billion euros programme negotiated with the European authorities for banking sector recapitalization and resolution.
Initially this line will be provided by means of loans to the Spanish Government, which will redirect the funds to the requiring banks through FROB. Once it has been instituted a single bank supervision mechanism, which also envolves the ECB, the loans will be directly provided to the banks by the European supports funds (EFSF/ESM).
The first quarter also witnessed the conclusion of the restructuring programme of the Greek public debt ("PSI – private sector involvement"), in which the great
majority of the private investors accepted the terms of exchange, with a related loss equivalent to 53.5% of the nominal value (approximately 75% of the value invested). On one hand, released the approval of a second bailout package, amounting to 130 billion euros, and, on the other, should contribute towards the reduction of the Greek public debt to 117% of GDP by 2020.
Still in Greece, the second electoral process resulted in a parliamentary majority backed by the New Democracy, PASOK and DIMAR political parties, with the Government not only committed to comply with the agreements reached with the international institutions, but also requesting more flexible targets that would allow a less abrupt adjustment to the economy. No agreement has yet been reached to review the programme, in spite of the opening shown by the European leaders.
The European authorities have, in the short term, adopted a set of temporary measures to provide supports to the economy, while structural mechanisms to solve the crisis are being analysed.
The European Council, in its meeting on 28 and 29 June, decided to reinforce the measures of support for economic growth, by increasing the share capital of the European Investment Bank – EIB –, the reallocation of community funds and the creation of "project bonds", a common debt issued by the EU to finance investment projects, amounting to a total of 130 billion euros, or approximately 1% of European GDP.
The ECB, reacting to the worsening signs of European recession, lowered the base interest rates, placing the refinancing rate at 0.75% and the deposit rate at 0%, this being reflected by a lowering in the market's interest rates. Even then, ECB recognizes that such measures should have a limited impact on the European economy.
By late July, the ECB President Mario Draghi, at a conference in London, stated the ECB, within its mandate, is ready to do whatever it takes to preserve the euro, something he described it will be enough. Side by side with the European bailout funds, it was decided in the August meeting of the ECB that for an intervention to happen, countries should make a formal request to the European funds EFSF/ESM, subjected however to some conditionalities.
In the USA, economic growth has been moderate, with the unemployment rate stable around 8.3%, well above the average of the past few years and the levels consistent with full employment (which the consensus estimates at around 6%). As a result and also responding to the higher risks posed by the European crisis, the Federal Reserve has been mentioning the possibility of adopting new non-conventional measures. Although investors have anticipated a new wave of "quantitative easing", the Federal Reserve extended "operation Twist", in which it reinvests and extends the maturities of its current public debt holdings.
The adoption of expansionist monetary policies was relatively generalized: the Chinese Central Bank decided to lower the basic interest rates, whilst the Bank of England published an increase in its public debt acquisition programme, to £375 billion (an increase of £50 billion).
Uncertainty continued to affect financial markets, with the Spanish and Italian credit spreads reaching new highs, after which were pulled back somewhat. German bund yields have fallen significantly, as a result of a flight-to-quality movement, which has resulted in negative yields for the tenors up to two years.
Equity markets have evolved in line with the differentiated macroeconomic conditions, appreciating in the US, where the earning season has surprised on the upside, and stagnating in Europe, except for the peripheral markets, which faced steeper price devaluations.
This climated of increased uncertainty also affected the euro in the forex markets, where its effective exchange rate fell to the lowest level since 2003. This is the result of a depreciation against the US dollar to the lowest since 2010 (and also touching levels last seen in 2006), against the pound sterling to the lowest since 2008 and a depreciation against the Japanese yen to its lowest since 2000. As for the cross against the Swiss Franc it has stabilized at 1.2 CHF, following the Swiss National Bank's decision to peg the currency, in order to avoid a further appreciation of the franc.
GDP continued to contract, falling 3.3% year-on-year, after -2.3% in the previous quarter, therefore deepening the recessionary conditions of the economy.
The current cycle is characterized by a much swifter adjustment than it was expected in domestic demand, especially regarding private consumption, which had already been shrinking for six consecutive quarters, including the last quarter of the half year under review. However the rate of shrinkage is becoming lower and the consumption of durable goods may have even recovered in quarterly terms, since the sales of
passenger motor vehicles have increased relatively to the previous quarter.
Investment, in its turn, has continued to show a pronounced decrease, with a worsening shrinkage in the construction sector, as well as in expenditure in plant and machinery. Pressures in the credit markets, but especially the worsening of the crisis at European level, with a greater contamination to Spain and Italy and subsequent increase in uncertainty as to demand prospects, are the main factors causing the postponement of decisions concerning the expansion of installed capacity.
Net exports have continued to be the main driver of the economy, although slowing down compared to the previous quarter. The stated worsening of the crisis in the euro zone is resulting in a deterioration of the economic environment, with the consequent moderation in external demand. Portuguese exports are slowing down, especially those destined for Europe. For example, sales to Spain fell by approximately 5% in the first five months of the year, but total exports grew by 9%. This reflects the capability of national enterprises to search for alternative export markets, with special success in non European markets (Angola and China, for instance).
Along with the recent trend, the trade deficit has been showing a sustained reduction. In its Summer Economic Bulletin, the Bank of Portugal has estimated that the balance of trade and services could show a surplus of 0.4% of GDP already in 2012.
In the first quarter, it was completed workstream 3 of the Special on-site Inspection Programme conducted by the Bank of Portugal, with the assistance of external consultants. This workstream evaluated the quality of the methodologies and systems used by the Portuguese banks in the stress test exercises. It concluded that two institutions (one being Santander Totta SGPS) had the top evaluation, with "methodologies that are clearly appropriate".
The programme for the recapitalization of the banking sector was concluded at the end of June. This programme envisages compliance with the minimum objectives for a Core Tier 1 ratio of 9%, as demanded by the European Banking Authority (on 30 June), as well as 10% in the end of the year, as demanded by the Bank of Portugal.
The share capital increase for the involved institutions amounted to 7.75 billion euros. One of the institutions recurred exclusively to its shareholders, whilst two accessed the 12 billion euro recapitalization line (Bank Solvency Support Facility) established within the scope of the Programme of Economic and Financial Adjustment.
With the completion of the fourth assessment of the Programme of Economic and Financial Adjustment, by the three international institutions IMF/EC/ECB, the previous conclusion was reasserted, this being that the Programme is on course in line with expectations. The assessment concludes that "this review confirms that the programme is making good progress amid continued strong external support. Provided that the authorities persevere with strict programme implementation, the euro area Member States have declared they stand ready to support Portugal until market access is regained. The efforts of the Portuguese authorities are being complemented by a strengthened EU economic policy framework and new EU initiatives to support growth and employment in Portugal and in Europe as a whole." (bold print is ours).
In spite of the existing challenges, the assessment of the international institutions also concluded that the budgetary target of 4.5% of GDP for 2012 could still be achieved without the need for additional measures.
However, the most recent data, that already includes information at VAT level, as to the total effects of the fiscal alterations put into practice at the beginning of the year (changes to the VAT rates), indicate that the largest fall in internal demand is being reflected at the level of indirect taxation. In its turn, the large increase in unemployment (that reached the historical maximum of 15.0% in 2Q2012) is being reflected on an increase in public expenditure on social allowances to families.
These two factors will hamper the strict compliance with the budgetary targets should additional measures not be adopted. However, it should be pointed out that the remaining expenditure components are evolving in line with expectations.
Published in this same period were the rules relative to the ECB's decision, adopted in December, to widen the range of assets eligible for financing operations with the same Institution. These alterations, which were placed under the auspices of the national central banks, were adopted by seven countries: Ireland, Cyprus, Spain, France, Italy, Austria and Portugal.
In the Portuguese case, the Bank of Portugal took two decisions: (i) with respect to personal credits, to lower the minimum amount to 100,000 euros (previously 500,000 euros) and to increase the related probability of default (PD) to 1.5% (from 0.4%); and (ii) to accept homogeneous credit pools, with no need for rating (i.e., through setting up synthetic securitizations).
These measures are very relevant in the current environment where the Republic (and the banks) faced its ratings revised to the "speculative grade" level, insofar as it separates the capacity for financing with the ECB from the actions of the rating agencies. Should this measure have not been adopted, would subsist the
risk that several securitizations would lose eligibility, compromising the financing of the Portuguese economy.
Credit spreads have narrowed during the first half of the year, especially from Spring onwards. This was the result of the reduction in Portuguese yields, as German Bund yields also fell to historical minima. For the 10 year tenor, the yield fell bellow 10%, to its lowest level since the request for economic and financial assistance, in May 2011.
Throught the first semester the Portuguese Treasury maintained its regular presence in short term debt markets, by issuing monthly Treasury Bills which maximum maturity has been extended to 18 months. Demand, mostly from domestic investors, has remained resilient, and average allotment rates fell to 2.3% in the 6-months tenor and 3.5% for the one-year tenor.
Moody's downgraded Portugal's rating to Ba3, still in the "high yield" range, while Standard and Poor's downgraded the Republic to BB, within their overall review and assessment of European sovereign ratings.
The measures adopted by the ECB and the Bank of Portugal, in terms of the new rules for collateral elegible for ECB funding, have minimized the liquidity risk of these downgrades for both the sovereign and the banks that could have posed for acceding ECB liquidity.
The overall amout of funding raised at the ECB by the Portuguese financial system increased to 60 billion euros in the end of June, but that trend reflected two situations: the second 3-year LTRO by the ECB, in February, and the increase of funding at the ECB by the local branches of non-domestic banks, in replacement of stable lines they had with their parent company.
The pace of deleveraging slowed in the first half of 2012, following the steeper reduction in the loans-todeposits ratio seen in the second half of 2011. The changes in the collateral rules, as well as the flexibilization in the ratio, which is now indicative instead of mandatory, explain this moderation.
Deposit growth remainded resilient, although banks have changed the way they were managing deposit capturing and retention, in order to protect the net interest margin. The new rules by the Bank of Portugal on the maximum spreads payable on deposits, which brought down interest rates being paid, have also contributed to this change in pace.
Credit continued to contract, especially at level of loans to the non-financial corporate sector (NFCs), but this also associated with lower deposits from NFCs, which may be an indicator of loans being repaid, in a context of high spreads on loans, especially to the companies in the riskier business segments. New production of
mortgages has fallen significantly, to around 150 million euros per month, which is below the average monthly redemption of existing mortgage loans.
The main risks and uncertainties which may affect activity in the second half of 2012 are twofolded, from domestic and external origins.
At the level of the external environment, the risk factors are associated with the growth prospects in the euro area, which are more negative, affected by the contagion of the sovereign debt crisis to Spain and Italy, and also by the impact this is having on the economic activity of the larger countries, which, so far, had been immune to the crisis. As the euro area is the main export market for Portugal, buying over 60% of domestic products sold abroad, a deeper recession may bring to a stall the source of economic growth in Portugal, which has been exports.
Also the current doubts and concerns, by global investors, regarding the current composition and size of the euro area may prove to be an important risk factor, because it puts a conversibility premium on Portuguese bond yields, despite the fact that Portugal has been meeting the targets, both fiscal and economic, agreed with the international institutions. Additonally, such premium hampers the access by the Republic and also by the domestic banks to the wholesale markets, worsening their overall funding conditions.
At the domestic level, the main risks are associated with the growth prospects. The steeper contraction in domestic demand, especially private consumption, is taking its toll on the tax revenue, namely at the level of VAT, which is well below the targets set in the 2012
State Budget. On the other hand, the increase in unemployment to new historical maxima, is negatively affecting the accounts of Social Security, through both a decrease in revenues from contributions on wages and an increase in the expenditure with unemployment benefits. These dynamics increase the negative risks when meeting the fiscal targets, and may also require additionaly austerity measures, which would aggravate further the recession.
At the level of the financial sector, one of the risks is associated with the economic outlook. As the economic recession deepens, NPL ratios may worsen, affecting both the profitability and capital of the banking institutions. Portuguese banks are still required to meet the 10% core Tier I capital ratio by the end of 2012, and four of the institutions have to comply with the sovereign buffer demanded by the European Banking Authority.
Additionally, and despite the flexibilization of the targets relative to the loans-to-deposits ratio, banks still have to increase their deposit base, in a context of diminishing income at the level of households and increased uncertainty about the fundamentals of the banking sector.
Strict compliance with the objectives, by the State or by the Banking sector, is fundamental for the recovery of the confidence of international investors and to allow that the current level of financing in the global markets (which is anyway reduced) may be maintained and, in the long term, expanded.
In a context of economic recession, Banco Santander Totta focused in the control of non-performing loans and operating costs and in the improvement of the commercial gap.
The deleveraging policy resulted in a decrease in loanto-deposit ratio that, at the end of June 2012 stood at 131.2%. The improvement of 14.1 p.p. over the same period last year reflected a 9.7% annual increase in customers' deposits and the decrease of 4.2% in net loans.
In June 2012, the Tier I ratio stood at 10.9% and the Core Capital ratio stood at 9.5%.
Consolidated net income reached 52.1 million euros, compared with 61.8 million euros recorded in the same period last year. This was a sign of good performances in revenues and operating costs, mitigated by increased impairment and provisions, under the prudent risk assessement policy of the Bank.
Operating income increased 33.8%, driven by a gain obtained in the repurchase of securities issued within credit securitization operations carried out in the 1st quarter. This gain was totally cancelled by constituting non obligatory provisions, as a precautionary measure forced by a context of deteriorating economic conditions, and thus did not had any impact on net profit of the semester. Meanwhile, operating costs decreased 6.5% compared to the figure recorded in June 2011.
| million euro | Jun-12 | Jun-11 | Var. |
|---|---|---|---|
| Net Interest Income (without Dividends) | 282.2 | 292.6 | -3.6% |
| Dividends | 1.6 | 1.2 | +32.8% |
| Net Interest Income | 283.8 | 293.9 | -3.4% |
| Fees and Other Income | 176.8 | 179.3 | -1.4% |
| Commercial Revenue | 460.6 | 473.2 | -2.7% |
| Gain/Losses on Financial Transactions | 78.7 | (70.0) | <-200% |
| Operating Income | 539.3 | 403.1 | +33.8% |
| Operating Costs | (234.5) | (251.0) | -6.5% |
| Personnel Expenses | (133.1) | (148.4) | -10.3% |
| Other Administrative Expenses | (68.7) | (71.9) | -4.4% |
| Depreciation | (32.7) | (30.6) | +6.8% |
| Net Operating Income | 304.8 | 152.2 | +100.3% |
| Impairment and Other Provisions | (245.5) | (95.2) | +157.9% |
| Equity | 4.6 | 6.5 | -28.7% |
| Income Before Taxes and MI | 64.0 | 63.5 | +0.8% |
| Taxes | (11.8) | (1.7) | >+200% |
| Minority Interests | 0.0 | 0.0 | -50.0% |
| Net Income | 52.1 | 61.8 | -15.6% |
* Personnel Expenses in June 2011 exclude 4.3 million euros related to the pension fund (excess of the corridor)
Banco Santander Totta achieved a consolidated net income of 52.1 million euros, at the end of the 1st half of 2012, which compared with 61.8 million euros in June 2011, represents a 15.6% decrease. Operating income increased by 33.8%, operating costs decrease 6.5% and impairment and other provisions recorded a 157.9% increase. A repurchasing operation of securities issued within the scope of securitization of credits operations was carried out during the 1st quarter of the year. However it did not have any impact in net income since the gain obtained was totally cancelled by setting up non obligatory provisions.
Net interest income, the main component of operating income, amounted to 282.2 million euros, 3.6% less than in the homologous period. The positive quarterly evolution of net interest income since the 4th quarter of 2011 should however be pointed out, evidencing a prudent management of spreads in assets and liabilities, within a very aggressive and competitive environment in deposits, which has been carefully managed through an adequate segmentation of the commercial supply.
Fees and other income amounted to 176.8 million euros, showing a 1.4% decrease. It can be highlighted the favourable evolution in the commissions of commercial paper, financial insurance, accounts, cards and POS. On the other side there is a negative influence brought by a decrease in performance of credit commissions, advisory, mutual funds and risk insurance.
Gains in financial transactions amounted to 78.7 million euros and include gains obtained in the repurchase of securities issued within credit securitization operations carried out in the 1st quarter. This value compares with the losses ocurred in the 1st half of 2011 as a consequence of the sale of credit portfolios and securities.
As a consequence of the described development, operating income amounted to 539.3 million euros, equivalent to a 33.8% homologous increase.
NII Fees and other income Gains in financial transactions
Operating expenses amounted to 234.5 million euros, a 6.5% reduction. Variation in the personnel expenses of -10.3%, is justified by the legislative changes in the calculation of death allowances amounting to 9.2 million euros, in June 2012, expenses with the integration of Totta-IFIC and with early retirements, amounting to 2.4 million euros, in June 2011. Without considering these impacts, personnel expenses would have been
decreased by 2.6% and total operating expenses would have recorded a variation of -1.9%.
General expenses decreased by 4.4%, related to the reorganization of the operational structure and depreciation increasedf by 6.8%, evidencing the impact of technology investments and the extraordinary depreciation deriving from the closure of branches.
| million euro | Jun-12 | Jun-11 | Var. |
|---|---|---|---|
| Personnel Expenses | (133.1) | (148.4) | -10.3% |
| Other Administrative Expenses | (68.7) | (71.9) | -4.4% |
| Operating Costs | (201.8) | (220.3) | -8.4% |
| Depreciation | (32.7) | (30.6) | +6.8% |
| Total Operating Costs | (234.5) | (251.0) | -6.5% |
| Efficiency Ratio (excludes depreciation) | 37.4% | 54.7% | -17.2 p.p. |
| Efficiency Ratio (includes depreciation) | 43.5% | 62.3% | -18.8 p.p. |
Efficiency ratio, which represents total operating expenses as a percentage of operating income, was set at 43.5% in June 2012. This improvement by 18.8 p.p. when comparing to the same period last year, was a
consequence of the increase in revenues (33.8%) and the decrease in operating expenses (-6.5%).
Net operating income, 304.8 million euros, represented a 100.3% increase when comparing to the amount reached in June 2011 (152.2 million euros).
Regarding productivity, the evolution of resources per branch and per employee must be highlighted.
| million euro | Jun-12 | Jun-11 | Var. |
|---|---|---|---|
| Loans(1) per Employee | 5.4 | 5.5 | -1.7% |
| Resources per Employee | 4.8 | 4.6 | +3.9% |
| Loans(1) per Branch(2) | 44.6 | 43.4 | +2.9% |
| Resources per Branch(2) | 39.8 | 36.6 | +8.7% |
(1) Include guarantees
(2) Include branches, corporate centers and representative offices
Total impairments and provisions amounted to 245.5 million euros comparatively to 95.2 million euros in the homologous period, in other words an increase of 157.9%. As previously referred, this movement is a consequence of the strengthening of non obligatory provisions, within a context of a prudent and conservative policy in risk management, adequate to the recessionary economic environment. However it cancels the impact in net income of the gain obtained in the
repurchase of the securities issued within the credit securitization operations.
Income before taxes recorded an increase of 0.8%, reaching 64.0 million euros. Consolidated net income amounted to 52.1 million euros, equivalent to a 15.6% decrease regarding the 61.8 million euros recorded in June 2011.
The strategic priorities of Banco Santander Totta were the soundness and the deleveraging of the balance sheet, in a framework marked by liquidity constraints in banks' access to international funding markets and the programme of economic and financial adjustment of Portugal.
Loans (including guarantees) decreased 3.6%, amounting to 30.5 billion euros in June 2012. Customers' resources amounted to 27.2 billion euros (+1.8%) by the 8.8% increase in balance sheet resources and the decline of 15.2% in off-balance sheet products. This evolution led to an annual change of -1.1% in the business volume at the end of the semester which amounted to 57.7 billion euros.
| million euro | Jun-12 | Jun-11 | Var. |
|---|---|---|---|
| Business Volume | 57,741 | 58,387 | -1.1% |
| Gross Loans (1) | 30,523 | 31,661 | -3.6% |
| Customers' Resources | 27,218 | 26,727 | +1.8% |
(1) Includes guarantees
The decline in credit simultaneously with the increase in customer deposits has lead to a gradual deleveraging of the balance sheet, with the loan-to-deposit ratio reaching 131.2%, a 14.1 p.p. decreasing, compared to 145.3% in June 2011 (ratios calculated in accordance
with the definition set out in the Memorandum of Understanding).
The decrease in the loan portfolio reflects the sharp decline in demand for credit, mainly associated with the deteriorating economic outlook and reduced disposable income. However, the comfortable liquidity position of the bank allows the continuation of a policy to support viable businesses which has been translated in a
prominent position achieved in SMEs Invest Lines in which the Bank has a market share of 17 % having placed more than 14,400 transactions with a total value of 1.5 billion euros.
| million euro | Jun-12 | Jun-11 | Var. |
|---|---|---|---|
| Total Gross Loans (includes guarantees) | 30,523 | 31,661 | -3.6% |
| Gross Loans | 29,156 | 30,149 | -3.3% |
| of which Commercial Banking |
26,617 | 28,145 | -5.4% |
| Loans to Corporates | 8,499 | 9,337 | -9.0% |
| Small Business | 3,439 | 3,971 | -13.4% |
| Corporates | 5,060 | 5,366 | -5.7% |
| Loans to Individuals | 18,118 | 18,808 | -3.7% |
| of which | |||
| Mortgage Loans (including securitization) | 16,014 | 16,499 | -2.9% |
| Consumer Loans | 1,487 | 1,627 | -8.6% |
| Large Corporates and Institutionals | 2,053 | 1,598 | +28.5% |
Loans to households stood at 18.1 billion euros, falling year-on-year, 3.7%, with variations of -2.9% on housing loans, which accounted for 52.5% of total loan portfolio, and -8.6% in consumer credit.
Loans to large companies and institutionals increased 28.5%, related to the repurchase of credits.
Despite the deterioration of credit quality indicators, reflecting the recessionary environment, the ratios presented by Banco Santander compare favorably with the average of the national banking system, according to the latest available data.
In June NPL ratio (>90 days) was set at 2.85% (+1.1p.p. increase regarding the homologous period), with a coverage ratio of 100.7% (112.1% in June 2011). NPL and doubtful loans ratio was set at 2.89% at the end of 1st semester, above the 1.78% recorded in June 2011, with a coverage ratio of 99.6% (111.0% in June 2011). In turn, the credit at risk (that relates non performing matured and yet to be matured loans (NPL) and restructured loans) represented 4.03% of total loans, and deteriorated +1.8 p.p. compared to 2.27% in June 2011, with a coverage ratio of 71.4% (90.9% in June 2011).
| * Includes guarantees | |
|---|---|
| Jun-12 | Jun-11 | Var. | |
|---|---|---|---|
| Non Performing Loans Ratio | 3.03% | 1.88% | +1.2 p.p. |
| Non Performing Loans Ratio (+90 days) | 2.85% | 1.76% | +1.1 p.p. |
| Non Performing Loans and Doubtful Loans Ratio | 2.89% | 1.78% | +1.1 p.p. |
| Credit at Risk Ratio | 4.03% | 2.27% | +1.8 p.p. |
| Non Performing Loans Coverage Ratio | 94.8% | 104.8% | -10.0 p.p. |
| Non Performing Loans Coverage Ratio (+90 days) | 100.7% | 112.1% | -11.3 p.p. |
| NPL and Doubtful Loans Coverage Ratio | 99.6% | 111.0% | -11.4 p.p. |
| Credit at Risk Coverage Ratio | 71.4% | 90.9% | -19.5 p.p. |
Total customers' funds at the end of June 2012 totaled 27,200 million euros, 1.8% up, over the figure recorded in June 2011.
Noteworthy are the deposits, representing 74.2% of total customer funds, which rose 9.7% in June 2012 over the same period last year.
| million euro | Jun-12 | Jun-11 | Var. |
|---|---|---|---|
| Customers' Resources | 27,218 | 26,727 | +1.8% |
| On-Balance Sheet Resources | 20,632 | 18,957 | +8.8% |
| Deposits | 20,203 | 18,421 | +9.7% |
| Securities issued and placed with clients | 429 | 536 | -20.0% |
| Off-Balance Sheet Resources | 6,585 | 7,769 | -15.2% |
| Investment Funds | 1,897 | 2,810 | -32.5% |
| Insurance and Other Resources | 4,688 | 4,959 | -5.5% |
| By segment: | |||
| Commercial Banking Resources | 23,926 | 23,774 | +0.6% |
| Households and Small Businesses | 22,276 | 22,082 | +0.9% |
| Deposits | 15,860 | 14,601 | +8.6% |
| Securities issued (clients), Inv. Funds and Insurance | 6,416 | 7,481 | -14.2% |
| Corporates | 1,650 | 1,692 | -2.5% |
| Large Corporates, Institutionals and Other | 3,292 | 2,953 | +11.5% |
In the first half of 2012, clients continued to reveal a major appetite for bank deposits in alternative to higher risk products.
Customers' deposits represent a prime source of funding in an environment of scarce liquidity in international funding markets. Deposits of individuals and business segment rose by 8.6% over the same period of 2011.
This growth was achieved by attracting savings and by the conversion of off-balance sheet resources, such as investment funds and financial insurance for deposits.
Balance sheet resources totaled 20.6 billion euros, representing 75.8% of total funds raised from
customers, and rose 8.8%, while the off-balance sheet totaled 6.6 billion euros, decreasing 15.2% compared to the figure recorded in June 2011.
This evolution reflected the instability in bond market and stock market, leading to greater risk aversion among investors and also by the need of deleverage, with the focus on balance sheet resources. Investment funds decreased 32.5%, reaching 1.9 billion euros. Insurance products and other resources stood at 4.7 billion euros, decreasing 5.5% over the first half of last year.
In June 2012, Tier I ratio stood at 10.9% and Core Capital ratio was 9.5%, including retained earnings (10.4% and 9.1% in June 2011). Excluding retained earnings, Tier I ratio and Core Capital ratio would be 10.9% and 9.4%, respectively. These ratios were obtained without the need to increase capital or public support.
| million euro | Jun-12 | Jun-11 | Var. |
|---|---|---|---|
| Total capital | 2,141 | 2,331 | -8.2% |
| Tier I Capital Tier II capital |
2,147 -6 |
2,336 -6 |
-8.1% +9.4% |
| Risk weighted assets | 19,688 | 22,530 | -12.6% |
| Core Capital | 9.5% | 9.1% | +0.4 p.p. |
| Tier I | 10.9% | 10.4% | +0.5 p.p. |
| Solvency Ratio | 10.9% | 10.3% | +0.6 p.p. |
The "READY" Model for Commercial Management had a full implementation in 2011, creating a commercial dynamic capable of reacting to the current climate of major difficulties.
A strategy was kept up essentially focused on capturing and retaining resources in added value products, capturing new payroll accounts and the control of non performing loans, which became a priority in the commercial teams.
Market conditions and the limitations imposed by the Bank of Portugal led to an adjustment in the interest rates offered for capturing deposits. However, the focus on traditional savings products and programmed savings was kept up.
Santander Totta launched a series of products and diversified solutions, embodied by structured deposits with guaranteed capital and minimum yield, financial insurance and programmed savings products.
Amongst the products launched during the half year, those who stand out are the SuperStar Deposit – which carries an attractive yield and was used as the base for "soft sponsoring" communication in large audience soap operas – and the Super Idols Savings Deposit – a solution launched within the scope of the Bank's sponsorship of the Idols programme, which rewards the amount and the period of permanence with the product.
In January and March, the launching of new sight deposit accounts – the Super Global Accounts – has to be highlighted. This product allows customers to access a wide set of advantages, which comprise exemption of commissions as well as offers of insurance, with a fixed monthly charge. This offer was adapted to the different segments, namely the "+55", and offers attractive conditions to customers who domicile their salaries/pensions with the Bank.
Several actions and campaigns were launched with the objective of capturing and binding customers. Via these, it was possible to obtain salaries/pensions, based upon the exemption of commissions on the main day-to-day services and by offering gifts.
As a continuation of the 2011 policy to prevent the increase in non performing and doubtful loans and to maintain full commitment to customers, new solutions were implemented for the regularization and the renegotiation of pending loans, adapted to cater to the level of non performance of each customer.
In the 2nd quarter, the Bank launched the IRIS programme, which aims to support and structurally resolve customers' non performance situations. On a first stage the plan approached a discreet set of customers with non performing mortgage loans.
In this semester part of the business in mortgages was redirected to financing the real estate portfolio and real estate that had been built with loans from Santander Totta. Very competitive pricing and financial conditions were thus put forward, investing on a greater disclosure of such conditions.
Additionally, regarding the current economic environment and the growing financial constraints of Portuguese households, this business focus was to design and implement swift solutions adapted to each customer's situation, aiming towards the immediate reduction of the monthly expenses of families in greater difficulties.
In the Premium segment a policy based upon 3 fundamental pillars continued being implemented: quality of service, setting up opportunities so that customers may increase the diversification of their assets, and the marketing of added value products and services, which allowed capturing new customers for the segment.
Noteworthy is the Bank's strong investment in the training of Premium managers, which was embodied, in the first half year, a number of training actions, amongst which stands out, due to its unquestionable value, training in Neurosales relationships.
The macroeconomic scenario continues challenging. Still, the ability to offer added value products has contributed towards setting up opportunities for customers to increase their asset diversification, thus resulting in a reduction of exposure to risk and in an increase in capital preservation.
In the Private Banking area, and deriving namely from uncertainties in sovereign debt issuance, continuity of the euro and solidity of the institutions, the customers require low risk and highly liquid assets. The Bank responded to these challenges by making available a wide scope of products that endeavour preserving the assets under management and to provide a service based upon confidentiality, proximity and trust.
Simultaneously, the solidity of Banco Santander Totta was recognized with the award of the Euromoney prize for best Private Banking in Portugal, by improving the level of satisfaction and capability for attracting customers
The Corporate network, in the semester of 2012, kept up a strategy based upon a balanced management between the volumes of credit portfolio and resources, granting the sustained growth of the profitability of the commercial network.
As to pricing strategy, Santander Totta continues adjusting the prices of new credit operations to the country's economic and financial environment.
Resulting from the attention given to the SME Investment lines, Santander Totta maintained an outstanding position with a 17% market share. Until June 2012, the bank placed more than 14,400 operations in these support lines, amounting to a total value of 1.5 billion euros.
It should be emphasized that Santander Totta is the leading Bank in the SME Growth Line, launched in January of the current year, with a 24% market share in total transactions, amounting to 321 million euros, and also detains the first position in the SME Enlargement line, with a 26% adhesion rate.
Equally outstanding is Santander Totta's leadership in factoring and confirming, with a 20.3% market share, which proves the commitment and availability of the Bank in supporting SME treasuries, a vital entrepreneurial fabric for the growth of the Portuguese economy.
The Promoters and Brokers area, which has the responsibility to monitor and stimulate these external partners channels, held a strategy that favours a close proximity with the external promoters and stores.
Accordingly, in addition to the quarterly road shows, whose importance is now fully assimilated by our external promoters, the Bank began to implement actions to host the new promoter stores. Among other things, it disclosed the history and culture of Santander, the characteristics and objectives of the project stores; as well as advantages and profitability resulting from the promoter activity, best practices and techniques and the major commercial campaigns and strategic priorities of the Bank.
Following the reestruturation in the promoters and brokers' portfolio, the main priority was to attract new partners, by launching two campaigns quarterly, involving managers of promoters, branches and commercial divisions of the Bank.
During the 1st semester, a wide range of competitions and campaigns was launched to boost external promoters channel and reward the best performers.
For promoter stores, the priority is to keep 250 stores active and committed to their targets.
In June 2012, the operating income of the area, which encompasses debit cards and TPA's, grew by 6.8% in homologous terms, countering the market's negative trend, and resulting in a greater capturing of customers and their binding and the excellence of the services at their disposal.
A number of initiatives were launched to render the portfolio profitable and to promote the use of cards. This was accomplished through invoicing and revolving campaigns, in which stands out Light Summer campaign, providing benefits to customers in offers and discounts and rewarding the regular use of our cards. Several support actions were also established through setting up new instruments to aid the commercial network, such as new swift adhesion leaflets, sale guides and a permanently updated card panel comprising all the ongoing relevant actions.
In spite of the general pessimism in Portugal, the global card issues grew annually by 2.2%, with a reduction in the number of cards cancelled by customers and with market shares evolving positively. Santander Totta's invoicing market share kept up above 10% at the end of the half year.
Santander Totta continues to be the reference to a major of larger retailers, which resulted in TPA commissions being 24% above the homologous value. Market share of 17.4% is superior to the Santander Totta's normal share, as a result of the canvassing
operations with the larger customers, their fidelity, retention policies, repricing and promotional campaigns.
During the first half of 2012, plans were made focusing on dinamizing products for companies and businesses. These plans had the involvement of teams of experts/facilitators, who together with the customer and product managers have developed specific programmes aimed at attracting customers and dinamizing business.
The products offer through Netbanco, were enlarged to the confirming and factoring, allowing customers more autonomy, extended service and unique features.
It was also provided a tool for multinational companies which allow sending files of payments or receipts, in an automated way, for countries where the Group is represented.
This semester, the Bank continued to offer unique products and consolidated the "Home Deposit" which continues to be a product that distinguishes the Bank from the competition. This kind of product allows the Bank to be one of the leading providers of Cash Management in Portugal.
Currently one of the strongest differentiation weapons in the market is the after sales area. Within this area it was consolidated the commercial side, which visits major customers side by side with the commercial area, supporting and strengthening the business relationship with companies.
Intense investment continued to be carried out by following up and controlling the resolution of incidents, improving answering times and satisfying companies' requirements.
In May 2012 Santander Totta's Contact Centre has been considered for the 4th consecutive year the "Best Contact Centre of Portugal in the financial sector", attributed by the Portuguese Association of Contact Centers.
The total number of contacts made by the operators of the Contact Centre is in line with the same period in
We have implemented measures to increase the number of situations solved at 1st contact, and launched new initiatives on Facebook pages, with simultaneous improvement in the management of social networks.
In Internet channels, we highlight the improvements made to the "NetBanco Companies" by launching new features for payment, collection, confirming and factoring. There were also improvements in the availability and performance of websites and an increase in traffic, with the number of unique visitors to increase 9%.
The number of frequent users of the private Netbanco grew by 6% in the 1st half of 2012.
It was launched a new version of Mobilie Banking, optimized for the main types of mobile devices, iPhone, iPad, Android, BlackBerry, and with even more features.
The activity of Self Banking was based in the optimization of the ATM network. The market share in number of ATMs and transactions were stabilized at 12% and 12.5%, respectively.
In the ATM network it was also implemented a pilot project for a new system for dyeing of notes, with this process taking place successfully. The use of such intelligent banknote neutralization systems has proved itself as an effective prevention and protection of attacks on ATMs, a factor that leads to a growing investment of the bank in this security area. In a standpoint of customer proximity, was given continuity to the adjustment and increase in deposit automation solutions, reaching the 570 equipments already installed with a coverage of about 72% of its branch network.
During the first half of 2012, the international activity of Banco Santander Totta continued to focus on services offered to overseas residents, with greater impact on the gaining of deposits and clients, based on a business model which favours proximity to clients and links to the commercial network in Portugal.
Some events took place, namely in Paris, London and Caracas, targeted to the most important Lusodescendent clients and business people, where ties with Portugal were strengthened and where BST's
services and its availability for support to the communities were made known.
As usual, at the end of this first half-year, the summer campaign was launched. The campaign is structured in such a way as to welcome Portuguese nationals who live overseas by greeting and communicating with them through the renewed image displayed in the national airports and the new airport metro station in Lisbon.
The volume of business in the overseas residents sector was reduced by 0.3%, mainly due to the slowing down in credit concession. In any case, during the second quarter of the year, a positive increase in deposits took place.
Following the commercial strategy of maintaining strong relationships with clients who live abroad, various visits were made by branch managers to areas with a high concentration of such clients. Likewise, through careful planning, visits were made possible by the managers of representative offices to branches and places in Portugal in order to maximise links with the commercial network.
Whilst promoting and offering services to the overseas community and taking advantage of Euro 2012, a campaign was launched in order to stimulate transfers to Portugal, which proved to be quite successful and resulted in an increase in remittances of 2% compared with the previous year, most significantly in transfers made through overseas units.
In order to guarantee alternative channels for the promotion of products and services of the bank abroad, a specific website aimed at clients in this sector was kept updated, with links to the home page of the bank and London Branch.
London Branch has been showing an increase in the volume of deposits and maintains strong support to the branches in Portugal.
In the Credit Markets area, the current economic environment and the aid programme agreed with the Troika (IMF/EU/ECB) led the State to commence negotiating procedures with the concessionaires of the several projects carried out by Public Private Partnerships (PPPs) to reduce the amounts payable, through the reduction of the objects of the concessions. In this context, Santander Totta has been following up these negotiations and supporting its customers in the search for the best solutions.
In the area of financing acquisitions and projects, the Bank continues very active, and is analysing and structuring at this time the financing of several
transactions for the acquisition of Portuguese companies and assets on behalf of Portuguese and international corporate clients, as well as several projects in the area of renewable energies. Still in this area Santander Totta has actively supported several customers and projects in restructuring their financing operations in order to adjust the companies' situations and their capacity to liberate funds.
Concerning Fixed Income, Santander Totta has continued supporting its customers in managing interest rate risks through products with basic risk coverage and global liquidity management, the latter specifically for customers operating in international businesses.
The management of exchange rate risk showed an increment in the customer base related to the focus of the Bank on international business. Santander Totta surges as a natural partner of Portuguese exporting and importing companies, investing in its capacity to offer products that allow the efficient management of the exchange rate risk. Outstanding is the fact that the Bank was considered by Global Finance magazine as the best institution in Portugal in the area of exchange rate risk management, for the second consecutive time, and was appointed as the "World's Best Foreign Exchange Providers 2012".
In the Equity area, Santander Totta continued performing well in the marketing of structured products. Eight structured products were issued in the latter six months, six expressed in euros, amounting to a total of 471 million euros, and two expressed in US\$ amounting to a total of 19.6 million US\$. The issues placed in this period are indexed to different types of assets: Swiss equity market, German bond market, commodities market, euro zone equity market, equity market of companies with close links to emergent markets, equity market of oil producing companies and North American equity market, amongst others.
With respect to business in Cash Equities, in spite of a favourable start to the year, the end of the half year, mainly the months of April and May, was branded by a climate of pessimism that drove the majority of private/retail customers away from the stock exchange. Together with the fall in the markets, a notorious lack of liquidity was recorded, with days where transacted volumes in the Portuguese market fell below 50 million euros. The Bank decided to focus the share brokerage business on the Spanish institutional segment, thus allowing a global and diversified offer for this range. Locally, Santander Totta continued investing its efforts in energizing the retail segment, especially in the range of Private Banking.
Santander Totta's area of Institutional Custody, notwithstanding the financial crisis and the uncertainties of the financial markets, particularly in Portugal, has kept 2nd place in the national ranking of Custody Keepers, with approximately 23.1% market share in the volume of assets under custody, according to the last data made available by the Securities Market Commission (CMVM).
In the last few years, Santander's performance in Asset Management has been ruled by the management of its products with a controlled risk level, focusing on maintaining high and adequate liquidity levels, and benefiting from the opportunities provided by the market.
This strategy resulted in the recording, at the end of the first half of 2012, of positive yield rates in most of the mutual funds managed by the company: Santander Multitreasury (5.9% gross annualized yield), Santander Fixed Multirate (3.9% gross annualized yield and the Best European Fixed Rate Fund in 2011), Santander Global (6.3% gross annualized yield) and Santander America Shares (Best North American Shares Fund at 1 and 2 years, as well as the Best National Security Investment Fund for a 12 month period).
In this context, and in spite of the instability in the financial markets, the core range of Santander Asset Management funds has shown appreciable yields in 2012, both in absolute and in relative terms.
The 1st half of 2012 also stood out due to the launching of the FEI Iberian Premium (totalling 48.8 million euros), but equally due to the energizing of its current range of funds, which totals 34 investment funds. Additionally the maturity of the FEI Santander Europe Invest became due (totalling 45.4 million euros).
In June 2012, the mutual funds managed by Santander Asset Management had an 11.8% market share.
With respect to real estate investment funds, yields obtained reflected the existing economic crisis and the current difficulties being encountered in the Portuguese real estate market. As such, the performance of the funds was generated through the rentals paid by the tenants. The half year was essentially marked by the renegotiation of the rental contracts with several tenants, in which the counterpart of reduced rental amounts was established as the enlargement of the obligatory contractual rental periods. At the end of the half year, real estate investment funds managed by Santander Asset Management totalled approximately 591.4 million euros, equivalent to an approximate market share of 6.6%.
The banking sector activity in Portugal will remain conditioned by the implementation of the Economic and Financial Assistance Programme, which aims to create the conditions for fiscal sustainability, to implement structural reforms on the economy and to set specific measures for the financial sector, namely the strengthening of core capital and of the pool of eligible assets for ECB funding operations, subject to a deleverage and recapitalization process to be implemented until 2014.
The more adverse external outlook, resulting from the worsening of the sovereign debt crisis in Europe, is a risk factor for the adjustment process, as it dampens export growth, therefore adding to the downside risks on economic growth itself as well as on unemployment.
The current process of correction of the structural economic imbalances of the Portuguese economy has clear short term negative impacts, namely through higher unemployment and also weaker economic and financial conditions of the Portuguese households and non-financial corporates, which, in turn, is reflecting in worsening risk indicators for the loan book. Banco Santander Totta will, therefore, maintain its policies of rigorous control of credit risk and selective lending, nevertheless maintaining its support to companies which produce tradable goods.
On the other hand, the Bank will maintain its strategy of gradual deleveraging of the balance sheet, aiming to reduce the loans-to-deposits ratio to 120% in 2014, therefore keeping great focus in deposit growth, although in a context of low savings by households.
As aforementioned, the management of its loan book credit risk is an important objective for Banco Santander Totta, as it is key in defending both profitability and capital, which is fundamental in the current adverse economic environment. For this purpose, the Bank has put special emphasis in preventing delinquency, by creating a programme of selective analysis of the clients, anticipating potential risk events by offering conditions which bring the payment profile more in line with the client's economic and financial situation.
Simultaneously, the Bank maintains an important focus on recoveries, by reinforcing its policy of negotiating with the clients in order to avoid a judicial resolution of conflicts.
The quality of risk management is fundamental for the activity of Banco Santander Totta, in line with the Group's corporate policy. Prudence in risk management allied to the use of advanced management technologies has constituted a decisive factor, particularly in a very difficult, uncertain and volatile environment within the financial markets.
In the 1st half of 2012, the activity in Credit Risk Area comprised the following main features:
customers' expenditure to their repayment capability relative to the new macroeconomic framework. For this purpose, action was taken to adequate the admission strategies in the Bank's systems of decision and to the use of behavioural systems to identify preventive measures to be offered to customers;
Credit risk is originated from the possibility of losses derived from total or partial non performance of loans contracted with the Bank by its customers.
The organization of the credit risk function in Santander Totta is specialized in line with customer typology, differentiating, throughout the whole process of risk management, between non-standardized customers and standardized customers.
Santander Totta uses its own tools for the attribution of internal solvency ratings for different customer segments, which then uses to measure the credit quality of a customer or operation, with each rating corresponding to a probability of non performance.
Global rating tools are applied to the segments of country risk, financial institutions and wholesale banking, both in determining their rating as in following up the assumed risks. Such tools attribute a rating to each customer as a result of a quantitative or automated module, based upon balance sheet data/ratios or macroeconomic variables complemented by the analysis carried out by the risk analyst that follows up the customer.
In the case of companies and institutions of the retail banking, the attributed rating is based upon modules such as those referred above, quantitative or automated in this case (analysing the credit performance of a customer sampling and its correlation with a set of accounting data and ratios), and qualitative, dependent from the analysis of the risk analyst, whose duty is to carry out a final review of the attributed rating.
Attributed ratings are reviewed periodically, incorporating any new financial information that may have meanwhile become available as well as, qualitatively, the experience deriving from the assessment of the existing credit relationship. This periodicity increases in the case of customers where the internal alert and risk classification system so demands.
For the standardized risk portfolios, scoring tools have been implemented that automatically attribute a valuation/decision for the operations submitted. Such decision tools are complemented by a behavioural scoring model, a tool that permits a greater predictability of the assumed risks and which are used both for pre-sale as well as for sale.
The valuation of the customer and/or operation, through rating or scoring, is an assessment of credit capacity which is quantified through probability of default (PD). In addition to the customer's valuation, the quantitative risk analysis considers other features such as the period of the operation, the type of product and the existing guarantees. Thus, what is taken into account is not just the probability of the customer entering into default (PD) but the exposure at default (EAD) which is also estimated as well as the proportion of EAD that is not recoverable (loss given default or LGD).
These factors (PD, LGD and EAD) are the main parameters of credit risk, allowing when jointly considered the estimate of both the expected loss and the non expected loss. The expected loss (or probable loss) is considered as a further activity expenditure (reflecting the risk premium), with this risk conveniently included in the price of the operations. The unexpected loss, which is the basis of the estimation of the regulatory capital in accordance with the standards of the Basel Capital agreement (BIS II), relates to a very high loss level, although not very probable, which is not considered recurrent due to its nature and can thus be covered by equity.
In small and medium size enterprises, the balance sheet information is used not just for the rating attribution but also to obtain explanatory factors as to probability of default. In retail portfolios, PD is estimated by observing delays being entered and correlating these with the scoring attributed to the operations. Excepted are portfolios in which, derived from a lower internal default experience, such as financial institutions, country risk or wholesale banking, the calculation of these parameters is based upon alternative sources of information, such as market prices or assessments by experienced and competent agencies with a portfolio containing a sufficient number of bodies (such portfolios are designated as low default portfolio).
The calculation of LGD is based upon the observation of the recovery process of operations in default, considering not only the income and expenditure related to this process but also the timing when these come about and the indirect costs deriving from the recovery activity.
The EAD estimation is based upon the comparison between the use of committed lines at the moment of default and at a normal situation in order to identify the lines' real consumption when default takes place.
The estimated parameters are immediately linked to normal operations and differentiated for low default portfolios and for the remainder.
The risk management process consists of identifying, measuring, analysing, controlling, negotiating and deciding as to the risks incurred by the Bank's operations.
This process commences in the business area, which proposes a given risk probability. These risks are analysed and decided upon by specific committees, which act with competences delegated by the Executive Committee or the Higher Credit Council
(HCC). It is the HCC that establishes policies and procedures, the limits and delegation of capacities.
Establishing risk limits is conceived as a dynamic process that identifies the risk profile that the Bank is prepared to assume, through the assessment of the business proposals and the opinions of the Risks area.
With large corporate groups a pre-classification model is used based upon a measuring system and follow-up of economic capital.
With portfolio risks the more basic level is the one of the customer and when certain features concur – generally at a level of relative importance – this is object of an individual limit, normally designated as preclassification, through a very simplified system and normally for those customers that comply with certain requisites (personal knowledge, rating, among others).
With standardized risks the planning process and establishing of limits is carried out via a joint preparation, by the Risks and Business areas, of programmes of credit management (PGC) where the expected results of the business in terms of risk and profitability are shown, as well as the limits to which the activity and the related risk management must be subject.
Risk assessment, operating decision, follow up and control
Risk assessment is a prior requisite to the authorization of any credit operation in Banco Santander Totta. This assessment consists in analysing the customer's capacity to comply with the contractual commitments with the Bank, which implies analysing the customer's credit qualities, its credit operations, its solvency and its profitability. Additionally an assessment and a review are also carried out of the attributed rating whenever there is an alert or event that affects the customer/operation.
The decision process is aimed at analysing and deciding these same operations, taking into consideration the risk profiles and the relevant components by determining a balance between risk and profitability.
In order to maintain adequate control of the portfolio's credit quality, in addition to the actions developed by the Internal Audit, a specific follow-up function is established in the Risks area, made up of special teams and responsible officers. This function is also specialized in line with customer segmentation and is fundamentally based upon a continuous observation
process that allows the prior detection of incidents that may occur in the evolution of the risk, with the objective of carrying out, in anticipation, the required mitigation actions.
Recovery management in Santander Totta is an integrated business strategic activity. The specific objectives of the recovery process are the following:
Recoveries activity is structured in line with customers' commercial segmentation: Private and Business & Companies, with specific management models. Recovery management, thus segmented, also respects the distinct management stages: preventive management, management of irregulars and management of non performing loans and bankruptcies. The whole of this activity is shared with the business areas.
The counterpart risk, latent in contracts carried out in financial markets – organized or over the counter markets (OTC) – corresponds to the possibility of non performance by the counterparts under the contracted terms and subsequent occurrence of financial losses for the institution.
The types of transactions covered include the purchase and sale of securities, operations in the interbank money market, "repos" contracting, security loans and derivative instruments.
The control of these risks is carried out via an integrated system that permits the record of the approved limits and provides information as to their availability for the different products and maturities. The same system equally permits the transversal control of the concentration of risks for certain groups of customers/counterparts.
The risk in derivative positions, known as Equivalent Credit Risk is the result of the addition of the present value of each contract (or the current replacement cost) with the respective potential risk, providing a component that reflects an estimate of the expected maximum value until maturity, according to the volatility of the underlying market factors and the contracted flow structure.
During the first half of 2012 there was a significant reduction of activity in derivatives with a marked decrease in the number of customers and ongoing operations. As to product families and segments that contributed most to the referred trend were interest rate contracts as well as contracts in progress with financial institutions. At the same time a generalized increase was evident in the present value of contracts in progress (Mark-to-Market) due to level variations and interest rate volatility, particularly the Euribor rates.
Derivatives - Credit Risk Equivalent as of 30/06/2012 (103 Euros)
| Total Consolidated | |||||||
|---|---|---|---|---|---|---|---|
| <1 Year 1-5 Years 5-10 Years >10 Years Total |
|||||||
| Interest Rate Derivatives | 41,113 | 326,584 | 123,732 | 1,589,530 | 2,080,959 | ||
| Foreign Exchange Derivatives | 8,272 | 629 | 0 | 72,244 | 81,145 | ||
| Equity Derivatives | 61,386 | 0 | 0 | 0 | 61,386 | ||
| Total | 110,771 | 327,213 | 123,732 | 1,661,774 | 2,223,491 |
The management of structural risk is ensured by a body in the highest structural level with decisions being taken by the Assets & Liabilities Committee (ALCO), presided by the Chairman of the Executive Committee,
which comprises the Directors responsible for the Financial, Risks, Commercial and Marketing areas. The committee meets on a monthly basis.
The interest rate risk of the consolidated balance sheet is measured through a model of dynamic risk analysis of the market risk of the balance sheet, modelling the timing variation of risk factors and the Bank's positions over the assets and liabilities sensitive to variations in interest rates. The model used allows measuring and controlling all the risk factors related to the balance sheet market risk, namely the risk originated directly from the movement of the income curve, given the existing structure of indexing factors and reappreciation, which determines the exposure to interest rate risk of the aggregates that constitute the balance sheet.
Considering the uncertainty in the variation of interest rate levels in 2011, the policy followed was to keep sensitivity at the adequate levels.
Exchange rate risk of commercial activity is measured and controlled by the global exchange position, being the Group's strategy its total coverage.
Liquidity policy followed by the Group is based upon a low liquidity risk and the continuous diversification of the sources of finance, placing into perspective the volume and nature of the financing instruments used to allow the achievement and the development under good conditions of the established business plan.
By keeping up to a conservative profile the Bank is better protected with respect to potential crises that affect its environment, and enables it to prepare a timely, adequate and better quality reaction.
The policy of a financing mix is always based on an adequate level of liquidity risk, in line with the established limits and is assessed monthly by the Assets & Liabilities Committee. The limits of liquidity risk are established by an independent management body which, apart from other indicators, demands a reasonable amount of available liquid assets to be employed as a liquidity cushion.
All the liquidity management procedures are focused on crises prevention and not on reacting to them. This idea underlies the contingency plan that is focused in modelling potential crises through the analysis of several scenarios, in the identification of the crisis types, in the definition of internal and external communications, as well as in the responsibility for each of the areas involved in the process.
Liquidity management is carried out at the consolidated level. The Group's financing policy takes into consideration the variations of the balance sheet components, the structural situation of the maturities of assets and liabilities, the level of net interbank indebtedness relative to the available lines, the spread of maturities and the minimization of expenditure related to the funding activity.
The structural liquidity situation is well balanced. In June 2012, the Bank presented an asset situation in the money market (short tem) of approximately 492 million euros.
During the 1st half, the capital market half ran very unevenly. In this context the ECB, by leading monetary policy assumed itself as the counterpart of the system via lending operations and absorbing liquidity. To participate in these operations is necessary to hold assets as eligible collateral in the ECB. In June 2012 the Bank had 13.6 billion euros of eligible assets that constitute a very comfortable liquidity reserve.
The segment of measurement, control and follow up of financial risks comprises the operations where asset risks are assumed. The risk derives from the variation in risk factors – interest rate, exchange rate, variable income and respective volatilities – as well as the solvency risk and the liquidity risk of the various products and markets where Santander Totta operates.
In line with the effect of the risk, activities are segmented as follows:
The standard methodology, applied within the scope of Santander Totta's banking activity, is the Value at Risk (VaR). The standard of historic simulation is the base used, with a 99% confidence level and a one day time frame, with the application of statistical adjustments that allowed a swift and effective inclusion of the more recent events that condition the assumed risk levels.
Stress testing is used as a supplement, consisting in the definition of behavioural scenarios of differing financial variables and to obtain the respective impact on income when applied on the Bank's activity. These scenarios can replicate the behaviour of financial variables in relation to past occurrences (such as crises) or, on the contrary, may determine plausible scenarios that do not correspond to past events. In short, the analysis of scenarios endeavours to identify the potential risk over extreme market conditions and in the fringes of probability of occurrences not covered by VaR.
Several measures of sensibility (BPV and Greeks) and equivalent volumes are also equally calculated.
A daily following up of the positions is carried out in parallel, with an exhaustive control of the changes occurring in portfolios, in order to detect profile alterations or possible incidences for their correction. The daily preparation of the income and expenditure account is a risk indicator, since it allows identifying the impact of variations on the financial variables or of the changes in the contents of portfolios.
The reliability of the VaR model is periodically checked through a back-testing analysis. Back-testing consists of a comparative analysis between the estimates of the Value at Risk (VaR) and the clean P&L (result related to the revaluation of the closing portfolios of the previous day at the closing prices of the following day), where the spot/sporadic variations of the results deriving from the estimated measures are analysed.
The back-testing analyses that are carried out for the banking activity in Santander Totta, comply with the BIS recommendations, as regards the comparison with the internal systems used in the measurement and management of financial risks. Additionally, hypothetical tests are carried out in back-testing: excess tests, normality tests, measures of average excess, among others.
In the case of negotiation portfolios, quantitative limits are used that are classified in two groups, and established in line with the following objectives:
VaR was kept at reduced levels, varying between 15,000 and 65,000 euros.
Santander Totta defines operational risk as "the risk of loss resulting from deficiencies or failures in internal processes, human resources or systems, or derived from external circumstances". This is generally a risk that exists in internally generated processes (people, systems, among others) or as a consequence of external risks such as natural catastrophes.
The management and control of operational risk are part of the responsibility for all areas, since they have a greater understanding of the processes, as well as the points which could cause significant operational risk exposures and they are accompanied by a central area, responsible for implementing and monitoring the project.
The implemented model has the following global advantages:
• To establish mitigation measures that eliminate or minimize the OR.
In the 1st half of 2012 was authorized, by the Bank of Portugal, the adoption of Standard Methods for the calculation of capital requirements for operational risk. Complementary Information and Attachments
The Governance of the Company structure, as well as the ones relative to policies, procedures and internal control bodies, have not been subject to any changes from what is stated and detailed in the annual report for 2011.
| Shareholder | Nº shares | % |
|---|---|---|
| Santander Totta, S.G.P.S., S.A. | 641,269,620 | 97.65 |
| TaxaGest - Sociedade Gestora de Participações Sociais, S.A. |
14,593,315 | 2.22 |
In the terms and for the purposes of the provisions of Article No. 447 of the Company's Act and of Regulation 5/2008 of the Security's Market Regulation Code, it is hereby stated that the movements in shares and bonds carried out by corporate officers, during the 1st half of 2012 were as follows:
| Situation | Movements in 2012 | Situation | |||||
|---|---|---|---|---|---|---|---|
| Name | Securities | at 31/12/11 |
Date | Acquisitions | Disposals | Unit Price (€) |
at 30/06/12 |
| Bond BST – Caixa EUA - Cx |
820 | 820 | |||||
| João Baptista Leite |
Bond BST – Caixa Rendimento América Latina TOP 3 |
400 | 400 |
Item c) of §1 of Article No. 246 of the Security Market Regulation Code determines that each of the company's corporate officers issues a declaration therein defined.
The members of the Board of Directors of Banco Santander Totta, S.A. nominally identified hereunder individually subscribed the following declaration:
"I declare, in the terms and for the purposes of item c) of §1 of Article No. 246 of the Security Market Regulation Code that, to my best knowledge, the condensed financial statements relative to the first half of 2012 were prepared in line with the applicable accounting standards, and provide a true and fair image of the assets and liabilities, of the financial situation and of the results of Banco Santander Totta, S.A. and of the companies included in the consolidation, and that the management report of the period under review faithfully expresses the information required in the terms of §2 of Article No. 246 of the Security Market Regulation Code."
| Board of Directors | ||||||||
|---|---|---|---|---|---|---|---|---|
| Carlos Manuel Amaral de Pinho | ||||||||
| Director | ||||||||
| João Batista Leite | ||||||||
| Director | ||||||||
| José Urgel Moura Leite Maia | ||||||||
| Director | ||||||||
| Luís Filipe Ferreira Bento dos Santos | ||||||||
| Director | ||||||||
The accounts referring to the first semester of 2012 were not subject to a limited review, nor to a corresponding opinion by the auditors of the Bank.
| Res d tate |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 30- 06- 201 2 |
31- 12- 201 1 |
01- 01- 201 1 |
|||||||||
| Am ts b efo oun re |
|||||||||||
| Imp airm ent an |
d D ecia tion epr |
Net | Net | Net | Res d tate |
||||||
| AS SET S |
Not es |
De ciat ion pre |
e Im pai nt rme |
Ass ets |
Ass ets |
Ass ets |
S A SH EHO RS ' EQ LIA BIL ITIE ND AR LDE UIT Y |
Not es |
30- 06- 201 2 |
31- 12- 201 1 |
01- 01- 201 1 |
| Cas h a nd dep osit l ba nks s at ntra ce |
5 | 279 .429 |
- | 279 .429 |
387 .837 |
316 .872 |
Lia bili ties |
||||
| Bal es d ue f oth er b ank anc rom s |
6 | 183 .844 |
- | 183 .844 |
356 .962 |
236 .219 |
Res of tral ba nks our ces cen |
18 | 6.8 51. 615 |
4.9 13.2 34 |
4.8 07. 162 |
| Fina ncia l as sets he ld fo r tra ding |
7 | 2.0 58. 272 |
- | 2.0 58. 272 |
1.9 95. 784 |
1.6 49. 296 |
Fin ial l iabi litie s he ld fo r tra ding anc |
7 | 1.8 55. 892 |
1.6 63. 299 |
1.3 12.9 88 |
| Fina ncia l as de sign d a t fa ir va lue thro ugh fit o r los sets ate pro s |
8 | 93. 318 |
- | 93. 318 |
80. 121 |
93. 286 |
Res of oth er f inan cial ins titut ions our ces |
19 | 2.6 32. 474 |
3.6 11.5 32 |
9.6 14.6 81 |
| Ava ilab le-f ale fina ncia l as sets or-s |
9 | 5.0 14.3 26 |
62. 035 |
4.9 52. 291 |
4.4 39. 605 |
6.9 25. 123 |
Res of tom and oth er l our ces cus ers oan s |
20 | 20. 203 .04 6 |
19. 844 .104 |
18. 006 .436 |
| Loa nd adv o b ank es t ns a anc s |
10 | 2.4 62. 438 |
- | 2.4 62. 438 |
2.6 92. 911 |
5.2 09. 821 |
De bt s ritie s is d ecu sue |
21 | 5.7 63. 447 |
7.3 93. 865 |
8.8 80. 346 |
| Loa nd adv es t usto ns a anc o c me rs |
11 | 29. 155 .968 |
837 .95 1 |
28. 318 .017 |
28. 372 .027 |
29. 773 .732 |
Hed ging de riva tive s |
12 | 314 .027 |
282 .889 |
189 .423 |
| Hed ging de riva tive s |
12 | 196 .633 |
- | 196 .633 |
167 .302 |
131 .512 |
Pro visi ons |
22 | 71. 929 |
75. 482 |
104 .193 |
| Non he ld fo le t as sets -cu rren r sa |
13 | 263 .154 |
83. 048 |
180 .106 |
141 .163 |
89. 123 |
Cu x lia bilit ies t ta rren |
16 | 2.9 95 |
6.5 45 |
6.6 08 |
| Oth er t ible sets ang as |
14 | 842 .739 |
495 .397 |
347 .342 |
365 .415 |
391 .323 |
Def d ta x lia bilit ies erre |
16 | 98. 716 |
66. 972 |
47. 885 |
| Inta ngib le a ts sse |
14 | 345 .417 |
263 .740 |
81. 677 |
74. 230 |
74. 375 |
Sub ord inat ed liab ilitie s |
23 | 4.3 21 |
4.3 28 |
32. 316 |
| Inve stm ent s in iate as soc s |
15 | 143 .263 |
500 | 142 .763 |
133 .052 |
158 .846 |
Oth er l iabi litie s |
24 | 316 .290 |
289 .589 |
446 .066 |
| Cur t ta ts ren x a sse |
16 | 25. 428 |
- | 25. 428 |
17. 632 |
21. 985 |
T l lia bilit ies ota |
38. 114 .752 |
38. 151 .839 |
43. 448 .104 |
|
| Def d ta ts erre x a sse |
16 | 700 .763 |
- | 700 .763 |
714 .817 |
477 .690 |
|||||
| Oth ts er a sse |
17 | 225 .315 |
24. 828 |
200 .487 |
176 .456 |
293 .928 |
Sha reh old ' eq uity ers |
||||
| Sha apit al re c |
25 | 656 .723 |
656 .723 |
620 .105 |
|||||||
| Sha ium nt re p rem ac cou |
25 | 193 .390 |
193 .390 |
163 .703 |
|||||||
| Oth quit y in stru nts er e me |
25 | 135 .000 |
135 .000 |
135 .000 |
|||||||
| Rev alua tion res erv es |
25 | (90 0) 1.17 |
(1.0 ) 08. 461 |
(58 56) 8.3 |
|||||||
| Oth d re tain ed ning er r ese rves an ear s |
25 | 1.4 29. 155 |
1.4 04. 582 |
1.1 38. 700 |
|||||||
| (Tre har es) asu ry s |
(42 .400 ) |
(42 .400 ) |
(42 .113 ) |
||||||||
| Con ST soli dat ed net inco attr ibut able to the sh hold of B me are ers |
26 | 52. 148 |
47. 121 |
399 .196 |
|||||||
| Sha reh olde rs' e quit trib ble he sha reh olde f BS T y at uta to t rs o |
1.5 22. 846 |
1.3 85. 955 |
1.8 26. 235 |
||||||||
| Min orit y in tere sts |
27 | 585 .210 |
577 .520 |
568 .792 |
|||||||
| T l sh hold ' eq uity ota are ers |
2.1 08. 056 |
1.9 63. 475 |
2.3 95. 027 |
||||||||
| T l as ota sets t , ne |
41. 990 .307 |
1.7 67. 499 |
40. 222 .808 |
40. 115 .314 |
45. 843 .13 |
1 Tot al li abi litie nd sha reh olde rs' e quit s a y |
40. 222 .808 |
40. 115 .314 |
45. 843 .13 1 |
||
| Restated | |||
|---|---|---|---|
| Notes | 30-06-2012 | 30-06-2011 | |
| Interest and similar income | 29 | 904.435 | 866.612 |
| Interest and similar charges | 30 | (622.269) | (573.991) |
| Net interest income | 282.166 | 292.621 | |
| Income from equity instruments | 31 | 1.645 | 1.239 |
| Income from services and commission | 32 | 203.149 | 210.274 |
| Charges with services and commission | 33 | (23.051) | (25.522) |
| Result of assets and liabilities valued at fair value through profit or loss | 34 | (3.544) | 5.529 |
| Result of available-for-sale financial assets | 35 | (3.815) | (77.011) |
| Result of foreign exchange revaluation | 36 | 2.610 | 1.794 |
| Result from the sale of other assets | 37 | 83.495 | (358) |
| Other operating results | 38 | (3.310) | (5.437) |
| Net income from banking activities | 539.345 | 403.129 | |
| Staff costs | 39 | (133.100) | (148.419) |
| General administrative costs | 40 | (68.730) | (71.910) |
| Depreciation in the year | 14 | (32.710) | (30.631) |
| Provisions, net of cancellations | 22 | (4.107) | 243 |
| Loan impairment net of reversals and recoveries | 22 | (214.881) | (73.249) |
| Impairment of other financial assets net of reversals and recoveries | 22 | (20) | (3.305) |
| Impairment of other assets net of reversals and recoveries | 22 | (26.447) | (18.863) |
| Result from associates | 41 | 4.603 | 6.459 |
| Income before taxes and minority interests | 63.953 | 63.454 | |
| Taxes | |||
| Current | 16 | (21.020) | (15.103) |
| Deferred | 16 | 9.212 | 13.393 |
| Income after taxes and before minority interests | 52.145 | 61.744 | |
| Minority interests | 27 | 3 | 6 |
| Consolidated net income attributable to the shareholders of BST | 26 | 52.148 | 61.750 |
| Average number of ordinary shares outstanding | 641.943.023 | 647.525.720 | |
| Earnings per share (in Euros) | 0,08 | 0,09 |
(Amounts expressed in thousands of Euros - tEuros)
(Translation of income statement originally issued in Portuguese - Note 48)
| 30 Ju |
20 12 ne |
( ) 30 Ju 20 11 Re sta ted ne |
||||
|---|---|---|---|---|---|---|
| Att rib uta ble to th e |
At trib uta ble to |
At trib uta ble to th e |
At trib uta ble to |
|||
| sh ho lde rs' of BS T are |
mi rity in ter ts no es |
sh ho lde rs' of BS T are |
mi rity in ter ts no es |
|||
| Co lida ted t in fo r th nso ne co me e y ea r |
52 .14 8 |
( 3) |
61 .75 0 |
( 6) |
||
| Inc ot inc lud ed in the lida ted in st ate nt om e n co nso co me me |
||||||
| Ex cha e f luc tio fo rei ub sid iar ies tua ng ns on g n s |
6.4 44 |
7.7 12 |
( ) 5.2 22 |
( 8) 20 .33 |
||
| f a Re lua tio cia ted ies lue d a t e ity tho d va n r ese rve s o sso co mp an va qu me |
||||||
| Fa ir v alu e |
39 4 |
- | ( 22 ) |
- | ||
| eff . T ect ax |
( ) 114 |
- | 14 | - | ||
| . A ari al a nd fin cia l de via tio rel d t sio ctu ate tor an ns o r em un era y p en ns |
||||||
| Fa ir v alu e |
( ) 5.7 62 |
- | ( 2) 49 .11 |
- | ||
| . T eff ect ax |
( 7.9 62 ) |
- | 14 .19 8 |
- | ||
| Ch in f air lue of fin cia l as ilab le f le set an g es va an s a va or sa |
||||||
| Fa ir v alu e |
137 .65 3 |
- | ( 25 0.8 29 ) |
- | ||
| eff . T ect ax |
( 9) 39 .87 |
- | 72 .75 1 |
- | ||
| Ch in f air lue of sh flow s h ed ing de riva tive an g es va ca g s |
||||||
| Fa ir v alu e |
24 .72 4 |
- | ( 9) 12 .47 |
- | ||
| . T eff ect ax |
( 7.1 70 ) |
- | 3.6 19 |
- | ||
| 108 .32 8 |
7.7 12 |
( 22 7.0 82 ) |
( 20 .33 8) |
|||
| Co lida ted reh siv e i fo r th nso co mp en nco me e y ea r |
16 0.4 76 |
7.7 09 |
( 2) 165 .33 |
( 4) 20 .34 |
| Rev alua tion res erve s |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sha re |
Sha re ium prem |
Oth quit er e y |
Leg al |
Fair | Fore ign han exc ge |
Defe rred |
Leg al |
Oth er |
Rea tine d |
Tr eas ury |
N et in com e |
Min orit y |
||
| Cap ital |
t acc oun |
inst ents rum |
alua tion rev |
valu e |
fluc ion tuat |
taxe s |
rese rve |
rese rves |
ning ear s |
sha res |
in th e ye ar |
inte rest s |
Tot al |
|
| Bala at 3 1 De ber 201 0 nce s as cem |
620 .105 |
163 .703 |
135 .000 |
23.2 45 |
(507 ) .379 |
(3.5 45) |
142 .578 |
215 .832 |
828 .691 |
94.1 77 |
(42. ) 113 |
394 .028 |
568 .792 |
2.63 3.11 4 |
| Imp of c han ge i ntin licy act n ac cou g po |
||||||||||||||
| rel ated to p ions (No te 1 .5.) ens |
- | - | - | - | (340 .502 ) |
- | 97.2 47 |
- | - | - | - | 5.16 8 |
- | (238 .087 ) |
| Bala 1 Ja (Re ed) at 0 ry 2 011 stat nce s as nua |
.105 620 |
163 .703 |
135 .000 |
45 23.2 |
(847 ) .881 |
(3.5 45) |
.825 239 |
215 .832 |
828 .691 |
94.1 77 |
(42. ) 113 |
399 .196 |
568 .792 |
5.02 2.39 7 |
| App iatio n of inc net ropr ome |
||||||||||||||
| . Tra nsfe r to rese rves |
- | - | - | - | - | - | (416 ) |
27.8 01 |
68.4 19 |
132 .307 |
- | (228 .111 ) |
- | - |
| . Div iden ds d istrib uted |
- | - | - | - | - | - | - | - | - | - | - | (17 1.08 5) |
- | (17 1.08 5) |
| . Pre fere sha nce res |
- | - | - | - | - | 179 | - | - | (30 .213 ) |
- | - | - | 62 | (29 .972 ) |
| IC Mer with Tot ta IF ger |
36.6 18 |
29.6 87 |
- | - | - | - | - | - | 67.6 11 |
- | - | - | - | 133 .916 |
| Pay t of sha re-b d re ion erat men ase mun |
- | - | - | - | - | - | - | - | 34 | - | - | - | - | 34 |
| Purc has e of ck trea sto sury |
- | - | - | - | - | - | - | - | - | - | (28 1) |
- | - | (28 1) |
| Oth er |
- | - | - | - | - | - | 388 | - | - | - | - | - | - | 388 |
| Com preh ive i for t he f irst r of 201 1 este ens nco me sem |
- | - | - | - | (312 .442 ) |
(5.2 22) |
90.5 82 |
- | - | - | - | 61.7 50 |
(20 .344 ) |
(185 .676 ) |
| Bala at 3 0 Ju ne 2 011 nce s as |
656 .723 |
193 .390 |
135 .000 |
23.2 45 |
(1.1 60.3 23) |
(8.5 88) |
330 .379 |
243 .633 |
934 .542 |
226 .484 |
(42. 394 ) |
61.7 50 |
548 .510 |
2.14 2.35 1 |
| Pref hare eren ce s s |
- | - | - | - | - | - | - | - | - | - | - | - | (90) | (90) |
| Pay t of sha re-b d re ion erat men ase mun |
- | - | - | - | - | - | - | - | (81) | - | - | - | - | (81) |
| Acq uisit ion of tr stoc k eas ury |
- | - | - | - | - | - | - | - | - | - | (6) | - | - | (6) |
| Oth er |
- | - | - | - | - | - | (130 ) |
- | 4 | - | - | - | - | (126 ) |
| Com for t of 2 preh ive i he s nd s ster 01 ens nco me eco eme |
- | - | - | - | (275 ) .628 |
2.47 2 |
80.1 12 |
- | - | - | - | (14 ) .629 |
29.1 00 |
(178 ) .573 |
| Bala at 3 1 De ber 201 1 nce s as cem |
656 .723 |
193 .390 |
135 .000 |
23.2 45 |
(1.4 35.9 51) |
(6.1 16) |
410 .361 |
243 .633 |
934 .465 |
226 .484 |
(42. 400 ) |
47.1 21 |
577 .520 |
1.96 3.47 5 |
| n of App iatio net inc ropr ome |
||||||||||||||
| . Tra nsfe r to rese rves |
- | - | - | - | - | - | 229 | 2.22 9 |
30.0 71 |
14.5 92 |
- | (47. ) 121 |
- | - |
| . Pre fere sha nce res |
- | - | - | - | - | (1.2 66) |
- | - | (29 .346 ) |
- | - | - | (22) | (30 .634 ) |
| Tax ben efit fer o f Pe nsio n Fu nd on t rans |
||||||||||||||
| the Soc ial S rity to ecu |
- | - | - | - | - | - | - | - | - | 7.58 7 |
- | - | - | 7.58 7 |
| Pay t of sha re-b d re erat ion men ase mun |
- | - | - | - | - | - | - | - | (624 ) |
- | - | - | - | (624 ) |
| Oth er |
- | - | - | - | - | - | - | - | 62 | 2 | - | - | 3 | 67 |
| Com for t he f r of preh ive i irst este 201 2 ens nco me sem |
- | - | - | - | 157 .009 |
6.44 4 |
(55 ) .125 |
- | - | - | - | 52.1 48 |
7.70 9 |
168 .185 |
| Bala at 3 0 Ju ne 2 012 nce s as |
656 .723 |
193 .390 |
135 .000 |
23.2 45 |
(1.2 78.9 42) |
(938 ) |
355 .465 |
245 .862 |
934 .628 |
248 .665 |
(42. 400 ) |
52.1 48 |
585 .210 |
2.10 8.05 6 |
| 30-06-2012 | 30-06-2011 | |
|---|---|---|
| CASH FLOW FROM OPERATING ACTIVITIES: | ||
| Interest and commission received | 1.006.802 | 1.020.727 |
| Payment of interest and commission | (584.782) | (520.142) |
| Payments to staff and suppliers | (212.794) | (233.871) |
| Foreign exchange and other operating results | 6.136 | (24.156) |
| Recovery of uncollectable loans | 5.228 | 10.980 |
| Operating results before changes in operating assets and liabilities | 217.491 | 253.538 |
| (Increase) / decrease in operating assets: | ||
| Loans and advances to banks | 215.382 | 4.411.836 |
| Financial assets held for trading | (56.306) | 511.012 |
| Loans and advances to customers | (174.969) | 2.105.215 |
| Assets and liabilities designated at fair value through profit and loss | (124.179) | 3.306 |
| Non-current assets held for sale | (55.713) | (28.687) |
| Other assets | 985 | 86.911 |
| (194.800) | 7.089.593 | |
| Increase / (decrease) in operating liabilities: | ||
| Resources of financial institutions | 951.912 | (8.894.591) |
| Resources of customers and other loans | 361.462 | 359.388 |
| Financial liabilities held for trading | 192.594 | (105.953) |
| Other liabilities | 20.515 | (62.030) |
| 1.526.483 | (8.703.186) | |
| Net cash flow from operating activities before income tax | 1.549.174 | (1.360.055) |
| Income tax paid | (39.953) | (35.011) |
| Net cash flow from operating activities | 1.509.221 | (1.395.066) |
| CASH FLOW FROM INVESTING ACTIVITIES: | ||
| Dividends received | 1.645 | 2.813 |
| Purchase of assets available for sale | (1.549.328) | (271.486) |
| Sale of assets available for sale | 1.198.963 | 2.985.817 |
| Income from assets available for sale | 156.940 | 142.851 |
| Purchase of tangible and intangible assets | (28.722) | (22.516) |
| Sale of tangible assets | 361 | 479 |
| Net cash flow from investment activities | (220.141) | 2.837.958 |
| CASH FLOW FROM FINANCING ACTIVITIES: | ||
| Dividends paid | - | (171.085) |
| Issuance/(redemption) of debt securities | (1.498.834) | (1.042.749) |
| Interest paid on bonds issued and other | (71.702) | (109.487) |
| Interest paid on subordinated liabilities | (70) | (497) |
| Net cash flow from financing activities | (1.570.606) | (1.323.818) |
| Net increase in cash and cash equivalents | (281.526) | 119.074 |
| Cash and cash equivalents at the start of the period | 744.799 | 553.090 |
| Entry of entities in the consolidation perimeter | 2 | |
| Cash and cash equivalents at the end of the period | 463.273 | 672.166 |
Notes to the Consolidated Financial Statements
Banco Santander Totta, S.A. (hereinafter referred to as the "Bank", "BST" or "Group"), previously known as Companhia Geral of Crédito Predial Português, S.A. (CPP), was founded in 1864 and has its registered office in Portugal in Rua do Ouro, no. 88, Lisbon. The Bank was nationalised in 1975 and transformed into a government owned corporation in 1990. On December 2, 1992 the Bank's capital was re-privatised through an Initial Public Offering carried out in a special session of the Lisbon Stock Exchange.
Since December 2000, following the acquisition of Banco Totta & Açores, S.A. ("Totta") by the Santander Group, the Bank has been part of the Santander Group. The main balances and transactions with companies of the Santander Group during the first semester of 2012 and the year 2011 are detailed in Note 45.
On December 16, 2004, a demerger/merger operation of Totta was carried out, under which its investments in Foggia, SGPS, S.A. and Totta Seguros – Companhia de Seguros de Vida, S.A. were demerged and the remainder of its operations, together with Banco Santander Portugal, S.A. ("BSP"), were merged into CPP, which then changed its name to the current one.
On May 3, 2010, the Bank carried out the merger by incorporation of Banco Santander de Negócios Portugal, S.A. ("BSN"). For accounting purposes the operation was recorded as from January 1, 2010.
On April 1, 2011, the Bank carried out the merger by incorporation of Totta Crédito Especializado – Instituição Financial de Crédito, S.A. ("Totta IFIC"). For accounting and tax purposes the operation was recorded as from April 1, 2011, which was the date of registration.
BST's operations consist in obtaining funds from third parties, in the form of deposits and other, to apply along with its own funds, in all sectors of the economy, mostly in the form of loans granted or securities and providing other banking services in Portugal and abroad.
The Bank has a domestic network of 640 branches (659 branches as at 31 December, 2011) and also has a branch in London, as well as an offshore financial branch and an international offshore financial branch in the Autonomous Region of Madeira. The Bank also has subsidiaries and representation offices abroad as well as investments in subsidiaries and associated companies.
BST's consolidated financial statements were prepared on a going concern basis, from its books and accounting records maintained in accordance with the accounting principles set forth in the International Financial Reporting Standards (IAS/IFRS) as adopted by the European Union, Regulation (CE) 1606/2002 of July 19 of the European Parliament and Council, transposed to Portuguese legislation by Decree Law 35/2005 of February 17, and Notice 1/2005 of February 21 of the Bank of Portugal. Where Group companies used different accounting principles, appropriate adjustments were made for conversion to the IAS/IFRS.
The Bank adopted Standard IAS 34 – Interim Financial Reporting, in the presentation of its halfyear financial statements.
In 2011, the Bank adopted the amendments to IAS 24 – "Related party disclosures", IAS 32 – "Financial instruments: presentation", IFRIC 14 – "The limit on a defined benefit asset, minimum funding requirements and their interaction" and IFRIC 19 – "Extinguishing financial liabilities with equity instruments", but the adoption of these standards had no impact on its financial statements.
The Bank also reviewed the amendments to IAS 39 – "Financial instruments: Recognition and Measurement", on the identification of inflation as a hedged risk and a hedging through options, but these had no impact on its financial statements. The amendments to IFRS 2 - "Share-based payments", to IFRIC 16 – "Hedge of a net investment in a foreign operation", to IFRIC 17 – "Distribution of non cash assets to owners" and to IFRIC 18 – "Transfer of assets from customers", also had no impact on its financial statements.
As at 30 June 2012, the following standards (new and revised) and interpretations, already adopted by the European Union, were available for early adoption:
Although these standards are endorsed by the European Union, they were not adopted by the Bank at 30 June 2012, as their application was not yet mandatory. The Board of Directors believes that their application will not have a materially relevant impact on the financial statements.
Furthermore, up to the date of approval of the attached financial statements, the following standards and improvements, which are still not endorsed by the European Union, were also issued:
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
The consolidated financial statements include the accounts of the Bank and those of the entities controlled directly and indirectly by the Bank (Note 4), including special purpose entities.
Subsidiary companies are those in which the Bank exercises effective control over the current management in order to obtain economic benefits from its activities. Control usually exists when more than 50% of the share capital or of the voting rights are held. Furthermore, as a result of the application of the IAS 27 – "Consolidated and separate financial statements", the Group includes special purpose entities in the consolidation perimeter, namely vehicles and funds created under securitization operations, when it exercises effective financial and operating control over them and in which the Bank owns most of the risks and benefits associated to their activity.
The financial statements of subsidiaries are consolidated by the full integration method, from the time that BST has control over their activities to the time control ceases. Transactions and the significant balances between the companies subject to consolidation were eliminated. Furthermore, when applicable, consolidation adjustments are made in order to ensure consistency in the application of accounting principles. Third party shareholders in subsidiary companies consolidated by the full integration method are accounted for under the caption "Minority interests" (Note 27).
Associated companies are those in which the Bank has significant influence, but over which it does not have control. Significant influence is presumed to exist when a participation (direct or indirect) exceeds 20% or where the Bank has the power to participate in decisions relating to their financial and operating policies, but does not have control or joint control over them. Companies in which the Bank's participation is less than 20%, but that are majority held by the Santander Totta SGPS Group are also considered associated companies. Participations in associated companies are recorded in accordance with the equity method, from the time the Bank has significant influence until the date it ceases.
In accordance with the equity method, the consolidated financial statements include the part of shareholders' equity and profit or loss of the associated companies attributable to the Bank.
Goodwill corresponds to the excess of the acquisition costs over the effective percentage held in the fair value of the assets, liabilities and contingent liabilities of subsidiary and associated companies. At least once a year, the Bank performs impairment tests to the goodwill in the balance sheet, in accordance with the requirements of IAS 36 - "Impairment of Assets". For this purpose, the "goodwill" is allocated to units that generate cash flows, and assessed the recoverable amount based on estimates of future "cash flows" date based on discount rates considered appropriate by the Bank. Impairment losses associated with "goodwill" are recorded in the income statement and cannot be reversed.
The Bank decided not to apply IFRS 3 – Business Combinations, retrospectively. Therefore goodwill on acquisitions up to January 1, 2004 is reflected as a deduction from shareholders' equity in compliance with the former accounting policy. On the other hand, previously recognised negative goodwill was recorded as an increase in shareholders' equity, as permitted by IFRS 1.
Acquisitions of subsidiaries and associated companies after January 1, 2004 are recorded in accordance with the purchase method. Cost of the acquisition corresponds to the fair value of the assets and liabilities of the subsidiaries and associated companies as of the acquisition date. Goodwill is recorded as an asset and is subject to impairment tests in accordance with IAS 36, but is not amortised. Furthermore, whenever it is seen that the fair value of the assets acquired and of the liabilities incurred or assumed is higher than the acquisition cost (negative goodwill), the difference is recognised in the income statement.
With the application of the amendments to IFRS 3 and IAS 27, the Bank defined as accounting policy the fair value valuation through profit or loss when there is a change of control for subsidiaries acquired in stages. In such cases, the share participation acquired prior to the time of the change of control is revalued at fair value through profit or loss (Note 15). Goodwill is calculated on a given date as the difference between total acquisition cost and the proportion in the fair value of the associate's assets and liabilities. Similarly, by the application of the said amendments, the Bank reassesses through profit or loss the undertakings in which joint control is lost (Note 4).
The Bank decided to reverse, as of the transition date (1 January 2004) the reserve resulting from foreign exchange differences arising out from the conversion of financial statements of subsidiaries expressed in functional currencies other than the Euro. As from that date, in compliance with IAS 21, the foreign currency financial statements of subsidiary and associated companies have been converted to Euros as follows:
Exchange differences arising upon conversion to Euros are stated in the equity of the Bank, in the caption of "Foreign exchange fluctuation reserves".
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
The main accounting policies used in the preparation of the financial statements were the following:
The Bank uses the accrual-based accounting principle for most of its financial statement captions. Therefore, expenses and income are recorded in the period to which they relate, independently of when they are paid or received.
The Bank's accounts are prepared in the currency of the economic environment in which the Bank operates (functional currency), being expressed in Euros.
Transactions in a currency other than the functional currency, and the corresponding income and expenses, are recorded at the exchange rate of the date that they occur. Foreign currency assets and liabilities are translated to Euros at the fixing exchange rates as of the balance sheet date (Bank of Portugal fixing).
This category of financial assets includes loans and advances to customers and applications in credit institutions.
Loans and advances to customers include loans to costumers, as well as other security operations (commercial paper) not intended for sale in the short term, are recorded at inception at their nominal value.
Subsequently, loans and other accounts receivable are recorded at amortised cost, being submitted to periodic impairment analysis.
Commission and external costs attributable to the underlying operations included in this category, as well as the interest associated to the loans and advances granted, are recognised on an accruals basis, using the effective interest rate method, regardless of when they are received or paid. The Bank opted to defer commission received and paid relating to credit granted as from January 1, 2004.
The Bank classifies as overdue credit, instalments of principal and interests overdue for more than 30 days. Credits with overdue instalments are denounced in accordance with the approved credit procedures, the whole debt being considered overdue.
The Bank periodically analyses the loans and advances which should have already been paid in full but where the effort to collect them had no effect. Where the prospects of recovering a loan are negligible, loans are considered to be uncollectible and impairment losses are recognised for the full amount. In these cases, the Bank writes them off. Credits recovered subsequently, are recognised in the income statement in the caption "Loan impairment net of reversals and recoveries".
The Group periodically analyses the loans and advances granted to customers and other amounts receivable in order to identify evidence of impairment. A financial asset is considered to be impaired if, and only if, there is evidence that one or more loss events have occurred that have a measurable impact on the estimated future cash flows of that asset or group of assets.
For the purpose of determining loan impairment, the Group's loan portfolio is segmented as follows:
The Group makes an individual assessment of corporate customers that have:
In this regard, these segments may include customers without overdue credit. Occasionally the Bank also includes some customers without the mentioned features in individual assessment, by professional judgment.
Customers assessed individually with no evidence of impairment are subsequently assessed on a collective basis, being segmented between customers with liabilities greater or less than tEuros 300.
The Bank carries out a collective impairment assessment on the remaining segments of the loan portfolio.
Evidence of impairment of an asset or group of assets, as defined by the Group, corresponds to the observation of several loss events, such as:
Impairment losses for customers without overdue credit correspond to the probability of having overdue credit (PI) times the difference between the book value of the respective credits and the present value of estimated future cash flows of those operations. The PI corresponds to the probability of one transaction, operation or client starting to have overdue credit during an emergency period. An emergency period corresponds to the period between the occurrence of a loss event and the identification of that event by the Bank (incurred but not reported). For all loan portfolio segments, the Bank considers an emergency period of 6 months.
If there is evidence that the Group has incurred in an impairment loss on credits or other receivables, the amount of the loss is determined by the difference between the book value of those assets and the present value of the estimated future cash flows, discounted at the interest original rate of the asset or financial assets. The book value of the asset or assets is reduced by the impairment loss account balance. In the case of credits with variable interest rates, the discount rate used to determine an impairment loss is the current interest rate, as determined by the contract. Impairment losses are recorded in the income statement.
In accordance with the Group's current impairment model for the customer loan portfolio, impairment losses are assessed individually, on a sample basis, and on a collective basis. When a group of financial assets is assessed collectively, the future cash flows of that group are estimated based on the contractual cash flows of the assets of that group and on historical data regarding losses arising out from assets with similar credit risk characteristics. Whenever the Group considers it necessary, the historic information is updated based on current observable data in order to reflect the effect of current conditions.
When, in a subsequent period, there is a decrease in the amount of impairment losses due to a specific event, the previously recognised amount is reversed and the impairment loss balance is adjusted. The amount of the reversal is recognised directly in the income statement.
In accordance with the policies in place in the Bank, interest arising overdue credits without a real guarantee are reverted three months after the due date of the operation or after the first overdue instalment. Unrecorded interest on the above-mentioned credits is only recognised in the period of its actual collection.
Interest on mortgages loans or on loans granted with other real guarantees are not reverted provided that the outstanding principal and interest due is less than the collateral value.
Gains and losses on the definitive sale of loans are recorded in the income statement in the caption "Results from the sale of other assets" (Note 37). These gains or losses correspond to the difference between the sale value agreed and the book value of these assets, net of impairment losses. Contingent future collections are not considered in the determination of the sale price.
Lease operations are classified as finance leases when substantially all the risks and benefits relating to ownership of the leased asset are transferred to the lessee under the lease contract. Finance lease operations are recorded in accordance with the following criteria:
Assets held under finance lease are recorded at their fair value in tangible assets and in liabilities and the corresponding depreciation is recognised. The lease instalments are divided in accordance with the respective financial plan, the liabilities being decreased by the amount corresponding to payment of the principal. Interest included in the instalments is recorded in the caption "Interest and similar charges".
Assets under a finance lease contract are recorded in the balance sheet as loans granted, which are repaid by amortising the principal in accordance with the financial plan of the contracts. Interest included in the instalments is recorded in the caption "Interest and similar income".
Responsibilities for guarantees given and irrevocable commitments are recorded in off- balance sheet accounts for the amount at risk, while interest, commission and other income are recorded in the income statement over the period of the operations.
Income from services and commission obtained in the execution of a significant act, for example such as commission from syndicating loans operations, is recognised in the income statement when the significant act has been completed.
Income from services and commission obtained as the services are rendered is recognised in the income statement in the period to which it refers.
Income from services and commission that is part of the remuneration from financial instruments is recorded in the income statement using the effective interest rate method.
Costs relating to services and commission are recognised using the same criteria as adopted for income.
The following assets and financial liabilities are recognised and valued in accordance with IAS 32 and IAS 39 within the following specific categories:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ON 30 JUNE 2012 AND 2011 (RESTATED) (Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
i) Financial assets and liabilities held for trading and financial assets and liabilities at fair value through profit or loss
Financial assets held for trading include fixed income income securities and variable yield securities traded on active markets, as well as derivables purchased with the intention of being sold or repurchased in the short term. Trading derivatives with a receivable net value (positive fair value), and options bought are included in the caption "Financial assets held for trading". Trading derivatives with a payable net value (negative fair value), and options sold are included in the caption "Financial liabilities held for trading".
Assets designated at fair value through profit or loss include fixed income securities.
Financial assets and liabilities held for trading and financial assets and liabilities at fair value through profit or loss are recognised initially at fair value. Gains and losses arising from subsequent fair value valuation are recognised in the income statement.
The interest inherent to financial assets and the difference between their acquisition cost and their nominal value (premium or discount) is calculated in accordance with the effective rate method and recognised in the income statement in the caption "Interest and similar income". The effective rate is that which is used to discount the estimated future cash flows associated to the financial instrument, and makes its present value equal to the value of the financial instrument on the date it was initially recognised.
Interest associated to trading derivative financial instruments is classified in the caption "Results of assets and liabilities valued at fair value through profit or loss" in the income statement.
Available for sale financial assets include equity and debt instruments that are not classified as financial assets held for trading, at fair value through profit or loss, as investments to be held to maturity or as loans and accounts receivable.
Available for sale financial assets are stated at fair value, with the exception of equity instruments not listed on an active market if their fair value cannot be determined reliably, which are recorded at cost. Subsequent gains or losses resulting from changes in fair value are reflected in the specific equity caption called "Fair value reserve" until they are sold (or until impairment losses are recognised on them), when they are transferred to the income statement. Foreign exchange gains or losses on monetary assets are directly recognised in the income statement.
In accordance with the amendment introduced on 13 October 2008 in Standard IAS 39 - "Financial instruments: Classification and measurement", the Bank "may reclassify a financial asset that is no longer held for sale or repurchase in the short term (although it may have been acquired or incurred mainly for sale or repurchase in the short term), removing it from the category of fair value through profit or loss if certain requirements are met. However, reclassifications are not permitted for the category "Financial assets at fair value through profit or loss".
Disclosure on the reclassifications made under this amendment is provided in Note 9.
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
iii) Income Recognition
Interest inherent to the financial assets and the recognition of the difference between their acquisition cost and their nominal value (premium or discount) is calculated in accordance with the effective rate method and recorded in the "Interest and similar income" caption in the income statement.
Income from variable return securities is recognised in the income statement on the date that it is declared. In accordance with this criterion, interim dividends are recognised as income in the year the distribution is declared.
Securities sold with repurchase agreements are maintained in the portfolio in which they were originally recorded. Funds received are recorded on the settlement date in a specific liability account, interest being recorded on an accrual basis.
When there is evidence of impairment of an asset or group of assets, the impairment loss is recognised in the income statement.
For quoted securities, evidence of impairment exists when the price falls continuously or significantly. Evidence of impairment for unquoted securities exists when there is a negative impact on the estimated future cash flows of the financial asset, provided that this can be reliably estimated.
The Group considers the specific nature and features of the assets being valued in its periodic impairment loss assessment. In terms of objective impairment criteria, the BST considers a 24 month period to be adequate for the prolonged devaluation of financial instruments in relation to their acquisition cost. Furthermore, BST considers the existence of unrealised capital losses exceeding 50% of the acquisition cost to be a significant devaluation.
Except as explained in the following paragraph, if in a subsequent period there is a decrease in the amount of impairment loss attributable to a specific event, the previously recognised amount is directly reverted through an adjustment to the impairment losses account. The amount of the reversal is recognised directly in the income statement.
When there is objective evidence of impairment of financial assets available for sale as a result of a significant or prolonged decrease in the fair value of the security or financial difficulty of the issuer, the accumulated loss of the fair value reserve is transferred from equity to the income statement. Impairment losses recorded on fixed income securities can be reverted through profit or loss if there is an increase in the fair value of the security resulting from an event that occurs after determination of the impairment. Impairment losses on variable yield securities cannot be reverted and so any unrealised capital gain arising after recognition of the impairment loss is recorded in the fair value reserve. In the case of variable yield securities for which impairment losses have been recognised, subsequent reductions in fair value are always recognised in the income statement.
For financial assets recorded at cost, namely unquoted shares whose fair value cannot be measured reliably, the Bank also carries out periodic reviews for impairment. In this context, the recoverable amount corresponds to the present value of the estimated future cash flows, using a discount rate that reflects the underlying risk of the asset held
vi) Income recognition
Other financial liabilities essentially correspond to resources of credit institutions, customers' deposits and debt issued. These liabilities are initially valued at fair value, which normally corresponds to the amount received, net of transaction costs, and are subsequently valued at amortised cost in accordance with the effective interest rate method.
Bond issues are entered in the captions "Other subordinated liabilities" and "Debt securities issued".
On the issue date debt securities issued are recorded at fair value (issue price) and subsequently are valued at amortised cost using the effective interest rate method.
Embedded derivatives in debt securities issued are recorded separately and valued at fair value through profit or loss.
As mentioned above, the financial assets recorded in the categories of financial assets held for trading and at fair value through profit or loss and financial assets available for sale are valued at fair value.
The fair value of a financial instrument corresponds to the amount for which an asset or financial liability can be sold or settled between independent, knowledgeable and interested parties in the transaction under normal market conditions.
The fair value of financial assets is determined by an independent area of the Bank's trading function, based on:
Financial instruments measured at amortised cost are initially recorded at fair value added to or deducted from the income or costs directly attributable to the transaction. Interest is recognised by the effective rate method.
Whenever the estimate of payments or charges associated with financial instruments valued at amortised cost is revised, the book value is adjusted to reflect the new expected cash flows. The new amortised cost results from the present value of the revised future cash flows discounted at the original effective rate of the financial instrument. The adjustment in amortised cost is recognised in the income statement.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ON 30 JUNE 2012 AND 2011 (RESTATED) (Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
f) Valuation of derivative instruments and hedge accounting
Derivative instruments traded by the Group are always recognised in the balance sheet at their fair value.
Derivatives embedded in other financial instruments (namely in debt issued) are separated from their host contract whenever their risks and characteristics are not closely related to those of the host contract and the whole instrument is not measured at fair value with changes in fair value recognised in profit or loss.
The BST uses derivative financial instruments for the hedging of interest rate and exchange rate risks resulting from financing and investment activities. Derivatives that do not qualify for hedge accounting are recorded as financial instruments held for trading, under the financial assets or financial liabilities held for trading captions, and all variations in their fair value are reflected in the income statement.
Derivatives that qualify for hedge accounting are recorded at fair value and the corresponding capital gains and losses are recognised in accordance with the hedge accounting model adopted by BST.
In accordance with IAS 39.88, hedge accounting is applicable only when the following requirements are cumulatively met:
effectiveness ceases to be between 80% and 125%, hedge accounting is discontinued. Hedge accounting is only applied as from the time all these requirements are met. In the same way, if at any time the hedging
hedged item relating to the risk being hedged are also recognised in the income statement. Gains or losses on the revaluation of a hedging instrument are recognised in the income statement. If the hedge is effective, the gains or losses resulting from variations in the fair value of the
of the hedged items are amortised through the income statement over the remaining period. If a hedging instrument matures or is terminated early, the gains or losses in the valuation of the hedged risk recognised as value adjustments of the hedged items, are amortised over the remaining period. If the asset or liability being hedged is sold or settled, the amounts recognised as a result of the valuation of the hedged risk are recognised in the income statement for the year and the derivative instrument is transferred to the trading portfolio. If the hedge becomes ineffective, the gains or losses recognised as value adjustments
of the monetary items both being recognised in the income statement for the period. Hedge accounting is not applied in the case of foreign exchange rate hedging of monetary items, with the gain or loss arising from the derivative and from the foreign exchange variation
d asset or liability, or to a highly probable forecast transaction that may affect profit or loss. Cash flow hedges refer to hedging the exposure to variability in future cash flows that can be attributed to a particular risk associated with a recognize
uments to hedge future cash flows of interest on its variable rate mortgage loan portfolio. BST has entered into derivative financial instr
viously mentioned general hedge accounting requirements and is accounted for as follows: The application of cash flow hedge accounting is subject to the pre
prehensive incom Furthermore, the gain or loss in the hedging instrument recognised in other com e corresponds to the lesser of the following amounts (in absolut amounts):
dging instrument not recognised in other comprehensive income is included in profit or loss. In this regard, and if applicable, the remaining of the gain or loss on the he
tatement in the same period that the gains or losses of the hedged item are recognised. Cash flow hedge accounting shall be discontinued if the hedging instrument matures or is terminated early, if the hedge relationship becomes ineffective or if it is decided to dedesignate the hedge relationship. In these cases, the cumulative gain or loss on the hedging instrument recognised in other comprehensive income continues to be separately classified in equity, being recorded in the income s
attributable costs), less accumulated depreciation and impairment losses, when applicable. Tangible assets used by the Bank in its operations are recorded at cost (including directly
ts is recorded on a straight forward basis over the estimated ul lifetime of the assets: Depreciation of tangible asse usef
| Years of useful life |
|
|---|---|
| Property for own use |
50 |
| Equipment | 4 to 10 |
the rental contract, if this is shorter. On average this corresponds to a period of ten years. Investment expenses in works that cannot be recovered carried out on buildings that are not owned by the Bank (rented) are amortised over a period compatible with that of their expected useful life or of
luations is not tax deductible, with the deferred tax liability being recognised accordingly. As permitted by IFRS 1, tangible assets acquired up to 1 January 2004 were stated at their book value on the transition date to the IAS/IFRS, which corresponded to the cost adjusted by legal revaluations based on evolution of the general price index. 40% of the increase in depreciation resulting from such reva
f the property (through the use in the operations or sale) is lower than the net book value. Impairment tests are made periodically. The branches are considered as cash flow generating units for this purpose with impairment losses being recognised whenever the recovered value o
unt of the valuation corresponds to the market value of the property in its current condition. The criteria followed in the valuations of the buildings normally use the market comparison method, and the amo
the expenses are paid out. Impairment losses assessments are made on an annual basis. In this caption the Bank recognises the expenses incurred in the development phase of IT systems implemented and in their implementation phase, as well as the expense of acquiring software, in both cases where the estimated impact extends beyond the financial year in which
r platform (Partenon), the expected useful lifetime corresponds to a maximum of five years. Intangible assets are amortised on a monthly basis over the estimated lifetime period of the assets, which corresponds to three years on average. For the new compute
not be met, these assets are accounted for under the caption "Other assets" (Note 17). The Group accounts for property and other assets received in settlement of non-performing loans under this caption, by the amount agreed under negotiatien or court decision, when these are available for immediate sale in their present condition and their sale is highly probable within one year's time. Should these criteria
al estate investment fund acquired following a debt settlement agreement with a customer. The caption also includes participation units of a closed-end re
recognised whenever the appraised value (net of costs to sell) is lower than the book value. The buildings are subject to periodic appraisals conducted by independent real estate appraisers. Impairment losses are
nted for under this caption at the outstanding amount as at the contract termination date. Assets recovered as a result of the early termination of financial lease contracts are accou
impairment losses), thereafter being subject to a periodic assessment of impairment losses. Furthermore, the Bank's property for own use which is in the process of being sold off is accounted for under this caption. These assets are transferred for their carrying amount in accordance with IAS 16 (acquisition cost, net of accumulated depreciation and accumulated
for sale and discontinued operations, no unrealised gains are recognised on these assets. According to IFRS 5 - Non-current assets held
ors considers that the methods adopted are appropriate and reflect the market situation. The Bank's Board of Direct
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ON 30 JUNE 2012 AND 2011 (RESTATED) (Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
A provision is set up whenever there is a present obligation (legal or constructive) resulting from past events relating to which there will be a probable future outlay of resources, and this can be determined reliably. The amount of the provision corresponds to the best estimate of the amount to be disbursed to settle a liability on the balance sheet date.
If the future disbursement of resources is not expected, there is a contingent liability. Contingent liabilities are disclosed unless the probability of materializing is remote.
This caption of liabilities includes the provisions set up namely to cater for specific postemployment benefits of members of the Board of Directors, for restructuring, for tax risks, lawsuits and other specific risks arising from the BST's activity, in accordance with IAS 37 (Note 22).
The Bank signed the Collective Labour Agreement (Acordo Colectivo de Trabalho - ACT) for the Portuguese Banking Sector, under which its employees or their families are entitled to retirement, disability and survival pensions.
For employees hired by the Bank up to December 31, 2008, BST's pension plan corresponds to a defined benefit plan, as it establishes the criteria for determining the amount of the pension that each employee will receive during retirement, based on his/her time of service and remuneration at the time of retirement, where the pensions are updated annually based on the remuneration established in the ACT for the serving employees. For these employees the Bank has been responsible for the payment of the full amount of the pensions established under the ACT. The liabilities arising out from the defined benefit plan are covered by a Pension Fund.
As from January 1, 2009, employees hired by the Bank started to be registered in the Social Security and are covered by a supplementary defined contribution pension plan with acquired rights under Article 137 – C of the ACT. The plan is supported by contributions from the employees (1.5%) and from the Bank (1.5%) over the amount of the effective monthly salary. For this purpose, each employee can choose his/her own pension fund.
The employees of the former Totta were already covered by Social Security, thus the Bank's liability with those employees consists in the payment of only the supplements.
In October 2010 an agreement was reached between the Ministry of Labour and Social Solidarity, the Portuguese Association of Banks and the Financial Sector Federation (FEBASE) to include workers of the banking sector in the General Regime of the Social Security. Following this agreement, Decree-Law No. 1-A/2011, dated January 3, was published in 2011, which defines that serving workers in the banking sector at the date of its entry into force (January 4, 2011) are to be included in the General Regime of the Social Security with regard to retirement pensions and in the event of maternity, paternity or adoption. Given the complementary nature allowed for under the rules of the Collective Labour Agreement for the Banking Sector, the Bank will continue to cover the difference between the amount of the benefits paid under the General Regime of the Social Security and those resulting from the Collective Labour Agreement.
Pursuant to the instructions of the National Council of Financial Supervisors, past service liabilities as at December 31, 2010 have not changed as result of the above-mentioned Decree Law since the reduction of the pensionable amount attributable to the Bank will affect the services to be provided by the employees in the future as from January 1, 2011. Thus, the current service cost has been reduced as from this date only, though at the same time the Bank has started to pay the employer's contribution to the Social Security of 23.6% (the so called "Taxa Social Única"). The Bank maintains the responsibility of paying out disability pensions and survival pensions along with any sickness allowances.
In December 2011 a three party agreement was established between the Ministry of Finance, the Portuguese Association of Banks and the Federation for the Financial Sector (FEBASE) concerning the transfer to the Social Security of part of the liabilities for pensioners which, as at December 31, 2011 were covered by the substitutive regime of the Social Security as per the Collective Labour Agreement (ACT) in force for the banking sector.
Following the above-mentioned three party agreement, Decree-Law no. 127/2011, dated December 31, was issued determining that as from January 1, 2012 the Social Security started to be responsible for the above-mentioned pensions for an amount corresponding to the pension computed in accordance to the terms and conditions in force under the Collective Labour Agreement for the banking sector as at December 31, 2011, including both the vacation (14th month) and Christmas subsidies.
In accordance with this Decree Law, the Bank, through its Pension Fund, only maintains the responsibility for paying:
Under the transfer of responsibilities to the Social Security, the Bank's pension fund assets backing such responsibilities were also transferred. The value of the pension fund assets transferred corresponds to the value of the responsibilities assumed under the mentioned Decree Law, which were determined bearing the following assumptions in mind:
Mortality table male population TV 73/77 less 1 year Mortality table female population TV 88/90 Actuarial technical rate (discount rate) 4%
The assets to be transferred were to be in cash and up to 50% in Portuguese government debt securities valued at the respective market value.
Under the terms of the said Diploma, the ownership of the assets was transferred by the Bank as follows:
In this regard, and prior to the transfer to the Social Security, the Bank obtained actuarial studies that helped to calculate the amount of the transfer.
Following the transfer agreement of the pensioners to the Social Security, and for purposes of determining the value of the liabilities to be transferred in accordance with the provisions in Decree Law no. 127/2011, of 31 December, the Bank calculated the liabilities separately for serving and retired employees, having defined specific assumptions for each case (Note 43).
The difference between the amount of the liabilities transferred to the Social Security determined as per the above assumptions, and the liabilities determined based on updated actuarial assumptions as adopted by the Bank was recorded under the caption "Staff costs" in the income statement.
Furthermore, the London branch employees are covered by a defined benefit pension plan, for which there is a separate pension fund (Note 43).
In February 2010, a supplementary defined contribution pension plan was approved for a defined set of the Bank's executives, for which an insurance policy was taken out.
BST's retirement pension liability is calculated annually by external experts (Towers Watson International Limited, Portuguese Branch), based on the "Projected Unit Credit" method. The discount rate used in the actuarial calculations is determined based on market rates for high quality corporate bonds, in the currency in which the benefits will be paid (Euros), with similar maturity of the plan's liability. Employees' post-employment benefits also include healthcare assistance (SAMS) and death subsidy during retirement.
Banco Santander Negócios Portugal, S.A. (BSN) did not sign the Collective Labour Agreement (ACT) in force for the banking sector. In 2006 the BSN established a defined contribution pension fund under which employees are allowed to make voluntary contributions. BSN's contribution depended on the results and corresponded to a percentage of the employees wages, with an annual floor of 1,000 Euros per participant. Following the merger of BSN into BST, the employees of the former BSN have been incorporated in the ACT and in BST's defined benefit pension plan as from May 2010, with recognition of the seniority of employees hired before July 1, 1997.
Totta IFIC had no pension fund. As a result of the merger by incorporation of Totta IFIC into BST, the employees of the former Totta IFIC were integrated in the ACT and in BST's defined benefit pension plan as from April 2011. The seniority of the employees hired before July 1, 1997 has been recognised. The increase of past service liability with the employees of Totta IFIC was recognised in the caption "Staff costs".
In the first semester of 2011 BST assumed an increase in liabilities of tEuros 1,044 concerning the employees of Totta IFIC (Note 43).
On 1 January 2004, BST opted not to apply IAS 19 retrospectively, and therefore has not recalculated the actuarial gains and losses that would be deferred on the balance sheet if this standard had been adopted as from the beginning of the pension plans. Accordingly, the actuarial gains and losses existing as at January 1, 2004, as well as those resulting from adopting IAS 19 were reversed/recorded against retained earnings as at the transition date.
In 2011 the Bank decided to change the accounting policy for recognizing actuarial gains and losses using the corridor method, havilg started to recognize actuarial gains and losses in equity, as permitted by IAS 19. The Board of Directors believes that this change reflects the economic and financial position of the Bank more appropriately in respect of pension liabilities.
This alteration of accounting policy was applied retrospectively, as required by IAS 8 (Note 1.5.).
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
The BST records the following components in the "Staff costs" caption of the income statement:
Liabilities with retirement pensions, less the fair value of the assets of the Pension Fund are recorded in the "Other assets" caption (Note 17).
Notice no. 4/2005 of the Bank of Portugal states that the liability arising from pensions being paid shall be fully funded and a 95% minimum funded level for the past service liability of serving employees. Notwithstanding this, it also established a transition period ranging from 5 to 7 years in respect of the increase in the liability as result of the adoption of IAS 19.
A contribution was made by the Bank on December 31, 2011 and 2010 to fully fund its employees' benefit liability, including healthcare assistance (SAMS).
In compliance with the ACT, BST has assumed the commitment to pay serving employees with fifteen, twenty-five and thirty years of good and effective service, a long service bonus corresponding to one, two or three months of their effective monthly wage (in the year the premium is attributed), respectively.
BST determines the present value of its liability for long service bonuses by actuarial calculations using the "Projected Unit Credit" method. The actuarial assumptions used (financial and demographic) are based on expectations, as of the balance sheet date, regarding salary increases and are based on mortality tables adapted to BST's population. The discount rate used is determined based on market rates for high quality corporate bonds with similar maturity of the liability.
Long service bonuses liabilities is recorded in the caption "Other liabilities – long service" (Note 24).
BST and the Group's companies are subject to the tax regime established in the Corporate Income Tax Code ("CIRC"). The branches' accounts are consolidated with those of the Bank for tax purposes. In addition to being subject to Corporate Income Tax, the results of the branches are also subject to local taxes in the countries/territories in which they are established. Local taxes are deductible for Corporate Income Tax in Portugal under the terms of article 91 of the CIRC and the Double Taxation Agreements signed by Portugal.
The Offshore branch in the Autonomous Region of Madeira benefits from article 33 of the Statute of Tax Benefits ("EBF"), which grants the exemption from corporate income tax until December 31, 2011. In accordance with article 34 of EBF, for the purposes of this benefit, at least 85% of the taxable profit of the Bank's total operations is considered to result from operations outside of the Madeira free trade area.
In accordance with article 92 of the Corporate Income Tax Code, tax paid under the terms of item 1, article 90, net of international double taxation and any tax benefits, cannot be less than 90% of the amount that would have been determined if the taxpayer did not have the tax benefits established in item 13, article 43 and article 75 of the Corporate Income Tax Code.
Since January 1, 2007, local authorities have been able to establish a maximum local surcharge of up to 1.5% over taxable income subject to and not exempt from corporate income tax. This provision implied that a tax rate of 25% was used at 30 June 2012 and on 31 December 2011 in the computation of deferred tax on any reportable tax losses and that a tax rate of 26.5% would be applied for all other temporary differences resulting from the recognition of corporate income tax for the year.
With the publication of Law no. 12–A/2010, of 30 June, a state surcharge was introduced, and is payable by all taxpayers subject to and not exempt from corporate income tax with taxable income in excess of tEuros 2,000. The state surcharge corresponds to 2.5% of the taxable income exceeding that limit. This means that the tax burden used for the computation of deferred taxes, except for tax losses carried forward, and for the recognition of income tax for the period, was 29%.
With the publication of the State Budget Law for 2012 (Law No. 64-B/2011, dated December 30), the companies that present higher taxable income are subject to higher state surcharge rates. In this sense, the companies with taxable income between tEuros 1,500 and tEuros 10,000 are now subject to a state surcharge rate of 3% and the companies with taxable income exceeding tEuros 10,000 are subject to a rate of 5%. Therefore, whenever the taxable income exceeds tEuros 10,000, a 3% state surcharge rate will be applied to the amount of tEuro 8,500 and a rate of 5% to the exceeding remaining taxable income. Consequently, the tax rate used in the year 2011 was 26.5% up to tEuro 1,500 of taxable income, 29.5% up to tEuro 8,500 of taxable income and 31.5% for the remainder. The Bank determined a tax loss for the year 2011.
The 2011 tax loss can be carried forward for four years, although its deduction will be restricted pursuant to the State Budget Law for 2012, mentioned above, which established that the deduction of tax losses in each year cannot exceed 75% of the respective taxable profit, though the remaining 25% continue to be deductible until the end of the four year period.
It should be pointed out that the losses arising from the 2012 financial year, inclusive, can be carried forward within the five subsequent tax years.
With the publication of Law no. 55 - A/2010, of 31 December, the Bank is subjected to the banking sector contribution regime. The basis of such contribution is as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ON 30 JUNE 2012 AND 2011 (RESTATED) (Translation of notes originally issued in Portuguese – Note 48)
The rates applicable to the bases of incidence defined in lines a) and b) above are 0.05% and 0.00015%, respectively, as allowed for in no. 1 and 2 of article 5 of Dispatch no. 121/2011, of 30 March.
Deferred tax assets and liabilities correspond to the amount of the tax recoverable and payable in future periods resulting from temporary differences between the carrying value of assets and liabilities in the balance sheet and their respective tax bases. Tax credits are also recognised as deferred tax assets.
Deferred tax assets are recognised when it is estimated that they will be recovered and only up to the amount that will probably be recovered through the existence of sufficient expected future taxable income to absorb the deductible temporary differences.
Deferred tax assets and liabilities were calculated based on the tax rates decreed for the period in which the respective assets are expected to be realised or the liabilities incurred.
Current and deferred taxes are reflected in the income statement, except for taxes on transactions recorded directly in shareholders' equity, namely potential gains and losses on securities available for sale and on cash flow hedging derivatives, and actuarial deviations related to pension liabilities following the change in accounting policy (Note 1.3. k)).
The Group has long-term incentive plans for stocks and stock options of Banco Santander, S.A., holding company of the Santander Group. Given their characteristics, these plans consist of equity settled share-based payment transactions, as defined in IFRS 2 and IFRIC 11. The management, hedging and implementation of these long-term incentive plans is provided directly by Banco Santander, S.A.. The Group pays out annually these plans to Banco Santander, S.A..
The acknowledgment of such plans imply the recognition of the Group's employees right to these instruments in the caption "Other reserves" and in the caption "Staff costs" of the income statement, as these are granted in exchange for services rendered.
A description of the long-term incentives plans for stocks and stock options of Banco Santander S.A. in force at 30 June 2012 and 31 December 2011 is included in Note 46.
The Bank uses the principle of accrual accounting for income from the provision of insurance brokerage services - commission. Thus, this income is recorded as it is generated, irrespective of when it is received. Amounts receivable are submitted to impairment analysis.
In preparing its cash flow statement, the Bank considers "Cash and cash equivalents" to be the total of the captions "Cash and balances in Central Banks" and "Balances in other credit institutions".
As mentioned in the Introduction, on April 1, 2011 the Bank carried out a merger by incorporation of Totta IFIC. For accounting purposes the operation was recorded as at that date. The Bank incorporated the assets and liabilities of Totta IFIC at their book value as at March 31, 2011. The difference between the accounting value and the acquisition cost was recorded in the shareholders' equity captions, share premium and reserves resulting from mergers. The impact of the merger on the shareholders' equity of the Bank can be shown as follows:
| Shareholders' equity of Totta IFIC as of the merger date Transfer of the fair value reserve Other adjustments – incentive plan |
175,019 ( 7,606 ) ( 32 ) |
|---|---|
| Adjusted shareholders' equity | ---------- 167,381 |
| Acquisition cost of the participation in Totta IFIC on 31 March 2011 Increase of the Bank's share capital Share premium |
---------- 10,556 36,618 29,687 |
| --------- 76,861 |
|
| Merger reserve | --------- 90,520 ===== |
Consequently, the Bank's costs and income as at 30 June 2012 are not directly comparable with those on 30 June 2011.
As indicated in Note 1.3.k), in 2011, the Bank's Board of Directors decided to alter the accounting policy, ceasing the use of the corridor method and starting to recognize actuarial gains and losses in equity, as permitted by IAS 19.
In accordance with Law no. 64 – B/2011, of the State Budget for 2012, the impact of this change will be accepted for tax purposes over a period of 10 years. Consequently, the Bank recorded deferred tax assets of tEuros 159,238 (Note 16), resulting from the change of this accounting policy.
As required under IAS 8, the effects of the change in the accounting policy in the shareholders' equity as at 1 January 2011, in the net result of the first semester of 2011 and in shareholders' equity as at 30 June 2011:
| 30-06-2011 | 01-01-2011 | |||
|---|---|---|---|---|
| Equity without net income |
of the year | Total Net income shareholder Shareholder' equity |
equity | |
| Balances before retrospective application | 2,353,600 | 57,451 | 2,411,051 | 2,633,112 |
| Impact of the retrospective application as at 1 January 2011 | ||||
| Accumulated actuarial differences as at 01 January 2011 | (335,334) | - | (335,334) | (335,334) |
| Actuarial differences recognised in the first semester of 2011 | (49,112) | - | (49,112) | - |
| Actuarial differences amortised in the first semester of 2011 (excess over the corridor) | - | 4,299 | 4,299 | - |
| Tax effect | 111,445 | - | 111,445 | 97,247 |
| (273,001) | 4,299 | (268,702) | (238,087) | |
| Balances after retrospective application | 2,080,599 | 61,750 | 2,142,349 | 2,395,025 |
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
The preparation of the financial statements requires estimates and assumptions to be made by the Bank's Board of Directors. These estimates are subjective by nature and may affect the value of the assets and liabilities, income and costs, and also of the contingent liabilities disclosed.
Retirement and survival pensions have been estimated using actuarial valuations performed by external experts certified by the Portuguese Securities and Exchange Commission (Comissão dos Mercados de Valores Mobiliários - CMVM). These estimates incorporate a set of financial and actuarial assumptions, including discount rate, expected return on pension assets of the Fund, the mortality, disability, pension growth and wages, amongst others. Note that the expected return of the Pension Fund has an impact on the annual cost of pensions.
The assumptions adopted correspond to the best estimate of the Bank and of the actuaries of the future behaviour of these variables.
Models and valuation techniques, such as those described in Note 1.3 e) and f) above, are used to value financial instruments not traded in active markets. Consequently, the valuations correspond to the best estimate of the fair value of these instruments as at the balance sheet date. As mentioned in Note 1.3. e) to ensure an adequate segregation of duties, the valuation of these financial instruments is determined by an independent area of the trading function.
Impairment losses on loans have been determined as explained in Note 1.3 c) above. Consequently, impairment assessment determined on an individual basis corresponds to the Bank's judgement as to the financial situation of the customers and its estimate of the value of the loan guarantees given, and the consequent impact on the expected future cash flows. Impairment losses determined on a collective basis are estimated based on historical parameters for comparable types of operations, considering estimates of overdue instalments, default and recoverability.
As described in Note 1.3. e), the unrealised capital losses resulting from the valuation of these assets are recognised under the revaluation reserve (equity). Whenever there is objective evidence of impairment, the accumulated capital losses that have been recognised in equity are transferred to the year profit or loss.
In the case of equity instruments, the determination of impairment losses may involve a degree of subjectivity. The Bank determines whether or not impairment on these assets exists through specific analysis at each balance sheet date taking into account the existence of any of the events foreseen IAS 39 (see Note 1.3. e)).
In the case of debt instruments recorded in this caption, unrealised capital losses are transferred from the fair value reserve to profit or loss whenever there are indications that default might occur over overdue installments, namely, due to financial difficulties of the issuer, failure to comply with other financial liabilities, or a significant deterioration in the rating of the issuer.
Deferred tax assets are recognised based on the assumption of the existence of future taxable income. Furthermore, deferred tax assets and liabilities have been determined based on the interpretation of the tax legislation currently in force. Therefore, changes in tax legislation or in its interpretation by the competent authorities may have an impact on the amount of deferred taxes.
The Bank, as an entity subject to Bank of Portugal supervision, must present separate (nonconsolidated) financial statements in accordance with the Adjusted Accounting Standards as issued under Bank of Portugal Notice 1/2005, dated February 21, and which form the basis for determining the taxable profit.
In order to adapt the Corporate Income Tax Code to International Accounting Standards as adopted by the European Union and to the new accounting system "Sistema de Normalização Contabilistica" (SNC), approved by Decree Law No. 158/2009, dated July 13, the Decree Law No. 159/2009, dated July 13, was also approved.
This Decree Law no. 159/2009, of 13 July, amended some articles of the Corporate Income Tax Code and also revoked paragraph 2 of Article 57 of the State Budget Law of 2007. These changes came into force on 1 January, 2010.
In this regard, these new rules were observed to compute the taxable profit for 2011 and the first semester of 2012, in accordance with their interpretation by the Bank.
In accordance with the requirements of IFRS 8, the disclosures of the Bank's operating segments are presented below in accordance with the information reviewed by the management:
This area essentially includes the Bank's activity with financial markets and large companies, providing financial advisory services, namely Corporate and Project Finance, as well as intermediary, custody and settlement services.
This essentially corresponds to credit granting operations and obtention of funds from private customers and businesses with a turnover of less than 5 million Euros through the branches network, telephone and internet banking services.
This is geared towards companies with a turnover ranging between 5 and 125 million Euros. This activity is backed by the branches network as well as by specialised services, and includes a variety of products such as loans, project funding, export financing and real estate.
This area results from the investment fund management activity, which includes the launching of funds, the objective of which is to create added value products for the Group's customers.
This area covers all the activities that provide support to the Group's main activities but which are not directly related to its core business, including also liquidity management, balance sheet hedging and Group funding.
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
The income statement by segment as at 30 June 2012 and 2011 (Restated) is made up as follows:
| 30-06-2012 | |||||||
|---|---|---|---|---|---|---|---|
| Global Banking & Markets |
Retail banking |
Commercial banking |
Asset Management |
Corporate activities |
Consolidated Total |
||
| Financial margin (narrow sense) Income from equity instruments |
36,264 - |
165,232 - |
80,837 - |
- - |
(167) 1,645 |
282,166 1,645 |
|
| Financial margin | 36,264 | 165,232 | 80,837 | - | 1,478 | 283,811 | |
| Net commissions Other results from banking activity |
34,791 - |
128,993 2,525 |
11,717 - |
3,890 (15) |
707 (5,820) |
180,098 (3,310) |
|
| Commercial margin | 71,055 | 296,750 | 92,554 | 3,875 | (3,635) | 460,599 | |
| Income from financial operations | 5,759 | (85) | 201 | - | 72,871 | 78,746 | |
| Net income from banking activities | 76,814 | 296,665 | 92,755 | 3,875 | 69,236 | 539,345 | |
| Operating costs Depreciation and amortization |
(9,236) (1,529) |
(167,705) (29,140) |
(22,580) (1,919) |
(2,309) (122) |
- - |
(201,830) (32,710) |
|
| Net operating income | 66,049 | 99,820 | 68,256 | 1,444 | 69,236 | 304,805 | |
| Impairment and provisions, net of reversals Result from associates |
(7,008) - |
(143,392) - |
(37,176) 4,611 |
(1,354) - |
(56,525) (8) |
(245,455) 4,603 |
|
| Income befora taxes and minority interest | 59,041 | (43,572) | 35,691 | 90 | 12,703 | 63,953 | |
| Tax expense Income attributable to minority interests |
(17,122) - |
12,490 - |
(9,013) - |
(27) - |
1,864 3 |
(11,808) 3 |
|
| Net result of the period | 41,919 | (31,082) | 26,678 | 63 | 14,570 | 52,148 |
| 30-06-2011 (Restated) | |||||||
|---|---|---|---|---|---|---|---|
| Global Banking & Markets |
Retail banking |
Commercial banking |
Asset Management |
Corporate activities |
Consolidated Total |
||
| Financial margin (narrow sense) | 19,821 | 229,110 | 52,990 | - | (9,300) | 292,621 | |
| Income from equity instruments | - | - | - | - | 1,239 | 1,239 | |
| Financial margin | 19,821 | 229,110 | 52,990 | - | (8,061) | 293,860 | |
| Net commissions | 44,585 | 131,555 | 11,081 | 5,197 | (7,666) | 184,752 | |
| Other results from banking activity | - | 3,498 | - | 10 | (8,945) | (5,437) | |
| Commercial margin | 64,406 | 364,163 | 64,071 | 5,207 | (24,672) | 473,175 | |
| Income from financial operations | 10,158 | (742) | 283 | - | (79,745) | (70,046) | |
| Net income from banking activities | 74,564 | 363,421 | 64,354 | 5,207 | (104,417) | 403,129 | |
| Operating costs | (10,814) | (185,307) | (21,600) | (2,608) | - | (220,329) | |
| Depreciation and amortization | (1,297) | (27,425) | (1,731) | (178) | - | (30,631) | |
| Net operating income | 62,453 | 150,689 | 41,023 | 2,421 | (104,417) | 152,169 | |
| Impairment and provisions, net of reversals | (1,044) | (65,800) | (434) | (1) | (27,895) | (95,174) | |
| Result from associates | - | - | 3,731 | - | 2,728 | 6,459 | |
| Income befora taxes and minority interest | 61,409 | 84,889 | 44,320 | 2,420 | (129,584) | 63,454 | |
| Tax expense | (1,775) | (2,342) | (1,268) | (70) | 3,745 | (1,710) | |
| Income attributable to minority interests | - | - | - | - | 6 | 6 | |
| Net result of the period | 59,634 | 82,547 | 43,052 | 2,350 | (125,833) | 61,750 |
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts e xpressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
The assets and liabilities under management for each business segment as at 30 June 2012 and 31 December 2011, in accordance with the information used by the Group's management for decision making, are as follows:
| 30-06-2012 | ||||||
|---|---|---|---|---|---|---|
| Global | ||||||
| Banking | Retail | Commercial | Asset | Corporate | Consolidated | |
| & Markets | banking | banking | Management | activities | Total | |
| Assets | ||||||
| Loans and advances to customers | ||||||
| Mortgage Loans | - | 16,015,552 | - | - | - | 16,015,552 |
| Consumer credit | - | 1,507,366 | - | - | - | 1,507,366 |
| Other loans | 1,994,267 | 3,892,041 | 4,908,791 | - | - | 10,795,099 |
| 1,994,267 | 21,414,959 | 4,908,791 | - | - | 28,318,017 | |
| Total allocated assets | 1,994,267 | 21,414,959 | 4,908,791 | - | - | 28,318,017 |
| Total non-allocated assets | 11,904,791 | |||||
| Total assets | 40,222,808 | |||||
| Liabilities | ||||||
| Resources in the balanc e sheet |
||||||
| Customers' accounts a nd other resources |
395,623 | 16,813,080 | 2,994,343 | - | - | 20,203,046 |
| Debt securities issued | - | 426,209 | 410,316 | - | 4,926,922 | 5,763,447 |
| 395,623 | 17,239,289 | 3,404,659 | - | 4,926,922 | 25,966,493 | |
| Guarantees and other sureties given | 323,872 | 194,233 | 849,064 | - | - | 1,367,169 |
| Investment funds | - | 1,271,691 | 602,026 | 780,085 | - | 2,653,802 |
| 31-12-2011 | ||||||
| Global | ||||||
| Banking | Retail | Commercial | Asset | Corporate | Consolidated | |
| & Markets | banking | banking | Management | activities | Total | |
| Assets | ||||||
| Loans and advances to customers | ||||||
| Mortgage Loans | - | 16,033,835 | - | - | - | 16,033,835 |
| Consumer credit | - | 1,537,078 | - | - | - | 1,537,078 |
| Other loans | 1,674,615 | 3,816,266 | 5,310,233 | - | - | 10,801,114 |
| 1,674,615 | 21,387,179 | 5,310,233 | - | - | 28,372,027 | |
| Total allocated assets | 1,674,615 | 21,387,179 | 5,310,233 | - | - | 28,372,027 |
| Total non-allocated assets | 11,743,287 | |||||
| Total assets | 40,115,314 | |||||
| Liabilities | ||||||
| Resources in the balance sheet | ||||||
| Customers' accounts and other resources | 576,672 | 16,580,506 | 2,686,926 | - | - | 19,844,104 |
| Debt securities issued | - 576,672 |
467,810 17,048,316 |
387,979 3,074,905 |
- - |
6,538,076 6,538,076 |
7,393,865 27,237,969 |
| Guarantees and other sureties given | 336,364 | 198,533 | 953,558 | - | - | 1,488,455 |
| Investment funds | - | 1,448,516 | 580,001 | 778,619 | - | 2,807,136 |
The information by geographic area of the consolidated activity, namely the balance sheet and the income statement, is presented below. At 30 June 2012, the balance sheet by geographic segments was as follows:
| Dom est ic o atio per ns |
|||||||
|---|---|---|---|---|---|---|---|
| Por tug al |
Irel and |
Ang ola |
Pue rto Ric o |
Oth er |
Tot al |
Co lida ted nso Tot al |
|
| Ass ets |
|||||||
| Cas h a nd dep osi ts a t ce ntra l ba nks |
279 ,42 9 |
- | - | - | - | - | 279 ,42 9 |
| Bal due fro m b ank anc es s |
183 ,28 7 |
22 | - | 49 | 486 | 557 | 183 ,84 4 |
| Fin ial a ts h eld for tra din anc sse g |
2,0 58, 267 |
- | - | 5 | - | 5 | 2,0 58, 272 |
| Oth er f ina ncia l as set s d esi ted at f air valu e th gh fit o r lo gna rou pro ss |
93, 318 |
- | - | - | - | - | 93, 318 |
| le-f fin Ava ilab ale ial a ts or-s anc sse |
4,9 52, 291 |
- | - | - | - | - | 4,9 52, 291 |
| Loa and ad to ban ks ns van ces |
2,4 62, 199 |
- | - | 239 | - | 239 | 2,4 62, 438 |
| Loa and ad to tom ns van ces cus ers |
28, 318 ,01 7 |
- | - | - | - | - | 28, 318 ,01 7 |
| Hed gin g d eriv ativ es |
196 ,63 3 |
- | - | - | - | - | 196 ,63 3 |
| Non t set s h eld for le -cu rren as sa |
180 ,10 6 |
- | - | - | - | - | 180 ,10 6 |
| Oth er t ible set ang as s |
347 ,28 7 |
- | - | - | 55 | 55 | 347 ,34 2 |
| Inta ngi ble set as s |
81, 677 |
- | - | - | - | - | 81, 677 |
| Inve stm ent s in iate as soc s |
(29 9) ,92 |
- | 172 ,69 2 |
- | - | 172 ,69 2 |
142 ,76 3 |
| Cu t tax set rren as s |
25, 000 |
428 | - | - | - | 428 | 25, 428 |
| Def d ta set erre x as s |
700 ,76 3 |
- | - | - | - | - | 700 ,76 3 |
| Oth ts er a sse |
199 ,39 0 |
- | - | 4 | 1,0 93 |
1,0 97 |
200 ,48 7 |
| Tot al N et A ts sse |
40, 047 ,73 5 |
450 | 172 ,69 2 |
297 | 1,6 34 |
175 ,07 3 |
40, 222 ,80 8 |
| Lia bilit ies |
|||||||
| Res of tral ba nks our ces cen |
6,8 51, 615 |
- | - | - | - | - | 6,8 51, 615 |
| Fin ial l iab ilitie s h eld for tra din anc g |
1,8 55, 880 |
- | - | 12 | - | 12 | 1,8 55, 892 |
| Res of oth er f ina ncia l ins titut ion our ces s |
2,6 32, 474 |
- | - | - | - | - | 2,6 32, 474 |
| of Res tom d o the r lo our ces cus ers an ans |
20, 036 ,98 5 |
- | - | 166 ,06 1 |
- | 166 ,06 1 |
20, 203 ,04 6 |
| Deb t se ities iss ued cur |
5,7 63, 447 |
- | - | - | - | - | 5,7 63, 447 |
| Hed gin g d eriv ativ es |
314 ,01 8 |
- | - | 9 | - | 9 | 314 ,02 7 |
| Pro visi ons |
71, 929 |
- | - | - | - | - | 71, 929 |
| Cu t tax lia bilit ies rren |
2,9 95 |
- | - | - | - | - | 2,9 95 |
| Def d ta x lia bilit ies erre |
97, 009 |
1,7 07 |
- | - | - | 1,7 07 |
98, 716 |
| Sub ord ina ted lia bilit ies |
4,3 21 |
- | - | - | - | - | 4,3 21 |
| Oth er l iab ilitie s |
315 ,82 8 |
118 | - | 130 | 214 | 462 | 316 ,29 0 |
| Tot al L iab ilitie s |
37, 946 ,50 1 |
1,82 5 |
- | 166 ,21 2 |
214 | 168 ,25 1 |
38, 114 2 ,75 |
| Tot al s har eho lde rs' |
1,4 84, 648 |
22, 194 |
11, 323 |
283 ,47 0 |
306 ,42 1 |
623 ,40 8 |
2,1 08, 056 |
| uity eq Tot al l iab ilitie nd sha reh old ' eq uity s a ers |
39, 431 ,14 9 |
24, 019 |
11, 323 |
449 ,68 2 |
306 ,63 5 |
791 ,65 9 |
40, 222 ,80 8 |
| Do stic tion me op era s |
Inte tion al o atio rna per ns |
||||||
|---|---|---|---|---|---|---|---|
| Po rtug al |
Irel and |
Ang ola |
Pue rto Ric o |
Oth er |
Tot al |
Co lida ted nso Tot al |
|
| As set s |
|||||||
| Ca sh and de its at c ent ral ban ks pos |
387 ,83 7 |
- | - | - | - | - | 387 ,83 7 |
| Ba lan du e fr ba nks ces om |
356 ,24 9 |
24 | - | 79 | 610 | 713 | 356 ,96 2 |
| fo Fin ial ets he ld r tra din anc ass g |
1,9 95, 784 |
- | - | - | - | - | 1,9 95, 784 |
| Oth fin ial ets de sig nat ed at f air val thro h p rofi t or er anc ass ue ug |
80, 121 |
- | - | - | - | - | 80, 121 |
| Ava ilab le-f sal e fi cia l as set or- nan s |
4,4 39, 605 |
- | - | - | - | - | 4,4 39, 605 |
| Loa and ad to ban ks ns van ces |
2,6 89, 956 |
2,7 20 |
- | 235 | - | 2,9 55 |
2,6 92, 91 1 |
| Loa and ad to tom ns van ces cus ers |
28, 372 ,02 7 |
- | - | - | - | - | 28 ,37 2,0 27 |
| He dg ing de riva tive s |
167 ,30 2 |
- | - | - | - | - | 167 ,30 2 |
| No s h eld for le ent set n-c urr as sa |
141 ,16 3 |
- | - | - | - | - | 141 ,16 3 |
| Oth er t ible set ang as s |
365 ,33 4 |
- | - | - | 81 | 81 | 365 ,41 5 |
| Inta ible set ng as s |
74, 230 |
- | - | - | - | - | 74, 230 |
| Inve s in iate stm ent as soc s |
( 25 ,91 8) |
- | 158 ,97 0 |
- | - | 158 ,97 0 |
133 ,05 2 |
| Cu nt t ets rre ax ass |
17, 632 |
- | - | - | - | - | 17, 632 |
| De fer red tax set as s |
714 ,81 7 |
- | - | - | - | - | 714 ,81 7 |
| Oth ts er a sse |
175 ,32 6 |
2 | - | 4 | 1,1 24 |
1,1 30 |
176 ,45 6 |
| Tot al n et A ts sse |
39, 95 1,4 65 |
2,7 46 |
158 ,97 0 |
318 | 1,8 15 |
163 ,84 9 |
40 ,11 5,3 14 |
| Lia bili ties |
|||||||
| Re f ce ntra l ba nks sou rce s o |
4,9 13, 234 |
- | - | - | - | - | 4,9 13, 234 |
| Fin ial liab iliti h eld for tra din anc es g |
1,6 63, 246 |
- | - | 53 | - | 53 | 1,6 63, 299 |
| f ot fin Re her ial ins titu tion sou rce s o anc s |
3,4 55, 964 |
155 ,56 8 |
- | - | - | 155 ,56 8 |
3,6 11, 532 |
| Re f cu sto nd oth er l sou rce s o me rs a oan s |
19, 706 ,99 2 |
- | - | 137 ,11 2 |
- | 137 ,11 2 |
19, 844 ,10 4 |
| De bt s ritie s is d ecu sue |
7,3 93, 865 |
- | - | - | - | - | 7,3 93, 865 |
| He dg ing de riva tive s |
282 ,88 9 |
- | - | - | - | - | 282 ,88 9 |
| Pro vis ion s |
75, 482 |
- | - | - | - | - | 75, 482 |
| Cu nt t liab iliti rre ax es |
4,6 73 |
957 | - | 915 | - | 1,8 72 |
6,5 45 |
| De fer red lia bili ties tax |
64 ,03 7 |
2,9 35 |
- | - | - | 2,9 35 |
66, 972 |
| Su bor din ate d li abi litie s |
4,3 28 |
- | - | - | - | - | 4,3 28 |
| Oth er l iab iliti es |
289 ,11 6 |
98 | - | 133 | 242 | 473 | 289 ,58 9 |
| Tot al L iab iliti es |
37, 853 ,82 6 |
159 8 ,55 |
- | 138 ,21 3 |
242 | 298 ,01 3 |
38, 151 ,83 9 |
| Tot al s har eho lde rs' uity eq |
1,3 87, 319 |
( 11, 44 1) |
6,8 83 |
275 ,59 5 |
305 ,11 9 |
576 ,15 6 |
1,9 63, 475 |
| Tot al l iab iliti and sh hol der s' uity es are eq |
39, 24 1,1 45 |
148 ,11 7 |
6,8 83 |
413 ,80 8 |
305 ,36 1 |
874 ,16 9 |
40 ,11 5,3 14 |
On 30 June 2012, the income statement by geographic segments was as follows:
| Do stic tion me op era s |
Inte tion al o rat ion rna pe s |
||||||
|---|---|---|---|---|---|---|---|
| Co lida ted nso |
|||||||
| Por al tug |
Irela nd |
An la go |
Pue Ric rto o |
Oth er |
Tot al |
To tal |
|
| Inte t an d s imil ar i res nco me |
904 ,41 7 |
3 | - | 15 | - | 18 | 904 ,43 5 |
| Inte t an d s imil har res ar c ges |
( 619 ,15 6) |
( 460 ) |
- | ( 2,6 53) |
- | ( 3,1 13) |
( 622 ,26 9) |
| Fin ial in anc ma rg |
285 ,26 1 |
( ) 457 |
- | ( 38) 2,6 |
- | ( 95) 3,0 |
282 ,16 6 |
| Inco fro ity inst ent me e m qu rum s |
1,6 45 |
- | - | - | - | - | 1,6 45 |
| Inco fro ices d c mis sio me s m erv an om n |
203 ,14 1 |
- | - | - | 8 | 8 | 203 ,14 9 |
| Cha ith s ices d c mis sio rge s w erv an om n |
( 22, 929 ) |
- | - | - | ( 122 ) |
( 122 ) |
( 23, 051 ) |
| Res ult of a ts nd liab ilitie s d esi ted at fair lue thro h p rof it o r lo sse a gna va ug ss |
( 3,5 52) |
- | - | 8 | - | 8 | ( 3,5 44) |
| of a le-f e fi Res ult vai lab sal cia l set or- nan as s |
( 15) 3,8 |
- | - | - | - | - | ( 15) 3,8 |
| Res ult of f ign han alu atio ore exc ge rev n |
2,6 09 |
- | - | 1 | - | 1 | 2,6 10 |
| Res ult f le o f ot her set rom sa as s |
83, 497 |
- | - | ( 2) |
( 2) |
83, 495 |
|
| Oth atin sul ts er o per g re |
( 3,2 68) |
- | - | ( 2) |
( 40) |
( 42) |
( 3,3 10) |
| Net inc e f ba nk ing tiv itie om rom ac s |
542 ,58 9 |
( 457 ) |
- | ( 2,6 31) |
( 156 ) |
( 3,2 44) |
539 ,34 5 |
| Sta ff c ost s |
( 132 ,56 4) |
( 95) |
- | ( 105 ) |
( 336 ) |
( 536 ) |
( 133 ,10 0) |
| Ge al a dm inis ive trat ts ner cos |
( 68, 322 ) |
( 199 ) |
- | ( 54) |
( 155 ) |
( 408 ) |
( 68, 730 ) |
| Dep iatio nd orti zat ion rec n a am |
( 32, 703 ) |
- | - | - | ( 7) |
( 7) |
( 32, 710 ) |
| Pro vis ions t of llati ne ca nce ons |
( 4,1 07) |
- | - | - | - | - | ( 4,1 07) |
| Loa n im irm ent t of als and ries pa ne rev ers rec ove |
( 214 ,88 1) |
- | - | - | - | - | ( 214 ,88 1) |
| Imp airm of oth er f ina nci al a f re sal nd ries ent ts n et o sse ver s a rec ove |
( 20) |
- | - | - | - | - | ( 20) |
| Imp airm of oth f re sal nd ries ent ts n et o er a sse ver s a rec ove |
( 26, 447 ) |
- | - | - | - | - | ( 26, 447 ) |
| Res ult f iate rom as soc s |
639 | - | 3,9 64 |
- | - | 3,9 64 |
4,6 03 |
| Inc e b efo d m ino rity int tax sts om re es an ere |
64, 184 |
( 751 ) |
3,9 64 |
( 2,7 90) |
( 654 ) |
( 231 ) |
63, 953 |
| Cur t ta ren xes |
( 15, 497 ) |
( 5,5 23) |
- | - | - | ( 5,5 23) |
( 21, 020 ) |
| Def ed tax err es |
7,9 92 |
1,2 20 |
- | - | - | 1,2 20 |
9,2 12 |
| Inc fte r ta d b efo mi rity int sts om e a xes an re no ere |
56, 679 |
( 5,0 54) |
3,9 64 |
( 2,7 90) |
( 654 ) |
( 4,5 34) |
52, 145 |
| Min orit inte ts y res |
3 | - | - | - | - | - | 3 |
| Co olid d n inc ttri but abl he sh ho lde of BST ate et e t o t ns om e a are rs |
56, 676 |
( 5,0 54) |
3,9 64 |
( 2,7 90) |
( 654 ) |
( 4,5 34) |
52, 148 |
On 30 June 2011 (Restated), the income statement by geographic segments was as follows:
| Do stic tio me op era ns |
Inte rna |
tio l op tio na era ns |
|||||
|---|---|---|---|---|---|---|---|
| Po l rtu ga |
Ire lan d |
An la go |
Pue Ric rto o |
Oth er |
Tot al |
Co olid ate d ns To tal |
|
| Inte t an d s imil ar i res nco me |
866 ,18 1 |
234 | - | 197 | - | 431 | 866 ,61 2 |
| Inte t an d s imil har res ar c ges |
( 570 ,33 2) |
( 1,9 62) |
- | ( 1,6 97) |
- | ( 3,6 59) |
( 573 ,99 1) |
| Fin ial in anc ma rg |
295 ,84 9 |
( 1,7 28) |
- | ( 1,5 00) |
- | ( 3,2 28) |
292 ,62 1 |
| Inco fro ity ins tru nts me m e qu me |
1,2 39 |
- | - | - | - | - | 1,2 39 |
| fro Inco ice nd mis sio me m s erv s a com n |
210 ,27 4 |
- | - | - | - | - | 210 ,27 4 |
| Cha ith vic and iss ion rge s w ser es co mm |
( 25, 401 ) |
- | - | - | ( 121 ) |
( 121 ) |
( 25, 522 ) |
| Res ult of nd liab ilitie s d esi ted fair lue thro h p rof it o r lo set at as s a gna va ug ss |
42 5,5 |
- | - | ( 13) |
- | ( 13) |
29 5,5 |
| Res ult of aila ble -fo ale fin ial a ts av r-s anc sse |
( 77, 011 ) |
- | - | - | - | - | ( 77, 011 ) |
| Res ult of fo reig xch val ion uat n e ang e re |
1,7 98 |
- | - | ( 4) |
- | ( 4) |
1,7 94 |
| Res ult f le o ot f her set rom sa as s |
( 364 ) |
- | - | - | 6 | 6 | ( 358 ) |
| Oth atin sul ts er o per g re |
( 5,3 88) |
- | - | ( 2) |
( 47) |
( 49) |
( 5,4 37) |
| Net in e f ba nk ing tiv itie com rom ac s |
406 ,53 8 |
( 28) 1,7 |
- | ( 19) 1,5 |
( ) 162 |
( 09) 3,4 |
403 ,12 9 |
| Sta ff c ost s |
( 147 ,89 7) |
( 80) |
- | ( 98) |
( 344 ) |
( 522 ) |
( 148 ,41 9) |
| Ge al a dm inis ive trat ts ner cos |
( 71, 490 ) |
( 201 ) |
- | ( 56) |
( 163 ) |
( 420 ) |
( 71, 910 ) |
| Dep iatio nd orti zat ion rec n a am |
( 30, 616 ) |
- | - | - | ( 15) |
( 15) |
( 30, 631 ) |
| Pro vis ion et o f ca llati s n nce ons |
243 | - | - | - | - | - | 243 |
| Loa n im irm ent t of als d re erie pa ne rev ers an cov s |
( 73, 249 ) |
- | - | - | - | - | ( 73, 249 ) |
| Imp airm ent of oth er f ina nci al a ts n et o f re sal nd ries sse ver s a rec ove |
( 3,3 05) |
- | - | - | - | - | ( 3,3 05) |
| Imp airm of oth f re sal nd ries ent ts n et o er a sse ver s a rec ove |
( 18, 863 ) |
- | - | - | - | - | ( 18, 863 ) |
| Res ult f iate rom as soc s |
2,7 29 |
- | 3,7 30 |
- | - | 3,7 30 |
6,4 59 |
| Inc b efo tax d m ino rity int sts om e re es an ere |
64, 090 |
( 2,0 09) |
3,7 30 |
( 1,6 73) |
( 684 ) |
( 636 ) |
63, 454 |
| Cur t ta ren xes |
( 7,4 29) |
( 7,2 31) |
- | ( 427 ) |
( 16) |
( 7,6 74) |
( 15, 103 ) |
| Def ed tax err es |
14, 488 |
( 1,0 87) |
- | ( 1) |
( 7) |
( 1,0 95) |
13, 393 |
| Inc fte ta d b efo ino rity int sts om e a r xes an re m ere |
71, 149 |
( ) 10, 327 |
3,7 30 |
( 01) 2,1 |
( ) 707 |
( 05) 9,4 |
61, 744 |
| Min orit inte ts y res |
( 6) |
- | - | - | - | - | ( 6) |
| Co olid ate d et inc ttr ibu tab le t o t he sh ho lde of BST ns n om e a are rs |
71, 155 |
( 10, 327 ) |
3,7 30 |
( 2,1 01) |
( 707 ) |
( 9,4 05) |
61, 750 |
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
As at 30 June 2012 and 31 December 2011, the subsidiaries and associated companies and their more significant financial data, taken from their respective individual financial statements, excluding of conversion adjustments to the IAS/IFRS, may be summarised as follows:
| Direct participation (%) |
Effective participation (%) |
Total assets (net) |
Shareholders' equity |
Net income of the period |
||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Company | 30-06-2012 31-12-2011 30-06-2012 31-12-2011 30-06-2012 | 31-12-2011 30-06-2012 31-12-2011 | 30-06-2012 | 30-06-2011 | ||||||
| BANCO SANTANDER TOTTA, S.A. | - | - | 100.00 | 100.00 41,350,511 | 45,639,291 | 1,186,688 | 746,961 | 2,791 | 15,473 | |
| BANCO CAIXA GERAL TOTTA DE ANGOLA (3) | - | - | 24.99 | 24.99 | 1,129,298 | 1,507,229 | 199,565 | 159,186 | 19,261 | 14,121 |
| TOTTA & AÇORES FINANCING (1) (5) | 100.00 | 100.00 | 100.00 | 100.00 | 305,611 | 311,790 | 305,611 | 299,430 | 6,180 | 6,180 |
| SERFIN INTERNATIONAL BANK & TRUST | - | - | 100.00 | 100.00 | 35,142 | 33,994 | 35,126 | 33,973 | 212 | 80 |
| TOTTA & AÇORES, INC. - NEWARK | 100.00 | 100.00 | 100.00 | 100.00 | 1,321 | 1,344 | 1,120 | 1,121 | (31) | 56 |
| TOTTA IRELAND, PLC (4) | 100.00 | 100.00 | 100.00 | 100.00 | 879,723 | 625,866 | 426,929 | 463,700 | 43,137 | 55,255 |
| SANTOTTA-INTERNACIONAL, SGPS | 100.00 | 100.00 | 100.00 | 100.00 | 103,806 | 102,948 | 75,932 | 75,827 | 104 | (53) |
| TOTTA URBE - Emp.Admin. e Construções, S.A. (2) | 100.00 | 100.00 | 100.00 | 100.00 | 124,449 | 121,003 | 119,794 | 117,281 | 862 | 1,043 |
| BENIM, S.A. (3) | - | - | 25.81 | 25.81 | - | n.d. | - | n.d. | - | n.d. |
| SANTANDER - GESTÃO DEACTIVOS,SGPS, S.A. | 100.00 | 100.00 | 100.00 | 100.00 | 51,532 | 50,308 | 42,049 | 49,732 | 1,771 | 14,522 |
| BST INTERNATIONAL BANK, INC. - PORTO RICO (1) (6) | 100.00 | 100.00 | 100.00 | 100.00 | 484,612 | 440,831 | 298,617 | 300,596 | 8,206 | 8,145 |
| SANTANDER, ASSET MANAGEMENT, SGFIM, SA | - | - | 100.00 | 100.00 | 25,635 | 25,258 | 22,889 | 22,294 | 625 | 1,506 |
| TAXAGEST, SGPS, S.A. | 99.00 | 99.00 | 99.00 | 99.00 | 59,940 | 55,004 | 54,934 | 55,000 | (66) | (625) |
| PARTANG, SGPS (3) | 0.49 | 0.49 | 49.00 | 49.00 | 135,467 | 113,535 | 134,948 | 112,384 | 9,936 | 2 |
| SANTANDER PENSÕES | - | - | 100.00 | 100.00 | 4,547 | 4,064 | 3,269 | 3,862 | 430 | 625 |
| UNICRE- INSTITUIÇÃO FINANCEIRA DE CRÉDITO, S.A. (3) | 21.50 | 21.50 | 21.50 | 21.50 | 292,809 | 307,856 | 73,400 | 73,375 | 3,549 | 4,945 |
| HIPOTOTTA no. 1 PLC | - | - | - | - | 226,870 | 238,832 | (3,218) | (2,923) | (1,856) | (1,573) |
| HIPOTOTTA no. 4 PLC | - | - | - | - | 1,258,319 | 1,299,458 | (21,723) | (17,616) | (9,956) | (4,869) |
| HIPOTOTTA no. 5 PLC | - | - | - | - | 1,046,024 | 1,076,745 | (12,504) | (8,857) | (5,370) | (4,515) |
| HIPOTOTTA no. 7 Ltd | - | - | - | - | 1,284,695 | 1,319,559 | (18,748) | (12,110) | (6,693) | (3,674) |
| HIPOTOTTA no. 8 Ltd (7) | - | - | - | - | - | - | - | - | - | (1,430) |
| LEASETOTTA no. 1 Ltd | - | - | - | - | 673,776 | 917,043 | (9,601) | (6,050) | (1,751) | (2,648) |
| HIPOTOTTA no. 1 FTC | - | - | - | - | 215,093 | 228,332 | 213,319 | 226,181 | (1,939) | (1,861) |
| HIPOTOTTA no. 4 FTC | - | - | - | - | 1,222,840 | 1,276,937 | 1,217,433 | 1,263,330 | (10,782) | (6,635) |
| HIPOTOTTA no. 5 FTC | - | - | - | - | 1,031,462 | 1,068,126 | 1,026,121 | 1,059,767 | (6,524) | (3,689) |
| HIPOTOTTA no. 7 FTC | - | - | - | - | 1,255,045 | 1,303,213 | 1,251,799 | 1,291,479 | (8,417) | (4,865) |
| HIPOTOTTA no. 8 FTC (7) | - | - | - | - | - | - | - | - | - | (2,397) |
| LEASETOTTA no. 1 FTC | - | - | - | - | 583,276 | 724,957 | 596,455 | 709,099 | - | - |
| TAGUS - Soc. Titularização de Créditos, S.A. (HIPOTOTTA no. 11) (7) | - | - | - | - | - | 1,881,452 | - | 100,452 | - | - |
| TAGUS - Soc. Titularização de Créditos, S.A. (HIPOTOTTA no. 12) (7) | - | - | - | - | 921 | 1,253,838 | 55,314 | 75,254 | - | - |
| TAGUS - Soc. Titularização de Créditos, S.A. (BST SME no. 1) (7) | - | - | - | - | - | 2,028,717 | - | 98,179 | - | - |
| TAGUS - Soc. Titularização de Créditos, S.A. (TOTTA CONSUMER no | - | - | - | - | 169,603 | 962,218 | 71,155 | 111,278 | - | - |
| Consolidation | |||
|---|---|---|---|
| Company | Business | Head office | method |
| BANCO SANTANDER TOTTA, S.A. | Banking | Portugal | Parent company |
| BANCO CAIXA GERAL TOTTA DE ANGOLA (3) | Banking | Angola | Excluded from consolidation |
| TOTTA & AÇORES FINANCING (1) (5) | Banking | Cayman Islands | Full |
| SERFIN INTERNATIONAL BANK & TRUST | Banking | Cayman Islands | Full |
| TOTTA & AÇORES, INC. - NEWARK | Obtaining funds | USA | Full |
| TOTTA IRELAND, PLC | Investment management | Ireland | Full |
| SANTOTTA-INTERNACIONAL, SGPS | Holding company | Madeira | Full |
| TOTTA URBE - Emp.Admin. e Construções, S.A. (2) | Real estate management | Portugal | Full |
| BENIM, S.A. (3) | Real estate | Portugal | Excluded from consolidation |
| SANTANDER - GESTÃO DEACTIVOS,SGPS, S.A. | Holding company | Portugal | Full |
| BST INTERNATIONAL BANK, INC. - PORTO RICO (1) (6) | Banking | Puerto Rico | Full |
| SANTANDER, ASSET MANAGEMENT, SGFIM, SA | Fund management | Portugal | Full |
| TAXAGEST, SGPS, S.A. | Holding company | Portugal | Full |
| SANTANDER PENSÕES - SOCIEDADE GESTORES DE FUNDOS DE PENSÕES, S.A. | Pension fund management | Portugal | Full |
| PARTANG, SGPS (3) | Holding company | Portugal | Excluded from consolidation |
| UNICRE - INSTITUIÇÃO FINANCEIRA DE CRÉDITO, S.A. (3) | Credit Card Management | Portugal | Excluded from consolidation |
| HIPOTOTTA no. 1 PLC | Investment management | Ireland | Full |
| HIPOTOTTA no. 4 PLC | Investment management | Ireland | Full |
| HIPOTOTTA no. 5 PLC | Investment management | Ireland | Full |
| HIPOTOTTA no. 7 Ltd | Investment management | Ireland | Full |
| HIPOTOTTA no. 8 Ltd (7) | Investment management | Ireland | Full |
| HIPOTOTTA no. 1 FTC | Securitized loans fund | Portugal | Full |
| HIPOTOTTA no. 4 FTC | Securitized loans fund | Portugal | Full |
| HIPOTOTTA no. 5 FTC | Securitized loans fund | Portugal | Full |
| HIPOTOTTA no. 7 FTC | Securitized loans fund | Portugal | Full |
| HIPOTOTTA no. 8 FTC (7) | Securitized loans fund | Portugal | Full |
| LEASETOTTA no. 1 FTC | Securitized loans fund | Portugal | Full |
| TAGUS - Soc. Titularização de Créditos, S.A. (HIPOTOTTA no. 11) (7) | Securitized loans company | Portugal | Full |
| TAGUS - Soc. Titularização de Créditos, S.A. (HIPOTOTTA no. 12) (7) | Securitized loans company | Portugal | Full |
| TAGUS - Soc. Titularização de Créditos, S.A. (BST SME no. 1) (7) | Securitized loans company | Portugal | Full |
| TAGUS - Soc. Titularização de Créditos, S.A. (TOTTA CONSUMER no. 1) | Securitized loans company | Portugal | Full |
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
In compliance with IAS 27 and SIC 12, the Group's consolidated financial statements include special purpose entities (SPE) created for securitization operations, given that the Bank retains most of the risks and benefits of their activity. This situation results from the fact that its portfolio includes bonds issued with a higher degree of subordination (Note 44). These entities are referred to above as Leasetotta Ltd, Hipototta FTC, (securitised loans funds) and Hipototta PLC or Ltd (entities which acquired the participating units issued by the securitised loan funds). Regarding Hipototta 11 and 12, BST SME No. 1 and Totta Consumer No. 1, the Group includes in its consolidated accounts the corresponding portion of the financial statements of Tagus - Sociedade de Titularização de Créditos, S.A., since for the same reason it also holds most of the risks and benefits associated to this securitization operation.
Under the agreement signed between the BST and CGD on July 5, 2010, the CGD used its purchase option of 1% of the share capital of Partang, which owns 51% of the share capital of BCGTA. Following this operation, the BST Group now holds 49% of the share capital of Partang, having lost joint control over the BCGTA. In accordance with IAS 27, the Bank valued the shareholding at fair value on the date that joint control was lost, having recorded a gain in its consolidated accounts of tEuros 54,045 (Notes 26, 36 and 37). Following this operation, the participation was recognised by the equity method.
This caption is made up as follows:
| ====== | ====== | |
|---|---|---|
| 279,429 | 387,837 | |
| European Central Bank | 102,887 ----------- |
201,130 ------------ |
| Demand deposits in Central Banks: | ||
| Cash | 176,542 | 186,707 |
| 30-06-2012 | 31-12-2011 |
In accordance with European Central Bank Regulation 2,818/98, dated December 1, as from January 1, 1999 credit institutions established in Member States shall maintain minimum cash reserves at the participating National Central Banks. The basis for determining the amount of the reserves is all deposits at central banks and financial and monetary entities outside the Euro Zone and all deposits of clients repayable in less than two years time, to which 2% is applied and tEuros 100 is deducted from the amount calculated. The minimum cash reserve requirements earn interest at the average of the rates for the principal refinancing operations of the European Central Bank System.
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
This caption is made up as follows:
| Net balance of the fair value of derivative financial instruments | ( 24,813 ) ====== |
45,453 ====== |
|
|---|---|---|---|
| Financial liabilities held for trading Derivatives Derivative with negative fair value |
(1,855,892 ) ------------- |
(1,663,299 ) ------------- |
|
| 2,058,272 ------------- |
1,995,784 ------------- |
||
| ------------- | ------------- | ||
| Derivative with positive fair value | 1,831,079 | 1,708,752 | |
| Financial assets held for trading Securities Participating units Derivatives |
227,193 | 287,032 | |
| 30-06-2012 | 31-12-2011 | ||
| This caption is made up as follows: | |||
| 7. | FINANCIAL ASSETS / LIABILITIES HELD FOR TRADING | ||
| 183,844 ====== |
356,962 ====== |
||
| Balances due from foreign banks Demand deposits Cheques for collection |
117,134 1,801 ----------- |
273,985 1,853 ----------- |
|
| Balances due from domestic banks Demand deposits Cheques for collection Interest receivable |
429 64,480 - |
332 80,789 3 |
|
| 30-06-2012 | 31-12-2011 |
As at 30 June 2012 and 31 December 2011, the caption "Participating units" refers essentially to security and real estate investment funds managed by Santander Group entities.
| ====== | ====== | |
|---|---|---|
| 227,193 | 287,032 | |
| ---------- | ------------ | |
| Real estate investment funds | - | 65,973 |
| Special investment funds | 25 | 23 |
| Securities investment funds | 227,168 | 221,036 |
| 30-06-2012 | 31-12-2011 |
On 31 December 2011, the caption "Real estate investment funds" refers to the market value of the participating units held in the real estate investment funds "Novimovest" and "Lusimovest". During the first semester of 2012, under the provisions of IAS 39, the Bank reclassified these participating units to the caption "Assets available for sale" (Note 9).
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
The caption of derivative financial instruments is made up as follows:
| 30/06/2012 | 31/12/2011 | |||||
|---|---|---|---|---|---|---|
| Assets | Liabilities | Net | Assets | Liabilities | Net | |
| (Note 12) | (Note 12) | |||||
| FRA's | 248 | 19 | 229 | 109 | - | 109 |
| Forwards | 1,224 | 668 | 556 | 544 | 9 | 535 |
| Swaps | ||||||
| Currency swaps | - | 2,040 | (2,040) | 28,998 | - | 28,998 |
| Interest rate swaps | 687,698 | 711,249 | (23,551) | 722,934 | 703,704 | 19,230 |
| Equity swaps | 22,305 | 22,349 | (44) | 1,232 | 3,836 | (2,604) |
| Options | 82,193 | 82,186 | 7 | 80,637 | 80,644 | (7) |
| Caps & Floors | 1,037,411 | 1,037,381 | 30 | 874,298 | 875,106 | (808) |
| 1,831,079 | 1,855,892 | (24,813) | 1,708,752 | 1,663,299 | 45,453 |
On 30 June 2012 and 31 December 2011 the balance of this caption corresponds exclusively to Portuguese Treasury Bonds that fall due in September 2013.
Interest and revaluation results arising out from these financial assets are recorded in the caption "Result of assets and liabilities valued at fair value through profit or loss" (Note 34).
This caption is made up as follows:
| 30-06-2012 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Value | ||||||||
| adjustments | ||||||||
| Acquisition | Interest | resulting from | Fair Value Reserve | Book | ||||
| Cost | receivable hedging operations | Positive | Negative | Total | Impairment | Value | ||
| (Note 22) | ||||||||
| Debt instruments | ||||||||
| Issued by residents | ||||||||
| Treasury Bonds | 3,013,852 | 26,544 | 136,099 | 6,216 | (429,854) | (423,638) | (346) | 2,752,511 |
| Other Portuguese Government entities | 132,004 | 987 | - | - | (13,199) | (13,199) | - | 119,792 |
| Other residents | ||||||||
| Acquired in securitization operations | 131,062 | 129 | - | - | (45,465) | (45,465) | - | 85,726 |
| Unsubordinated debt | 327,332 | 5,759 | - | - | (38,555) | (38,555) | (231) | 294,305 |
| Subordinated debt | 16,795 | 5 | - | - | (12,108) | (12,108) | - | 4,692 |
| Issued by non-residents | ||||||||
| Foreign government entities | 1,629,189 | 22,220 | 130,869 | 384 | (272,325) | (271,941) | - | 1,510,337 |
| Equity instruments | ||||||||
| Issued by residents | ||||||||
| Valued at fair value | 220,128 | - | - | 2,337 | (66) | 2,271 | (54,766) | 167,633 |
| Valued at historical cost | 21,399 | - | - | - | - | - | (5,947) | 15,452 |
| Issued by non-residents | ||||||||
| Valued at fair value | 1,044 | - | - | 338 | - | 338 | - | 1,382 |
| Valued at historical cost | 1,206 | - | - | - | - | - | (745) | 461 |
| 5,494,011 | 55,644 | 266,968 | 9,275 | (811,572) | (802,297) | (62,035) | 4,952,291 |
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
| 31-12-2011 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Value | ||||||||
| adjustments | ||||||||
| Acquisition | Interest | resulting from | Fair Value Reserve | Book | ||||
| Cost | receivable hedging operations | Positive | Negative | Total | Impairment | Value | ||
| (Note 22) | ||||||||
| Debt instruments | ||||||||
| Issued by residents | ||||||||
| Treasury Bonds | 2,131,053 | 25,352 | 110,949 | - | (688,358) | (688,358) | (373) | 1,578,623 |
| Other Portuguese Government entities | 132,004 | 988 | - | - | (9,366) | (9,366) | - | 123,626 |
| Other residents | ||||||||
| Acquired in securitization operations | 134,096 | 197 | - | - | (22,798) | (22,798) | - | 111,495 |
| Unsubordinated debt | 949,321 | 9,650 | - | 1,495 | (62,587) | (61,092) | (231) | 897,648 |
| Subordinated debt | 16,759 | 8 | - | - | (2,108) | (2,108) | - | 14,659 |
| Issued by non-residents | ||||||||
| Foreign government entities | 1,638,666 | 47,306 | 99,192 | 523 | (157,187) | (156,664) | - | 1,628,500 |
| Other non-residents | ||||||||
| Other | 16,500 | 130 | - | 102 | - | 102 | - | 16,732 |
| Equity instruments | ||||||||
| Issued by residents | ||||||||
| Valued at fair value | 108,246 | - | - | - | - | - | (57,373) | 50,873 |
| Valued at historical cost | 21,648 | - | - | - | - | - | (5,947) | 15,701 |
| Issued by non-residents | ||||||||
| Valued at fair value | 1,016 | - | - | 328 | - | 328 | - | 1,344 |
| Valued at historical cost | 1,150 | - | - | - | - | - | (746) | 404 |
| 5,150,459 | 83,631 | 210,141 | 2,448 | (942,404) | (939,956) | (64,670) | 4,439,605 |
As at 30 June 2012 and 31 December 2011, the captions Treasury Bonds and Foreign government entities include capital gains of tEuros 266,968 and tEuros 210,141, respectively, relating to value adjustments resulting from hedging interest rate risk operations. These securities have the following Characteristics: 30/06/2012
| 31/12/2011 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gains | Gains | ||||||||||||
| Acquisition | Interest | in hedging | Fair value | Book | Acquisition | Interest | in hedging | Fair value | Book | ||||
| Description | Cost | receivable | operations | reserve | Impairment | Value | Cost | receivable | operations | reserve | Impairment | Value | |
| Treasury bonds - Portugal | |||||||||||||
| . Maturity in one year | - | - | - | - | - | - | 5,617 | 24 | - | (2) | - | 5,639 | |
| . Maturity betw een one and three years | 824,135 | 21,715 | 32,767 | (100,580) | - | 778,037 | 825,852 | 6,635 | 28,427 | (244,873) | - | 616,041 | |
| . Maturity betw een five and ten years | 790,171 | 4,825 | 103,332 | (329,139) | - | 569,189 | 790,657 | 18,687 | 82,522 | (443,167) | - | 448,699 | |
| Treasury bills - Portugal | 1,399,060 | - | - | 6,044 | - | 1,405,104 | 508,440 | - | - | (316) | - | 508,124 | |
| Other | 486 | 4 | - | 37 | (346) | 181 | 487 | 6 | - | - | (373) | 120 | |
| 3,013,852 | 26,544 | 136,099 | (423,638) | (346) | 2,752,511 | 2,131,053 | 25,352 | 110,949 | (688,358) | (373) | 1,578,623 | ||
| Treasury bonds - Spain | |||||||||||||
| . Maturity in one year | - | - | - | - | - | - | 5,596 | 23 | - | 62 | - | 5,681 | |
| . Maturity betw een one and three years | 621,256 | 10,964 | - | (24,016) | - | 608,204 | - | - | - | - | - | - | |
| . Maturity betw een three and five years | - | - | - | - | - | - | 625,354 | 24,231 | - | (10,774) | - | 63 8,811 |
|
| . Maturity betw een five and ten years | 1,000,000 | 11,169 | 130,869 | (248,309) | - | 893,729 | 1,000,000 | 22,966 | 99,192 | (146,412) | - | 975,746 | |
| Other | 7,933 | 87 | - | 384 | - | 8,404 | 7,716 | 86 | - | 460 | - | 8,262 | |
| 1,629,189 | 22,220 | 130,869 | (271,941) | - | 1,510,337 | 1,638,666 | 47,306 | 99,192 | (156,664) | - | 1,628,500 | ||
| 4,643,041 | 48,764 | 266,968 | (695,579) | (346) | 4,262,848 | 3,769,719 | 72,658 | 210,141 | (845,022) | (373) | 3,207,123 | ||
As at 30 June 2012 and 31 December 2011, the Group held in its portfolio Treasury Bonds of Portugal and Spain in the amount of tEuros tEuros 1,438,878 and tEuros 1,874,532, respectively, used as collateral in financing operations (Notes 19).
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
As at 30 June 2012 and 31 December 2011, the caption Debt instruments – other residents includes, among others, the following securities:
| 30-06-2012 | 31-12-2011 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Acquisition | Interest | Fair value | Book | Acquisition | Interest | Fair value | Book | |||
| Description | Cost | receivable | reserve | Impairment | Value | Cost | receivable | reserve | Impairment | Value |
| Acquired w ithin securitization operations | ||||||||||
| ENERGYON NO.2 CLASS A NOTES MAY | 96,043 | 101 | (38,477) | - | 57,667 | 99,111 | 154 | (22,227) | - | 77,038 |
| TAGUS ROSE-07 1 SEC NOTES DEC/12 | 34,968 | 28 | (6,968) | - | 28,028 | 34,936 | 42 | (571) | - | 34,407 |
| Other | 51 | - | (20) | - | 31 | 49 | 1 | - | - | 50 |
| 131,062 | 129 | (45,465) | - | 85,726 | 134,096 | 197 | (22,798) | - | 111,495 | |
| Unsubordinated debt | ||||||||||
| PARPUBLICA 3.5 07-2013 | 139,908 | 4,806 | (7,491) | - | 137,223 | 139,863 | 2,370 | (37,663) | - | 104,570 |
| SONAE DISTRIBUICAO SET 2007/2015 | 70,000 | 387 | (12,113) | - | 58,274 | 70,000 | 501 | (10,701) | - | 59,800 |
| IBERWIND II P- CONSULTORIA SENIOR A | 33,091 | 43 | (4,943) | - | 28,191 | 33,967 | 59 | 170 | - | 34,196 |
| OBRIGAÇÕES ZON MULTIMÉDIA 2010/2 | 24,300 | 53 | (1,281) | - | 23,072 | 24,300 | 63 | (1,195) | - | 23,168 |
| MODELO CONTINENTE - 2005/2012 | 15,830 | 150 | (51) | - | 15,929 | - | - | - | - | - |
| AUTO SUECO 2009/2014 | 15,000 | 3 | (1,494) | - | 13,509 | 15,000 | 5 | (1,552) | - | 13,453 |
| EDIA 2010/2030 | 19,250 | 299 | (11,035) | - | 8,514 | 19,250 | 336 | (8,627) | - | 10,959 |
| BANCO ESPIRITO SANTO 3.75% 01/12 | - | - | - | - | - | 77,171 | 2,750 | (480) | - | 79,441 |
| BANCO INTL DO FUNCHAL SA 3.25 | - | - | - | - | - | 59,994 | 1,268 | (1,713) | - | 59,549 |
| BANCO COMERC PORTUGUES 3.625% 01 | - | - | - | - | - | 23,605 | 813 | (142) | - | 24,276 |
| Commercial Paper | - | - | - | - | - | 475,962 | 1,459 | 769 | - | 478,190 |
| Other | 9,953 | 18 | (147) | (231) | 9,593 | 10,209 | 26 | 42 | (231) | 10,046 |
| 327,332 | 5,759 | (38,555) | (231) | 294,305 | 949,321 | 9,650 | (61,092) | (231) | 897,648 | |
| Subordinated debt | ||||||||||
| TOTTA SEGUROS - OBRIG. SUB. 2002 | 14,000 | 2 | (9,780) | - | 4,222 | 14,000 | 2 | (784) | - | 13,218 |
| BPSM/97-TOP'S-OB.PERP.SUB.-1./2. | 2,795 | 3 | (2,328) | - | 470 | 2,759 | 6 | (1,324) | - | 1,441 |
| 16,795 | 5 | (12,108) | - | 4,692 | 16,759 | 8 | (2,108) | - | 14,659 |
The operations of commercial paper held on 31 December 2011 fell due in the first semester of 2012. The issues subscribed in 2012 were recorded under the caption of "Loans and advances to customers".
With reference to 30 June 2012 and 31 December 2011, the caption of Financial assets available for sale – equity instruments includes the following securities:
| 30/06/2012 | 31/12/2011 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Acquisition | Fair value | Book | Acquisition | Fair value | Book | |||||
| Description | Cost | reserve | Impairment | Value | Cost | reserve | Impairment | Value | ||
| Valued at fair value | ||||||||||
| NOVIMOVEST - F.I. IMOBILIÁRIO | 75,910 | 234 | - | 76,144 | - | - | - | - | ||
| LUSIMOVEST - F.I. IMOBILIÁRIO | 42,269 | 1,436 | - | 43,705 | - | - | - | - | ||
| FUNDO RECUPERAÇÃO FCR | 20,201 | - | - | 20,201 | 18,356 | - | - | 18,356 | ||
| FUNDO SOLUCAO ARRENDAMENTO | 14,000 | - | - | 14,000 | - | - | - | - | ||
| BANCO BPI SA | 24,433 | 599 | (19,376) | 5,656 | 27,782 | - | (22,031) | 5,751 | ||
| GARVAL - SOC.DE GARANTIA MUTUA | 2,416 | - | - | 2,416 | 2,506 | - | - | 2,506 | ||
| F.I.I. FECHADO IMORENDIMENTO II | - | - | - | - | 18,663 | - | - | 18,663 | ||
| Other | 9,893 | 340 | (3,340) | 6,893 | 9,905 | 328 | (3,292) | 6,941 | ||
| Securities w ith 100% impairment losses | 32,050 | - | (32,050) | - | 32,050 | - | (32,050) | - | ||
| 221,172 | 2,609 | (54,766) | 169,015 | 109,262 | 328 | (57,373) | 52,217 | |||
| Valued at historical cost | ||||||||||
| ASCENDI NORTE- AUTO ESTRADAS DO NORTE (Supplementary capital contributions) (ex-AENOR) | 3,749 | - | - | 3,749 | 3,749 | - | - | 3,749 | ||
| SIBS - SOC.INTERBANCÁRIA DE SERVIÇOS SARL | 3,461 | - | - | 3,461 | 3,461 | - | - | 3,461 | ||
| ASCENDI NORTE- AUTO ESTRADAS DO NORTE (ex-AENOR) | 3,749 | - | (404) | 3,345 | 3,749 | - | (404) | 3,345 | ||
| NORGARANTE - SOC. GARANTIA MUTUA S.A. | 851 | - | (5) | 846 | 1,012 | - | (5) | 1,007 | ||
| Other | 5,768 | - | (1,256) | 4,512 | 5,800 | - | (1,257) | 4,543 | ||
| Securities w ith 100% impairment losses | 5,027 | - | (5,027) | - | 5,027 | - | (5,027) | - | ||
| 22,605 | - | (6,692) | 15,913 | 22,798 | - | (6,693) | 16,105 |
During the semester ended on 30 June 2012 the Bank subscribed 2,800,000 participating units in the "Solução Arrendamento" closed-end real estate fund for housing rental worth tEuros 14,000. The share capital was paid up in cash for the amount of tEuros 13,861 and the remainder was covered by buildings.
During the semesters ended on 30 June 2012 and 2011 the Bank sold 1,441,158 shares and 2,360,640 shares of the Bank BPI for the amounts of tEuros 744 and tEuros 2,870, respectively, having recorded capital gains of tEuros 50 and of tEuros 26, respectively, and use the corresponding recorded impairment (Note 22).
On 17 May 2011 the Group received 1,177,461 shares of the Bank BPI, arising from the capital increase of this Bank by incorporation of reserves.
As at 30 June 2012 and 31 December 2011, BST held 10,515,276 shares and 11,956,434 shares of the Bank BPI, S.A. with an acquisition cost of tEuros 24,433 and tEuros 27,782, respectively. As at 30 June 2012 the impairment carried for these securities amounted to tEuros 19,376.
During 2011 and in the first semester of 2012 the Bank responded to the capital calls of the Recovery Fund, FCR, with a total amount of tEuros 8,385. In this regard and up to 30 June 2012, the Bank subscribed 30.000 participating units of this Fund, having paid around 67.3%.
As mentioned in Note 7, during the first semester of 2012 the Bank reclassified the participating units held in the real estate investment funds "Novimovest" and "Lusimovest" from the caption "Financial assets held for trading" to the caption "Available-for-sale financial assets".
The impact of the reclassification of these participating units on results and in the fair value reserve was the following:
| Book value on the date of reclassification | 66,179 |
|---|---|
| Book value on 30 June 2012 | ---------- 67,691 ---------- |
| Fair value of the participating units reclassified as at 30 June 2012 |
67,691 --------- |
| Fair value reserve of the participating units reclassified as at 30 June 2012 |
1,512 ------- |
| Gains/(losses) associated to the variation in fair value of the participating units between the date of reclassification and 30 June 2012 |
1,512 |
| ------- |
In the first semester of 2012, the Bank reclassified to the caption "Non-current assets held for sale" (Note 13) the 2,748,238 participating units for the value of tEuros 18,663 of the closed-end real estate investment fund – Imorendimento II received in 2011, following a settlement agreement of a debt receivable on a loan granted. This Fund is in the process of liquidation.
As at 30 June 2012 and 31 December 2011, the negative fair value reserve resulting from the fair value valuation had the following percentages in relation to cost:
| 30-06-2012 | 31-12-2011 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Acquisition cost |
Interest receivable |
Gains on hedging operations |
Negative reserve |
Book Value | Acquisition cost |
Interest receivable |
Gains on hedging operations |
Negative reserve |
Book Value | |
| Debt Instruments | ||||||||||
| . between 0% and 25% | 3,231,438 | 50,324 | 163,636 | (416,353) | 3,029,045 | 2,940,006 | 54,486 | 99,192 | (214,661) | 2,879,023 |
| . between 25% and 50% | 898,268 | 4,926 | 103,332 | (372,011) | 634,515 | 1,051,519 | 9,603 | 28,427 | (335,379) | 754,170 |
| . over 50% | 36,045 | 304 | - | (23,146) | 13,203 | 675,000 | 17,680 | 82,522 | (392,364) | 382,838 |
| 4,165,751 | 55,554 | 266,968 | (811,510) | 3,676,763 | 4,666,525 | 81,769 | 210,141 | (942,404) | 4,016,031 | |
| Equity Instruments | ||||||||||
| . between 0% and 25% | 26,379 | - | - | (66) | 26,313 | - | - | - | - | - |
| 26,379 | - | - | (66) | 26,313 | - | - | - | - | - | |
| 4,192,130 | 55,554 | 266,968 | (811,576) | 3,703,076 | 4,666,525 | 81,769 | 210,141 | (942,404) | 4,016,031 |
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Loans and advances - Bank of Portugal | 900,000 ---------- |
1,150,000 ------------- |
| Loans and advances to other Portuguese banks | ||
| Loans | 48,360 | 57,428 |
| Purchase operations with resale agreements | 289,375 | 368,711 |
| Deferred income | ( 148 ) | ( 150 ) |
| Interest receivable | 261 | 953 |
| ----------- 337,848 |
----------- 426,942 |
|
| Loans and advances to foreign banks | ----------- | ---------- |
| Very short term loans and advances | 89,334 | 65,215 |
| Deposits | 765,344 | 918,705 |
| Other applications | 354,608 | 102,345 |
| Interest receivable | 15,304 | 29,704 |
| ----------- 1,224,590 |
-------------- 1,115,969 |
|
| ------------- 2,462,438 |
-------------- 2,692,911 |
|
| ======== | ======== |
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Unsecuritised credit | ||
| Domestic loans | ||
| To corporate clients | ||
| Credit on current account | 1,361,840 | 1,334,775 |
| Loans | 4,472,820 | 3,325,033 |
| Finance leasing | 493,761 | 526,117 |
| Discount and credit securities | 147,521 | 184,867 |
| Overdrafts | 365,962 | 438,299 |
| Factoring | 1,138,170 | 1,231,264 |
| Other credits | 36,950 | 39,165 |
| To individuals | ||
| Mortgage loans | 11,893,004 | 9,141,345 |
| Consumer credit and others | 1,326,168 | 1,255,346 |
| Foreign loans | ||
| To corporate clients | ||
| Credit on current account | 12,257 | 12,240 |
| Loans | 115,847 | 82,077 |
| Finance leasing | 3,843 | 4,239 |
| Discount and credit securities | - | 49 |
| Overdrafts | 7,037 | 5,294 |
| Factoring | 34,392 | 91,558 |
| Other credits | 3,202 | 3,432 |
| To individuals | ||
| Mortgage loans | 397,532 | 397,570 |
| Consumer credit and others | 25,655 | 22,035 |
| --------------- 21,835,961 |
--------------- 18,094,805 |
|
| Loans represented by securities | --------------- | -------------- |
| Non-subordinated debt securities | ||
| Commercial paper | 1,481,295 | 40,000 |
| ------------- | --------- | |
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Non-derecognised securitised assets | ||
| Companies | ||
| Finance leasing | ||
| . Leasetotta no. 1 | 550,073 | 652,910 |
| Loans | ||
| . BST SME no. 1 | - | 1,327,390 |
| . Totta Consumer no. 1 | 30,245 | 36,331 |
| Loans represented by securities - Commercial paper | ||
| . BST SME no. 1 | - | 615,200 |
| To individuals | ||
| Mortgage loans | ||
| . Hipototta no. 1 | 213,554 | 225,469 |
| . Hipototta no. 4 | 1,217,172 | 1,255,543 |
| . Hipototta no. 5 | 1,022,097 | 1,049,819 |
| . Hipototta no. 7 | 1,244,106 | 1,275,981 |
| . Hipototta no. 11 | - | 1,736,471 |
| . Hipototta no. 12 | - | 1,216,021 |
| Consumer credit | ||
| . Totta Consumer no. 1 | 601,348 | 747,758 |
| Finance leasing | ||
| . Leasetotta no. 1 | 1,137 | 1,803 |
| ------------- 4,879,732 |
--------------- 10,140,696 |
|
| ------------- | -------------- | |
| Overdue loans and interest | ||
| Up to 90 days | 48,764 | 47,748 |
| More than of 90 days | 745,219 | 539,251 |
| Non-derecognised securitised assets | 90,293 | 94,737 |
| ----------- 884,276 |
----------- 681,736 |
|
| --------------- 29,081,264 |
--------------- 28,957,237 |
|
| --------------- | -------------- | |
| Interest receivable | ||
| Unsecuritised credit | 64,065 | 58,914 |
| Loans represented by securities | 3,564 | 1,541 |
| Non-derecognised securitised assets Deferred expenses: |
11,724 | 31,981 |
| Unsecuritised credit | 94,114 | 99,922 |
| Loans represented by securities | 227 | 305 |
| Fees and commissions relating to amortised cost (net) | ( 104,831 ) | ( 111,287 ) |
| Value adjustment of hedged assets | 5,841 ---------- |
5,327 ---------- |
| 74,704 | 86,703 | |
| --------------- 29,155,968 |
-------------- 29,043,940 |
|
| Impairment on loans and advances to customers (Note 22) | ( 837,951 ) | ( 671,913 ) |
| --------------- 28,318,017 |
-------------- 28,372,027 |
|
| ========= | ========= |
In the first semester of 2012 and 2011 some mortgage loans and company loans portfolios were sold off. As a result of these operations, the Bank has recorded net realised capital gains of tEuros 3,825 tEuros and net losses of tEuros 2,373, respectively (Note 37).
As at 30 June 2012 and 31 December 2011, the caption "Domestic loans – Mortgage loans" includes loans allocated to the autonomous property of the mortgage bonds issued by the Bank totalling tEuros 7,305,448 and tEuros 7,567,003, respectively (Note 21).
The changes in impairment of loans and advances to customers during 2011 and 2010 is presented in Note 22.
As at 30 June 2012 and 31 December 2011, overdue loans and interest are made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Up to three months | 52,549 | 54,267 |
| Between three and six months | 119,656 | 97,880 |
| Between six months and one year | 267,150 | 176,115 |
| Between one year and three years | 340,552 | 258,491 |
| More than three years | 104,369 | 94,983 |
| ----------- | ---------- | |
| 884,276 | 681,736 | |
| ====== | ====== |
The portfolio of loans to customers as at 30 June 2012 and 31 December 2011, broken down by business sector of is as follows:
| 30-06-2012 | ||||
|---|---|---|---|---|
| Performing | Overdue | Total | % | |
| Agriculture and forestry | 235,904 | 8,863 | 244,767 | 0.84% |
| Fishing | 25,243 | 813 | 26,056 | 0.09% |
| Mining | 184,002 | 2,944 | 186,946 | 0.64% |
| Manufacturing: | ||||
| Food, beverage and tobacco | 399,630 | 8,903 | 408,533 | 1.40% |
| Textiles, leather and clothing | 405,532 | 15,914 | 421,446 | 1.45% |
| Wood and cork | 98,089 | 4,426 | 102,515 | 0.35% |
| Paper and publishing | 144,161 | 3,765 | 147,926 | 0.51% |
| Chemical industry | 145,945 | 754 | 146,699 | 0.50% |
| Ceramics, glass and cement | 224,641 | 3,004 | 227,645 | 0.78% |
| Metal-working | 154,082 | 5,429 | 159,511 | 0.55% |
| Machines and vehicles | 228,996 | 9,390 | 238,386 | 0.82% |
| Electricity, water and gas | 274,932 | 3,928 | 278,860 | 0.96% |
| Construction and public works | 1,812,114 | 178,763 | 1,990,877 | 6.85% |
| Commerce and hotels | ||||
| Wholesale trade | 679,907 | 28,612 | 708,519 | 2.44% |
| Retail sale | 749,094 | 34,257 | 783,351 | 2.69% |
| Restaurants and hotels | 438,639 | 13,770 | 452,409 | 1.56% |
| Transport and communications | 630,295 | 10,848 | 641,143 | 2.20% |
| Non-monetary financial institutions | 441,529 | 4,152 | 445,681 | 1.53% |
| Government administration | 916,634 | 7,245 | 923,879 | 3.18% |
| Other service companies | 1,611,849 | 85,099 | 1,696,948 | 5.84% |
| Loans to individuals | 17,154,725 | 416,254 | 17,570,979 | 60.42% |
| Foreign loans | 356,982 | 4,075 | 361,057 | 1.24% |
| Other Loans | 884,063 | 33,068 | 917,131 | 3.16% |
| 28,196,988 | 884,276 | 29,081,264 | 99.99% |
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
| 31/12/2011 | ||||
|---|---|---|---|---|
| Performing | Overdue | Total | % | |
| Agriculture and forestry | 246,502 | 6,808 | 253,310 | 0.87% |
| Fishing | 29,425 | 425 | 29,850 | 0.10% |
| Mining | 94,724 | 1,842 | 96,566 | 0.33% |
| Manufacturing: | ||||
| Food, beverage and tobacco | 378,800 | 5,074 | 383,874 | 1.33% |
| Textiles, leather and clothing | 442,721 | 8,796 | 451,517 | 1.56% |
| Wood and cork | 109,911 | 3,446 | 113,357 | 0.39% |
| Paper and publishing | 157,400 | 2,890 | 160,290 | 0.55% |
| Chemical industry | 107,122 | 582 | 107,704 | 0.37% |
| Ceramics, glass and cement | 185,302 | 2,174 | 187,476 | 0.65% |
| Metal-working | 150,166 | 4,006 | 154,172 | 0.53% |
| Machines and vehicles | 221,242 | 6,774 | 228,016 | 0.79% |
| Electricity, water and gas | 289,613 | 1,665 | 291,278 | 1.01% |
| Construction and public works | 2,000,621 | 119,107 | 2,119,728 | 7.32% |
| Commerce and hotels | ||||
| Wholesale trade | 720,013 | 23,497 | 743,510 | 2.57% |
| Retail sale | 780,496 | 27,081 | 807,577 | 2.79% |
| Restaurants and hotels | 435,822 | 11,809 | 447,631 | 1.55% |
| Transport and communications | 575,057 | 7,031 | 582,088 | 2.01% |
| Non-monetary financial institutions | 265,207 | 12 | 265,219 | 0.92% |
| Government administration | 858,269 | 3,977 | 862,246 | 2.98% |
| Other service companies | 1,631,742 | 71,580 | 1,703,322 | 5.88% |
| Loans to individuals | 17,648,536 | 363,747 | 18,012,283 | 62.20% |
| Foreign loans | 378,485 | 2,592 | 381,077 | 1.32% |
| Other Loans | 568,325 | 6,821 | 575,146 | 1.98% |
| 28,275,501 | 681,736 | 28,957,237 | 100.00% |
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
As at 30 June 2012, the overdue and performing loans, with and without evidence of impairment, considering the segmentation for the purpose of calculating impairment losses, are made up as follows:
| Overdue loans |
Performing loans |
Total loans |
|
|---|---|---|---|
| Loans to companies Without evidence of impairment With evidence of impairment |
- 449,193 ----------- |
10,010,026 405,593 --------------- |
10,010,026 854,786 --------------- |
| 449,193 | 10,415,619 | 10,864,812 | |
| Mortgage loans Without evidence of impairment With evidence of impairment |
----------- - 289,952 |
--------------- 15,106,173 750,306 |
--------------- 15,106,173 1,040,258 |
| ----------- 289,952 |
--------------- 15,856,479 |
--------------- 16,146,431 |
|
| Consumer credit Without evidence of impairment With evidence of impairment |
----------- - 27,657 --------- |
--------------- 1,054,046 73,557 -------------- |
--------------- 1,054,046 101,214 -------------- |
| 27,657 --------- |
1,127,603 -------------- |
1,155,260 -------------- |
|
| Loans granted through credit cards Without evidence of impairment With evidence of impairment |
- 28,734 --------- |
254,020 12,332 ----------- |
254,020 41,066 ----------- |
| 28,734 --------- |
266,352 ----------- |
295,086 ----------- |
|
| Other loans to individuals Without evidence of impairment With evidence of impairment |
- 88,740 --------- |
444,861 86,074 ----------- |
444,861 174,814 ----------- |
| 88,740 | 530,935 | 619,675 | |
| ----------- 884,276 ====== |
--------------- 28,196,988 ========= |
---------------- 29,081,264 ========= |
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
On 31 December 2011, the overdue and performing loans, with and without evidence of impairment, considering the segmentation for the purpose of calculating impairment losses, are made up as follows:
| Overdue loans |
Performing loans |
Total loans |
|
|---|---|---|---|
| Loans granted to companies Without evidence of impairment With evidence of impairment |
- 302,396 |
9,670,386 409,940 |
9,670,386 712,336 |
| ----------- 302,396 ----------- |
--------------- 10,080,326 --------------- |
--------------- 10,382,722 --------------- |
|
| Mortgage loans | |||
| Without evidence of impairment With evidence of impairment |
- 249,306 |
15,384,875 779,278 |
15,384,875 1,028,584 |
| ----------- 249,306 |
--------------- 16,164,153 |
--------------- 16,413,459 |
|
| Consumer credit | ----------- | --------------- | --------------- |
| Without evidence of impairment With evidence of impairment |
- 31,771 |
1,111,840 88,956 |
1,111,840 120,727 |
| --------- 31,771 --------- |
-------------- 1,200,796 -------------- |
-------------- 1,232,567 -------------- |
|
| Loans granted through credit cards | |||
| Without evidence of impairment With evidence of impairment |
- 25,535 |
262,819 11,696 |
262,819 37,231 |
| --------- 25,535 |
----------- 274,515 |
----------- 300,050 |
|
| Other loans to individuals | --------- | ----------- | ----------- |
| Without evidence of impairment | - | 435,914 | 435,914 |
| With evidence of impairment | 72,728 --------- |
119,797 ----------- |
192,525 ----------- |
| 72,728 ----------- |
555,711 --------------- |
628,439 ---------------- |
|
| 681,736 ====== |
28,275,501 ========= |
28,957,237 ========= |
This caption is made up as follows:
| 30/06/2012 | 31/12/2011 | |||||||
|---|---|---|---|---|---|---|---|---|
| Assets | Liabilities | Net | Assets Liabilities |
Net | ||||
| Fair value hedges | ||||||||
| Interest rate swaps | 69,482 | 284,075 | (214,593) | 63,427 | 253,052 | (189,625) | ||
| Equity swaps | 27,539 | 21,667 | 5,872 | 13,286 | 21,039 | (7,753) | ||
| AutoCallable options | 4,411 | 8,285 | (3,874) | 3,897 | 8,798 | (4,901) | ||
| Cash flow hedges | ||||||||
| Interest rate swaps | 95,201 | - | 95,201 | 86,692 | - | 86,692 | ||
| 196,633 | 314,027 | (117,394) | 167,302 | 282,889 | (115,587) |
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
As at 30 June 2012 and in 31 December 2011, derivative financial instruments were broken down as follows:
| 30-06-2012 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Book | Up to 3 Between 3 anBdetween 6 and Between 1 | Notional amounts | Over | Notional amounts | |||||
| Type of financial Instruments | Value | months | 6 months | 12 months and 3 years | 3 years | Total | EUR | Other | |
| 1. Derivatives held for trading (Note 7) | |||||||||
| Forwards | |||||||||
| . Purchased | 24,961 | 9,818 | 2,380 | 666 | - | 37,825 | 10,349 | 27,476 | |
| . Sold | 556 | 24,395 | 9,769 | 2,372 | 664 | - | 37,200 | 25,623 | 11,577 |
| Currency swaps | |||||||||
| . Purchased | 1,258,213 | - | - | - | - | 1,258,213 | - | 1,258 ,213 |
|
| . Sold | (2,040) | 1,259,714 | - | - | - | - | 1,259,714 | 1,259,714 | - |
| Interest rate swaps | |||||||||
| Other | (23,551) | 575,624 | 834,879 | 958,232 | 3,894,075 | 4,085,648 | 10,348,458 10,288,811 | 59,647 | |
| Equity swaps | (44) | 116,047 | 93,045 | 897,986 | 1,296,182 | 1,196,420 | 3,599,680 | 3,576,728 | 22,952 |
| FRA's | 229 | 275,000 | 360,000 | 139,800 | 20,000 | - | 794,800 | 794,800 | - |
| Currency options | |||||||||
| . Purchased | 52,390 | 18,752 | 12,287 | - | - | 83,429 | 155 | 83,274 | |
| . Sold | 1 | 52,390 | 18,752 | 12,287 | - | - | 83,429 | 155 | 83,274 |
| Equity options | |||||||||
| . Purchased | - | - | 8,667 | - | - | 8,667 | 8,667 | - | |
| . Sold | 11 | - | - | 8,667 | - | - | 8,667 | 8,667 | - |
| Interest rate options | |||||||||
| . Purchased | 1,396 | 948 | 1,497 | 1,232 | 845,442 | 850,515 | 845,973 | 4,542 | |
| . Sold | (5) | 1,098 | 948 | 1,447 | 1,048 | - | 4,541 | - | 4,541 |
| Caps | 162 | 15,566 | 5,555 | 15,969 | 257,952 | 1,474,830 | 1,769,872 | 1,769,872 | - |
| Floors | (132) | - | 2,500 | - | 90,133 | 545,361 | 637,994 | 602,861 | 35,133 |
| (24,813) | 3,656,794 | 1,354,966 | 2,061,591 | 5,561,952 | 8,147,701 | 20,783,004 19,192,375 | 1,590,629 | ||
| 2. Hedging derivatives | |||||||||
| Fair value hedges | |||||||||
| Interest rate swaps | |||||||||
| . Liabilities and loans | 62,400 | 196,350 | 92,830 | 1,042,658 | 1,232,922 | 375,993 | 2,938,777 | 2,905,073 | 33,704 |
| . Financial assets available for sale | (276,993) | - | - | - | 400,000 | 1,675,000 | 2,075,000 | 2,075,000 | |
| AutoCallable options | (3,861) | 117,177 | 112,385 | 85,483 | 160,533 | - | 475,577 | 475,577 | - |
| Equity swaps | 5,859 | 79,116 | 34,043 | 423,577 | 2,049,122 | 239,277 | 2,825,136 | 2,668,105 | 157,031 |
| Cash flow hedges | |||||||||
| Interest rate swaps | |||||||||
| . Cash flow | 95,201 | - | - | 550,000 | 1,200,000 | 1,200,000 | 2,950,000 | 2,950,000 | - |
| (117,394) | 392,643 | 239,258 | 2,101,718 | 5,042,577 | 3,490,270 | 11,264,490 11,073,755 | 190,735 | ||
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts expressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
| 31-12-2011 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Notional amounts | |||||||||
| Book | Up to 3 Between 3 anBdetween 6 and Between 1 | Over | Notional amounts | ||||||
| Type of financial Instruments | Value | months | 6 months | 12 months and 3 years | 3 years | Total | EUR | Other | |
| 1. Derivatives held for trading (Note 7) | |||||||||
| Forwards | |||||||||
| . Purchased | 24,970 | 13,224 | 65,692 | - | - | 103,886 | 41,739 | 62,147 | |
| . Sold | 535 | 24,771 | 13,095 | 65,429 | - | - | 103,295 | 58,873 | 44,422 |
| Currency swaps | |||||||||
| . Purchased | 1,299,485 | - | - | - | - | 1,299,485 | - | 1,299,485 | |
| . Sold | 28,998 | 1,270,008 | - | - | - | - | 1,270,008 | 1,270,008 | - |
| Interest rate swaps | |||||||||
| Other | 19,230 | 807,700 | 328,943 | 1,588,220 | 4,284,187 | 4,544,329 | 11,553,379 | 11,306,226 | 247,153 |
| Equity swaps | (2,604) | 171,581 | 205,402 | 246,615 | 2,526,267 | 1,782,833 | 4,932,698 | 4,924,443 | 8,255 |
| FRA's | 109 | 130,000 | 120,000 | 60,000 | 25,000 | - | 335,000 | 335,000 | - |
| Currency options | |||||||||
| . Purchased | 26,929 | 46,255 | 60,430 | 10,796 | - | 144,410 | 155 | 144,255 | |
| . Sold | 34 | 26,929 | 46,255 | 60,430 | 10,796 | - | 144,410 | 155 | 144,255 |
| Equity options | |||||||||
| . Purchased | 100 | 9,409 | - | - | - | 9,509 | 9,509 | - | |
| . Sold | (34) | 100 | 9,409 | - | - | - | 9,509 | 9,509 | - |
| Interest rate options | |||||||||
| . Purchased | 1,522 | 1,657 | 2,289 | 2,662 | 885,631 | 893,761 | 887,684 | 6,077 | |
| . Sold | (7) | 1,522 | 1,657 | 1,991 | 2,428 | - | 7,598 | 1,522 | 6,076 |
| Caps | 148 | 155,791 | 241,410 | 180,691 | 410,265 | 1,540,644 | 2,528,801 | 2,528,801 | - |
| Floors | (956) | - | - | 2,500 | 161,878 | 548,237 | 712,615 | 677,373 | 35,242 |
| 45,453 | 3,941,408 | 1,036,716 | 2,334,287 | 7,434,279 | 9,301,674 | 24,048,364 | 22,050,997 | 1,997,367 | |
| 2. Hedging derivatives | |||||||||
| Fair value hedges | |||||||||
| Interest rate swaps | |||||||||
| . Liabilities and loans | 56,347 | 3,200 | 38,550 | 305,230 | 2,218,571 | 435,287 | 3,000,838 | 2,993,032 | 7,806 |
| . Financial assets available for sale | (245,972) | - | - | - | 400,000 | 1,675,000 | 2,075,000 | 2,075,000 | - |
| AutoCallable options | (4,901) | 5,690 | 16,204 | 229,792 | 250,940 | - | 502,626 | 502,626 | - |
| Equity swaps | (7,753) | 50,856 | 45,809 | 120,943 | 1,370,021 | 526,245 | 2,113,874 | 1,969,989 | 143,885 |
| Cash flow hedges | |||||||||
| Interest rate swaps | |||||||||
| . Cash flow | 86,692 | - | - | - | 1,550,000 | 1,050,000 | 2,600,000 | 2,600,000 | - |
| (115,587) | 59,746 | 100,563 | 655,965 | 5,789,532 | 3,686,532 | 10,292,338 | 10,140,647 | 151,691 |
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Property received as settlement of defaulting loans | 207,921 | 177,737 |
| Own property for sale | 31,313 | 26,525 |
| Participating units | 18,663 | - |
| Equipment | 5,157 | 3,982 |
| Other | 100 | 100 |
| ----------- 263,154 ---------- |
----------- 208,344 ---------- |
|
| Accumulated impairment (Note 22) | ( 83,048 ) ---------- |
( 67,181 ) ---------- |
| 180,106 ====== |
141,163 ====== |
In 2011 the Bank acquired 2,748,238 participating units of the closed-end real estate investment fund - Imorendimento II for an amount of tEuros 18,663, following a debt settlement agreement receivable referring to loans granted and this asset was stated in financial assets available for sale. In the first semester of 2012, the Bank reclassified these participating units to this caption as it considers that these are available for immediate sale in their present condition and that the sale is probable within the period of one year (Note 9).
(Translation of notes originally issued in Portuguese – Note 48)
(Amounts e xpressed in thousands of Euros - tEuros, unless otherwise expressly indicated)
Changes in these captions during the periods of six months ended on 30 June 2012 and 2011, may be presented as follows:
| 31 December 2011 | 30 June 2012 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross | Accumulated | Impairment (Note 22) | Gross | Accumulated | Net | ||||||
| amount | impairment | Increases | Sales | Transfers | Increases | Reversals | Utilization | amount | impairment | amount | |
| (Notes 9 and 14) | |||||||||||
| Property received as settlement of defaulting loans | 177,737 | (53,639) | 71,705 | (41,521) | - | (15,715) | 672 | 6,006 | 207,921 | (62,676) | 145,245 |
| Ow n property for sale | 26,625 | (10,757) | 46 | (265) | 5,007 | (4,092) | 90 | 18 | 31,413 | (14,741) | 16,672 |
| Equipment | 3,982 | (2,785) | 1,627 | (452) | - | (990) | 112 | 32 | 5,157 | (3,631) | 1,526 |
| Fund units | - | - | - | - | 18,663 | (2,000) | - | - | 18,663 | (2,000) | 16,663 |
| 208,344 | (67,181) | 73,378 | (42,238) | 23,670 | (22,797) | 874 | 6,056 | 263,154 | (83,048) | 180,106 | |
| 31 December 2010 | Totta IFIC Merger | Transfers | 30 June 2011 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross | Accumulated Gross Accumulated | from tangible | Impairment (Note 22) | Gross Accumulated | Net | ||||||||
| amount | impairment amount impairment Increases | Sales | fixed assets | Increases | Reversals | Utilization | amount | impairment | amount | ||||
| (Note 14) | (Note 22) | (Note 22) | (Note 22) | ||||||||||
| Property received as settlement of defaulting loans | 114,013 | (36,052) 16,866 | (4,424) | 64,318 | (42,599) | - | (13,514) | 169 | 6,420 152,598 | (47,401) 105,197 | |||
| Equipment | - | - | 2,564 | (1,670) | 986 | (353) | - | (521) | 9 | 38 | 3,197 | (2,144) | 1,053 |
| Ow n property for sale | 20,788 | (9,626) | - | - | 22 | (721) | 5,216 | (4,400) | 3,557 | 299 | 25,305 | (10,170) | 15,135 |
| 134,801 | (45,678) 19,430 | (6,094) | 65,326 | (43,673) | 5,216 | (18,435) | 3,735 | 6,757 181,100 | (59,715) 121,385 |
Changes in these captions during the period of six months ended on 30 June 2012 may be presented in the following manner:
| Tran | sfers | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 31/12 /201 1 |
Write | offs | From for s |
/to a sset s he ld ale ( Note 13) |
Betw | een f ixed ts asse |
Fore ign e |
xcha nge d iffere nces |
30/0 6/20 |
12 | ||||||||
| Acc lated umu |
Acc lated umu |
Acc lated umu |
Acc lated umu |
Amo rtizat ion |
Acc lated umu |
Acc lated umu |
||||||||||||
| Gros s |
depr eciat ion a nd |
Gros s |
depr eciat ion a nd |
Gros s |
depr eciat ion a nd |
Gros s |
depr eciat ion a nd |
of th e |
Gros s |
depr eciat ion a nd |
Gros s |
depr eciat ion a nd |
Net | |||||
| unt amo |
rtizat ion I amo |
irme nt mpa |
Acq uisit ions |
unt amo |
rtizat ion amo |
unt amo |
rtizat ion amo |
unt amo |
rtizat ion amo |
year | Impa irme nt |
unt amo |
rtizat ion amo |
unt amo |
rtizat ion amo |
Impa irme nt |
unt amo |
|
| (Not e 22 ) |
(Not e 22 ) |
(Not e 22 ) |
||||||||||||||||
| Tang ible a sset s |
||||||||||||||||||
| Prop erty |
||||||||||||||||||
| . Pro for o perty wn u se |
415,4 72 |
120,7 14 |
2,48 6 |
176 | - | - | (6,52 6) |
(1,56 0) |
(846 ) |
(164) | 4,07 1 |
1,227 | - | - | 408, 276 |
123,0 61 |
3,713 | 281,5 02 |
| . Lea seho ld ex pend iture |
134,2 31 |
105,2 17 |
- | 373 | - | - | - | - | 832 | 163 | 3,38 8 |
- | 5 | 5 | 135,4 41 |
108,7 73 |
- | 26,6 68 |
| . Oth perty er pro |
347 | 1 | 43 | - | - | - | - | - | - | - | 1 | 122 | - | - | 347 | 2 | 165 | 180 |
| Tang ible a s in p sset rogre ss |
||||||||||||||||||
| . Pro perty for o wn u se |
240 | - | - | 208 | - | - | - | - | - | - | - | - | - | - | 448 | - | - | 448 |
| 550,2 90 |
225, 932 |
2,52 9 |
757 | - | - | (6,52 6) |
(1,56 0) |
(14) | (1) | 7,46 0 |
1,349 | 5 | 5 | 544, 512 |
231,8 36 |
3,878 | 308, 798 |
|
| Equi nt pme |
||||||||||||||||||
| . Fur nitur d fixt an e ures |
23,16 0 |
17,68 9 |
- | 120 | - | - | - | - | - | - | 962 | - | 1 | 1 | 23,2 81 |
18,65 2 |
- | 4,62 9 |
| M a chine d too ls ry an |
3,922 | 3,817 | - | 9 | - | - | - | - | - | - | 30 | - | 1 | 1 | 3,932 | 3,84 8 |
- | 84 |
| . Com pute r har dwar e |
124,0 15 |
107,1 15 |
- | 689 | 237 | 130 | - | - | - | - | 3,534 | - | - | - | 124,4 67 |
110,5 19 |
- | 13,94 8 |
| . Inte rior i nsta llatio ns |
91,26 8 |
82,54 5 |
- | 980 | - | - | (57) | (16) | 14 | 1 | 1,386 | - | - | - | 92,2 05 |
83,9 16 |
- | 8,28 9 |
| . Veh icles |
18,48 2 |
11,00 2 |
- | 1,750 | 1,277 | 1,097 | - | - | - | - | 1,851 | - | 4 | 2 | 18,95 9 |
11,75 8 |
- | 7,20 1 |
| . Sec urity equi nt pme |
27,8 05 |
26,7 37 |
- | 23 | - | - | - | - | - | - | 240 | - | - | - | 27,8 28 |
26,9 77 |
- | 851 |
| . Oth ipme nt er equ |
5,663 | 3,35 9 |
- | 76 | - | - | - | - | - | - | 373 | - | - | - | 5,739 | 3,732 | - | 2,00 7 |
| 294, 315 |
252, 264 |
- | 3,64 7 |
1,514 | 1,227 | (57) | (16) | 14 | 1 | 8,37 6 |
- | 6 | 4 | 296,4 11 |
259,4 02 |
- | 37,0 09 |
|
| Othe r tan gible ets ass |
||||||||||||||||||
| . Lea sed uipm ent eq |
281 | 281 | - | - | - | - | - | - | - | - | - | - | - | - | 281 | 281 | - | - |
| . Oth er |
1,535 | - | - | - | - | - | - | - | - | - | - | - | - | - | 1,535 | - | - | 1,535 |
| 1,816 | 281 | - | - | - | - | - | - | - | - | - | - | - | - | 1,816 | 281 | - | 1,535 | |
| 846,4 21 |
478, 477 |
2,52 9 |
4,40 4 |
1,514 | 1,227 | (6,58 3) |
(1,57 6) |
- | - | 15,83 6 |
1,349 | 11 | 9 | 842, 739 |
491,5 19 |
3,878 | 347, 342 |
|
| Intan gible ets ass |
||||||||||||||||||
| Soft hase d ware purc |
317,4 82 |
243, 252 |
- | 12,74 4 |
- | - | - | - | - | - | 16,87 4 |
- | - | - | 330,2 26 |
260, 126 |
- | 70,10 0 |
| Intan gible ets i ass n pro gres s |
- | - | - | 11,57 7 |
- | - | - | - | - | - | - | - | - | - | 11,57 7 |
- | - | 11,57 7 |
| Goo dwill |
3,585 | 3,58 5 |
- | - | - | - | - | - | - | - | - | - | - | - | 3,585 | 3,58 5 |
- | - |
| Othe r |
29 | 29 | - | - | - | - | - | - | - | - | - | - | - | - | 29 | 29 | - | - |
| 321,0 96 |
246, 866 |
- | 24,3 21 |
- | - | - | - | - | - | 16,87 4 |
- | - | - | 345,4 17 |
263, 740 |
- | 81,67 7 |
| Trans fers |
|||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Entry and/ |
it o f entiti or ex es |
From | /to a ssets held |
Betw een |
|||||||||||||||||
| 31-12- 2010 |
in the cons |
olida tion p erime ter |
Write offs |
for s | ale (N ote 13 ) |
fixed ts asse |
Fore ign ex |
chan ge dif feren ces |
30-06 -2011 |
||||||||||||
| Accu mula ted |
Accu mula ted |
Accu mula ted |
Accu mula ted |
Amo rtizat ion |
Reve rsals |
Accu mula ted |
Accu mula ted |
||||||||||||||
| Gros s |
depre ciatio n and |
Gros s |
depre ciatio n and |
Gros s |
depre ciatio d n an |
Gros s |
depre ciatio n and |
Gros s |
of the | of | Gros s |
depre ciatio n and |
Gros s |
depre ciatio n and |
Net | ||||||
| unt amo |
rtizat ion amo |
Impa irmen t |
unt amo |
rtizat ion amo |
Acqu isitio ns |
unt amo |
rtizat ion amo |
Impa irmen |
t a t moun |
rtizat ion amo |
unt amo |
year | Impa irmen |
t I mpai t rmen |
unt amo |
rtizat ion amo |
unt amo |
rtizat ion amo |
Impa irmen |
t a t moun |
|
| (Note 22) |
(Note 22) |
(Note 22) |
(Note 22) |
(Note 22) |
|||||||||||||||||
| Tang ible a ssets |
|||||||||||||||||||||
| Prop erty |
|||||||||||||||||||||
| . Pro perty for o wn us e |
423,2 63 |
115,79 1 |
2,486 | 4,076 | 476 | 615 | - | - | - | (6,77 8) |
(1,677 ) |
382 | 3,873 | - | - | - | - | 421,5 58 |
118,46 3 |
2,486 | 300,6 09 |
| . Leas ehold nditu expe re |
133,3 93 |
99,18 7 |
- | - | - | 846 | - | - | - | (549) | (549) | - | 3,213 | - | - | (13) | (11) | 133,6 77 |
101,84 0 |
- | 31,83 7 |
| . Othe perty pro r |
1,542 | 295 | 697 | - | - | - | 655 | - | 654 | (355) | (255) | (227) | (39) | - | - | - | - | 305 | 1 | 43 | 261 |
| Tang ible a ssets in pr ogres s |
|||||||||||||||||||||
| . Pro perty for o wn us e |
3 | - | - | - | - | 362 | - | - | - | - | - | (155) | - | - | - | - | - | 210 | - | - | 210 |
| . Leas ehold nditu expe re |
1 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 1 | - | - | 1 |
| 558,2 02 |
215,2 73 |
3,183 | 4,076 | 476 | 1,823 | 655 | - | 654 | (7,68 2) |
(2,48 1) |
- | 7,047 | - | - | (13) | (11) | 555,7 51 |
220,3 04 |
2,529 | 332,9 18 |
|
| Equip ment |
|||||||||||||||||||||
| . Furn iture and f ixture s |
22,90 8 |
15,617 | - | 107 | 107 | 197 | 237 | 237 | - | - | - | - | 1,140 | - | - | (3) | (3) | 22,97 2 |
16,62 4 |
- | 6,348 |
| . M hiner y and tool ac s |
4,028 | 3,864 | - | 18 | 18 | 12 | 152 | 152 | - | - | - | - | 49 | - | - | (3) | (3) | 3,903 | 3,776 | - | 127 |
| . Com puter hard ware |
119,88 4 |
99,70 3 |
- | 371 | 350 | 3,141 | 511 | 446 | - | - | - | (40) | 4,035 | - | - | (1) | (1) | 122,8 44 |
103,6 41 |
- | 19,20 3 |
| . Inter ior inst allatio ns |
89,48 2 |
79,61 9 |
- | 115 | 114 | 1,088 | 35 | 35 | - | (176) | (161) | - | 1,510 | - | - | - | - | 90,47 4 |
81,04 7 |
- | 9,427 |
| . Veh icles |
18,38 9 |
10,139 | - | 428 | 334 | 1,660 | 1,956 | 1,904 | - | - | - | - | 1,914 | - | - | (8) | (5) | 18,513 | 10,47 8 |
- | 8,035 |
| . Sec urity e quipm ent |
27,77 7 |
26,34 3 |
- | 2 | 2 | 119 | 4 | 4 | - | - | - | - | 288 | - | - | - | - | 27,89 4 |
26,62 9 |
- | 1,265 |
| . Othe ipme nt equ r |
5,486 | 2,617 | - | - | - | 93 | 2 | 2 | - | - | - | - | 368 | - | - | - | - | 5,577 | 2,983 | - | 2,594 |
| 287,9 54 |
237,9 02 |
- | 1,041 | 925 | 6,310 | 2,897 | 2,780 | - | (176) | (161) | (40) | 9,304 | - | - | (15) | (12) | 292,1 77 |
245,1 78 |
- | 46,99 9 |
|
| Othe r tang ible a ssets |
|||||||||||||||||||||
| . Leas ed eq uipm ent |
281 | 281 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 281 | 281 | - | - |
| . Othe r |
1,564 | 39 | - | 10 | - | - | 38 | 38 | - | - | - | - | - | - | - | - | - | 1,536 | 1 | - | 1,535 |
| 1,845 | 320 | - | 10 | - | - | 38 | 38 | - | - | - | - | - | - | - | - | - | 1,817 | 282 | - | 1,535 | |
| 848,0 01 |
453,4 95 |
3,183 | 5,127 | 1,401 | 8,133 | 3,590 | 2,818 | 654 | (7,85 8) |
(2,64 2) |
(40) | 16,35 1 |
- | - | (28) | (23) | 849,7 45 |
465,7 64 |
2,529 | 381,4 52 |
|
| Intan gible ts asse |
|||||||||||||||||||||
| Softw urcha sed are p |
286,8 49 |
213,9 18 |
- | 2,154 | 1,696 | 13,09 4 |
1,280 | 1,280 | - | - | - | 40 | 14,28 0 |
- | - | - | - | 300,8 57 |
228,6 14 |
- | 72,24 3 |
| Intan gible ts in asse progr ess |
1,444 | - | - | - | - | 1,289 | - | - | - | - | - | - | - | - | - | - | - | 2,733 | - | - | 2,733 |
| Good will |
3,585 | 3,585 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 3,585 | 3,585 | - | - |
| Othe r |
29 | 29 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 29 | 29 | - | - |
| 291,9 07 |
217,5 32 |
- | 2,154 | 1,696 | 14,38 3 |
1,280 | 1,280 | - | - | - | 40 | 14,28 0 |
- | - | - | - | 307,2 04 |
232,2 28 |
- | 74,97 6 |
As at 30 June 2012 and 31 December 2011, software (including intangible assets in progress) net of depreciation included, tEuros 79,928 and tEuros 72,054, respectively, acquired from Santander Tecnologia y Operaciones A.E.I.E., a European Economic Interest Group, belonging to the Santander Group.
As at 30 June 2012 and 31 December 2011, this caption is made up as follows:
| 30 June 2012 Effective (%) participation |
Book value |
31 December 2011 Effective (%) participation value |
Book | |
|---|---|---|---|---|
| Investments in associates | ||||
| Domestic Benim - Sociedade Imobiliária, S.A |
25.81 | 2,202 | 25.81 | 2,326 |
| Partang, SGPS, S.A. Unicre - Instituição Financeira de Crédito, S.A. 21.50 |
49.00 | 113,300 27,761 |
49.00 21.50 |
103,470 27,756 |
| ----------- 143,263 |
---------- 133,552 |
|||
| Impairment of investments in associates (Note 22) | ---------- | ---------- | ||
| Benim – Sociedade Imobiliária, S.A. | ( 500 ) | ( 500 ) | ||
| ---------- 142,763 ====== |
--------- 133,052 ====== |
The participation in Benim – Sociedade Imobiliária, S.A. is held indirectly by the Bank through Totta Urbe – Empresa de Administração e Construções, S.A. (Totta Urbe).
As described in Note 4, Partang, SGPS, S.A. holds 51% of the Bank Caixa Geral Totta of Angola. The Group has a put option to Caixa Geral de Depósitos, S.A. of their participation in Partang exercisable within four years time as from July 2, 2011. In addition, CGD also has a call option over the Group's share in Partang, with a cap of 80% of the share capital and voting rights, exercisable in the first month of the fifth anniversary of the date of the share capital increase of Partang (July 2, 2009).
As at 30 June 2012 and 31 December 2011, these captions were made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Current tax assets: | ||
| . Corporate income tax receivable | 24,918 | 17,613 |
| . Other | 510 | 19 |
| --------- 25,428 |
-------- 17,632 |
|
| ===== | ===== | |
| Current tax liabilities: | ||
| . Corporate income tax payable | 848 | 1,501 |
| . Other | 2,147 | 5,044 |
| --------- | ------- | |
| 2,995 | 6,545 | |
| ===== | ==== | |
| Deferred tax assets | ||
| . Relating to temporary differences | 687,523 | 701,127 |
| . Tax losses reportable | 13,239 | 13,690 |
| ----------- | ------------ | |
| 700,763 | 714,817 | |
| ====== | ====== | |
| Deferred tax liabilities | ||
| . Relating to temporary differences | 94,771 | 62,862 |
| . Relating to tax credits | 3,945 | 4,110 |
| --------- | ---------- | |
| 98,716 | 66,972 | |
| ===== | ===== | |
As at 30 June 2012 and 2011, the taxation in the income statement was made up as follows:
| 30-06-2012 | 30-06-2011 (Restated) |
|
|---|---|---|
| Current tax | ||
| Of the period | ( 4,184 ) | ( 17,203 ) |
| Consortiums (ACE's) | (741 ) | ( 766 ) |
| Taxation relating to previous years | (4,253 ) | 8,366 |
| Special contribution for the banking sector | ( 11,842 ) | ( 5,500 ) |
| --------- ( 21,020 ) --------- |
--------- ( 15,103 ) --------- |
|
| Deferred tax | ||
| Increases and reversals of temporary differences, net | 9,212 | 13,393 |
| --------- ( 11,808 ) ===== |
--------- ( 1,710 ) ===== |
Following the change in the accounting policy mentioned in Note 1.5, the Bank recorded, in 2011, deferred tax assets amounting to tEuros 61,992, relating to the impact of the said change in policy.
Changes in deferred tax assets and liabilities during the years ended on 30 June 2012 and 2011 may be presented in the following manner:
| Balances on | Income | Balances on | |||
|---|---|---|---|---|---|
| 12/31/2011 | Shareholders' equity | Statement | Other | 6/30/2012 | |
| Retirement pensions | 34,614 | - | (7,730) | - | 26,884 |
| Transfers of pension liabilities to the social security | 6,047 | - | (302) | - | 5,745 |
| Change in accounting policy on pensions (Note 1.5.) | 159,238 | (7,962) | - | - | 151,276 |
| Tangible assets | 85 | - | (27) | - | 58 |
| Deferred commission | 2,663 | - | (124) | - | 2,539 |
| Long service bonus | 7,471 | - | 93 | - | 7,564 |
| Early retirements | 19,543 | - | (1,872) | - | 17,671 |
| Other Deferred tax assets resulting from temporary differences | 182,499 | - | 40,699 | - | 223,198 |
| Other Deferred tax liabilities resulting from temporary differences | (8,324) | - | 1,753 | - | (6,571) |
| Tax losses carried forw ard | 12,503 | - | (451) | - | 12,052 |
| Tax gains that are not accounting gains | (1,854) | - | 19 | - | (1,835) |
| Revaluation of tangible fixed assets | (4,110) | - | 165 | - | (3,945) |
| Valuation of associated companies | |||||
| in accordance w ith the equity method | (402) | - | 7 | - | (395) |
| Pension Fund - London Branch | 193 | - | (97) | - | 96 |
| Long term incentives | 3,098 | - | 64 | 1 | 3,163 |
| Securitization operations: | |||||
| . Premium/discount on debt issued | (439) | - | 136 | - | (303) |
| . Recognition of accrual of interest from notes w ith greater subordination | (8,622) | - | 128 | - | (8,494) |
| . Results on securities purchases | (17,130) | - | (22,901) | - | (40,031) |
| Investments in subsidiaries, associates and joint ventures | 5,809 | - | (348) | - | 5,461 |
| Hedging derivatives - Cash flow | (16,978) | (7,170) | - | - | (24,148) |
| Financial assets available for sale: | |||||
| . Deferred tax assets | 281,054 | (35,998) | - | - | 245,056 |
| . Deferred tax liabilities | (9,113) | (3,881) | - | - | (12,994) |
| 647,845 | (55,011) | 9,212 | 1 | 602,047 | |
| Deferred tax assets | 714,817 | 700,763 | |||
| Deferred tax liabilities | (66,972) | (98,716) | |||
| 647,845 | 602,047 |
| Balances on | Totta IFIC | Income | Balances on | |||
|---|---|---|---|---|---|---|
| 12/31/2010 | Merger | Shareholders' equity Statement | Other | 6/30/2011 | ||
| Retirement pensions | 44,427 | - | - | (1,666) | - | 42,761 |
| Change in accounting policy on pensions (Note 1.5.) | 97,247 | - | 14,198 | - | - | 111,445 |
| Tangible assets | 153 | - | - | (35) | - | 118 |
| Intangible assets | 562 | - | - | (187) | (1) | 374 |
| Deferred commission | 5,855 | - | - | (2,672) | (1) | 3,182 |
| Long service bonus | 7,894 | - | - | 327 | - | 8,221 |
| Early retirements | 19,841 | - | - | 488 | - | 20,329 |
| Provisions temporarily not tax deductible | 143,243 | 7,235 | 388 | 2,513 | (646) | 152,733 |
| Revaluation of tangible fixed assets | (4,339) | - | - | 117 | - | (4,222) |
| Valuation of associated companies in accordance | ||||||
| w ith the equity method | (401) | - | - | (2) | - | (403) |
| Pension Fund - London Branch | 386 | - | - | (96) | - | 290 |
| Long term incentives | 2,316 | - | - | 406 | - | 2,722 |
| Investments in subsidiaries, associates and joint ventures | 5,809 | - | - | - | - | 5,809 |
| Hedging derivatives: | ||||||
| . Cash flow | (1,874) | - | 3,619 | - | - | 1,745 |
| Financial assets available for sale: | ||||||
| . Deferred tax liabilities | (1,580) | - | (9,857) | - | 1 | (11,436) |
| . Deferred tax assets | 149,957 | - | 82,608 | - | 646 | 233,211 |
| Securitization operations: | ||||||
| . Premium/discount on debt issued | (495) | - | - | 28 | - | (467) |
| . Results of intragroup securities purchases | (32,298) | - | - | 13,086 | - | (19,212) |
| . Recognition of accrual of interest from notes | ||||||
| w ith greater subordination | (6,897) | (717) | - | 1,086 | - | (6,528) |
| 429,806 | 6,518 | 90,956 | 13,393 | (1) | 540,672 | |
| Deferred tax assets | 477,690 | 582,940 | ||||
| Deferred tax liabilities | (47,884) | (42,268) | ||||
| 429,806 | 540,672 |
Tax Authorities may review the Bank's tax situation during a period of four years, except when tax losses carried forward have been used, in which case the right to corrections expires in six years. This may result in possible additional tax assessments for the years subject to review, due to different interpretations of fiscal legislation.
The Bank was subject to tax inspections for the years up to 2009 inclusive, excluding the year 2006, and is, on the date that this report is issued, undergoing a tax inspection fiscal for 2010.
As a result of these inspections, the Bank received additional tax assessments, mainly related to corporate income tax. The corrections made relate to several matters, including, amongst others, early retirement costs, provisions in excess of the minimum limits set out in the Bank of Portugal's Notice 3/95, questions regarding exemption of income of the offshore financial branch in the Autonomous Region of Madeira, taxes of other branches, increases in shareholders' equity, and the sale value of properties, amongst others. Some of these corrections are only temporary, namely those relating to early retirement costs and provisions in excess of the minimum limits required by the supervisory authority.
The Bank paid the additional tax assessments in full or in part or, when applicable, gave a bank guarantee. However, the Bank has challenged against the majority of the additional tax assessments.
The Bank records in the liability caption "Provisions", the amount considered to be necessary to cover the risks of the additional tax assessments received which were not paid out and contingencies relating to prior years not yet reviewed by the Tax Administration (Note 22).
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Income receivable: | ||
| from commission on the management of securities investment funds 2,238 | 2,113 | |
| from other services rendered | 23,444 | 23,816 |
| from other interest and similar income | 14,916 | 18,523 |
| from deposit and custodial services | 881 | 808 |
| other | 1,604 | 7,066 |
| Expenses with deferred costs | 23,686 | 5,760 |
| Other receivables | 24,906 | 25,081 |
| Promises and other assets received as settlement of defaulting loans | 101,569 | 89,888 |
| Gold, other precious metals and coin collections | 2,421 | 2,459 |
| Loan interest subsidy receivable from the Portuguese State | 9,675 | 8,345 |
| Debtors resulting from operations with futures | 3,894 | 2,580 |
| Other funds | 339 | 353 |
| Liability with pensions and other benefits (Note 43) | 6,674 | 3,297 |
| Shareholders' loans: | ||
| Propaço – Sociedade Imobiliária de Paço de Arcos, Lda, (Propaço) | 2,443 | 2,443 |
| Fafer – Empreendimentos Urbanísticos Construção, S.A. (Fafer) | 364 | 364 |
| Gestínsua – Aquisições e Alienações de Património Imobiliário | ||
| e Mobiliário, S.A. | 126 | 126 |
| Other equity investments: | ||
| Nortrem – Aluguer de Material Ferroviário, A.C.E. (Nortrem) | 3,342 | 2,281 |
| Trem II – Aluguer de Material Circulante (Trem II) | 563 | 682 |
| Trem I - Aluguer de Material Circulante, A.C.E. (Trem I) | 179 | 220 |
| Other | 2,057 | 1,904 |
| ----------- 225,315 |
---------- 198,109 |
|
| Impairment (Note 22): | ----------- | ---------- |
| Shareholders' loans | ( 2,042 ) | ( 2,042 ) |
| Payments in Kind | ( 21,707 ) | ( 18,456 ) |
| Other | ( 1,079 ) | ( 1,155 ) |
| ---------- ( 24,828 ) |
---------- ( 21,653 ) |
|
| ----------- 200,487 ====== |
---------- 176,456 ====== |
As at 30 June 2012 and 31 December 2011 the caption "Income receivable – from other services rendered" essentially includes commission receivable from Santander Totta Seguros – Companhia de Seguros de Vida, S.A. for the sale of its products.
As at 30 June 2012 and 31 December 2011 the caption "Income receivable – other interest and similar income" refers to the amount receivable from "Swap Agreements" established between the Bank and the Santander Group and between the Santander Group and the securitization companies. The amount payable relating to these operations is entered in the caption "Other liabilities – other interest and charges payable" (Note 24).
The caption "Debtors resulting from operations with futures" refers to the current accounts maintained by the Bank in international financial institutions relating to the trading of futures. Futures margin accounts are recorded under the caption "Other liabilities - Creditors resulting from operations with futures" (Note 24).
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Resources of the European Central Bank | ||
| Sales with repurchase agreement | 6,821,811 | 4,913,227 |
| Term deposits | 29,786 | - |
| Resources of other Central Banks | ||
| Demand deposits | 17 | 7 |
| Interest payable | 1 | - |
| ------------- | --------------- | |
| 6,851,615 ======== |
4,913,234 ======== |
|
As at 30 June 2012 and 31 December 2011, the caption of "Resources of the European Central Bank" corresponds funding operations from the Euro System using BST a part of its eligible assets portfolio. On these dates, the total amount of eligible assets portfolio backing funding obtained from the European Central Bank was as follows:
| 30-06-2012 | |||||||
|---|---|---|---|---|---|---|---|
| Deferred | |||||||
| Type of asset | Principal | Total interest | costs | Total | Maturity | ||
| Treasury Bills and other assets | 1,800,000 | 350 | (150) | 1,800,200 | July 2012 | ||
| Bonds issued in securitization operations | 2,400,000 | 27,000 | (14,200) | 2,412,800 | January 2013 | ||
| Bonds issued in securitization operations | 2,600,000 | 78,867 | (70,056) | 2,608,811 | February 2015 | ||
| 6,800,000 | 106,217 | (84,406) | 6,821,811 | ||||
| 31-12-2011 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Deferred | ||||||||
| Type of asset | Principal | Total interest | costs | Total | Maturity | |||
| Bonds issued in securitization operations | 2,500,000 | 17,830 | (5,270) | 2,512,560 | March 2012 | |||
| Bonds issued in securitization operations | 2,400,000 | 27,000 | (26,333) | 2,400,667 | January 2013 | |||
| 4,900,000 | 44,830 | (31,603) | 4,913,227 |
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Resources of domestic financial institutions | ||
| Sale operations with repurchase agreements | 280,691 | 368,649 |
| Deposits | 59,444 | 191,740 |
| Other resources | - | 2,762 |
| Interest payable | 82 | 999 |
| ----------- 340,217 |
------------ 564,150 |
|
| Resources of foreign financial institutions | ----------- | ------------ |
| Sale operations with repurchase agreements | 1,439,400 | 1,880,953 |
| Deposits | 733,555 | 777,401 |
| Consigned resources | 100,000 | 339,000 |
| Very short term resources | 16,690 | 41,168 |
| Other resources | 2,411 | 8,402 |
| Interest payable | 201 -------------- |
458 -------------- |
| 2,292,257 | 3,047,382 | |
| -------------- 2,632,474 |
-------------- 3,611,532 |
|
| ======== | ======== |
As at 30 June 2012 and 31 December 2011, the caption "Consigned resources" refers to loans obtained from the European Investment Bank (EIB), to be used exclusively to finance small and medium size projects previously submitted to the EIB for approval.
As at 30 June 2012 and 31 December 2011, the breakdown of consigned resources by residual maturity period is as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Repayment between one and three years | 100,000 | - |
| Repayment between three and five years | - | 250,000 |
| Repayment between five and ten years | - | 29,000 |
| Repayment in over ten years | - | 60,000 |
| 100,000 | 339,000 |
As at 30 June 2012, the caption of "Resources of domestic credit institutions – Sale operations with repurchase agreements", has bonds issued under securitization operations of the Bank as underlying assets in its portfolio.
| 30-06-2012 | ||||
|---|---|---|---|---|
| Assets | Principal | Interest | Deferred costs | Total |
| Treasury bonds - Spain | 1,438,878 | 1,017 | (495) | 1,439,400 |
| 31-12-2011 | |||||||
|---|---|---|---|---|---|---|---|
| Assets | Principal | Interest | Deferred costs | Total | |||
| Treasury bonds - Portugal | 88,026 | 76 | (39) | 88,063 | |||
| Treasury bonds - Spain | 1,470,289 | 8,857 | (3,220) | 1,475,926 | |||
| Bonds issued by the BST Group | 316,217 | 858 | (111) | 316,964 | |||
| 1,874,532 | 9,791 | (3,370) | 1,880,953 |
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Term deposits | 13,645,869 | 12,758,347 |
| Demand deposits | 4,729,386 | 5,034,181 |
| Structured deposits | 1,495,026 | 1,668,085 |
| Savings deposits | 74,243 | 116,103 |
| Advance notice deposits | 24,997 | 25,609 |
| Cheques and orders payable | 93,371 | 99,636 |
| Interest payable | 143,232 | 141,682 |
| Value adjustments of hedging operations | ( 3,078 ) | 461 |
| --------------- | --------------- | |
| 20,203,046 | 19,844,104 | |
| ========= | ======== |
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Bonds in circulation | ||
| Covered bonds | ||
| Issued | 5,630,000 | 5,630,000 |
| Repurchased | ( 3,580,750 ) | ( 3,580,750 ) |
| Interest from covered bonds | 22,934 | 21,666 |
| Bonds issued within securitization operations | ||
| Issued | 2,713,697 | 2,942,534 |
| Repurchased | ( 995,547 ) | ( 717,679 ) |
| Interest payable | 1,124 | 2,882 |
| Cash bonds | ||
| Issued | 731,357 | 740,376 |
| Repurchased | ( 40,860 ) | ( 10,691 ) |
| Interest payable | 7,819 ------------- |
4,348 ------------- |
| 4,489,774 | 5,032,685 | |
| Other | ------------- | ------------- |
| EMTN Programme | ||
| Issued | 1,226,550 | 2,289,570 |
| Repurchased | ( 45,710 ) | ( 22,920 ) |
| Interest payable | 10,460 ------------- |
31,661 ------------- |
| 1,191,300 | 2,298,311 | |
| Value adjustments of hedging operations | ------------- 82,373 |
------------- 62,868 |
| -------------- 5,763,447 ======== |
-------------- 7,393,865 ======= |
The conditions of the covered bonds and cash bonds are described in Annex I.
In the first semester of 2012 and 2011, the Group repurchased bonds issued within securitization operations, recording capital gains of tEuros 80,400 and tEuros 2,114, respectively (Note 37).
Between May 2008 and November 2011, BST made seven issues of Covered Bonds under the "€ 12,500,000,000 Covered Bonds Programme". As at 30 June 2012 and 31 December 2011, the covered bonds had an autonomous pool of assets comprised by:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Loans and advances to banks Interest on applications |
262,418 192 |
355,804 647 |
| ----------- 262,610 |
----------- 356,451 |
|
| Loans and advances to customers (Note 11) Interest on loans Commission Expenses with deferred charges |
------------- 7,305,448 11,674 ( 32,488 ) 18,131 |
-------------- 7,567,003 15,150 ( 37,605 ) 18,364 |
| -------------- 7,302,765 |
------------- 7,562,912 |
|
| Hedging derivatives | -------------- 43,999 |
------------- 47,423 |
| -------------- 7,609,374 ======== |
-------------- 7,966,786 ======== |
Changes in debt issued by the Bank during 2011 and in the first semester of 2012 were the following:
| Bonds in circulation | EMTN Programme | |||
|---|---|---|---|---|
| Issued | Repurchased | Issued | Repurchased | |
| Balances on 31 December 2010 | 7,203,795 | (1,016,403) | 2,470,420 | - |
| . Issues made | 4,543,598 | - | 740,010 | - |
| . Issues repaid | (2,434,483) | 104,655 | (920,860) | - |
| . Issues repurchased | - | (3,397,372) | - | (22,920) |
| Balances on 31 December 2011 | 9,312,910 | (4,309,120) | 2,289,570 | (22,920) |
| . Issues made | - | - | 900 | - |
| . Issues repaid | (237,856) | 35,257 | (1,063,920) | 7,270 |
| . Issues repurchased | - | (343,294) | - | (30,060) |
| Balances on 30 June 2012 | 9,075,054 | (4,617,157) | 1,226,550 | (45,710) |
As at 30 June 2012, the Bank had the following bonds issued under the Euro Medium Term Notes Programme:
| 30-06-2012 | 31-12-2011 |
|---|---|
| 6,250 | |
| 112,910 | |
| 900 | - |
| 32,300 | 32,300 |
| 1,343,750 | |
| 327,200 | |
| 183,300 | |
| 269,460 | 283,860 |
| -------------- 2,289,570 |
|
| ======= | |
| - 110,340 341,650 325,325 146,575 ------------ 1,226,550 ======= |
Changes in provisions and impairment during the semesters ended on 30 June 2012 and 2011 is as follows:
| 31-12-2011 | Increases | Reversals | Utilizations | 30-06-2012 | |
|---|---|---|---|---|---|
| Provisions for tax contingencies (Note 16) Provision for pensions and other charges |
16,683 29,957 |
263 441 |
- - |
- (5,587) |
16,946 24,811 |
| Impairment and provisions for guarantees and other sureties given |
8,254 | 10,036 | (6,160) | - | 12,130 |
| Other provisions | 20,588 | 3,808 | (4,281) | (2,073) | 18,042 |
| 75,482 | 14,548 | (10,441) | (7,660) | 71,929 |
| Entry and/or exit from the consolidation |
|||||||
|---|---|---|---|---|---|---|---|
| 31-12-2010 | perimeter | Increases | Reversals | Utilizations | Other | 30-06-2011 | |
| Provisions for tax contingencies | 32,982 | - | 1,169 | - | (2,468) | (2,000) | 29,683 |
| Provision for pensions and other charges | 9,565 | - | 447 | - | - | - | 10,012 |
| Impairment and provisions for guarantees | |||||||
| and other sureties given | 32,993 | - | 2,226 | (3,837) | (446) | - | 30,936 |
| Other provisions | 28,653 | 3,380 | 3,264 | (3,512) | (1,870) | - | 29,915 |
| 75,482 | 3,380 | 7,106 | (7,349) | (4,784) | (2,000) | 100,546 |
(Amounts in thousands of Euros - tEuros, except when expressly indicated)
| Impairment | Reversal of impairment |
Impairment | ||||||
|---|---|---|---|---|---|---|---|---|
| 31-12-2011 | losses | losses | Utilizations | 30-06-2012 | recovery | |||
| Impairment of loans and advances to customers (Note 11): | ||||||||
| Domestic loans | 219,830 | 115,065 | (23,098) | - | 311,797 | - | ||
| Foreign loans | 869 | 435 | - | - | 1,304 | - | ||
| Non-derecognized securitized loans | 67,955 | 304 | (35,987) | - | 32,272 | - | ||
| Other securitized loans and receivables | 3,094 | 971 | - | - | 4,065 | - | ||
| Impairment of overdue loans and interest (Note 11): | ||||||||
| Domestic loans | 325,816 | 168,118 | (17,938) | (52,815) | 423,181 | (5,183) | ||
| Foreign loans | 10,095 | 4,881 | (713) | (210) | 14,053 | (45) | ||
| Non-derecognized securitized loans | 44,203 | 16,028 | (8,194) | (1,046) | 50,991 | - | ||
| Other securitized loans and receivables | 51 | 237 | - | - | 288 | - | ||
| 671,913 | 306,039 | (85,930) | (54,071) | 837,951 | (5,228) | |||
| Impairment of other financial assets: | ||||||||
| Impairment of available-for-sale financial assets (Note 9) | 64,670 | 160 | (140) | (2,655) | 62,035 | - | ||
| Impairment of investments in associates (Note 15) | 500 | - | - | - | 500 | - | ||
| 65,170 | 160 | (140) | (2,655) | 62,535 | - | |||
| Impairment of non-financial assets: | ||||||||
| Non-current assets held for sale (Note 13) | 67,181 | 22,797 | (874) | (6,056) | 83,048 | - | ||
| Tangible assets (Note 14) | 2,529 | 1,371 | (22) | - | 3,878 | - | ||
| Other assets (Note 17) | 21,653 | 5,148 | (1,973) | - | 24,828 | - | ||
| 91,363 | 29,316 | (2,869) | (6,056) | 111,754 | - | |||
| 828,446 | 335,515 | (88,939) | (62,782) | 1,012,240 | (5,228) | |||
| Entry and/or exit of | Reversal of | |||||||
| entities to/from the | Impairment | impairment | Impairment | |||||
| 31-12-2010 | consolidation perimeter | losses | losses | Utilizations | 30-06-2011 | recovery | ||
| Impairment of loans and advances to customers: | ||||||||
| Domestic loans | 162,074 | 19,252 | 40,841 | (52,845) | (4,173) | 165,149 | - | |
| Foreign loans | 1,860 | - | 1 | (1,231) | - | 630 | - | |
| Non-derecognized securitized loans | 53,894 | 8,322 | 38,224 | (24,248) | - | 76,192 | - | |
| Other securitized loans and receivables | 7,680 | - | - | (230) | - | 7,450 | - | |
| Impairment of overdue loans and interest: Domestic loans |
215,928 | 6,592 | 101,872 | (1,967) | (20,388) | 302,037 | 10,806 | |
| Foreign loans | 5,277 | - | 2,017 | (689) | (239) | 6,366 | 174 | |
| Non-derecognized securitized loans | 49,665 | 5,124 | 5,741 | (22,478) | (981) | 37,071 | - | |
| Other securitized loans and receivables | 779 | - | - | (779) | - | - | - | |
| 497,157 | 39,290 | 188,696 | (104,467) | (25,781) | 594,895 | 10,980 | ||
| Impairment of other financial assets: | ||||||||
| Impairment of available-for-sale financial assets | 59,148 | - | 3,345 | (40) | (3,693) | 58,760 | - | |
| Impairment of investments in associates | 500 | - | - | - - |
500 | |||
| Impairment of non-financial assets: | 59,648 | - | 3,345 | (40) | (3,693) | 59,260 | - | |
| Non-current assets held for sale (Note 13) | 45,678 | 6,094 | 18,435 | (3,735) | (6,757) | 59,715 | - | |
| Tangible assets (Note 14) | 3,183 | - | - | - (654) |
2,529 | - | ||
| Other assets | 11,227 | - | 5,954 | (1,791) | - | 15,390 | - | |
| 60,088 | 6,094 | 24,389 | (5,526) | (7,411) | 77,634 | - | ||
| 616,893 | 45,384 | 216,430 | (110,033) | (36,885) | 731,789 | 10,980 |
As at 30 June 2012 and 31 December 2011, the provision for pensions and other charges refers essentially to a provision for a restructuring plan amounting to tEuros 14,684 and tEuros 20,271, respectively, and for a supplementary pension plan of the Board of Directors (Note 45).
As at 30 June 2012 and 31 December 2011 the caption "Other provisions" includes:
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Subordinated Perpetual Bonds Totta 2000 | 270,447 | 270,447 |
| Subordinated Perpetual Bonds BSP 2001 | 13,818 | 13,818 |
| Subordinated Perpetual Bonds CPP 2001 | 4,275 | 4,275 |
| ------------- | ----------- | |
| 288,540 | 288,540 | |
| Repurchased securities | ( 284,265 ) | ( 284,265 ) |
| Interest payable | 46 | 53 |
| ------- | --------- | |
| 4,321 | 4,328 | |
| ==== | ==== | |
The conditions of the subordinated liabilities are presented in Annex II.
This caption is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Suppliers | 3,080 | 1,914 |
| Invoices received and pending approval | 31,270 | 36,650 |
| Withholding tax | 21,093 | 17,344 |
| Social Security contributions | 3,898 | 3,886 |
| Contributions to other health systems | 1,520 | 1,534 |
| VAT payable Staff charges: |
8,006 | 8,455 |
| Long service bonus | 26,081 | 25,762 |
| Holidays and holiday subsidy | 24,006 | 30,846 |
| Other variable remuneration | 30,582 | 26,336 |
| Other staff costs | 9,315 | 859 |
| Captive account resources | 28,486 | 28,026 |
| Other resources | 1,551 | 1,365 |
| Creditors' balances pending settlement | 10,890 | 9,147 |
| Creditors from factoring contracts | 62,677 | 38,249 |
| Amounts to be settled with banks and customers | 18,237 | 10,970 |
| Creditors from futures operations (Note 17) | 3,894 | 2,580 |
| Other interest and charges payable (Note 17) | 14,675 | 18,283 |
| Liability operations to be settled | 4,663 | 4,548 |
| Other | 12,366 | 22,835 |
| ----------- 316,290 |
---------- 289,589 |
|
| ====== | ====== |
As at 30 June 2012 and 31 December 2011, the caption "Amounts to be settled with banks and customers" corresponds essentially to inter-bank electronic transfers that were cleared in the first days of the following year.
As indicated in the Introduction and in Note 1.4., the merger by incorporation of Totta IFIC was recorded on 1 April 2011, with its assets and liabilities being integrated into BST. The terms of the exchange were determined based on an independent valuation of each of the entities as at May 31, 2010, which resulted in the following amounts:
| Totta IFIC | BST | |
|---|---|---|
| Subscribed share capital (excluding treasury shares) | 34,562,675 | 620,052,218 |
| Nominal value per share (in Euros) | 5 | 1 |
| Number of shares | 34,562,680 | 620,052,219 |
| Independent valuation of the shareholders' equity (in Euros) | 318,666,145 | 4,488,702,452 |
| Value per share (in Euros) | 46.10 | 7.24 |
| Terms of exchange | 6.3680 | |
| Shares of Totta IFIC held by Santander Totta SGPS | 5,750,322 | |
| Share capital increase of BST (in Euros) | 36,618,301 | |
| Value assigned to the shares of Totta IFIC held by Santander | ||
| Totta SGPS (in Euros) | 66,304,974 | |
| Share premium increase (in Euros) | 29,686,673 |
Therefore on March 18, 2011, BST's share capital was increased by 36,618,301 Euros, equivalent to 36,618,301 shares of 1 Euro each, which was performed Santander Totta, SGPS, S.A. through the transfer of 5,750,322 shares representing the share capital of Totta IFIC held by that entity, for which the total value of 66,304,974 Euros was assigned. This corresponds to a share premium of Euros 0.8107059066 per share.
The difference between the share capital increase and the shareholders' equity of Totta IFIC on the date of the merger was recorded in the merger reserve, which was determined as explained in Note 1.4..
Consequently, as at 30 June 2012 and 31 December 2011 the Bank's share capital was represented by 656,723,284 shares with a nominal value of 1 Euro each, fully subscribed and paid up by the following shareholders:
| Number of shares |
% of participation |
Amount | |
|---|---|---|---|
| Santander Totta, SGPS, S.A. | 641,269,620 | 97.65 | 641,270 |
| Taxagest, SGPS, S.A. | 14,593,315 | 2.22 | 14,593 |
| Other | 761,419 | 0.11 | 761 |
| Treasury shares | 98,930 | 0.02 | 99 |
| ----------------- 656,723,284 |
--------- 100.00 |
----------- 656,723 |
|
| ========== | ===== | ====== |
On 27 May 2011 the General Meeting of Shareholders approved the distribution of dividends for the amount of tEuros 175,000.
Within the terms of Dispatch no. 408/99, of 4 June, published in the Diário da República – I Série B, no. 129, the share premium, amounting to tEuros 193,390, annot be used to pay out dividends or to purchase treasury shares.
The other equity instruments refer to supplementary capital contributions made by the shareholder Santander Totta, SGPS, S.A., which neither bear interest nor have a defined redemption term. These instruments can only be redeemed by decision of the Bank's Board of Directors with the prior approval of the Bank of Portugal.
As at 30 June 2012 and 31 December 2011, the revaluation reserves were made up as follows:
| 30-06-2012 | 31-12-2011 | ||
|---|---|---|---|
| Revaluation reserves - | |||
| Reserves resulting from the fair value valuation: | |||
| Financial assets available for sale (Note 9) | ( 802,301 ) | ( 939,954 ) | |
| Financial assets available for sale of companies | |||
| under the equity method | 1,494 | 1,100 | |
| Cash flow hedging instruments | 83,270 | 58,546 | |
| Legal revaluation reserves as at the transition date to the IFRS | 23,245 | 23,245 | |
| Actuarial differences of | |||
| liabilities with pensions (Note 1.5.) | ( 560,029 ) | ( 554,267 ) | |
| Actuarial differences over pension liabilities of | |||
| companies under the equity method | ( 1,376 ) | ( 1,376 ) | |
| Foreign exchange differences in consolidation | ( 938 ) | ( 6,116 ) | |
| ------------- ( 1,256,635 ) |
--------------- ( 1,418,822 ) |
||
| Deferred tax reserves | ------------- | --------------- | |
| Due to temporary differences: | |||
| Relating to available-for-sale financial assets | 232,708 | 272,587 | |
| companies under the equity method | ( 324 ) | ( 210 ) | |
| Relating to hedging instruments | ( 24,148 ) | ( 16,978 ) | |
| Due to the revaluation of tangible fixed assets | ( 4,314 ) | ( 4,543 ) | |
| Due to the revaluation of tangible fixed assets of companies | |||
| under the equity method | ( 132 ) | ( 132 ) | |
| Due to actuarial differences (Note 1.5.) | 151,276 | 159,238 | |
| Due to actuarial differences of companies under the | |||
| equity method | 399 | 399 | |
| ------------ 355,465 |
----------- 410,361 |
||
| ------------ ( 901,170 ) ======= |
------------ ( 1,008,461 ) ======== |
During 1998, under Decree Law no. 31/98, of 11 February, the Bank revalued its tangible fixed assets, which resulted in an increase in the respective value, net of accumulated depreciation, of approximately tEuros 23,245, which was entered in revaluation reserves. The net amount resulting from the revaluation may only be used for capital increases or the hedging of losses, through the use (amortization) or sale of the assets it relates to.
As at 30 June 2012 and 31 December 2011, the caption of "Other reserves and retained earnings" was made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Legal reserve | 245,862 | 243,633 |
| ---------- | ---------- | |
| Other reserves | ||
| Reserves of consolidated companies | 190,872 | 194,447 |
| Reserves of companies valued under the equity method | 74,749 | 70,463 |
| Merger reserve | ||
| By incorporation of Totta and BSP | 541,334 | 541,334 |
| By incorporation of Totta IFIC | 90,520 | 90,520 |
| By incorporation of BSN | 35,405 | 35,405 |
| Other | 1,748 | 2,296 |
| ----------- | ----------- | |
| 934,628 | 934,465 | |
| ----------- | ----------- | |
| Retained earnings | 248,665 | 226,484 |
| ------------- 1,429,155 |
------------- 1,404,582 |
|
| ======= | ======= |
In conformity with the provisions of Decree Law no. 298/92, of 31 December, amended by Decree Law no. 201/2002, of 26 of September, the Bank set up a reserve fund up to the amount of the share capital or of the sum of the free reserves and retained earnings, if greater. For this purpose, a fraction of the annual net income on a stand-alone basis is transferred to this reserve each year until the said amount is reached.
This reserve may only be used for the hedging of accumulated losses or to increase the share capital.
Under current legislation, the merger reserve is equivalent to the legal reserve and may only be used to hedge accumulated losses or to increase the share capital.
Consolidated net income for the semesters ended 30 June 2012 and 2011 may be summarised as follows:
| 30-06-2012 | 30-06-2011 | |||
|---|---|---|---|---|
| (Restated) | ||||
| Net income | Contribution to the consolidated |
Net income | Contribution to the consolidated |
|
| for the period | net income | for the period | net income | |
| Net income of BST on an individual basis | 2,791 | 2,791 | 19,224 | 19,224 |
| Net income of the remaining Group companies: | ||||
| Serfin International Bank & Trust (SIBT) | 212 | 212 | 80 | 80 |
| Santotta - Internacional, SGPS | 104 | 104 | (53) | (53) |
| Totta Ireland, Plc. | 43,137 | 43,137 | 55,255 | 55,255 |
| Banco Caixa Geral Totta de Angola | 19,261 | 4,813 | 14,168 | 3,541 |
| Totta Urbe | 862 | 862 | 1,043 | 1,043 |
| Totta & Açores, Inc. - New ark | (31) | (31) | 56 | 56 |
| Totta & Açores, Financing, Ltd (TAF) | 6,180 | 6,180 | 6,180 | 6,180 |
| BST International Bank, Inc | 8,206 | 8,206 | 8,145 | 8,145 |
| Partang, SGPS | 9,936 | 4,869 | 2 | 1 |
| Santander Pensões | 430 | 430 | 625 | 625 |
| Santander Gestão de Activos | 1,771 | 1,771 | 14,522 | 14,522 |
| Santander Asset Management, SGFIM, S.A. | 625 | 625 | 1,506 | 1,506 |
| Taxagest | (66) | (65) | (625) | (618) |
| Unicre | 3,549 | 763 | 4,945 | 1,063 |
| 94,176 | 71,876 | 105,849 | 91,346 | |
| Elimination of dividends: | ||||
| Totta Ireland, Plc. | (46,800) | (33,000) | ||
| Santander Gestão de Activos | (9,430) | (13,000) | ||
| Unicre | (1,036) | (1,574) | ||
| Santander Pensões | (1,000) | - | ||
| (58,266) | (47,574) | |||
| Adjustments related w ith the merger of Totta IFIC in BST | - | 6,206 | ||
| Temporal alignment of the results of Totta Ireland | (6,700) | (4,639) | ||
| Application of IAS/IFRS - Retirement pensions | (301) | 5,638 | ||
| Adjustments related w ith securitization operations | 48,534 | (9,129) | ||
| Elimination of the valuation by Partang of the participation in Banco Caixa Geral Totta de Angola | (4,869) | - | ||
| Other | (917) | 678 | ||
| Consolidated net income for the period | 52,148 | 61,750 |
Third party participation in the Group's companies in 2011 and 2010, was as follows by entity:
| Income | ||||
|---|---|---|---|---|
| Balance sheet | statement | |||
| 30-06-2012 31-12-2011 | 30-06-2012 30-06-2011 | |||
| (Restated) | ||||
| Preference shares of BST | ||||
| International Bank, Inc | 285,941 | 278,229 | - | - |
| Preference shares of TAF | 300,000 | 300,000 | - | - |
| Special dividends | ( 1,483 ) | ( 1,459 ) | - | - |
| Taxagest | 549 | 550 | - | 7 |
| Other | 203 | 200 | 3 | ( 1 ) |
| ----------- | ---------- | --- | ----- | |
| 585,210 | 577,520 | 3 | 6 | |
| ====== | ====== | == | == |
As at 30 June 2006, the BST International Bank, Inc (BST Porto Rico) issued 3,600 non-voting preference shares of 100,000 United States Dollars (USD) each, fully subscribed and paid up by Banco Santander, S.A.. The Bank guarantees a non-cumulative dividend on these shares corresponding to an annual remuneration of 6.56% payable if and when declared by BST Puerto Rico's directors, at the beginning of January of each year. BST Puerto Rico may redeem the preference shares, in full or in part as from June 30, 2016 at 100,000 USD per share plus the amount of the dividend accrued monthly since the last payment made.
On 29 of June 2005, TAF issued 300,000 non-voting preference shares of 1,000 Euros each, fully subscribed and paid up by Banco Santander, S.A.. The Bank guarantees a non-cumulative dividend on these shares corresponding to an annual remuneration of 4.12% payable if and when declared by TAF's directors, at the beginning of January of each year. TAF may redeem the preference shares, in full or in part, as from June 30, 2015 at 1,000 Euros per share plus the amount of the dividend accrued monthly since the last payment made.
These issues were classified as equity in accordance with IAS 32. Under this Standard, the preference shares issued are classified as equity if:
Off-balance sheet items were made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Guarantees given and other contingent liabilities | ||
| Guarantees and sureties | 1,367,169 | 1,488,455 |
| Open documentary credits | 173,465 | 570,363 |
| Assets pledged as guarantee | ||
| Bank of Portugal | 123,114 | 121,723 |
| Deposit Guarantee Fund | 82,202 | 70,345 |
| Investor Indemnity System | 4,636 | 4,079 |
| Other contingent liabilities | 5 | 6 |
| -------------- 1,750,591 |
-------------- 2,254,971 |
|
| ======== | ======== | |
| Commitments | ||
| Credit lines | ||
| Revocable | 4,558,117 | 4,792,257 |
| Irrevocable | 1,399,910 | 1,217,742 |
| Term deposit contracts | 57,179 | 85,933 |
| Deposit Guarantee Fund | 54,092 | 54,092 |
| Investor Indemnity System | 2,911 | 3,119 |
| Other irrevocable commitments | 11,024 | 16,141 |
| Other revocable commitments | 26,807 | 27,751 |
| -------------- 6,110,040 |
------------- 6,197,035 |
|
| ======== | ======= | |
| Liabilities for services rendered | ||
| Deposit and custodial services | 50,664,036 | 55,382,093 |
| Amounts received for collection | 169,236 | 130,762 |
| Assets managed by the institution | ||
| Other | 7,432,258 | 7,264,208 |
| --------------- 58,265,530 |
---------------- 62,777,063 |
|
| ========= | ========= |
The Deposit Guarantee Fund was created in November 1994 in accordance with Decree Law no. 298/92, dated December 31, to guarantee customers' deposits in accordance with the limits established in the General Regime for Credit Institutions. The initial contribution to the Fund, which was established by Ministerial Order of the Ministry of Finance, was made in cash and deposit securities, and was amortised over 60 months as from January 1995. Except as mentioned in the following paragraph, regular annual contributions to the Fund are recorded as an expense of the year to which it relates.
In 2011, as allowed by the Bank of Portugal, the Bank paid 90% of the annual contribution to the Fund, in the amount of tEuros 3,918. In this period, the Bank accepted an irrevocable commitment to the Deposit Guarantee Fund to pay the remaining 10% of the annual contribution if and when required to do so. The total unpaid amount of this commitment as at 30 June 2012 and 31 December 2011 amounted to tEuros 54,092. The assets pledged as guarantee to the Bank of Portugal are recorded in off-balance sheet accounts at market value.
In 2012 the Bank made the payment of 100% of the annual contribution in the amount of tEuros 4,906.
The responsibility to pay the Investor Indemnity System is not recorded as a cost, but is covered by the acceptance of an irrevocable commitment to pay that amount, if required to do so, with part (50%) of the commitment being guaranteed by a pledge of Portuguese Treasury Bonds. As at 30 June 2012 this commitment amounted to tEuros 2,911 (tEuros 3,119 on 31 December 2011).
In accordance with a regulation of the CMVM, an extraordinary payment of tEuros 4,082 was made by the Bank to the SII in 2011, regarding the Banco Privado Português.
This caption is made up as follows:
| 30-06-2012 30-06-2011 | ||
|---|---|---|
| (Restated) | ||
| Interest on cash and deposits | ||
| In Central Banks | ||
| In the Bank of Portugal | 1,051 | 2,045 |
| In credit institutions | 116 | 179 |
| Interest on loans and advances | ||
| In domestic credit institutions | ||
| In the Bank of Portugal | 948 | 142 |
| In other credit institutions | 5,261 | 13,978 |
| In foreign credit institutions | 21,988 | 29,928 |
| Interest on loans and advances to customers | ||
| Domestic loans | 364,964 | 331,723 |
| Foreign loans | 10,211 | 11,486 |
| Other loans and receivables (commercial paper) | 16,085 | 20,387 |
| Associated commission received at amortised cost | 20,703 | 20,748 |
| Interest from securitised assets not derecognised | 118,475 | 107,951 |
| Interest on overdue credit (Note 47) | 4,601 | 4,424 |
| Interest and similar income on other financial assets | ||
| Financial assets available for sale | ||
| Securities | 103,991 | 85,731 |
| Other financial assets at fair value through profit or loss | 2,092 | 2,087 |
| Hedging derivatives | 167,859 | 170,695 |
| Debtors and other applications | 14 | 7 |
| Other interest and similar income | ||
| Swap agreements | 65,400 | 64,100 |
| Other | 676 | 1,001 |
| ----------- 904,435 |
----------- 866,612 |
|
| ====== | ======= |
This caption is made up as follows:
| 10,330 | (Restated) |
|---|---|
| 9,058 | |
| 10,072 | 7,160 |
| 207,308 | 135,294 |
| 12,059 | 8,144 |
| ----------- | ---------- |
| 239,769 | 159,656 |
| ----------- 532 |
---------- 1,625 |
| 29,976 | 21,323 |
| - | 13 |
| 10,934 | |
| 58,156 | |
| 50,760 | |
| 47,131 | |
| 160,311 | |
| 205 | |
| 63,784 | |
| 149 | 93 |
| 382,500 | ------------ 414,335 |
| ----------- | ----------- |
| 7,157 20,047 52,044 43,521 161,129 108 67,837 ----------- |
This caption refers to dividends and income received and is made up as follows:
| 30-06-2012 | 30-06-2011 (Restated) |
|
|---|---|---|
| Available-for-sale financial assets: SIBS – Sociedade Interbancária de Serviços Other |
1,075 570 |
1,072 167 |
| ------- 1,645 ==== |
------- 1,239 ==== |
This caption is made up as follows:
| 30-06-2012 | 30-06-2011 (Restated) |
|
|---|---|---|
| On guarantees given | ||
| Guarantees and sureties | 8,022 | 7,495 |
| Open documentary credits | 1,509 | 2,347 |
| On commitments to third parties | ||
| Irrevocable | 788 | 943 |
| Revocable | 2,818 | 1,158 |
| For services rendered | ||
| Funds for collection and management | 6,944 | 7,527 |
| Fund management | 13,334 | 16,896 |
| Card transactions | 34,341 | 32,303 |
| Annuities | 7,087 | 7,032 |
| Credit operations | 26,823 | 29,211 |
| Other | 5,407 | 5,520 |
| On operations carried out on behalf of third parties | ||
| On securities | 24,147 | 17,034 |
| Other | 250 | 180 |
| Other commission received | ||
| Insurance companies (Note 42) | 51,769 | 50,848 |
| Specialised credit | 571 | 721 |
| Demand deposits | 9,415 | 7,323 |
| Cheques and Booklets | 7,667 | 7,873 |
| Other | 2,257 | 15,863 |
| ---------- 203,149 |
---------- 210,274 |
|
| ====== | ====== | |
| 33. CHARGES WITH SERVICES AND COMMISSION | ||
| This caption is made up as follows: | ||
| 30-06-2011 | 30-06-2011 | |
| (Restated) |
| On guarantees received | ||
|---|---|---|
| Guarantees and sureties | 620 | 730 |
| On banking services rendered by third parties | ||
| Funds for collection and management | 2,009 | 2,845 |
| Credit operations | 5,739 | 6,619 |
| Customer transactions | 11,123 | 11,374 |
| Other | 1,575 | 1,498 |
| On operations carried out by third parties | ||
| Securities | 1,236 | 1,293 |
| Other | 574 | 856 |
| Other commission paid | 175 | 307 |
| --------- | --------- | |
| 23,051 | 25,522 | |
| ===== | ===== |
These captions were made up as follows:
| 30-06-2012 | 30-06-2011 (Restated) |
|
|---|---|---|
| Financial assets held for trading: | ||
| Equity instruments | 6,181 | 26 |
| Debt instruments | 11,104 | (13,578 ) |
| Derivative instruments: | ||
| FRA's | 260 | - |
| Swaps | ||
| . Foreign exchange rate contracts | ( 324 ) | (173 ) |
| . Interest rate contracts . Equity contracts |
3,244 1,946 |
19,982 188 |
| .Other | ( 25,759 ) | (488 ) |
| Options: | ||
| . Foreign exchange rate contracts | 19 | 225 |
| . Interest rate contracts | 45 | 64 |
| . Equity contracts | 41 | ( 82 ) |
| . Other | - | (1 ) |
| Interest rate guarantee contracts | ( 150 ) | 87 |
| --------- ( 3,393 ) |
-------- 6,250 |
|
| Hedging derivatives: | -------- | --------- |
| Swaps | ||
| . Interest rate contracts | ( 42,163 ) | (18,278 ) |
| . Equity contracts | 634 | (52,946 ) |
| Options: | ||
| . Auto-callable | 489 | ( 769 ) |
| Value adjustments of | ||
| hedged assets and liabilities | 40,889 ---------- |
71,272 ---------- |
| ( 151 ) | ( 721 ) | |
| -------- ( 3,544 ) ===== |
--------- 5,529 ==== |
This caption is made up as follows:
| (Restated) | ||||||
|---|---|---|---|---|---|---|
| 30-06-2012 | 30-06-2011 | |||||
| Gains | Losses | Net | Gains | Losses | Net | |
| Debt instruments Issued by residents |
||||||
| National public issuers Issued by non-residents |
- | (1) | (1) | - | (57,474) | (57,474) |
| Foreign public issuers | - | - | - | - | (25,858) | (25,858) |
| Equity instruments | ||||||
| Valued at fair value | 50 | - | 50 | 78 | (51) | 27 |
| Other | 9 | (3,873) | (3,864) | 6,321 | (27) | 6,294 |
| 59 | (3,874) | (3,815) | 6,399 | (83,410) | (77,011) |
In 2011 this caption refers essentially to realised capital losses on the sale of Portuguese and Spanish treasury bonds amounting to tEuros 83,331.
This caption is made up as follows:
| ===== | ===== | |
|---|---|---|
| 2,610 | 1,794 | |
| --------- | --------- | |
| Gains on the revaluation of the foreign exchange position Losses on the revaluation of the foreign exchange position |
26,830 ( 24,220 ) |
8,555 ( 6,761 ) |
| 30-06-2012 | 30-06-2011 (Restated) |
|
This caption is made up as follows:
| 30-06-2012 | 30-06-2011 (Restated) |
|
|---|---|---|
| Gains on the sale of loans and advances to customers (Note 11) | 3,925 | - |
| Gains on non-current assets held for sale | 1,427 | 627 |
| Gains on tangible assets | 172 | 368 |
| Gains on the repurchase by the Group of bonds | ||
| Issued under mortgage securitization loans | 80,400 | 2,114 |
| Other | 103 | 48 |
| -------- 86,027 |
-------- 3,157 |
|
| Losses on non-current assets held for sale | -------- ( 1,281 ) |
-------- ( 905 ) |
| Losses on tangible assets | ( 97 ) | ( 7 ) |
| Losses on the sale of loans and advances to customers (Note 11) | ( 100 ) | ( 2,373 ) |
| Other | ( 1,054 ) ------- |
( 230 ) ------- |
| ( 2,532 ) | ( 3,515 ) | |
| ---------- 83,495 |
--------- ( 358 ) |
|
| ===== | ==== |
In March 2012, BST made a tender offer for the bonds issued under the mortgage securitization operations held by entities outside of the Santander Group. As a result of this operation the Bank recorded a capital gain of tEuros 80,367.
This caption is made up as follows:
| 30-06-2012 | 30-06-2011 | |
|---|---|---|
| (Restated) | ||
| Other operating income | ||
| Operating leases | 172 | 166 |
| Reimbursement of expenses | 1,402 | 2,413 |
| Income from sundry services rendered | 2,968 | 2,339 |
| Other | 9,998 | 9,338 |
| --------- 14,540 |
--------- 14,256 |
|
| Other operating expenses | --------- | --------- |
| Subscriptions and donations | (783 ) | ( 1,518 ) |
| Contributions to the Deposit Guarantee Fund | ( 2,310 ) | ( 1,894 ) |
| Other operating expenses Other taxation |
( 13,684 ) | ( 13,587 ) |
| Direct | ( 592 ) | ( 2,163 ) |
| Indirect | (481 ) | ( 531) |
| --------- ( 17,850 ) |
-------- ( 19,693 ) |
|
| -------- (3,310 ) |
-------- ( 5,437 ) |
|
| ==== | ==== |
| This caption is made up as follows: | 30-06-2012 | 30-06-2011 (Restated) |
|---|---|---|
| Remuneration | ||
| Management and supervisory boards (Note 45) | 2,745 | 3,098 |
| Employees | 93,713 | 95,312 |
| Other variable remuneration | 17,986 ----------- |
13,077 ---------- |
| 114,444 | 111,487 | |
| Mandatory social charges | ----------- | ---------- |
| Charges on remuneration | 25,784 | 26,979 |
| Charges with pensions and other benefits (Note 43) | ( 1,746 ) | 816 |
| Other mandatory social charges | 488 | 3,878 |
| Early retirement | - | 1,270 |
| Gains resulting from the reduction in liabilities | ||
| with death subsidy (Note 43) | ( 9,190 ) | - |
| Adjustment of liabilities transferred to the | ||
| Social Security | 59 | - |
| --------- | --------- | |
| 15,395 --------- |
32,943 --------- |
|
| Other staff costs | ||
| Contractual indemnities | - | 455 |
| Staff transfers | 264 | 293 |
| Other | 2,997 | 3,241 |
| --------- 3,261 |
--------- 3,989 |
|
| ----------- 133,100 |
---------- 148,419 |
The balance of the caption "Gains resulting from the reduction in liabilities with death subsidy" refers to the reduction in liabilities with pensioners resulting from the amendments introduced by Decree Law no. 133/2012 of 27 of June, which introduced a maximum to the amount for the subsidy for death corresponding to six times the amount of the social support index.
This caption is made up as follows:
| 30-06-2012 | 30-06-2011 (Restated) |
|
|---|---|---|
| Specialised services | 21,013 | 22,964 |
| Communications | 7,193 | 6,431 |
| Maintenance of software and hardware | 15,842 | 16,129 |
| Maintenance and repairs | 1,170 | 1,484 |
| Advertising and publishing | 5,273 | 7,079 |
| Rent and leases | 5,674 | 4,428 |
| External supplies | ||
| Water, electricity and fuel | 4,065 | 3,756 |
| Current consumable material | 1,143 | 1,564 |
| Other | 181 | 99 |
| Travel, lodging and representation expenses | 2,596 | 3,063 |
| Transportation | 1,156 | 1,230 |
| Staff training | 942 | 1,223 |
| Insurance | 324 | 271 |
| Other | 2,158 | 2,189 |
| ---------- 68,730 |
---------- 71,910 |
|
| ====== | ====== |
This caption is made up as follows:
| 30-06-2012 | 30-06-2011 (Restated) |
|
|---|---|---|
| Partang, SGPS, S.A. | 3,964 | 3,731 |
| Totta Crédito Especializado, IFIC, S.A. | - | 1,560 |
| Unicre - Instituição Financeira de Crédito, S.A. | 763 | 1,063 |
| Benim - Sociedade Imobiliária, S.A. | ( 124 ) | 105 |
| -------- | ------- | |
| 4,603 | 6,459 | |
| ==== | ==== | |
Income from the insurance brokerage services rendered refers mainly to the commissions charged to Santander Totta Seguros - Companhia de Seguros de Vida S.A., and to other insurance companies for the placement of their products (Note 32), and it is as follows:
| 30-06-2012 | 30-06-2011 | |||||
|---|---|---|---|---|---|---|
| (Restated) | ||||||
| Life | Non-Life | Life | Non-Life | |||
| Insurance Insurance | Total | Insurance Insurance | Total | |||
| Santander Totta Seguros | 46,278 | 123 | 46,401 | 45,705 | 129 | 45,834 |
| Other | - | 5,368 | 5,368 | - | 5,014 | 5,014 |
| ---------- 46,278 |
-------- 5,491 |
---------- 51,769 |
---------- 45,705 |
------- 5,143 |
---------- 50,848 |
|
| ====== | ===== | ====== | ====== | ==== | ====== |
As at 30 June 2012 and 31 December 2011, the caption "Other assets – Income receivable from other services rendered" (Note 17) includes commission receivable from insurance companies, as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Santander Totta Seguros Other |
18,988 1,411 |
19,558 1,309 |
| --------- | ---------- | |
| 20,399 | 20,867 | |
| ===== | ===== |
These amounts refer essentially to the commissions raised on premiums for insurances sold during the second quarter of 2012 and last quarter of 2011, respectively, which were received subsequently to the balance sheet date.
For the purpose of determining BST's past service liability relating to the servicing and retired employees, actuarial studies were carried out by Towers Watson International Limited, Portuguese branch. The present value of the past service liability and corresponding current service cost were determined based on the Projected Unit Credit method.
The liability with retirement pensions, healthcare benefits and death subsidy as at 30 June 2012 and in the four previous years, as well as the respective hedging, are as follows:
| 30-06-2012 | 31-12-2011 | 31-12-2010 | 31-12-2009 | 31-12-2008 | |
|---|---|---|---|---|---|
| Estimated past service liability | |||||
| - Pensions | |||||
| . Serving employees | 214,235 | 210,669 | 275,580 | 255,009 | 231,114 |
| . Pensioners | 27,970 | 18,455 | 36,406 | 34,692 | 34,895 |
| . Retired and early retired staff | 378,926 | 387,608 | 855,952 | 896,251 | 973,904 |
| 621,131 | 616,732 | 1,167,938 | 1,185,952 | 1,239,913 | |
| - Healthcare benefits (SAMS) | 118,167 | 117,422 | 127,822 | 127,877 | 132,522 |
| - Death subsidy | 8,329 | 16,973 | 18,184 | 17,728 | 17,994 |
| 747,627 | 751,127 | 1,313,944 | 1,331,557 | 1,390,429 | |
| Funding of the liability | |||||
| - Valued of the fund assets | 754,689 | 758,244 | 1,312,888 | 1,395,849 | 1,391,585 |
| Amount overdunded/(underfunded) | 7,062 | 7,117 | (1,056) | 64,292 | 1,156 |
| Actuarioal and financial differences generated in the year | |||||
| - Change in assumptions | - | (103,831) | - | (51,086) | (100,674) |
| - Experience adjustments: | |||||
| . Other actuarial (Gains)/Losses | 2,581 | (23,708) | (29,458) | (21,172) | (4,100) |
| . Financial (Gains)/Losses | 3,087 | 339,627 | 103,392 | 61,639 | 306,680 |
| 5,668 | 315,919 | 73,934 | 40,467 | 302,580 | |
| 5,668 | 212,088 | 73,934 | (10,619) | 201,906 |
The reduction in liabilities with the death subsidy in the first semester of 2012 is essentially due to the amendments introduced by Decree Law no. 133/2012 of 27 of June, which introduced a maximum amount for the subsidy for death corresponding to six times the amount of the social support index. The reduction in liabilities resulting from this alteration was tEuros 9,190 (Note 35).
As indicated in Note 1.3.k) a three party agreement was established between the Finance Ministry, the Portuguese Association of Banks and the Federation for the Financial Sector (FEBASE) regarding the transfer to the Social Security of part of the liabilities with pensioners who as at December 31, 2011 were covered by the substitutive regime of the Social Security under the Collective Labor Agreement (ACT) in force for the banking sector. As a result, the Bank's pension fund assets backing such liabilities were also transferred to the Social Security. Following Decree-Law no. 127/2011, dated 31 December, the value of pension liabilities transferred to the Government was determined considering the following assumptions:
| Mortality table male population | TV 73/77 less 1 year |
|---|---|
| Mortality table female population | TV 88/90 |
| Actuarial technical rate (discount rate) | 4% |
The liabilities transferred to the Social Security amounting to tEuros 456,111 were determined based on the assumptions described above.
The liabilities calculated by the Bank immediately before the transfer, according to the financial and actuarial assumptions used, amounted to tEuros 435,260.
The difference between the liabilities transferred to the Social Security calculated using the assumptions set out in the Decree-Law No. 127/2011, dated of December 31 (tEuros 456,111) and those used by the Bank (tEuros 435,260), amounting to tEuros 20,851, was recorded in the caption "Staff costs" of the income statement for 2011.
The assumptions used by the Bank for the determination of responsibilities, immediately before the transfer to the Social Security were the following:
| Serving employees |
Retired employees |
|
|---|---|---|
| Mortality table | TV 88/90 | TV 88/90 |
| Actuarial technical rate (discount rate) | 5.92% | 5.00% |
| Salary growth rate | 2.35% | - |
| Pension growth rate | 1.35% | 1.35% |
The liabilities determined considering the above assumptions amounted to tEuros 1,186,387 of which tEuros 435,260 corresponds to liabilities transferred to the Social Security, as mentioned above.
The main assumptions used as at 30 June 2012 and 31 December 2011 were the following:
| Mortality table | TV 88/90 |
|---|---|
| Pension fund return rate | 5.50% |
| Actuarial technical rate (discount rate) | |
| - Serving | 5.92% |
| - Non-serving | 5.00% |
| Salary growth rate | 2.35% |
| Pension growth rate | 1.35% |
| Inflation rate | 1.75% |
The assumptions used in the calculation of the liabilities in 31 December 2011 were used in determining the cost with pensions for the first semester of 2012.
The discount rate of 5.00% for serving employees and 5.92% for the inactives correspond to an average of 5.5%, more specifically, the use of different rates for different populations leads to the same liability amount that would be determined if a rate of 5.5% for the entire population had been used.
To determine the amount of the Social Security pension which, under the terms of the ACT of the banking sector, should reduce the pension to be provided under the ACT, the following assumptions were used:
| Salary growth rate to calculate the deductible pension | 2.35% |
|---|---|
| Inflation (no. 1 of article 27) | 1.75% |
| Inflation (no. 1 of article 27) | 2.00% |
| Sustainability factor accumulated to 2011 | Reduction of 3.14% |
| Future sustainability factor | Reduction of 0.5% per year |
The basis for the return on assets expected rate of the Pension Fund is the estimated return on assets of the Fund's portfolio as at December 31, 2011, which is determined by the actuaries in charge.
The discount rates used in the actuarial studies are determined based on the market rates of highly rated corporate bonds in Euros for similar maturities as those of the Plan's liabilities, for serving and nonserving employees, respectively.
More specifically, among other sources, the rates of return on a sample of bonds of private corporations in Euros with credit quality of Aa-(credit risk rating, based on four rating agencies - Moody's, Standard & Poor's, Fitch and Dominion Bond Rating Service) were used. This information was taken from Bloomberg.
As at 30 June 2012 and 31 December 2011, the amount of liabilities with healthcare arising from a 1% variation in the contribution rate may be presented as follows:
| 30-06-2012 | 31-12-2011 | |||||
|---|---|---|---|---|---|---|
| Number of beneficiaries |
Contribution rate -1% |
Contribution rate + 1% |
Number of beneficiaries |
rate -1% |
Contribution Contribution rate + 1% |
|
| Serving employees (Defined Benefit Plan) | 5,393 | 22,746 | 31,018 | 5,451 | 20,811 | 28,379 |
| Serving employees (Defined Contribution Plan) | 171 | 40 | 54 | 157 | 25 | 33 |
| Pensioners | 950 | 4,203 | 5,731 | 926 | 4,183 | 5,705 |
| Retired and early retired staff | 5,340 | 73,363 | 100,039 | 5,338 | 74,338 | 101,370 |
| 11,854 | 100,352 | 136,842 | 11,872 | 99,357 | 135,487 |
Changes in the Bank's past service liability in the semester ended on 30 June 2012 and in the year ended 31 December 2011 may be broken down as follows, with regard to the Bank's pension plan:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Liabilities at the start of the period | 751,127 | 1,313,944 |
| Current service cost | 199 | 2,237 |
| Interest cost | 18,742 | 66,962 |
| Actuarial (gains)/losses | 2,582 | ( 127,539 ) |
| Early retirement | 5,009 | 3,763 |
| Amounts paid | ( 21,950 ) | ( 76,337 ) |
| Employees' contributions | 1,151 | 2,313 |
| Transfer of liabilities to the Social Security | - | (435,260 ) |
| Liabilities of the IFIC arising from the merger | - | 1,044 |
| Reduction of liabilities with death subsidy (Note 39) | ( 9,190 ) | - |
| Adjustment of the liabilities transferred to the Social Security | ( 43 ) | - |
| Liabilities at the end of the period | ----------- 747,627 ====== |
------------ 751,127 ====== |
The cost of the period relating to pensions includes current service and interest cost, less the estimated income from the assets of the Fund. In the first semester of 2012 and 2011, costs with pensions were recognised in the caption of "Staff costs" (Note 39) and are made up as follows:
| 30-06-2012 30-06-2011 (Restated) |
||
|---|---|---|
| Current service cost Interest cost Estimated income |
199 18,742 ( 20,374 ) |
1,159 33,502 ( 35,059 ) |
| Defined benefits plan Defined contribution plan London branch plan Increase of liability with IFIC |
--------- ( 1,433 ) 18 ( 331 ) - |
---------- ( 398 ) 20 150 1,044 |
| -------- ( 1,746 ) ===== |
------ 816 === |
The decrease in the current service cost results from the transfer to the Social Security General Regime of the serving employees covered by CAFEB and admitted in the sector before March 3, 2009 as set out under Decree Law No 1-A/2011, dated of January 3. As a result of this alteration, after the transition date the retirement pension considered is a complementary pension that results from the difference between the ACT pension and the Social Security pension.
Changes in actuarial differences in 2011 and in the first semester of 2012 was the following:
| Balance on 31 December 2010 – Restated | 338,967 ----------- |
|---|---|
| . Actuarial gains on pensions generated in 2011 | (112,771 ) |
| . Financial losses on pensions generated in 2011 | 301,625 |
| . Actuarial gains with healthcare and death subsidy in 2011 |
( 14,768 ) |
| . Financial losses with healthcare and death subsidy in 2011 |
38,002 |
| Balance on 31 December 2011 (Note 25) | ----------- 551,055 |
| . Actuarial losses on pensions generated in 2012 | 2,258 |
| . Financial losses on pensions generated in 2012 | 2,544 |
| . Actuarial losses with healthcare and death subsidy in 2012 |
323 |
| . Financial losses with healthcare and death subsidy in 2012 |
543 |
| Balance as at 30 June 2012 (Note 25) | ----------- 556,723 ====== |
As a result of the change in the accounting policy described in Note 1.3. k), the accumulated actuarial differences are deducted under the caption "Revaluation reserves".
As at 30 June 2012 and 31 December 2011, the balance sheet amount related with the pension plan is made up as follows (Note 17):
| ==== | ==== | |
|---|---|---|
| 6,674 | 3,297 | |
| Underfunded liability (London branch) | ( 388 ) -------- |
( 3,820 ) ------- |
| (Underfunded)/Overfunded liability | 7,062 | 7,117 |
| 30-06-2012 31-12-2011 |
In 2011, the changes in actuarial assumptions include the effect of the discount rate increase from 5.25% to 5.5% and the changes in the pensions and salaries growth rate from 1.75% to 1.35% and 3.2% to 2.35%, respectively.
The effective salary growth in the first semester of 2012 and in 2011 for the purpose of the contributions to the Social Security relating to the employees of the former Totta was 2.13% and 1.18%, respectively.
There was no effective increase in the pensions and of the salary table in 2012 and 2011.
Santander Pensões – Sociedade Gestora de Fundos de Pensões, S.A. is the entity that manages BST's Pension Fund. As at 30 June 2012 and 31 December 2011, the number of participants in the Fund was as follows:
| 30-06-2012 31-12-2011 | ||
|---|---|---|
| Serving employees (1) Pensioners |
5,564 950 |
5,608 926 |
| Retired and early retired staff | 5,340 --------- |
5,338 --------- |
| 11,854 ===== |
11,872 ===== |
(1) Of whom 171 and 157 employees are included in the new defined contribution plan as at 30 June 2012 and 31 December 2011, respectively.
The main demographic changes in 2011 and in the first semester of 2012 were the following:
| Serving | Retired and early retired |
||
|---|---|---|---|
| employees | staff | Pensioners | |
| Total as at 31-12-2010 | 5,606 | 5,381 | 912 |
| Exits: . Serving employees |
(111) | - | - |
| . By death . Other |
- - |
(86) - |
(19) (25) |
| Transfers | (36) | 36 | - |
| Entry of Totta IFIC employees | 99 | - | - |
| Entries | 50 | 7 | 58 |
| Total as at 31-12-2011 | 5,608 | 5,338 | 926 |
| Exits: . Serving employees |
(48) | - | - |
| . Retirement | - | (31) | (13) |
| Transfers | (24) | 24 | - |
| Entries | 28 | 9 | 37 |
| Total as at 30-06-2012 | 5,564 | 5,340 | 950 |
Changes in BST's Pension Fund during 2011 and in the first semester of 2012 was the following:
| Net asset value on 31 December 2010 | 1,312,888 |
|---|---|
| Contributions made by the Bank (cash) | ------------- 245,000 |
| Contributions made by employees | 2,313 |
| Net return of the Fund | ( 269,509 ) |
| Pensions paid | ( 76,337 ) |
| Transfer to the Social Security | ( 456,111 ) |
| Net asset value on 31 December 2011 | ------------ 758,244 |
| Contributions made by employees | ------------ 1,151 |
| Net return of the Fund | 17,287 |
| Pensions paid | ( 21,950 ) |
| Adjustment of the transfer of liabilities to the Social Security | ( 43 ) |
| Net asset value on 30 June 2012 | ------------ 754,689 ====== |
The rates of return of the Pension Fund in the first semester of 2012 (annualised) and in 2011 were 4.6% and -20.53%, respectively.
The Pension Fund's profitability was affected negatively in 2011 by the negative trend of the equity and loans markets.
As at 30 June 2012 and 31 December 2011, the BST's Pension Fund portfolio in 2011 included the following assets:
| 30-06-2012 31-12-2011 | ||
|---|---|---|
| Debt instruments | 271,159 | 385,693 |
| Real estate investment funds | 216,286 | 222,339 |
| Securities investment funds | 145,372 | 139,059 |
| Equity instruments | 152 | 152 |
| Buildings | 87,210 | 87,215 |
| Deposits | 42,960 | 125,255 |
| Pending settlement | ( 8,450 ) ( 201,470 ) | |
| ---------- | ------------ | |
| 754,689 | 758,244 | |
| ====== | ====== |
On 31 December 2011 the "Pending settlement" caption included an amount payable to the State of tEuros 201,575, referring to the transfer of part of the Bank's Pension Fund to the Social Security, as established in Decree Law no. 127/2011, of 31 December.
As at 30 June 2012 and 31 December 2011, the portfolios of the Pension Fund included the following assets with Santander Group companies:
| ====== | ====== | |
|---|---|---|
| 183,112 | 177,430 | |
| units in funds) | 160,146 ----------- |
154,464 ----------- |
| Leased property Securities (including participating |
22,966 | 22,966 |
| 30-06-2012 31-12-2011 |
A life insurance policy was taken out in 2010 to cover the liability arising from a new supplementary retirement plan for the Bank's executives. The initial contribution to the new plan amounted to tEuros 4,430. In 2011, the premium paid by the Bank amounted to tEuros 583 and the periodified amount as at 30 June 2012 was tEuros 291.
As at 30 June 2012 and 31 December 2011, the main assumptions used in the calculation of the liabilities with retirement pensions relating to the pension plan that covers the employees of the London branch were the following:
| Mortality table | AMC00/AFC00 |
|---|---|
| Rate of return on the assets of the Pension Fund | 5.02% |
| Actuarial technical rate (discount rate) | 4.90% |
| Salary growth rate | 2.70% |
| Pension growth rate | 1.90% |
| Rate of inflation | 2.70% |
As at 30 June 2012 and 31 December 2011, the liabilities with the defined benefit pension plan of the London branch and its hedging were as follows:
| 30-06-2012 31-12-2011 | ||
|---|---|---|
| Estimated liabilities for past services | 30,786 | 29,260 |
| Hedging – net asset value of the fund | 30,398 | 25,440 |
| --------- | ---------- | |
| Non-financed amount – London branch | ( 388 ) | ( 3,820 ) |
| === | ==== |
In relation to the specific pension plan of the London branch, the movement in the liabilities for past services in the year ended 31 Decemgber 2011 and in the first semester of 2012 may be presented as follows:
| Liabilities as at 31 December 2010 | 25,003 |
|---|---|
| --------- | |
| Cost of current services | 174 |
| Interest cost | 1,450 |
| Actuarial losses | 2,551 |
| Amounts paid | ( 680 ) |
| Foreign exchange fluctuations | 762 --------- |
| Liabilities as at 31 December 2011 | 29,260 |
| Cost of current services | --------- 100 |
| Interest cost | 729 |
| Amounts paid | ( 337 ) |
| Foreign exchange fluctuations | 1,034 |
| Liabilities as at 30 June 2012 | --------- 30,786 |
| ===== |
The movement in the Pension Fund of the London branch during 2011 and first semester of 2012 was the following:
| Net asset value on 31 December 2010 | 23,112 |
|---|---|
| Net return of the fund | --------- 2,125 |
| Contribution by the Bank | 179 |
| Pensions paid | ( 680 ) |
| Foreign exchange fluctuations | 704 |
| Net asset value in 31 December 2011 | --------- 25,440 |
| Net return of the fund | --------- 1,202 |
| Contribution by the Bank | 3,193 |
| Pensions paid | ( 337 ) |
| Foreign exchange fluctuations | 900 |
| Net asset value as at 30 June 2012 | ---------- 30,398 |
| ===== |
The costs with the pension plan of the London branch in the first six months of 2012 and 2011 were as follows:
| 30-06-2012 30-06-2011 | ||
|---|---|---|
| Cost of current services | 100 | 104 |
| Interest cost | 729 | 675 |
| Estimated return | ( 1,160 ) | ( 629 ) |
| ------- | ----- | |
| ( 331 ) | 150 | |
| === | === |
As at 30 June 2012 and 31 December 2011, the movement in the actuarial differences of the London branch was broken down as follows:
| 30-06-2012 31-12-2011 | ||
|---|---|---|
| Actuarial losses on pensions in 2009 | 3,630 | 3,630 |
| Financial gains on pensions in 2009 | ( 1,315 ) | ( 1,315 ) |
| Actuarial gains on pensions in 2010 | ( 817 ) | ( 817 ) |
| Financial gains on pensions in 2010 | ( 45 ) | ( 45 ) |
| Actuarial losses on pensions in 2011 | 2,551 | 2,551 |
| Financial gains on pensions in 2011 | ( 930 ) | ( 930 ) |
| Financial gains on pensions in 2012 | ( 41 ) | - |
| Foreign exchange fluctuations | 273 | 138 |
| ------- | ------- | |
| Balance of actuarial differences (Note 25) | 3,306 | 3,212 |
| ==== | ==== |
As at 30 June 2012 and 31 December 2011, the Pension Fund of the London branch included the following assets:
| ===== | ===== | |
|---|---|---|
| Fund's net asset value | 30,398 | 25,440 |
| --------- | --------- | |
| Deposits | 3 | 69 |
| Equity instruments | 4,354 | 3,608 |
| Debt instruments | 26,041 | 21,763 |
| 30-06-2012 31-12-2011 | ||
Between July 2003 and February 2011, BST sold part of its mortgage loan portfolios, through twelve operations, with a total initial amount of tEuros 23,250,000. The loans were sold at their nominal value (book value) to Hipototta FTC Funds, with the exception of the last two securitization operations (Hipototta No. 11 and Hipototta No. 12, BST SME no. 1 and Totta Consumer no. 1), in which the credits were sold to Tagus – Sociedade de Titularização de Créditos, S.A. (Tagus).
In April 2009, Totta IFIC securitised part of its leasing portfolio and long-term rental through an operation with a total initial amount of tEuros 1,300,000. The loans were sold at their nominal value (book value) to a securitization fund called LeaseTotta No. 1 FTC.
In October 2009 BST liquidated Hipototta No. 9 Ltd. which was established under the securitization operation of November 2008, the initial amount of the loans sold being tEuros 1,550,000. The liquidation occurred after a "Mortgage Retransfer Agreement", under which the Bank repurchased the previously securitised loans for tEuros 1,462,000.
In April 2010, BST liquidated Hipototta No. 6 Ltd, which was established under the securitization operation of October 2007, the initial amount of the loans sold being tEuros 2,200,000. The liquidation occurred after a "Mortgage Retransfer Agreement", under which the Bank repurchased the previously securitised loans for tEuros 1,752,357.
In July 2010, BST securitised part of its mortgage portfolio, called Hipototta no. 11, for the total initial amount of tEuros 2,000,000. The loans were sold at their nominal value (book value) to Tagus – Sociedade de Titularização de Créditos, S.A. (Tagus).
In January and February 2011, BST entered into a Mortgage Retransfer Agreements with Hipototta No. 2 PLC, Hipototta No. 3 PLC and Hipototta no. 10 Ltd. under which repurchased the loans previously securitised, by the amounts of tEuros 880,636, tEuros 1,548,396 and tEuros 803,494, respectively and the Notes held in its portfolio related to these securitizations have redeemed at their nominal value.
In May and June 2012, BST entered a Mortgage Retransfer Agreements with Hipototta no. 11 and Hipototta no. 12. Under these agreements BST repurchased the previously securitised loans for tEuros 1,719,660 and tEuros 1,197,009, respectively, and was reimbursed for the Notes it held in portfolio associated to these securitizations at the respective nominal value.
In March 2011 BST securitised part of its portfolio of commercial paper and loans to companies through an operation called BST SME No. 1, with a total initial amount of tEuros 2,000,000. Furthermore, in June 2011 the Bank securitised part of its consumer credit portfolio through an operation called Totta Consumer No. 1, with a total initial amount of tEuros 1,000,000. The credits from these operations were sold at their nominal value to Tagus. In March 2012, BST liquidated BST SME no. 1. This liquidation took place through the "SME Receivables Retransfer Agreement", under which the Bank again purchased the credits initially securitised for tEuros 1,792,480.
Part of the funds Hipototta and Leasetotta are managed by Navegator – Sociedade Gestora de Fundos de Titularização de Créditos, S.A. (Navegator). BST continues to manage the loan contracts, transferring all the amounts received under the loan contracts to the Hipototta and Leasetotta Funds and to Tagus. The Group holds no direct or indirect participation in Navegator or in Tagus.
To finance the operation, the Hipototta and Leasetotta No. 1 FTC Funds issued participating units, for the same amount of the loan portfolio purchased, which were fully subscribed for by Hipototta PLC/Ltd. and Leasetotta, both based in Ireland.
The Hipottota FTC and Leasetotta No.1 FTC Funds pays all amounts received from BST and from the Portuguese Treasury ("Direcção Geral do Tesouro") to the Hipototta PLC/Ltd and Leasetotta No. 1 Limited, segregating the instalments between principal and interest.
To finance these operations, the Hipottota and the LeaseTotta PLC/Ltd. and Tagus issued bonds with different levels of subordination and rating and, consequently, of return. As at 30 June 2012, the bonds issued and still active are as follows:
| Hipottta no. 1 PLC | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Remuneration | ||||||||||
| Issued debt | Amount Initial |
Actual | S&P | Rating Moody's |
Redemption date |
Early redemption date |
Up to early redemption date |
After early redemption date |
||
| Class A | 1,053,200 | 196,808 | AA- | A2 | November 2034 | August 2012 | Euribor 3 m + 0.27% | Euribor 3 m + 0.54% | ||
| Class B | 32,500 | 12,690 | AA- | Baa2 | November 2034 | August 2012 | Euribor 3 m + 0.65% | Euribor 3 m + 0.95% | ||
| Class C | 14,300 | 5,592 | A | Ba1 | November 2034 | August 2012 | Euribor 3 m + 1.45% | Euribor 3 m + 1.65% | ||
| 1,100,000 | 215,090 | |||||||||
| Class D | 17,600 | 11,000 | November 2034 | August 2012 | Residual income of the securitized portfolio | |||||
| 1,117,600 | 226,090 | |||||||||
| Hipottta no. 4 PLC | Remuneration | |||||||||
| Amount | Redemption | Early | Up to early | After early | ||||||
| Issued debt | Initial | Actual | Rating Fitch | date | redemption date | redemption date | redemption date | |||
| Class A | 2,616,040 | 1,068,211 | A | December 2048 | December 2014 | Euribor 3 m + 0.12% | Euribor 3 m + 0.24% | |||
| Class B | 44,240 | 38,863 | A | December 2048 | December 2014 | Euribor 3 m + 0.19% | Euribor 3 m + 0.40% | |||
| Class C | 139,720 | 122,735 | BB | December 2048 | December 2014 | Euribor 3 m + 0.29% | Euribor 3 m + 0.58% | |||
| 2,800,000 | 1,229,809 | |||||||||
| Class D | 14,000 | 14,000 | December 2048 | December 2014 | Residual income of the securitized portfolio | |||||
| 2,814,000 | 1,243,809 | |||||||||
| Hipottta no. 5 PLC | ||||||||||
| Amount | Rating | Redemption | Early | Up to early | Remuneration After early |
|||||
| Issued debt | Initial | Actual | S&P | Moody's | date | redemption date | redemption date | redemption date | ||
| Class A1 | 200,000 | - | February 2060 | February 2014 | Euribor 3 m + 0.05% | Euribor 3 m + 0.10% | ||||
| Class A2 | 1,693,000 | 926,158 | AA- | A3 | February 2060 | February 2014 | Euribor 3 m + 0.13% | Euribor 3 m + 0.26% | ||
| Class B | 26,000 | 26,000 | AA- | Baa3 | February 2060 | February 2014 | Euribor 3 m + 0.17% | Euribor 3 m + 0.34% | ||
| Class C | 24,000 | 24,000 | A | Ba2 | February 2060 | February 2014 | Euribor 3 m + 0.24% | Euribor 3 m + 0.48% | ||
| Class D | 26,000 | 26,000 | BBB | B3 | February 2060 | February 2014 | Euribor 3 m + 0.50% | Euribor 3 m + 1.00% | ||
| Class E | 31,000 | 31,000 | BB | Caa2 | February 2060 | February 2014 | Euribor 3 m + 1.75% | Euribor 3 m + 3.50% | ||
| 2,000,000 | 1,033,158 |
Class F 10,000 10,000 CCC- Ca February 2060 February 2014 Residual income of the securitized portfolio 2,010,000 1,043,158
Hipototta no. 7 Ltd
| Amount | Rating | Redemption | ||||
|---|---|---|---|---|---|---|
| Issued debt | Initial | Actual | S&P | Moody's | date | Remuneration |
| Class A1 | 200,000 | - | February 2061 | Euribor 3 m + 0.20% | ||
| Class A2 | 1,596,000 | 1,059,152 | AA- | A2 | February 2061 | Euribor 3 m + 0.30% |
| Class B | 60,000 | 60,000 | A | A3 | February 2061 | Euribor 3 m + 0.60% |
| Class C | 50,000 | 50,000 | BBB | Baa2 | February 2061 | Euribor 3 m + 1.2% |
| Class D | 44,000 | 44,000 | BB | Ba3 | February 2061 | Euribor 3 m + 2.75% |
| Class E | 50,000 2,000,000 |
50,000 1,263,152 |
B | Caa1 | February 2061 | Euribor 3 m + 4.75% |
| Class F | 20,000 2,020,000 |
20,000 1,283,152 |
CCC- | Ca | February 2061 | Residual income of the securitized portfolio |
(Amounts in thousands of Euros - tEuros, except when expressly indicated)
| Totta Consumer no. 1 | |||||
|---|---|---|---|---|---|
| Issued debt | Amount Initial |
Actual | Rating DBRS |
Redemption date |
Remuneration |
| Class A | 700,000 | 399,785 | AAH | 2038 | Euribor 3 m + 3% |
| Class B | 300,000 | 300,000 | 2038 | Euribor 3 m + 3.25% | |
| 1,000,000 | 699,785 | ||||
| Class C | 100,400 | 100,400 | 2038 | Residual income of the securitized portfolio | |
| 1,100,400 | 800,185 | ||||
| Leasetotta no. 1 Ltd | |||||
| Amount | Rating | Redemption | |||
| Issued debt | Initial | Actual | DBRS | date | Remuneration |
| Class A | 1,040,000 | 346,020 | AAH | 2042 | Euribor 3 m + 0.30% |
| Class B | 260,000 | 260,000 | 2042 | Euribor 3 m + 4.75% | |
| 1,300,000 | 606,020 | ||||
| Class C | 65,000 | 65,000 | 2042 | Residual income of the securitized portfolio | |
| 1,365,000 | 671,020 |
The bonds issued by Hipototta no. 1 PLC and Hipototta no. 4 PLC bear interest payable quarterly on March 30, June 30, September 30 and December 31 of each year. The bonds issued by Hipototta no. 5 PLC and Hipototta no. 7 Ltd bear interest payable quarterly on February 28, May 30, August 31 and November 30 of each year. The bonds issued by Totta Consumer no. 1 bear interest payable quarterly on January 30, April 30, July 31 and October 31 of each year. The bonds issued by LeaseTotta no. 1 Limited bear interest payable quarterly on January 15, April 15, July 15 and October 15 of each year.
BST has the option to early redeem the notes on the above-mentioned dates. For all Hipotottas, for BST SME No. 1 and for Totta Consumer No. 1, BST has the possibility of repurchasing the loan portfolios at their nominal value when the outstanding loan portfolio is equal to or less than 10% of the initial amount of the operations.
Furthermore, up to five days before each quarterly interest payment date, Hipototta and Leasetotta PLC/Ltd have the option to make partial repayments of the Class A, B and C notes, as well as the Class D and E notes in the case of Hipototta PLC No. 5 and Hipototta No. 7 Ltd, in order to adjust the amount of the liability to that of the outstanding mortgage loan portfolios).
Remuneration of the Class D notes of Hipototta No. 1 and Hipototta No. 4, the Class F notes for Hipottota No.5, Hipottota No.7 and the Class C notes for the Hipototta No. 11, Hipototta No. 12, Leasetotta No. 1 Limited, Totta Consumer No. 1 and BST SME No. 1 are the last liabilities to be paid.
Remuneration of these classes of Notes corresponds to the difference between the income generated by the securitised loan portfolio and the sum of all the costs of the operation, namely:
When the securitization operations were launched, the estimated income of the securitised loan portfolios included in the calculation of the remuneration of the Class D notes of Hipototta PLC No. 1 and 4 corresponded to an average annual rate of 1.1% and 0.9%, respectively. For the Class F notes of Hipototta PLC No. 5 it corresponded to an annual average of 0.9% of the total credit portfolio. For the Class F notes of Hipotottas No. 7 and the Class C notes of Hipototta No.11 and Leasetotta No. 1, it corresponded to an annual average rate of 0.7% of each of the loan portfolios. For the Class C notes of Hipototta No. 12, BST SME and Totta Consumer corresponded to an average annual rate of 5.25% on the value of the loan portfolio.
In 2010, the Bank repurchased class A bonds from Hipototta no. 4 PLC, class A2 bonds from Hipototta no. 5 PLC and class A bonds from Hipototta no. 2 PLC. As mentioned above, the Hipototta no. 2 PLC, Hipototta no. 3 PLC and the Hipototta no. 10 Ltd were liquidated in January and February 2011. The Hipototta no. 11, Hipototta no. 12 and the BST SME no. 1 were liquidated in March, May and June 2012, respectively.
When the securitizations were issued, subordinated loans were granted by BST to Hipotottas, for facilities / credit lines in case of need for liquidity by Hipotottas. There were also signed Swap Agreements between the Santander Group and the first issued Hipotottas and between the BST and the remaining securitization vehicles to cover the interest rate risk.
In compliance with IAS 27 and SIC 12, for the purposes of the consolidated financial statements, the Hipototta FTC Funds and Hipototta PLC/Ltd were included in the consolidation perimeter (Note 4), given that the Bank has the majority of the risks and benefits relating to the operations of these entities. Consequently, the securitised mortgage loans were reflected in the balance sheet and part of the bonds issued by Hipototta PLC/Ltd, Leasetotta No.1 Limited and Tagus which are held by the Group, were eliminated in the consolidation process.
The related party disclosures of the Bank with which it had balances or transactions in the first semester of 2012 and in 2011 are the following:
| Name of the related entity | Head office |
|---|---|
| Entities that directly or indirectly control the Group | |
| Santander Totta, SGPS Santusa Holding, S.L. |
Portugal Spain |
| Banco Santander, S.A. | Spain |
| Entities under direct or indirect control by the Group | |
| Totta & Açores, Inc. - Newark | USA |
| Serfim International Bank & Trust | Cayman Islands |
| Totta & Açores Financing, Ltd Totta Ireland, PLC |
Cayman Islands Ireland |
| Bst International Bank, Inc. | Puerto Rico |
| Santander Asset Management SGFIM, S.A. | Portugal |
| Santander - Gestão de Activos,SGPS,S.A. | Portugal |
| Santander-Pensões Sociedade Gestora de Fundos de Pensões, S.A. | Portugal |
| Santotta Internacional, S.G.P.S, Sociedade Unipessoal, LDA Taxagest, SGPS, S.A. |
Portugal Portugal |
| Tottaurbe - Empresa Administração e Construções, S.A. | Portugal |
| Entities significantly influenced by the Group | |
| Banco Caixa Geral Totta de Angola | Angola |
| Benim - Sociedade Imobiliária, S.A. | Portugal |
| Partang,SGPS.S.A. Unicre-Instituição Financeira de Crédito, S.A. |
Portugal Portugal |
| Name of the related entity | Head office |
| Entities under direct or indirect common control by the Group | |
| Banco Santander Brasil, S.A. Banco Santander Chile |
Brasil Chile |
| All Funda Bank, SA | Spain |
| Banco Banif, S.A. | Spain |
| Capital Grupo Santander, SA SGECR | Spain |
| Fondo de Titulización de Activos Santander Empresas 1 | Spain |
| Fondo de Titulización de Activos Santander Empresas 2 | Spain |
| Fondo de Titulización de Activos Santander Empresas 3 Fondo de Titulización Santander Financiación 1 |
Spain Spain |
| Ftpyme Santander 2 Fondo de Titulización de Activos | Spain |
| Geoban, S.A. | Spain |
| Gesban Servicios Administrativos Globais | Spain |
| Grupo Banesto: Sociedades consolidables Ibérica de Compras Corporativas |
Spain Spain |
| Ingeniería de Software Bancário, S.L. | Spain |
| Open Bank Santander Consumer S.A. | Spain |
| Produban Servicios Informáticos Generales, S.L. | Spain |
| Santander Back-Office Globales Mayorista | Spain |
| Santander Bank & Trust Ltd. Santander Consumer Finance S.A. |
Spain Spain |
| Santander Consumer Spain Auto 07-1 | Spain |
| Santander Consumer, EFC, S.A. | Spain |
| Santander de Titulizacion SGFT | Spain |
| Santander Global Facilities Santander Hipotecario 1 Fondo de Titulización de Activos |
Spain Spain |
| Santander Hipotecario 2 Fondo de Titulización de Activos | Spain |
| Santander Hipotecario 3 Fondo de Titulización de Activos | Spain |
| Santander Investment, S.A. | Spain |
| Santander Seguros y Reaseguros, Compañía Aseguradora, S.A. | Spain |
| Santander Tecnologia y Operaciones AEIE Transolver Finance EFC,SA |
Spain Spain |
| Union de Créditos Inmobiliários,SA | Spain |
| Banco Santander International Miami | USA |
| Santander Investment Securities,Inc | USA |
| Sovereign Bank Optimal Strategic Us Equity Irl Euro Fnd |
USA Ireland |
| Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander | México |
| Banco Santander Puerto Rico | Puerto Rico |
| Banco Santander Consumer Portugal S.A. | Portugal |
| HBF Aluguer Comércio Viaturas S.A. ISBAN PT - Engenheria and Software Bancário, S.A. |
Portugal Portugal |
| Konecta Portugal, Lda. | Portugal |
| Multi-Rent, Aluguer e Comércio de Automóveis, S.A. | Portugal |
| Portal Universia Portugal, Prestaçao de Serviços de Informática, S.A. | Portugal |
| Santander Totta Seguros, Companhia de Seguros de Vida, S.A. | Portugal |
| UCI Mediação de Seguros, Unipessoal Lda. Abbey National Treasury Services plc |
Portugal United Kingdom |
| Alliance & Leicester PLC | United Kingdom |
| Cater Allen International Limited | United Kingdom |
| Santander UK plc | United Kingdom |
| Banco Santander (Suisse), S.A. | Switzerland |
| Special Purpose Entities that are directly or indirectly controlled by the Group | |
| HIPOTOTTA NO. 1 PLC | Ireland |
| HIPOTOTTA NO. 4 PLC | Ireland |
| HIPOTOTTA NO. 5 PLC HIPOTOTTA NO. 7 Ltd |
Ireland Ireland |
| LEASETOTTA NO. 1 Ltd | Ireland |
| HIPOTOTTA NO. 1 FTC | Portugal |
| HIPOTOTTA NO. 4 FTC | Portugal |
| HIPOTOTTA NO. 5 FTC HIPOTOTTA NO. 7 FTC |
Portugal Portugal |
| LEASETOTTA NO.1 FTC | Portugal |
TAGUS - Soc. Titularização de Créditos, S.A. (TOTTA CONSUMER NO. 1) Portugal
| Entities that directly or indirectly |
Entities that are significantly influenced |
Entities under direct or indirect common control |
|
|---|---|---|---|
| Assets: | control the Group | by the Group | by the Group |
| Balances due from banks | 7,182 | - | 27,448 |
| Financial assets held for trading | 217,868 | - | 2,279 |
| Available-for-sale financial assets | - | - | 4,672 |
| Loans and advances to banks | 869,757 | - | 291,738 |
| Loans and advances to customers | - | - | 36,530 |
| Hedging derivatives | 196,633 | - | - |
| Investments in associates and subsidiaries excluded from the consolidation | - | 143,763 | - |
| Other assets | 18,740 | - | 39,101 |
| Liabilities: Financial liabilities held for trading |
1,636,798 | - | 56,439 |
| Resources of other financial institutions | 631,662 | 79,967 | 304,164 |
| Resources of customers and other loans | 83,213 | 1,233 | 838,202 |
| Debt securities issued | 537,845 | - | 1,342,057 |
| Hedging derivatives | 314,018 | - | - |
| Subordinated liabilities | - | - | 4,321 |
| Other liabilities | 14,813 | - | 505 |
| Costs: | |||
| Interest and similar charges | 220,457 | 513 | 47,949 |
| Charges w ith services and commission | 440 | - | 45 |
| Result of assets and liabilities designated at fair value through profit or loss |
2,663,659 | - | 184,754 |
| General administrative costs | - | - | 16,998 |
| Income: | |||
| Interest and similar income | 221,655 | 4 | 5,884 |
| Result of assets and liabilities designated at fair value through profit or loss |
2,344,349 | - | 168,580 |
| Result of foreign exchange revaluation | 1,256 | - | - |
| Income from services and commission | 196 | - | 48,057 |
| Results of participations in associates and joint-ventures | - | 4,603 | - |
| Other operating results | - | - | 99 |
| Off-balance sheet Items: | |||
| Guarantees and other contingent liabilities | 17,063 | - | 46,941 |
| Guarantees received | 715 | - | 1,400 |
| Commitments to third parties | 12,275 | 815 | 83,202 |
| Currency operations and derivatives | 23,074,154 | - | 1,157,897 |
| Responsibilities for services rendered | 2,938,302 | 36,426 | 8,742,557 |
| Assets: | Entities that directly or indirectly control the Group |
Entities that are significantly influenced by the Group |
Entities under direct or indirect common control by the Group |
|---|---|---|---|
| Balances due from banks | 9,444 | - | 18,537 |
| Financial assets held for trading | 297,417 | - | 5,948 |
| Available-for-sale financial assets | - | - | 13,668 |
| Loans and advances to banks | 1,011,381 | - | 371,170 |
| Loans and advances to customers | - | - | 32,502 |
| Hedging derivatives | 136,090 | - | - |
| Investments in associates and subsidiaries excluded from the consolidation | - | 134,050 | - |
| Other assets | 21,016 | 5,395 | 23,014 |
| Liabilities: | |||
| Financial liabilities held for trading | 1,440,410 | - | 68,602 |
| Resources of other financial institutions | 668,304 | 103,227 | 391,231 |
| Resources of customers and other loans | 108,163 | 11,004 | 711,466 |
| Debt securities issued | 699,812 | - | 1,658,447 |
| Hedging derivatives | 277,632 | - | - |
| Subordinated liabilities | - | - | 4,328 |
| Other liabilities | 18,430 | - | 1,547 |
| Costs: | |||
| Interest and similar charges | 326,109 | 234 | 83,914 |
| Charges w ith services and commission | 1,118 | - | 269 |
| Result of assets and liabilities designated at fair value through profit or loss |
2,901,332 | - | 200,887 |
| Result of available-for-sale financial assets | 75,247 | - | - |
| Result of foreign exchange revaluation | 2,418 | - | - |
| General administrative costs | - | 16 | 35,203 |
| Result from sale of other assets | 2,817 | - | - |
| Other operating results | - | - | 1 |
| Income: | |||
| Interest and similar income | 321,961 | 26 | 8,494 |
| Result of assets and liabilities designated at fair value through profit or loss |
2,281,194 | - | 162,403 |
| Result of available-for-sale financial assets | - | - | 715 |
| Income from services and commission | 588 | 721 | 96,663 |
| Results of participations in associates and joint-ventures | - | 11,330 | - |
| Other operating results | - | - | 176 |
| Off-balance sheet Items: Guarantees and other contingent liabilities |
475,879 | - | 32,935 |
| Guarantees received | 715 | - | 1,400 |
| Commitments to third parties | 1,946 | 389 | 116,684 |
| Currency operations and derivatives | 24,154,065 | - | 1,200,737 |
| Responsibilities for services rendered | 3,532,924 | 35,717 | 8,511,057 |
As at 30 June 2012 and 31 December 2011, the loans and advances to members of management and supervisory boards, considered key management personnel of the Bank, amounted to tEuros 1,092 and tEuros 1,289, respectively. Fixed and variable remuneration at these dates amounted to tEuros 2,745 and tEuros 4,522, respectively.
The Santander Group, which includes BST, also has a worldwide long term incentive plan, which is described in Note 41 and is divided into cycles. For the members of the Board of Directors, the amount entered in the caption of staff costs as at 30 June 2012 and 2011 is presented below:
| 30-06-2012 30-06-2011 | ||
|---|---|---|
| Third cycle – PI11 - assigned in 2008 and exercisable in July 2011 | - | 177 |
| Fourth cycle – PI12 - assigned in 2009 exercisable in July 2012 | 85 | 152 |
| Fifth cycle – PI13 - assigned in 2010 exercisable in July 2013 | 109 | 158 |
| Sixth cycle – PI14 - assigned in 2011 exercisable in July 2014 | - | - |
| ----- | ------ | |
| 194 | 487 | |
| === | === |
In 11 July 2011, the third cycle of the long term incentive plan linked to objectives was completed. In this regard, the total number of shares assigned to members of the Board of Directors was 133,727, at a price of
7.511 Euros per share.
With regard to post-employment benefits, the members of the Board of Directors with a labour contract with BST are included in the pension plan of the Collective Labour Agreement ("Acordo Colectivo de Trabalho" - ACT) for the banking sector subscribed by BST. The general conditions of this plan are described in Note 1.3. k).
In the Shareholders' General Meeting held on May 30, 2007, the BST's shareholders approved the "Regulation for suplementary attribution of retirement pensions for age or disability" for the executive members of the Board of Directors of the former BTA that are executive members of the BST's Board of Directors (executive committee) and were in office for more than fifteen years, consecutive or interpolated. Under this Regulation they will be entitled to a pension supplement equivalent to 80% of gross annual salary. The amount of the supplementary retirement pension shall be determined by the Compensation Committee when the time in office is less than fifteen years. For these situations, it is defined that the supplement of the pension will be 65% of gross annual salary, whenever the time in office equals to or is greater than ten years, and 75% of gross annual salary, whenever the time in office equals to or is greater than twelve years. This defined benefit plan is a supplementary plan dependent from the general Social Security system.
As at 30 June 2012 and 31 December 2011 the liabilities with this plan amounted to tEuros 10,127 and tEuros 9,686, respectively, and were covered by a provision of the same amount stated in the caption "Provisions for pensions and other charges" (Note 22).
With regard to employment termination benefits, in accordance with Commercial Company Law (Código das Sociedades Comerciais), whenever the term of a member of management or supervisory boards is early terminated by BST, it will pay the member the future remuneration that he/she would be entitled to up to the end of its term.
The "Share Plan Linked to the Santander Group's Objectives" was approved in a Shareholders' General Meeting of Banco Santander. This plan is divided into cycles, and so far six cycles have been approved. BST is also included in this plan.
Each beneficiary of the plan has the right to receive a maximum number of Banco Santander shares.The final number allocated is determined by multiplying the maximum number of shares initially allocated by the sum of the coefficients indexed to the evolution of Banco Santander in relation to other entities included in a predefined group. The comparison is measured in relation to two parameters: total shareholders' return and increase in earnings per share for the first three cycles, for the remaining cycles the comparison is measured by the total shareholders' return only.
The maturity dates of the cycles for the stock plans linked to objectives, the total number of shares granted and the value per share are as follows:
| Total number of | |||
|---|---|---|---|
| Cycle | Maturity date | shares granted | Value per share |
| First | July 6, 2009 | 326,681 | 8.49 |
| Second | July 8, 2010 | 540,822 | 8.77 |
| Third | July 11, 2011 | 571,640 | 7.51 |
As described in Note 1.3. n), recognition of the share incentive plans consists in recognizing the right of the Bank's employees to such instruments in the income statement for the year under the caption "Staff costs", as it corresponds to remuneration for services rendered. Management, hedging and implementation of the plans are provided by Banco Santander for all employees covered by the Plan worldwide.
As at 30 June 2012 and 2011, the cost total of the plan for all the employees of BST covered by it may be presented as follows:
| Third cycle - PI11 - Fourth cycle - PI12 575 Fifth cycle - PI13 736 Sixth cycle - PI14 533 ------- 1,844 |
30-06-2012 30-06-2011 |
|---|---|
| 632 | |
| 575 | |
| 736 | |
| - | |
| -------- | |
| 1,943 | |
| ==== | ==== |
The employees are entitled to stocks upon their permanence in the Santander Group (vesting condition). The cost per share, as well as the dates to deliver the shares are summarised in the following table:
| Estimated date | |||||
|---|---|---|---|---|---|
| Number of | Cost per share | of delivery of the | Number of | Entitlemen | |
| Stocks' plans | shares | (Euros) | shares | employees | t date |
| Plans in place as at 31 December 2010: | |||||
| PI11 | 662,021 | 5.4419 | Jul/2011 | 311 | 2008 |
| PI12 | 754,339 | 4.5112 | Jul/2012 | 311 | 2009 |
| PI13 | 778,723 | 5.5707 | Jul/2013 | 310 | 2010 |
| Change in 2011: | |||||
| PI11 - Reversals (*) | (1,750) | - | - | (1) | - |
| PI11 - Shares available | (571,640) | - | Jul/2011 | (321) | - |
| PI11 - Shares not available (**) | (95,001) | - | - | - | - |
| PI12 - Reversals (*) | (15,250) | - | - | (5) | - |
| PI13 - Reversals (*) | (13,870) | - | - | (4) | - |
| PI11 - Inclusion of employees due to entry of companies (***) | 6,370 | - | - | 11 | - |
| PI12 - Inclusion of employees due to entry of companies (***) | 7,970 | - | - | 12 | - |
| PI13 - Inclusion of employees due to entry of companies (***) | 10,590 | - | - | 13 | - |
| PI13 - Corrections (****) | 3,769 | - | - | 1 | - |
| PI14 - Entitlement | 609,358 | 4.5254 | Jul/2014 | 309 | 2011 |
| Plans in place as at 31 December 2011: | |||||
| PI12 | 747,059 | 4.5112 | Jul/2012 | 318 | 2009 |
| PI13 | 779,212 | 5.5707 | Jul/2013 | 320 | 2010 |
| PI14 | 609,358 | 4.5254 | Jul/2014 | 309 | 2011 |
| Change in 2012: | |||||
| PI12 - Reversals (*) | (74,339) | - | - | (2) | - |
| PI13 - Reversals (*) | (76,339) | - | - | (2) | - |
| Plans in place as at 30 June 2012: | |||||
| PI12 | 672,720 | 4.5112 | Jul/2012 | 316 | 2009 |
| PI13 | 702,873 | 5.5707 | Jul/2013 | 318 | 2010 |
| PI14 | 609,358 | 4.5254 | Jan/1900 | 309 | 2011 |
Notes:
(*) Reversal of the rights granted to beneficiaries who have not completed the permanence requirements in the Santander Group established in the Regulation Plan.
(**) Difference between the maximum number of allocated shares and the number of shares actually delivered. The number of allocated shares results by applying a coefficient calculated according to the Santander Group's performance applied to the maximum number of shares allocated.
(***) Corresponds to employees from Totta IFIC integrated into the BST following the merger occurred in the first half of 2011
(****) Difference between the values indicated by Santander in Spain December 2010 (estimate) and March 2011 (actual).
For the share plans linked to objectives in force on 30 June 2012 (4th, 5th and 6th cycles), the fair value was determined in accordance with a following methodology:
| PI12 | PI13 | PI14 | |
|---|---|---|---|
| Volatility (*) | 42.36% | 49.65% | 51.35% |
| Annual dividend yield in recent years | 4.88% | 6.34% | 6.06% |
| Risk-free interest rate | 2.040% | 3.330% | 4.073% |
(*) Historical volatility of the corresponding period (2 or 3 years)
Application of the simulation model results in a percentage of 55.42% for PI12, 62.62% for Pl13 and 55.39% for PI14 to which 50% of the value allocated to determine the accounting cost of the TRS incentive is applied. Since the valuation refers to a market condition, it is not subject to adjustment as from the allocation date.
As at 30 June 2012 and 31 December 2011, financial instruments had the following book value:
| 30-06-2012 | |||||
|---|---|---|---|---|---|
| Valued at | Valued at | Valued at | Net | ||
| fair value | amortised cost | historical cost | Impairment | Value | |
| Assets | |||||
| Cash and deposits at central banks | - | 102,887 | 176,542 | - | 279,429 |
| Balances due from banks | - | 117,563 | 66,281 | - | 183,844 |
| Financial assets held for trading | 2,058,272 | - | - | - | 2,058,272 |
| Financial assets held for trading | 93,318 | - | - | - | 93,318 |
| Available-for-sale financial assets | 4,991,721 | - | 22,605 | (62,035) | 4,952,291 |
| Loans and advances to banks | - | 2,462,438 | - | - | 2,462,438 |
| Loans and advances to customers | 51,954 | 29,104,014 | - | (837,951) | 28,318,017 |
| Hedging derivatives | 196,633 | - | - | - | 196,633 |
| 7,391,898 | 31,786,902 | 265,428 | (899,986) | 38,544,242 | |
| Liabilities | |||||
| Resources of central banks | - | 6,851,615 | - | - | 6,851,615 |
| Financial liabilities held for trading | 1,855,892 | - | - | - | 1,855,892 |
| Resources of other financial institutions | - | 2,632,474 | - | - | 2,632,474 |
| Resources of customers and other loans | 2,543,828 | 17,659,218 | - | - | 20,203,046 |
| Debt securities issued | 3,708,060 | 2,055,387 | - | - | 5,763,447 |
| Hedging derivatives | 314,027 | - | - | - | 314,027 |
| Subordinated liabilities | - | 4,321 | - | - | 4,321 |
| 8,421,807 | 29,203,015 | - | - | 37,624,822 |
| 31-12-2011 | |||||
|---|---|---|---|---|---|
| Valued at | Valued at | Valued at | Net | ||
| fair value | amortised cost | historical cost | Impairment | Value | |
| Assets | |||||
| Cash and deposits at central banks | - | 201,130 | 186,707 | - | 387,837 |
| Balances due from banks | - | 274,320 | 82,642 | - | 356,962 |
| Financial assets held for trading | 1,995,784 | - | - | - | 1,995,784 |
| Financial assets held for trading | 80,121 | - | - | - | 80,121 |
| Available-for-sale financial assets | 4,481,477 | - | 22,798 | (64,670) | 4,439,605 |
| Loans and advances to banks | - | 2,692,911 | - | - | 2,692,911 |
| Loans and advances to customers | 53,573 | 28,990,367 | - | (671,913) | 28,372,027 |
| Hedging derivatives | 167,302 | - | - | - | 167,302 |
| 6,778,257 | 32,158,728 | 292,147 | (736,583) | 38,492,549 | |
| Liabilities | |||||
| Resources of central banks | - | 4,913,234 | - | - | 4,913,234 |
| Financial liabilities held for trading | 1,663,299 | - | - | - | 1,663,299 |
| Resources of other financial institutions | - | 3,611,532 | - | - | 3,611,532 |
| Resources of customers and other loans | 1,832,184 | 18,011,920 | - | - | 19,844,104 |
| Debt securities issued | 4,816,609 | 2,577,256 | - | - | 7,393,865 |
| Hedging derivatives | 282,889 | - | - | - | 282,889 |
| Subordinated liabilities | - | 4,328 | - | - | 4,328 |
| 8,594,981 | 29,118,270 | - | - | 37,713,251 |
During the semesters ended on 30 June 2012 and in 2011, the reclassification of financial assets refer to the commercial paper and real estate investment funds (Notes 7 9).
The financial assets and liabilities for which fair value hedge accounting was applied are valued at fair value, although only the amounts relating to the hedged risk were subject to fair value adjustment.
In the semesters ended on 30 June 2012 and 2011, the net gains and losses in financial instruments were as follows:
| 30-06-2012 | ||||||
|---|---|---|---|---|---|---|
| By corresponding entry to profit or loss | By corresponding entry to equity | |||||
| Gains | Losses | Net | Gains | Losses | Net | |
| Financial assets and liabilities held for trading | 4,079,823 | (4,094,349) | (14,526) | - | - | - |
| Other financial assets and liabilities designated at fair value through profit or loss | 13,196 | - | 13,196 | - | - | - |
| Available-for-sale financial assets | 162,663 | (4,035) | 158,628 | 137,653 | - | 137,653 |
| Balances in central banks and other financial institutions | 29,364 | - | 29,364 | - | - | - |
| Loans and advances to customers | 661,354 | (312,631) | 348,723 | - | - | - |
| Hedging derivatives | 534,253 | (568,328) | (34,075) | 24,724 | - | 24,724 |
| Resources in central banks and other financial institutions | - | (57,180) | (57,180) | - | - | - |
| Resources of customers and other loans | 25,610 | (240,989) | (215,379) | - | - | - |
| Debt securities issued | 80,400 | (115,600) | (35,200) | - | - | - |
| Subordinated liabilities | - | (108) | (108) | - | - | - |
| 5,586,663 | (5,393,220) | 193,443 | 162,377 | - | 162,377 | |
| Guarantees given | 10,753 | (6,886) | 3,867 | |||
| Credit lines | 8,544 | (3,150) | 5,394 | |||
| 30-06-2011 | ||||||
|---|---|---|---|---|---|---|
| By corresponding entry to profit or loss | By corresponding entry to equity | |||||
| Gains | Losses | Net | Gains | Losses | Net | |
| Financial assets and liabilities held for trading | 2,826,430 | (2,806,602) | 19,828 | - | - | - |
| Other financial assets and liabilities designated at fair value through profit or loss | 2,087 | (13,577) | (11,490) | - | - | - |
| Available-for-sale financial assets | 86,230 | (101,641) | (15,411) | - | (250,829) | (250,829) |
| Balances in central banks and other financial institutions | 46,272 | - | 46,272 | - | - | - |
| Loans and advances to customers | 638,616 | (201,271) | 437,345 | - | - | - |
| Hedging derivatives | 290,785 | (350,836) | (60,051) | - | (12,479) | (12,479) |
| Resources in central banks and other financial institutions | - | (90,656) | (90,656) | - | - | - |
| Resources of customers and other loans | 35,267 | (165,742) | (130,475) | - | - | - |
| Debt securities issued | 137,399 | (149,896) | (12,497) | - | - | - |
| Subordinated liabilities | - | (205) | (205) | - | - | - |
| 4,063,086 | (3,880,426) | 182,660 | - | (263,308) | (263,308) | |
| Guarantees given | 10,428 | (29) | 10,399 |
The above amounts do not include gains and losses resulting from the foreign exchange revaluation of financial instruments, which, as at 30 June 2012 and 2011, corresponded to net gains of tEuros 2,610 and tEuros 1,794, respectively.
In the first semesters of 2012 and 2011 interest, income and expense, determinated in accordance with the effective interest rate method of financial assets and liabilities not stated at fair value through profit or loss, are as follows:
| 30-06-2012 | 30-06-2011 | |||||
|---|---|---|---|---|---|---|
| Income | Expense | Net | Income | Expense | Net | |
| Assets | ||||||
| Cash and deposits at central banks | 1,051 | - | 1,051 | 2,045 | - | 2,045 |
| Balances due from banks | 116 | - | 116 | 179 | - | 179 |
| Available-for-sale financial assets | 103,991 | - | 103,991 | 84,874 | - | 84,874 |
| Loans and advances to banks | 28,197 | - | 28,197 | 44,048 | - | 44,048 |
| Loans and advances to customers | 537,866 | (357) | 537,509 | 500,410 | (1,650) | 498,760 |
| 671,221 | (357) | 670,864 | 1,324,745 | (1,862) | 1,322,883 | |
| Liabilities | ||||||
| Resources of central banks | - | (29,976) | (29,976) | - | (21,336) | (21,336) |
| Resources of other financial institutions | - | (27,204) | (27,204) | - | (69,090) | (69,090) |
| Resources of customers and other loans | 4,259 | (240,301) | (236,042) | 4,199 | (161,281) | (157,082) |
| Debt securities issued | - | (95,565) | (95,565) | - | (97,891) | (97,891) |
| Subordinated liabilities | - | (108) | (108) | - | (205) | (205) |
| 4,259 | (393,154) | (388,895) | 8,373 | (798,557) | (790,184) | |
| Guarantees given | 9,531 | - | 9,531 | 9,842 | - | 9,842 |
| Credit lines | 3,606 | - | 3,606 | 2,101 | - | 2,101 |
In the first semesters of 2012 and 2011 fees and commissions income and expenses, not included in the calculation of the effective interest rate, on financial assets and liabilities not stated at fair value through profit or loss, are as follows:
| 30-06-2012 | 30-06-2011 | |||||
|---|---|---|---|---|---|---|
| Income | Expense | Net | Income | Expense | Net | |
| Assets | ||||||
| Loans and advances to customers | 27,394 | (6,313) | 21,081 | 21,751 | (7,475) | 40,217 |
| Liabilities | ||||||
| Resources of customers and other loans | 17,081 | - | 17,081 | 22,656 | - | 30,723 |
During the first semesters of 2012 and 2011 the Bank recognised financial income referring to "Interest and similar income" on overdue or impaired credit operations, amounting to tEuros 4,601 and tEuros 4,424, respectively (Note 29).
As at 30 June 2012 and 31 December 2011, hedging derivatives and financial instruments designated as hedged items, are as follows:
| 30-06-2012 | |||||||
|---|---|---|---|---|---|---|---|
| Hedged item | Hedging instrument | ||||||
| Nominal | Value net | Fair value | Book | Nominal | Fair | ||
| value | of impairment | adjustments | value | value | value | ||
| Fair value hedge: | |||||||
| Loans and advances to customers | 45,702 | 46,100 | 5,841 | 51,941 | 45,704 | (6,125) | |
| Available-for-sale financial assets | 2,075,000 | 2,097,838 | 266,968 | 2,364,806 | 2,075,000 | (276,993) | |
| Resources of customers and other loans | (2,526,442) | (2,546,907) | 3,079 | (2,543,828) | 2,538,599 | 1,953 | |
| Debt securities issued | (3,585,136) | (3,625,688) | (82,372) | (3,708,060) | 3,655,187 | 68,570 | |
| Cash flow hedge: | |||||||
| Loans and advances to customers | 3,995,266 | 3,995,266 | - | 3,995,266 | 2,950,000 | 95,201 | |
| 4,390 | (33,391) | 193,516 | 160,125 | 11,264,490 | (117,394) |
| 31-12-2011 | |||||||
|---|---|---|---|---|---|---|---|
| Hedged item | Hedging instrument | ||||||
| Nominal value |
Value net of impairment |
Fair value adjustments |
Book value |
Nominal value |
Fair value |
||
| Fair value hedge: | |||||||
| Loans and advances to customers | 47,809 | 48,242 | 5,327 | 53,569 | 47,811 | (5,567) | |
| Available-for-sale financial assets | 2,075,000 | 2,118,714 | 210,141 | 2,328,855 | 2,075,000 | (245,972) | |
| Resources of customers and other loans | (1,822,365) | (1,831,722) | (461) | (1,832,183) | 1,811,861 | 2,600 | |
| Debt securities issued | (4,696,585) | (4,753,741) | (62,868) | (4,816,609) | 3,780,998 | 46,660 | |
| Cash flow hedge: | |||||||
| Loans and advances to customers | 3,496,486 | 3,496,486 | - | 3,496,486 | 2,600,000 | 86,692 | |
| (899,655) | (922,021) | 152,139 | (769,882) | 10,315,670 | (115,587) |
The expected cash flows by period that might affect the profit or loss in the semester ended on 30 June 2012 and during 2011 are as follows:
| 30-06-2012 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Up to 3 months |
From 3 months to 6 months |
From 6 months to 1 year |
From 1 to 3 years |
Over 3 years |
Total | |||
| Cash flow hedge Interest rate sw ap |
(1,968) | (1,465) | 25,656 | 53,114 | 19,864 | 95,201 | ||
| 31-12-2011 | ||||||||
| Up to 3 | From 3 months | From 6 months | From 1 to | Over | ||||
| months | to 6 months | to 1 year | 3 years | 3 years | Total | |||
| Cash flow hedge | ||||||||
| Interest rate sw ap | 18,568 | 5,780 | (8,270) | 56,938 | 13,676 | 86,692 |
In the semesters ended on 30 June 2012 and 2011, hedge ineffectiveness did not have an impact on the income statement.
The gains and losses recognised on fair value hedging operations in the income statements of the semesters ended on 30 June 2012 and 2011 are as follows:
| Results of assets and liabilities valued at fair value through profit or loss | ||||||||
|---|---|---|---|---|---|---|---|---|
| 30-06-2012 | 30-06-2011 | |||||||
| Hedged | Hedging | Hedged | Hedging | |||||
| item | instrument | Net | item | instrument | Net | |||
| Loans and advances to customers | 976 | (976) | - | (1,076) | 1,100 | 24 | ||
| Available-for-sale financial assets | 56,828 | (56,828) | - | (14,886) | 14,886 | - | ||
| Resources of customers and other loans | 3,115 | (2,909) | 206 | 3,951 | (4,216) | (265) | ||
| Debt securities issued | (20,040) | 19,683 | (357) | 83,281 | (83,761) | (480) | ||
| 40,879 | (41,030) | (151) | 71,270 | (71,991) | (721) |
As at 30 June 2012 and 31 December 2011, financial instruments were made up as follows:
| 30-06-2012 | |||||
|---|---|---|---|---|---|
| Valued at | Not valued at | ||||
| fair value | fair value | Total | |||
| Assets | |||||
| Cash and deposits at central banks | - | 279,429 | 279,429 | ||
| Balances due from banks | - | 183,844 | 183,844 | ||
| Financial assets held for trading | 2,058,272 | - | 2,058,272 | ||
| Other financial assets designated at fair value through profit or loss | 93,318 | - | 93,318 | ||
| Available-for-sale financial assets | 4,936,379 | 15,912 | 4,952,291 | ||
| Loans and advances to banks | - | 2,462,438 | 2,462,438 | ||
| Loans and advances to customers | 51,941 | 28,266,076 | 28,318,017 | ||
| Hedging derivatives | 196,633 | - | 196,633 | ||
| 7,336,543 | 31,207,699 | 38,544,242 | |||
| Liabilities | |||||
| Resources of central banks | - | 6,851,615 | 6,851,615 | ||
| Financial liabilities held for trading | 1,855,892 | - | 1,855,892 | ||
| Resources of other financial institutions | - | 2,632,474 | 2,632,474 | ||
| Resources of customers and other loans | 2,543,828 | 17,659,218 | 20,203,046 | ||
| Debt securities issued | 3,708,060 | 2,055,387 | 5,763,447 | ||
| Hedging derivatives | 314,027 | - | 314,027 | ||
| Subordinated liabilities | - | 4,321 | 4,321 | ||
| 8,421,807 | 29,203,015 | 37,624,822 |
| 31-12-2011 | ||||
|---|---|---|---|---|
| Valued at | Not valued at | |||
| fair value | fair value | Total | ||
| Assets | ||||
| Cash and deposits at central banks | - | 387,837 | 387,837 | |
| Balances due from banks | - | 356,962 | 356,962 | |
| Financial assets held for trading | 1,995,784 | - | 1,995,784 | |
| Other financial assets designated at fair value through profit or loss | 80,121 | - | 80,121 | |
| Available-for-sale financial assets | 4,423,499 | 16,106 | 4,439,605 | |
| Loans and advances to banks | - | 2,692,911 | 2,692,911 | |
| Loans and advances to customers | 53,568 | 28,318,459 | 28,372,027 | |
| Hedging derivatives | 167,302 | - | 167,302 | |
| 6,720,274 | 31,772,275 | 38,492,549 | ||
| Liabilities | ||||
| Resources of central banks | - | 4,913,234 | 4,913,234 | |
| Financial liabilities held for trading | 1,663,299 | - | 1,663,299 | |
| Resources of other financial institutions | - | 3,611,532 | 3,611,532 | |
| Resources of customers and other loans | 1,832,184 | 18,011,920 | 19,844,104 | |
| Debt securities issued | 4,816,609 | 2,577,256 | 7,393,865 | |
| Hedging derivatives | 282,889 | - | 282,889 | |
| Subordinated liabilities | - | 4,328 | 4,328 | |
| 8,594,981 | 29,118,270 | 37,713,251 |
The financial assets and liabilities for which hedge accounting has been applied to are included as valued at fair value, being subject to fair value adjustments on the hedged risk only.
As at 30 June 2012 and 31 December 2011, the fair value of financial assets and liabilities valued at fair value or subject to fair value adjustments in accordance with hedge accounting, was broken down as follows:
| 30-06-2012 | |||||||
|---|---|---|---|---|---|---|---|
| Value adjustments | Net | ||||||
| Acquisition | due to hedging | Impairment and | book | ||||
| cost | Accruals | Valuation | operations | depreciation | value | ||
| Assets | |||||||
| Financial assets held for trading | 227,193 | - | 1,831,079 | - | - | 2,058,272 | |
| Other financial assets designated at fair value through profit or loss | 90,855 | 3,779 | (1,316) | - | - | 93,318 | |
| Available-for-sale financial assets | 5,471,406 | 55,645 | (802,297) | 266,968 | (55,343) | 4,936,379 | |
| Loans and advances to customers | 45,702 | 410 | - | 5,841 | (12) | 51,941 | |
| Hedging derivatives | - | - | 196,633 | - | - | 196,633 | |
| 5,835,156 | 59,834 | 1,224,099 | 272,809 | (55,355) | 7,336,543 | ||
| Liabilities | |||||||
| Financial liabilities held for trading | - | - | 1,855,892 | - | - | 1,855,892 | |
| Resources of customers and other loans | 2,526,442 | 20,464 | - | (3,078) | - | 2,543,828 | |
| Debt securities issued | 3,585,136 | 40,551 | - | 82,373 | - | 3,708,060 | |
| Hedging derivatives | - | - | 314,027 | - | - | 314,027 | |
| 6,111,578 | 61,015 | 2,169,919 | 79,295 | - | 8,421,807 |
| (Amounts in thousands of Euros - tEuros, except when expressly indicated) | |
|---|---|
| --------------------------------------------------------------------------- | -- |
| 31-12-2011 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Value adjustments | ||||||||
| Acquisition | due to hedging | Impairment and | book | |||||
| cost | Accruals | Valuation | operations | depreciation | value | |||
| Assets | ||||||||
| Financial assets held for trading | 286,984 | - | 1,708,800 | - | - | 1,995,784 | ||
| Other financial assets designated at fair value through profit or loss | 91,202 | 1,340 | (12,421) | - | - | 80,121 | ||
| Available-for-sale financial assets | 5,127,670 | 83,579 | (939,913) | 210,141 | (57,978) | 4,423,499 | ||
| Loans and advances to customers | 47,809 | 437 | - | 5,327 | (5) | 53,568 | ||
| Hedging derivatives | - | - | 167,302 | - | - | 167,302 | ||
| 5,553,665 | 85,356 | 923,768 | 215,468 | (57,983) | 6,720,274 | |||
| Liabilities | ||||||||
| Financial liabilities held for trading | - | - | 1,663,299 | - | - | 1,663,299 | ||
| Resources of customers and other loans | 1,822,365 | 9,357 | - | 462 | - | 1,832,184 | ||
| Debt securities issued | 4,696,585 | 57,156 | - | 62,868 | - | 4,816,609 | ||
| Hedging derivatives | - | - | 282,889 | - | - | 282,889 | ||
| 6,518,950 | 66,513 | 1,946,188 | 63,330 | - | 8,594,981 |
The methods used to determine fair value are based on market prices on active markets or other valuation techniques, such as discounted cash flows. As at 30 June 2012 and 31 December 2011, the book value of the financial instruments valued at fair value or subject to value adjustments due to hedging operations, is as follows:
| 30-06-2012 | |||||||
|---|---|---|---|---|---|---|---|
| Method of determining fair value | |||||||
| Quoted in Other valuation |
|||||||
| active markets | techniques | ||||||
| (Level 1) | (Level 2) | (Level 3) | Total | ||||
| Assets | |||||||
| Financial assets held for trading | 227,193 | 1,831,079 | - | 2,058,272 | |||
| Other financial assets designated at fair value through profit or los | 93,318 | - | - | 93,318 | |||
| Available-for-sale financial assets | 4,638,213 | 280,157 | 18,009 | 4,936,379 | |||
| Loans and advances to customers | - | 51,941 | - | 51,941 | |||
| Hedging derivatives | - | 196,633 | - | 196,633 | |||
| 4,958,724 | 2,359,810 | 18,009 | 7,336,543 | ||||
| Liabilities | |||||||
| Financial liabilities held for trading | - | 1,855,892 | - | 1,855,892 | |||
| Resources of customers and other loans | - | 2,543,828 | - | 2,543,828 | |||
| Debt securities issued | - | 3,708,060 | - | 3,708,060 | |||
| Hedging derivatives | - | 314,027 | - | 314,027 | |||
| - | 8,421,807 | - | 8,421,807 |
| 31/12/2011 | |||||||
|---|---|---|---|---|---|---|---|
| Method of determining fair value | |||||||
| Quoted in Other valuation |
|||||||
| active markets | techniques | ||||||
| (Level 1) | (Level 2) | (Level 3) | Total | ||||
| Assets | |||||||
| Financial assets held for trading | 287,010 | 1,708,774 | - | 1,995,784 | |||
| Other financial assets designated at fair value through profit or los | 80,121 | - | - | 80,121 | |||
| Available-for-sale financial assets | 3,615,429 | 804,088 | 3,982 | 4,423,499 | |||
| Loans and advances to customers | - | 53,568 | - | 53,568 | |||
| Hedging derivatives | - | 167,302 | - | 167,302 | |||
| 3,982,560 | 2,733,732 | 3,982 | 6,720,274 | ||||
| Liabilities | |||||||
| Financial liabilities held for trading | - | 1,663,299 | - | 1,663,299 | |||
| Resources of customers and other loans | - | 1,832,184 | - | 1,832,184 | |||
| Debt securities issued | - | 4,816,609 | - | 4,816,609 | |||
| Hedging derivatives | - | 282,889 | - | 282,889 | |||
| - | 8,594,981 | - | 8,594,981 |
In accordance with IFRS 7, the Bank's financial assets and liabilities valued at fair value are classified into three levels:
For derivative financial instruments, the main valuation techniques were as follows:
| Derivative instrument Main Valuation Techniques |
|||
|---|---|---|---|
| Forwards | Present Value Model | ||
| Interest Rate Swaps | Present Value Model | ||
| Currency Swaps | Present Value Model | ||
| Equity Swaps | Present Value Model | ||
| FRA's | Present Value Model | ||
| Currency Options | Black-Scholes Model, Monte Carlo Model | ||
| Equity Options | Black-Scholes Model, Heston Model | ||
| Interest Rates Options | Black-Scholes Model, Heath-Jarrow-Morton Model | ||
| Options - Other | Black-Scholes Model, Monte Carlo Model, Heath-Jarrow-Morton Model | ||
| Caps/Floors | Black-Scholes Model, Monte Carlo Model, Heath-Jarrow-Morton Model |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ON 30 JUNE 2012 AND 2011 (RESTATED) (Amounts in thousands of Euros - tEuros, except when expressly indicated)
The most representative interest rate curves by maturity and currency are the following:
| 30-06-2012 | 31-12-2011 | |||
|---|---|---|---|---|
| EUR | USD | EUR | USD | |
| Overnight | 0.60% 0.30% | 1.00% 0.30% | ||
| 1 month | 0.38% 0.23% | 1.10% 1.55% | ||
| 3 months | 0.66% 0.51% | 1.40% 1.85% | ||
| 6 months | 0.93% 0.78% | 1.65% 2.15% | ||
| 9 months | 1.08% 1.00% | 1.83% 2.25% | ||
| 1 year | 1.23% 1.30% | 1.98% 2.40% | ||
| 3 years | 0.95% 0.63% | 1.39% 0.88% | ||
| 5 years | 1.30% 0.96% | 1.74% 1.28% | ||
| 7 years | 1.64% 1.33% | 2.07% 1.69% | ||
| 10 years | 1.98% 1.75% | 2.38% 2.06% |
As at 30 June 2012 and 31 December 2011, the book value and fair value of the financial instruments valued at amortised cost or historical cost was the following:
| 30-06-2012 | |||
|---|---|---|---|
| Book | Fair | ||
| value | value | Difference | |
| Assets | |||
| Cash and deposits at central banks | 279,429 | 279,429 | - |
| Balances due from banks | 183,844 | 183,844 | - |
| Available-for-sale financial assets | 15,912 | 15,912 | - |
| Loans and advances to banks | 2,462,438 | 2,595,457 | 133,019 |
| Loans and advances to customers | 28,266,076 | 25,911,616 | (2,354,460) |
| 31,207,699 | 28,986,258 | (2,221,441) | |
| Liabilities | |||
| Resources of central banks | (6,851,615) | (6,862,423) | (10,808) |
| Resources of other financial institutions | (2,632,474) | (2,652,316) | (19,842) |
| Resources of customers and other loans | (17,659,218) | (17,780,569) | (121,351) |
| Debt securities issued | (2,055,387) | (1,567,240) | 488,147 |
| Subordinated liabilities | (4,321) | (4,287) | 34 |
| (29,203,015) | (28,866,835) | 336,180 |
| 31-12-2011 | ||||
|---|---|---|---|---|
| Book | Fair | |||
| value | value | Difference | ||
| Assets | ||||
| Cash and deposits at central banks | 387,837 | 387,837 | - | |
| Balances due from banks | 356,962 | 356,962 | - | |
| Available-for-sale financial assets | 16,106 | 16,106 | - | |
| Loans and advances to banks | 2,692,911 | 2,889,517 | 196,606 | |
| Loans and advances to customers | 28,318,459 | 26,139,361 | (2,179,098) | |
| 31,772,275 | 29,789,783 | (1,982,492) | ||
| Liabilities | ||||
| Resources of central banks | (4,913,234) | (4,883,949) | 29,285 | |
| Resources of other financial institutions | (3,611,532) | (3,534,077) | 77,455 | |
| Resources of customers and other loans | (18,011,920) | (18,070,005) | (58,085) | |
| Debt securities issued | (2,577,256) | (1,740,447) | 836,809 | |
| Subordinated liabilities | (4,328) | (4,263) | 65 | |
| (29,118,270) | (28,232,741) | 885,529 |
As at June 30, 2012, if the fair value of the most of the debt issued subject to hedging operations included in the debt securities issued item (second and third covered bond issues) was calculated, it would be lower than the respective carrying amount by approximately tEuros 244,613 (tEuros 596,042 as at 31 December 2011).
The main assumptions used in the calculation of the fair value, by type of financial instrument, were the following:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ON 30 JUNE 2012 AND 2011 (RESTATED) (Amounts in thousands of Euros - tEuros, except when expressly indicated)
Credit risk management by the Bank includes identification, measurement, integration and evaluation of different credit risk exposures and analysis of return in relation to risk, on an overall basis, as well as for each area of activity.
Credit risk management is provided by an independent area, the Group Risk Area, which is responsible for managing the special client vigilance system, credit risk segmentation based on the characteristics of customers and products and for the scoring systems (applicable to mortgage loans, consumer credit and credit cards) and ratings used by the Bank.
Counterparty risk consists of the potential credit risk on transactions in financial markets, corresponding to the possibility of non-compliance by the counterparty with the contracted terms and subsequent financial loss for the Bank. Such transactions include the purchase and sale of securities, the contracting of sale transactions with repurchase agreements, the loan of securities and derivative instruments. Considering the complexity and volume of the transactions, as well as the requirements of an adequate control of the consolidated risks with certain customer segments, perimeter control is defined in accordance with the segments involved.
Control of these risks is carried out on a daily basis using an integrated system that records the limits approved, updates the positions in real time, provides information on the limits available and aggregate exposure, also in real time, for the different products and maturities. The system also enables the concentration of risk by groups of customers/counterparties to be controlled on a transversal basis (at several levels).
Derivative position risk (known as Equivalent Credit Risk) is determined as the sum of the present value of each contract (or present cost of substitution) with its Potential Risk, that reflects the estimated maximum expected value until maturity, in accordance with the volatility of the underlying market and contracted cash flow structure.
For specific customer segments (namely global corporate customers) the Bank has implemented credit limits that consider economic capital, incorporating variables relating to the credit quality of each counterparty in the quantitative control.
As at 30 June 2012 and 31 December 2011, the maximum exposure to credit risk and corresponding book value of the financial instruments is made up as follows:
| 30-06-2012 | 31-12-2011 | |||
|---|---|---|---|---|
| Book | Maximum | Book | Maximum | |
| value | exposure | value | exposure | |
| Cash and deposits at central banks | 279,429 | 279,429 | 387,837 | 387,837 |
| Balances due from banks | 183,844 | 183,844 | 356,962 | 356,962 |
| Financial assets held for trading | 2,058,272 | 2,058,272 | 1,995,784 | 1,995,784 |
| Other financial assets designated at fair value through profit or lo | 93,318 | 93,318 | 80,121 | 80,121 |
| Available-for-sale financial assets | 4,952,291 | 4,952,291 | 4,439,605 | 4,439,605 |
| Loans and advances to banks | 2,462,438 | 2,462,438 | 2,692,911 | 2,692,911 |
| Loans and advances to customers | 28,318,017 | 34,276,044 | 28,372,027 | 34,382,026 |
| Hedging derivatives | 196,633 | 196,633 | 167,302 | 167,302 |
| Investments in associates | 142,763 | 142,763 | 133,052 | 133,052 |
| 38,544,242 | 44,502,269 | 38,492,549 | 44,502,548 | |
| Guarantees given | 1,540,634 | 1,540,634 | 2,058,818 | 2,058,818 |
The maximum exposure in "Loans and advances to customers" as at 30 June 2012, includes tEuros 1,399,910 and tEuros 4,558,117 relating to irrevocable credit lines and revocable credit lines, respectively (tEuros 1,217,742 and tEuros 4,792,257 on 31 December 2011, respectively).
The Bank periodically reviews loans and advances to customers and other receivables in order to identify evidence of impairment. For the purpose of the collective analysis of impairment losses, the Bank segments the credit portfolio in accordance with the type of product and type of customer involved in the operations (Note 11). In this respect, as at 30 June 2012 and 31 December 2011, the loans granted to customers without evidence of impairment is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Consumer credit | 1,054,046 | 1,111,840 |
| Mortgage loans | 15,106,173 | 15,384,875 |
| Other loans and advances to individuals | 444,861 | 435,914 |
| Credit cards of individuals | 242,329 | 250,675 |
| Total credit without evidence of impairment granted to individuals | 16,847,409 | 17,183,304 |
| Loans and advances to large companies | 1,532,047 | 1,361,928 |
| Loans and advances to medium-sized companies | 4,306,646 | 4,684,117 |
| Loans and advances to small companies | 611,020 | 652,240 |
| Leasing | 903,143 | 1,045,821 |
| Factoring | 1,175,875 | 1,271,079 |
| Credit cards of companies | 11,691 | 12,144 |
| Loans and advances to financial institutions | - | 1 |
| Commercial paper | 1,481,295 | 655,200 |
| Total credit without evidence of impairment granted to companies | 10,021,717 | 9,682,530 |
| Guarantees given | 1,451,153 | 1,988,824 |
| Total credit granted without evidence of impairment | 28,320,279 | 28,854,658 |
The risk analysis for clients or economic groups where the Bank has an exposure of more than 500,000 Euros are made by analysts risks that follow customers and is supported by a mandatory internally developed rating model approved by regulators. The risk level inherent to the customer is implied in the allocation of internal rating levels, which can go from 1 to 9, a probability of default to a year that the bank monitors and calibrates in a constant and regular form. The rating is determined based on an analysis of the following parameters:
A classification from 1 (minimum) to 9 (maximum) is attributed to these factors in accordance with the following weighting:
| Weighting parameters | Large Companies |
Small and medium-sized Companies |
|---|---|---|
| Demand/Market | 20% | 20% |
| Partners/Management | 25% | 15% |
| Access to credit | 10% | 10% |
| Profitability | 15% | |
| Generation of funds | 25% | 55% |
| Solvency | 15% |
The rating is calculated by analysts, based on information supplied by the customer, general information of the business sector and external databases. The final rating, by each weighting parameter, is subsequently introduced into the Bank's IT system.
In general terms, the Bank's internal rating classification may be described and classified in the following manner:
Rating 1 – 3: Customer with high credit risk; Rating 4 – 6: Customer with moderate credit risk; Rating 7 – 9: Customer with with low credit risk.
As at 30 June 2012 and 31 December 2011, the loans granted to companies without evidence of impairment, is made up as follows by internal rating:
| 30-06-2012 | 31-12-2011 | ||||
|---|---|---|---|---|---|
| Credit | Guarantees | Credit | Guarantees | ||
| granted | given | granted | given | ||
| Rating 7 - 9 | 319,735 | 41,441 | 369,368 | 41,815 | |
| Rating 4 - 6 | 6,138,664 | 1,176,203 | 6,142,092 | 1,214,133 | |
| Rating 1 - 3 | 610,190 | 84,228 | 697,212 | 85,918 | |
| 7,068,589 | 1,301,872 | 7,208,672 | 1,341,866 | ||
| Without Rating | 1,460,142 | 112,181 | 1,806,513 | 160,073 | |
| 8,528,731 | 1,414,053 | 9,015,185 | 1,501,939 | ||
| Credit cards of companies | 11,691 | - | 12,144 | - | |
| Financial institutions | - | 37,101 | 1 | 486,885 | |
| Commercial paper | 1,481,295 | - | 655,200 | - | |
| 10,021,717 | 1,451,153 | 9,682,530 | 1,988,824 |
With regard to loans granted to individuals without evidence of impairment, provisions obtained from the impairment model in effect in the Bank as at 30 June 2012 and 31 December 2011 came to tEuros 54,422 and tEuros 37,437, respectively, corresponding to percentages on these dates of 0.32% and 0.22%, respectively.
As at 30 June 2012 and 31 December 2011, the loans granted to customers with evidence of impairment, was made up as follows:
| Guarantees given | 90,044 ===== |
70,559 ===== |
|---|---|---|
| 2,212,138 ======== |
2,091,403 ======= |
|
| . Between 90 and 180 days . Over 180 days |
115,532 711,465 ------------- |
97,880 529,589 ------------ |
| Maturing loans Overdue loans . Up to 90 days |
1,327,862 57,279 |
1,409,667 54,267 |
| 30-06-2012 | 31-12-2011 |
As at 30 June 2012 and 31 December 2011, overdue credit or impaired credit determined by specific analysis guaranteed by mortgage, pledged deposits at the Bank, debt securities issued by the entity itself or with no guarantee, is made up as follows:
| 30-06-2012 | 31-12-2011 | ||||
|---|---|---|---|---|---|
| Outstanding principal |
Value of guarantee/collateral |
Outstanding principal |
Value of guarantee/collateral |
||
| Credit overdue or impaired determined by specific analysis: | |||||
| Guarantees in excess of the principal due | 463,754 | 1,492,480 | 464,167 | 972,751 | |
| Guarantees low er than the principal due | 192,338 | 42,159 | 554,772 | 215,718 | |
| Without guarantee | 1,209,116 | - | 1,474,172 | - | |
| 1,865,208 | 1,534,639 | 2,493,111 | 1,188,469 |
As at 30 June 2012 and 31 December 2011, the book value of executed guarantees and other collateral relating to credit granted amounted to tEuros 243,296 and tEuros 215,389, respectively, and is made up as follows:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Assets received as settlement of defaulting loans (Note 13) | ||
| . Properties | 207,921 | 177,737 |
| . Equipment | 5,157 | 3,982 |
| . Participation units | 18,663 | - |
| Other assets received as settlement of defaulting loans (Note 17) | 101,569 | 89,888 |
| Available-for-sale financial assets | 22,121 | 40,784 |
| 355,431 | 312,391 | |
| Impairment of assets received as settlement of defaulting loans | ||
| . Properties | (62,676) | (53,639) |
| . Equipment | (3,631) | (2,785) |
| . Other | (23,707) | (18,456) |
| Impairment of available-for-sale financial assets | (22,121) | (22,121) |
| (112,135) | (97,001) | |
| 243,296 | 215,390 |
As at 30 June 2012 and 31 December 2011, the book value referring to debt instruments is made up as follows, by external rating:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| Financial assets designated at fair value through profit or loss Rating S&P |
||
| BBB+ / BBB / BBB- | 93,318 | 80,121 |
| 93,318 | 80,121 | |
| Available-for-sale financial assets Rating S&P |
||
| AA+ / AA / AA- | 8,404 | 1,628,499 |
| BBB+ / BBB / BBB- | 1,501,933 | 1,578,621 |
| BB+ / BB / BB- | 2,752,512 | 209,729 |
| Without external rating | 504,514 | 954,434 |
| 4,767,363 | 4,371,283 | |
| 4,860,681 | 4,451,404 |
The liquidity risk management policy is decided by the top level area in the organization structure responsible for Asset and Liability Management (ALM) and the Assets and Liabilities Committee (ALCO), which is chaired by the President of the Executive Committee and includes the members of the Executive Committee responsible for the Financial, Treasury, Commercial, Marketing and International Areas. The ALCO Committee meets monthly and analyses balance sheet risks and strategic options.
The following balance sheet risk management limits are defined for the ALM Area:
The Group's financing policy considers the evolution of the balance sheet components, the structural position of terms to maturity of assets and liabilities, the net inter-bank indebtedness level given the credit lines available, dispersion of the maturities and minimization of funding activity related costs. In this respect, the medium term bonds issued to retail banking clients contribute to the structural adequacy.
Under its liquidity policy, as at 30 June 2012, the Bank has a Euro Medium Term Notes (EMTN) programme of tEuros 10,000,000, of which tEuros 1,226,550 have been issued.
It should be noted that the Bank does not analyze liquidity risk of financial instruments held for trading.
The contractual projected cash flows of financial instruments (not discounted) as at 30 June 2012 and 31 December 2011 were as follows:
| 30-06-2012 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Up to 3 | From 3 months | From 1 to | From 3 to | Over | ||||
| On demand | months | to 1 year | 3 years | 5 years | 5 years | Undetermined | Total | |
| Assets | ||||||||
| Cash and deposits at central banks | 176,609 | 254 | 780 | 2,085 | 2,088 | 149,821 | - | 331,637 |
| Balances due from banks | 183,844 | - | - | - | - | - | - | 183,844 |
| Financial assets held for trading | 2,058,272 | - | - | - | - | - | - | 2,058,272 |
| Other financial assets designated at fair value through profit or loss | - | 4,909 | - | 94,901 | - | - | - | 99,810 |
| Available-for-sale financial assets | 2 | 27,046 | 1,574,655 | 2,033,275 | 252,501 | 2,253,240 | 243,777 | 6,384,496 |
| Loans and advances to banks | 1,343,988 | 394,891 | 37,085 | 376,561 | 321,997 | 160,632 | - | 2,635,154 |
| Loans and advances to customers | 506,185 | 3,233,352 | 4,520,311 | 4,778,801 | 3,150,933 | 18,757,000 | - | 34,946,582 |
| Hedging derivatives | 196,633 | - | - | - | - | - | - | 196,633 |
| Investments in associates | - | - | - | - | - | - | 143,263 | 143,263 |
| 4,465,533 | 3,660,452 | 6,132,831 | 7,285,623 | 3,727,519 | 21,320,693 | 387,040 | 46,979,691 | |
| Liabilities | ||||||||
| Resources of central banks | 1,830,155 | - | - | 5,154,467 | - | - | - | 6,984,622 |
| Financial liabilities held for trading | 1,855,892 | - | - | - | - | - | - | 1,855,892 |
| Resources of other financial institutions | 233,191 | 1,670,946 | 58,361 | 434,135 | 293,167 | - | - | 2,689,800 |
| Resources of customers and other loans | 5,798,379 | 4,205,686 | 5,055,628 | 2,961,308 | 2,601,531 | 243,395 | - | 20,865,927 |
| Debt securities issued | 82,570 | 278,975 | 1,491,158 | 2,584,182 | 481,261 | 1,210,342 | - | 6,128,488 |
| Hedging derivatives | 314,027 | - | - | - | - | - | - | 314,027 |
| Subordinated liabilities | - | 4,341 | - | - | - | - | - | 4,341 |
| 10,114,214 | 6,159,948 | 6,605,147 | 11,134,092 | 3,375,959 | 1,453,737 | - | 38,843,097 |
| 31-12-2011 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Up to 3 | From 3 months | From 1 to | From 3 to | Over | ||||
| On demand | months | to 1 year | 3 years | 5 years | 5 years | Undetermined | Total | |
| Assets | ||||||||
| Cash and deposits at central banks | 186,840 | 508 | 1,535 | 4,076 | 4,081 | 290,803 | - | 487,843 |
| Balances due from banks | 356,962 | - | - | - | - | - | - | 356,962 |
| Financial assets held for trading | 1,995,784 | - | - | - | - | - | - | 1,995,784 |
| Other financial assets designated at fair value through profit or loss | - | - | 4,909 | 94,901 | - | - | - | 99,810 |
| Available-for-sale financial assets | 34,652 | 1,095,018 | 239,605 | 1,439,120 | 881,861 | 2,317,414 | 132,061 | 6,139,731 |
| Loans and advances to banks | 1,318,976 | 587,418 | 6,965 | 79,838 | 659,418 | 364,647 | - | 3,017,262 |
| Loans and advances to customers | 320,687 | 3,160,729 | 5,293,895 | 6,481,685 | 4,245,405 | 14,734,212 | - | 34,236,613 |
| Hedging derivatives | 167,302 | - | - | - | - | - | - | 167,302 |
| Investments in associates | - | - | - | - | - | - | 133,552 | 133,552 |
| 4,381,203 | 4,843,673 | 5,546,909 | 8,099,620 | 5,790,765 | 17,707,076 | 265,613 | 46,634,859 | |
| Liabilities | ||||||||
| Resources of central banks | - | 2,517,830 | - | - | 2,475,600 | - | - | 4,993,430 |
| Financial liabilities held for trading | 1,663,299 | - | - | - | - | - | - | 1,663,299 |
| Resources of other financial institutions | 898,441 | 1,767,346 | 52,556 | 196,904 | 700,795 | 95,203 | - | 3,711,245 |
| Resources of customers and other loans | 5,659,027 | 5,445,875 | 4,596,317 | 2,387,104 | 2,141,908 | 199,668 | - | 20,429,899 |
| Debt securities issued | 62,919 | 100,261 | 1,825,804 | 3,692,185 | 693,491 | 1,655,971 | - | 8,030,631 |
| Hedging derivatives | 282,889 | - | - | - | - | - | - | 282,889 |
| Subordinated liabilities | - | 4,350 | - | - | - | - | - | 4,350 |
| 8,566,575 | 9,835,662 | 6,474,677 | 6,276,193 | 6,011,794 | 1,950,842 | - | 39,115,743 |
The projected cash flows of the financial instruments were determined based on principles and assumptions used by the Group to manage and control liquidity resulting from its operations. The following main assumptions were used to determine the projected cash flows:
Market risk consists in the potential fluctuation of a financial asset's value due to unanticipated variations in the market variables, such as interest rates, exchange rates, credit spreads, equity security prices, precious metals and commodities.
The standard methodology applied for the Santander Totta Group's trading activity is Value at Risk (VaR). Historical simulation with a 99% confidence level and a time horizon of one day is used as the basis, statistical adjustments having been applied, to enable the more recent occurrences that affect the level of risk assumed to be included rapidly and effectively. This measure is only used in the Group's treasury management, the Bank using specific sensitivity measures.
The VaR calculated represents a daily estimate of the maximum potential risk under normal market conditions (individually by portfolio/business sector and for the overall positions), within the underlying assumptions of the model.
In addition, other measures are carried out that enable additional risk control to be maintained. In abnormal market conditions Stress Testing is carried out. This consists of defining extreme behavioural scenarios with different financial variables in order to obtain the corresponding potential impact on results. In short, the analysis of scenarios tries to identify the potential risk in extreme market conditions and scenarios at the limits of probability, not covered by VaR.
In parallel with this, daily positions are also monitored, with an exhaustive control being made of changes in the portfolios so as to detect possible situations that might require immediate correction. A daily income statement is prepared in order to identify the impact of changes in variables or in the composition of the portfolios.
The Bank uses sensitivity measures and equivalent positions. In the case of interest rate it uses the BPV – estimated impact on results of parallel changes in interest rate curves. Because of the unusual nature of derivative operations, specific sensitivity measures are carried out daily, namely calculation of sensitivity to changes in the underlying prices (delta and gamma), volatility (vega) and time (theta).
Quantitative limits, classified into two groups, are used for the trading portfolio, based on the following objectives:
The model used to analyze interest rate structural risk enables all the factors relating to balance sheet market risks to be controlled, namely the risk resulting directly from changes in the yield curve, given the existing indexing and re-pricing structure that determine the sensitivity of the financial margin and sensitivity of the asset value of balance sheet instruments.
As at 30 June 2012 and 31 December 2011, financial instruments by exposure to interest rate risk are as follows:
| 30-06-2012 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Exposure to | Not subject to | |||||||
| Fixed rate | Variable rate | interest rate risk | Derivatives | Total | ||||
| Assets | ||||||||
| Cash and deposits at central banks | - | 102,887 | 176,542 | - | 279,429 | |||
| Balances due from banks | - | - | 183,844 | - | 183,844 | |||
| Financial assets held for trading | - | - | 227,193 | 1,831,079 | 2,058,272 | |||
| Other financial assets designated at fair value through profit or loss | 90,855 | - | 2,463 | - | 93,318 | |||
| Available-for-sale financial assets | 4,902,999 | 347,235 | (297,943) | - | 4,952,291 | |||
| Loans and advances to banks | 1,905,131 | 183,185 | 374,122 | - | 2,462,438 | |||
| Loans and advances to customers | 1,684,658 | 26,519,279 | 114,080 | - | 28,318,017 | |||
| Hedging derivatives | - | - | - | 196,633 | 196,633 | |||
| 8,583,643 | 27,152,586 | 780,301 | 2,027,712 | 38,544,242 | ||||
| Liabilities | ||||||||
| Resources of central banks | 29,786 | 6,800,018 | 21,811 | - | 6,851,615 | |||
| Financial liabilities held for trading | - | - | - | 1,855,892 | 1,855,892 | |||
| Resources of other financial institutions | 2,120,608 | 385,941 | 125,925 | - | 2,632,474 | |||
| Resources of customers and other loans | 15,026,251 | 4,938,539 | 238,256 | - | 20,203,046 | |||
| Debt securities issued | 3,713,286 | 1,926,321 | 123,840 | - | 5,763,447 | |||
| Hedging derivatives | - | - | - | 314,027 | 314,027 | |||
| Subordinated liabilities | - | 4,274 | 47 | - | 4,321 | |||
| 20,889,931 | 14,055,093 | 509,879 | 2,169,919 | 37,624,822 |
| 31-12-2011 | ||||||
|---|---|---|---|---|---|---|
| Exposure to | Not subject to | |||||
| Fixed rate | Variable rate | interest rate risk | Derivatives | Total | ||
| Assets | ||||||
| Cash and deposits at central banks | - | 201,130 | 186,707 | - | 387,837 | |
| Balances due from banks | - | - | 356,962 | - | 356,962 | |
| Financial assets held for trading | - | - | 287,032 | 1,708,752 | 1,995,784 | |
| Other financial assets designated at fair value through profit or loss | 91,202 | - | (11,081) | - | 80,121 | |
| Available-for-sale financial assets | 4,190,407 | 828,000 | (578,802) | - | 4,439,605 | |
| Loans and advances to banks | 2,248,983 | 305,621 | 138,307 | - | 2,692,911 | |
| Loans and advances to customers | 2,141,904 | 26,135,221 | 94,902 | - | 28,372,027 | |
| Hedging derivatives | - | - | - | 167,302 | 167,302 | |
| 8,672,496 | 27,469,972 | 474,027 | 1,876,054 | 38,492,549 | ||
| Liabilities | ||||||
| Resources of central banks | - | 4,900,007 | 13,227 | - | 4,913,234 | |
| Financial liabilities held for trading | - | - | - | 1,663,299 | 1,663,299 | |
| Resources of other financial institutions | 2,850,564 | 617,229 | 143,739 | - | 3,611,532 | |
| Resources of customers and other loans | 14,403,256 | 5,177,142 | 263,706 | - | 19,844,104 | |
| Debt securities issued | 4,838,253 | 2,432,154 | 123,458 | - | 7,393,865 | |
| Hedging derivatives | - | - | - | 282,889 | 282,889 | |
| Subordinated liabilities | - | 4,274 | - | 54 | 4,328 | |
| 22,092,073 | 13,130,806 | 544,130 | 1,946,242 | 37,713,251 |
The methodology used for the calculation of the sensitivity of the net asset value simulates the variation in the market value of assets and liabilities, based on changes of 100 basis points (bp's) in the forward interest rate curve. This methodology uses the following parameters and assumptions:
The interest rate gap enables an approximation to be made of the sensitivity of the asset value and the financial margin to variations in market rates. This approximation uses the following assumptions:
In terms of variation in net asset value, increases in interest rates assume a decrease in the amount of the intervals with positive gaps and an increase in the value of the negative gaps. A decrease in interest rates has the opposite effect.
General assumptions of this interest rate sensitivity analysis
As at 30 June 2012 and 31 December 2011, the sensitivity of the asset value of these financial instruments to positive and negative variations of 100 basis points (bp's) corresponds to:
| 30-06-2012 | 31-12-2011 | |||||
|---|---|---|---|---|---|---|
| Change | Change | Change | Change | |||
| Assets | + 100 bp's | - 100 bp's | + 100 bp's | - 100 bp's | ||
| Cash and deposits at central banks | 1,017 | (941) | 1,954 | (1,954) | ||
| Available-for-sale financial assets | 2,516 | (2,437) | 2,503 | (2,499) | ||
| Loans and advances to banks | 14,422 | (13,703) | 3,076 | (3,077) | ||
| Loans and advances to customers | 211,071 | (205,823) | 203,667 | (203,378) | ||
| 229,026 | (222,904) | 211,200 | (210,908) | |||
| Hedging derivatives | (39,021) | 39,152 | (37,970) | 37,966 | ||
| Liabilities | ||||||
| Resources of central banks | 50,139 | (38,328) | 47,278 | (47,278) | ||
| Resources of other financial institutions | 34,805 | (33,961) | 11,853 | (11,844) | ||
| Resources of customers and other loans | 79,724 | (73,941) | 88,286 | (84,198) | ||
| Debt securities issued | 14,764 | (14,624) | 18,692 | (18,654) | ||
| 179,432 | (160,854) | 166,109 | (161,974) |
Besides the Bank's own calculation methodology, the basic parameters for the calculation of VaR are as follows:
In any case, the values of VaR are those which are greater when the calculation is made with the factor of deterioration in force and the calculation with uniform weights.
The calculation of the VaR Percentile assumes that the set of 520 observations considered all have the same weight. The VaR Weighted Percentile assumes the granting of a significantly higher weight to the more recent observations in relation to the reference date of the analysis.
Historic simulation consists of using historic changes as a distribution model of possible changes in risk factors. Therefore the period chosen must be sufficiently long and significant, so that all the interactions between the market factors, the volatility and correlation between them, are well reflected in the historical period selected.
On the other hand, a complete revaluation of the portfolio requires valuation for each of the instruments, using the respective mathematical expression in order to obtain the market value of each individual position. Upon using revaluation methods, the implicit non linear effects on certain financial products as a result of market factor changes are calculated and retained in the VaR amounts.
As at 30 June 2012 and 31 December 2011, the VAR associated to the interest rate risk corresponded to:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| VaR Percentil 99% | (27) | (34) |
| VaR Weighted Percentil 99% | (25) | (25) |
The profile defined for foreign exchange risk is very conservative and is based on the hedging policy adopted. Implementation of the policy is a responsibility of the Treasury Area so that the risks involved are maintained at a low level, this being achieved mainly through currency swaps. Exchange risk limits are established and monitored by the Market Risk Area.
As at 30 June 2012 and 31 December 2011, financial instruments by currency are as follows:
| 30-06-2012 | |||||||
|---|---|---|---|---|---|---|---|
| Other | |||||||
| Euros | US Dollars | currencies | Total | ||||
| Assets | |||||||
| Cash and deposits at central banks | 276,215 | 1,679 | 1,535 | 279,429 | |||
| Balances due from banks | 142,628 | 34,134 | 7,082 | 183,844 | |||
| Financial assets held for trading | 2,047,519 | 10,623 | 130 | 2,058,272 | |||
| Other financial assets designated at fair value through profit or loss | 93,318 | - | - | 93,318 | |||
| Available-for-sale financial assets | 4,942,506 | 9,785 | - | 4,952,291 | |||
| Loans and advances to banks | 2,058,064 | 370,170 | 34,204 | 2,462,438 | |||
| Loans and advances to customers | 28,221,250 | 57,863 | 38,904 | 28,318,017 | |||
| Hedging derivatives | 195,784 | 849 | - | 196,633 | |||
| 37,977,284 | 485,103 | 81,855 | 38,544,242 | ||||
| Liabilities | |||||||
| Resources of central banks | 6,821,829 | 29,786 | - | 6,851,615 | |||
| Financial liabilities held for trading | 1,842,473 | 13,335 | 84 | 1,855,892 | |||
| Resources of other financial institutions | 2,282,049 | 339,540 | 10,885 | 2,632,474 | |||
| Resources of customers and other loans | 19,120,851 | 904,214 | 177,981 | 20,203,046 | |||
| Debt securities issued | 5,763,447 | - | - | 5,763,447 | |||
| Hedging derivatives | 313,264 | 763 | - | 314,027 | |||
| Subordinated liabilities | 4,321 | - | - | 4,321 | |||
| 36,148,234 | 1,287,638 | 188,950 | 37,624,822 | ||||
| 31-12-2011 | |||||||
| Other | |||||||
| Euros | US Dollars | currencies | Total | ||||
| Assets |
| Cash and deposits at central banks | 382,103 | 3,631 | 2,103 | 387,837 |
|---|---|---|---|---|
| Balances due from banks | 320,314 | 23,126 | 13,522 | 356,962 |
| Financial assets held for trading | 1,988,164 | 7,472 | 148 | 1,995,784 |
| Other financial assets designated at fair value through profit or loss | 80,121 | - | - | 80,121 |
| Available-for-sale financial assets | 4,429,999 | 9,606 | - | 4,439,605 |
| Loans and advances to banks | 2,295,560 | 378,576 | 18,775 | 2,692,911 |
| Loans and advances to customers | 28,281,995 | 51,966 | 38,066 | 28,372,027 |
| Hedging derivatives | 166,846 | 456 | - | 167,302 |
| 37,945,102 | 474,833 | 72,614 | 38,492,549 | |
| Liabilities | ||||
| Resources of central banks | 4,913,234 | - | - | 4,913,234 |
| Financial liabilities held for trading | 1,655,678 | 7,473 | 148 | 1,663,299 |
| Resources of other financial institutions | 3,126,454 | 475,918 | 9,160 | 3,611,532 |
| Resources of customers and other loans | 18,794,630 | 891,766 | 157,708 | 19,844,104 |
| Debt securities issued | 7,393,865 | - | - | 7,393,865 |
| Hedging derivatives | 282,079 | 810 | - | 282,889 |
| Subordinated liabilities | 4,328 | - | - | 4,328 |
| 36,170,268 | 1,375,967 | 167,016 | 37,713,251 |
As at 30 June 2012 and 31 December 2011, the VaR associated to the foreign exchange risk corresponded to:
| 30-06-2012 | 31-12-2011 | |
|---|---|---|
| VaR Percentil 99% | (7) | (16) |
| VaR Weighted Percentil 99% | (5) | (9) |
As at 30 June 2012 and 31 December 2011, had no equity risk of its financial instruments held for trading, therefore the VaR related to this risk is zero.
These financial statements are a translation of the financial statements originally issued in Portuguese language. In the event of discrepencies, the Portuguese language version prevails.
| Sec uritie s iss ued |
Cur renc y |
Tota l |
Amo of th e iss unt Sub scrib ed by th e G roup |
ue Con solid ated Bala She et nce |
Acc rual |
Valu e ad just ts men of h edg ing ratio ope ns |
Tota l Con solid ated Bala She et nce |
Inte rest rate |
Issu e Dat e |
Mat urity Dat e |
Inde x |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Bon ds i ed ssu Bon ds |
|||||||||||
| Call Auto able 80- 20 |
EUR | 1.61 1 |
1.61 1 |
(25 5) |
1.35 6 |
Var iable |
07-0 6-20 11 |
07-0 6-20 13 |
f Sh Bas ket o ares |
||
| Auto Call able 80- 20 2 nd s erie s |
EUR | 2.95 0 |
- | 2.95 0 |
- | (11 6) |
2.83 4 |
Var iable |
30-0 8-20 10 |
30-0 8-20 13 |
Bas ket o f Sh ares |
| Wor ld B aske t Oc tobe r 20 12 |
EUR | 7.05 0 |
- | 7.05 0 |
- | (2.8 45) |
4.20 5 |
Var iable |
12-1 0-20 09 |
12-1 0-20 12 |
Bas ket o f ind exes |
| Euro pa 5 |
EUR | 7.42 4 |
- | 7.42 4 |
- | (62 ) |
7.36 2 |
Var iable |
08-0 3-20 10 |
08-0 3-20 13 |
Bas ket o f sh ares |
| Euro pa 5 2nd ies ser |
EUR | 3.09 4 |
- | 3.09 4 |
- | (22 ) |
3.07 2 |
Var iable |
25-0 5-20 10 |
25-0 5-20 13 |
Bas ket o f sh ares |
| Euro pa 1 55 |
EUR | 1.92 0 |
- | 1.92 0 |
- | (34 ) |
1.88 6 |
Var iable |
28-0 6-20 10 |
28-0 6-20 14 |
2 sh inde are xes |
| Euro pa B ond s 2n d se ries |
EUR | 1.21 0 |
- - |
1.21 0 |
- - |
- | 1.21 0 |
Var iable |
09-1 1-20 09 |
09-1 1-20 12 |
Bas ket o f Sh ares |
| Perf Ma is orm ance |
EUR | 63.0 96 |
6.36 7 |
56.7 29 |
354 | 2.35 5 |
59.4 38 |
Var iable |
24-1 1-20 09 |
24-1 1-20 14 |
Bas ket o f ind exes |
| Perf Ma is II orm ance |
EUR | 13.7 31 |
- | 13.7 31 |
75 | 487 | 14.2 93 |
Var iable |
22-1 2-20 09 |
15-0 1-20 15 |
f ind Bas ket o exes |
| Ren dime nto Euro peu |
EUR | 99.7 96 |
12.4 34 |
87.3 62 |
920 | 4.02 1 |
92.3 03 |
Var iable |
06-0 8-20 09 |
06-0 8-20 14 |
Stoc k ex cha inde nge x |
| Ren dime Glob al nto |
EUR | 3.76 7 |
- | 3.76 7 |
- | (21 ) |
3.74 6 |
Var iable |
18-0 1-20 10 |
18-0 1-20 13 |
Bas ket o f Sh ares |
| ST D ion C ivers ifica Inve st 2 nd a tizat usto çao mor mer s |
EUR | 28.0 08 |
8.97 7 |
19.0 31 |
1.14 0 |
1.66 8 |
21.8 39 |
Var iable |
17-0 3-20 09 |
28-0 3-20 13 |
/US EUR D |
| ST D ivers ifica Inve st 3 rd a tizat ion C usto çao mor mer s |
EUR | 19.8 17 |
786 | 19.0 31 |
- | - | 19.0 31 |
Var iable |
17-0 3-20 09 |
28-0 3-20 15 |
Bas ket o f ind exes |
| ST D ivers ifica Inve h am ortiz atio n Cu st 4t stom çao ers |
EUR | 23.9 13 |
4.88 2 |
19.0 31 |
- | - | 19.0 31 |
Var iable |
17-0 3-20 09 |
28-0 3-20 17 |
Bas ket o f ind exes |
| Sup er R end imen to C eão Clie ntes |
EUR | 58.9 07 |
7.41 4 |
51.4 93 |
(36 ) |
51.4 57 |
Var iable |
23-0 8-20 07 |
23-1 1-20 12 |
Bas ket o f 5 s hare s |
|
| amp Valo rizaç ão P erfo 5 ye rma nce ar |
EUR | 21.5 33 |
21.5 33 |
- 189 |
2 | 21.7 24 |
Var iable |
30-0 9-20 10 |
30-0 9-20 15 |
Bas ket o f ind exes |
|
| Valo rizaç ão P erfo ar O CTO BER 5 ye 201 0 rma nce |
EUR | 9.99 3 |
- | 9.99 3 |
83 | (57 ) |
10.0 19 |
Var iable |
02-1 1-20 10 |
02-1 1-20 15 |
Bas ket o f ind exes |
| Doll ar V alua tion |
EUR | 3.64 5 |
- | 3.64 5 |
(24 ) |
3.62 1 |
Var iable |
12-0 4-20 10 |
12-0 4-20 13 |
Rat e of exch e EU R/U SD |
|
| Top Ale ha man |
EUR | 65.0 42 |
- | 65.0 42 |
- 896 |
1.44 8 |
67.3 86 |
Var iable |
14-0 2-20 11 |
13-0 2-20 15 |
ang Bas ket o f Sh ares |
| Top Ale ha F ebru 201 1 man |
EUR | 57.8 92 |
- | 57.8 92 |
951 | 983 | 59.8 26 |
Var iable |
09-0 3-20 11 |
09-0 3-20 15 |
f Sh Bas ket o ares |
| ary Chin a Va luati on |
EUR | 56.3 79 |
- | 56.3 79 |
694 | 731 | 57.8 04 |
Var iable |
11-0 4-20 11 |
02-0 4-20 15 |
Inde x FT SE C hina 25 |
| Latin Am erica |
EUR | 2.17 5 |
- | 2.17 5 |
24 | 25 | 2.22 4 |
Var iable |
20-0 5-20 11 |
20-0 5-20 14 |
Bas ket o f fun ds |
| USA | EUR | 74.6 07 |
- | 74.6 07 |
1.12 4 |
418 | 76.1 49 |
Var iable |
30-0 6-20 11 |
30-0 6-20 14 |
x St Inde and ard & Po or's 500 |
| Latin Am erica Top 3 |
EUR | 99.9 97 |
- | 99.9 97 |
1.36 9 |
691 | 102 .057 |
Var iable |
01-0 8-20 11 |
31-1 0-20 14 |
Inde x FT SE Latib ex T |
| Auto Call able 85- 15 |
EUR | 3.23 0 |
- | 3.23 0 |
(29 2) |
2.93 8 |
Var iable |
01-0 8-20 11 |
31-1 0-20 14 |
op Inde x FT SE Latib ex T |
|
| Auto Call able 85- 15a |
EUR | 570 | - | 570 | - | 570 | Var iable |
01-0 8-20 11 |
31-1 0-20 14 |
op Inde x FT SE Latib ex T |
|
| - | - | - | op | ||||||||
| 731 .357 |
40.8 60 |
690 .497 |
7.81 9 |
9.06 5 |
707 .381 |
||||||
| Cov ered bon ds |
|||||||||||
| Hipo rias II teca |
EUR | 1.00 0.00 0 |
125 .750 |
874 .250 |
18.9 12 |
36.2 85 |
929 .447 |
3,25 % |
21-O ut-2 009 |
21-O ut-2 014 |
Tx F ixa |
| Hipo teca rias III |
EUR | 1.00 0.00 0 |
1.00 0.00 0 |
5.15 1 |
6.98 7 |
1.01 2.13 8 |
2,62 5% |
15-A br-2 010 |
15-A br-2 013 |
Tx F ixa |
|
| Hipo rias IV - 1st T teca r |
EUR | 750 .000 |
- 750 .000 |
4,37 5% |
12-J an-2 011 |
12-J an-2 014 |
Tx F ixa |
||||
| Hipo rias IV - 2nd Tr teca |
EUR | 600 .000 |
600 .000 |
- | - | - | - | 4,04 5% |
21-J an-2 011 |
12-J an-2 014 |
Tx F ixa |
| Hipo teca rias IV - 4th Tr |
EUR | 225 .000 |
225 .000 |
- | - | - | - | 2,88 3% |
16-F ev-2 011 |
12-J an-2 014 |
Tx F ixa |
| Hipo rias IV - 5th Tr teca |
EUR | 175 .000 |
- 175 .000 |
- (1.1 29) |
- | - 173 .871 |
1,07 7% |
30-M ar-2 011 |
30-M ar-2 014 |
Tx F ixa |
|
| teca rias V |
EUR | 1.25 0.00 0 |
- 1.25 0.00 0 |
- | 3,18 2% |
23-M ai-2 011 |
23-M ai-2 014 |
Tx F ixa |
|||
| Hipo teca rias VI - 1st t he |
EUR | 250 .000 |
250 .000 |
- | - | - | - | 3,20 4% |
4-N ov-2 011 |
4-N ov-2 014 |
Tx F ixa |
| Hipo ranc rias VII - 1st che teca tran |
EUR | 380 .000 |
380 .000 |
- | - | - | - | 4% | 4-N ov-2 011 |
4-N ov-2 014 |
Tx F ixa |
| Hipo | - | - | - | - | 3,20 | ||||||
| 5.63 0.00 0 |
3.58 0.75 0 |
2.04 9.25 0 |
22.9 34 |
43.2 72 |
2.11 5.45 6 |
||||||
| Bon ds i ed o curi tiza tion ratio ssu n se ope ns |
|||||||||||
| Hipo totta 1 - Clas s A - No tes |
EUR | 196 .808 |
160 .014 |
36.7 94 |
82 | - | 36.8 76 |
Var iable |
25-J ul-2 003 |
25-N ov-2 034 |
Eur ibor 3m+ 0,27 % (a té a emb olso ant ecip ado a A gost o de 201 2); E urib o re or 3m+ 0,54 % (a pós data de bols tecip ado ) reem o an |
| Clas Hipo totta 4 - s A - No tes |
EUR | 1.06 8.21 1 |
524 .926 |
543 .285 |
(1.4 10) |
- | 541 .875 |
Var iable |
9-D ez-2 005 |
30-D ez-2 048 |
% (a té a 4); Eur ibor 3m+ 0,12 emb olso ant ecip ado a D mbr o de 201 o re eze % (a pós ) Euri bor 3m+ 0,24 data de bols tecip ado reem o an |
| Hipo 4 - Clas s C - No totta tes |
EUR | 122 .735 |
65.6 37 |
57.0 98 |
3 | - | 57.1 01 |
Var iable |
9-D ez-2 005 |
30-D ez-2 048 |
Eur ibor 3m+ 0,29 % (a té a emb olso ecip ado a D mbr o de 201 4); ant o re eze Euri bor % (a pós data de bols tecip ado ) 3m+ 0,58 reem o an |
| Hipo 5 - Clas s A2 - N totta otes |
EUR | 926 .158 |
244 .970 |
681 .188 |
(11 2) |
- | 681 .076 |
Var iable |
22-M ar-2 007 |
28-F ev-2 060 |
Eur ibor 3m+ 0,13 % (a té a emb olso ecip ado a F reiro de 201 4); ant o re eve Euri bor 3m+ 0,26 % (a pós data de bols tecip ado ) reem o an |
| CON Clas 1 - s A -Not es |
EUR | 399 .785 |
- | 399 .785 |
2.56 1 |
- | 402 .346 |
Var iable |
24-J un-2 011 |
24-J un-2 038 |
Eur ibor 3m+ 0,3% |
| 2.71 3.69 7 |
995 .547 |
1.71 8.15 0 |
1.12 4 |
- | 1.71 9.27 4 |
||||||
| Oth er |
|||||||||||
| EMT N's |
EUR | 1.22 6.55 0 |
45.7 10 |
1.18 0.84 0 |
10.4 60 |
30.0 36 |
1.22 1.33 6 |
||||
| 1.22 6.55 0 |
45.7 10 |
1.18 0.84 0 |
10.4 60 |
30.0 36 |
1.22 1.33 6 |
||||||
| TOT AL DEB T SE CUR ITIE S IS SUE D |
10.3 01.6 04 |
4.66 2.86 7 |
5.63 8.73 7 |
42.3 37 |
82.3 73 |
5.76 3.44 7 |
| Am t of the issu oun e |
Acc rual |
Tot al |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Sub scri bed |
Con soli date d |
Sub scri bed |
C olid ated ons |
Inte rest |
Issu e |
Mat urity |
|||||
| Sec uriti es i ed ssu |
Cur renc y |
Tota l |
by t he G roup |
Bal e S hee t anc |
Tot al |
by t he G roup |
Bal e S hee t anc |
rate | Dat e |
Dat e |
Cal l Op tion |
| Per al S ubo rdin ated Bo nds petu 200 0 |
EU R |
270 .447 |
270 .447 |
- | 180 | 180 | - | - | 3,44 % |
Per al petu |
22 J 201 0 une |
| Aut oCa llab le 8 0-20 |
EU R |
4.27 5 |
- | 4.27 5 |
46 | - | 46 | 4.32 1 |
3,50 % |
Per petu al |
23 Feb y 20 11 ruar |
| Per al S ubo rdin ated Bo nds BS P 20 01 petu |
EU R |
13.8 18 |
13.8 18 |
- | 151 | 151 | - | - | 3,50 % |
Per al petu |
23 Feb y 20 11 ruar |
| 288 .540 |
284 .265 |
4.27 5 |
377 | 331 | 46 | 4.32 1 |
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