2012
Annual
REPORT
Consolidated
2012
CONTENTS
00
MESSAGE FROM THE CHAIRMAN
OF THE SENIOR AND SUPERVISORY BOARD
4
01
PROFILE OF THE CRÉDITO AGRÍCOLA
FINANCIAL GROUP
10
1. Caixa Central Governing Bodies
12
2. Organisation chart
14
3. SICAM - Main Indicators
15
MACROECONOMIC
FRAMEWORK
16
1. The international economy
18
2. The Portuguese economy
23
3. The financial markets
27
4. The banking markets 32
MAIN OPERATIONS
OF THE CRÉDITO AGRÍCOLA GROUP
36
1. Commercial Operations
38
02
03
2
CONTENTS
1.1. Deposits and other funds
39
1.2. Moves in credit
a) Companies
b) Households
c) Leasing
42
44
45
45
1.3. Electronic means of payment
46
1.4. Direct and digital channels
50
1.5. The international, emigration and foreign representation area
55
2. Financial operations and capital markets
2.1. Treasury strategy
59
2.2. Caixas, associated companies and the corporate desk (CEACD)
60
2.3. Intermediation in the capital market
60
3. Bancassurance
05
06
62
3.1. Insurance – Non-life
62
3.2. Insurance – Life
64
4. Investment banking
04
59
66
4.1. Asset management and investment funds
66
4.2. Financial consultancy
72
FINANCIAL ANALYSIS
76
1. Income statement 78
2. Balance sheet
87
3. The Crédito Agrícola Group
95
GROUP CONSOLIDATED
FINANCIAL STATEMENTS
102
1. Balance Sheet and Income Statement
104
2. Notes to the Consolidated Accounts
110
3. Statutory Audit Certificate
220
4. Opinion of the Advisory Board
222
COMPOSITION OF THE CRÉDITO AGRÍCOLA GROUP
226
1. Caixa Central and Group Companies
228
2. Caixas Associadas de Crédito Agrícola Mútuo
229
Annual Report 2012
Consolidated
3
00
MESSAGE
FROM THE CHAIRMAN
OF THE SENIOR
AND SUPERVISORY BOARD
MESSAGE FROM THE CHAIRMAN
OF THE SENIOR AND SUPERVISORY BOARD
Gentlemen
Chairmen and representatives of the Caixas de Crédito Agrícola,
As Chairman of the Senior and Supervisory Board, I am here to express my considerations, bearing
in mind the circumstances that formed the backdrop for the past year, along with the analysis
and clarifications in the Report and Account of both the Caixa Central itself and of the Crédito
Agrícola in consolidated terms. These considerations are as follows:
Last year was deeply marked by the recession in the Portuguese economy, and by adverse
conditions in the banking and financial markets. Nonetheless, the Caixa Central came in with
upside results of around 1.3 million euros, while maintaining substantial reserves as provisions
and continuing to ensure a return on excess liquidity in the Caixas at rates which allowed them
to stay competitive in attracting funds in the face of the pressure from rates offered by other
institutions.
In terms of SICAM as a whole, profits of around 41 million euros were posted, over and against
47.3 million in 2011. This was a fall of around 12%, but yet again it meant that the Crédito Agrícola
was one of the few financial groups in the country with positive results from its banking arm and
the only one where the results stemmed exclusively from day-to-day domestic operations. They
did not come about as a result of such factors as: the realization of gains from treasury bonds
issued by the Portuguese State; financial gains from buy-back of its own debt issues; or profits
from operations outside Portugal.
The results for the Crédito Agrícola Group (made up of the consolidated figures of SICAM, the
insurance companies, other Group companies, and companies handling special vehicle funds and
investment funds) came in at 44,7 million euros, which is a decline from 2011, when the results
were 55 million (down 18,7%).
A number of the entities that make up the consolidated accounts came in with negative results.
This stemmed from the requirement to set aside provisions to cover impairments from the
potential losses in their property portfolio, as the economic and financial situation of the country
took its toll on the property market. This meant a partial absorption of the positive figures,
coming in at around 8 million euros, made in other areas of the Group, above all in the insurance
arms but also in asset management.
The downward revaluation of the properties in FII CA Imobiliário has affected the value of the
units in this fund, held by the Caixa Central, and gave rise to recognition of impairment in the
individual accounts of the Caixa Central. This meant a readjustment of the figures for 2010 and
2011, as explained in the Annual Report for the Caixa Central, and explained in detail in the Notes
to its Accounts. This meant that the results for 2010 and 2011 come in below the line, though
this has no impact on equity, given that the losses are offset against reserves, in line with the
applicable accounting norms.
6
MESSAGE FROM THE CHAIRMAN
OF THE SENIOR AND SUPERVISORY BOARD
At another level, 10 of the Caixas Agrícolas posted negative results in 2012, compared with 4 in
2011. This stems from the worsening operating conditions, where compression on the financial
margin was compounded by the need to set aside higher provisions.
The financial margin in SICAM as a whole was down by 7.2%, and to this was added the decline
in euribor rates to almost 0%, with both points contributing to maintaining the cost of funds at a
high level. To this picture was added the fierce competitive conditions for attracting funds, already
mentioned. In our case specifically, it is the weak demand for viable loans that has exclusively
led to the stagnation in credit provided, amounting in effect to a retraction, and has become a
major factor in the scenario. since the Crédito Agrícola, in terms of both its transformation ratio
and its solvency, has an ample margin for expanding the portfolio. This is an important strategic
advantage that the Group has, but the very adverse macro-economic climate means that no
advantage can be gained from it in this recession.
In the Caixa Central itself, seen as an individual entity, the financial margin in fact grew by 5.4%
year on year, though this came above all as a result of the exceptional rise during the third quarter.
After this the financial margin fell steeply nearing year-end as the Caixa Central maintained
comparatively high levels of return on CCAM deposits. This was within the Group’s strategy
framework, the purpose being to allow the CCAMs, as already mentioned, to face the competition
from other institutions in attracting funds. The fall in the financial margin came also on the back
of a generalised decline in the level of return on placements, with the prevailing conditions in the
financial markets bringing these returns to unprecedented minimums.
In terms of net worth, SICAM as a whole also saw a decline, though it was slight, coming in a mere
1.4% lower. Underlying this was the fact that the other headings making up this aggregate came
in with an overall expansion, offsetting to some extent the fall in the financial margin. Worth
a special mention is the 11.3% rise in the balance on commissions. This situation came about,
among other things, from making the banking service pricing structure more rational, more
automatic and more efficient, and building commissions relating to cross-selling (insurance and
investment funds).
Although SICAM as whole saw a slight fall in net worth, the opposite was true at the Caixa
Central. Here the aggregate grew by 11.7% year on year, with the financial margin up, along
with commissions and, above all, substantial improvements under the residual heading of other
operating results, which has been impacted in 2011 by exceptional losses in asset disposals.
We must hold to our focus on the growth in commissions and the complementary margin
(specifically through cross-selling). It has become amply clear that it is not possible to sustain
returns in the current circumstances for banking operations, based purely and simply on
intermediation.
Against this backdrop, we must continue with the careful management of pricing for our services,
building on the improvements that have been made, ensuring the effectiveness of collection
procedures and the rationalization of the policy of reductions and exemptions, which should only
be given in exceptional circumstances, to customers of major importance to the Caixas, or are
particularly profitable even with special adjustments to the pricing system. In the management
of our commission policy, however, we cannot ignore the difficulties that the current climate is
placing before our associates and customers.
In the same way, we must also grow the returns from cross-selling and up-selling, with
particular reference to insurance and investment funds, areas where the Group has been having
considerable success, with the recent distinction (another one) awarded to CA Vida as the best
large life insurance company and the highlights that some of the CA Gest funds have received
from the specialist press.
Annual Report 2012
Consolidated
7
But we must also boost the areas of banking business with big potential for generating
commissions. Even credit cards provide the group with this possibility, in spite of the higher
risk involved in this business in the current climate, always supposing, of course, that here are
improvements in the treatment and management of information backing up the business and in
risk control.
In a period such as the present, when the operating conditions for financial institutions are under
pressure, it is of maximum importance to ensure maximum efforts to bring the Group’s operating
costs down. In the year under review, we brought about a fall of 0.5% in these charges, but we
have to manage much more. The most significant reductions came in general administrative
expenditure, down by 11% in the Caixa Central and by 1.7% in SICAM as a whole. There was, of
course, an exceptional increase in this kind of expenditure in 2011, with the celebration of the
Group’s centenary and the special inspection programme. This to a large extent explains the year
on year reduction seen in 2012.
It was inevitable, in the economic and financial crisis we are going through, that overdue credit
would rise substantially across the whole domestic banking system. Neither SICAM as a whole,
nor the Caixa Central, nor the associated Caixas could avoid this, though to date the problem
has been a lot less acute in the Crédito Agrícola than in the average of the banking system. In
figures, the banking sector as a whole saw overdue credit up by 186% since 2008, as against the
Crédito Agrícola, which was up by 70% in the same period. At the Caixa Central, the ratio for
overdue credit (at more than 90 days) rose from 4.8% at the end of 2011 to 5.9% a year later, and
in SICAM from 5.8% to 6.8%. This move was logically matched by an increase in net provisions set
up during the year, leaving the total in SICAM as a whole at 121 million euros in 2012, the highest
figure recorded ever under this heading on the operating account. The cover for overdue credit at
more than 90 days is 115.3%, a comfortable level which is even higher than the figure before the
onset of the financial crisis (the ratio was 108.9% in 2007 and a mere 73.6% in 2000 at the turn of
the millennium).
In tandem with the increase in overdue credit, the problems caused by the economic circumstances
have led to a major increase in the properties held by the Caixa Central and the associated Caixas
as a result of repossessions and other operations needed to recover the credit in question. At
year-end, the value of these assets stood at 367 million euros, some 120 million more than a year
earlier. The provisions for the year also include recognition of impairment on these properties.
Given the negative prospects for the current year, overdue credit will continue to amass in the
domestic banking system, and more provisions will be required. This, in conjunction with the low
level of return on credit and the continuing high cost of funds, will weigh heavily on the results
from institutions – and the trajectory of the accounts in the Group up to April of the current year
has already confirmed this.
The solvency and liquidity situation of the Crédito Agrícola gives the Group a margin to hold firm
against any exceptional troubles stemming from the current circumstances. We must face them
with determination, strength and tranquillity, built also with intelligence and vision. This is the
way forward for the Group, bolstering its robustness and build on the trust of our associates and
customers.
The Senior and Supervisory Board has underscored the fact that this is a challenge that has to be
taken on by everybody, including those in positions of responsibility in the associated Caixas, the
Caixa Central and Group companies, with the interests of the Crédito Agrícola always up front,
working in a spirit of great cohesion, for this is the key to our success.
8
MESSAGE FROM THE CHAIRMAN
OF THE SENIOR AND SUPERVISORY BOARD
The Crédito Agrícola has in front of it a historic opportunity to make its mark as one of the
country’s great financial institutions and as a benchmark in the excellent panorama of European
cooperative banking. This is an opportunity that we cannot waste.
In this context, the members of this Board would like to record its satisfaction at the way a start
has been made to the overhaul and reorganisation of the Caixa Central and the transformation
of the group undertaken by the Executive Board, approved at the last AGM. This is a wide-ranging
process, touching on all the key aspects of the business, support structures and strategic
coordination units. It is now under way.
A successful conclusion to this project, which this Board will be monitoring closely and with great
interest, will have a crucial impact on the overall performance of the Group, both in terms of its
commercial dynamics and in its operational efficiency, allowing the Crédito Agrícola to realize its
enormous potential to the full.
Lisbon, 9 May 2013
The Chairman of the Senior and Supervisory Board
Annual Report 2012
Consolidated
9
01
PROFILE
OF THE CRÉDITO AGRÍCOLA
FINANCIAL GROUP
01
PROFILE OF THE CRÉDITO AGRÍCOLA
FINANCIAL GROUP
1. Caixa Central Governing Bodies
BOARD OF THE ANNUAL GENERAL MEETING
Caixa de Crédito Agrícola Mútuo de Terras de Viriato
Chairman
Nuno Carlos Ferreira Carrilho
Caixa de Crédito Agrícola Mútuo de Cantanhede e Mira
Deputy Chairman
Carlos Alberto Pereira Martins
Caixa de Crédito Agrícola Mútuo de Ferreira do Alentejo
Company Secretary
Josué Cândido Ferreira dos Santos
SENIOR AND SUPERVISORY BOARD
Caixa de Crédito Agrícola Mútuo de Pombal
Chairman
Carlos Alberto Courelas
Caixa de Crédito Agrícola Mútuo dos Açores
Francisco Amâncio Oliveira Macedo
Caixa de Crédito Agrícola Mútuo de Baixo Mondego
António João Mota Cachulo da Trindade
Caixa de Crédito Agrícola Mútuo da Batalha
Afonso de Sousa Marto
Caixa de Crédito Agrícola Mútuo do Noroeste
José Gonçalves Correia da Silva
Caixa de Crédito Agrícola Mútuo de Porto de Mós
Jorge Manuel da Piedade Volante
Caixa de Crédito Agrícola Mútuo de Sotavento Algarvio
João Lázaro da Cruz Barrote
Caixa de Crédito Agrícola Mútuo do Baixo Vouga
José Luís Sereno Gomes Quaresma
Caixa de Crédito Agrícola Mútuo do Douro, Corgo e Tâmega
Alcino Pinto dos Santos Sanfins
12
PROFILE OF THE CRÉDITO AGRÍCOLA
FINANCIAL GROUP
SENIOR AND SUPERVISORY BOARD
Front row (from left to right)
João Barrote, Francisco Macedo, Carlos Courelas (chairman)
Jorge Volante and José Quaresma
Back row António Cachulo da Trindade, Afonso de Sousa Marto,
José Correia da Silva and Alcino Sanfins
EXECUTIVE BOARD
Chairman
Licínio Manuel Prata Pina
Member
Renato Manuel Ferreira Feitor
Member
José Fernando Maia Alexandre
Member
Ana Paula Ramos
Member
Sérgio Raposo Frade
CHARTERED ACCOUNTANT
EXECUTIVE BOARD
(from left to right)
Ana Paula Ramos, Renato Feitor, Licínio Pina (chairman),
José Maia Alexandre and Sérgio Frade
Ernst&Young Audit & Associados – S.R.O.C., S.A.
Represented by Ana Rosa Ribeiro Salcedas Montes Pinto
ADVISORY BOARD
Caixa de Crédito Agrícola Mútuo de Albufeira
Chairman
João Manuel Correia da Saúde
Caixa de Crédito Agrícola Mútuo de Alenquer
Hélio José de Lemos Rosa
Caixa de Crédito Agrícola Mútuo de Beja e Mértola
Francisco José Salgueiro Correia
Caixa de Crédito Agrícola Mútuo de Estremoz, Monforte e Arronches
Normando António Gil Xarepe
Caixa de Crédito Agrícola Mútuo de Lourinhã
António Augusto Nascimento Mateus
Caixa de Crédito Agrícola Mútuo de Paredes
António Francisco Coelho Pinheiro
Caixa de Crédito Agrícola Mútuo de Silves
ADVISORY BOARD
Front row (from left to right)
Francisco Correia, António Augusto Mateus,
João Saúde (chairman) and José Estiveira Gonçalves
Second row Hélio Rosa, Antonio Pinheiro and Francisco Rebelo
Back row Normando Xarepe, Adriano Diegues and Angelo Antunes
José Manuel Guerreiro Estiveira Gonçalves
Caixa de Crédito Agrícola Mútuo de Vale do Távora e Douro
Francisco Eduardo das Neves Rebelo
Caixa de Crédito Agrícola Mútuo de Zona do Pinhal
Ângelo de Jesus Antunes
In accordance with article 35, no2 from Caixa Central estatutes
Adriano Augusto Diegues
Annual Report 2012
Consolidated
13
2. Organisation chart
SICAM
ASSOCIATED
CAIXAS
1.13%
(1)
100.00%
FENACAM
0.10%
CAIXA CENTRAL
32.65%
CA VIDA
57.27%
10.00%
0.68%
CA SEGUROS
96.72%
100.00%
CRÉDITO AGRÍCOLA
S.G.P.S.
100.00%
CA IMÓVEIS
100.00%
CA GEST
100.00%
CA CONSULT
CA INFORMÁTICA
20.25%
79.20%
2.06%
0.59%
CA SERVIÇOS
84.78%
12.55%
100.00%
CCCAM SGPS
UNIPESSOAL LDA.
100.00%
CA FINANCE
18.18%
5.44%
66.67%
28.57%
26.05%
27.78%
3.29%
50.06%
85.73%
AGROCAPITAL SCR FCR CENTRAL FRIE
FCR INOVCAPITAL
GLOBAL 2
FCR
AGROCAPITAL 1
FII CA IMOBILIÁRIO
FII CA PATRIMÓNIO
CRESCENTE
FII CA
ARRENDAMENTO
HABITACIONAL
3.33%
4.29%
(1)
FENACAM holds 98.74% of its own capital >> Group = 99.98%
As at: 31/12/2012
14
PROFILE OF THE CRÉDITO AGRÍCOLA
FINANCIAL GROUP
FULL CONSOLIDATION
14.27%
11.10%
CONSOLIDATION THROUGH ASSET EQUIVALENCE
3. SICAM - Main Indicators
THE DEVELOPMENT OF SICAM
2002
Dec.
2003
Dec.
2004
Dec.
2005
Dec.
2006
Dec.
2007
Dec.
2008
Dec.
2009
Dec.
2010
Dec.
2011
Dec.
2012
Dec.
Figures in millions of euros
Customer deposits
6,863
7,181
7,599
8,174
8,671
9,158
9,613
10,070
9,989
9,884
10,178
Loans to customers
6,387
6,690
6,942
7,290
7,464
7,467
8,373
8,859
8,606
8,587
8,365
Net assets
7,946
8,251
8,696
9,319
10,044
10,566
11,447
12,097
13,213
13,027
13,747
Operating income
520
570
657
738
828
874
979
1,000
1,026
1,054
1,098
Financial margin
307
306
316
326
352
387
403
315
306
342
318
47
53
58
63
74
76
87
91
110
116
130
Net worth
370
376
396
404
424
486
513
424
445
472
465
Net result
33
81
90
87
96
113
121
42
36
47
41
Complementary margin
(net commissioning)
Ratio in %
Core Tier 1 – Group (%)
a)
8.1%
9.1%
10.4%
10.5%
11.6%
11.6%
12.2%
12.1%
12.7%
12.5%
11.6%
Tier 1 – Group (%)
a)
8.1%
9.1%
10.4%
10.5%
11.6%
11.5%
12.0%
11.8%
12.5%
12.3%
11.1%
Solvency ratio – Group (%)
a)
10.5%
11.3%
12.9%
14.0%
14.4%
14.4%
13.3%
12.7%
13.4%
12.7%
10.9%
Transformation ratio (%)
93.1%
93.2%
91.4%
89.2%
86.1%
81.5%
87.1%
88.0%
86.2%
86.9%
82.2%
Efficiency ratio SICAM (%)
52.5%
52.1%
52.5%
55.2%
58.4%
54.1%
55.5%
69.4%
67.1%
64.7%
65.3%
ROE (%)
6.4%
14.1%
13.7%
11.8%
11.5%
13.0%
12.4%
4.2%
3.5%
4.5%
3.8%
ROA (%)
0.4%
1.0%
1.0%
0.9%
1.0%
1.1%
1.1%
0.3%
0.3%
0.4%
0.3%
Leverage
15.3
14.5
13.2
12.6
12.1
12.1
11.7
12.1
12.9
12.4
12.5
5.3%
5.5%
5.7%
5.9%
4.0%
3.4%
3.8%
4.1%
4.9%
5.8%
6.8%
73.6%
94.7%
98.4%
105.4%
113.6%
108.9%
136.0%
127.4%
127.8%
119.8%
114.2%
126
120
118
111
105
100
92
88
85
84
84
Ratio of overdue credit >90 days
Ratio of cover for overdue credit (%)
Number of CCAM
Number of Caixa branches
(SICAM total)
b)
584
598
616
628
632
647
670
680
689
686
686
Net average assets per CCAM
c)
61,543
67,026
71,754
81,993
91,648
102,500
116,924
127,626
132,375
133,162
140,695
Average number of branches/CCAM
d)
4.6
5.0
5.2
5.6
6.0
6.4
7.2
7.6
8.0
8.0
8.0
NotE Figures for 2011 were re-expressed for comparative purposes.
a) Figures for the ratios from 2002 to 2006 were calculated according to the rules of the Portuguese accounting system for the banking sector (PCSB), 2007 as per transitional accounting
and following IAS from 2008, including, from March 2008, the Basel II criteria
b) This includes the branches of the Caixa Central
c) In thousands of euros
d) Only CCAM branch
Annual Report 2012
Consolidated
15