Annual Report 2012

Transcripción

Annual Report 2012

Annual Report 2012
www.creditandorra.ad
Comparative summary of financial data for the last two years
Crèdit Andorrà Group
2012
2011
409,799
3,101,781
4,454,875
430,353
3,112,228
4,315,606
Key balance sheet figures
(Amounts shown in thousand euros)
Cash and at banks
Loan investments
Customer deposits
Securities and other instruments on
deposit with third parties (*)
Securities managed by group companies
and held in custody by third parties
5,568,125
4,696,938
1,285,714
1,074,452
Total
6,853,839
5,771,390
11.81
16.96
69.63
14.52
1.27
17.80
59.35
11.38
15.78
72.12
14.79
1.36
17.39
51.81
50.77
48.56
662
12
609
16
Ratios (%)
Equity / Deposits
Equity / Loans
Loans / Deposits
Profits / Average capital + Reserves
Profits / Average total assets: ROA (**)
Solvency
Liquidity
Efficiency (Operating Costs /
Ordinary margin)
Other figures
Number of employees
Number of branches
Fitch Ratings
Long-term
Short-term
Individual
Support
(*) See note 19 of Annual Report.
(**) As per ANIF Memorandum 141/02.
A–
F2
B/C
5
Contents
Comparative summary of financial
data for the last two years
Introduction
Letter from the Board of Directors
74
Governance structure
76
Financial statements
Consolidated balance sheets
78
Consolidated off-balance-sheet records
81
Consolidated profit and loss account
82
Consolidated statement of source
and application of funds
84
Notes on the consolidated financial statements 86
Auditors’ report
140
Branch network 142
Introduction
According to the IMF, in 2012 the world as a whole had an economic growth index of 3.2%. Nevertheless, since 2007 it
can be seen that not all countries have followed the same course or enjoyed the same rate of growth. The United States
and China continue to lead the recovery process in international demand and it the engine for growth is clearly moving
towards the Pacific and the emerging economies, compared with moderate growth in the developed economies.
The two most decisive factors in the eurozone have been: the crisis in the single currency area and intervention on
the part of central banks, applying expansionary monetary measures and maintaining low interest rates in order
to adjust the sovereign debt markets. The ultimate aim has been to make monetary and fiscal union more stable.
The debt crisis in periphery countries such as Greece, Portugal, Ireland and Spain has continued to dominate the
political agenda, resulting in a technical recession in the last quarter of 2012.
The United States, with a much more vigorous economy, has ended the year with moderate growth of 2.2%,
thanks partly to increased activity due to an upswing in private consumption, improvements in the stock cycle and
investment in the construction industry. It still has a positive growth forecast for 2013 in spite of the uncertainties
caused by its fiscal policy.
This moderation in economic growth has also affected the emerging countries, which started 2013 with great
optimism but have had to curb their expectations like the rest of the economies.
In Andorra, it has been necessary to establish measures to diversify our economic and boost growth. To this end,
policies have been promoted to attract foreign investment and some structural reforms have been started to bring
us in line with European standards.
With regard to the measures approved in Andorra’s new tax framework, corporate tax has now come into force,
complementing the taxes on economic activity and on the income of individuals not resident for fiscal purposes.
In the institutional sphere, OECD Model Tax Convention on Income and on Capital are being negotiated with
France and Spain, politically crucial to boost our economy as they will offer greater legal security for foreign
investors and will be of great help towards internationalising our country’s firms.
Work is on schedule to implement the Monetary Agreement and to adapt to the Basel III requirements, a horizon
that brings us in line with the best practices and standards of international finance. The finance industry’s growth
beyond our own borders is also continuing to be relevant.
With regard to the Crèdit Andorrà Group, we have maintained our leadership and market share in Andorra’s
financial sector. In 2012, we increased our presence and business in new geographies, consolidating our
international project.
Our solvency ratio is 17.80% and our liquidity ratio is 59.35%, both above the legally established minimums of 10%
and 40%, respectively. The consolidated balance sheet for the Crèdit Andorrà Group as at December 31, 2012 shows
a total business volume of 14,410 million euros, representing a 9% increase on the previous year. Total assets under
management stand at 11,308 million euros, 12% more than in 2011, and loan investments total 3,102 million euros.
Within a complex economic situation, we have significantly increased all our business margins. Total operating income
reached 195.64 million euros, a considerable increase of 12.14% on 2011; the financial margin was 76.46 million euros,
13.30% more; and the net profit from operations came to 74.61 million euros, up by 8.41% compared with the previous
year. In spite of our Group’s international expansion, the efforts made to contain spending have given us a healthy
efficiency ratio of 50.77%. Finally, after having applied a prudent and conservative policy of provisions for insolvency,
the Crèdit Andorrà Group recorded a consolidated net profit of 70.86 million euros, 0.33% higher than in 2011.
Throughout 2012 we continued to make progress in implementing the Group’s international expansion plan with
a greater presence abroad. The geographical diversification of our business in Private Banking, asset management
74
and insurance in Europe and America has provided us with sustainable growth and guaranteed strength as a leading
group in the Andorran financial market.
We have reinforced our project of private banking and asset management in Europe (Spain and Luxembourg) with
two strategic shareholders joining Banco Alcalá: the financial group Riva y Garcia, with 10% of the bank’s share
capital, and the Ros González family with 5%. This operation has increased Banco Alcalá’s volume of business and
improved its solvency ratio, now standing at 96%. It has also provided us with growth and experience in Spain’s
private banking sector.
We must also mention the Group’s implementation in Peru and Paraguay. With the acquisition of 51% of the share
capital of KRESE Sociedad Intermediaria de Valores S.A.C., based in Lima (Peru), and the purchase of 70% of the
share capital of the Paraguayan firm Valores Casa de Bolsa S.A., two operations have been carried out that have
helped us to expand and continue consolidating our presence in Latin America.
One of the objectives of the strategic plan was to grow our insurance business via a specific expansion plan in Spain
for our holding ERM. In 2012 we opened a new branch in Lleida and now have an extensive branch network in
Spain with branches in Barcelona, Madrid, Lleida, Girona, Tarragona, Seville and Palma de Mallorca.
The different distinctions and classifications received in 2012 are a reflection of Crèdit Andorrà’s prudent,
conservative management, of our leading position in the Andorran market, our growing business in international
private banking and positive developments in the Bank’s business margins. Fitch Ratings highlighted our solid
solvency and liquidity by renewing our ratings, namely a long-term rating “A–”, a short-term rating “F2” and a
support 5 rating. Further recognition came from The Banker, with our Bank ranked 757th in the world and number
1 in Andorra in the annual Top 1000 ranking, which classifies banks worldwide according to their strength and
capitalisation.
All these results and distinctions, achieved in a year within a difficult environment such as the present, would not
have been possible without the involvement and commitment of all those who form part of our team and who
constitute our most important asset.
Regarding the social responsibility plan of the Crèdit Andorrà Group, we have supported projects that contribute
to the country’s development. The Crèdit Andorrà Group has allocated 2.16 million euros overall (representing 3%
of our total net profit) to programmes and actions aimed at achieving a better future for Andorra.
We have prioritised the main engines of the Andorran economy and provided direct support for the business world
via the Crèdit Andorrà Chair in Markets, Organisations and Humanities at IESE, as well as other institutions in
the country.
The will to serve the country and its people, which has always been present in the Crèdit Andorrà Group, is most
clearly reflected in the Fundació Crèdit Andorrà, celebrating its 25th anniversary in 2012. Throughout its history,
the Foundation has become the driving force behind our work for society. We have evolved side-by-side with
people, the very essence of our community’s present and future.
To end this account, we would like to reaffirm our founding commitment to serve Andorra. The values that form
the basis of the sustainability of a great national and international undertaking such as the Crèdit Andorrà Group
are professionalism, security and trust. Our responsibility within the sector is to preserve these values and always
take them into account for the benefit of our customers and shareholders.
The Board of Directors
75
Governance structure
BOARD OF DIRECTORS
Chairman of the Board of Directors
Antoni Pintat Santolària
Vice-Chairman
Jaume Casal Mor
Chief Executive Officer / Secretary
Josep Peralba Duró
Member of the Board
Rosa Pintat Santolària
Member of the Board
Maria Reig Moles
Member of the Board
Josep Vidal Martí
EXECUTIVE COMMITTEE MEMBERS
Chief Executive Officer / General Manager
Josep Peralba Duró
Business General Manager
Xavier Cornella Castel
Private Banking International division Director
David Betbesé Aleix
Insurance group Director
Josep Brunet Niu
Commercial Banking division Director
Sílvia Cunill Calvet
Investment division Director
José Luis Dorado Ocaña
General Secretary to the CEO
Agustí Garcia Puig
Loans division Director
Frederic Giné Diumenge
Management Risk and Financial Planning division Director
Francesc Jordà Blanes
Resources division Director
Ramon Lladós Bernaus
Private Banking Europe division Director
Frank Martínez Sánchez
Private Banking America division Director
José Antonio Monreal Hurtado
Risk and Regulatory Compliance division Director
Andrés Roldán Cubas
At its meeting on September 27, 2012, the Board of Directors of Crèdit Andorrà approved
the appointment of Xavier Cornella Castel as Business General Manager.
76
At December 31, 2012
Consolidated balance sheets as at December 31, 2012 and 2011
ASSETS
2012
Cash and deposits with OECD central banks
Euros (thousands)
40,061
33,602
210
210
369,156
258,864
110,874
–582
395,847
215,890
180,861
–904
3,071,818
3,079,454
14,339
7,988
–29,963
3,090,775
3,084,980
12,787
14,461
–21,453
1,851,627
1,762,319
–3,897
—
1,426,527
1,358,488
–2,466
–5
Investments in Group companies
22,201
8,262
Other investments
Provision for market fluctuations
17,259
—
17,167
—
Shares and other equity securities
10,158
—
11,635
–11
Investment funds
44,494
–907
33,751
–294
Consolidation gains (note 7.1)
41,081
41,081
—
40,576
42,039
–1,463
56,234
8,762
78,570
–31,098
46,053
—
87,264
–41,211
321,346
439,875
–110,407
–8,122
281,523
417,663
–128,727
–7,413
55,063
54,710
353
55,840
55,096
744
91,933
84,128
223
2,429
—
5,153
47,142
44,157
318
2,667
—
—
5,898,529
5,418,095
Andorran National Institute of Finance (ANIF) (notes 4 and 21)
Financial intermediaries (notes 4 and 5)
Financial intermediaries at sight
Due from banks on time deposit
Provision for insolvencies
Loan investments (notes 4 and 5)
Customer loans and credits
Overdrafts on customer accounts
Customer bills discounted
Securities portfolio (notes 4 and 6)
Bonds and other fixed-income instruments
Consolidation gains
Accumulated amortisation
Intangible assets and expenses to be written off (notes 2.5 and 7.1)
Goodwill
Intangible assets and expenses to be written off
Accumulated amortisation
Fixed assets (note 7.2)
Fixed assets
Accumulated depreciation
Provision for depreciation
Accrued income and prepaid expenses (note 12.1)
Accrued income but not collected
Prepaid expenses
Other assets (note 12.3)
Operations in course
Stock
Options purchased
Other
Taxes
Total assets
(*) Shown solely for purposes of comparison. Notes 1 to 23 herewith form an integral part of the consolidated financial statements.
78
2011 (*)
LIABILITIES
Euros (thousands)
2012
Andorran National Institute of Finance (ANIF) (note 4)
Creditors (note 4)
Banks and lending institutions
Other financial intermediaries
Customer deposits
Bonds issued (note 4)
Provision for risks and contingencies (note 8)
Provision for pensions and similar obligations
Provision for contingent liabilities
Other provisions
Provision for general banking risks (note 11)
Subordinated liabilities (note 11)
Accrual accounts (note 12.2)
Accrued expenses
Deferred income
Other liabilities (note 12.4)
Operations in course
Options issued
Suppliers and other creditors
Taxes
Minority interest
Share capital (note 11)
Reserves (note 11)
Legal reserve
Guarantee reserve
Voluntary reserve
Revaluation reserve
Consolidation reserve
Exchange rate differences
Income (notes 10 and 11)
Income for year
Income from previous years awaiting allocation
Dividends paid out in advance
Total liabilities
2011 (*)
6,799
6,651
4,751,270
286,202
10,193
4,454,875
4,451,678
128,900
7,172
4,315,606
370,821
206,610
2,359
—
1,238
1,121
2,541
—
1,238
1,303
—
8,154
150,000
150,000
35,705
19,812
15,893
42,082
20,723
21,359
30,117
14,257
1,667
7,994
6,199
29,753
12,867
1,781
15,105
—
5,380
4,463
70,000
70,000
425,216
14,000
42,505
259,575
109,351
3
–218
410,535
14,000
39,311
207,280
109,351
40,722
–129
50,862
70,862
—
–20,000
35,628
70,628
—
–35,000
5,898,529
5,418,095
(*) Shown solely for purposes of comparison. Notes 1 to 23 herewith form an integral part of the consolidated financial statements.
79
Consolidated off-balance-sheet records as at December 31, 2012 and 2011
2012
Contingent liabilities
Guarantees given
Documentary letters of credit issued or received
with notification to customers
Commitments and contingent risks
Operating commitments and risks
Actuarial commitments and risks
Other contingent commitments and risks
Forward operations (note 15)
Forward foreign exchange transactions
Forward transactions on other financial instruments
Customer securities held in custody (note 19)
Securities held in custody by third parties
Securities held in own custody
Other off-balance-sheet records
exclusively for management control (note 19)
Guarantees and commitments obtained
Other off-balance-sheet records
Euros (thousands)
2011 (*)
147,697
145,703
198,958
196,981
1,994
1,977
420,099
390,470
11,696
17,933
418,688
391,831
11,747
15,110
2,145,966
1,435,259
710,707
1,397,793
767,515
630,278
7,080,540
5,895,838
1,184,702
5,976,252
5,196,892
779,360
1,452,876
512,247
940,629
1,280,845
412,294
868,551
(*) Shown solely for purposes of comparison.
Notes 1 to 23 herewith form an integral part of the consolidated financial statements.
81
Consolidated profit and loss account for years ended
December 31, 2012 and 2011
2012
Interest and related income
ANIF and financial intermediaries at sight
On loan investments
On bonds and other fixed-income securities
Interest and related expenses
ANIF and financial intermediaries
On customer deposits
On bonds
On subordinated liabilities
On internal pension fund
Income from equity securities
From other investments
From shares and other equity securities
From investment funds
Financial margin
Commissions, net (note 12.5)
Commissions on services supplied
Commissions on services received
Results of financial transactions
Net provision for market fluctuations (note 6)
Foreign exchange earnings
Income from securities transactions
Income from forward transactions
Share in losses / profits of companies accounted
for by equity method (note 2.3)
Other
Other ordinary profit
Ordinary margin
82
Euros (thousands)
2011 (*)
127,427
184
87,098
40,145
114,777
1,420
87,633
25,724
–51,452
–5,917
–33,743
–7,629
–4,163
—
–47,748
–908
–38,308
–3,091
–5,441
—
484
—
329
155
442
—
261
181
76,459
67,471
100,488
112,918
–12,430
93,468
105,229
–11,761
17,903
–622
5,375
8,195
14
12,759
–121
5,299
3,442
–594
4,941
—
4,177
556
792
764
195,642
174,462
2012
Euros (thousands)
2011 (*)
Ordinary margin
195,642
174,462
Personnel costs
–48,856
–38,597
–4,300
–2,976
–2,983
–39,938
–31,548
–3,394
–2,911
–2,085
–50,464
–934
–32,084
–17,446
–44,780
–975
–24,171
–19,634
–21,003
–21,003
–20,209
–20,209
–709
–709
—
–707
–707
—
74,610
68,828
—
–9,692
–10,726
1,034
—
–8,429
–9,208
779
Allocations to provision for risks and contingencies
Recovery of provisions for risks and contingencies
–254
–254
—
330
—
330
Provision for general banking risks (note 11)
—
—
64,664
60,729
8,196
8,154
42
9,644
15,078
–5,434
Profit for the year before tax
72,860
70,373
Corporate tax (notes 12.8 and 13)
–1,685
—
Profit for the year after tax
71,175
70,373
Profit attributed to minority interest
Profit attributed to the Group
313
70,862
–255
70,628
Personnel, Board of Directors and indemnities
Social Security
Ordinary allocations to other insurance institutions (notes 3.9 and 9)
Other personnel costs
General expenses (note 12.6)
Supplies
External services
Taxes
Depreciation expenses, net (note 7)
Depreciation allowed on intangible and tangible fixed assets
Provision for depreciation of fixed assets, net (note 7)
Allocation of provision for depreciation of fixed assets
Recovery of provisions
Operating margin
Losses due to asset impairment
Provision for insolvencies, net (notes 5 and 6)
Allocations to provision for insolvencies
Recovery of provisions for insolvencies
Provision for risks and contingencies, net (note 8)
Ordinary profit
Extraordinary profit (note 12.7)
Recovery of provisions for general banking risks (note 11)
Other extraordinary profit
83
Consolidated statement of source and application of funds for years ended
December 31, 2012 and 2011
SOURCES OF FUNDS
2012
Funds generated by operations
Profit for the year
Net provision for insolvencies
Net provision for asset depreciation
Net provision for market fluctuations
Allocations to other funds
Other
Depreciation of tangible and intangible fixed assets
(Profit)/Loss on sale of fixed assets
Profits from other companies accounted for by equity method
Positive change in liabilities over assets
Cash
Other headings
Net increase in liabilities
Creditors - Customers
Subordinated liabilities
Bonds issued
Net decrease in assets
Cash
Loan investments
Securities portfolio less investments
Sale of permanent investments
Sale of investments
Sale of fixed assets
Funds generated by financing operations
External contributions to capital
Other equity amounts
Total source of funds
84
Euros (thousands)
2011 (*)
110,620
70,862
9,692
710
623
254
12,305
21,003
112
–4,941
80,645
70,628
8,429
707
—
–330
–15,078
20,209
257
–4,177
187,482
148
184,314
3,020
55,337
—
55,337
—
303,479
139,269
—
164,210
203,185
133,902
—
69,283
—
—
—
—
3,964
3,964
—
—
1,632
—
1,632
4,439
—
4,439
—
—
—
4,771
3,909
862
603,213
352,341
APPLICATION OF FUNDS
2012
Funds applied to operations
Applied from other funds
Other
Positive change in assets over liabilities
Other headings
Net decrease in liabilities
Creditors - Customers
Bonds issued
Net increase in assets
Cash
Loan investments - Customers
Securities portfolio less investments
Purchase of permanent investments
Purchase of investments
Purchase of tangible and intangible fixed assets
Funds applied to financing operations
Supplementary dividend for previous year
Preliminary dividend for current year
Other equity amounts
Total application of funds
Euros (thousands)
2011 (*)
8,154
8,154
—
14,180
511
13,669
87,044
—
87,044
4,417
4,417
—
—
—
—
—
—
—
—
—
454,903
6,459
33,960
414,484
189,827
—
2,144
187,683
13,112
505
12,607
73,917
—
73,917
40,000
20,000
20,000
—
70,000
35,000
35,000
—
603,213
352,341
85
Notes on the consolidated financial statements at December 31, 2012 and 2011
Note 1 Identity of the Bank and its activities
Crèdit Andorrà SA (hereinafter the Bank), authorised in 1949, is a limited company engaged in banking activities
which it carries out as a commercial bank and as a private bank and is subject to the rules and regulations governing
financial institutions operating in Andorra. However, on April 11, 2011, the Andorran National Institute of Finance
(ANIF) approved the application to widen the Bank’s corporate object to include the investment and auxiliary
services established in articles 5 and 6 of Act 13/2010, of May 13.
The Bank’s registered offices are at Avinguda Meritxell, 80, Andorra la Vella, Principality of Andorra.
Crèdit Andorrà SA is the parent company in the Group and, together with its subsidiaries, set out in Notes 2.4 and
6.1, form part of the Crèdit Andorrà Group (hereinafter the Group).
Note 2 Bases of presentation and consolidation principles
2.1 Approval by the General Shareholders’ Meeting
The Group’s annual consolidated financial statements for the year ending December 31, 2011 were approved
by the Bank’s General Shareholders’ Meeting on May 18, 2012.
The annual consolidated financial statements of the Group, of the Bank and of almost all the companies
that form part of the Group for the year ending December 31, 2012 are pending approval by their respective
General Shareholders’ Meetings. Nevertheless, the Bank’s Board of Directors believes they will be approved
without any changes.
2.2 Presentation and Application of the Accounting Plan of the Andorran Financial System
These consolidated financial statements have been drawn up by the Bank’s directors based on the accounting
records of the banks and companies that go to make up the Group and have been prepared according to the
Accounting Plan of the Andorran Financial System approved by the government of Andorra on January
19, 2000, so that they show a true and fair view of the consolidated equity, consolidated financial position,
consolidated results and resources obtained and applied by the Group.
The consolidated financial statements are presented in thousands of euros, which is the currency used for the
Group’s operations and presentations, rounded up or down to the nearest thousand.
The Andorran National Institute of Finance (ANIF) is the body charged with the supervision and control of
those entities that go to make up the Andorran Financial System, as well as the implementation and application
of the Accounting Plan of the Andorran Financial System and those regulations applicable to these entities.
Note 3 summarises the accounting principles and policies and the most significant valuation criteria applied
in preparing these consolidated financial statements.
No mandatory accounting principle or valuation criterion having a significant effect on these consolidated
financial statements has been excluded.
86
2.3Critical aspects of valuation, estimating uncertainty and relevant opinions made when
applying accounting policy
The preparation of the consolidated financial statements requires the use of relevant accounting estimates,
the application of opinion and processes of estimation and hypothesis. In this respect, below is a summary
providing details on those aspects that have involved a greater degree of opinion and complexity or for which
the hypotheses and estimates are significant in preparing these consolidated financial statements:
• Useful life and intangible assets and expenses that can be depreciated.
• Fair value of certain assets and liabilities not listed.
• Calculation of provisions made.
• Estimates to calculate corporation tax and deferred fiscal assets and liabilities.
• Valuation of the recovery of goodwill and differences from the initial consolidation.
Although the estimates made by the Bank’s directors at December 31, 2012 have been carried out according
to the best available information to date, events that may take place in the future may require these to be
modified in the next few years. This modification would be carried out prospectively, recognising the effects
of the change in estimate in the corresponding consolidated profit and loss accounts.
2.4 Consolidation principles
According to the Accounting Plan of the Andorran Financial System, there is a relationship of control by
a dominant entity over a dependent entity when the former, either directly by itself or indirectly through
other persons or entities acting on its behalf or in agreement with the former:
• holds a majority of the voting rights or is able to make use of, pursuant to an agreement with other
shareholders, a majority of the voting rights of the latter;
• has the right or has actually exercised the right to appoint or remove the majority of the members of
the governing body;
• has appointed, exclusively with its votes, at least half plus one of the members of the governing body
of the latter; or
• controls the governing body because at least half plus one of the members of the governing body of the
latter are board members or senior management, directly or indirectly, of the former.
The same economic group is made up of those entities that, irrespective of their legal form, activity or company
domicile, constitute:
• a decision-making unit so that one of these entities exercises, directly or indirectly, the sole management
of the other entities or the aforementioned management is exercised by one or more individuals acting
systematically and co-ordinately; and
• an economic unit of risk because its solvency, capacity to generate funds or future viability depends
closely on any of its components.
In any case, dominant entities and their dependent entities are understood as an economic group.
Multigroup entities are those not included in the economic group but which are managed by one or more
entities of the group and which form part of its share capital, together with one or more other entities which
are not related to it. Entities are understood to be managed jointly when, in addition to forming part, directly
or indirectly, of the capital, any of the following circumstances apply:
• joint management has been established in the company articles of association; or
• there are pacts or agreements that allow shareholders to exercise their right to veto in taking company
decisions.
87
Associated entities are those not included in the economic group but which meet both the following requirements:
• one or more group entities form a part, directly or indirectly, of the entity’s share capital; and
• a long-lasting relationship has been created that contributes to its activity.
These requirements are deemed to have been met when one or more group entities hold a direct or indirect
share in the company’s capital of at least 20%, or 3% if it is quoted on a regulated market.
Consolidation methods
Full integration is applied when the entity to be consolidated carries out a non-differentiated activity (entities
from the financial system or instrumental and/or auxiliary entities, fundamentally) and when it belongs to the
economic group.
According to the full integration method, the book value of investments and flows resulting from this situation
is replaced with the assets and liabilities and with the income and expenditure of the investee company; i.e.
the items of the subsidiaries to be consolidated within the group are included within or added to the balance
sheet and the profit and loss account of the parent company, replacing the book value of the investment with
the assets and liabilities of the companies to be consolidated.
All significant balances from the balance and off-balance-sheet accounts, i.e. loans, debts and claims existing
between the Group’s companies, have been eliminated.
Income and expenditure related to significant transactions between consolidated companies have been
eliminated and do not affect the Group’s results. Results produced by internal transactions have been
eliminated and deferred until realised via third parties.
The difference between the book value of companies consolidated by the fully-integrated method and their
equity at year-end is included in the consolidation reserves.
The accounts of the consolidated companies are governed by the same rules of classification, valuation,
depreciation and supply.
The consolidation of the profit or loss generated by subsidiaries acquired in a financial year is carried out
by taking only into consideration the results for the period between the date of acquisition and the date the
reporting period ends.
In the case of the fully-integrated consolidation method, in the consolidated profit or loss, the part
corresponding to the group, in proportion to the group’s percentage investment, is differentiated from the
part corresponding to the minority, i.e. that which does not belong to the group. In the liabilities of the
balance sheet, the heading “Minority interest” reflects the part that does not form part of the equity and that
corresponds to minority shareholders.
The equity method is applied when the entity to be consolidated is an associated company, when it belongs to
the economic group but carries out a differentiated activity and when it is a multigroup company.
In the equity consolidation method, the book value of the investment is replaced by the corresponding
percentage of equity in the investee company, adjusting the liabilities, if necessary, for any differences between
the investment and the equity of the company consolidated via the equity method. As established by ANIF
Memorandum 162/05, in subsequent consolidations any variations in equity (if negative, up to the difference
between the equity of the previous consolidation and the book value of the investment) are reported within
the section “Share in (losses) / profits of companies accounted for by equity method” of the profit and loss
account of the financial statements for the part corresponding to the profit or loss of the investee company.
In other cases, variations in equity have a direct balancing entry in liabilities under “Consolidation reserves”.
88
Annual accounts provided in foreign currencies of companies included within the consolidation are converted
into the reference currency of the consolidated financial statements according to the following criteria:
• Assets and liabilities on the balance sheet are converted at the exchange rate on the date of closing the
annual accounts.
• With regard to drawing up the consolidated profit and loss account, profit and loss accounts of
subsidiaries are converted at the average exchange rate for the period.
• The items of capital, reserves and remainder not eliminated in the consolidation process are converted
at the historic exchange rate for the date on which they were generated.
• Any differences arising from the different conversion methods are charged to the item “Exchange rate
differences of liabilities”.
Consolidated companies
These consolidated financial statements include the following investee companies, consolidated by the fully
and proportionally integrated method (in thousand euros):
Auditor
Holding
(direct and
indirect)
Capital
and
reserves
Profits/
Losses
KPMG
—
—
100%
100%
100%
3,481
8,459
982
1,626
268
1
–800
—
—
4,307
8,727
983
—
100%
99,354
412
—
99,766
—
100%
1
—
—
1
KPMG
60%
1,142
–152
—
990
KPMG
100%
7,998
314
—
8,312
—
100%
33,412
215
—
33,627
KPMG
KPMG
100%
85%
20,542
24,144
1,624
308
—
—
22,166
24,452
KPMG
100%
1,400
2
—
1,402
KR&Co
80%
736
911
—
1,647
KR&Co
100%
77
433
—
510
UHY
PyA
51%
406
292
—
698
2012
Domicile
Activity
Crediinvest SA
Andorra
Fund Manager
Crèdit Iniciatives SA
Andorra
Venture capital
Patrigest SA (*)
Andorra
Property
Crèdit Capital
Andorra
Instrumental
Immobiliari SA
Cayman
Crèdit Andorrà
Islands
Financial
Preference Ltd.
Valira Asset
Spain
Investment advice
Management SL (*)
Banking, securities
Crèdit Andorrà
Panamá Holding SA (*) Panama and stock market
Informàtica Crèdit
Andorra
Instrumental
Andorrà SLU
Banque de Patrimoines
Luxembourg
Banking
Privés, SA
Banco Alcalá SA (*)
Spain
Banking
CA Holding
Property
Luxembourg, SARL(*) Luxembourg
Beta Capital
United States Securities firm
Management LP
Credit Andorra
United States
Property
US GP LLC
CA Perú, SA
Peru
Securities firm
Dividends
paid out
Total
equity
(*) Parent company of the consolidated subgroup.
Information given without taking minority shareholders into account.
In 2012, the main companies incorporated within the Group’s consolidation were as follows: CA México
Asesores Patrimoniales, SA de CV; Valores Casa de Bolsa, SA; CA Perú Sociedad Agente de Valores de Bolsa;
CA Holding España SAU and CA Life Insurance Experts Compañía de Seguros y Reaseguros, SAU (see the
rest of note 2.4 for more information).
89
2011
Domicile
Activity
Crediinvest SA
Andorra
Fund Manager
Crèdit Iniciatives SA
Andorra
Venture capital
Patrigest SA (*)
Andorra
Property
Crèdit Capital
Andorra
Instrumental
Immobiliari SA
Cayman
Crèdit Andorrà
Islands
Financial
Preference Ltd.
Valira Asset
Spain
Investment advice
Management SL (*)
Banking, securities
Crèdit Andorrà Panamá
Panama and stock market
Holding SA (*)
Informàtica Crèdit
Andorra
Instrumental
Andorrà SLU
Banque de Patrimoines
Luxembourg
Banking
Privés, SA
Banco Alcalá SA (*)
Spain
Banking
CA Holding
Property
Luxembourg, SARL Luxembourg
Beta Capital
United States Securities firm
Management LP
Credit Andorra
United States
Property
US GP LLC
Auditor
Holding
(direct and Capital and
indirect)
reserves
Profits/
Losses
2,980
501
14,194 –4,271
996
5
Dividends
paid out
Total
equity
KPMG
—
—
100%
100%
100%
—
—
—
3,481
9,923
1,001
—
100%
109,247
32 –9,925
99,354
—
100%
1
—
—
1
KPMG
60%
1,383
–241
—
1,142
KPMG
100%
8,395
–283
—
8,112
—
100%
33,368
44
—
33,412
KPMG
KPMG
100%
85%
20,230
22,051
312
2,135
—
—
20,542
24,186
—
100%
–12
13
—
13
KR&Co
80%
283
487
—
770
KR&Co
100%
—
85
—
85
(*) Parent company of the consolidated subgroup.
Information given without taking minority shareholders into account.
At December 31, 2012 and 2011, the Group had not integrated any company via the proportional method.
Below is a brief description of the object and composition (if applicable) of the companies and subgroups as
at December 31, 2012:
Crediinvest SA is a fund management company, for which Crèdit Andorrà SA acts as a sales entity.
Crèdit Andorrà SA is the depository for the Andorran investment funds and Banque de Patrimoines Privés,
SA, for Luxembourg investment funds.
This company, and the various investment bodies it manages, comes under the supervision and control of the ANIF.
The products offered by Crediinvest SA are sold under the name of Crèdit Andorrà Asset Management.
On February 8, 2011, the ANIF approved the request by Crediinvest SA to extend its activities in order to carry
out the discretional, individualised management of portfolios and to provide investment advice.
Crèdit Iniciatives SA is a venture capital company. At December 31, 2012, this subgroup’s portfolio of
investee companies was made up of SPA SA (25%) and CLIGE SA (25%) (see note 6.2).
With effect as from January 1, 2012, in accordance with that established in ANIF Memorandum 227/12 on initial
consolidation differences and specifically its rule of first-time adoption, Crèdit Andorrà, in its consolidated
financial statements, has recognised, against consolidation reserves, the difference from the initial consolidation
entailed by its holding in CLIGE, SA for a sum of 1,463 thousand euros. As a result of this, the Bank has impaired
its holding for same amount against reserves in the individual financial statements (see note 3.7 and note 11).
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Patrigest SA is a property asset management company. At December 31, 2012, this subgroup’s portfolio of
investee companies was made up of Cassamanya Ltd. (99.97% held directly by Crèdit Andorrà SA and 0.03%
by Patrigest SA) and Private Investment Management SA (Switzerland) (100%).
Crèdit Capital Immobiliari SA is a property company whose only activity is holding and managing the
Group’s property.
Crèdit Andorrà Preference Ltd. is a 100% owned subsidiary of Crèdit Andorrà, established in December 2005
for the issue of preferred shares (see note 11).
Valira Asset Management SL, established in January 2007 with its head offices in Madrid (Spain), is a company
with a complete structure for investment management and advisory services in the area of Hedge Funds. At
December 31, 2012, the company has a 100% share in Valira Capital Asset Management SGIIC, SAU.
Crèdit Andorrà Panamá Holding SA is a 100% owned subsidiary of Crèdit Andorrà SA whose sole corporate
purpose is to carry out the functions of a parent company for the subgroup Crèdit Andorrà Panamá, the
vehicle used by the Bank to channel the expansion of its Latin American business.
In September 2008, the Republic of Panama Superintendency of Banks (the supervising authority in that
country) authorised an international banking licence for Crèdit Andorrà. Subsequently, on November 17,
2008, Banco Crèdit Andorrà (Panamá) SA was set up, 100% owned by Crèdit Andorrà Panamá Holding SA,
and started operations with the main purpose of carrying out asset management, offering customers a wide
variety of financial services and global advice.
In 2009, the Crèdit Andorrà Group was granted a licence by the National Securities Commission of the
Republic of Panama to operate through the securities firm Crèdit Andorrà Panamá Securities SA. This
subsidiary, 100% owned by Crèdit Andorrà Panamá Holding SA, focuses its services on brokerage and
financial investment.
In order to maximise the efficiency and synergies of the subgroup, once the relevant authorisations had been
obtained, on June 30, 2012, Banco Crèdit Andorrà (Panamá) SA took over Crèdit Andorrà Panamá Securities
SA, the former remaining as the only company with a licence for international banking and as a securities firm.
Similarly, CA Colombia Asesores, SAS (100%) was set up on January 13, 2012, whose sole corporate purpose
is to provide advice on asset management in Colombia.
In addition to the above-mentioned companies, as at December 31, 2012, the subgroup Crèdit Andorrà Panamá,
which can be consolidated, is also made up of the following companies: Crèdit Andorrà Panamá Patrimonial SA
(100%), Crèdit Andorrà Panamá Call Center SA (100%) and the representative office Crèdit Andorrà Uruguay
SA (100%).
Informàtica Crèdit Andorrà SLU. Holding company whose only activity is to handle the ownership and
management of IT-related fixed assets (both tangible and intangible) of the Group.
Banque de Patrimoines Privés, SA. On April 20, 2011, Crèdit Andorrà concluded the process to acquire 100%
of the capital of the Luxembourg bank, Banque de Patrimoines Privés, SA.
The acquisition of Banque de Patrimoines Privés, SA was a strategic move whose aim is to reinforce the
Group’s presence in the European market and particularly in international private banking.
In August 2012, by virtue of that established in the purchase agreement, the acquisition price was adjusted for
the subsidiary by 882 thousand euros, resulting in the equivalent adjustment in the initially reported goodwill
(see note 7.1).
91
Banco Alcalá, SA. On October 11, 2011, Crèdit Andorrà concluded the acquisition of 85% of the capital of
the Spanish bank, Banco Alcalá, SA, and its subsidiaries Gesalcalá, SA, SGIIC and Alcalá Pensiones EGFP, SA
(both 100% owned by Banco Alcalá, SA).
Banco Alcalá, SA focuses on global asset management for private and institutional customers and has branches
in Barcelona and Madrid.
CA Holding Luxembourg SARL. A holding company domiciled in Luxembourg that was set up on September
29, 2011 as part of the corporate organisation designed by the Group in order to maximise the efficiency of its
new business in the euro area.
On April 18, 2012, its capital was increased by 1,400 thousand euros, subscribed entirely by Crèdit Andorrà SA.
The aim of this capital increase was to provide the company with the necessary resources to implement the
investment plan for which it was created. Consequently, in 2012 CA Holding Luxembourg SARL brought the
following companies within its consolidation:
• CA Holding España, SAU (100%): company set up on June 7, 2012, whose sole corporate purpose is to
carry out the functions of its parent company.
On the same day, CA Life Insurance Experts Compañía de Seguros y Reaseguros, SAU was also set up
(100% owned by CA Holding España SAU) (see note 6.1).
• Valores Casa de Bolsa, SA (70%): On November 2, 2012, 70% of this company was acquired, whose
corporate purpose is to operate as a stockbroking firm in Paraguay, being duly registered with the
National Securities Commission of Paraguay.
• CA Mexico Asesores Patrimoniales, SA de CV (79%): On December 27, 2012, Crèdit Andorrà Holding
Luxembourg SARL (1) acquired 51% of this company from its founding partner Private Investment
Management, SA, (2) as was initially established in the strategic collaboration agreement taken out with
its local shareholders. Crèdit Andorrà acquired the remaining 28% through the Luxemburg holding
from the minority shareholders and (3) CA Holding Luxembourg SARL increased its capital via loan
capitalisation for a sum of 6,000 thousand US dollars. The company’s corporate purpose is to provide
advice on asset management in Mexico.
Beta Capital Management LP. On September 30, 2011, Crèdit Andorrà concluded the acquisition of 80% of
the share capital of Beta Capital Management LP, a securities firm based in Miami (United States of America).
Additionally, in the same operation, Crèdit Andorrà also acquired 80% of Beta Capital Management LLC
(United States). Crèdit Andorrà US GP LLC was set up to be the subgroup’s holding company, owning 1% of
the capital of Beta Capital Management LP (Crèdit Andorrà SA owns the remaining 79% of the capital) and
80% of the capital of Beta Capital Management LLC.
CA Perú Sociedad Agente de Valores de Bolsa. On September 28, 2012, 51% was acquired of Krese Sociedad
Intermediaria de Valores S. A. C., from the Republic of Peru. The original purpose of the company was to
provide financial services related to Peru’s stock market, although its corporate purpose has been modified
to include the provision of stockbroking services, being registered with the Peruvian Securities and Exchange
Commission (Superintendencia del Mercado de Valores or SMV), and its name has been changed to the
current one.
The Group companies consolidated by the equity method are mentioned in notes 6.1 and 6.2.
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2.5 Comparing the information
The information contained in these financial statements for 2012 referring to 2011 is only presented for
comparative purposes and therefore does not constitute the Group’s consolidated financial statements for 2011.
The balances presented in these financial statements for 2012 and 2011 are comparable apart from the
following:
• Amortisation of differences from initial consolidation and goodwill: as established in ANIF Memoranda
227/12 of December 28, 2012 and 228/12 of December 31, 2012, as from January 1, 2012, in line with
that established by International Accounting Standards, differences from consolidation and goodwill
are not amortised but are accounted at their initial acquisition price less, if applicable, any impairment
in the value observed after their acquisition. However, every year the Bank must allocate part of its profit
to a restricted reserve totalling at least 10% of the difference in the initial consolidation or goodwill,
until reaching 100% of its book value. The date these Memoranda were to be first adopted was January
1, 2012, the time when those entities which come under the Accounting Plan of the Andorran Financial
System had to reverse their surplus accumulated amortisation to offset any impairments at that date,
against reserves (in the case of goodwill) or consolidation reserves (in the case of consolidation gains),
at the same time as a restricted reserve was generated on the books of the parent Andorran company
under the aforementioned terms. The following would have occurred had this regulatory change had
been taken into account when presenting the balances for 2011:
• The heading “Consolidation gains – Accumulated amortisation” and “Depreciation allowed on
intangible and tangible fixed assets” would have seen their balance decrease by 1,463 thousand
euros (see note 7.1).
• The heading “Securities portfolio – Holdings in Group companies” and “Reserves – Consolidation
reserves” would have seen their balance increase by 413 thousand euros (see note 6.1).
• Corporate tax: On December 1, 2011, the General Council of the Principality of Andorra passed an Act
amending Act 95/2010, of December 29, on Corporate Tax, according to which companies are subject
to a general rate of 10%. The Andorran National Institute of Finances, by means of its Memorandum
226/12 of December 28, 2012, established the framework for accounting and reporting this tax. In this
respect, among other concepts, the headings “Other assets – Taxes”, “Other liabilities – Taxes” and
“Income statement – Corporate tax” show the impact of accounting for this corporate tax in 2012.
Given that this is the first year this tax has been applied, the balances for the aforementioned headings
cannot be compared with the previous year (see notes 3.12, 12.8 and 13).
However, to make it easier to compare information, the balances for 2011 presented under the off-balance
sheet headings “Customer securities held in custody – Securities held in custody by third parties” have been
re-expressed to take into account that established in ANIF Memorandum 233/13. This change has led to an
increase in the aforementioned heading of 499,953 thousand euros, accounting in off-balance sheet positions
both the value of the shares/holdings in collective investment undertakings (CIUs) deposited by customers
with the Group as well as the value of portfolios deposited by the CIUs themselves (see note 20 for more
information on the volume of assets managed by the Group).
93
Note 3 Accounting principles and valuation guidelines applied
The accounting principles and policies and the valuation criteria established by the ANIF in the Accounting Plan of
the Andorran Financial System have been applied in preparing these financial statements for 2012. These principles
are as follows:
3.1 Going concern premise
In preparing the consolidated accounts, it has been assumed that the management of the companies within
the Group will continue in the future. The application of the accounting rules has therefore not been aimed
at determining the value of the net consolidated equity for the purposes of total or partial transfer, nor the
resulting amount in the case of a company being dissolved.
3.2 Accrual accounting
Income and expenditure are recorded according to the accrual period, applying the financial method for those
transactions with a liquidation date of more than twelve months. The only exception relates to interest on
doubtful and very doubtful loans, which is recorded as income only when collected.
In applying this principle, accrual accounts show income/expenditure accrued but not collected/paid, and
income/expenditure collected/prepaid.
3.3 Recording principle
Following banking practice, transactions are recorded on the date they take place, which may be different from
the corresponding value date, which is taken as the basis for calculating income and expenditure for interest.
3.4 Conversion of foreign currencies
Assets and liabilities expressed in foreign currencies other than the euro are converted to euros at the exchange
rate current on the balance sheet date, obtained from reliable market sources. Income and expenditure are
converted at exchange rates current on the transaction date.
Below are details of the key exchange rates at December 31, 2012:
2012
US dollars
Swiss francs
Pounds sterling
Japanese yen
Canadian dollars
1.3204
1.2071
0.8120
114.3268
1.3123
2011
1.2986
1.2142
0.8349
99.9744
1.3196
3.5 Provision for insolvencies
A. Specific provisions
The determination of specific provisions is based on quantitative and qualitative regulatory guidelines and
on a detailed analysis of exposure to credit risk, carried out by the entity itself, bearing in mind experience of
actual loan losses and other relevant factors.
B. General provisions
The Group carries a general provision fund for insolvencies regarding loan investments as follows:
• 1% of loan investments to customers. This includes loan investments to the public sector.
94
Loan investments for the part covered by financial guarantee contracts, those secured by the pledge of
listed securities, with the limit of the market value of these securities, and loans and mortgage loans,
with sufficient mortgage cover, pursuant to that established in ANIF Memorandum 198/10 on the
Evaluation of land and property under mortgage guarantee, are not recorded under general provisions.
This cannot be considered as effective mortgage cover if no appraisal has been carried out by an
independent professional.
• 0.5% of bank loan investment to banks.
The Group also carries a general provision for insolvency for the institutional securities portfolio:
• 1% of the bonds issued by non-bank entities.
• 0.5% of the bonds issued by banks.
• Bonds issued by the central administrations
of OECD countries and Andorra or those expressly
guaranteed by these organisms are not recorded under general provisions.
C. Provisions for country risk
The Group operates only with correspondent banks and lending institutions established in Andorra and
in OECD countries. Risks regarding an institution’s branches abroad are considered as being in the parent
company’s country of residence. The securities portfolio is made up of issues carried out in Andorra and the
OECD, except in the case of the odd issue traded in recognised financial markets. With regard to these bonds,
no country risk provision is made, given that they are regularly traded with daily market quotations reflecting
their real value.
3.6 Securities portfolio
The securities that go to make up the Bank’s securities portfolio are presented, according to their classification,
in line with the following criteria:
Fixed income
The fixed-income securities that form part of the Group’s portfolio are presented, according to their
classification, in line with the following criteria:
a) Securities classified as part of the trading portfolio, which are bonds the Group expects to see before
maturity in order to benefit in the short term from price variations, are brought into account at their market
value. The profit or loss arising from the valuation of these bonds, without taking into account the accrued
interest, is recorded net in the profit and loss account under the item “Results of financial transactions –
Income from securities transactions” in the Interest accrued after acquisition is recorded under “Interest and
related income – Bonds and other fixed-income securities”.
b) Securities within the held-to-maturity portfolio are bonds that the Group has decided to keep until they
mature, being capable of doing so. These securities are recorded at their adjusted cost price. The cost price
is adjusted daily by the amount resulting from accruing the negative or positive difference between the
reimbursement value and cost price during the remaining life of the security. Any profit from this accrual is
recorded under the heading “Interest and related income – Bonds and other fixed-income instruments”.
On the disposal of securities, any losses arising are carried to the profit and loss account as extraordinary profit
or loss; in the case of profit, this accrues lineally throughout the remaining life of the security sold as a result
of financial transactions.
c) The rest of the securities are classified in the ordinary investment portfolio and are valued at their cost price.
However, the difference between the market or fair value and the cost price is calculated and provision is made,
charged to the profit and loss account, to the provision for market fluctuation, which is equal to the sum of the
different losses less the sum of the gains up to the amount of the losses.
95
The market value of unlisted fixed-income securities has been determined using a model (an evaluation study
carried out by an independent professional of renowned prestige or by the valuation section of the department
of Financial and Operational Risk). Valuation using a market model is largely based on the determination
and recording of movements in market values related to credit risk. These movements are shown under the
provision for market fluctuations mentioned above.
Securities from the trading portfolio are transferred to any other portfolio at market price, deducting the
accrued interest, if necessary. Securities are transferred from the ordinary investment portfolio to the heldto-maturity portfolio at cost price or market value, whichever is lower, and any losses arising are written off,
if necessary.
Permanent investments
As established by ANIF Memorandum 123/01, as a general rule, securities classified in the permanent
investment portfolio are valued on the balance sheet at cost price or market value, whichever is lower. If
the latter is lower, the necessary provision is made to reflect the amortization of the provision for market
fluctuation.
The market value of shares is determined by the share price on the last day of the year and, for unlisted shares,
by the underlying book value of the investment based on the latest available balance sheet.
With regard to the unlisted shares of Group companies, they are recorded by the value of the fraction
represented by the net equity of the investment adjusted by the amount of potential capital gains existing at
the time of acquisition up to the limit of the cost price.
In the presentation of the balance sheet, the provision for fluctuation for these shares will reduce the entry
corresponding to the assets in question.
Equity and investment funds
Shares and parts of investment funds that make up the trading portfolio are recorded at market value.
Shares and parts of investment funds that are assigned to the ordinary investment portfolio are stated at cost
price or market value, whichever is lower, and any negative differences in value are recorded in a provision
for market fluctuation.
Market value is determined in accordance with the following criteria:
• Listed shares: share price on the last day of the year.
• Unlisted shares: underlying book value, based on the latest available balance sheet.
• Parts of investment funds: latest values provided by the managing companies and/or depositories of
the investment funds.
3.7 Consolidation differences, intangible assets and amortisable expenses
When a new company is incorporated within the consolidation perimeter, any difference between the price
paid for the subsidiary’s shares and the value of its corresponding share of equity is recorded in the assets under
“Consolidation gains”. Nevertheless, before accounting positive differences from this initial consolidation, and
therefore before determining the equity of the consolidation, it is evaluated whether any amount from these
differences should be attributed directly to the headings on the consolidated balance sheet at a higher or
lower value than their book value and up to the limit attributable to the parent company depending on the
percentage holding in the dependent company.
As established by ANIF Memorandum 227/12 on initial consolidation differences and ANIF Memorandum
228/12 on goodwill, differences from initial consolidation and goodwill are not amortised. However, an
96
impairment test is carried out in line with the applicable current international valuation standards for the
sector and, if there are indications of asset impairment, the corresponding loss is recorded in the profit
and loss account, which is irreversible. If the impairment test carried out on the investment in the investee
company indicates impairment in portfolio investment, the value of the investee company is also adjusted in
the corresponding individual financial statements, an adjustment which is also irreversible, as in the case of
goodwill.
Amortisable expenses are amortised systematically against the profit and loss account, at a maximum limit
of 5 years. Entities can send a reasoned application to the ANIF to extend this period up to 10 years (see
note 7.1).
The rest of the headings under intangible fixed assets are amortised on a straight line basis over the established
period of time, which cannot exceed 10 years in any case, always in accordance with current regulations and
technical memoranda.
In this respect, amortisable expenses and intangible fixed assets are amortised over their useful life which, in
general, is up to a maximum of 5 years. However, in the case of the Core Banking application, whose useful life
is longer than 10 years, this is amortised by Crèdit Andorrà over a period of 10 years due to the significance
and specific characteristics of this kind of application, which cannot be compared with other more standard
applications.
With regard to amortisable expenses, only those expenses are activated that may be affected in more than
one year, such as expenditure related directly to the purchase of new subsidiaries or businesses that have not
been considered at more than cost price according to that established by ANIF Memorandum 225/12. In this
respect, Memorandum 225/12 “Considerations regarding the treatment of expenditure related to acquisitions
of holdings in Group companies” establishes that, in general, inherent expenses, i.e. those that are directly
related to the acquisition and that are essential in order to carry out the purchase, form part of the cost price.
3.8 Fixed assets
Fixed assets are recorded at cost, updated if necessary, less accumulated depreciation, which is spread over the
useful life of each individual asset. Land where buildings and other constructions are located has an indefinite
life and is therefore not depreciated.
Provision for depreciation is made when a reversible loss of economic value of the fixed asset is apparent.
At June 12, 2008, and with the prior presentation of valuations carried out by an independent expert, the ANIF
authorised Crèdit Andorrà SA to revalue certain working fixed assets (basically property) by 30% and nonworking fixed assets by 90% of the difference between the market value established in this valuation and the
book value of the assets at December 31, 2006. The revaluation totalled 101,628 thousand euros, recorded with
a balancing entry in a revaluation reserve, as established by the Accounting Plan of the Andorran Financial
System (see note 11).
Moreover, premises acquired or built before December 31, 1989 appeared on the balance sheet at their
estimated market value, as established by an independent expert in November 1989 (see note 11).
Revaluation reserves are limited until the asset effectively leaves the Group and/or the ANIF authorises their
access.
Upkeep and maintenance costs of fixed assets that do not improve their use or lengthen their useful life are
charged to the profit and loss account when they occur, under general expenses.
97
Individual fixed assets are depreciated using the straight-line method in accordance with the following
terms:
Years
Buildings
Installations
Furniture
IT equipment
Vehicles
30 to 50
8 to 10
4 to 6
3 to 5
5
Other properties acquired through partial or full foreclosure on loans are recorded under “Non-working
fixed assets” at the book value of the loan foreclosed at the time of acquisition or the estimated market value,
whichever is lower. Should the market value (based on updated valuations) be lower than the net book value
at a later date, provision is made for this difference charged to the income statement (see note 7.2.)
Subsequently, assets acquired through foreclosure on unrepaid loans that are not applied to buildings/
equipment for own use or that remain unsold within a period of 3 years are depreciated, as of the date of
foreclosure, according to the following cumulative depreciation percentages:
Between 3 and 4 years
Between 4 and 5 years
More than 5 years
25%
50%
75%
The book value of repossessed land and property must be certified by an updated valuation (at least every
two years), carried out by an independent appraisal organisation. Any reductions in value are recorded in the
profit and loss.
3.9 Provision for risks and contingencies
A. Specific provisions on contingent liabilities
Provisions for contingent liabilities contain the amounts to cover contingent payments or contingencies of a
specific nature.
B. Provision for pensions and similar obligations
Up to January 30, 2012, obligations with all Crèdit Andorrà employees and their beneficiaries related to such
contingencies as retirement, death and incapacity (defined contribution system with regard to the Bank)
were outsourced to an independent Andorran foundation (Previfun), established in 1998, governed under
the Regulation of Mutual Funds for Benefit and Aid to Crèdit Andorrà Employees, approved by the Ordinary
General Assembly of Mutual Fund Members of October 23, 2006.
With the aim of ensuring the future viability of the pensions of Crèdit Andorrà employees, on December 19,
2011, the Assembly of Mutual Fund Members agreed to start the process of transforming the Mutual Fund
from a collective scheme with defined benefits to an individual scheme with defined contributions (except
with regard to passive mutual fund members and a number of members who are still working but close to
retirement, for whom the former conditions will be maintained).
In this respect, on January 30, 2012, by means of an Extraordinary Assembly, the mutual fund members
approved the dissolution and subsequent liquidation of the Mutual Fund. However, since the Mutual Fund has
been dissolved, the management of the present and future assets of the mutual fund members, as well as the
98
management of the undertakings mentioned in the previous paragraph, have been outsourced to the
insurance company of the Crèdit Andorrà Group (Crèdit Assegurances, SAU).
3.10 Provision for general banking risks
The Group makes provision for general banking risks corresponding to funds allocated by the Bank for
reasons of prudence, given the risks inherent in its banking activity.
3.11 Financial derivatives
The Group uses these instruments, principally futures or forward currency contracts, to hedge its balance
positions in currencies other than the euro, recorded in off-balance sheet accounts at the nominal exchange
amount at maturity of the respective contracts (see note 15).
Transactions undertaken in order to eliminate or significantly reduce exchange rate, interest rate or
market risks in equity positions or other operations are considered hedging transactions. Any profit or loss
generated by these hedging transactions is accrued symmetrically in the profit and loss account as income
or expenditure for the item hedged.
Non-hedging operations, i.e. trading transactions undertaken in regulated markets, are stated at their listed
value and fluctuations are recorded in the profit and loss account.
Any profit or loss from trading transactions undertaken outside these markets is not recorded in the profit
and loss accounts until effectively settled. Notwithstanding this, the positions are assessed every month and,
if necessary, any potential net losses are charged to the profit and loss for each type of risk that may have
resulted from these assessments. The types of risk considered for this purpose are interest, market price and
exchange risk.
3.12Taxes
A.Indirect tax on banking and financial services
At its meeting on May 14, 2002, the General Council of the Principality of Andorra approved the Indirect
Taxation on Banking and Financial Services Act. This Act came into force in 2002 and its object was to levy
taxes on services provided by banking and financial entities. Subsequently, on July 10, 2002, the Government
of Andorra approved the regulations related to the Indirect Tax Rate on Banking and Financial Services Act.
The rate is calculated according to a system that estimates the value of the services provided based on
economic and financial data.
Finally, on June 21, 2012, Act 11/2012 was published on general indirect taxation, entering into force on
January 1, 2013. In its repealing provision, this Act, which contains an incremental tax rate of 9.5% on bank
and financial services, repeals, among others, the Act on indirect taxation on bank and financial services of
May 14, 2002. Consequently, in 2012 (the last year in which this tax was applied), the rate applied to the
provision of bank and financial services was 9.5% (12% in 2011).
99
Accrued expenditure for indirect tax on banking and financial services in 2012 (ISI in Catalan) amounted
to 14,721 thousand euros (17,056 thousand euros in 2011), and is recorded under the heading “General
expenses – Taxes” in the profit and loss account (see note 12.6).
At December 31, 2011, the net amount due, having deducted payments on account, is recorded under the
heading “Other liabilities – Suppliers and other creditors” on the enclosed balance sheet, while at December
31, 2012 an entitlement to a refund has been recognised (as the payments made for this tax were higher
than the tax incurred during 2012) under the heading “Other assets – Taxes” in line with the accounting
system for the new corporate tax (see notes 2.5 and 12.3). This tax will be paid during the first quarter of the
following year.
B.Corporate tax
On December 1, 2011, the General Council of the Principality of Andorra passed Act 17/2011, amending Act
95/2010 of December 29 on Corporate Tax (published in the Official Gazette of the Principality of Andorra,
BOPA, number 80 on December 28, 2011), according to which limited companies (“societats anònimes”) are
subject to a general tax rate of 10%. This Act came into force the day after it was published in BOPA and is
applicable to taxation periods starting on January 1, 2012.
Expenditure on Corporate Tax represents all expenses for taxation on the profits from the year, as well as for
the effect of variations in the assets and liabilities due to advance and deferred tax and tax debt.
Tax expenses on profits from the year are calculated using the sum of the current tax resulting from applying
the tax rate to the tax base for the year, after having applied any fiscally admissible deductions, plus any
variations in assets and liabilities due to advance/deferred taxes and tax debt, both for negative taxable
incomes and for deductions.
Deferred tax assets and liabilities include temporary differences identified as those amounts expected to paid
or received for differences between the book value of assets and liabilities and their fiscal value, as well as
negative tax bases to be offset and credit for tax deductions that are not fiscally applied. These amounts are
recorded by applying, to the corresponding temporary difference or credit, the expected tax rate to recover
and settle them.
Any taxable temporary differences are recognised as deferred tax liability. For their part, deferred tax assets,
identified with temporary differences, negative tax bases and deductions to be offset, are only recognised in
the case that the Group is deemed likely to have sufficient tax gains in the future against which these can be
charged.
At the end of every accounting period, the deferred tax recorded is checked (both assets and liabilities) in
order to verify any still in effect and the relevant adjustments are made in accordance with the findings of
the analyses carried out.
3.13 Unused lines of credit
Lines of credit granted to customers are recorded in the balance sheet at the amount provided and the
amounts available in off-balance sheet accounts are recorded under the heading “Commitments and
contingent risks – Operating commitments and risks”.
100
Note 4 Maturity of financial assets and liabilities and breakdown by currency
4.1 Distribution of maturity of financial assets and liabilities
The residual maturity of certain assets and liabilities at December 31, 2012 and 2011 is as follows (in thousand euros):
2012
Assets
ANIF
Financial intermediaries sight, gross
Financial intermediaries forward, gross
Loan investments, gross
Bonds and other fixed income instruments
Due and
doubtful
Up to
1 month
From 1 to
3 months
From 3 months
to 1 year
From 1 to
5 years
More than
5 years
Total
—
210
—
—
—
—
210
—
258,864
—
—
—
—
258,864
—
142,475
107,922
145,946
94
122,720
2,858
408,008
—
864,211
—
1,418,421
110,874
3,101,781
—
32,786
21,330
421,476
618,869
667,858
1,762,319
142,475
545,728
144,144
832,342 1,483,080 2,086,279
5,234,048
Liabilities
ANIF
Customer deposits-sight
Customer deposits-forward
Bonds issued
—
6,379
—
63,062
—
6,193
— 1,893,293
—
369,553
—
45,418
—
38,083
—
—
543,632
9,811
420
135,843
4,000
—
1,541,752
192,830
—
49,214
—
—
7,639
112,176
—
—
—
—
99,006
10,586
6,799
286,202
10,193
1,893,293
2,561,582
370,821
Total
— 2,383,898
591,526
1,874,845
169,029
109,592
5,128,890
From 1 to
5 years
More than
5 years
Total
2011
Assets
ANIF
Financial intermediaries sight, gross
Financial intermediaries forward, gross
Bonds and other fixed income instruments
Due and
doubtful
Up to
1 month
From 1 to
3 months
From 3 months
to 1 year
Total
—
210
—
—
—
—
210
—
215,890
—
—
—
—
215,890
—
120,512
150,349
102,872
15,369
273,508
15,143
483,950
—
812,037
—
1,319,349
180,861
3,112,228
—
39,952
92,140
246,940
432,367
547,089
1,358,488
120,512
509,273
381,017
746,033 1,244,404 1,866,438
4,867,677
Liabilities
ANIF
Customer deposits-sight
Customer deposits-forward
Bonds issued
—
1,231
—
128,900
—
7,172
— 1,466,009
—
542,444
—
—
—
—
—
—
821,223
2,600
5,420
—
—
—
1,353,693
122,796
—
—
—
—
28,694
50,891
—
—
—
—
103,543
30,323
6,651
128,900
7,172
1,466,009
2,849,597
206,610
Total
— 2,145,756
823,823
1,481,909
79,585
133,866
4,664,939
Total
Interest rates on variable rate customer loans with a maturity of more than one year are indexed at the one-year
interbank market interest rate. At December 31, 2012 and 2011 there were no amounts without a maturity date.
101
4.2 Currency breakdown
Details of the currency breakdown of certain assets and liabilities as at December 31, 2012 and 2011 (in
thousand euros):
2012
Euros
Assets
ANIF
Swiss
francs
Pounds
sterling
Japanese
yen
Canadian
dollars
Other
currencies
Total
210
—
—
—
—
—
—
210
157,533
33,496
3,442
39,475
1,685
520
22,713
258,864
—
48,268
—
—
—
18,098
44,508
110,874
–582
—
—
—
—
—
—
–582
156,951
81,764
3,442
39,475
1,685
18,618
67,221
369,156
2,840,815
154,147
68,717
4,571
11,084
57
63
3,079,454
13,816
412
1
18
—
1
91
14,339
7,988
—
—
—
—
—
—
7,988
–29,425
–445
–34
—
–59
—
—
–29,963
2,833,194
154,114
68,684
4,589
11,025
58
154 3,071,818
Securities portfolio, net 1,525,859
295,308
986
29,474
—
—
— 1,851,627
Total assets
4,516,214
531,186
73,112
73,538
12,710
18,676
67,375 5,292,811
6,799
—
—
—
—
—
—
6,799
—
286,202
Financial intermediaries,
at sight
Banks and lending
institutions
Provision for
insolvencies (–)
Total financial
intermediaries, net
Customer loans
and credits
Overdrafts on
customer accounts
Customer bills
discounted
Provision for
insolvencies (–)
Total loan
investments, net
102
US
dollars
Liabilities
ANIF
Banks and lending
institutions
Other financial
intermediaries
Customer deposits
Bonds issued
235,616
38,964
1,657
169
9,796
—
7,499
3,447,083
346,951
1,730
700,120
23,558
228
70,258
—
736
148,790
312
—
2,669
—
—
18,701
—
—
10,193
67,254 4,454,875
—
370,821
Total liabilities
4,043,948
764,372
72,143
150,007
12,465
18,701
67,254 5,128,890
2011
Euros
Assets
ANIF
US
dollars
Swiss
francs
Pounds
sterling
Japanese
yen
Canadian
dollars
Other
currencies
Total
210
—
—
—
—
—
—
210
89,052
53,589
1,489
43,240
8,004
795
19,721
215,890
42,021
44,175
—
48,509
—
13,375
32,781
180,861
–904
—
—
—
—
—
—
–904
130,169
97,764
1,489
91,749
8,004
14,170
52,502
395,847
2,907,789
80,379
66,879
4,655
23,848
1,275
155
3,084,980
9,089
323
542
317
2,515
—
1
12,787
14,461
—
—
—
—
—
—
14,461
–20,896
–487
–22
–47
–1
—
—
–21,453
2,910,443
80,215
67,399
4,925
26,362
1,275
156 3,090,775
Securities portfolio, net 1,042,134
345,571
—
38,822
—
—
— 1,426,527
Total assets
4,082,956
523,550
68,888
135,496
34,366
15,445
52,658 4,913,359
6,651
—
—
—
—
—
—
6,651
144
128,900
Financial intermediaries,
at sight
Banks and lending
institutions
Provision for
insolvencies (–)
Total financial
intermediaries, net
Customer loans
and credits
Overdrafts on
customer accounts
Customer bills
discounted
Provision for
insolvencies (–)
Total loan
investments, net
Liabilities
ANIF
Banks and lending
institutions
Other financial
intermediaries
Customer deposits
Bonds issued
95,567
612
—
303
32,267
7
6,174
3,490,712
198,559
959
570,733
8,051
—
48,147
—
39
135,688
—
—
2,150
—
—
15,433
—
—
7,172
52,743 4,315,606
—
206,610
Total liabilities
3,797,663
580,355
48,147
136,030
34,417
15,440
52,887 4,664,939
For more information on the Group’s currency positions, see note 14.
103
4.3 Bonds issued
The Bank has different financing programmes and instruments to appropriately plan the management of
liquidity. Within these programmes, the Bank used both short-term and long-term structured products,
channelled through securities.
All the bonds issued have been sold to the Bank’s customers.
The movement in the years 2012 and 2011 was as follows:
Opening balance for the year
Issues
Amortisation
Valuation adjustments
Closing balance for the year
2012
2011
206,610
137,327
360,837
–195,948
–678
146,983
–78,399
699
370,821
206,610
The balance for this item at December 31, 2012 was mainly made up of 285,849 thousand euros corresponding
to structured credit whose underlying assets form part of the Bank’s own portfolio (122,699 thousand euros
in 2011), 42,331 thousand euros corresponding to structured credit charged by the Bank via credit derivative
contracts with independent financial institutions (38,126 thousand euros in 2011) and 33,323 thousands
corresponding to structured products via which their holders acquire the risks and benefits of certain venture
capital holdings in the Bank’s own portfolio (30,742 thousand euros in 2011).
Note 5 Loan investments and financial intermediaries
5.1 Analysis of loan investments and financial intermediaries
The evaluation of loan investments and financial intermediaries with regard to minimum legal requirements
and internal criteria, according to the breakdown as at December 31, 2012 and 2011 (in thousand euros), is
set out as follows:
2012
104
Normal
Past due
Doubtful
Total
Insolvency
provision
Net
amount
Financial intermediaries, at sight
258,864
110,874
—
—
—
—
258,864
110,874
—
–582
258,864
110,292
Total financial intermediaries
369,738
—
—
369,738
–582
369,156
2,943,954
7,364
7,988
28,454
3,994
—
107,046
2,981
—
3,079,454
14,339
7,988
–27,747
–2,136
–80
3,051,707
12,203
7,908
Loan investments-customers
2,959,306
32,448
110,027
3,101,781
–29,963
3,071,818
2011
Normal
Past due
Doubtful
Insolvency
provision
Total
Net
amount
Financial intermediaries, at sight
215,890
180,861
—
—
—
—
215,890
180,861
—
–904
215,890
179,957
Total financial intermediaries
396,751
—
—
396,751
–904
395,847
2,969,120
8,135
14,461
22,028
2,027
—
93,832
2,625
—
3,084,980
12,787
14,461
–20,131
–1,177
–145
3,064,849
11,610
14,316
Loan investments-customers
2,991,716
24,055
96,457
3,112,228
–21,453
3,090,775
5.2 Provision for insolvencies
Movements in provision for insolvencies of forward financial intermediaries and loan investments during
2012 and 2011 (in thousand euros) were as follows:
2012
Financial intermediaries
Provision banks on time deposit
Opening
balance
Allocations/
(Recoveries)
Amounts
applied
Other
movements
Closing
balance
904
–322
—
—
582
Loan investments
Specific loan investment provisions
General loan investment provisions
12,720
8,733
9,220
–637
–28
—
36
–81
21,948
8,015
Total loan investment provisions
21,453
8,583
–28
–45
29,963
Total provisions
22,357
8,261
–28
–45
30,545
Opening
balance
Allocations/
(Recoveries)
Other
movements
Closing
balance
2011
Provision banks on time deposit
Amounts
applied
777
127
—
—
904
Loan investments
Specific loan investment provisions
General loan investment provisions
15,627
9,452
8,021
–906
–11,002
—
74
187
12,720
8,733
Total loan investment provisions
25,079
7,115
–11,002
261
21,453
Total provisions
25,856
7,242
–11,002
261
22,357
At December 31, 2012, the Group had an NPL coverage ratio of 27.23% (22.24% in 2011) not including loans
secured by mortgage collateral, and 111.64% (107.87% in 2011) taking mortgage secured loans into account.
105
5.3 Collateral security for loan investment
Collateral security obtained for loan investments as at December 31, 2012 and 2011 (in thousand euros) is
broken down as follows:
2012
Cash
deposits
Securities
Mortgages
Total
secured
Unsecured
Total
185,222
—
—
254,523 1,963,635
—
—
—
—
2,403,380
—
—
676,074
14,339
7,988
3,079,454
14,339
7,988
Total security for loan investments
185,222
254,523 1,963,635
2,403,380
698,401
3,101,781
Total
secured
Unsecured
Total
2011
Cash
deposits
Securities
Mortgages
97,736
—
—
235,452 1,893,259
—
—
—
—
2,226,447
—
—
858,533
12,787
14,461
3,084,980
12,787
14,461
Total security for loan investments
97,736
235,452 1,893,259
2,226,447
885,781
3,112,228
At December 31, 2012, the heading “Customer loans and credits” included housing loans that, according to
current legislation, were granted for a total of 252 thousand euros (321 thousand euros in 2011) (see note 21.3).
There are also loans granted as part of a programme classified as of national and social interest, focusing on
the preferential financing of newly created firms and businesses, firms related to innovation, reconversion and
enterprising projects, passed by the government of Andorra on March 3, 2010, for a total of 1,811 thousand
euros (1,116 thousand euros in 2011), and loans granted as part of a programme classified as of national and
social interest, focusing on the preferential financing of rehabilitation for housing and residential buildings,
passed by the government of Andorra on March 23, 2011, for a total of 185 thousand euros (see note 21.3).
Loan investments at December 31, 2012, with the investment fund managed by the Group, totalled 7,760
thousand euros (25,455 thousand euros in 2011).
Given that appraisals are being carried out and no valuation is available that has been carried out by an
independent professional, pursuant to ANIF Memorandum 198/10, at December 31, 2012 the Group had
88,496 thousand euros of mortgage loans classified as not secured by property (114,913 thousand euros in
2011) (see note 3.5).
5.4 Loan investments to the public sector
Breakdown of loan investments to public sector entities as at 31 December, 2012 and 2011 (in thousand euros):
Loan investments to the public sector
Loans secured by the state of Andorra
Loans on counties in the Principality of Andorra
Other Andorran public bodies and para-public entities
Total
106
2012
2011
95,107
83,201
59,174
61,300
84,520
63,865
237,482
209,685
The balance of “Other Andorran public bodies and para-public entities” basically corresponds to the loan
operation between the Bank and the para-public society, Centre de Tractament de Residus d’Andorra SA.
In accordance with applicable legislation, the Bank calculates a general provision of 1% of the total balance of
these loan operations to the public sector (see note 3.5).
Note 6 Securities portfolio
6.1 Holdings in Group companies
The Bank has direct and indirect holdings in the following companies, consolidated according to the equity
method (in thousand euros), at December 31, 2012 and 2011:
2012
Crèdit
Assegurances SAU
CA Life Insurance
Experts Compañía
de Seguros y
Reaseguros, SAU
Domicile
Activity
%
holding
Capital
2012
Reserves Earnings
Dividends
paid out
Equity
Book
value
Andorra
Insurance
100%
9,000
4,675 4,639
—
18,314
18,314
Spain
Insurance
100%
4,507
0 –620
—
3,887
3,887
22,201
2011
Crèdit
Assegurances SAU
Domicile
Activity
%
holding
Capital
2012
Reserves Earnings
Andorra
Insurance
100%
4,000 28,114 4,404
Dividends
paid out
–28,256
Equity
Book
value
8,262
8,262
8,262
The corporate purpose of Crèdit Assegurances SAU, parent company of the subgroup Crèdit Assegurances,
is to carry out insurance actions and cover risks based on contracts of private law, including the life assurance
branch in any of its types. It comes under the legal provisions established in the Act governing the actions of
insurance companies of the Principality of Andorra, dated May 11, 1989.
Its sole shareholder is Crèdit Andorrà SA.
At December 31, 2012, the subgroup Crèdit Assegurances included the following Spanish companies: ERM
SA (79%), ERM Consultoría, SA (79%), ERM Reinsurance Broker, SL (79%), ERM Gerencia Integral de
Riesgos Correduría de Seguros, SL (79%), Gerencia de Riesgos Correduría de Seguros, SA (79%), Davante
Correduría de Seguros, SL (79%) and AMK Ibérica & Principado Correduría de Seguros, SL (19.75%), and the
following Andorran companies: CA Vida Assegurances SAU (100%), Actiu Assegurances SA (55%), Financera
d’Assegurances SA (25%), Línia Asseguradora Andorrana SL (12.75%), Consell Assegurador SL (20%) and
Patrigest Informació Financera SL (100%).
On December 29, 2011 the ANIF approved the application presented by Crèdit Andorrà to increase the
share capital of Crèdit Assegurances SAU by 5,000 thousands euros, which was entered in the register of this
Institute in January 2012.
Pursuant to that established in ANIF Memorandum 227/12 on differences from initial consolidation, and with
effect as from January 1, 2012, the Group reversed, against the consolidation reserves, the cumulative amount
amortised at the date when the initial consolidation differences arose from acquiring Actiu Assegurances SA
(see note 2.5).
107
CA Life Insurance Experts Compañía de Seguros y Reaseguros, SAU. The creation of this insurance brokerage
firm, in the branch of life assurance, forms part of the international expansion plan for insurance business of the
Crèdit Andorrà Group and, at December 31, 2012, it was still pending authorisation to operate by the Spanish
Directorate General for Insurance and has therefore yet to begin business (see note 2.4).
The holdings in Crèdit Assegurances SAU and CA Life Insurance Experts Compañía de Seguros y Reaseguros,
SAU have been consolidated via the equity method as the insurance business has been considered different
from the banking business.
6.2 Other investments and qualified holdings
The Group had the following direct “Other investments” and “Qualified holdings” as at December 31, 2012
and 2011 (in thousand euros):
2012
%
holding
Other investments
ENSISA
Administració i Serveis
Seguriser
Activity
Domicile
49.57% Services Andorra
Capital
Reserves
Earnings
23,385
11
1,663
10,289
5
–471
174
–1
15
Dividend
paid out
—
—
—
Equity
Net book
value
33,848 16,777
15
4
1,207
478
17,259
Qualified holdings
SEMTEE
Other (*)
17.05% Services Andorra 29,403
19,223
867
—
49,493
5,715
4,443
10,158
(*) Includes the rest of the indirect holdings: SPA, SA, CLIGE SA, Mutua Eléctrica Sant Julià, etc.
Note: Information refers to the latest financial statements available without adjusting by the percentage of the share held by the Group.
2011
%
holding
Other investments
ENSISA
Administració i Serveis
Seguriser
Capital
Reserves
Earnings
Dividend
paid out
11
10,643
5
–342
–354
—
–129
—
—
—
Activity
Domicile
Equity
Net book
value
33,674 16,691
16
4
1,192
472
17,167
Qualified holdings
SEMTEE
Other (*)
13,091
2,012
—
40,345
5,715
5,920
11,635
(*) Includes the rest of the indirect holdings: SPA, SA, CLIGE SA, Mutua Eléctrica Sant Julià, etc.
Note: Information refers to the latest financial statements available without adjusting by the percentage of the share held by the Group.
“Other investments” are consolidated by the equity method.
“Qualified holdings” are recorded at cost price or market value, whichever is lower.
108
Esports de Neu Soldeu-Incles SA (ENSISA) manages the ski resort Soldeu-el Tarter, at Canillo (Andorra), and
also owns 50% of Neus de Valira SA (Nevasa), an Andorran company whose purpose is the commercialisation
of Grandvalira.
The holding in Seguretat i Serveis SA (Seguriser SA) was consolidated by the equity method, as established by
Memorandum 145/02, dated November 20, 2002, of the Andorran National Institute of Finance.
Qualified holdings in a company are those in which the entity holds, directly or indirectly, at least 5% of its
capital or of its voting rights, or in which the entity can appoint, directly or indirectly, at least 20% of the
members of the Board of Directors of the company, or in which the entity exercises significant influence.
Significant influence is understood as participation in the financial and operational decisions of a company,
although these may not be controlled, and this may be exercised in various ways, usually via representation on
the governing body, with participation in the process of establishing policies, important transactions, changing
directors or technological dependence. Significant influence can be secured via participation in ownership or
via agreements. It is assumed that significant influence is exercised when the holding company holds, directly
or indirectly, more than 20% of the voting rights or of the capital of the investee company or 3% if listed on
regulated markets.
Society d’Economia Mixta Termolúdic Escaldes-Engordany, SA (SEMTEE SA) manages the thermal water
centre Caldea, located at Escaldes (Andorra).
Pursuant to that established in ANIF Memorandum 227/12 on differences from initial consolidation,
specifically its first-time adoption rule, and with effect as from January 1, 2012, the Group has recognised,
against the consolidation reserves, the difference from the initial consolidation related to the holding in
CLIGE, SA, totalling 1,463 thousand euros.
In 2012 dividends totalled 287 thousand euros (255 thousand euros in 2011) brought into account from
“Other investments” and “Qualified holdings”.
6.3 Investment funds
A breakdown of holdings in investment funds at December 31, 2012 and 2011 is as follows (in thousand
euros):
Investment funds
Group-related entities
Entities not related to the group
2012
2011
9,629
33,958
2,107
31,350
43,587
33,457
The balance at December 31, 2012 of the investment funds managed by entities not related to the Group
includes 33,375 thousand euros corresponding to holdings of venture capital firms, the risks and profits of
which have been acquired by the Bank’s customers by taking out structured products (30,794 thousand euros
at December 31, 2011) (see note 4.3).
109
6.4 Portfolio evaluation
The book value of those securities classified in the valuation categories set out in note 3.6 as at December 31,
2012 and 2011 is given below (in thousand euros):
2012
2011
Trading portfolio:
Fixed income instruments
Equity instruments
Investment funds
Held-to-maturity portfolio
Permanent investments
Ordinary investment portfolio:
Fixed-income instruments
Equity instruments
Investment funds
4,498
—
—
4,498
1,758,223
39,460
54,250
4,096
10,158
39,996
1,128
—
—
1,128
1,344,780
25,429
57,966
13,708
11,635
32,623
Total
1,856,431
1,429,303
2012
2011
Listed securities
Unlisted securities
1,279,105
577,326
907,329
521,974
Total
1,856,431
1,429,303
–907
–3,897
–310
–2,466
1,851,627
1,426,527
Market fluctuation fund (–)
Provision for insolvencies (–)
Total
The held-to-maturity portfolio is principally made up of issues of government bonds from OECD countries
and other bonds and fixed-income securities issued by banks with a public guarantee, as well as structured
products with capital secured against underlying government bonds from OECD countries.
The acquisition cost of instruments in the trading portfolio as at December 31, 2012 was 4,184 thousand euros
(1,093 thousand euros in 2011).
At December 31, 2012, the market or fair value of the held-to-maturity portfolio was 1,755,220 thousand euros
(1,269,382 thousand euros in 2011), of which 1,315,197 thousand euros was for listed securities while the rest,
440,023 thousand euros, corresponds to securities valued mark-to-model or unlisted (904,209 thousand euros
and 365,173 thousand euros respectively at December 31, 2011).
Pursuant to the Act governing mandatory investment ratios (see note 21.3), at December 31, 2012 the Group
had subscribed 103,430 thousand euros in government bonds of the Principality of Andorra, issued on 30
December, 2009. This bond issue matures on December 31, 2013, at the official one-year Euribor interest
rate of the European Central Bank, established on the first working day of each calendar year. The amount
subscribed by the Group is recorded under the heading “Securities portfolio – Bonds and other fixed-income
securities” in the consolidated balance sheet included here, within the held-to-maturity portfolio, as an
unlisted security and not included in the calculation of the liquidity ratio.
110
The market value of the ordinary investment portfolio held in fixed-interest instruments as at December 31,
2012 was 4,411 thousand euros (13,822 thousand euros in 2011), 113 thousand euros of which corresponds to
listed securities (0 thousand euros in 2011) and 4,298 thousand euros corresponds to unlisted securities (13,822
thousand euros in 2011) where the market value is estimated based on the mark-to-model (see note 3.6).
The market value of the ordinary investment portfolio held in equity shares at December 31, 2012 was 12,127
thousand euros (13,559 thousand euros in 2011).
The market value, at December 31, 2012, of the ordinary investment portfolio in collective investment
management firms was 41,417 thousand euros (34,454 thousand euros in 2011), all of which corresponds to
unlisted securities (32,860 thousand euros in 2011).
6.5 Provision for market fluctuation
Movements in provision for market fluctuation in 2012 and 2011 (in thousand euros) were as follows:
2012
Opening
balance
Allocations
/(Recoveries)
Amounts
applied
Securities portfolio
Other holdings
Shares and other equity instruments
Investment funds
5
—
11
294
–5
—
–11
638
—
—
—
—
—
—
—
–25
—
—
—
907
Total movements for year
310
622
—
–25
907
Opening
balance
Allocations
/(Recoveries)
Amounts
applied
Other
movements
Closing
balance
Other holdings
Shares and other equity instruments
Investment funds
47
—
11
111
–42
—
—
163
—
—
—
—
—
—
—
20
5
—
11
294
Total movements for year
169
121
—
20
310
2011
Other
movements
Closing
balance
In line with the applicable accounting regulations, the Group also has a general provision fund for insolvencies,
whose details are as follows:
2012
2011
Opening
balance
Allocations
/(Recoveries)
Amounts
applied
Other
movements
Closing
balance
2,466
1,431
—
—
3,897
Opening
balance
Allocations
/(Recoveries)
Amounts
applied
Other
movements
Closing
balance
1,279
1,187
—
—
2,466
111
Note 7 Fixed assets
7.1 Intangible assets and amortisable expenses
The movements in intangible assets and amortisable expenses for last year were as follows (in thousand euros):
Consolidation gains
Transfers /
Other
31.12.12
–1,504
1,463
—
—
41,081
—
–41
—
41,081
Transfers /
Other
31.12.12
31.12.11
Additions
Acquisition cost
42,039
–1,463
546
—
Total net
40,576
546
31.12.11
Additions
—
63,813
23,451
8,762
5,625
7,757
—
–22,063
—
—
–13
—
8,762
47,362
31,208
87,264
22,144
–22,063
–13
87,332
Goodwill
IT applications
Amortisable expenses
—
–32,481
–8,730
—
–6,289
–5,669
—
22,063
—
—
16
–8
—
–16,691
–14,407
Total provision for depreciation
–41,211
–11,958
22,063
8
–31,098
46,053
10,186
—
–5
56,234
Intangible assets and
amortisable expenses
Acquisition cost
Goodwill
IT applications
Amortisable expenses
Total intangible assets
Total, net int. assets
and after amort.
Retirements
Retirements
The breakdown of gains from initial consolidation is as follows: (1) Banque de Patrimoines Privés, SA,
10,091 thousand euros, (2) Banco Alcalá, SA, 7,241 thousand euros, (3) Beta Capital Management LP, 23,203
thousand euros, (4) CA Perú Agente de Valores de Bolsa, 112 thousand euros and (5) Valores Casa de Bolsa
SA, 434 thousand euros.
Retirements under gains from initial consolidation and are mainly made up of the adjustment in the cost price
of Banque de Patrimoines Privés, SA, as mentioned in note 2.4.
Retirements under cumulative amortisation of gains from initial consolidation are related to the first-adoption
rule contained in Memorandum 227/12 on differences from initial consolidation (see note 2.5).
Additions under “Goodwill” corresponds to the value of 79% of the business acquired by Credit Andorrà
from its local Mexican shareholders which, as established in the strategic agreement signed between both
parties, will be exclusively exploited by CA Mexico Asesores Patrimoniales, SA de CV or by any other vehicle
considered opportune and set up for this purpose by both parties (see note 2.4).
Additions under IT applications correspond both to the programming of several periphery management
applications and also the development of the Bank’s Core Banking capacities and its implementation in
different Group subsidiaries.
112
Additions under “Amortisable expenses” correspond mainly to expenses incurred in acquiring new
subsidiaries (see notes 2.4, 3.7 and 6.1).
Retirements under IT applications correspond to the retirement of totally amortised assets and those not in
use, principally related to the definitive disconnection of the Bank’s previous host, which had been maintained
operational in consultation mode subsequent to the migration to the new Core Banking system for operational
reasons.
7.2 Fixed assets
The movements in fixed assets for 2012 were as follows (in thousand euros):
Acquisition cost
Working fixed assets
Land
Buildings
Installations
Furniture
IT equipment
Vehicles
Fixed assets in progress
31.12.11
Additions
Retirements
Transfers /
Other
31.12.12
51,666
78,477
69,161
18,315
18,930
627
102
—
—
2,813
670
2,612
93
154
—
—
–11,565
–5,706
–11,142
–208
—
—
–31
–448
–79
3
–110
–102
51,666
78,446
59,961
13,200
10,403
402
154
237,278
6,342
–28,621
–767
214,232
132,269
41,481
6,635
34,878
10,263
156
—
–654
—
—
538
77
167,147
51,628
6,868
Subtotal
180,385
45,297
–654
615
225,643
Total fixed assets
417,663
51,639
–29,275
–152
439,875
Working fixed assets
Buildings
Installations
Furniture
IT equipment
Vehicles
Other
–38,790
–48,969
–17,385
–14,689
–566
—
–2,211
–3,762
–191
–1,525
–35
—
—
11,246
4,940
11,130
208
—
228
–2,635
47
–44
1
—
–40,773
–44,120
–12,589
–5,128
–392
—
–120,399
–7,724
27,524
–2,403
–103,002
–8,328
—
–1,321
—
9
—
2,312
–77
–7,328
–77
–8,328
–1,321
8
2,235
–7,405
–128,727
–9,045
27,533
–168
–110,407
–7,413
–709
—
—
–8,122
281,523
41,885
–1,742
–320
321,346
Subtotal
Non-working fixed assets
Land
Buildings
Art fund
Subtotal
Non-working fixed assets
Buildings and installations
Art funds
Subtotal
Total provision for depreciation
Provisions for depreciation
Total fixed assets, net
113
At December 31, 2012, the item “Provisions for depreciation” included 6,212 thousand euros corresponding
to the depreciation of non-working fixed assets that were revalued in 2008 (6,212 thousand euros at December
31, 2011).
Of the total additions of non-working fixed assets, 37,429 thousand euros correspond to property acquired
by the Bank by a process of repossession or datio in solutum of assets in lieu of payment of debt during 2012
(9,428 thousand euros in 2011) (see note 5.2).
The total retirements of non-working assets, 390 thousand euros, correspond to sales of land and property
acquired by the Bank by a process of repossession or datio in solutum of assets in lieu of payment of debt (5,126
thousand euros in 2011).
At December 31, 2012 and 2011, all property was fully available.
The fully depreciated fixed assets at December 31, 2012 totalled 51,629 thousand euros (88,881 thousand euros
in 2011).
Note 8 Provision for risks and contingencies
Movements in provision for risks and contingencies in 2012 and 2011 (in thousand euros) are given below:
2012
Opening
balance
Allocation
Recoveries
Amounts
applied
Other
movements
Closing
balance
Other provisions
1,238
1,303
—
254
—
—
—
–436
—
—
1,238
1,121
2,541
254
—
–436
—
2,359
2011
Opening
balance
Allocation
Recoveries
Amounts
applied
Other
movements
Closing
balance
Other provisions
1,525
1,857
—
—
–330
—
—
–554
43
—
1,238
1,303
3,382
—
–330
–554
43
2,541
“Other provisions” includes the necessary provisions resulting from early retirement commitments as at December
31, 2012 and 2011.
114
Note 9 Pension fund and other funds
Below are details of the contributions made for this concept during the years ended December 31, 2012 and 2011:
Non-voluntary contributions
Voluntary contributions
2012
2011
2,615
361
2,411
500
2,976
2,911
The voluntary contribution of 361 thousand euros forms part of the commitment undertaken by the Board of
Directors of the Bank while converting the Mutual Fund, consisting of making regular voluntary contributions up
to a total of 3,800 thousand euros during the 10 years following conversion to guarantee the future viability of the
Mutual Fund’s defined benefit system (see note 3.9).
Note 10 Distribution of profits
The proposed distribution of profits of Crèdit Andorrà SA for the year 2012 to be presented by the Board of
Directors to the General Shareholders’ Meeting for approval (in thousand euros) is as follows:
Group profits for the year
Profits awaiting application
Consolidation adjustments:
For dividends
For other (net)
Profit available for distribution from the Bank
Dividend payments
Restricted reserves - Mem. 227/12 and 228/12
Provision to Bank Deposit Guarantee Reserve (see note 21.4)
Transfer to voluntary reserves
Profits awaiting application
2012
2011
70,862
—
70,628
—
800
–10,799
38,181
1,680
60,863
110,489
–40,000
–4,966
–1,896
–14,001
–55,000
—
—
–55,489
—
—
In 2012 Crèdit Andorrà SA distributed interim dividends from the profits of 2012 totalling 20,000 thousand euros
(35,000 thousand euros in 2011).
The profit from the Group’s consolidated companies will be distributed in the manner agreed by their respective
Shareholders’ Meetings.
The amount allocated to the reserve to cover the Bank Deposit Guarantee Fund is an estimate pending the
definitive amount to be allocated by the Bank, as ruled by the Deposit Guarantee Scheme Management Committee
(see note 21.4). However, the Bank’s administrators believe there will be no significant differences between the
amount estimated at December 31, 2012 and the definitive amount to be allocated. However, should there be any
differences, these would be charged against voluntary reserves.
115
Note 11 Movements in Shareholders’ Equity
In 2012 and 2011, the following movements (in thousand euros) took place in Shareholders’ Equity:
2012
Share
capital
Balance at beginning of
year before distribution 70,000
Supplementary dividend
—
Application of 2011 profits/
transfer to reserves
—
Consolidation adjustments
—
year following distribution 70,000
Profits for 2012
Interim dividend 2012
Adjustment guarantee
deposit reserves
Adjustment consolidation
reserves
First-time adoption
Mem. 227/12 (note 2.5)
First-time adoption
Mem. 227/12 (note 6.2)
Adjustment conversion
reserves
Total
116
Legal
reserve
14,000
—
—
—
14,000
Guarantee Revaluation Voluntary Consolidation Conversion
reserve
reserve
reserve
reserve
differences
39,311 109,351 207,280
—
—
—
Profit
Total
40,722
—
–129
—
35,628 516,163
–20,000 –20,000
55,489
—
—
—
—
—
–55,489
—
39,861 39,861
39,311 109,351 262,769
40,722
–129
— 536,024
70,862 70,862
–20,000 –20,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,194
—
–3,194
—
—
—
—
—
—
—
— –41,133
—
— –41,133
—
—
—
—
—
1,877
—
—
1,877
—
—
—
—
—
–1,463
—
—
–1,463
—
—
—
—
—
—
–89
—
–89
70,000
14,000
42,505 109,351 259,575
3
–218
—
50,862 546,078
2011
Share
capital
year before distribution 70,000
Supplementary dividend
—
Application of 2010 profits/
transfer to reserves
—
Consolidation adjustments
—
year following distribution 70,000
Profits for 2011
Interim dividend 2011
Adjustment guarantee
deposit reserves
Adjustment consolidation
reserves
Adjustment revaluation
reserves
Adjustment conversion
reserves
Total
Legal
reserve
14,000
—
—
—
14,000
Guarantee Revaluation Voluntary Consolidation Conversion
reserve
reserve
reserve
reserve
differences
33,063 109,306 208,380
—
—
—
Profit
Total
39,775
—
—
—
5,148
—
—
—
—
—
33,063 109,306 213,528
39,775
—
— 479,672
70,628 70,628
–35,000 –35,000
—
—
—
—
42,816 517,340
–35,000 –35,000
–5,148
–2,668
—
–2,668
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,248
—
–6,248
—
—
—
—
—
—
—
—
—
947
—
—
947
—
—
—
45
—
—
—
—
45
—
—
—
—
—
— –129
—
–129
70,000
14,000
39,311 109,351 207,280
40,722 –129
35,628 516,163
Share capital
Share capital is represented by 790,000 “A” series shares and 210,000 “E” series shares, each of 70 euros, fully
subscribed and paid up. Both series have the same economic and policy-making rights, the latter being syndicated.
Legal reserve
In compliance with the Act governing companies passed by the General Council on October 18, 2007, a legal reserve
must be established of a minimum of 10% of the profit until 20% of the share capital has been reached. At December
31, 2012 and 2011, the Bank had this reserve totally set up.
Guarantee reserve
At December 31 of 2012, Crèdit Andorrà, in compliance with that established by Act 1/2011 on the creation of a
deposit guarantee system by banks, had a restricted guarantee reserve totalling 42,505 thousand euros, hedged by
an equivalent amount in eligible securities, according to article 7.3 of Act 1/2011 (39,311 at 31 December, 2011)
(see notes 21.3 and 21.4).
Voluntary reserve
These reserves correspond to profits from previous years that have not been distributed by the General Shareholders’
Meeting.
Pursuant to article 23 of Act 20/2007 of October 18, on public limited companies (“societats anònimes” and “de
responsabilitat limitada” in Catalan), the Bank has set up a restricted reserve for loans granted to shareholders.
In addition, based on that established in Memorandum 227/12 on Differences from initial consolidation and
Memorandum 228/12 on Goodwill, the Bank, via the appropriation of earnings, sets up annually a restricted reserve
for at least 10% of the book value of the differences from the initial consolidation and goodwill reported, directly
117
or indirectly, on its balance sheet, up to 100% of their value. To avoid overlapping, this reserve is not set up for any
goodwill or differences from the initial consolidation of subsidiaries for which local regulations require a reserve
of a similar nature to that described above (see notes 2.5, 7.1 and 10). At December 31, 2012, the restricted reserve
totalled 1,876 thousand euros (see note 2.5).
Revaluation reserve
This restricted reserve corresponds to two revaluations:
• The first, totalling 13,934 thousand euros, corresponds to revaluations of buildings for own use of
property acquired or built before December 31, 1989.
• The second, totalling 101,628 thousand euros, corresponds to the revaluation authorised by the ANIF
on June 12, 2008 of the land, building work and installations of working and non-working fixed assets,
as detailed below:
Book value
before revaluation
Appraised value
Percentage
revaluation
Revaluation
Working land
Working buildings:
Amount building revaluation corresponding to land
Amount building revaluation corresponding to building
16,828
14,890
—
—
53,354
105,351
—
—
30%
30%
—
—
10,958
27,138
6,813
20,325
Non-working land
Non-working buildings:
Amount building revaluation corresponding to land
Amount building revaluation corresponding to building
27,656
3,208
—
—
89,630
11,825
—
—
90%
90%
—
—
55,777
7,755
5,725
2,030
Total
62,582
260,160
—
101,628
At December 31, 2010, the Bank registered a provision of 6,256 thousand euros for the effect of certain nonworking fixed assets that have lost their fair realised value since they were revalued, calculated according to updated
valuations carried out by independent experts. However, on December 31, 2011, the Bank reversed 45 thousand
euros of this provision according to updated valuations. Both effects, in line with the applicable accounting practice
at the time of revaluation, were carried out against the revaluation reserves.
Consolidation reserves
The consolidation reserves correspond to accrued profits in previous years by Group companies forming part of the
consolidation perimeter from the date of their acquisition or constitution up to December 31, 2012 and 2011 that
have not been distributed as dividends.
Consolidation reserves
Companies consolidated by the fully-integrated method
Companies consolidated by the equity method
31.12.2012
31.12.2011
–9,286
9,289
7,768
32,954
3
40,722
The reduction in consolidation reserves observed in the table above is due to the allocation of 38,181 thousand
euros as dividends to Crèdit Andorrà SA (see note 10).
118
The consolidation reserves by the fully-integrated method at December 31, 2012 therefore correspond principally
to: –5,081 thousand euros of the Crèdit Andorrà Panamá Group (–3,903 thousand euros in 2011), –3,082 thousand
euros of Crèdit Iniciatives SA (–1,188 thousand euros in 2011), –2,727 thousand euros of Crèdit Capital Immobiliari
SA (7,830 thousand euros in 2011) and 2,551 thousand euros of Crediinvest SA (2,236 thousand euros in 2011).
The consolidation reserves by the equity method at December 31, 2012 correspond mainly to: 4,675 thousand euros
of Crèdit Assegurances SAU (28,113 thousand euros in 2011) and 4,799 thousand euros of ENSISA (4,975 thousand
euros in 2011).
On October 26, 2005, the ANIF Board of Governors agreed to authorise the issue of preference shares by Crèdit
Andorrà SA Preference Ltd., to be accounted for as Tier 1 type regulatory capital of the Crèdit Andorrà Group.
In accordance with this ANIF authorisation, on December 22, 2005 Crèdit Andorrà Preference Ltd. issued 100
million euros in preference shares, without voting rights and with a specified annual dividend of 5% in the first
three years following issue and then variable annually with reference to the CMS 10-year rate plus 30 basis points,
with a maximum of 8%, adjusted for the number of days during the year when the CMS 10-year rate is equal to or
higher than the CMS 2-year rate.
On January 25, 2006, the ANIF Board of Governors agreed to authorise an increase in the preference share issued
by Crèdit Andorrà Preference Ltd. amounting to an additional 50 million euros, given that the other components
of the equity of Crèdit Andorrà SA continued to account for around 70% of the Group’s total shareholder equity.
These preference shares are identical in nature to those of the first issue.
Crèdit Andorrà Preference Ltd. is a wholly-owned subsidiary of Crèdit Andorrà and the issue mentioned has the
joint and several and irrevocable guarantee of Crèdit Andorrà, as indicated in the corresponding information folder
for the issue.
This issue of a perpetual nature was fully taken up by third parties outside the Group and may be fully written off
should the issuing company so decide, and with authorisation from the ANIF, after a period of six years following
it being paid up.
The variable coupon paid in the period between December 23, 2011 and December 22, 2012 was 2.775% (3.647%
for the period between December 22, 2010 and December 22, 2011).
Provision for general banking risks
The Group makes provision for general banking risks corresponding to funds allocated by the Bank for reasons of
prudence, given the risks inherent in its banking activity.
The movements in 2012 and 2011 were as follows:
Opening balance for the year
Allocation to fund
Recoveries
Closing balance for the year
2012
2011
8,154
—
–8,154
23,232
—
–15,078
—
8,154
119
Note 12 Other balance sheet and profit and loss account items
Other significant items in the balance sheet and profit and loss account for the years ended December 31, 2012 and
2011 (in thousand euros) are shown below:
12.1 Asset accrual accounts
The details of this item on the balance sheet are as follows (in thousand euros):
Accrued income
Interest
Commissions
Other
Prepaid expenses
Commissions
Other
2012
2011
54,710
32,694
22,016
—
55,096
34,216
20,880
—
353
—
353
744
—
744
55,063
55,840
12.2 Liability accrual accounts
2012
2011
Accrued expenses
Interest
Commissions
Other
19,812
15,034
716
4,062
20,723
15,526
1,966
3,231
Before-due receipts
Interest
Commissions
Other
15,893
13,264
—
2,629
21,359
17,333
—
4,026
35,705
42,082
The interest received in advance corresponds to structured products.
120
12.3 Other assets
Other assets
Operations underway
Taxation
Withholdings and advanced payments (note 3.12.A)
Pre-paid tax (note 13.4)
Fiscal credit
Options acquired
Stock
2012
2011
91,933
84,128
5,153
4,651
502
—
2,429
223
47,142
44,157
—
—
—
—
2,667
318
12.4 Other liabilities
Other liabilities
Operations underway
Suppliers and other creditors (note 3.12.A)
Taxation
Deferred taxes (note 13.3)
Collection accounts
Options issued
2012
2011
30,117
14,257
7,994
6,199
287
5,912
1,667
29,753
12,867
15,105
—
—
—
1,781
12.5 Commissions for services
The details of these items in the profit and loss account (in thousand euros) are as follows:
2012
2011
Commissions on services supplied
For transactions with securities and other instruments to third parties
For loan transactions
For foreign exchange transactions
Other
Account administration and maintenance
Other
Commissions on services received
For transactions with financial intermediaries
Other
112,918
88,419
5,672
415
18,412
11,267
7,145
–12,430
–9,330
–3,100
105,229
78,259
7,978
154
18,838
12,477
6,361
–11,761
–8,919
–2,842
Net service commissions
100,488
93,468
121
12.6 General expenses and taxes
The details of these items in the profit and loss account (in thousand euros) are as follows:
2012
General expenses
Supplies
2011
–934
–934
–975
–975
External services
Research and development
Leases
Repairs and conservation (maintenance)
Services from independent professionals
Fund security and transport services
Insurance premiums
Advertising and public relations
Utilities
Other
–32,084
–164
–2,345
–4,623
–8,269
–1,508
–420
–3,745
–3,411
–7,599
–24,171
–177
–1,714
–4,210
–5,714
–1,741
–403
–3,131
–2,727
–4,354
Taxes
Indirect taxes on banking services (ISI)
Other taxes
–17,446
–14,721
–2,725
–19,634
–17,056
–2,578
–50,464
–44,780
12.7 Extraordinary profit
The details of this item in the profit and loss account (in thousand euros) are as follows:
Recovery provision for general banking risks (note 11)
Extraordinary profit
Extraordinary loss
Net profit (loss) from disposal of tangible
and intangible assets (note 7)
122
2012
2011
8,154
2,877
–2,723
15,078
1,097
–6,274
–112
–257
8,196
9,644
12.8 Corporate tax
The details of this item in the profit and loss account (in thousand euros) are as follows:
Corporate tax
Local corporate tax
Tax due
Current tax (expenses)
Deferred tax (income)
Adjustments
Foreign corporate tax
Tax due (expenses)
Adjustments
2012
2011
–1,685
–1,550
–1,550
–1,802
252
—
–135
–135
—
—
—
—
—
—
—
—
—
—
Income from deferred taxes comes from considering that temporary differences would be reversed at the rate
of 10% and not at the lower rate of 5% (see note 13.6).
Note 13 Tax situation: corporate tax
13.1 Application of the fiscal consolidation regime
Crèdit Andorrà SA is the parent company of the Group which is taxed under the special fiscal consolidation
regime (hereinafter the Fiscal Group). This Fiscal Group is made up of the dependent companies listed
below, of which more than 75% of the share capital is held and all have the same financial year as the Bank:
• Crediinvest, SA
• Patrigest, SAU
• Crèdit Capital Immobiliari, SAU
• Informàtica Crèdit Andorrà, SLU
• Crèdit Iniciatives, SA
• Crèdit Assegurances, SA
• CA Vida Assegurances, SA
• Patrigest Informació Financera, SLU
The Bank’s directors do not expect any additional liabilities of any significance to arise should the tax
authorities carry out an inspection.
13.2 Calculation of expenses due to corporate tax
Below is a reconciliation between the consolidated accounting profit before tax of the Fiscal Group and the
expenses due to corporate tax for the financial year 2012 (thousand euros):
2012
Aggregate book profit before tax
Permanent differences
Eliminations
69,416
–10,710
–800
Adjusted accounting profit
57,906
Tax liability at 10%
Deductions and rebates
5,791
–2,188
Expenses due to corporate tax
3,603
Reduction first-time adoption
50%
Expenses due to corporate tax (note 12.8)
1,802
123
13.3 Reconciliation of the accounting and taxable profit and calculation of the tax to be paid
As certain operations are treated differently for the purposes of corporate tax and the production of these
annual accounts, the consolidated tax base for the year differs in terms of the accounting profit.
The reconciliation between the accounting profit and taxable profit for the consolidated Fiscal Group in
terms of corporate tax during the financial year of 2012 is as follows (thousand euros):
2012
Group consolidated profit before tax
Profit before tax from companies not within Fiscal Group
Aggregate book profit before tax of Fiscal Group
Permanent differences
Temporary differences
Eliminations
72,860
–3,444
69,416
–10,710
5,021
–800
Tax base
62,927
Tax liability at 10%
Deductions and rebates
6,293
–2,188
Net tax payable
4,105
Reduction first-time adoption
2,053
Prepaid
1,766
Tax due (note 12.4)
287
13.4 Deferred taxation
Applying current regulations, certain temporary differences have arisen that have been reported in the
balance sheet at December 31, 2012, originating due to the following circumstances:
2012
Assets due to prepaid tax
Temporary difference between income and expenditure
Allocation to reserves (note 12.3)
Other
502
—
Liabilities due to deferred tax
Temporary difference between income and expenditure
Application of funds
Other
—
—
The Bank’s directors expect the deferred taxes detailed in the above table to be reversed within 5 years.
13.5 Negative tax bases
At December 31, 2012, neither the Fiscal Group nor any of its member companies has generated in 2012 or
has a negative tax base to be offset.
124
13.6 Changes in the applicable tax rate
The applicable tax rate is 10%. Nevertheless, pursuant to the first additional provision of Act 95/2010 of
December 29 on Corporate Tax, during the first year of application for this tax, those obliged to pay this shall
benefit from a 50% reduction in the tax liability.
Consequently, in calculating the corporate tax for the Fiscal Group, a 50% reduction has been applied to the
tax liability in question. However, temporary differences have been recorded at the rate at which they will
be reversed, i.e. 10%.
Note 14 Net foreign currency positions
At year-end 2012 and 2011, the Group held the following significant foreign currency positions (in thousand euros):
2012
Euro
US dollar
Swiss franc
Pound sterling
Japanese yen
Canadian dollar
Other currencies
2011
Euro
US dollar
Swiss franc
Pound sterling
Japanese yen
Canadian dollar
Other currencies
Assets
Liabilities
5,082,768
565,621
73,362
73,745
12,820
18,722
71,492
4,810,346
763,153
72,259
150,145
12,477
18,706
71,444
5,898,529
5,898,529
Assets
Net position
242,422
–197,532
1,103
–76,400
343
16
48
Liabilities
Net position
4,553,627
557,253
69,197
135,944
34,446
15,455
52,173
4,554,232
578,917
46,726
136,033
34,422
15,446
52,319
–605
–21,664
22,471
–89
24
9
–146
5,418,095
5,418,095
Exchange rates applied at year-end are those obtained from reliable market sources (see note 3.4).
The above table shows the currency position of headings from the consolidated balance sheet. The Group also uses
derivative products to close any possible currency gaps resulting from the balance positions (see note 18).
125
Note 15 Financial derivatives
15.1 Analysis of financial derivatives
At December 31, 2012 and 2011, the Group held the following positions in financial derivatives, not listed
on organised markets (face value in thousand euros):
2012
Less than
1 year
Firm transactions
Foreign exchange transactions
Interest rate swaps
Credit default swaps
Futures
Option transactions
Options
2011
Option transactions
Options
More than
5 years
Total
1,435,222
30,704
20,500
—
37
32,025
—
—
—
499,411
—
—
1,435,259
562,140
20,500
—
83,740
—
44,327
128,067
1,570,166
32,062
543,738
2,145,966
Less than
1 year
Firm transactions
Foreign exchange transactions
Interest rate swaps
Credit default swaps
Futures
From 1 to
5 years
From 1 to
5 years
More than
5 years
Total
767,515
55,085
11,000
—
—
39,130
19,000
—
—
452,953
—
—
767,515
547,168
30,000
—
3,614
2,846
46,650
53,110
837,214
60,976
499,603
1,397,793
At year-end, these positions in financial derivatives were being used as hedge instruments for Group assets
and liabilities or to offset open customer positions (see notes 3.11 and 15.2).
15.2 Treatment of hedges
Financial derivatives used to hedge specific market risks are individually assigned to those assets, liabilities
or off-balance sheet positions being hedged and are initially recorded at cost. Forward foreign currency
contracts are later adjusted at market value, applying these fluctuations to the profit and loss account. Market
fluctuations of these hedge positions are monitored and controlled using RiskMetrics and ALM II models
(assets and liabilities management).
126
Note 16 Pledged assets
At December 31, 2012, Crèdit Andorrà had on its books a total of 1,490 thousand euros (3,993 thousand euros in
2011) in guarantees required for futures transactions undertaken in regulated markets on account of third parties.
It also had a total of 49,912 thousand euros on deposit with financial intermediaries as pledged assets as a guarantee
for its own obligations (47,129 thousand euros in 2011).
Additionally, at December 31, 2012 the Group had temporary pledged asset contracts with independent third
parties affecting 215,847 thousand euros of the held-to-maturity portfolio (2011: 154,567 thousand euros). These
temporarily pledged assets earn an interest rate of between 0.07% and 3.7% (2011: 0.45%-2.6756%).
In addition, at December 31, 2012, the Group was using a total of 98,381 thousand euros from the held-to-maturity
portfolio as a hedge for the Deposit Guarantee Fund (see note 21.4) and to guarantee a line of credit with the
Spanish regulator (39,311 thousand euros in 2011, assigned solely to cover the Deposit Guarantee Fund).
Note 17 Transactions with entities or persons related to the Group or Group entities
Details follow of the operations with entities or persons related to the Group or with group entities, which have not
been consolidated by the fully-integrated method and account for more than 10% of equity as shown in the balance
sheet or 5% of the result for the year in the profit and loss account:
2012
Shareholders
Board of Directors
General
Other related
management Companies
parties
NonShareholders shareholders
Individuals
Corporations
2
—
—
—
—
—
—
—
—
—
—
—
Assets
166,261
Loan investments, banks and lending institutions 166,261
Accrual accounts
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Liabilities
Deposits
Accrual accounts
—
—
1,515
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9,605
—
—
—
—
—
Balances
Transactions with main shareholder
Interest and income - assimilated
Interest and income - liable to assimilation
Other
Off-balance-sheet records
At December 31, 2012, there was no transaction with any shareholder or member of the Board of Directors and/
or Executive Committee (non-shareholders) that, on an individual level, accounted for more than 10% of equity as
shown in the balance sheet or 5% of the result for the year as shown in the profit and loss account.
All transactions with related entities and people are carried out under market conditions.
127
Note 18 Risk control and management
The management and control of risk has always been a priority objective of Crèdit Andorrà and, with this in mind,
we have developed the necessary infrastructure, internal methods and controls. The Bank maintains a conservative
profile in all its investments and activities.
Policy and limits on risks are established and supervised by a committee called the Assets, Liabilities and Risks
Committee (with functions equivalent to those of ALMCO, Assets and Liabilities Management Committee).
Among other functions, this committee approves risk policies affecting the management of assets and liabilities
of the entity and management mandates. The committee also sets and revises the limits of balancing entries
with banks and supranational entities and/or private entities. With the aim of avoiding a concentration of risk,
it also establishes limits for issuers of financial instruments, whether within or outside the Crèdit Andorrà
balance sheets. This committee also approves the methodologies employed, either in valuing assets or in the risk
models implemented by the different activities and relevant factors, so that they can be measured, monitored
and controlled.
The Assets, Liabilities and Risks Committee has also provided a global, integrating view of the risk resulting from
the international expansion carried out by the Crèdit Andorrà Group.
All steps taken by this committee bear in mind the rules of ANIF, the Andorran national body that regulates,
controls and supervises the country’s financial activity and new regulatory trends, in compliance with the directives
of the New Basel Capital Accord, which emphasises increasing awareness of risk and risk management.
For some years, and without putting aside conventional methods of risk control, Crèdit Andorrà has applied
Value-at-Risk (VaR) methodology to all areas of risk management. By means of statistical and stochastic techniques,
VaR provides a measurement of risk. Formally, VaR is a synthetic figure that indicates the maximum loss to be
expected for a specific interval of confidence in the value of a portfolio over a fixed time span.
Managing market risk
Market risk arises as a consequence of operations carried out in financial markets via financial instruments whose
value can be affected by variations in market conditions, reflected in changes in the different assets and factors of
financial risk. In all cases, market risk relates to a potential loss in the profitability or value of the portfolio resulting
from unfavourable movements in market rates or prices.
Regarding the measurement, control and management of the different risks, Crèdit Andorrà tracks market risk
using the VaR methodology, this being the market’s basic and standard variable.
Regarding the methodology employed to obtain these measurements, this has been the historic VaR, which
calculates the impact on the current portfolio value of historic variations in risk factors, taking into account the
variations from the last 250 days and with a confidence interval of 95%.
The market VaR is calculated daily for a timescale of one day and with a confidence interval of 95% for portfolios
of the entity as a whole.
A detailed report indicating the VaR, with various timescales and confidence intervals, is periodically sent to
members of the Executive Committee and the Assets, Liabilities and Risks Committee. These VaR measurements,
along with others, provide a test of integrity and consistency.
For the securities portfolios as a whole, the average daily VaR, calculated at a 95% level of confidence, was 5,869.3
thousand euros with a maximum and minimum of 6,746.5 thousand euros and 4,578.5 thousand euros respectively,
compared with the authorised risk limit of 17 million euros.
128
An analysis of this report is supported by Backtesting tests. In 2012, Backtesting showed that gains and losses
performed in accordance with what would be statistically expected. For investment portfolios as a whole, the daily
VaR, with a 95% level of confidence, was exceeded by 0.39% of all cases throughout the year.
In order to monitor and control the market risks assumed by the Bank, the Assets, Liabilities and Risks Committee
approves an overall structure of limits implemented through the following:
• Limits to investment; limited by volume.
• Limits to investment by issuer rating, maturity and portfolio or sub-portfolio.
• Limits to investment by issuer concentration.
• Limits via market risk; VaR per portfolio and overall VaR.
• Limits via maximum cumulative loss per year, quarter and month.
The department of Financial and Operational Risk is responsible for monitoring and controlling these limits and
the risks assumed.
Daily VaR (2012)
(in million euros)
7
6
5
4
3
2
1
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Managing foreign currency risk
Another source of risk is the risk of structural change, which results essentially from exposure to variations in
exchange rates arising from positions in a currency other than the investment currency.
The Assets, Liabilities and Risks Committee is responsible for defining and supervising hedges to limit the impact of
possible exchange rate variations on assets and solvency, in line with their expected trends, and ensures the counter
value in euros of the profit in the currency that is expected from the aforementioned investments.
Regarding foreign currency risk, the trading position is monitored on a daily basis (aggregating the position
at-sight and at term) and a maximum position in terms of volume is applied for all currencies. For the purposes of
calculating currency risk exposure, the net position is used for each currency.
At December 31, 2012, the overall open position in foreign currency risk amounted to 468 thousand euros, as
against the established limit of 5 million euros.
129
Managing country risk
Country risk is the risk incurred by counterparts resident in a specific country due to circumstances other than
those related to the customary commercial risk. According to the economic development of countries, their political
situation, regulatory and institutional framework and the rating given by credit ratings agencies for each country,
Crèdit Andorrà classifies its operations carried out with third parties and assigns to each group the percentage
provisions for insolvency resulting from this analysis.
With regard to exposure by geographical area, the Assets, Liabilities and Risks Committee establishes percentage
limits of maximum exposure at the level of country or group of countries, as applicable.
Additionally, and in terms of concentration by country, the investment guidelines approved by the Assets,
Liabilities and Risks Committee establish that the maximum exposure in a specific country must not account for
more than 35% of the total country risk exposure.
In the consolidated figure in euros, calculated for each country, the on or off-balance sheet investments are included
that involve exposure to a certain country.
Managing credit risk
At the end of 2012, interbank deposits accounted for 7% of the total exposure to credit risk and the securities
portfolio 35%, while customer loans accounted for the remaining 58%.
With regard to interbank deposits and the securities portfolio, Crèdit Andorrà also introduced the loan VaR
as a management and control tool. This is calculated by applying the so-called “CreditManager”, a programme
developed by J. P. Morgan. Crèdit Andorrà follows the loan VaR with a timescale of one year and a confidence
level of 99%.
At year-end, the loan VaR for the securities portfolio and interbank deposits was 34,268.5 thousand euros out of a
total risk exposure of 1,753,782.8 thousand euros. This loan VaR is below the risk limit of 35,000 thousand euros
set by the Assets, Liabilities and Risks Committee. On the other hand, this loan VaR level would be equivalent to
having a portfolio with an average rating of A+.
Under credit risk, special attention is given to balancing-entry risk and country risk, as well as diversification in
terms of sector. These risks are regularly monitored, always keeping within established limits.
Managing counterparty risk
In order to control counterparty risk, and to a large extent the risk of concentration in financial institutions, the
Assets, Liabilities and Risk Committee approves interbank limits for different timescales on and off-balance.
By means of an internal model to assign interbank lines, whose aim is to establish internal, objective criteria to
measure the credit quality of different interbank counterparties, Crèdit Andorrà attempts to classify the maximum
exposure limit in line with the range of limits being applied at any particular time.
With regard to the off-balance sheet exposure of financial counterparties, a scale of ratios has been established based
on asset maturity order to weight the consumption of securities concentrated off the balance sheet. A ceiling has
also been established for per financial counterparty, adding the total consumption off and on-balance sheet.
The department of Financial and Operational Risk also monitors and controls settlement risk by assigning
settlement risk limits for each financial credit institution. Settlement risk is the risk that one of the financial
counterparties does not deliver a security or its value in cash on the settlement date agreed when the security was
traded with the other counterparty.
130
The settlement risk limit for a financial credit institution is the maximum exposure assigned by the interbank
line model.
Managing interest rate risk
The Crèdit Andorrà Group has traditionally paid particular attention to maintaining a very strict relation between
investment and how it is financed in order to facilitate the management of interest rate risk.
Exposure to interest rate risk should be seen as the possible adverse variation in economic value and/or profit due
to an unexpected variation in the market interest rate.
The Assets, Liabilities and Risks Committee is responsible for defining the targets for managing interest rate risk,
determining portfolio investment strategies, hedging strategies and for taking decisions concerning proposals to
manage structural risk.
Sensitivity and scenario analysis techniques are used in order to analyse, measure and control the interest rate
risk assumed, and limits are established to avoid risk exposure levels that might significantly affect the Bank. The
department of Financial and Operational Risk is responsible for measuring and reporting on a monthly basis
regarding the interest rate risk of the Crèdit Andorrà Group.
The main techniques used by the Crèdit Andorrà Group to measures interest rate risk are static and dynamic gaps,
as well as sensitivity to financial margin and economic value.
Static gap shows the distribution of maturities and interest rate reviews at a specific date. For balance sheet items
without a contract maturity date, their sensitivity to interest rates is analysed, together with their expected maturity
date, considering the possibility that the customer may settle early.
Dynamic gap consists of the same aforementioned rules but also including expected budget operations and/or
financial planning of the Bank, with a future projection of the upcoming reviews and maturities of operations
involving the Bank’s assets and liabilities. This analysis can predict potential asset liability mismatches, helping to
anticipate possible future tensions.
Financial margin sensitivity shows the impact on the balance sheet’s composition caused by changes in the interest
rate curve. This sensitivity is measured by comparing the simulation of the most probable financial margin with
other scenarios assuming a rise or fall in interest rates and movements in the curve. At year-end, financial margin
sensitivity at one year of the sensitive balance sheet assets and liabilities, assuming a rising interest rate scenario and
another falling interest rate scenario of 100 base points each, was +7.2% and –2.8%, respectively.
Interest rate sensitivity of economic value measures the impact of interest rate variations on the current balance
sheet value. This sensitivity is measured by comparing the calculated economic value of the Bank and the economic
value taking into account variations in the market interest rate and dividing the result by the Bank’s shareholders’
equity. At year-end, economic value sensitivity (over shareholders’ equity), assuming a rising interest rate scenario
and another falling interest rate scenario of 100 base points each, was –3.3% and +4.3%, respectively.
Financial margin sensitivity focuses on the short and medium term while economic value sensitivity focuses on
the medium and long term. These measures complement each other and provide an overall view of the Bank’s
structural risk.
Managing liquidity risk
Liquidity risk is the risk resulting from potential difficulties in meeting obligations associated with financial liabilities
that are settled by paying cash or through another financial asset. Liquidity risk is therefore the risk of not having
enough liquidity to be able to fulfil, on the date due, payment obligations to third parties or having to do so at a
higher cost.
131
The Assets, Liabilities and Risks Committee is responsible for defining liquidity management targets, determining
investment strategies for portfolios and taking decisions on proposals for managing liquidity risk.
The fundamental objective related to liquidity risk is to have the necessary instruments and processes at all times to
ensure the Bank can meet its payment obligations on time, as well as carry out its business to achieve the strategic
goals of the Crèdit Andorrà Group. The capacity to maintain sufficient levels of liquidity to meet payments is also
analysed in stress scenarios.
The measurement of liquidity risk is tackled from the point of view of liquidity requirements; i.e. decisions must be
taken regarding how to cover these needs. These measures must cover the short, medium and long term and always
with a global view of the balance sheet, covering both minority and majority positions.
The Crèdit Andorrà Group has drawn up a Liquidity Risk Contingency Plan that establishes an action plan for the
different crisis scenarios (systemic and specific), detailing measures at a commercial and institutional level to tackle
this kind of situation.
The department of Financial and Operational Risk is responsible for measuring the Bank’s liquidity ratio on a daily
basis.
Managing operational risk
The Basel Committee defines operational risk as the risk of direct or indirect loss resulting from inadequate or
failed internal processes, people and systems or from external events.
Crèdit Andorrà has continued to develop its organisational structure and establish the capacities required
to guarantee compliance with the Basel Capital Accord with regard to the measurement and management of
operational risk.
132
Note 19 Other off-balance-sheet records
Details of the composition by type of security and other securities deposited and held in trust with third parties at
December 31, 2012 and 2011 are set out below (in thousand euros):
Equity
Fixed income
Parts of investment funds
Other
2012
2011
2,123,614
1,755,152
1,494,842
522,230
1,442,211
1,677,751
1,714,799
362,131
5,895,838
5,196,892
The details of “Other off-balance-sheet records exclusively for management control” at December 31, 2012 and
2011 (in thousand euros) were as follows:
Guarantees and obligations received
Unlisted own shares and those held in trust
Very doubtful loans
Pending products due, for doubtful loans
Other
2012
2011
512,247
879,921
60,473
235
—
412,294
805,232
62,806
513
—
1,452,876
1,280,845
In compliance with ANIF Memorandum 233/13, “Assets held in trust” includes all shares and securities held in
trust with third parties that the Bank or one of its company holdings has issued, the shares of the Bank or one of its
company holdings held by third parties and held in custody by the Bank, as well as fiduciary deposits.
Whenever possible, own and third party shares and securities held in trust are always valued at market price in
off-balance sheet accounts (see note 3.6 for more information on methods for valuing the portfolio that can also be
applied to securities held in trust).
Note 20 Customer funds managed
In compliance with ANIF Memorandum 209/13, below are details of the composition of customer funds managed,
differentiating between those held in custody by the Bank and those by third parties (in thousand euros):
2012
Mutual funds
Individual client portfolios
managed via mandate
Other individual clients
2011
Custody /
deposited by
Group
Custody /
deposited by
third parties
183,325
149,911
333,236
1,955,110
7,884,565
—
1,135,803
10,023,000
Total
Custody /
deposited by
Group
248,674
Custody /
deposited by
third parties
Total
—
248,674
1,955,110
9,020,368
1,761,892
—
7,001,978 1,074,452
1,761,892
8,076,430
1,285,714 11,308,714
9,012,544 1,074,452
10,086,996
133
Note 21 Compliance with regulations
21.1 Act governing the solvency and liquidity criteria of financial entities
At its session held on February 29, 1996, the General Council of the Principality of Andorra passed the Act
governing the solvency and liquidity criteria of financial entities (hereinafter “the Act”).
In accordance with this Act, the Group must maintain an ordered financial structure to ensure its capacity to
meet its obligations. This capacity can be observed essentially from a dual perspective: on the one hand, by
quantifying the sufficiency of its equity (solvency ratio); on the other, by means of a suitable period of time
between the maturities of obligations and the availability of investments (liquidity ratio). The Crèdit Andorrà
Group must maintain specific ratios with regard to quantitative measurement of the amounts of assets,
liabilities and certain off-balance-sheet records calculated under accounting criteria, as well as qualitative
options on the various components, valuation of risk and other factors.
This Act makes it obligatory to maintain a solvency ratio, made up according to the recommendations of the
“Basel Committee on Banking Supervision”, with a minimum of 10% of the weighted risk of assets. It also
obliges financial entities to maintain a minimum liquidity ratio of 40%.
The requirements regarding minimum equity are calculated according to the Group’s exposure to credit risk
(depending on the assets, commitments and other off-balance-sheet records with this risk, in terms of their
amounts, characteristics, counterparts, guarantees, etc.), to counterpart risk and the position and liquidation
of the trading portfolio, to exchange risk and the position in gold (according to the overall net position in
currency and net position in gold) and to commodity risk.
Below are details of the adjusted consolidated equity as at December 31, 2012 and 2011 and the corresponding
solvency ratios:
2012
2011
Capital and reserves
Preferred stock
Provision for general banking risks
Intangible assets
416,727
150,000
—
–97,315
386,813
150,000
8,154
–86,629
Tier 1
469,412
458,338
Revaluation reserve
General provision loan investment banks
109,351
582
109,351
904
Tier 2
109,933
110,255
Total adjusted equity
579,345
568,593
3,254,814
3,270,160
14.42%
3.38%
17.80%
14.02%
3.37%
17.39%
Risk-adjusted assets
Tier 1 (%)
Tier 2 (%)
Solvency ratio (%)
In the above table, the complementary dividend proposed by the Bank’s Board of Directors has been deducted from
the heading of “Capital and reserves” as part of the proposed distribution of profit (see note 10), which is pending
approval by the General Shareholders’ Meeting.
134
Below are details of the solvency and liquidity ratios in comparison with the aforementioned legal
requirements:
Bank's current ratio
Solvency ratio
Liquidity ratio
Legal minimum ratio
2012
2011
17.80%
59.35%
17.39%
51.81%
10.00%
40.00%
It should be noted that the calculation of the solvency ratio is carried out according to ANIF Memorandum
159/04 on Equity Requirements. This memorandum, which is technically binding, complements the Act
governing the solvency and liquidity criteria of financial entities of February 29, 1996, and is designed to
foster greater security and stability in the Andorran financial system by incorporating the hedging of market
risks.
The Act also limits the concentration of risks in favour of any one beneficiary to 20% of the Bank’s equity.
It also establishes that the concentration of risks that individual exceeds 5% of equity cannot go beyond the
limit of 400% of this equity. Similarly, the balances or transactions maintained with members of the Board
of Directors cannot be above 15% of equity.
In 2012, the Group met the requirements set out in this Act. The highest concentration of risk in favour of
any single beneficiary was 17.49% (17.29% in 2011) of the Group’s equity. Total loans, discounts and other
transactions creating individual credit risk in excess of 5% of the Group’s equity did not go above 140.70%
(121.07% in 2011).
21.2
Act on international cooperation on crime and the fight against money and security
laundering arising from international crime
On July 24, 2001, the current Act on international cooperation on crime and the fight against money and
security laundering arising from international crime came into force, replacing the previous Act protecting
bank secrecy and preventing money or security laundering resulting from international crime, of 1995.
At its session on December 11, 2008, the General Council of the Principality of Andorra passed the
Act amending the Act on international cooperation on crime and the fight against money and security
laundering arising from international crime. This amendment of Andorran legislation against laundering
and against the financing of terrorism, as well as its subsequent amendment passed on May 25, 2011, updates
the previous Act, adapting it to international standards in this area and harmonising it with the equivalent
laws in Europe.
As a continuation of the legal application of this Act, on May 13, 2009, the government passed the Regulation
of the Act on international cooperation on crime and the fight against money and security laundering arising
from international crime and against the financing of terrorism and its amendment on May 18, 2011.
The Group has gradually adapted its internal procedures to the successive national and international
legislative modifications, taking into account the recommendations of the Financial Action Task Force
(FATF) and of the Basel Committee on Banking Supervision (BCBS) in order to ensure that the financial
services provided by any member of the Group cannot be used by any criminal organisation while also
continuing to protect bank confidentiality.
135
21.3 Act governing mandatory investment ratios
At its session on June 30, 1994, the General Council of the Principality of Andorra passed the Act governing
mandatory investment ratios. This Act obliges entities whose activities include receiving public deposits and
which use these in granting loans and other investments to maintain an investment ratio in Andorran public
funds.
On December 9, 2009, the Decree was passed that amends the Decree regulating the Act governing
mandatory investment ratios of August 22, 1994, which obliges entities to maintain an investment ratio of
2% in public funds in their assets.
Government bonds
In compliance with this ratio, at December 31, 2012, Crèdit Andorrà SA had subscribed 103,430 thousand
euros to government bonds of the Principality of Andorra, issued on December 30, 2009 and maturing on
December 31, 2013 at a one-year Euribor interest rate, established on the first working day of each year
(103,430 thousand euros in 2011). This figure is recorded under the heading “Securities portfolio – Bonds
and other fixed-income instruments” of the enclosed balance sheet (see note 6.4).
Housing funding programme
Also included in calculations as public funds are loans granted as part of a programme classified as of national
and social interest, aimed at the preferential funding of housing, approved by the government of Andorra on
April 26, 1995. At December 31, 2012 and 2011, the loans granted under this programme amounted to 252
and 321 thousand euros, respectively, they are recorded under the heading “Loan investments – Customer
loans and credits” on the balance sheet. These loans accrue a fixed annual interest of 6% (see note 5.3).
Programme aimed at the preferential funding of newly created firms and businesses, firms related
to innovation, reconversion and enterprising projects
Also included in calculations as public funds are loans granted as part of a programme classified as of
national and social interest, aimed at the preferential funding of newly created firms and businesses, firms
related to innovation, reconversion and enterprising projects, passed by the government of Andorra on
March 3, 2010. The loans granted under this programme amounted to 1,811 thousand euros at December 31,
2012 and are recorded under the heading “Loan investments – Customer loans and credits” on the balance
sheet (1,116 thousand euros at December 31, 2011). These loans accrue an annual interest equivalent to the
one-year Euribor rate, with the government acting as guarantor (see note 5.3).
Programme aimed at the preferential funding for the rehabilitation of housing and residential
buildings
Also included in calculations as public funds are loans granted as part of a programme classified as
of national and social interest, aimed at the preferential funding for the rehabilitation of housing and
residential buildings, passed by the government of Andorra on March 23, 2011. The loans granted under
this programme amounted to 185 thousand euros at December 31, 2012 and are recorded under the heading
“Loan investments – Customer loans and credits” on the balance sheet. These loans accrue an annual interest
equivalent to the one-year Euribor rate plus 0.5% (see note 5.3).
Guarantee reserves
Until the new Act 1/2011 came into force, creating a system of deposit guarantees for banks (see note 21.4),
all institutions in the Andorran financial system were subject to the Act governing the guarantee reserves for
deposits and other operational duties to be maintained and deposited by entities operating in the financial
system. This Act stipulated that entities had to maintain, among their permanent resources, minimum equity
reserves to guarantee their operational obligations of up to 4% of their total investments, after deducting
investments made using shareholders’ equity or funds from financial institutions.
136
In accordance with the aforementioned Act, entities involved in the Andorran financial system must
mandatorily set up and maintain guarantee reserves deposited with the ANIF. Since the new system has
come into force, applicable to banks, the amount invested corresponds only to the guarantee reserves of the
Group’s management company.
At December 31, 2012 and 2011, the balance and return from these deposits with the ANIF (in million euros)
were as follows:
2012
Mandatory investment
Crediinvest SA
2011
Mandatory investment
Crediinvest SA
Deposit
210
Deposit
210
Interest
rate
1.8670%
Period
December 30, 2011 - December 31, 2012
Interest
rate
1.2400%
Period
December 31, 2010 - December 30, 2011
21.4Act 1/2011 creating a deposit guarantee system for banks
On 2 February 2011, the General Council of the Principality of Andorra passed Act 1/2011, creating a deposit
guarantee scheme for banks in order to guarantee the return of funds in cash and securities deposited to the
depositors. This Act establishes that, so that the guarantee scheme can comply with the obligations attributed
by this Act, all banks authorised to operate in Andorra must set up and maintain a restricted reserve in order
to comply with the guarantees covered and that an amount equivalent to this reserve must be held invested
in secure, liquid securities that comply with a series of requirements established by the Act.
In this respect, at December 31, 2012, Crèdit Andorrà, complying with that established by article 7
“Calculating the mandatory reserve and investment of the amount” of the aforementioned Act, had a
restricted guarantee reserve of 42,505 thousand euros (39,311 thousand euros at December 31, 2011), hedged
by an equivalent amount of eligible securities, as per article 7.3 of Act 1/2011 (see note 16). The increase in
this reserve is charged to the distribution of the profit from the year.
21.5Act to apply the Accord between the Principality of Andorra and the European Union
regarding the taxation of savings income in the form of interest payments
At its meeting held on February 21, 2005, the General Council of the Principality of Andorra approved
the Accord between the Principality of Andorra and the European Union regarding the establishment of
measures equivalent to those contained in Council Directive 2003/48/EC on the taxation of savings income
in the form of interest payments. At its meeting held on June 13, 2005, it also approved the Act applying this
Accord.
In 2012, Crèdit Andorrà, as a payment agent, complied with the obligations contained in the Accord and its
Act of application and paid the withholding tax in accordance with that provided for in the aforementioned
legislation.
137
21.6
Act 14/2010 of May 13, on the legal regime of banking institutions and the basic
administrative regime of entities operating within the financial system
On May 13, 2010, the General Council of the Principality of Andorra approved Act 14/10 on the legal regime
of banking institutions and on the basic administrative regime of entities operating within the financial
system in order to maintain a structurally and functionally solid financial system. This annulled the Act
in force on the basic administrative regime of banking institutions of June 30, 1998. This Act contains the
principles established in EU Directive 2004/39/EEC of the European Parliament and the Council, of April
21, 2004, known as the MiFID (Markets in Financial Instruments Directive).
Note 22 Significant events following year-end
On February 4, 2013, once the approval had been given by the different regulators (ANIF, Bank of Spain and the
Spanish securities commission or CNMV), Banco de Alcalá SA increased its capital by 15%, fully subscribed by
two new strategic local shareholders, diluting the investment of Crèdit Andorrà from 85% to 72.25%.
This operation forms part of the strategic internationalisation being carried out over the last few years (see
note 2.4) and has allowed the Crèdit Andorrà Group to incorporate the business of private banking and capital
markets of Riva y Garcia which, to date, had carried out these activities through the companies Riva y Garcia
Gestión SGIIC and Riva y Garcia 1877 SV.
In addition, after the end of the financial year of 2012, the capital has been increased of several companies in
the Group to provide them with the additional resources required to carry out the international expansion plan.
Specifically, on February 27, 2013 (1) the share capital was increased of Banque de Patrimoines Privés, SA for a
total of 7,500 thousand euros and (2) the share capital was increased of CA Holding Luxembourg, SARL for a
total of 15,510 thousand euros, partially used by the latter on February 28, 2013 to increase the capital of CA Life
Insurance Experts Compañía de Seguros y Reaseguros, SAU for a total of 4,508 thousand euros, with the prior
capitalisation of Credit Andorrà Holding España, SAU for a total of 4,510 thousand euros.
Note 23 Other matters of interest
Fundació Privada Crèdit Andorrà
Crèdit Andorrà SA established the Fundació Privada Crèdit Andorrà by means of public deed dated December 15,
1987, for an indefinite period of time. The Foundation has its own legal identity, is of Andorran nationality and
of a private nature. Pursuant to Act 11/2008, of June 12, this has been entered in the Foundation Register under
number 7/2010.
This foundation, which is a non-profit organisation, aims to contribute to improving the quality of economic,
cultural and social life in Andorra by taking on, programming, funding and carrying out specific goals. Among
these goals, of particular note is the granting of study scholarships to those who deserve them in order to help them
get the best possible education in whatever areas that may have an influence on the bettering of the economic,
scientific, educational, cultural and services structure of the country.
In 2012, and always with the aim of adapting its work to the needs of the country, the activities carried out by
the Fundació Privada Crèdit Andorrà focused on three major areas: social programmes, particularly those aimed
at the elderly and organisations dealing with the disabled; educational activities, particularly granting scholarships,
and also cultural activities, dealing with pedagogical aspects and all those areas directly related to the country, its
history and its natural environment.
138
Note 24 English translation
These consolidated financial statements are a free translation of the consolidated financial statements originally
issued in Catalan. In the event of a discrepancy, the Catalan language version prevails. These consolidated financial
statements are presented in conformity with the accounting principles and valuation criteria established by the
Accounting Plan of the Andorran Financial System. Certain accounting practices applied by the Group that
conform with the Accounting Plan of the Andorran Financial System may not conform with generally accepted
accounting principles in other countries.
139
AUDITORS’ REPORT
140
141
Crèdit Andorrà branch network in Andorra
Head Office
Av. Meritxell, 80
AD500 Andorra la Vella
Principality of Andorra
Tel.: +376 88 86 00
Fax: +376 88 86 01
Swift: CRDA AD AD
Canillo
Escaldes-Engordany
CANILLO
ESCALDES
C/ Peu del Carrer
AD100 Canillo
Tel.: +376 88 84 60
Fax: +376 88 84 61
Av. Carlemany, 42
AD700 Escaldes-Engordany
Tel.: +376 88 82 00
Fax: +376 88 82 01
Tel. Corporate banking:
+376 88 94 00
Encamp
PAS DE LA CASA
Branches
Andorra la Vella
MAIN BRANCH
Av. Meritxell, 80
Tel.: +376 88 86 00
Fax: +376 88 86 01
+376 88 93 00
24-hour branch
PLAÇA REBÉS
Pl. Rebés, 3
Tel.: +376 88 83 60
Fax: +376 88 83 61
+376 88 97 00
24-hour branch
PRADA RAMON
C/ Sant Jordi, 7
AD200 Pas de la Casa
Tel.: +376 88 84 40
Fax: +376 88 84 41
24-hour branch
Plaça del Consell, 7
AD200 Encamp
Tel.: +376 88 84 00
Fax: +376 88 84 01
24-hour branch
La Massana
SANT ANTONI
Av. Sant Antoni, 34
AD400 La Massana
Tel.: +376 88 85 00
Fax: +376 88 85 01
24-hour branch
Av. Fiter i Rossell, 22
AD700 Escaldes-Engordany
Tel.: +376 88 82 60
Fax: +376 88 82 61
Automatic branches
ILLA CARLEMANY
Illa Carlemany shopping centre
(Escaldes-Engordany)
SOLDEU
Ctra. General, s/n. Soldeu
(Canillo)
ARINSAL
Ctra. General d’Arinsal. Arinsal
(La Massana)
Hotline 24 h: +376 88 87 00
Ordino
C/ Maria Pla, 30
Tel.: +376 88 86 70
Fax: +376 88 86 71
+376 88 90 95
ORDINO
24-hour branch
Sant Julià de Lòria
SANTA COLOMA
PLAÇA LAURÈDIA
Av. d’Enclar, 53
Tel.: +376 88 81 80
Fax: +376 88 81 81
Av. Verge de Canòlich, 55
AD600 Sant Julià de Lòria
Tel.: +376 88 83 40
Fax: +376 88 83 41
FITER I ROSSELL
PLAÇA DEL CONSELL
C/ Major
AD300 Ordino
Tel.: +376 88 85 50
Fax: +376 88 85 51
24-hour branch
142
24-hour branch
Crèdit Andorrà Group in the world
Banking
and financial services
CRÈDIT ANDORRÀ
Head office
Av. Meritxell, 80
Tel.: +376 88 86 00
BANCO ALCALÁ, SA
C/ Ortega y Gasset, 7 4a planta
28006 Madrid
Spain
Tel.: +34 914 310 911
BANQUE DE PATRIMOINES
PRIVÉS, SA
30, Boulevard Royal
L-2449 Luxembourg
Tel.: +352 27 207 1
BANCO CRÈDIT ANDORRÀ
(PANAMÁ)
Regus Business Centre
Torres de las Américas
Torre A, piso 10
Punta Pacífica
Panamá, Rep. de Panamá
Tel.: +507 306 48 00
OFICINA DE REPRESENTACIÓN
DE CRÈDIT ANDORRÀ Y DE BANCO
CRÈDIT ANDORRÀ (PANAMÁ) EN
URUGUAY (REPRESENTATIVE
OFFICE)
Edificio Quantum Oficina 506 A
Ruta 8, km 17.500
(Zonamérica)
91600 Montevideo
Uruguay
Tel.: +598 2 5184895
Asset Management
CRÈDIT ANDORRÀ
ASSET MANAGEMENT
Crediinvest SA
C/ Bonaventura Armengol, 6-8
Tel.: +376 88 95 10
ALCALÁ DE PENSIONES
VALORES CASA DE BOLSA
C/ Goya, 23
28001 Madrid
Spain
Tel.: +34 914 301 911
+34 915 779 979
Av. Mcal. López c/ Dr. Morra
Edificio Mariscal Center 4o piso
Asunción, Paraguay
Tel. +595 (21) 600 450
GESALCALÁ SGIIC
CA PERÚ SOCIEDAD
AGENTE DE BOLSA
C/ Goya, 23
28001 Madrid
Spain
Tel.: +34 914 301 911
+34 915 779 979
Av. Rivera Navarrete 501 piso 16
Edificio Capital - San Isidro
Lima, Peru
VALIRA CAPITAL ASSET
MANAGEMENT
Insurance
C/ Moreto, 5
28014 Madrid
Spain
Tel.: +34 914 290 837
INVESTCREDIT SICAV –
CREDIINVEST SICAV
Sociétés d’investissement à
capital variable
Registered Office: Aerogolf
Center, 1A Hoehenhof,
L-1736 Senningerberg,
Luxembourg
PRIVATE INVESTMENT
MANAGEMENT
PIM Private Investment
Management SA
Case Postale 539
Rue du Général-Dufour 20
CH - 1211 Genève 17
Tel.: +41 22 849 02 90
BETA CAPITAL MANAGEMENT LP
777 Brickell Avenue
Suite 1201
Miami, Florida 33129
United States of America
Tel.: +1 305 358 88 44
CRÈDIT ASSEGURANCES
C/ Bonaventura Armengol, 6-8, 2n
Tel.: +376 88 89 00
VINCLES
C/ Bonaventura Armengol, 6-8, 2n
Tel.: +376 88 89 00
ERM HÒLDING
C/ Caravel·la La Niña, 12, 9è
08017 Barcelona
Spain
Tel.: +34 932 803 133
Social activity
CRÈDIT ANDORRÀ FOUNDATION
Av. Meritxell, 80
Tel.: +376 88 88 80
CA MÉXICO ASESORES
PATRIMONIALES
Torre Tres Picos
Arquímedes N. 19 piso 1 y 2
Col. Bosque de Chapultepec
Delegación Miguel Hidalgo
11580 México DF
México
Tel. +52 (55) 52814644
143
Av. Meritxell, 80
Principat d’Andorra
Design, page make-up and printing
www.cege.es
ISBN: 978-99920-60-42-1
DL: AND.137-2013
Resum comparatiu de dades financeres dels darrers dos anys
Grup Crèdit Andorrà
2012
2011
409.799
3.101.781
4.454.875
430.353
3.112.228
4.315.606
Dades més importants del Balanç
(Imports en milers d’euros)
Caixa i bancs
Inversió creditícia
Dipòsits de clients
Dipòsits de valors i altres títols en custòdia de tercers (*)
Patrimoni gestionat per empreses del Grup
custodiat per tercers
5.568.125
4.696.938
1.285.714
1.074.452
Total
6.853.839
5.771.390
11,81
16,96
69,63
14,52
1,27
17,80
59,35
11,38
15,78
72,12
14,79
1,36
17,39
51,81
50,77
48,56
662
12
609
16
Ràtios (%)
Fons propis / Dipòsits de clients
Fons propis / Inversió creditícia
Inversió creditícia / Dipòsits de clients
Resultats / Mitjana Capital + Reserves
Resultats / Actius totals mitjans: ROA (**)
Solvència
Liquiditat
Eficiència (D. Administració /
Marge Ordinari)
Altres dades
Nombre d’empleats
Nombre d’oficines
Fitch Ratings
Llarg termini
Curt termini
Individual
Suport
(*) Vegeu la nota 19 de la Memòria.
(**) Segons Comunicat INAF 141/02.
A–
F2
B/C
5
Annual Report 2012

Annual Report 2012

Transcripción

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