Informe Anual 09...of Caja de Ahorros y Monte de Piedad de Barcelona, founded in 1844, and Caja de Pensiones para la Vejez y de Ahorros de Cataluña y Baleares, founded in 1904. On

”la Caixa” Annual ReportTrust, social commitment and excellence in service

2009

”la Caixa” GROUP HiGHliGHTSFinancial information

CHaNGE

Figures in millions of euros 2009 2008 aMOUNT %

Balance SheetTotal assets 271,873 260,827 11,046 4.2 Total Banking Business volume 415,825 414,123 1,702 0.4

Loans and credits, gross 178,026 176,423 1,603 0.9 Total customer funds 237,799 237,700 99 0.0

Investee portfolio:Market value of listed companies 20,118 14,691 5,427 36.9 Unrealised gains on listed companies 3,945 1,026 2,919 284.5

income StatementNet interest income 3,932 3,508 424 12.1 Recurring gross income 7,187 6,752 435 6.4 Recurring net operating income 3,622 3,223 399 12.3 Recurring profit after tax 2,004 2,317 (313) (13.5)Recurring profit attributable to the ”la Caixa” Group 1,710 2,052 (342) (16.7)Net extraordinary profit (200) (250) 50 Profit attributable to the ”la Caixa” Group 1,510 1,802 (292) (16.2)Efficiency and ProfitabilityRecurring efficiency ratio (Administrative expenses / Gross income) 42.9% 45.2% (2.3)ROE (Recurring attributable profit / Average own funds) 11.3% 14.8% (3.5)ROA (Net recurring profit / Average total assets) 0.8% 1.0% (0.2)RORWA (Net recurring profit / Risk-weighted assets) 1.6% 2.0% (0.4)Risk ManagementNPL ratio 3.42% 2.48% 0.94 NPL coverage ratio 62% 66% (4)NPL coverage ratio including mortgage collateral 127% 129% (2)”la Caixa” liquidity 21,208 22,262 (1,054) (4.7)Capital adequacy - BiS iiCore capital 8.7% 8.8% (0.1)Tier 1 10.4% 10.1% 0.3 Capital ratio (BIS II ratio) 11.0% 11.0% 0.0 Own funds 16,696 15,619 1,077 6.9 Eligible capital 17,251 15,802 1,449 9.2 Surplus capital 4,667 4,260 407 9.6 Risk-weighted assets (RWA) 157,300 144,272 13,028 9.0 Commercial activity and resources (number)

Employees – ”la Caixa” 24,944 25,335 (391) (1.5)– ”la Caixa” Group 27,505 27,818 (313) (1.1)

Branches 5,326 5,530 (204) (3.7)Self-service terminals 7,951 8,113 (162) (2.0)Cards in circulation – ”la Caixa” 10,293,683 10,344,006 (50,323) (0.5)POS terminals 167,993 171,631 (3,638) (2.1)Línea Abierta – ”la Caixa” internet channel

– Total customers 6,020,192 5,544,092 476,100 8.6 – Users 2,964,355 2,667,358 296,997 11.1

Caixamóvil customers – Mobile banking channel 1,415,533 941,603 473,930 50.0

Corporate ResponsibilityDirect contribution of ”la Caixa” operations to Spain’s GDP 0.49% 0.42% 0.07 Diversity: % men / women employed 53/47 54/46Number of projects financed in line with the Equator Principles 65 64 1 1.5 Number of employees taking part in the Corporate Volunteer programme 3,061 2,538 523 20.6Number of microloans granted 32,008 20,641 11,367 55.1

Welfare Projects

Welfare Projects budget 2010 Millions of euros %

Social programmes 356 71.2 Environmental and scientific programmes 62 12.4 Cultural programmes 55 11.0 Educational and research programmes 27 50.4 Total 500 100

2009”la Caixa” annual Report

Trust, social commitment and excellence in service

iDENTiFiCaTiON PaRTiCUlaRS

CAJA DE AHORROS Y PENSIONES DE BARCELONA, ”LA CAIXA”, was established on 27 July 1990 by the merger of Caja de Ahorros y Monte de Piedad de Barcelona, founded in 1844, and Caja de Pensiones para la Vejez y de Ahorros de Cataluña y Baleares, founded in 1904.

It is registered under number 1 in the Register of Catalan Savings Banks of the Directorate-General of Financial Policy of the Department of Economy and Finance of the Catalonia Autonomous Community Government.

On 16 November 1990, it was entered under number 3003 in the Barcelona Mercantile Register, in volume 20,397, page 1, sheet B-5614, first entry. It is registered with code number 2100 in the Bank of Spain’s Special Register of General Popular Savings Banks.

The Bylaws of ”la Caixa” were approved by the Department of Economy and Finance of the Catalonia Autonomous Community Government and may be examined by that Department, at the Bank of Spain or at the Mercantile Registry.

The Board of Directors calls the Annual General Assembly to be held during the first half of the calendar year. The notice of the Assembly is published in the «Boletín Oficial del Estado» (Official State Gazette), in the «Diario Oficial de la Generalitat de Cataluña» (Official Journal of the Catalonia Autonomous Community Government) and in at least one newspaper with a wide circulation in the area of operations of the Institution, in the period and under the terms established in the Bylaws of ”la Caixa”. In addition, an Extraordinary General Assembly may be called whenever deemed fit, as provided in the Bylaws, in the same terms and conditions as those set forth for the Annual General Assembly.

”la Caixa” is a member of the Savings Banks Deposit Guarantee Fund.

CaJa DE aHORROS Y PENSiONES DE BaRCElONa - ”la Caixa”Avenida Diagonal, 621-629. 08028 Barcelona, SpainTelephone: (34) 93 404 60 00Fax: (34) 93 339 57 03Telex: 52623-CAVEA E and 50321-CAIX E

Websitewww.laCaixa.es

2009 ”la Caixa” Annual Report

CONTENTS

The ”la Caixa” Group in 2009

”la Caixa” annual ReportCorporate Governance of ”la Caixa” The ”la Caixa” Group

Strategic Keys2009 Financial Report of the ”la Caixa” Group

1. High-quality profits in 20091.1. Business growth coupled with good profits and conservative write-downs 1.2. Positive margin evolution through efficiency and high returns 1.3. Welfare Projects1.4. Business segment reporting

2. Great commercial capacity: the strength of the banking business2.1. Sustained and balanced growth in banking activity2.2. Customer base: the core of the business2.3. Commercial network and human resources: cornerstones2.4. Multi-channel management: an ongoing relationship with customers2.5. Payment methods: a distinctive offering2.6. Innovation in customer services2.7. Quality and customer service: the groundwork for the future2.8. Supporting the business: ”la Caixa” subsidiaries

3. Investee portfolio3.1. Criteria CaixaCorp: Internationalising and diversifying income3.2. Venture capital and financing for entrepreneurs3.3. Active management of the ”la Caixa” Group’s investee portfolio

4. Active risk management4.1. Comprehensive risk management at the heart of strategy4.2. Credit risk4.3. Managing the risk in balance sheet positions4.4. Managing liquidity risk4.5. Managing operational risk4.6. Regulatory compliance risk management

5. High financial strength5.1. Excellent liquidity levels 5.2. Excellent capital adequacy levels5.3. ”la Caixa” Group ratings in the AA range

Report on ”la Caixa” Corporate Responsibility1. Our values, our continuing commitment2. ”la Caixa” with entrepreneurs3. Trust4. Excellence in service5. Social Commitment

”la Caixa” Welfare Projects 2009 annual Report Social ProgrammesEducational ProgrammesScience, Research and Environment ProgrammesCultural Programmes2009 Data of ”la Caixa” Welfare Projects

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2009 ”la Caixa” Annual Report 4

isidro Fainé Chairman I Juan María Nin President and CEO


THE ”la Caixa” GROUP iN 2009

Financial bottom line: quality and consolidation of the financial strengths, the outcomes of a year of strong commercial activity

The activity of the ”la Caixa” Group in 2009 was hit by the economic and financial crisis, with volatile financial markets, plummeting interest rates, a slowdown in activity and employment, a rise in non-performing loans and stiff competition in the banking industry. Against this backdrop, the intense commercial activity undertaken by ”la Caixa” with respect to its 10.5 million customers proved successful, strengthening its leading position with increased market shares. The banking business volume managed rose to EUR 415,825 million thanks to the great commercial strength of the Group, which includes 27,505 employees, 5,326 branches and 7,951 ATMs, and its leadership in online banking, mobile banking and payment systems.

The sustained increase in income and the stringent cost-containment policy resulted in a 12.3% increase in recurring net operating income which, after recognition of substantial provisions, placed the recurring profit attributable to the Group at EUR 1,710 million in 2009. In accordance with its strategy of utmost prudence, ”la Caixa” allocated in full its net extraordinary gains of EUR 249 million to extraordinary provisions for contingencies. Also, with a proactive vision, it recognised an additional post-tax provision of EUR 200 million for the future management of the business. The total profit attributable to the Group amounted to EUR 1,510 million.

The contained NPL ratio of 3.42%, much below the 5.08% ratio for the Spanish financial system, and the high NPL coverage ratio of 62% (127% including mortgage collateral), continued to evidence the quality of the lending portfolio. Also, the general credit loss allowance stood at EUR 1,835 million, ensuring a high degree of financial soundness against a backdrop of adverse outlooks. Hence, the balanced growth and the quality of profits, combined with conservative risk management policies, consolidated the high liquidity and capital adequacy levels, the financial strengths of ”la Caixa”. With regard to capital adequacy, core capital was in a pre-eminent position in the Spanish banking system with a ratio of 8.7%, and an excellent position was maintained in terms of total liquidity, with EUR 21,208 million, 7.8% of the Group’s assets.

”la Caixa” continued to develop its Strategic Plan 2007-2010, and its leading position in individual banking in 2009 led to the consolidation of the business specialisation model. In this regard, ”la Caixa” continued to promote the private banking division and business banking and completed the implementation of a specialised model for personal banking and SMEs banking (SMEs, self-employed professionals and retail stores), with nearly 1,800 specialised managers. Within the framework of its international expansion plan, ”la Caixa” opened the first operational branch of a Spanish bank in Morocco (Casablanca), and through its subsidiary Criteria CaixaCorp it entered into strategic investment and cooperation agreements with its investees The Bank of East Asia (14.99%) and Erste Group Bank (10.1%).

The quality, soundness and strength of the ”la Caixa” Group’s activity and profits in 2009 are evidential signs of its strategy of secure, efficient, profitable and solvent growth.



High-quality profits and stronger balance sheet performance with high, conservative provisions

The ”la Caixa” Group’s great commercial capacity, featuring a sound management policy for margins and for the services offered to the customers of its most traditional banking activity, and the positive trend of its investees’ income, brought about a substantial increase in total recurring income (gross income) to EUR 7,187 million in 2009, up 6.4% on 2008.

The stringent cost containment and streamlining policy restrained the increase in operating expenses to 1% which, together with the increase in total income, resulted in net operating income of EUR 3,622 million, a notable increase of 12.3%, with an ongoing improvement in the efficiency ratio, at 42.9% (–2.3).

The high level of profits earned on the Group’s recurring activities enabled it to recognise increased provisions, totalling EUR 2,821 million, of which EUR 2,092 million were charged to 2009 profit (EUR 1,401 million to recurring profit and EUR 691 million to extraordinary profit), giving rise to a net recurring profit of EUR 1,710 million, down 16.7%, with high returns (ROE at 11.3%).

Post-tax extraordinary gains amounted to EUR 249 million, and additional, unscheduled credit loss provisions and provisions for the investee portfolio were recognised for the same amount. Also, with a proactive vision, an additional post-tax provision of EUR 200 million was recognised for the future management of the business. Net attributable profit amounted to EUR 1,510 million, down 16.2%.

Great commercial capacity with growing business and market shares

The ”la Caixa” Group is committed to providing personalised quality service that is innovative and adapted to the needs of its customers through efficient multi-channel distribution, where the branch is at the heart of the relationship with the customer, with the support of leading-edge technology. ”la Caixa” is the leader in individual banking, with a penetration of 21.6%, i.e. one out of every five users of banking services in Spain is a ”la Caixa” customer; moreover, this leadership is confirmed for all age groups. The strategic objective, bolstered by the Group’s pre-eminence in individual banking, is to achieve leading positions in other segments, namely business banking, personal banking and private banking. The commercial activity is therefore focused on providing specialised service to the huge 10.5 million customer base through an appropriate segmentation process.

2009 was marked by the Group’s major commercial effort, with its banking business volume managed –customer funds plus loans and credits– increasing to EUR 414,825 million, up 0.4%, bolstered by the loans and credits portfolio, which rose by EUR 1,603 million to EUR 178,026 million, up 0.9%, with 1.1 million new transactions and EUR 104,045 million in credit risk approvals. In this regard, the credit granted throughout the branch network evidences the commitment of ”la Caixa” to the economic development of the territory, particularly with the 14% increase in loans and credits granted to businesses through the 80 specialised centres. Customer funds stood at EUR 237,799 million, with increases in current accounts and a prudent price and volume management approach, and strong growth in pension plans, insurance and investment funds.

The Group has 5,315 branches in Spain, the largest network in the Spanish financial system, and, owing to its wide-reaching model, it is a source of new jobs and wealth across the whole of Spain. The Group’s workforce numbers 27,505 employees, making ”la Caixa” one of Spain’s most important generators of employment.

As part of its international expansion plan, ”la Caixa” has eleven international branches, of which three are operational branches and eight are representative offices. In 2009 ”la Caixa” opened the first operational branch of a Spanish bank in Morocco (Casablanca) and started up its first representative office in Turkey (Istanbul) and the second in China (Shanghai). It also expanded its foreign trade business, increasing its share of export and import documentary credits to 9.4% and 12.7%, respectively.



One of the ”la Caixa” Group’s distinguishing features is its leadership in multi-channel management, evidenced by its 7,951 self-service terminals and massive use of the Línea Abierta internet channel (www.laCaixa.es), with over 6 million contract customers, 2.9 million of which are operational users. In 2009 ”la Caixa” consolidated its leadership in online banking services in Spain, with a market share of 30.1% and strong innovation in contents and ease of access to the internet channel. The 1.4 million customer mark was exceeded in the Caixa Móvil Service, which positions ”la Caixa” as the leader in mobile-based financial services with a market share of 52%. The extensive multi-channel support is also the basis for the commercial efficiency of the branches, which can establish personalised customer care as a priority.

The differentiated offering in payment systems positions ”la Caixa” as the top card issuer in the Spanish market, with 10.3 million cards in circulation and a market share of 17.7%. In terms of point of sale (POS) terminals, ”la Caixa” is the market leader with a network of 167,993 units and a 20.9% share of retail outlet turnover. To consolidate this market advantage, in 2009 ”la Caixa” continued to launch new innovative service offerings for businesses and retail stores.

Despite the crisis, the growth of the business in terms of funds and loans, the extensive branch network, efficient multi-channel management and sound customer segmentation have all reinforced the ”la Caixa” Group’s leading position in the Spanish banking market, with a general increase in the market shares. Loans and customer deposits had a share of 9.9% and 10.4%, respectively, life insurance and individual pension plan products stood at 13.4% and 15.6% respectively, and there was a notable increase in the market share for investment funds to 8.5%, up from 6.9% in December 2008, with managed assets of EUR 13,805 million. Also, as a result of the relationship with customers and intense commercial activity, ”la Caixa” also strengthened its positioning as a supplier of basic but high-value banking services, with the result that in 2009 it achieved market shares of 15.1% for payroll direct deposits and 15.6% for social security pension direct deposits.

Excellence in service is the framework within which ”la Caixa” wishes all its dealings with third parties to take place, with a commitment to continuous improvement in order to retain the trust of customers. This strong focus on service is endorsed by the fact that, according to the Bank of Spain, ”la Caixa” is the bank which has the fewest claims in relation to its financial activities. Other independent surveys have also rated ”la Caixa” as one of the best in the banking industry in terms of quality.

Criteria CaixaCorp: a vehicle for international expansion and investment in special-interest industries

Criteria CaixaCorp is the subsidiary encompassing substantially all of the ”la Caixa” Group’s investee portfolio and is responsible for implementing the Group’s investing strategy and international expansion, with a portfolio made up of equity interests in leading companies in the utility, international banking, insurance and specialised financial services industries which complement the products and services of ”la Caixa”. 2009 saw the continuation of the strategy aimed at rebalancing the investee portfolio, giving priority to investing in the financial industry, without excluding investments in special-interest services. In this regard, considering the investments made and committed since the flotation of Criteria CaixaCorp in 2007, the volume of investments in the financial industry in relation to the value of the assets rose to 33% in 2009, up from 17%.

Criteria CaixaCorp holds the following ownership interests in international financial institutions: 20% of GF Inbursa, 30.1% of Banco BPI, 14.99% of The Bank of East Asia, after the increase in its interest through the EUR 331 million subscription to a capital increase in January 2010, 10.1% of Erste Group Bank, an interest reinforced in 2009 basically through the EUR 635 million subscription to a capital increase, and 20.9% of Boursorama. Also, in the context of the internationalisation process, in 2009 ”la Caixa” and Criteria CaixaCorp signed strategic investment and cooperation agreements with their investees The Bank of East Asia and Erste Group Bank.



Also, Criteria CaixaCorp entered into an agreement to acquire Adeslas, the leading Spanish health insurer, for EUR 1,178 million, with the aim of reinforcing its dominant position in the health insurance industry. As a result, Adeslas will be integrated into the structure of SegurCaixa Holding in 2010. As part of this transaction, Criteria CaixaCorp agreed to sell Suez Environnement a 44.1% ownership interest in Agbar, in which it will continue to be a shareholder with an interest of between 15% and 25%, subject to the acceptance of Agbar’s delisting takeover bid which is underway.

In the context of its investments in utility companies, Criteria CaixaCorp subscribed to its share of the capital increase at Gas Natural (36.4% interest) for EUR 1,313 million as part of the merger with Unión Fenosa. Criteria CaixaCorp also entered into an agreement with Investindustrial, which became a 50% investor in the company operating the Port Aventura theme park, but retained the remaining 50%, plus 100% of the company that owns the land for residential and commercial use, the golf courses and the beach club, among others. Also, a 1% interest in Telefónica was sold in 2009, giving rise to consolidated net gains of EUR 249 million. Criteria CaixaCorp retained a 5.2% interest in this company at 31 December 2009.

The market value at 31 December 2009 of the listed investee portfolio of the ”la Caixa” Group amounted to EUR 20,118 million, with unrealised gains of EUR 3,945 million. In 2009 the market value of Criteria CaixaCorp rose by 18.5%, in line with its benchmark indexes IBEX 35 and Eurostoxx50.

Stringent risk management policy intensified

Within the framework of the proactive, conservative risk management policy which characterises ”la Caixa”, the Group continued its global, active and conservative management of all the business-related risks in the face of the complex, changing environment that marked 2009.

Particularly, the risk management and control structures were reinforced during the year and new risk approval systems based on expected loss were consolidated. Also, greater organisational resources were provided and new processes were defined for recovery management. In addition, work continued in the development of advanced scoring and rating techniques in risk acceptance processes and in risk assessment and monitoring mechanisms.

In the area of credit risk, the ”la Caixa” Group’s lending activity is geared towards meeting the financing needs of households and businesses and, accordingly, its lending activity is diversified and fragmented, as evidenced by the fact that 52% of the loan portfolio is in the hands of individuals. The lending portfolio is also strongly collateralised, since 66% is secured by mortgages with an average loan to value ratio of 49%. Following the application, at 2009 year-end, of principles of utmost prudence, the NPL ratio was 3.42% and the NPL coverage ratio was 62% (127% including mortgage collateral). The ”la Caixa” Group’s credit risk thus remains contained and ranks among the lowest of the Spanish financial system thanks to diversification, the value of collateral and a prudent risk coverage policy. In this regard, the notable general credit loss allowance of EUR 1,835 million, combined with the other financial strengths of ”la Caixa”, places the Institution in an extremely sound position to face new challenges.

Consolidation of the financial strengths: liquidity and capital adequacy. Very good ratings

Balanced growth, quality profit-making capacity in 2009, stringent risk management and prudent recognition of provisions consolidated the Group’s financial strengths with high liquidity and capital adequacy levels, in spite of the economic crisis.

Conservative and proactive management of liquidity and diversification of the sources of financing have always constituted a distinguishing feature of ”la Caixa” which places it in a sound position to deal with the growth



of the business and meet the credit needs of customers. In this regard, the liquidity position at 31 December 2009 was excellent at EUR 21,208 million, 7.8% of the Group’s total assets, substantially all of which were totally liquid.

The ”la Caixa” Group retained an outstanding capital adequacy level within the Spanish financial industry. Specifically, core capital stood at 8.7%, and Tier 1 and the capital ratio (BIS ratio) reached the high level of 10.4% and 11.0%, respectively, with a total eligible capital of EUR 17,251 million and a surplus over the minimum regulatory capital requirement of EUR 4,667 million.

The long-term ratings were confirmed in 2009 as being in the AA range, thereby consolidating the ”la Caixa” Group as one of the only three groups in the Spanish financial market rated by the three agencies within this range indicating very strong creditworthiness. All the rating agencies gave a highly positive assessment of the Group’s banking position in Spain, of the success of its strategy and its sound management practices, of the high quality of its assets and of its high liquidity and capital adequacy levels.

Sustainable bottom line: our values, our long-standing commitment

In 2009 ”la Caixa” developed an action strategy based on its corporate values of trust, service excellence and com-mitment to society.

Accordingly, the main lines of action in the area of corporate responsibility in 2009 were targeted at maintaining the financial support for businesses and individuals and their financing needs, and the commitment of ”la Caixa” to entrepreneurs was reinforced through the activities of MicroBank and of the Caixa Capital Riesgo managers. Also, private borrowers who experienced a fall in their income may take advantage of the measures introduced by the Group to help them pay their mortgage instalments.

Also noteworthy was the role of the ”la Caixa” Welfare Projects, which, for yet another year, were characterised by their commitment to people and the community. In 2009, priority was given to the implementation of social and community programmes, which accounted for 65% of the expended budget.

Social bottom line: thinking of people, more than ever before

In a difficult context such as that of 2009, the importance of fostering social, educational, cultural and environmental programmes to help meet people’s main needs takes on even greater relevance.

For this reason, ”la Caixa” chose to reinforce, now more than ever, its commitment to people. The financial institution earmarked EUR 500 million for its Welfare Projects budget. It is an unequivocal sign which evidences that the care for people has always been and will continue to be one of our top priorities. It is probably our most distinguishing feature.

The development of social programmes, tailored to meet the most significant needs emerging in the current circumstances, was once again the focus of most of our efforts. Overcoming child poverty, promoting employment and struggling against exclusion were the priority lines of action.

Struggle against child poverty and social exclusion

CaixaProinfancia is probably our most ambitious project. The aim of this project is to help break the spiral of poverty in which many minors in Spain are trapped as a result of precarious family situations, which in turn give



rise to a lack of educational opportunities, a deficient diet or unhealthy conditions. To date more than 140,000 children have received aid under this programme.

People with difficulties in finding a job are also trapped in this circle of exclusion. Aware that unemployment not only affects the unemployed but also has a bearing on society as a whole, the ”la Caixa” Welfare Projects has launched the Incorpora programme. It is probably our most brilliant programme. More than 9,400 companies have already joined us in the endeavour to provide decent employment for the most vulnerable groups, and 23,000 people have already found a job thanks to this programme.

Another major challenge to be faced by society is ageing. Older people are one of society’s main assets. Ensuring their well-being, their participation and full integration in society, fostering their self-sufficiency and preventing situations of dependence have been part of our commitment to society for more than 100 years. The programme for the elderly is, therefore, our most long-standing project.

Innovation has always played a significant role in Welfare Projects. Loyal to this spirit, in 2009 Welfare Projects consolidated our latest initiative, the programme of integrated care for the terminally ill and their families. With this programme we intend to provide aid to people who are in the last stage of their life, alleviate their suffering, contribute to making them feel properly cared for and guarantee that they and their families receive the appropriate emotional, spiritual and social care. 6,793 patients and 10,794 family members have already received attention within the framework of this programme.

In addition to the above lines of action, the ”la Caixa” Welfare Projects launched other projects aimed at covering various deficiencies in society. The promotion of affordable property rentals for the young, for families and for the elderly, drug consumption awareness and prevention, the integration of immigrants, the promotion of voluntary work or the grant of micro-loans through MicroBank were just a few.

To all these programmes we should add the 1,051 projects launched by associations throughout Spain which have been supported by Welfare Projects through their competitions for aid for social initiatives in 2009. All these projects were aimed at meeting the needs of society’s most disadvantaged groups, adapted to the characteristics and deficiencies of each territory in particular.

The ”la Caixa” Welfare Projects also act beyond the borders of Spain. The International Cooperation programme contributes to the eradication of extreme poverty in the most disadvantaged countries, where the lack of resources and diseases are very closely related. Aware of this, the ”la Caixa” Welfare Projects leads a vaccination programme targeted at children under five which immunised more than 425,000 children in 2009.

The expansion of knowledge is possibly one of the best ways of improving social welfare. In this regard, Welfare Projects fosters training for all types of groups. 221 university students had a chance to further their studies at the best universities in Spain and abroad thanks to the ”la Caixa” scholarships. This is completed, among others, by 40 beneficiaries of the programme of aid for biomedical research in Spanish scientific centres of excellence.

Research and the environment

Support for research also received a considerable boost from Welfare Projects in 2009. The opening of the Wider Centre for endoscopic surgery in Barcelona and the start-up of the RecerCaixa programme, which is geared towards encouraging research at Catalan universities, consolidate the commitment of ”la Caixa” in this connection.

Over recent years, the environment has become a primary issue within the fields of action of Welfare Projects. The Conservation of Natural Spaces and Social Rehabilitation programme contributes to the sustainment of the most valuable ecosystems in Spain, with priority being given to hiring the disadvantaged. In this regard,



the 292 environmental projects launched in 2009 led to the rehabilitation of 1,869 people at risk of social exclusion. The programme known as ”la Caixa” a favor del mar (”la Caixa” Supports the Sea) is focused on heightening awareness and knowledge of Spain’s rich marine biodiversity. The scientific commitment of Welfare Projects is completed with the huge informative and awareness-raising task undertaken by both the CosmoCaixa science museums in Madrid and Barcelona and by the travelling exhibitions on the environment. The latter included most notably the exhibitions which dealt with the origin of language, the evolution of mankind and the use of energy.

Culture as a tool for social integration

Culture is a powerful tool for people’s growth. Based on this principle, Welfare Projects is committed to the dissemination of culture in all of its various forms to an audience comprising all age groups and educational levels.

The CaixaForum social and cultural centres spread knowledge about major civilisations in the past, contemporary creation, music, literature and humanities. The CaixaForum model has consolidated its identity as the 21st century reference model. It comprises meeting points, open spaces and platforms for knowledge, and tradition and vanguard are brought together in the proposed programmes. The existing centres in Barcelona, Madrid, Tarragona, Lleida and Palma will soon be joined by the new centre in Girona. Also, in 2009 the CaixaForum centres in Zaragoza and Seville took the first steps towards their inauguration, which is scheduled for 2011 and 2015, respectively.

The proposals made by the proprietary centres are complemented with the cultural exhibitions offered by Welfare Projects, which travel throughout Spain. The legacy of Alphons Mucha –the father of Art Nouveau–, the Antoni Tapies engravings or the works of Joaquim Mir were the theme of just a few. Particularly worthy of mention is the programme known as Art al carrer (Art on the Street), which in 2009 brought sculptures of Auguste Rodin and Manolo Valdés to the streets of the main Spanish capital cities.

One of the new cultural developments undertaken by Welfare Projects in 2009 was the signing of two cooperation agreements with the Prado Museum in Madrid and the Louvre Museum in Paris. The new programme known as ”la Caixa” - El Museo del Prado. El arte de educar (”la Caixa” – The Prado Museum. The Art of Educating) will immerse students and families visiting Spain’s best art gallery in the methodology of the educational activities organised by the ”la Caixa” Foundation. In coming years, the agreement with the Louvre Museum will secure the exhibition of works and exhibitions originating from the Louvre at the CaixaForum centres. The talks on current affairs, poetry, cinema and music have completed a cultural programme that has proved highly popular with the public.

The year 2009 was, in short, marked by the confirmation, from all standpoints, of the social commitment of ”la Caixa” to people.

”la Caixa” Annual Report

Corporate Governance of ”la Caixa”

The ”la Caixa” GroupStrategic keys

2009 Financial Report of the ”la Caixa” Group1. High-quality profits in 20092. Great commercial capacity: the strength of the banking business 3. Investee portfolio4. Active risk management5. High financial strength


Governing BodiesGeneral AssemblyBoard of DirectorsControl Committee

Management



GOVERNiNG BODiES

Caja de Ahorros y Pensiones de Barcelona, ”la Caixa”, is a financial institution governed by Legislative Decree 1/2008, of 11 April, approving the Consolidated Catalan Savings Banks Law, and is registered in the special register of savings banks of the Catalonia Autonomous Community Government. As a savings bank it is a non-profit foundational financial institution serving the community, it does not depend on any other company and it engages in attracting, administering and investing the savings entrusted to it.

According to the powers established in the law and its Bylaws, ”la Caixa” is governed, ruled, run, represented and controlled by the General Assembly, the Board of Directors and the Control Committee.

General assembly

The General Assembly is the highest governing and decision-making body of ”la Caixa”. In addition to its general governing powers, the following duties also fall especially and exclusively within its powers:

• To appoint the Board of Directors and members of the Control Committee.

• To decide upon the reasons for the removal and revocation of the powers of the members of the governing bodies before the end of their term of office.

• To approve and amend the Bylaws and regulations governing the system for electing the members of the governing bodies.

• To resolve upon the change of registered office.• To resolve upon the alteration of the Institution’s legal form,

or its merger with other institutions, or make any decision affecting its nature, and resolve upon dissolution and liquidation.

• To define the general guidelines for the Institution’s annual action plan.

• To approve management of affairs by the Board of Directors, the notes to the financial statements, annual balance sheet and income statement, and the allocation of profit to the aims of ”la Caixa”.

• To approve management of Welfare Projects, and the related annual budgets and expenditure.

• To confirm the appointment of the President and CEO of the Institution.

• To designate, at the proposal of the Board of Directors, the community-interest entities that are able to appoint members of the General Assembly.

• To deal with any other matter submitted to it for consideration by the bodies empowered to do so.

The members of the General Assembly oversee that the interests of deposit holders and customers are safeguarded, that the Institution’s community-oriented aims in its area of influence are fulfilled and that the integrity of its assets is preserved, while setting the regulations guiding the Institution’s activities.

The stakeholder groups making up the General Assembly are represented in it. The Catalan savings banks law divides these stakeholder groups into four sectors:

a) The deposit holders;b) The founder entities and other community-interest entities;c) Local government corporations;d) The Institution’s employees;

The first three sectors always relate to the geographical scope of operation of ”la Caixa” and this requirement is also implicit in the fourth sector. Pursuant to the law, each of the above sectors must be represented in the following proportions:

a) Between 30% and 40% representing the deposit holders.b) Between 25% and 35% representing the founder entities

and other community-interest entities.c) Between 15% and 25% representing the local government

corporations.d) Between 5% and 15% representing the employees.

(36%)

(30%)

(21%)

(13%)

COMPOSITION OF THE GENERAL ASSEMBLY

Deposit holders

Local governmentcorporations

Founder and community-interest entities

Employees

Total 160

20 (13%)

48 (30%)

34 (21%)58 (36%)

“THE GENERal aSSEMBlY iS THE HiGHEST GOVERNiNG aND DECiSiON-MaKiNG BODY OF ”la Caixa””



Caja de Ahorros y Pensiones de Barcelona has stipulated these percentages in its Bylaws in the following manner, on a total of 160 General Assembly members:

a) 58 members representing the deposit holders (36.25%).b) 48 members representing the founder entities and other

community-interest entities (30%).c) 34 members representing the local government corporations

(21.25%).d) 20 members representing the employees (12.5%).

General Assembly Meetings may be either annual or extraordinary. Annual Assembly Meetings are held once a year within the first six months of the calendar year to approve, where applicable, the notes to the financial statements, the balance sheet, the income statement, the proposed allocation of surpluses and the proposed transfer to the Welfare Projects, and to reappoint, where required, positions on the Board of Directors and the Control Committee, and to discuss and make decisions in relation to the other matters and proposals on the agenda. Extraordinary Assembly Meetings are held as and when they are called, and may only deal with the purpose for the meeting.

Board of Directors

Pursuant to the law, the Board of Directors is the body appointed by the General Assembly to govern, manage run and represent the savings bank and may be made up of a minimum of 10 and a maximum of 21 members. Its composition must reflect the composition of the General Assembly.

The Board of Caja de Ahorros y Pensiones de Barcelona is made up of 21 members. As the largest savings bank in Spain, it is reasonable for it to have chosen to appoint the maximum number of Board members (and General Assembly members) to ensure that its governing bodies are as representative as possible, both in terms of the four stakeholder groups represented and from a geographical standpoint, in view of the areas where the Institution carries on its activities and the close ties that savings banks have in the territories where they operate. This relationship is especially clear in the way in which its Welfare Projects are distributed.

The Board of Directors is made up of:

• Eight directors representing deposit holders, of which six must be elected from among the General Assembly members representing this sector, and two may be elected from among

non members meeting the appropriate professional conduct requirements.

• Six directors representing the founder entities or community-interest entities, elected from among the General Assembly members representing this sector.

• Four directors representing local government corporations, of which two must be elected from among the General Assembly members representing this sector and two may be elected from among non members meeting the appropriate professional conduct requirements.

• Three directors representing employees, elected from among the General Assembly members representing this sector.

Board meetings are also attended by the President and CEO of ”la Caixa”, who has the right to speak and vote by law.

The Welfare Projects Committee and the Executive Committee are delegate committees of the Board of Directors.

Welfare Projects Committee

The role of the Welfare Projects Committee is to submit for approval by the Board of Directors all new welfare projects for which support has been sought from ”la Caixa”, and the budgets for existing projects, and to manage and run the projects, guided by economic rationality concerns and the aim

“THE BOaRD OF DiRECTORS DECiDES UPON THE STEPS TO BE TaKEN TO CaRRY OUT THE aiMS aND OBJECTiVES

OF ”la Caixa””

COMPOSITION OF THE BOARD OF DIRECTORS

Total 21

3

6

48

(38%)

(29%)

(19%)

(14%)

Deposit holders


Founder and community-interest entities

Employees



to serve, to the fullest extent possible, the general interests of the territory where they are carried out.

The members of the Welfare Projects Committee are the Chairman of the Board of Directors and eight people elected by the Board of Directors from among its members, in proportion to the sectors represented on the Board. Committee meetings are also attended by the President and CEO of ”la Caixa” and the Executive Vice-President in charge of Welfare Projects.

Executive Committee

The Executive Committee is the permanent delegate body of the Board of Directors. Its powers are all those delegated by the Board of Directors and those attributed to it under the Bylaws, mainly in relation to activities concerning management, disposal, taxation and ownership, as well as the exercise of the administrative, court and out-of-court actions to which the ”la Caixa” is entitled.

The following Board members sit on the Executive Committee: the Chairman, the Deputy Chairmen and four members, one from each of the sectors represented at the General Assembly. Meetings are also attended by the President and CEO of ”la Caixa”.

The Investment Committee and the Remuneration Committee are formed within the Board of Directors and play an informative role.

investment Committee

The role of the Investment Committee is to inform the Board of Directors or the Executive Committee of the investments or divestments which, in accordance with current legislation, are of a strategic and stable nature. It also informs on the financial viability of these investments and how they fit in with the Institution’s budgets and strategic plans. Current legislation defines “strategic” as the purchase or sale of a significant investment in a listed company or participation in business projects with a presence on managing or governing bodies implying a total investment by ”la Caixa” of over 3% of its eligible capital.

The Investment Committee consists of the Chairman of the Board of Directors and two directors, chosen according to their specialist skills and professional experience. Meetings are also attended by the President and CEO of ”la Caixa”.

Remuneration Committee

The role of the Remuneration Committee is to inform the Board of Directors or the Executive Committee of the general remuneration and incentive policy for the members of the Board of Directors and management personnel.

The Remuneration Committee consists of the Chairman of the Board of Directors and two directors. Meetings are also attended by the President and CEO of ”la Caixa”.

Control Committee

The role of the Control Committee is to act as an independent supervisory body of the Board of Directors which is not subordinate to the latter. Its supervisory role not only encompasses financial issues but it also plays a significant part in the Institution’s election processes and can even recommend to the Department of Economy and Finance of the Catalonia Autonomous Community Government that any Board resolutions it considers to contravene current legislation be suspended.

Its composition must reflect the proportional representation of the various stakeholder groups in the General Assembly. Moreover, there may be no duplication of representatives so that no institution may have representatives on both the Board of Directors and the Control Committee at the same time.

To carry out these duties the Control Committee has the following powers:

• To supervise management of affairs by the Board of Directors, while overseeing that their decisions are consistent with the guidelines and resolutions of the General Assembly and with the aims of the Institution.

• To monitor the functioning of and the tasks carried out by the Institution’s supervisory bodies.

• To examine the external auditors’ reports and be familiar with the recommendations made by the auditors.

• To review the balance sheet and income statement for each year and make such observations as it sees fit.

• To report on its activities to the General Assembly at least once a year.

• To request that the Chairman call an extraordinary General Assembly Meeting whenever it sees fit.

• To supervise elections for members of the General Assembly and Board of Directors, jointly with the Department of



Economy and Finance. Also, the Control Committee will often supervise elections for new Control Committee members.

• To examine the reports of the delegate Welfare Projects Committee and issue its opinion thereon.

• To propose to the Department of Economy and Finance to suspend the Board of Directors’ resolutions if they contravene current legislation.

• All of the duties conferred upon the Audit Committee by virtue of additional provision eighteen of Securities Market Law 24/1998, of 28 July, with regard to the powers not conferred with the aforementioned functions, in particular:

a) To inform the General Assembly of issues arising in their committee meetings in relation to matters of their competence.

b) To propose the appointment of external financial auditors to the Board of Directors for submission to the General Assembly.

c) To supervise internal audit services.d) To be familiar with the financial information process and

internal control systems.e) To contact the external auditors to receive information

on any issues that could jeopardise their independence, including issues related to the audit process and any other communications envisaged in current legislation.

• Any other powers conferred upon it by the General Assembly within the guidelines set in the above paragraphs.

The Control Committee has nine members elected by the General Assembly from among its non-director members, in the following proportions:

• Three members from the deposit holders sector.• Three members from the founder and community-interest

entities sector. • Two members of the local government corporations sector.• One member from the employees sector.

In addition to the above bodies, also remarkable is the office of the President and CEO of ”la Caixa” as the executive who is responsible under the law for implementing the resolutions of the Board and carrying out the other duties entrusted to him in the Institution’s Bylaws or regulations. The post of President and CEO is especially important as, in addition to being appointed by the Board, the office must be confirmed by the General Assembly, as must the removal from the role. Moreover, under Catalan law the President and CEO sits on the Board of Directors in a speaking and voting capacity.

Therefore, there is a separation between the various bodies with different functions which acts as a means of control and provides a balance, in line with good corporate governance practices. Each of the governing bodies contains a suitable proportion of the various sectors, thereby maintaining the same balance.

Regime applicable to members of the Governing Bodies

With respect to the characteristics of Board members, it should be noted that the qualifications on use in codes of governance do not apply to savings banks since, due to their foundational nature, they may not have proprietary directors. All of the members belong to or represent a specific stakeholder group, although the deposit holders and local government corporations sectors may appoint up to two members of the Board of Directors for each of these sectors from among persons who are not members of the General Assembly but meet the requirements concerning professional conduct, without this resulting in the removal from the Board of representatives of those groups who are also General Assembly members.

Under applicable legislation, the following persons shall be disqualified from holding office in the General Assembly and on the Board of Directors and Control Committee:

COMPOSITION OF THE CONTROL COMMITTEE

Total 9

1

3

23

(33%)

(33%)

(22%)

(11%)

Deposit holders


Founder amd community-interest entities

Employees

“THE CONTROl COMMiTTEE OVERSEES CORRECT MaNaGEMENT OF aFFaiRS BY THE BOaRD OF DiRECTORS”



a) Undischarged bankrupt traders or non-traders, as well as persons subject to judgments that disqualify them from holding public office.

b) Those who breached their obligations to ”la Caixa”, prior to or during their appointment to office.

c) Board members and members of the governing bodies of more than three business corporations or cooperatives, the chairmen, general managers, directors, CEOs, board members, executives, managers, advisors and employees of other credit institutions or companies dependent thereon, or of Caja de Ahorros y Pensiones de Barcelona itself, except where they hold such positions in the interests of Caja de Ahorros y Pensiones de Barcelona, and of corporations or entities that promote, support or guarantee credit institutions or establishments. This includes the holders of posts in any commercial company, except: • Where the post is held, in their own name or otherwise, on

the direct or indirect recommendation of Caja de Ahorros y Pensiones de Barcelona and is exercised in its interests.

• Where the post is held solely for the purposes of carrying out the holder’s commercial or professional activities.

• Where the post is held in a company which does not carry on independent commercial activity on a regular basis and which belongs to a family group of which the post holder, his/her spouse, ascendants or descendants form a part.

• Where the post is in a company belonging to other companies included in the calculation in accordance with the provisions of this Article.

Notwithstanding the above rules for calculating the number of members of the Board of Directors, under no circumstances may members of the Board of Directors sit on the Board of more than eight commercial or cooperative companies, whether or not they are included in the limit established in the rules.

d) Public servants with duties directly related to the activities of savings banks.

e) Those holding public offices by political appointment of public authorities and the Chairman of the founder institution or corporation.

f) Those who have held the offices of Board Member or President and CEO for more than 20 years in the same savings bank or in an another which has been absorbed or merged.

The term of office of the members of the General Assembly, the Board of Directors and the Control Committee is six years, and they may be reappointed for a second term if they meet the conditions for appointment, up to a maximum term of 12 continuous or uninterrupted years. The calculation of this limit does not include any time when the office may have been discharged through delegation, since the term must be

calculated entirely in relation to the original office-holder. Eight years after expiry of the previous term, the calculation of the 12-year limit starts again.

In addition, members of the General Assembly, of the Board of Directors and the Control Committee may not be linked to ”la Caixa” or to companies in which ”la Caixa” has an investment of more than 25% due to contracts for project work, services, supplies or paid work during the period in which they hold such office and in the two years following their removal, except in the case of an employment relationship when they are members representing the employees.

Moreover, the grant of loans, guarantees and sureties to members of the Board of Directors or the Control Committee, or to the President and CEO or to their spouses, ascendants, descendants and second-degree relatives, as well as to companies in which such persons hold an ownership interest which, individually or jointly, is a majority interest, or in which they hold executive office, must be approved by the Board of Directors or by the Executive Committee (as authorised by the Board and reporting to it) and expressly authorised by the Department of Economy and Finance of the Catalonia Autonomous Community Government.

This regime is also applicable to transactions performed by the above individuals or legal entities for the purposes of transferring the assets, rights or securities they own, or that were issued by them, to the Institution. Transactions performed by individuals not exceeding a total of EUR 139,675 and by legal entities not exceeding EUR 349,196 are generally approved. However, transactions with legal entities in which the executive acts on behalf of the Institution and has no personal or family financial interest, either directly or through a nominee, do not require authorisation.

From another standpoint, since the Institution issues securities, Caja de Ahorros y Pensiones de Barcelona is subject to the Internal Rules of Conduct of the Securities Market, approved by the Spanish Federation of Savings Banks, to which it adhered by a resolution of the Board of Directors dated 19 July 2007, amended by a subsequent resolution dated 18 September 2008, in accordance with a change to the Internal Rules. These Rules regulate various issues such as the general rules, transactions carried out by parties subject to the Rules on their own behalf, the prevention of abuse of the market, the conflicts of interest management policy, the depositary arrangements for collective investment schemes and pension funds and the application of the Rules. Therefore, the Rules have been adapted to the latest changes with respect to this subject matter, introduced by the Securities Market Law



and implementing regulations, which, in turn, has been implemented and completed by a Circular approved by the Board of Directors on 23 October 2008, which relates to specific areas such as the control and compliance structure, the scope of application and transactions carried out by parties subject to the Rules on their own behalf, separate areas and information barriers, abuse of the market, suspicious transactions reporting and conflicts of interest policy.

Other Corporate Governance measures

Having set forth above the legal regime applicable to the governing bodies of Caja de Ahorros y Pensiones de Barcelona, there follows a description of certain measures adopted by the Institution concerning Corporate Governance:

1) To counter one of the accusations traditionally made against savings banks that they are subject to excessive political influence, Caja de Ahorros y Pensiones de Barcelona chose a system for the election of members of the General Assembly to represent deposit holders based on delegates drawn by lots and elected by the General Assembly members from among the delegates in each electoral district, since a direct electoral system could distort representation of these interests as there are very few organisations of the same size as ”la Caixa”, besides the political parties, to organise candidatures and a genuine electoral campaign throughout the territory where they operate. The aim of using a system of delegates who are elected in each electoral district is to prevent the election of deposit holders’ representatives from being affected by politics and to prevent politics from having an excessive influence on ”la Caixa”.

2) With regard to the duties attributed by the Spanish Companies Law to the Audit Committee (which is a body appointed by the Board of Directors), in accordance with the Bylaws of Caja de Ahorros y Pensiones de Barcelona, the Institution has opted to have such duties discharged by the Control Committee, since it is an independent body from the Board of Directors and this system enables thorough compliance with good governance guidelines.

3) The Institution has chosen to establish the maximum age for its Board members as well as Control Committee members

at 78, although the member in question may continue to discharge office until the first Annual General Assembly following his 78th birthday. In addition, in order to avoid short-term appointments, members must be under 75 years of age when elected.

4) The Bylaws of Caja de Ahorros y Pensiones de Barcelona also stipulate that persons belonging to the Board of Directors or Control Committee of another savings bank or financial or credit institution are disqualified from taking a seat on the Institution’s Board of Directors.

Public or private entities and local government corporations represented on the Board of Directors or Control Committee of another savings bank may not have the same representatives on the Control Committee of Caja de Ahorros y Pensiones de Barcelona.

Lastly, in line with the corporate governance recommendations vis-à-vis the flotation of the subsidiary Criteria CaixaCorp, S.A., on 19 September 2007 ”la Caixa” signed an Internal Relationship Protocol with Criteria CaixaCorp, S.A. The purpose of the Protocol is to govern the relationship between ”la Caixa” and Criteria CaixaCorp, S.A. and their respective groups, with the aim of defining the required mechanisms to guarantee the appropriate degree of coordination, and to ensure that it inures to the benefit and common interest of the ”la Caixa” Group (to which Criteria CaixaCorp, S.A. belongs) and of the listed company, while ensuring due respect and protection for the other shareholders of Criteria CaixaCorp, S.A. within a framework of transparent relations. In addition, an objective of the Protocol is to strike a balance in the operating relations so as to minimise and regulate conflicts of interest while responding to the requirements of the markets and the regulators.

In accordance with the above objectives, the areas governed by the Protocol are the principles and objectives, the main areas of activity of the Criteria CaixaCorp group, the intra-group operations and services, the flows of information and the follow-up of the Protocol. The Protocol is available on the websites of the Spanish National Securities Market Commission (www.cnmv.es) and Criteria CaixaCorp, S.A. (www.criteriacaixacorp.es).



General assemblyat 31 December 2009

Honorary ChairmenJuan Antonio Samaranch

José Vilarasau

Ricardo Fornesa

ChairmanIsidro Fainé

First Deputy ChairmanSalvador Gabarró

Second Deputy ChairmanJordi Mercader

Third Deputy ChairmanJavier Godó

Secretary (non director)Alejandro García-Bragado

Deputy Secretary (non director)Óscar Calderón

MembersAlejandro Aguilar

Luis Enrique Alameda

Núria Aloy

Estrella Amoedo

Joan Albert Argenter

Maria Artigas

Eva Aurin

Enrique Azpeleta

Enric Bach

Ramon Josep Badia

Joan Badia

Francisco Javier Báez

Albert Balcells

Victòria Barber

Antoni Baron

María Teresa Bartolomé

Maria Teresa Bassons

Albert Batalla

Ferran Bel

Robert Benaiges

Josefa Benavent

Antoni Joan Bertomeu

Macià Bibiloni

Ruth Bolaños

Fernando Bonet

Carles Bonet

Guillem Boscana

Mª del Carmen G. Bruach

Francesc Cabana

Montserrat Cabra

José Luis Calvo

José Ramón Calvo

Joaquín Calvo

Aina Calvo

Francesc d’Assís Carbonell

Jordi William Carnes

Antonio José Carrique

Marc Casadellà

Ferran Casado

Xavier Casoliva

Jaume Castán

Josefina Castellví

Ramon Clotet

Miguel Coca

Josep Colomer

Susana Company

Maria Crespo

Josep Antoni Díaz

José Luis Echavarría

Óscar Luis Egea

Irene Erra

M. Àngels Esteller

Josep Fabra

José Antonio Fayas

José Manuel Fernández

Albert Fernández

Carlos Fernández-Lerga

M. Teresa Ferrés

Joana Font

Llorenç Fontan

Joaquim Forn

Josep Antoni Frias

Josep Fullana

Rafael Gabriel

Maria Cristina Galindo

Bárbara García-Andrade

Rosa Garicano

Joan Gaspart

Joaquim Gay de Montellá

Pere Gifré

Jaume Gil

Maria Mercè Giné

Albert Gras

Josep-Delfí Guàrdia

Carlos Güell

José Guirao

Monika Habsburg

Anna Hernández

Rafael Hinojosa

Alicia Huerta

Lluís Jerez

Inmaculada Juan

Enric Lacalle

Juan-José López

Montserrat López

Mario López

Catalina Llibre

Dolors Llobet

Manuel Llorca



Miguel Martín

Gustavo Martínez

Ferran Mascarell

Ramon Masià

Josep Maria Mauri

Josep Mayoral

Vicente Miguel

Francesc Josep Miró

José María Momblant

Rosa Maria Mora

Ángel Morales

Joan Andreu Morant

Antoni Maria Muntañola

María Antonia Muñoz

Pere Navarro

Carlos Nieto

Miquel Noguer

Enric Nosàs

Justo Bienvenido Novella

Lluís Obiols

Albert Ollé

Nuria Ortega

Antonio Padilla

Anna Pagans

Jordi Pàmies

Anton Pàmies

Jordi Panal

Xavier Parés

Víctor Ignacio Pascual

Francisco Javier Pérez

Celia Pino

Maria Carme Piqué

Joan Pons

Jordi Portabella

Ramon Pou

Maria Rosa Pujol

Enrique Quijano

Francisco Ramírez

Francisco Ramos

Xose Mario Rey

Lluís Riera

Óscar Rionegro

Miguel Ángel Roa

Josep Roca

Leopoldo Rodés

Jordi Roglà

Àngel Ros

Josep Manel Ruiz

Gaspar Sabater

María del Carmen Sanclemente

Carlos Santana

Pablo Saravia

José Antonio Segarra

Mariano Serra

Alfredo Santiago Serrano

Joan Sierra

Juan Antonio Socías

Roser Soldevila

Benet Triquell

María Ángeles Trouillhet

Sandra Maria Van Dellen

Josep M. Vila

Alfonso Vilá

Josep Vilaró

Jaume Vilella

Nuria Esther Villalba

Francisco Villoslada

Jeroni Vinyet

Josep Francesc Zaragozà

Executive Officers

President and Chief Executive Officer Juan María Nin

Senior Executive Vice-PresidentsAntonio Massanell

Tomás Muniesa

Marcelino Armenter

Juan Antonio Alcaraz



Board of Directorsat 31 December 2009





DirectorsVictòria Barber

María Teresa Bartolomé

Maria Teresa Bassons

Montserrat Cabra

Aina Calvo

Josep-Delfí Guàrdia

Monika Habsburg

Inmaculada Juan

Juan-José López

Montserrat López

Dolors Llobet

Rosa Maria Mora

Miquel Noguer


Leopoldo Rodés





Executive Officers

President and Chief Executive Officer

Juan María Nin

Senior Executive Vice-PresidentsAntonio Massanell

Tomás Muniesa

Marcelino Armenter

Juan Antonio Alcaraz





Members Inmaculada Juan

Dolors Llobet

Miquel Noguer

Leopoldo Rodés



Executive OfficersPresident and Chief Executive Officer Juan María Nin

Welfare Projects Committeeat 31 December 2009

Executive Committeeat 31 December 2009


Members Salvador Gabarró

Jordi Mercader

Javier Godó

Montserrat Cabra

Aina Calvo

Juan-José López

Montserrat López




Executive OfficersPresident and Chief Executive Officer

Juan María Nin

Executive Vice-PresidentJaime Lanaspa


Members Javier Godó

Dolors Llobet



Executive OfficersPresident and Chief Executive OfficerJuan María Nin

Remuneration Committeeat 31 December 2009

investment Committeeat 31 December 2009


Members Salvador Gabarró

Jordi Mercader



Executive OfficersPresident and Chief Executive Officer

Juan María Nin



Control Committeeat 31 December 2009

ChairmanJaume Gil

SecretaryÀngel Ros

MembersJosefina Castellví

Josep Antoni Frias

Josep Fullana

Albert Gras

Maria Rosa Pujol

Carlos Santana

Joan Sierra



MaNaGEMENTSteering Commitee

Isidro Fainé Chairman Juan María Nin President and Chief Executive Officer

Antonio Massanell Senior Executive Vice-PresidentTomás Muniesa Senior Executive Vice-PresidentMarcelino Armenter Senior Executive Vice-PresidentJuan Antonio Alcaraz Senior Executive Vice-President

Francisco Javier Coll Human Resources Executive Vice-PresidentAlejandro García-Bragado General SecretaryJaume Giró Communication, Institutional Relations & CSR Executive Vice-PresidentJaime Lanaspa Welfare Projects Executive Vice-PresidentJoaquim Vilar Financial Executive Vice-President

Management President and Chief Executive OfficerJuan María Nin

Senior Executive Vice-PresidentsAntonio Massanell Tomás Muniesa Marcelino Armenter Juan Antonio Alcaraz

Executive Vice-Presidents

HEAD OFFICE

Ignacio Alegre Global Risk ManagementIgnacio Álvarez-Rendueles International BankingFrancisco Javier Coll Human ResourcesLuis Deulofeu IT ServicesElisa Duran Deputy to the ”la Caixa” Chairman’s OfficeJesús Escolano Risk - Analysis and ApprovalJoan Fábrega Network business - International BankingAlejandro García-Bragado General Secretary’s OfficeJaume Giró Communication, Institutional Relations & CSRJaime Lanaspa Welfare ProjectsRobert Leporace RecoveriesSebastià Sastre Legal ServicesJoaquim Vilar Financial Division

gEnErAl ArEA MAnAgErS

Evaristo del Canto Castile-Leon and Castile-La ManchaJuan Carlos Gallego MadridJoan Ramón Fuertes Balearic IslandsJuan José Muguruza Northern SpainBibiano Manuel Martínez Levante - MurciaAndrés Orozco Canary IslandsJuan Reguera Southern SpainManuel Romera Catalonia



general Managers / Area Managers

gEnErAl MAnAgErS

Manuel Barrachina Organisation and QualityLuis Cabanas Business BankingFernando Cánovas MarketsJulián Cabanillas General Services ManagementPablo Arturo Forero Asset ManagementJuan Miguel Gandarias Private and Personal BankingJuan Antonio García Banking ServicesJordi Gual Research DepartmentJuan Llopis Internal AuditM. Victòria Matia Electronic BankingManuel Fdo. Menéndez Investment BankingJosep Ramón Montserrat Property, SMEs and Individuals RiskOriol Ordax Validation and Technical Secretary’s OfficeJavier José Paso Tax AdvisoryÀngel Pes Corporate Responsibility and Brand

ArEA MAnAgErS

Marc Arthur Benhamou GaliciaJosé Alberto Gutiérrez South Western MadridMiquel Àngel Pla Barcelona CityFrancisco Cornejo Córdoba and MálagaJosé Ramón Cuesta Castile-LeonRafael Fernández Eastern MadridEnrique Pujol LleidaJesús Lorenzo Alonso North Western MadridJordi Nicolau GironaAntonio Gómez de Figueroa Castile-La ManchaVíctor Guardiola Murcia and AlicanteJosé Manuel Bilbao Basque CountryJuan Ignacio Zafra Granada, Jaén and AlmeríaJosé Francisco Macario Valencia and CastellónRaúl José Marqueta Aragon, Navarre and La RiojaAmparo Martínez TarragonaMiguel Ángel Palanco Extremadura, Cádiz and HuelvaJaume Torrents Barcelona ProvinceVictorino Lluch SevilleCarlos Javier Serrano Asturias and Cantabria

BUSInESS BAnKIng ArEA MAnAgErS

Juan Pedro Badiola Nothern SpainMaría de las Cruces Rivera MadridFrancisco Costa Levante-MurciaMaría Jesús Català CataloniaJuan Antonio Pérez Castile-Leon and Castile-La ManchaFelipe Pulido Southern Spain

PrIVATE BAnKIng ArEA MAnAgErS

Lluís Caballé CataloniaJuan Andrés Llamas MadridAna Guzmán Nothern Spain



Division HeadsRicardo Agramunt Commercial PositioningTeresa Algans QualityVíctor Manuel Allende Private and Personal Banking Business DevelopmentJoan Alfons Álvarez Regulatory ComplianceFernando Arce Structured Finance-BusinessesIgnacio Badiola Infrastructure BusinessJosé Ballbé Territorial AuditJuan Manuel Bermejo International Branches and BusinessTomàs Bravo Customer Treasury DivisionAlfredo Bustillo Communication and Sponsorship ServicesVicenç Buxarrais Counterparty RiskPere Capella Institutional RelationsNatividad Capella Market Risk ControlÓscar Valentín Carpio Corporate and Public Sector RiskPere Lluís Carrera Human Resources Employment Law-Legal ServiceCarles Casanovas Marketing and Advertising ServicesJuan Cebrián Credit Risk Methodology and ModelsJosep Lluís Compte Expenditure ControlCarlos de Parias Corporate and Acquisitions DivisionÁngel José Díez Corporate FinanceAna María Díez Foreign TradeCarles Feliu Brand and Corporate ImageMiguel Ángel Fernández SecurityMarta Fina Organisation and EfficiencyJordi Fontanals Multichannel Information SystemsJavier Ceferino Garcia-Lluís Transactional BankingErnesto Gil AccountingAdolfo Gómez Financial Audit and Risk ManagementFrancesc Xavier Gómez SolvencyCarles Gramunt Corporate BankingPere Huguet Technical Secretary to the President and CEO’s OfficeJordi Ibern Credit Risk Analysis and MonitoringMaría Beatriz Kissler Banking Operating ServicesJesús Antonio Losa Energy FinancingJavier Marín Martínez Distribution and OriginationMaría Luisa Martínez Communication and SponsorshipJuan Masjoan Compliance and Investee AuditJordi Mondéjar Management and Expenditure ControlIgnacio Moreno de Guerra Commercial Information ManagementJuan Morlà CardsMaría Isabel Munuera Market Operating ServicesJosé Javier Nicolás Personal BankingFelipe Augusto Oriol Banking Strategic AlliancesJavier Pano TreasuryJosep Parareda SMEs BankingJuan José Pelayo SyndicationsLuis Enrique Pérez Business DevelopmentJavier Ignacio Peyra Approval Policies and ProceduresMª Luisa Retamosa Media AuditJosé María Rifé Default ManagementJoan Rosás International Financial Institutions and Representative OfficesFrancisco Emilio Ruiz Administration of Own and Investee PortfoliosAlfons Salvó Human Resources ManagementAlbert Soler Structured FinanceDaniel Torras Human Resource Selection and DevelopmentÀlex Valencia Balance Sheet Risk Analysis

The ”la Caixa” Group

Strategic Keys Mission and Vision and ValuesTriple Bottom Line: Financial, Social and Sustainable

This section of the 2009 Annual Report describes Management’s perspective on and analysis of the ”la Caixa” Group’s strategic keys: Mission, Vision and Values, and the goal of implementing the Triple Bottom Line - Financial, Social and Sustainable.

The ”la Caixa” GroupStrategic Keys


“THE MISSION AND THE VISION OF ”LA CAIXA” AS BASIC FACTORS FOR THE

STRATEGIC DEVELOPMENT OF THE GROUP”

“THE DEFINING VALUES OF ”LA CAIXA” UNDERPIN THE INSTITUTION’S STRATEGY”

THE ”LA CAIXA” GROUP: STRATEGIC KEYS Mission, Vision and Values

Caja de Ahorros y Pensiones de Barcelona, ”la Caixa”, was established in 1990 as a result of the merger of Caja de Pensiones para la Vejez y de Ahorros de Cataluña y Baleares, founded in 1904, with Caja de Ahorros y Monte de Piedad de Barcelona, founded in 1844, and it is therefore the lawful universal successor to the personality of those institutions, namely their nature, aims, rights and obligations.

It was established as a non-profit financial institution providing beneficent, community services with a private board of trustees, and is separate from any company or institution.

The object of ”la Caixa” is to encourage all authorised forms of saving, to carry out beneficent work for the well-being of the community and invest the related funds in safe and profitable assets of general interest.

The basic aims set forth in its Bylaws are as follows:

• To encourage savings as the individual economic expression of collective interests.• To encourage providence generally as the expression of an individual and collective interest.• To provide financial and social-interest services.• To finance and support beneficent and/or social-interest activities.• To develop the Institution so as to enable it to fulfil its aims in the most appropriate manner.

The Mission and Vision of ”la Caixa”, which are its strategic keys, have been shaped by its origins, object and basic aims and constitute a reference for the Institution’s future. Its values, on the other hand, form the foundation on which its strategy stands.

Mission

The Mission of an institution defines its reason for existing, its aims and the basic objective to be achieved, vis-à-vis the various stakeholder groups.

The Mission of ”la Caixa”:To encourage saving and investment by offering the best and most comprehensive range of financial services to the greatest number of customers and make a decisive contribution to society to provide flexible tailored coverage of basic financial and social needs.

Vision

Its Vision is a projection, an image of the institution’s future in the long term.

The Vision of ”la Caixa”:Leading financial group in the Spanish market generating value for its customers, employees and for society.

Values

The strategic activity of ”la Caixa” is underpinned by its defining values, guidelines and characteristic convictions. The Institution’s most important values are: Trust based upon honesty and respect for people, Excellence in service based on professionalism and innovation and a Commitment to society, whereby society forms the backbone of its activities.

The ”la Caixa” Group


Triple Bottom Line: FINANCIAL, SOCIAL AND SUSTAINABLE

The objectives of ”la Caixa” go beyond the strictly financial concerns of achieving safe, efficient, profitable and solvent growth, to focus on other areas that give shape to its strong commitment to society, by reinforcing welfare activities to cover basic needs in a proactive and flexible manner, and its commitment to sustainability, which is defined as responsibility and ethical conduct in all of the activities it carries out, which generate trust and the Institution’s corporate reputation.

This approach represents an investment in the future, in which the commitments “la Caixa” has acquired will contribute towards increasing the Group’s overall returns and generating value for society. The objective is to place ”la Caixa” at the forefront of the Spanish financial industry and make it a leader in household and business banking.

“MAXIMISING IMPLEMENTATION OF THE TRIPLE BOTTOM LINE AS A GUARANTEE

FOR THE FUTURE”

SOCI

AL

BOT

TOM LINE SUSTAINABLE BOTTOM

LINE

”la Caixa”Group

FINANCIAL BOTTO M LI

NE

2009 Financial Report of the ”la Caixa” Group

1. High-quality profits in 2009

2. Great commercial capacity: the strength of the banking business

3. Investee portfolio

4. Active risk management

5. High financial strength

This section of the Annual Report describes the key features which may aid interpretation of the Group’s overall economic and financial performance in 2009, within the context of its business and risk management setting. The most significant details of these key features are provided on pages 34 and 35.

To aid analysis of the Group’s activities and profits, information from the last three years is provided. The information is based on the consolidated financial statements of the ”la Caixa” Group. The consolidated financial statements and directors’ report for 2009, together with the auditors’ report dated 4 February 2010, which contains an unqualified opinion, may be consulted on the website of the Spanish National Securities Market Commission (www.cnmv.es).


2009 FiNaNCial REPORT OF THE ”la Caixa” GROUP

1. High-quality profits in 2009

1.1 Business growth coupled with good profits and conservative write-downs PAGE 36

recurring profit: EUr 1,710 million.Extraordinary profit of EUr –200 million with conservative write-downs.

Sustained high recurring profits afford conservative provisions to manage business risks.

group profit: EUr 1,510 million, –16.2%.

Total assets: +4.2%. Total assets stood at EUR 271,873 million.

1.2 Positive margin evolution through efficiency and high returns PAGE 38

Increase in income and cost contaiment.

Substantial increase in income (+6.4%) and strict containment of operating expenses (+1.0%).

Improved efficiency. Recurring efficiency ratio: 42.9% (–2.3%).

net operating income: +12.3%. Strong net operating income absorbs major credit loss provisions and write-downs.

High returns. Recurring ROE 11.3%, ROA 0.8%, RORWA 1.6%.

1.3 Welfare Projects PAGE 44

The Welfare Projects budget for 2010 totals EUr 500 million.

Welfare Projects budget maintained, reflecting the commitment to society.

1.4 Business segment reporting PAGE 45

good performance of the group’s business.

Spanish Banking, Investee Portfolio and ALCO and Corporate Activities.

2. Great commercial capacity: the strength of the banking business2.1 Sustained and balanced growth in banking activity PAGE 47

The banking business increased by EUr 1,702 million to EUr 415,825 million.

Customer funds of EUR 237,799 million and Loans of EUR 178,026.

High market shares: Deposits 10.4%, and Loans 9.9%.

2.2 Customer base: the core of the business PAGE 51

retail banking model: Segmenting and providing a specialised focus on commercial activity.

10.5 milion customers, with a penetration of 21.6% in individual customers. Boost to specialised business approach.

2.3 Commercial network and human resources: cornerstones PAGE 57

Extensive retail network and qualified staff. 5,326 branches with a share of 12% and 27,505 employees.

2.4 Multi-channel management: an ongoing relationship with customers PAGE 59

Multi-channel management: an ongoing relationship with customers, providing a full offering of products and services.

ATMs: A network of 7,951. Línea Abierta (internet channel): 6.0 million customers (share: 30.1%).Mobile banking services: 1.4 million customers.

2.5 Payment methods: a distinctive offering PAGE 63

Payment methods: a distinctive range and integrated service.

10.3 million cards issued by ”la Caixa”, top-ranking institution in terms of turnover, with a share of 17.7%.

167,993 Point of Sale (POS) terminals.

2.6 innovation in customer services PAGE 64

2.6.1 Branches and services designed for personalised attention PAGE 64

leading-edge banking branch design offering personalised attention.

Three components: individualised spaces, quick cash area and self-service area.

2.6.2 Technological innovation as a priority for improving customer care and service PAGE 66

Innovation as an ongoing objective: línea Abierta channel, ATMs, mobile phones and cards.

Efficient organisation with cutting-edge technological support where innovation is an integral part of the culture of ”la Caixa”.

2.7 Quality and customer service: the groundwork for the future PAGE 68

Quality to secure customer satisfaction and future growth.

Customers’ quality perception scores higher than competitors’.

BANKING BUSINESS VOLUME(Millions of euros)

07 08 09

Customer funds Customer loans

415,825414,123387,850

�

14.1%�

6.8%�

0.4%

07 08 09

2,0111,710

2,052

RECURRING PROFIT ATTRIBUTABLE TO THE GROUP (Millions of euros)

16.7%

�2.0%�

33.5%�

07 08 09

2,488

1,5101,802

16,2%

�27,6%

�33,5%�17,8%

�

Resultat total

1,082 1,510 2,488

Total profit attributable to the Group

1,5101,802

2,488

07 08 09Resultat total

_ 27,6%

_ 17,8%

_ 16,2%

!2,052

1,7102,011

07 08 09Resultat recurrent

_ 2,0%

_ 33,5%

_ 16,7%

RECURRING PROFIT 2009 Yr-on-Yr Change

Textos picats

Gross income 7,187 +6.4%Net operating income 3,622 +12.3%Net profit before non-controlling interests 2,004 –13.5%

Efficiency 42.9% –2.3ROE 11.3% –3.5

WELFARE PROJECTS

Textos picats

EUR 500 million budget

”la Caixa” THE LEADER

CUSTOMERS

Textos picats

10.5 million customers21.6% penetration in individual customers

COMMERCIAL NETWORK 2009

Textos picats

Branches 7.187 5,326Employees 27.505 3.622 27,505ATMs 7,951

MULTI-CHANNEL MANAGEMENT 2009

Textos picats

Leader in complementary channels:Online banking market share 30.1%Línea abierta customers (millions) 6.0Mobile banking customers (millions) 1.4

PAYMENT SYSTEMS 2009

Textos picats

Cards issued (millions) 10.3Point of Sale (POS) terminals 167,993


LISTED PORTFOLIO:MARKET VALUE AND UNREALISED GAINS(Millions of euros)

Gràfic “calcat”Textos picats

Market value

1.0263.945

1,026Gross unrealised gains

3,945Gross

unrealised gains

Net investmentsChange in value

Market value

2008 2009

14.691

+1.888

+3.539 20.118

1.0263.945

Valor de

mercat

Plusvàlues

latents brutes

Valor de

mercat

Inversions netes

Variació valor

Plusvàlues

latents brutes

2008 2009

20,118+3,539

+1,88814,691

2.8 Supporting the business: ”la Caixa” subsidiaries PAGE 69

Subsidiaries which provide support services.

Multi-channel management, property services and other.

3. investee portfolio

3.1 Criteria CaixaCorp: internationalisation and diversification PAGE 71

3.1.1 Criteria CaixaCorp: a subsidiary which encompasses the largest portion of the ”la Caixa” Group’s investee portfolio PAGE 71

Investment strategy: diversification of income and international expansion.

Value creation with controlled risk. The ”la Caixa” Group holds a 79.5% interest at 31/12/09.

3.1.2 Utilities business PAGE 72

Strategic investments in industries offering basic services to society.

Investments in leading companies, with capacity for growth and value generation.

3.1.3 Financial business PAGE 74

International banking. Interests in countries where the Group can provide added value and take advantage of growth potential.

Insurers and specialised financial services.

Complementing ”la Caixa” products and services. Leading position in the Spanish insurance industry.

3.2 Venture capital and financing for entrepreneurs PAGE 78

Presence of the ”la Caixa” group in the venture capital industry.

Under the framework of the ”la Caixa” Group’s corporate social responsibility activities.

3.3 active management of the ”la Caixa” Group’s investee portfolio PAGE 79

Strategic objective: increase the proportion of the financial business through active management.

Increase of the stake in Erste Bank and in The Bank of East Asia.EUR 1,313 million investment in Gas Natural, for the acquisition of Unión Fenosa.Agreements to acquire Adeslas and sell part of Agbar, and joint venture in Port Aventura.The market value of the listed portfolio is EUR 20,118 million, with gross unrealised gains of EUR 3,945 million.

4. active risk managementglobal risk management. Key factor in the Group’s strategy.

Credit risk: ensure the quality of the loan portfolio.

Appropriate risk approval procedures. Support provided with advanced tools and measurement and monitoring procedures.

low-risk, diversified lendings with adequate collateral.

A contained NPL ratio, 3.42%, lower than the industry average, with a high coverage ratio, at 62%, and 127% including mortgage collateral.

Market risk: reduce exposure to risk in balance-sheet positions.

Extensive natural hedges and financial market dealings.

liquidity risk: diversify the markets and products related to the financing sources.

Active management of the balance sheet and of financing sources to secure high liquidity levels.

Operational risk: minimise the risk inherent to business activities.

An expert workforce and the procedures and controls in place help mitigate risk.

Regulatory compliance risk. Foster the compliance culture.

5. High financial strength

5.1 Excellent liquidity levels PAGE 107

Conservative proactive management of liquidity levels.

Excellent liquidity position supports the growth of the Group’s business.

5.2 Excellent capital adequacy levels PAGE 108

Core capital at 8.7%. Capital ratio (BIS ratio): 11.0%. Tier 1: 10.4%.

Surplus capital: 4,667 million.

5.3 ”la Caixa” Group ratings in the aa range PAGE 110

Very good ratings confirmed. Very good ratings in the AA range (very high creditworthiness).

Moody’s

Aa2

Standard & Poor’s

AA–

Fitch

AA–RatingsOutlook Negative NegativeNegative

79.5%

CRITERIA CAIXACORP

QUALITY OF ASSETS 2009

Textos picats

NPL ratio ”la Caixa” Group 3.42%Financial industry 5.08%High coverage Coverage ratio 62%Coverage ratio including mortgage collateral 127%Generic credit loss allowance (millions) 1,835

FINANCIAL STRENGTH

Textos picats

Liquidity (millions of euros) 21,208

Capital adequacy (%)

Core Capital 8.7%Tier 1 10.4%BIS Ratio 11.0%Surplus capital (millions of euros) 4,667

2009

FINANCE

LISTED

INTERNATIONAL BANKS

INSURANCE COMPANIES

SPECIALISED FINANCIAL SERVICES

UNLISTED

UTILITIES

2009 Financial Report of the ”la Caixa” Group 1. High-quality profits in 2009


1. High-quality profits in 2009 1.1. Business growth coupled with good profits and conservative write-downs

The ”la Caixa” Group’s recurring profit for 2009 amounted to EUR 1,710 million (–16.7%), with a 12.3% rise in recurring net operating income and strong write-downs:

• Solid 6.4% increase in total income (recurring gross income) and stringent cost-containment policy, +1.0%, with increased efficiency.

• Net extraordinary profit of EUR –200 million with provisions for the future management of the business.

• The Group’s attributable profit stood at EUR 1,510 million.

The ”la Caixa” Group’s business experienced balanced, quality growth in 2009, in an economic and financial context characterised by volatility in the financial markets and plummeting interest rates, a slowdown in activity, rising NPL ratios and fierce competition in the banking industry.

The Group’s robust commercial capacity, its effective income management activities, its customer service management efforts and the favourable performance of the investees led to a

sustained increase in income, of 6.4% year-on-year, up to EUR 7,187 million, driven by the most traditional banking activity. This strong rise in income, combined with the stringent cost-containment policy, made it possible to continue to improve efficiency and maintain high returns.

Hence, net operating income was up 12.3% to EUR 3,622 million and absorbed the increased credit loss provisions with the result that net recurring profit stood at EUR 1,710 million, down 16.7%. Total attributable profit stood at EUR 1,510 million in 2009, including extraordinary gains of EUR 249 million allocated in full to additional, unscheduled provisions and to the investee portfolio, and also EUR 200 million (EUR 286 million before tax) in provisions for the future management of the business.

All the above, in conjunction with active and stringent risk, liquidity and capital adequacy management, consolidated the Group’s considerable financial strengths. Therefore, the ”la Caixa” Group is optimally positioned to manage successfully a complex and demanding context like the present, and to ensure the growth of its businesses and respond to the credit needs of all its customers.

17.8%

�

07 08 09

2,0111,710

2,052

Recurring profit

PROFIT ATTRIBUTABLE TO THE ”LA CAIXA” GROUP (Millions of euros)

16.7%

�2.0%�

33.5%�

07 08 09

2,488

1,5101,802

16.2%

�27.6%

�

Total profit

Extraordinary profit

477 (250) (200) 07 08 09



4.2% increase in total assets.

The ”la Caixa” Group’s total assets amounted to EUR 271,873 million, an increase of EUR 11,046 million or 4.2% in 2009.

In an economic climate affected by the slowdown in economic activity, ”la Caixa” managed to achieve an increase in the volume of the banking business (loans and credits plus funds managed) of EUR 1,702 million compared to 2008 to reach a figure of EUR 415,825 million. The gross amount of loans and credits grew by EUR 1,603 million, up 0.9%. Total customer funds remained at EUR 237,799 million thanks to active management of

margins and structure and off-balance-sheet funds increased.

Own funds (reserves plus profits) increased by EUR 1,077 million or 6.9%, after taking into account the profit attributable to the Group of EUR 1,510 million and the sum allocated to Welfare Projects. In addition, the fair value adjustment to available-for-sale financial assets increased in 2009 by EUR 963 million due to the positive performance of the securities markets in 2009.

For a more detailed explanation of the main balance sheet aggregates, please see section 2. Great commercial capacity: the strength of the banking business, section 3. Investee portfolio, and section 5. High financial strength.

Consolidated management balance sheets of the ”la Caixa” Group

(Figures in millions of euros) 2009 2008

YEaR-ON-YEaR CHaNGE

aMOUNT %

AssetsCash, balances with central banks and credit institutions and fixed-income securities 33,678 30,203 3,475 11.5 Loans and advances to customers, net 173,641 175,471 (1,830) (1.0)Insurance contract assets 21,261 19,829 1,432 7.2 Equity securities 19,997 15,624 4,373 28.0 Tangible and intangible assets 8,845 7,236 1,609 22.2Other assets and prepayments and accrued income 14,451 12,464 1,987 15.9

Total assets 271,873 260,827 11,046 4.2 liabilities 250,470 241,906 8,564 3.5

Deposits from credit institutions 22,521 13,290 9,231 69.5 On-balance-sheet customer funds 205,631 209,376 (3,745) (1.8)Provisions 2,925 3,195 (270) (8.5)Other liabilities and accrued expenses and deferred income 19,393 16,045 3,348 20.9

Equity 21,403 18,921 2,482 13.1 Own funds 16,696 15,619 1,077 6.9

Of which: Profit attributable to the Group 1,510 1,802 (292) (16.2)Valuation adjustments 1,612 649 963 148.4 Non-controlling interests 3,095 2,653 442 16.7

Total liabilities and Equity 271,873 260,827 11,046 4.2

“GROWTH OF THE BaNKiNG BUSiNESS”



1.2. Positive margin evolution through efficiency and high returns

Consolidated income statements of the ”la Caixa” Group

CHaNGE (Figures in millions of euros) 2009 2008 %

Financial income 9,097 12,401 (26.6)Financial expenses (5,165) (8,893) (41.9)Net interest income 3,932 3,508 12.1 Dividends 400 395 1.3 Share of results of entities accounted for using the equity method 840 718 17.0 Net fee and commission income 1,303 1,250 4.2 Gains/losses on financial assets and exchange differences 130 163 (19.7)Other operating income and expenses 582 718 (19.1)Gross income 7,187 6,752 6.4 Total operating expenses (3,565) (3,529) 1.0 Net operating income 3,622 3,223 12.3 Credit loss provisions and other (1,401) (617) 126.4 Gains/losses on disposal of assets and other (90) 10 Profit before tax 2,131 2,616 (18.6)Income tax (127) (299) (57.6)Profit after tax 2,004 2,317 (13.5)Profit attributable to non-controlling interests 294 265 10.7 Recurring profit (*) 1,710 2,052 (16.7)Extraordinary income 249 260 Extraordinary write-downs (249) (260)Provision for future management of the business (200) (250)Extraordinary profit (200) (250)Profit attributable to the Group 1,510 1,802 (16.2)

(*) Recurring profit excluding extraordinary profit.

In view of the particular significance of the non-recurring extraordinary profits recorded in 2009 and 2008, and in order to aid understanding and analysis of the performance of the business, the accompanying consolidated income statements show the profit from the ordinary recurring activities of the ”la Caixa” Group. In addition, the recurring profit is adjusted for the effects of extraordinary profit net of tax and non-controlling interests, in order to establish the profit attributable to the Group.

Gross income rose by 6.4% to EUR 7,187 million, showing a positive evolution in the main items.

Net interest income totalled EUR 3,932 million, a notable rise of 12.1%. This increase reflects the sound growth of the banking business and the operating margins management in a highly competitive environment, the impact of the yield curve and the positive performance of the net financial income from the life business of the insurance subsidiaries.

“SUSTaiNED GROWTH

iN GROUP iNCOME”

07 08 09

3,3173,932

3,508

NET INTEREST INCOME(Millions of euros)

5.8%� 12.1%

�



The total income from the investee portfolio (dividend income and the share of results of companies accounted for using the equity method) amounted to EUR 1,240 million, up 11.4% due to the performance of the investees’ businesses and their capacity to distribute recurring dividends. Thus, the dividends from investees classified as available-for-sale financial assets totalled EUR 400 million. The post-tax profits of the companies accounted for using the equity method, basically Gas Natural, Abertis Infraestructuras, Banco BPI, Aguas de Barcelona, GF Inbursa and Boursorama, totalled EUR 840 million, a considerable rise of 17.0%.

Net fees and commission income grew by 4.2% to reach EUR 1,303 million, thanks to appropriate management of the services offered to customers. Fees and commissions relating to banking services increased by 4.9%, based on the provision of quality services and personalised advice,

as well as improved price management. The fees and commissions relating to investment funds, meanwhile, fell in line with the performance of the market.

The gains/losses on financial assets and liabilities and exchange differences stood at EUR 130 million.

Other operating income and expenses amounted to EUR 582 million and include the net insurance premiums and the mathematical provisions relating to the non-life business of the insurance subsidiaries, as well as the income from the non-banking subsidiaries and the accrued financial fees and commissions offsetting expenses.

The considerable 6.4% increase in gross income, combined with the strict control of expenses described below, is one of the cornerstones of the solid growth of operating income.

07 08 09

979

1,2401,113

INCOME FROM INVESTEESDividend income plus the share of results of companies accounted for using the equity method (Millions of euros)

13.6%� 11.4%

�

07 08 09

1,257 1,3031,250

COMISSIONS(Millions of euros)

0.6%

�

4.2%�

07 08 09

6.148

7,1876,752

GROSS INCOME(Millions of euros)

9.8%� 6.4%

�



improved efficiency with increased productivity

The Group’s strict cost containment and streamlining policy, coupled with improved productivity, tempered the increase in operating expenses which stood at EUR 3,565 million, up 1%.

The Group’s considerable commercial strength, with its 27,505 employees, 5,326 branches, 7,951 ATMs and leadership in online, mobile phone and electronic banking services, has resulted in the sustained, balanced and high-quality growth of the business and the commercial activity.

The objective of growing the ”la Caixa” Group’s banking business is being carried out through the management of income/expense matching to ensure competitiveness and future profits. In 2009 ”la Caixa” proved its flexibility and considerable capacity to adapt to the environment by reducing the number of branches by 204, without affecting customer relations. The growth strategy has always been based on an analysis of the investment/expense ratio and on undertaking projects that generate value.

At the same time, as part of its international expansion plan, in 2009 ”la Caixa” opened an operating branch in Casablanca (Morocco) and brought two new representative offices into operation in Shanghai (China) and Istanbul (Turkey).

The large investments in recent years have resulted in an increase in operating expenses. These investments basically relate to the development of businesses,

technology and new retail channels, improvements to the information systems and the optimisation of processes to enhance the branches’ commercial activities, the internal risk management and control systems and human capital training. Nevertheless, the efforts made in streamlining and controlling operating expenses, including administrative expenses and amortisation charges, limited the increase in these expenses to 1% in 2009, which is less than the considerable growth reported in gross income of 6.4%.

Technological advances have cut administrative tasks at the branches, thereby freeing up resources to focus on commercial activities and personalised care to customers.

The combination of these factors explains the ongoing growth in the business volume ratios (total customer funds and lendings) and in the recurring net operating income per employee and branch, while the number of employees per branch remains at a low level of 4.7, one of the lowest in the Spanish financial industry.

As a whole, the streamlining of the Group’s costs and the favourable performance of the business volume ratios show the high growth potential in terms of efficiency and profit.

In this respect, in 2009 the recurring efficiency ratio improved, falling by 2.3 points to 42.9%, thereby confirming the considerable improvement in the last few years.

1.2. Positive margin evolution through efficiency and high returns (cont.)

07 08 09

24,117

5,4805,326

25,335 24,944

5,530

Branches Employees (*)

MAIN COMPONENTS OF THE OPERATING EXPENSES OF ”LA CAIXA”

(*) Total Group employees: 27,505

07 08 09

70,776

78,07574,887

Business volume per branch

Recurring net operating income per branch

534

BRANCH PRODUCTIVITY RATIOS(Thousands of euros)

583

678

07 08 09

16,082

16,67016,346

Business volume per employee

Recurring net operating income per employee

121.4

EMPLOYEE PRODUCTIVITY RATIOS(Thousands of euros)

127.2

144.8

08 vs. 07 09 vs. 08

+6049.8% +288

8.9% +4356.4%

+361.0%

Income(gross income)

Operatingexpenses

ANNUAL GROWTH OF INCOMEHIGHER THAN THE EXPENSES: IMPROVEMENT OF EFFICIENCY(Millions and annual change)

6,4% 1,0%

8,9%+9,8%

Ingressos (marge brut)

Despeses d'explotació Ingressos (marge brut)

Despeses d'explotació

2008vs 2007

2009vs 2008

+435

+36

+604 +288



“MaKiNG THE BEST USE OF

TECHNOlOGiCal aDVaNCES TO iMPROVE PRODUCTiViTY aND MaxiMiSE TiME SPENT ON COMMERCial aCTiViTiES”

07 08 09

EFFICIENCY RATIO (%) (*)

45.2

42.9

07 08 09

45,2

42,9

46,1

46.1

(*) Staff + overhead costs / gross income

–2.3

Efficiency improvement plan

The Efficiency Improvement Plan aims to achieve a high level of efficiency of the ”la Caixa” Group, with permanent and sustainable improvement over time. The plan involves setting and implementing objectives defined around three major cornerstones:

• Securing income: To ensure that the Group’s businesses and segments make positive and increasing contributions to the Institution’s profit. The differentiated product offering, the excellent standard of service quality provided to customers through the branch network or other banking channels, the commercial effort and active margin management have been the keys to ensuring the aforementioned growth in income in a highly competitive setting.

• Containment of costs and investment needs: Given the current economic climate and the new specialised network model implemented, a Branch Optimisation Plan for the retail banking segment was set in motion in 2009 to integrate certain branches, often owing to the close distances between them. The plan made it possible to release resources, contain workforce growth and optimise overhead costs (rent, electricity, etc.) while ensuring significant savings in future recurring costs. This process involved a detailed analysis in order to guarantee and maintain the level of service provided

by ”la Caixa” and its close relationship with customers. In this regard, the level and scope of the service remained unchanged, since ”la Caixa” retains its leadership in terms of share of the total number of branches in the Spanish financial system, and its close contact with the market should enable it to seize the commercial opportunities afforded by the new competitive environment.

In conjunction with the branch optimisation plan, the Institution continued its major effort to contain and streamline costs and investments, analysing and assessing each item based on need and expected savings returns. ”la Caixa” also put in place improvements aimed at achieving energy savings at the branches and reducing paper consumption and physical delivery of correspondence to customers, among other things, which, in addition to the positive impact in terms of efficiency, contribute to strengthening the Institution’s commitment to sustainability.

• Fostering the self-service channels and operational innovation: These factors are key to ensuring that, while customers are provided with a differentiated service, the operating processes and therefore the related costs are effectively managed, so that the efforts of ”la Caixa” and its staff are focused on serving the financial needs of households and companies efficiently.



Recurring net operating income: eur 3,622 million, up 12.3%.

The solid increase in “Gross Income” (up 6.4%), driven by the more traditional banking business and considerable containment of operating expenses (up 1.0%), benefited the productivity of the Group’s banking business and the “Net Operating Income”, which includes the profits from the Group’s businesses, amounted to EUR 3,622 million, up 12.3% on 2008. The large rise in income and, above all, strict cost control and monitoring, have resulted in the ongoing improvement of the recurring efficiency ratio to 42.9% (–2.3 points).

The strong increase in “Net Operating Income” evidences the ”la Caixa” Group’s considerable capacity to generate high recurring profits and endorses its strategy to maximise the high potential for efficient profitable growth.

The considerable profit generated from recurring activities afforded significant provisions of EUR 2,821 million, of which EUR 2,092 million were charged to 2009 profit (EUR 1,401 million to recurring profit and EUR 691 million to extraordinary profit). The increase in specific provisions was partially offset by the release of a portion of the generic credit loss allowance, which stood at EUR 1,835 million at the end of 2009.

Nevertheless, the NPL ratio of 3.42% is lower than the industry average and the doubtful assets coverage ratio stands at 62% (127% taking into account mortgage collateral).

Recurring profit attributable to the group stood at eur 1,710 million (–16.7%), maintaining high levels of returns (ROE of 11.3%).

“Recurring Profit After Tax” amounted to EUR 2,004 million, down 13.5%. For a proper interpretation of “Income Tax”, first of all, it must be taken into account that virtually all the dividends from investees are not taxed to avoid double taxation; that, in accordance with accounting regulations, the profits of companies accounted for using the equity method are shown net of tax and, lastly, that the contribution to Welfare Projects is a deductible expense.

The profit of non-controlling interests of EUR 294 million relates basically to the 2009 profit of the Criteria CaixaCorp Group attributable to non-controlling interests. Therefore, the “Recurring Profit Attributable to the Group”, after tax and non-controlling interests, amounted to EUR 1,710 million (–16.7%), with a recurring return on average capital of 11.3%.

1.2. Positive margin evolution through efficiency and high returns (cont.)

RECURRING NET OPERATING INCOME(Millions of euros)

2,907

3,6223,223

10.9%� 12.3%

�

07 08 09

RECURRING NET PROFIT(Millions of euros)

2,125 2,0042,317

9.0%�

13.5%

�

07 08 09

RECURRING ATTRIBUTABLE PROFIT (Millions of euros)

2,0111,710

2,052

2.0%�

16.7%

�

07 08 09

“NET OPERaTiNG iNCOME UP 12.3%”



Extraordinary profit: extraordinary income was offset in full by conservative write-downs and additionally a provision of eur 286 million before tax, was recognised for the future management of the business.

In 2009 a total of EUR 249 million in gains, net of tax and non-controlling interests, were recognised on the sale of 1% of Telefónica. This income was offset in full by additional unscheduled and other credit loss provisions amounting to a gross sum of EUR 241 million (158 million net) and provisions relating to the investee portfolio amounting to EUR 164 million gross (EUR 91 million net).

In addition, provisions before tax amounting to EUR 286 million (EUR 200 million net) were recognised in 2009 for the future management of the business, including a provision for the extension of the pre-retirement scheme and precautionary credit loss provisions.

Extraordinary gains totalled EUR 260 million in 2008 (due to tax benefits and the release of the provisions for interest-rate risk on insurance contracts) and were offset in full by provisions recognised to cover the investee portfolio, the substandard loans portfolio and others. A net provision of EUR 250 million was also recognised to cover future risks relating to the business.

The “Profit attributable to the Group” totalled EUR 1,510 million.

Having considered the excellent performance of the businesses and of the ”la Caixa” Group’s high-quality recurring profits, as well as the impact of the extraordinary profits, the “Profit Attributable to the Group” totalled EUR 1,510 million in 2009, down 16.2%.

Recurring return on average own funds (excluding extraordinary profit) (ROE) stood at 11.3% in 2009. Taking into account the total profit, the ROE stood at 10.0%.

The levels of return have been affected by the considerable increase in the Group’s capital in the last few years, particularly as a result of the flotation of Criteria CaixaCorp in October 2007, and the performance of recurring profits.

Recurring return on average total assets (ROA), net of cash brokerage, stood at 0.8% in 2009.

Also, the low risk exposure of the assets on the ”la Caixa” Group’s balance sheet meant that the recurring return obtained in relation to the risk taken (RORWA), which is calculated on the basis of risk-weighted on-balance-sheet assets, was much higher than the ROA, at 1.6% in 2009. Taking into account the Group’s total profit, the ROA and RORWA stood at 0.7% and 1.5%, respectively.

13.0%

08

23.2%

10.0%

07 09

14.8%

08

19.4%

11.3%

07 09

ROE (Attributable profit/Average own funds)

Recurring business Total

2.0%

08

1.9%1.6%

07 09

1.0%

08

1.0%0.8%

07 09

ROA (Net profit/Average total assets)RORWA (Net profit/Risk-weighted assets)

ROA RORWARecurring business



1.3. Welfare Projects

Welfare Projects budget for 2010: EUR 500 million

In 2009 ”la Caixa” consolidated its commitment to the needs of society. Welfare Projects continued to develop its programmes to provide opportunities to people, make culture more easily available to all and promote protection of the environment.

The Welfare Projects budget for 2010 totals EUR 500 million, thereby showing, despite the unfavourable economic climate, the Institution’s commitment to society. Of this budget, 71.2% is to be used for social programmes.

2010

Social

Programmes

Environmental and scientific

Culture Educational and research

297

278

356

64 63 6271

60 55

33 29 2735

69

2008 2009 2010

500

Socials

Medi Ambient i Ciència

Culturals

Educatius i Investigació

Programes:

(milions dʼeuros)

500 500

Fons social

WELFARE PROJECTS 2010 BUDGET (Millions of euros)

356

62 5527

500



1.4. Business segment reporting

Business segment reporting of activity and profits: a basic management tool for the group

The objective of business segment reporting is to enable internal control, monitoring and management of the ”la Caixa” Group’s activity and profits. The information is organised by reference to the various lines of business established on the basis of the Group’s organisation and structure. The lines of business are defined taking into account the inherent risks and characteristics of each business.

Under these principles, the ”la Caixa” Group comprises the following business segments:

Spanish Banking: this is the ”la Caixa” Group’s core business and includes the entire banking business (loans and receivables, customer deposits and marketing of investment funds, insurance and pension plans, among others) carried on primarily in Spain through the branch network and the other complementary channels. It encompasses the activity and the profits generated by 10.5 million customers, whether individuals, companies or institutions. The volume of business managed by this segment at 31 December 2009 amounted to EUR 366,123 million, in line with the 2008 figure, with a gross amount of EUR 178,026 million in customer loans and EUR 188,097 million in customer funds, excluding institutional issues and subordinated liabilities.

The net interest income from this business amounted to EUR 4,237 million and the gross income to EUR 6,170 million, a rise of 3.4%. Business with companies and institutions accounts for 21% of gross income, an increase on its 17% contribution to Spanish Banking in 2008. This segment’s net operating income stood at EUR 2,885 million, up 5.7%, thereby enabling higher recurring credit loss provisions to be recognised which, for this business, amounted to EUR 961 million,

an 80.0% increase on 2008, and net profit attributable to the Group totalled EUR 1,430 million, down 13.4%.

investee portfolio: this segment basically includes the recurring profits of the investee portfolio’s investments in utilities and international banks, held through Criteria CaixaCorp. The dividend income and the share of results of equity accounted companies amounted to EUR 1,222 million (of which EUR 839 million relate to the share of results of jointly controlled entities and associates accounted for using the equity method), up 10.4% on 2008, as a result of these investees’ ability to generate profits and distribute recurring dividends. Changes in the costs of financing the business, characterised by an increase in the funded portfolio and offset by the declining interest rates, together with the performance of other income statement items, meant that the net recurring attributable profit of the business stood at EUR 744 million, up 12.1% on 2008.

The market value of the ”la Caixa” Group’s listed portfolio totalled EUR 20,118 million, of which EUR 12,739 million related to investments in jointly controlled entities and associates accounted for using the equity method, with unrealised gains of EUR 3,945 million in 2009.

alCO and Corporate activities: the activity of the ALCO (Asset-Liability Committee) encompasses management of interest rate and currency risk, as well as liquidity risk, through the management of issues in the institutional market and of capital and the investment/financing of the other businesses. Corporate activities encompass the activities and profits which are the outcome of decisions affecting the Group taken as a whole or which, due to their nature, are not allocable to the rest of the businesses, such as extraordinary profits, shared service costs and the Group’s property services business. The segment also includes the reconciling

GROSS INCOME OF SPANISH BANKING(Millions of euros)

08 09

6,170

3.4%�5,966

79%

21%

Individuals banking

Business banking

BREAKDOWN OF THE GROSS INCOME OF SPANISH BANKING

INCOME FROM THE INVESTEE PORTFOLIO (DIVIDEND INCOME AND THE SHARE OF RESULTS OF EQUITY ACCOUNTED COMPANIES)(Millions of euros)

08 09

1,222

10.4%�

1,108



adjustments required for the inclusion of the financial statements of the various lines of business in the Group’s consolidated financial statements.

Description of the segment reporting methods and measurement bases applied

For the purposes of business segment reporting of the Group’s activities and profits, the core business units on which accounting and management figures are available are taken as a reference. The same general principles as those used for the Group’s management information are applied and the accounting principles and measurement bases used are basically the same as those used to determine the financial statement figures, and there are no mismatched allocations.

The data of the ”la Caixa” Group’s segments were re-calculated in 2009 using the best available information and assumptions and, for comparison purposes, the 2008 figures were unified,

without significant impacts on the attributable profit for 2008 for each of the segments.

The gross income of the Spanish banking segment is determined on the basis of the net gains or losses on each on-balance-sheet financial asset or liability, which is calculated by applying to the contractual income or expense a transfer price which is equal to the market price for a term equal to its length or review frequency. In addition, income from services generated by the banking activity is also included in gross income.

The gross income from the investee portfolio includes dividend income and income from the respective equity-accounted investments, net of the related borrowing costs, equal to the opportunity cost of retaining the investment in the long term.

The balancing entry for the banking transfer prices and the cost of financing

the other businesses is recognised in ALCO and Corporate Activities.

The operating expenses of each business segment include both direct and indirect expenses, which are allocated in accordance with internal allocation methods. Shared service costs forming part of corporate or institutional operating services are allocated in full to the ALCO and Corporate Activities segment.

The allocation of capital to the businesses is calculated on the basis of the requirements of the New Capital Accord (Basel II), in accordance with the risks taken by each business unit. These risks include credit risk, market risk, operational risk, equity risk, fixed asset risk and the risks relating to the insurance business.

The consolidated income statements of the ”la Caixa” Group for 2009 and the changes with respect to 2008, by business segment, and the aggregates of assets and own funds of each, are as follows:

1.4. Business segment reporting (cont.)

Consolidated income statements of the ”la Caixa” Group - By business segment

SPaNiSH BaNKiNG iNVESTEE PORTFOliO alCO aND CORPORaTE aCTiViTiES (*)

”la Caixa" GROUP TOTal

(Figures in millions of euros) 2009 CHaNGE (%) 2009 CHaNGE (%) 2009 2009 CHaNGE (%)

Gross income 6,170 3.4 1,028 7.9 (11) 7,187 2.9 Administrative expenses (2,846) 1.6 (152) (6.1) (86) (3,084) 1.1 Depreciation and amortisation charge (439) 0.8 (26) (2.8) (16) (481) 0.5 Net operating income 2,885 5.7 850 11.3 (113) 3,622 4.9 Impairment losses on financial assets and other (961) 80.0 (10) 10.7 (834) (1,805) 29.9

Gains (losses) on disposal of assets and other (34) 2 (53.7) 83 51

Profit before tax 1,890 (13.6) 842 10.9 (864) 1,868 (9.9)Tax (428) (14.1) 120 14.9 273 (35) Profit after tax 1,462 (13.5) 962 11.4 (591) 1,833 (11.2)Profit attributable to non-controlling interests 32 (18.2) 218 8.9 73 323 23.8

Profit attributable to the Group 1,430 (13.4) 744 12.1 (664) 1,510 (16.2)

Total assets 196,926 (0.9) 20,365 18.1 271,873 4.2 Allocation of capital/Equity 11,166 10.2 5,063 4.0 21,403 13.1

(*) Including the Group’s net extraordinary profits (EUR –200 million in 2009 and EUR –250 million in 2008), see section 1.2, Positive margin evolution through efficiency and high returns.



2. Great commercial capacity: the strength of the banking business 2.1. Sustained and balanced growth in banking activity

In 2009 the volume of the banking business (loans and advances to customers plus customer funds) increased by EUR 1,702 million, up 0.4%, to reach a figure of EUR 415,825 million.

Customer funds

The ”la Caixa” Group’s total customer funds (financial liabilities with customers, insurance contract liabilities (technical provisions)) and off-balance-sheet funds (investment funds, pension funds, managed portfolios and other) reached the figure of EUR 237,799 million at the end of 2009. Compared to 2008, the change was affected by the complex economic and financial situation and stiff banking competition. On-balance-

sheet customer funds amounted to EUR 205,631 million, with an increase of EUR 954 million in demand deposits and a fall of EUR 5,857 million in term deposits and a decrease of EUR 639 million in debt securities and subordinated liabilities, changes influenced by active price management and the effort made to protect margins with an impact on product structure. On the other hand, there was an increase of EUR 822 million in institutional issues and of EUR 1,208 million in insurance contract liabilities. Pension plans managed basically by VidaCaixa increased by 15.1%, while investment fund assets managed rose by 19.4%, helped by the positive performance of the capital markets.

BANKING BUSINESS VOLUME(Millions of euros)

07 08 09

Customer funds Customer loans

415,825414,123387,850

�

14.1%�

6.8%�

0.4%

TOTAL CUSTOMER FUNDS(Millions of euros)

07 08 09

237.799237,700226,236�

12.4%

�

5.1%

�

=

Financial liabilities - CustomersInvestment funds

Insurance, pension plans and other

15%

6%

79%

Total customer funds

YEaR-ON-YEaR (At 31 December, in millions of euros) 2009 2008 CHaNGE %

Financial liabilities - Customers 186,690 191,643 (4,953) (2.6)Proprietary products 142,778 148,320 (5,542) (3.7)

Demand deposits 55,670 54,716 954 1.7 Term deposits 74,161 80,018 (5,857) (7.3)Debt securities and subordinated liabilities 12,947 13,586 (639) (4.7)

Repurchase agreements and other accounts 4,121 4,354 (233) (5.4)institutional issues 39,791 38,969 822 2.1 insurance contract liabilities 18,941 17,733 1,208 6.8 Total on-balance-sheet customer funds 205,631 209,376 (3,745) (1.8)Investment funds 15,457 12,943 2,514 19.4 Pension plans 11,982 10,407 1,575 15.1 Other funds managed 4,729 4,974 (245) (4.9)Total off-balance-sheet customer funds 32,168 28,324 3,844 13.6 Total customer funds 237,799 237,700 99 =

2009 Financial Report of the ”la Caixa” Group 2. Great commercial capacity: the strength of the banking business


2.1. Sustained and balanced growth in banking activity (cont.)

loans and advances to customers

Gross loans and advances to customers amounted to EUR 178,026 million in 2009, an increase of EUR 1,603 million or 0.9%. In 2009 1,084,168 loans were approved and granted for a total of EUR 104,045 million. The growth of loans to both individuals and companies reflects the Group’s contribution to the economic development of the territory.

Of particular note among total loans are financing transactions for the business segment, and investment in the productive development of other sectors. Mortgage loans, mainly to primary residence home-buyers, experienced a

slowdown in 2009, reflecting the state of the property industry, characterised by reduced growth in the price of housing and demand.

On the other hand, other loans to the private sector increased by 2.2%. Therefore, investments in companies is driving growth through the 80 business centres (+14%) and the entire branch network. Of particular note was the considerable growth in factoring and reverse factoring products, with rises in market shares of 4.3 and 2.6 points, respectively, to 10.2% and 13.2%. In 2009 ”la Caixa” renewed various credit facilities with different employers’ organizations to finance working capital.

GROSS LOANS AND ADVANCES TO CUSTOMERS(Millions of euros)

07 08 09

178,026176,423161,614

178.026176.423161.614

_16,5%

_9,2%

_0,9%

07 08 09

�

16.5%

�

9.2%�

0.9%

Gross loans and advances to customers by segment

YEaR-ON-YEaR CHaNGE

(Figures in millions of euros) 2009 2008 aMOUNT %

Public sector loans 6,298 4,627 1,671 36.1 Private sector loans 171,728 171,796 (68) 0

Secured loans 119,607 120,800 (1,193) (1.0)Unsecured loans and other 52,121 50,996 1,125 2.2

Total loans and advances to customers, gross 178,026 176,423 1,603 0.9



The Group’s strong commercial activity secures high market shares.

Following high growth levels in recent years in banking activity, 2009 was marked by the stabilisation of volumes in the system, with growth rates standing at almost nil in terms of lending activity and funds managed.

In this difficult economic situation, ”la Caixa” has managed to maintain and even increase its market shares. According to the latest public information available on credit institutions, including specialized credit institutions, in 2009 the ”la Caixa” Group obtained market shares in Spain of 10.0% in loans and 10.4% in deposits (excluding insurance and funds). As a whole, the share of business volume stands at 10.2%, catching up with the share of branches at 12.0%, in which ”la Caixa” remains the leader, and exceeding the share of employees.

”la Caixa” continued to focus its lending business on financing for individuals and

SMEs. In this regard, the slight loss of market share in mortgages (which stayed above 10.5%) due to the slowdown in property development, has been more than compensated by a strong increase in the share of loans secured by other types of collateral which rose to 9.3%, up 1.2% on 2008. The strategy for penetration into the business segment has started to reap significant rewards.

With respect to customer funds attracted, the considerable fall in interest rates and the negative performance of the Spanish economy meant that the market did not grow in 2009, and remained at the same level as 2008, when it grew by 25%. There was also no growth in the deposits market in 2009 compared to the significant growth levels in recent years. On the other hand, the favourable performance of the stock markets helped make the offering of investment funds and pension funds more attractive. In this context, ”la Caixa” maintained practically the same market share of deposits at 10.4% and of life insurance at 13.8%, while the share of investment funds

“HiGH MaRKET SHaRES”

“aMONG THE TOP THREE iN THE MaiN

FiNaNCial PRODUCTS”

Market shares and place in the ranking

1st

Shares at December 2009 SHaRE

Card turnover 17.7%Merchant business (POS terminals) 20.9%Salaries paid in 15.1%Pensions paid in 12.8%Demand deposits 11.3%Savings life insurance 13.8%Mortgages 10.5%National Electronic Clearing System (SNCE) 12.7%No. of branches 12.0%ATMs 12.9%

2ndPension plans 15.6%Deposits 10.4%Loans 10.0%

3rdFactoring and Confirming 11.6%Commercial loans 9.3%Investment funds 8.5%



increased considerably to 8.5% and that of pension plans rose to 15.6%.

Of particular note was the effort made to adapt the lending and deposit offering throughout the year in order to tailor the offering to the various customer groups. In this regard, in the second half of 2009, the “Hipoteca a Medida” mortgage was launched for personal banking customers, where reductions are conditional upon personal banking products being held, and the catalogue of deposits was reviewed, developing hybrid products that provide attractive returns for customers against the backdrop of interest rates at historical lows which prevailed at the end of the year.

In line with its customer loyalty policy, ”la Caixa” launched the “Multiestrella Nómina” and “Multiestrella Pensión” programmes, that have extended the advantages of the “Puntos Estrella” customer loyalty programme to customers who credit their salaries directly to their account. The success of these programmes brought about an increase in the share of directly credited salaries of over 15%, despite the fact that the job market shrank by more than 5% in terms of the numbers of employees registered for social security purposes. A figure of nearly one million pensioner customers has been achieved, with a market share of 12.8%.

2.1. Sustained and balanced growth in banking activity (cont.)



2.2. Customer base: the core of the business

a broad customer base that guarantees growth

The growth of the ”la Caixa” Group’s business is underpinned by a broad customer base totalling 10.5 million customers at 31 December 2009. The customer base is the Group’s main asset as it affords stability and drives the growth of the volume of the business, managed funds and lendings, with high market shares, all of which must be viewed within the context of the high level of competition in the financial industry.

leadership in individual Banking

In the 2007-2010 Strategic Plan, ”la Caixa” defined the consolidation of its leadership in individual banking as a key objective. This strategy is supported by the professional, innovative and high-quality service offered to our customers, which is provided through an efficient multi-channel distribution system, in which the branch, supported by cutting-edge technology, is at the heart of our relationship with the customer. Our focus on the customer is complemented by ongoing innovation in terms of the products and services offered, such as mortgages, personal loans, insurance, direct credit of salaries and pensions, payment methods, complementary channels, etc., which enables ”la Caixa” to retain its leadership and achieve significant and ever higher market shares (see section 2.1. Sustained and balanced growth in banking activity – High market shares).

In this connection, with a penetration of 21.6% in individual customers, according to the FRS/Inmark study, ”la Caixa” is the leader in individual banking in Spain, with the gap between the second institution widening every year, which demonstrates the Institution’s capacity to obtain its customers’ loyalty, allegiance and trust.

Specialised approach to target customer segments

Additionally, with a view to supplementing the traditional leadership of ”la Caixa” in individual banking, the Strategic Plan expressed the intention to implement specialised value proposals for companies and individuals to enable the Group to strengthen its position in these market segments. At 2009 year-end this implementation had been completed and all the specialised management models are now fully integrated into the commercial network structure.

Personal BankingThe implementation of a personal banking customer management model, which commenced in 2008, was completed in the first half of 2009. Accordingly, every branch currently has managers dedicated to serving these customers, whose funds and securities amount to between EUR 100,000 and EUR 500,000. A central support unit was created, which is responsible for defining the value-added strategy and proposal for this segment, and shared commercial action protocols were established for all the branches. Also, the appointment of personal banking professionals in each geographical area enables the information, guidelines and support to be transmitted to the managers more effectively.

Of the more than 5,300 ”la Caixa” branches, 842 branches now have a sufficient critical customer mass to have one or more managers dedicated exclusively to the personal banking segment. There are currently 946 personal banking managers at these branches, who receive sufficient training and information at all times to be able to provide a high value-added service. At the remaining branches, the personal banking customers are managed by the employee assigned in coordination with the branch manager, who provides a personalised service to this group.

“a BROaD BaSE OF 10.5 MilliON

CUSTOMERS BY PROViDiNG a PERSONaliSED aDViSORY SERViCE”

2008

2009

PrivateBanking

0.5

BusinessBanking

10

High Net WorthCustomers

10

CorporateBanking

200

LEGAL ENTITIES(Turnover)

INDIVIDUALS(Funds and securities)

(ranks in millions of euros)

Individual Banking

SMEBanking

1

Personal Banking

0.1

10.5 million total

customers

“SEGMENTiNG CUSTOMERS allOWS US

TO FOCUS COMMERCial aCTiViTY”

“946 PERSONal BaNKiNG MaNaGERS”

”21.6% PENETRaTiON”

07 08 09


20.421.621.0

Penetration as a %

Source: FRS/Inmark

Personal Banking



“PRiVaTE BaNKiNG: 31 CENTRES

aND 373 SPECialiSED PROFESSiONalS”

2.2. Customer base: the core of the business (cont.)

In the second half of 2009, following the implementation of the model, the Group’s positioning in this segment was consolidated with the launch of the “Made-to-Measure” image, which transmits the main values of the service: personal management, professionalism, experience, knowledge, closeness and trust. The image was communicated internally and externally, with the focus on a specific value proposal and maximum contact with the customer.

The launch of deposits specially designed for this segment and various lending and services campaigns have enabled ”la Caixa” to consolidate its position and the new image. The development of specific advisory tools, segment reporting and the development of specific channels will be fundamental to boosting the segment in the future.

”la Caixa” has more than 468,000 personal banking customers, with funds and securities totalling EUR 57,703 million.

Private Banking”la Caixa” Private Banking has consolidated its position as one of the benchmark entities in Spain in the private banking segment, focusing on customers with funds and securities exceeding EUR 500,000. In contrast to the general trend in the private banking

segment, where the volume of assets has fallen by between 20% and 30%, the predominant feature in 2009 of ”la Caixa” Private Banking was growth, both in the number of customers and in the funds under management.

Consequently, at 2009 year-end ”la Caixa” had more than 65,000 private banking customers, with an increase of 13% on 2008, and funds under management amounted to EUR 40,985 million, up 21.5% year-on-year. This growth in assets is due mainly to the considerable commercial activity performed by 373 private banking professionals, supported by the 31 specialist centres integrated into the extensive branch network.

The considerable commercial dynamism and the continuous efforts to adapt to the market with the launch of new products and services led to strong growth in terms of both customers and funds in this segment. The Institution’s efforts in private banking focused on providing the advisory services process with a methodology based on a correct distribution of assets that responds to the customers’ different needs, on the basis of a case-by-case analysis, a standardised message and choosing products with the customers’ needs in mind.

Noteworthy among the new developments aimed at high net worth customers is the marketing of a new investment fund, Albus, which is intended to design a stable medium-term asset growth strategy, proposing a return to tradition, and is aimed at customers who require counselling to be able to make decisions with a certain degree of involvement and information. Albus has been very well received, obtaining contributions of more than EUR 330 million.

Mention should also be made of the synergies generated with the other business areas of ”la Caixa”. The strength of the branch network (which is the largest in Spain), the parallel development of the business and corporate banking network and the Corporate department and Servihabitat XXI are the perfect combination to enable ”la Caixa” Private Banking to offer a complete value proposal to its customers. Also key is the support of the ”la Caixa” Foundation with regard to matters relating to sponsorship and corporate social responsibility.



High net worth customers: “Altium”For the management of asset portfolios exceeding EUR 10 million, a segment was created within ”la Caixa” Private Banking with a specific value-added proposal. These customers have a specialised team –the “Altium” team– that meets the quality, sophistication and commitment demands of high net worth customers. This segment’s current positioning in Spain is impressive, with 265 “Altium” family groups and a portfolio under management totalling more than EUR 6,000 million. These aggregates make the Institution one of the main benchmark firms in high net worth wealth management in Spain, achieving net growth of 45% in funds in 2009.

The “Altium” value-added proposal focuses mainly on the management of financial investments, portfolio advisory services, alternative investments, successor training, global reporting and management control, advisory services in connection with corporate and real estate transactions and Family Office services. The loyalty building actions take the form of customised training courses at prestigious universities and conferences on matters such as tax and philanthropy, and exclusive events.

SME BankingIn the first half of 2009 ”la Caixa” implemented a proprietary personalised management model and a comprehensive and innovative catalogue of products and services covering all the needs of SMEs, and introduced a new specialised commercial professional dedicated exclusively to this customer group - the SME manager. At 31 December 2009, there was a team of 852 managers present in 820 branches. All of the foregoing is supported by the commercial strength offered by the extensive ”la Caixa” branch network.

This specialisation in SME services enables ”la Caixa” to continue to report organic growth despite the current unfavourable

market situation. Accordingly, at 31 December 2009, this business managed almost 179,000 ”la Caixa” customer companies and self-employed individuals, giving rise to a 30.8% penetration of the Spanish market. The share is even greater in Catalonia and Madrid where the Group retains a notable leadership with market shares exceeding 40% for reasons of tradition and because of the presence of the commercial network that affords ”la Caixa” a distinctive position in the two autonomous communities in which a large portion of Spain’s SME business is located.

At 2009 year-end the volume of loans was close to EUR 29,000 million and the volume of customer funds amounted to EUR 10,500 million. The Group continued to add to the segment’s value offering, with the creation of new products aimed at SMEs, retailers, self-employed individuals and the agricultural sector, such as the property mortgage to finance the transfer of pharmacies, and advances to agricultural customers (“agroanticipo“) to advance income from harvests. Also, with a view to reinforcing the support provided to SMEs, contracts and agreements were entered into with several public bodies which ensure access to financing with preferential terms and conditions, e.g. the Spanish Confederation of Employers’ Organisations (CEOE), the Spanish Confederation of Small and Medium-Sized Enterprises (CEPYME), the Official Credit Institute (ICO), the Centre for Industrial and Technological Development (CDTI), the Catalan Institute of Finance (ICF) and the European Central Bank (ECB).

Business BankingIn order to better serve medium-sized and large companies (companies which have a turnover of between EUR 10 million and EUR 200 million), in 2008 the Group implemented a differentiated management model in the provision of services to this group. Consequently, following the opening of 11 specialised centres in 2009,

“BUSiNESS BaNKiNG: 80 CENTRES

aND 735 SPECialiSED PROFESSiONalS”



”la Caixa” had a network of 80 business banking centres at 2009 year-end, with a workforce of highly specialised personnel under a decentralised, flexible management which is integrated within the territorial structure, thereby favouring synergies with the other segments as much as possible.

In what proved to be a lacklustre year for the market, ”la Caixa” business banking achieved considerable growth in commercial activity. Accordingly, in 2009 it attracted more than 4,000 customers, bringing the total to around 25,000. As regards the performance of volumes, in the past twelve months the loans under management by these centres grew by 14%, amounting to close to EUR 14,000 million, and the funds under management exceeded EUR 7,000 million at 31 December 2009, with year-on-year growth of 38%.

The products that proved to be most dynamic include most notably factoring and

reverse factoring, which increased by 42% to a total of more than EUR 12,114 million, representing a market share of 11.6% and moving ”la Caixa” up to third place in the ranking. This development is in line with the objective of becoming a transactional benchmark for companies, providing a service in day-to-day transactions, with the aim of making companies consider ”la Caixa” as an alternative solution in their business decisions. Considerable efforts were also made to complete the offering of products and services to meet companies’ international needs, which was very well received by our customers as reflected by the increase in documentary credits and in financing for foreign trade.

As regards the new products and services launched in 2009, particularly worthy of note is working capital financing, with special reverse factoring lines for public authorities and new online reverse factoring services, with the possibility of signing the contract online, automatic

advance requests and the launch of a new website specifically for non-customers. With respect to services, in 2009 a procedure was introduced through CaixaFactura enabling factoring and reverse factoring remittances to be generated directly from the electronic billing application. Turning to the treasury offering, ”la Caixa” continued to increase the product offering with the launch of European barrier options, commodity hedges, special currency hedging products linked to the price of the dollar, and new structures for interest rate hedges.

Additionally, customers’ operating needs are dealt with through “Línea Abierta Empresas”, which allows users to access a wide range of products and services. It includes over 1,000 functions which facilitate the integral management all kinds of transaction. In the latest AQMetrix survey, ”la Caixa” was again selected as the leading provider in Spain of internet services for companies.




Corporate BankingCompanies with an annual turnover exceeding EUR 200 million are managed by two corporate banking branches located in Madrid and Barcelona. The strategy proposals regarding this customer segment and the implementation of the necessary adaptation of the relationship model and the product/service offering are performed by a specialised business which has its own corporate structure.

This model is intended to increase the penetration in large companies with an integrated proposal both for financing requirements and the provision of services, underpinned by the Institution’s strong technological base and commercial network, with the aim of being the first choice for our customers with innovation, efficiency and excellence of service. In 2009 progress was made with this model

and growth was achieved on two fronts:

on the one hand, the customer base

was increased, and, on the other hand,

the relationship with current customers

was strengthened, incorporating the

Institution’s wide range of products. This

resulted in strong growth of 20% in the

lending portfolio.

In addition, within the framework of the

specialised customer offering model,

”la Caixa” has two institutions branches

which, together with the wide reach of

the network, enable the Group to handle

the business linked to the public sector

and institutions with a differentiated

value proposal.

International business”la Caixa” caters for its customers’

international needs by offering a full range of

products and services based on the type

of need and the presence of ”la Caixa” in each market.

In countries where there is an operating branch, ”la Caixa” offers financial services to Spanish as well as local companies with a presence in the country. It currently has operating branches in Warsaw, Bucharest and Casablanca (opened in 2009), and is the leading Spanish financial institution in these locations.

To complement its direct presence, ”la Caixa” has entered into commercial co-operation agreements with its strategic partners. In Portugal, it has entered into an agreement with Banco BPI to offer a comprehensive service to businesses that operate in a unified manner in the Iberian Peninsula. Under this agreement, a specialised centre for businesses has been created both at ”la Caixa” and at Banco BPI and a range of products and




General Managers of international BranchesMohammed Alí Morocco (Casablanca)Raúl Carmona Poland (Warsaw)Juan Luis Martín Rumania (Bucharest)

Directors of Representative OfficesFrancisco Javier Serrado China (Beijing and Country Manager)Danni Cheng Zhou China (Shanghai)Claudina Farré Italy (Milan)Jordi Fuster France (Paris)Carlos Morales Turkey (Istanbul)Juan Francisco Riutort Germany (Frankfurt)Berta Rodó Germany (Stuttgart)Álvaro Valera United Kingdom (London)

services has been tailored to this segment (“Iberian Solutions for Businesses”). In addition, strategic agreements entered into with investee financial institutions have increased in number and been strengthened, such as the co-operation agreement signed in 2007 with The Bank of East Asia to enhance the range of products and services offered to customers with interests in China and Hong Kong, and a similar agreement with Grupo Financiero Inbursa (GFI), Mexico’s sixth largest financial group, in which Criteria CaixaCorp has a 20% holding. Thanks to this agreement, we can offer our customers the ability to perform any financial transactions with one of the leading companies in that country. These agreements reflect the desire of ”la Caixa” to assist our customers in the best way possible in their business dealings in areas with the greatest economic growth: Asia and Latin America. Lastly, a similar agreement, entered into in 2009, is being developed with Erste Group Bank for Central and Eastern Europe, where it is one of the leading banks with a customer base of 17.5 million (see section 3.1. Criteria CaixaCorp: Internationalising and diversifying income).

Meanwhile, the representative offices of ”la Caixa” provide support to customers who operate abroad and to potential

customers with commercial interests in the Institution’s area of influence, and also help attract operations of foreign companies establishing or maintaining commercial dealings with Spain. They offer the full range of products for companies. ”la Caixa” has eight representative offices, located in France (Paris), Germany (Stuttgart and Frankfurt), the United Kingdom (London), Italy (Milan), China (Beijing and Shanghai) and Turkey (Istanbul).

In addition, ”la Caixa” has 3,000 correspondent banks throughout the world which enable customers to manage any foreign trade transaction anywhere in the world. It also provides an international cash management service through the Unicash Alliance, made up of 27 top Banks which provide coverage in Europe and the United States. ”la Caixa” also has 75 bilateral cash management agreements in force with the world’s leading banks.

Organisations and multilateral bodiesIn 2009, agreements were strengthened with multilateral development organisations and Spanish official bodies to increase business and the customer base.

The Council of Europe Development Bank (CEB) and Microbank of ”la Caixa”

agreed to allocate EUR 100 million to finance the economic development and social integration of groups with limited resources. This is the second time that the CEB has opened a credit facility of this kind, by lending funds for microloans outside its target countries. It also represents an innovative alliance, being the second credit facility of its kind arranged in Spain.

Several transactions were arranged with the European Investment Bank (EIB), including notably the recent signing of a loan to contribute, together with the Barcelona Provincial Council, to meeting the European Union’s energy and climate change targets, by financing investment in energy saving in public buildings and another loan to finance the construction and operation of the gas transport network. Lastly, corporate guarantees were signed to finance hospital building and refurbishment projects and energy efficiency improvements, and ”la Caixa” participated in issues launched by the EIB.

Furthermore, ”la Caixa” entered into foreign trade agreements with the EIB to increase the Forex transactions between the two institutions, and the CosmoCaixa centre in Barcelona was host to the “EIB Forum 2009” entitled “Connecting Europe: financing mobility and sustainable cities”.



2.3. Commercial network and human resources: cornerstones

”la Caixa” is the leading institution by number of branches.

The ”la Caixa” Group’s banking business strategy is based on an extensive distribution system in the form of a wide-reaching branch network, which is the basic tool for forging relationships and maintaining close ties with customers, reinforced by the development of additional communication channels (see section 2.4. Multi-channel management: an ongoing relationship with customers).

At the end of 2009, ”la Caixa” had 5,326 branches, 5,315 of which were located in Spain. ”la Caixa” is the leading player in Catalonia and the Balearic Islands, its traditional area of activity, where it has 1,915 branches, and is also one of the most well established institutions in other autonomous communities such as Madrid, Andalusia and Valencia. With its extensive network, ”la Caixa” continues to be the Spanish financial industry leader in terms of number of branches, with a market share of 12.0%.

Outside Spain, it has three operating branches (one in Warsaw, one in Bucharest and another in Casablanca which was opened in 2009) and eight representative offices (see section 2.2. Customer base: the core of the business).

In 2009 a detailed analysis was performed of the universal banking network, which led to the integration of certain branches, in many cases due to the close proximity between them. This process was performed while guaranteeing service levels and maintaining the close relationship between ”la Caixa” and the branches’ customers, and as a result it enhanced efficiency and enabled the commercial network to adapt to the current business environment. With regard to specialised branches, Business Banking and Private Banking centres were opened in 2009, as part of the specialised value-added service model offered to these groups (see section 2.2. Customer base: the core of the business).

“THE NETWORK’S WiDE REaCH iS THE KEY TO OFFERiNG QUaliTY

PERSONaliSED SERViCE”

07 08 09

5,480 5,3265,530

3,425 3,489 3,411

2,055 2,041 1,915

NUMBER OF ”LA CAIXA” BRANCHES

Catalonia and Balearic Islands

Rest of Spain

NETWORK DISTRIBUTION BY TYPE OF BRANCH


Total branches 5,326

5,200115

48031

5,31511

Universal banking branchesSpecialised centres

Corporate and institutions bankingBusiness bankingPrivate banking

Branches in SpainInternational branches

20182

276

85

667

749

50

130

93

30

18556

494

1,665

250

16042

136

GEOGRAPHICAL DISTRIBUTION OF BRANCHES

Total in Spain 5,315Branches outside Spain 3Representative offices 8

”LA CAIXA” TOTAL 5,326



The ”la Caixa” Group’s workforce numbered 27,505 employees in 2009.

In 2009, 902 employees joined or returned to the Group and 1,215 employees left permanently or temporarily, as a result of the natural turnover of the workforce, including early retirement.

As part of the process to integrate certain branches following efficiency criteria, an outplacement procedure was defined for the employees of the integrated branches. In order to take advantage of the professional experience of the staff at these branches, temporary support teams were created to provide cover for commercial and management functions.

With regard to the deployment of the business specialisation model that was launched in previous years, the organisational solutions completing it were specified in 2009. The first initiative in this area took place in the first quarter and consisted of an internal communication campaign to explain the model to the entire branch network. As part of the personal banking management system, 946 personal banking managers were appointed and, as a result of the implementation of the SME banking model, 852 employees assumed the role of SME managers. Meanwhile, the number of centres in the business banking network increased, thus opening up new professional development opportunities for more than a hundred employees.

With regard to talent management, the competence management system was consolidated among the managers of the branch network in 2009. The system is scheduled to be rolled out to the rest of the workforce in 2010. At management level, much progress was made in the creation of a talent map of the organisation, with a detailed identification of development potential. These two programmes are

helping to consolidate a performance appraisal culture and a professional development approach based on areas for improvement that have been identified. The Virt@ula platform, a virtual employee training area, has adopted the Web 2.0 standard, which opens up new interaction opportunities among the participants in virtual learning, communication and knowledge management activities.

With respect to remuneration management, a remuneration master plan was approved that sets the main guidelines and initiatives for this area. Noteworthy among these -already implemented in 2009- was the implementation of the bonus schemes for each of the business segments. Also, in line with the Bank of Spain recommendations based on the Financial Stability Board principles, the self-appraisal of ”la Caixa” was completed, approved by the Remuneration Committee and submitted to the Bank of Spain.

In the area of personnel management and administration, intense efforts were made from the standpoint of cost containment and tools were developed to assist centre managers with staff management duties. On-call teams were also strengthened, thereby helping to manage workplace absenteeism efficiently and cover the vacancies generated by it.

Constructive dialogue was conducted on an ongoing basis with union representatives through the normal operation of the employees’ committees and of various working committees, including the committee in charge of monitoring the Work-Life Balance Protocol and the committee that led the signing of the Employment Protocol in the Branch Integration process and, on the basis of an external analysis, work is already underway on various initiatives involved in the forthcoming equality plan.

“QUaliFiED STaFF COMMiTTED TO

PROViDiNG GOOD SERViCE”

“BEST COMPaNY TO WORK FOR

iN SPaiN” (Source: MercoPersonas 2009)

EMPLOYEES 2009 2008 Yr-on-yrchange

”la Caixa” 24,944 25,335 –391”la Caixa” Group 27,505 27,818 –313

Textos picats

2.3. Commercial network and human resources: cornerstones (cont.)



2.4. Multi-channel management: an ongoing relationship with customers

“30.1% SHaRE OF THE ONliNE

BaNKiNG MaRKET” Source: Nielsen Net Ratings

“7,951 SElF-SERViCE TERMiNalS, OF WHiCH 6,985 SEll TiCKETS”

”la Caixa” multi-channel management: shall we t@lk?

The strategy of ”la Caixa” is based on providing customer satisfaction and offering all the services, technological advances and information that customers need to enable them to manage their finances effectively. The multi-channel management of ”la Caixa” takes advantage of new technologies to bring quality banking services closer to all users and make them more accessible through innovative services that are available anywhere, any time.

The leading network of self-service terminals

”la Caixa” has 7,951 self-service terminals, with functionalities available in 15 languages. This makes it the institution with the most extensive network of self-service terminals in the Spanish financial system, with a market share of 12.9%, and the second largest in Europe, thereby reflecting its strong commitment to, and vocation for, customer service. More than 527 million transactions were carried out on these ATMs in 2009.

The most widely requested transactions were cash withdrawals and savings passbook updates, which accounted for 69% of the main ATM transactions. The second most common transaction, which accounted for 23% of the total, was paying in cash. Currently, 7,567 ATMs (95% of the total network) are equipped for paying in cash.

The ”la Caixa” ATMs also provide various features to make them more accessible and user-friendly, such as the “CaixaFácil” functionality, which has a simpler menu and larger buttons, and “My Usual Transactions”, which has a screen menu that the customer can personalise. Another tool to help the customer is the search engine, which is used both for the

functionalities of the ATM itself and for locating other branches and ATMs nearby in a highly visual manner using Google Maps.

All the Institution’s ATMs are adapted to Braille and are also equipped with voice-operated software for the visually impaired. In this regard, the Institution has 3,235 ATMs with a voice-operated system, conceived and designed for customers with this type of disability. They also have a system that enlarges the font size for people with sight difficulties (see section 2.6.2 Technological innovation as a priority for improving customer care and service).

Of the total number of ATMs, 6,985 terminals sell tickets, giving customers access to the widest range of entertainment on offer in Spain, including cinema, theatre, music and sport.

www.laCaixa.es is the leader in internet banking

The website of ”la Caixa” has confirmed its leadership in online banking services with a 30.1% market share of active Internet users, as measured by Nielsen Net Ratings.

According to the latest AQMatrix survey, ”la Caixa” was once again rated the leader in terms of quality in all internet banking services (individual banking, personal banking, professional and business banking, online brokers and foreign trade).

The ”la Caixa” website provides access to Línea Abierta, an online management tool for financial products, which is available in 19 languages and has over 850 different functionalities. More than 6 million customers have signed up for this service, of whom 3 million performed almost 1,600 million transactions in 2009.

07 08 09


4,9536,020

5,544

LÍNEA ABIERTA CUSTOMERS (Thousands)



2.4. Multi-channel management: an ongoing relationship with customers (cont.)

The website also provides corporate information on the Group. It acts as a showcase for promoting new ”la Caixa” products and as a tool for providing information on finance.

It is also the access point for ”la Caixa” Welfare Projects, the investment holding company Criteria CaixaCorp and non-financial services, such as leisure services (ServiCaixa.com).

Developments in 2009 included the launch of the new MicroBank website (www.microbanklacaixa.com), which reinforces the image of ”la Caixa” as a social bank, and changes to the Servihabitat XXI website, which now has a more modern look and feel and a search engine adapted to users’ different needs, which can be used to locate properties using Google Maps or for scheduling visits. The online sale of non-financial products includes the newly-created multiEstrella area, which describes all the advantages of becoming a member of this programme, from financial advantages to special offers on Puntos Estrella gift points and on leisure.

Various documents with web functionalities were also added, including the Corporate Responsibility Report and the Puntos Estrella catalogue, which enable easy reading by imitating a real page being turned and provide links to the corresponding product descriptions.

”la Caixa” continued to work on adding a number of multimedia initiatives to its website. These constitute a decisive move towards web 2.0, the second generation web based on specific user communities, and a range of services that encourage customer participation and the quick, easy exchange of information, including notably the new services in “beta” format, as described below in section 2.6 Innovation in customer services. Also, ”la Caixa” is the first financial institution to have a corporate channel on YouTube (http://es.youtube.com/lacaixa), which has more than 300 videos of exclusive services that it wishes to promote, and has received over 275,000 visits.

Noteworthy among the services to businesses is the new “Iberian Solutions” area, which was created as a result of

the agreement between ”la Caixa” and Banco BPI aimed at supporting business customers that operate in Portugal, while also attracting Portuguese businesses with a presence in Spain. Another development was the new functionality added to Foreign Trade, which enables customers to consult the status of documentation sent to their supplier, both for payment by documentary credit and remittances. Another business solution was the creation of the new website, CaixaConfirming.com, a particular feature of which is the possibility offered to supplier companies that are not customers of ”la Caixa” to access the reverse factoring functionalities of Línea Abierta.

The widespread acceptance of the service is reflected in the increase in the absorption rate of the main functionalities, notably the 95% absorption rate in the case of the transfer of invoice files, 71% in the case of payment files, 67% for bank transfers and 72% for the purchase and sale of securities.



“2009: 1.4 MilliON CUSTOMERS USE

MOBilE PHONE SERViCES”

Mobile phone services: CaixaMóvil

CaixaMóvil encompasses all the products and services that the Institution has been offering by mobile phone for over eight years. ”la Caixa” is the leading financial institution in mobile phone financial services both in terms of the range of services available and the 1.4 million customers who use these services.

Línea Abierta Móvil, which underwent improvements to its design and browsing capabilities in 2009, enables a wide range of transactions to be carried out using mobile phones. Of particular note were the addition of the Global Position feature, the new design of the Bolsa Abierta securities area, which has a wide range of functionalities, and the new mobile-enabled website for businesses, with specific functionalities for businesses.

The service also added functionalities for businesses, such as the possibility of multi-signatures for transactions and authorisations for sending files.

”la Caixa” was the first banking entity to have a store selling mobile phone services and applications, “CaixaMóvil Store”, which can be downloaded easily by customers. In 2009 over 300,000 mobile phone applications were downloaded.

With regard to ticket sales, a new application was developed for ServiCaixa that enables purchases to be made in a similar way to on the ”la Caixa” website, in a user-friendly manner and displaying the complete programme of events available.

Also, thanks to the Alertas CaixaMóvil service, customers can receive SMS or e-mail messages on their accounts, account movements, settlement of card balances or cash withdrawals using self-service terminals. The alerts service also has exclusive alerts for businesses, such as cash, card and file status reports sent by

SMS message to various recipients based on the type of alert. In 2009 more than 35 million messages were sent to ”la Caixa” customers’ mobile phones.

According to Nielsen Mobile, ”la Caixa” is the leader of the Spanish mobile phone services market, with a 52% market share. The Institution believes that in the future the mobile phone will be one of the most frequently used channels for financial enquiries and transactions, not only because of its widespread use but also because the technology is constantly evolving, thereby increasing the range of functionalities, the graphic capabilities, speed, usability and accessibility.

Ticket sales: ServiCaixa.com

Through ServiCaixa.com, ”la Caixa” leads the Spanish ticket sales market, both in terms of volume and the range of tickets available. In 2009 ”la Caixa” made 9.3

million advance ticket sales through electronic channels and the number of Club ServiCaixa members reached 1.6 million, thereby consolidating its position as one of Spain’s leading cultural clubs.

In 2009 ServiCaixa.com launched its new website, with a more innovative design including 3D technology, more animated areas and a purchasing process that makes it easier to buy tickets.

accessible multi-channel management

The ”la Caixa” Group’s strong social commitment and its vocation to serve and

“2009: 9.3 MilliON aDVaNCE TiCKET

SalES”



“QUaliTY ONliNE BaNKiNG

FOR EVERYONE”

work in the general interest is shown in its efforts to make access to its services easier for all user groups, through an active policy aimed at removing architectural, technological and communication barriers.

”la Caixa” aims to provide quality banking to everyone and, for this reason, since 2006 it has been implementing A level international web accessibility standards (under the Web Accessibility Initiative or WAI) for Línea Abierta, its online banking service.

”la Caixa” is committed to ensuring that its website and Línea Abierta service are accessible, regardless of the type of hardware, software or network infrastructure used, or the language,

culture, geographical location or skills of its users. To this end, the WCAG 1.0, AA level accessibility guidelines have already been applied to a number of channels on the website.

Furthermore, ”la Caixa” also participates in the INREDIS project (INterfaces for RElations between environment and people with DISabilities). This is an accessibility initiative led by Technosite, the ONCE technological company. The aim of the project, from 2007 to 2010, is to develop basic technologies to create communication and interaction channels between people with some kind of disability and their environment, thereby helping to make a substantial improvement to their quality of life.

2.4. Multi-channel management: an ongoing relationship with customers (cont.)



2.5. Payment methods: a distinctive offering

With 10.6 million cards in circulation, of which 10.3 million were issued by ”la Caixa” and 0.3 million by Finconsum, the ”la Caixa” Group is the top card issuer in the Spanish market. In 2009 the Group maintained the number of cards issued, although the total number of cards in Spain fell 3% with respect to 2008. In 2009 a total of 560 million transactions were carried out with the ”la Caixa” Group’s cards, with turnover of retail sales and cash withdrawals from ATMs totalling EUR 33,657 million, of which EUR 33,410 million related to ”la Caixa”, which represents a decline of 2.5% on 2008, as compared with the drop of 4.1% in Spain’s financial institutions taken as a whole. Adding the business volume generated through cards from other issuers used in retail stores and ATMs, the ”la Caixa” Group manages EUR 1,570 every second.

”la Caixa” is the top-ranking financial institution in terms of bank card turnover, with a market share of 17.7%, or 17.9% including the Group. The market share of ”la Caixa” in terms of bank card turnover through its customer retail stores stood at 20.9%, 1.2 points up on 2008, which also makes it the leader in this area. Accordingly, ”la Caixa” customers have access to the widest range of payment methods available in Spain, including all the card types and international brands. Also, in 2009 an agreement was entered into with the Chinese card brand China Unionpay whereby its cards are accepted in ”la Caixa” ATMs, making ”la Caixa” the first Spanish entity to enter into an agreement of this type with China Unionpay, which has more than 1,800 million cards issued.

Of the 10.6 million cards in circulation at the end of 2009, 41.9% are credit cards (5.3% of which are revolving credit cards), 48.8% are debit cards and the remaining 9.3% are private and purse cards. The number of point of sale (POS) terminals, in which ”la Caixa” is also the market leader, had reached 167,993 at the end

of 2009, 97% of which are equipped for transactions with smart cards.

Mention should also be made of the growth in business cards (490,000), as a result of which ”la Caixa” became the leading issuing entity in Spain, with the largest turnover for this type of card. The wide range of business cards available, using all payment methods, and the cards that can be used for specific purposes (restaurants, fuel, payments into ATMs, gifts), meet all the payment needs of companies.

2009 saw an increase in the use of prepaid cards, especially in public institutions, to channel economic assistance aimed at social programmes, such as grants, food subsidies and social assistance subsidies, and in private companies, for which prepaid cards are an especially useful instrument for rewarding and encouraging customers and employees, e.g. in the form of gift cards.

Also, 30 new “Tarjeta Comercio” shopper advantage card projects tied to local retailers’ associations were implemented in 2009. ”la Caixa” now has 55 projects of this kind up and running in various Spanish cities, with over 100,000 cards issued and 4,500 participating businesses.

In services for retail outlets, at the beginning of 2009 the innovative CaixaRápida service was introduced, which is aimed at stores dealing mainly with transactions involving small amounts and where few card payments are made. This system speeds up the payment process by removing the requirement for the customer’s signature and filing of the copy of the receipt for this type of transaction. Additionally, the installation of new GPRS dataphones with touch screens allows the customer to sign directly on the POS terminal screen, in the case of transactions involving larger amounts, eliminating the need for printing and filing a paper record of the receipt.

“THE ”la Caixa” GROUP iS THE lEaDER

iN TERMS OF BaNK CaRD TURNOVER, WiTH a MaRKET SHaRE OF 17.7%”

07 08 09

Cards issued Transactions

546 556 560

”LA CAIXA” GROUP CARDS(Millions)

9.8 10.610.3

07 08 09

32,957 33,41034,260

16,036 16,476 16,226

16,921 17,784 17,184

Turnover at retail stores

Turnover at self-service terminals

”LA CAIXA” TURNOVER(Millions of euros)

POINT OF SALE (POS) TERMINALS(Units)

07 08 09

127,449

167,993171,631

Market share in terms of turnover at retail stores in 2009:20.9%



2.6. innovation in customer services2.6.1. Branches and services designed for personalised attention

In 2009 the work carried out to modernise the facilities focused mainly on the adaptation of 330 branches, based on the space layout concepts and criteria applied at the “new model” branches introduced in 2006, which represented a genuine revolution in bank branch design, affording comfort and privacy for business meetings with customers. As with the new design branches, these adapted branches give priority to areas for individualised attention, thereby fostering a personalised business relationship which enables advisory services to be tailored for each customer. The result of this adaptation process has been welcomed and highly appraised by customers.

The use of glass as the main material for separating areas provides pleasant bright surroundings, making our customers feel comfortable. The transactions and quick cash area is also sufficiently set apart and identifiable to make it easier to use.

In addition, in 2009, all the branches that were opened, relocated or fully refurbished were adapted to the “new model”, which has now been implemented at over 800 branches, where customers can enjoy all the advantages it brings. Also in 2009 business and private banking branches were opened which, as in previous years, have a similar design to the universal banking branches in terms of materials used and comfort for customers, but are also specially adapted to the particular characteristics of these customer groups.

To complement the innovations in space layout and the use of latest generation technologies, in 2009 particular emphasis was placed on energy efficiency at branches so that, without affecting comfort, progress could be made in implementing the environmental sustainability policy.

A series of projects were consolidated in 2009 with respect to new technologies

aimed at providing better customer service. In this regard, the features offered by the new financial terminal were increased and now include securities, cards, loans, incident management, etc. and the new Google search engine. As a result, 46.7% of the transactions carried out by the branches are managed using these new financial terminal functionalities. Also, suggestions most frequently made by the branches were added such as “My Favourites”, a list of transactions with balances, the incorporation of the Sales Advisor service and the resolution of incidents concerning cheques.

In addition, various activities were undertaken to improve the branch network communication model. Of particular note was the new Home Page containing current events with a digital newspaper format and a more attractive intuitive design which, in addition to providing information, also aids commercial activity by highlighting issues that are relevant and require priority attention in commercial and business activities.

In the same area of improvements to support technology for branches, Webcollaboration and Call Log services were implemented in 2009. Webcollaboration enables a call centre operator to visualise the screen at which the branch employee is looking, with the employee’s consent, thereby helping to resolve complex enquiries, while increasing the security of access to the ”la Caixa” financial platform. The Call Log service implemented in branch employees’ telephones enables lost, answered and completed calls to be consulted, in a similar manner to mobile phone calls, thereby enabling the numbers of managed calls to be consulted easily and quickly. In the area of customer care, the private banking platform was consolidated, particularly with respect to the inclusion of economic and commercial

“THREE COMPONENTS: iNDiViDUaliSED

SPaCES, QUiCK CaSH aREa aND SElF-SERViCE aREa”

“SPaCES DESiGNED TO FaCiliTaTE

FaCE-TO-FaCE MEETiNGS”



follow-up information and backtesting of customers’ portfolios using information on portfolio risk and returns analyses. The “MIFID Compliance” platform was also built, consisting of a commercial proposal entailing the validation of volatility, liquidity and suitability with respect to the test signed by the customer.

With regard to international expansion, with the opening of the new operating branch in Casablanca (Morocco), the new banking IT platform for the international expansion of ”la Caixa” was brought into operation, which is remarkable for its flexibility. The platform includes a hub for all the countries and specific parties,

thereby making it possible to cater for the particular needs of the business in each country. In this way, ”la Caixa” will have the same financial terminal and Línea Abierta channel in all the countries where it operates.

In the field of communications infrastructure, work continued on the plan to replace the lines used for inter-branch communications and communications with head office, with high-speed fibre optic lines, resulting in faster response times for branch employees and customers alike, both with respect to ATMs and attention for employees.



2.6.2. Technological innovation as a priority for improving customer care and service

línea abierta

Innovation is a constant objective for ”la Caixa”. Customers can acccess new products through the Línea Abierta channel, such as “Mis Finanzas”, which enables customers to manage their household finances using Línea Abierta and now incorporates improvements based on comments made by customers who tested the service. It provides customers with up-to-date information on all their account and card transactions and personalised categories into which they can be classified. It also includes an income and expenses budget which provides added value for managing customers’ finances, all contained in an easy-to-use graphic visual environment.

As part of its working methods, ”la Caixa” incorporates systems that enable users to participate in the creation and improvement of Línea Abierta services. Users are invited to try new functionalities in “beta” format and give their opinions, and customers are provided with the “Ongoing Evaluation” feature whereby customers can evaluate and give their opinions on various Línea Abierta operations already up and running. The changes introduced based on the suggestions for improvement sent by customers mean that users are able to play an active role in improving the services.

The customer can also choose the colour and image for the Línea Abierta menu tabs from more than 32 different designs. This original functionality has resulted in over 170,000 customers personalising the service.

Various catalogues with web functionalities have been included in the ”la Caixa” internet website, www.lacaixa.es, which simulate the turning of a real page, and links to the related product descriptions have been added. Examples include the “Puntos Estrella” customer loyalty points catalogue or the Corporate Responsibility Report. At the end of 2009, the “CaixaMóvil Store” was created, which

acts as a showcase for mobile telephone applications, and the new channel of the Institution’s website which displays the various mobile applications of ”la Caixa”. The Institution also launched the new ”la Caixa” blog, the first corporate blog by a Spanish financial institution, in order to disseminate contents of general interest.

In the area of environmental responsibility, as part of its “ecoCaixa” initiative, Línea Abierta offers customers the full extent of its range of technology, enabling them to consult any correspondence online without needing to receive anything on paper, using the “Servicio de Correspondencia Personalizada” personalised correspondence service, which already has almost 2.5 million users. As a result of its launch, over 250 million communications are no longer sent on paper. The

“ecoCaixa” initiative also provides customers with various ways of carrying out their activities in order to optimise resources and protect the environment, through ”la Caixa” Welfare Projects.

aTMs

By simply inserting their cards or passbooks into ”la Caixa” ATMs, visually impaired people can access a specific screen showing white large-font letters on a black background, making information easier to read.

In addition, 3,200 ATMs now have assistance videos in sign language (Spanish and Catalan) that explain the most frequently used transactions: “cash withdrawals” and “checking account balances and transactions”.



Mobile phones

”la Caixa” has been a pioneer among banks in launching a store for mobile phone services and applications called “CaixaMóvil Store”, where customers can download them easily. The ”la Caixa” applications are available from the applications stores of the leading manufacturers and operators.

An application has been created for iPhone, Blackberry and Android , with a branch locator that finds the nearest branches using the device’s GPS and displays them using Google Maps; in the case of Android, and for iPhone, an augmented functionality has been added which, in this case, shows information (address, telephone number, ATMs, etc.) on branches using the device’s camera.

To improve users’ experience of distance banking by mobile phone, the Línea Abierta Móvil service has been redesigned to enhance not only visual display but also screen browsing. The “Mis Finanzas” service has also been included and adapted to mobile phone use, so that customers can manage their incomings and outgoings with no restrictions on their mobility. The latest development is the introduction of the “Transfi” service whereby transfers can be made between mobile phones. Also, the Puntos Estrella loyalty points catalogue can also be accessed by mobile phone and points exchanged for gifts.

CaixaProtect

To consolidate its leadership in the area of electronic channels, ”la Caixa” has continued to give priority to ongoing innovation by offering CaixaProtect, a service that automatically provides total security in the event of irregular transactions using cards, the Línea Abierta service or ATMs and guarantees customers

full protection, thereby giving them peace of mind and confidence. The CaixaProtect service also activates a system of mobile phone alerts when transactions involving large amounts are carried out, whether purchases, cash withdrawals, or card transactions and transfers using Línea Abierta or ATMs. In 2009 over 7 million alerts were sent.

Cards

A new card, Tarjeta Money, has been created mainly for customers who wish to control their expenses as much as possible. This is a free, prepaid card that may be topped up for use in retail outlets and ATMs. A notable feature is the fact that this is the first card that can be topped up by mobile phone. When a purchase or cash withdrawal is made, a text alert is sent to the mobile phone number provided by the customer.

Retail outlets

All the services and products to cover the needs of retail outlets are grouped together under one label, “Comerci@”. The latest services are Premi@, Caixarápida, Multidivisa, Servicuentas, Propinas, Crossborder, Taxfree, etc.

In 2009 a new free service was introduced for retail outlets called “Taxfree” that refunds VAT to customers resident outside the European Union who have made purchases using a ”la Caixa” point of sale terminal in Spain.

As part of the search for new services to facilitate card payment in all types of retail outlets, an innovative and unique application has been developed, which is specially designed to convert mobile phones into portable point of sale terminals for payment using cards for home delivery services, for example, which are traditionally paid for in cash.



2.7. Quality and customer service: the groundwork for the future

Service excellence

Service excellence has always formed part of the identity of ”la Caixa”. This quality mission is borne out in its constant efforts to offer customers top-quality care, a fast and effective service and personalised attention. Independent market surveys frequently confirm ”la Caixa” as one of the institutions with the highest quality of service. According to FRS Inmark’s financial behaviour study, ”la Caixa” is the institution with the highest recommendation rate, which indicates how strongly quality is associated with the Institution. Also, with regard to the multi-channel service, according to the data provided by AQMetrix, the Línea Abierta service of ”la Caixa” is the leader in terms of quality in all the categories measured.

Customer satisfaction surveys

In 2009 ”la Caixa” continued to monitor on an ongoing basis its customers’ assessment of the service they receive. This programme of surveys is used to obtain a service quality indicator for individual customers and businesses. 223,457 surveys were carried out in 2009 and were used to obtain a satisfaction indicator for each ”la Caixa” branch. This ongoing monitoring of customers’ opinions forms the basis for the continuous improvement plans.

Customer service office

”la Caixa” provides its customers with multiple forms of communication: letters to the President and Chief Executive Officer, the free customer care telephone service and the website, all of which are

accessible from the branches. All the complaints received through any of the above channels were handled by the persons in charge in the territorial network, at head office or at the Group’s subsidiaries. In 2009, 31,668 complaints were received. A total of 2,229 complaints were processed by the customer care/customer ombudsman service in 2009, of which 458 were resolved in favour of the claimant, 660 in favour of the Institution, 445 were classified as inadmissible, 24 claims were dropped by customers and 642 have not yet been resolved.

”la Caixa” regards each complaint as an opportunity to improve internal procedures and the services it provides. Thanks to the thorough way in which it handles claims, ”la Caixa” is regularly one of the institutions with the fewest number of complaints in relation to the size of its business, as highlighted by the Bank of Spain’s Complaints Service.

Branch satisfaction with internal services

To maintain and improve the high standard of service that ”la Caixa” offers its customers, it is first necessary to ensure that employees are fully satisfied with the service they receive from their internal suppliers. To this end, periodic surveys of branches provide information about the employees’ level of satisfaction with the internal services they receive. Quality levels are also monitored on the basis of objective data, using indicators obtained by measuring various activity parameters e.g. the time taken to resolve breakdowns and downtime for certain services.

2009 FINANCIAL BEHAVIOUR STUDY Perceived quality scores(Scale of 0 to 10)

ATMs

Internetbanking

Branchservice

”la Caixa” Market average

Source: FRS Inmark

8.16

8.10

8.43

8.32

8.61

8.52

“QUaliTY WORKS TO SECURE FUTURE

GROWTH aND PROFiTS”



2.8. Supporting the business: ”la Caixa” subsidiaries

The ”la Caixa” Group encompasses a number of subsidiaries whose basic objective is to provide support services to the Group.

e-la Caixa

e-la Caixa is responsible for carrying out the multi-channel management strategy developed by ”la Caixa” (see section 2.4 Multi-channel management).

e-la Caixa is in charge of co-ordinating, managing and developing the electronic channels made available by ”la Caixa” to its customers, which include both financial and non-financial services. The main tasks assigned to e-la Caixa include both researching and implementing new functionalities and solutions and commercial management of all distance channels. These activities are carried out in co-ordination with the branch network to ensure full integration of all the channels used in its dealings with customers, in line with the multi-channel strategy adopted by the Institution.

Through a hot-line service, e-la Caixa provides customers with all the assistance they may need to make proper use of the various channels: telephone, e-mail or online tools. It also offers its services to other Group companies.

e-la Caixa also manages investments in electronic channel projects which provide the traditional banking business with added value and differentiated services.

Serviticket, the leading company in the Spanish ticketing market, is the ”la Caixa” Group company in charge of managing the advance ticket sale service through the various existing channels (self-service terminals, internet, mobile phone, etc.), and offers an extensive, permanent entertainment programme. Serviticket offers the widest range of entertainment options including cinema, theatre, music, sports, theme parks and historical monuments.

Servicios informáticos ”la Caixa”

Servicios informáticos ”la Caixa” is the company in charge of managing and providing technology support to ”la Caixa” and its Group, by channelling the implementation of the projects making up the ”la Caixa” Strategic Plan in the field of IT. It is also the company that manages the technology resources in the areas of internet, self-service, telephony (land and mobile) and digital television, monitoring the security and integrity of the systems, in order to offer customers a service of maximum quality.

MicroBank

MicroBank, the social bank of ”la Caixa”, is a new concept of financial institution specialised in providing financing through micro-loans to people at risk of social and financial exclusion and other groups with limited resources, with the basic aim of fostering productive activity, personal development and job creation.

SUPPORT COMPANIES

E-LA CAIXA

MICROBANK

GDS-CUSA

CAIXAVIDA

SUMASA

PROMOCAIXA

TRADECAIXA

FOMENT IMMOBILIARI ASSEQUIBLE

ARRENDAMENT IMMOBILIARI ASSEQUIBLE II

ARRENDAMENT IMMOBILIARI ASSEQUIBLE

SERVIHABITAT XXI

SERVITICKET

SERVICIOS INFORMÁTICOS ”LA CAIXA”

BUSINESS ACTIVITYMulti-channel management

Ticket sales

Technology support

Micro-loans

Default risk management

Life insurance

Property management and salesConstruction projects and maintenanceMarketing

Administrative servicesDevelopment of government-subsidised housing

Rental of government- subsidised housing

Housing rental

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%



GDS-Cusa Sumasa

GDS-Cusa provides services related to Sumasa manages new office the management of default risk and the construction projects, refurbishment centralised handling of certain operating works and the maintenance of existing tasks of the ”la Caixa” branches. buildings, and is also in charge of

procurements and utilities management CaixaVida for ”la Caixa” and the ”la Caixa” Group.

Caixa de Barcelona Seguros de Vida, PromoCaixaS.a. de Seguros y Reaseguros is one of the Group companies engaged in life PromoCaixa is the company in charge of insurance, to which ”la Caixa” transferred managing loyalty building programmes the insurance business in 1994 as credit and promotions and performing other institutions were no longer allowed to marketing activities for ”la Caixa” and recognise insurance operations in their other Group companies. financial statements. Since then, the company’s activity has been limited TradeCaixato maintaining the existing operations until expiry. Since the establishment

TradeCaixa provides administrative and of SegurCaixa Holding in 1992, the

accountancy services for some support execution of new insurance contracts has

companies in the ”la Caixa” Group.been channelled through its subsidiaries (see section 3.1. Criteria CaixaCorp:

Foment immobiliari assequible, Internationalising and diversifying

arrendament immobiliari income).

assequible and arrendament immobiliari assequible iiServihabitat xxi

Foment immobiliari assequible, Servihabitat xxi is the property services arrendament immobiliari assequible company of the ”la Caixa” Group. It and arrendament immobiliari engages in property investment and

the provision of property services to the assequible ii are the companies through

Group and to third parties. It develops, which the ”la Caixa” Welfare Projects’

manages, administers and sells properties Affordable Housing programme is carried

relating to the Group’s business activity, out for the promotion and operation

as well as properties of third parties and of quality housing rental at affordable Group-owned properties. prices.

2.8. Supporting the business: ”la Caixa” subsidiaries (cont.)



3. investee portfolio 3.1. Criteria CaixaCorp: internationalising and diversifying income

3.1.1. Criteria CaixaCorp: a subsidiary which encompasses the largest portion of the ”la Caixa” Group’s investee portfolio

Criteria CaixaCorp is the company in charge of implementing the ”la Caixa” Group’s investment strategy and international expansion. The ”la Caixa” Group’s interest in the capital of Criteria CaixaCorp, at 31 December 2009, was 79.45%. ”la Caixa” has stated its intention to hold a controlling interest at all times.

The main strategic goals of Criteria CaixaCorp are as follows:

– Increase its exposure to the financial business:

• Stakes in banks in Asia, Central Europe and America.

• Consolidation of the Spanish insurance business.

– Active management of the investments.

• Presence in the investees’ governing bodies.

• Influencing the decision-making process and fostering the investees’ development and profit-making capacity.

• Value management, investing and divesting based on market opportunities.

In 2009 the strategy aimed at rebalancing the investee portfolio continued, giving priority to financial assets, without excluding investments of special interest in the utilities industry (see section 3.3. Active management of the ”la Caixa” Group’s investee portfolio).

Criteria CaixaCorp contributes long-term value for its shareholders by actively managing its portfolio using a controlled risk approach, while fostering the growth, development and profit-making capacity of the companies involved in defining Criteria CaixaCorp’s future policies and strategies.

Criteria CaixaCorp has two lines of business:

• Utilities, which comprises the stakes in listed companies operating in utility industries, and in unlisted companies at an advanced stage of the business cycle.

• Finance and insurance, which groups together the interests in international banks and insurance companies, and in unlisted finance companies.

“TO BE a BENCHMaRK FOR iNVESTORS

iN FiRST-ClaSS COMPaNiES, PRiORiTiSiNG OUR PRESENCE iN iNDUSTRiES WHERE

WE HaVE ExPERiENCE”

79.45%

CRITERIA CAIXACORP

FINANCE

INTERNATIONAL BANKS

INSURANCE COMPANIES


LISTED

UNLISTED

UTILITIES

2009 Financial Report of the ”la Caixa” Group 3. Investee portfolio


3.1.2. Utilities business

listed companies: leading companies in the energy, infrastructure and utilities industries

This group is made up of leading companies with capacity for growth and value generation, centred basically in Spain but with a high level of international presence, in the energy, infrastructure and utilities industries, where the ”la Caixa” Group has accumulated knowledge and experience. A profitable portfolio has been built up with the capacity to generate attractive dividends, with excellent performance and a controlled level of risk. The goal is to create a value differential in these companies by taking up core positions in the shareholder structure that provide an active presence in the managing bodies and enable participation in key decision-making and in the development of business strategy.

Following completion of the merger with Unión Fenosa on 7 September 2009, Gas Natural has become one of the top ten energy companies in Europe and the leading integrated gas and electricity company in Spain. It is the world’s leading liquid natural gas operator in the Atlantic

basin and one of the main combined cycle operators around the world. The new company has more than 20 million customers (9 million in Spain) and 18 GW of installed electrical power worldwide. Gas Natural’s total assets exceed EUR 45,300 million.

Repsol YPF is an international integrated oil and gas company, with activities in more than 30 countries, and a leader in Spain and Argentina. It is one of the ten largest private oil companies in the world and the largest private company in the energy industry in Latin America in terms of asset volume. Repsol YPF’s total assets exceed EUR 58,000 million.

abertis is one of the leading European infrastructure development and management corporations, with more than 3,700 km of tolls managed and total assets exceeding EUR 24,000 million. In the last four years it has increased its geographical and business diversification with investments of over EUR 5,800 million in motorways, telecommunications, airports, car parks and logistics centres. At present approximately 50% of its income is generated outside Spain.

ENERGY

GAS NATURAL

ABERTIS

INFRASTRUCTURE

REPSOL YPF

AGBAR

UTILITIES / OTHER

TELEFÓNICA

BME

LISTED COMPANIES

Criteria CaixaCorp’s direct and indirect ownership interest

36.4%

12.7%

25.0%

44.1%

5.2%

5.0%



aguas de Barcelona (aGBaR) is a multi-concession operator providing services to the community.

With total assets of over EUR 6,500 million, Agbar is the leading private urban water management company in Spain, supplying water to nearly 13 million people and providing sewerage services to more than 8.3 million. Internationally, the Agbar Group supplies drinking water and sewerage to over 10 million people in Chile, the United Kingdom, China, Colombia, Algeria, Cuba and Mexico.

As part of the transaction to acquire Adeslas, Criteria CaixaCorp agreed to reduce its ownership interest in Agbar in 2010 (see section 3.3. Active management of the ”la Caixa” Group’s investee portfolio).

Telefónica is one of the world’s leading integrated telecommunications operators, with a presence in Europe and Latin America and a benchmark in the Spanish- and Portuguese-speaking markets, with total assets of more than EUR 108,000 million. With over 265 million access connections, Telefónica has a high international profile and generates more than 60% of its business abroad: (i) in Spain, with nearly 47 million access connections, it is the leader in all the business segments, (ii) in Europe (the United Kingdom, Germany, Ireland, the Czech Republic and Slovakia) it has more than 49 million access connections, and (iii) in Latin America, with nearly 169 million access connections, it is the leader

in the main countries (Brazil, Argentina, Chile and Peru), while also carrying out significant operations in other countries such as Mexico, Colombia, Venezuela and Central America.

BME integrates all the registration, clearing and settlement systems for Spanish secondary markets. In 2009 over 118,000 million securities were traded on the stock exchanges, with a trading total in cash of almost EUR 900,000 million.

Unlisted companies

Port aventura. The park had over 3.3 million visitors this season and is continuing with its aim of extending its offering and consolidating its position as a differentiated product both in Spain and abroad. Accordingly, it opened a new theme hotel, the Hotel Gold River, in July, and a Convention Centre in October with capacity for 4,000 people. As a result of a corporate reorganisation to enable the entry of a new shareholder, Port Aventura spun off into two independent companies:

Port aventura Entertainment (50%) includes the Port Aventura theme park, the Caribe Aquatic Park, as well as operation of the four hotels, two of which are owned, and the Convention Centre. Mediterranea Beach & Golf Resort (100%) is the company that owns two of the four hotels, the convention centre and the land for residential and commercial use, the golf business and the Beach Club.

PORT AVENTURA ENTERTAINMENT50%

100%

Criteria CaixaCorp’s ownership interest

UNLISTED COMPANIES

MEDITERRANEA BEACH & GOLF RESORT



3.1.3. Financial business

international banking

In the area of investments in the financial industry, the Board of Directors of ”la Caixa” resolved that Criteria CaixaCorp should lead the international expansion through acquisitions of financial institutions. This line of business consists of interests in the banking industry, mainly abroad, in countries where it can provide added value and take advantage of growth potential.

Grupo Financiero inbursa, with total assets of over EUR 15,000 million, close to 190 branches, more than 5,900 employee and 14,000 financial advisors, is Mexico’s sixth largest financial group by total assets and one of the largest in terms of stock market capitalisation in Latin America.

Founded in Mexico in 1965, GFI offers commercial banking services, a field in which it is a benchmark, as well as retail banking, asset management and life and non-life insurance and pension products, together with stock market brokerage and custody services. It is currently the leading financial group in Mexico in terms of asset management and custody services, as well as the top insurance company in damages insurance, and is well positioned in other insurance segments.

Erste Group Bank was founded in 1819 and was Austria’s first savings bank. The bank was floated on the stock exchange in 1997 to expand its retail banking business to Central and Eastern Europe. It is currently Austria’s second largest banking group and one of the leading groups in Central

and Eastern Europe with total assets over EUR 200,000 million. Outside Austria, Erste Group Bank controls banks in seven countries (the Czech Republic, Romania. Slovakia, Hungary, Croatia, Serbia and the Ukraine) and is the market leader in the Czech Republic, Romania and Slovakia. It serves 17.5 million customers and operates over 3,200 branches.

In 2009 Strategic Investment and Cooperation Agreements were signed with the Bank and the main shareholder, together with an Agreement between Foundations.

The Bank of East asia (BEA), founded in 1918, with assets of over EUR 38,500 million, more than 250 branches and over 10,500 employees, is Hong Kong’s leading independent private bank and one of the best positioned foreign banks in China, where, through its subsidiary BEA China, it has a network of more than 70 branches which is being expanded to reach 100 branches in the short term.

BEA offers commercial, personal, business and investment banking services to its customers in Hong Kong and China. It also serves the Chinese community abroad by operating in other countries in South-East Asia, as well as in the United States, Canada and the United Kingdom.

In 2009 Strategic Investment and Cooperation Agreements were signed with the Bank, together with an Agreement between Foundations. In January 2010, the ownership interest was increased from 9.81% to 14.99% through

Criteria CaixaCorp’s ownership interest(*) Including the 5.18% increase in the

ownership interest formalised in January 2010

GRUPO FINANCIERO INBURSA

ERSTE GROUP BANK

THE BANK OF EAST ASIA

BANCO BPI

BOURSORAMA

20.0%

10.1%(*)

14.99%

30.1%

20.9%

INTERNATIONAL RETAIL BANKING



subscription through a capital increase (see section 3.3. Active management of the ”la Caixa” Group’s investee portfolio).

Banco BPi is a universal, multi-specialised financial group, focused on the area of commercial banking targeted at business, institutional and individual customers, and is the third-largest private financial group in Portugal by business volume. Its total assets exceed EUR 47,000 million and it has a commercial network of over 800 branches in Portugal and over 100 in Angola.

In 2009 ”la Caixa” and Banco BPI signed a Strategic Cooperation Agreement to serve companies operating in Spain and Portugal called “Iberian Solutions for Companies”.

Boursorama, founded in 1995, with total assets of approximately EUR 3,000

million, is one of the leading on-line brokers and savings product retailers in Europe and forms part of the Société Générale Group.

Boursorama operates in four countries and in France it is the market leader in on-line financial information and is also a key player in internet banking. It is one of the three top on-line brokers in the United Kingdom and Spain. Boursorama also operates in Germany under the OnVista Bank brand.

In 2008 Boursorama and ”la Caixa” signed a shareholders’ agreement as part of a joint venture to launch an on-line bank in Spain. In the third quarter of 2009, the commercial launch of new products took place at SelfTrade Bank, in which ”la Caixa” holds an ownerhip interest of 49%.



insurers and specialised financial services: complementing ”la Caixa” products and services

In order to meet at all times the entire range of financial and service needs of households and businesses, particularly SMEs, as well as institutions, the Group complements the banking products and services offered by ”la Caixa” with specialised products through credit institutions, full-service leasing companies, insurance companies and managers of collective investment and securitisation undertakings.

insurers

An insurance group serving over 3.4 million individual customers with assets under management worth more than EUR 31,000 million The insurance group carries on its business through the subsidiaries held by the holding company SegurCaixa Holding. The insurance group offers customers a wide range of tailor-made life and non-life insurance products. More than 3.4 million customers and 45,000 companies and employee groups have taken out pension plans and insurance (retirement schemes, life-long pensions and other products).

VidaCaixa engages primarily in life insurance. It also administers assets worth more than EUR 13,500 million in pension plans, placing it second in the industry ranking.

The organic growth of the business has reinforced VidaCaixa’s position as the top life insurance company, with technical provisions exceeding EUR 17,200 million. In addition, VidaCaixa consolidated its leadership of the supplementary benefits segment with assets under management (technical provisions and pension plans) exceeding EUR 30,800 million.

SegurCaixa is the holding company that focuses on non-life insurance, and has a strong position in the home insurance business.

In 2009 SegurCaixa consolidated the vehicle insurance business started in 2007 and launched two new products for SMEs and self-employed professionals (“SegurCaixa Negocio” and “SegurCaixa Auto Negocio”), thereby extending the Group’s product offering for this market segment. Following the execution of the agreement to purchase adeslas in 2010 (see section 3.3 Active management of the ”la Caixa” Group’s investee portfolio), the Group will hold a leading position in several lines of the Spanish insurance business, a segment in which the Group foresees major growth in the years to come. Also, taking advantage of the synergies between the two groups will benefit both existing and future customers, since SegurCaixa Holding, a leading life and pension plan insurer, will be joined by Adeslas, a leading health insurer.

“lEaDiNG POSiTiON iN iNDiViDUal aND GROUP liFE iNSURaNCE, WiTH iNCREaSED PRESENCE iN NON-liFE

iNSURaNCE”

3.1.3. Financial business (cont.)

INSURERS

SEGURCAIXA HOLDING

AGENCAIXA

VIDACAIXA

SEGURCAIXA

GDS-CORREDURÍA DE SEGUROS

100%

67%

100%

100%

100%

BUSINESS

Life

Non-life

Insurance agency

Insurance brokerage

Criteria CaixaCorp’s ownership percentage



Specialised financial services

Complementary range of fund management servicesinverCaixa Gestión is the management company of the ”la Caixa” Group’s collective investment undertakings and manages a diverse range of products: investment funds, OEICs and portfolios. InverCaixa Gestión also advises ”la Caixa” in connection with marketing investment funds managed by third-party managers.

In 2009 the funds managed by InverCaixa Gestión stood at EUR 15,457 million and its share of the investment fund market rose from 6.9% (December 2008) to 8.5%, placing it third in the ranking for fund managers.

Specialised financing productsCaixaRenting specialises in full-service lease (“renting”) transactions, both for vehicles and capital goods and property. The sales policy carried out in recent years

has enhanced its presence in the SME segment, through distribution on the ”la Caixa” network. In 2009 CaixaRenting entered into new vehicle, capital goods and property leases amounting to EUR 362 million. It managed a total of 34,894 cars: 31,965 under full-service leases and 2,929 under fleet management arrangements.

Finconsum offers consumer financing products mainly through the POS channel (retailers of goods and services and car dealers). In 2009 it brought in EUR 574 million in new business.

GestiCaixa continued to operate on the financial markets as an asset securitisation manager. In 2009 GestiCaixa structured and set up five new asset funds, with issues totalling EUR 8,925 million. At December 2009 GestiCaixa managed 35 securitisation funds with a volume of outstanding bonds totalling approximately EUR 20,000 million.

INVESTMENT FUND ASSETS MANAGED BY THE ”LA CAIXA” GROUP(Millions of euros)

07 08 09

Fixed income, money market and other

Equity

Mixed fixed income

Guaranteed funds


13,51815,457

12,943

13.518 12.943

15.457

07 08 09

FIM Renda Fixa,Monetaris i altres

Renda Fixa Mixta

Renda Variable Fons Garantits

(M ilions d'euros)

LOANS AND RECEIVABLES: FULL-SERVICE LEASES AND CONSUMER FINANCING(Millions of euros)

07 08 09

Full service leasing

Consumer financing


(M ilio n s d 'e u ro s )

930 1.016 1.037

852928 870

07 08 09

Renting Finançament al Consum

,

07 08 09

Renting Finançament al Consum

852

930 1,016 1,037

928 870


GESTICAIXA

FINCONSUM

CAIXARENTING

INVERCAIXA GESTIÓN

100%

100%

100%

100%BUSINESSFund and portfolio managementFull-service leasing

Consumer financing

Asset securitisation

Criteria CaixaCorp’s ownership percentage



3.2. Venture capital and financing for entrepreneurs

The ”la Caixa” Group maintains a

presence in the venture capital industry

through the following companies:

Caixa Capital Risc, whose object is to

administer and manage the assets of

venture capital companies and funds.

It currently manages two funds: Caixa

Capital Semilla and Caixa Capital Pyme

Innovación.

Caixa Capital Semilla has funds totalling

EUR 15 million. The company invests,

on a temporary basis, in small innovative

companies at the concept building and

developmental stage of their product

or service, helping to cover the lack of

financing for business innovation by

entrepreneurs. At 2009 year-end it had a

portfolio of 52 projects. The amount of

the committed investment totalled EUR

11.5 million.

Caixa Capital Pyme innovación has funds of EUR 31 million, EUR 25 million of which have been committed by ”la Caixa” and the rest by institutional investors (Instituto Catalán de Finanzas y Empresa Nacional de Innovación-ENISA), and complements the venture capital business by investing at the growth capital stage. The company invests, on a temporary basis, in small, recently created innovative companies which require financing to strengthen their structure and enable them to reach a stage where they can consolidate a strong competitive position. At the end of 2009 it had a cumulative portfolio of 10 projects underway. The amount of the committed investment totalled EUR 10.5 million.

iniciativa Emprenedor xxi aims to promote and support entrepreneurs in general and the creation of innovative companies with a high growth potential throughout Spain. As part of its

CAIXA CAPITAL RISC

CAIXA CAPITAL SEMILLA

CAIXA CAPITAL PYME INNOVACIÓN

INICIATIVA EMPRENEDOR XXI

100%

100%

80.7%

100%

% of ownership of ”la Caixa”

”LA CAIXA” VENTURE CAPITAL

programme and in conjunction with the branch network and leading national and regional institutional organisations, it conducts specific activities such as the organisation of awards, courses and seminars, and supports networking and business angel activities, among others.

The activities carried out through these companies form part of the ”la Caixa” Group’s Corporate Social Responsibility activities.



3.3. active management of the ”la Caixa” Group’s investee portfolio

Active management of the ”la Caixa” Group’s investee portfolio in 2009 resulted in net investments of approximately EUR 1,888 million. In this respect, in 2009 the Group continued with its strategy to rebalance the investee portfolio, giving more weight to financial investments, without excluding investments in utilities. In this regard the proportion of investments in the financial sector went from 17%, at the time of the Criteria CaixaCorp flotation, to 33%, taking into account all the corporate resolutions formalised prior to 31 December 2009.

With regard to investments in the financial business, the interest in Erste Group Bank was increased from 4.9% to 10.1%. This increase was carried out mainly through subscription to a capital increase performed in November 2009 by the bank. Criteria CaixaCorp subscribed to 36% of the capital increase through the acquisition of the subscription rights on shares of Erste Group Bank owned by the DIE Erste Foundation, with an investment of EUR 635 million. This ownership interest increase is in line with the Preferential Cooperation agreement signed by Criteria CaixaCorp and the DIE Erste Foundation in June 2009 to regulate their dealings as shareholders of Erste Group Bank.

The interest in Banco BPi was also increased in 2009, by 0.72% to 30.10%. ”la Caixa” contributed EUR 42 million to the incorporation, in conjunction with the Boursorama Group, of a new internet bank, the Self Bank.

In addition, in 2009, Criteria CaixaCorp reached an agreement, to be formalised in 2010, with Suez Environnement, on the one hand, and Malakoff Médéric on the other, for the acquisition of 99.8% of adeslas, the leading health insurance company in Spain, for a total of EUR 1,178 million. At the same time, Criteria CaixaCorp reached an

agreement with Suez Environnement to sell it a sufficient ownership percentage of agbar to enable Suez Environnement to obtain a 75.01% interest in Agbar following completion of the delisting tender offer made by Agbar itself and effectively targeted at 10% of the total share capital of Agbar in the hands of minority shareholders. The final ownership interest held by Criteria CaixaCorp in Agbar will consist of between 15% and 25%, depending on the final outcome of the delisting tender offer.

On 30 December 2009, Criteria CaixaCorp signed an agreement with The Bank of East asia (BEa) to subscribe to a large part of a capital increase which concluded on 14 January 2010 and increased Criteria CaixaCorp’s ownership interest in the bank from 9.81% to 14.99%, with an investment of EUR 331 million. This transaction was carried out under the agreements signed in June 2009 between BEA, ”la Caixa” and Criteria CaixaCorp.

With respect to interests in utilities, Criteria CaixaCorp supported the acquisition of Unión Fenosa by Gas Natural and, accordingly, subscribed to its proportion of the capital increase performed by Gas Natural for EUR 1,313 million. The merger between the two companies concluded on 7 September 2009 with the admission to listing of the shares of the new company and the registration of the public deed of merger in the Mercantile Register. Following completion of the transaction, Criteria CaixaCorp’s ownership interest in Gas Natural amounted to 36.43%.

In December 2009, Criteria CaixaCorp entered into a joint venture with investindustrial, for its inclusion as an investor (50%) in Port Aventura Entertainment, the company that operates the Port aventura theme park, Caribe Aquatic Park, and four hotels,

aCTiVE MaNaGEMENT – MaiN TRaNSaCTiONS:

Financial business

• Increase in the ownership interest in Erste Group Bank to reach 10.1%, basically through subscription to a capital increase with an investment of EUR 635 million.

• Agreement to subscribe to a capital increase in The Bank of East Asia with an investment of EUR 331 million, performed in Janaury 2010, resulting in the increase of the ownership interest to 14.99%.

• Agreement to acquire 99.8% of Adeslas for EUR 1,178 million and the reduction of the interest in Agbar, maintaining beetween 15% and 25%.

Utilities business

• Subscription to the corresponding portion of the capital increase for the takeover bid by Gas Natural of Unión Fenosa with an investment of EUR 1,313 million.

• Sale of 1% of Telefónica, giving rise to consolidated gains amounting to EUR 249 million net of tax and non-controlling interests.

• Joint venture agreement with Investindustrial for its inclusion as a shareholder (50%) of Port Aventura Entertainment, the company that operates the Port Aventura theme park.



LISTED PORTFOLIO:PERFORMANCE OF MARKET VALUE AND UNREALISED GAINS (Millions of euros)


Market value

1.0263.945

1,026Gross unrealised gains

3,945Gross

unrealised gains

Net investments

Change in value

Market value

2008 2009

14.691

+1.888

+3.539 20.118

1.0263.945

Valor de

mercat

Plusvàlues

latents brutes

Valor de

mercat

Inversions netes

Variació valor

Plusvàlues

latents brutes

2008 2009

20,118+3,539

+1,88814,691

two of which are owned, as well as a

convention centre. In addition, Criteria

CaixaCorp holds 100% of Mediterranea

Beach and Golf Resort, which owns

two of the four hotels, the convention

centre and the land for residential and

commercial use belonging to the golf club

and Beach Club business.

In 2009, 1% of the ownership interest

in Telefónica was sold, giving rise

to consolidated gains of EUR 249

million net of tax and non-controlling

interests. In addition, a 1% ownership

interest was acquired subject to financial

agreements, whereby the ”la Caixa”

Group does not assume any market risk.

The ownership interest in Telefónica at 31

December 2009 amounted to 5.2%.

Performance of the market value and unrealised gains of the listed companies of the ”la Caixa” Group

The market value of the interests in the listed companies of the ”la Caixa” Group at 31 December 2009 was EUR 20,118 million, with gross unrealised gains of EUR 3,945 million.

The market value of Criteria CaixaCorp, the company that includes the ”la Caixa” Group’s interests in listed companies, was revalued by 18.5% in 2009, as part of the recovery of the capital markets and in line with the benchmark indexes, the Ibex-35 and Eurostoxx, which had a positive performance, at 29.8% and 21.1%, respectively.

3.3. active management of the ”la Caixa” Group’s investee portfolio (cont.)

YEAR-ON-YEAR PERFORMANCE AS COMPARED TO THE INDEXES

1.0263.945

Criteria CaixaCorp18.5%

IBEX 3529.8%

EUROSTOXX 5021.1%



“GlOBal RiSK MaNaGEMENT TO

OPTiMiSE THE RETURN/RiSK RaTiO”

4. active risk management4.1. Comprehensive risk management at the heart of strategy

Management of the risks inherent to the business is an essential component of the Group’s strategy to secure a balance between returns and risk.

Global risk management is essential for the business of any credit institution. At the ”la Caixa” Group, global risk management is aimed at optimising the return/risk ratio by identifying, measuring and assessing risks and ensuring that they are always taken into account in the business decision-making process, without losing sight of enhancing customer service quality. Likewise, the Group wishes to safeguard the health of risk and preserve the capital adequacy mechanisms as a guarantee to confirm the ”la Caixa” Group’s position as one of the soundest groups in the Spanish market.

The fundamental risks undertaken as a result of the Group’s own activities

are classified as follows: credit risk, arising from the banking activity and also associated with the investee portfolio; market risk, which includes structural balance sheet interest rate risk, the price or rate risk associated with treasury positions and foreign currency risk, liquidity risk, operational risk and regulatory compliance risk.

The ”la Caixa” Group’s risk management, monitoring and control tasks are performed autonomously from the standpoint of independence with respect to the risk approval function. Risk management is geared towards setting a risk profile aligned with the Group’s strategic objectives and helps to ensure progress towards a delegation model for risk approval underpinned by all the fundamental risk variables and amounts, while supporting the quantification of risk through capital use scenarios.

2009 Financial Report of the ”la Caixa” Group 4. Active risk management


4.1. Comprehensive risk management at the heart of strategy (cont.)

Structure and organisation

The Board of Directors of ”la Caixa” is the Group highest risk policy-setting body. Senior management acts within the framework of the duties assigned by the Board of Directors and sets up the following risk management committees:

• Global Risk Committee. The Global Risk Committee is in charge of the comprehensive management of the Group’s risk, as well as of the implications of risk on capital adequacy and capital management. It analyses the Group’s risk positioning and sets policies aimed at optimising risk management within the framework of the Group’s strategic challenges.

• Loan Approval Policy Committee. The Loan Approval Policy Committee proposes loan approval powers and loan prices, process efficiency and streamlining measures, the level of risk taken in the loan acceptance diagnostics, and the risk profiles accepted in commercial campaigns.

• Lending Committee. The Lending Committee analyses and, where appropriate, approves the transactions that fall within the scope of its authority and refers any transactions that exceed its level of authority to the Board of Directors.

• Refinancing Committee. The Refinancing Committee analyses and, where appropriate, approves the transactions that fall within the scope of its authority and refers any transactions that exceed its level of authority to the Lending Committee.

• Asset-Liability Committee (ALCO). The ALCO analyses liquidity, balance sheet interest rate and foreign currency risk as part of structural risk and proposes taking out hedges and launching issues to manage those risks.

In addition, Criteria CaixaCorp manages and controls almost the entire equity securities portfolio of the Group.

”la Caixa” has a Senior Executive Vice-President’s office in charge of risk over the whole Group. The Global Risk Management Division, which reports to the Senior Executive Vice-President’s office, is the global control unit performing the independence functions required by Basel II, with responsibility for safeguarding the quality of the assets and preserving the capital adequacy and security mechanisms. The objectives of this division are to identify, measure and integrate the various risk exposures together with the risk-adjusted return in each line of business, from the overall standpoint of the ”la Caixa” Group and in accordance with its management strategy.

One of the most important missions of the division, in conjunction with other divisions of ”la Caixa”, is to lead the implementation of instruments throughout the branch network to ensure comprehensive risk management under the Basel II guidelines, in order to secure a balance between the risks taken and the expected returns.

The tasks assigned to complete this mission define the organisational structure of the Global Risk Management Division, which is arranged around each of the risks of the ”la Caixa” Group:

• Credit Risk: defining, validating and monitoring the portfolio risk measurement models, at operational and customer levels (ratings, scorings, probability of default (PD), loss given default (LGD) and exposure at default (EAD)) and developing tools for their integration into management and monitoring. The above measurements are used to determine the minimum capital requirements, from a regulatory and financial standpoint, and the risk-adjusted return on the portfolio.



Analysis of credit risk monitoring and control: direct responsibility for monitoring and controlling the most significant credit risk positions and for the steps taken by the branch network to monitor the lending quality of the portfolio.

• Market Risk: independent supervision of the monitoring and control of risk relating to own positions, balance-sheet risk and liquidity risk, measured by the General Markets Division.

• Operational Risk: definition and implementation of the operational risk management model, developing the policies, methodologies and tools required to adopt advanced management models –AMA– in the future, as an upgrade on the standard model initially adopted; and measurement of the capital required to cover this risk, either under the standard

method (initially) or the AMA methods in the future.

• Risk Aggregation and Economic Capital: aggregation of the total risk, taking into account all risk types and studying any interactions between them.

In 2009 the Recovery Management Division was created, which reports to the President and CEO’s office and aims to reduce non-performing loans, by helping to prevent lending transactions from being placed in dispute status or speeding up the removal of such status.

Finally, to supplement the controls in place, the ”la Caixa” Internal Audit Division performs continuous checks on the adequacy of the internal control systems and the accuracy of the risk measurement and control methods employed by the various divisions involved in the risk monitoring function.

Procedures, tools and strategies

For several years the ”la Caixa” Group has used a set of tools and techniques based on the specific needs of each type of risk. These include probability of default calculations obtained through rating and scoring tools, loss given default and expected loss calculations relating to the various portfolios and risk-adjusted return tools, both at customer and branch level. Value at Risk (VaR) calculations are also performed for the various portfolios as a method for controlling and setting market risk limits, as well as a qualitative identification of the various operational risks relating to each of the Group’s activities.

The “Banking Business Management Model”, implemented throughout the organisation down to branch level, enables monitoring of the return obtained according to the credit risk taken and, as a result, of the capital allocated. The branches therefore



4.1. Comprehensive risk management at the heart of strategy (cont.)

have innovative tools on hand to assist them with global management of all the business they generate.

Use of internal credit risk models – Basel ii

All the risk measurement, monitoring and management work is performed in accordance with the recommendation of the Basel Committee on Banking Supervision: “International Convergence of Capital Measurement and Capital Standards – A Revised Framework”, commonly known as Basel II, and the ensuing implementation thereof by the related European directives and Spanish legislation in force, supported by three pillars:

• Pillar 1 determines the minimum capital requirements for financial institutions based on several financial risks: credit risk, market risk associated with financial assets and liabilities held for trading and the position in foreign currency and operational risk.

• Pillar 2 analyses the main principles of the supervisory process. It also sets out the guidelines to be followed to develop an internal capital assessment process, and defines the capital objectives in relation to each institution’s risk profile and control environment, in order to cover possible risks, whether or not included in Pillar 1, such as:

concentration of risk, credit risk pressure, liquidity risk, balance-sheet interest-rate risk, etc.

• Pillar 3, which supplements the other two pillars, encourages market discipline by setting out disclosure requirements helping the market players to assess the information on capital, risk exposure and measurement processes.

Following a validation process, in June 2008 the Bank of Spain authorised the ”la Caixa” Group to use advanced models for the calculation of the minimum capital requirements to meet credit risk. In 2007 the Bank of Spain authorised use of the internal model for measuring market risk associated with financial assets and liabilities held for trading, foreign currency and gold risk or commodity price risk for the calculation of regulatory capital consumption from 31 December 2007 onwards.

Going beyond merely satisfying the regulatory capital requirements proposed by Basel II, which relate to formulations geared towards guaranteeing capital adequacy with confidence levels of 99.9%, the ”la Caixa” Group applies more exacting levels and is making progress towards a risk management model based on Economic Capital with the objective of assuring, at the least, its current rating levels.



4.2. Credit risk4.2.1. High-quality loan portfolio

”la Caixa” loans and receivables have a medium/low risk profile

The Bank of Spain’s accounting regulations classify loans and receivables and debt instruments into various categories according to the default status and/or the existing risk, as follows: standard, substandard, doubtful and loss.

Standard risk also contains the following subcategories: negligible risk (public sector, credit institutions, cash collateral), low risk (mortgages on completed housing and on amounts under 80% of the appraised value), medium-low risk (other types of mortgages and secured loans), medium risk (other resident sectors and OECD countries), medium-high risk (consumer loans and loans to non-OECD countries) and high risk (card balances and current and credit account overdrafts).

76.1% of the loan portfolio of ”la Caixa” is classified as being between low risk and medium-low risk, demonstrating the Institution’s intention to invest in assets with the highest solvency and keep a medium/low risk profile.

Diversified lendings with adequate collateral

The ”la Caixa” Group’s lending activity is geared towards meeting the financing needs of households and businesses, and its lending portfolio is characterised by its diversified and fragmented nature, which therefore reduces the already low and strongly collateralised credit risk.

Along these lines, despite the stagnation in the property industry, mortgage loans account for 65.2% of total loans with a loan-to-value (LTV) ratio of 48.6%. 88.5% of the mortgage portfolio has an LTV ratio of less than 80%.

“MEDiUM/lOW RiSK PROFilE”

“TOP QUaliTY lENDiNG”

“aVERaGE MORTGaGE

PORTFOliO lTV OF 48.6%”

“88.5% OF PORTFOliO WiTH lTV < 80%”

20.2%

23.2%

28.7%

16.4%

11.5%

MORTGAGE PORTFOLIO BY LTV RATIO

< 50%=60%-70%

> 80%

50%-60%

70%-80%

LOAN PORTFOLIO COMPOSITIONRISK TRANCHES (*)

Low riskMedium risk

Medium-low riskMedium-high / High risk

(*) Categories based on the classification issued in Bank of Spain Circular

08 09

3.4%

21.5%

25.1%

50.0%

20.8%

22.5%

53.6%

3.1%

31.3%

65.2%

3.5%

BREAKDOWN BY COLLATERAL

Non-mortgageMortgage portfolio

Public sector



Loans to private borrowers account for 52.0% of the ”la Caixa” Group’s total loan portfolio, 89.9% of which are mortgages. Of these, 92.2% are granted to primary residence homebuyers.

A portion of the loans to primary residence homebuyers are first taken out temporarily by developers to finance construction work, and then, once the development is finished and has been sold, the private homebuyer is subrogated to the loan. Developer loans are characterised by being granted primarily for the construction of new homes concentrated in urban areas, and have an LTV ratio of less than 70%.

Through the financing it grants to businesses, the ”la Caixa” Group participates in the productive development of all of the business sectors of the Spanish economy: infrastructure

construction, industry (manufacturing companies and electric, gas and water utilities), services (retail trade, hospitality and transport) and the primary sector (agriculture, livestock breeding and fishing). The strategy undertaken by ”la Caixa”, which is aimed at achieving a greater presence in the business segment, gave a boost to lending for productive activities in 2009.

Financing for SMEs accounts for 62.1% of the Group’s business lending portfolio. In line with its clear commitment to further strengthening its ties with the country’s industrial fabric, in 2009 ”la Caixa” continued to develop new products and services for SMEs.

In terms of geographical distribution, the ”la Caixa’’ Group’s lending activity is basically concentrated in Spain.

LOANS TO PRIVATE BORROWERS

By type of business

Large companiesSMEsOther collateral

Mortgage collateral (*)

By collateral

LOANS TO BUSINESSES

62.1%

37.9%

89.9%

10.1%

Gràfic refetText picat

TOTAL

7.4%

52.0%

CompaniesPrivateborrowers

Other

40.6%

BREAKDOWN BY CUSTOMER

(*) Of which 92.2% relates to primary residence homebuyers

4.2.1. High-quality loan portfolio (cont.)



Following the application of principles of the utmost prudence in terms of risk rating and provisions at 2009 year-end, the NPl ratio was 3.42% and the NPl coverage ratio stood at 62%, 127% with mortgage collateral.

Since most loans are to private borrowers and consist primarily of mortgages to primary residence homebuyers, the loan structure has a significantly low risk level. Doubtful loans rose to EUR 6,321 million in 2009 as a result of the overall deterioration of the economy and of prudent risk rating policies, which resulted in an NPL ratio (doubtful loans as a percentage of total loans) of 3.42% for the ”la Caixa” Group and 3.20% for ”la Caixa”. Despite the increase in 2009, these ratios continue to be lower than the average for the Spanish financial system taken as a whole, which stood at 5.08% at 31 December 2009.

Credit loss provisions totalled EUR 3,914 million, EUR 888 million more than in 2008, with the result that the NPL coverage ratio stood at 62% at 2009 year-end. The coverage provided by

mortgage collateral brings the total coverage up to 127%. At 31 December 2009, the general allowance amounted to EUR 1,835 million. The general allowance ratio stood at 100% of the α ratio defined under Bank of Spain rules, considerably higher than the required minimum.

Therefore, the level of credit risk at the ”la Caixa” Group remains among the lowest in the Spanish financial system as a result of diversification, the value of the collateral and a prudent risk coverage policy. Management of the ”la Caixa” Group’s credit risk is characterised by a prudent loan approval policy and a high degree of anticipation to achieve one of the soundest equity positions in the Spanish financial market.

As a result of management of the credit portfolio, the ”la Caixa” Group’s property portfolio amounted to a net sum of EUR 3,097 million at 31 December 2009, with coverage for 20% thereof. Property sales rose significantly in the last quarter of 2009, thanks to active management by Servihabitat, the ”la Caixa” Group’s property subsidiary.

“CONSERVaTiVE RiSK COVERaGE POliCiES”

2.48%3.40% 3.53%3.38% 3.42%

08

4,590

1Q09

6,345

2Q09

6,367

3Q09

6,577

09

6,321

DOUBTFUL LOANS AND NPL RATIO

NPL ratio

Doubtful loans


66%51%

60%60% 62%

08

3,026

1Q09

3,240

2Q09

3,790

3Q09

3,917

09

3,914

PROVISIONS AND NPL COVERAGE RATIO

NPL coverage ratio

Provisions

3.026 3.2403.790 3.917 3.914

62%60%60%51%

66%

0%

70%

2008 1T09 2T09 3T09 20090

7.000

1,073–863

552–356

1,437

–361

1,067

–244

2,057

–562

2,626

-871

1,428–1,406

1,048–1,304

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

Added Removed

DOUBTFUL LOANS. ADDED AND REMOVED, BY QUARTER(Millions of euros)

30%% recovery 72%

Fewer added in

2009

Significant increase in loans removed

1,048

2,057

1,437

2,626

1,073

1,428

1,067

552

-863

-1,304-1,406

-356 -361 -244

-562

-871

0300600900

120015001800210024002700

1T08 2T08 3T08 4T08 1T09 2T09 3T09 4T09

Entradas Salidas



4.2.2. Credit risk management

lending organisation and processes

The new internal system of credit approval powers based on expected loss was consolidated in 2009. This system has enabled the powers to be much more closely adapted to shifts in the economic cycle, a particularly significant feature in the current climate. In addition, part of the system of powers continues to be associated with the transaction amount and has been maintained mainly for the individuals segment and for very large companies.

Use of the electronic file as a tool to provide and increase the efficiency of the credit approval circuits was consolidated in 2009. It has been used not only for the approval of transactions other than new applications (such as credit facility or credit account overdrafts) but also for transactions which, although not strictly lending transactions, do involve the assumption of risk, such as the merchant activity of stores.

A risk-adjusted price system has been introduced in relation to the approval of consumer loans for individuals, complementing the system already in place for mortgage transactions and, with

respect to companies, the system for the calculation of the risk-adjusted price in the SME segment has been consolidated. These systems enable a risk premium to be allocated to transactions.

In addition, implementation began of a second phase of the current system of customer risk adjusted return, which will provide a simulation of returns in light of future changes in the business with customers, as well as information on returns on capital in the analysis of loan applications.

Lastly, also of note was a far-reaching organisational change that took place in 2009: a change in the risk structure throughout the network in order to separate risk assessment entirely from commercial considerations, while strengthening the independence of the risk function as a core principle of prudent risk management. As part of the application of the change, sign-off is required from the two lines, risk and business, for transactions exceeding the levels set for Business Division Managers or Business Centres, both in relation to risk transactions of companies and individuals, all under the control of the system of powers.

54%

17%

14%

13%

LOANS GRANTED BY LEVEL OF AUTHORITY % of principal granted

Business Division Managers

Branches

Area Managers Head Office

Board of Directors

2%

16%

LOANS GRANTED BY LEVEL OF AUTHORITY % of approved loans

4%

72%

8%

Branches Business Division Managers

Area Managers

Head Office and Board of Directors



Recovery Management

The Group’s risk management has focused on the organisational efforts begun in the second half of 2008 to deal with the increase in non-performing loans and to adopt careful measures to ensure that debts that are difficult to recover may be claimed effectively, starting from the first signs of deterioration of borrowers’ solvency, with ongoing monitoring of their creditworthiness and of the mortgage collateral. Of particular note was the creation of the Recovery Management Division in the fourth quarter of 2009, which reports to the President and CEO’s office and aims to reduce non-performing loans, by helping to prevent lending transactions from being placed in dispute status or speeding up the removal of such status.

Notwithstanding the constant monitoring of the lending portfolio, ”la Caixa” has also adopted measures to mitigate the impact of the recession on individual

customers. Accordingly, ”la Caixa” is adapting short-term payments to debtors’ current available funds, with the expectation that this deferral will result in a successful outcome for the transactions concerned. Among the various options to achieve this end (such as the introduction of grace periods, waiting clauses or a moratorium on payments), an analysis is carried out with customers of the one which would best suit their situation, always ensuring the final objective of recovering the loan, while complying with internal risk approval procedures.

Credit Risk analysis and Monitoring

At ”la Caixa”, the Credit Risk Analysis and Monitoring Division, which reports to the Global Risk Management Division, is kept independent from the Risk Analysis and Approval Division and is organised into a set of territorial monitoring units. Its function is twofold: to prepare follow-up reports on borrowers or groups of companies

with higher risks and monitor risk holders whose creditworthiness shows signs of deteriorating, using a rating system based on risk alerts on each borrower.

The risk alert system and the borrower scoring system based on the borrower’s risk performance play a key role in assisting both the approval system, as discussed above, and the monitoring process. As a result, borrowers with a higher probability of default in the short term are analysed more thoroughly and more frequently.

Another feature of the alert system is that it is fully integrated with the customer information systems as the alerts are allocated to each borrower and a rating is established on a monthly basis. In addition, the information on a customer’s alerts is integrated with the rest of the information on the customer and whenever the customer applies for a loan, a report is obtained on these alerts and on the customer’s rating.



4.2.2. Credit risk management (cont.)

The outcome of the monitoring process is the establishment of “Action Plans” for each of the borrowers analysed. These “Action Plans” aim to complement the alert-based rating system, while acting as a guide for the lending policy for future loans.

Monitoring borrowers in the property development and construction industries was a priority for the Credit Risk Analysis and Monitoring Division. With respect to individuals, a risk prevention management project was undertaken to detect, as soon as possible, any signs of deterioration in borrowers’ ability to repay, in order to analyse each case individually and adopt the most appropriate solution.

Credit risk measurement and rating

The mission of the Credit Risk Methodology and Models Division, which reports to the Global Risk Management Division, is to build, maintain and monitor the credit risk measurement systems. It is also in charge of guaranteeing and advising on the use of these systems, while seeking to ensure that the decisions based on these measurements take into account their quality. As established in the best practices, this function is independent from the business divisions to ensure that the risk rating policies are not affected by commercial considerations.

On 25 June 2008, the Bank of Spain authorised the ”la Caixa” Group to

use an internal ratings based approach to calculate the minimum capital requirements for credit risk. The ”la Caixa” Group is therefore now among the leading institutions that have passed the supervisory validation process.

To achieve the Division’s aims, periodical reviews are performed of all the models, to detect any deterioration in the quality of the measurements, and of the estimates made, in order to include any shifts in the economic cycle. Practically the entire retail banking portfolio, which includes the individual and SME segments, is assessed on a monthly basis, enabling the knowledge base on these customers and their portfolios to be updated almost continually. This continual risk assessment provides information on the distribution of the risk exposure in the various portfolios with respect to creditworthiness, expressed as a probability of default.

Risk measurement involves two basic concepts: expected loss and unexpected loss. Basel II provides for the need for entities to cover the expected loss amount through provisions. In this area, the ’’la Caixa’’ Group applies the rules contained in Annex IX of Bank of Spain Circular 4/2004. Therefore, it recognises the specific, general and country risk provisions required under the Circular to cover expected loss. Unexpected loss, on the other hand, must be provided for with capital.



BREAKDOWN OF EXPOSURE. CORPORATE (%)

AAA / AA A BBB BB B CCC

(0.0-1.3) (1.3-2.6) (2.6-4.0) (4.0-6.0) (6.0-8.1) (8.1-9.5)

0

014

20

28

14

2

0

2

9

Gràfic ”calcat”

Xifres picat

11

Property developersNon developer companies

BREAKDOWN OF EXPOSURE. MORTGAGES (%)

Gràfic ”calcat”

Xifres picat

AAA / AA A BBB BB B CCC

0

19

30

39

6 6

(0.0-1.3) (1.3-2.6) (2.6-4.0) (4.0-6.0) (6.0-8.1) (8.1-9.5)

Expected loss

Expected loss is the result of multiplying three factors: exposure, probability of default and loss given default. These three factors provide an estimate of the expected loss through credit risk from each loan, customer or portfolio.

Exposure at Default Exposure at Default (EAD) provides an estimate of the debt outstanding in the event of default by the customer. This measurement is particularly significant for financial instruments with a repayment structure that varies according to customer drawdowns (credit accounts, credit cards and any revolving credit product, in general).

This estimate is obtained through observation of the Institution’s internal default experience, and relates the drawdown levels upon default to the drawdown levels in the 12 preceding months. The relationships observed in terms of product type, term to maturity and customer characteristics are modelled

for each transaction in order to provide the aforementioned estimate.

Probability of default”la Caixa” has management tools in place to assist with predicting the probability of default (PD) associated with each borrower, covering virtually all of its lending business.

These tools are either product- or customer-oriented. Product-oriented tools take into account the debtor’s specific characteristics in relation to the product concerned and are used basically in connection with the approval of new retail banking transactions.

On the other hand, customer-oriented tools assess the debtor’s probability of default on a general basis; however, the results for individuals may be differentiated according to product. Customer-oriented tools include behavioural scoring models for individuals and ratings for companies, and are implemented throughout the branch network as part of the ordinary credit approval tools.

AAA-CCC: descending scale of credit-worthiness



Risk master scale

Expected NPL % 0.01 0.02 0.03 0.05 0.08 0.12 0.19 0.29 0.44 0.68 1.04 1.59 2.44 3.70 5.59 8.36 12.30 17.70 25.00 37.00

Scoring/rating 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5


The credit risk rating tools were developed on the basis of the Institution’s NPL experience and include the measurements needed to fine-tune the results to the business cycle and the projections for the next cycle, in order to provide ratings that are relatively stable in the long term which may differ from the default rates observed from time to time.

The accompanying chart illustrates the annual performance of default frequency (the percentage of customers or, regarding the retail segment, of contracts in the healthy portfolio at the start of the year that have defaulted at any time during the year). In order to provide more representative information on the portfolios, unlike in previous years, the chart shows the overall past performance of each segment, regardless of the existence of multiple advanced models or the lack thereof. Therefore, the historical values of the series are not comparable with those published in prior years.

All the rating tools for companies are customer-oriented and vary considerably

according to the customer segment. The rating process for micro-enterprises and SMEs is very similar to that for individuals. In this case a modular algorithm was developed, which rates three different sets of data: the financial statements, the information drawn from dealings with customers and certain qualitative factors. The ratings obtained are also adjusted to the economic cycle.

The Corporate Rating function, which reports to the Credit Risk Analysis and Monitoring Division, has three internal models in place to obtain ratings for the large companies segment. These are expert models and give greater weight to analysts’ qualitative opinion and were built in line with Standard & Poor’s methodology and, as a result, the global default rates published by this rating agency could be used, which made the methodology more reliable. The models were developed on the basis of data with sufficiently significant historical depth and, therefore, they include the cycle effect to a reasonable degree and ensure the stability of the measurements obtained.

The results of all the tools are linked to a risk master scale which provides a standard classification for the lending portfolio, namely it allows risk to be grouped according to a common expected NPL ratio.

Loss given defaultLoss given default (LGD) is the percentage of debt that may not be recovered in the event of customer default. The Institution reviews the default recovery and default remedial procedures on an ongoing basis to minimise the impact of a potential write-off.

The historical loss given default rates are calculated using ”la Caixa” internal information, taking into consideration all of the cash flows associated with the contracts from the moment of default until the situation is either remedied or a write-off finally declared. This calculation also includes an estimate of the indirect expenses (office personnel, infrastructure costs and the like) associated with the process.

Trend in NPl frequency

2007 2008 2009

Developers Companies 0.96% 10.38% 14.81%SMEs 1.15% 5.12% 8.96%

Non-developers Companies 0.99% 2.46% 3.60%SMEs 1.59% 3.48% 4.84%

Retail Mortgage 0.42% 1.26% 1.65%Consumption 1.34% 1.89% 3.09%Cards 0.55% 0.70% 0.99%



Risk master scale

Expected NPL % 0.01 0.02 0.03 0.05 0.08 0.12 0.19 0.29 0.44 0.68 1.04 1.59 2.44 3.70 5.59 8.36 12.30 17.70 25.00 37.00

Scoring/rating 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5

In addition, work is being carried out on modelling loss given default in order to provide correct initial estimates, based on the collateral, the loan-to-value ratio, the type of product, the borrower’s creditworthiness and, as required by current legislation, the recessionary phases of the economic cycle.

As a result of the composition of the portfolio, which is the consequence of the credit approval policies, of the collateral provided and of the related loan-to-value ratio, and of active management of the default remedial procedures, the loss given default rates of the ”la Caixa’’ Group’s exposures at default are very low, with an average of 11.65% for exposures in mortgage loans to individuals, which represent 54% of the total exposures assessed under the IRB approach, and 33.39% for exposures in loans to SMEs, which in turn represent 17% of the total exposures assessed under the IRB approach. The above values were determined in accordance with the internal models approved by the Bank of Spain for use in estimating the minimum capital requirements for credit risk.

Risk-adjusted return

”la Caixa” has a number of tools in place to assess the rate of return that may be expected from a contract/customer based on the coverage of the expected losses and an adequate return on the capital retained to meet the unexpected losses which might arise from the risks taken.

The benchmark spread for companies indicates the cost of the risk taken in each customer’s outstanding loans in the last year-on-year period. This cost is compared with the Risk-Adjusted Spread, which indicates the customers’ overall rate of return, net of the finance and operating costs, and ultimately determines the Customer’s Added Value.

Tools were developed in 2009 for a more in-depth analysis of the risk-adjusted returns of each customer or group of customers, together with applications to estimate risk-adjusted returns in the future and link them to the transaction approval processes (see the section, Lending organisation and processes).

Unexpected loss and economic capital

The measurement of expected loss ensures that credit risk can be properly controlled in “normal” market conditions. In fact, expected loss can be considered an additional cost of the business. However, actual losses may occasionally exceed expected losses as a result of sudden changes in the cycle, or in the risk factors specific to each portfolio, and of the natural correlation among the credit risks of the various debtors. In fact, Pillar 1 of Basel II provides for certain minimum capital requirements specifically to cope with potential unexpected losses. If an internal ratings-based methodology such as the one used by the ’’la Caixa’’ Group is adopted, the relevant formula for each business segment should be used, which takes into account the influence of the probability of default, the proportional impact of the loss given default, the adjustment for the term to maturity of the transaction concerned and certain established correlations, whether fixed or in inverse proportion to the probability of default, depending on the business segment in question.

The variability of expected portfolio losses constitutes the unexpected losses, which represent the potential unforeseen losses. These losses are calculated as the loss associated with a sufficiently high confidence level of the loss distribution, less the expected loss. The aim of the Institution is to have sufficient own funds or capital to meet unexpected losses.



Two concepts have traditionally been distinguished:

• Economic capital is the capital that an institution should have in order to assume the unexpected losses which might be incurred and which might jeopardise the Institution’s continuity. It is an internal estimate which is gradually adjusted according to the Institution’s own level of risk tolerance, volume and business activity.

• Regulatory capital is the mandatory capital to be maintained by the entity as required by the supervisory body.

Economic capital is not a substitute for regulatory capital but a supplement thereto which is used to achieve greater alignment with the actual risk profile assumed by the Institution and include risks not foreseen, or only partially considered, in the regulatory requirements.

The level of capitalisation of an institution (not necessarily in regulatory terms) and the risk profile assumed, measured in terms of capital requirements, define an institution’s capital adequacy, i.e. its credit worthiness.

Appropriate capital management is and will be a differentiating factor among the most advanced and competitive entities. A management approach based on the measurement of economic capital makes it possible to measure and manage risk, while identifying the riskier transactions or lines of business and also those which generate the highest economic value according to the measurements of return on capital.

The Institution therefore has an integrated model in place that, using its own standards, measures the integrated risk on the credit portfolio and on the equity portfolio. This internal economic capital model is undergoing continual improvement to ensure that it incorporates

industry best practices in this area and includes the Group’s risk profile as accurately as possible.

internal Validation

The New Basel Capital Accord is geared towards determining the minimum capital requirements of each entity in accordance with its risk profile. In the area of credit risk it enables entities to use internal rating models and their own estimates of risk parameters to determine their capital requirements.

The importance of the process for determining capital requires adequate controls to be in place which guarantee the reliability of the estimates. The control environment must also be sufficiently specialised and ongoing, supplementing the traditional control functions (internal audit).

The Bank of Spain establishes the internal validation of internal rating models and risk parameters as an essential prerequisite to validation by the supervisory authority, and it must be performed by a specialised independent department within the Institution. In this respect,”la Caixa” has an independent unit from the model development team and the team in charge of defining policies and procedures, in order to validate the correct functioning of the risk measurement models in broad terms.

The validation function is carried out by the Internal Validation Unit, which falls under the General Division of the Validation and Technical Secretary’s office, which reports to the Senior Executive Vice-President’s office in charge of Risks.

The internal validation unit must ensure that the credit risk models are adequate, both from a quantitative and qualitative standpoint, in order to determine capital requirements correctly.


Follow-up report on the model

Textos picatsDoncs és imatge de word

Management integration

map and report

Follow-up report on variables

Quality of data

Mapa iinformedʼIn tegrac

ió en laGestióIn fo rmeExec uti

u

In fo rme s deseguime ntde Paràme tre sde Ris c

(PD, EAD iLG D)

Dossi er deseguime nt

Cicledevali dac ió



u


(PD, EAD iLG D)




u


(PD, EAD iLG D)


Cicledevali dac ió

Validationcycle



The main goals of the Internal Validation Unit are as follows:

• Issue an opinion on whether the internal models are adequate for regulatory and management purposes, identifying all the relevant uses thereof.

• Assess whether the risk management and control procedures are aligned with the Institution’s risk profile and strategy.

• Support senior management, and the Global Risk Management Committee in particular, in their responsibilities regarding approval of the use of the models for management and regulatory purposes and their periodical review processes.

• Coordinate the supervisory validation process with the Bank of Spain and prepare the follow-up file as required by the regulatory body for each of the internal models.

The Internal Validation Unit’s tasks consist basically of the following:

• Validation cycles, which consist of periodical (yearly) reviews which ensure the adequacy of the models and the use thereof.

• Specific tests consisting of a comprehensive review of the process of model building and parameter calculation. In addition, replication procedures are performed and the adequacy of the documentation is verified.

The areas of review are as follows:

• Methodology and documentation: analysis of the models (type of model, methodology, explanatory variables, validation of the model’s construction, identification of changes), analysis of the significant definitions used (default,

loss, segmentation) and the adequacy of the existing documentation.

• Data: verification of the integrity and consistency of the current calibration and exposure databases, both regarding database design and construction and the performance thereof over time.

• Quantitative procedures: guaranteeing the strength of the models by means of replication procedures (defaults, segmentation, model outputs), periodical follow-up tests (discriminatory capacity, back-testing and stress-testing), analysis of sensitivity of the parameters and benchmarking of the internal models.

• Qualitative procedures: checking whether the Institution uses the models and the output thereof in the risk management processes (use testing) and assessing senior management’s knowledge of and reliance on the models and the use thereof (model reporting and approval cycle and organisational structure).

• Review of the technological environment: assessing the degree of integration of the models with the Institution’s systems and the functionality of the models (and ensuring that they meet actual information needs).

At the beginning of each year the Internal Validation Unit issues a Validation Report which contains the work carried out and details the conclusions and main recommendations issued in the reviews of the previous year.

investee Portfolio

The risk relating to the ’’la Caixa’’ Group’s investee portfolio is the risk associated with the possibility of incurring losses as a result of fluctuations in market prices and/or default on the positions making up the equity portfolio within a mid- to long-term time horizon. At 31 December 2009,




the market value of the listed investee portfolio amounted to EUR 20,118 million, including pre-tax unrealised gains amounting to EUR 3,945 million.

The Global Risk Management Division, with the support of Criteria Caixacorp, measures the risk of these positions, both from the standpoint of the underlying risk in terms of market price volatility, applying VaR models (a statistical estimate of the maximum potential losses by reference to historical data on changes in prices) to the return spread in relation to risk-free interest rates as indicated in Basel II, and of the uncertainty of default, using models based on the PD/LGD approach, also following the guidelines contained in Basel II.

These indicators are monitored on an ongoing basis to ensure that the most appropriate decisions are always adopted on the basis of the past and projected

performance of the markets and of the ’’la Caixa’’ Group’s strategy.

These measurements and the related developments are necessary to monitor management of the investee portfolio and enable strategic decisions to be made on the composition of the portfolio by senior executives of the ’’la Caixa’’ Group.

The Global Risk Management Division has an Investee Risk Control unit, the main objective of which is to optimise the risk/return ratio on this portfolio and monitor and, once investments or divestments have been made, follow up on the risk relating to the asset positions held by ”la Caixa” in investees. The risk relating to the asset positions comprises two factors: the ownership interest and the risk granted to investees.

The principle guiding the work of this unit is to apply a holistic approach to risk, so that the equity investments of ”la Caixa” are considered within a broad risk assessment context. Analysis of these positions provides a dynamic overview of the effects of the diversification and concentration of the Group’s global portfolio. The work carried out by this unit is designed to provide management with a global analysis of the risk associated with the interests in investees, comparing them with the investments in other assets.

In addition, the Market Risk Control Division, in conjunction with Criteria CaixaCorp, includes in its risk monitoring process the risk arising from derivatives and the foreign currency risk associated with the investee portfolio, and also performs an ongoing follow-up of the risks relating to the financial market transactions associated with the financial investees.



“MiNiMUM ExPOSURE TO BalaNCE

SHEET iNTEREST RaTE RiSK THROUGH NaTURal HEDGiNG aND FiNaNCial

MaRKET HEDGiNG”

Matrix of maturities and repricings in the sensitive balance sheet (static gap) of ”la Caixa” at 31/12/09

(Figures in millions of euros) 1 YEaR 2 YEaRS 3 YEaRS 4 YEaRS 5 YEaRS > 5 YEaRS

assets 166,692 7,407 4,754 2,242 3,664 6,542Mortgage collateral 114,360 576 179 133 96 506Other guarantees 47,841 2,696 2,865 1,817 481 2,021Money market 2,315 0 0 0 0 0Debt securities 2,176 4,135 1,710 292 3,087 4,015liabilities 120,108 19,152 12,336 4,811 12,196 22,698Customer funds 98,313 12,564 8,687 2,811 7,696 8,548Issues 21,795 6,588 3,649 2,000 4,500 14,150GaP 46,584 (11,745) (7,582) (2,569) (8,532) (16,156)HEDGES (37,816) 8,170 3,862 1,800 8,892 15,091TOTal GaP 8,768 (3,575) (3,720) (769) 360 (1,065)

4.3. Managing the risk of balance sheet positions

Management of balance sheet interest rate risk

Interest rate risk, which is inherent to all banking activities, arises when changes in the structure of the market yield curve affect assets and liabilities and cause them to be renewed at rates other than those set previously, thereby affecting their economic value and net interest income. This risk, also known as structural interest rate risk, is managed and controlled directly by management of ”la Caixa” through the ALCO.

The ”la Caixa” Group manages interest rate risk pursuing a twofold objective: to reduce the sensitivity of net interest income to interest rate fluctuations and preserve the economic value of the balance sheet. To attain these two objectives, the Group actively manages interest rate risk by taking out financial market hedges in addition to the natural hedges generated in the Group’s own balance sheet as a result of the complementary nature of the sensitivity to interest rate fluctuations of the deposits and lending transactions arranged with customers.

The General Markets Division is responsible for analysing interest rate risk and proposing hedging transactions aligned with the above objectives to

the ALCO. To carry out this task, various measures are used to evaluate the risk:

I. Static gap analysis provides a breakdown of maturities and interest rate resets, at a given date, of sensitive items on the balance sheet. The sensitivity to interest rates and the expected term to maturity, based on past experience of customer behaviour, are analysed for items without a contractual maturity date (e.g. demand deposits), while taking into account the likelihood of customers withdrawing the funds from these products. Internal models are used for the early repayment or termination assumptions which include behavioural variables of customers, products, seasonality and macroeconomic variables, in order to infer the customers’ future performance.

II. The sensitivity of net interest income shows the impact upon the review of on-balance-sheet transactions caused by changes in the yield curve. This sensitivity is determined by comparing a net interest income simulation by reference to various interest rate scenarios. The most likely scenario, which is arrived at using underlying market rates, is compared against other scenarios of rising or falling interest rates and changes in the slope of the curve. The two-year sensitivity of net interest income to sensitive on-balance-

sheet assets and liabilities, taking into consideration scenarios of rises and falls in interest rates of 150 basis points each and distributing the rate fluctuation over the two years is approximately 0.25%.

III. The sensitivity of asset/liability values to interest rates measures the potential effect on balance sheet present value in the event of interest rate fluctuations. The sensitivity of net interest income and equity value are measures that complement each other and provide an overview of structural risk which is more focused on the short and medium term, in the case of net interest income, and on the medium and long term in the case of equity value.

IV. VaR measures are used following the treasury-specific methodology (see the next section).

V. EaR (earnings at risk) measures are used to establish, with a given confidence level (99%), the maximum expected loss in net interest income for the next two years, considering a given level of balance sheet growth.



DISTRIBUTION OF THE DAILY RESULTS OF THE FRONT OFFICE TRADING ACTIVITY IN 2009(Frequency: number of days)Millions of euros

Gràfic ”calcat”xifres picat

2 6 4

33

85

60

32

169 4 0 4

<–3

>7

–3/–

2–2

/–1

–1/0 0/1

1/2

2/3

3/4

4/5

5/6

6/7

“THE POSiTiONS TaKEN aRE BaSED ON a MaRKET SCENaRiO THaT PREMiUMS

lOW RiSK aBOVE RETURNS”

4.3. Managing the risk of balance sheet positions (cont.)

In keeping with current legislation, the ”la Caixa” Group does not consume capital as a result of the structural interest rate risk taken, due to its low balance sheet risk profile. Although the balance sheet interest rate risk taken by ”la Caixa” is substantially below levels considered significant (outliers), in keeping with the proposals of Basel II, a series of steps continue to be taken at ”la Caixa” towards more intense monitoring and management of balance sheet interest rate risk.

Management of the market risk of treasury positions

The Market Risk Control Division is responsible for monitoring these risks and assessing counterparty risk and the operational risk associated with the activity in the financial markets. To fulfil its duties, each day this division monitors the contracts traded, calculates how changes in the market will affect the positions held (daily result of marking to market), quantifies the market risk taken, monitors compliance with the limits and analyses the ratio of actual return to risk taken.

As a result of its front office activities in financial markets, the ”la Caixa” Group is exposed to market risk due to adverse changes in the following risk factors: interest and exchange rates (caused by the treasury positions taken), share prices, commodity prices, inflation, volatility and changes in the credit spreads on private fixed-income positions. The two most commonly used risk measures are Sensitivity and VaR (Value at Risk).

Sensitivity calculates risk as the impact on the value of positions of a minor change in the risk factors, as follows:

• For interest rate and inflation risk, a calculation is performed of the change

in the present value of each of the future flows (actual or forecast) in the event of a one basis point (0.01%) change at all stages of the curve.

• For foreign currency risk, a calculation is performed of the change in the counter value of each of the foreign currency flows in the event of a one percent (1%) change in the exchange rate.

• For the price risk on shares or other equity instruments arranged by the front office, and for commodity price risk, a calculation is performed of the change in the present value of the position or portfolio in the event of a one percent (1%) change in the price of its components.

• For the volatility risk (interest-rate or price fluctuations) associated with options transactions (interest-rate caps and floors and currency or equity options), a calculation is performed of the change in the present value of each of the future flows in the event of volatility changes in quoted exchange rates at all stages of the curve, in exchange rates and/or in asset prices.

These sensitivity analyses provide information on the impact on the economic value of positions of a rise in interest rates, exchange rates, prices or volatility, but do not provide any assumptions regarding the likelihood of this change.

In order to standardise risk measurement across the entire portfolio, and to provide certain assumptions regarding the extent of changes in the market risk factors, the VaR methodology is employed (VaR: a statistical estimate of the potential losses by reference to historical data on changes in prices), using a one-day time



RISK OF THE FRONT OFFICE TRADING ACTIVITY IN 2009Daily performance of VAR (in thousands of euros)

Gràfic ”calcat”Text picat

01,0002,0003,000

5,000

7,000

Jan. Feb. Mar. Apr . May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.

4,000

6,000

“aVERaGE VaR iN 2009: EUR 4.3 MilliON”

horizon and a statistical confidence level of 99%. In other words, 99 times out of 100 the actual losses sustained will be less than the losses estimated under the VaR method. In 2009 the average VaR in the front office trading activity was EUR 4.3 million. The highest consumption levels, up to a maximum of EUR 5.9 million, were attained in October, mainly as a result of a slightly better positioning of the front office with regard to the market risk limits allowed, both for the purpose of obtaining returns on its market performance expectations (in particular in the yield curve and in equity securities) and as part of its assignment to invest in order to optimise the returns obtained on residual balance sheet liquidity.

Two methodologies are used to obtain this measurement:

• The parametric VaR technique, which is based on the statistical treatment of parameters such as volatility and matching fluctuations in the prices and interest and exchange rates of the assets composing the portfolio. According to the recommendations of the Basel Committee on Banking Supervision, it is applied using two time horizons: 75 days, giving more weight to recent observations, and 250 days, giving equal weight to all observations.

• Historical VaR calculates the impact on the value of the current portfolio of historical changes in the risk factors; the changes over the last 250 days are taken into account and, with a confidence level of 99%, VaR is taken to be the third worst impact on the value of the portfolio.

A drop in the credit rating of asset issuers can also give rise to adverse changes in quoted market prices. Accordingly, the

Market Risk Control Division completes the quantification of market risk with an estimate of the losses arising from changes in the volatility of the credit spread on private fixed-income positions (Spread VaR), which constitutes an estimate of the specific risk attributable to securities issuers. This calculation is performed with a given stress component, assuming that the daily change in credit spreads may result in a change equal to that historically experienced over a one-week time horizon (taking into account, when doing so, the potential lower liquidity of these assets) and a confidence level of 99%.

At 31 December 2009, the ’’la Caixa’’ Group’s exposure to structured credit, which is included under “Financial Assets and Liabilities Held for Trading”, is residual and is measured at market price.

The Market VaR (arising from fluctuations in interest rates, exchange rates and the volatility of both) and the Spread VaR are aggregated on a conservative basis, assuming zero correlation between the two groups of risk factors.

In the following table there is an estimate of the average VaR amounts attributable to the various risk factors. As may be noted, consumption levels are moderate and basically relate to yield curve and credit spread risks. The volatility, commodity price and inflation risk amounts are of very marginal significance.

To confirm the suitability of the risk estimates, daily results are compared against the losses estimated under the VaR technique (backtest). As required by banking regulators, two validations are made of the risk estimate model:

VaR by risk factor

(Thousands of euros) aVERaGE VaR 2009

INTEREST RATE 2,423EXCHANGE RATE 562SHARE PRICE 524INFLATION 207COMMODITY PRICE 125INTEREST-RATE VOLATILITY 167EXCHANGE-RATE VOLATILITY 52CREDIT-SPREAD VOLATILITY 2,294SHARE-PRICE VOLATILITY 39



Gràfic ”calcat”text picat

GROSS BACKTESTING 2009(In thousands of euros)

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.–12,000

–3,0000

3,0006,0009,000

12,000

VaR + VaR –

–6,000–9,000

Income Statement

NET BACKTESTING 2009(In thousands of euros)

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.–12,000

–3,0000

3,0006,0009,000

12,000

–6,000–9,000

VaR + VaR – Income Statement

4.3. Managing the risk of balance sheet positions (cont.)

a) Net backtesting, which relates the portion of the daily result of marking to market for open transactions at the close of the previous session to the estimated VaR over a time horizon of one day, calculated on the basis of the open positions at the close of the previous session. This validation is the most appropriate means of performing a self-assessment of the methodology used to quantify risk.

b) Gross backtesting, which involves an assessment of the total result obtained in the day (therefore including any intraday transactions) by comparing this result against the VaR over a time horizon of one day calculated on the basis of the open transactions at the close of the previous session. This provides an assessment of the importance of intraday transactions in generating profit and calculating the total risk of the portfolio.

Lastly, two stress testing techniques are used on the value of the treasury positions to

calculate the possible losses on the portfolio in situations of extreme stress:

1. Systematic stress testing: this technique calculates the change in value of the portfolio in the event of a specific series of extreme changes in the main risk factors. The following factors are considered: parallel interest rate shifts (rising and falling); changes at various points of the slope of the yield curve (steepening and flattening); increased and decreased spread between the instruments subject to credit risk and government debt securities (bond-swap spread); shifts in the euro-US dollar curve spread; higher and lower volatility of interest rates; the appreciation and depreciation of the euro versus the dollar, the yen and sterling; higher and lower volatility of exchange rates; rising and falling stock and commodity prices and, lastly, the increased and reduced volatility of stocks and commodities.

2. Historical scenario analysis: this analysis addresses the potential impact of actual

past situations on the value of the positions held, such as the collapse of the Nikkei in 1990, the US debt crisis and the Mexican peso crisis in 1994, the 1997 Asian crisis, the 1998 Russian debt crisis, the growth and collapse of the technology bubble in 1999-2000, or the terrorist attacks that have caused the most severe effects on the financial markets over recent years, the credit crunch of summer 2007 or the liquidity and confidence crisis triggered by the failure of Lehman Brothers in September 2008.

To complete these analyses of risk under extreme situations, the “worst-case scenario” is determined, which is the state of the risk factors in the last year that would cause the heaviest losses in the current portfolio. This is followed by an analysis of the distribution tail, i.e. the size of the losses that would arise if the market factor movement causing the losses is calculated on the basis of a 99.9% confidence level.



Gràfic ”calcat”text picat Distribució de risc per rating

Contrapartida (en%)situació a 31-12-08

BREAKDOWN OF RISK BYCOUNTERPARTY RATING (%) Balance at 31/12/09

AAA

AA–

A+ A A– BBB

BBB–

Oth

er

BBB+

0

2015105

40

AAAA+

3025

35

As part of the required follow-up and control of the market risks taken, management approves a structure of overall VaR and sensitivity limits for the front office activity. The risk factors are managed by the General Markets Division on the basis of the return/risk ratio determined by market conditions and expectations. The Market Risk Control Division is in charge of monitoring compliance with these limits and the risks taken, and generates a daily report on position, risk quantification and the utilisation of risk limits which is distributed to management, front office executives and the internal audit division.

Therefore, the market risk of the ”la Caixa” Group’s treasury positions is managed in accordance with the methodology and monitoring guidelines proposed by Basel II.

Control of the risks taken in financial market operations must be supplemented by a calculation and monitoring of the losses that could arise as a result of default by the counterparty due to insolvency or inability to meet the payment obligations.

The maximum authorised exposure to credit risk with a counterparty is determined on the basis of a calculation, approved by management, which is based primarily on ratings for the entities and on the analysis of their financial statements.

The exposure of the ’’la Caixa’’ Group vis-à-vis credit institutions (excluding the balance with the Bank of Spain) amounted to EUR 11,479 million at 31 December 2009. Nearly all the exposures arising from front office activities are undertaken with counterparties based

primarily in European countries and the United States.

In addition, the distribution by rating reflects the significance of the operations with counterparties rated as investment grade, i.e. those which the international credit rating agencies have considered to be safe due to their high payment capacity.

The Global Risk Management Division has responsibility for integrating those risks within the Group’s overall exposure management framework, although the specific responsibility for managing and monitoring the exposure to the counterparty risk arising from the front office activity lies with the Risk Analysis and Approval Division, which prepares the proposals for approval of risk lines and monitors the use of such lines.

The ”la Caixa” Group controls counterparty risk by means of an integrated, real-time system which provides knowledge of the limit available to any counterparties, by product and term, at all times. The risk is measured with reference to both present market value and future exposure (value of the risk positions taking into account future changes in the market factors underlying the transactions).

Furthermore, the Risk Analysis and Approval Division, together with the Legal Advisory Division, as part of monitoring the credit risks taken by the market operations, actively manage and monitor the adequacy of the related supporting contractual documentation. Hence, virtually all the risks taken in connection with derivative instruments are covered by ISDA and/or CMOF standardised contracts, which provide for the possibility of offsetting the flows of outstanding

collections and payments between the parties for all the transactions covered by these contracts.

The ”la Caixa” Group has entered into collateral agreements with most counterparties which act as security for the market value of the derivatives transactions. A collateral agreement is an agreement whereby two parties undertake to deliver an asset to each other as security for the net credit risk position arising from the derivatives traded between the parties, on the basis of a prior close-out netting agreement included in the clauses of ISDA or CMOF contracts.

In order to ensure that the collateral agreements are effective, the market value of the collateralised transactions and the deposits made by the counterparties are monitored on a daily basis. Most of the collaterals received are cash and, accordingly, there is no risk of adverse effects due to correlation between the collateral and the collateralised portfolio. The collateralisation percentage of the ”la Caixa” derivatives with financial institutions exceeds 97%.



“aCTiVE MaNaGEMENT OF THE BalaNCE

SHEET TO GUaRaNTEE aDEQUaTE lEVElS OF liQUiDiTY aND STaBlE

aND DiVERSiFiED FiNaNCiNG SOURCES”

4.4. Managing liquidity risk

The ”la Caixa” Group keeps excellent liquidity levels with careful monitoring of natural hedging on the balance sheet and active management of financing sources.

The Balance Sheet Risk Analysis Division, which reports to the General Markets Division, is in charge of analysing liquidity risk.

The ”la Caixa” Group manages liquidity risk so as to ensure that it is always able to meet its obligations on a timely basis and never see its investment activities suffer from a lack of lendable funds. This objective is achieved by actively managing liquid assets, through ongoing monitoring of the balance sheet structure, on the basis of due dates and early detection of potentially undesirable structures of short- and medium-term liquid assets, while adopting a strategy that stabilises financing sources.

Also, ”la Caixa” has a Liquidity Risk Contingency Plan, in which analyses are made under both ordinary market conditions and crisis situations, and in which various systemic and combined crisis scenarios are considered, entailing various loss given default assumptions in terms of reduced liquidity. Five categories of crisis scenario are analysed: three systemic crisis scenarios (macroeconomic crisis, upsets in the capital markets and alterations in payment systems), a specific crisis scenario (reputational crisis) and a combined crisis scenario considered as a “worst-case scenario.” These scenarios address various timeframes and loss given default levels based on the nature and depth of the crisis analysed. For each of the crisis scenarios, “survival” periods are calculated (defined as the ability to fulfil acquired commitments), together

with sufficient liquidity levels to cope successfully with the crisis situations considered. These analyses are used to prepare the Liquidity Risk Contingency Plan which contains an action plan for each of the crisis scenarios established (systemic, specific and combined) and gives details on measures to be taken on a commercial, institutional and communications level to deal with this type of situation. The Plan also includes the possibility of using a series of spare reserves or extraordinary financing sources.

The ALCO monitors medium-term liquid assets on a monthly basis by analysing forecast time lags in the balance sheet structure and verifies compliance with the limits and operating lines of action approved by the Board of Directors. The ALCO makes proposals to the Board of Directors on the optimum issues or financing or investment programmes to suit market conditions and the instruments and terms needed to support the growth of the business. The ALCO periodically monitors a series of indicators and warnings in order to anticipate a liquidity crisis and take the corrective measures, as laid down in the Liquidity Risk Contingency Plan. In addition, a monthly analysis is performed of the potential liquidity levels under each of the hypothetical crisis scenarios.

Short-term liquid assets are managed to ensure that liquid assets are available on the balance sheet at all times, i.e. minimising the structural liquidity risk inherent to the banking business. To assist with this management process, a daily breakdown of liquid assets by due dates is made available by preparing projections of future flows, which provides information on the time structure of liquid assets at all times.

(Millions of euros)

Total Liquidity


7.8%of Group assets

2009

21.208

7,8

Ac tiu del Gr up

2009

21,208

ECBfacilityECBfacility

On-balance-sheetliquidity

10,166

11,042



As part of this approach to managing liquidity risk, so that it can anticipate potential needs for lendable funds, the ”la Caixa” Group has a variety of ordinary financing programmes that cover the various maturity periods to ensure that it has adequate liquidity levels at all times:

• The Note Programme, with a principal amount of EUR 12,000 million, provides access to short-term funds.

• Renewal and extension of the Simple Fixed-Income Securities Issue

Framework Programme, which ensures the availability of long-term funds. The principal amount of this issue is EUR 25,000 million, of which EUR 24,125 million were available at 31 December 2009.

• In addition, as a prudent measure to prepare for potential stress on liquid assets or market crises, i.e. to cope with the contingent liquidity risk, the ”la Caixa” Group has placed a series of guarantee deposits with the European Central Bank (ECB) through which

high levels of liquid assets can be made available at short notice (ECB facility), currently standing at EUR 10,166 million.

In short, the ”la Caixa” Group takes advantage of the existing mechanisms on financial markets to ensure that it has adequate levels of liquid assets to meet its strategic objectives, while taking into account a balanced distribution of the maturity dates of issue, thereby avoiding concentration and diversifying the financial instruments.

SCENaRiOS liQUiDiTY SOURCE RiSK OF FUNDS

CONTINGENT ECB FACILITY

RISK + SPARE RESERVES

STRUCTURAL ORDINARY

RISK FINANCING

SPECIFIC

OR SYSTEMIC

CRISIS

ORDINARY

CONDITIONS

Probabili tat-

- Normalitat

Crisi lleu o moderada

Crisi greu o moltgreu

Probabili tat-

- Normalitat

Crisi lleu o moderada

Crisi greu o moltgreu

Seve

rity

+–

Likelihood– +

Serious or very serious crisis

Minor or moderate crisis

PROBABILISTIC DISTRIBUTION OF THE SEVERITY OF LIQUIDITY RISK:Three severity or stress levels

Ordinary conditions

There is a continuum of possible situations involving the need for liquidity in the activities of ”la Caixa”

– Severity + Severity

+ Probability of occurrence

– Probability of occurrence

OUTliNE OF liQUiDiTY RiSK MaNaGEMENT

COMBiNED CRiSiS

Serious reputational and systemic crisis

Minor systemic crisis

SYSTEMiC CRiSiS

Serious systemic crisis

SPECiFiC CRiSiS

Serious reputational crisis

Daily operations

ORDiNaRY CONDiTiONS

Seasonality



“MiNiMiSE THE OPERaTiONal RiSK

iNHERENT TO all BUSiNESS aCTiViTiES BY MONiTORiNG THE MaiN RiSKS UNDER

QUaliTaTiVE aND QUaNTiTaTiVE TECHNiQUES”

“DiSTRiBUTiON OF OPERaTiONal RiSK EVENTS aT THE ”la Caixa” GROUP iN

2009 BY TYPE OF RiSK”

OPERATIONAL RISK MANAGEMENT MODEL AT THE ”LA CAIXA” GROUP

Management Identification

Assessment

Practices with customers

Process perfomance, delivery and management

Internal fraud

17.1%

1.7%

36.9%

0.7%9.8%

24.7%

9.1%

External fraud

Impairment of tangible assets

System failures

Labour relations and safety at work

4.5. Managing operational risk

Operational risk management is based on specially qualified personnel, and the procedures, systems and controls in place.

Operational risk includes all the events that could give rise to a loss caused by shortcomings in internal processes, human error, malfunctioning of information systems and/or external events. This risk is inherent to all business activities and, although it can never be wholly eliminated, it can be managed, mitigated and, in some cases, insured.

Operational risk has become increasingly important as a result of the greater dependence of the banking business on such factors as the intensive use of information technology, outsourcing and complex financial instruments.

Management of this risk takes place at the highest level. Management and the Global Risk Committee define the strategic lines of action and monitor the operational risk profile, the main loss events and the actions taken to mitigate them.

There are two main lines of action: training employees so that they have the skills and information required to carry out their functions and systematic recurring reviews of the business and operating processes, putting improvements and new controls in place. In addition, where necessary, ”la Caixa” transfers the risk to third parties by taking out insurance policies.

The ’’la Caixa’’ Group is also developing a strategic project, promoted by management and in keeping with Bank of Spain proposals and regulations, for the implementation of a single comprehensive operational risk measurement and control model at the ’’la Caixa’’ Group. Management at Group level covers all the companies included in the scope of application of Bank of Spain Solvency Circular 3/2008.

The ’’la Caixa’’ Group applies the standard method to calculate the regulatory capital for operational risk, in order to progress towards the advanced model to be used once the data available on operational losses covers a minimum period of five years and when authorised by the Bank of Spain. In this regard, ”la Caixa” has an “Operational Risk Management Framework” which defines the Group’s operational risk objectives, policies, management model and assessment methods. It also establishes the gradual progression from the standard operational risk measurement model to the adoption of an advanced measurement approach (AMA).

The ”la Caixa” Group’s overall objective is to improve the quality of business management based on information on operational risks, aiding decision-making to ensure the long-term continuity of the organisation and improving processes and the quality of customer service, while also complying with the established regulatory framework and optimising capital consumption.



The organisational model is based on the following:

• Business and support divisions and subsidiaries: responsible for the identification, assessment, management, control and reporting on the operational risks relating to their activities.

• Operational Risk Unit: responsible for the definition, implementation and standardisation of the operational risk management, measurement and control model at the ”la Caixa” Group. It provides support to the divisions and subsidiaries and consolidates the information for management reporting purposes. It forms part of the Credit Risk Methodology and Models Division within the Global Risk Management Division.

• Internal Audit Division: responsible for supervising compliance with the Management Framework and implementation of established operational risk assessment, control and management procedures.

The operational risk management model and policies establish an ongoing process based on the following:

• Identification and detection of all current and potential operational risks, based on qualitative techniques (the opinion of process experts and risk indicators) and procedures for the management of operational risks, in order to define the ”la Caixa” Group’s operational risk profile.

• Quantitative assessment of operational risk based on actual data on losses recorded on the database of operational events.

• Active management of the Group’s risk profile, which implies establishing a reporting model at all levels of the organisation to assist with decision-making aimed at mitigating the risk (setting up new controls, developing business continuity plans, reengineering processes, taking out insurance against potential contingencies and others),

while anticipating potential causes of risk and mitigating their economic impact.

In 2009 a process was begun by the process experts to streamline and simplify the risk self-assessment system. This project began to be applied to pilot business areas and will be extended to the other areas and subsidiaries in 2010. In addition, in 2009 the implementation began of key risk indicators (KRIs) to supplement the qualitative and quantitative information on operational risks and help determine the ”la Caixa” Group’s operational risk profile.

Progress also continued to be made in building the “operational events database” and recognising and monitoring operational losses, especially those classified as significant (operational events with the biggest economic impact), to be used, together with the qualitative information, for proactive operational risk management, so as to anticipate the possible causes of risk and reduce its financial impact, with the resulting adjustment of capital requirements.

EVENT CaPTURE PROCESS

Loss events database

Manual input of significant operational events

Automatic collection of recurring loss events

Accounting recordsaccounting reconciliation / identification process



Integrity Securities market

Customer products

and services

Money-laundering prevention

and personal data protection

Corporate governance and capital adequacy

Other

IMPROVEMENT MEASURES

0

10

20

30

40

50

60

70

80

Pending legal/administrative definition

Planned

Not yet started

In progress

Under examination

Completed

COMPLIANCE REPORTS


2229

15

Regulations reviewed:Compliance obligations analysed:Business divisions/Head Office contacted:

4.6. Regulatory compliance risk management

The regulatory compliance policy of the ”la Caixa” is based on the principles of integrity and ethical conduct, which form the cornerstones of the ”la Caixa” Group’s activities. In addition, following transposal into Spanish law of the Markets in Financial Instruments Directive (MiFID), the regulatory compliance function appears as a legal requirement for financial institutions in the following legislation:

• Securities Market Law 47/2007, of 19 December, amending Law 24/1988, of 28 July.

• Royal Decree 216/2008, of 15 February, on capital of financial institutions.

• RD 217/2008, of 16 February, on investment services companies.

The mission of the regulatory compliance function

The mission of the ”la Caixa” Group’s regulatory compliance function is geared towards managing the risk of penalties imposed by laws or regulations and financial, material or reputational losses

which may be suffered by the ”la Caixa” Group upon violation of laws, regulations, regulatory standards or codes of conduct.

This mission involves carrying out a series of activities including most notably: creating, disseminating and implementing a compliance culture at all levels of the ”la Caixa” Group; advising senior management on regulatory compliance issues, preparing and/or promoting internal standards and codes or, where necessary, improving them; and defining effective procedures and proposing appropriate controls. In this regard, any risk of noncompliance must be detected and, where necessary, proposals for improvement drawn up and monitored, and any potential deficiencies with respect to professional ethics must be examined.

To attain these objectives, the Regulatory Compliance Division issues regulatory compliance reports, monitors improvements and carries out the activities set out in the Internal Rules of Conduct of the Securities Market.

These improvements are monitored on a monthly basis until their resolution.

It should be noted that the regulatory compliance function is universal in nature and includes all of the business activities of the ”la Caixa” Group.

internal Rules of Conduct of the Securities Market

In October 2008 the Board of Directors approved a new version of the Internal Rules of Conduct (IRC) of the Securities Market to bring them into line with the latest changes in legislation and, in this respect, various activities were carried out in 2009 to comply with the code:

• Additions were made to the contents of the dedicated intranet website on regulatory compliance which contains information on the rules and codes of conduct of ”la Caixa” and on all activities carried out in the area of regulatory compliance and other issues of interest to all employees.

• The Inventory of Separate Divisions (departments or work groups which, due to the nature of their duties, may have access to privileged information) was updated and periodical tests carried out on the functioning of their barriers (physical and logical) to prevent undue transfer of privileged information.



5. High financial strength 5.1. Excellent liquidity levels

The Group’s excellent liquidity position enables it, with prudent management, to guarantee the growth of the business and respond to customers’ credit needs.

Conservative proactive management of liquidity levels has always been one of the distinguishing features of the ”la Caixa” Group, enabling it to ensure the growth of the Group’s business and respond to its customers’ credit requirements. Prudent liquidity management, coupled with the objective of maximising returns, is the reason behind the increase in the investments in assets with the highest solvency, which may be turned into cash immediately, while also reducing exposure in the interbank markets.

The ”la Caixa” Group maintained very high liquidity levels in 2009, to reach EUR 21,208 million at 31 December, including the credit facility with the European Central Bank amounting to EUR 10,166 million.

Total liquidity accounts for 7.8% of the ”la Caixa” Group’s total assets,

comfortably exceeding the objective set in the 2007-2010 Strategic Plan of maintaining a minimum level of 5%.

Liabilities to customers account for 70% of the Group’s sources of financing, providing it with considerable stability and reflecting our customers’ trust in us, deposits from credit institutions account for 11% and institutional issues for the remaining 19%.

In addition, dependence on international institutional markets is very limited since ”la Caixa” actively manages the issues, distributing maturities and avoiding significant concentrations in particular years. Proof of this are the maturities scheduled for 2010 and 2011, totalling EUR 2,810 million and EUR 7,118 million, respectively. Therefore, in 2009, in the context of a global financial crisis and a climate characterised by a general lack of confidence, the ”la Caixa” Group demonstrated its considerable capacity to attract the interest of domestic and international investors, obtaining up to EUR 4,604 million on the capital markets.

“MaiNTaiN HiGH liQUiDiTY lEVElS”

Liabilities to customers

Deposits from credit institutions

Institutional issues

Gràfic refet,dades picadesTextos picats

DIVERSIFIED THIRD-PARTY FINANCING SOURCES At 31 December 2009

11%

70%

19%

(Millions of euros)

Total Liquidity


7.8%of Group assets

2009

21.208

7,8

Ac tiu del Gr up

2009

21,208

ECBfacilityECBfacility

On-balance-sheetliquidity

10,166

11,042

2009 Financial Report of the ”la Caixa” Group 5. High financial strength


5.2. Excellent capital adequacy levels

The ”la Caixa” Group’s high solvency

The own funds attributable to the Group amounted to EUR 16,696 million, up 6.9% on 2008. The balance was increased in 2009 as a result of the profit attributable to the Group (EUR 1,510 million) and reduced mainly by the portion of 2008 profit allocated to Welfare Projects. In addition, the ”la Caixa” Group’s equity, which includes attributable own funds, non-controlling interests and valuation adjustments, amounted to EUR 21,403 million at 31 December 2009, up 13.02% on December 2008, due to the positive performance of the markets which is reflected in an increase in the valuation adjustments.

The ”la Caixa” Group’s eligible capital at 31 December 2009, calculated in accordance with the guidelines established by Bank of Spain Circular 3/2008, of 22 May, in addition to own funds (less the contribution to be made to Welfare Projects in 2009), includes other items such as non-controlling interests (EUR 2,392 million), preference shares (EUR 4,898 million) and subordinated debentures (EUR 3,195 million), subject to the limits set forth in the Circular. However, eligible capital excludes intangible assets, consolidation goodwill, significant investments in unconsolidated financial institutions and insurance entities, as well as any excess amounts in qualified investments in non-financial entities.

Risk-weighted on-balance-sheet assets fell considerably with respect to total assets.

At 31 December 2009, after each balance sheet item had been weighted according to its exposure to risk pursuant to Basel II, the figures showed an estimated total

reduction of 54% and of 93% in the memorandum items.

In 2009 risk-weighted assets (BIS II) increased by 9.0%.

The required minimum capital level is calculated by reference to credit and counterparty risk, currency risk, the risk associated with financial assets and liabilities held for trading, the risk associated with the investee portfolio and operational risk. Practically all the Group’s capital requirements are to cover credit and counterparty risk.

Basel ii

The application of the Basel II Accord, transposed to Spanish legislation by Bank of Spain Circular 3/2008, has had a significant positive effect on the management of the ”la Caixa” Group’s capital adequacy levels. The regulations are structured around three pillars.

With respect to Pillar 1, minimum capital requirements, the ”la Caixa” Group has been applying internal models to calculate market risk since December 2007 and, with respect to credit risk, to the main asset categories since June 2008, following the required authorisations by the Bank of Spain. The ”la Caixa” Group continues to strengthen its risk and capital adequacy management processes and tools (see section 4. Active risk management).

In accordance with the guidelines of Pillar 2, the supervisory review process, the ”la Caixa” Group has designed a capital self-assessment process which aims to ensure an appropriate relationship between its capital and its risk profile. The results of the capital self-assessment process are included in a capital self-assessment report each year. The first official capital self-assessment report,

“KEEP CaPiTal aT a lEVEl ENSURiNG

SUSTaiNaBlE GROWTH”

0

5000

10000

15000

20000

OWN FUNDS(Millions of euros)

06 07 0908

Gràfic ”generat”Textos picats

16,69615,61914,418

10,769

16.69615.619

10.769

14.418

06 07 08 09


100% 100%

7%

WEIGHTED RISK AT 31/12/2009

On-balance-sheet assets Memorandum items

Risk-weighted assets and memorandum items

Risk reduction resulting from weighting

7%

46%

100% 100%

Actius Comptes d'ordre

Reducció del risc per l'efecte de la ponderació

Actius i Comptes d'ordre ponderats pel seu grau de ris

46%



compiled in the first quarter of 2009, confirmed the ”la Caixa” Group’s high level of capital adequacy, both in regulatory and economic terms.

As regards Pillar 3: market discipline, from 2008 on, the ”la Caixa” Group publishes the document entitled “Information of Prudential Relevance”, which contains information on capital, exposures to risk and risk assessment processes at the ”la Caixa” Group, and aims to provide market players with an assessment of the Group’s capital adequacy.

Self-financing of organic growth

Core capital at 8.7%.

Core capital (capital and reserves, net of goodwill and other intangible assets) stood at EUR 13,735 million, with a ratio of 8.7%. Tier 1 capital totalled EUR 16,349 million, representing 10.4% of risk-weighted assets.

The ”la Caixa” Group’s eligible capital totalled EUR 17,251 million at 31 December 2009, which gives a capital ratio of 11.0%, with an estimated excess of EUR 4,667 million over and above the minimum capital requirement of 8%.

In order to strengthen its high capital adequacy level and maintain its position among the best in the industry, the ”la Caixa” Group launched two issues in the first half of 2009, one totalling EUR 2,500 million of subordinated debt and another EUR 1,898 million of preference shares. This will make it possible to undertake the future business growth strategy while keeping the Group’s capital adequacy at appropriate levels.

The performance of eligible capital throughout 2009 enabled the self-financing of the additional core capital requirements arising from the ”la Caixa” Group’s recurring business.

10.4%

8.7%

11.0%

CAPITAL RATIO (BIS II RATIO)

09

Core capital Tier 1 Tier 2

8,7%

10,4%

11,0%

09

Tier 2Tier 1Core capital

CORE CAPITAL IN 2009 (%)

SubtotalDec. 2008 Dec. 2009

Self-financing

Organic growth

Equity securities portfolio

purchases

8.8 8.78.8 (0.1)

8,8

Subtotal

8,8

Autofinan ç ament

Compres cartera

r. variable

Creixement org ànic

(0,1) 8,7

Des. 2009Des. 2008

8,8

Subtotal

8,8

Autofinan ç ament

Compres cartera

r. variable


(0,1) 8,7

Des. 2009Des. 2008

8,8

Subtotal

8,8

Autofinan ç ament


(0,1) 8,7

Des. 2009Des. 2008

finan ç ament

org

“SURPlUS CaPiTal:EUR 4,667 MilliON”

Capital adequacy - BiS ii Ratio

(Amounts in millions of euros) 31/12/2009 31/12/2008 CHaNGE

Core capital 13,735 12,664 8.5%Ratio 8.7% 8.8% (0.1)

Preference shares 4,898 3,000Tier 1 capital 16,349 14,618 11.8%

Ratio 10.4% 10.1% 0.3Tier 2 capital 902 1,184Total eligible capital 17,251 15,802 9.2%

BiS Ratio 11.0% 11.0%Minimum capital requirement (8% ratio) 12,584 11,542Surplus capital 4,667 4,260

Ratio 3.0% 3.0%Risk-weighted assets 157,300 144,272 9.0%

2009 Financial Report of the ”la Caixa” Group 5. High financial strength


“THE aGENCiES CONFiRMED THE

VERY GOOD RaTiNGS OF ”la Caixa” iN THE aa RaNGE iN 2009”

5.3. ”la Caixa” Group ratings in the aa range

Following confirmation in 2009 of the ”la Caixa” Group’s credit ratings in the aa range, the Institution is one of the only three Spanish financial groups to be rated in the AA range, denoting its very high creditworthiness, from the three agencies.

In this regard, in September 2009 Standard&Poor’s confirmed the “AA–/A–1+” long- and short-term credit rating. In addition, as part of the review conducted of the Spanish financial system’s ratings in June 2009, Moody’s revised the ”la Caixa” Group’s long-term credit rating to “Aa2” from “Aa1” and confirmed the “P1” short-term

credit rating. Lastly, in April 2009, Fitch confirmed the “AA–/F1+” long- and short-term credit rating.

The agencies rate very highly the success of the Group’s strategy and its sound management, and particularly emphasise its commercial strength due to the excellent positioning of ”la Caixa” in Spain, which secure the good performance of the banking business. The quality of the Institution’s assets and its financial strengths, together with the high liquidity and capital adequacy levels, are highlighted by the agencies as fundamental factors explaining the Group’s very good ratings.

SHORT LONG OUTLOOK TERM TERM

Moody’s P1 Aa2 Negative

Standard & Poor’s A1+ AA– Negative

Fitch F1+ AA– Negative

Report on ”la Caixa” Corporate ResponsibilityExecutive Summary

1. Our values, our continuing commitment

2. ”la Caixa” with entrepreneurs

3. Trust

4. Excellence in service

5. Social Commitment

This section is the summary of the 2009 ”la Caixa” Corporate Responsibility Report. The full version can be consulted onwww.laCaixa.es/corporateresponsibility, where you will find more detailed information on the subjects tackled, the advances made and the Entity’s commitments for the future in questions of Corporate Responsibility.




Trust, social commitment and excellence in service are the values that have inspired the operations of ”la Caixa” since its beginnings. This is why, even though 2009 was a difficult year, the Entity has continued to bet on people and their projects and continues to be committed to the advance of society.

In 2009, ”la Caixa” combined the development of its financial operations with its social action, to contribute to overcoming the current adverse economic

situation. Along these lines, last year’s main lines of action were:

• To give financial support to private individuals, the self-employed and companies, placing special attention on entrepreneurs’ innovatory initiatives, through MicroBank, Caixa Capital Risc and other channels.

• To help private customers who were having short-term problems in paying their mortgages.

• To maintain jobs.

• To contribute to the advance of society through ”la Caixa” Welfare Projects, which maintained its budget of 500

million euros and focused on social and care programmes.

The commitment of ”la Caixa” to its stakeholders (customers, employees and society) has led it to set up consultation mechanisms to discover their expectations and give them a proper response.

As a result of this dialogue, the themes to which ”la Caixa” and its stakeholders have given greatest priority and which are reported in its 2009 Corporate Responsibility Report are the following:

Maturity of the theme

Importance for stakeholders

Latent Being consolidated Integrated into ”la Caixa” strategy

Very Important

Ecological footprint Financial responses to the crisisImpact of Welfare ProjectsCommitment to the communityEnvironment managementCustomer satisfactionFinancial inclusion

Important

Establishment and communication of objectives and challenges

Life/Work Balance Commitment to maintaining jobsEquality of opportunitiesTransparency of informationCorporate volunteer work

GrowingFinancial Education (*) Socially responsible

investment

Relevant themes relating to customers. Relevant themes relating to employees. (*) To be developed in the future.Relevant themes relating to society. Relevant themes relating to the environment.



“The idea was born in the need I had for someone to come and look after my two dogs at home. Internet led me to MicroBank, to whom I put forward a viable project. It is very important that the security on the loan is your project. With the 15,000-euro microloan and some small savings, I was able to set up Cangur. There we offer a full service for pets, which includes service at home. I began on my own, but now there are two of us full-time. In addition, we donate 0.7% of our profits to entities working for animal welfare.”

Montse Nzang, biologist.

2. ”la Caixa” with entrepreneurs MicroBank, the social bank of ”la Caixa”, responding to the needs of entrepreneurs, families and social organisations

Supporting the country’s business fabric and the people who want to set up their own business and make it grow, is one of the challenges of ”la Caixa”, especially in a period marked by economic recession.

Many people have managed to start their business careers thanks to the microloans: loans thought up for entrepreneurs who want to develop a personal or professional project, but have no resources of their own and cannot easily obtain traditional credit.

Montse Nzang’s case is an example of the 32,008 microloans that, to a volume of 176.8 million euros, MicroBank has financed.

More on MicroBank

• Microloans for the self-employed and small business-people have contributed to creating over 16,000 jobs. 6 out of every 7 businesses financed by MicroBank are successful and a fifth of them have had to take on more staff.

• In 2009, 4,131 business microloans were granted.

• MicroBank responds to people’s needs, helping them to overcome short-term family difficulties or to develop personally. In 2009, 27,877 microloans for these purposes were granted.

• During 2009 a credit line was created to attend to the needs of disabled people and their families.

• 417 entities throughout Spain work together with MicroBank to help concretise and develop business ideas.

• MicroBank makes available to social entities products and services that enable them to develop their work in a more agile and comfortable way, such as to pay in advance invoices pending from the State or Autonomous Communities.

THE CHALLENGE:”LA CAIXA” PLANS TO ACHIEVE IN THE 2009-2010 PERIOD:

85,000 MICROLOANS 100,000 CUSTOMERS 350 MILLION EUROS INVESTMENT

MICROBANK INVESTMENT (Millions of euros)

07 08 09

33.7

176.8

137.1

NUMBER OF MICROLOANS GRANTED

07 08 09

3,099

32,008

20,641

For further information: www.microbanklacaixa.com



“Winning the prize has given an injection of self-esteem to all of us involved in the project. At the same time it gives us the chance to receive financing in a simpler way, in order to turn the company we had imagined into reality.”

Salvador Borros Gómez, SAGETIS.

We bet on innovation and entrepreneurs

Converting ideas into business projects is one of the aims of ”la Caixa”, not only through the financing of business initiatives, but also through the training and consciousness-raising of future business-people.

For many entrepreneurs, the backing from ”la Caixa” is a determining factor in their being able to carry out their projects. As well as obtaining finance and recognition of a good business plan, they are able to draw on the experience of ”la Caixa”.

• During 2009, through Caixa Capital Risc, ”la Caixa” invested 3.6 million euros in various innovative Spanish projects belonging to emerging sectors such as ICT or biotechnology.

• The EmprendedorXXI programme trains future business people and organises activities to raise entrepreneurs’ awareness of their social function. In addition, it assists the financing of projects through networks

of private investors, such as the Keiretsu Forum.

• ”la Caixa”, through its 900 branches in rural areas, accompanies rural entrepreneurs, thanks to whom the quality of life of these areas is improved by the creation of new services and infrastructure. The Entity provided them with access to financing to the amount of 4,600 million euros.

SAGETIS won the BioEmprendedorXXI programme, contest in which 18 projects were entered.

Financial responses for companies and support for their international deployment

Companies need access to credit lines and other products that enable them to finance their sales, reach new markets and develop their businesses.

”la Caixa” continues to construct an agile, effective and friendly structure that can adapt to the needs of every kind of company and to help Spanish businesses with their international expansion plans through its network of overseas branches.

• ”la Caixa” has 11 representative offices in Europe, Africa and Asia. 2009 saw the opening of offices in Istanbul, Casablanca and Shanghai.

• ”la Caixa” places at the disposal of companies 2 corporate banking offices and 80 business centres.

• It collaborates with the ICO (Official Credit Institute) and the European Investment Bank to offer financing under company-friendly conditions.

• It renewed its collaboration with the CEOE and the CEPYME for the granting of loans under the best possible conditions.

For further information: www.emprendedorxxi.com / www.caixacapitalrisc.es

THE CHALLENGE:TO SUPPORT NEW RURAL INITIATIVES.

TO INCREASE PARTICIPATION IN THE EMPRENDEDORXXI PRIZE

THE CHALLENGE:TO OPEN NEW COMMERCIAL OFFICES IN 2010 IN DELHI, ALGIERS AND DUBAI.


3. Trust

3. TrustSolid results

The trust of the customers of ”la Caixa” has been constructed since its beginnings on the basis of its solvency and a prudent risks policy that guarantees all operations to the maximum.

”la Caixa” is one of the most solvent entities in the Spanish and European financial system.

• For yet another year, the international agencies that measure financial bodies’ solvency awarded ”la Caixa” a high rating (in the AA range).

• ”la Caixa” maintained a good level of liquidity (7.8% of assets) thanks to its prudent management, based on the following of good practices.

• The portfolio of customer loans increased by 1,603 million euros, with over 1,084 million operations and 104,045 million euros of risk on loans extended.

Ethics and transparency in its sales activity

The relations of ”la Caixa” with its customers are sustained on the basis of business ethics and transparency in sales activity.

• It approved a new Code of Ethical Values and Operating Principles, based on its corporate values, which it wants to be a public commitment of ”la Caixa” to its surroundings. The Code promotes principles such as integrity, confidentiality, service to customers, transparency,

respect for people and cultures, personal and social responsibility and team-work.

• It maintains its commitment to transparency in its commercial communications, with an internal code that goes beyond the legal regulations. It also takes part in the Association for the Self-Regulation of Commercial Communication (AUTOCONTROL).

• It reinforced its systems for the prevention of money laundering and the financing of organised crime. The Operative Unit for the Prevention of

Money Laundering investigated 685 operations.

• It safeguards strict compliance with the protection of the confidentiality of its customers’ data, in business conducted through both branches and other channels.

For further information: consult the new ethical code at www.laCaixa.es/corporateresponsibility

THE CHALLENGE:TO KEEP ”LA CAIXA” AT THE TOP OF THE SPANISH SYSTEM’S FINANCIAL ENTITIES IN TERMS OF ITS SOLVENCY AND LIQUIDITY.

THE CHALLENGE:TO APPLY AND SPREAD THE ETHICAL CODE.



4. Excellence in service We contribute solutions to the crisis

In the current economic climate, ”la Caixa” has created new products and services to help its private and business customers to overcome any economic difficulties.

• Aid Plan for people with a mortgage on their home, designed for families that have historically behaved well, in financial terms, towards the entity and who have now seen their income reduced due to temporary circumstances. Under the Plan, over 53,500 families benefited from postponements in repayments or reductions in them.

• Credit Line of Mortgage Moratorium from the ICO for deferring repayments of the self-employed and private individuals with substantial reductions in income, with over 2,200 families benefited.

• Financing through loans against security in kind (Monte de Piedad). The value of the pledges deposited marks the amount of the loan, which is granted at once at one year’s term. If necessary, ”la Caixa” offers facilities to renew the loan for a further year. In 2009, the loans on pledges increased by 8.5%.

• ICO lines (such as ICO-liquidity for SMEs, ICO-Moratoria for SMEs and the Business Development Plan), so that its self-employed and SME customers can gain access to this finance and stimulate their operations (16,278 loans to a total value of 773.7 million euros).

We support social organisations

”la Caixa” supports the “third sector” not only through its Welfare Projects, but also in its day-to-day operations.

Years ago, ”la Caixa” eliminated the charging of commissions on transfers that donated money to the accounts of these organisations. In 2009, this exemption reached approximately 300,000 euros.

• MicroBank developed in 2009 a range of specific products and services for these organisations.

• The collaboration of its customers through the Estrella Points programme, which allows customers to donate the value of points to social projects or exchange them for Fair Trade products.

• The creation of financial products in favour of social and environmental causes such as the Solidarity Estrella Deposit Account.

For further information: www.microbanklacaixa.com

THE CHALLENGE:TO STRENGTHEN THE ROLE OF ”LA CAIXA” AS A LEADING ENTITY IN FINANCING SMES AND THE SELF-EMPLOYED.

THE CHALLENGE:TO CONVERT ”LA CAIXA” INTO A REFERENCE FOR SOCIAL ORGANISATIONS.



We listen to our customers and give them replies

”la Caixa” is highly demanding with itself in seeking to satisfy its customers. It bases its relationship with them on trust, close contact and personal attention.

The evaluation of customer satisfaction enables improvements to be added all the time, both in products on offer and in the service provided. Just as ”la Caixa” is in close contact with its customers to get to know their concerns, it also responds to their suggestions and demands.

Permanent monitoring of customers’ views is the basis of its plans of ongoing improvement.

Quality and customer service

• In 2009, ”la Caixa” obtained the Madrid Excelente Prize for customer trust.

• Various internal and external studies indicate that ”la Caixa” maintains consistently a level of service quality above the average in the sector.

• In the first half-year of 2009, the number of complaints received increased, though in the second six months this trend reversed. The overall increase over 2008 was about 60%. Despite this, ”la Caixa” is one of the entities with the fewest complaints received, in proportion with its business volume, according to the latest data available from the Bank of Spain.

• Last year, objective indicators to measure quality were added. These complement the habitual indicators of perception of customer satisfaction. These indicators are based on measurements of various operating parameters. Examples of this kind of indicator are the time taken to replace a card or the non-availability of certain services.

“Giving customers good service involves improving every day, being attentive to their needs and searching for new ways to sort out problems. For this reason, and after discussing with several business customers the various possibilities of the on-line correspondence service, I thought it would be a good option to group all their receipts in just one pdf, to facilitate control of them and reduce consumption of paper. I put forward the proposal and this option was included in the service.”

Sergio Villegas Jiménez, Manager, Branch 1446 Quevedo (Madrid).

THE CHALLENGE:TO REDUCE THE NUMBER OF CUSTOMER COMPLAINTS BY 15%.



We promote innovation and access to financial services

For ”la Caixa”, innovation is turning ideas into value for its customers, which includes offering services that become more and more accessible.

”la Caixa” responds to the needs for improvement through innovation, just as its 2007-2010 strategic plan defines. Similarly, it understands that access to financial services is a right for everyone.

In 2009, 166.5 million euros were invested in technology, of which 24.65 were dedicated to R+D+i.

Advances in 2009

• Signature of accords with leading information technology companies (such as IBM, HP and Telefónica).

• New services for customers such as a mobile phone search engine for branches and ATMs, the CaixaMóvil Store or new facilities in shops’ point-of-sale terminals.

• Multiple channels: branches, self-service terminals, mobiles (CaixaMóvil) and Línea Abierta (Internet, phone and digital television).

• Adaptation of the websites, branches (30 in 2009) and self-service terminals (50.03% are already fully accessible).

• Continuing collaboration with the ONCE Foundation in the INREDIS Project for developing technology to create channels of communication between visually handicapped people and their surroundings.

• Presence in 100% of Spanish towns of over 20,000 inhabitants and in over 90% of those with between 5,000 and 20,000.

“From the Cards division, we work constantly to create new forms of payment that are comfortable for our customers. Thinking of professionals and the self-employed who do work at home, such as repairs of electrical appliances, we developed mobile POS terminals. With this, they only need a mobile phone to accept card payment -- it’s that easy. This removes the risk of theft or loss when carrying cash. In addition, they can offer their customers an easy way to pay and have the security of being paid for their work at once.”

Sergio Segovia Rubio, Administration Director of Electronic Banking.

THE CHALLENGE:TO DEVELOP NEW FORMULAE FOR PAYMENT BY MOBILE PHONE.



5. Social Commitment Welfare Projects with impact

In the same way as ”la Caixa” with its financial business, so Welfare Projects responds to the concerns of the people with whom it works. In a year that was difficult for disadvantaged groups, ”la Caixa” paid special attention to their social requirements.

In 2009, ”la Caixa” allocated to Welfare Projects a fund of 500 million euros.

• With the premise of helping people, by offering them, regardless of their age or circumstances, opportunities that help meet their needs, ”la Caixa” Welfare Projects prioritised in 2009 its social programmes, to which it dedicated 65% of the expended budget. The following stand out among these programmes:

• CaixaProinfancia: to fight child poverty in Spain. Welfare Projects invested between 2007 and 2009 over 100 million euros in improving the conditions of over 140,000 children.

• Incorpora Employment Programme: to facilitate integration into work of groups at risk of social marginalisation. By the end of 2009, 30,850 people had found work thanks to this programme, which had 358 job placement experts and over 9,400 member companies.

• Programme of Integrated Care for the Very Ill People: to provide help for those at the final stages of their lives. The programme set up 30 multi-disciplinary teams of emotional, psychological and spiritual support. ”la Caixa” has allocated 11 million euros since the start of the programme, which has already attended 6,793 patients and 10,794 families.

• Elderly People: to promote the integration and social participation of the elderly through lines of action encouraging volunteer work, learning new technology and preventing dependency.

• In the area of education, the Scholarship programme stands out. This programme allows people to study postgraduate courses in Spain and other countries; it also promotes journalism placements and studies in biomedicine. In 2009, ”la Caixa” granted 276 scholarships.

• In conservation of the environment, “la Caixa” Welfare Projects promotes initiatives such as ”la Caixa” in Favour of the Sea and the conservation of natural spaces, within a project that prioritises the hiring of the less privileged and integrated over 1,800 people into jobs.

• The following cultural projects and projects to spread knowledge should also be emphasised:

• The initiation of a new line of collaboration with major museums, such as the Prado and the Louvre.

• Plans to give Saragossa and Seville their own CaixaForum centres in the future.

• Reflection and analysis through the Research Department, the ”la Caixa” Economy and Society Chair and the ”la Caixa” Business Social Responsibility and Corporate Governance Chair, in collaboration with the IESE.

“Now more than ever we must contribute to palliating citizens’ principal worries, among which are unemployment and poverty. It is time to move closer to people.”

Isidro Fainé, Chairman of ”la Caixa” and of the ”la Caixa” Foundation.

For further information: www.laCaixa.es/obrasocial

THE CHALLENGE:TO COLLABORATE WITH THE GAVI ALLIANCE, THROUGH THE BUSINESS ALLIANCE FOR CHILD VACCINATION, IN ORDER TO ACHIEVE THE REDUCTION OF CHILD MORTALITY BY TWO-THIRDS BEFORE THE YEAR 2015.

TO STRENGTHEN BUSINESS AWARENESS IN FAVOUR OF HIRING PEOPLE WITH DIFFICULTIES OR AT RISK OF SOCIAL MARGINALISATION.

TO CONSOLIDATE THE PARTICIPATION OF THE EMPLOYEES OF THE ”LA CAIXA” GROUP IN THE DEVELOPMENT OF SOLIDARITY ACTION.



In favour of sustainability

”la Caixa” understands that its responsibility cannot be limited to just identifying and financing economically viable projects, but that it must also ensure that these projects are socially and environmentally sustainable. In addition to this, the Entity is committed to reducing the negative impact of its operations on the environment.

The commitment of ”la Caixa” to sustainability is concretised in its financing of environmentally sustainable projects, its financial support for renewable energy projects and its attempts to reduce to the maximum the impact of its operations on the environment.

• ”la Caixa” follows the Equator Principles in evaluating the economic, social and environmental viability of finance projects of more than 10 million dollars: 65 projects in 2009, with a total volume of 7,837 million euros.

• Together with other entities, it financed 21 renewable energy projects, to the sum of 3,172 million euros.

• To reduce expenditure on electricity, by 6.58%, it improved management of equipment, lighting and air conditioning. By means of these measures, and thanks to reduction in travel, CO2 emissions fell by 5,087.7 tonnes.

• Paper consumption fell by 7% and use of recycled paper increased to 99%.

• It offers its customers socially responsible investment products, in which the Entity cedes part of the handling charges to social projects and gives ethical guarantees on the use of funds.

We contribute to the welfare of society

In all its operations, ”la Caixa” is committed to Human Rights and people’s needs.

• Since 2005, ”la Caixa” has been a part of the United Nations Global Compact for promoting an ethical and responsible business culture. In 2009, its subsidiaries Caixa Capital Risc, GDS-CUSA, PromoCaixa, ServiHabitat, Silk, Sumasa, Vivienda Asequible, MicroBank and e-la Caixa joined too.

• Since 2008, ”la Caixa” has been contributing to the fight against child mortality as one of the strategic European partners of the GAVI Alliance.

In 2009, it repeated the contribution of 4 million euros made to this organisation in 2008. In addition, it promotes the Business Alliance for Child Vaccination, a responsible initiative to which over 150 Spanish companies contributed more than 450,000 euros.

• Through Affordable Housing (Vivienda Asequible), the entity assists groups with difficulties to find a home. By 2012, 3,000 flats will have been built for people aged 18 to 35 and for people over 65. The programme expanded in 2009 with 1,000 new homes for low-income families.

THE CHALLENGE:TO REDUCE ELECTRICAL CONSUMPTION BY 10%.

TO PROMOTE SOCIALLY RESPONSIBLE INVESTMENT.

THE CHALLENGE:

TO BUILD THE 4,000 HOMES PLANNED IN THE ACCESSIBLE HOUSING PROGRAMME.



“I began working at ”la Caixa” thirty-five years ago and throughout my long career have been able to develop my profession in a stable working environment, taking advantage of the opportunities for learning and professional growth that the Entity offers us.”

Juan Antonio García Gálvez, General Manager of Banking Services.

A good company to work for

The most valuable asset of ”la Caixa” are its employees, who are in charge of the day-to-day transmission of the Entity’s corporate values. Recognising this, it seeks to maintain the most favourable working conditions, which permit its staff to develop their professional life to the maximum.

”la Caixa” was elected for the fourth consecutive year, according to the Merco Personas report, as the best company to work for in Spain. The Entity’s sensitivity to its employees’ expectations is key to this choice.

Commitment to its employees

Despite the adverse economic climate, ”la Caixa” continues to be faithful to its commitment to its employees.

• Defence of jobs: the new strategic model redistributed human resources. This led to the combination of some branches, in which no-one was made redundant, as staff opted for retirement, early retirement or partial retirement.

• Equal opportunities: in 2009 a new equality plan began to be drawn up. A protocol to prevent and handle sexual harassment is in place.

• Training and personal development: personal programmes of talent and skills management were drawn up. In addition, ”la Caixa” invested 10.99 million euros in both class-room courses and virtual training, which added up to 584,000 hours of training received.

• Reconciliation of private and professional life: ”la Caixa” applied a Protocol of Life/Work Balance and Equality, which watches over the welfare of its staff. Employees benefited from advantages and social benefits to the tune of 196 million euros.

• Encouragement of Corporate Volunteer work: through 45 associations in 46 of Spain’s provinces that channel the activity of 3,061 volunteers (current, retired, early-retired employees, family and friends), with a contribution of 328,100 euros.

NUMBER OF EMPLOYEES OF ”LA CAIXA” GROUP

07 08 09

26,226 27,50527,818

54.8

45.2

53.8

46.2

52.9

47.1

DIVERSITY

07 08 09

Men Women

THE CHALLENGE:TO CONSOLIDATE THE COMMITMENT OF ITS VOLUNTEERS AND ENCOURAGE VOLUNTEER WORK IN ITS SUBSIDIARY COMPANIES.



“We want to make sure that the products we buy have been manufactured with respect for the principles of the United Nations Global Compact on Human Rights and under the necessary conditions of protection of the environment. For this reason, we request outside audits of the factories concerned and demand compliance with the above principles.”

Carles Guillot Colls, Managing Director of PromoCaixa.

Commitment of our suppliers

The suppliers of ”la Caixa” must not only comply with legal requirements, but act in line with the corporate values and ethical commitments adopted by the Entity.

In 2009, the Entity had 551 strategic suppliers and a total turnover of 1,144 million euros.

• They are selected through a purchase forum or, depending on the volume, at public auction.

• They must undertake to respect human rights and the environment, and must sign, in contract, clauses to protect the environment and respect the principles of the Global Compact.

• They must be fully aware of their legal obligations.

• They are especially tightly controlled if the supplies come from outside the OECD countries.

• They may be inspected to evaluate compliance with these commitments. One of PromoCaixa’s audits, in Bangladesh, found that safety at work was not complied with and the contract was cancelled.

THE CHALLENGE:TO OBTAIN THE CERTIFICATE OF THE EUROPE STANDARD ON PURCHASES.


Note of the auditor and GRI stamp

This Corporate Responsibility Report of ”la Caixa” was drawn up in line with the regulations in the GRI Guide for Drawing up Sustainability Reports, published in 2006, and known as G3, and the financial services sector suplement, updated in 2009.

The Corporate Responsibility Report (CRR) of ”la Caixa” meets the requisites for the A+ rating for applying G3, which means it complies with the specifications for G3 Level A for Profile, Management Approach and Performance Indicators and that it has been subjected to verification mechanisms under the conditions set by this standard.

Deloitte checked the complete version of the ”la Caixa” CRR and concludes that in Chapter 5 of this report the scope of the review is explained in detail and that the indicators reviewed, included in an additional document to the complete

version, that do not cover all the points recommended by GRI are identified. After them review, no aspect stood out to make them think that:

• The ”la Caixa” CRR has not been prepared in line with the Guidelines for drawing up Sustainability Reports of the Global Reporting Initiative, version 3 (G3).

• The information in the 2009 CRR of ”la Caixa” on applying the principles of the AA1000 regulation on relevance, integrity and stakeholder feedback contains material errors or omissions.

• The information provided on the advances in the lines of work on Corporate Responsibility in 2009 has significant errors.

• In the complete version of the 2009 ”la Caixa” CRR, the pages and coverage of the requisites, management approaches and indicators are shown.

”la Caixa” Welfare Projects 2009 Annual Report

Social Programmes

Educational Programmes

Science, Research and Environment Programmes

Cultural Programmes

2009 Data of ”la Caixa” Welfare Projects

Social Programmes

Introduction

Fighting Child Poverty

Integration of disadvantaged groups into Society and Work

Integrated Care for Very Ill People

Active and Socially Integrated Elderly people

Accessible Housing

International Cooperation and Child vaccination

MicroBank, the Social Bank of ”la Caixa”

Aid for projects of social organisations to assist disadvantaged groups

Social Programmes

Annual Report ”la Caixa” 2009 130

Social Programmes

The basic aim of ”la Caixa” Welfare Projects since its beginnings has been to offer opportunities to people, especially the most disadvantaged members of society. In a year like 2009, marked by the tough economic situation, the entity devoted 278.6 million euros to its many social programmes, 65% of its overall budget of 430.1 million euros.

Main lines of action in 2009

The main lines of action of Welfare Projects in 2009 were the fight against child poverty through CaixaProinfancia; the promotion of jobs for disadvantaged groups through the Incorpora project; Integrated care for the very ill; and the social integration and participation of elderly people, including the prevention of dependency.

We should add to these as our main areas of work the promotion of accessible housing for families, the young and elderly people, the granting of social or financial microloans through MicroBank and the support for child vaccination in low-income countries.

Through these programmes, on which the following pages offer more detailed information, the entity tries to provide solutions to some of today’s most pressing social problems.

A long tradition of service

”la Caixa” Welfare Projects, in addition to its responses to society’s recently emerging needs, has programmes which already have a long tradition.

“Let’s Talk about Drugs” aims to prevent the consumption of drugs in the general population, but especially among young people. It operates through several lines: a touring interactive exhibition that offers innovative resources and information for understanding the effects of drug consumption on the brain, behaviour and health in general; a campaign of raising awareness aimed at families, including a prevention guide, of which 1,143,000 copies have been distributed since the start of the programme in 2007, and a free phone-line for guidance (900 22 22 29); educational material for working on prevention at school from a scientific perspective; and a campaign of training and updating professionals working in Health Centres. Within the framework of this programme, CosmoCaixa Barcelona hosted between June 3 and 5, 2009, the International Congress Let’s Talk about Drugs. Families and Young People, Together for Prevention, organised jointly with the Drug Addiction Help Foundation (FAD) and the Ministry of Health and Social Policy. The Congress, opened by HM the Queen, was attended

by internationally renowned speakers such as Dr. Nora Volkow, Director of the National Institute on Drug Abuse (NIDA) of the United States. Dr. Volkow took part in a debate with over 300 secondary school students, informing them directly of the effects of drugs on the brain, health and behaviour.

Violence: zero tolerance, set up in 2005, supports psycho-social care and the reintegration into society of victims of gender violence, as well as promoting the prevention of violent behaviour and generally raising awareness of this problem. This initiative consists of a travelling exhibition that visited 7 cities in 2009 and was seen by 36,147 people and of a double line of educational workshops, aimed at secondary students, teachers and university students, and training workshops for professionals specializing in the question.

This programme also pays attention to women who are victims of male violence. Among other actions, it has organised a joint project with the Red Cross, which has already re-integrated 2,900 women.

“As a volunteer, I am not only helping others. I’m also doing something that enriches me...”

Nino, aged 36, ”la Caixa” branch manager and Welfare Projects volunteer.

Social Programmes


Intercultural relations and social cohesion is another of today’s great challenges on which Welfare Projects concentrates its efforts. It runs various activities to assist the social integration of recently arrived people and to encourage harmony and social cohesion between people from different cultures. Thus, the initiatives in this programme are aimed at both new neighbours and society as a whole. An important aspect is the network for mediation between cultures, which last year operated throughout Spain with over 114 professionals. There is also a specific network of 50 professionals who act in the health-care field, facilitating health provision for new residents in Catalonia. In addition to assisting integration through intercultural mediation, ”la Caixa” Welfare Projects has set up a postgraduate course in management of cultural diversity, designed for professionals wanting to improve their skills and abilities in this field. Lastly, through the Intercultural Relations and Social Cohesion plan of the Programme of Assistance for Social Initiative Projects, Welfare Projects channelled 1 million euros to 69 projects promoted by associations and NGOs with similar aims.

To encourage ethical values and living in harmony in the school context, Welfare Projects developed KitsCaixa Values, an educational resource for teachers and primary school children aged 8 to 12. These materials seek to get students to assimilate civic values through three main themes: Identity, Living in Harmony and Responsibility. Since the start of the programme, Welfare Projects has distributed 387 Kits to 1,249 schools, with which 657,100 children have worked.

In operation since 2005, the programme to support and foster Volunteer Work encourages the involvement of all the employees of the ”la Caixa” group in Welfare Projects and contributes to optimizing the human resources, materials and management systems of social entities working with volunteers. Within this Corporate Volunteer Work Scheme, 3,061 current and early-retired employees of the entity, along with family members and friends, work actively in solidarity initiatives. This figure is over 12% of the total staff of the entity. At present, ”la Caixa” already has 45 provincial associations of volunteers. In 2009, they took part in 1,347 volunteer activities in Spain.

To minimize the impact of a hospital stay for both children in hospital and their family members, ”la Caixa” Welfare Projects has created educational-play spaces in children’s hospitals. These are the Hospital CiberCaixa. This Project reinforces the humanisation of the health system, by creating a happy environment full of friendly interchanges in hospitals, which has positive repercussions on children’s welfare. Both ”la Caixa” volunteers and those from other hospital volunteer associations work together in stimulating activities organised in the hospital CiberCaixa. Mention should be made of the Hospital KitCaixa that makes children more aware of their new situation and softens the impact of their illness. At present, Welfare Projects has 65 Hospital CiberCaixa in health centres throughout Spain, as fruit of the accords between Welfare Projects and the governments of the Autonomous Communities since 2002.

Two travelling exhibitions on social questions, Let’s Talk about Drugs and Violence: zero tolerance, toured 12 Spanish cities.

“When I grow up, I’d like to be a doctor to cure myself of all the needles they’ve stuck into me...”

Ramón shares his happiness with other children at a Hospital CiberCaixa.

Social Programmes


Fighting Child Poverty

Child poverty is not a reality alien to our own surroundings. It is increasing in many developed countries and Spain has a very high rate. ”la Caixa” Welfare Projects wants to help palliate it, to make society aware of this problem and to mobilize people. The CaixaProinfancia programme of Welfare Projects tries to ensure that minors in our country who live at risk of social marginalisation can open a door onto a better future and can enjoy the same opportunities as the rest.

Within its framework and on its more educational side, the CiberCaixa Let’s meet after class! sessions provide these children with an informal educational context out of school hours and in the holidays.

CaixaProinfancia

DefinitionSocial, educational and economic resources aimed at families with children at risk of social marginalisation, to provide them with opportunities that help promote their social integration and construct a better future for them.ActionHelp to promote children’s social and educational development: psychological support and family therapy, educational back-up, schools opened, summer camps and schools.Help to improve the families’ economic situation: school equipment, basic necessities for babies.AmbitMadrid, Barcelona, Valencia, Seville, Málaga, Saragossa, Murcia, Bilbao and their metropolitan areas, the Canary Islands and the Balearic Islands.BeneficiariesFamilies with children aged 0 to 16 at risk of social marginalisation.Collaborating307 social entities. Figures. 2007-2009 140,386 children assisted.378,655 assistances given.

• In 2009, ”la Caixa” Welfare Projects spent over 50 million euros on the CaixaProinfancia programme, which is designed to promote the development of the children and families in our country that have the fewest resources. The project has functioned since 2007 with the aim of strengthening the welfare and development of vulnerable children, through provision of services and economic assistance that favour the social integration of children and provide them with opportunities to build a better future.

• The beneficiaries are families with children aged 0 to 16, who are in process of social integration or could enter such a process.

• Most of the children attended were under 8 years old. Moreover, 78% of the children assisted were born in Spain. The rest came from countries such as Morocco, Ecuador and Bolivia.

• ”la Caixa” Welfare Projects is the first private foundation in Europe to take this initiative. The CaixaProinfancia programme promotes the network of 307 social organisations in charge of coordinating the initiative and putting it into practice in the various areas. These organisations and Local Government bodies identify the children and families that might benefit from the programme, make a general assessment of the child’s needs and monitor him/her through a work-plan for the family.

• CaixaProinfancia tackles child poverty in an integrated way, promoting children’s social and educational development and providing them, when it is necessary, with material assistance. The activities of the programme include:

• Psycho-social care: psychological help and family therapy, educational back-up, activities at open centres and summer camps and schools.

• Help for babies: food and child hygiene products, school equipment, glasses and hearing aids.

“What I most like about my life is that I’m lucky enough to go to school. And I’m not hungry.”

José Miguel, aged 10, beneficiary of the CaixaProinfancia programme.

José Miguel attends a Maths class

Social Programmes


CiberCaixa Let’s meet after class! Programme

• This assistance is made available through the CaixaProinfancia cheques, which can be exchanged for the different services and basic goods offered by the programme in the establishments and entities belonging to it.

CiberCaixa Let’s meet after class!

DefinitionSocial and educational spaces for reception out of school hours and in holiday time of children aged between 3 and 12, whose families find it difficult to look after them.ActionResources and activities that strengthen children’s cognitive, emotional and social development. The activities promoted at these facilities are aimed at encouraging the access of the children to information and communication technology, the habit of study, and play as a tool of socialisation and amusement.AmbitMadrid, Barcelona, Badalona, Valencia, Málaga, Palma de Mallorca, Las Palmas de Gran Canaria, Valladolid and La Laguna.BeneficiariesChildren aged between 3 and 12 from families that find it hard to reconcile jobs and child care and/or are in an especially vulnerable situation.Figures40 CiberCaixa in operation.2,407 beneficiaries.

• The CiberCaixa programme Let’s meet after class! is part of the overall strategy of overcoming child poverty promoted by ”la Caixa” Welfare Projects, by fostering the social and educational advance of children with very few opportunities. The initiative is designed both for those children who live in homes where the parents find it hard to reconcile jobs and family life and for children in situations of particular vulnerability.

• The CiberCaixa Let’s meet after class! sessions, for children aged 3 to 12, take place in public centres (schools, civil centres, social action centres etc.) and remain open out of school hours and in holiday periods. The children receive non-regulated training and do educational activities in an informal educational context. Trained staff work on the children’s social, emotional and cognitive development.

• Activities focus on three areas:• Computer space, in which children can relate to each other through new technology.

• Reading and audiovisual space, with various pedagogic materials.

• Infants’ space, equipped with the furniture, games and specific resources for the very young.

• In 2009, 2,407 children benefited from the 40 CiberCaixa Let’s meet after class! programmes now operating.

Social Programmes


Integration of disadvantaged groups into society and work

One of the objectives of ”la Caixa” Welfare Projects is the struggle against the social marginalisation of vulnerable groups, since inequality, as well as affecting those who suffer it, has repercussions on society as a whole. Having a proper job is, as well as a source of economic subsistence, a factor in social integration and opens a door onto a future with opportunities. Thus, the programme Incorpora. ”la Caixa” Welfare Projects with integration into work encourages the hiring of people at risk of social marginalisation or already suffering it.

In parallel, the Scholarships for prison inmates awarded by Welfare Projects provide training for prisoners, with a view to facilitating their reintegration into work and society when they complete their sentences and leave prison.

Incorpora. ”la Caixa” Welfare Projects with integration into work

DefinitionProgramme of intervention for jobs that encourages the integration into normal companies of people who have difficulties in entering the world of work, as a mechanism to combat their social marginalisation.ActionJoint work of companies, social organisations and job developers to assist the hiring of people from disadvantaged groups and so promote their social integration. AmbitAll of Spain and Morocco. BeneficiariesPeople with special difficulties to enter the world of work: disabled people, people with a mental disorder or people in a situation of social marginalisation or at risk of it (young people, the over-45s, immigrants and women affected by domestic violence).Collaborating 9,452 companies who took on a beneficiary.236 social entities.358 job developers.Figures. 2006-200923,004 vulnerable people taken on.47 Incorpora courses for Technicians in Integration into Work in 24 Spanish universities, in which 1,179 job developers have taken part.

• The Incorpora programme, set up in 2006, received funding of over 11 million euros for 2009. The full consolidation of the project and the efforts of the organisations taking part in the programme allowed it to confront the effects of the crisis with a 20% increase in the number of people attended (30,850 people attended in 2009 and 25,786 in 2008).

• Despite the economic crisis, the number of companies collaborating with the programme grew considerably, rising from 6,020 in 2008 to 9,542 in 2009. The figure of social organisations belonging to the programme also rose: to 236 in 2009 from 227 in 2008.

• Through the figure of the job developer, Incorpora builds a bridge between the social organisations that operate to integrate people into work and companies. The 358 job developers in the programme, who receive ongoing training from Welfare Projects, research the preferences of the companies in their area with the aim of offering them the profiles that best match their requirements. They also monitor the future employee’s training process, accompany at work the people placed and mediate in any possible conflicts that might arise in the labour relationship.

“I am in charge of unloading goods, controlling everything and seeing that nothing’s missing. They’ve given me a chance and I’ve responded to their trust… I have changed from feeling hopeless to feeling I can touch the sky.”

Miguel Ángel, aged 36, found work at Leroy Merlin through the Incorpora programme.

Social Programmes


• Thanks to Incorpora, collaborating companies take part in a programme of Corporate Social Responsibility for integration into work, which gives them the chance to integrate into their activity social and economic commitment values, which in addition make the company more competitive and foster sustainable development.

• In June 2009, the presentation ceremony of the II Incorpora Prizes took place. The Prize recognises the best actions in the field of employing people who are socially excluded or at risk of social marginalisation. The prize-winning companies were: Ventana y transformación de aluminio, from Aragon (small company category); Limpiezas Saramar, from Galicia (medium-sized company category); Clece, from Catalonia (large company category); and Decathlon Spain (work on the web category).

• Incorpora also organises courses for Job Development Experts. Since the start of the programme, 1,179 job developers have been trained with the assistance of 24 universities throughout Spain.

Scholarships for prisoners

DefinitionTraining scholarships for prisoners in order to give them access to knowledge and professional skills that permit their reintegration into society on completing their sentences.ActionProfessional training courses in trades in high demand on the job market. The scholarship covers the cost of travel to the training centre, keep and a monthly salary.AmbitAll of Spain.BeneficiariesPrisoners in the second and third levels of their sentences.Collaborating83 educational centres. Figures. 2008-20091,417 scholarships granted.4,700 euros on average for each scholarship.Scholarships completed: 1,287.Beneficiaries taking part: 1,300.Beneficiaries gaining diplomas: 1,136.

• The Scholarships for prisoners programme of ”la Caixa” Welfare Projects offers an opportunity to improve the future of the prison population. Through these scholarships, prisoners serving the second and third levels attend professional training courses at centres outside the prison, in order to acquire knowledge that will enable them to confront their future reintegration into society with a guarantee of job stability.

• In 2008-2009, 1,417 scholarships were granted, with overall funding of 6.9 million euros and a mean investment per scholarship of 4,700 euros. The training courses have had to change to fit in with the new realities of the labour market. Last year, courses in the following jobs increased: warehouse assistant, kitchen helper, waiter, geriatric assistant and industrial cleaning specialist.

• Another new feature last year was the setting-up in Catalonia of a support team of various professionals in different disciplines – job development experts, psychologists, teachers etc. – , who monitored each beneficiary individually.

“I’ve had the luck of being able to devote myself to giving and receiving affection...”

Enrique, aged 50, ex-prisoner working at an elderly person’s centre.

Social Programmes


Integrated Care for Very Ill People

Among other initiatives, ”la Caixa” Welfare Projects has set up new lines of action that are notable. One of these is the Programme for the Integrated Care of Very Ill People, which has received funding of 11 million euros since it started in 2008.

The aim of this programme is to assist people at the final stages of their lives: in other words, to palliate the suffering of those who are extremely ill, to help see they are well looked after in their final days and to ensure that both they and their families receive proper emotional, spiritual and social care.

Integrated Care for People who are Very Ill

DefinitionProgramme of integrated care for the very ill, aimed at improving their quality of life and complementing the current model of care with emotional, social and spiritual support.ActionIntegrated care focusing on the psychological and social aspects: emotional, social and spiritual support for patients, handling of grief, support for families and for Palliative Care professionals; raising awareness in society about the end of life; promotion of volunteer work.AmbitAll the Autonomous Communities.BeneficiariesPersons who are very ill or terminally ill and their families. Professionals and volunteers in the area of palliative care.Figures. 20096,8 funding for the programme.6,793 patients and 10,794 family members attended in 2009.30 multi-disciplinary emotional and psychological support teams.

• The programme of ”la Caixa” Welfare Projects to care for the very ill was proposed in 2008 as a complement to the current model of health care for these patients, with an intervention that also took into consideration the spiritual and psychological well-being of the patient and his/her carers.

• In 2009, ”la Caixa” attended 17,587 people, including both patients and family members. The aim is to increase this figure in the coming years.

• A first evaluation of the new programme, a year after it was set up, concluded that almost half the very ill patients attended (45%) experienced a reduction in their anxiety, depression and insomnia. The programme also improved their ability to relate to others and their degree of acceptance of the illness, under circumstances in which it is more normal for this to worsen.

• The programme, backed by the Ministry of Health and the World Health Organisation, has 30 multi-disciplinary teams from non-profit organisations throughout Spain. These teams, selected and trained by Welfare Projects in a 250-hour postgraduate course, consist of 120 professionals – psychologists, social workers, nurses and volunteers – working throughout Spain in over 60 hospitals and social-health centres and at patients’ homes. This new model of support for the very ill includes the following facets:

• Spiritual and emotional help for patients and their families: facilitating the expression of emotions and feelings, reinforcing the value of positive experiences in this adverse situation, helping to adapt steadily to the illness, supporting carers in giving care to the patient.

• Treating families’ grief: diagnosing a person’s stage in the grieving process, assisting them to become aware of the situation, helping them to search for meaning in the experience of loss.

• Support for the health-care and social teams that look after the very ill, helping them in their work and reducing the risk of burn-out.

Social Programmes


“Accompanying someone in the difficult moments of his/her life makes me feel fulfilled. There is always something to do for the sick person.”

Silvia Viel, aged 63, clinical psychologist at the Sant Camil General Hospital.

• In addition, the programme for the Integrated Care of the Very Ill includes ongoing assessment and interpretation of the results obtained, both quantitatively and qualitatively. It is planned to present in 2011 the results of this scientific assessment so as to appraise the importance of psycho-social factors and the need to include and develop them within a new social-health care model of integrated care for the very ill. The aim is to go beyond the limits of the programme and set a scientific precedent, exporting this model of integrated care and opening up new research pathways.

• The programme also collaborates, through publicity activities, in making society as a whole more aware of the end of life and palliative care.

”la Caixa” Welfare Projects attended 17,587 very ill people and their families in 2009

• During 2009, the programme took part in the following conferences:

• Inter-county Day-school on grief at the Sant Camil Hospital Foundation in Sant Pere de Ribes (Catalonia).

• VII Palliative Care Conference of the SECPAL (Spanish Palliative Care Society) in Logroño.

• Congress of the Catalan-Balearic Association for Palliative Care in Badalona.

• “The art of accompanying well: in life and death” day-school at the Sant Jaume i Santa Magdalena Foundation, Mataró.

• Palliative Care Conference organised by the Almería Red Cross.

• First Aragonese Conference on Palliative Care, at the San Juan de Dios Hospital, Saragossa.

• Palliative Care Conference at the San Camilo Hospital, Madrid.

• Congress of the SEPO (Spanish Psycho-Oncology Society) in Barcelona.

• Conference on integrated care for very ill persons, organised jointly with the SAR Foundation and held in Lleida.

Social Programmes


Active and socially integrated Elderly people

”la Caixa” Welfare Projects develops care programmes for the elderly, aimed at improving their quality of life and encouraging personal autonomy. The Elderly Persons programme promotes active and healthy ageing, with activities encouraging ongoing training, personal development, healthy habits of life, stimulation of skills and abilities and the social integration of the elderly. It is complemented by the Prevention of dependency programme, which assists old people starting to find difficulties in conducting their day-to-day life.The participation of elderly people in volunteer tasks that reinforce their contribution to society is another of the programme’s main features. As such, the Solidarity CiberCaixa stand out as spaces where elderly people and vulnerable groups inter-relate. Through these programmes, elderly people not only add years to their lives but, above all, life to their years.

Elderly people

DefinitionComplete programme based on volunteer work, work within associations, getting to know the new information and communication technologies and ongoing education, in order to develop elderly people as active and fully integrated members of society.ActionComputers and Communication programme; courses and workshops in new technology; talks and debates on questions of interest to the elderly; reading workshops; inter-generational workshops; volunteer activity. AmbitThroughout Spain. Figures. 2009605 own centres and centres under accord with Government bodies.525 CiberCaixa in elderly persons’ centres.6 CiberCaixa in prisons.4,813,482 beneficiaries.

• The Elderly Persons programme of ”la Caixa” Welfare Projects is held in 605 centres, 69 of its own centres and 536 centres in accords with Government Bodies and Elderly People’s Associations. A wide range of courses and workshops of different programmes take place in them:

• The Computers and Communication programme helps elderly people to find out about Information and Communication Technology (ICT), avoiding their isolation from the world of new technology and giving them the chance to use this new knowledge in their daily lives. In addition, it fosters volunteer work by the elderly people who are most experienced in the subject as teachers of new students of ICT. It also promotes the CiberCaixa – rooms in elderly persons’ centres

where the classes are given – as platforms for social participation.

• A wide range of activities are included in the framework of the Health and Welfare programme, from talks on questions of today to workshops favouring personal development, the desire to learn and keeping up-to-date by introducing healthy habits to improve the quality of life.

• Another of the programmes, Older Readers, organises workshops to promote reading that encourage personal autonomy. In 2009, 848 “Older Readers” workshops were held all over Spain, with 11,877 people attending. Within this programme, the publishing project Lectura+, promoted by Welfare Projects, the Planeta Group and Edicions 62, was set up last year, to promote large-print editions of classic and current books so that elderly people with eyesight difficulties can read.

• In addition, in 2009 the First Contest of Stories written by Elderly People was convened. It was promoted jointly by ”la Caixa” Welfare Projects and Spain’s National Radio (RNE) programme Juntos Paso a paso (Together, step by step).

• Encouragement of volunteer work is another of the main features of this programme. For this reason, Welfare Projects supports associations of volunteers consisting of elderly people (67 Elderly Persons’ Associations that manage their own centres, 16 Associations of computer volunteers and 1 Association of Volunteers that conducts solidarity actions on social questions, science, culture and computer studies).

• Another relevant part of this programme is the Inter-generational activities designed to encourage links and exchanges of experience between children and the elderly.

Older volunteers bring ICT to prison inmates

Social Programmes


Solidarity CiberCaixa

DefinitionVolunteer Project for elderly people who bring new technology to disadvantaged groups.ActionWorkshops to bring new technology to new residents, prison inmates and people marginalised in society, which are held in the CiberCaixa of elderly persons’ centres or in prisons. AmbitThroughout Spain.BeneficiariesPrisoners, immigrants, people suffering a mental or physical handicap, etc.Figures. 20092,194 beneficiaries of CiberCaixa in elderly persons’ centres. 226 beneficiaries of CiberCaixa in prisons.

• In the Solidarity CiberCaixa, elderly people who have started to understand new technology become the support group for other vulnerable social groups.

• 2009 saw new CiberCaixa opened in 3 Spanish prisons.

Prevention of dependency and support for the family carer of

dependent persons

Definition“The Challenge of Autonomy”Programme to encourage the autonomy of elderly people.“One Carer. Two Lives”Programme aimed at non-professional family carers for dependent persons.Action“The Challenge of Autonomy”: psycho-social care workshops; service of free adapted transport to facilitate attendance at the workshops; KitCaixa; exercise guide and a DVD.“One Carer. Two Lives”: KitCaixa with two consultation guides; class-room workshops for family carers; permanent phone line service.AmbitThroughout Spain. BeneficiariesElderly people starting to find their day-to-day activities difficult and non-professional carers of dependent persons.Figures. 2009“The Challenge of Autonomy”2,224 workshops organised at 342. elderly persons’ centres.32,568 beneficiaries.92 microbuses for adapted transport.“One Carer. Two Lives”393 workshops.7,393 beneficiaries.7,334 phone calls. 165,160 guides distributed.

Dependency Prevention programme. “The Challenge of Autonomy”

• The programme encourages fragile elderly people to include healthy habits in their life styles, with the dual objectives of increasing their autonomy and delaying the loss of capacity caused by ageing.

• The workshops are held free in the elderly persons’ centres of ”la Caixa” Welfare Projects, jointly with various local Government Bodies throughout Spain.

• The workshops last for three months. They are given by professional course leaders in small groups in two weekly sessions lasting 90 minutes each.

• ”la Caixa” Welfare Projects organises an adapted transport service that brings the elderly with mobility problems or reduced mobility to the centres for the workshops.

Programme of Support for Family Carers. “One Carer. Two Lives”

• ”la Caixa” Welfare Projects promotes the workshops “One Carer. Two Lives” for non-professional family carers of dependent persons, which are held in conjunction with local government bodies and various federations and confederations.

• Family carers take part in workshops that offer techniques and advice to enable them to look after themselves better and improve both their own quality of life and that of the dependent person they are responsible for. Carers also have a kit that provides information on all the resources and services within their reach. There is also a free 24-hour care line.

• The workshops are directed by a professional and are organised in small groups during four sessions of two and a half hours each.

“I am very happy to be coming here, because it gives me more life...”

Carmen, aged 82, has had a more active life since she started attending workshops at an elderly persons’ centre.

Social Programmes


Accessible Housing

Since 2004, ”la Caixa” Welfare Projects has run a programme to promote low-rental housing with three basic aims: to help young people to become independent, to offer dignified housing to the elderly and, a new facet in 2009, to help families to find housing at a reasonable rent.

Accessible Housing

DefinitionPromotion of housing at rents below those set in the Official Protection Regime, in order to help palliate the deficit of flats for rent and help young people to become independent, old people to have a decent home and families to find accessible housing.ActionConstruction of homes in provincial capitals and metropolitan areas with a deficit of flats to rent; managing the provision of homes at rents below the market rates.AmbitProvincial capitals and their metropolitan areas in Catalonia, Madrid, Andalusia, the Community of Valencia and the Basque Country.BeneficiariesPeople aged between 18 and 35, people aged over 65 and families.Figures. 2004-20091,610 homes handed over.1,176 housing units being built.

Flats for the young and elderly people

• In 2004, ”la Caixa” Welfare Projects set up the Accessible Housing programme, with the commitment to build 3,000 homes by 2012. These were for young and elderly people, considered the two sectors of the population with most problems of access to the housing market, due to the high purchase and rental prices.

• The flats have 1 or 2 rooms and a surface area of between 45 and 50 m2. The conditions and requisites of access are as follows:

• Being a young person aged 18 to 35 or someone over 65.

• Having an income no higher than 4.5 times the value of the Public Multi-Effect Indicator of Income (IPREM).

• Proving minimum income, so that the annual rent is no higher than 30% of this income, or finding someone to vouch for it.

• Not owning a home.• The homes are adjudicated by means of a draw conducted before a Notary.

• The rent contract lasts 5 years and can be extended.

Flats for families

• Given the current demand for family flats, in 2009 ”la Caixa” Welfare Projects agreed to expand the Accessible Housing programme, by building 1,000 additional homes for this group by 2012. This will enable families to have access to housing at rents below the market price and, in some schemes, have the option of buying their home. In 2009, the entity earmarked 10 million euros for this new initiative.

• The homes have two or three rooms, with usable surface area of not less than 60 m2.

• In the housing for families, the conditions and requisites of access are as follows:

• Being of legal age.• The family unit can have as many members as the housing unit’s surface area allows (according to the official regulations).

• Rental with purchase option, depending on scheme.

”When I opened the letter and saw they had given me the flat, I was very moved. I’ve won the lottery, my friends told me.”

Teresa, awarded an Accessible Housing flat for her and her husband. The couple will pay 250€ a month.

Social Programmes


Promotion of Accessible Housing in Vallecas

• Having a maximum income no higher than 5.5 times the value of the IPREM.

• Proving minimum income, so that the annual rent is no higher than 30% of this income, or finding someone to vouch for it.

• Not owning a home.• The homes are adjudicated by means of a draw conducted before a Notary.

• The rent contract lasts 5 years and can be extended. There is a possibility of rental with purchase option.

• Some of the housing for families will be assets originating in agreements with construction companies to cancel their debts. Thus, ”la Caixa” will reactivate promotions that are currently paralysed because of the economic conjuncture, by transferring their management to Welfare Projects to give citizens access to housing.

Promotions of homes under construction

Flats for young and elderly people

• The second stage of the Accessible Housing programme ends in 2010. Ten promotions in several Autonomous Communities – Catalonia, Madrid, the Valencian Community and the Basque Country – will have constructed 998 homes.

• Between 2010 and 2012, the third stage will be completed with the delivery of the rest of the housing units up to the 3,000 envisaged in the Young and Elderly Persons Programme.

Flats for families

• By the end of 2009, Welfare Projects already had the land to build 306 family homes in the towns of Sentmenat (87), Terrassa (22), Olot (23), Tarragona (55), Bilbao (30), Sant Just Desvern (30) and Vila-Seca Tarragona (54).

• In 2010, land will be acquired to build the remaining 694 homes.

Social Programmes


International Cooperation and Child Vaccination in Developing Countries

In 1997, ”la Caixa” Welfare Projects started the Programme of International Cooperation with the aims of helping to wipe out extreme poverty in the developing countries and to foment the culture of solidarity in Spain. In these countries, lack of resources and disease are closely linked, which makes health such a key part of the fight against poverty.

Through its Child Vaccination programme, Welfare Projects contributes to improving the health of the population most in need in the most vulnerable areas of the planet.

“The help received has given me hope. Thanks to it, I believe in a better future for my family...”

Bau, father of a Cambodian family who lost a leg because of a mine.

International Cooperation

DefinitionProgramme of support for initiatives to help improve the conditions of life and promote sustainable development for the population most in need in developing countries.ActionBasic lines: social and economic development; training of social capital in Africa; Crisis and humanitarian action; CooperantesCaixa Programme; training for international cooperation workers; raising the awareness of Spanish society.AmbitDeveloping countries of Africa, Asia and Latin America.Figures355,920 beneficiaries.26 initiatives selected in 2009: Burundi, Cameroon, Chad, Democratic Republic of Congo, Ecuador, El Salvador, Ethiopia, Gambia, Guinea Conakry, Honduras, India, Ivory Coast, Mali, Morocco, Mozambique, Nicaragua, Peru, Senegal, Sudan, Tanzania, Zambia.

• Through its International Cooperation programme, ”la Caixa” Welfare Projects supports initiatives of Spanish NGOs in Asia, Africa and Latin America, working together with local NGOs. The basic lines of action are:

• Social and economic development: encouraging and supporting processes of local development, through financing actions to create jobs and economic activity.

• Training of social capital in Africa: preparing professionals (medical and teaching staff, scholarships for women entrepreneurs, among other things) to improve basic social services in Africa.

• Emergencies and humanitarian action: promoting protection and aid to victims of natural disasters and armed conflicts. Donations from the general public, the “Estrella Solidario” Deposit Account and resources from the ethical and solidarity investment fund of ”la Caixa”, FonCaixa Cooperation, are devoted to this initiative as well.

Social Programmes


• Welfare Projects offers technical assistance to NGOs through the programme CooperantesCaixa, whereby ”la Caixa” volunteers, experts in areas such as marketing, accountancy, finance, viability studies, microloans, communication and sales of products work with projects of local organisations in several developing countries.

• The programme promotes the professionalisation of cooperation agents. In 2009, the programme “Management and Administration of NGOs” was held for the eleventh time and “Leadership and Social Innovation in NGOs” for the fourth time. ”la Caixa” Welfare Projects and the ESADE Business School set up these programmes years ago to supply ongoing training to NGO managers. We also have a training programme run jointly with the Spanish Coordinating Council of Development NGOs.

• Similarly, since 2001, the International Cooperation programme has organized, jointly with the IECAH, a Training Programme to Improve the Quality of Humanitarian Action, whose aim is to improve the efficiency of humanitarian aid interventions. Training is for experts, volunteers and managers of NGOs and non-profit organisations.

• The task of raising society’s awareness, dialogue, social debate and promotion of solidarity is carried out through the lectures, seminars, exhibitions, publications and school and family workshops promoted by the programme.

• In 2009 the following exhibitions were organised: Cambodia, Land of Hope; Fair Trade, a Product, a History; Maternities; Chasing the dream; and finally Refugees, Lives in Transit.

Business Alliance for Child Vaccination

• Since this programme started twelve years ago, Welfare Projects has devoted over 51 million euros to promoting 398 projects in 60 countries.

Child Vaccination

DefinitionAccord with the GAVI Alliance to encourage vaccination of children in low-income countries.ActionCollaboration with the GAVI Alliance, as the main private partner of ”la Caixa” in Europe, in the distribution of vaccines. Promotion and channelling of Spanish companies’ contributions through the Business Alliance for Child Vaccination, a corporate social responsibility initiative promoted and led by ”la Caixa”. AmbitThe GAVI Alliance operates in countries with an annual income per head of under 1,000 dollars (72 countries at present).Beneficiaries Children under 5.Figures. 2009 4 million euros funding from ”la Caixa” Welfare Projects.62 companies with a total contribution of 182,650 euros.

• En 2009, ”la Caixa” Welfare Projects renewed its contribution to the GAVI Alliance to encourage child vaccination in low-income countries, strengthening its position as GAVI’s leading private partner in Europe.

• ”la Caixa” also leads in Spain the first Business Alliance for Child Vaccination, set up in 2008 to encourage Spanish companies to join and collaborate in the social task of collecting funds for child vaccination.

• This corporate initiative of social responsibility, channelled by ”la Caixa” through its network of branches, is collaborating in trying to achieve the Fourth Goal of the Millennium Development: to reduce child mortality by two-thirds by 2015. To date, 155 companies have joined the project.

Social Programmes


MicroBank, the Social Bank of ”la Caixa”

In 2009, the main activity of MicroBank, the social bank of ”la Caixa”, was to grant microloans. Difficulties in gaining access to credit are, to a great extent, a way of marginalising people, which means that these personal loans, which encourage the creation of employment, productive activity and personal and family development, contribute not only to stimulating economic growth but also to social cohesion.

MicroBank

DefinitionSocial bank of ”la Caixa” specializing in granting microloans to encourage productive activity, personal and family development and the creation of employment.ActionConcentration on microloans has meant that MicroBank has built up a full portfolio of specially adapted financial products and services. MicroBank operates through the ”la Caixa” network of over 5,300 branches and has the backing of over 400 collaborating entities.AmbitThroughout Spain.BeneficiariesPersons and groups who may find it difficult to find support in the traditional credit system for their projects and entrepreneurs who need resources to set up, consolidate or expand a small business or self-employment project.Figures. 200932,008 microloans granted.52,000 beneficiaries.417 collaborating entities.

• MicroBank was born in 2007 as a new kind of financial entity specializing in the granting of microloans to people with limited resources who find it difficult to enter the traditional credit system. Since then, it has financed 57,060 operations to the sum of 376.9 million euros, of which operations to the sum of 237.6 million are currently in the portfolio.

• The criterion for granting a microloan is basically trust in the person and the viability of the project to be financed.

• As well as the more than 5,300 branches of ”la Caixa”, 417 social entities collaborate in the granting of microloans. These entities provide MicroBank with information on possible beneficiaries and the evaluations needed before ratifying projects. These are organisations of all kinds with experience in economic and social assistance to create micro-companies, foment self-employment and stimulate entrepreneurial activity.

• After two years specialising in microloans, MicroBank has built up a full portfolio of specialist financial products, both assets and liabilities. MicroBank offers social, financial and family microloans:

• Social microloans of up to 15,000 euros to finance self-employment

projects. To concretise and develop their business idea, customers are advised by an entity collaborating with MicroBank.

• Financial microloans. These are personal loans of up to 25,000 euros for the self-employed or small business people who need finance to start or expand their business.

• Family assistance. These are loans to meet personal needs, such as housing expenses, financing for the regroupment of families, loans for disabled people and family situations needing special attention.

• Over half of MicroBank’s operations are microloans for families (56%), to a value of 214.1 million euros. The financial and social loans that fill the rest of its portfolio account for 162.8 million euros. 60% of its financial and social loans were to set up a business project, whilst 40% were used to expand an already existing project.

• The social impact of microloans is seen in their encouragement of private initiative in the area of creation of employment and small businesses, as a way of stimulating economic growth and social cohesion.

MicroBank grants loans to groups with limited economic resources

Social Programmes


Programme of assistance to social initiative projects

”la Caixa” Welfare Projects has as one of its priorities to support entities that work in solidarity to improve the quality of life of vulnerable groups. ”la Caixa” Welfare Projects calls for various bids from non-profit social organisations for help in developing projects designed to meet the needs of the most socially disadvantaged, adapted to the specific deficits and needs of each area.

Social assistance projects

DefinitionProgramme to help social initiatives undertaken by non-profit organisations in Spain.ActionFinancing of projects to integrate people with a disability into society and work, to fight poverty and social marginalisation, to support temporary accommodation encouraging social integration, to foster inter-cultural relations and social cohesion, and to encourage volunteer work, social action and cultural activities with a social impact. AmbitThroughout Spain.BeneficiariesNon-profit social organisations that carry out projects in benefit of the most needy.Figures. 2009Support for 1,051 projects:263 projects to integrate people with a disability into society and work.206 projects to fight poverty and social marginalisation.94 projects to support temporary accommodation encouraging social integration.69 projects to foster inter-cultural relations and social cohesion.168 projects encouraging volunteer work.200 social action projects.51 projects of cultural activities with a social impact.

• Integration of people with a disability into society and work: initiatives to promote personal autonomy and to give psychological and social support to the families of beneficiaries, and projects to promote routes for integration into ordinary jobs and into the specific job market.

• Fight against poverty and social marginalisation: projects that offer services that cover the basic needs of people at risk of social marginalisation or who are already marginalised, that promote these people’s participation and integration into society and that favour routes of integration into work in order to overcome marginalisation.

• Support for temporary accommodation encouraging social integration: projects that offer temporary accommodation to people on their own and without social relationships, women victims of gender violence and people with serious social or family problems. In addition, each case is monitored in order to assist beneficiaries to overcome difficulties.

• Inter-cultural relations and social cohesion: projects favouring relationships between people from different cultures and offering inter-cultural mediation.

• Encouraging volunteer work: projects to welcome, train and integrate volunteers into social organisations and to improve the management of groups of volunteers.

• Social action projects: initiatives to promote health, gender equality and education in values; and to improve the quality of life of people with physical or mental health problems.

• Help for cultural activities with a social impact: initiatives to promote activities linked to the plastic arts, photography, music, literature and drama as resources for personal development and social integration; and to foster the active involvement in social action of participant groups and of professionals of the world of culture.

“la Caixa” Welfare Projects collaborates on projects that foster good relations between people from different cultures


Introduction

Spanish, International, Journalism Scholarships and Scholarships to study a Biomedicine PhD




Investment in education is fundamental for society, as the advances in this field contribute to improving the level of progress and social welfare. Convinced as it is of this, ”la Caixa” Welfare Projects has run since its beginnings several educational programmes to support the advance of knowledge. In 2009, Welfare Projects devoted 28.9 million euros to educational initiatives.

Scholarships

Welfare Projects’ various scholarship programmes contribute to the training of the young, one of the groups it prioritises. The scholarships help create equality of educational opportunities and train excellent professional people who will benefit society as a whole.

As in 2008, scholarships were offered in 2009 for Master’s degree studies in Spain, postgraduate studies in other countries, journalism placements and a PhD in Biomedicine.

Social Studies

Another of the initiatives of ”la Caixa” Welfare Projects to promote the creation of knowledge in the social science field is the Social Studies collection, whose aim is to analyse the social, technological, environmental and public health transformations in contemporary society and promote reflection and debate about them.

27 books have come out in this collection. Three works were presented in 2009:

• Vocational Training in Spain. Towards the Knowledge Society, which points to the importance of modernizing vocational training to adapt what’s on offer to the needs of the labour market.

Award of the 2008 scholarships for taking Master’s degree courses in Spanish universities

• Sport, Health and Quality of Life, which warns against increasingly sedentary habits in Spanish society and vindicates sport as a source of health.

• Spain’s rural population. From imbalances to social sustainability, which explains the consequences of demographic imbalances in Spain’s rural areas.

In addition in 2009, ”la Caixa” Social Science Prize, worth 40,000 euros, was convened for the first time. In this contest, academically and scientifically rigorous research into Spain’s social reality will be rewarded. The winner will be published in the Social Studies collection of ”la Caixa” Welfare Projects.



Spanish and International Scholarships, in Journalism and for a PhD in Biomedicine

”la Caixa” Welfare Projects is convinced that investment in education is one of the main pillars for climbing to the highest levels of progress and social welfare. This is why, since 1982, the entity has been offering scholarships to help students to extend their university education in the best universities of Spain and other countries.

• The objective of the Scholarships programme of ”la Caixa” Welfare Projects is to collaborate in training top professionals, which is of benefit to society as a whole.

• The funding on offer, the number of scholarships, the services provided for students before, during and after the scholarship and the diversity of subjects subsidised mean that the scholarship programme of ”la Caixa” is one of the best in the world.

• In 2009, the following were awarded:• 100 scholarships for Master’s degrees in Spain.

• 121 scholarships for postgraduate studies in other countries.

• 15 scholarships for journalism placements.

• 40 scholarships for PhDs in Biomedicine.

Scholarships for Master’s degrees in Spain

DefinitionProgramme of scholarships to take an official Master’s degree at any university or centre of higher education in Spain.ActionTo encourage mobility and give the support necessary for students to take the Master’s degree that best suits their abilities and potential and to derive the maximum benefit from it.Funding givenRegistration fees, monthly income and initial funds for travel and settlement costs.Number of scholarships100.

Scholarships for postgraduate studies in other countries

DefinitionProgramme of scholarships for postgraduate studies at any university or centre of higher education in the United Status, Germany, France, Great Britain or Canada and Business Management studies in China or India.ActionTo encourage mobility and give a first opportunity to do postgraduate work in another country.Funding givenReturn air ticket, university registration fees, monthly income, initial funds for settlement costs, health insurance, academic guidance course, cost of applications to the country’s universities and visa costs.Number of scholarships121.CountriesUnited States: 40 scholarships.Germany: 20 scholarships.France: 20 scholarships.Great Britain: 20 scholarships.Canada: 10 scholarships.China: 8 scholarships.India: 3 scholarships.

Scholarships for journalism placements

DefinitionProgramme of scholarships for students in the final year of Information Sciences (Journalism branch) for two-year training placements.ActionPlacement work in offices of the Efe Agen-cy in the Autonomous Communities for the first year and in its international offices for the second.Funding givenMonthly income and travel allowance.Number of scholarships15.

“My dream, to develop products that help to improve people’s quality of life.”

Patxi, aged 29, enjoyed a scholarship from ”la Caixa” to study a Master’s degree in Clinical Research.



Scholarships for studying a PhD in Biomedicine

DefinitionProgramme of scholarships for students from all round the world to study their doctorate at four Spanish biomedical research centres.ActionTo favour the settlement among Spain’s scientific community of top young researchers in Biomedicine.Funding givenMonthly income, annual grant equivalent to a monthly payment for travel, settlement and seminar costs.Number of scholarships40.

• In 2009, ”la Caixa” Welfare Projects awarded 40 scholarships for the second year of international students taking part in this programme, thanks to which each of the following Spanish centres received ten young researchers: the Carlos III National Centre for Oncology Research (CNIO), the National Biotechnology Centre (CNB-CSIC), the Genome Regulation Centre (CRG) and the Institute for Biomedical Research (IRB). These scholarships, lasting four years, are aimed at students worldwide.

• The amount of funding given and the scientific excellence of the Spanish centres where the doctorates are taken mean that this programme can compete with the world’s best in the field of Biomedicine.

• These scholarships favour the scientific integration into our country of the world’s best young biomedical researchers, wherever they come from. This gives Spanish biomedical science a new resource for remaining an international leader in the field.

”la Caixa” offers scholarships for PhD studies in Biomedicine


Introduction

Science

Research

Environment




The science, research and environment programmes of ”la Caixa” Welfare Projects contribute to the advance and spread of scientific knowledge, to the raising of citizens’ awareness in favour of conserving our biodiversity and to the conservation of our country’s most valuable ecosystems.

In 2009, the entity devoted 63 million euros to the promotion of environmental, scientific and research initiatives.

The programme Conservation of natural spaces and reintegration into society contributes to maintaining our country’s most valuable ecosystems with several activities to protect the environment. ”la Caixa” in favour of the sea focuses on the dissemination of scientific knowledge about the sea and on the raising of environmental awareness. Along with it, ”la Caixa” Welfare Projects, convinced that the impact of science on daily life is taking giant steps forward, is developing the important task of making science popular.

In the CosmoCaixa Science Museums of Barcelona and Madrid, the entity

organises permanent and temporary exhibitions that analyse a wide variety of contemporary themes, from biological evolution to climate change.

Welfare Projects also organises travelling exhibitions throughout Spain, to bring scientific and environmental themes before the general public and raise social awareness. In 2009, 16 travelling exhibitions were shown in marquees in 98 Spanish cities. Those related to Science were: And then came... The Shape!, Neolithic: from nomads to settlements, Origins. Five landmarks in human evolution, Objective: Flying!, Stick your nose. Essences and natural fragrances, Human. The first settlers, Neuronal landscapes, Mars-Earth. Their anatomy compared and Sedentary. Once upon a time... Speech!, There were also environmental exhibitions: Energy. Get moving for a sustainable future, mountains in the Canaries and The forest.

A major initiative in 2009 was the South Pole without Limits Expedition: ”la Caixa” Welfare Projects, an adventure in which, for the first time in history, a group of physically disabled people travelled 250 kilometres across the

Antarctic plain. The objectives were to show the capacity of disabled people and to gather samples to show the impact of climate change on the Antarctic continent. “Really the final three hours passed by as in a dream. On reaching the South Pole itself, our emotions flooded over. Our families, team, collaborators, friends, ”la Caixa” Welfare Projects, all of them reached the Pole lodged in our hearts”, said Jesús Noriega, one of the expedition members, disabled through lack of a hand.

In 2009, Welfare Projects finalised the availability to all Autonomous Communities of a Mobile Unit equipped with the technology needed to handle emergency situations. This equipment, an authentic “intelligent truck”, has all the resources needed to create an environment of information, coordination and useful logistics in both preventive Civil Defence operations and emergencies.

The entity’s investment in each of these vehicles, delivered to regional governments, was a million euros per truck.

South Pole without Limits Expedition: ”la Caixa” Welfare Projects



Science

The programme to popularise science puts on exhibitions and organises activities that bring scientific knowledge to the general public and encourage positive changes of attitude towards the environment.

CosmoCaixa Barcelona

DetailsOpened in 2004.30,000 m2.2,082,154 visits.752,981 visitors.LocationIsaac Newton 26, Barcelona.Facilities4 halls for temporary exhibitions.7 multi-purpose rooms and halls.Auditorium.Agora.Science Plaza.Permanent exhibitions and spacesDrowned Forest.Geological Wall.Hall of Matter.Planetarium and Meteorological Station.Click and Flash.Bubble Planetarium.Touch, touch!

• CosmoCaixa Barcelona is an international point of reference in questions of popularising science, as it offers an extensive programme of temporary and permanent exhibitions, workshops, lectures, courses and debates on science, in which renowned researchers from all over the world take part. Its activities change every four months and are organised around the exhibitions and the most relevant scientific events in Spain and internationally at the time.

• Opened in 2004, this Science Museum of ”la Caixa” Welfare Projects brings scientific knowledge closer to the public in all its age-groups –elderly people, families, young people, children–, and at all educational levels.

• CosmoCaixa’s educational provision is based on constant innovation in the teaching resources and formats of its activities. As well as guided tours, the centre puts on workshops, itineraries, science classes, scientific theatre and talks for school students, initiatives that are highly valued by teachers. CosmoCaixa Barcelona is a museum where visitors use all their senses, participate, play, learn and, above all, enjoy themselves.

• In 2009, CosmoCaixa Barcelona celebrated its fifth anniversary with a wide range of activities on astronomy.

Temporary Exhibitions

• Technology compared. Previously unknown treasures of Pre-Colombian Science. From 28 October 2008 to 13 September 2009.

• Numb3rs of good family. From 16 July 2008 to 18 April 2010.

• Let’s Talk about Drugs. From 15 January 2009 to 31 January 2010.

• Darwin observer. From 21 October 2009 to 15 November 2010.

• Abracadabra, conjuring and science. From 19 November 2009 to March 2011.

Cycles of Talks, Debates and Courses to Popularise Science• Cycle of talks Talk today… Science and Citizens, jointly with the Catalan Association of Public Universities (ACUP), with the lecturers Manel Esteller and Roderic Guigó.

• Mysteries of the Cosmos. Three unresolved questions about the Universe, cycle of talks organised jointly with the Institut de Ciències de l’Espai (Space Science Institute).

• VIII International Congress on research into Science Education.

• Scientific Day-school. Stem Cells; a Debate on the Future of Biomedicine, with the lecturers Jonathan Moreno and Juan Carlos Izpisúa.

CosmoCaixa Barcelona



CosmoCaixa Madrid

DetailsOpened in 2000.11,000 m2.1,133,471 visits.295,194 visitors.LocationPintor Velázquez s/n, Alcobendas (Madrid).Facilities3 Exhibition Halls.4 multi-purpose rooms and halls.Conference room/ Auditorium.Permanent exhibitions and spacesHall of Matter.Bubble Planetarium.Touch, touch!Click for children.Digital Planetarium.Explore your five senses.

• Exhibitions, talks, films, workshops and guided tours are some of the options at CosmoCaixa Madrid, a museum committed to popularising science, in which adults, young people, children, the elderly, teachers, students and scientists all find a place.

• Since it opened in Alcobendas in 2000, this centre belonging to ”la Caixa” Welfare Projects has managed to get a lot of people, especially the very young, to stop thinking of science as a complicated, alien and boring subject. Its success is based on visitors’ participation and experiments with the scientific concepts transmitted. Above all, CosmoCaixa Madrid is an interactive centre.

• The number of visitors to CosmoCaixa Madrid has steadily increased to the figure of 1,133,471 visits in 2009.

CosmoCaixa Madrid

Temporary Exhibitions

• Understanding to Survive: the Climate. From 26 June 2009 to 31 January 2011.

• Mars-Earth, their anatomy compared. From 6 August 2008 to 15 May 2009.

• Neuronal landscapes. From 17 June 2008 to 17 May 2009.

• Long Live Difference! The most Valuable Treasure of the last Thousand Million Years. From 6 November 2008 to 31 January 2010.

Cycles of Talks, Debates and Courses to Popularise Science

• Cycle of talks Around the Sun. Our star from ten points of view, given by Fred Espenak and Paal Breke.

• How, How much and Why. Climate Change and its Consequences, talks by Fernando Valladares and Josep Enric Llebot.

• Cycle of talks The Rhythm of Life: Evolution and Biological Diversity, with Michael Coates and Charles Godfray.

• Course of Initiation into Astronomy.



Research

Since 1995, ”la Caixa” Welfare Projects has promoted scientific research in order to support the development of science and, by extension, the advance of knowledge and people’s welfare.

• It is in this context that RecerCaixa was set up in 2009. This new programme, fruit of the collaboration between ”la Caixa” and the Catalan Association of Public Universities (ACUP), aims to stimulate research in Catalonia. RecerCaixa has two basic objectives: to support researchers in Catalan universities and research centres and to attract researchers from all round the world to support to the most innovative projects. The investment of ”la Caixa” in this project will reach 9 million euros by 2014.

• As evidence of the commitment of ”la Caixa” Welfare Projects to scientific research, 2009 also saw the opening of the WIDER-Barcelona Centre (World Institute for Digestive Endoscopy Research, Barcelona), directed by Dr. Josep Ramon Armengol-Miró within the Research Institute Foundation of the Vall d’Hebron University Hospital (FIR-HUVH). ”la Caixa” will devote 10 million euros over the next five years to this centre, which will promote the advance of endoscopic surgery through natural orifices. This technique avoids incisions and means fewer infections and a quicker and less painful recovery.

Opening ceremony of the WIDER Centre, set up jointly by ”la Caixa” Welfare Projects and the Generalitat of Catalonia at the Vall d’Hebron Hospital

• Since 1995, Welfare Projects has collaborated with biomedical research in various centres. The IrsiCaixa laboratory at the Germans Trias Pujol Hospital, Badalona, in which the entity invested 1 million euros in 2009, has become one of the world’s leading references in AIDS research.

• In addition, ”la Caixa” supports the National Centre for Cardiovascular Research of Madrid (CNIC), directed by Dr. Valentín Fuster; and the research programmes of the Cancer Research Institute of the Vall d’Hebron Hospital (VHIO), directed by Dr. Josep Baselga and the Centre BarcelonaBeta – Barcelona Research Complex for Better Aging.



Environment

The Environment programme encourages respect for the environment and promotes actions for the conservation of natural spaces on land and sea.

Conservation of natural spaces and reintegration into society

DefinitionThe programme, fruit of agreements with the Autonomous Communities and Regional Councils, has a dual objective: to contribute to improving and maintaining natural spaces and to promote the placement in work of disadvantaged people.ActionRestoration of degraded areas, protection of rivers and their banks, fire prevention and improvement of natural habitats and landscapes; conservation of biodiversity, encouragement and publicising of research into environmental values; strengthening of the economic fabric and in-job training of the local population in towns within natural spaces; strengthening actions that help minimize the effects of climate change; and the introduction of activity to encourage use of renewable energies.AmbitThroughout Spain.BeneficiariesPeople at risk of social marginalisation, preferably with a physical or mental disability, the mentally ill, former prisoners, former drug addicts, immigrants, the long-term unemployed and women in an extreme situation.CollaboratingAutonomous Communities and Catalan and Basque Regional Councils.Number of beneficiaries in 20091,869 people at risk of social marginalisation.Number of projects in 2009292.

“The mountains call to me. I’d like to be a forest ranger...”

Tolo, aged 19, gardener with intellectual disability.

Conservation of natural spaces and reintegration into society

Through the programme Conservation of Natural Spaces and Reintegration into Society, ”la Caixa” Welfare Projects offers people belonging to disadvantaged groups the chance of integrating into society and work by developing actions to protect and conserve the most valuable natural spaces in our country.

• This initiative was set up in 2005 with the signing of a first agreement with the Barcelona Regional Council. Now, Welfare Projects has agreements in force with all of Spain’s Autonomous Communities, most of which were renewed in 2009. The rest will be renewed in 2010. It should be emphasized that these years have seen action in most of Spain’s national and natural parks.

• Lines of action focus not just on the conservation of our natural surroundings (forest habitats, rivers, marshes, river-banks, degraded areas etc.), but also on fire prevention, improvement of infrastructures, the conservation of biodiversity, making spaces accessible to the disabled.

• The programme is also designed to strengthen the economic fabric of the towns located in sites of great natural value and to train the local population.

• As publicity and awareness-raising activities, in 2009 ”la Caixa” Welfare Projects and the Regional Council of Barcelona presented the book Oak Woods, one of a collection of fifteen manuals to manage habitats, which explains experiences to improve the management of forests, rivers and open spaces.



• To cite just some of the initiatives taken as part of the programme to conserve natural spaces, Welfare Projects supported last year:

• The rehabilitation of thirteen fountains in the Collserola Natural Park (Barcelona)

• The reforestation of the area affected by the fire at La Palma (Canary Islands)

• The recovery of the Barbate marshes (Andalusia)

• The creation of forestry brigades to improve and maintain the environment in all the Balearic Islands

• The restoration of highly sensitive habitats in the Somiedo Natural Park (Asturias)

• The creation of a nursery of autochthonous plants and an

The programme promotes job placement of disadvantaged people

ecological kitchen-garden to train groups at risk of social marginalisation in the restoration of degraded environments in Tarragona

• The elimination of invasive plants at various beaches on the coast of Cantabria

• The improvement of energy and reduction of light pollution in the Network of Natural Spaces of Castilla y León

• The drawing up of the Environmental Radioactivity Map of the Community of Aragon

• The study of the adaptation response of pre-Pyrenean vegetation in Aragon to climate change

• Making sensory routes adapted for the visually challenged in the National Park of Aigüestortes (Catalonia)

• The restoration of the Belate peat bog (Navarra)

• The cleaning up of water-ways and forest on the slopes of Lorca Castle (Murcia)

• Restoration of Lake Hervías (La Rioja) for public use

• Environmental restoration of the uncontrolled dump of waste materials at Eslida (Castellón)

• The placing of explanatory signs on paths and routes in Las Lagunas de Ruidera Natural Park in Castilla-La Mancha.

• 2009 saw a total of 292 projects, in which 1,869 people from socially disadvantaged groups took part.



”la Caixa” in favour of the sea

Our seas possess one of the world’s highest biodiversity indexes, but many of our marine species are catalogued as at grave danger of extinction. ”la Caixa” Welfare Projects, aware of the importance of marine biodiversity, has developed the programme ”la Caixa” in Favour of the Sea, to contribute to the raising of awareness about the most valuable ecosystems on the shores of Spain’s islands and mainland and to their conservation.

”la Caixa” in favour of the sea

DefinitionSeries of actions to conserve the ecosystems of the Spanish shore-line and of its islands through the rescue and recovery of marine species facing the danger of extinction, to research the state of marine ecosystems and to raise environmental awareness.ActionThe Route of the Vell Marí, for rescuing, publicising and researching threatened marine species and ecosystems; the Carboocean campaign, to analyse the importance of oceans as sources and sinks of CO2; an acoustic underwater map of Spain’s coastal waters, to find the levels of acoustic pollution and its effects on marine ecosystems and organisms.AmbitSpain’s entire shore-line.Number of visits in 200913,875 visits.

• One of the bulwarks of the programme ”la Caixa” in favour of the sea is The Route of the Vell Marí, developed jointly with the Foundation for the Conservation and Recovery of Marine Animals (CRAM). The project has a scientific schooner (the Vell Marí), which sails Spain’s shores and islands developing research

projects and rescuing threatened marine species, and a mobile class-room which can become a publicity platform open to everyone. In the latter, biologists specializing in environmental education guide visitors through the most characteristic marine depths of our country with the help of an audiovisual, a multimedia presentation and simulation glasses.

• Conservation and research focus on campaigns to study zoological and botanical groups, ecosystems and communities that are especially sensitive to the sustainability of marine ecosystems.

• The educational and information activities of the programme transfer to society the knowledge obtained in conservation and research activities, with a view to encouraging attitudes in favour of environmental sustainability. These activities include visits of school groups to the Vell Marí, in which all the equipment and technology deployed are shown.

In 2009, the Vell Marí visited 25 ports: Barcelona, Badalona, Blanes, Tarragona, Castellón, Valencia, Alicante, Ibiza, Mallorca, Menorca, Cartagena, Almería, Málaga, Marbella, Barbate, Cádiz, Seville, Huelva, Donostia, Santander, Gijón, A Coruña, Vigo, Las Palmas de Gran Canaria and Santa Cruz de Tenerife. In addition, in 2009 educational activities took place outside the schooner too, concretely in workshops held in hospitals and schools in Madrid, Burgos, Saragossa and Lleida.

• The main 2009 innovation in the programme ”la Caixa” in favour of the sea was a new environmental campaign that, as part of the European Carboocean Project of La Laguna University, collected water samples from the entire shoreline and islands of Spain. The objective of the campaign was to reveal the relationships between the atmosphere, the oceans and CO2 and to evaluate the viability of seas and oceans as carbon (CO2) sources and sinks.

The Route of the Vell Marí conserves the ecosystems of Spain’s shorelines

Cultural Programmes

Introduction

CaixaForum Barcelona

CaixaForum Madrid

CaixaForum Palma, Lleida, Tarragona and the ”la Caixa” Foundation in Girona

New CaixaForum centres at Seville and Saragossa

Exhibitions

Music


Cultural Programmes

Cultural Programmes

The cultural programmes of ”la Caixa” Welfare Projects, which received 59,6 million euros funding in 2009, are planned and run to popularise culture and so have greater social impact. Their aim is to encourage in society habits of cultural consumption that improve the general public’s quality of life. Thus, the various cultural initiatives of the entity bring art, music, theatre and the humanities to every kind of public, but particularly to people who lack the opportunities or habits of going to museums, theatres or concert halls. In short, Welfare Projects promotes culture as a motor of society and a tool for personal growth.

Two new CaixaForum centres

To this end, ”la Caixa” has set up and runs a new model of socio-cultural centre, the CaixaForum, a space that is free and open to everyone and that puts on activities relating to the various branches of culture. The CaixaForum centres maintain all year round stable cultural programmes), which are noted for their transversal character and are regularly renewed. In addition, they house the ”la Caixa” Welfare Projects Contemporary Art Collection, which holds over 700 works and is a point of reference for international collectors.

At the end of 2009, Welfare Projects started building the future CaixaForum Saragossa, whose opening is scheduled for 2012, and CaixaForum Sevilla. The latter project will convert the Royal Dockyards of Andalusia’s capital into an innovatory cultural centre, due to open in 2015. These two new centres will be added to those already operating in Madrid, Barcelona, Palma de Mallorca, Girona, Lleida and Tarragona.

Broad cultural provision

Welfare Projects organises travelling exhibitions and concerts outside its centres, on stages and in cultural spaces throughout Spain. One of its main initiatives is the programme Art in the Street, which installs key modern and contemporary sculptures in cities’ best-known public spaces.

The cultural programmes of ”la Caixa” Welfare Projects revolve mainly around four main areas: exhibitions, the humanities, music and the theatre. The humanities programme tackles classical and contemporary thought, literature, film, history, the plastic arts and the dramatic arts. It aims to probe the roots of culture and stimulate debate on the huge changes in society. In addition, Welfare Projects offers a music programme that seeks to create social cohesion and favour relations between cultures. Dramatic art is the protagonist of CaixaEscena, a programme that bets on the educational possibilities of the stage arts among secondary school students. The importance of art education at the successive stages of the learning process is widely recognised. In the concrete case of the theatre, factors and values that are instrumental and expressive and which inspire social harmony coincide, making drama an effective argument for both individuals and groups. Through CaixaEscena, Welfare Projects provides ongoing appraisal, specialist resources and technical experts to all those schools that work with the theatre as a tool to educate in values. The programme is designed to encourage creativity, stimulate students’ capacity of expression and get them to take part in a contributive, non-competitive spirit. In the 2008-2009 school year, the programme was introduced into all the Autonomous Communities, with the participation of 591 school groups and a total of 12,749 students, 1,232 performances and 152,651 beneficiaries.

Collaboration in favour of art

One of last year’s cultural innovations was the establishment by ”la Caixa” Welfare Projects of collaboration agreements with the Prado Museum in Madrid and the Louvre in Paris. The programme ”la Caixa”. The Prado Museum. The art of educating, launched in 2009-2010, promotes visits led by stimulating guides to Spain’s best picture gallery for primary and secondary school groups. The collaboration agreement with the Louvre will permit in years to come the showing at various CaixaForum centres of works from the Louvre Museum. Among the exhibitions planned are the first major retrospective in Spain of the Romantic painter Eugène Delacroix and archaeological exhibitions on Saudi Arabia and the Sumerian and Coptic civilisations.

Another line of action starting in 2009, run jointly with the Generalitat (Autonomous Government) of Catalonia, was a programme to recover Catalan monuments that have great importance to Catalonia’s art heritage. The project Open Romanesque is one of these. Its objective is to review, improve and prevent the deterioration of Catalan Romanesque. The initiative comprises the restoration and improvement of 74 Romanesque monuments and items and the dissemination of their artistic and heritage value. Another initiative related to this new line is the collaboration agreement to rehabilitate nine cooperative wine cellars in Catalonia that have great architectural value.


Cultural Programmes



DetailsOpened 2002.12,000 m2.1,573,201 visits.782,493 visitors.LocationAvinguda Marquès de Comillas 6-8, Barcelona. FacilitiesFive exhibition halls.Auditorium holding 340 people.Three halls for courses, talks and other activities.Arts Laboratory for educational activities.Media library.

• In 2009, over a million and a half people of all ages attended the various activities and exhibitions organised at CaixaForum Barcelona, the cultural centre of ”la Caixa” Welfare Projects located in the former Casaramona factory (designed by Puig i Cadafalch), jewel of industrial Art nouveau architecture. CaixaForum has become one of the city’s busiest and most dynamic cultural spaces.

• The main objective of the programmes of CaixaForum Barcelona is to bring culture closer to society. In 2009, the centre put on an extensive programme of activities for every kind of public, including exhibitions of art from various periods and civilizations and in different categories (painting, architecture, photography...). Around these, CaixaForum organised complementary activities, debates and talks, cycles on literature and thought, films, multimedia activities, courses, workshops, family programmes, guided tours for the general public and tours booked beforehand for groups, prepared visits for people with hearing difficulties, concerts, stage performances and coffee discussions for the elderly. The humanities, music, international cooperation, educational and family

activities and multimedia programmes put on a great many events in several formats: concerts, theatre shows, debates and talks, literature and thought cycles, film shows, courses and workshops.

• Of all the exhibitions put on in 2009, the most popular was that of the Catalan painter, Joaquim Mir, which received 130,000 visits, followed by the one on the architect Richard Rogers with over 120,000. The retrospectives of the Fauve painter Maurice de Vlaminck, the architect Andrea Palladio, and “The Worlds of Islam” were also popular, with each receiving almost 100,000 visitors. Special mention should be made of the exhibitions that showed works from the ”la Caixa” Foundation Contemporary Art Collection, one of the most important in the Spanish state, which were seen by nearly 300,000 visitors.

• In the area of Photography, we highlight the exhibition of the award-winning works from the FotoPres ”la Caixa”09 prizes.

Exhibitions

• Palladio, the architect (1508-1580)• Cambodia, land of hope• ”la Caixa” Foundation Collection of Graphic Art. Sign, space, time

• Fair Trade: a history, a product• The sea of Barceló in the hall of human rights and of the alliance of civilizations, United Nations building, Geneva

• The bread of angels. Collections from the Uffizi gallery. From Botticelli to Luca Giordano

• Imaginations. ”la Caixa” Foundation Contemporary Art Collection

• FotoPres ”la Caixa”09• Joaquim Mir. Retrospective (1873-1940)

• The look of the artist: Luis Gordillo. Dogmatic Cosmetics. ”la Caixa” foundation contemporary art collection

• The worlds of Islam in the collection of the Aga Khan Museum

• Massimo Bartolini. In the back of my mind

• Maurice de Vlaminck, a fauve instinct. Paintings from 1900 to 1915



Cultural Programmes

• Mersad Berber. Retrospective• Looking at collection 2. ”la Caixa” foundation contemporary art collection

• Modernism, modernity. From textile factory to CaixaForum. Permanent Space

• Richard Rogers + architects. From the House to the City

• Zabaleta 101. Centenary of Rafael Zabaleta

• Zones of risk. ”la Caixa” Foundation Contemporary Art Collection

Humanities

• Cycles of talks• 70 years on from the Civil War• Four days with Dante and the Divine Comedy

• China, India, Brazil: the case of the emerging countries. The effects of the current social and economic situation

• Designing what we will be. Utopias for the XXI century

• Isaiah Berlin. Freedom and Pluralism• The social construction of identity. Body, gender and culture

• Classical myths• Countries in mutation. USA, Russia, United Kingdom, Italy and Romania

• Concerning the emotions

• Cycle of illustrated talks • Slavic Europe and its Literature• Music in the cinema• Letters from universal Journeys

• Film cycle• Cinema: city and architecture

• Poetry cycle• From poet to poet

• Recreation of History• Baspedas: Prince or Merchant? Historical-archaeological recreation of the Iber world

International Cooperation

• Film cycle• Fair Trade: a history, a product

• Talk• Globalization and Civil Society

• Round Table• Every minute nine children die of malnutrition… did you know?

Music

• Concerts of Diversons, Music for Integration

• Concerts of the CaixaForum Music Season: 24 concerts with major performers and groups of Ancient Music, World Music and other styles, including Europa Galante, Giovanna Marini, the London Haydn Quartet, Marta Almajano, Soloists from the Seville Baroque Orchestra and Gustav Leonhardt

• Filmed music• The songs of the Soul. Voice and song in human expression

• Diverse music from Central Asia

• Music afternoons• The times of Joseph Haydn• Felix Mendelssohn 1809-2009

• Summer nights• Gospel• Celtic Music• Jazz• Film music

Family Activities

• Family concerts• Family cinema• Street art. And if it’s raining, too!• Dramatic arts• Art in the lab• Art in play (autonomous activities: CaixaForum back-packs, the Sol LeWitt mural: variations on a theme, Crack your Nut at CaixaForum)

• Workshops• Educational space • Family introductions to exhibitions• Treasure hunts with clues

Educational Activities

• Plastic arts workshops• Music workshops• Visits stimulated by a leader to exhibitions

• Concerts• Lectures• Films

Multimedia Activities

• Concerts • Films• Lectures

Exhibition: Maurice de Vlaminck, a fauve instinct


Cultural Programmes

CaixaForum Madrid

CaixaForum Madrid

DetailsOpened in 2008.10,000 m2.1,419,387 visits in 2009.1,120,224 visitors in 2009.LocationPaseo del Prado 36, Madrid.FacilitiesTwo exhibition halls.Auditorium holding 333 people.Five educational and/or multi-purpose spaces.

• CaixaForum Madrid celebrated its first birthday in February 2009, already established as a social and cultural platform for all publics. In its first full year, citizens proffered an outstanding welcome to the new social and cultural centre of ”la Caixa” Welfare Projects in Madrid, receiving 2,521,696 visitors.

• Through the exhibitions of ancient, modern and contemporary art it programmed, and the concerts, literature and poetry cycles, debates on today’s issues, social, scientific and environmental workshops, educational and family workshops and activities for groups of elderly people, CaixaForum Madrid promoted knowledge and personal growth in citizens of all ages.

• Architecture was one of the year’s main subjects at CaixaForum Madrid through the exhibitions dedicated to Richard Rogers and Andrea Palladio, two architects intimately committed to humanity and the improvement of urban life. The centre also hosted a major retrospective on Vlaminck, one of the key fauve artists, and an exhibition of master-pieces of Islamic art from the prestigious collection of the Aga Khan’s Museum.

• Among the various activities organised by CaixaForum Madrid in its first twelve months, the greatest attendances were seen at the exhibitions, followed by educational events, concerts, family activities, the humanities cycles and Welfare Projects.

CaixaForum Madrid


Cultural Programmes

Exhibitions

• Cambodia, Land of Hope• Chasing the Dream. The 8 Goals of Millennium Development

• The Sea of Barceló in the Hall of Human Rights and of the Alliance of Civilizations, United Nations building, Geneva.

• Hannah Collins. History in the Making. Films and photographs

• The Yi School: thirty years of Chinese Abstract Art

• The Worlds of Islam in the collection from the Aga Khan Museum

• Maternities. Photographs by Bru Rovira

• Maurice de Vlaminck, a fauve instinct. Paintings from 1900 to 1915

• Palladio, the architect (1508-1580)• Etruscan princes. Between East and West

• Richard Rogers + architects. From the House to the City

• Areas of risk. ”la Caixa” Foundation Contemporary Art Collection

Humanities

• Cycles of talks• Andrea Palladio, yesterday and today• Double voices• Europe’s XXth century and its limits. A historical analysis

• On the frontier: dialogues of a changing world

• Europe: new scenarios, new frontiers. ”la Caixa” Chair

• Isaiah Berlin. Freedom and Pluralism• The social construction of identity. Body, gender and culture

• Spanish thinkers of the XIXth century• Religions of the ancient world• Open society, diversity and cohesion. ”la Caixa” Chair

• A challenge for Europe: the future of the social welfare system. ”la Caixa” Chair

• Cycles of illustrated talks• Slavic Europe and its literature• Music in the cinema

• Cycles of talks• Make someone act• Immigration. Mirror and reflection of today’s world

• Film cycles• Maternities• The camera eye

• Poetry cycle• From poet to poet

Music

• Concerts of Diversons, music for integration

• Concerts of the CaixaForum music season

• Music Courses• Johann Sebastian Bach• A history of jazz

• Filmed music• The voices of Allah. The musical dimensions of Islam

• Diverse music from Central Asia

Inside staircase at CaixaForum Madrid


Cultural Programmes

CaixaForum Palma, Lleida, Tarragona and the ”la Caixa” Foundation in Girona

CaixaForum Palma

DetailsOpened in 1993.4,000 m2.339,612 visits.325,251 visitors.LocationPlaza Weyler 3, Palma de Mallorca.Facilities5 exhibition halls.Auditorium holding 163 people.3 educational and/or multi-purpose spaces.

• Exhibitions: Alphonse Mucha (1860-1939). Seduction, modernity and utopia; Chaplin in images; The art of Tibet. Images for contemplation; The aesthetic of Anglada-Camarasa. Permanent exhibition; Maternities. Photographs by Bru Rovira; Mersad Berber. Retrospective; Feet. Tracks towards evolution; Ramon Llull. History, thought and legend; Salvador Dalí and magazines; Areas of risk. Contemporary Art Collection of ”la Caixa” Welfare Projects.

• Humanities: Cycles of lectures: 70 years on from the Civil War; China, India, Brazil: the case of the emerging countries. The effects of the current social and economic situation; The world of the muses. How to read classical poetry; Great women, great values; Social intelligence; My brain and I. Get to know yourself. Film cycles: Cinema and psychiatry. Souls of glass; Maternities. Courses: VII Humanities Hall Course: Mythology: the world of heroes; XIII Course in Classical Culture and Thought: Daily

CaixaForum Palma

life in Greco-Latin antiquity. Seminars: Posters: from Alphonse Mucha to postmodernism. Congresses: First International Congress 1959 from Collioure to Formentor.

• Music: Concerts of Diversons, music for integration; Concerts of the CaixaForum music season. Filmed music: Diverse music of Central Asia. Music afternoons: Johann Sebastian Bach. Courses: Understanding Opera. Music for disabilities workshop: Listen, discover and create your own music!


Cultural Programmes

CaixaForum Lleida

DetailsOpened 1989.1,835 m2.85,490 visitors.95,762 visits.Location Avenida Blondel, 3, Lleida.Facilities1 exhibition hall.Auditorium holding 230 people.2 educational and/or multi-purpose spaces.

• Exhibitions: Chasing the Dream. The 8 Goals of Millennium Development; Chillida. 1980-2000; “Botanic Harmony” – Count Urgell; Henri Cartier- Bresson. Photographer; “Kaüpunke” – Fito Conesa; Women. Mirror of cultures.

• Humanities: Cycles of lectures: Historical biographies; Chillida: two approaches; The journey of foods: beliefs, customs and names; George Friedrich Händel (1685-1759); Heroines of fiction; The names of happiness; Universal Religions II; Science Afternoons.

• Cycles of illustrated talks: Cartier-Bresson and Robert Frank, two opposing ways of seeing the world; Jacqueline du Pré. Filmed Music; The limits of the human. Faces of the monster in classical mythology; Past, present and future of the rumba.

• Film cycles: With one’s own voice; D+D: Documentary plus Debate; Terres de Lleida Film Theatre; Cinema Mornings; 13th International Festival of Animation Films in Catalonia (ANIMAC).

• Music: Concerts of the CaixaForum musical season; Diversons.

• Multimedia• Family Programme

CaixaForum Tarragona

DetailsOpened 2001.1,429 m2.103,469 visitors.129,581 visits.LocationCristòfor Colom 2, Tarragona.Facilities1 exhibition hall.Auditorium holding 177 people.3 educational and/or multi-purpose spaces.

• Exhibitions: Alphonse Mucha (1860-1939). Seduction, modernity and utopia; “Botanic Harmony” – Count Urgell; Chasing the Dream. The 8 Goals of Millennium Development; Gustav Klimt. Drawings 1879-1918; Become a volunteer; “Kaüpunke” – Fito Conesa; The skin of the real. Engravings by Antoni Tàpies. Collection of Graphic Art of ”la Caixa” Foundation; Feet. Tracks towards evolution.

• Humanities: Cycles of lectures: The journey of foods: beliefs, customs and names; Between myth and religion; The Balkans: old and new keys; The names of happiness; Mucha and Art Nouveau, the flowering of modernity; Science week. Film and debate cycles: D+D: Documentary plus Debate. Cycles of drama, poetry and literature: Literary autumn. Music: Concerts of the CaixaForum Music Season; Concerts of Diversons.

”la Caixa” Foundation in Girona

Details32,967 visits.31,079 visitors.LocationSanta Clara, 11, 17001 de Girona.FacilitiesNarcís de Carreras Auditorium, ”la Caixa”, Tallers Room.

• Exhibitions: Chaplin in images; Refugees: lives in transit; Chasing the Dream. The 8 Goals of Millennium Development; Origins. Five landmarks in human evolution.

• Educational Activities: Music workshops; Plastic arts workshops; Educational concerts; Scientific theatre; Theatre in values; Cinema and young people.

• Humanities: Cycles of lectures: Let’s rediscover master-pieces. Israel-Palestine: towards the hundred years war?; Classical thought; Difficult conversations. Conflict and the human condition; Georg Friedrich Händel (1685-1759).

• Cycles of films: Filmed music: Documentary of the month.

• Music: Concerts of Diversons. Music for integration.


Cultural Programmes

CaixaForum Seville. Virtual re-creation. Exterior

CaixaForum Saragossa. Virtual re-creation

New CaixaForum centres in Seville and Saragossa

CaixaForum Seville

• In September 2009, the Department of Culture of the Government of Andalusia ceded to ”la Caixa” the use for 75 years of the city’s Reales Atarazanas (Royal Dockyards) to install the future CaixaForum Seville in this historic building. The new project will entail complete rehabilitation of the building, which will nevertheless lose none of its valuable architectural features.

• The architectural project for the conversion into CaixaForum Seville of the old ship-yards that Alfonso X the Wise ordered to be built was adjudicated to the architectural studio led by Guillermo Vázquez Consuegra.

• The future centre will emphasise the most relevant historical and archaeological elements of the Reales Atarazanas complex. The aim is to convert the building itself into a significant part of the contents of the CaixaForum, vindicating the historical and cultural wealth it encloses. Thus, most of the intervention will affect the upper part of the building, with a view to keeping the ground-floor space untouched. The project opts for constructing a sustainable building that respects the environment.

• Steel and Wood, emblematic materials in the history of navigation, evoked by the historical function of the Atarazanas, will be, together with glass, the main materials employed. Their fusion with bare brick will highlight the multiple colours of the new building.

• Intended to become a public space open to all, the Reales Atarazanas complex will be opened out to the city by means of a new public square.

• The future CaixaForum of Andalusia’s capital city will be similar to the CaixaForum centres of Madrid and Barcelona: all kinds of activities explaining science, technology and culture in their broadest senses will be fostered.

CaixaForum Saragossa

• At the end of December 2009, work began on the future CaixaForum Saragossa. The new centre is scheduled for completion by 2012, the planned opening date.

• The Catalan architect Carme Pinós is in charge of the CaixaForum Saragossa building project. She is seeking to convert ”la Caixa” Welfare Projects’ new social and cultural centre into an avant-garde architectural landmark in the city.

• The building will be divided into two large and tall geometrical structures that will house the exhibition halls, creating a new public space on the ground floor that will connect the new El Portillo Park with the city through the bottom of CaixaForum. These two big exhibition halls will be suspended at different levels, so that the visitor can view the city when moving from one to the other.

• As a distinguishing feature, the Saragossa centre will be the first brand-new building to be used as a CaixaForum centre.

• The centre is located within the Milla Digital (Digital Mile) project, part of the City of Innovation and Knowledge that the Saragossa City Council is developing, in which businesses, cultural facilities and housing will stand side-by-side. The CaixaForum Saragossa plot covers an area of 4,407 m2. The centre’s total floor-space will exceed 6,000 m2.

• CaixaForum Saragossa hopes to be a living space, at the service of people, in which culture becomes an effective tool for social cohesion and integration.


Cultural Programmes

Exhibitions

Exhibitions are one of the most important cultural activities of ”la Caixa” Welfare Projects and the one that creates the most ripples. The entity’s own centres put on, in addition to the permanent exhibitions belonging to ”la Caixa” Welfare Projects’ Contemporary Art Collection, a wide range of exhibitions on diverse themes that are constantly being changed. In addition, the entity organises throughout Spain and outside the centres themselves travelling exhibitions accessible to every kind of public.

Travelling Exhibitions

• The travelling exhibitions of ”la Caixa” Welfare Projects are shown in halls offered by local institutions and marquees put up in cities all over Spain to enable free access of the general public to the exhibition. These are explanatory exhibitions on social questions, art, photography, history, environment and science, which are often accompanied by complementary activities designed for the families and schools of the town where the exhibition is on. In 2009, ”la Caixa” Welfare Projects travelling exhibitions moved 254 times.

• With them, Welfare Projects contributes to making society more aware of social questions, encourages knowledge and creates spaces for the promotion of culture that become genuine meeting places.

• In 2009, photography exhibitions were put on in 116 Spanish cities, including Looking for silver. Photographs of Extremadura in the Mas Archive; Andalusia imagined. Photographs 1910-1930; Avelino Pi. Sports photography; Chaplin in images; Fotopres ’07; Henri Cartier-Bresson. Photographer; and A century of motorcycling as a sport in Catalonia. There were also historical exhibitions around particular themes, such as: Europe was a road. The pilgrimage to Santiago in the Middle Ages; The Ibers. Our civilisation before Rome; Science in the World of Al-Andalus; The aromas of Al-Andalus; The castles of Al-Andalus; or The millares. An age-old civilisation. Plastic arts exhibitions included: Alphonse Mucha 1860-1939. Seduction, modernity, utopia; Chillida. 1980-2000; Designers for a legend. Homage to Toulouse-Lautrec; Joaquim Mir. Retrospective (1873-1940); Rodin and Symbolist Mythology; and A day in Mongolia. The Holdings of the Welfare Projects Collection were also used for exhibitions, such as Poetic abstraction; The aesthetic of Anglada-Camarasa; The trace of the artist; The skin of the real. Engravings by Antoni Tàpies.

Art in the Street

• The Art in the Street programme is a pioneering initiative from ”la Caixa” Welfare Projects. It started in 2007, in order to bring art closer to citizens and knock down the barriers that sometimes separated them from contemporary creation.

• The exhibitions are in the street, in famous spaces given by the city councils, to achieve a more direct and enriching connection between the pieces on show and the people contemplating them. The project puts works of renowned artists within reach of everyone, with a view to creating a dialogue between these works and the architecture of the place where they are shown.

• The exhibitions organised in 2009 by Welfare Projects in 11 Spanish cities within this programme were:

• Auguste Rodin. Exhibition consisting of seven monumental sculptures from the Rodin Museum of Paris: The Thinker and six studies of the six men featured in The Burghers of Calais. Cities: Bilbao, Madrid, Valencia and Barcelona.

• Manolo Valdés. Exhibition of 17 sculptures of the Valencian artist living in New York, Manolo Valdés. The works (five of them done expressly for this exhibition) represent themes from history and art recreated freely. Cities: Murcia, Málaga, Cáceres, Girona, Santander, Donostia and Madrid.

Art in the Street. The Thinker by Auguste Rodin


Cultural Programmes

Music

Sharing the experience of listening to music and taking part in it usually has a positive social effect. ”la Caixa” Welfare Projects devotes various programmes to popularising music, organises participative concerts with non-professional singers and promotes music seasons, school and family concerts and specialist courses.

Participative Concerts: Händel’s Messiah

• These concerts are a unique experience that brings together renowned professional musicians with amateur choral singers in a joint interpretation of one of the most famous and significant works of all times: Händel’s Messiah. Starting in Barcelona in 1995, this project had the dual objective of recognising and stimulating the social practice of singing and music that takes place in choral societies and promoting social participation in the area of culture. Since then, over 17,000 individual participants have sung the choral parts of this work and almost 171,000 people have attended the concerts. In 2009, 2,476 singers took part and 13 participative concerts took place: two in Madrid, Barcelona, Valencia and Donostia, and one in each of Palma de Mallorca, Santa Cruz de Tenerife, Lleida, Girona and Valladolid. For the second consecutive year, in 2009 Händel’s Messiah was broadcast on television and by Internet, in collaboration with TVE (the Madrid concert). The overall public for these broadcasts exceeded 100,000.

Participative Concerts: Carmina Burana by Carl Orff

• As described above, lovers of choral music could sing in 2009, for the second year in Barcelona and the first in Madrid, the choral parts of Carl Orff’s Carmina Burana. The concerts were held in June, with 897 singers taking part.

Diversons. Music for Integration

• Welfare Projects runs the programme Diversons, to make better known the traditional music of the countries of origin of many people now living in Spain, with the objective of developing closer links and cultural exchange between immigrants and the autochthonous population. The participants, selected through an annual contest, are traditional world music interpreters. 210 concerts all over Spain, attended by 103,626 people, took place in 2009.

School concerts

• This programme seeks to bring music into the schools (infants, primary and secondary) as an activity that is both educational and playful. School and family concerts offer children the experience and the pleasure of attending attractive and stimulating events. They also give teachers the opportunity of rounding off their pupils’ musical education with an activity that can be developed both in the class-room, with the teaching material that Welfare Projects makes available before the concert, and by attending the school concerts. In 2009 the following productions were put on: The Super-barber of Seville, Metal and its colours, Cinderella, Sakapatú! A trip through Andean music, The Moussakis. Music from the Balkans, Within a suitcase and A glass of mint tea. Music from the Maghreb.

Antiqua

• Through this programme, Welfare Projects promotes Ancient Music concerts that are held in the open air in well-known spaces in various Spanish cities. The objective of the project is to bring to the general public Ancient Music, interpreted with historical criteria and instruments, and to support the musicians, selected through an annual

contest, at the start of their professional careers. In 2009, 46 concerts by nine musical groups were put on in 7 cities.

Solidarity concert of ”la Caixa” volunteers

• 2009 saw the second year this concert took place, on this occasion organised in benefit of the NGO Sonrisas de Bombay (Bombay Smiles), which works with the poorest and most vulnerable communities of this Indian city. Well-known musicians of various nationalities took part in the concert and 10,570 euros were collected.

Participative concert: Händel’s Messiah


Governing Bodies of ”la Caixa” Welfare Projects

Financial Statements of ”la Caixa” Welfare Projects



Governing Bodies of ”la Caixa” Welfare Projectson 31 December 2009

Welfare Projects Committee


Committee MembersSalvador GabarróJordi MercaderJavier GodóMontserrat CabraAna María CalvoJuan José LópezMontserrat LópezJusto B. Novella

Secretary (non-member)Alejandro García-Bragado

Deputy Secretary (non-member)Óscar Calderón

Executive Officers

President and Chief Executive Officer of ”la Caixa”Juan María Nin

Executive President of Social and Cultural Outreach Projects Jaime Lanaspa

Board of the ”la Caixa” Foundation

Honorary President

José Vilarasau

Chairman

Isidro Fainé

Deputy Chairmen

Ricardo Fornesa (First Deputy Chairman)

Salvador Gabarró

Jordi Mercader

Juan María Nin

Board Members

Victoria Barber

Mª Teresa Bartolomé

Mª Teresa Bassons

Montserrat Cabra

Ana María Calvo

José F. de Conrado

Javier Godó

Josep Delfín Guàrdia

Monika Habsburg

Inmaculada Juan

Jaime Lanaspa

Juan José López

Montserrat López

Dolors Llobet

Rosa M. Mora

Amparo Moraleda

Miquel Noguer

Justo B. Novella

Jordi Portabella

Leopoldo Rodés

Luis Rojas



President and Chief Executive Officer Jaime Lanaspa

Secretary (non-member) Alejandro García-Bragado

Deputy Secretary (non-member)Óscar Calderón



Senior Management of ”la Caixa” Welfare Projects


Executive PresidentJaime Lanaspa

Managing Director of Accessible HousingJaume Cabré

Manager of the Area of Scholarships, Universities and Social Studies Rosa Maria Molins

Senior Management of the ”la Caixa” Foundation


President and Chief Executive Officer Jaime Lanaspa

Senior Vice-PresidentElisa Durán

General SecretaryLluís Reverter

General ManagerEsther Planas

General ManagerAlbert Sòria

Manager of the Department of CommunicationsFrancisco Javier Zuloaga

Manager of the International DepartmentS.A.R. La Infanta Doña Cristina

Manager of the Department for Area ActionRafael Chueca

Manager of the Culture DepartmentIgnasi Miró

Manager of the Production DepartmentEnric Sagrera

Manager of the Department of Social IntegrationMarc Simón

Science DirectorJorge Wagensberg

Manager of the Department of Science, Research and the EnvironmentEnric Banda

Manager of the Department of Organisation and General ServicesJordi Cabedo

Manager of the Social Action DepartmentXavier Bertolín

Manager of the Human Resources DepartmentSilvia Ciurana

Manager of the Department of CentresJosep Ollé

Manager of the Department of Social MarketingDaniel Zafra



Financial Statements of ”la Caixa” Welfare Projects

Welfare Projects Expediture in 2008

PROGRAMMES IN THOUSANDS OF EUROS

Social programmes 278,543Environmental and scientific programmes 63,098Cultural programmes 59,576Educational and research programmes 28,860Total 430,077

Welfare Projects Budget for 2009

PROGRA M SM E EUROSIN THOUSANDS OF

Social programmes 356,274Environmental and scientific programmes 61,633Cultural programmes 55,384Educational and research programmes 26,709Total 500,000

Assets and Liabilities of Welfare Projects

at 31 December 2008, after expenditure for the year and before allocation of 2008, ”la Caixa” profit, in thousands of euros

AssetsCurrent assets 400,259Cash 213Accounts receivable 175Other allocations - ”la Caixa” 399,871Investments 82,907Financial investments 100,250Security price fluctuation fund (17,343)Non-current assets 366,300Property, plant and equipment 502,964

Land and buildings 349,582 Furniture and fixtures 153,382

Accumulated depreciation (136,664)Buildings (79,455)Furniture and fixtures (57,209)

Total 849,466

LiabilitiesCurrent liabilities 257,209Deferred expenses payable 134,210Other accounts payable 145”la Caixa” Foundation 122,854Welfare Projects own funds 592,257Welfare Fund 143,050Welfare Projects reserves 449,207

Total 849,466

Concept and designExit de disseny

Make-up and printingwww.cege.es

Cover photographiesExit de disseny, Roc Herms and Máximo García

D.L.: B.

PhotographsDavid Campos: p. 4.Exit de Disseny: pp. 12, 13, 15, 29, 33, 39, 44, 50, 52, 54, 55, 57, 60, 61, 62, 65, 66, 67, 71, 75, 78, 80, 81, 83, 89, 96, 110, 112, 113, 117, 118, 119, 120, 121, 123, 124, 171.Joan Masats: pp. 44, 129, 144, 145. Roc Herms: pp. 112, 113, 126, 127, 129, 130, 131, 132, 134, 135, 137, 149, 156.Jordi Nieva: pp. 115, 121, 127, 133, 147, 151, 155, 157, 162.Raimon Solà: p. 116.Máximo García: pp. 126, 148, 151, 159, 163, 168, 169, 171.Antonella Delussu: p. 129.Camilo Alonso: p. 138.

Estudio McGuffin: p. 141.Kike Figaredo: p. 142.UNICEF Giacomo Pirozzi: p. 143.Norman García-Solera: pp. 151, 154.Enric Monté: p. 151.Limit 0: p. 152.Olga Planas: pp. 153, 164.CRAM: p. 158.EFE. Yoan Valet: p. 159.Museo del Prado: p. 159.Oriol Clavera: p. 159.Alejandro Espadero: p. 160.Mónica Reboredo: p. 161.Carme Ortega: p. 165.Estudi Carme Pinós: p. 167.H.Caux / ACNUR: p. 171.

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