DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS - FONDO DE GARANTÍA DE DEPÓSITOS DE ENTIDADES DE CRÉDITO ANUAL REPORT 2013
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DEPOSIT GUARANTEE
FUND
OF CREDIT INSTITUTIONS
FONDO DE GARANTÍA
DE DEPÓSITOS
DE ENTIDADES DE CRÉDITO
ANUAL REPORT 2013
Approved by the Management Committee as of
June 10th, 2014 and presented to their members
and to the Bank of SpainDEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS - FONDO DE GARANTÍA DE DEPÓSITOS DE
ENTIDADES DE CRÉDITO
José Ortega y Gasset, 22 – 28006-MADRID
This document is a translation of the Spanish original and it has been prepared for the
convenience of readers and in the event of ambiguity, the Spanish text will prevail. The Spanish
version can be downloaded from the web site (www.fgd.es) or can be requested to:
Fondo de Garantía de Depósitos de Entidades de Crédito
José Ortega y Gasset, 22
28006 Madrid - España
2MANAGEMENT COMMITTEE OF THE DEPOSIT GUARANTEE FUND FOR CREDIT INSTITUTIONS
(At 31 December 2013)
(Formed in accordance with Royal Decree Law 16/2011 of 14 October 2011)
President D. Fernando Restoy Lozano
Deputy Governor of Banco de España
Vice president D. Ramón Quintana Aguirre
Supervision Managing Director of Banco de España
Secretary D. Francisco Javier Priego Pérez
Secretary-general of Banco de España
D. Javier Alonso Ruiz-Ojeda
Managing Director of Operations, Markets and Payment Systems of Banco de España
D. Julio Durán Hernández (from October 14 th, 2013)
Managing Director of Regulation and Finantial Stability of Banco de España
D. Mariano Herrera García-Canturri (from February 1st, 2013)
Deputy Director General of Supervision of Banco de España
D. Matías Rodríguez Inciarte
Second Vice President of Banco Santander, SA
D. Jaime Sáenz de Tejada Pulido
Managing Director of Spain and Portugal of BBVA
D. Isidro Fainé Casas
President of Confederación Española de Cajas de Ahorros
D. José María Méndez Àlvarez-Cedrón
Managing Director of Confederación Española de Cajas de Ahorros
D. Julio Gallastegui Zubizarreta
Managing Director of Caja Laboral Popular Cooperativa de Crédito
D. Juan de la Cruz Cárdenas Rodríguez
Vice-CEO of Cajas Rurales Unidas
Dña. Pilar Trueba Gutiérrez (until January 31st, 2013)
D. José María Roldán Alegre (until October 14th, 2013)
Substitute chair D. Roberto Ugena Torrejón
suplentes Director of the Legal Department of Banco de España
D. Jose María Lamamie de Clairac Delgado (from February 1st, 2013)
Director of the Inspection Department II of Banco de España
D. Jaime Guardiola Romojaro
CEO of Banco Sabadell, SA
D. Francisco Gómez Martín (from February 18th , de 2013)
CEO of Banco Popular, SA
D. Amado Franco Lahoz
President of Ibercaja Banco, SA
D. Braulio Medel Cámara
President of Unicaja Banco, SA
D. Dimas Rodríguez Rute
Managing Director of Caja Rural de Granada
D. Rafael López-Taruella Martín
Managing Director of Caja Rural del Sur (from September 18th, 2013)
D. Mariano Herrera García-Canturri (until January 31st, 2013)
D. Roberto Higuera Montejo (until February 18th, 2013)
D. Joaquín Vázquez López (until September 18th, 2013)
M Managing Director Mr. Luis Lorenzo Olmeda
Certain changes have taken place in the FGDEC Management Committee since 31 December 2013: Mr.
Pedro Comín Rodríguez and Ms. Cristina de Parias Halcón have been appointed to the Committee and Mr.
Ramón Quintana Aguirre and Mr. Jaime Sáenz de Tejada Pulido have resigned.
3FONDO DE GARANTÍA DE DEPÓSITOS DE ENTIDADES DE CRÉDITO
ANUAL REPORT 2013
TABLE OF CONTENTS
Page
DIRECTORS`S REPORT 2013 ....................................................................................... 7
INDEPENDENT AUDITOR`S REPORT ....................................................................... 17
ANNUAL ACCOUNTS 2013
Balance Sheet ................................................................................................... 18
Income statement ........................................................................................... 20
Statement of changes in equity .................................................................. 21
Cash Flow Statement...................................................................................... 22
ANNUAL REPORT FOR 2013
Notes to the annual accounts .................................................................... 24
Notes to the balance sheet .......................................................................... 33
Notes to the income statement.................................................................. 60
Appendix 1 List of shareholdings .......................................................................... 69
Appendix 2 Historical breakdown of contributions, equity and investments 71
Appendix 3 Member credit institutions at 31 December 2013.................... 74
Appendix 4 Credit institutions rehabilitations ................................................... 78
Appendix 5 Legislation ............................................................................................. 82
4FONDO DE GARANTÍA DE DEPÓSITOS DE ENTIDADES DE CRÉDITO
Under the article 2.º - 4 b) of Royal Decree 2606/1996, of December 20, the Management
Committee is competent to approve the accounts that the Deposit Guarantee Fund of Credit
Institutions must submit each year to their members and to Banco de España.
In fulfilment of those rules, on 3 June 2014 are formulated the balance sheet, the income statement,
the statement of changes in equity, the statement of cash flows and the related notes, that together
with the Directors’ Report, offer information about the activities performed during the year 2013,
present fairly the financial position, the equity and the financial situation of the Deposit Guarantee
Fund of Credit Institutions, the results of its management and the source and allocation of funds for
the year 2012.
These annual accounts have been audited by PricewaterhouseCoopers Auditores, S.L., and the
report is included herein.
5DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS
Annual Accounts and Director`s report for the year 2013
Abbreviations and signs
FGDEC: Fondo de Garantía de Depósitos de Entidades de Crédito (Deposit Guarantee Fund for Credit Institutions)
FGDEB Fondo de Garantía de Depósitos en Establecimientos Bancarios (Deposit Guarantee Fund for Banks)
FGDCA: Fondo de Garantía de Depósitos en Cajas de Ahorro (Deposit Guarantee Fund for Savings Banks)
FGDCC: Fondo de Garantía de Depósitos en Cooperativas de Crédito (Deposit Guarantee Fund for Credit Cooperatives)
FROB: Fondo de Reestructuración Ordenada Bancaria (Bank Restructuring Fund)
Manager: Management Company of the Deposit Guarantee Fund for Credit Institutions, AIE.
--: Amount equal to zero or inexistent with respect to the item in question
( ): Negative figure
6DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS
DIRECTOR`S REPORT FOR THE YEAR 2013
Formation
1. On 15 October 2011, Royal Decree Law 16/2011, of 14 October, whereby the Deposit
Guarantee Fund of Credit Institutions was created, came into effect and declared the dissolution
of the three Deposit Guarantee Funds that existed up until now (the Deposit Guarantee Fund for
Savings Banks - FGDCA, the Deposit Guarantee Fund for Banking Establishments - FGDEB and the
Deposit Guarantee Fund for Credit Cooperative Banks - FGDCC), whose assets will be covered by
the new Deposit Guarantee Fund of Credit Institutions - FGDEC which subrogates to all the rights
and obligations of the former.
The references shown as FGDCA, FGDEB and FGDCC are referred to the three Deposit Guarantee
Funds dissolved.
Organization
2. The FGDEC has its own legal personality and full capacity to carry on its objects under Spanish
private law without being subject to the regulations governing public bodies and government
corporations.
The purpose of the FGDEC is to guarantee deposits in credit institutions in accordance with the
provisions of Royal Decree-Law 16/2011 and the enabling regulations thereof.
To fulfil its objects, the FGDEC utilises the following resources: contributions from member
institutions provided for in the regulations governing its operation; b) extraordinary contributions
by these institutions, distributed according to the calculation base for contributions, which will
be treated as equity after being agreed; and c) funds raised on stock markets, from loans or from
any other kind of borrowing operation.
Activity carried out during the year
3. The management of the FGDEC in 2013 centred on the action taken and the guidelines
followed in recent years, as concerns:
Management of liquid assets in investments in Government debt.
Income from investments in Spanish public debt has amounted to €3,781.9 thousand
(€27,269.1 thousand in 2012) which, based on an average investment in the year of
€639.5 million, has provided an annual yield of 0.59%.
7However, financial results, which include revenues from investments, the cost of
financing received, income from the sale of public debt and the effect of the financial
restatement of the payments expected by reason of the asset protection schemes
("APS") granted and from other expected payments and collections, have given rise to a
net loss of €113,919.1 thousand (€47,388.2 thousand in 2012).
Operations related to the management and disinvestment of the assets acquired in 2010
from Caja de Ahorros de Castilla-La Mancha (CCM), under that entity's action plan.
Operations related to the management and development of portfolios of assets covered
by asset protection schemes granted in 2010, 2011 and 2012 to Banco de Castilla La-
Mancha, SA, (BdCLM), Banco CAM, SA, and Unnim Banc, SA, respectively, in compliance,
in each case, with the action or restructuring plan approved in this respect.
Actions related to the acquisition of two shareholdings in Catalunya Banc, SA, and NCG
Banco, SA, respectively, through voluntary share acquisition offerings announced by the
FGDEC on 10 June 2013.
Management of loans to investee entities and the remaining assets acquired in previous
operations in credit institutions.
Preparation of management committees and implementation of the decisions taken.
Action plan for Caja de Ahorros de Castilla La Mancha
4. The management and divestment of the assets derived from the actions taken in Caja de
Ahorros de Castilla-La Mancha have continued. In 2012, these assets were grouped into the
company Inversiones Corporativas, SA, (IC), also derived from the CCM and, since 2010, a 100%
subsidiary of the FGDEC, through a non-cash contribution of those assets thereto in a share
capital increase.
Following this grouping, during 2013 the funds derived from the divestments carried out have
been applied to the expenses of IC or its investees, and to reducing its debt. Accordingly, the
FGDEC has not received any cash amount from these divestments.
In addition, as part of the CCM action plan, the FGDEC granted an APS to BdCLM on a certain
asset portfolio, with the FGDEC assuming the losses that could arise therein over a period of
five years as from 31 December 2009. This term could be extended to seven years in certain
circumstances, above the provisions pertaining to that asset portfolio and up to a given
maximum. To this end, a guarantee deposit for the same sum as that maximum was set up in
BdCLM. At end-2013 the FGDEC has covered the total of the losses expected to be incurred up
to the termination of the APS in accordance with the latest available estimate.
8At the date of preparation of the FY 2013 annual accounts, the FGDEC had received a
notification from BdCLM expressing its interest in negotiating an extension to the APS.
Restructuring of Banco CAM, SA
5. The commitments derived from the restructuring of Banco CAM, SA in force in 2013 pertain to
the APS granted on a certain portfolio of assets, with the FGDEC assuming 80% of the losses that
could arise therein over a term of ten years as from 31 July 2011, above the provisions existing
with respect to that asset portfolio. At end-2013 the FGDEC has recorded at present value the
amount of the payments to be made to cover the losses expected to be incurred to the
termination of the APS in accordance with the latest available estimate.
Restructuring of Unnim Banc, SA
6. The commitments derived from the restructuring of Unnim Banc, SA in force in 2013 pertain
to the APS granted on a certain portfolio, with the FGDEC assuming 80% of the losses that could
arise therein over a term of ten years as from 31 October 2011, above the provisions existing
with respect to that asset portfolio. At end-2013 the FGDEC has recorded at present value the
amount of the payments to be made to cover the losses expected to be incurred to the
termination of the APS in accordance with the latest available estimate.
European financial aid
7. On 16 July 2012, in order to facilitate the European financial aid operation for the
recapitalisation of Spanish financial institutions in the terms laid down in Additional Provision 5
of Royal Decree-Law 21/2012 on liquidity and financial measures by the public authorities, and
under the provisions of paragraph 4 of that Provision, the FGDEC entered into a guarantee
contract in favour of the Republic of Finland, undertaking to furnish a pledge equivalent to 40%
of the risk assumed by that state with respect to the disbursements made by the European
Financial Stability Fund to the Kingdom of Spain. This contract was subsequently adapted to the
definitive implementation of the European Stability Mechanism through the relevant Addenda
on 28 November 2012.
The Republic of Finland's share of the European Stability Mechanism is 1.7974% and the
disbursements made by it to the Kingdom of Spain were €39,468 million in November 2012 and
€1,865 million in January 2013, by reason of which the FGDEC created the respective guarantee
deposits in cash, the first on 28 November 2012 in the amount of €283,759.1 thousand and the
second on 22 January 2013 for €13,408.6 thousand.
Subsequently, under the terms of the guarantee contract, these amounts were invested in
securities issued by Member States of the euro zone with the highest credit rating. It is
considered that the granting of that guarantee will not entail any loss for the FGDEC.
9During 2013, €3,327.1 thousand has been paid with respect to the coupons of the securities
acquired. In accordance with the terms of the contract, these funds have been used to acquire
further securities issued by Member States of the euro zone with the highest credit rating, and
are retained as security for the operation.
Subscription of shares in NCG Banco, SA and Catalunya Banc, SA
8. In accordance with Additional Provision Five of Royal Decree Law 21/2012, on liquidity
measures for the public authorities and in the financial area, amended by Article 2 of Royal
Decree-Law 6/2013 on the protection of holders of certain savings and investment products and
other financial measures, on 10 June 2013 the FGDEC announced voluntary offerings for the
acquisition of ordinary shares in NCG Banco, SA, and Catalunya Banc, SA, in accordance with
certain consideration and conditions. As a result of these offerings, the FGDEC acquired
640,964,146 shares in Catalunya Banc, SA, (representing 32.4% of its capital) for a total cost of
€1,000,939.9 thousand, and 603,671,160 shares in NCG Banco, SA, (representing 25.6% of its
capital) for a total cost of €802,364.1 thousand. Simultaneously, it concluded certain agreements
to partially cover the fluctuations in the value and the result of the sale of those shares with the
controlling shareholder, the Bank Restructuring Fund (FROB).
On 18 December 2013, the FROB reported the adjudication, after studying the binding offers
received in the sale process, of a shareholding of 88.3% in NCG Banco, SA to Banco Etcheverría
SA, (Grupo Banesco). As provided in Articles 26.2 and 64.1.c of Law 9/2012 on the restructuring
and rehabilitation of credit institutions, the above sale process included the shares owned by the
FGDEC. This operation is contingent on compliance with the relevant legal requirements and
approval by the competent national and international authorities.
In view of the conditions of the operation and the amounts that the FGDEC is expected to receive
from it, at the end of 2013 the necessary adjustments have been made to bring the book value of
the holding of FGDEC in NCG Banco, SA, into line with these receipts.
The holding in Catalunya Banc, SA is recorded at equity value reflected in the audited annual
accounts of its consolidated group for the year ended 31 December 2013.
At the date of this report, the Bank Restructuring Fund (FROB), which is the majority and
controlling shareholder of Catalunya Banc, SA, has initiated the process for selling that bank. This
process includes the holding of FGDEC. It has decided, for reasons of confidentiality inherent to
transactions of this kind, not to disclose its estimate of the selling price that it considers might be
obtained on the basis of the market research it has performed.
10Other restructuring costs of member institutions
9. On 29 October 2012, the Management Committee of the FGDEC, considering the interest and
benefit for the member institutions derived from the contracts entered into by the Bank of Spain
and described in a communication addressed to the FGDEC with the aim of achieving a diagnosis
of the situation in the Spanish financial system required to enable the European assistance in the
recapitalisation of Spanish banks, and in accordance with Additional Provision 5.2. of Royal
Decree Law 21/2012, amended by Royal Decree Law 24/2012, agreed that the FGDEC should
repay to the Bank of Spain the cost of these contracts for a total of €31,398.9 thousand, as a
result of which that amount was provided for in 2012.
The payment, made in 2013, finally amounted to €37,932.3 thousand, including the VAT paid.
This is the largest cost item recorded in the year.
Disputes with the heirs of Mr. Domingo López Alonso
10. In relation to the disputes with Mr. Domingo López Alonso, now with his heirs, against
Banco de Valladolid, SA, (now, Barclays Bank, SA,) which are under the legal supervision and
economic coverage of the FGDEC, it should be recalled that the FGDEC's report for 2012 stated
that, in a ruling dated 27 July 2012, the Court of First Instance number 4 of Madrid had
determined and listed the securities that Barclays Bank, SA, should deliver in compliance with
the judgement of 6 October 1998. That bank delivered all these securities to the court and
requested that the proceedings be terminated and archived.
It should be noted that on 15 March 2013, the Madrid Provincial Court announced that it had
rejected the appeal against refusal of leave to appeal filed by the executing party after the court
had refused to admit the appeal filed against that ruling of 27 July 2012 on the grounds that the
relevant time limit had expired.
More recently, on 20 November 2013, the Court of First Instance No. 4 ruled not to admit a new
appeal lodged by the heirs of Mr. Domingo López Alonso, this time against a ruling by the Court
of 17 October 2013 which rejected a prior appeal for reversal in which said heir sought to re-
initiate the proceedings for economic compensation, on the grounds that the securities
delivered by Barclays were worthless. They also filed an appeal against refusal of leave to appeal
with the Madrid Provincial Court.
In addition, in relation to the legal proceedings brought by Barclays Bank, SA in order to recover
the amounts (€27.4 million) incorrectly transferred to Mr. Domingo López Alonso at the end of
2003 in the provisional enforcement of the judgement in the suit brought by him against that
bank, during 2013 the investigation has continued to ascertain the destination of the money
delivered to that person, through the banks to which that money was transferred from the
Court's consignment account.
11Finally, in another case in which amounts are claimed from the heirs of Mr. Domingo López
Alonso (arising from a ruling in 1981), it should be noted that the Madrid Provincial Court
confirmed on 11 February 2013 a previous ruling of 23 October 2009 of the Court of First
Instance No. 21, which set at €1.6 million the amounts pending payment to the FGDEC.
Investment coverage function
11. Under a Resolution by the Secretary of State for the Economy dated 1 August 2002, issued
in compliance with the provisions of Article 74.3 of Law 24/2001 on fiscal, administrative and
social measures, the percentages to be paid by each of the three Deposit Guarantee Funds
existing at the time and the General Investment Guarantee Fund were set with respect to the
total indemnities due to non-compliance with return obligations occurring with respect to
investment service enterprises before the entry into force of Law 24/2001.
By virtue of that resolution, the percentage distribution of the total of the indemnities to be paid
to the prejudiced investors among the dissolved Deposit Guarantee Funds and the General
Investment Guarantee Fund, was determined as follows:
Deposit Guarantee Fund Credit Institutions 99.83%
Guarantee Fund Bank Deposit ...........................................................................................................
53.98%
Deposit Guarantee Fund for Savings Banks........................................................................................
40.90%
Deposit Guarantee Fund for Credit Cooperatives .............................................................................
4.95%
General Investment Guarantee Fund .................................................................................................
0.17%
The indemnities estimated by Gestora del Fondo General de Garantía de Inversiones, SA, totalled
€79.7 million, with €79.5 million corresponding to the Deposit Guarantee Funds. During 2013, €36
thousand was paid. At the year end, the indemnities pending payment by the FGDEC totalled €5.7
million.
12Institutions included and their contributions
12. At 1 January 2013, there were 181 member institutions. During 2013, two new member
entities have jointed and 17 members have departed. Therefore, at the year end there are 166
member institutions. Appendix 3 includes a list of member institutions at 31 December 2013.
On 3 December 2011, Royal Decree Law 19/2011 came into effect, amending Royal Decree Law
16/2011 which specified the annual contributions to be made by member institutions
at 0.2% of the calculation basis established in Articles 3 and 4 of Royal Decree 2606/1996, also
laying down a maximum limit of 0.3%. The contributions are to be paid on the last working day of
February.
On 23 March 2013, Royal Decree Law 6/2013 on the protection of holders of certain savings and
investment products and other financial measures was enacted, which amended Additional
Provision 5 of Royal Decree law 21/2012 on liquidity measures for the public authorities and in the
financial area, stipulating that the annual contribution envisaged in Article 3 of Royal Decree
2606/1996 on Deposit Guarantee Funds for Credit Institutions, to be made by member institutions
with respect to deposits at 31 December 2012, was to be increased, exceptionally and on a one-off
basis, by 0.3%. This increase was to be paid in two tranches: the first consisting of two-fifths of the
total increase, to be paid within twenty working days of 31 December 2013, and the second
consisting of the remaining three-fifths, to be paid after 1 January 2014 within a maximum of seven
years in accordance with the payment schedule fixed by the Management Committee,
notwithstanding which the amount pertaining to the second tranche is to be recognised as equity
in the FGDEC on the date on which the first tranche is paid.
It is also stipulated that, in relation to the first tranche, the Management Committee of the FGDEC
may establish, through resolutions adopted by a majority of two thirds of members: (i) a shift to
the second tranche of the contribution corresponding to this initial tranche of up to a maximum of
50%; (ii) the non-application of this tranche to the institutions referred to in Additional Provision
Nine of Law 9/2012; (iii) a deduction of up 50% in the contributions by member institutions whose
calculation basis does not exceed € 5,000 million; and (iv) a deduction of up to 30% of the amounts
invested by the institutions before 31 December 2013 in the subscription or acquisition of
subordinated debt instruments issued by the Management Company for Assets Derived from Bank
Restructuring. With respect to the foregoing, the sum of the deductions mentioned in iii) and iv)
above may not exceed 90% of the amount which, based on the deposit balance maintained at 31
December 2012, each entity is required to pay.
To arrange payment of the first tranche of the additional contribution, on 22 November 2013 the
Management Committee agreed to the adoption, within the framework of the authorisation
granted by the legislation referred to above, of the deductions envisaged therein, thus specifying
the amount of the first tranche payable by each member institution, for a total of €233,790.8
thousand, recorded as an increase in the equity of the FGDEC in 2013 and paid by the member
institutions on 22 January 2014. Also on that date, the FGDEC recorded as an increase in equity
€1,474,189.8 thousand, equivalent to the present value of the receipts expected from the second
tranche.
13Under current legislation, the Bank of Spain is not required to make any contribution.
Guaranteed Deposits and equity coverage
13. On 3 June 2010 Royal Decree 628/2010 was enacted, amending Royal Decree 2606/1996, de
20 on deposit guarantee funds in credit institutions and Royal Decree 948/2001 on indemnity
systems for investors, stipulating that deposits guaranteed shall have a limit of the amount of
€100,000 per account holder, and the guaranteed amount for investors that have entrusted to the
credit institution securities and financial instruments shall be independent and shall be at least
€100,000 per holder.
Fluctuations in guaranteed deposits corresponding to the aggregate of the Deposit Guarantee
Funds in recent years have been as follows, in million euro:
Deposits and Basis of Deposits and
% covered/
Year securities contributions securities
guaranteed
guaranteed covered
31.12.1993 279,856.6 279,856.6 133,727.7 47.78%
31.12.1994 298,108.4 298,108.4 142,104.8 47.67%
31.12.1995 319,992.3 319,992.3 148,661.7 46.46%
31.12.1996 316,887.0 316,887.0 185,299.7 58.48%
31.12.1997 317,391.6 317,391.6 182,881.1 57.62%
31.12.1998 337,448.6 337,448.6 185,378.4 54.94%
31.12.1999 377,872.2 377,872.2 205,270.6 54.32%
31.12.2000 417,778.8 417,778.8 244,364.3 58.49%
31.12.2001 742,921.9 477,849.7 311,175.4 41.89%
31.12.2002 740,303.0 508,062.7 318,361.1 43.00%
31.12.2003 811,140.3 547,543.0 335,517.1 41.36%
31.12.2004 849,784.8 587,193.0 350,629.5 41.26%
31.12.2005 950,281.4 652,226.3 371,890.7 39.13%
31.12.2006 1,127,567.1 753,000.5 396,649.8 35.18%
31.12.2007 1,209,858.1 829,527.1 420,353.0 34.74%
31.12.2008 1,171,019.2 888,317.6 736,271.3 62.87%
31.12.2009 1,221,925.9 917,702.5 781,115.6 63.92%
31.12.2010 1,216,780.8 948,386.4 790,302.7 64.95%
31.12.2011 1,213,656.3 923,759.4 792,281.2 65.28%
31.12.2012 1,154,804.3 904,953.0 794,845.2 68.83%
31.12.2013 1,197,049.1 936,898.2 796,873.8 66.57%
Since 31 December 2001, the guaranteed deposits and securities include guaranteed securities and
financial instruments. The calculation basis for the contributions includes cash deposits and 5% of
securities and financial instruments. At 31 December 2013, the amount of guaranteed cash
deposits and securities has increased by 3.2% compared with the previous year.
14Under Article 3.4 of Royal Decree 2606/1996, the contributions will be stopped when the equity
fund not committed to operations performed under the objects of the FGDEC equals or exceeds 1%
of the calculation basis of the contributions.
At 31 December 2013, the FGDEC does not have an uncommitted equity fund.
Financial situation
14. Available financial assets amount to € 537,856.8 thousand, and have diminished by €317,560.3
thousand during the year. Financial resources have been invested in government debt, in
compliance with Article 3.7 of Royal Decree 2606/1996, which provides that uncommitted equity
of the FGDEC must be invested in public debt or other high liquidity and low risk assets.
At the year end, investments in government debt amounts to €59,787.8 thousand, invested in
Government Bonds and Debentures. The average maturity period is 150 days. Cash and cash
equivalents also includes €4,996.9 thousand relating to public debt.
Extraordinary contribution approved
15. The FGDEC Management Committee, at a meeting held on 30 July 2012 and in order to
restore the financial position of the FGDEC in accordance with Article 6.2 of Royal Decree Law
16/2011, agreed to an extraordinary contribution by the member institutions for a nominal
amount of €2,346,000 thousand, distributed according to the calculation basis for contributions
at 31 December 2011, to be paid by each institution through ten equal annual instalments, with
annual payments totalling €234,600 thousand, which will be paid on the same day that the
ordinary annual contributions are paid. Each member institution may deduct that payment of the
ordinary annual contribution which they pay on that same date, as the case may be, up to the
amount of the ordinary contribution.
The first annual instalment was paid in 2013.
Results for the year and equity
16. The year ended with a deficit of €677,822.1 thousand, which breaks down as follows
(thousand euro):
Credit institution Total
Items Financial
Management restructuring (€'000)
Income ...................................................... 1,576,362.1 6,311.1 -- 1,582,673.2
Expenses.................................................... (5,655.8) (122,254.0) -- (127,909.8)
Profit/(loss) on fixed asset disposals ......... 617.1 -- -- 617.1
Profit/(loss) on divestments ...................... -- 2,023.8 -- 2,023.8
Extraordinary items ................................... (1,374,268.3) -- -- (1,374,268.3)
Restructuring or rehabilitation cost .......... -- -- (760,958.1) (760,958.1)
Total .......................................................... 197,055.1 (113,919.1) (760,958.1) (677,822.1)
15Management income includes €1,575,314.8 thousand of ordinary contributions. Extraordinary
items consist of increased costs derived from credit institution restructuring processes compared
with those calculated in previous years.
Credit institution restructuring or rehabilitation includes actions, restructuring and operations
carried out during the year.
Accumulated equity at 31 December 2013 is negative by €1,637,313.6 thousand, including the
deficit for the year.
Subsequently, on 22 January 2014 an increase of €1,474,189.7 thousand in equity was recorded,
relating to the second tranche of the extraordinary contribution provided for in Additional Provision
Five of Royal Decree Law 21/2012, mentioned in 12 above, and on 28 February 2014 income
amounting to €1,639,228.5 thousand was recorded relating to the ordinary annual contributions by
member institutions. Thanks to these two amounts, equity is positive at the date of preparation of
the annual accounts.
In addition, on 28 February 2014 the FGDEC received the second annual payment of the
extraordinary contribution described in 15 above, in the amount of €234,600 thousand, although
the receipt of this sum, while impacting the FGDEC's financial situation, does not affect its equity as
it had already been recorded as an asset and as equity on its balance sheet.
Financial and economic control
Court of Accounts
17. At the date of preparation of this report, the contracts concluded in 2013 have already been
sent to the Court of Accounts. In addition, on 27 March 2014 the Court of Auditors issued the
report on the legality of the FGDEC's actions relating to the banking sector restructuring, referring
to the period 2009-2012.
External audit
18. The audit report for the year drawn up by PricewaterhouseCoopers Auditores, S.L. is set out
below.
16Audit report
17DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS
Balance sheet at 31 December 2013 and 31 December 2012
Thousand euros
ASSETS Notes 31.12.2013 31.12.2012
NON CURRENT ASSETS
Intangible assets .............................................................. 8 27.6 24.6
Property, plant and equipment ...................................... 9 173.0 126.7
Investment in related companies ................................... 10 45,595.9 126.7
172,209.2
- Company shareholdings.................................................. 10.1 672,606.0 670,821.6
- Impairment of the shareholding .................................... 10.1 (627,010.1) (498,612.4)
Long term financial investments ..................................... 11 2,428,075.1 2,728,302.3
- Credit institutions - Extra payments contributions ........ 11.1 2,428,075.1
1,637,686.7 2,728,302.3
1,816,549.8
- Reimbursement rights APS ............................................ 11.2 1,637,686.7
2,475,000.0 2,475,000.0
- Impairment reimbursement rights APS ......................... 11.2 (2,049,323.0) 2,475,000.0
(1,949,000.0)
- Receivable - guarantees received APS ........................... 11.3 12,335.4 36,120.6
- Participating rights ......................................................... 11.4 52,219.8 36,120.6
63,102,6
- Public Debt (bonds and government bonds) ................. 11.5 297,547.2 63,102.6
--
- Deposit held as security ................................................. 11.5 1.0 283,759.1
- Subordinated Debt (net) ................................................ 11.6 2,004.0 2,169.3
- Credit Institutions shareholdings.................................... 11.7 186.3 --
- Other financial assets ..................................................... 11.8 224.1 375.7
- Loans to working personal ............................................. 11.9 193.6 225.2
Total non current assets .......................................... 2,473,871.6 2,900,662.8
CURRENT ASSETS
Assets available for sale ..............................................................12 146.0 140.5
Accounts receivable......................................................... 13 37,486.6 46,072.6
Loans to related companies .......................................................... 14 12,216.7 12,719.9
Short term financial investments .................................... 15 12,216.7
1,573,560.8 607,247.2
- Credit institutions - Extra payments outlays .................. 15.1 234,600.0 234,600.0
- Credit institutions - Extra payments contributions ........ 15.2 233,790.8 --
- Credit Institutions shareholdings .................................... 15.3 233,790.8
1,045,194.6 --
- Debt securities .............................................................. 15.4 1,045,194.6
59,787.8 356,487.3
- Interest receivable on financial investments ................. 15.5 187.6 16,159.9
Accruals ............................................................................ 16 84.1 76.4
Cash and others liquid assets .......................................... 17 9,490.8 248,169.9
Total current assets ......................................................... 1,632,985.0 914,426.5
TOTAL ASSETS .................................................................. 4,106,856.6 3,815,089.3
18DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS
Balance sheet at 31 December 2013 and 31 December 2012
Thousand euros
STOCKHOLDER´S EQUITY and LIABILITIES Notes 31.12.2013 31.12.2012
STOCKHOLDER’S EQUITY
Equity .................................................................................. 18 (1,637,229.3) (1,248,934.8)
- Retained Earnings ............................................................. 18 (1,248,934.8) (2,036,307.1)
- Extraordinary outlay ......................................................... 18.1 55,736.8 2,051,149.8
- Extraordinary payments .................................................... 18.2 233,790.8 --
- (Deficit) Surplus of the year .............................................. (677,822.1) (1,263,777.5)
Valuation Adjustments ....................................................... 18.3 (84.3) 1,449.4
Total Stockholder’s Equity ............................................. (1,637,313.6) (1,247,485.4)
NON CURRENT LIABILITIES
Long term provisions .......................................................... 19 5,033,481.4 3,786,618.0
- Provision for payment APS Banco CAM ........................... 19.1 3,647,933.6 2,680,545.1
- Provision for payment APS Unnim Banc .......................... 19.2 1,201,165.4 885,676.6
- Payables APS success fee CCM ......................................... 19.3 61,991.8 75,332.3
- Provision for asset management fee ............................... 19.4 72,045.5 58,993.9
- Obligations assumed with investee companies ............... 19.5 42,861.7 78,564.7
- Indemnities for legal prescription (art. 74, Ley 24/2001) 19.6 5,661.9 5,697.9
- Acquired commitments with personal ............................. 19.7 1,353.4 1,339.4
- Other Provisions ............................................................... 19.8 468.1 468.1
Long Term Debt .................................................................. 20 1,654.4 1,978.7
- Other liabilities ................................................................. 20 1,654.4 1,978.7
Total Non current liabilities................................................ 5,035,135.8 3,788,596.7
CURRENT LIABILITIES
Short term Debt .................................................................. 21 709,034.4 1,273,969.5
- Payables - Payment APS .................................................... 21.1 -- 252,935.2
- Loan received (FROB) ........................................................ 21.2 703,110.8 968,608.3
- Creditors and other payables ............................................ 21.3 5,644.6 52,230.3
- Taxes and Social Security payable ..................................... 21.4 277.5 194.0
- Creditors pending disbursements ..................................... 1.5 1.7
Liabilities with related companies ..................................... 22 -- 8.5
Total current liabilities ................................................... 709,034.4 1,273,978.0
Total Liabilities ............................................................... 5,744,170.2 5,062,574.7
TOTAL STOCKHOLDER’S EQUITY & LIABILITIES ............. 4,106,856.6 3,815, 089.3
19DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS
Income statement for the year 2013 and the year 2012
Thousand euros
CONTINUING OPERATIONS Notes 31.12.2013 31.12.2012
Revenue .............................................................................. 24 1,576,362.1 2,519,025.7
- Annual contributions from adhered entities...................... 24.1 1,575,314.8 2,517,413.6
- Professional Services ......................................................... 24.2 1,575,314.8
1,047.3 1,612.1
Operating expenses ............................................................ 25 (5,655.8) (4,009.5)
Result on disposal of assets ................................................ 26 617.1 403.9
Extraordinary expense ........................................................ 27 (1,374,268.3) (1,884,730.6)
Operating Income ........................................................... 197,055.1 630,689.5
Financial revenue ................................................................ 28 6,311.1 34,962.0
Financial expenses .............................................................. 29 (122,254.0) (85,529.7)
Result on disposal of financial investments ....................... 30 2,023.8 3,179.5
Financial Income ............................................................. (113,919.1) (47,388.2)
Results on continuing operations ................................... 83,136.0 583,301.3
Credit institutions restructuring cost ................................. 31 (760,958.1) (1,847,078.8)
Income (loss) from restructuring operations (760,958.1) (1,847,078.8)
REESTRUCTURACIÓN ...........................................................
PROFIT (LOSS) FOR THE YEAR ........................................... (677,822.1) (1,263,777.5)
20DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS
Statements of income and expense
During the year, except for the amount originating from the greater present value of the receipts
expected from the extraordinary contribution approved on 30 July 2012 from the member
institutions and the amount of the first tranche of the additional contribution laid down in Royal
Decree Law 21/2012, no income or expense item has been allocated directly to equity, other than
those relating to the statement of income and the adjustment for the valuation of investments.
Total statements of changes in Equity
Thousand euros
Items
31.12.2013 31.12.2012
INITIAL BALANCE ................................................................ (1,247,485.4) (2,025,515.2)
Annual contributions.................................................................. 1,575,314.8 2,517,413.6
Professional Services .................................................................. 1,047.3 1,612.1
Management Expenses .............................................................. (5,655.8) (4,009.5)
Result on disposal of assets ....................................................... 617.1 403.9
Extraordinary items .................................................................... (1,374,268.3) (1,884,730.6)
Operating Income ......................................................................... 197,055.1 630,689.5
Financial Income ........................................................................... (113,919.1) (47,388.2)
Restructuring costs for credit institutions .................................... (760,958.1) (1,847,078.8)
(Deficit) Surplus for the period ........................................... (677,822.1) (1,263,777.5)
VARIATION IN VALUE OF INVESTMENTS .............................. (1,533.7) (9,342.5)
EXTRAORDINARY PAYMENTS CREDIT INSTITUTIONS .................. 55,736.8 2,051,149.8
EXTRAORDINARY PAYMENT 1er. TRAMO RDL 21/2012 ........ 233,790.8 --
INCREASE (DECREASE) IN EQUITY ........................................ (389,828.2) 778,029.8
FINAL BALANCE .................................................................. (1,637,313.6) (1,247,485.4)
21DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS
Cash Flow Statement - Indirect Method
Thousand euros
2013 2012
Profit or loss for the year ................................................ (677,822.1) (1,263,777.5)
Adjustment to achieve cash flow from operating activities
2,262,866.5 2,722,722.8
.........................................................................................
Losses (net) by assets impairment .................................. 2,310,403.1 2,885,302.9
Provisioning expense (net) .............................................. (49,065.4) (159,122.6)
Financial Revenue............................................................ (5,429.0) (18,802.0)
Financial Expenses ........................................................... 6,957.8 15,344.5
Net increase (decrease) on operating activities ............ 692.3 19,547.5
Other receivables ............................................................ 700.8 20,209.5
Other operating liabilities ................................................ (8.5) (662.0)
Other cash flows from operating activities .................... 4,502.2 3,457.4
Other amounts collected ................................................. 4,502.2 3,457.4
NET CASH USED IN OPERATING ACTIVITIES OF CONTINUING
1,590,238.9 1,481,950.2
OPERATIONS....................................................................
INVESTING ACTIVITIES ..................................................... (1,575,123.9) (3.117.969,7)
Shareholding in Banco CAM, S.A ..................................... -- (338,286.1)
Related Group Companies............................................... (1,575,100.7) (2,779,295.8)
Financial Investments ...................................................... (46.3) (126.7)
Property, plant and equipment ....................................... (3.0) (24.6)
Other Assets .................................................................... 26.1 (236.5)
Cash provided by operating activities ............................ 553,087.7 1,529,877.9
Related Group companies ............................................... 503.2 248,447.9
Financial Investments ...................................................... 552,432.8 1,281,284.3
Other financial assets ...................................................... 151.7 145.7
NET CASH USED IN INVESTING ACTIVITIES OF CONTINUING
(1,022,036.2) (1,588,091.8)
OPERATIONS....................................................................
Issue of equity instruments ............................................ -- 2,051,149.8
Collections and payments from financial liabilities instruments (567,120.8) (1,956,338.9)
Other receivables ............................................................ (312.324,0) 1,019,828.9
Debt with Credit Institutions ........................................... (254.796,8) (2,965,297.8)
Assets management commission .................................... -- (10,870.0)
NET CASH PROVIDED BY FINANCING ACTIVITIES ........... (567,120.8) 94,810.9
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 1,081.9 (11,330.7)
Cash and cash equivalents at beginning of the year ..... 3,412.0 14,742.7
Cash and cash equivalents at end of the period ............ 4,493.9 3,412.0
22DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS
Cash Flow Statement - Direct Method
Thousand euros
2013 2012
OPERATING ACTIVITIES
Annual contributions................................................................. 1,809,914.8 2,524,562.9
Excess contribution refund ....................................................... (7,050.4) --
Loan received from FROB .......................................................... 700,000.0 --
Repayment of loan FROB .......................................................... (953,263.8) --
Interest expense loan FROB ...................................................... (18,484.6) --
Receivables- commissions APS .................................................. 15,932.7 40,425.7
Financial Revenue ...................................................................... 5,667.2 41,737.0
Spanish Financial system diagnosis ........................................... (37,932.3) --
Refund FOGAIN ......................................................................... 5,810.6 --
Operating Expenses ................................................................... (4,971.1 ) (6,274.4)
IVA refund ................................................................................. 1,496.7 --
Billing collection from services .................................................. 1,946.6 --
Realization of company shareholdings ...................................... (283.0) 77.4
Others ...................................................................................... (548.9) (37.0)
Transfer cash and bank of Management Company .................. -- 761.8
Total change in continuing activities ........................................ 1,518,234.5 2,601,253.4
INVESTING ACTIVITIES
Maturity and divestment of financial investments .................... 4,458,582.3 26,265,750.6
Acquisition of financial investments .......................................... (3,905,393.8) (25,620,827.5)
Repo refinancing operations ..................................................... 1,143,201.6 --
Maturity of repo financing transactions ................................... (1,143,908.4) --
Acquisition of shares Catalunya Banc, SA ................................. (1,000,939.9) --
Acquisition of shares NCG Banco, SA ........................................ (800,490.0) --
Deposits with euro area guarantee ........................................... (13.408,6) (283,759.1)
Application security deposits in euro zone ............................... (13,408.6)
297,167.7 --
Eurozone debt Interest ............................................................. 3,327.2 --
Acquisition eurozone debt ........................................................ (300,493.9) --
Creditors for granted APSs ........................................................ (254,796.8) (524,748.1)
Closing capital subscription Banco CAM, SA. ........................... -- (2,449,000.0)
Total change in investing activities ........................................... (1,517,152.6) (2,612,584.1)
Net increase (decrease) in cash or equivalents ....................... 1,081.9 (11,330.7)
Cash and cash equivalents at beginning of the year ............... 3,412.0 14,742.7
Cash and cash equivalents at end of the period ...................... 4,493.9 3,412.0
23DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS
NOTES CORRESPONDING TO THE YEAR ENDED 31 DE DECEMBER DE 2013
NOTES TO THE ANNUAL ACCOUNTS
1. FORMATION, NATURE, PURPOSE AND GUARANTEE
Formation: On 15 October 2011 Royal Decree Law 16/2011 came into force, leading to the
creation of the Deposit Guarantee Fund for Financial Institutions ("FGDEC") and the dissolution
of the three Deposit Guarantee Funds existing to that time (Deposit Guarantee funds for Savings
Banks, Banking Institutions and Credit Cooperatives) the equity of which was integrated into the
FGDEC, which was subrogated to all their rights and obligations.
Nature: The FGDEC has its own legal personality and full capacity to carry on its objects under
Spanish private law.
It is administered by a Management Committee comprising twelve members: six designated by
the Bank of Spain and six by the associations that represent the member credit institutions, in
compliance with applicable regulations. The Bank of Spain's representatives are appointed by its
executive committee. One of the members is the Deputy Governor, which is Chairman of the
Committee and has a casting vote in the event of a tied vote. The representatives of the member
institutions are appointed as follows: two by the associations representing the banks, two by
those representing savings banks and two by those representing credit cooperatives, in
compliance with applicable regulations.
The registered office is located in calle José Ortega y Gasset 22, Madrid. The Fund is nationwide
in scope.
Spanish mercantile legislation requires, with certain exceptions, that the parent companies of
corporate groups draw up the corresponding consolidated annual accounts and consolidated
directors' report. However, commercial legislation also establishes that, in exceptional cases in
which the application of statutory accounting regulations is incompatible with the true and fair
view that must be provided by the annual accounts, such regulations shall not apply.
24In this respect, the FGDEC has carried out an analysis of the necessity of presenting consolidated
annual accounts and, given its special legal nature, the specific legal rules governing it and the
special characteristics of the investments it makes in investees entities, it has concluded that it
does not need to draw up consolidated annual accounts, on the understanding that these would
not fulfil the objective of offering a true and fair view of the nature and purpose of the FGDEC's
holdings; furthermore, no obligation is laid down in this respect in the specific legislation
governing the FGDEC. The matters taken into consideration include the extremely exceptional
circumstances that require the involvement of the FGDEC in the processes in which it has
acquired majority shareholdings, the fact that the acquisition of these majority holdings forms
part of a restructuring process in which there is not expectation of gain, and the fact that the
presentation of these consolidated annual accounts would not provide relevant information for
their potential users.
Purposes: The purpose of the FGDEC is to guarantee deposits in credit institutions in accordance
with the provisions of Royal Decree-Law 16/2011 and the enabling regulations thereof.
Guarantee: The guarantees furnished are different and independent for cash deposits and for
deposits in securities or other financial instruments, which have a maximum and independent
limit of €100,000 each per depositor and credit institution, as established by Royal Decree
628/2010.
Cash deposits: Guaranteed deposits are considered to be credit balances in accounts, including
funds from transitory commercial situations and registered certificates of deposit, in any
currency, provided that they are made in Spain or another European Union Member State.
Securities deposits: Guaranteed deposits are considered to be marketable securities and financial
instruments provided for in the Stock Market Act which have been entrusted to the credit
institution to be deposited or registered, or to carry out an investment service with specific
characteristics described in applicable prevailing legislation.
2. BASIS OF PRESENTATION
a) Fair presentation
The balance sheet, income statement, statement of changes in equity and cash flow statement are
shown before the application of results and have been prepared on the basis of the accounting
records of the FGDEC. They are presented in accordance with current mercantile legislation in
order to provide a true and fair view of the equity and financial position at 31 December 2013 and
the results of operations and cash flows that have occurred during the year.
All mandatory accounting principles having a significant effect on these annual accounts have
been applied.
25b) Estimates made
In the accounts for the year estimates were used to quantify certain assets, liabilities, income,
expenses and commitments, which are described in each section. These estimates have been
made based on the best information available at the time of preparation and refer to 31
December 2013; however, it is possible that future events may have an impact on these
estimates. Any such impact is recognised in the income statement for the years in question
under the heading Extraordinary items.
c) Preparation of the annual accounts and comparison of information
The accounts for the year have been drawn up in accordance with the standards laid down in the
General Chart of Accounts, approved through Royal Decree 1514/2007, and the amendments
included therein through Royal Decree 1159/2010.
The annual accounts are presented in thousand euro, unless otherwise indicated and include the
figures for the previous year relating to each item in the 2013 balance sheet, income statement
and statement of changes in equity, for purposes of comparison.
d) Shareholdings in credit institutions
At 31 December 2013, the FGDEC has a direct interest in the capital of Catalunya Banc, SA,
(640,964,146 shares, representing 32.4% of its share capital, acquired in July 2013 through a
voluntary share acquisition offering), Banco CEISS SA (1,992,595 shares, representing 0.5% of its
share capital, derived from an exchange of fixed income securities issued by savings banks) and
Banco Mare Nostrum, SA, (2,691,098 shares, representing 0.2% of capital derived from an
exchange of fixed income securities issued by savings banks).
At the same date of 31 December 2013, the FGDEC also held an interest in the capital of NCG
Banco, SA (603,671,160 shares, representing 25.6% of the share capital, acquired in July 2013
through a voluntary share acquisition offering), although this holding is the object of a share
purchase agreement signed on 18 December 2013 and is subject to certain suspensive conditions
which had not yet been fulfilled at 31 December 2013.
In addition, through Inversiones Corporativas, SA, 100% owned by the FGDEC and derived from
CMM within the action plan of the entity, the FGDEC holds an interest in the capital of
CaixaBank, SA (341,334 shares, representing 0.01% of share capital, derived from the exchange
of fixed income securities issued by savings banks).
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