<![CDATA[CaixaBank - Communication]]> https://www.caixabank.com/aplnr/comunicacion/buscador/servicio.noticiasRSS_en.html WordPress <![CDATA[Colonial signs a sustainable loan with CaixaBank]]> https://blog.caixabank.es/?p=23645 2019-06-18T00:00:00.0Z 2019-06-18T00:00:00.0Z <![CDATA[Colonial signs a sustainable loan with CaixaBank]]> Colonial has signed a sustainable loan agreement with CaixaBank for 75 million euros, maturing in July 2024. The conditions of this kind of loan are linked to recognition of the good impact of the company's sustainability strategy, measured with indicators by independent entities.

The Colonial’s sustainability policy is included within the ESG - environmental, social and governance - strategy that the company is developing as one of its crucial pillars of corporate growth. It also includes the highest standards of Corporate Governance, the development of initiatives in social areas and in talent attraction, as well as an environmental sustainability strategy. In this latter area, Colonial already has environmental certification for its office buildings amounting to 91% of its full portfolio, far higher than the market average.

This clear commitment to ESG has led to the company acquiring significant certifications and qualifications over the last few years. These include the AA rating, one of the best ESG qualifications in Europe, granted by MSCI, and the EPRA GOLD award, received consecutively for the last three years. In March 2019, BREEAM and GRESB recognised the Colonial Group as the number one leader in Europe in terms of responsible investment, with the 'Award for Responsible Real Estate Investment' in the large portfolios category.

In turn, CaixaBank is one of the leading companies in the fight against climate change at a global level, recognised by the international organisation CDP. It is the first bank in the Ibex 35 to completely neutralise its calculated carbon footprint. In 2018, it dedicated nearly $1.5 billion to green loans, and collaborates with the European Investment Bank in financing projects focused on the fight against climate change.

The financial institution has been a pioneer in integrating its environmental strategy into the core business of the bank, with a strong contribution from the Risks department, which has incorporated environmental risk criteria into project evaluations, and the Business department, which looks for opportunities that contribute to climate action. The company continues to decisively contribute to the Sustainable Development Goals, with a special focus on Goal 13, Climate action.

The loan signed with CaixaBank allows Colonial to complete the restructuring of its outstanding debt from Axiare, improving margins and cancelling mortgage guarantees. After the signing of this loan, the Group's debt is €4.8 billion, with an average life of more than 5 years and a financial cost of less than 1.7%, whilst total liquidity amounts to €2 billion.

The low leverage of the Group (Loan to Value), of 39%, together with its asset quality, has allowed Colonial to obtain the rating BBB+ by Standard & Poor's, the highest rating in the Spanish real estate sector.

About Colonial

The Colonial Group is a Spanish RAIT listed on the Spanish stock exchange, and the leader in the prime office market in Europe. It is present in the main business areas of Barcelona, Madrid and Paris, with a portfolio of prime offices of more than one million m2, and a value of assets under management of more than €11 billion.

About CaixaBank  

CaixaBank is the leading financial group in retail banking in Spain with 15.6 million customers, and the most significant commercial network on the peninsula, with more than 5,000 branches. Since 2007, it is part of the group of financial institutions associated with the Equator Principles to guarantee that the projects to which it provides funding and advisory are carried out in a socially responsible way. In addition, since 2016 it is on the board of directors of the Spanish Green Growth Group, which fosters economic growth linked to a low-carbon economy. 

CaixaBank has also joined the United Nations Environment Programme - Finance Initiative (UNEP FI), which has three main goals: commitment to sustainable development, sustainability management and public awareness. Furthermore, the company is a member of the Dow Jones Sustainability Index (DJSI), a global index that assesses the behaviour of companies according to social, environmental and corporate governance criteria.

 

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Colonial has signed a sustainable loan agreement with CaixaBank for 75 million euros, maturing in July 2024. The conditions of this kind of loan are linked to recognition of the good impact of the company's sustainability strategy, measured with indicators by independent entities.

The Colonial’s sustainability policy is included within the ESG - environmental, social and governance - strategy that the company is developing as one of its crucial pillars of corporate growth. It also includes the highest standards of Corporate Governance, the development of initiatives in social areas and in talent attraction, as well as an environmental sustainability strategy. In this latter area, Colonial already has environmental certification for its office buildings amounting to 91% of its full portfolio, far higher than the market average.

This clear commitment to ESG has led to the company acquiring significant certifications and qualifications over the last few years. These include the AA rating, one of the best ESG qualifications in Europe, granted by MSCI, and the EPRA GOLD award, received consecutively for the last three years. In March 2019, BREEAM and GRESB recognised the Colonial Group as the number one leader in Europe in terms of responsible investment, with the 'Award for Responsible Real Estate Investment' in the large portfolios category.

In turn, CaixaBank is one of the leading companies in the fight against climate change at a global level, recognised by the international organisation CDP. It is the first bank in the Ibex 35 to completely neutralise its calculated carbon footprint. In 2018, it dedicated nearly $1.5 billion to green loans, and collaborates with the European Investment Bank in financing projects focused on the fight against climate change.

The financial institution has been a pioneer in integrating its environmental strategy into the core business of the bank, with a strong contribution from the Risks department, which has incorporated environmental risk criteria into project evaluations, and the Business department, which looks for opportunities that contribute to climate action. The company continues to decisively contribute to the Sustainable Development Goals, with a special focus on Goal 13, Climate action.

The loan signed with CaixaBank allows Colonial to complete the restructuring of its outstanding debt from Axiare, improving margins and cancelling mortgage guarantees. After the signing of this loan, the Group's debt is €4.8 billion, with an average life of more than 5 years and a financial cost of less than 1.7%, whilst total liquidity amounts to €2 billion.

The low leverage of the Group (Loan to Value), of 39%, together with its asset quality, has allowed Colonial to obtain the rating BBB+ by Standard & Poor's, the highest rating in the Spanish real estate sector.

About Colonial

The Colonial Group is a Spanish RAIT listed on the Spanish stock exchange, and the leader in the prime office market in Europe. It is present in the main business areas of Barcelona, Madrid and Paris, with a portfolio of prime offices of more than one million m2, and a value of assets under management of more than €11 billion.

About CaixaBank  

CaixaBank is the leading financial group in retail banking in Spain with 15.6 million customers, and the most significant commercial network on the peninsula, with more than 5,000 branches. Since 2007, it is part of the group of financial institutions associated with the Equator Principles to guarantee that the projects to which it provides funding and advisory are carried out in a socially responsible way. In addition, since 2016 it is on the board of directors of the Spanish Green Growth Group, which fosters economic growth linked to a low-carbon economy. 

CaixaBank has also joined the United Nations Environment Programme - Finance Initiative (UNEP FI), which has three main goals: commitment to sustainable development, sustainability management and public awareness. Furthermore, the company is a member of the Dow Jones Sustainability Index (DJSI), a global index that assesses the behaviour of companies according to social, environmental and corporate governance criteria.

 

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<![CDATA[The new rules of digital banking. Smarter systems with AI, with Pere Nebot]]> https://blog.caixabank.es/?p=23645 2019-06-13T18:00:00.0Z 2019-06-13T18:00:00.0Z <![CDATA[The new rules of digital banking. Smarter systems with AI, with Pere Nebot]]> Artificial intelligence is already transforming the financial sector in many ways, but especially in terms of machine learning, natural language processing and robotics.

Machine learning is a computer’s capacity to understand what is happening in the world around us, to learn about it and to translate that knowledge into algorithms. These algorithms can then be applied to, for example, risk models, fraud detection, or recruitment processes. On the other hand, CaixaBank chatbots, for example, are assistants created from the processing of natural language, spoken or written. These assistants help inform the customer around any CaixaBank product or service. Robotics is a technology that has many possibilities in the future of the financial services sector.

One of the challenges presented by the use of artificial intelligence in the banking sector is the management consumer data. This strategy is based on three axes: cybersecurity, data privacy, and the ethics of algorithms. At CaixaBank, a large investment is made to guarantee the security of customer data and, in particular, to monitor the ethics of the algorithms.

This interview is the fourth episode of the Masterclass with The Banker, “The new rules of digital banking”.

]]>
Artificial intelligence is already transforming the financial sector in many ways, but especially in terms of machine learning, natural language processing and robotics.

Machine learning is a computer’s capacity to understand what is happening in the world around us, to learn about it and to translate that knowledge into algorithms. These algorithms can then be applied to, for example, risk models, fraud detection, or recruitment processes. On the other hand, CaixaBank chatbots, for example, are assistants created from the processing of natural language, spoken or written. These assistants help inform the customer around any CaixaBank product or service. Robotics is a technology that has many possibilities in the future of the financial services sector.

One of the challenges presented by the use of artificial intelligence in the banking sector is the management consumer data. This strategy is based on three axes: cybersecurity, data privacy, and the ethics of algorithms. At CaixaBank, a large investment is made to guarantee the security of customer data and, in particular, to monitor the ethics of the algorithms.

This interview is the fourth episode of the Masterclass with The Banker, “The new rules of digital banking”.

]]>
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<![CDATA[CaixaBank shortlists 14 regional finalists for the national 2019 Women in Business Award]]> https://blog.caixabank.es/?p=23645 2019-06-13T00:00:00.0Z 2019-06-13T00:00:00.0Z <![CDATA[CaixaBank shortlists 14 regional finalists for the national 2019 Women in Business Award]]> CaixaBank has chosen the 14 regional winners who have qualified for the national stage of the 2019 CaixaBank Women in Business Award, which acknowledges the careers and talent of leading managers in Spain. The awards, now in their third annual edition, have been consolidated nationwide as a result of fostering diversity and contributing to promote gender equality throughout Spanish society. The purpose of the initiative is to increase the awareness, credibility, social acceptance and respect for women in business, helping to create social consensus on the key role of women in the economic and social landscape.

After the regional stage, the national winner will be chosen from among 14 regional finalists by a jury made up of the CaixaBank Diversity Committee, comprising members of the Steering Committee and various leaders of the diversity projects. This winner will be one of the Spanish representatives at the 2019 IWEC awards, within the framework of the 12th International Women's Entrepreneurial Challenge (IWEC), which will be held this year in New Delhi (India) from 10 to 13 November.

Regional winners who are candidates for the national 2019 CaixaBank Women in Business Award

The 14 winners of each of the CaixaBank regional departments vying for the national 2019 Women in Business Award and to be one of the Spanish representatives at the 2019 IWEC Awards are:

  • Western Andalusia: Arancha Manzanares Abásolo, Executive Vice-President of Ayesa Advance Technologies. It is a benchmark company in engineering, technology and consultancy in the industrial engineering, aeronautics and information systems sectors.
  • Eastern Andalusia and Murcia: María Dolores Ciurana Boadas, CEO of Faccsa. The company, founded in 1941, is dedicated to manufacturing cooked meat products. It is today one of the 10 main Spanish companies in its sector.
  • Aragon and La Rioja: Cristina Forner González, Chair of the Board of Directors of Unión Vitivinícola, a company founded in 1972, with long-standing experience in La Rioja winegrowing. It currently exports to more than 120 countries.
  • Balearic Islands: María Antonia Llull Sánchez, vicepresident of the Hipotels Hotels & Resorts, in the hotel and tourism sector, which has 30 establishments spread throughout Majorca, Lanzarote, Cádiz and Mexico.
  • Barcelona: Vanesa Martínez Chamorro, CEO of Carinsa (Creaciones Aromáticas Industriales), a multinational industrial group dedicated to manufacturing and marketing fragrances, functional ingredients and additives for food, perfumery and cosmetics.
  • Canary Islands: María del Carmen Pérez Lara, Deputy Chair and CEO of Grupo Pérez Moreno, a parent company of a group of businesses from the construction, property, tourism and services sectors.
  • Castile-La Mancha and Extremadura: Isabel Sánchez Serrano, CEO of Disfrimur, a Spanish company founded in 1997, dedicated to road freight.
  • Castile León and Asturias: Verónica Pascual Boé, CEO of ASTI Tech Group, a company dedicated to robotics engineering.
  • Catalonia: Anna Alzamora Planaguma, Manager of Alzamora Carton Packaging, a company specialising in manufacturing cardboard containers for its customers' packaging, active in various sectors.
  • Community of Valencia: Ángela Pérez Pérez, CEO and Chairwoman of the Board of Directors of Imegen, one of Europe’s leading laboratories specialised in Oncogenetics, dedicated to the research and development in the hman genetic diagnosis, that works in the field of the customised precision medicine by offering DNA analysis aimed at the characterisation of tumours and the assignment of the best treatment to every oncological patient.
  • Galicia: Emma Lustres Gómez, Administrator and Executive Producer of Vaca Films, an audiovisual and cinematographic production company for films intended both for the national and international markets.
  • Madrid: Ana Victoria Ugidos Álvarez, CEO of Btsa Biotecnologías Aplicadas, a company specialising in manufacturing and preparing antioxidants. It is the first European company to manufacture natural vitamin E and to prepare natural antioxidants for the food industry.
  • Navarre: Laura Sandúa Escribano, Manager of Aceites Sandúa, a company dedicated to packaging and marketing edible oils, a benchmark in Spain in the development of a special frying-type oil that does not contain palm oil.
  • Basque Country and Cantabria: María Luisa Galardi Aduriz, CEO of Ondarreta Mesas y Sillas, a company founded more than 40 years ago and dedicated to manufacturing designer furniture. It currently exports 40% of its production.

CaixaBank, committed to diversity

The CaixaBank Women in Business Award has been consolidated nationwide for fostering diversity and its contribution to promoting gender equality in the Spanish society. It is part of the CaixaBank Wengage programme, which works to develop and foster the value of diversity inside and outside the bank.

In the internal setting, CaixaBank features 40.1% of women in managerial positions as of the close of March 2019, and has an Equality Plan to contribute to real equality between men and women.

In the external setting, CaixaBank promotes awards and conferences to increase the visibility of women in many areas of responsibility. This is precisely the goal of the CaixaBank Women in Business Award, which acknowledges the careers of women in the business world; or the WONNOW awards, in collaboration with Microsoft, which acknowledge the best students in the STEM fields (Sciences, Technology, Engineering and Mathematics). In addition, in 2018, CaixaBank promoted 70 conferences in Spain to raise awareness on the value of diversity; and 11 Diversity Talks in the bank's international network.

The Wengage programme is framed within the CaixaBank model of socially responsible banking, characterised by its commitment to the environment, its social approach and its contribution to the development of people and society as a whole.

The IWEC Awards

The International Women’s Entrepreneurial Challenge (IWEC) is a worldwide network of female business leaders who nurture company ownership and cooperate on a global level with the goal of creating and distributing wealth in the business world.

Every year, within the framework of its Conference, IWEC hands out prestigious awards in recognition and support of businesswomen all over the world. Among other aspects, the IWEC awards aim to increase the awareness, credibility and responsibility of businesswomen, so that they can represent a major and decisive element in the development of the 21st century global economy.

The first edition of these awards took place in Barcelona in February 2007; subsequently, they were held in New York (2008), New Delhi (2009), Cape Town (2010), New York (2011), Barcelona (2012), Lima (2013), Stockholm (2014), Istanbul (2015), Brussels (2016), Seattle (2017) and Shanghai (2018).

In 2018, this international award ceremony recognised the careers of 48 businesswomen from 20 countries. The global turnover of the companies run by these women stands above 1.7 billion dollars and they employ more than 48,000 people.

]]>
CaixaBank has chosen the 14 regional winners who have qualified for the national stage of the 2019 CaixaBank Women in Business Award, which acknowledges the careers and talent of leading managers in Spain. The awards, now in their third annual edition, have been consolidated nationwide as a result of fostering diversity and contributing to promote gender equality throughout Spanish society. The purpose of the initiative is to increase the awareness, credibility, social acceptance and respect for women in business, helping to create social consensus on the key role of women in the economic and social landscape.

After the regional stage, the national winner will be chosen from among 14 regional finalists by a jury made up of the CaixaBank Diversity Committee, comprising members of the Steering Committee and various leaders of the diversity projects. This winner will be one of the Spanish representatives at the 2019 IWEC awards, within the framework of the 12th International Women's Entrepreneurial Challenge (IWEC), which will be held this year in New Delhi (India) from 10 to 13 November.

Regional winners who are candidates for the national 2019 CaixaBank Women in Business Award

The 14 winners of each of the CaixaBank regional departments vying for the national 2019 Women in Business Award and to be one of the Spanish representatives at the 2019 IWEC Awards are:

  • Western Andalusia: Arancha Manzanares Abásolo, Executive Vice-President of Ayesa Advance Technologies. It is a benchmark company in engineering, technology and consultancy in the industrial engineering, aeronautics and information systems sectors.
  • Eastern Andalusia and Murcia: María Dolores Ciurana Boadas, CEO of Faccsa. The company, founded in 1941, is dedicated to manufacturing cooked meat products. It is today one of the 10 main Spanish companies in its sector.
  • Aragon and La Rioja: Cristina Forner González, Chair of the Board of Directors of Unión Vitivinícola, a company founded in 1972, with long-standing experience in La Rioja winegrowing. It currently exports to more than 120 countries.
  • Balearic Islands: María Antonia Llull Sánchez, vicepresident of the Hipotels Hotels & Resorts, in the hotel and tourism sector, which has 30 establishments spread throughout Majorca, Lanzarote, Cádiz and Mexico.
  • Barcelona: Vanesa Martínez Chamorro, CEO of Carinsa (Creaciones Aromáticas Industriales), a multinational industrial group dedicated to manufacturing and marketing fragrances, functional ingredients and additives for food, perfumery and cosmetics.
  • Canary Islands: María del Carmen Pérez Lara, Deputy Chair and CEO of Grupo Pérez Moreno, a parent company of a group of businesses from the construction, property, tourism and services sectors.
  • Castile-La Mancha and Extremadura: Isabel Sánchez Serrano, CEO of Disfrimur, a Spanish company founded in 1997, dedicated to road freight.
  • Castile León and Asturias: Verónica Pascual Boé, CEO of ASTI Tech Group, a company dedicated to robotics engineering.
  • Catalonia: Anna Alzamora Planaguma, Manager of Alzamora Carton Packaging, a company specialising in manufacturing cardboard containers for its customers' packaging, active in various sectors.
  • Community of Valencia: Ángela Pérez Pérez, CEO and Chairwoman of the Board of Directors of Imegen, one of Europe’s leading laboratories specialised in Oncogenetics, dedicated to the research and development in the hman genetic diagnosis, that works in the field of the customised precision medicine by offering DNA analysis aimed at the characterisation of tumours and the assignment of the best treatment to every oncological patient.
  • Galicia: Emma Lustres Gómez, Administrator and Executive Producer of Vaca Films, an audiovisual and cinematographic production company for films intended both for the national and international markets.
  • Madrid: Ana Victoria Ugidos Álvarez, CEO of Btsa Biotecnologías Aplicadas, a company specialising in manufacturing and preparing antioxidants. It is the first European company to manufacture natural vitamin E and to prepare natural antioxidants for the food industry.
  • Navarre: Laura Sandúa Escribano, Manager of Aceites Sandúa, a company dedicated to packaging and marketing edible oils, a benchmark in Spain in the development of a special frying-type oil that does not contain palm oil.
  • Basque Country and Cantabria: María Luisa Galardi Aduriz, CEO of Ondarreta Mesas y Sillas, a company founded more than 40 years ago and dedicated to manufacturing designer furniture. It currently exports 40% of its production.

CaixaBank, committed to diversity

The CaixaBank Women in Business Award has been consolidated nationwide for fostering diversity and its contribution to promoting gender equality in the Spanish society. It is part of the CaixaBank Wengage programme, which works to develop and foster the value of diversity inside and outside the bank.

In the internal setting, CaixaBank features 40.1% of women in managerial positions as of the close of March 2019, and has an Equality Plan to contribute to real equality between men and women.

In the external setting, CaixaBank promotes awards and conferences to increase the visibility of women in many areas of responsibility. This is precisely the goal of the CaixaBank Women in Business Award, which acknowledges the careers of women in the business world; or the WONNOW awards, in collaboration with Microsoft, which acknowledge the best students in the STEM fields (Sciences, Technology, Engineering and Mathematics). In addition, in 2018, CaixaBank promoted 70 conferences in Spain to raise awareness on the value of diversity; and 11 Diversity Talks in the bank's international network.

The Wengage programme is framed within the CaixaBank model of socially responsible banking, characterised by its commitment to the environment, its social approach and its contribution to the development of people and society as a whole.

The IWEC Awards

The International Women’s Entrepreneurial Challenge (IWEC) is a worldwide network of female business leaders who nurture company ownership and cooperate on a global level with the goal of creating and distributing wealth in the business world.

Every year, within the framework of its Conference, IWEC hands out prestigious awards in recognition and support of businesswomen all over the world. Among other aspects, the IWEC awards aim to increase the awareness, credibility and responsibility of businesswomen, so that they can represent a major and decisive element in the development of the 21st century global economy.

The first edition of these awards took place in Barcelona in February 2007; subsequently, they were held in New York (2008), New Delhi (2009), Cape Town (2010), New York (2011), Barcelona (2012), Lima (2013), Stockholm (2014), Istanbul (2015), Brussels (2016), Seattle (2017) and Shanghai (2018).

In 2018, this international award ceremony recognised the careers of 48 businesswomen from 20 countries. The global turnover of the companies run by these women stands above 1.7 billion dollars and they employ more than 48,000 people.

]]>
0
<![CDATA[CaixaBank issues 1.25 billion euros in non-preferred senior debt, with a demand above 4 billion euros]]> https://blog.caixabank.es/?p=23645 2019-06-11T18:00:00.0Z 2019-06-11T18:00:00.0Z <![CDATA[CaixaBank issues 1.25 billion euros in non-preferred senior debt, with a demand above 4 billion euros]]> CaixaBank has closed its third bond issue of 2019, issuing non-preferred senior debt with a value of 1.25 billion euros. Investor confidence in CaixaBank's solvency has allowed the issuer to reach a demand above 4 billion, which it has made it possible to lower the interest rate by 30 basis points (bps) from the 175 bps offered in the announcement to the mid-swap + 145 pbs. Consequently, the coupon rate now sits at 1.375%.

This is CaixaBank's fourth time issuing non-preferred senior debt since its first issue of this debt class in 2017, and it is the first one with a 7-year maturity, which allows it to expand the profile of maturities in this class while substantially reducing cost. In January, CaixaBank issued 1 billion euros with a 5-year maturity at a price of 225 bps above the mid-swap.

Aside from the high demand, the issue featured more than 170 adjudicated corporate investors and strong participation from foreign investors, who represented around 85% of the demand, with 89% of the issue sold between investment funds, sovereign funds and insurance companies.

This new issue strengthens the position of the company in its compliance with MREL requirements scheduled for 1 January 2021 and reflects the intention of the bank to continue proactively building a safety net of “bail-in-able” subordinate debt that increases the protection of senior creditors and depositors.

The non-preferred senior debt has a lower order of seniority in the event of resolution or bankruptcy with respect to ordinary credits, but a higher order than subordinated debt. It was devised by lawmakers to boost banking solvency and ensure larger amounts of liabilities to enable losses to be absorbed in the event of resolution at a bank.

This issue increases the CaixaBank group's high quality liquid assets, which reached 64 billion euros on 31 March with a Liquidity Coverage Ratio (LCR) of 198%, well above of the minimum requirement of 100% for 2019.

The underwriting banks of this issue were Barclays, BNP Paribas, CaixaBank, Credit Suisse and Morgan Stanley.

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CaixaBank has closed its third bond issue of 2019, issuing non-preferred senior debt with a value of 1.25 billion euros. Investor confidence in CaixaBank's solvency has allowed the issuer to reach a demand above 4 billion, which it has made it possible to lower the interest rate by 30 basis points (bps) from the 175 bps offered in the announcement to the mid-swap + 145 pbs. Consequently, the coupon rate now sits at 1.375%.

This is CaixaBank's fourth time issuing non-preferred senior debt since its first issue of this debt class in 2017, and it is the first one with a 7-year maturity, which allows it to expand the profile of maturities in this class while substantially reducing cost. In January, CaixaBank issued 1 billion euros with a 5-year maturity at a price of 225 bps above the mid-swap.

Aside from the high demand, the issue featured more than 170 adjudicated corporate investors and strong participation from foreign investors, who represented around 85% of the demand, with 89% of the issue sold between investment funds, sovereign funds and insurance companies.

This new issue strengthens the position of the company in its compliance with MREL requirements scheduled for 1 January 2021 and reflects the intention of the bank to continue proactively building a safety net of “bail-in-able” subordinate debt that increases the protection of senior creditors and depositors.

The non-preferred senior debt has a lower order of seniority in the event of resolution or bankruptcy with respect to ordinary credits, but a higher order than subordinated debt. It was devised by lawmakers to boost banking solvency and ensure larger amounts of liabilities to enable losses to be absorbed in the event of resolution at a bank.

This issue increases the CaixaBank group's high quality liquid assets, which reached 64 billion euros on 31 March with a Liquidity Coverage Ratio (LCR) of 198%, well above of the minimum requirement of 100% for 2019.

The underwriting banks of this issue were Barclays, BNP Paribas, CaixaBank, Credit Suisse and Morgan Stanley.

]]>
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<![CDATA[CaixaBank, market leader in discretionary management with €24.3 billion portfolio, expands its range with the launch of Master Portfolios]]> https://blog.caixabank.es/?p=23645 2019-06-11T13:00:00.0Z 2019-06-11T13:00:00.0Z <![CDATA[CaixaBank, market leader in discretionary management with €24.3 billion portfolio, expands its range with the launch of Master Portfolios]]> CaixaBank Asset Management, Spain's leader in investment fund asset management and also leader in discretionary management with €24.3 billion in portfolios, has launched the Master Portfolios, a service that will feature advice from the following international asset managers: Amundi, JP Morgan, Morgan Stanley, Nomura and Robeco.

These portfolios will be available to the customers of Premier and Private Banking who have an advisory contract with the bank and invest more than €6,000. The assets of Premier Banking customers managed at the bank amount to €60,000, while those of Private Banking surpass €500,000.

Agility, flexibility and innovation

A range of 12 funds has been created exclusively for the Master Portfolios, designed with suitable investment diversification and comprehensive representation of the investment universe.

The Master Portfolios highlight all of CaixaBank AM's capabilities in terms of management, analysis, monitoring and control, and supplement them with knowledge and specialisation – both in terms of geographic aspects and specific asset types – of the best international managers with custom-made advisory mandates.

CaixaBank AM is responsible for distributing assets in the Master Portfolios and managing assets in which it has greatest expertise, as well as for running all fund operations. Similarly, it defines the activity framework for third-party managers, who will advise on the selection of assets (government bonds; international bonds; American equity, Japanese equity and emerging-market equity) in five of the new funds.

The bank receives advice from the manager selected for each kind of asset with a mandate designed by CaixaBank AM that accurately meets customer needs. Each “Advised By” fund has a designated CaixaBank AM manager who is ultimately responsible for that fund.

The Master funds that comprise these portfolios are direct investment funds and not funds of funds (except for the alternative investment fund), which means they can be managed with greater agility, since trades can be made with more immediacy, as well as cost savings, since they do not invest in funds. These funds have a "pure" investment approach, given that they solely invest in one kind of asset, with no mixed funds in the portfolio, allowing for a more accurate view of the composition of the Master Portfolio at all times.

The Master Portfolios provide greater transparency and flexibility of management trades, since a change in the allocation of assets will be reflected in an immediate trade in the portfolio.

Fewer costs for the holder

Implementation via advisory mandates will also be reflected in an economic improvement on costs borne by the holder, meaning the total cost of the service will be reduced.

All costs related to the Master Portfolios have been made more efficient, thus, the total expense ratio (TER) is lower than that of the foregoing Value Portfolios. This enables a more efficient and more transparent cost model, reduced on average by between 14-19 basis points in all profiles.

International manager selection process

Managers have been selected through a rigorous due diligence process. The process has been cross-cutting, led by specialists in each mandate, combining quantitative, qualitative, operational and solvency analysis of the managers, and according to which the various CaixaBank AM teams assessed the suitability of the selected manager.

Like CaixaBank AM, all managers advising on these Master funds have subscribed to the United Nations Principles for Responsible Investment (UNPRI).

In American Bonds. AMUNDI ASSET MANAGEMENT.

Europe's largest asset manager, with more than €1.4 trillion in assets under management, and present in 37 countries. Its fixed-income platform, with more than 200 professionals and six main investment centres, provides privileged access to this kind of asset. In American bonds, the subsidiary Amundi Pioneer offers one of the firmest investment processes, acknowledged for its history and results.

In American Equity. JP MORGAN ASSET MANAGEMENT.

More than a century of experience investing in the US equity market, the world's largest. Its wide range of funds benefits from a level of knowledge and experience that can be matched by very few; with 24 managers specialised in this kind of asset, backed by the analyses of a team of more than 40 analysts.

In Emerging-Market Equity. MORGAN STANLEY INVESTMENT MANAGEMENT.

A benchmark in emerging-market investment, with €480 billion under management. Present in this field since 1986, with a broad number of managers, analysts and traders, located in New York, Singapore and India. Its experience, global presence and resources establish it as a leading team to take advantage of investment opportunities arising in emerging markets.

In 1-3-year Government Bonds. ROBECO INSTITUTIONAL ASSET MANAGEMENT.

Leader in fixed-income investment and sustainability integration. The macro global fixed-income team has 40 years of experience, with renowned standing, and more than 30 experienced professionals. It combines a top-down vision by country and bottom-up vision by issuance. Robeco, through its subsidiary RobecoSAM, is highly committed to sustainability, the cornerstone of investment and a pillar in this strategy.

In Japanese Equity. NOMURA ASSET MANAGEMENT.

An asset manager with around 500 billion dollars in assets under management and 60 years of experience in Japanese equities. It features a team of more than 20 independent analysts specialised in Japanese companies, with which it held 3,100 meetings in 2018, and a unique database of more than 30 years of history. The Nomura Group was founded in 1925.

The range of Master funds comprises:

  • CaixaBank Master Renta Fija Corto Plazo, IF (short-term bonds)
  • CaixaBank Master Renta Fija Deuda Pública 3-7, IF (government bonds)
  • CaixaBank Master Renta Fija Privada Euro, IF (private bonds)
  • CaixaBank Master Renta Variable Europa, IF (European equity)
  • CaixaBank Master Renta Variable España, IF (Spanish equity)
  • CaixaBank Master Retorno Absoluto, IF (fund of funds)
  • CaixaBank Master Gestión Alternativa, IF (fund of funds)

And five “Advised By” funds:

    • CaixaBank Master Renta Fija Deuda Pública 1-3 Advised By, IF (government bonds)
    • CaixaBank Master Renta Fija Advised by, IF (bonds)
    • CaixaBank Master Renta Variable USA Advised By, IF (American equity)
    • CaixaBank Master Renta Variable Japón Advised By, IF (Japanese equity)
    • CaixaBank Master Renta Variable Emergente Advised By, IF (emerging-market equity)
]]>
CaixaBank Asset Management, Spain's leader in investment fund asset management and also leader in discretionary management with €24.3 billion in portfolios, has launched the Master Portfolios, a service that will feature advice from the following international asset managers: Amundi, JP Morgan, Morgan Stanley, Nomura and Robeco.

These portfolios will be available to the customers of Premier and Private Banking who have an advisory contract with the bank and invest more than €6,000. The assets of Premier Banking customers managed at the bank amount to €60,000, while those of Private Banking surpass €500,000.

Agility, flexibility and innovation

A range of 12 funds has been created exclusively for the Master Portfolios, designed with suitable investment diversification and comprehensive representation of the investment universe.

The Master Portfolios highlight all of CaixaBank AM's capabilities in terms of management, analysis, monitoring and control, and supplement them with knowledge and specialisation – both in terms of geographic aspects and specific asset types – of the best international managers with custom-made advisory mandates.

CaixaBank AM is responsible for distributing assets in the Master Portfolios and managing assets in which it has greatest expertise, as well as for running all fund operations. Similarly, it defines the activity framework for third-party managers, who will advise on the selection of assets (government bonds; international bonds; American equity, Japanese equity and emerging-market equity) in five of the new funds.

The bank receives advice from the manager selected for each kind of asset with a mandate designed by CaixaBank AM that accurately meets customer needs. Each “Advised By” fund has a designated CaixaBank AM manager who is ultimately responsible for that fund.

The Master funds that comprise these portfolios are direct investment funds and not funds of funds (except for the alternative investment fund), which means they can be managed with greater agility, since trades can be made with more immediacy, as well as cost savings, since they do not invest in funds. These funds have a "pure" investment approach, given that they solely invest in one kind of asset, with no mixed funds in the portfolio, allowing for a more accurate view of the composition of the Master Portfolio at all times.

The Master Portfolios provide greater transparency and flexibility of management trades, since a change in the allocation of assets will be reflected in an immediate trade in the portfolio.

Fewer costs for the holder

Implementation via advisory mandates will also be reflected in an economic improvement on costs borne by the holder, meaning the total cost of the service will be reduced.

All costs related to the Master Portfolios have been made more efficient, thus, the total expense ratio (TER) is lower than that of the foregoing Value Portfolios. This enables a more efficient and more transparent cost model, reduced on average by between 14-19 basis points in all profiles.

International manager selection process

Managers have been selected through a rigorous due diligence process. The process has been cross-cutting, led by specialists in each mandate, combining quantitative, qualitative, operational and solvency analysis of the managers, and according to which the various CaixaBank AM teams assessed the suitability of the selected manager.

Like CaixaBank AM, all managers advising on these Master funds have subscribed to the United Nations Principles for Responsible Investment (UNPRI).

In American Bonds. AMUNDI ASSET MANAGEMENT.

Europe's largest asset manager, with more than €1.4 trillion in assets under management, and present in 37 countries. Its fixed-income platform, with more than 200 professionals and six main investment centres, provides privileged access to this kind of asset. In American bonds, the subsidiary Amundi Pioneer offers one of the firmest investment processes, acknowledged for its history and results.

In American Equity. JP MORGAN ASSET MANAGEMENT.

More than a century of experience investing in the US equity market, the world's largest. Its wide range of funds benefits from a level of knowledge and experience that can be matched by very few; with 24 managers specialised in this kind of asset, backed by the analyses of a team of more than 40 analysts.

In Emerging-Market Equity. MORGAN STANLEY INVESTMENT MANAGEMENT.

A benchmark in emerging-market investment, with €480 billion under management. Present in this field since 1986, with a broad number of managers, analysts and traders, located in New York, Singapore and India. Its experience, global presence and resources establish it as a leading team to take advantage of investment opportunities arising in emerging markets.

In 1-3-year Government Bonds. ROBECO INSTITUTIONAL ASSET MANAGEMENT.

Leader in fixed-income investment and sustainability integration. The macro global fixed-income team has 40 years of experience, with renowned standing, and more than 30 experienced professionals. It combines a top-down vision by country and bottom-up vision by issuance. Robeco, through its subsidiary RobecoSAM, is highly committed to sustainability, the cornerstone of investment and a pillar in this strategy.

In Japanese Equity. NOMURA ASSET MANAGEMENT.

An asset manager with around 500 billion dollars in assets under management and 60 years of experience in Japanese equities. It features a team of more than 20 independent analysts specialised in Japanese companies, with which it held 3,100 meetings in 2018, and a unique database of more than 30 years of history. The Nomura Group was founded in 1925.

The range of Master funds comprises:

  • CaixaBank Master Renta Fija Corto Plazo, IF (short-term bonds)
  • CaixaBank Master Renta Fija Deuda Pública 3-7, IF (government bonds)
  • CaixaBank Master Renta Fija Privada Euro, IF (private bonds)
  • CaixaBank Master Renta Variable Europa, IF (European equity)
  • CaixaBank Master Renta Variable España, IF (Spanish equity)
  • CaixaBank Master Retorno Absoluto, IF (fund of funds)
  • CaixaBank Master Gestión Alternativa, IF (fund of funds)

And five “Advised By” funds:

    • CaixaBank Master Renta Fija Deuda Pública 1-3 Advised By, IF (government bonds)
    • CaixaBank Master Renta Fija Advised by, IF (bonds)
    • CaixaBank Master Renta Variable USA Advised By, IF (American equity)
    • CaixaBank Master Renta Variable Japón Advised By, IF (Japanese equity)
    • CaixaBank Master Renta Variable Emergente Advised By, IF (emerging-market equity)
]]>
0
<![CDATA[The new rules of digital banking. Improving CX with tech, with Mariona Vicens]]> https://blog.caixabank.es/?p=23645 2019-06-06T00:00:00.0Z 2019-06-06T00:00:00.0Z <![CDATA[The new rules of digital banking. Improving CX with tech, with Mariona Vicens]]> In today’s banking, one of the technologies with the potential to make the biggest impact is blockchain. An example of this is the we.trade platform, which CaixaBank promotes in collaboration with other banks, and which aims to improve the process for companies in terms of how they manage all the tracking information and processes associated with supply chain.

Other trends that stand out among the emerging technologies applied to the banking sector are artificial intelligence, with automatic learning techniques, and quantum computing, which will change the paradigm on how computing is currently used.

CaixaBank has notable experience in machine learning and cognitive technologies, and began developing technical proof of concepts to test very early on: from launching the Spanish banking sector’s first chatbot powered by machine learning and artificial intelligence, to the application of machine learning to the models used for risk assessment.

The value of emerging technologies in financial services lies in the combination of machine learning and big data and data analytics, and in applying the results to all areas that require modelling, like risk evaluation or corporate intelligence.

]]>
In today’s banking, one of the technologies with the potential to make the biggest impact is blockchain. An example of this is the we.trade platform, which CaixaBank promotes in collaboration with other banks, and which aims to improve the process for companies in terms of how they manage all the tracking information and processes associated with supply chain.

Other trends that stand out among the emerging technologies applied to the banking sector are artificial intelligence, with automatic learning techniques, and quantum computing, which will change the paradigm on how computing is currently used.

CaixaBank has notable experience in machine learning and cognitive technologies, and began developing technical proof of concepts to test very early on: from launching the Spanish banking sector’s first chatbot powered by machine learning and artificial intelligence, to the application of machine learning to the models used for risk assessment.

The value of emerging technologies in financial services lies in the combination of machine learning and big data and data analytics, and in applying the results to all areas that require modelling, like risk evaluation or corporate intelligence.

]]>
0
<![CDATA[Ownerless banks]]> https://blog.caixabank.es/?p=23645 2019-06-03T10:00:00.0Z 2019-06-03T10:00:00.0Z <![CDATA[Ownerless banks]]> Vienna, 20th May 2019

Good evening. Thank you, Fernando, for your kind words, and thank you for giving me the opportunity to be here tonight in front of such a distinguished audience. It is an honour to be part of this conference, jointly organised by the Basel Committee on Banking Supervision (BCBS), the Group of Banking Supervisors from Central and Eastern Europe (BSCEE) and the Financial Stability Institute (FSI).

As a representative of a European bank, which has successfully navigated ten difficult years of financial crisis, I cannot overstate the importance of financial stability and the need to implement regulatory reforms that dampen financial cycles. For that reason, I would like to recognise the role of the Bank for International Settlements, the Basel Committee and, in particular, of institutions such as the FSI in contributing to the effective implementation of global regulatory standards around the world. Such work benefits us all. I do encourage Fernando Restoy to continue with the FSI's excellent work.

I am also delighted to be in Vienna, a city where one can breathe European history and enjoy the finest opera and classical music.

Tonight, I would like to share with you a few thoughts on the importance of the ownership structure of companies, in general, and of banks, in particular.

I must admit that the title of this address, “Ownerless Banks”, is somewhat provocative. It refers to a particular structure of bank ownership: one in which the shares of a bank are widely dispersed among a large number of shareholders. In some sense, therefore, nobody feels as if they are the owner of the bank.

This structure is in contrast with one in which ownership is more concentrated, for example, with one large shareholder holding a significant percentage of the shares. Such a shareholder may feel like the owner of the bank in the sense that they can exert a significant influence in shaping the bank’s mission, its culture and its strategy. They need not necessarily hold a controlling stake. A substantial stake will suffice.

I am not 100% sure what response I would get if I asked you what type of ownership structure would be preferable from a social welfare point of view. Some of you would probably say a dispersed structure, some would say a concentrated and some would certainly say (as economists usually do) “it depends”.

My goal over the next few minutes will be to try to dispel the prejudice that some hold against concentrated ownership structures, in particular, against reference shareholders. I will feel that I have accomplished that goal if, by the end of the talk, I have sown a seed of doubt in you regarding the superiority of ownerless banks to banks with a reference shareholder. Even if that leaves many of you thinking that the right answer is still “it depends” ‐ thinking that I can convince a group with a good number of economists in it to rule out such an answer would be foolish on my part‐. Setting reasonable goals is a good principle to follow, even more so for bankers.  

I will argue that both models ‐dispersed ownership and concentrated ownership structures‐ have advantages and disadvantages. I am afraid, however, that the advantages of having a reference shareholder may have been overshadowed by some unfortunate experiences that ought to be the exception rather than a rule.

Before I start delving deeper into this issue, a disclaimer is in order. Let me tell you where I am coming from. CaixaBank was founded in 1904, 115 years ago, as a savings bank. It is now a listed commercial retail bank, the largest by market penetration in Spain and with a significant footprint in Portugal through BPI. The largest shareholder is “la Caixa” Banking Foundation, who owns an almost 40% stake in the bank but no longer controls the Board. The Banking Foundation –which is one of the largest private foundations in the world- also holds stakes in other banks (like Inbursa in Mexico or the Bank of East Asia in China and Hong Kong) and European blue chip companies, like Suez, Telefonica and Naturgy. With income from this investment portfolio, the Foundation is currently dedicating a budget of more than 500 million euros a year to a broad range of social welfare programs –of which financing top medical research or fighting against child poverty are just a couple of examples. Therefore, as you can see, I have a vested interest here.

Let me now get to the core of the issue –that is, what are the advantages of having a reference shareholder compared to a widely dispersed ownership structure? I will focus on three dimensions: agency problems, short-termism and the stakeholder model for a company (in contrast to the shareholder value maximization model).

 1. Dealing with the agency problems

Firstly, having a reference shareholder may reduce the agency problems that arise between shareholders and managers. It is well known that, with a dispersed ownership structure, the incentives for any individual shareholder to monitor management are very weak. Their capacity to hold management accountable is also limited. In this situation, managers may take advantage of information asymmetries and use their discretion to maximize firm size, pay themselves excessive salaries or entrench and protect themselves from indirect means of corporate control.

On the contrary, investors with large ownership stakes have strong incentives to maximize their firms' value and are able to collect information and oversee managers. Large shareholders also have strong incentives to put pressure on managers or even to oust them. In an important paper on this issue, Shleifer and Vishny (1997)[1] point out that “Large shareholders thus address the agency problem in that they have both a general interest in profit maximization, and enough control over the assets of the firm to have their interest respected.”

In another well-known paper, Stijn Claessens of the BIS and his co-authors[2] find (using a sample of East Asian corporations) that firm value increases with the share of cash‐flow rights in the hands of the largest shareholder, a result that is consistent with previous studies on the positive incentive effects associated with increased cash‐flow rights in the hands of one or a few shareholders.

These authors, however, also point out that excessive control rights may have a negative effect on firm value through the entrenchment effect. Shleifer and Vishny argued that “as ownership gets beyond a certain point, large owners gain nearly full control of the company and are wealthy enough to prefer to use firms to generate private benefits of control that are not shared by minority shareholders.” Indeed, Claessens et al find that, for the largest shareholders, the difference between control rights and cash‐flow rights is associated with a value discount (a result that may be driven by the use of pyramid schemes, cross‐holdings among firms or dual‐class shares). They find, however, that the wedge between control and ownership is associated with value discounts for family‐controlled firms and somewhat for state‐controlled corporations, but not significantly for other types of owners. Obviously, corporate governance rules need to address these issues.

The challenge is to have a system that retains the benefits of monitoring provided by concentrated ownership while encouraging the flow of external funds to corporations from small shareholders.

2. The benefits of long-term investment versus short-termism

The second dimension that I wanted to comment on relates to the benefits of long-term investment versus short-termism, a trend that appears to be on the rise. In recent years, several initiatives have emerged designed to promote aspects such as long-term investment mandates and an end to quarterly guidance to the markets. In the United States, the movement against corporate short-termism has been led by well-known leaders such as Jamie Dimon and Warren Buffett[3]. Top CEOs acknowledge that financial markets have become too focused on the short term and that, under this pressure, companies frequently hold back on technology spending, hiring and research and development to meet quarterly earnings forecasts that may be affected by factors outside the company’s control (such as stock-market volatility).

Problems deriving from an excessive focus on the short term have a larger impact in banking. As we all know, this is an industry that engages in maturity transformation and the full consequences of management actions are only revealed over time. Therefore, a short-term management bias is particularly harmful.

A reference shareholder may contribute to reduce short-termism. In particular, a stable one who is committed to stay as a shareholder for the long-term.

The consulting company McKinsey has systematically measured short and long-termism at a company level and they find that companies on the long-term end of the spectrum dramatically outperform those classified as short term[4]. Long-term oriented firms deliver higher revenue growth, less volatility, higher earnings and higher total returns to shareholders. They find, for instance, that during the crisis years, these companies continued to invest while others cut spending.

A few years ago, McKinsey, together with the Aspen Institute, concluded that the best strategy for firms to overcome excessive short-termism and support long-term value creation was to attract and retain intrinsic investors: sophisticated long-term institutional investors with long holding periods and concentrated portfolios[5]. These are investors that do not require a lot of detailed guidance on quarterly numbers. They need clarity, consistency and transparency from managers in communicating strategic priorities and their long-term goals.

 3. Shareholder versus stakeholder value

Finally, the third dimension that I want to consider relates to the distinction between the shareholder model and the stakeholder model of the corporation. I will argue that a reference shareholder may facilitate the adoption of a stakeholder model –a model that I will defend. In contrast, a dispersed ownership bank will be under strong pressure to adopt a shareholder maximization model.

As you know well, according to the shareholder model, the primary responsibility of a firm is to maximise the wealth of its shareholders. The criteria by which performance is judged in this model is simply the market value of the firm – that is, shareholder value. In its purest form, this model neglects the important role of other players such as employees, suppliers, customers and society as a whole[6].

In contrast to this, the stakeholder model provides a broader approach, where a company should be managed serving the interest of a wider constituency of stakeholders. With this approach, profits are a way of achieving the ultimate goal of the firm, but are not the goal itself.

Relevant stakeholders include all those who need to contribute firm-specific assets for the success of the firm: employees, customers and suppliers. Financial investors (equity and bond holders) are not the only ones who invest in a firm: there are others who invest in intangible assets. But they do not do it only as a result of contracts or a price mechanism. They do it because they trust that their investments will be corresponded over time by other stakeholders. Thus, a stakeholder approach promotes the development of long-term relationships, trust and commitment amongst various stakeholders, through incentives for firm-specific investment and for cooperation. It leads to committed employees, customers and suppliers and this is crucial for the success of the firm in the long run.

The stakeholder approach also cares about the progress of society as a whole and, in particular, about the members of the communities in which the firm conducts its business. A firm that follows a stakeholder approach is, by construction, a socially responsible firm[7].

In my view, a stakeholder approach may be particularly beneficial in banking:

  • Because it is a business based on long-term relationships, where customer trust is key.
  • Because banks can generate systemic risks (important negative external effects arising from its own actions) and a stakeholder model better internalizes the external effects of a firm’s actions.
  • And because banks can also generate –through their activity- important positive external effects to the economy. For instance, through sustainable finance (by promoting financial inclusion or financing the necessary investments to fight the risks arising from climate change).    

The role of foundations and concluding remarks

I have argued that a reference shareholder may contribute to alleviate the agency problems that arise from the separation of ownership and management; may induce a long-term view in the management of the firm; and may facilitate the adoption of a stakeholder model –if the reference shareholder supports such a model. This is particularly relevant in the banking business.

Obviously, a reference shareholder may also give rise to some problems. I already mentioned that a large shareholder may try to take advantage of smaller shareholders –and therefore it is important for corporate governance to protect, as it does, the rights of minority shareholders.

Also, the nature of the reference shareholder may also lead to insufficient monitoring of managers, problems of short-termism and objectives that have little to do with share values or a stakeholder approach. These problems clearly arise, for instance, when the reference shareholder is vulnerable to political interference – and that is why it is particularly important to avoid political meddling in the banking business.

Before I finish, let me briefly comment on the nature of a particular type of reference shareholder: foundations. Some of you may say that a bank in which a foundation is a reference shareholder is also an ownerless bank –in the sense that the foundation has no owners.

But there is an irony here. A foundation can have a strong personality and a strong governance. And that makes a difference. There is empirical evidence (looking at the experience of Denmark, for instance, where foundations are a common form of ownership) that foundation ownership is highly stable and promotes long-termism –top management changes less frequently and the level of long-term investments is higher[8]. Other studies find a strong and robust relationship between foundation governance and firm performance in the largest corporations in Denmark[9].

Indeed, a well-governed foundation (governed by an experienced and diverse Board of Trustees not subject to political interference) with a strong character and a clear mission (which often implies the adoption of a stakeholder approach) may be an ideal candidate to be a reference shareholder of any company, and especially of a bank.

I am not sure if I have succeeded in casting any doubt around the prejudices you may have had against concentrated ownership structures. I have highlighted some of its benefits, particularly when referring to well-governed foundations as a shareholder reference of a bank. And the potential drawbacks are clear.  

In any event, what I can certainly conclude is that a strong case can be made for maintaining a diversity of ownership structures. As is the case with a diversity of business models or a diversity of biological species. Structures will need to evolve, mutate and improve over time as we learn from experience.

Thank you for your attention.

 

  • [1] See Shleifer, A. and R. Vishny (1997). “A Survey of Corporate Governance”. Journal of Finance, 52(2). The Journal of Finance, 52(2).
  • [2] See Claessens, Stijn et al. (2002). “Disentangling the Incentive and Entrenchment Effects of Large Shareholdings.” The Journal of Finance 57.6, 2741:2771.
  • [3] See Dimon, J. and W. E. Buffet (2018, 6 June). “Short-termism is Harming the Economy”, The Wall Street Journal. Retrieved from www.wsj.com.
  • [4] See Barton, D. et al (2017) “Measuring the Economic Impact of Short-termism”. Discussion paper. McKinsey Global Institute, February.
  • [5] See Koller, t. et al (August 4, 2017) “The case against Corporate Short termism”, Milken Institute Review. Retrieved from https://www.mckinsey.com.
  • [6] See Friedman, M. (1970, September). “A Friednanz doctrine: The Social Responsibility of Business is to Increase its Profit” New York Times Magazine. 32–33. Retrieved from www.nytimes.com.
  • [7]See, for instance, Maher, M. and T. Andersson (1999). “Corporate Governance: Effects on Firm Performance and Economic growth”, OCDE.
  • [8] See Thomsen, S. et al (2018) “Industrial Foundations as Long term Owners”. Finance Working Paper N`556, November. European Corporate Governance Institute.
  • [9] See Hansmann, H. and Thomsen, S. (2018) “The governance of Foundation–Owned Firms”, Research Project on Industrial Foundations.
]]>
Vienna, 20th May 2019

Good evening. Thank you, Fernando, for your kind words, and thank you for giving me the opportunity to be here tonight in front of such a distinguished audience. It is an honour to be part of this conference, jointly organised by the Basel Committee on Banking Supervision (BCBS), the Group of Banking Supervisors from Central and Eastern Europe (BSCEE) and the Financial Stability Institute (FSI).

As a representative of a European bank, which has successfully navigated ten difficult years of financial crisis, I cannot overstate the importance of financial stability and the need to implement regulatory reforms that dampen financial cycles. For that reason, I would like to recognise the role of the Bank for International Settlements, the Basel Committee and, in particular, of institutions such as the FSI in contributing to the effective implementation of global regulatory standards around the world. Such work benefits us all. I do encourage Fernando Restoy to continue with the FSI's excellent work.

I am also delighted to be in Vienna, a city where one can breathe European history and enjoy the finest opera and classical music.

Tonight, I would like to share with you a few thoughts on the importance of the ownership structure of companies, in general, and of banks, in particular.

I must admit that the title of this address, “Ownerless Banks”, is somewhat provocative. It refers to a particular structure of bank ownership: one in which the shares of a bank are widely dispersed among a large number of shareholders. In some sense, therefore, nobody feels as if they are the owner of the bank.

This structure is in contrast with one in which ownership is more concentrated, for example, with one large shareholder holding a significant percentage of the shares. Such a shareholder may feel like the owner of the bank in the sense that they can exert a significant influence in shaping the bank’s mission, its culture and its strategy. They need not necessarily hold a controlling stake. A substantial stake will suffice.

I am not 100% sure what response I would get if I asked you what type of ownership structure would be preferable from a social welfare point of view. Some of you would probably say a dispersed structure, some would say a concentrated and some would certainly say (as economists usually do) “it depends”.

My goal over the next few minutes will be to try to dispel the prejudice that some hold against concentrated ownership structures, in particular, against reference shareholders. I will feel that I have accomplished that goal if, by the end of the talk, I have sown a seed of doubt in you regarding the superiority of ownerless banks to banks with a reference shareholder. Even if that leaves many of you thinking that the right answer is still “it depends” ‐ thinking that I can convince a group with a good number of economists in it to rule out such an answer would be foolish on my part‐. Setting reasonable goals is a good principle to follow, even more so for bankers.  

I will argue that both models ‐dispersed ownership and concentrated ownership structures‐ have advantages and disadvantages. I am afraid, however, that the advantages of having a reference shareholder may have been overshadowed by some unfortunate experiences that ought to be the exception rather than a rule.

Before I start delving deeper into this issue, a disclaimer is in order. Let me tell you where I am coming from. CaixaBank was founded in 1904, 115 years ago, as a savings bank. It is now a listed commercial retail bank, the largest by market penetration in Spain and with a significant footprint in Portugal through BPI. The largest shareholder is “la Caixa” Banking Foundation, who owns an almost 40% stake in the bank but no longer controls the Board. The Banking Foundation –which is one of the largest private foundations in the world- also holds stakes in other banks (like Inbursa in Mexico or the Bank of East Asia in China and Hong Kong) and European blue chip companies, like Suez, Telefonica and Naturgy. With income from this investment portfolio, the Foundation is currently dedicating a budget of more than 500 million euros a year to a broad range of social welfare programs –of which financing top medical research or fighting against child poverty are just a couple of examples. Therefore, as you can see, I have a vested interest here.

Let me now get to the core of the issue –that is, what are the advantages of having a reference shareholder compared to a widely dispersed ownership structure? I will focus on three dimensions: agency problems, short-termism and the stakeholder model for a company (in contrast to the shareholder value maximization model).

 1. Dealing with the agency problems

Firstly, having a reference shareholder may reduce the agency problems that arise between shareholders and managers. It is well known that, with a dispersed ownership structure, the incentives for any individual shareholder to monitor management are very weak. Their capacity to hold management accountable is also limited. In this situation, managers may take advantage of information asymmetries and use their discretion to maximize firm size, pay themselves excessive salaries or entrench and protect themselves from indirect means of corporate control.

On the contrary, investors with large ownership stakes have strong incentives to maximize their firms' value and are able to collect information and oversee managers. Large shareholders also have strong incentives to put pressure on managers or even to oust them. In an important paper on this issue, Shleifer and Vishny (1997)[1] point out that “Large shareholders thus address the agency problem in that they have both a general interest in profit maximization, and enough control over the assets of the firm to have their interest respected.”

In another well-known paper, Stijn Claessens of the BIS and his co-authors[2] find (using a sample of East Asian corporations) that firm value increases with the share of cash‐flow rights in the hands of the largest shareholder, a result that is consistent with previous studies on the positive incentive effects associated with increased cash‐flow rights in the hands of one or a few shareholders.

These authors, however, also point out that excessive control rights may have a negative effect on firm value through the entrenchment effect. Shleifer and Vishny argued that “as ownership gets beyond a certain point, large owners gain nearly full control of the company and are wealthy enough to prefer to use firms to generate private benefits of control that are not shared by minority shareholders.” Indeed, Claessens et al find that, for the largest shareholders, the difference between control rights and cash‐flow rights is associated with a value discount (a result that may be driven by the use of pyramid schemes, cross‐holdings among firms or dual‐class shares). They find, however, that the wedge between control and ownership is associated with value discounts for family‐controlled firms and somewhat for state‐controlled corporations, but not significantly for other types of owners. Obviously, corporate governance rules need to address these issues.

The challenge is to have a system that retains the benefits of monitoring provided by concentrated ownership while encouraging the flow of external funds to corporations from small shareholders.

2. The benefits of long-term investment versus short-termism

The second dimension that I wanted to comment on relates to the benefits of long-term investment versus short-termism, a trend that appears to be on the rise. In recent years, several initiatives have emerged designed to promote aspects such as long-term investment mandates and an end to quarterly guidance to the markets. In the United States, the movement against corporate short-termism has been led by well-known leaders such as Jamie Dimon and Warren Buffett[3]. Top CEOs acknowledge that financial markets have become too focused on the short term and that, under this pressure, companies frequently hold back on technology spending, hiring and research and development to meet quarterly earnings forecasts that may be affected by factors outside the company’s control (such as stock-market volatility).

Problems deriving from an excessive focus on the short term have a larger impact in banking. As we all know, this is an industry that engages in maturity transformation and the full consequences of management actions are only revealed over time. Therefore, a short-term management bias is particularly harmful.

A reference shareholder may contribute to reduce short-termism. In particular, a stable one who is committed to stay as a shareholder for the long-term.

The consulting company McKinsey has systematically measured short and long-termism at a company level and they find that companies on the long-term end of the spectrum dramatically outperform those classified as short term[4]. Long-term oriented firms deliver higher revenue growth, less volatility, higher earnings and higher total returns to shareholders. They find, for instance, that during the crisis years, these companies continued to invest while others cut spending.

A few years ago, McKinsey, together with the Aspen Institute, concluded that the best strategy for firms to overcome excessive short-termism and support long-term value creation was to attract and retain intrinsic investors: sophisticated long-term institutional investors with long holding periods and concentrated portfolios[5]. These are investors that do not require a lot of detailed guidance on quarterly numbers. They need clarity, consistency and transparency from managers in communicating strategic priorities and their long-term goals.

 3. Shareholder versus stakeholder value

Finally, the third dimension that I want to consider relates to the distinction between the shareholder model and the stakeholder model of the corporation. I will argue that a reference shareholder may facilitate the adoption of a stakeholder model –a model that I will defend. In contrast, a dispersed ownership bank will be under strong pressure to adopt a shareholder maximization model.

As you know well, according to the shareholder model, the primary responsibility of a firm is to maximise the wealth of its shareholders. The criteria by which performance is judged in this model is simply the market value of the firm – that is, shareholder value. In its purest form, this model neglects the important role of other players such as employees, suppliers, customers and society as a whole[6].

In contrast to this, the stakeholder model provides a broader approach, where a company should be managed serving the interest of a wider constituency of stakeholders. With this approach, profits are a way of achieving the ultimate goal of the firm, but are not the goal itself.

Relevant stakeholders include all those who need to contribute firm-specific assets for the success of the firm: employees, customers and suppliers. Financial investors (equity and bond holders) are not the only ones who invest in a firm: there are others who invest in intangible assets. But they do not do it only as a result of contracts or a price mechanism. They do it because they trust that their investments will be corresponded over time by other stakeholders. Thus, a stakeholder approach promotes the development of long-term relationships, trust and commitment amongst various stakeholders, through incentives for firm-specific investment and for cooperation. It leads to committed employees, customers and suppliers and this is crucial for the success of the firm in the long run.

The stakeholder approach also cares about the progress of society as a whole and, in particular, about the members of the communities in which the firm conducts its business. A firm that follows a stakeholder approach is, by construction, a socially responsible firm[7].

In my view, a stakeholder approach may be particularly beneficial in banking:

  • Because it is a business based on long-term relationships, where customer trust is key.
  • Because banks can generate systemic risks (important negative external effects arising from its own actions) and a stakeholder model better internalizes the external effects of a firm’s actions.
  • And because banks can also generate –through their activity- important positive external effects to the economy. For instance, through sustainable finance (by promoting financial inclusion or financing the necessary investments to fight the risks arising from climate change).    

The role of foundations and concluding remarks

I have argued that a reference shareholder may contribute to alleviate the agency problems that arise from the separation of ownership and management; may induce a long-term view in the management of the firm; and may facilitate the adoption of a stakeholder model –if the reference shareholder supports such a model. This is particularly relevant in the banking business.

Obviously, a reference shareholder may also give rise to some problems. I already mentioned that a large shareholder may try to take advantage of smaller shareholders –and therefore it is important for corporate governance to protect, as it does, the rights of minority shareholders.

Also, the nature of the reference shareholder may also lead to insufficient monitoring of managers, problems of short-termism and objectives that have little to do with share values or a stakeholder approach. These problems clearly arise, for instance, when the reference shareholder is vulnerable to political interference – and that is why it is particularly important to avoid political meddling in the banking business.

Before I finish, let me briefly comment on the nature of a particular type of reference shareholder: foundations. Some of you may say that a bank in which a foundation is a reference shareholder is also an ownerless bank –in the sense that the foundation has no owners.

But there is an irony here. A foundation can have a strong personality and a strong governance. And that makes a difference. There is empirical evidence (looking at the experience of Denmark, for instance, where foundations are a common form of ownership) that foundation ownership is highly stable and promotes long-termism –top management changes less frequently and the level of long-term investments is higher[8]. Other studies find a strong and robust relationship between foundation governance and firm performance in the largest corporations in Denmark[9].

Indeed, a well-governed foundation (governed by an experienced and diverse Board of Trustees not subject to political interference) with a strong character and a clear mission (which often implies the adoption of a stakeholder approach) may be an ideal candidate to be a reference shareholder of any company, and especially of a bank.

I am not sure if I have succeeded in casting any doubt around the prejudices you may have had against concentrated ownership structures. I have highlighted some of its benefits, particularly when referring to well-governed foundations as a shareholder reference of a bank. And the potential drawbacks are clear.  

In any event, what I can certainly conclude is that a strong case can be made for maintaining a diversity of ownership structures. As is the case with a diversity of business models or a diversity of biological species. Structures will need to evolve, mutate and improve over time as we learn from experience.

Thank you for your attention.

 

  • [1] See Shleifer, A. and R. Vishny (1997). “A Survey of Corporate Governance”. Journal of Finance, 52(2). The Journal of Finance, 52(2).
  • [2] See Claessens, Stijn et al. (2002). “Disentangling the Incentive and Entrenchment Effects of Large Shareholdings.” The Journal of Finance 57.6, 2741:2771.
  • [3] See Dimon, J. and W. E. Buffet (2018, 6 June). “Short-termism is Harming the Economy”, The Wall Street Journal. Retrieved from www.wsj.com.
  • [4] See Barton, D. et al (2017) “Measuring the Economic Impact of Short-termism”. Discussion paper. McKinsey Global Institute, February.
  • [5] See Koller, t. et al (August 4, 2017) “The case against Corporate Short termism”, Milken Institute Review. Retrieved from https://www.mckinsey.com.
  • [6] See Friedman, M. (1970, September). “A Friednanz doctrine: The Social Responsibility of Business is to Increase its Profit” New York Times Magazine. 32–33. Retrieved from www.nytimes.com.
  • [7]See, for instance, Maher, M. and T. Andersson (1999). “Corporate Governance: Effects on Firm Performance and Economic growth”, OCDE.
  • [8] See Thomsen, S. et al (2018) “Industrial Foundations as Long term Owners”. Finance Working Paper N`556, November. European Corporate Governance Institute.
  • [9] See Hansmann, H. and Thomsen, S. (2018) “The governance of Foundation–Owned Firms”, Research Project on Industrial Foundations.
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<![CDATA[The new rules of digital banking. Business Intelligence and remote banking, with Cristina Lázaro]]> https://blog.caixabank.es/?p=23645 2019-05-30T15:00:00.0Z 2019-05-30T15:00:00.0Z <![CDATA[The new rules of digital banking. Business Intelligence and remote banking, with Cristina Lázaro]]> According to the latest McKinsey multichannel survey, more than 50% of the Spanish banking customers say that they still really need a ‘human touch’ for their financial and personal advice.

In 2018, CaixaBank launched the inTouch omni-channel relationship model based on remote assistance with the objective of satisfying these changing customer needs. Its core value proposition is the relationship with the financial manager, maintained over various channels and combined with the use of the different digital tools the entity puts at customers’ disposal. This model, created and developed by CaixaBank Business Intelligence, works using predictive modelling and the use of sophisticated analysis algorithms to identify and select clients that best fit into this advisory model, achieving an average acceptance of 93%.

inTouch’s omnichannel advisory model aims to remain as close as possible to customers when they are looking for new products or services, while at the same time digitalizing these products and services as much as possible. By exploiting big data and applying data science analysis techniques and predictive modelling, it is possible to know the each client's willingness to try new products or services. The result is an exponential increase in sales results.

This interview is the second chapter of the Masterclass series with The Banker “The new rules of digital banking”.

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According to the latest McKinsey multichannel survey, more than 50% of the Spanish banking customers say that they still really need a ‘human touch’ for their financial and personal advice.

In 2018, CaixaBank launched the inTouch omni-channel relationship model based on remote assistance with the objective of satisfying these changing customer needs. Its core value proposition is the relationship with the financial manager, maintained over various channels and combined with the use of the different digital tools the entity puts at customers’ disposal. This model, created and developed by CaixaBank Business Intelligence, works using predictive modelling and the use of sophisticated analysis algorithms to identify and select clients that best fit into this advisory model, achieving an average acceptance of 93%.

inTouch’s omnichannel advisory model aims to remain as close as possible to customers when they are looking for new products or services, while at the same time digitalizing these products and services as much as possible. By exploiting big data and applying data science analysis techniques and predictive modelling, it is possible to know the each client's willingness to try new products or services. The result is an exponential increase in sales results.

This interview is the second chapter of the Masterclass series with The Banker “The new rules of digital banking”.

]]>
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<![CDATA[CaixaBank and the CEOE agree on €20 billion line of credit for companies during 2019-2020]]> https://blog.caixabank.es/?p=23645 2019-05-29T00:00:00.0Z 2019-05-29T00:00:00.0Z <![CDATA[CaixaBank and the CEOE agree on €20 billion line of credit for companies during 2019-2020]]> The Chairman of CaixaBank, Jordi Gual, and the Chairman of the CEOE (Confederation of Employers and Industries of Spain), Antonio Garamendi, have entered a new collaboration agreement to make available a line of credit of €20 billion to CEOE-associated companies and its business organisations during the 2019-2020 period. The aim is to effectively meet the needs of companies and contribute to stimulating internationalisation, innovation and entrepreneurship.

This agreement renews a collaboration between both entities that was initiated in 2016. Since then, CaixaBank has made available a total amount of €66 billion to CEOE-associated companies to promote actions aimed at improvement and growth. In all renewals the amount established in the agreement has been exceeded.

Last year, CaixaBank, Spain’s leading retail bank, granted €59.7 billion euros in new loans to its entire portfolio of micro-enterprises, SMEs and large businesses, representing a 69% increase with respect to the previous year.

Of this amount, 61% represented short-term investment via commercial loans and credit accounts; 35% long-term investment from loans and guarantees; and 3% in medium-term investment through leasing and renting.

Within the framework of the agreement with the CEOE, last year CaixaBank completed over 178,000 financing operations with companies.

Boosting modernisation and business internationalisation

During the signing of this agreement, Jordi Gual highlighted the role of the financial institution in boosting the corporate banking segment in recent years. “If we want to improve the Spanish economy's competitiveness and to access new international and domestic markets, we must provide companies with appropriate financing. CaixaBank is committed to meeting this need and does so by offering the highest quality service,” stated the Chairman of CaixaBank.

Gual also emphasised that “CaixaBank is in a privileged position to offer an expert and personalised service thanks to its 125 business centres located throughout all the autonomous regions and its team of 1,183 managers and experts in this segment.”

Furthermore, Antonio Garamendi thanked CaixaBank for renewing an agreement that “provides Spanish SMEs access to financing, which is one of the biggest barriers they currently face.” In addition, the Chairman of the CEOE stressed that the purpose of this agreement is to support the investment needs of companies, boost internationalisation, facilitate financing, and develop innovative projects that are “vital in the new digital era we live in.”

Antonio Garamendi also highlighted the importance of this agreement at a regional level, as since 2016 several agreements have been entered with business organisations in several autonomous regions, ratifying this agreement and supporting the financing needs at all territorial levels.

Solid experience and swift response to requests

The agreement establishes that CaixaBank will manage swiftly all funding requests made by companies and offer them preferential conditions, based on the characteristics of each operation.

The success of this quick response is the result of CaixaBank's territorial capillarity and extensive commercial network, the largest in the Spanish banking sector. The financial institution, with a solid reputation in providing advisory services to companies, offers companies a specialised service at specific centres and an expert team in all the autonomous regions.

In addition, CaixaBank is one of the foremost companies in advisory services in foreign trade for Spanish companies, providing service in 127 countries through operational branches, representative branches, correspondents and banking shareholdings.

About CaixaBank

CaixaBank is the leading financial group in retail banking in Spain with 15.6 million customers; the peninsula's largest business network with more than 5,000 branches; and a leader in innovation with the largest base of digital customers in Spain (6.1 million).

CaixaBank undertakes a socially-responsible model of universal banking and is considered by Merco as the number one company in corporate responsibility and governance in the Spanish financial sector. Similarly, in 2019, CaixaBank was chosen as the Best Bank in Spain and the Best Bank in Western Europe by the US magazine Global Finance.It also earned Bank of the Year in Spain 2018 by the magazine The Banker.

]]>
The Chairman of CaixaBank, Jordi Gual, and the Chairman of the CEOE (Confederation of Employers and Industries of Spain), Antonio Garamendi, have entered a new collaboration agreement to make available a line of credit of €20 billion to CEOE-associated companies and its business organisations during the 2019-2020 period. The aim is to effectively meet the needs of companies and contribute to stimulating internationalisation, innovation and entrepreneurship.

This agreement renews a collaboration between both entities that was initiated in 2016. Since then, CaixaBank has made available a total amount of €66 billion to CEOE-associated companies to promote actions aimed at improvement and growth. In all renewals the amount established in the agreement has been exceeded.

Last year, CaixaBank, Spain’s leading retail bank, granted €59.7 billion euros in new loans to its entire portfolio of micro-enterprises, SMEs and large businesses, representing a 69% increase with respect to the previous year.

Of this amount, 61% represented short-term investment via commercial loans and credit accounts; 35% long-term investment from loans and guarantees; and 3% in medium-term investment through leasing and renting.

Within the framework of the agreement with the CEOE, last year CaixaBank completed over 178,000 financing operations with companies.

Boosting modernisation and business internationalisation

During the signing of this agreement, Jordi Gual highlighted the role of the financial institution in boosting the corporate banking segment in recent years. “If we want to improve the Spanish economy's competitiveness and to access new international and domestic markets, we must provide companies with appropriate financing. CaixaBank is committed to meeting this need and does so by offering the highest quality service,” stated the Chairman of CaixaBank.

Gual also emphasised that “CaixaBank is in a privileged position to offer an expert and personalised service thanks to its 125 business centres located throughout all the autonomous regions and its team of 1,183 managers and experts in this segment.”

Furthermore, Antonio Garamendi thanked CaixaBank for renewing an agreement that “provides Spanish SMEs access to financing, which is one of the biggest barriers they currently face.” In addition, the Chairman of the CEOE stressed that the purpose of this agreement is to support the investment needs of companies, boost internationalisation, facilitate financing, and develop innovative projects that are “vital in the new digital era we live in.”

Antonio Garamendi also highlighted the importance of this agreement at a regional level, as since 2016 several agreements have been entered with business organisations in several autonomous regions, ratifying this agreement and supporting the financing needs at all territorial levels.

Solid experience and swift response to requests

The agreement establishes that CaixaBank will manage swiftly all funding requests made by companies and offer them preferential conditions, based on the characteristics of each operation.

The success of this quick response is the result of CaixaBank's territorial capillarity and extensive commercial network, the largest in the Spanish banking sector. The financial institution, with a solid reputation in providing advisory services to companies, offers companies a specialised service at specific centres and an expert team in all the autonomous regions.

In addition, CaixaBank is one of the foremost companies in advisory services in foreign trade for Spanish companies, providing service in 127 countries through operational branches, representative branches, correspondents and banking shareholdings.

About CaixaBank

CaixaBank is the leading financial group in retail banking in Spain with 15.6 million customers; the peninsula's largest business network with more than 5,000 branches; and a leader in innovation with the largest base of digital customers in Spain (6.1 million).

CaixaBank undertakes a socially-responsible model of universal banking and is considered by Merco as the number one company in corporate responsibility and governance in the Spanish financial sector. Similarly, in 2019, CaixaBank was chosen as the Best Bank in Spain and the Best Bank in Western Europe by the US magazine Global Finance.It also earned Bank of the Year in Spain 2018 by the magazine The Banker.

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<![CDATA[CaixaBank designs the first chatbot that talks to customers to help them finance their purchases]]> https://blog.caixabank.es/?p=23645 2019-05-28T00:30:00.0Z 2019-05-28T00:30:00.0Z <![CDATA[CaixaBank designs the first chatbot that talks to customers to help them finance their purchases]]> CaixaBank has implemented the function of splitting card purchase payments via a chatbot. It is the Spanish finance sector's first application that provides credit based on artificial intelligence and machine learning, and one of the first that allows real fund transactions by bot. Its design also features big data technology, required to enable the bot to identify users and transactions that may need financing.

The service works via Gina, imaginBank's chatbot. The company's mobile bank has added the function in the latest version of its iOS application and it will also shortly be launched for Android. In total, the process can be started and finished in under a minute.

CaixaBank has designed two options for use. On the one hand, the service can be activated by the customer accessing Gina and requesting – by text or by voice message – that payment of a recent purchase be split into instalments. The chatbot is able to instantly identify which of the recent transactions made by the user can be split and responds by showing them on screen. The customer chooses the purchase for which they need the credit and the operation is processed automatically. Gina notifies the customer of the operation's status throughout the process.

The second option for use is activation of the service at the chatbot's own initiative. When a customer may need to split a payment, the bot connects to their imaginBank app, and Gina sends the customer a message offering the option.

The transactions that the bot assesses to manage the split-payment service are purchases with imaginBank cards made in the last week of at least 40 euros. The customer can choose to pay them over a term of three, six or nine months, under the same conditions as requesting as such conventionally via the app.

As a result of implementing this new functionality in the bot, it is estimated that use of imaginBank split payments – a service with approximately 1,200 operations per month – could grow by around 15%. CaixaBank's mobile bank currently has 1.2 million customers.

About Gina, Spain's first financial chatbot

Gina was the first chatbot to appear in the Spanish financial sector. It was launched by imaginBank in 2017 to help the banking application's users to find offers and promotions suited to their interests and their place of residence. Gina gradually took on new responsibilities and is currently able to offer information on any matter related to imaginBank products and services.

A service of these characteristics has to be trained by the bank's advisors to know how to resolve customers' technical queries on a huge corpus of commerce regulations, regulations specific to each country, and internal regulations, etc. Similarly, the system requires ongoing training by technology specialists to improve its understanding of the natural language of people and conversation skills.

After the arrival of Gina, CaixaBank implemented Neo, a chatbot that attends customers and offers information through the CaixaBankNow app.

CaixaBank, leader in banking digitalisation

CaixaBank is the leader in retail banking in Spain, with a 29.3% share among individual customers. Technology and digitalisation support the company's business model, which continues to strengthen its leadership with the largest base of digital customers in Spain: more than 6 million digital customers, 5.2 million mobile banking customers and a penetration rate of 32%.

The company has developed projects that have been milestones in the sector, such as the first commercial implementation of contactless and mobile payment systems in Europe, the creation of the first contactless ATMs in the world, the launch of imaginBank, the first mobile bank in Spain, and the development of the first artificial intelligence application for customer services.

Thanks to its digital transformation strategy, CaixaBank is among the world's most highly valued banks due to its quality of digital services. In 2018, the company was named 'Best Digital Bank in Western Europe', by the specialised publications Euromoney and Global Finance. Furthermore, the mobile banking application was recognised by the Bank Administration Institute (BAI) and the British magazine The Banker, which selected it as the best technological project in 2018 for the mobile category.

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CaixaBank has implemented the function of splitting card purchase payments via a chatbot. It is the Spanish finance sector's first application that provides credit based on artificial intelligence and machine learning, and one of the first that allows real fund transactions by bot. Its design also features big data technology, required to enable the bot to identify users and transactions that may need financing.

The service works via Gina, imaginBank's chatbot. The company's mobile bank has added the function in the latest version of its iOS application and it will also shortly be launched for Android. In total, the process can be started and finished in under a minute.

CaixaBank has designed two options for use. On the one hand, the service can be activated by the customer accessing Gina and requesting – by text or by voice message – that payment of a recent purchase be split into instalments. The chatbot is able to instantly identify which of the recent transactions made by the user can be split and responds by showing them on screen. The customer chooses the purchase for which they need the credit and the operation is processed automatically. Gina notifies the customer of the operation's status throughout the process.

The second option for use is activation of the service at the chatbot's own initiative. When a customer may need to split a payment, the bot connects to their imaginBank app, and Gina sends the customer a message offering the option.

The transactions that the bot assesses to manage the split-payment service are purchases with imaginBank cards made in the last week of at least 40 euros. The customer can choose to pay them over a term of three, six or nine months, under the same conditions as requesting as such conventionally via the app.

As a result of implementing this new functionality in the bot, it is estimated that use of imaginBank split payments – a service with approximately 1,200 operations per month – could grow by around 15%. CaixaBank's mobile bank currently has 1.2 million customers.

About Gina, Spain's first financial chatbot

Gina was the first chatbot to appear in the Spanish financial sector. It was launched by imaginBank in 2017 to help the banking application's users to find offers and promotions suited to their interests and their place of residence. Gina gradually took on new responsibilities and is currently able to offer information on any matter related to imaginBank products and services.

A service of these characteristics has to be trained by the bank's advisors to know how to resolve customers' technical queries on a huge corpus of commerce regulations, regulations specific to each country, and internal regulations, etc. Similarly, the system requires ongoing training by technology specialists to improve its understanding of the natural language of people and conversation skills.

After the arrival of Gina, CaixaBank implemented Neo, a chatbot that attends customers and offers information through the CaixaBankNow app.

CaixaBank, leader in banking digitalisation

CaixaBank is the leader in retail banking in Spain, with a 29.3% share among individual customers. Technology and digitalisation support the company's business model, which continues to strengthen its leadership with the largest base of digital customers in Spain: more than 6 million digital customers, 5.2 million mobile banking customers and a penetration rate of 32%.

The company has developed projects that have been milestones in the sector, such as the first commercial implementation of contactless and mobile payment systems in Europe, the creation of the first contactless ATMs in the world, the launch of imaginBank, the first mobile bank in Spain, and the development of the first artificial intelligence application for customer services.

Thanks to its digital transformation strategy, CaixaBank is among the world's most highly valued banks due to its quality of digital services. In 2018, the company was named 'Best Digital Bank in Western Europe', by the specialised publications Euromoney and Global Finance. Furthermore, the mobile banking application was recognised by the Bank Administration Institute (BAI) and the British magazine The Banker, which selected it as the best technological project in 2018 for the mobile category.

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