In the future, financial institutions will
have to be civic... if they are to survive
               CAN ANNUAL REPORT 2008
In the future,
financial
institutions
will have to be
civic... if they
are to survive.
The 2008 Caja Navarra
Annual Report,...
[MS]
                                  We are living in times of great uncertainty. We might say that 2008 was the year of...
[EG]
                                          In the future, financial institutions will have to be civic... if they are t...
01. What is [P. 12]

Civic Banking?
02. Sustainable  [ ]  P. 30

value is a
shared value.
[a business model
which works]
0...
01.What
       is Civic
       Banking?


[10]              [11]
01. What is Civic Banking?


       A transparent
       and participative
       bank.
       Only CAN tells
       its c...
01. What is Civic Banking?


       ... and they decide
       which good causes
       will receive 30 out
       of ever...
01. What is Civic Banking?


       It is transparent
       because...
       > We tell customers
       how much we earn...
01. What is Civic Banking?


       It is transparent
       because...
       > Customers know how
       much goes into ...
01. What is Civic Banking?


       It is transparent
       because...
       > Social organizations
       explain to cu...
01. What is Civic Banking?


       It is participative           > And they work with
       because...                  ...
01. What is Civic Banking?

       It is participative
       because...
       > Non-customers
       can join Civic Bank...
01. What is Civic Banking?


       It is participative
       because...
       > Customers create
       the products an...
02.
       Sustainable
       value is
       a shared
       value.
       [a business
       model which works]
[28]    ...
02. A business model which works.                                       [3] CAN
                                          ...
02. A business model which works. Three visions...


                                                [1] Customers.
      ...
02. A business model which works. Three visions...
                             CAN
                                      ...
02. A business model which works. Three visions...
                       [3] CAN
                       acts as a catalys...
02. A business model which works.   Core Capital: 8.15%, among
                                           the top 10 Spani...
02. A business model which works.

       Consolidated income
       statement                                  2008      ...
02. A business model which works.


       And the market
       recognizes it...
       Forética 2008: Best Spanish CSR
 ...
03.In 2009,
       we are
       growing.
       [wearepollinating]
       > While the financial sector is thinking things
...
03. In 2009, we are growing. While the financial
       sector is thinking things over, at CAN, we are looking
       after...
03. In 2009, we are growing. While the financial
       sector is thinking things over, at CAN, we are looking
       after...
03. In 2009, we are growing. While the financial
                         sector is thinking things over, at CAN, we are lo...
03. In 2009, we are growing. While the financial sector is
       looking for solutions, at CAN, we continue to work
      ...
03. In 2009, we are growing. While the financial sector is
       looking for solutions, at CAN, we continue to work
      ...
03. In 2009, we are growing. While the financial sector is
       looking for solutions, at CAN, we continue to work
      ...
03. In 2009, we are growing. Cancha branch offices
       have become district civic centres.

       Cancha branch offices
...
03. In 2009, we are growing. Cancha branch offices
       have become district civic centres.

       At the Cancha branch ...
03. In 2009, we are growing. Cancha branch offices
       have become district civic centres.

       We also inform custom...
03. In 2009, we are growing. We are taking
       Civic Banking everywhere.

       We are moving to the Net.
       > The...
03. In 2009, we are growing. We are taking
       Civic Banking everywhere.

       Civic Banking is going
       out into...
03. In 2009, we are growing. We are taking
       Civic Banking everywhere.

       We have taken our first steps
       in...
03. In 2009, we are growing. We are taking
       Civic Banking everywhere.

       Conciban was set up as the
       Civi...
The time has
       come to change
       the rules.
       People demand
       transparency,
       participation and
  ...
Published by:
                        Caja Navarra.
               Communications Office
                              Desi...
CAN Annual Report 2008
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CAN Annual Report 2008

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In the future financial institutions will have to be civic...if they are to survive

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CAN Annual Report 2008

  1. 1. In the future, financial institutions will have to be civic... if they are to survive CAN ANNUAL REPORT 2008
  2. 2. In the future, financial institutions will have to be civic... if they are to survive. The 2008 Caja Navarra Annual Report, with individual and consolidated data, is available at www.can.es.
  3. 3. [MS] We are living in times of great uncertainty. We might say that 2008 was the year of change; the financial sector is never going to be the same again. At CAN, in this key year, we have attained a historic record by topping the 200-million euro mark in net profit. This has allowed us to make voluntary provisions totaling 40 million euros for an increasingly uncertain future. Ahead of us lie two years (2009 and 2010) when the entire financial Miguel Sanz Sesma system is going to be affected by never-before experienced restrictions. The impact of PRESIDENT OF CAJA NAVARRA delinquency and dropping margins is going to put the balances of all banking institutions to the test and only those which have done their homework properly and have something different to offer people will survive. At CAN, we are confident that we have them covered. We have a healthy and well-structured balance. We are closing the year with one of the lowest delinquency rates in the sector (1.93%). The percentage of credit granted to real estate promoters is remarkably low (only 13% of the assets) so we have strong and diversified assets. Additionally, we closed the year with a core capital of 8.15%, highly- ranked among the top savings banks; and 116% coverage ratio, also one of the most outstanding in the sector. … We also have a unique business model, Civic Banking, which makes us even more competitive within the current framework. We are experiencing times of economic uncertainty in general, and uncertainty in the financial sector in particular. However, one thing is clear, companies entering periods of economic crisis which hold advantages over their competitors come out stronger. This is our case. [4] [5]
  4. 4. [EG] In the future, financial institutions will have to be civic... if they are to survive. For this reason, at Caja Navarra we are one step ahead and we are changing things. We blazed our own trail: transparency and participation. Unlike at other banks, our customers know how much we earn with their money and can decide which projects to support with 30 out of every 100 euros from this profit. Do you know of any other bank that does the same? Enrique Goñi Beltrán de Garizurieta At Caja Navarra we are Civic Banking pioneers and we continue to innovate today because MANAGING DIRECTOR OF CAJA NAVARRA our customers can also choose to whom they lend their savings. A bank for people and by people as well as a bank for customers and by customers. This way, we are creating great affinity networks: groups of customers with similar concerns who help each other, work together, do business and build the community in which they live. More than a million people form these networks today and extend their power for transformation through over 3,500 socially-good causes. CAN is growing within its community. In Civic Banking everyone provides and everyone wins, and that is why it works. This business model attains economic and social results, which is what drives us. We continue to move forward and, as in the land of the Red Queen, in “Alice Through the Looking Glass” by Lewis Carroll, we must run faster than we are able because the market moves with us. Society no longer wants outdated economic models. We have learnt that, all of a sudden, we can no longer just look to shareholders. From now on, companies will look after the profits generated by all of the role players with whom they deal, because this is the only way of guaranteeing their sustainability. All the progress we make on this path gives us an advantage over our competitors. We have demonstrated that Civic Banking is sustainable and profitable. Now we want to get out there and ‘pollinate’ the world with our way of understanding financial relations. The U.S. market will be our next stop. [6] [7]
  5. 5. 01. What is [P. 12] Civic Banking? 02. Sustainable [ ] P. 30 value is a shared value. [a business model which works] 03. In 2009, [ ] P. 46 we are growing. [we are pollinating]
  6. 6. 01.What is Civic Banking? [10] [11]
  7. 7. 01. What is Civic Banking? A transparent and participative bank. Only CAN tells its customers how much it earns with them [transparency]... [12] [13]
  8. 8. 01. What is Civic Banking? ... and they decide which good causes will receive 30 out of every 100 euros of this profit [participation]. [14] [15]
  9. 9. 01. What is Civic Banking? It is transparent because... > We tell customers how much we earn with them and they know how much goes to the good causes they choose [civic account]. > Month by month at www.can.es. > At the end of the year, in a letter. [16] [17]
  10. 10. 01. What is Civic Banking? It is transparent because... > Customers know how much goes into their civic account from each product they bought [civic seal]. > This way, they can allocate their yearly donation, as they wish, to the good causes of their choice. [18] [19]
  11. 11. 01. What is Civic Banking? It is transparent because... > Social organizations explain to customers what they have done with their money [accountability]. > CAN informs them about the loans that have been granted using their savings [financial traceability]. [20] [21]
  12. 12. 01. What is Civic Banking? It is participative > And they work with because... them as volunteers > Social organizations [VolCan]. present projects. > Customers choose which projects to support with their profits [‘You Choose, You Decide’]. > They get to know the organizations they support [Meeting Points]. [22] [23]
  13. 13. 01. What is Civic Banking? It is participative because... > Non-customers can join Civic Banking without necessarily buying financial products [Civic Sampling]. > And come to the Cancha branch offices with customers, to get information, learn, do business, enjoy themselves [24] and share interests. [25]
  14. 14. 01. What is Civic Banking? It is participative because... > Customers create the products and services they want [Viálogos]. > And their assessments determine 30% of CAN managers’ bonuses [Ideals survey]. [26] [27]
  15. 15. 02. Sustainable value is a shared value. [a business model which works] [28] [29]
  16. 16. 02. A business model which works. [3] CAN acts as a catalyst We are creating a framework for common of relations: the Civic Banking interests. Civic Banking community community. We share interests with comes together at customers and social organizations. the Meeting Points We generate value for everyone and we and the Cancha branch offices. develop sustainable business. . Three visions: customers, social organizations and CAN. [2] Social organizations. [1] Customers. In the Civic Banking More than 650,000 community, social customers know organizations how much CAN proactively seek earns from them, financing for their and decide projects. where to send 45 million euros for charitable organizations and This model projects. multiplies and expands. [30] [31]
  17. 17. 02. A business model which works. Three visions... [1] Customers. CAN > They know how much CAN earns from them and they choose the social project which is to receive 30% of this profit [590,000 customers made this choice in 2008]. > With their choice they can help both local people or interests and distant, global causes. Social > They choose their level of organizations commitment by becoming a volunteer [1] Customers. in the social organization of their More than 650,000 choice [10,000 volunteers actively customers know how participated in good causes in 2008]. much CAN earns with them, and decide where > At the Cancha branch offices, to send 45 million you can meet people with the same euros for charitable organizations and concerns [98,830 people attended projects. activities organized at the offices]. [32] [33]
  18. 18. 02. A business model which works. Three visions... CAN [2] Social Organizations > Seek financing in the Civic Banking community by presenting their projects [3,750 projects in 2008]. > Encourage customers to choose their project. [2] Social > Get people they know to go to CAN. organizations. If they become customers, they can In the Civic Banking Customers support their social cause economically community, social [20,000 customers came to CAN organizations proactively seek through their social organization]. financing for their > Use the Cancha branch offices as projects. their own space for their association and meet with the customers who support them to explain their project [500 accountability reports in 2008]. [34] [35]
  19. 19. 02. A business model which works. Three visions... [3] CAN acts as a catalyst for common [3] Here at CAN, interests. Civic Banking community comes we promote it. together at the > We provide social organizations Meeting Points and the Cancha with the tools to seek financing branch offices. among people. > We put citizens and social Social organizations in contact [in organizations 2008, we organized nine Meeting Points, attended by 26,000 Customers people]. > We can even go where there are no Cancha branch offices [remote Civic Banking]. ...and we all grow together. [36] [37]
  20. 20. 02. A business model which works. Core Capital: 8.15%, among the top 10 Spanish savings banks. The 2008 ratios Delinquency: 1.93% [3.65% in the sector]. confirm we are Coverage: 116%, one of the top 5 [without general provisions]. doing well. We put Retail coverage on growth: 86%. Balance sheet stability: 70% of credit good economic investment with retail resources. and social results ROE-ROA: the fifth-ranking savings bank. Recurring profit: +9.17%. together, and the [without voluntary provisions, +14.4%]. Credit investment: +9% [credits numbers add up. totaling 3,300,000,000 euros]. Client deposits: +18%. Rating: A. [38] [39]
  21. 21. 02. A business model which works. Consolidated income statement 2008 2007 AMOUNT VARIATION % Interest margin 231,675 207,136 24,539 11.85 Recurring gross margin 473,391 426,090 47,301 11.10 Operating costs 254,665 225,737 28,928 12.81 Recurring operating margin Endowments and provisions 218,726 134,716 200,353 65,462 18,373 9.17 69,254 105.79 * } Other results 77,935 47,362 30,573 64.55 Results before tax 161,945 182,253 -20,308 -11.14 Results after tax 161,474 175,610 -14,136 -8.05 Result attributed to the group 160,260 175,037 -14,777 -8.44 * Endowments: Voluntary provisions of the recurrent operating margin + other substandard voluntary provisions [40] [41]
  22. 22. 02. A business model which works. And the market recognizes it... Forética 2008: Best Spanish CSR solutions in innovation [traceability] and communication and reporting [CSR reports for SMEs]. Fundación Empresa y Sociedad: 2008 Empresa y Sociedad Award. Esade: Best Brand Repositioning Award. Spanish Institute of Chartered Accountants (ICJCE): Best Sustainability Report [April 2008]. Merco Marcas: Best Corporate Reputation Financial Brand in Spain 2008. I’M AN SME AND I HAVE A CSR REPORT THANKS TO CAN [42] [43]
  23. 23. 03.In 2009, we are growing. [wearepollinating] > While the financial sector is thinking things over, at CAN, we are looking after our customers. > While the financial sector is looking for solutions, at CAN, we are continuing to work on our model in greater depth. > Cancha branch offices have become district civic centers. > We can take Civic Banking everywhere. [44] [45]
  24. 24. 03. In 2009, we are growing. While the financial sector is thinking things over, at CAN, we are looking after our customers. We are giving out credits and we are telling you about it. Every month, we publish a list of credits and loans which we have given out to our customers [visit www.can.es to view this list]. We are keeping the flow of money running: +9% [3,300,000,000 euros in loans in 2008] +18.6% in the business sector. In 2009, our aim is to grow by 6%. EMPRESA: COMPANY / PARTICULAR: PRIVATE CUSTOMER [46] [47]
  25. 25. 03. In 2009, we are growing. While the financial sector is thinking things over, at CAN, we are looking after our customers. We are creating a line of basic needs. A line to channel charity projects which alleviate needy situations caused by the economic downturn: for instance, soup kitchens, school materials and activities, transportation and domestic assistance programs. [48] [49]
  26. 26. 03. In 2009, we are growing. While the financial sector is thinking things over, at CAN, we are looking after our customers. YOUR YOU We connect customers CO-WORKER who want to help, with others who need it. We put people who want a loan in contact with people who can finance them. People in need of a loan can post their request at www.can.es. Anyone who wants to finance them can link their deposits to their loan. [50] [51]
  27. 27. 03. In 2009, we are growing. While the financial sector is looking for solutions, at CAN, we continue to work on our model in greater depth. Our growth is based on social affinity networks. In 2009, 25% of new customers will come this way by working with social organizations. We align the goals of these organizations with our own. They proactively encourage their associates to support their projects. [52] [53]
  28. 28. 03. In 2009, we are growing. While the financial sector is looking for solutions, at CAN, we continue to work on our model in greater depth. We are looking for people to participate in Civic Banking. Civic Sampling has become a good way for people who are not customers to experience how Civic Banking works and become part of it by using 10 euro cards to make a donation to a social project [in 2008, we provided 28,000 cards and, in 2009, this figure will rise to 100,000]. [54] [55]
  29. 29. 03. In 2009, we are growing. While the financial sector is looking for solutions, at CAN, we continue to work on our model in greater depth. We turn SMEs’ financial costs into an asset with social value. In 2008, we produced 136,000 reports for 2,500 client companies, based on their choices. In 2009, we are going one step further. We are signing an agreement with Spain’s Official Credit Institute (OCI) to publish the CSR Reports for 1,500 non- customer SMEs. [56] [57]
  30. 30. 03. In 2009, we are growing. Cancha branch offices have become district civic centres. Cancha branch offices are becoming an engine for driving social and financial relations. Cancha branch offices are not traditional offices. They are free and transparent spaces which are waiting to be occupied. [58] [59]
  31. 31. 03. In 2009, we are growing. Cancha branch offices have become district civic centres. At the Cancha branch offices, anything is possible: for instance, a Mario Kart competition, trips with the Minube travel website, classes of English as a Foreign Language, magic acts, Bollywood dancing classes, txalaparta musical instrument classes, self-defense classes or laughter therapy. In 2008, we organized 2,640 activities which were attended by 98,830 people. [60] [61]
  32. 32. 03. In 2009, we are growing. Cancha branch offices have become district civic centres. We also inform customers about and train them in financial principles. Cancha branch offices become classrooms where we talk about the downturn and its consequences, in clear language which everyone can understand. [62] [63]
  33. 33. 03. In 2009, we are growing. We are taking Civic Banking everywhere. We are moving to the Net. > The new CAN website -www.can.es-, based on an ambitious multimedia project, will become the new stage to demonstrate the vitality of Civic Banking. > With the largest online community of projects and social organizations and new bank 2.0 developments, CAN is a pioneer in the new way of making the power of social networks available for society. [64] [65]
  34. 34. 03. In 2009, we are growing. We are taking Civic Banking everywhere. Civic Banking is going out into the world. We have tried it out at home, we have grown and now we want to ‘pollinate’ the world. Target: The United States of America, the most advanced financial system in the world, under review after the downturn, and with an enormous tradition of social mobilization. [66] [67]
  35. 35. 03. In 2009, we are growing. We are taking Civic Banking everywhere. We have taken our first steps in the U.S. market. Alliances with non-profit organizations to present projects to the ‘You Choose, You Decide’ initiative. Civic Banking has been studied at prestigious universities: Georgetown, New York University, Harvard, Wharton, George Washington, Columbia and George Mason. [68] [69]
  36. 36. 03. In 2009, we are growing. We are taking Civic Banking everywhere. Conciban was set up as the Civic Banking consultancy office, which transfers its differentiating features to the U.S. market: transparency and participation. Yes, we CAN! [70] [71]
  37. 37. The time has come to change the rules. People demand transparency, participation and responsibility. For this reason, from now on, financial institutions will have to be civic, if they [72] are to survive. [73]
  38. 38. Published by: Caja Navarra. Communications Office Design: Bermer&Co. Printing: Ona Industrias Gráficas Printed on superior offset paper, 100% recycled chlorine-free manufacturing process with optical whiteners. Internationally approved with Blue Angel, Nordic Swan and NAPM. Legal Deposit: NA 2406-07

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