Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

Inform e A nual 2006 A nnual Report by mm6889

VIEWS: 8 PAGES: 105

									Informe Anual 2006 Annual Report
Annual Report 2006




Comparative financial data for past 5 years Crèdit Andorrà Group

                                           2006        2005        2004         2003           2002
 Key balance sheet figures
 (Amounts shown in thousand euros)


 Cash and at banks                       1,113,092   1,164,827   1,181,454   1,459,208      1,859,380
 Loans to customers                      2,443,606   1,942,398   1,111,770     907,712        767,692
 Customer deposits                       3,258,707   2,879,458   2,060,498   2,244,446      2,517,434
 Bonds and other instruments
   on deposit with third parties (*)     7,003,841   6,499,132   4,125,570   3,442,605      2,812,554

 Ratios (%)

 Equity / Deposits                          16.37       17.42       22.85         19.92             16,80
 Equity / Loans                             21.83       25.82       42.35         49.25             55.10
 Loans / Deposits                           75.51       67.75       55.97         41.65             32.08
 ROE (Returns / Average equity)             22.00       22.31       18.57         19.17             19.45
 ROA (Returns / Average total assets)        2.83        2.84        2.75          2.53              2.27
 Solvency ratio                             20.94       19.92       32.08         32.61             35.55
 Liquidity ratio                            57.22       66.71       97.66         79.58             99.52
 Efficiency ratio
   (Operating costs / Ordinary margin)      23.05       26.06       23.47         24.50             26.61

 (*) See Note 18 in Annual Report.




                                                                             Financial statements           103
      Introduction




      In 2006, the world economy, once more led by the United States, continued to move ahead in a balanced and
      dynamic way. The European Union enjoyed a framework of stable growth and consolidated its recovery. The
      emerging economies continued to show very high growth rates thanks to the prices of raw materials and the low
      interest rates which still permitted high investment levels. In spite of the apparent moderation of its economic
      activity and low returns on the stock market, Japan continued to grow, thanks to corporate profits and commercial
      exports. On top of this favourable global economic environment came the excellent performance of financial
      markets which showed very attractive returns for the fourth year in a row.

      Within this framework, in 2006 the Andorran economy maintained the positive trend seen in recent years. The
      indicators show that economic activity is well consolidated from a macroeconomic point of view. Standard & Poor’s
      estimated a per capita income in 2006 at 36,954 dollars and classified the country with an excellent AA long-term
      rating and a short-term rating of A–1+.

      For the Crèdit Andorrà Group, 2006 was a notable year because of two significant events: the completion of the
      process of integrating CaixaBank and the divestment of ”la Caixa” from our organization. On December 31, we
      successfully finalized the process of integrating the two organizations and, as a result, we have strengthened our
      leadership in the Andorran market and bolstered our position in the international financial system through
      consolidation of the Crèdit Andorrà Group, owned entirely by Andorran capital. The Group’s operations are
      basically concentrated in the banking and insurance markets.

      The results of the integration process have been excellent. We have unified the Crèdit Andorrà branch network
      under one corporate name, with a total of 21 offices and 42 automatic teller machines, and have consolidated our
      leadership in the Andorran banking sector with a market share of 37%. In this process, we have brought together
      different capabilities, have retained talent and have thus created a team of more than 400 professionals ready to look
      after our customers with even better personal attention and effectiveness. Furthermore, we have broadened our
      range of financial products and services, obtaining economies of scale and incorporating the best practices, products
      and services of the two organizations. We should also mention that in 2006 we continued to strengthen our
      progressive international growth through Crediinvest SICAV based in Luxembourg and Private International
      Management, an asset management company located in Switzerland.

      The consolidated balance sheet of the new Crèdit Andorrà Group on December 31, 2006, shows an excellent year
      both in terms of income and results. Customer resources being handled went above 10,000 million euros, reaching
      10,263 million euros, 9.4% more than the previous year. Growth of loan investment reached 25.8%, with a figure of
      2,444 million euros and, as a result, total income rose by 12.2%, going to 12,706 million euros.

      The ordinary margin rose to 223.8 million euros, 12.6% more than the year before. This growth was possible thanks
      to the increase in commissions earned, 23.5% more than the previous year. The operating margin, after showing the
      impact of amortization of goodwill related to the acquisition of CaixaBank (9.8 million euros), reached 130.4 million
      euros, 19.1% more than in the year 2005. As a result of the abovementioned and thanks to a careful policy of
      containing expenses, we have reached an excellent efficiency ratio of 23.05%. After applying a prudent policy
      of provisions, the net consolidated result of the Crèdit Andorrà Group was 121.3 million euros, 19.8% more than the
      year before.




104          Financial statements
Introduction




For the 17th time in a row, the international rating agency, Fitch Ratings, has given us an individual A/B rating and
has classified us with a support 3 rating, a long-term A rating and a short-term F1 rating. According to Fitch, these
ratings “reflect the leading position of the company in the Andorran market, its solid management and profitability, its
good liquidity, its quality of assets and its prudent risk management”. We should also like to point out that this year
Crèdit Andorrà was again given the award “Bank of the Year 2006 for Andorra” by the financial magazine The Banker
published by the Financial Times editorial group. This is the fourth time we have won this distinction in the five
years since Andorra was included in the list of participating countries (2002, 2003, 2004 and 2006).

In 2006, we strengthened the management of our investment funds when Crediinvest, our fund management
company, became an associate member of AIMA (Alternative Investment Management Association). We also
obtained the GIPS (Global Investment Performance Standards) which ensures that yields published by our asset
management company are comparable at the international level.

With regard to the social and environmental commitments of the Crèdit Andorrà Group to Andorran society, again
this year we have prepared the Corporate Social Responsibility Report to make known our economic, social and
environmental results with full transparency.

In the area of social action, the Crèdit Andorrà Foundation is the main driving force of our activities. The balance
shown after the first operating year of the new Crèdit Andorrà Foundation is very positive. We have consolidated
the social assistance programmes, which now include management of the Data-processing and Media Library
Workshop for the elderly, seminars and workshops on diseases of great social impact, and a support programme for
the volunteer work of the Association of Elderly Volunteers.

In the educational area, we have continued to give aid to young people of our country through the Crèdit Andorrà
Foundation scholarship programme and have actively collaborated with the University of Andorra. In the cultural
field, we have participated in setting up the Fundació Escena Nacional d’Andorra, a forward-looking project which
will provide a firm base for theatre arts in our country. We have not neglected other cultural activities already well
established, such as the International Narciso Yepes Festival, the International Organ Cycle of the Principality of
Andorra and the annual programme of concerts, both within and beyond our borders, of the National Classical
Orchestra of Andorra and the National Youth Chamber Orchestra of Andorra.

In short, 2006 was a key year to define a broad project for our future which starts in 2007. The challenges that lay
ahead are to maintain our position as the leading bank group in Andorra, to continue improving our customer
service and to be competitive in the international financial environment. Our team of professionals is our main
capability to attain these goals.

The integration of the two banks involved a major internal effort throughout the year but this has borne fruit. This
was possible thanks to the confidence of our customers and the involvement and efforts of our staff. Now, our goal
is to continue improving each day in order to best serve our customers and our country.



The Board of Directors




                                                                                             Financial statements          105
      Year ended December 31, 2006




                                 Chairman of the Board of Directors
                                    Antoni Pintat Santolària




                                           Vice-chairman
                                     Antoni Pintat Argelich




                                 Chief Executive Officer / Secretary
                                       Josep Peralba Duró




                                              Director
                                        Jaume Casal Mor




                                              Director
                                        Maria Reig Moles




106       Financial statements
Financial statements
        Crèdit Andorrà Group
      Consolidated balance sheets as at December 31, 2006 and 2005
      Crèdit Andorrà Group


      ASSETS
                                                                                     Euros (thousands)
                                                                            2006                            2005
       Cash and deposits with OECD central banks                            32,266                          30,899

       Deposits with Andorran National Institute of Finance (ANIF)          46,245                          47,287

       Financial intermediaries (Notes 4 and 5)                          1,075,878                       1,126,137
       Financial intermediaries at sight                                    91,216                          59,573
       Due from banks on time deposit                                      989,610                       1,074,355
       Provision for insolvencies                                           –4,948                          –7,791

       Loan investments (Notes 4 and 5)                                  2,429,826                       1,923,743
       Customer loans and credits                                        2,285,741                       1,786,450
       Overdrafts on customer accounts                                     117,809                         121,717
       Bills discounted                                                     40,056                          34,231
       Provision for insolvencies                                          –13,780                         –18,655

       Securities portfolio (Note 6)                                       438,185                         458,257
       Bonds and other fixed-income securities                             340,490                         364,885
       Provision for insolvencies                                           –1,686                          –1,577
       Provision for market fluctuations                                        —                               —

       Investments in Group companies                                       13,730                          13,029

       Other investments                                                    20,019                          18,941
       Provision for market fluctuations                                        —                               —

       Shares and other equity securities                                   14,672                          14,205
       Provision for market fluctuations                                    –2,109                          –2,109

       Investment funds                                                     53,069                          50,883

       Consolidation goodwill (Note 7.2)                                   156,534                         176,101
       Consolidation goodwill                                              195,668                         195,668
       Accumulated amortization                                            –39,134                         –19,567

       Intangible fixed assets and expenses to be written off (Note 7)      12,335                          12,487
       Intangible fixed assets and expenses to be written off               38,840                          34,188
       Accumulated depreciation                                            –26,505                         –21,701

       Fixed assets (Note 7)                                               111,955                         110,821
       Fixed assets                                                        212,574                         210,357
       Accumulated depreciation                                            –98,669                         –97,483
       Provision for depreciation                                           –1,950                          –2,053

       Accrued income and prepaid expenses (Note 12)                        41,429                          33,074
       Accrued income                                                       41,364                          32,897
       Prepaid expenses                                                         65                             177

       Other assets                                                         21,487                          43,977
       Operations in course                                                 16,230                          37,793
       Stock                                                                   555                             514
       Options acquired                                                      4,702                           5,670

       Total assets                                                      4,366,140                       3,962,783




108          Financial statements
BALANÇOS DE SITUACIÓ CONSOLIDATS A 31 DE DESEMBRE DE 2005 I 2004
Grup Crèdit Andorrà


LIABILITIES AND SHAREHOLDER EQUITY
                                                              Euros (thousands)
                                                     2006                            2005
 Andorran National Institute of Finance (ANIF)       62,085                          63,404

 Creditors (Note 4)                               3,413,776                       3,082,577
 Due to banks and lending institutions              155,069                         203,119
 Customer deposits                                3,258,707                       2,879,458

 Bonds issued                                        12,318                          40,945

 Provision for risks and contingencies (Note 8)      27,825                          25,053
 Provision for pensions and similar obligations      25,324                          20,223
 Provision for contingent liabilities                   893                             595
 Other provisions                                     1,608                           4,235

 Provision for general banking risks (Note 8)        68,619                          60,463

 Subordinated liabilities (Note 11)                 150,000                         100,000

 Accrued expenses and deferred income (Note 12)      37,930                          28,584
 Accrued expenses                                    36,845                          26,861
 Deferred income                                      1,085                           1,723

 Other liabilities                                   30,257                          44,277
 Operations in course                                14,707                          31,373
 Options issued                                       3,622                           4,381
 Suppliers and other creditors                       11,928                           8,523

 Share capital (Note 11)                             70,000                          70,000

 Reserves (Note 11)                                 421,959                         391,103
 Legal reserve                                        7,000                           7,000
 Guarantee reserve                                   33,063                          33,063
 Voluntary reserve                                  346,131                         325,477
 Revaluation reserve                                 13,934                          13,934
 Consolidation reserve                               21,831                          11,629

 Income (Notes 10 and 11)                            71,371                          56,377
 Income for year                                    121,371                         101,275
 Income for previous years awaiting allocation           —                              102
 Dividends paid out in advance                      –50,000                         –45,000




 Total liabilities and shareholder equity         4,366,140                       3,962,783




                                                              Financial statements            109
Consolidated off-balance-sheet records as at December 31, 2006 and 2005
Crèdit Andorrà Group




                                                                    Euros (thousands)
                                                          2006                            2005
 Contingent liabilities                                  256,403                         292,334
 Guarantees given                                        252,417                         288,289
 Documentary letters of credit issued or received and
  notified to customers                                     3,986                           4,045

 Commitments and contingent risks                        581,664                         548,486
 Commitments and operating risks                         534,339                         473,690
 Actuarial commitments and risks                          25,323                          22,082
 Other contingent commitments and risks                   22,002                          52,714

 Forward operations (Note 14)                           5,606,325                       6,321,333
 Forward foreign exchange transactions                  3,116,870                       5,120,467
 Forward transactions on other financial instruments    2,456,623                       1,138,602
 Other forward transactions                                32,832                          62,264

 Customer assets held in custody (Note 18)              7,289,278                       6,810,832
 Assets held in custody by third parties                7,003,841                       6,499,132
 Assets held in own custody                               285,437                         311,700
 Other off-balance-sheet records, exclusively for
   management control (Note 18)                         1,086,573                        997,089
 Guarantees and commitments obtained                      444,396                        372,198
 Other off-balance-sheet records                          642,177                        624,891




                                                                    Financial statements            111
      Consolidated profit and loss account for years ended
      December 31, 2006 and 2005
      Crèdit Andorrà Group




                                                                          Euros (thousands)
                                                                 2006                          2005
       Interest and related income                              144,657                       112,905
       ANIF and financial intermediaries at sight                 2,245                         1,391
       Loan investments                                         129,006                       100,235
       Bonds and other fixed-income securities                   13,406                        11,279

       Interest and related expenses                            –87,850                       –55,529
       ANIF and financial intermediaries                         –3,551                        –4,559
       On customer deposits                                     –82,993                       –49,937
       On bonds                                                      —                           –160
       On internal pension fund                                  –1,306                          –873

       Income from equity securities                               357                           403
       From other investments                                      318                           287
       From shares and other equity securities                      39                           116

       Financial margin                                          57,164                        57,779

       Commissions, net                                         149,646                       121,189
       Commissions for services supplied                        164,360                       133,672
       Commissions on services received                         –14,714                       –12,483

       Results of financial transactions                         16,634                        19,380
       Net provision for market fluctuations                         —                          1,402
       Foreign exchange earnings                                 10,684                         7,736
       Income from securities transactions                        4,356                         4,622
       Income from forward transactions                             –46                          –561
       Share in (losses) / profits of companies accounted for
         by equity method (Note 2.3)                              1,437                         5,911
       Other                                                        203                           270

       Other ordinary profit                                       370                           435

       Ordinary margin                                          223,814                       198,783




112          Financial statements
                                                                          Euros (thousands)
                                                                 2006                          2005
Ordinary margin                                                 223,814                       198,783

Personnel costs                                                 –30,441                       –29,871
Personnel, Board of Directors and indemnities                   –22,113                       –23,254
Social Security                                                  –2,625                        –2,481
Ordinary allocation to pensions fund (Note 8)                    –1,258                          –638
Other personnel costs                                            –4,445                        –3,498

General expenses                                                –41,905                       –39,445
Supplies                                                           –656                          –672
Outside services                                                –20,489                       –21,252
Taxes                                                           –20,760                       –17,521

Depreciation expenses, net                                      –21,151                       –19,901
Depreciation allowed on intangible and tangible fixed assets    –21,151                       –19,901

Provision for depreciation of fixed assets, net                     80                           –80
Allocation of provision for depreciation of fixed assets            80                           –80

Operating margin                                                130,397                       109,486

Provision for insolvencies, net                                   2,363                        –7,377
Allocations to provision for insolvencies                        –6,377                        –8,988
Recovery of provision for insolvencies                            8,740                         1,611

Provision for risks and contingencies, net                        2,266                           373
Allocations to provision for risks and contingencies (Note 8)      –983                        –2,403
Recoveries of provisions for risks and contingencies (Note 8)     3,249                         2,776

Provision for general banking risks                             –10,897                        –1,251

Ordinary profit                                                 124,129                       101,231

Extraordinary profit (Note 12)                                      502                           320
Extraordinary contribution to pensions fund (Notes 8 and 12)     –3,260                          –276

Profit for the year                                             121,371                       101,275




                                                                          Financial statements          113
      Consolidated statement of source and application of funds for years ended
      December 31, 2006 and 2005
      Crèdit Andorrà Group


      SOURCE OF FUNDS
                                                                         Euros (thousands)
                                                                2006                            2005
       Funds generated by operations                           145,105                         123,679
       Profit for the year                                     121,371                         101,275
       Net provision for insolvencies                           –2,363                           7,377
       Net provision for asset depreciation                        –80                              80
       Net provision for market fluctuations                        —                           –1,402
       Allocations to other funds                                8,631                           3,654
       Other                                                    –1,904                          –1,295
       Depreciation of tangible and intangible fixed assets     21,151                          19,901
       (Profit) / loss on sale of fixed assets                    –264                              —
       Profits from companies accounted for by equity method    –1,437                          –5,911

       Positive change in liabilities over assets               11,674                         225,132
       ANIF and financial intermediaries                         2,211                         202,203
       Other headings                                            9,463                          22,929

       Net increase in liabilities                             429,250                         918,960
       Creditors - Customers                                   379,250                         818,960
       Subordinated liabilities                                 50,000                         100,000

       Net decrease in assets                                   21,741                             —
       Securities portfolio less investments                    21,741                             —

       Sale of permanent investments                              581                              —
       Sale of fixed assets                                       581                              —


       Total source of funds                                   608,351                       1,267,771




114          Financial statements
ESTAT D’ORIGEN I D’APLICACIÓ DELS FONS CONSOLIDAT PER ALS EXERCICIS
ANUALS ACABATS EL 31 DE DESEMBRE DE 2006 I 2005



APPLICATION OF FUNDS
                                                              Euros (thousands)
                                                     2006                            2005
Funds applied to operations                             —                              743
Application of other funds                              —                              451
Other                                                   —                              292

Positive change in assets over liabilities             278                              —
ANIF and financial intermediaries                      278                              —

Net decrease in liabilities                          28,627                          13,833
Creditors - Customers                                    —                               —
Bonds issued                                         28,627                          13,833

Net increase in assets                              500,906                         953,568
Cash                                                  1,367                           6,712
Loan investments - Customers                        499,539                         826,600
Securities portfolio less investments                    —                          120,256

Purchase of permanent investments                     2,756                         231,343
Purchases of investments                                 —                              893
Purchases of tangible and intangible fixed assets     2,756                         230,450

Funds applied to financing operations                75,784                          68,284
Supplementary dividend for previous year             16,000                          13,500
Preliminary dividend for current year                50,000                          45,000
Other equity amounts                                  9,784                           9,784


Total application of funds                          608,351                       1,267,771




                                                              Financial statements            115
        Notes on the consolidated financial statements as at December 31, 2006 and 2005
        Crèdit Andorrà Group



Note 1 Identity of the Bank and its activities

        Crèdit Andorrà SA, authorized in 1949, is a limited company engaged in banking activities which it carries out as a
        commercial bank and a private bank.
        Together with its subsidiaries, set out in Note 2.3, it forms the Crèdit Andorrà Group.



Note 2 Bases of presentation and consolidation principles

        2.1 Approval by the General Shareholders Meeting
               These financial statements will be presented for approval at the next General Shareholders Meeting of the Bank
               on April 27, 2007. The financial statements for the year ending on December 31, 2005 were approved by the
               General Shareholders Meeting of the Bank on April 28, 2006.

        2.2 Presentation of the Normalized Accounting Plan of Andorran financial system
               The consolidated financial statements have been taken from the accounting records of the banks and
               companies making up the Group and have been prepared according to the Normalized Accounting Plan of the
               Andorran financial system approved by the Government of Andorra on January 19, 2000.
               The Andorran National Institute of Finance (ANIF) is the body charged with the supervision and control of
               the entities integrated in the Andorran financial system as well as the implementation and application of the
               Accounting Plan and the regulations applicable to these entities.

        2.3 Consolidation principles
               The Bank holds all the share capital and voting rights of various companies carrying out activities complemen-
               tary to its own and which are jointly managed.

               Consolidated entities
               These consolidated financial statements include the following fully-owned companies, consolidated by the
               fully-integrated method (in thousand euros):


                                                                                             %                   Profits/   Dividends
                                                            Domicile       Activity    participation    Equity    losses     paid out

          CaixaBank SA                                      Andorra        Bank           100%         141,487   38,841     32,648
          Credi-Invest SA (*)                               Andorra    Fund manager       100%           1,402    2,965      2,792
          Crèdit Iniciatives SA (*)                         Andorra     Risk capital      100%           3,630      103         —
          Patrigest                                         Andorra      Property         100%             954      233         —
          Crèdit Andorrà Preference Ltd.                    Cayman       Financial        100%               1       —          —

        (*) Percentage direct and indirect participation.


               On July 31, 2005, Crèdit Andorrà acquired 100% of the Andorran banking entity CaixaBank SA, an entity
               established on August 1, 1997, which has as its corporate aim the carrying on of activities proper to the banking
               business which up until this time was performed by the branches open in the Principality of Andorra of the
               Caixa d’Estalvis i Pensions de Barcelona (”la Caixa”). For comparitive purposes, the consolidated financial
               statements for 2005 are presented fully taking into consideration the acquisition of a 100% share of the
               CaixaBank Group effective on January 1, 2005.




  116             Financial statements
           Credi-Invest SA is the management company of Crèdit-Fons investment fund, for which Crèdit Andorrà acts
           as depository. This company and the fund come under the supervision and control of ANIF. Dividend received
           in 2006 was 592 thousand euros as supplementary dividend for 2005 and 2,200 thousand euros in interim
           dividend as a charge to the 2006 financial year.

           Crèdit Iniciatives SA is the Group’s capital risk company.

           The company Crèdit Andorrà Preference Ltd. is a 100% owned subsidiary company of Crèdit Andorrà SA.
           It was set up in December 2005 for the issue of preferred shares (See Note 11).

           Method of consolidation
           All balances and significant transactions between the consolidated companies have been eliminated in the
           consolidation process.

           The difference between the book value of companies consolidated by the fully-integrated method and their
           equity at year-end is included in consolidation reserves.

           In accordance with that laid down in ANIF Memorandum 162/05, the proportional profit of those subsidiary
           companies consolidated by the equity method are set out in the section “Participation in (losses) / profits
           of companies consolidated by the equity method” in the profit and loss account of these financial statements.



Note 3 Accounting principles and valuation guidelines

       The account books and financial statements of the Group are governed by the following general accounting
       principles:

           • True and fair view
           • Prudent valuation
           • Historic cost
           • Accrual accounting
           • Consistency in presentation
           • Completeness
           • No compensation
           • Matching of income and expenses
           • Going concern premise
           • Relative importance

       The Group has also adopted the following accounting criteria for amounts considered material or critical in
       determining the results for the year and financial position:

       3.1 Recording of income
           Income is recorded following the accrual principle. The only exception is with reference to interest on very
           doubtful loans, which is recorded as income only when collected.

       3.2 Provision for insolvencies
           A. Specific provisions
           The determination of specific provisions is based on quantitative and qualitative regulatory guidelines and
           detailed analysis of exposure to credit risk, carried out by the entity itself, bearing in mind experience of actual
           loan losses and other relative factors. Provision for specific risks is deducted directly from the corresponding
           asset.




                                                                                                    Financial statements          117
          B. General provisions
          The Group carries a general provision fund for insolvencies as follows:

               • One   percent of net unsecured loan investment with customers and of bonds issued by non-bank
                 entities, central governments of OECD countries and Andorra.
               • 0.5% of net loan investment with banks and lending institutions and bonds issued by banks.

          These amounts are deducted directly from the corresponding asset.

          C. Provision for country risk
          The Group operates only with correspondent banks and lending institutions established in Andorra and OECD
          countries. The securities portfolio is made up of issues made in Andorra and the OECD, except in the case of
          the odd issue traded in recognized financial markets. With regard to these bonds, no country risk provision is
          made given that they are regularly traded with daily market quotation reflecting their real value.

      3.3 Provision for market fluctuation
          Provision for market fluctuation is deducted from the securities portfolio when a market risk shows up for
          bonds and shares in the ordinary investment portfolio (See Note 3.6).

      3.4 Provision for risks and contingencies
          A. Specific provision for contingent liabilities
          Provision for contingent liabilities is brought into account when obligations under contingent liabilities arise.

          B. Provision for pensions and similar obligations
          In keeping with the individual Agreement in force in 2006, CaixaBank SA is obliged to supplement Social
          Security payments for part of its staff or rights-holders in cases of retirement, incapacity, widowhood or
          orphanhood. CaixaBank SA is following the pattern of making an annual contribution for the amount needed
          to cover accrued liabilities for supplements for retirement, incapacity, widowhood or orphanhood calculated
          by the individual capitalization method (See Note 8).

      3.5 Provision for general banking risks
          The Group makes allocations to the fund for general banking risks in order to maintain prudent coverage of
          general risks inherent in its banking and financial activities.

      3.6 Securities portfolio
          The securities portfolio includes the trading portfolio, the portfolio of instruments held to maturity, the
          portfolio of permanent investments and the ordinary investment portfolio.

          Securities classified as part of the trading portfolio are brought into account at their market value and the profit
          or loss arising is recorded in the profit and loss account.

          Bonds and other fixed-income securities expected to be held to maturity are initally valued at cost and later
          adjusted prorata temporis in order to show the difference between cost and reimbursement value and for any
          depreciation provision.

          Permanent investments are initially recorded at cost and later adjusted to show the underlying book value of
          the Group’s investment in the equity of the subsidiary company.




118         Financial statements
    Bonds in the ordinary investment portfolio are shown in the same way as portfolio investment securities held
    to maturity. When the market value is lower than adjusted cost, provision is made in the securities market fluc-
    tuation fund and shown by deducting the portfolio value according to the amount of the sum of all individual
    negative valuation differences less the sum of all the individual positive valuation differences up to the amount
    of the negative differences.

    Shares held in the ordinary investment portfolio are shown at cost price or market value, whichever is the
    lower, and negative valuation differences are recorded in a market fluctuations fund.

3.7 Consolidation goodwill
    The heading “Positive consolidation differences” includes consolidation differences on considering the tacit
    capital gains assignable to assets of the subsidiary company still to be amortized which arise from acquisition
    of companies consolidated by the fully-consolidated method, the proportionally consolidated method or using
    the equity method. These differences are amortized on a straight-line basis (over a maximum of 10 years)
    (See Note 7.2).

3.8 Intangible fixed assets and amortizable expenses
    Intangible fixed assets and amortizable expenses are stated at cost and amortized over their expected valuable
    life for a maximum of 5 years. Other intangible assets are stated at cost and amortized over their expected
    valuable life up to a maximum of 10 years.

3.9 Fixed assets
    Fixed assets are recorded at cost less depreciation which is spread over the economic life of each individual
    asset. Provision for depreciation is made when a definitive loss of economic value of the fixed asset is apparent.

    A. Premises
    The acquisition of buildings and improvements carried out after December 31, 1989 are shown at cost. Premi-
    ses acquired or built before December 31, 1989 appear in the balance sheet at their estimated market value as
    established by an independent expert in November 1989. When a decrease in value takes place, amounts recor-
    ded as revaluation reserve may be transferred directly to voluntary reserves.

    B. Other real estate property
    Other real estate, that includes an office building (Crèdit Centre), buildings, apartments and lands, is shown at
    estimated market value or acquisition cost, whichever is the less.

    Other properties acquired through partial or full foreclosure of loans are accounted for at the book value of the
    loan foreclosed at the moment of acquisition or estimated market value, whichever is the less.




                                                                                           Financial statements          119
      3.10 Depreciation rates and periods
           Premises for own use, furniture, data-processing equipment and computer software are depreciated according
           to the following percentages and periods:


                                                                               % per year                Years

            Buildings                                                        2 to 3.33%               30 to 50
            Furniture, installations and equipment                           10 to 30%                 3 to 10
            Data-processing equipment                                        20 to 30%                  3 to 5
            Computer software                                                       20%                      5



           Assets acquired through foreclosure related to unrepaid loans that are not incorporated into buildings or
           equipment for own use and that have not been sold within a period of 3 years are depreciated as of the date
           of foreclosure according to the following cumulative depreciation percentages:


                                   Between 3 and 4 years                                     25%
                                   Between 4 and 5 years                                     50%
                                   Between 5 and 6 years                                     75%
                                   More than 6 years                                        100%


      3.11 Conversion of foreign currencies
           Assets and liabilities expressed in foreign currencies are converted to euros at the exchange rate current on
           the balance sheet date, obtained from reliable market sources, except deposits in foreign currency at banks
           hedged by forward foreign currency contracts. These deposits are converted at current exchange rates at the
           time they are made and gains or losses under the corresponding forward foreign exchange contracts are
           recorded during the life of the contracts in the profit and loss account (statement of earnings). Income and
           expenses are converted at exchange rates current on the date transactions take place.

      3.12 Financial derivatives
           The Group makes use of financial derivatives, interest rate swaps and forward currency contracts to hedge
           interest rate and foreign currency risks in its operations. In keeping with its liquid assets policy, the Group
           does not use financial derivatives that are not for hedging purposes.




120         Financial statements
Note 4 Maturity of financial assets and liabilities and breakdown by currency

       4.1 Distribution of maturity of financial assets and liabilities
           The residual maturity of certain assets and liabilities as at December 31, 2006 and 2005 (in thousand euros) was
           as follows:


        2006                                           Up to     From 1 to   From 3 months   From 1 to       More than
                                                     1 month     3 months       to 1 year     5 years         5 years       Total

        Assets
        ANIF                                         33,273          —             —              —           12,972    46,245
        Financial intermediaries, gross           1,071,417         997         6,909          1,503              — 1,080,826
        Loan investments, gross                     101,123     175,063       591,508        766,430         809,482 2,443,606
        Bonds and other fixed-income securities,
          net of provision for market fluctuation        —        15,706        21,965       180,818         122,001      340,490

        Total                                     1,205,813     191,766       620,382        948,751        944,455 3,911,167


        Liabilities
        ANIF                                         61,983          —            102             —               —     62,085
        Banks and lending institutions              101,533      53,029           507             —               —    155,069
        Customer deposits                         2,276,799     750,200       191,274         24,327          16,107 3,258,707
        Bonds issued                                     —           —          5,314          7,004              —     12,318

        Total                                     2,440,315     803,229       197,197         31,331          16,107 3,488,179




        2005                                           Up to     From 1 to   From 3 months   From 1 to       More than
                                                     1 month     3 months       to 1 year     5 years         5 years       Total

        Assets
        ANIF                                            123          —         34,192             —           12,972    47,287
        Financial intermediaries, gross           1,082,923      29,121        20,382          1,502              — 1,133,928
        Loan investments, gross                     120,767     154,388       507,800        461,857         697,586 1,942,398
        Bonds and other fixed-income securities,
          net of provision for market fluctuation        57          162        50,342       170,878         143,446      364,885

        Total                                     1,203,870     183,671       612,716        634,237        854,004 3,488,498


        Liabilities
        ANIF                                         63,404        —               —              —               —     63,404
        Banks and lending institutions              150,081    39,518          13,520             —               —    203,119
        Customer deposits                         1,253,362 1,398,272         175,136         35,186          17,502 2,879,458
        Bonds issued                                  2,000        —           23,165         15,780              —     40,945

        Total                                     1,468,847 1,437,790         211,821         50,966          17,502 3,186,926


           Interest rates on customer loans with maturity of more than one year are indexed at the one-year interbank
           market interest rate.




                                                                                                         Financial statements       121
      4.2 Currency breakdown
          Details of the currency breakdown of certain assets and liabilities as at December 31, 2006 and 2005
          (in thousand euros) are as follows:


       2006                                          US       Swiss    Pounds     Japanese   Canadian     Other
                                         Euros     dollars   francs    sterling      yen      dollars   currencies    Total

       Assets
       ANIF                             46,245          —        —           —         —         —            —       46,245

       Financial intermediaries,
         at sight                 74,319            6,977       740      3,392     3,753        871       1,165       91,216
       Banks and lending
         institutions            385,103          375,686     4,170   196,416        –83     14,393     13,925       989,610
       Provision for
         insolvencies (–)         –1,542           –1,902     –308       –986        –68        –72         –70       –4,948

       Total financial
         intermediaries, net           457,879    380,760     4,601   198,821      3,602     15,192     15,021 1,075,878

       Loans and credits
         to customers                 2,185,945    13,919    59,429      4,288    22,133         —            27 2,285,741
       Overdrafts on
         customer accounts               95,805    12,033     8,247        252       523        145         804      117,809
       Customer bills
         discounted                      40,056         —        —           —         —         —            —       40,056
       Provision for
         insolvencies (–)              –12,966      –191      –520         –43       –52         –1           –8     –13,780

       Total loan
         investments, net             2,308,840    25,761    67,156     4,497     22,604        144         823 2,429,826

       Securities
         portfolio, net                437,060      1,125        —           —         —         —            —      438,185

       Total                          3,250,024   407,646    71,758   203,318     26,206     15,336     15,844 3,990,135


       Liabilities
       ANIF                             62,085          —        —           —         —         —            —       62,085
       Banks and lending
         institutions                    68,469     8,185    52,747       179     24,604         20        865 155,069
       Customer deposits              2,529,159   474,698    17,860   202,872      3,732     15,275     15,112 3,258,707

       Total                          2,659,713   482,883    70,607   203,051     28,337     15,295     15,977 3,475,861




122            Financial statements
2005                                   US           Swiss    Pounds     Japanese   Canadian     Other
                           Euros     dollars       francs    sterling      yen      dollars   currencies    Total

Assets
ANIF                      47,287          —            —           —         —         —            —       47,287

Financial intermediaries,
  at sight                 41,386    10,403         1,132      1,040     4,351        530         731       59,573
Banks and lending
  institutions            391,827   453,225         5,770   194,644          26    14,857      14,006 1,074,355
Provision for
  insolvencies (–)         –3,639    –2,409         –274       –952       –107        –74        –336       –7,791

Total financial
  intermediaries, net    429,574    461,219         6,628   194,732      4,270     15,313      14,401 1,126,137

Loans and credits
  to customers          1,669,148    16,004        58,214      3,836    39,199         —            49 1,786,450
Overdrafts on
  customer accounts        97,636    18,679         1,631      1,531     2,098           3        139      121,717
Customer bills
  discounted               34,222              9       —           —         —         —            —       34,231
Provision for
  insolvencies (–)       –17,487      –247          –581         –63      –277         —            —      –18,655

Total loan
  investments, net      1,783,519    34,445        59,264     5,304     41,020           3        188 1,923,743

Securities
  portfolio, net         454,526      3,657            —           74        —         —            —      458,257

Total                   2,714,906   499,321        65,892   200,110     45,290     15,316      14,589 3,555,424


Liabilities
ANIF                      63,404          —            —           —         —         —            —       63,404
Banks and lending
  institutions             97,010    22,871        41,821     1,889     39,462          1          65 203,119
Customer deposits       2,161,552   461,616        23,220   198,199      4,930     15,357      14,584 2,879,458

Total                   2,321,966   484,487        65,041   200,088     44,392     15,358      14,649 3,145,981




                                                                                         Financial statements        123
Note 5 Loan investments

        5.1 Analysis of loan investments
               The evaluation of “Loan investments” with regard to minimum legal requirements and internal criteria,
               according to the breakdown as at December 31, 2006 and 2005 (in thousand euros), is set out below:


          2006                                                                                                                     Insolvency     Net
                                                                      Normal          Past due         Doubtful         Total       provision   amount

          Customer loans and credits                                2,277,688         6,437             1,616 2,285,741           –13,104 2,272,637
          Overdrafts on customer accounts                             107,876         1,380             8,553   117,809             –537    117,272
          Customer bills discounted                                    39,855           176                25    40,056             –139     39,917

          Total customer loan investments                          2,425,419          7,993            10,194 2,443,606          –13,780 2,429,826




          2005                                                                                                                     Insolvency     Net
                                                                      Normal          Past due         Doubtful         Total       provision   amount

          Customer loans and credits                                1,781,875         3,605               970 1,786,450           –18,145 1,768,305
          Overdrafts on customer accounts                             114,793         1,798             5,126   121,717             –458    121,259
          Customer bills discounted                                    34,206            25                —     34,231               –52    34,179

          Total customer loan investments                          1,930,874          5,428             6,096 1,942,398          –18,655 1,923,743



        5.2 Provision for insolvencies
               Movements in provision for insolvencies in “Loan investments” in 2006 and 2005 (in thousand euros) were as
               follows:


          2006                                                          Opening        Allocations /              Amounts         Other          Closing
                                                                        balance        (Recoveries)                applied      movements        balance

          Specific loan investment provisions                            6,493           –466                –2,517                –23           3,487
          General loan investment provisions                            12,162          –1,479                   —                –390          10,293
          Provision for bank deposits on time (*)                        7,791          –2,856                   —                  13           4,948

          Total provisions                                              26,446          –4,801               –2,517               –400          18,728
          Other allocations                                                              2,327                   —                  —

          Total movements during year                                                   –2,474               –2,517               –400

        (*) Includes recovery of provisions on elimination of inter-group balances.




  124             Financial statements
 2005                                                        Opening           Allocations /          Amounts         Other           Closing
                                                             balance           (Recoveries)            applied    movements (**)      balance

 Specific loan investment provisions                          1,639                 3,711             –102           1,245             6,493
 General loan investment provisions                           6,139                 2,549               —            3,474            12,162
 Provision for bank deposits on time                          5,667                 –328                —            2,452             7,791

 Total provisions                                           13,445                  5,932             –102           7,171           26,446
 Other allocations                                                                    899               —               —

 Total movements during year                                                        6,831             –102           7,171

(**) Other movements: includes opening balances from the entity acquired, CaixaBank SA.


      Movements in provision for insolvencies in the securities portfolio during the years 2006 and 2005
      (in thousand euros) are set out below:


 2006                                                        Opening           Allocations /          Amounts        Other            Closing
                                                             balance           (Recoveries)            applied     movements          balance

 Securities portfolio
 Bonds and other fixed-income securities                      1,577                  111                 —               –2              1,686




 2005                                                        Opening           Allocations /          Amounts        Other            Closing
                                                             balance           (Recoveries)            applied     movements          balance

 Securities portfolio
 Bonds and other fixed-income securities                      1,049                  524                 —                4              1,577




5.3 Collateral security for loan investment
      Collateral security obtained for “Loan investments” as at December 31, 2006 and 2005 (in thousand euros) is
      broken down as follows:


 2006                                                    Cash                                            Total
                                                        deposits       Securities         Mortgages     secured      Unsecured       Total

 Loan investments, gross
 Customer loans and credits                             30,753         240,183        1,247,700       1,518,636      767,105       2,285,741
 Overdrafts on customer accounts                            —               —                —               —       117,809         117,809
 Customer bills discounted                                  —               —                —               —        40,056          40,056

 Total security for loan investments                   30,753          240,183        1,247,700       1,518,636      924,970       2,443,606




                                                                                                                  Financial statements           125
         2005                                                    Cash                                                    Total
                                                                deposits              Securities      Mortgages         secured         Unsecured        Total

         Loan investments, gross
         Customer loans and credits                             28,960            187,712             936,030      1,152,702            633,748        1,786,450
         Overdrafts on customer accounts                            —                  —                   —              —             121,717          121,717
         Customer bills discounted                                 334                 —                   —             334             33,897           34,231

         Total security for loan investments                    29,294            187,712            936,030       1,153,036            789,362        1,942,398


              As at December 31, 2006, the heading “Customer loans and Credits” included housing loans granted accord-
              ing to current legislation for a total amount of 1,177 thousand euros (2005: 1,622 thousand euros).



        5.4 Loan investment to public sector
              Breakdown of “Loan investments” to public sector entities as at December 31, 2006 and 2005 (in thousand
              euros) follows:


                                                                                                                    2006                             2005
         Loan investments
         Central government                                                                                        30,829                            3,248
         Local government                                                                                          60,472                           53,218
         Other                                                                                                        875                              946

         Total                                                                                                     92,176                           57,412




Note 6 Securities portfolio

        6.1 Holdings in Group companies
              The Group had direct holdings in the following Andorran companies consolidated according to the equity
              method (in thousand euros) as at December 31, 2006 and 2005:


         2006                                                                                         %                                       2006           Book
                                                Domicile                   Activity                holding    Capital         Equity        earnings         value

         Crèdit Assegurances                   Andorra                Insurance                    100%      4,000          12,759            694           12,759
         Patrigest Informació
           Financera (*)                       Andorra          Company services                   100%             3             701         302             701
         CaixaBank Gestió SA (**)              Andorra           Investment fund
                                                                     manager                       100%           301             301           —             270

                                                                                                                                                         13,730

        (*) Percentage direct or indirect holding.
        (**) CaixaBank Gestió SA was created with the aim of providing investment fund management. Up until now it has not carried on any business.




  126            Financial statements
 2005                                                                                        %                                          2006         Book
                                         Domicile                   Activity              holding        Capital         Equity       earnings       value

 Crèdit Assegurances                   Andorra                  Insurance                 100%       4,000               8,734        2,125          8,734
 Patrigest Informació
   Financera (*)                       Andorra            Company services                100%              3              398          233            398
 CaixaBank Vida SA                     Andorra                Insurance                   100%            847            3,627        1,936          3,627
 CaixaBank Gestió SA (**)              Andorra             Investment fund
                                                               manager                    100%            301              301            —            270

                                                                                                                                                   13,029

(*) Percentage direct or indirect holding.
(**) CaixaBank Gestió SA was created with the aim of providing investment fund management. Up until now it has not carried on any business.


      The holding in Crèdit Assegurances was consolidated by the equity method as its insurance business was
      considered as being different from that of banking.

      During the current year, as part of the restructuring process to optimize the Crèdit Andorrà Group, necessary
      following the acquisition of CaixaBank, the holding and business arising from the activity of CaixaBank Vida
      SA was transferred to Crèdit Assegurances. In this process, a review was made of all actuarial hypotheses of the
      products marketed by CaixaBank and of instruments held by CaixaBank Vida SA. As a result of this review of
      actuarial hypotheses, there arose the need to improve and complement existing hedge in Crèdit Assegurances
      which brought about extraordinary negative results (–4,107 thousand euros), which explains the decrease in
      results for 2006.



6.2 Other Investments and Qualified Holdings
      The Group had the following direct “Other investments and Qualified holdings” as at December 31, 2006 and
      2005 (in thousand euros):


 2006                                               Consolidation                                 %                                              Book value,
                                  Domicile            process                  Activity        holding        Capital        Equity   Earnings      net

 Other investments (*)
 Esports de Neu                                      Equity                Skiing
   Soldeu-Incles SA    Andorra                       method               services           49.57%         20,885         39,167       2,521      18,964
 Other (**)            Andorra                       Equity
                                                     method               Services                  —              347      1,303         106        1,055

                                                                                                                                                   20,019

 Qualified holdings (*)
 SEMTEE SA              Andorra                                           Services           17.05%         25,242         32,528      4,109         4,633
 Other                                                                                            —             76         18,186     –1,045         7,025

                                                                                                                                                   11,658

(*) Latest financial statements available.
(**) Includes Seguriser SA, Administració i Serveis SL, SPI SA and SPA SA.




                                                                                                                              Financial statements             127
       2005                                             Consolidation                      %                                      Book value,
                                         Domicile         process           Activity    holding    Capital    Equity   Earnings      net

       Other investments (*)
       Esports de Neu                                     Equity            Skiing
         Soldeu-Incles SA    Andorra                      method           services    49.57%     20,885     37,801     3,212       18,738
       Other (**)            Andorra                      Equity
                                                          method           Services         —         46       709          86          203

                                                                                                                                    18,941

       Qualified holdings (*)
       SEMTEE SA              Andorra                                      Services    17.05%     25,242     30,310     3,844         4,633
       Other                                                                                —         76     19,935     –337          7,025

                                                                                                                                    11,658

      (*) Latest financial statements available.
      (**) Includes Seguriser SA, Administració i Serveis SL and SPI SA.


            Other holdings are consolidated by the equity method.

            Qualified holdings are recorded at cost price or market value, whichever is the least.

            Esports de Neu Soldeu-Incles SA manages a ski resort at Canillo (Andorra) and SEMTEE SA (Societat d’Eco-
            nomia Mixta Termolúdic Escaldes-Engordany), a hot-springs centre located at Escaldes (Andorra).

            The holding in Seguriser SA (Seguretat i Serveis SA) was consolidated by the equity method, as established by
            Memorandum 145/02 dated November 20, 2002 of the Andorran National Institute of Finance.

            In 2006, dividends brought into account from “Other investments and Qualified holdings” amounted to 1,122
            thousand euros (2005: 1,288 thousand euros).



      6.3 Investment funds
            The book value of holdings in investment funds managed by a related entity as at December 31, 2006 was
            53,069 thousand euros (2005: 50,883 thousand euros).




128            Financial statements
6.4 Portfolio valuation
    The book value of securities classified in the valuation categories described in Note 3.6 as at December 31, 2006
    and 2005 is set out below (in thousand euros):


                                                                                     2006                        2005
 Trading portfolio                                                                  55,976                   55,009
 Investments held to maturity                                                      211,350                  247,083
 Permanent investments                                                              33,749                   31,971
 Ordinary investment portfolio:
   Fixed-income instruments                                                        126,255                  113,838
   Equity instruments                                                               12,542                   11,933

                                                                                   439,872                 459,834
 Provision for insolvencies                                                         –1,686                  –1,577

 Total                                                                             438,186                 458,257


    The acquisition cost of instruments in the trading portfolio as at December 31, 2006 was 53,275 thousand euros
    (2005: 53,620 thousand euros). Market value of the investments held to maturity as at December 31, 2006 was
    209,239 thousand euros (2005: 248,091 thousand euros), that of the ordinary investment portfolio in fixed
    income instruments was 126,324 thousand euros (2005: 113,890 thousand euros) while the ordinary investment
    portfolio in equity instruments was 13,684 thousand euros (2005: 12,900 thousand euros).



6.5 Provision for market fluctuation
    Movements in provision for market fluctuation in 2006 and 2005 (in thousand euros) were as follows.


 2006                                                Opening                          Amounts          Other            Closing
                                                     balance         Allocations       applied       movements          balance

 Securities portfolio
 Bonds and other fixed-income instruments                —              —                   —            —                 —
 Other holdings                                          —              —                   —            —                 —
 Shares and other equity instruments                  2,109             —                   —            —              2,109
 Investment funds                                        —              —                   —            —                 —

 Total movement for year                              2,109             —                   —            —              2,109




 2005                                                Opening                          Amounts          Other            Closing
                                                     balance         Allocations       applied       movements          balance

 Securities portfolio
 Bonds and other fixed-income instruments                 4             3                –7              —                 —
 Other holdings                                           1             —                –1              —                 —
 Shares and other equity instruments                  3,506             —            –1,397              —              2,109
 Investment funds                                        —              —                —               —                 —

 Total movement for year                              3,511              3           –1,405              —              2,109




                                                                                                 Financial statements             129
        6.6 Mandatory deposits
            At its session on June 30, 1994, the General Council approved the Law on Regulation of the Ratio of Manda-
            tory Investments. This law makes it obligatory for those entities that include in their activities the taking of
            deposits from the public, which deposits are applied to the granting of loans and other investments, to main-
            tain an investment ratio in Andorran public instruments.

            In compliance with this ratio, on December 31, 2006, the Group had subscribed 105,292 thousand euros to
            government bonds of the Principality of Andorra issued on December 31, 2005. This bond issue matures on
            December 31, 2009 at the official 1-year Euribor interest rate established on the first working day of each year.
            The amount subscribed by the Group is recorded under the heading “Investment portfolio - Bonds and other
            Fixed-income Instruments” in the consolidated balance sheet here included.

            In addition, in accordance with the law, Andorran banks must maintain deposits with ANIF. The situation and
            remuneration of those deposits in 2006 and 2005 (in thousand euros) was as follows:


         2006                                      Deposit         Interest rate                         Term

         Mandatory deposits                       46,245            2.400%            December 30, 2005 - April 28, 2006
                                                                    2.999%            April 28, 2006 - December 29, 2006
         Other deposits (ANIF)                     1,126            2.300%          December 30, 2005 - January 16, 2006




         2005                                      Deposit         Interest rate                         Term

         Mandatory deposits                       46,245            2.025%                           January - February 2005
                                                                    2.201%                           March - December 2005
         Other deposits (ANIF)                    20,603            2.090%                       January 1 - January 17, 2005
                                                   1,042            1.964%                       January 18 - December 2005



Note 7 Intangible assets and consolidation goodwill

        7.1 Intangible and fixed assets
            Movements in intangible assets and amortizable expenses and movements in fixed assets (in thousand euros)
            are set out below:

        Fixed assets and amortizable expenses

                                             December 31, 2005    Additions        Retirements     Transfers/Other   December 31, 2006

         Cost:
           Computer software                     32,286            4,658              —                 —                 36,944
           Amortizable expenses                   1,902               —               –6                —                  1,896

         Total intangible fixed assets          34,188            4,658               –6                —                38,840

         Amortization provision
          Computer software                    –20,921           –4,429               —                 —               –25,350
          Amortizable expenses                   –780             –375                —                 —                –1,155

         Total amortization provision          –21,701           –4,804               —                 —               –26,505

         Total, net                             12,487             –146               –6                —                12,335




  130           Financial statements
Fixed assets

                                     December 31, 2005    Additions      Retirements   Transfers/Other   December 31, 2006

 Cost:
   Working fixed assets
   Land                                  19,496              —             —                —                 19,496
   Buildings                             46,543           1,992            —                —                 48,535
   Furniture                             14,437             354         –473                —                 14,318
   Installations                         47,927           3,016        –3,134               —                 47,809
   Data-processing equipment             23,042           1,829        –1,708               —                 23,163
   Vehicles                                 238             146           –40               —                    344
   Other                                    842              —             —                —                    842

 Sub-total                             152,525            7,337        –5,355               —               154,507

   Non-working fixed assets
   Land                                  47,988              —           –157               —                 47,831
   Buildings                              5,062              —           –150               —                  4,912
   Other                                  4,782             748          –206               —                  5,324

 Sub-total                              57,832              748          –513               —                58,067

 Total fixed assets                    210,357            8,085        –5,868               —               212,574

 Provision for depreciation:
   Working fixed assets
   Buildings                           –29,190           –1,201             —               —               –30,391
   Furniture                           –13,629            –322             473              —               –13,478
   Installations                       –33,792           –3,267          3,119              —               –33,940
   Data-processing equipment           –19,085           –1,574          1,708              —               –18,951
   Vehicles                              –220               –18             40              —                 –198
   Other                                 –236               –17             —               —                 –253

 Sub-total                             –96,152           –6,399         5,340               —               –97,211

   Non-working fixed assets
   Buildings                             –1,261            –123             —               —                 –1,384
   Other                                    –70              –4             —               —                    –74

 Sub-total                              –1,331             –127             —               —                –1,458

 Total provision for depreciation      –97,483           –6,526         5,340               —               –98,669

 Provision for depreciation             –2,053               23            80               —                –1,950
 Total fixed assets, net               110,821            1,582          –448               —               111,955

    The accounting treatment of the above headings is explained in Notes 3.8 and 3.9. Depreciation is calculated
    on a straight-line basis at rates set out in Note 3.10.

    In 2006 and 2005 no interest or exchange rate differences in fixed assets were capitalized.

    Buildings not available for sale on December 31, 2006 represented 28,201 thousand euros in net value.




                                                                                           Financial statements              131
             Lands classified as non-working fixed assets largely comprise acquisitions made with the entity’s own funds.

             The heading “Other” includes, among other things, Crèdit Andorrà’s art collection.



        7.2 Consolidation goodwill
             Movements in consolidation goodwill in 2006 and 2005 (in thousand euros) were as follows:


                                                                                       2006           2005
                                       Opening balance for year                       176,101             —
                                       Additions                                           —         195,668
                                       Depreciation:
                                         Charged to reserves                           –9,783         –9,783
                                         Charged to profit and loss account            –9,784         –9,784

                                       Closing balance at year-end                    156,534       176,101


             With regard to amortization of consolidation goodwill or provision for consolidation goodwill arising from the
             purchase of a 100% participation in CaixaBank, the Accounting Plan of the Andorran financial system, under
             “Intangible Fixed Assets and Amortizable Expenses” in Article 10 Specific Evaluation Regulations, sets out that
             “Amortizable expenses and goodwill shall be amortized systematically against profit and loss account and shall
             not exceed the period during which the funds mentioned contribute to obtaining income, with a maximum
             limit of 5 years. Entities may apply to ANIF asking for extension of this period up to 10 years.” Given the
             exceptional nature of the transaction that created this goodwill, as well as its permanent nature, the entity
             having so applied to ANIF, in compliance with that set out in the Plan and without diminishing the entity’s
             results, this body expressly gave its approval on October 28, 2005 for the amortization of the goodwill involved
             in that purchase over 10 years, as well as covering 50% of the cost of such amortization as a charge to reserves,
             given that the effect on the high level of equity held by the entity did not prevent the carrying out of the
             requirements laid down in current legislation so far as concerns minimum equity (See Note 11).



Note 8 Provision for risks and contingencies

        Movements in provision for risks and contingencies in 2006 and 2005 (in thousand euros) are given below:


         2006                                                  Opening                              Amounts      Other      Closing
                                                               balance   Allocation    Recoveries    applied   movements    balance

         Provision for pensions and similar amounts           20,223      4,518            —         –724       1,306      25,323
         Provision for contingent liabilities                    595        163         –217           –3         355         893
         Other provisions                                      4,235        820        –3,032        –415           1       1,609

                                                              25,053      5,501        –3,249       –1,142      1,662      27,825




  132           Financial statements
 2005                                                             Opening                                 Amounts       Other         Closing
                                                                  balance       Allocation   Recoveries    applied    movements       balance

 Provision for pensions and similar amounts                           —            914           —         –710       20,019      20,223
 Provision for contingent liabilities                                591            22           —           —           –18         595
 Other provisions                                                  2,475         2,342       –2,637        –451        2,506       4,235

                                                                   3,066         3,278       –2,637       –1,161      22,507      25,053

(*) Other movements: includes opening balances from the entity acquired, CaixaBank SA.


The amount recorded under the heading “Provision for Pensions and Similar Obligations” in the financial
statements herewith corresponds with the accrued liability to active and retired employees of CaixaBank SA and
hedged by that entity. During the current year 2006, actuarial hypotheses have been brought up to date in the
valuation of obligations for accrued pensions as at December 31, 2006 in order make use of more up-to-date
demographic hypotheses and interest rates. Actuarial obligations hedged have been calculated in accordance with
the following actuarial hypotheses:

      • Interest rate applied on updating: 4%
      • Rate of salary increase: 2% compound annual
      • Rate of pension revaluation: 3%
      • Growth rate of CASS points: 1.5%
      • CPI: 1.5%
      • Method of calculation: individual capitalization
      • Retirement age of employees in Subplan 1: 60 years
      • Retirement age of employees in Subplan 2 and 3: 65 years
      • Survival tables: PERM - 2000P

Movement taking place in the heading “Provision for Pensions and Similar Obligations” in 2006 and 2005 (in thousand
euros) is shown below:


                                                                                             2006              2005
                           Opening balance for the year                                      20,223             —
                           Allocation to fund                                                 1,258            638
                           Extraordinary allocations                                          3,260            276
                           Return for the year                                                1,306            873
                           Amounts applied in the year                                         –724          –710
                           Other                                                                 —          19,146

                           Closing balance for the year                                      25,324        20,223


Apart from the above mentioned provision, the Group showed a provision for general banking risks as at December
31, 2006 of 68,620 thousand euros (2005: 60,463 thousand euros).




                                                                                                               Financial statements             133
 Note 9 Pension fund and other funds

          Obligations with all Crèdit Andorrà employees and beneficiaries related to such contingencies as retirement, death
          and incapacity are currently contracted out to an independent Andorran foundation (Previfun) established in 1998.

          Annual contributions made to the Foundation both by the Bank and employees are regulated by statute and, in the
          case of the Bank, these amounted to 1,502 thousand euros (2005: 1,428 thousand euros).

          Voluntary contributions to the Employees Fund amounted to 983 thousand euros (2005: 950 thousand euros).



Note 10 Distribution of profits

          The proposed distribution of profits of Crèdit Andorrà SA for the year 2006 to be presented to the General Share-
          holders Meeting for approval (in thousand euros) is as follows:


                                                                                        2006                   2005
           Group profit for the year                                                   121,371               101,275
           Profits awaiting application                                                     —                    102
           Amortization of consolidated goodwill                                         9,783                 9,783
           Other adjustments                                                            –2,830                    —
           Consolidation adjustments
             For dividends                                                              36,213                23,491
             For other (net)                                                           –44,406               –33,430

           Profit available for distribution                                           120,132               101,221

           Dividend payments                                                           –85,000               –61,000
           Transfer to reserves                                                        –34,632               –40,221
           Extraordinary contribution to Fundació Crèdit Andorrà allocation fund         –500                     —

           Profits awaiting application                                                     —                      —



          During the year, Crèdit Andorrà distributed interim dividends of 50,000 thousand euros (2005: 45,000 thousand
          euros).




    134          Financial statements
Note 11 Movements in shareholders’ equity

        In 2006 and 2005, the following movements (in thousand euros) took place in shareholders’ equity:


         2006                                                                                          Retained
                                                                                                       earnings
                                    Share     Legal    Guarantee Revaluation Voluntary Consolidation    carried
                                   capital   reserve    reserve    reserve    reserve    reserve       forward      Profits        Total

         Balance at beginning
           of year before
           distribution         70,000       7,000     33,063      13,934 325,477 11,629                  102      56,275 517,480
         Supplementary dividend     —           —          —           —       —      —                    —      –16,000 –16,000
         Application of 2005
           profits/transfer
           to reserves              —            —           —          —      40,221          —         –102     –40,119              —
         Other (Consolidation
           adjustments)             —            —           —          —           —          —            —        –156          –156

         Balance at beginning
           of year following
           distribution           70,000     7,000     33,063      13,934 365,698 11,629                    —           — 501,324

         Profits for 2006              —         —           —          —           —          —            —     121,371 121,371
         Interim dividend 2006         —         —           —          —           —          —            —     –50,000 – 50,000
         Amortization of
           consolidation
           goodwill (Note 7.2)         —         —           —          — –19,567              —            —           —     –19,567
         Other (Consolidation
           adjustments)                —         —           —          —           —     10,202            —           —      10,202

         Total                    70,000     7,000     33,063      13,934 346,131 21,831                    —      71,371 563,330



         2005                                                                                          Retained
                                                                                                       earnings
                                    Share     Legal    Guarantee Revaluation Voluntary Consolidation    carried
                                   capital   reserve    reserve    reserve    reserve    reserve       forward      Profits        Total

         Balance at beginning
           of year before
           distribution         70,000       7,000     33,063      13,934 313,618          8,929          101      37,731 484,376
         Supplementary dividend     —           —          —           —       —              —            —      –13,500 –13,500
         Application of 2004
           profits/transfer
           to reserves              —            —           —          —      21,642          —             1    –21,643              —
         Other (Consolidation
           adjustments)             —            —           —          —           —          —            —      –2,588      –2,588

         Balance at beginning
           of year following
           distribution           70,000     7,000     33,063      13,934 335,260          8,929          102           — 468,288

         Profits for 2005              —         —           —          —           —          —            —     101,275     101,275
         Interim dividend 2005         —         —           —          —           —          —            —     –45,000     –45,000
         Amortitzation of
           consolidation
           goodwill (Note 7.2)         —         —           —          —      –9,783          —            —           —      –9,783
         Other (Consolidation
           adjustments)                —         —           —          —           —      2,700            —           —          2,700

         Total                    70,000     7,000     33,063      13,934 325,477 11,629                  102      56,275 517,480




                                                                                                            Financial statements           135
      Share capital
      Share capital is represented by 900,000 shares in “A” series and 100,000 shares in “E” series, each of 70 euros, fully
      subscribed and paid up.

      During the year, sale of the holding of ”la Caixa” Group (46.35%) was carried out in favour of other shareholders.

      Legal reserve
      In compliance with legal and statutory requirements, a legal reserve of 10% of share capital was established.

      Guarantee reserve
      In accordance with Andorran legislation passed in 1995, Crèdit Andorrà SA has established a guarantee reserve for
      deposits and other operational obligations of 33,063 thousand euros (2005: 33,063 thousand euros). This reserve
      cannot be distributed.

      Revaluation reserve
      This reserve, amounting to 13,934 thousand euros (2005: 13,934 thousand euros) corresponds to the revaluation of
      buildings for own use (See Note 3.9).

      Reserves in consolidated companies
      Reserves in consolidated companies correspond to accrued profits in previous years of Group companies forming
      part of the consolidation perimeter from the date of their acquisition or constitution up to December 31, 2006 that
      have not been distributed as dividends.

      Subordinated liabilities
      On October 26, 2005, the ANIF Board of Governors agreed to authorize the issue of preference shares by Crèdit
      Andorrà Preference Ltd. to be accounted for as Tier 1 type regulatory capital of Crèdit Andorrà Group, given that,
      on the one hand, these preference shares met the conditions so that, at the international level, this type of share could
      be considered as equity of first category (Tier 1). This did not imply renouncing one of the strengths of the
      Andorran financial system when it comes to protecting itself abroad, which always involves following the most
      conservative criteria among all those established at the international level. On the other hand, the other components
      of the equity of Crèdit Andorrà SA continue to represent around 80% of the Group’s total shareholders’ equity.

      In accordance with this ANIF authorization, on December 22, 2005, Crèdit Andorrà Preference Ltd. carried out an
      issue of 100 million euros in preference shares, without voting rights and with a specified annual dividend of 5% in
      the first three years following issue and then variable annually with reference to the CMS 10-year rate plus 30 basis
      points, for the number of days in the year when the CMS 10-year rate is equal to or higher than the CMS 2-year rate.

      On January 25, 2006, the ANIF Board of Governors agreed to authorize an increase in the preference share issue by
      Crèdit Andorrà Preference Ltd. of 50 million additional shares to be accounted as Tier 1 type regulatory capital of
      Crèdit Andorrà Group, given that the other components of the equity of Crèdit Andorrà continued to represent
      around 70% of total shareholder equity of the Group. These preference shares are identical in nature to those of the
      first issue apart from price.

      Crèdit Andorrà Preference Ltd. is a wholly-owned subsidiary of Crèdit Andorrà SA and the issue mentioned has the
      joint and several and irrevocable guarantee of Crèdit Andorrà SA, as indicated in the corresponding information fol-
      der for the issue.

      In addition, this issue has received the necessary ANIF qualification so that it can be fully computed as basic equity
      of the Group. This issue of a perpetual nature was fully taken up by third parties outside the Group and may be fully
      written off should the issuing company so decide, and with authorization of ANIF, after a period of six years
      following its being paid up.

      This year, Fitch Ratings gave these preference share issues an A– rating.



136          Financial statements
Note 12 Other balance sheet and statement of earnings items

        Other significant items in the balance sheet and statement of earnings (profit and loss account) for the years ended
        December 31, 2006 and 2005 (in thousand euros) are shown below:



        12.1 Asset accrual accounts



                                                                                         2006                   2005
                Accrued interest                                                       33,550                  26,119
                Commissions                                                             7,814                   6,778
                Other                                                                      65                     177

                                                                                       41,429                 33,074



        12.2 Liability accrual accounts



                                                                                         2006                   2005
                Accrued expenses                                                       36,845                  26,861
                Before-due receipts                                                     1,085                   1,723

                                                                                       37,930                 28,584



        12.3 Extraordinary results
              During the year, an amount of 2,361 thousand euros was released from provision for general banking risks
              and 2,123 thousand euros was computed as negative extraordinary results.

              In 2006, an extraordinary contribution of 3,260 thousand euros was made to the CaixaBank pension fund as
              a result of a review of actuarial hypotheses (See Note 8).




                                                                                                  Financial statements         137
Note 13 Net foreign currency positions

         At the end of 2006 and 2005, the Group held the following significant foreign currency positions (in thousand
         euros):


          2006                                                 Assets                Liabilities       Net position

          Euros                                              3,450,811             3,529,666           –78,855
          US dollars                                           570,685               493,201            77,484
          Swiss francs                                         215,039               215,337             –298
          Pounds sterling                                       67,414                68,061             –647
          Japanese yen                                          30,655                28,465             2,190
          Canadian dollars                                      15,370                15,370                —
          Other currencies                                      16,166                16,040               126

                                                            4,366,140             4,366,140




          2005                                                 Assets                Liabilities       Net position

          Euros                                              3,039,265             3,116,222           –76,957
          US dollars                                           529,221               504,048            25,173
          Swiss francs                                         201,060               201,365             –305
          Pounds sterling                                       65,241                66,120             –879
          Japanese yen                                          44,590                44,666               –76
          Canadian dollars                                      15,400                15,491               –91
          Other currencies                                      68,006                14,871            53,135

                                                            3,962,783             3,962,783


         Exchange rates applied at year-end were obtained from reliable market sources.




   138           Financial statements
Note 14 Financial derivatives

        14.1 Analysis of financial derivatives
                On December 31, 2006 and 2005, the Group held the following positions in over-the-counter financial deri-
                vatives (face value in thousand euros):


         2006                                                  Less than                              More than
                                                                1 year           From 1-5 years        5 years             Total

         Interest rate swaps                                  1,911,389             83,200            314,751          2,309,340
         Futures                                                     —                  —                  —                  —
         Foreign exchange transactions                        3,116,870                 —                  —           3,116,870
         Options                                                 17,315             16,533            146,267            180,115

                                                             5,045,574             99,733            461,018           5,606,325




         2005                                                  Less than                              More than
                                                                1 year           From 1-5 years        5 years             Total

         Interest rate swaps                                    777,527             61,400            181,067          1,019,994
         Futures                                                     —                  —                  —                  —
         Foreign exchange transactions                        5,120,467                 —                  —           5,120,467
         Options                                                     —              62,264            118,608            180,872

                                                             5,897,994            123,664            299,675           6,321,333


                At year-end, these positions in financial derivatives were being used as hedge instruments for Group assets
                and liabilities or to offset open customer positions (See Note 14.2).

                On December 31, 2006 and 2005, there were no transactions under contract in organized markets.



        14.2 Treatment of hedges
                Financial derivatives used to hedge specific market risks are individually assigned to those assets, liabilities or
                off-balance-sheet positions being hedged and are initially recorded at cost. Forward foreign currency
                contracts are subsequently stated at market value, applying these fluctuations to the statement of earnings
                (profit and loss account). Market fluctuations of these hedged positions are monitored and controlled using
                RiskMetrics and ALM II models (for management of assets and liabilities).




Note 15 Pledged assets

        On December 31, 2006, Crèdit Andorrà had no assets pledged as guarantee for its own obligations or those of third
        parties.




                                                                                                        Financial statements          139
Note 16 Transactions with entities or persons related to the Group and Group entities

         Balances and transactions with the Group and related third parties that represent more than 10% of equity as shown
         in the balance sheet or 5% of the result for the year in the profit and loss account (statement of earnings) are set out
         below (in thousand euros):


          Balances with related financial intermediary                                       2006                   2005
          Assets                                                                           68,805                 52,669
          Financial intermediaries                                                         68,608                 52,390
          Accrual accounts                                                                    197                    279
          Liabilities                                                                      60,606                104,133
          Financial intermediaries                                                         60,474                101,766
          Accrual accounts                                                                    132                  2,367
          Transactions with related financial intermediary                                  3,337                  –551
          Interest and related income                                                       4,107                  2,710
          Interest and related expenses                                                      –770                 –2,275
          Other                                                                                —                   –986




          Balances with CaixaBank SA                                                         2006                   2005
          Assets                                                                           96,804                 72,056
          Financial intermediaries                                                         93,893                 72,003
          Accrual accounts                                                                  2,911                     53
          Liabilities                                                                     478,320                412,134
          Financial intermediaries                                                        476,488                411,562
          Accrual accounts                                                                  1,832                    572
          Transactions with CaixaBank SA                                                  –15,448                 –1,898
          Interest and related income                                                       1,061                     64
          Interest and related expenses                                                   –14,838                 –1,962
          Other                                                                            –1,671                     —




   140          Financial statements
Note 17 Risk control and management

        The management and control of risk has always been a priority objective of Crèdit Andorrà and, for this purpose,
        we have developed the necessary infrastructure, internal methods and controls.

        Policy and limits on risk are established and supervised by a committee called the Assets, Liabilities and Risks
        Committee (with functions equivalent to those of ALMCO, the Assets and Liabilities Management Committee). Among
        other functions, this committee approves risk policies affecting the management of assets and liabilities of the entity and
        management mandates. At the same time, the committee sets and revises the limits of balancing entries with banks and
        supranational entities and/or private entities. At the same time, with the aim of avoiding the concentration of risk, limits
        are established for issuers of financial instruments whether within or outside the Crèdit Andorrà balance sheets.

        All steps taken by this committee bear in mind the rules of ANIF, the Andorran national body that carries out the
        tasks of regulation, control and supervision of the country’s financial activities and new regulatory trends, in
        compliance with the directives of the New Basle Capital Accord which puts emphasis on the increasing sensitivity
        to risks and risk management.

        For some years, without ignoring classical methods of risk control, Crèdit Andorrà has applied Value-at-Risk (VaR)
        methodology in all areas of risk management. Through statistical and stochastic techniques, VaR provides a
        measurement of risk. Formally, VaR is a synthetic figure that indicates the maximum loss to be expected for a
        specific interval of confidence in the value of a portfolio over a fixed time span.

        Management of market risk
        The market VaR is calculated daily for a timescale of one day and with a confidence interval of 95% for the portfolios
        of the entity as a whole. A detailed report indicating the VaR, with differing timescales and intervals of confidence,
        is periodically sent to members of the Executive Committee and the Assets, Liabilities and Risks Committee. These
        VaR measurements, along with others, make possible a test of integrity and consistency. During this period, the
        average daily VaR for share portfolios, calculated with a 95% interval of confidence and a timescale of one day, was
        6.1 thousand euros with a maximum and minimum of 21.3 thousand euros and 0.3 thousand euros respectively,
        which was below the authorized risk limit of 200 thousand euros.

        For securities portfolios as whole, the average daily VaR, calculated at a 95% level of confidence, was 298.0 thousand
        euros, with a maximum and minimum of 690.9 thousand euros and 59.3 thousand euros respectively, as compared
        with the authorized risk limit of one million euros.


                         Daily VaR
                                                                                                  (in million euros)
                          0.80




                          0.60




                          0.40




                          0.20




                          0.00
                                 jan   feb   mar    apr    may    jun   jul    aug   sep    oct     nov       dec




                                                                                                            Financial statements       141
      Analysis of this report is supported by Backtesting tests. In 2006, Backtesting showed that both gains and losses were
      in line with intervals of confidence. The daily VaR of the share portfolios as a whole, with a level of confidence of
      95%, was exceeded in 6.5% of all cases throughout 2006, compared with the expected 5%. For investment portfolios
      as a whole, the daily VaR, with a confidence level of 95%, was exceeded in only 5% of cases during the year as against
      what was statistically expected.

      Management of credit risk
      At the end of 2006, of the total exposure to credit risk, interbank deposits represented 33%, the securities portfolio
      represented 16%, while customer loans accounted for the remaining 51%.

      So far as concerns interbank deposits and the securities portfolio, Crèdit Andorrà has also introduced the loan VaR
      as a management and control tool. This calculation is carried out by applying the so-called “CreditManager”
      programme developed by J.P. Morgan. Crèdit Andorrà follows the loan VaR with a timescale of one year and an
      interval of confidence of 99%.

      At year-end, the loan VaR for the securities portfolio and interbank deposits was 3,653.1 thousand euros out of a
      total exposure to risk of 1,152,853.6 thousand euros. This loan VaR is below the risk limit of 7,000 thousand euros
      set by the Assets, Liabilities and Risks Committee. Put another way, this level of loan VaR would be equal to having
      a portfolio with an AA rating.

      In credit risk, special attention is given to balancing entry risk and country risk. These are regularly monitored
      always with respect to established limits.

      Management of interest rate and foreign currency risk
      Crèdit Andorrà has traditionally paid special attention to maintaining a very strict relation between investment and
      how it is financed. For this reason, the Assets, Liabilities and Risks Committee has not set any ordinary limit for the
      establishment of open positions and therefore any gap not in keeping with the normal development of daily
      operations must have prior authorization.

      The control of these risks is maintained through the ALM II programme. Exposure to interest rate risk as a consequence
      of gaps between investment and financing is very limited. In fact, at the end of 2006, a displacement parallel to the
      interest rate curve of all currencies of 1% would have had an impact of less than 0.20% of shareholder equity.

      Liquidity risk, understood as that risk arising from the difficulty the entity may have in meeting its payments or in
      obtaining funds for that purpose, is handled through the management tools mentioned above.

      Foreign currency risk is also subject to daily monitoring, both with regard to transactions at sight and those at term.
      At year-end, the open position in foreign currency risk, consolidated in euros, was 232.0 thousand euros as against
      the established limit of 5 million euros.

      Management of operational risk
      The Basle Committee defined operational risk as the risk of direct or indirect loss caused by errors and omissions in
      processes, persons and internal systems or outside events.

      Crèdit Andorrà has continued to develop the organizational structure and establish the necessary capacity to ensure
      adaptation to the Basle Capital Accord with regard to the measurement and management of operational risk.




142          Financial statements
Note 18 Other off-balance-sheet records

        Other off-balance-sheet records at year-end are set out below (in thousand euros):


                                                                                                   2006                 2005
         Guarantees and obligations received                                                     444,396              372,198
         Unlisted shares and those held in trust                                                 564,703              562,523
         Very doubtful loans                                                                      34,155               30,495
         Other                                                                                    43,319               31,873

                                                                                            1,086,573                997,089


        In compliance with ANIF Memorandum 169/06 relating to the Accounting Plan for the Andorran financial system
        published on October 12, 2006, in clause V - Other off-balance-sheet records with functions exclusively related to
        administrative control, in the section “Securities and own unlisted shares”, bonds issued by the Government of
        Andorra have been reclassified under off-balance-sheet records, both for the current year and the previous year, for
        purposes of comparison. Under “Shares held in trust”, shares of Crèdit Andorrà SA have been excluded from being
        considered assets managed by the Group and have been reclassified at face value.



Note 19 Compliance with regulations

        19.1 Law on regulation of solvency and liquidity of financial entities
              At its session on February 29, 1996, the General Council of the Principality of Andorra approved the Law on
              Regulation of Solvency and Liquidity of Financial Entities (hereinafter referred to as “the Law”).

              In accordance with the Law, Crèdit Andorrà must maintain specific ratios with regard to quantitative
              measurement of the amounts of assets, liabilities and certain off-balance-sheet records of the Bank, calculated
              under accounting criteria and with qualitative opinions on the various components, evaluation of risk and
              other factors.

              This Law makes it obligatory to maintain a solvency ratio, made up according to the recommendations of the
              Basle Committee on Banking Supervision, with a minimum of 10% of the weighted risk of assets. It also
              obliges financial entities to maintain a liquidity ratio with a minimum of 40%.

              The solvency and liquidity ratios as at December 31, 2006 are set out below with comparison of the legal
              requirements mentioned above:


                                                                 Group’s current ratio                            Legal minimum ratio
                                                          2006                            2005
                Solvency ratio                          20.94%                           19.92%                          10%
                Liquidity ratio                         57.22%                           66.71%                          40%



              We should mention that the calculation of the solvency ratio is made according to ANIF Memorandum No.
              159/04 on Equity Requirements. This memorandum, which is technically binding, complements the Law on
              Regulation of Solvency and Liquidity of Financial Entities, dated February 29, 1996, and is designed to foster
              greater security and stability of Andorra’s financial system through the incorporation of hedging of market
              risks.




                                                                                                           Financial statements         143
           In addition, the Law limits the concentration of risks in favour of any one beneficiary to 20% of the Bank’s
           equity. On the other hand, it establishes that the concentration of risks that individually exceed 5% of equity
           cannot go above the limit of 400% of such equity. At the same time, the balances or transactions maintained
           with members of the Board of Directors cannot go above 15% of equity.

           During the current year, the Group met the requirements set out in this Law. The highest concentration of
           risk reached in favour of any single beneficiary was 11.69% of the entity’s equity. Total loans, discounts and
           other transactions creating individual credit risk above 5% of the Group’s equity did not exceed 35.56%.

      19.2 Law on international cooperation on crime and the fight against laundering of money or
           securities
           At its session on May 11, 1995, the General Council of the Principality of Andorra approved the Law on
           Protection of Bank Secrecy and the Prevention of Laundering of Money or Securities arising from Crime, a
           law in operation until July 24, 2001 when the present Law on International Cooperation on Crime and the
           Fight against Laundering of Money or Securities arising from International Delinquency came into force.

           In compliance with these laws, the Bank has established a series of internal control and reporting procedures
           aimed at protecting bank secrecy and to foresee and prevent money-laundering operations. In this respect,
           specific training programmes have been carried out.

      19.3 Law on indirect taxation on banking and financial services
           At its session on May 14, 2002, the General Council of the Principality of Andorra approved the Law on
           Indirect Taxation on Banking and Financial Services. This law came into force in 2002 and its object was to
           levy tax on services provided by banking entities.

           Subsequently. on July 10, 2002, the Government of Andorra approved the regulations related to the
           abovementioned law.

           On February 21, 2005, the General Council of the Principality of Andorra approved the Law to Modify the
           Indirect Tax Rate on Banking and Financial Services raising the rate from 7% to 12%, applicable as of April
           1, 2005. Later, on March 30, 2005, it approved the amended regulations related to the above law.

           Accrued expenses for the indirect tax on banking and financial services in 2006 amounted to 18,637 thousand
           euros (2005: 15,483 thousand euros), recorded under the heading “General expenses - Taxes” in the profit and
           loss account (statement of earnings).

      19.4 Law to apply the Agreement between the Principality of Andorra and European Union on
           taxation of returns on savings in form of interest
           At its session held on February 21, 2005, the General Council of the Principality of Andorra ratified the Agre-
           ement between the Principality of Andorra and the European Union regarding the establishment of measu-
           res equivalent to those foreseen in Directive 2003/48/CE issued by the Council with regard to taxation on
           returns on savings in the form of interest payments. Also, at its session on June 13, 2005, it approved the law
           to apply the abovementioned Agreement. This law establishes the obligation to withhold at source amounts
           due on interest payments made by payment agents established in the Principality of Andorra to effective
           beneficiaries, being residents of one of the member states of the European Union.

           During the year, Crèdit Andorrà SA and CaixaBank SA, in their role as payment agents, fulfilled all the
           obligations contained in the Agreement and the Law dealing with its application and duly paid the amount
           of retentions as established in the abovementioned legislation.




144        Financial statements
Note 20 Significant events following year-end

        In the process begun in July 2005 with the purchase of the CaixaBank Group, accounting and data-processing
        integration was successfully completed on January 1, 2007. This also involved changing the corporate image of the
        branch network. In the course of 2007, it is expected to fully complete the process of integration of the two entities
        which, when operating as a single body, will allow for the fullest optimization of technical and human resources.

        On January 1, 2007, as a consequence of the process of restructuring the entity arising from the acquisition of
        CaixaBank SA by Crèdit Andorrà SA, and as a step previous to a process of externalizing the pension obligations
        of CaixaBank SA in a specialized Group company, these acquired obligations will be changed from forming part of
        a pension plan with defined benefits to a defined contributions plan through individual contracts of acceptance,
        signed by each of those participating.




Note 21 Other matters of interest

        Crèdit Andorrà SA established the Fundació Crèdit Andorrà registered in the Principality of Andorra on December
        15, 1987, for an indefinite period of time. The Foundation has its own legal identity, Andorran nationality and is of a
        private nature.

        This Foundation, which is a non-profit body, has as it objective to contribute to improving the quality of economic,
        cultural and social life in Andorra through taking on, programming, funding and carrying out of specific aims. Among
        these aims, we should especially mention the granting of study scholarships to those who deserve them in order to help
        them obtain the best possible education in whatever areas that may have an influence on the bettering of the economic,
        scientific, educational, cultural and services structure of the country.

        In 2006, always with the aim of adapting its work to the needs of the country, three major areas were the target for
        activities carried out by the Crèdit Andorrà Foundation. These included its social work programmes, especially those
        aimed at the elderly and organizations dealing with the disabled. Another key area was in educational activities,
        particularly in the granting of scholarships. It was also involved in cultural activities, dealing with pedagogical aspects
        and all those areas directly related to the country, its history and its natural environment.




                                                                                                        Financial statements          145
AUDITORS’ REPORT
Crèdit Andorrà Group




                       Financial statements   147
Corporate Social Responsibility
                   2006 Report
         Working together to reach more people
Corporate Social Responsibility 2006 Report




Contents

1. Statement by the Chief Executive Officer                152
2. Our corporate social responsibility policy              154
3. Working together for better customer service            156
  3.1. Socially responsible financial products             157
  3.2. Communicating with the customer                     161
4. Working together as a team                              163
  4.1.   Team work                                         164
  4.2.   Policy on attracting and keeping professionals    164
  4.3.   Policy on professional training and development   165
  4.4.   Social benefits                                   167
  4.5.   Crèdit Andorrà staff profile                      167
  4.6.   Staff stability                                   169
5. Working together with the community                     170
  5.1. Social programmes                                   171
  5.2. Educational programmes                              176
  5.3. Cultural programmes                                 178
6. Working together to preserve the environment            183
  6.1. Integration of CaixaBank branches in
       Crèdit Andorrà’s environmental management
       system (EMS)                                        183
  6.2. Constant improvement in environmental
       management through EMS                              184
  6.3. Staff environmental training                        185
  6.4. Resource consumption and waste management           185
  6.5. Environmental criteria for construction
       of new branches                                     189
  6.6. Collaboration with Andorra National Wastes Plan     189
7. Working together for economic progress                  190
  7.1. Economic indicators                                 190
  7.2. Ratings and awards                                  190
  7.3. Collaboration and sponsorship                       192
8. Scope of the report                                     196
9. Table of GRI – SPI – EPI indicators                     197
  Glossary                                                 201
                                  1. Statement by the Chief Executive
                                     Officer




      Working together to reach   The year 2006 involved integrating CaixaBank with Crèdit Andorrà, a process
                   more people    successfully brought to a conclusion on December 31. It gives us much satisfaction
                                  to be able to say that the results of this process have been very positive from the point
                                  of view of social responsibility, a matter we deal with in this report. Corporate social
                                  responsibility has indeed been fully integrated in the overall corporate management
                                  of the Crèdit Andorrà Group.

                                  Working together for a year and a half, the Crèdit Andorrà Group has seen its
                                  leadership in the Andorra market strengthened, as well as its position in the
                                  international financial system. Furthermore, it has now been able to reinforce its
                                  links with Andorran society.

                                  We have been able to show that by working together we can better develop our
                                  strategy, further reaffirm our commitments and move ahead with determination to
                                  achieve our objectives. Because of a desire to be involved and wanting to serve our
                                  country, we include social and environmental values in our management and we
                                  welcome those persons and groups with whom we work together as partners.

                                  The process of integration has been carried out gradually and without haste in an
                                  effort to fully involve everyone, especially the integration teams who all through
                                  2006 have watched over the progressive amalgamation of the various divisions and
                                  departments and the branch network. It gives us great satisfaction that we were able
                                  to obtain the hoped-for synergies through various procedures and not through
                                  having to eliminate jobs. Crèdit Andorrà’s policy has been to bring together the
                                  capabilities of the two workforces, involving the professionals of both entities in the
                                  Group’s new corporate project.

                                  Throughout the integration process, our main objective has been to keep providing
                                  the best possible service to the customers of the new Crèdit Andorrà Group. Given
                                  that up until January 2, 2007, the two financial organizations had not yet been
                                  unified under a single name, the customers of Crèdit Andorrà Group have
                                  continued to receive personal service at their usual branches with the same
                                  managers as always.

                                  On the other hand, for some years Andorran society has benefited from the policy
                                  of Crèdit Andorrà Group to promote, carry out and support those initiatives that
                                  contribute to social development in our country and the improvement of quality of
                                  life. The broad areas of involvement have been and continue to be the social
                                  programmes, culture and education, which were increased in 2006 through more
                                  funding and new areas of activity, especially in the social and health fields, as a
                                  result of incorporation of the activities of Fundació CaixaBank in those of Fundació
                                  Crèdit Andorrà.




152         RSC Report
In 2006 we were very much aware of our commitment to contribute to the
improvement of the environment and, apart from continuing the good
environmental practices we now consider as part of our everyday activities, we
concentrated our efforts on integrating the CaixaBank branch network in Crèdit
Andorrà’s environmental management system. We have also introduced
environmental criteria in projects for future branches. During the year, we helped
to raise public awareness of environmental problems, especially in the generation of
wastes, within the framework of our collaboration with the Ministry of Tourism and
the Environment in the Andorra National Wastes Plan that began back in 1999.

Taking full integration of the two financial organizations in a single body as our
starting point, our objectives for 2007 include introducing an environmental
management system in all Group branch offices and implementation of our
corporate social responsibility strategy throughout the Crèdit Andorrà Group.
Another priority will be to increase our capability to meet the needs of our
customers in all areas of business and to broaden service to our country through the
Crèdit Andorrà Group and the Foundation.




Josep Peralba i Duró
Chief Executive Officer
Crèdit Andorrà




                                                                                       RSC Report   153
                                       2. Our corporate social responsibility
                                          policy

         Our commitment to social      The inclusion of corporate social responsibility in the management of Crèdit Ando-
      responsibility is based on the   rrà Group has made it possible to introduce an environmental management system
          culture and philosophy of
                                       and establish a body of measures related to social responsibility, following the guide-
                      Crèdit Andorrà
                                       lines of the Global Reporting Initiative (GRI), the criteria set out in the Dow Jones Sus-
                                       tainability Index, and the principles of the World Pact of the United Nations.

                                       In order to underline the commitment of Crèdit Andorrà Group to corporate social
                                       responsibility, this year we have defined and established the social responsibility
                                       policy of Crèdit Andorrà.




154             RSC Report
Corporate Social Responsibility Policy

Our commitment to social responsibility is based on our corporate culture and the philosophy of
our Group, which has always been linked to various interest groups, namely the customer, the
country and society in general as well as the Group’s own professional team. It also includes a
vision of long-term leadership closely linked to the concept of sustainable development. Crèdit
Andorrà’s social responsibility policy therefore involves sustainable management on three levels -
economic, environmental and social.

Our commitment may be stated as follows:

Customer service, our aim being to fully meet the needs of our customers through personal
service and a high level of professionalism. The Group’s philosophy in this respect demands clear
and transparent communication, a proactive approach and innovation.

Attention to the work team, encouraging the professional and personal development of our staff
while at the same time ensuring that their commitment and dedication, always in keeping with
principles of professional ethics, makes room for prudence and discretion, true characteristics of
Crèdit Andorrà.

Attention to social needs, redirecting our energies for the benefit of all through social
programmes addressed to various groups in our community. In this respect, both Crèdit Andorrà
and Fundació Crèdit Andorrà have always been deeply rooted in the country and, in fact, our aim
is to take an active part in its economic, social and cultural development.

Preservation of the environment, with the adoption and introduction of a system of
environmental management following the UNE-EN-ISO 14001:2004 guideline, which makes it
possible to ensure constant improvement. This system is based on continuing knowledge,
prevention and correction of those aspects or environmental impacts generated through our
activities, as well as conserving resources and reducing wastes. All this helps to prevent pollution
and meet current environmental legislation and those requirements to which Crèdit Andorrà has
voluntarily subscribed.

The inclusion of Corporate Social Responsibility in the management of Crèdit Andorrà was
carried out following the various international guidelines such as the Green Book issued by the
European Union, those set out in the Global Reporting Initiative (GRI) and in the World Pact of
the United Nations.




                                                                                            RSC Report   155
                                      3. Working together for better customer
                                         service

                                      The process of integrating the two organizations has also been carried out progres-
                                      sively in order to help customers become accustomed to the change. Following this
                                      premise, we have all worked so that as of January 2, 2007 a single branch network
                                      and a single range of financial products and services would become a reality.

                                      All through 2006, the two entities lived side by side as part of the same group within
                                      the framework of the integration process. Internal procedures were being fully
                                      unified in order to minimize the change so far as customers were concerned.

        All through the process of    During this process, we made every effort and invested all our resources to keep our
        integration we have made      customers fully informed of the changes. More than 10,000 telephone calls were
      every effort and invested all   made and more than 100,000 letters were sent out in order to maintain good
        our resources to keep our
                                      communications with Group customers. With the customer in mind, therefore, all
         customers fully informed
                                      through 2006 we maintained the identity of the two entities in all branch offices as
                                      well as the personnel with whom the customer was familiar. We also gave all
                                      CaixaBank customers the possibility of informing themselves individually through
                                      their own business managers on how the change might affect them.

                                      In the final quarter of 2006, we worked on unifying the range of financial products
                                      and services and on redesigning our entire branch network so that it was ready on
                                      January 2, 2007, the date when the two brands would become one.




156            RSC Report
3.1. Socially responsible financial products

Clau UNICEF Visa Card

We have been collaborating with the Andorra National UNICEF Committee in               The Clau UNICEF Visa card was
                                                                                       instrumental in bringing the
development projects since 2004. The year 2006 saw the successful conclusion of the    Bosnia-Herzegovina project to
Bosnia-Herzegovina project for which more than 81,000 euros was collected from         a successful conclusion in
2004 to the middle of 2006.                                                            2006 with more than 81,000
                                                                                       euros collected. We have now
Continuing this work with UNICEF in Andorra, in 2006 we began a new                    begun a new project to help
                                                                                       the fight against AIDS in
collaborative project through which we will be helping the fight against AIDS
                                                                                       Cameroon
through a programme in Cameroon aimed especially at children. The project is
called “All together for the children. All together against AIDS”. We have put a new
card on the market giving a new look to our UNICEF card with the aim of raising
awareness in our own society of this problem so that all those who wish can
collaborate in the project.

Thanks to this card, customers can participate with a minimum contribution of 30
euros in a campaign aimed at preventing transmission of VIH-AIDS from mothers
to children, offering pediatric attention to those children needing it, preventing
infection between adolescents and young people and providing protection, care and
support to affected children.

In addition, Crèdit Andorrà applies 50% of the profits from commissions obtained
from use of the Clau UNICEF Visa card outside the country, along with an annual
complementary amount as a direct contribution to the project.




                                                                                               RSC Report          157
                                       CF Sustainability Investment Fund

                                       Our commitment to sustainability also shows up in the CF Sustainability investment
                                       fund which is aimed at giving investors maximum returns on their capital through
               The CF Sustainability   investment in companies that are leaders in terms of sustainability and have inclu-
         Investment Fund promotes      ded corporate social responsibility criteria in their internal operations. This applies
      investment in companies that     to companies that are not involved in alcohol, tobacco, betting or arms and are
             are leaders in terms of   included in the Dow Jones Sustainability Index, as well as other financial assets and
                      sustainability
                                       derivatives.


                                                                                                        2005           2006
                                        Clau UNICEF Visa card Number of card-holders                     391            508
                                                              Donations from customers               12,395€        13,405€

                                                                    Contribution from Bank           25,000€        30,271€

                                        CF Sustainability fund      Yield                            20.14%         16.72%
                                                                    Assets                        1,239,601€     2,423,705€




                                       Mixed mortgage loan

                                       In view of the situation in interest rates, Crèdit Andorrà has decided to offer
                                       customers a mortgage loan that gives them more peace of mind, protecting them
                                       from increases in interest rates and offering more flexibility in terms of early
                                       repayment.

                                       The Mixed mortgage loan combines two types of mortgage, both fixed and standard
                                       at variable interest rate. It is aimed at those who want to follow the market trend
                                       without exposing themselves 100 percent to how it moves. They can amortize their
                                       loan using a mixed formula that, right from the outset, allows them to enjoy the
                                       advantages of variable rates and the security of fixed rates.

                                       In this respect, we offer the customer the possibility of dividing the mortgage into
                                       two loans, one at fixed rate and the other at variable rate, using a mixed formula
                                       where the customer choses and decides what percentage he wants at fixed rate and
                                       what amount at variable rate.




158             RSC Report
Financial products for young people: 16PUNT30 programme

We continue to extend the 16PUNT30 programme in order to offer young people
16-30 years of age facilities most suitable to their needs and expectations. All Crèdit
Andorrà customers between 16-30 years of age can ask for the 16PUNT30 card
which identifies them as programme members. At the end of 2006, some 5,000 young
people were enjoying its advantages. Apart from those financial products and
services already well-known, the 16PUNT30 card offers the following new features:




0 PUNT 0 - No commission in ATMs outside the country                                      The 16PUNT30 programme
                                                                                          offers young people 16-30
• Cardallows user to obtain cash from any ATM outside the country without
                                                                                          years of age a card most
 paying any commission.                                                                   suitable for their needs and
                                                                                          expectations
Study loan
• Loans raised from 7,300 to 10,000 euros per academic year.
• Possibility of repaying loan up to 4 years after finishing studies.

Training loan
• Loan to finance additional studies, for specialization, learning languages or even
 to purchase data-processing equipment or obtain a driving licence.
• Possibility of repaying loan in 4 years.
• No commission.
• Interest rate: 3-month Libor + 0.75%.
• 0% interest for purchase of data-processing       equipment or obtaining driving
 licence for students not yet working.

First business loan
• Financing of purchases and business start-up expenses up to 60,000 euros.
• Evaluation commission: 0.25%.
• Interest rate: 3-month Libor + 0.75%.

Credihipoteca 16PUNT30 mortgage loan
• Increases amortization period from 35 to 40 years.
• No commission.
• Free home insurance the first year.




                                                                                                   RSC Report            159
                   www.16punt30.ad
                   • We continue to add to the web site of the www.16punt30.ad programme as a
                     regular communication channel for young people where they can keep fully
                     informed about our draws, gifts, special promotions and all the advantages this
                     programme has to offer.
                   • They can also obtain information and suggestions for spending their free time and
                     recreation, activities and events in Andorra and outside the country in Barcelona,
                     Lleida, Tortosa, etc.
                   • All these suggestions and notices can be received by e-mail every two weeks
                     simply by signing up with the “T’apuntes?” newsletter.

                   What is more, in May 2006 Crèdit Andorrà obtained sponsorship of the Carnet Jove
                   < 26 Andorra, for a period of 10 years (2007-2016). This new card will form part of
                   the financial products and services available through the 16PUNT30 programme
                   and will be launched in 2007.

                   Until then, those young people wanting a Carnet Jove can obtain one by applying
                   directly to the Carnet Jove organization. Meanwhile, Crèdit Andorrà makes the
                   16PUNT30 card available.




160   RSC Report
3.2. Communicating with the customer

Communicating with the customer is one of the pillars of our corporate policy and,
in keeping with this, we constantly aim at improving our channels of communication
so that the customer feels well served and can carry out transactions, obtain advice
or make complaints at any moment.

In this respect, special attention was given to customer information during the          Communication with the
process of integration and for this purpose two monthly bulletins were issued -          customer is one of the key
                                                                                         features of our corporate
Crèdit Avui and InfoCaixaBank. These bulletins included information about the
                                                                                         culture. In keeping with this,
integration, as well as marketing and institutional material. As of January 2007,        during the process of
when integration becomes effective at the branch level, a single information bulletin    integration two monthly
is to be published.                                                                      information bulletins were
                                                                                         issued - Crèdit Avui and
Along these lines, we have been constantly improving our electronic banking              InfoCaixaBank
service (e-Crèdit) so that our customers will have the means of communicating with
the bank most suitable to their specific needs. The various types of e-Crèdit (Basic,
Operational and Corporate) make it possible to carry out various transactions,
namely to obtain financial information from home, to manage accounts and deal
with all those transactions required by a company.

According to figures on December 31, 2006, we have more than 8,100 active e-crèdit       Electronic banking
contracts and there was a 33.71% increase in electronic banking transactions over        transactions have grown
                                                                                         33.71% over 2005
2005. We can therefore say that the use of electronic banking by our customers in
on the increase.


 e-crèdit                                              2005            2006
 Number of operations carried out                    1,232,300      1,647,705


The Línea Directa Crèdit is our direct line for information and attention to people,
whether or not they are customers, for making any inquiry or claim about the
Bank’s services and activities. On the other hand, through the institution’s web-page,
customers can express their opinions about financial products or services or about
other corporate matters.




                                                                                                  RSC Report              161
                                 Our plans include the creation of specialized communication channels. Last year we
                                 set up BorsaCrèdit, a stock market and financial portal that provides our customers
                                 and web-site users in general rapid access to key information about international
                                 financial markets. This site has obtained a high level of acceptance among our
                                 customers as shown by the fact that a total of 50,875 hits were recorded from
                                 January to December 2006.




                                 In 2005, with the aim of making a big leap forward in communications with the
                                 customer, we set up a new system of communication and merchandizing at our
                                 branches, a pioneer venture in all of Europe. The main aim of this system was to
                                 improve announcements about financial products and services available. We also
                                 wanted to inform our customers about all the institutional events we organize from
                                 time to time. The value added of this system lies in the interactivity it opens up with
                                 customers wanting to obtain information. After a year of operation the overall result
                                 is very positive. The statistics show that our customers have scanned more than
                                 9,800 leaflets about financial products and services, which shows us that this is a
                                 project that simplifies communication with the customer and becomes a highly
                                 attractive factor in marketing for all our branches.


      Banking area at Head Office.




162     RSC Report
4. Working together as a team

During 2006, the key factor at Crèdit Andorrà, specifically the Department of
Human Relations, was the joining together of the workforces of both institutions
and helping to consolidate the broad qualifications of these professionals.

One of our main objectives in 2006 was to facilitate the step-by-step adaptation of all
those working in the new Crèdit Andorrà Group. For this purpose, the institution
made a special effort in the processs of assimilation that is the basis for professional
development of all employees. This will make it possible for us to maintain and
further increase our human capital, a factor of vital importance for our organization.

At the Central Services management level, in order to meet this objective, the
various departments were gradually unified and those tasks specific to CaixaBank
were progressively reduced. Between January and February 2006 some 70% of
CaixaBank central services personnel were physically moved to the respective
departments of Crèdit Andorrà and between December 2006 and January 2007 the
remaining 30% were moved.

At the branch level, the integration process involved putting in operation a total
of 21 branches, which consolidates the institution with the most extensive branch
network in the country.




                                                                                           RSC Report   163
                                        4.1. Team work

        Integration teams simplified    One of the tools that made a very positive contribution to the process of
      the adaptation of personnel to    assimilation all through 2006 was the setting up of integration teams. Created in
                      the new Group     2005, these mixed work teams (29 people from Crèdit Andorrà and 15 from
                                        CaixaBank) made it possible to plan the joining of the two entities, examine the
                                        current situation and visualize the future needs of the new organization in order to
                                        reach the expectations and objectives of the Bank in the best possible way.




                                        4.2. Policy on attracting and keeping professionals

                                        As a result of its policy aimed at bringing together capabilities and talent, Crèdit
                                        Andorrà has made a big effort to keep its professional staff, as indicated by the low
                                        percentage of persons leaving (5.75%), all of these being voluntary separations. It
                                        gives us great satisfaction that we were able to obtain the hoped-for synergies
       All hiring contracts at Crèdit   through various procedures and not through having to eliminate jobs.
         Andorrà are for permanent
                                 jobs   The synergies produced in some divisions as a result of the integration of services
                                        made it essential to carry out a study to determine the optimum size of the new
                                        entity. On the basis of the results obtained, it was decided, on the one hand, in order
                                        to continue recruiting new personnel, and on the other, to consolidate personnel
                                        hired through temporary work agencies during the integration process with the
                                        permanent work force of Crèdit Andorrà. In 2006, some 21 persons were hired on
                                        a temporary basis and it should be pointed out that all of those who fitted in with
                                        their work-station (76%) have ended up joining the permanent staff of Crèdit
                                        Andorrà.

                                        With regard to the above, we should mention that all employee hiring contracts at
                                        Crèdit Andorrrà are permanent in nature and that those employees engaged
                                        through temporary work agencies were hired only to meet specific needs of short
                                        duration, as a result of the integration process.

                                        In the whole process of integration it has been our desire, as far as possible, to keep
                                        all staff professionals in the same work-station. For this reason, the changes made
                                        have been only those strictly necessary while always looking for the best match
                                        between the person and the work-station.



164              RSC Report
4.3. Policy on professional training and
     development

In the task of internal unification, one of the most notable aspects was the training     We have invested an average
plan which was key in successfully carrying out the integration of the two entities.      of 1,694 euros per staff
A clear demonstration of this was the notable amount of 1,694 euros invested in           member on training
training each staff member and the average of 51 hours of training per person per
year. Out of a total of 20,306 hours of training, 9% was exclusively devoted to matters
of integration and 1% to training in the prevention of money-laundering. The other
time was given over to specialized training in financial and banking matters, judicial
and legal questions, languages, data-processing and systems, or in management.

Specific training in integration matters was broken down into two broad areas:
• Theoretical
            training, using intensive methods, from September to the end of               In 2006 we gave priority to
 December, dealing with financial transactions and banking products, given by a           training in specific matters of
                                                                                          integration
 group of Crèdit Andorrà personnel to all employees of the CaixaBank branch
 network.
• Practical training, in which professional staff of Crèdit Andorrà played the role of
 assistants at various CaixaBank branches in order to facilitate the change-over and
 train staff in the new systems. On the other hand, personnel from CaixaBank
 spent periods at CrèditAndorrà branches for the purpose of making first-hand
 contact with their new fellow employees, with customers and the different
 operating systems as well as with the Crèdit Andorrà culture in general.




                                                                                                   RSC Report               165
                                    Specific training on prevention of money-laundering:

                                    • In keeping with Article 52 of the Law on International Cooperation on Crime and
                                      the fight against the laundering of money or securities arising from international
                                      delinquency, in 2006 Crèdit Andorrà organized a training course for all employees
                                      of the Bank. The course dealt with theoretical aspects such as the new definition of
                                      money-laundering in the Penal Code and modifications in our own internal rules
                                      for preventing money-laundering. It also included practical matters related to the
                                      operation of the Customer Acceptance Committee and how to deal with occasional
                                      customers.
                                    • Specific  training sessions were also given for private banking managers which,
                                      among other matters, paid the fullest attention to the position of the Bank in
                                      relation to politically exposed persons (PEPs) and systems for properly identifying
                                      customers and how to obtain information about and understand the source of their
                                      fortunes.


                                                                                               2006
                                     Hours of training per employee                             51


     Each employee received an      Figures for training in 2006 are not comparable with those for the year before as the
  average of 51 hours of training   methodology used to prepare data was not the same at CaixaBank as at Crèdit
                    during 2006
                                    Andorrà. With the integration of the new entity, we have unified the methodology
                                    for calculating these indicators so that in coming years we shall be able to make
                                    comparisons and note annual changes.

                                    This year each employee received an average of 51 hours of training, largely
                                    involving specific matters related to integration, such as financial products and
                                    services and financial transactions of Crèdit Andorrà.


                                                                                               2006
                                     % outlay on training/total salaries and wages             3.9%


                                    The high percentage of outlay in terms of total salaries and wages once more shows
                                    the importance given to investment in training at Crèdit Andorrà. What is more, we
                                    should point out that this ratio would be still greater if we were to take into account
                                    the value of training carried out internally, that is to say, if we were to include the cost
                                    of the hours devoted to this task by our internal training staff.




166          RSC Report
4.4. Social benefits

In keeping with the wish expressed in the 2005 Annual Report to bring the rights            We have progressively
and social benefits of the two groups of employees to the same level, during the year       equalized all social benefits of
                                                                                            both employee groups
the overall social benefits of the Crèdit Andorrà Group have been progressively
equalized. As a result, we can now say that since January 2007 all employees of the
group enjoy the following social benefits:
• Broad medical and health insurance.
• Life insurance.
• Fundació   de Previsió Social dels Empleats de Crèdit Andorrà (Previfun). This
 foundation, which is totally independent of Crèdit Andorrà in terms of assets and
 legal entity, directs its funds to the social security and aid of the Bank’s employees.
 This fund allows employees to enjoy the following benefits: retirement, invalid,
 orphanhood and widow’s pensions, as well as grants for marriage or stable
 relationship, and for births, among other features. Furthermore, at the educational
 level, there are grants for children of employees for school costs, professional
 training, university studies, post-graduate and similar studies.

We should also point out that, as a result of the sale of the participation of ”la Caixa”   Percentage participation of
in Crèdit Andorrà, the percentage of employee participation in the share-capital            employees in the Bank’s
                                                                                            share-capital has increased to
of the Bank rose from 18.6% to 21%. This has made possible the acquisition of
                                                                                            21%
shares by all employees of the integrated bank, the only limitation being that they
have a minimum seniority of one year. This is one more demonstration that Crèdit
Andorrà is working to unite the two employee groups and underlines the Bank’s
desire to involve all staff professionals as participants in the objectives and strategy
of the Bank.



4.5. Crèdit Andorrà staff profile

Following integration, our workforce now numbers 392 employees (on December
31, 2006) which consolidates our position as one of the companies with most
employees in the country.


               Crèdit Andorrà workforce                                                     With 392 employees,
                                                                                            (on December 31, 2006) the
                                          On December 31, 2006                              Bank consolidates its position
                                    500
                                                                                            as one of the companies with
                                                                                            most employees in Andorra
                                                                   411



                                                                          392




                                    400
              Number of employees




                                                             289




                                    300



                                    200



                                    100



                                      0
                                                            2004   2005   2006




                                                                                                      RSC Report               167
                   We at Crèdit Andorrà are committed to equal opportunity for men and women and
                   for this reason the percentage of women is increased year after year. The incorpora-
                   tion of the employee group from CaixaBank, has meant a slight increase in the per-
                   centage of women and a general reduction in age level of the workforce. Most of the
                   men are within the range of 35-40 years of age whereas the female group stands in
                   a younger age bracket of 25-30 years.


                      Age pyramid


                              >60

                             56-60

                             51-55

                             46-50

                             41-45
                      Ages




                             36-40

                             31-35

                             26-30

                              <25
                                     60   40        20           0         20          40          60

                                                         Women       Men




                   Compared with the year before, we note that the percentage of women holding
                   management and/or responsible posts has been maintained following integration.


                                                                                2005        2006
                   Women                                                        40%         41%

                   Women holding management and responsible posts               20%         19%


                   The diversity of our customers and Andorran society is also reflected in our staff
                   profile. A notable 54% is of Andorran nationality, followed by a considerable group
                   of Spanish nationality with a (42%). Other nationalities such as German, British,
                   French, Uruguayan, Portuguese and Venezuelan together represent a 4% minority
                   group.




168   RSC Report
             Nationalities of workforce
                                                                                        National diversity of our
                                            4%                                          customers and Andorran
                                                                                        society is also reflected in our
                                                                                        staff profile




                             54%                        42%



                      Andorran        Spanish         Other




On the other hand, we wish to foster the social and labour integration of
handicapped persons and for this purpose we have signed a collaboration agreement
with AGENTAS (Work Agency with Support of the Board of Meritxell Special
School). This has made it possible for two handicapped persons to join our staff.



4.6. Staff stability

                                                                                        2006 saw increase in average
                                                       2005              2006
                                                                                        seniority, both of men and
 Average seniority with Bank                                                            women

     Women                                          10.38 years       10.97 years
     Men                                            15.52 years       15.68 years
     Both sexes                                     13.56 years       14.76 years
 Percentage of separations                             6.08%            5.75%

 Percentage of permanent job contracts                 100%             100%


Crèdit Andorrà continues to be characterized by a high level of staff stability
with average seniority on the increase, both for men and women. With regard to
the percentage of separations, we should point out that, as mentioned earlier, the
reduction seen in this figure is a reflection of our policy of holding onto our staff
professionals and the desire of Crèdit Andorrà to maintain its human capital intact.




                                                                                                  RSC Report               169
                                      5. Working together with the community

                                      At Crèdit Andorrà, within the framework of our policy of corporate social
                                      responsibility, we are committed to involvement and service to our country. For this
                                      reason, our activity in social programmes is structured and carried out through a
                                      group of projects of an educational, cultural and social nature. In carrying out this
                                      social commitment, the Fundació Crèdit Andorrà is a fundamental instrument.

      The Fundació Crèdit Andorrà     Apart from the activities programmed by Fundació Crèdit Andorrà, this social
      has increased its community     commitment is broadened through programmes carried out by Crèdit Andorrà
             involvement thanks to
                                      within the framework of its corporate social responsibility. These are projects that
               incorporation of the
          programmes of Fundació      also have a positive effect on our social environment and are largely carried out in
                        CaixaBank     collaboration with entities of recognized prestige.

                                      In 2006, the Fundació Crèdit Andorrà had a much greater involvement in the
                                      community thanks to the incorporation of programmes established by the Fundació
                                      CaixaBank. This allowed us to be increasingly involved in the social and health
                                      fields and to become a more balanced foundation in terms of the range of our
                                      activities. For the first time, these activities have been reflected in the Foundation’s
                                      Annual Report complementing the Report on Corporate Social Responsibility and
                                      setting out our involvement with the community.

                                      We are thus contributing, both from Crèdit Andorrà Group and Fundació Crèdit
                                      Andorrà, to social development and we are giving support to programmes that can
                                      bring a better quality of life to all those living in Andorra. Our policy is to foster
                                      those programmes and support those projects that fall within our main fields of
                                      interest. Both our own projects carried out and those involving our sponsorship or
                                      collaboration clearly demonstrate our social commitment.




170            RSC Report
Total consolidated investment of Crèdit Andorrà and its Foundation in our              Social, cultural and
community in 2006 amounted to 1% of total net profits. This overall investment         educational programmes form
breaks down as follows:                                                                the three basic pillars of our
                                                                                       investment in community
                                                                                       action
             Consolidated investment

                                              1%
                                     13%           6%




                            35%                            45%


                     Culture               Education        Social work
                     Institutional         Environmental




5.1. Social programmes

One of the main programme areas of Fundació Crèdit Andorrà is that related to the      More than 370 persons over 60
social-work sphere, especially that involving the elderly. Among support               years of age took part in
programmes carried out with this group in 2006, one of special note was that           courses and workshops at the
                                                                                       Data-processing Workshop
involving the Data-processing Workshop where courses and workshops were
organized that helped to make this technology available to more than 370 persons
over 60.

Also with regard to the elderly we should mention the collaboration agreement made
between Fundació Crèdit Andorrà and the Association of Elderly Volunteers (AVIM).
This agreement provides for a grant to AVIM with the aim of giving support to the
important volunteer work this group is carrying out in the sphere of the Data-
processing and Media Library Workshop organized by the Fundació Crèdit Andorrà.


    Activities in the Data-processing Workshop organized by Fundació Crèdit Andorrà.




                                                                                                RSC Report              171
                                   The incidence of diseases of great social concern, such as Alzheimer’s disease,
                                   multiple sclerosis, fibromyalgia, chronic fatigue syndrome and breast cancer, has
                                   also attracted our attention. In collaboration with various associations of sufferers,
                                   we have continued to organize informative talks and workshops dealing with each
                                   of these illnesses. The talks help to spread information about the diseases and raise
                                   public awareness. Workshops are aimed specifically at sufferers, their families and
                                   care-givers and are designed to help them deal with illness in the best possible way.

                                   In the area of collaboration with institutions and associations we should also refer
                                   to the organization of another cycle of Workshops for the Spread of Knowledge.
                                   This cycle of talks by former scholarship-winners who are members of the
                                   Association of Fundació Crèdit Andorrà Scholarship-winners is aimed at dealing
                                   with matters of general interest in the society. In similar fashion, we again
                                   collaborated with the Andorran Science Society (SAC) in sponsoring the 12th SAC
                                   Workshops which this year opened a debate about the future of the retail trade in
                                   Andorra. We also collaborated in publication of the technical papers given at these
                                   workshops in 2005 dealing with justice in Andorra.

                                   Apart from the activities of our Foundation, as a continuation of efforts made in
                                   previous years, in 2006 we at Crèdit Andorrà helped to organize talks for a wide
                                   public given by the well-known psychiatrist Dr. Luis Rojas Marcos. Under the title
                                   Optimism and healthy adaptation to change, the talk drew a large audience of
                                   Andorrans. Rojas Marcos analyzed the positive influence of optimism in various
                                   areas of life and the capacity to overcome new challenges starting out from
                                   enthusiasm, flexibility, optimism and hope.



      Psychiatrist Dr. Luis Rojas Marcos.




                                   We also gave our support to specific courses and workshops with the aim of
                                   contributing to the spread of knowledge and the continuous training of various
                                   professional groups in our country.




172     RSC Report
Together with the Andorran Association of Psychologists, we continued the second                                        Crèdit Andorrà contributes to
course on Legal and Forensic Psychology, seminars aimed at the training of                                              the spread of knowledge
psychologists and professionals in the world of justice in matters such as separation and                               and the training of various
                                                                                                                        groups through courses,
divorce, mobbing and the evaluation of psychic damage, forensic psychopathology, drug                                   workshops and talks
addiction and delinquency. The 3rd Workshop on Legal Psychology dealt with such
matters as victimology and domestic violence, psychopathy and criminology as well as
legal incapacity, confinement and guardianship. With the same objective, we also gave
our support to the 2nd Workshops on Legal and Forensic Medicine organized by the
Department of Legal and Forensic Medicine of the Ministry of Justice and the Interior,
along with sponsorship of the 7th Catalan Conference on Pathological Anatomy.


     Ms. Marta Compte, president, Association of Psychologists and Ms. Eva Sala
     who gave a talk on legal psychology.




On the other hand, we are trying to spread our activities into some of the social concerns
about matters of health and family. For this reason, we collaborated in an exhibition
organized by the Fundació Respira of the Spanish Society for Pneumology and
Thoracic Surgery, together with the Government of Andorra, on the occasion of the
Year Dedicated to Apnea and Sleep. Furthermore, we broadened the exhibition with the
organization of a talk by pneumologist Dr. Jordi Roig on diagnosis and treatment of
apnea in order to raise popular awareness about this serious public health problem.


     Sociedad
     Española
     de
     Neumología
                                                                             Poster about apnea and talk being given by pneumologist Dr. Jordi Roig.
     y
     Cirugía
     Torácica
     (SEPAR)




                                                    Any de l'Apnea del Son




   saps dormir bé
                  nei
                                                           ea
          Co




                               x l' a p n
                   Envelat de l'Apnea del son
                      Fira d'Andorra la Vella
                  27, 28 i 29 d’octubre de 2006


                        AMB LA COL·LABORACIÓ ESPECIAL DE




                                                                                                                                  RSC Report            173
                                     As a response to concern expressed by the Andorran Association of Logopedics, we
                                     collaborated in the organization of a talk by psychiatrist Dr. Mariano Trillo entitled
                                     Hyperactivity: How to detect it at home and at school. His talk dealt with disorders
                                     associated with hyperactivity in speech, attitude, personality and the emotions. He
                                     also spoke about how to detect these in the family and school environment in order
                                     to help the future development of the child.


      Talk on child hyperactivity.




                                     This year we have developed other social-aid programmes aimed at giving support
                                     to deprived groups as well as collaborating with programmes being carried out by
                                     NGOs based in our country.


                                          West Saharan children on arrival in Andorra.




174           RSC Report
    West Saharan children taking part in summer activities.




To be specific, for the second year in a row, Crèdit Andorrà collaborated with the
Association of Friends of the West Saharan People (ADSAPS) in the welcome
programme for 20 child refugees in the months of July and August. The association
organized a second visit of children from Saharan refugee camps allowing them to
spend the summer with Andorran families. The Bank contributed funds for the
children to travel to our country and also financed insurance for the boys and girls
during their stay as well as the organization of a summer activity and promotion of
the association’s work.

In addition, we helped to fund the blood-donation campaign organized by the
Andorran Red Cross in order to raise popular awareness of the importance of giving
blood and thus increase the number of blood donations. In the Spring campaign a
total of 472 blood donations were received while the Autumn count was 363.

Under social programmes we have not neglected programmes related to sport and           We have not neglected
social integration. We at Crèdit Andorrà have continued to invest in basic sports in    programmes related to sports
                                                                                        and social integration
its various disciplines, such as soccer, basketball, skiing, judo and hockey. We have
also carried out programmes for special groups, such as judo for handicapped
children at the Meritxell Special School. This activity helps them become socially
integrated through sport.


    Scenes from Borrufa Trophy.




                                                                                                 RSC Report            175
                                      5.2. Educational programmes

           From 1988 until now, 144   The annual call for scholarships by the Fundació Crèdit Andorrà was once more
        young people have benefited   the main programme in the educational field. This programme began back in 1988
      from scholarships awarded by
                                      and since that time some 144 young people have benefited from it. We are convinced
            Fundació Crèdit Andorrà
                                      that through the scholarship grants we are making a contribution to the personal and
                                      professional development of these young people in view of the heavy demands of the
                                      labour market. The scholarships are used to follow post-graduate studies (master,
                                      doctorate or post-doctorate) and professional training in tourism and the hotel trade.
                                      The scholarship covers all academic expenses, travel and maintenance. This year six
                                      young Andorrans or residents obtained scholarship aid.


                                           New scholarship winners in 2006 call by Fundació Crèdit Andorrà with
                                           Chief Executive Officer Peralba and Chairman Pintat in the centre.




                                      The Foundation also collaborated with the Government of Andorra in co-sponsor-
                                      ing the Fulbright Scholarship programme. Each year, this programme offers two
                                      Andorrans with degrees the possibility of following post-graduate studies at the
                                      Master or PhD level at any university of their choice in the United States.

                                      Within the framework of the collaboration agreement signed with the University of
                                      Andorra in 2004, with the aim of fostering the training of young people as well as
                                      bringing the professions and business closer to the academic world, we have given
                                      support and aid to various projects involving the university, such as the following:
                                      • TheProfessional Finishing Course of the Data-processing and Management
                                       School.
                                      • The sixth group of University-Business Workshops, this year devoted to Information
                                       and Communications Technology and the Health System: an inseparable binomial.
                                      • Open Opera Course, a continuing study course organized in collaboration with
                                       the Barcelona Liceu Opera House.
                                      • Publication of three new volumes of the Andorran Law Series: Sources of
                                       Andorran Law, prepared by André Pigot; Judicial Catalan, written by Josep Salom;
                                       and Andorran Administrative Law, with contributions by three authors under the
                                       direction of Pere Pastor.
                                      • Post-graduate course in Andorran law.




176             RSC Report
Among notable projects this year, the Fundació Crèdit Andorrà carried out two sig-
nificant tasks in publishing
• The first was the Atlas of Andorra. This publication, essential for a full knowledge   The Atlas of Andorra and the
 of the natural and social environment of the country, was published by the              Encyclopaedic Dictionary of
                                                                                         Andorra were two publishing
 Ministry of Education and Professional Training in collaboration with Fundació
                                                                                         projects promoted by the
 Crèdit Andorrà. It is designed as a reference tool for students and a resource for      Foundation
 teachers in their day-to-day work.
• The second publication, the Encyclopaedic Dictionary of Andorra, was edited by
 writer and journalist Àlvar Valls, who had the collaboration of experts in the
 various fields it covers. The dictionary project came about from a desire to make
 a work of a general nature available to the public, a work offering a broad view
 of the history, geography, institutions, economy, society, culture and heritage of
 Andorra. The project turned into a publication of more than 500 pages with 2,200
 entries, fully illustrated with photographs and drawings. The work, which
 represents the first contribution of an encyclopaedic nature dealing with
 the Principality, was designed to become a means of general consultation on the
 country. Its publication is fully in line with the desire of the Fundació Crèdit
 Andorrà to contribute to the improvement and encouragement of the cultural,
 social and educational life of the Principality. Given the social and service aims of
 the Foundation, revenue from the sale of this work will go into social projects.




     First encyclopaedic dictionary of Andorra.




                                                                                                  RSC Report            177
                                         5.3. Cultural programmes

                                         Through the Fundació Crèdit Andorrà we have continued to contribute to the
                                         spread of culture through various programmes, mainly centred around music but
                                         also in the world of artistic creation, conservation of heritage and the spread of
                                         general knowledge. This year we maintained this direction through established
                                         programmes such as the ONCA Foundation concert cycles, supported equally by
                                         the Ministry of Foreign Affairs, Culture and Cooperation and Fundació Crèdit
                                         Andorrà.

           Fundació Crèdit Andorrà       In 2006, nearly 15 years after ONCA was formed, we wanted to make a qualitative
        contributes to the spread of     leap forward with the launching of the National Classical Orchestra of Andorra.
             culture largely through     The new make-up of the orchestra makes it possible to form a chamber group, a
                               music
                                         classical orchestra and even a symphony orchestra, depending on artistic
                                         requirements. The direction of the chamber orchestra continues under Gerard
                                         Claret while the classical orchestra comes under the baton of Marzio Conti.

                                         Also in the area of music, we again collaborated with the Comú d’Ordino in the
                                         work of the Ordino Festivals Association. The first of these activities was the now
                                         traditional Year-end Concert and the second, the well-established International
                                         Narciso Yepes Festival, which this year was dedicated to Mozart, a composer
                                         honoured on the 250th anniversary of his birth.


Year-end Concert by El Vallès Symphony Orchestra.




  178           RSC Report
In August we were able to enjoy the concerts making up the 7th International
Organ Cycle of the Principality of Andorra. This cycle is organized each year by
the Friends of the Organ of Valls d’Andorra Foundation, with the support of the
Archpriestry of Andorra and Fundació Crèdit Andorrà.

Among new events, we should mention that the Foundation sponsored the
mounting of the theatrical work Anitta Split as part of the 2006 Grec Festival in
Barcelona. This work won the 50th Anniversary of Crèdit Andorrà Theatre Prize.
This step gave an important boost to the works recognized as well as the promotion
of young artists.

In the area of cultural collaboration we should mention the Culture-cultures
Exhibition organized by the Comú d’Escaldes-Engordany with the sponsorship of
the Ministry of Foreign Affairs, Culture and Cooperation and Fundació Crèdit
Andorrà. The exhibition was made up of 100 archaeological and artistic objects
from ancient cultures from the funds of the Museum of Montserrat. On the opening
day of the exhibition an agreement was signed with the Abbey of Montserrat
Foundation for the restoration of the Coptic fabric funds of the Museum of
Montserrat. These form the most important collection of Egyptian fabrics in Spain.

The end of the year saw the start of a cultural project of great importance for our      At year-end the National
country. This was the establishment of the National Theatre of Andorra                   Theatre of Andorra Foundation
                                                                                         came into existence with the
Foundation with the participation of the Government of Andorra, the Comú de
                                                                                         participation of Fundació
La Massana and our Foundation. The main aim of this new foundation is the                Crèdit Andorrà
management and promotion of a theatre arts body in Andorra that makes it
possible to have a national theatre of the highest level and to help raise public
awareness of the theatre arts.

Parallel to the Foundation’s activities, Crèdit Andorrà also collaborated in other
cultural events, notable among which were the Andorra Literary Night and
Andorra Art Prizes, organized by the Arts and Letters Circle of Andorra. This year
we increased our support for literature and the arts with the calling of two new
prizes. These prizes for poetry and sculpture have been added to the prize of theatre,
the prize of future of the valley, and the painting prize.


     First and second prize for painting.




                                                                                                  RSC Report         179
      First prize (below) and second prize (right) for sculpture.




    The book Women of Andorra,           A notable initiative of great impact with a good public response was publication of the
 co-published by Crèdit Andorrà,         book Women of Andorra by Adelaida Garcia and Montserrat Ronchera, published
 gives first-person accounts of a
                                         jointly with Gala Perfumeries. The book includes more than 40 interviews with
  generation of Andorran women
           at the beginning of the       women born in Andorra at the beginning of the 20th century with first-person
                       20th century      accounts of the daily lives of a generation of Andorran women of those days, a sincere
                                         and very personal view that will contribute to the popular history of our society.


                                               Mr. Antoni Pintat, Chairman, Crèdit Andorrà, and Ms. Adelaida Garcia and Ms.
                                               Montserrat Ronchera, authors of the book.




180           RSC Report
    Launching of the book attracted more than 300 people.




We also sponsored other cultural events aimed at getting to know more about French
and Portuguese culture as people from those countries are among the most numerous
in our country. We collaborated with an event organized by the cultural programme
of the French embassy in Andorra, the Renaud Garcia-Fons Jazz-Flamenco Concert
and with the Portuguese embassy in Andorra giving support to the Soloists of the
Gulbenkian Orchestra Concert and the Pavilions and Museums Exhibition 1993-
2005 dealing with the prestigious architect Álvaro Siza Vieira.

We should mention that, thanks to the joint efforts of the Ministry of Foreign
Affairs, Culture and Cooperation, the Comú de Sant Julià de Lòria and Crèdit
Andorrà, our country was able to enjoy a large-scale opera performance for the first
time. In this case, the opera chosen was La Bohème involving El Vallès Symphony
Orchestra and Sabadell Friends of the Opera. More than 450 persons filled the
Claror Auditorium of the Culture and Conference Centre lauredià for this
outstanding cultural event.



    A scene from La Bohème.




                                                                                       RSC Report   181
                                  Apart from sponsorship and organization of cultural events, Crèdit Andorrà has a
      Base of the altarpiece of
                                  special interest in art and we have our own collection of Catalan painting that
      Sant Miquel de
                                  includes works from the 18th to the 20th century. This year we added to our art funds
      Prats de Canillo.
                                  with acquisition of the base of the altarpiece of Sant Miquel de Prats de Canillo,
                                  a Gothic piece from the beginning of the 16th century that was recovered after being
                                  out of the country for 80 years. This object, which becomes the oldest and most
                                  exceptional item in the Bank’s art collection, is in a good state of conservation with
                                  the finest of polychromy.


      The Crucifixion, the
      central scene of the
      altarpiece base.




182        RSC Report
6. Working together to preserve the
   environment

We at Crèdit Andorrà are anxious to work on preserving the environment, minimi-
zing the consumption of natural resources, properly managing wastes generated as
a result of our activities, always trying to raise public awareness of these matters.




6.1. Integration of CaixaBank branches in Crèdit Andorrà’s
     environmental management system

The process of integrating CaixaBank in our organization which was carried out in                  All CaixaBank branches have
2006 was also one of our most important challenges from the point of view of                       now been brought within the
                                                                                                   Crèdit Andorrà Environmental
environmental management. Those branches which up until 2005 belonged to
                                                                                                   Management System
CaixaBank and now form part of Crèdit Andorrà’s branch network did not have any
environmental management system in place and it was therefore necessary to work
all through 2006 in order to bring them into the Crèdit Andorrà system at all levels.
The objective was set for them to have the same model in operation by the
beginning of 2007.

Apart from incorporating the pertinent changes in all the documentation of the
system, the main task carried out in the course of this integration process was to give
specific training in the environmental management system to all CaixaBank staff and
to designate a person responsible for the environment in each branch providing them
with the proper tools to carry out their work. In addition, all personnel previously
with CaixaBank were given training in waste management at their branch offices.

This training process involved three sessions, one aimed mainly at management
personnel, another at those attending the customer at CaixaBank (as links between
branches and the environmental management system), and finally a session for all
CaixaBank employees. These training sessions represented a total of 67.5 hours per
person1.

1. The hours/person units refer to hours involved multiplied by the number of persons attending.




                                                                                                            RSC Report            183
                                    6.2. Constant improvement in environmental management
                                         through EMS

           Crèdit Andorrà has an    This year we again passed the ISO 14001 review audit. This audit, carried out by an
     environmental management       outside company, lasted 17 hours spread over a period of three days during which
  system in operation in keeping    the auditor remained in the offices of Crèdit Andorrà verifying the correct opera-
             with ISO 14001:2004
                                    tion of the Environmental Management System (EMS). The audit body was TÜV
   guidelines and this year again
    passed the review inspection    International, Grup TÜV Rheinland. It is anticipated that next year’s audit will
                                    include the new branches that up until now have belonged to CaixaBank.

                                    Within the framework of environmental management and in order to ensure cons-
                                    tant improvement, on an annual basis we establish a series of environmental objec-
                                    tives to be reached the following year. The result of objectives set for 2006 are set out
                                    below, along with objectives put forward for 2007.

                                    Review of objectives for 2006

                                    • To reduce energy consumption through the installation of a new lighting system
                                     with air curtains in some offices.

                                    All new lighting panels installed in new Crèdit Andorrà branches are of low-consump-
                                    tion type. Furthermore, air curtains were installed in branches at Escaldes and La
                                    Massana while that at Head Office was adapted. Overall electrical power consumption
                                    remained constant compared with the year before.

                                    • To inform employees about environmental matters through publication of bulle-
                                     tins with information on consumption, new features and curiosities.

                                    To begin with, an announcement was prepared to explain the results of the audit of the
                                    Environmental Management System and to thank everyone for their collaboration.

              Each year we set
                                            Objectives for 2007
    environmental objectives to
           ensure the constant             To reduce energy consumption through installation of photo-electric
           improvement of the
                                           cells on all Crèdit Andorrà signs in order to bring time they are alight
  environmental management of
                  our activities           into line with the absence of daylight

                                           To carry out a pilot energy study in one of our branch offices in
                                           order to analyze consumption with the possibility of extending it to other
                                           installations

                                           To incorporate environmental criteria in all Crèdit Andorrà financial
                                           products



                                    The environmental team this year was made up of one person involved 90% full-time
                                    and one other person who carried out coordination and monitoring tasks. Given that
                                    the environmental management system is now fully in place, the time spent by the
                                    second person this year was not as great as in previous years. This EMS structure is
                                    rounded out with a specific person responsible for environmental matters at each
                                    branch and, since last year, with another person as substitute.




184          RSC Report
6.3. Staff environmental training

Within the framework of the Environmental Management System, each year some
kind of training is given to all employees of Crèdit Andorrà.

This year we carried out training at three levels. At the first level, training was given to   We carried out environmental
those responsible for attention to the customer as links between the branches and the          training at three levels - for
                                                                                               those responsible for the
environmental management system. This consisted of a one-hour session attended
                                                                                               environmental management
by 31 persons.                                                                                 system at each branch, for all
                                                                                               employees who did not receive
At the second level, training was given to all those employees who had not been able           any training the year before
to attend training sessions given in 2005 and all those who had recently joined the            and for all security personnel
staff, both internal and external, including all personnel of CaixaBank now
integrated in Crèdit Andorrà. This training consisted of a one-hour session
attended by 39 persons.

Finally, at a third level, training was given to all security personnel. This involved a
half-hour session attended by 12 persons. Also taking training were 7 external
personnel in the data-processing department who had not yet received
environmental training. This session lasted for one hour.



6.4. Resource consumption and waste management

One of the fundamental bases of our environmental management system is how to
minimize consumption of resources, reduce the generation of wastes and to ensure
proper management.

The figures set out in this section do not yet include the CaixaBank branches but do
include personnel of CaixaBank who were given early integration and actually are
working at Crèdit Andorrà branches and central services departments. This would
justify certain increases in consumption that took place in 2006.

On the other hand, this year we have redefined the method of accounting both for
consumption of resources and the generation of wastes. Up until last year we
published figures from January to December but, given that the real figures for
consumption at year-end did not come in until some months later, we were obliged
to estimate the figures for consumption in the last 2 or 3 months of the year. In
order to work with real figures, as of this year we shall use figures from October to
September instead of those from January to December. Furthermore, in order to be
able to compare this year’s figures with those of previous years, we have restated
figures for 2004 and 2005 according to the same criteria. For this reason, the figures
for 2004 and 2005 given in this section do not coincide with those published in the
Annual Report last year.

Energy consumption

The biggest part of the energy consumed by Crèdit Andorrà is electricity (71%)                 In recent years, electric power
while the rest is fuel-oil (29%). In the past 3 years we have been increasing electricity      consumption has been rising
                                                                                               while consumption of fuel-oil
consumption and progressively decreasing that of fuel-oil. This may be explained,
                                                                                               has progressively dropped
first of all, by greater use of air conditioning equipment (that can also be used for
heating) which consumes a lot of electricity. Secondly, it may be accounted for by
less use of heating systems operating on fuel-oil.



                                                                                                        RSC Report               185
  Annual energy consumption                                                                         Annual energy consumption per m 2 of office space
              KW/h                                                                                          KW/h / m 2




                                                                                                                                            126.82
      5,000                                                                                           140




                                                                                                                                   116.57
                                                                                                                          110.83
                                            4,056
                                                                                                      120
                                    3,728
      4,000
                            3,510


                                                                                                      100




                                                                                                                                                            74.52
      3,000
                                                                                                       80

                                                       2,360




                                                                                                                                                                      61.68
                                                                 1,973




                                                                                                                                                                               52.92
                                                                                                       60



                                                                          1,692
      2,000

                                                                                                       40
      1,000
                                                                                                       20

          0                                                                                             0
                              Electricity                      Fuel-oil                                                      Electricity                            Fuel-oil

                         2004                   2005                 2006                                                2004                        2005                     2006
      Figures for October to September                                                                Figures for October to September




                                                               Emissions arising from energy consumption by our activities have remained stable
                                                               over the past three years and even have shown a tendency to decrease in terms of
                                                               the number of employees.


                                                               CO2 emissions arising from energy consumption

     CO2 emissions per employee
             arising from energy
                                                                                                                    2004                               2005                             2006
  consumption by Crèdit Andorrà                                  Tons of CO2                                      1,693.67                           1,662.34                          1,692.28
         are tending to decrease
                                                                 Tons of CO2 / employee                              5.21                              5.05                             4.66

                                                               * Figures for October to September
                                                               Source of conversion factors: FEDA, Centre Nacional d’Educació Ambiental d’Espanya, Electricité de France.



                                                               Water consumption

                                                               The main task carried out in 2006 was to install meters at all water connections still
                                                               without them. For this reason, the figures published for 2006 are not comparable
                                                               with those for 2005.

                                                                                                                                                                                 2006
                                                                 Water consumption                                                 m3                                          32,021

                                                                                                             m3 of water /m2 of office space                                     1.00

                                                               * Figures for October to September




186                  RSC Report
Consumption of materials

The material we consume most is paper. Of the paper consumed in 2006 a little
more than 60% ended up with the customer while the remaining 40% was for
internal use.

It should, however, be noted that some of the measures carried out during the year              In 2006 we reduced paper
have contributed to a reduction of paper consumption. An example of this is the                 consumption compared with
                                                                                                the year before
change in format and frequency of the magazine CrèditAvui, that used to be
published every four months with an average of 48 pages but now is issued monthly
and consists of only one sheet.

In this respect the operation of e-Crèdit is also notable. By this means it is possible
to read most bank correspondence via Internet and stop getting it by mail.

In general, we can say that we have filled our objective of reducing paper
consumption, both for internal use and that sent out to customers, as well as
consumption of fluorescent tubes.

In the case of toners, the increase in consumption was due to the fact that Crèdit
Andorrà began to supply these materials to some offices and departments of
CaixaBank marked for early integration.


 Consumption of materials                                            2004            2005               2006
                                     t                               14.75           16.94              16.48
 Paper for internal use
                                     kg / employee                   45.37           51.49              45.41
 Paper going to customers            t                               28.68           28.80              26.08
 Toners                              units                            370                 354             424
                                     units                           2,040           1,121              1,099
 Fluorescent tubes
                                     units / 100 m of office space
                                                  2
                                                                      6.44            3.50               3.44

* Figures for October to September


Waste management

Generally, the year 2006 saw a reduction in the quantity of wastes generated com-
pared with last year, which underlines the effort we are making to minimize waste
generation and to improve waste management.

The figures shown in this section refer to the amount of wastes separated and eval-             The quantity of wastes
uated, that is to say, wastes that have been managed through an authorized waste                separated and evaluated per
                                                                                                worker decreased compared
handler with the aim of having them fully or partly recycled.
                                                                                                with the year before,
                                                                                                underlining the improvement
Through our environmental management system we have established the necessary                   in staff awareness in this
mechanisms so that all persons working in the Bank are aware of the waste man-                  matter
agement channels in place. We have also carried out measures to make people
aware of these channels and to show the importance of carrying out proper selective
waste collection.




                                                                                                        RSC Report            187
                   What is especially notable is the reduction in the quantity of plastics generated,
                   both in absolute value (23%) and in relation to the number of employees (30%).
                   One factor that influenced this reduction was the introduction of a system of filters
                   for purifying water at the offices of Central Services in order to make it better for
                   drinking thus reducing the use of bottled water by staff members.

                   Finally, it should be mentioned that all fluorescent tubes and toners generated as
                   wastes are collected separately and managed through an authorized waste handler.


                   Wastes separated and evaluated
                               Kg
                     16,000
                                       15,080
                     14,000


                                                              13,216
                     12,000
                                                   12,666


                                                                                  Kg




                                                                                                                                2,250
                     10,000                                            2,500




                                                                                                                                          2,031
                      8,000                                            2,000




                                                                                                                      1,560
                      6,000                                            1,500

                                                                                                1,102




                                                                                                                                                                1,087
                                                                                                                                                     1,040



                                                                                                                                                                           839
                      4,000                                            1,000
                                                                                        780



                                                                                                         597
                      2,000                                                500

                           0                                                0
                                                Paper                                    Cardboard                     Newspapers                            Plastics

                                                                           2004                         2005                      2006
                     Figures for October to September




                   Wastes separated and evaluated per employee
                          Kg /employee
                     50

                     45
                               46.40




                     40
                                           38.50




                     35
                                                      36.41




                     30

                     25
                                                                           Kg /employee
                                                                                                                         6.84




                     20                                                8
                                                                                                                                   5.60




                     15
                                                                                                               4.80




                                                                       6
                                                                                                                                                             3.30
                                                                                         3.35




                                                                                                                                                  3.20




                     10                                                4
                                                                                                                                                                        2.31
                                                                                 2.40



                                                                                                  1.64




                      5                                                2
                      0                                                0
                                       Paper                                      Cardboard                     Newspapers                               Plastics

                                                                       2004                         2005                      2006
                     Figures for October to September




188   RSC Report
6.5. Environmental criteria for construction of new
     branches

In order to be environmentally responsible, it is important that our branch offices
be highly efficient and respectful of the environment. For this reason,
environmental aspects are being kept in mind for the construction of new branches.

In addition, in order to optimize energy consumption, we are installing double-         Environmental criteria to be
glass windows to improve insulation. At the same time, we are separating air-           set for construction of new
                                                                                        branches, mainly aimed at
conditioning areas in order to obtain greater efficiency. In lighting washrooms we
                                                                                        optimizing energy
are using LED technology which has a much lower energy consumption than                 consumption
conventional lighting methods. Furthermore, in new branch offices we are
evaluating the viability of installing solar energy in unattached buildings. In order
to minimize gas emissions, we are studying various energy sources for heating and
hot water.



6.6. Collaboration with Andorra National Wastes Plan

Since 1999, Crèdit Andorrà has been collaborating with the National Wastes Plan         Crèdit Andorrà has distributed
being administered by the Ministry of Tourism and the Environment of the                25,000 bags to raise popular
Government of Andorra.                                                                  awareness of need to reduce
                                                                                        use of throw-away products

During the year, this collaboration took shape in various activities aimed mainly at
increasing popular awareness of the environment and optimum waste management.

On the one hand, we collaborated in the distribution of 25,000 bags carrying the
message Reduce, Re-use and Recycle, an approach aimed at encouraging rational and
responsible attitudes to waste management. The objective of this campaign was to
raise public awareness of the need to reduce the use of plastic bags in daily life,
reduce the use of throw-away products and foster the separation of recyclable
materials.

In addition, we also joined in the distribution of 30,000 collection boxes for spent
batteries intended for storing these until there is a sufficient number to take them
to the waste centre or to one of the containers located at more than 600
establishments around Andorra. Furthermore, the box is printed with advice about
the best way to help the collection of these wastes, one of the most contaminating
of all those generated at home.



                                                         Bags aimed at helping
                                                         waste management.




                                                                                                 RSC Report              189
                                      7. Working together for economic progress

                                      Our financial results and our growing business volume confirm our position as one
                                      of the leading banks in Andorra



                                      7.1. Economic indicators

                                      Business volume

                                       Thousand euros                                                  2006                       2005
                                       Customer loans                                              2,443,606                    1,942,398
                                       Total customer funds                                       10,262,548                    9,378,590
                                       Efficiency ratio                                              23.05%                       26.06%
                                       ROE                                                           22.00%                       22.31%
                                       Solvency ratio                                                20.94%                       19.92%
                                       Number of branches                                                 21                           24
                                       Number of ATMs                                                     42                           47



                                      Economic figures

                                       Thousand euros                                                  2006                       2005
                                       Profits                                                       121,371                     101,275
                                       Personnel costs                                                30,441                      29,871
                                       Taxes                                                          20,760                      17,521
                                       Investment in sponsorhip and
                                        social programmes                                                1,198                       787
                                       Environmental investment and expenses *                              45                       164

                                      (*) Cost of collaborations, works and maintenance, training, auditing and merchandising




                                      7.2. Ratings and awards

      Excellent rating for 17 years   Crèdit Andorrà still maintains an excellent rating following the withdrawal of
                           in a row   ”la Caixa” as a shareholder. Last September, in its annual revision the prestigious
                                      international bank rating agency, Fitch Ratings, gave the bank an individual rating
                                      of A/B, a support rating of 3, a long-term rating of A and a short-term rating of
                                      F1, with a stable outlook. Crèdit Andorrà has maintained an individual rating
                                      of A/B for 17 years in a row.

                                      According to Fitch Ratings, these classifications reflect “the entity’s position of
                                      leadership in the Andorra market, sound management and profitability, good
                                      liquidity, quality of assets and prudent risk management”. They also indicate that, in
                                      spite of the impact of the CaixaBank acquisition, the Bank’s profitability has
                                      continued to grow satisfactorily, thanks to the good performance of the commercial
                                      bank and private banking business.




190            RSC Report
The individual rating makes it possible to make comparisons in the international
sphere regarding solvency and security of a bank by itself, that is to say, without
having to count on outside support in case of difficulties. The support rating is
related to the outside aid a bank could receive in case it had difficulties. The short-
term and long-term ratings, in turn, are indicators of the quality of credit risk which
measure the probability of repayment of bonds issued by the entity.

The renewal of this rating is an objective and independent recognition that
positions Crèdit Andorrà among the world’s most solvent and best managed banks
included in the more than 1,400 banks surveyed by Fitch Ratings.

“Bank of the Year 2006 for Andorra”

Crèdit Andorrà received another international recogition during the year. As the
choice of an inernational jury, we were presented with the “Bank of the Year 2006
for Andorra” award from The Banker magazine. This is the fourth time we have
received this award (2002, 2003, 2004 and 2006) since Andorra has been included
in the list of participating countries.

The award organizers stressed the strong consolidation of our leadership in the           For the fourth time,
Andorran financial sphere, thanks to the acquisition of CaixaBank in 2005 which           we have received the “Bank of
                                                                                          the Year 2006 for Andorra”
has meant an increase in market share in terms of business volume moving up
                                                                                          award from The Banker
to 37%.                                                                                   magazine

Good planning of the integration process, especially the policy on human resources,
was a decisive factor in gaining this award. Also contributing to this was the
development of our Commitment to Social Responsibility carried out by the Bank
and the Foundation which expresses our strong support for the society and the
country.

The Banker is a financial magazine published by the Financial Times group, one of
the world’s most prestigious in its field. The magazine established these awards in
order to pay tribute to the best banks in each country and to create an international
point of reference for good banking practice.


     Mr. Timewell handing the award to Mr. Peralba and Mr. Pintat.




                                                                                                   RSC Report         191
                                      7.3. Collaboration and sponsorship

   Jointly with the IESE school,      Crèdit Andorrà Chair at IESE on markets, organizations
  we have established a chair of      and the humanities
         business management
                                      Together with the IESE Business School, Crèdit Andorrà has now set up a new chair
                                      to encourage research, training and the spread of knowledge about certain aspects
                                      of the art of business management.

                                      Through this chair, we wish to give fresh impetus to efforts being made to achieve
                                      better interaction between the corporate sector, research and university studies. In
                                      this respect, it will encourage research and the spread of new knowledge through
                                      seminars, forums and publications. It will also foster the education of Andorran
                                      business executives and managers, as well as those of other countries, in these fields
                                      in order to aid in the development of their responsilities.

                                      In the field of research, among other matters, it will carry out practical studies
                                      aimed at making it possible to accurately determine the current state of companies
                                      and institutions, both public and private, in Andorra so far as concerns their
                                      accounting and/or financial structure and the management of human resources.

                                      In addition, through forums, seminars and work sessions, the chair will keep open
                                      debate aimed at developing those studies carried out.

                                      For Crèdit Andorrà, making possible such open contact between the academic
                                      world and the realm of business represents a commitment to the future of Andorra.


          Prof. Jordi Canals, general manager of IESE, Mr. Josep Peralba, Chief Executive Officer of Crèdit Andorrà,
          and Prof. Josep M. Rosanas, director of the Chair, at its public announcement.




192          RSC Report
Andorra Report: 2005

For the past 25 years, Crèdit Andorrà has been publishing an annual report giving
the main socio-economic figures on the country.

As in previous years, the report was prepared by Xavier Sáez, professor of applied
economics at University of Barcelona. The report for this year, Andorra 2005, shows
the country’s economy with an increase of only 1% in the GDP compared with the
year before, putting it at 30,092 dollars per capita. The sectors that continue to lead
the Andorran economy are tourism and retail trade, although the figures show a
drop in the number of visitors and little growth in imports.


     Andorra 2005 Report.




Andorra Marketing Meeting

In November 2006, the first conference on marketing and corporate social
responsibility was held in Andorra organized by the Marketing Club of Andorra
with sponsorship of Crèdit Andorrà.

The Marketing Club of Andorra, set up in 2003 by a group of professionals, is aimed       During the year, we
at exchanging experience among those working in the sector, sharing concerns with         collaborated on various
                                                                                          economic workshops such as
other groups, the promotion of marketing and improving communication between
                                                                                          the Andorra Marketing Meeting
companies. This year the club began to broadly develop one of its basic objectives        and the Cycle on Andorran
by organizing the Andorra Marketing Meeting, with the intention that this would           Family Business
become a biennial event.

The aims of this conference, that attracted more than 100 participants, was to foster
marketing as an indispensable tool for the management and development of any
area of business. It was also aimed at making known the concept of corporate
responsibility as a business management tool.

Crèdit Andorrà gave support to this initiative as a means of contributing to the
economic and professional development of our overall environment.




                                                                                                  RSC Report          193
                                      8th Cycle on Andorran Family Business and Quality
                                      and 5th Forum on Andorran Family Business

                                      As it does every year, the Adorran Family Business Association organized two of the
                                      most important events for the business fabric of the country. On the one hand, it
                                      arranged the Cycle on Andorran Family Business and Quality, which this year was
                                      aimed at second-generation groups in Andorran family businesses. It also again
                                      organized the Forum on Andorran Family Business under the title of “Attracting the
                                      best resources and finding opportunities”. This forum dealt with internationalization,
                                      that is, how important it is, over the medium and long term, for Andorran
                                      businesses to develop outside our borders.

                                      Crèdit Andorrà, along with other entities, sponsored these events.


                                           Round table on “Transition Experience” in the Cycle on Andorran Family Business.
                                           Photo: EFA-Foto Màgic Archive.




                                      17th Pyrenees Business Gathering
      First-time collaboration with   As part of Crèdit Andorrà’s policy of contributing to the growth and increasing
             the Pyrenees Business    professionalism of business, and to foster the good image of the country, we
        Gathering, one of the most
                                      collaborated for the first time with the Pyrenees Business Gathering, one of the
               important economic
            workshops in Catalonia    most important economic workshops in Catalonia.

                                      This gathering represents a strong bid for the development of Lleida, the Pyrenees
                                      and Andorra. It involves annual workshops at which business executives and
                                      managers, especially those from the Pyrenees area but also from the rest of
                                      Catalonia and the Principality of Andorra, are able to gather together to think,
                                      discuss and promote the economic development of the area.

                                      Born of a desire to strengthen the interchange of views and experience among those
                                      attending and those giving papers, the gathering aims at the redevelopment and
                                      modernization of the business culture in the area. Workshops this year went under
                                      the title “We are growing, but in what direction?” They also questioned some
                                      traditional growth models.




194            RSC Report
Publication of new book by Victor Pou dealing with new
agreements between Andorra and the European Union

Crèdit Andorrà has published a new book by Victor Pou, an economist and
consultant specializing in European Affairs, which deals with the new agreements
and complementary arrangements between the Principality of Andorra and the
European Union. This publication, under the title of The New Andorra – European
Union Agreements. The second process of bringing the Principality of Andorra closer
to the EU. From customs duties to the stage of cooperation, is the fifth book in a series
in which Pou examines the relations between Andorra and the European Union.

This book is an essential work of reference on what the author considers the second
stage of bringing Andorra closer to the European Union covering such aspects as
education, infrastructures, energy, telecommunications, the creation of a Pyrenees
area, culture, the environment, health, social affairs, youth and regional cooperation.


     Launching of the new book by Prof. Victor Pou.




                                                                                            RSC Report   195
                   8. Scope of the report

                   Since 2003, Crèdit Andorrà has been publishing its corporate social responsibility
                   report on an annual basis.

                   The present report for 2006 has been drawn up taking as reference the guidelines
                   set out in the Global Reporting Initiative.

                   The information included in the report covers the whole Crèdit Andorrà Group,
                   including both the Bank and the Foundation. In a year marked by the integration of
                   CaixaBank in Crèdit Andorrà, corporate social responsibility has oriented this
                   process toward human resources and work processes. In this respect, we have
                   worked to ensure that this operation involves the proper integration of all
                   personnel.

                   In any case, it should be borne in mind that this year we had the problem of
                   integrating the figures for the new branches being incorporated in our branch
                   network, which were formerly part of CaixaBank and now belong to Crèdit
                   Andorrà. It is for this reason that in the section on the environment the figures for
                   generation of wastes do not yet include those branches brought in from CaixaBank.




196   RSC Report
9. Table of GRI – SPI – EPI indicators

An index of indicators in the G3 guidelines of the Global Reporting Initiative and
EPI-Finance 2000 and SPI-Finance 2002 is given below.



Indicators in G3 guidelines of the Global Reporting Initiative (GRI)


                                          Main
                                          indicators        Pages

Economic indicators
    Economic development                  EC1               190
                                          EC3               167


Environmental indicators
    Materials                             EN1               187
                                          EN2               188
    Energy                                EN3               185, 186
                                          EN4               185, 186
                                          EN5 (*)           184, 189
    Water                                 EN8               186
    Emissions, spills and wastes          EN16              186
                                          EN22              187, 188
    Financial products and services       EN26              185-189


Social indicators: Labour practices and work ethic
    Employment                            LA1               164, 167-169
                                          LA2               164
    Training and education                LA10              165, 166
    Diversity and equality of opportunity LA13              168


Social indicators: Society
    Community                             SO1               170, 171
    Corruption                            SO3               166
    Public policy                         SO5               189


Social indicators: Responsibility for financial products
    Labelling of products and services    PR3               161

 (*) Additional indicators




                                                                                     RSC Report   197
                   Indicators in supplement on financial services in GRI, SPI Finance
                   2002 and EPI Finance 2000


                                             Indicators                    Pages

                   Environmental indicators (GRI Supplement)
                      F1                                                   154, 155, 157, 158
                      F5                                                   183-185
                      F12                                                  158


                   Environmental indicators (EPI)
                      1 Jobs related to environment and
                        environmental departments                          184
                      2 Environmental training                             185
                      3 Environmental audits                               184
                      4 Environmental aspects of business                  158


                                      Social indicators (GRI Supplement + SPI)



                   Management of Corporate Social Responsibility
                      Management system                     RSC1           155
                                                            RSC3           184
                      Sensitive issues                      RSC4           165, 166
                      Participation                         RSC6           161, 162


                   Internal social development
                      Policy                                INT1           167-169
                      Work and social protection            INT2           164
                                                            INT3           165
                      Equality of opportunity               INT7           167-169


                   Development with regard to society
                      Beneficent work                       SOC1           170-182


                   Investment bank
                      Policy                                IB1            157, 158
                      Customer profile                      IB2            159
                      Fostering of share capital            IB3            157, 158




198   RSC Report
The Global Reporting Initiative (GRI) was set up in 1997 with the support of the United Nations Programme on the
Environment with the aim of providing a reliable and credible framework for drawing up sustainbility reports.
At the end of 2006 the GRI published a new G3 guide which we have used as a basis for drawing up the present report.



Indicators in G3 Guide of the Global Reporting Initiative

Indicators of economic development
 EC1       Direct economic value generated and distributed, including income, operating costs, salaries and
           wages, donations and other investments in the community, undistributed profits, payments to those
           providing capital and payments to government.
 EC3       Cover for organizational commitments due to social benefit programmes.


Indicators of environmental development
 EN1       Materials used, by weight or volume.
 EN2       Percentage of materials used that are evaluated materials.
 EN3       Direct energy consumption broken down by primary source.
 EN4       Indirect energy consumption broken down by primary source.
 EN5       Energy savings due to conservation and improvements in efficiency.
 EN8       Total water collection by source.
 EN16      Total emissions, direct and indirect, of greenhouse-effect gases, by weight.
 EN22      Total weight of wastes managed, according to type and method of treatment.
 EN26      Initiatives to reduce environmental impact of products and services and degree of reduction
           of this impact.


Indicators of social development: labour practices and work ethic
 LA1       Breakdown of workforce by job type, hiring contract and region.
 LA2       Total number of employees and average turnaround, broken down age group, sex and region.
 LA10      Average number of hours of training per employee per year, broken down by type of employee.
 LA13      Make-up of corporate and workforce governing bodies, broken down by sex, age group,
           whether they belong to minorities and other indications of diversity.


Indicators of social development: society
 SO1       Nature, scope and effectiveness of programmes and practices for evaluating and managing the impact
           of operations in the community, including the start-up, operation and closing down of a company.
 SO3       Percentage of employees trained in the organization’s anti-corruption policies and procedures.
 SO5       Position on public policy and participation in their development and lobbying activities.


Indicators of social development: responsibility for products
 PR3       Type of information on products and services required by current procedures and regulations and
           percentage of products and services subject to those information requirements.




                                                                                                   RSC Report          199
                   Indicators on financial services sector in supplements to G3
                   Guide of Global Reporting Initiative


                   Supplement on Financial Services Sector: environmental development
                    F1      Description of environmental policies applied to basic areas of
                            business.
                    F5      Description of processes for improving competence of employees when
                            it comes to dealing with environmental risks and opportunities.
                    F12     Total monetary value of specific environmental products and services
                            broken down by basic types of business.


                   Supplement on Financial Services Sector: Social development + SPI
                    RSC1    Policy on corporate social responsibility.
                    RSC3    Audits of corporate social responsibility.
                    RSC4    Management of sensitive issues.
                    RSC6    Dialogue between interested parties.
                    INT1    Internal policy on corporate social responsibility.
                    INT2    Turnaround of employees and job creation.
                    INT3    Employee satisfaction.
                    INT7    Employee profile.
                    SOC1    Beneficent work.
                    IB1     Social and environemental aspects of investment policy.
                    IB2     Customer profile: structure of global operations.
                    IB3     Operations with high social and environmental content.




200   RSC Report
Glossary

Dow Jones Sustainability Index: Index of companies published by Dow Jones
providing information about the economic, social and environmental performance
of the main companies giving support to sustainable development.

Emissions: Release into the atmosphere, water or soil of substances, vibrations,
radiation, heat or noise directly or indirectly from specific or broad sources of
company operations.

GRI: Global Reporting Initiative, an organization that has developed a guide on how
to provide transparent information on economic, environmental and social results.
To obtain more information, visit web page www.globalreporting.org

Indicator: Quantitative or qualitative figure providing information on the state of a
specific situation. The trend shown by indicators provides information about
changes.

Parties, interest groups or stakeholders: Persons, communities or organizations
affected by the operations of a company or who influence those operations. Interested
parties may be internal (workers, for example) or external (customers, suppliers/sub-
contractors, shareholders/investors, financial institutions, government, local
community).

ISO 14001: International environmental management regulation.

European Union Green Book: Document on Fostering a European framework for
social responsibility of companies by taking advantage of existing experience, the
development of innovative practices, increased transparency and greater reliability
of evaluation and validation.

United Nations World Pact: Code of conduct for large multinational and
transnational companies that includes proposals on human rights, labour rights
and ecological rights.

Recycling: Option for evaluation consistent with reuse of a waste in the process of
manufacturing the same product or one of similar function.

CSR: Corporate social responsibility, the responsibility of companies to respond in
an equitable manner to economic, environmental and social interests.

Waste: Material generated as undesirable result of any human activity which the
generator or holder has disposed of or has the intention or obligation to dispose of.

Evaluation: Series of operations aimed at returning a waste to total or partial reuse.
This is the case, for example, with paper, plastics, data-processing equipment, toners
and fluorescent tubes.




                                                                                         RSC Report   201
                   Working together, thanks to your comments


                   Through this annual report, we at Crèdit Andorrà want to inform all interest groups
                   about our commitments to social responsibility and results obtained in 2006. This
                   report sets out full information in the economic, social and environmental spheres.

                   In keeping with our belief in open communications, we invite you to send us your
                   ideas and suggestions that may help improve this annual report in future years.

                   You may contact us at: comunicacio@creditandorra.ad




202   RSC Report
Branch Network of Crèdit Andorrà Group



Head Office                Branches

Andorra la Vella           Andorra la Vella                 Escaldes-Engordany
Principat d’Andorra        OFICINA SEU SOCIAL               OFICINA ESCALDES
Av. Meritxell, 80          Av. Meritxell, 80                Av. Carlemany, 42
Tel.: 88 86 00             Tel.: 88 86 00 - Fax: 88 86 01   Tel.: 88 82 00 - Fax: 88 82 01
Fax: 88 86 01
                           OFICINA ANDORRA LA VELLA         OFICINA ENGORDANY
Swift: CRDA AD AD
                           Av. Príncep Benlloch, 25         Av. del Pessebre, 27
www.creditandorra.ad
                           Tel.: 88 81 00 - Fax: 88 81 01   Tel.: 88 82 80 - Fax: 88 82 81
                           OFICINA BAIXADA DEL MOLÍ         OFICINA FITER I ROSSELL
                           Av. Príncep Benlloch, 95         Av. Fiter i Rossell, 22
Administration Building    Tel.: 88 86 60 - Fax: 88 86 61   Tel.: 88 82 60 - Fax: 88 82 61

Sant Julià de Lòria        OFICINA PLAÇA REBÉS

C/ Isidre Valls, s/n       Plaça Rebés, 3                   La Massana
Tel.: 88 87 20             Tel.: 88 83 60 - Fax: 88 83 61   OFICINA LA MASSANA I

Fax: 88 87 21              OFICINA PRADA RAMON              Av. Sant Antoni, 34
                           C/ J. Maragall/Na Maria Pla      Tel.: 88 85 00 - Fax: 88 85 01
                           Tel.: 88 86 70 - Fax: 88 86 71   OFICINA LA MASSANA II

Support Service            OFICINA PRAT DE LA CREU          Av. Sant Antoni, 25
                           C/ Prat de la Creu, 83           Tel.: 88 85 70 - Fax: 88 85 71
Escaldes-Engordany         Tel.: 88 81 60 - Fax: 88 81 61   OFICINA ARINSAL
Av. Fiter i Rosell, 22                                      Carretera General d’Arinsal
                           OFICINA SANTA COLOMA
Cantonada vial Viladomat                                    Tel.: 88 85 40 - Fax: 88 85 41
                           Av. d’Enclar, 53
Tel.: 88 89 50
                           Tel.: 88 81 80 - Fax: 88 81 81
Fax: 88 89 51
                                                            Ordino
                           Canillo                          OFICINA ORDINO

                           OFICINA CANILLO                  Carretera General
                           Plaça Major                      Tel.: 88 85 50 - Fax: 88 85 51
                           Tel.: 88 84 60 - Fax: 88 84 61
                           OFICINA SOLDEU                   Sant Julià de Lòria
                           Carretera General                OFICINA SANT JULIÀ I
                           Tel.: 88 84 90 - Fax: 88 84 91   Av. Verge de Canòlich, 17-19
                                                            Tel.: 88 83 00 - Fax: 88 83 01
                           Encamp                           OFICINA SANT JULIÀ II

                           OFICINA ENCAMP I                 Av. Verge de Canòlich, 55
                           Plaça del Consell                Tel.: 88 83 40 - Fax: 88 83 41
                           Tel.: 88 84 00 - Fax: 88 84 01
                           OFICINA ENCAMP II
                           Av. Copríncep Episcopal, 6
                           Tel.: 88 84 20 - Fax: 88 84 21
                           OFICINA PAS DE LA CASA
                           C/ Sant Jordi, 7
                           Tel.: 88 84 40 - Fax: 88 84 41




                                                                         Branch Network      203
Av. Meritxell, 80
Andorra la Vella
AD500 Andorra la Vella


Disseny, maquetació i impressió
Design, page make-up and printing
www.cege.es

ISBN: 978-99920-1-639-8
DL: B. 18022-2007

								
To top