CONCURRENCIA DE CULPAS

As part of the reorganization of the ”la Caixa” Group (see Note 1, Reorganization of the ”la Caixa” Group), practically all ”la Caixa” employees were spun off to CaixaBank as of July 1, 2011 (with accounting effects as of January 1, 2011). The obligations assumed by ”la Caixa” vis-à-vis these employees were also assumed by CaixaBank at that time. Among others, these commitments include ”la Caixa”’s pension and similar obligations at June 30, 2011, primarily governed by the labor agreements on ”la Caixa”’s pension schemes, dated July 31, 2000 and July 29, 2002, and by the labor agreement on early retirement, dated December 23, 2003.

Under the labor agreement signed on July 31, 2000, retirement commitments with currently serving personnel were rolled over to an external defined contribution plan. Among other aspects, the agreement established coverage for disability and care for widows and orphans.

The agreement also arranges guaranteed future benefits for certain groups of employees, where these benefits are treated as defined benefit commitments.

In 2002, in compliance with the labor agreement signed on July 29 of that year, the present value at that date of employees retired prior to July 31, 2000 was included under the Group’s pension plan, and a specific policy was established with VidaCaixa, SA de Seguros y Reaseguros.

The transfer of commitments from ”la Caixa” to CaixaBank resulted from the agreement reached with certain trade unions on April 1, 2011 in order to safeguard employees’ labor conditions. One of the key points of this agreement is that ”la Caixa” bank employees transferred to CaixaBank will be subject to the labor conditions set out in all collective labor agreements and other agreements in force in ”la Caixa” at the time of transfer, without prejudice to any subsequent modifications agreed by all the parties. As a result, CaixaBank is required to maintain the same conditions and commitments for all employees transferred from ”la Caixa”, including post-employment obligations.

On July 10, 2011 and with the involvement of the committee set up to monitor compliance with the labor agreement of April 1, 2011, ”la Caixa” and the trade unions agreed on the basis for implementing the sixth covenant, applicable in CaixaBank as of July 1, 2011. The agreements affect all employees adhered to the pension plan (”la Caixa” and CaixaBank employees) and all pension plan beneficiaries. The key points agreed are as follows:

1) approval of the creation of a Joint ”la Caixa”/CaixaBank Pension Plan;

2) approval of the amendments to transform the specifications of the ”la Caixa” employee Pension Plan to the Joint ”la Caixa”/CaixaBank Pension Plan, and incorporation of two appendices of specifications (employees of ”la Caixa” were included under the ”la Caixa” plan, while employees of CaixaBank, all beneficiaries of the former ”la Caixa” Pension Plan, and non-contributing members were included under the CaixaBank plan); 3) appointment of members of the Joint Pension Plan Monitoring Committee.

4) formal creation of the Joint ”la Caixa”/CaixaBank Pension Plan Monitoring Committee.

On July 12, 2011 (effective July 1, 2011), ”la Caixa” and CaixaBank signed a collective labor agreement with representatives of the main trade unions, in order to incorporate the above points in ”la Caixa” and CaixaBank’s pension and welfare scheme.

post-employment benefits

Post-employment benefit obligations are all those undertaken by the CaixaBank with its employees, to be paid upon termination of their employment with the Group.

Defined contribution plans

All pension plan contributions made during the year are recognized under “Personnel expenses” in the income statement (see Note 33).

Defined benefit plans

CaixaBank records the present value of defined benefit post-employment obligations, net of the fair value of plan assets and of the net accumulated unrecognized actuarial gains and/or losses and of deferred past service costs, under “Provisions – Provisions for pensions and similar obligations” (see Note 22).

Plan assets are defined as those assets that will be used to directly settle plan obligations and that meet the following conditions:

• Are not owned by the Group but rather by a legally separate, non-related third party.

• Are available to pay or finance post-employment benefits and can never be allocated to Group creditors, even in

the case of insolvency proceedings. Assets cannot return to the Group, except where those remaining under the plan are sufficient to meet all post-employment obligations under the plan or assumed by the entity, or are used to reimburse post-employment benefits the Group has already extended to employees.

Virtually all of CaixaBank’s defined benefit commitments are assured through polices contracted with the Group entity VidaCaixa, SA de Seguros y Reaseguros. Consequently, these contracts do not meet the requirements to be considered plan assets. The fair value of the insurance contracts is shown under “Insurance contracts linked to pensions” on CaixaBank’s individual balance sheet.

Actuarial gains and losses arise from differences between the previous actuarial assumptions and what has actually occurred and the effects of changes in actuarial assumptions. The Group does not apply the corridor approach. Therefore, it recognizes the full amount of actuarial gains and losses in the income statement in the year they arise. Past service cost, arising from changes in current plan arrangements for post-employment obligations or the addition of new benefits, is recognized on a straight-line basis over the period from when the obligation arises until the date the employee’s irrevocable right to receive the benefit becomes vested.

The following are recognized in the income statement with respect to post-employment benefits:

• Current service cost, understood as the increase in the present value of obligations arising from employee service

in the period.

• Interest cost, understood as the increase during a period in the present value of the obligation which arises because

the benefits are one period closer to settlement.

• Expected return on insurance contracts linked to pensions less any costs of administering the plan and less any tax

payable by the plan.

• The effect of any plan curtailments or settlements.

• Actuarial gains and losses arising from differences between the previous actuarial assumptions and what has

actually occurred and changes in actuarial assumptions.

other long-term employee benefits

Other long-term employee benefits include commitments with employees who have taken early retirement, both with respect to salary and social benefit contributions up to the date the employee is formally retired, as well as long- service bonuses paid (see Note 21).

Early retirement schemes

As indicated in the preceding note, CaixaBank assumed the obligations deriving from the two early retirement programs in force at the time the ”la Caixa” Group was reorganized. These programs were launched in 2003 and, after being rolled over several times, lapsed on December 31, 2011. The first was a partial retirement scheme for employees over 60, and the second was an early retirement scheme for employees aged between 57 and 62 who had at least two and up to five years before reaching the agreed retirement age. To qualify for these two schemes, employees were required to meet a minimum length of service at CaixaBank and have paid in a minimum amount of social security contributions.

Employees taking part in the partial retirement scheme hold a part-time employment contract with CaixaBank, work an equivalent of 15% of a full-time position and receive 15% of their regular salary, their Social Security pension and an additional supplementary benefit insured through a policy taken out with VidaCaixa, SA de Seguros y Reaseguros. Employees on the early retirement scheme terminate their employment contract with CaixaBank and in return the company pays them a consideration depending on the duration of the early retirement, equivalent to a percentage of their gross annual salary over the last twelve months, as well as a gross payment of the amount set out in the special Social Security contributions agreement. This amount is increased on a yearly basis in accordance with the year-on-year change in the Consumer Price Index (CPI) for December. Employees on the early retirement scheme and the partial retirement scheme retain, for all purposes, their status as participants in the Pension Plan for CaixaBank employees.

CaixaBank covers the entire cost of the obligations for additional payments, social security contributions, defined contributions to the pension plan, and other obligations up to the retirement age agreed with the employees by a specific provision included under “Provisions – Provisions for pensions and similar obligations” in the balance sheet. The provision covers the cost for all employees who took early retirement up to December 31, 2011.

From the start of the early retirement schemes in 2003 to the termination of the program on December 31, 2011, 3,446 employees have taken early or partial retirement.

Long-service bonuses

CaixaBank has made a provision for long-service bonuses accrued by currently serving personnel and by employees on mandatory leave of absence. CaixaBank has assumed the obligation of paying a bonus to employees upon reaching 25 or 35 years of service at the institution. The amounts in this connection are recognized in the balance sheet under “Provisions – Provisions for pensions and similar obligations.”

termination benefits

Provisions for termination benefits are recognized under “Pension and similar obligations” and “Personnel expenses” when there is a demonstrable commitment to terminating the employment of personnel before the normal retirement date, or paying termination benefits as the result of an offer made to encourage voluntary redundancy. Since no such commitment exists, there are no provisions in this connection in the balance sheet.

credit facilities made available to employees

Credit facilities made available to employees at below market rates are considered to be non-monetary benefits and are calculated as the difference between market rates and the agreed rates. The difference is recognized under “Administrative expenses – Personnel expenses,” with a balancing entry under “Interest and similar income” in the income statement.