2023 Annual Accounts of FROB and the National Resolution Fund
- FROB reported an accounting profit of 456 million euros in 2023.
- This result was driven by the evolution of CaixaBank’s market capitalisation and the dividends it distributes to BFA.
- In 2024, FROB receives dividends from its investee BFA for the first time, based on the latter’s 2023 results, amounting to 335 million euros.
- In 2024, there will be no contributions to the Single Resolution Fund (SRF), as it has reached its target level.
Madrid, 26/06/2024.
FROB publishes its annual accounts, along with the directors’ report for FROB and the National Resolution Fund (NRF) for the 2023 financial year.
FROB Annual Accounts
The financial year closed with an accounting profit of 456 million euros, primarily due to the positive performance of CaixaBank. This was driven by the increase in the market value of BFA’s stake in the entity and the dividend received by BFA, resulting in the reversal of an impairment on FROB’s participation in BFA, amounting to 405 million euros in 2023. Therefore, the share price has appreciated by 146% from the announcement of the merger to the end of the 2023 financial year.
FROB’s balance at year-end 2023, amounts to 7,424 million euros, with a positive net worth of 5,521 million euros.
The main movements recorded in the 2023 financial statements compared with the previous year are as follows:
Valuation of investees
- In accordance with accounting standards and as has already occurred in previous years, FROB has estimated the carrying amount of its stake in BFA (100% owned by FROB, holding 17.3% of CaixaBank’s shares as of December 31, 2023[1]), taking as a reference the individual equity of BFA recorded in its annual accounts as of 31 December 2023, plus the unrealised capital gains from BFA’s stake in CaixaBank as of that date, which, in compliance with applicable regulations, are not recorded in BFA’s accounts.
- BFA’s individual net equity as of 31 December 2023 stands at 5,294 million euros, compared to 4,959 million euros in 2022. The unrealised capital gains amount to 1,455 million euros, resulting from the revaluation of its stake in CaixaBank, of which 70 million euros correspond to 2023. Consequently, as of 31 December 2023, the net carrying amount of FROB’s stake in BFA amounts to 6,749 million euros. This has resulted in a reversal of the impairment for FROB, amounting to 405 million euros.
- Meanwhile, the results achieved by BFA in 2023, considering its future sustainability, the consistent reduction of its reliance on external resources, and its very strong equity position, have enabled the distribution of the first dividend to FROB. As reflected in the subsequent events section of FROB’s annual accounts, on 9 May 2024, BFA paid FROB 335 million euros as a dividend, drawn from its 2023 profits.
- With regard to the stake in Sareb, since 5 April 2022, under the provisions set out in Royal Decree-Law 1/2022, FROB has held 50.14% of the institution’s equity. As for the valuation of its stake in Sareb, FROB had already recorded the full impairment of this investment in 2019, and it remains entirely impaired, with no impact on the 2023 accounts.
Contingencies for guarantees
- The payment for the final settlement of the Banco de Valencia Asset Protection Scheme (APS), (which matured in September 2022) was made in June 2023, thereby concluding this guarantee with a scheduled payment of 65.8 million euros. As a result, the total cost of the APS for FROB has amounted to 206 million euros, a figure significantly lower than the 600 million euros estimated at the time of its issuance.
- With regard to the remaining guarantees, the estimated costs have been updated, with minimal variations expected in the future since they are all nearing their completion. Thus, these updated estimates have had a combined positive impact on FROB’s income statement of nearly 31 million euros due to the reduction in estimated costs.
Financial margin
- Excluding the positive effect of the valuation of BFA, the financial result has been negative, amounting to 11.6 million euros, primarily due to the financial expense of FROB’s liabilities (ESM loan). As of 31 December 2023, this loan had an outstanding principal of 1,865 million euros.
Cash reserves
- As of 31 December 2023, FROB’s cash reserves amounted to 641 million euros, which are invested in Government Debt assets (519 million euros) and current accounts, with the majority held in accounts at the Bank of Spain.
Extraordinary income
- During the 2023 financial year, extraordinary income of 13.3 million euros was recorded as a result of judicial actions in ongoing legal proceedings.
Fee for maintenance of FROB activities
- FROB finances its operating expenses without any charge to the General State Budget, but rather through a fee paid by the financial industry. This resulted in income of 25.1 million euros in 2023.
Contributions to the SRF 2024
- As reflected in the directors’ report for FROB, following the verification exercise, the Single Resolution Board (SRB) has confirmed that the resources of the Single Resolution Fund (SRF) have reached the target amount, and therefore, no contributions will be collected in 2024.
[1] FROB’s indirect stake in CaixaBank through BFA has increased from 16.12% to the current 17.88% following the redemption of shares repurchased under various share buyback programs executed by CaixaBank from 2022 to the first half of 2024.
Annual accounts of the National Resolution Fund
The National Resolution Fund (NRF) recorded a positive result of 3.8 million euros in 2023, primarily derived from contributions to the NRF made by subject entities (3.4 million euros), which include certain investment firms not part of banking groups supervised by the European Central Bank, as well as branches in Spain of credit institutions and investment firms established outside the European Union. The financial result, generated from interest accrued in the current account held at the Bank of Spain by the NRF, amounted to 469 thousand euros.
The net assets of the fund amount to 16.6 million euros, comprising the contributions made by these entities between 2015 and 2023 (both inclusive).
Both FROB and the NRF (managed by FROB) prepare their annual accounts in accordance with Spanish general accounting standards (which use criteria that are not comparable with those used in national accounting). These accounts are audited.
The annual accounts and directors’ reports of FROB and the NRF, together with their audit reports, are available on the website: www.frob.es