2022 Annual Accounts of FROB and the National Resolution Fund

Madrid, 28/06/2023.

On 19 June, FROB’s Governing Committee approved the annual accounts and the directors’ report of FROB and of the National Resolution Fund (NRF) for 2022.

Annual Accounts of FROB

The year closed with accounting profits of EUR 2.22 billion, mainly stemming from the positive evolution of the market value of the BFA stake in CaixaBank, which resulted in countable income from the reversal of the impairment of FROB’s stake in BFA of EUR 1.85 billion in 2022. This countable income, as occurred with the impairment losses in previous years, has no impact on the public deficit or debt. This action accumulates to a 142.8% increase since the announcement of the merger operation until year-end 2022.

FROB’s balance, at year-end 2022, amounts to EUR 7.05 billion, with a positive net worth of EUR 5.07 billion

The main movements recorded in the 2022 financial statements compared with the previous year are as follows:

i. Valuation of investees

• In accordance with accounting standards and as had already occurred in 2021, FROB has estimated the carrying amount of its stake in BFA, 100% owned by FROB and holder at 31 December 2021 of 17.3% of CaixaBank’s shares¹, taking as reference the individual equity of BFA recorded in its annual accounts as at 31 December 2022, adjusted with the unrealised capital gains existing at the valuation date.
• The individual net worth of BFA stood at EUR 4.96 billion in 2022, compared with EUR 4.49 billion in 2021. In turn, the unrealised capital gains to be obtained amounts to EUR 1.38 billion, stemming from the strong increase in its stake in CaixaBank in 2022. Consequently, at 31 December 2022, the net book value of FROB’s stake in BFA amounts to EUR 6.34 billion. The accounting profit for FROB has been a reversal in the value impairment for the sum of EUR 1.85 billion.
• FROB had recorded the total write-down of its stake in Sareb in 2019. In 2022, culminating the process to take public control following the approval of Royal Decree-Law 1/2022, the stake in Sareb remains wholly impaired, with no effects on the accounts in 2022.

ii. Contingencies for guarantees 

• In 2022, the Banco de Valencia Asset Protection Scheme (APS) matured. The payment for the final settlement of the APS, which will take place in the coming months, amounts to EUR 65.8 million, with a positive impact on FROB’s accounts due to the release of the rest of the provision for EUR 77.6 million. Accordingly, the total cost of the APS for FROB has amounted to EUR 206 million, a much lower amount than the EUR 600 million estimated at the time it was executed.
• Furthermore, a net positive impact of EUR 253 million was recognised in the income statement as a result of the release of a provision following a court ruling in favour of FROB.

iii. Net interest income (expense)

• Without taking into account the positive effect of the valuation of BFA, a financial loss was recorded of EUR 18.8 million, mainly stemming from the financial expense of the liability of FROB (loan from the Treasury to channel the funds deriving from the loan from the European Stability Mechanism (ESM). At 31 December 2022, this loan had a balance of EUR 1.87 billion.

iv. Cash and banks

• At 31 December 2022, the amount of FROB’s cash totalled EUR 692 million, which is invested in Government Debt assets and in a current account with the Bank of Spain.

v. Extraordinary income

• In 2022, extraordinary income of EUR 30.5 million was recorded as a result of judicial actions in legal proceedings under way.

vi. Fee to fund FROB’s activity

• 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 EUR 28.3 million in 2022.

Annual accounts of the National Resolution Fund

The National Resolution Fund (NRF) recorded a profit of EUR 2.90 million, resulting from the collection of contributions to the NRF from those entities required to pay (EUR 2.89 million), which are certain investment firms not included in banking groups supervised by the European Central Bank and by the branches in Spain of credit institutions and investment firms established outside the European Union. The net assets of the fund amount to EUR 12.78 million, comprising the contributions made by these entities between 2015 and 2022 (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 auditor’s reports are available at the website: www.frob.es.