31/12/2012 Issue Nominal
22. Shareholders’ equity
Balance as at 31/12/2010 71,090
Net additions to reserves for the year charged to profit and loss 28,175
Application of funds (42,532)
Other movements 7,389
Balance as at 31/12/2011 64,122
Net additions to reserves for the year charged to profit and loss 21
Application of funds (1,881)
Transfer of funds (17,290)
Other movements 3,228
Balance as at 31/12/2012 48,200
“Other movements” reflects the reclassification of balances under the heading “Provisions for taxes and other legal contingencies”.
The remaining amount under this heading refers to risks for which the Institution has estimated there is a probability that disbursements may be required in the future for past events.
22. Shareholders’ equity
The breakdown of the composition and movements in the Group's shareholders' equity in financial years 2012 and 2011 is included in the Overall Statement of Changes in Consolidated Public Net Worth.
a) Capital
As at 31 December 2012, the share capital of Bankinter, S.A. was represented by 563,806,141 registered shares with a nominal value of €0.30 each, fully subscribed and paid up. These shares all have equal voting and economic rights. As at 31 December 2011, The breakdown of the allocations made to allowances during the financial years 2012 and
2011 is as follows:
€000s
31/12/2012 31/12/2011
Net allocations charged to income:
Pension funds and similar obligations (5,645) (8,509)
Provisions for contingent risks and commitments 1,787 (1,642)
Other provisions (2,874) 38,326
Allowances for taxes and other legal contingencies 6,753
-21 28,175
The balance shown against “Provisions for taxes and other legal contingencies” in the
“Provisions” section includes, among other items, those corresponding to provisions for tax and legal proceedings, which have been estimated using prudent calculation methods consistent with the uncertainties inherent in the obligations that they cover. In some cases, the time at which resources involving economic benefits for the Group will have to be released for the obligation in question has been determined as not having a fixed term, and in other cases it has been set in accordance with the status of the proceedings that are underway.
The heading “Provisions for contingent risks and commitments” comprises the generic and specific provisions for contingent risks as at 31 December 2012 and 2011. In 2012 there was a net addition of €1.79 million to these provisions, there having been a net release of €1.64 million in 2011.
The breakdown of shareholders with a percentage holding equal to or greater than 10%
of share capital as at 31 December 2012 and 2011 is as follows:
Number of Shares held
Directly Number of Shares held
Indirectly Percentage of Share Capital Shareholder 31/12/2012 31/12/2011 31/12/2012 31/12/2011 31/12/2012 31/12/2011
Cartival, S.A. 131,565,493 106,671,902 - 7,378,822 23,34 23,91
Crédit Agricole, S.A 85,146,775 116,927,050 18,505 47,723 15,102 24,53
b) Issue premium
During 2012 the share premium account increased by the difference between the nominal value of the new shares and their subscription price. During 2011 there were no changes in this Balance Sheet heading. Movements in the share premium account in 2012 and 2011 were as follows:
€000s Nominal value
Balance as at 31/12/2010 737,079
Additions
-Balance as at 31/12/2011 737,079
Additions 381,107
Of which on conversion of subordinated bonds 314,294
March conversion 313,990
May conversion 146
November conversion 158
Of which on exchange of preferred shares (Note 19) 66,813
Balance as at 31/12/2012 1,118,186
the share capital of Bankinter, S.A. was represented by 476.919.014 registered shares with a nominal value of €0.30 each.
All the shares are represented by book entries, officially listed on the Madrid and Barcelona stock exchanges and traded by the Spanish computer-assisted trading system.
The following changes were recorded in the shares in circulation in financial years 2012 and 2011:
€000s
Number of shares Nominal value
Balance as at 31/12/2010 473,447,732 142,034
Additions 3,471,282 1,042
Of which alternative dividend 3,471,282 1,042
Balance as at 31/12/2011 476,919,014 143,076
Additions 86,887,127 26,066
Of which on conversion of subordinated bonds 59,616,575 17,885 Of which on exchange of preferred shares (Note 19) 27,270,552 8,181
Balance as at 31/12/2012 563,806,141 169,142
The increase in capital is the result of the conversion of mandatorily convertible subordinated bonds into shares (see section d) as well as of the purchase of preferred shares issued by Bankinter Emisiones S.A.U. (see Note 19).
Under the Bankinter Alternative Dividend Flexible Shareholder Remuneration Programme approved by the Ordinary General Meeting of Shareholders of 28 April 2011, shareholders holding 263,906,373 warrants opted during 2011 to receive free new shares. As a result of the above, on 30 September 2011 the Board of Directors set the number of ordinary shares to be issued in the capital increase against freely available reserves at 3,471,282 for a capital increase of €1.04 million.
Voluntary reserves
Voluntary reserves are freely available for use.
Reserves (losses) of entities accounted for using the equity
method-The breakdown of the reserves and losses in companies accounted for using the equity method is as follows:
€000s 31/12/2012 31/12/2011
Reserves Reserves
Bankinter Seguros Generales, S.A 232
-Professional Future Materials, S.L. - (176)
Mercavalor, S.V., S.A. 1,607 1,414
Bankinter Seguros de Vida, S.A. 2,681 8,830
Helena Activos Líquidos, S.L. 187 499
Eurobits Technologies, S.L. 215 327
4,922 10,894
d) Other Equity Instruments
On 11 May 2011 the Bank issued mandatorily convertible bonds for €404.81 million, in two series: Series I for a nominal amount of €175.00 million and Series II for a nominal amount of €229.81 million maturing 11 May 2014 with an annual remuneration of 7%.
The terms of the issue conform to the definition of equity instrument since i) there is no obligation to deliver cash or other financial assets since conversion is mandatory, and since the remuneration is subject, inter alia, to the discretion of the Bank’s Board of Directors, and ii) the conversion rate is fixed for all conversions as the result of dividing the nominal value of the bonds by the established conversion price (€6.28 and €5.03 per share for Series I and Series II respectively), subject in any case to fixed numbers of bonds being exchanged for fixed numbers of shares. The issue is therefore recognised in equity as “Equity - Other equity instruments”. Remuneration accruing during 2011 on this product amounted to €18.24 million. This amount net of corporation tax (€12.77 million) is recognised directly in equity as a deduction from reserves.
c) Reserves
The breakdown of this item in the consolidated balance sheet is as follows:
€000s
31/12/2012 31/12/2011
Statutory reserve 51,680 51,091
Freely-available reserve 1,448,986 1,349,513
Revaluation reserve 149,057 160,634
Treasury shares reserve- 106,773 111,034
By acquisition 225 742
By guarantee 106,548 110,292
Canary Islands investment reserve 28,363 28,363
Reserves (losses) of entities accounted for using the equity method- 4,922 11,070
Associates 4,707 10,743
Jointly controlled entities 215 327
1,789,781 1,711,705
Statutory reserve
Companies are obliged to allocate 10% of their profits in each financial year to a reserve fund, until this reaches at least 20% of share capital. This reserve may not be distributed to shareholders and may be used only to cover losses if there are no other reserves available. In certain circumstances it may also be used to increase the share capital in the part of this reserve that exceeds 10% of the increased capital figure.
Revaluation reserves
This heading in the consolidated Balance Sheet shows the effect on the reserves of the revaluation of properties carried out on 1 January 2004, as allowed in the transition to the IFRS. This heading also includes the revaluation reserves generated by business combination transactions.
None of the exchange transactions described involved the recognition of any amount in the enclosed consolidated Income Statements for the years ended 31 December 2012 or 2011.
e) Own securities
As at 31 December de 2012, the Group owned 76,316 of its own shares (162,620 shares as at 31 December de 2011).
During 2012, stock market transactions were carried out for the purchase of 22,014,342 shares (7,011,172 in 2011) and the sale of 22,100,646 shares (7,256,473 in 2011) on which gains of €0.19 thousands were obtained, recognised directly in equity under “Reserves”
in the Balance Sheet.
The breakdown of treasury stock as at 31 December 2012 and 2011 is as follows:
€000s Euros €000s
Number of shares Nominal value
Average acquisition
price Acquisition cost Treasury-stock
reserve Percentage of capital 31/12/
2012 31/12/
2011 31/12/
2012 31/12/
2011 31/12/
2012 31/12/
2011 31/12/
2012 31/12/
2011 31/12/
2012 31/12/
2011 31/12/
2012 31/12/
2011
Bankinter, S.A. 76,316 71,203 23 21 2.95 4.33 226 308 226 308 0.01 0.01
Hispamarket, S.A. - 91,417 - 28 3.19 4.75 - 434 - 434 0.00 0.02
Total 76,316 162,620 23 49 6.14 9.08 226 742 226 742 0.01 0.03
During the first half of 2012 the following mandatorily convertible subordinated bonds were voluntarily converted into new Series I and II Bankinter shares:
The Company’s AGM, held on 15 March 2012, in its eighth resolution, approved the setting of 29 March 2012 as an extraordinary date for voluntary conversion. Consequently on that date requests were made for the conversion of 3,240,012 Series I bonds, with a nominal value of €162 million (93% of Series I) and 3,397,138 Series II bonds, with a nominal value of €169.86 million (74% of Series II). To meet these conversion requests a total of 59,559,333 new shares were issued.
On the ordinary voluntary conversion date, 11 May 2012, requests were made for the conversion of 1,186 Series I bonds with a nominal value of €59,000 and 1,901 Series II bonds with a nominal value of €95,000. To meet these conversion requests a total of 28,279 new shares were issued.
On the ordinary voluntary conversion date, 12 November 2012, requests were made for the conversion of 2,170 Series I bonds with a nominal value of €108,000 euros and 1,182 Series II bonds with a nominal value of €59.000. To meet these conversion requests a total of 28,963 new shares were issued.
Remuneration accruing during 2012 on this product amounted to €57,362. This amount, net of corporation tax (€40.15 million), is recognised directly in equity as a deduction from reserves.
€000s
Balance as at 31/12/2010
-Additions 404,812
Balance as at 31/12/2011 404,812
Additions
-Subordinated bonds cancelled upon conversion 332,179
March conversion 331,857
May conversion 154
November conversion 168
Balance as at 31/12/2012 72,633
g) Earnings per share
Earnings per share are calculated by dividing profit attributable to the Group by the weighted average number of ordinary shares in circulation during the financial year, excluding any treasury stock acquired by the Group. In financial years 2012 and 2011, earnings per share are as follows:
2012 2011
Profit for the year (€000s) 124,654 181,227
Average number of shares (000s) 521,177 474,183
Earnings per share (euros) 0.24 0.38
To calculate diluted earnings per share, the weighted average number of ordinary shares in circulation is adjusted to reflect the conversion of all the potentially dilutive ordinary shares. The potentially dilutive ordinary shares that the Group holds are bonds convertible into shares. It is assumed that convertible bonds are converted into common shares.
The calculation of diluted earnings per share for the Group is as follows:
2012 2011
Diluted profit for the year (€000s) 124,654 181,227
Average number of diluted shares (000s) 527,659 520,243
Diluted earnings per share (euros) 0.23 0.35
f) Results attributed to the Group
The breakdown of the individual pre-tax results for each of the companies belonging to the Group during the financial years 2012 and 2011 is as follows:
€000s
2012 2011
Bankinter, S.A. 187,958 187,267
Bankinter Consultoría, Asesoramiento y Atención Telefónica, S.A. 853 (59)
Bankinter Seguros Generales, S.A - 5
Bankinter Gestión de Activos, S. A., SGIIC 15,806 15,235
Hispamarket, S. A. (7,085) 514
Intermobiliaria, S. A. (113,463) (98,169)
Bankinter Consumer Finance, E.F.C, S.A. 31,636 16,033
Bankinter Capital Riesgo, SGECR, S. A. 280 222
Bankinter Sociedad de Financiación, S. A. (12) (1,203)
Bankinter Emisiones, S. A. 370 716
Bankinter Capital Riesgo I, Fondo Capital 1,426 830
Línea Directa Aseguradora, S.A. 121,497 107,213
Arroyo Business Consulting Development S.A - (1)
Relanza Gestión S.A 50 18
Gneis Global Services S.A. 18,223 2,937
The result of the companies consolidated by the equity method for years 2012 and 2011 is as follows:
€000s 31/12/2012 31/12/2011
Mercavalor, S.V., S.A. (75) 28
Eurobits Technologies, S.L. (57) 3
Helena Activos Líquidos, S.L. (9) (98)
Moto Club LDA, S.L.U. - 233
Centro Avanzado de Reparaciones CAR, S.L.U. - (322)
Ambar Medline, S.L. - 19
Bankinter Seguros de Vida, S.A. de Seguros y Reaseguros 17,818 14,812 17,677 14,675
June2012 September
2012 December 2012
First Second Third
Profit after tax (€000s) 99,212 121,848 148,208
Dividends paid (€000s) - 15,375 30,750
Interim dividend (€000s) 15,375 15,375 15,375
Accumulated interim dividends (€000s) 15,375 30,750 46,125
Gross dividend per share (euros) 0.0286614 0.027276 0.027275
Payment date July 2012 Oct 2012 Jan 2013
23. Valuation adjustments (equity)