Federación de cajas de Ahorros Vasco-Navarras

The 2010 financial year was marked by the convulsive movements of the economy in general and of the financial sector in particular, with a pronounced restriction in liquidity which was reflected in each and every economic sector.

This scenario was also visible in the Basque economy and as a result, the Basque Administration maintained its more important specific lines of support to the productive sectors.

In addition to traditional support lines, the Collaboration Agreements in force in 2010 therefore included a joint support programme for the most affected sectors with a credit line of 500 million €.

The Basque Administration continued to require funding in order to fulfil its economic and social objectives and therefore resorted to indebtedness by means of various market formulas.

In terms of financial agreements, the Basque Savings Banks continued to boast the highest overall participation rates in the agreements and collaboration between the Basque Government and financial institutions throughout 2010.

In 2010, funds allocated to the financial collaboration agreements by the three Basque Savings Banks totalled approximately 222.3 million €, with total funds channelled by all the financial institutions amounting to 550.6 million €, with an approximate participation rate, therefore, of 50.4%.

Housing

The volume of financing granted during the 2010 financial year by all financial institutions amounted to 328.4 million €, with the Basque Savings Banks supplying most resources with a rate of 46.7%.

There was a severe drop in interest rates during 2011, and this was subsequently reflected in the Housing Agreement.

During 2010, the interest rate applicable to the Housing Agreements signed in previous years followed a similar path to the rates applicable in the rest of Spain.

The Housing Agreement which was signed in 2009 was extended in 2010 and financial aid matched that of the previous financial year, i.e. non-refundable subsidies for promoting social housing, renovations, etc. and interest rate subsidies for rent support.

Legislation was updated with Decree 628/2009 of 22nd December, which came into effect in 2010. This Decree covered the introduction of an important series of new measures aimed at price-controlled housing and regional government-owned rented housing, housing repurchase possibility in the case of non-payment, interest rate modification, etc.

Productive Investment Agreements AFI

In 2010, the traditional financial instruments or Productive Investment Agreements (e.g. the AFI programme for Industry, Commerce and Tourism) remained in force although the level of financed investment was considerably lower (-39%). The SPRI Basque Development Agency continued to manage these lines.

Financial investment incentives were geared towards SMEs in any of the three sectors (industry, commerce or tourism) which comply with the legally-established requirements such as minimum investment of 100,000€ in the case of the industrial sector and 30,000€ in either of the other two sectors.

The financial conditions applied during 2010 were the Euribor plus a margin of 1.5% regardless of the term chosen with a maximum applicable commission of 0.40%.
Previous financial year subsidies remained with general interest subsidisation standing at 1.5 percentage points.

The volume of funds channelled by the three Basque Savings Banks into the AFI financial investment incentive programme totalled 20.5 million €.

BBK, Kutxa and Caja Vital Kutxa collaborated with other financial institutions on an agrement to improve AFI teleprocessing.

Lines of adaptation to the financial structure

Financial Adaptation Agreement for SMEs and Self-employed Workers: The additional ninth regulation of Law 19/2008 of 30th December for the 2009 Basque Government Budgets authorised the Government to approve a specific support programme for the financing of Basque companies. One of these consisted of a pluriannual financing line for individual entrepreneurs, self-employed workers and SMEs totalling 500 million euros for their working capital needs, revocation or adaptation of short-term debt to medium and long term, etc. This line was also in force throughout 2010.

Financing was available for financial structure adaptation projects when the presented financing structure was inadequate for future development. Formalized loan and credit operations were guaranteed by an MGC (Mutual Guarantee Company).

The financial conditions applicable to the applicant were the Euribor plus a margin of 1.5%.

The volume of funds allocated by the institutions to these lines in 2010 amounted to 115.2 million €, with financing granted by the three Basque Savings Banks of 30.3 million € (26.3%).