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The resources administered on the balance sheet performed excellently, with 24.5% growth and the liabilities administered, both on and off the balance sheet, totalled 12,332 million euros at the end of the year. Term deposits increased by 38.4%, with a continuation in the strong growth in savings schemes for retirement. The different pension, welfare and retirement plans increased their overall balances by 14.3%, with the hedge funds managed with the EPSV’s (Provident Societies) standing out.

In the strong increase in business volume, mortgage loans to purchase homes stand out especially, with a 20.6% increase. This has made Caja Laboral the reference institution in those markets in which it operates, especially in the areas targeted for expansion, which already account for 31% of the total balances accumulated in mortgage loans. On the other hand, personal loans, with the so-called “Crédito Ilusión” as the main scheme, increased by 10.1%.

As far as company banking is concerned, one of Caja Laboral’s strategic commitments, the increase was also quite considerable, with the overall investment in this segment increasing by 18.9%, a figure which includes credits, loans, leasing and commercial credit. Pure credit to companies increased by 21.5% and the account operated via the Internet, Caja Laboral Net Empresas, established a balance of 112 million euros in its first year of operation. All this took the overall turnover administered by Caja Laboral to 27,033 million euros at the end of the year, with outstanding growth of 24% in 2006.

The profit before tax came to 176 million euros, which is 17.1% higher than the figure posted the previous year, confirming the positive trends observed throughout the year. The increase in profit was not just based on an increase in activity, but also on efficiency, which saw the operating margin rise by 19.6%.

The standard business margin also performed well, with an 8.3% increase compared to the previous year. This was due to the strong increase in activity as well as the rises in interest rates in the second half of the year. After the strong increase in income from financial operations, the ordinary margin rose by 14.7%.

Administration overheads increased by 9.3%, which is well below the growth in activity. So the efficiency ratio, which shows the percentage that operating costs detract from the ordinary margin, recorded a new improvement, by falling 1.96 pp, to 39.6%. The provisions for a deterioration in assets increased by 31.3%, due to the strong increase in credit, which required significant rises in generic transfers, whilst specific transfers fell by 19.3%, given the good quality of investment, with a index of non-performing loans of 0.69%.

In line with its Strategic Plan, Caja Laboral continued to expand with the opening of 17 new branches, of which 11 were in the areas targeted for expansion and 6 in the institution’s traditional area of operation. Asturias with 5 branches and Madrid with 4 were the Autonomous Communities in which Caja Laboral focused its new branch policy in 2006. At 31 December, the total number of branches came to 372 distributed as follows: Basque Country 204, Navarra 48, Aragón 32, Rioja 12, Castilla y León 53, Madrid 5, Cantabria 7, Asturias 10 and Cataluña 1.

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