CaixaBank

19.1

Goodwill

The breakdown of this heading is as follows:

Breakdown of goodwill (Millions of euros)
	CGU	31-12-2019	31-12-2018	31-12-2017
Acquisition of Banca Cívica	Banking	2,020	2,020	2,020
Acquisition of Banca Cívica Vida y Pensiones	Insurance	137	137	137
Acquisition of Cajasol Vida y Pensiones	Insurance	50	50	50
Acquisition of Cajacanarias Vida y Pensiones	Insurance	62	62	62
Acquisition of Banca Cívica Gestión de Activos	Banking	9	9	9
Acquisition of the Morgan Stanley business in Spain	Banking/Insurance *	402	402	402
Acquisition of Bankpime	Banking	40	40	40
Acquisition of VidaCaixa	Insurance	331	331	331
Total		3,051	3,051	3,051

* Of which EUR 3.7 million are allocated to the Insurance CGU and the remainder to the Banking CGU.

19.2

Other intangible assets

The breakdown of this heading is as follows:

Breakdown of other intangible assets (Millions of euros)
	Useful life	CGU	Remaining useful life	31-12-2019	31-12-2018	31-12-2017
Software and other	4 to 15 years		1 to 15 years	641	584	459
Customer relationships (core deposits) of Barclays Bank	9 years	Banking	4 years	10	13	16
Customer relationships (core deposits) of Banca Cívica	4 to 9.5 years	Banking		0	30	72
Customer relations (core deposits) of Banco de Valencia	6.2 years	Banking		0	1	6
Insurance portfolio of Banca Cívica y Pensiones	10 years	Insurance	3.5 years	20	28	35
Insurance portfolio of CajaSol Vida y Pensiones	10 years	Insurance	3.5 years	5	6	7
Insurance portfolio of CajaCanarias Vida y Pensiones	10 years	Insurance	3.5 years	3	3	5
Customer funds of Banco de Valencia	10 years	Insurance	4 years	1	1	1
Customer funds of Barclays Bank	10 years	Insurance	6.5 years	14	16	18
Contracts with Morgan Stanley customers	11 years	Banking/Insurance		0	1	3
Contracts with Banca Cívica Gestión de Activos customers	10 years		3.5 years	2	3	4
Contracts with Barclays Gestión de Activos customers	9 years		4 years	3	4	5
Customer relationships (core deposits) of BPI	5.8 years	Banking	2.8 years	19	25	32
BPI brand		Banking	Indefinite	20	20	20
Life insurance portfolios of BPI Vida	5 to 10 years	Insurance	2 to 7 years	8	11	14
Customer portfolios - asset management	10 years	Banking	7 years	12	14	15
Customer portfolios - Insurance brokerage	10 years	Banking	7 years	20	23	25
Deposit portfolio	6 years	Banking	3 years	10	14	17
Total				788	797	754

The breakdown of the changes of the balance under this heading is as follows:

Changes in other intangible assets (Millions of euros)
	2019		2018		2017
	Software	Other assets	Software	Other assets	Software	Other assets
Gross cost
Opening balance	1,348	637	1,220	677	989	556
Additions due to business combinations (Note 7)					94	165
Additions	201	31	191	34	200	27
Transfers and other	(29)	(33)	26	(46)	11	(12)
Write-downs (Note 37)		(147)		(24)	(62)	(58)
Other disposals	(2)	(113)	(89)	(4)	(12)	(1)
Subtotal	1,518	375	1,348	637	1,220	677
Accumulated depreciation
Opening balance	(791)	(396)	(789)	(341)	(605)	(292)
Additions due to business combinations (Note 7)					(78)	(16)
Additions	(108)	(44)	(87)	(60)	(120)	(72)
Transfers and other	7		1	3	2	(5)
Write-downs (Note 37)		124			8	43
Other disposals	1	107	84	2	3	1
Subtotal	(891)	(209)	(791)	(396)	(790)	(341)
Impairment allowances
Opening balance		(1)		(12)		(12)
Allowances (Note 37)		(4)		(5)	(1)	(4)
Recoveries (Note 37)		1		4		4
Transfers and other		(1)		12
Amounts used					1
Closing Balance		(5)		(1)		(12)
Total	627	161	557	240	430	324

During 2018, in collaboration with an independent expert, the Group carried out an exercise to adapt the useful lives of software developed internally. As a result of the aforementioned analysis, the useful life of the software was revised to between 3-15 years – depending on its nature – and these modifications have been applied prospectively, starting from 2018, with no significant impact.

Selected information related to other intangible assets is set out below:

Other information about other intangible assets (Millions of euros)
	31-12-2019	31-12-2018	31-12-2017
Fully amortised assets still in use	859	912	551
Commitments to acquire intangible assets	Insignificant	Insignificant	Insignificant
Assets with ownership restrictions	Insignificant	Insignificant	Insignificant

Impairment test of the banking CGU

For the purpose of analysing the recoverable amount of the Banking Business CGU, the Group performs a regular allocation of the Group's capital based on internal regulatory capital models, which take into account the risks assumed by each of the businesses. The amount to be recovered from the CGU is compared to its recoverable amount to determine any potential impairment.

The recoverable amount is based on value in use, which was determined by discounting the estimated dividends over the medium term obtained from the projection of the budget with a time horizon of 5 years. In addition, the projected cash flows are updated every six months to factor in any potential deviations to the model.

The projections are determined using assumptions based on the macroeconomic data applicable to the Group's activity, contrasted by means of renowned external sources and the entities' internal information. A summary of the ranges of assumptions used and the ranges of contrasting sensitivity are provided below:

Assumptions used and baking business CGU sensitivity scenarios (Percentage)
	31-12-2019	31-12-2018	31-12-2017	Sensitivity
Discount rate *	7.5%	9.0%	9.3%	[-1.5%; + 1.5%]
Growth rate **	1.0%	2.0%	2.0%	[-0.5%; + 0.5%]
Net interest income over average total assets (NII) ***	[1.21% - 1.46%]	[1.29% - 1.60%]	[1.27% - 1.60%]	[-0.05%; + 0.5%]
Cost of risk (CoR) ****	[0.26% - 0.36%]	[0.09% - 0.33%]	[0.37% - 0.39%]	[-0.1%; + 0.1%]

(*) Calculated on the yield for the German 10-year bond, plus a risk Premium.

(**) Corresponds to the normalised growth rate used to calculate the net carrying value.

(***) Net interest income over average total assets, reduced by persistence of low rates.

(****) Cost of risk in 2018 affected by one-off releases (without considering them, it would be [0.22% - 0.33%]).

At the close of the financial year, it has been confirmed that the projections used in the previous impairment test and actual figures would not have affected the conclusions of that test. Similarly, the sensitivity analyses did not uncover the need to recognise any impairment at the close of the financial year.

Impairment test of the Insurance CGU

The methodology for estimating the value of the insurance CGU in use is the same as the methodology for the banking CGU, and the results obtained have not highlighted any indications of impairment at the close of the financial year.

A summary of the ranges of assumptions used and the ranges of contrasting sensitivity are provided below:

Assumptions used and insurance business CGU sensitivity scenarios (Percentage)
	31-12-2019	31-12-2018	31-12-2017	Sensitivity
Discount rateo	8.68%	8.57%	8.84%	[-0.5%; + 0.5%]
Growth rate *	2.00%	2.00%	2.00%	[-0.5%; + 0.5%]

(*) Corresponds to the normalised growth rate used to calculate the net carrying value.