19.1
The breakdown of this heading is as follows:
CGU | 31/12/2020 | 31/12/2019 | 31/12/2018 | |
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
The breakdown of this heading is as follows:
USEFUL LIFE | CGU | REMAINING USEFUL LIFE | 31/12/2020 | 31/12/2019 | 31/12/2018 | |
Software and other | 4 to 15 years | 1 to 15 years | 784 | 641 | 584 | |
Customer relationships (core deposits) of Barclays Bank | 9 years | Banking | 3 years | 8 | 10 | 13 |
Customer relationships (core deposits) of Banca Cívica | 4 to 9.5 years | Banking | 0 | 0 | 30 | |
Customer relations (core deposits) of Banco de Valencia | 6.2 years | Banking | 0 | 0 | 1 | |
Insurance portfolio of Banca Cívica y Pensiones | 10 years | Insurance | 2.5 years | 13 | 20 | 28 |
Insurance portfolio of CajaSol Vida y Pensiones | 10 years | Insurance | 2.5 years | 3 | 5 | 6 |
Insurance portfolio of CajaCanarias Vida y Pensiones | 10 years | Insurance | 2.5 years | 2 | 3 | 3 |
Customer funds of Banco de Valencia | 10 years | Insurance | 3 years | 1 | 1 | 1 |
Customer funds of Barclays Bank | 10 years | Insurance | 5.5 years | 12 | 14 | 16 |
Contracts with Morgan Stanley customers | 11 years | Banking/ Insurance | 0 | 0 | 1 | |
Contracts with Banca Cívica Gestión de Activos customers | 10 years | 2.5 years | 2 | 2 | 3 | |
Contracts with Barclays Gestión de Activos customers | 9 years | 3 years | 2 | 3 | 4 | |
Customer relationships (core deposits) of BPI | 5.8 years | Banking | 1.8 years | 12 | 19 | 25 |
BPI brand | Banking | Indefinite | 20 | 20 | 20 | |
Life insurance portfolios of BPI Vida | 5 to 10 years | Insurance | 1 to 6 years | 5 | 8 | 11 |
Customer portfolios - asset management | 10 years | Banking | 6 years | 10 | 12 | 14 |
Customer portfolios - Insurance brokerage | 10 years | Banking | 6 years | 17 | 20 | 23 |
Deposit portfolio | 6 years | Banking | 2 years | 7 | 10 | 14 |
TOTAL | 898 | 788 | 797 |
The breakdown of the changes of the balance under this heading is as follows:
2020 | 2019 | 2018 | |||||||
SOFTWARE | OTHER ASSETS | SOFTWARE | OTHER ASSETS | SOFTWARE | OTHER ASSETS | ||||
Gross cost | |||||||||
Opening balance | 1,518 | 375 | 1,348 | 637 | 1,220 | 677 | |||
Additions due to business combinations (Note 7) | |||||||||
Additions | 255 | 32 | 201 | 31 | 191 | 34 | |||
Transfers and other | 19 | (37) | (29) | (33) | 26 | (46) | |||
Write-downs (Note 37) | (327) | (34) | (147) | (24) | |||||
Other disposals | (1) | (2) | (113) | (89) | (4) | ||||
SUBTOTAL | 1,464 | 336 | 1,518 | 375 | 1,348 | 637 | |||
Accumulated depreciation | |||||||||
Opening balance | (891) | (209) | (791) | (396) | (789) | (341) | |||
Additions due to business combinations (Note 7) | 1 | ||||||||
Additions | (125) | (35) | (108) | (44) | (87) | (60) | |||
Transfers and other | 7 | 1 | 7 | 1 | 3 | ||||
Write-downs (Note 37) | 319 | 33 | 124 | ||||||
Other disposals | 2 | 1 | 107 | 84 | 2 | ||||
SUBTOTAL | (687) | (210) | (891) | (209) | (791) | (396) | |||
Impairment allowances | |||||||||
Opening balance | (5) | (1) | (12) | ||||||
Allowances (Note 37) | (4) | (5) | |||||||
Recoveries (Note 37) | 1 | 4 | |||||||
Transfers and other | (1) | 12 | |||||||
Amounts used | |||||||||
CLOSING BALANCE | (5) | (5) | (1) | ||||||
TOTAL | 777 | 121 | 627 | 161 | 557 | 240 |
Selected information related to other intangible assets is set out below:
31/12/2020 | |
Fully amortised assets still in use | 563 |
Commitments to acquire intangible assets | Insignificant |
Assets with ownership restrictions | Insignificant |
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 6 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:
31/12/2020 | 31/12/2019 | 31/12/2018 | SENSITIVITY RANGE | |
Discount rate (after tax) * | 8.2% | 7.5% | 9.0% | [-0.5%; + 2.5%] |
Growth rate ** | 1.0% | 1.0% | 2.0% | [-0.5%; + 1.0%] |
Net interest income over average total assets (NII) *** | [1.15% - 1.30%] | [1.21% - 1.46%] | [1.29% - 1.60%] | [-0.05%; + 0.05%] |
Cost of risk (CoR) | [0.82% - 0.39%] | [0.26% - 0.36%] | [0.09% - 0.33%] | [-0.1%; + 0.1%] |
(*) Calculated on the yield for the German 10-year bond, plus a risk Premium. The pre-tax discount rate at 31 December 2020, 2019 and 2018 stood at 11.7%, 10.8% and 12.9%, respectively.
(**) Corresponds to the normalised growth rate used to calculate the net carrying value.
(***) Net interest income on average total assets.
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.
Taking into account the excess of the recoverable value over the carrying amount, the Group does not consider that any reasonably possible change in any of the assumptions could, in isolation, cause the carrying amount to exceed the recoverable value.
The judgements and estimates on the basis of which the key assumptions have been determined are those which the Group considers to be the most plausible and which, therefore, best reflect the value of the banking business.
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:
31/12/2020 | 31/12/2019 | 31/12/2018 | SENSITIVITY | |
Discount rate (after tax) | 8.81% | 8.68% | 8.57% | [-0.5%; + 0.5%] |
Growth rate * | 1.5% | 2.0% | 2.0% | [-0.5%; + 0.5%] |
(*) Corresponds to the normalised growth rate used to calculate the net carrying value.