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CORPORATE
PRESENTATION
JUNE 2018
2
Disclaimer
This document is not an offer of securities for sale in the United States, Canada, Australia, Japan or any other jurisdiction. Securities
may not be offered or sold in the United States unless they are registered pursuant to the US Securities Act of 1933 or are exempt
from such registration. Any public offering of securities in the United States, Canada, Australia or Japan would be made by means of a
prospectus that will contain detailed information about the company and management, including financial statements
The matters discussed in this document may include forward-looking statements that are subject to risks and uncertainties. By their
nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of BCP to be
materially different from future results, performance or achievements expressed or implied by such forward looking statements. Many
of these risks and uncertainties relate to factors that are beyond BCP's ability to control or estimate precisely, such as future market
conditions, currency fluctuations, the behavior of other market participants, the actions of regulators and other factors such as BCP's
ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which
BCP operates or in economic or technological trends or conditions, including inflation and consumer confidence. Attendees at this
presentation are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this
presentation. Even if BCP’s financial condition, business strategy, plans and objectives of management for future operations are
consistent with the forward-looking statements contained in this presentation, those results or developments, as well as BCP past
performance, may not be indicative of results or developments in future periods. BCP expressly disclaims any obligation or
undertaking to release any updates or revisions to these forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by applicable law
The information in this presentation has been prepared under the scope of the International Financial Reporting Standards (‘IFRS’) of
BCP Group for the purposes of the preparation of the consolidated financial statements under Regulation (CE) 1606/2002
First 3 months figures for 2018 and 2017 not audited
3
Agenda
Macro and Business Overview
Strategic Plan 2013-2018
3M2018 earnings
Other information
4
Key highlights
• Successful fiscal consolidation in the last years in Portugal: State budget deficit at
0.9%* in 2017, with a surplus forecasted for as early as 2021.
• Following the 2011-2013 recession, economic activity is now strong, with GDP up by
2.7% in 2017 from 1.6% in 2016
• Unemployment decreased significantly from its peak, and now stands at 7.9% (8.9%
full year 2017 figures)
• The current account has turned positive (0.6% surplus in 2017), following ≈10%
deficits for most of the decade up to 2010
• The real estate market has also recovered
• Concentrated banking system (top 5 banks account for ≈80% of total market), with
comfortable liquidity and capital position, together with a lower, although still
elevated, weight of non-performing loans
• Largest private sector bank in Portugal, with an unique international position,
diversified shareholder structure and a clear governance model
1
2
3
*3%, including the impact from recapitalisation of CGD
5
96.2 111.4
126.2 129.0 130.6 128.8 129.9 125.7
2010 2011 2012 2013 2014 2015 2016 2017
51.8 50.0
48.5 49.9
51.8
48.2
44.9 45.9
2010 2011 2012 2013 2014 2015 2016 2017
0
2
4
6
8
10
12
14
16
18
2004 2006 2008 2010 2012 2014 2016 2018
Fiscal consolidation creates the conditions for the sustainability of the
public debt, leading to normalisation of yields on sovereign debt
Average >10%
Average≈4%
<2%
10y Portuguese bonds (yield, %)
Yields have decreased
…with significant effort on expenditure Budget deficit decreases…
(% of GDP) (total expenditure, % of GDP)
(Public debt, % of GDP)
Debt level is expected to decrease
Source: Bank of Portugal; Ministry of Finance.
Source: Statistics Portugal for 2010-16; Bank of Portugal estimate for 2017
Source: Thomson Reuters.
0.9
11.2
7.4
5.7 4.8
7.2
4.4
2.0 3.0
2010 2011 2012 2013 2014 2015 2016 2017E
Including
recapitalisation
of CGD
Source: Statistics Portugal
1
6
+1.9
-1.8
-4.0
-1.1
+0.9 +1.8 +1.6
+2.7
2010 2011 2012 2013 2014 2015 2016 2017
10.8 12.7
15.6 16.2
13.9 12.4
11.1 8.9
7.9
2010 2011 2012 2013 2014 2015 2016 2017 1Q18
-10.2
-6.0 -2.2
+1.5 +0.2 +0.3 +0.6 +0.6
2010 2011 2012 2013 2014 2015 2016 2017
Portugal has been undergoing profound structural reforms, which are
already showing positive results
Real GDP growth rate (yoy) Current account balance (% of GDP)
Unemployment rate (%)
Source: Statistics Portugal (INE); Ministry of Finance. Source: Statistics Portugal; Ministry of Finance.
Source: Statistics Portugal (INE); Ministry of Finance.
Budget deficit at 0.9% in 2017 (excluding recapitalisation of
CGD), down from 11.2% in 2010, mainly on the back of
lower levels of expenditure as a percentage of GDP
GDP up by 2.7% in 2017 from 1.6% in 2016, following the
2011-2013 recession
Unemployment has decreased significantly and continuously
from a 16.2% peak in 2013, standing at 7.9% at 1Q18 (8.9%
at 2017)
Following ≈10% deficits for most of the decade up to 2010,
the current account has turned positive from 2013 (0.6%
surplus in 2017)
1
7
Housing prices and bank appraisals are recovering
Source: Eurostat.
Housing bank appraisals House price index (HPI) (€ /m2) (HPI base 100=2015)
Property prices (2010=100)
85
95
105
115
125
1Q
09
3Q
09
1Q
10
3Q
10
1Q
11
3Q
11
1Q
12
3Q
12
1Q
13
3Q
13
1Q
14
3Q
14
1Q
15
3Q
15
1Q
16
3Q
16
1Q
17
3Q
17
Total Existing New
800
900
1000
1100
1200
1300
1400
1500
Jun-0
9
Dec-0
9
Jun-1
0
Dec-1
0
Jun-1
1
Dec-1
1
Jun-1
2
Dec-1
2
Jun-1
3
Dec-1
3
Jun-1
4
Dec-1
4
Jun-1
5
Dec-1
5
Jun-1
6
Dec-1
6
Jun-1
7
Dec-1
7
Portugal Lisbon Area
Source: Statistics Portugal. Source: Statistics Portugal.
The House Price Index increased 10.5% in 4Q17 when compared
to 4Q16, with existing dwellings recording an average increase
in excess of new dwellings (+11.8% vs. +5.9%, respectively)
The average value of housing bank appraisals in Portugal stood
at €1,160 per square meter in Feb 18, up 4.6% y-o-y (+5.5% to
€1,422 in the Lisbon area)
Property prices were relatively stable in Portugal since 2000,
comparing to a volatile property market in neighboring Spain
The housing costs accounted for 17.7% of disposable household
income in Portugal, compared to 22.0% for the Eurozone as a
whole (latest available data: 2016)
0
50
100
150
200
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Spain 129
Portugal 92
1
8
Portuguese financial system market shares
Branches Employees
23% 19% 17%
13% 10%
Bank 1 Bank 2 Millennium bcp Bank 4 Bank 5
Gross loans
26%
17% 15% 12% 10%
Bank 1 Millennium bcp Bank 3 Bank 4 Bank 5
20.1% 15.9% 13.2% 11.7% 11.6%
Bank 1 Millennium bcp Bank 3 Bank 4 Bank 5
Deposits
13.8% 13.5% 13.4% 11.9% 10.1%
Bank 1 Bank 2 Millennium bcp Bank 4 Bank 5
(December 2017) (December 2017)
(June 2017) (June 2017)
2
9
Portuguese financial system
17.5% 17.2% 13.3%
2015 2016 2017
NPEs (Non-performing exposures) NPE coverage
LTD (Loans-to-deposits ratio) CET1 ratio
40.8% 45.3% 49.3%
2015 2016 2017
12.2% 11.3% 12.4% 11.4% 13.9%
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
112% 102% 96% 95% 93%
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
2
10
Building the leading private sector bank in Portugal and a
relevant player in selected markets
… to leadership in Portugal and to international
presence through growth in selected affinity retail markets
From foundation…
Incorporation
and organic
growth to
become
relevant player
Consolidation to
reach critical
mass
Leadership in
Portugal, setting
the foundations
for expansion in
Poland and
Greece
Partnership
with Ageas
for insurance
business
Consolidation
of international
expansion
with a single
brand
Focus on
Portugal and on
affinity markets
Reference bank
in Portugal
Portugal -
Poland –
Mozambique –
Angola (since
2016 with a
partnership with
BPA)
Leading bank in
Portugal and
strong position
in Poland and
Mozambique
Business model
transformation
to adapt to new
customer needs 1985-1995
1995-2000
2000-2005
2005–2012
2012–2017
2017- …
3
11
The largest private sector bank in Portugal
• Main business lines directed to retail
and commercial banking, investment
banking, corporate and private
banking/asset management
• Strong focus on innovation and on
Customer experience
3
12
Unique international presence focused on key strategic
markets
Representation office
2 employees
Single brand
Millennium
Market share: 27.1% on loans, 26.9% on deposits
Loans to Customers (gross): €882 million
Customer funds: €1,379 million
Customers: >1.3 million
Employees: 2,477
Branches: 190
BCP shareholding: 66.7%
Mozambique
Angola
Market share: 4.4% on loans, 5.2% on deposits
Loans to Customers (gross): €11,832 million
Customers funds: €16,402 million
Customers: >1.6 million
Employees: 5,848
Branches: 356
BCP shareholding: 50.1%
Poland
On-shore branch
Loans to Customers (gross):
€228million
Customer funds: €559 million
Employees: 12
Branches: 1
Macao
China (Guangzhou)
Market share: 17.6% on loans, 17.5% on deposits
Loans to Customers (gross): €37,984 million
Customers: >2.4 million
Customer funds: €52,819 million
Employees: 7,155
Branches: 578
Portugal
Loans market share: >11%
Deposits market share: >12%
Customers: >1,000,000
Employees: >1,800
Branches: 140
BCP shareholding: 22.5%
De-consolidated from June 2016
Leading
Private Sector Bank
Retail focus
Stable position
Market know-how
Solid partnership
Since 1993
On-shore branch
Market leader
Key innovator
>5.5 million Customers
>1,100 Branches
>15,700 Employees
(excluding Angola)
3
13
Diversified shareholder base, geographically scattered
Number of Shareholders
Shareholder structure
Per geography
(Last information available)
Fosun 27%
Sonangol 19%
EDP 2%
PT retail 24%
PT institutionals 6%
Non-PT retail 1%
Non-PT institutionals 21%
170.9 167.0
Dec10 Dec 17
(x1000) (Last information available)
Other 11.1%
UK/US 10.9%
Africa 19.6%
China 27.1%
Portugal 31.2%
3
14
One-tier management and supervisory model, composed by a
Board of Directors
General Meeting of Shareholders
Board for International Strategy
Remuneration and Welfare Board
Statutory Auditor (ROC)
Audit Committee
Executive Committee Company Secretary
Board of Directors
Commissions and Sub-Commissions
• Legal Affairs • Costs and Investments – Costs and Investments Sub-Committee • Companies • Human Resources • Retail – Customer Experience Sub-Committee – Investment Products Sub-Committee
•Pension Funds Risk Monitoring • Security and Data Quality Commission •Digital Transformation and Procedures Commission • Operational Risk and Internal Control Monitoring •CrossNetworking
• Committee for Nominations and Remunerations • Committee for Corporate Governance, Ethics and Professional Conduct • Committee for Risk Assessment
Client Ombudsman
•Compliance Office – AML Sub-Committee • Pension Fund Monitoring • Credit • NPE Credit • Capital, Assets and Liabilities Management •Risk •Credit at Risk
3
15
Agenda
Macro and Business Overview
Strategic Plan 2013-2018
3M2018 earnings
Other information
16
Key highlights
*Core income = net interest income + net fees and commission income.
**By loan-loss reserves, expected loss gap and collaterals.
• Profitable operation with a recurring capacity to generate operating results at c. €1.2 billion
per annum
Net interest benefits from continuing reduction in cost of funding: NIM of 2.2% in 1Q18
(Portugal:1.8%, up from 0.6% in 2013)
Consistent track record of delivering reduction in operating costs: cost to core-income of
48%*, vs Eurozone’s 75%. Largest operating restructuring in Portugal, with operating costs
down by >40% from 2011 (pre-programme)
• Focused NPE management through a dedicated recovery strategy in Portugal: NPE reduction of
€6.5bn from €12.8bn at year-end 2013 to €6.3bn at March 31, 2018. Increased coverage by
provisions to 46% (48% for the Group) from 23% in 2013. Total coverage** of 105% at March 31,
2018
• Resilient international recurring earnings contribution of €41mn in 1Q18 (c. € 170 mn per
annum)
• Sustainable funding strategy: loans to deposits ratio at 91% as of March 31, 2018. ECB funding at
€3.2 billion as of the same date, down from a maximum of €12.4 billion at year-end 2011
• Enhanced capital position: fully implemented CET1 ratio of 11.8%, phased-in of 11.9%, compared
to minimum required phased-in CET1 (SREP) of 8.81% for 2018; fully implemented total capital
ratio of 13.5% and phased-in total capital ratio of 13.6% (SREP requirement: 12.31%)
1
2
3
4
5
17
Net interest income to benefit from continuing reduction in
cost of funding 1
-239 -173
-123 -83 -69 -59
2013 2014 2015 2016 2017 1Q18
Net Interest Income
... leading to a decrease in total funding
costs
NII to improve, as cost of time deposits keeps
decreasing ...
(€ mn)
(Interest expenses divided by Interest-bearing liabilities) (Portugal, spread on TDs book vs 3m Euribor, bps)
64 97 175 172 194 192
808
343
527
711 736
2013 2014 2015 2016 2017 1Q18
2.41% 1.92%
1.21% 0.78% 0.44% 0.38%
2013 2014 2015 2016 2017 1Q18
NIM
1.8%
0.6%
1.0%
1.5% 1.6% 1.8%
2013 2014 2015 2016 2017 1Q18
1Q
Front book:
-47bp
18
Consistent track record of delivering reduction in
operating costs 1
9,959 8,584 7,795 7,459 7,333 7,189 7,155
2011 2013 2014 2015 2016 2017 Mar 18
* Excluding non-usual items in 2016: impact from revision of collective labour agreement net of restructuring costs.
885 774 695 671 618 578 578
2011 2013 2014 2015 2016 2017 Mar 18
196 213 173 158 155 153 153
588
1,039
853
690 644 624
2011 2013 2014 2015 2016 2017 1Q18
...with a >30% reduction in branches...
Operating costs down by > 40% vs 2011 (pre-
programme) ...
Branches (#)
Employees (#)
... and >25% reduction in employees
Operating costs (€ mn)
*
1Q
19
1
Pre-provision profit
Millennium bcp: one of the most efficient banks in the
Eurozone
Cost to core income*
Bank 1
Bank 2
Bank 3
Bank 4
Latest available information
vs. peers in
Portugal
vs. Euro-zone
banks
58%
85%
65%
49%
51%
48%
75%
84%
105%
82%
55%
48%
86%
48%
2013 1Q18
-38pp
Cost to core income*
80% 75% -4pp
*Core income = net interest income + net fees and commission income.
122 296 292
474
1,243
2013 2017 1Q18
20
Asset quality metrics to benefit further from continued focus
on NPE reduction
2
743 1,021 730 1,045
Cost of risk and loan-loss charges
Impairment
charges (€mn)
Cost of risk
(basis points)
-1,5p.a.
NPEs (EBA definition) (€ bn)
Other
NPLs>90d
(Basis points)
Continued decrease of NPEs over the last 4.25 years at a
pace of €1.5bn per year as a result of a stabilisation of the
macro environment and the measures implemented
Reduction of €6.5bn from Dec 13 to Mar 18
Cost of risk at 96bps in 1Q18 with NPE coverage by
provision at 46% and total coverage* at 105% by Mar 18
NPEs net from loan-loss reserves were down to €3.4 billion
as at March 31, 2018 from €9.8 billion at year-end 2013
Cost of risk at 85 bps and NPE coverage by provisions at
48%, at a Group level
533
* Coverage by LLRs, collateral and expected loss gap.
6.2 6.1 5.6 5.0 4.1 3.9
12.8 10.9
9.8 8.5
6.8 6.3
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18
157
233 175
266
140 96
2013 2014 2015 2016 2017 1Q18
89
NPE coverage
23% 28%
31%
39% 42%
46%
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18
Total
coverage* 101.4% 105.6% 90.3% 92.6% 105.2%
Coverage by
LLRs
86.0%
21
Strong coverage levels
Individuals 26%
Companies 74%
NPLs >90d 62%
Other NPEs 38%
2
(March 2018)
NPE breakdown Total NPEs: €6.3bn
*By loan-loss reserves, expected loss gap and collaterals.
NPE total coverage*
Other NPE total coverage* NPL >90d total coverage*
LLRs
Real estate
collateral
Cash, other
fin.collat., EL gap
LLRs
Real estate
collateral
Cash, other
fin.collat., EL gap LLRs
Real estate
collateral
Cash, other
fin.collat., EL gap
24% 54% 46% 7%
18% 15%
70%
35% 44%
101% 107% 105%
Individuals Companies Total
13%
45% 37% 12%
14% 14%
79%
49% 56%
105% 108% 107%
Individuals Companies Total
30%
61% 52% 4%
20% 15%
64%
25% 36%
98% 106% 104%
Individuals Companies Total
22
Diversified and coherent international exposure delivering resilient
contribution 3
Key international operations Contribution to consolidated results*
* Comparable, assuming shareholding in Bank Millennium (Poland) constant at 50.1% and excluding discontinued operations
(€ mn)
Market share: 4.4% on loans, 5.2% on deposits
Loans to Customers (gross): €11,832 million
Customers funds: €16,402 million
Customers: >1.6 million
Employees: 5,848
Branches: 356
BCP shareholding: 50.1%
Poland
Angola
Loans market share: >11%
Deposits market share: >12%
Customers: >1,000,000
Employees: >1,800
Branches: 140
BCP shareholding: 22.5%
De-consolidated from June 2016
Market share: 27.1% on loans, 26.9% on
deposits
Loans to Customers (gross): €882 million
Customer funds: €1,379 million
Customers: >1.3 million
Employees: 2,477
Branches: 190
BCP shareholding: 66.7%
Mozambique
159
178 170 173 175
41
2013 2014 2015 2016 2017 1Q18
1Q
Full year
** Excluding IAS 29 impact for the Angola operation in the amount of €28.4 million
**
23
Balanced Sheet
Sovereign debt portfolio
Securities portfolio (€ bn)
(Billion euros) Debt issued
Balance sheet breakdown (€ bn)
68.0
47.5 47.0 52.4
12.1
12.9 13.2
3.2
18.5 7.2
5.8
4.4
6.8
Dec 11 Mar 18
2.3
Equity
MM (net) Debt issued
Other (net)
Loans
Securities
Other
Sovereign
debt
(Billion euros)
7.3 10.3
4.8
2.9
12.1 13.2
Dec 11 Mar 18
Deposits
Dec 11 Mar 18
Portugal 4.7 4.7
T-bills 1.7 0.5
Bonds 3.0 4.2
Poland 0.8 4.0
Mozambique 0.3 0.6
Other 1.5 1.1
Total 7.3 10.3
Dec 11 Mar 18
Debt securities 16.2 2.9
Senior - MTN 7.6 0.2
Senior - Retail Bonds 4.1 1.4
Covered bonds 3.3 1.0
Securitisation 1.2 0.3
Subordinated debt 1.1 1.2
Loan Agreements 1.2 1.7
Total 18.5 5.8
4
24
Stronger funding and liquidity 4
Net loans Deposits
(€ bn)
Commercial gap (net loans – deposits)
Important deleveraging process: -31% loans
+10% deposits which account for 85% of funding
compared to 62% in 2011
Loans to deposit ratio at 91% versus 143% in 2011
Foreign operations self funded
(€ bn)
143% 91% Loans to deposits ratio
20.5 13.2 7.8 3.9 0.4
-0.8 -3.6 -5.4
Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec 17 Mar18
(€ bn)
68.0 62.6 56.8 53.7 52.0 48.0 47.6 47.0
Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Mar18
47.5 49.4 49.0 49.8 51.5 48.8 51.2 52.4
Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec 17 Mar18
-31% +10%
25
Credit, deposits and Customers 4
Credit Performing portfolio
34.5 32.9
31.8 30.8 31.2 31.7
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18
• The performing portfolio increased in Portugal
by approximately €500 million from year-end
2017, with the total portfolio remaining stable
• Stable deposits as the decrease of term deposits
(due to historically low yields) has been
compensated by expanding demand deposits
• Significant Customer acquisition from 2017
Customer deposits
9.0 10.1 12.9 14.1 16.4 17.0
24.9 24.3 21.9 19.9 18.9 19.1
33.9 34.4 34.8 34.0 35.3 36.1
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18
On-demand
deposits
Term
deposits
(€ bn) (€ bn)
Total Customers
(x1,000)
2,317 2,308 2,330 2,350 2,445 2,474
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18
26
Continued reduction of ECB funding 4
ECB funding
(€ bn)
Net usage of ECB funding at €3.2 billion, compared to
€12.4 billion at December 31, 2011
€14.2 billion (net of haircut) of eligible assets available
for refinancing operations with ECB, of which €3.5
billion are related to Portuguese sovereign debt, with a
€11.0 billion buffer
Future debt repayments (medium-long term)
significantly lower than in the past
Compliance with relevant liquidity ratios
Liquidity ratios (CRD IV/CRR)
126%
180%
NSFR (Net stable funding ratio)
LCR (Liquidity coverage ratio)
Buffer
ECB
funding
Total
collateral
(€ bn)
Outstanding debt repayments (medium-long term)
Already repaid To be repaid
2.3 2.3
0.2 0.5 0.5
4.8
Average 2011-2016
2017 1Q18 2018 2019 >2019
12.4 10.5 10.0 6.6 5.3 4.4 3.0 3.2
15.7
22.3 19.9
14.2 13.9 12.1 12.8 14.2
Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec 17 Mar 18
27
Enhanced capital position 5
Minimum capital requirements (SREP)
Capital ratio* (Million euros)
-720 -115 -50
5,769
4,884
Equity DTAs EL gap Other CET1 fully imp.
From equity to CET1 capital*
11.8% CET1 ratio
fully imp.
6.4%
9.3% 11.1% 11.9% 11.8%
Dec09 Dec11 Dec16** Dec17 Mar18
CT1 ratio, BoP definition CET1 ratio fully implemented, CRDIV/CRR
Pillar 1Conservation
buffer
Counter-
cyclical
buffer
Other syst.
important
institutions
buffer
Pillar 2
requirements
(P2R)
Total
require
-ments
Mar 18
CET1 4.50% 1.875% 0.00% 0.1875% 2.25% 8.81% 11.8%
Total capital 8.00% 1.875% 0.00% 0.1875% 2.25% 12.31% 13.5%
*Estimates including earnings for the first quarter. **Estimates as at January 1, 2017, adjusted by the impact of the capital increase and of
CoCos repayment, both completed in February 2017.
28
3.1% 4.5%
5.7% 6.7% 6.5%
FR DE ES IT
Capital at comfortable levels, strong leverage ratios
Leverage ratio
Texas ratio*
Leverage ratio
5.7% 6.5%
Mar 17 Mar 18
Fully implemented, latest available data
98.2%
79.2%
Mar 17 Mar 18
26% 25%
43% 42%
57%
FR DE ES IT
RWA density RWAs as % of assets, latest available data
Fully implemented
*Texas ratio = NPE / (Tangible equity + loan-loss reserves).
5
29
Strategic plan for 2018
1 Estimates including earnings for the first quarter.
2 Core income = net interest income + net fees and commission income.
3 Based on a fully implemented CET1 of 11%.
Consolidated
Cost of risk
Cumulative NPE reduction
from January 1, 2016 (Portugal)
CET1 fully implemented1
Loans to Deposits
Cost-Core Income2
Cost–Income
1Q17 1Q18 2018
114 bp
-€1.5 billion
11.2%
97%
48.3%
44.6%
85 bp
-€3.5 billion
11.8%
91%
48.0%
45.7%
<75 bp
-€3.0 billion
≈11%
<100%
<50%
≈43%
4.7% 7.7% ≈10% RoE3
30
Investment case
1
2
3
4
Reference private sector bank in Portugal, and well-positioned in a rapidly
changing landscape, following the completion of the restructuring plan
successfully implemented over the last years: one of the most efficient
banks in the Eurozone, with cost to core income ratio of 48% (Eurozone:
75%) and cost to income ratio of 46%
Profitable commercial banking business model with highly recurrent
operating results, supported by a continued track record of improvement
in operating performance: PPP of approximately €1.2 billion per annum
Profitable and self-funded international operations
Strong balance sheet (fully implemented CET1 ratio at 11.8%, loans to
deposits of 91%)
Distinct
position
Return to normalization allows Millennium bcp to focus on its core
strengths
31
Agenda
Macro and Business Overview
Strategic Plan 2013-2018
3M2018 earnings
Other information
32
3M2018 earnings
Highlights
Group
• Profitability
• Liquidity
• Capital
Portugal
International operations
Conclusions
33
Summary
• Net profit of €85.6 million (€50.1 million in 1Q17), on the back of
strong earnings from the domestic activity and a robust performance
from the international business, whose contribution was stable
• NPEs significantly down again: approximately -€500 million from year-
end 2017 to €6.3 billion in Portugal, with coverage by loan-loss
reserves reinforced to 46% (48% for the Group), 105% including
collaterals
• Performing credit portfolio up by approximately €500 million from
year-end 2017, together with a stable total loan portfolio
• Strong business performance, with Customer acquisition and Customer
funds standing out. Active Customers for the Group total 5.6 million,
an increase in excess of 380,000 Customers from March 31, 2017; total
Customers funds amounted to €72.7 billion, a 5.7% increase from March
31, 2017
1
2
3
4
34
Highlights: improved profitability 1
(Million euros)
Net income
Core net income*
43.2
117.4
205.8 213.2 254.8 266.6
1Q13 1Q14 1Q15 1Q16 1Q17 1Q18
-45.2
-152.0
-40.7
70.4 46.7 50.1
85.6
1Q13 1Q14 1Q15 1Q16 1Q17 1Q18
Not including gains on
Portuguese sovereign debt
of €116 million
*Core net income = net interest income + net fees and commission income - operating costs.
**47.3% excluding specific items.
• Net earnings of €85.6 million in 1Q18,
a 70.8% increase from €50.1 million
in the same period of the previous
year
• Earnings from domestic activity
improved significantly: €44.5 million
in 1Q18, compared to €9.0 million in
the same period of 2017
• Core net income increased to €266.6
million in 1Q18, keeping the continued
improvement seen in the last years
• One of the most efficient banks in the
Eurozone, with cost to core income of
48.0%** (cost to income of 45.7%)
35
Highlights: improved asset quality 2
(Million euros)
Non-performing exposures (NPEs)
NPE coverage
6,213 6,134 5,572 5,029 4,058 3,872
12,783 10,921
9,777 8,538
6,754 6,282
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18
NPL>90d
Other
NPEs
23% 28%
31%
39% 42%
46%
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18
Total
coverage* 101.4% 105.6% 90.3% 92.6% 105.2%
Coverage by
LLRs
86.0%
• NPEs in Portugal down to €6.3 billion as at
March 31, 2018, a reduction of
approximately €500 million from year-end
2017
• The NPE decrease from year-end 2017 is
attributable to a €0.2 billion NPL>90d
reduction and to a €0.3 billion reduction of
other NPEs
• NPE total coverage* of 105%, broken down as
follows:
– coverage by loan-loss reserves of 46%
– coverage by real-estate collateral of 44%
– coverage by financial collateral of 13%
– coverage by expected loss gap of 2%
• NPEs net from loan-loss reserves were down
to €3.4 billion as at March 31, 2018 from
€9.8 billion at year-end 2013
*By loan-loss reserves, expected loss gap and collaterals.
36
Highlights: credit now growing in Portugal 3
(Billion euros)
Performing portfolio
34.5 32.9
31.8 30.8 31.2 31.7
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18
Companies portfolio
-5.5 -0.8 -0.1
+0.1
25.2
18.9 18.9
Dec 13 Construction, real estate, holding cos.
Other activities
Dec 17 Construction, real estate, holding cos.
Other activities
Mar 18
• The performing portfolio increased in
Portugal by approximately €500 million from
year-end 2017, with the total portfolio
remaining stable
• Structural change to the portfolio of loans to
companies over recent years, with a lower
weight of construction and real-estate
activities and of non-financial holding
companies
• Strong credit activity in 1Q18:
– Market leadership in the “Portugal 2020”
programme, with a 31% share of total
funding
– Market leadership in factoring business,
with a 24% share
– Market leadership in leasing business, with
a 17% share
– Leading bank in loans to exporting
companies, with a 19% share
37
Highlights: strong business performance, focus on
Customers 4
Total Customers
5.2 5.6
Mar 17 Mar 18
+380,000
2.4 2.5
Mar 17 Mar 18
+113,000
Group
Portugal
• More than 1 million Customers hold bundled solutions to help managing their day-to-day financial life
• Leader in online brokerage, with a 22.6% market share
• Closest to Customers, most innovating, top ranked in satisfaction with quality of products (BASEF)
• New 100% digital account opening service (Millennium bcp and ActivoBank app)
(Million)
(Million)
Digital Customers
2.2 2.6
Mar 17 Mar 18
+362,000
0.8 0.9
Mar 17 Mar 18
+121,000
Group
Portugal
(Million)
(Million)
38
3M2018 earnings
Highlights
Group
• Profitability
• Liquidity
• Capital
Portugal
International operations
Conclusions
39
Profit of €85.6 million in the 1st quarter of 2018
*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.
(million euros) 1Q17 1Q18 YoYImpact on
earnings
Net interest income 332.3 344.8 +3.8% +12.5
Commissions 160.8 167.8 +4.4% +7.0
Operating costs -238.3 -246.0 +3.2% -7.7
Of which: non-recurring -7.7 -3.5
Core net income 254.8 266.6 +4.6% +11.7
Other income* 40.9 25.2 -38.4% -15.7
Operating net income 295.8 291.8 -1.3% -4.0
Impairment and provisions -203.2 -129.9 -36.1% +73.3
Net income before income tax 92.5 161.8 +74.9% +69.3
Income taxes and non-controlling interests -42.4 -76.2 +79.7% -33.8
Net income 50.1 85.6 +70.8% +35.5
40
Increased net interest income
(Million euros)
Net interest income Portugal
Net interest margin 2.2% 2.2%
332.3 344.8
1Q17 1Q18
+3.8%
138.2 152.8
1Q17 1Q18
Net interest margin 1.8% 1.8%
194.1 192.0
1Q17 1Q18
-1.1%
International operations
+10.6%
Net interest margin 3.0% 3.2%
Consolidated
41
Increased commissions
(Million euros)
108.2 113.0
1Q17 1Q18
Fees and commissions
52.6 54.8
1Q17 1Q18
+4.1%
Portugal
International operations
+4.5%
Consolidated
1Q17 1Q18 YoY
Banking fees and commissions 135.1 139.4 +3.2%
Cards and transfers 37.6 40.0 +6.3%
Loans and guarantees 38.7 39.1 +1.1%
Bancassurance 23.2 24.7 +6.3%
Customer account related 26.0 26.2 +0.7%
Other fees and commissions 9.6 9.4 -1.3%
Market related fees and commissions 25.7 28.5 +10.6%
Securities operations 15.8 17.3 +9.8%
Asset management 10.0 11.2 +11.8%
Total fees and commissions 160.8 167.8 +4.4%
42
36.4 34.4
19.7 19.9
-15.2
-29.1
40.9 25.2
1Q17 1Q18
Other income*
(Million euros)
Other income* Portugal
International operations
2.5
-3.1
1Q17 1Q18
Mandatory
contributions 24.2 25.6
38.4 28.2
1Q17 1Q18
Consolidated
-38.4% -26.4%
Net trading
income
Equity earnings
+ dividends
Other operating
income
Includes €5.7 million
losses related to real-
estate
Includes gain on sale of building
and insurance compensation
(€3.1 million)
*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.
43
Operating costs
(Million euros)
Operating costs
136.9 142.3
88.7 89.5
12.7 14.2 238.3
246.0
1Q17 1Q18
+3.2%
Staff costs
Other
administrative
costs
Depreciation
Cost to core
income* 48.3% 48.0%
152.5 153.4
1Q17 1Q18
85.8 92.6
1Q17 1Q18
Portugal
International operations
Cost to core
income* 50.4% 50.3%
Cost to core
income* 45.0% 44.6%
+7.9%
Cost to income 44.6% 45.7% Cost to income 44.8% 46.0%
Cost to income 44.4% 45.3%
Consolidated
+0.6%
*Core income = net interest income + net fees and commission income.
44
Millennium bcp: one of the most efficient banks in the
Eurozone
Cost to core income*
Banco 1
Banco 2
Banco 3
Banco 4
Latest available information
vs. peers in
Portugal
vs. Euro-zone
banks
58%
85%
65%
49%
51%
48%
75%
84%
105%
82%
55%
48%
86%
48%
2013 1Q18
-38pp
Cost to core income*
80% 75% -4pp
73%
46%
2013 1Q18
-27pp
Cost to income
67% 63% -3pp
*Core income = net interest income + net fees and commission income.
45
Strengthening the balance sheet: cost of risk trending
towards normalisation (Million euros)
148.9
106.1
54.3
23.9
203.2
129.9
1Q17 1Q18
Impairment and provision charges Portugal
International operations
125.9 89.0
56.8
19.0
182.7
108.0
1Q17 1Q18
-40.9%
-36.1%
114bp 85bp
Loans
Cost of risk
Other
22.9 17.1 -2.4
4.9
20.5 22.0
1Q17 1Q18
Loans
Cost of risk
Other
Loans
Cost of risk
Other
128bp 96bp
+7.1%
Consolidated
71bp 53bp
Loan-loss
reserves 3,709 3,447
Loan-loss
reserves 3,280 2,915
Loan-loss
reserves 429 532
Includes €4.6 million of
IAS29 impact (Angola)
Includes €10.2 million
of real-estate
impairment
46
Lower delinquency and increased coverage
5,212 4,323
3,947
2,834
9,159
7,157
Mar 17 Mar 18
8,320
6,282
Mar 17 Mar 18
839 875
Mar 17 Mar 18
(Million euros)
Portugal Credit quality
International operations
NPEs
NPEs
+4.3%
-24.5%
Consolidated
Down from €944
million at June
30, 2017
NPEs
NPL>90d
Other
-21.9%
NPE coverage by
LLRs 40.5% 48.2%***
*EBA definition.
**By loan-loss reserves, expected loss gap and collaterals.
***Does not include 2% of coverage by expected loss gap (deducted from capital).
Mar 17 Mar 18
NPL>90 days ratio 10.0% 8.5%
NPE ratio* 17.5% 14.0%
NPE ratio inc. securities and off-BS* 13.9% 10.3%
NPE total coverage** 100% 103%
47
3M2018 earnings
Highlights
Group
• Profitability
• Liquidity
• Capital
Portugal
International operations
Conclusions
48
Strong business dynamics results in growing Customer funds in
Portugal and in international operations (Million euros)
Tot. Customer funds* international operations
Total Customer funds* in Portugal
23,113 26,579
27,025 25,811
1,536 1,402
17,096 18,877
68,769 72,669
Mar 17 Mar 18
Total Customers funds*
On-
demand
deposits
Term
deposits
Other BS
funds
Off-BS
funds
+5.7%
Consolidated
14,605 16,992
20,026 19,107
15,504 16,720
50,136 52,819
Mar 17 Mar 18
Demand
deposits
Term
deposits
Other
+5.4%
+6.0% including
OTRVs
8,507 9,587
6,999 6,704
3,128 3,559
18,633 19,849
Mar 17 Mar 18
Demand
deposits
Term
deposits
Other
+6.5%
*Deposits, debt securities, assets under management, capitalisation products and investment funds placed with Customers.
49
Increasing performing portfolio, total portfolio stable from end-
2017
(Million euros)
Loans to Customers (gross)
24,116 23,750
4,235 3,845
23,892 23,365
52,242 50,959
Mar 17 Mar 18
Companies
Consumer
and other
Mortgage
International operations
Portugal
-2.5%
12,856 12,976
Mar 17 Mar 18
Consolidated
NPE: -21.6% (-€2.0 billion)
Performing: +1.6% (+€0.7 billion)
39,386 37,984
Mar 17 Mar 18
-3.6%
NPE: -24.5% (-€2.0 billion)
Performing: +2.0% (+€0.6 billion)
+0.9%
50
Comfortable liquidity position
Net loans to deposits ratio
97%
91%
Mar 17 Mar 18
-6pp
ECB funding
(Billion euros)
3.7 3.2
Mar 17 Mar 18
14.2 13.1 Eligible
assets
Liquidity ratios (CRD IV/CRR)
126%
180%
NSFR (Net stable funding ratio)
LCR (Liquidity coverage ratio)
51
3M2018 earnings
Highlights
Group
• Profitability
• Liquidity
• Capital
Portugal
International operations
Conclusions
52
Strengthened capital
Fully implemented
11.2% 11.8%
Mar 17 Mar 18
38.3 41.1 RWAs (€Bn)
12.3% 13.5% Total ratio
Common Equity Tier 1 ratio*
ECB requirement
(SREP) for CET1 in
2018: 8.8%
CET1 capital ratio of 11.8% (fully
implemented) and 11.9% (phased-in)
Increase from 11.2% fully implemented as
at March 31, 2017 due to earnings in the
last 4 quarters and to the increase in fair
value reserves, partially cancelled out by
the IFRS9 first time adoption and by the
deduction of irrevocable payment
commitments (DGF/SRF)
Decrease from 11.9% fully implemented at
year-end 2017 due to the IFRS9 first time
adoption and to the deduction of
irrevocable payment commitments
(DGF/SRF), partially compensated for by the
earnings for the quarter
Total capital ratios at 13.5% (fully
implemented) and at 13.6% (phased-in),
boosted by the €300 million subordinated
debt (tier 2) issued in December 2017
*Estimates including earnings for the first quarter.
53
3.1% 4.5%
5.7% 6.7% 6.5%
FR DE ES IT
Capital at comfortable levels, strong leverage ratios
Leverage ratio
Texas ratio*
Leverage ratio
5.7% 6.5%
Mar 17 Mar 18
Fully implemented, latest available data
98.2%
79.2%
Mar 17 Mar 18
26% 25%
43% 42%
57%
FR DE ES IT
RWA density RWAs as % of assets, latest available data
Fully implemented
*Texas ratio = NPE / (Tangible equity + loan-loss reserves).
54
3M2018 earnings
Highlights
Group
• Profitability
• Liquidity
• Capital
Portugal
International operations
Conclusions
55
152.5 153.4
1Q17 1Q18
9.0
44.5
1Q17 1Q18
340.7 333.3
1Q17 1Q18
Increased net income
(Million euros)
Net income
Operating costs
Banking income
+35.4
Net earnings of €44.5 million in 1Q18, +€35.4
million compared to €9.0 million in 1Q17
Net earnings were boosted by the significant
decrease in credit-loss charges (-29.4%, with
cost of risk decreasing to 96bp to 128bp), as
well as by lower other impairment and
provisions (-66.5%)
56
Net interest income
Net interest income (Million euros)
-1.1%
+6.3 +5.7
-6.2 -5.1 -2.3 -0.7
194.1 192.0
1Q17 CoCo repayment
effect
Effect of cost of time deposits
Performing loans volume
effect
Effect of net recovery of
interest
Effect of securities portfolio
Credit yield effect, net of WSF cost,
other
1Q18
1.8% 1.8% NIM
Net interest income decreased from €194.1 million in 1Q17 to €192.0 million in the same period of 2018. The favourable
impacts of the repayment of CoCos and of the consistent reduction of the cost of time deposits were more than offset
by the negative effects of lower credit volumes, reflecting, to a large extent, the focus on NPE reduction (unlikely to
pay); of the net recovery of interest (including IFRS9); of the securities portfolio (increased balance yielding lower
interest, reflecting lower sovereign yields); and of lower credit yields (reflecting the normalisation of the
macro-economic environment), net of a lower wholesale funding cost
The decrease from €216.0 million in 4Q17 was a result of a lower amount related to TLTRO (the amount for the full year
2017 was booked in 4Q17); of the effect of the net recovery of interest (including IFRS9); of the securities portfolio
(increased balance yielding lower interest, reflecting lower sovereign yields); and of a lower number of days in the
quarter (90 days in 1Q18, 92 days in 4Q17)
57
Continued effort to reduce the cost of deposits
Spread on the performing loan book
-0.70%
-0.59%
1Q17 1Q18
(vs 3m Euribor)
Spread on the book of term deposits (vs 3m Euribor)
2.78% 2.63%
1Q17 1Q18
NIM
1.8% 1.8%
1Q17 1Q18
Continued improvement of the spread of the
portfolio of term deposits: to -0.59% in 1Q18
from -0.70% in the same period of 2017; front
book for 1Q18 priced at an average spread of
-47bp, still below current back book’s spread
Spread on the performing loan book at 2.63%
in 1Q2018 (2.78% in 1Q2017)
NIM stood at 1.8%
58
Commissions and other income*
(Million euros)
38.4
28.2
1Q17 1Q18
-26.4%
Fees and commissions Other income*
Growing commissions in Portugal,
with the performance of market
related fees (and, in particular,
brokerage) and of bancassurance
standing out
Lower other income, influenced by
the booking of €5.7 million losses
related to real-estate
*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.
1Q17 1Q18 YoY
Banking fees and commissions 96.2 98.9 +2.9%
Cards and transfers 26.1 26.4 +1.2%
Loans and guarantees 25.0 25.4 +1.9%
Bancassurance 19.9 20.6 +3.5%
Customer account related 23.2 23.4 +0.8%
Other fees and commissions 2.0 3.1 +56.1%
Market related fees and commissions 12.0 14.1 +17.2%
Securities operations 10.5 12.3 +16.9%
Asset management 1.5 1.8 +18.7%
Total fees and commissions 108.2 113.0 +4.5%
59
Operating costs
Employees
Branches
(Million euros)
89.8 91.1
54.7 53.3
8.0 9.0
152.5 153.4
1Q17 1Q18
Operating costs
615 578
Mar 17 Mar 18
-37
7,327 7,155
Mar 17 Mar 18
-172
Staff costs
Other
administrative
costs
Depreciation
Cost to core
income* 50.4% 50.3%
Cost to income 44.8% 46.0%
+0.6%
*Core income = net interest income + net fees and commission income.
60
Lower NPEs, with reinforced coverage
(Million euros)
NPE build-up
NPEs in Portugal down by €2.0 billion, from €8.3 billion as at
March 31, 2017 to €6.3 billion as at the same date of 2018
This decrease results from net exits of €902 million, sales of
€666 million and write-offs of €471 million
The decrease in NPE from March 31, 2017 is attributable to a
€0.9 billion reduction of NPL>90d and to a €1.1 decrease of
other NPE
Significant NPE decrease during the quarter, from €6.8 billion
at end-2017 to €6.3 billion as of March 31, 2018 (-€0.5 billion)
Cost of risk decreased to 96bp in 1Q18 from 128bp in 1Q17,
while NPE coverage by loan-loss reserves was reinforced to
46% from 39%, respectivelly
Mar 18
vs.Mar 17
Mar 18
vs.Dec 17
Opening balance 8,320 6,754
+/- Net entries -902 -273
- Write-offs -471 -37
- Sales -666 -162
Ending balance 6,282 6,282
Non-performing exposures (NPEs)
4,819 3,872
3,501 2,410
8,320
6,282
Mar 17 Mar 18
-24.5%
NPL>90d
Other NPEs
Loan impairment (net of recoveries)
125.9 89.0
1Q17 1Q18
128bp 96bp Cost of
risk
Loan-loss
reserves 3,280 2,915
61
Reinforced NPE coverage
NPE total coverage* NPE total coverage*
Other NPE total coverage* NPL >90d total coverage*
LLRs
Real estate
collateral
Cash, other
fin.collat., EL gap
LLRs
Real estate
collateral
Cash, other
fin.collat., EL gap LLRs
Real estate
collateral
Cash, other
fin.collat., EL gap
24% 54% 46% 7%
18% 15%
70%
35% 44%
101% 107% 105%
Individuals Companies Total
13%
45% 37% 12%
14% 14%
79%
49% 56%
105% 108% 107%
Individuals Companies Total
30%
61% 52% 4%
20% 15%
64%
25% 36%
98% 106% 104%
Individuals Companies Total
LLRs
Real estate
collateral
Cash, other
fin.collat., EL gap
39% 46%
15% 15%
45% 44%
100% 105%
Mar 17 Mar 18
*By loan-loss reserves, expected loss gap and collaterals.
62
Foreclosed assets and corporate restructuring funds
Foreclosed assets
Sales of foreclosed assets
(Million euros)
(Million euros)
79 83
1Q17 1Q18
Book value
1,597 1,525
188 232
1,785 1,757
Mar 17 Mar 18
Net value
Impairment
Corporate restructuring funds
(Million euros)
# properties
sold 719 919
Sale value 86 96
9 0
861 823
224 199
1,094 1,022
Mar 17 Mar 18
Original credit exposure: €2,006 million
Book value (31 Mar 2018): €1,022 million
Total impairment (credit+restr. funds): €984 milion
(49% coverage)
Construction
RE/tourism
Industry
-4.5% -6.6%
63
14,605 16,992
20,026 19,107
1,439 1,293
14,065 15,427
50,136 52,819
Mar 17 Mar 18
19,347 18,891
2,533 2,006
17,506 17,087
39,386 37,984
Mar 17 Mar 18
Strong business dynamics leads to increased Customer funds and
performing credit portfolio
(Million euros)
Loans to Customers (gross) Total Customer funds*
+5.4%
-3.6%
On-
demand
deposits
Term
deposits
Other BS
funds
Off-BS
funds
Companies
Consumer
and other
Mortgage
NPE: -24.5% (-€2.0 billion)
Performing: +2.0% (+€0.6 billion)
*Deposits, debt securities, assets under management, capitalisation products and investment funds placed with Customers.
64
3M2018 earnings
Highlights
Group
• Profitability
• Liquidity
• Capital
Portugal
International operations
Conclusions
65
Stable contribution from international operations
*Contribution of the Angolan operation.
**Includes goodwill impairment (-€4.6 million) and contribution revaluation (+€3.5 million).
Subsidiaries’ net income presented for 2017 at the same exchange rate as of 2018 for comparison purposes.
(Million euros)
41.1 41.1
Contribution 1Q17 Contribution 1Q18
+0.1%
1Q17 1Q18Δ %
local currency
Δ %
eurosROE
Poland 33.7 37.2 +10.5% +14.1% 8.2%
Mozambique 20.7 24.7 +19.2% +18.9% 25.9%
Angola*
Before IAS 29 impact 5.3 4.1
IAS 29 impact** -- -1.1
Total Angola including IAS 29 impact 5.3 2.9
Other 3.1 3.1 -1.2% -5.5%
Net income 62.8 67.9 +8.2% +5.7%
Non-controlling interests Poland and Mozambique -23.7 -26.8
Exchange rate effect 2.0 --
Contribution from international operations 41.1 41.1 +0.1%
Same as above without FX effect and IAS 29 (Angola) 39.1 42.3 +8.1%
66
Increased net income
75.4 79.2
1Q17 1Q18
(Million euros)
Net income
Operating costs
ROE 8.1% 8.2%
+5.0%
FX effect excluded. €/Zloty constant at March 2018 levels: Income Statement 4.17110000; Balance Sheet 4.2116. | *Pro forma data. Margin
from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in
accounting terms, part of this margin (€2.0 million in 2018 and €4.2 million in 2017) is presented in net trading income.
Banking income
33.7 37.2
1Q17 1Q18
+10.5% 149.3 157.4
1Q17 1Q18
+5.4%
Net earnings at €37.2 million, with ROE of 8.2%.
Net interest income up by 6.2%*, commissions by
3.8% and operating costs by 5.0%
Customer funds up by 7.6%, with loans to
customers increasing by 13.4% excluding FX-
denominated loans
CET1 ratio of 22.3% as at March 31, 2018
1.7 million active Customers, 10% up from March
31, 2017, with 1.2 million active digital Customers
(+17%)
67
39.8 41.4
10.9 11.3
50.8 52.7
1Q17 1Q18
Increased net interest income and commissions
*Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest
income, whereas in accounting terms, part of this margin (€2.0 million in 2018 and €4.2 million in 2017) is presented in net trading income.
| FX effect excluded. €/Zloty constant at March 2018 levels: Income Statement 4.17110000; Balance Sheet 4.2116.
34.8 37.8
40.6 41.4
75.4 79.2
1Q17 1Q18
Net interest income*
Commissions and other income
Operating costs
Branches Employees
+5.0%
365 356
Mar 17 Mar 18
98.6 104.7
1Q17 1Q18
+6.2%
(Million euros)
Staff costs
Other
+3.8%
Commissions
Other
NIM 2.5% 2.5% Cost to income 50.5% 50.3%
+3.8%
+8.7%
+1.9%
5,854 5,848
Mar 17 Mar 18
-6 -9
Does not include tax on
assets and contribution to
resolution fund
68
14.3 12.2
1Q17 1Q18
Credit quality
NPL>90d
Loan impairment (net of recoveries)
Loan-loss reserves
(Million euros)
NPL>90d ratio at 2.7% of total credit as at
March 31, 2018 (2.6% as at the same date of
the previous year)
Provision coverage of NPL>90d at 137%
(110% as at March 31, 2017)
Cost of risk decreased to 44bp (51bp in
1Q17)
Credit ratio Mar 17 Mar 18
NPL>90d 2.6% 2.7%
Coverage ratio Mar 17 Mar 18
NPL>90d 110% 137%
334.8 435.5
Mar 17 Mar 18
303.7 318.1
Mar 17 Mar 18
Cost of risk
51bp 44bp
-14.6%
FX effect excluded. €/Zloty constant at March 2018 levels: Income Statement 4.17110000; Balance Sheet 4.2116.
69
7,321 8,486
6,065 5,635
98 109 1,765
2,171 15,249
16,402
Mar 17 Mar 18
Growing volumes
3,563 3,873
1,514 1,692
4,067 3,412
2,349 2,855
11,493 11,832
Mar 17 Mar 18
+3.0%
-16.1%
+11.7%
+8.7%
(Million euros)
Loans to Customers (gross) Customer funds
Companies
Consumer
and other
Mortgage foreign exchange
On-
demand
deposits
Term
deposits
Other BS
funds
Off-BS
funds
+7.6%
+15.9%
-7.1%
+12.0%
+23.0%
FX effect excluded. €/Zloty constant at March 2018 levels: Income Statement 4.17110000; Balance Sheet 4.2116.
+13.4% excluding FX
mortgage loans
Mortgage Local currency
+21.6%
70
Growing net earnings
20.7 24.7
1Q17 1Q18
+19.2%
(Million euros)
Net income
Operating costs
55.2 57.2
1Q17 1Q18
+3.6% ROE 26.3% 25.9%
FX effect excluded. €/Metical constant at March 2018 levels : Income Statement 74.81583333; Balance Sheet 75.6750.
Banking income
20.5 20.7
1Q17 1Q18
+1.0%
Net income up by 19.2%, with ROE at 25.9%
3.6% increase in banking income, on the back of higher
net interest income (+8.6%), that more than
compensated for lower commissions (-5.9%)
Customer funds up by 0.9%, loans to customers down by
18.9%
Capital ratio of 18.7%
463,000 active mobile Customers, +18% from year-end
2017
71
9.1 8.8
11.5 12.0
20.5 20.7
1Q17 1Q18
2,387 2,477
Mar 17 Mar 18
Growing income partially offset by the increase in
operating costs
+1.0%
(Million euros)
*Excludes employees from SIM (insurance company)
Staff costs
Other
43.9 47.7
1Q17 1Q18
+8.6%
176
190
Mar 17 Mar 18
+90 +14
-3.2%
+4.4%
NIM 10.9% 11.6% Cost to income 37.2% 36.3%
7.6 7.2
3.7 2.4
11.4 9.5
1Q17 1Q18
-16.0%
-5.9%
-36.6%
FX effect excluded. €/Metical constant at March 2018 levels : Income Statement 74.81583333; Balance Sheet 75.6750.
Net interest income
Commissions and other income
Operating costs
Branches Employees*
Commisions
Other
72
Credit performance influenced by challenging environment
(Million euros)
NPL>90d ratio of 14,7% as at March 31,
2018, with a 66% coverage by loan-loss
reserves as at athe same date
Lower provisioning effort, as reflected by a
270bp cost of risk in 1Q18, down from 308bp
in 1Q17
Credit ratio Mar 17 Mar 18
NPL>90d 7.7% 14.7%
Coverage ratio Mar 17 Mar 18
NPL>90d 105% 66%
88.2 85.0
Mar 17 Mar 18
83.8 129.7
Mar 17 Mar 18
Cost of risk 308bp 270bp
8.5 6.0
1Q17 1Q18
-28.8%
Down from €162
million as reported in
June 2017
FX effect excluded. €/Metical constant at March 2018 levels : Income Statement 74.81583333; Balance Sheet 75.6750.
NPL>90d
Loan impairment (net of recoveries)
Loan-loss reserves
73
737 657
629 722
1,366 1,379
Mar 17 Mar 18
886 725
189
147
12
10
1,087
882
Mar 17 Mar 18
Growing deposits and lower credit
-18.9%
-22.3%
-18.2%
(Million euros)
Companies
Consumer
and other
Mortgage
On-
demand
deposits
Term
deposits +14.7%
+0.9%
-15.1%
-10.9%
FX effect excluded. €/Metical constant at March 2018 levels : Income Statement 74.81583333; Balance Sheet 75.6750.
Loans to Customers (gross) Customer funds
74
3M2018 earnings
Highlights
Group
• Profitability
• Liquidity
• Capital
Portugal
International operations
Conclusions
75
Road to 2018: targets
1 Estimates including earnings for the first quarter.
2 Core income = net interest income + net fees and commission income.
3 Based on a fully implemented CET1 of 11%.
Consolidated
Cost of risk
Cumulative NPE reduction
from January 1, 2016 (Portugal)
CET1 fully implemented1
Loans to Deposits
Cost-Core Income2
Cost–Income
1Q17 1Q18 2018
114 bp
-€1.5 billion
11.2%
97%
48.3%
44.6%
85 bp
-€3.5 billion
11.8%
91%
48.0%
45.7%
<75 bp
-€3.0 billion
≈11%
<100%
<50%
≈43%
4.7% 7.7% ≈10% RoE3
76
• Largest private sector bank based in Portugal with a balanced
shareholder structure and a sound balance sheet (fully implemented
CET1 ratio of 11.8%, loans to deposits of 91%)
• Successful implementation of the NPE reduction plan in Portugal:
approximately €0.5 billion down in the quarter, €2.0 billion down from
March 31, 2017, to €6.3 billion at the end of 1Q18
• Profitable operation with a recurring capacity to generate operating
results in excess of €1.2 billion per year (€0.3 billion in 1Q18);
contribution from domestic activity growing strongly
• One of the most efficient banks in the Eurozone, with a cost to core
income ratio of 48% (Eurozone: 75%) and a cost to income ratio of 46%
(Eurozone: 63%)
• Well-positioned in a rapidly changing landscape, following the
completion of the restructuring plan successfully implemented over
the last years: 7.3% increase in active Customers to 5.6
million,16.0% increase in active digital Customers to 2.6 million
Millennium bcp: a bank ready for the future
Profitability and
balance-sheet
indicators in line
with targets for
2018
1
2
3
4
5
77
Appendix
78
Sovereign debt portfolio
(Million euros)
Sovereign debt maturity Sovereign debt portfolio
≤1y 30%
>1y, ≤2y 10%
>2y, ≤5y 27%
>5y, ≤8y 30%
>8y, ≤10y 2%
>10y 1%
The sovereign debt portfolio totaled €10.3 billion, €3.1 billion of which maturing within one
year
The Portuguese sovereign debt portfolio totalled €4.7 billion, whereas the Polish and
Mozambican portfolios amounted to €4.0 billion and to €0.6 billion, respectively; “other”
includes US sovereign debt of €0.9 billion
Portugal 4,241 3,636 4,696 +11% +29%
T-bills and other 589 585 499 -15% -15%
Bonds 3,652 3,051 4,197 +15% +38%
Poland 3,745 3,160 3,981 +6% +26%
Mozambique 302 491 553 +83% +13%
Other 90 553 1,068 >100% +93%
Total 8,378 7,841 10,299 +23% +31%
QoQMar 17 Mar 18 YoYDec 17
79
Sovereign debt portfolio
(Million euros)
*Includes financial assets held for trading at fair value through net income (€142 million).
**Includes financial assets at fair value through other comprehensive income (€9,057 million) and financial assets at amortised cost (€662
million).
Portugal Poland Mozambique Other Total
Trading book* 153 396 0 32 581
≤ 1 year 114 55 0 0 168
> 1 year and ≤ 2 years 0 33 0 0 33
> 2 years and ≤ 5 years 37 236 0 0 273
> 5 years and ≤ 8 years 2 50 0 0 52
> 8 years and ≤ 10 years 0 6 0 31 38
> 10 years 0 16 0 1 17
Banking book** 4,543 3,586 553 1,036 9,718
≤ 1 year 452 1,205 372 942 2,970
> 1 year and ≤ 2 years 0 890 61 0 951
> 2 years and ≤ 5 years 980 1,472 21 1 2,475
> 5 years and ≤ 8 years 3,066 7 0 2 3,074
> 8 years and ≤ 10 years 10 6 34 78 129
> 10 years 35 6 65 13 119
Total 4,696 3,981 553 1,068 10,299
≤ 1 year 566 1,259 372 942 3,139
> 1 year and ≤ 2 years 0 923 61 0 984
> 2 years and ≤ 5 years 1,017 1,708 21 1 2,747
> 5 years and ≤ 8 years 3,068 57 0 2 3,126
> 8 years and ≤ 10 years 10 13 34 109 166
> 10 years 35 22 65 14 136
80
Diversified and collateralised portfolio
Mortgage 46%
Consumer / other 8%
Companies 47%
59% 25% 16%
Real guarantees Other guarantees Unsecured
Loan portfolio
Loans per collateral
Consolidated
LTV of the mortgage portfolio in Portugal
Loans
Loans to companies accounted for 47% of the loan portfolio at March 31, 2018, including 8% to construction
and real-estate sectors
Mortgage accounted for 46% of the loan portfolio, with low delinquency levels and an average LTV of 65%
84% of the loan portfolio is collateralised
Collaterals
Real estate accounts for 93% of total collateral value
80% of the real estate collateral is residential
15% 11% 13% 28% 11% 11% 10%
0-40 40-50 50-60 60-75 75-80 80-90 >90
81
Consolidated earnings
(million euros) 1Q17 1Q18 YoYImpact on
earnings
Net interest income 332.3 344.8 3.8% +12.5
Net fees and commissions 160.8 167.8 4.4% +7.0
Other income* 40.9 25.2 -38.4% -15.7
Banking income 534.0 537.8 0.7% +3.8
Staff costs -136.9 -142.3 3.9% -5.4
Other administrative costs and depreciation -101.4 -103.7 2.3% -2.3
Operating costs -238.3 -246.0 3.2% -7.7
Operating net income (before impairment and provisions) 295.8 291.8 -1.3% -4.0
Of which: core net income** 254.8 266.6 4.6% +11.7
Loans impairment (net of recoveries) -148.9 -106.1 -28.8% +42.8
Other impairment and provisions -54.3 -23.9 -56.1% +30.5
Impairment and provisions -203.2 -129.9 -36.1% +73.3
Net income before income tax 92.5 161.8 +69.3
Income taxes -19.1 -49.3 -30.2
Non-controlling interests -23.3 -26.9 -3.6
Net income from discontinued or to be discontinued operations 0.0 0.0 0.0
Net income 50.1 85.6 +35.5
*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.
**Core net income = net interest income + net fees and commission income - operating costs.
82
Consolidated balance sheet
(Million euros)
31 March
2018
31 March
2017
Assets
Cash and deposits at Central Banks 2,265.8 1,684.4
Loans and advances to credit institutions
Repayable on demand 254.5 258.3
Other loans and advances 864.0 1,337.8
Loans and advances to customers 46,950.1 48,533.7
Other financial assets at amortised cost 990.1 464.5
Financial assets held for trading 1,234.6 1,021.1
Other financial assets not held for trading
mandatorily at fair value through profit or loss 1,608.5 -
Other financial assets held for trading
at fair value through profit or loss 142.4 147.3
Financial assets at fair value through other comprehensive income 10,814.4 10,715.1
Assets with repurchase agreement 33.5 30.3
Hedging derivatives 141.7 73.6
Investments in associated companies 498.8 611.2
Non-current assets held for sale 2,144.7 2,225.4
Investment property 12.5 12.6
Other tangible assets 481.6 482.5
Goodwill and intangible assets 179.8 162.3
Current tax assets 24.8 17.7
Deferred tax assets 2,956.9 3,193.2
Other assets 1,075.2 1,106.1
Total Assets 72,673.9 72,076.9
31 March
2018
31 March
2017
Liabilities
Resources from credit institutions 7,427.1 9,284.1
Resources from customers 52,389.8 50,137.5
Debt securities issued 2,902.9 2,962.7
Financial liabilities held for trading 408.7 509.7
Hedging derivatives 140.8 287.5
Provisions 340.4 341.6
Subordinated debt 1,179.4 846.1
Current tax liabilities 12.8 38.5
Deferred tax liabilities 5.5 2.3
Other liabilities 1,041.3 932.0
Total Liabilities 65,848.7 65,342.2
Equity
Share capital 5,600.7 5,600.7
Share premium 16.5 16.5
Preference shares 59.9 59.9
Other equity instruments 2.9 2.9
Legal and statutory reserves 252.8 245.9
Treasury shares (0.3) (0.7)
Fair value reserves 24.1 (103.1)
Reserves and retained earnings (273.3) (90.9)
Net income for the period attributable to Bank's Shareholders 85.6 50.1
Total equity attrib. to Shareholders of the Bank 5,769.0 5,781.3
Non-controlling interests 1,056.2 953.4
Total Equity 6,825.2 6,734.7
72,673.9 72,076.9
83
(Million euros)
Consolidated income statement Per quarter
Net interest income 332.3 346.2 344.7 368.1 344.8
Dividends from equity instruments 0.1 1.5 0.1 0.1 0.1
Net fees and commission income 160.8 169.5 164.3 172.1 167.8
Other operating income -15.2 -71.4 -10.4 -5.2 -29.1
Net trading income 36.4 53.5 25.1 33.4 34.4
Equity accounted earnings 19.6 15.5 21.7 34.8 19.8
Banking income 534.0 514.8 545.5 603.2 537.8
Staff costs 136.9 104.6 138.6 146.5 142.3
Other administrative costs 88.7 94.0 92.2 99.3 89.5
Depreciation 12.7 13.4 13.6 13.9 14.2
Operating costs 238.3 211.9 244.4 259.6 246.0
Operating net income bef. imp. 295.8 302.9 301.1 343.6 291.8
Loans impairment (net of recoveries) 148.9 156.1 153.6 165.1 106.1
Other impairm. and provisions 54.3 56.0 59.6 131.2 23.9
Net income before income tax 92.5 90.8 87.9 47.3 161.8
Income tax 19.1 24.3 19.7 -33.0 49.3
Non-controlling interests 23.3 27.9 24.8 27.1 26.9
Income tax 50.1 38.6 43.4 53.1 85.6
Net income arising from discont. operations 0.0 1.3 0.0 0.0 0.0
Net income 50.1 39.8 43.4 53.1 85.6
1Q 17 1Q 184Q 173Q 172Q 17
84
Income statement (Portugal and International operations)
For the 3-month periods ended March 31st, 2017 and de 2018
(Million euros)
M ar 17 M ar 18 Δ % M ar 17 M ar 18 Δ % M ar 17 M ar 18 Δ % M ar 17 M ar 18 Δ % M ar 17 M ar 18 Δ % M ar 17 M ar 18 Δ %
Interest income 475 473 -0.5% 271 251 -7.3% 205 222 8.5% 134 146 9.2% 69 75 7.3% 2 2 -1.3%
Interest expense 143 128 -10.4% 77 59 -23.1% 67 69 4.2% 42 43 2.4% 26 27 5.6% -1 -1 26.3%
N et interest inco me 332 345 3.8% 194 192 -1.1% 138 153 10.6% 91 103 12.4% 44 48 8.3% 3 2 -12.8%
Dividends from equity instruments 0 0 -27.6% 0 0 14.2% 0 0 -46.1% 0 0 -46.1% 0 0 -- 0 0 --
Intermediat io n margin 332 345 3.7% 194 192 -1.1% 138 153 10.6% 91 103 12.4% 44 48 8.3% 3 2 -12.8%
Net fees and commission income 161 168 4.4% 108 113 4.5% 53 55 4.1% 39 41 7.2% 8 7 -6.2% 6 6 -2.3%
Other operating income -15 -29 -91.8% 5 -3 <-100% -21 -26 -26.3% -22 -26 -20.1% 1 0 -78.0% 0 0 -0.6%
B asic inco me 478 484 1.2% 308 302 -1.9% 170 182 6.7% 108 118 9.0% 53 55 4.0% 9 9 -5.7%
Net trading income 36 34 -5.3% 21 19 -9.2% 16 15 -0.1% 12 13 2.8% 2 2 -13.2% 1 1 -5.7%
Equity accounted earnings 20 20 0.9% 12 12 2.1% 8 8 -1.0% 0 0 -- 0 0 -- 8 8 -1.0%
B anking inco me 534 538 0.7% 341 333 -2.2% 193 205 5.8% 120 130 8.4% 55 57 3.3% 18 17 -3.6%
Staff costs 137 142 3.9% 90 91 1.4% 47 51 8.7% 34 38 12.3% 9 9 -3.5% 4 5 6.7%
Other administrative costs 89 90 1.0% 55 53 -2.5% 34 36 6.7% 23 25 8.7% 10 10 1.9% 2 2 7.2%
Depreciation 13 14 11.5% 8 9 12.7% 5 5 9.4% 3 3 5.6% 2 2 17.1% 0 0 -25.0%
Operat ing co sts 238 246 3.2% 153 153 0.6% 86 93 7.9% 59 66 10.6% 21 21 0.8% 6 6 6.6%
Operat ing net inco me bef . imp. 296 292 -1.3% 188 180 -4.5% 108 112 4.1% 61 65 6.2% 35 36 4.8% 12 11 -8.8%
Loans impairment (net of recoveries) 149 106 -28.8% 126 89 -29.4% 23 17 -25.5% 14 12 -18.3% 8 6 -29.0% 0 -1 <-100%
Other impairm. and provisions 54 24 -56.1% 57 19 -66.5% -2 5 >100% 0 1 >100% -2 0 80.3% 0 5 >100%
N et inco me befo re inco me tax 93 162 74.9% 5 72 >100% 87 90 3.4% 47 52 12.2% 29 31 7.4% 11 7 -42.5%
Income tax 19 49 >100% -3 27 >100% 23 22 -3.2% 14 15 7.8% 8 6 -23.3% 1 1 1.1%
Non-contro lling interests 23 27 15.5% 0 0 -81.0% 23 27 15.6% 0 0 -- 0 0 22.4% 23 27 15.6%
Inco me tax 50 86 70.8% 9 44 >100% 41 41 0.1% 33 37 14.1% 21 25 18.9% -12 -21 -69.2%
M illennium bim (M o z.)
Internat io nal o perat io ns
Gro up P o rtugal T o tal B ank M illennium (P o land) Other int . o perat io ns
85
Glossary (1/2)
Balance sheet impairment – Balance sheet impairment related to amortised cost and fair value adjustments related to loans to customers at fair value
through profit or loss.
Balance sheet customer funds - debt securities and customer deposits.
Capitalisation products – includes unit linked saving products and retirement saving plans (“PPR”, “PPE” and “PPR/E”).
Commercial gap –loans to customers (gross) minus on-balance sheet customer funds.
Core income - net interest income plus net fees and commissions income.
Core net income - corresponding to net interest income plus net fees and commissions income deducted from operating costs.
Cost of risk, gross (expressed in bp) - ratio of impairment charges accounted in the period to loans to customers at amortised cost before impairment.
Cost of risk, net (expressed in bp) - ratio of impairment charges (net of recoveries) accounted in the period to loans to customers at amortised cost before
impairment.
Cost to core income - operating costs divided by core income (net interest income and net fees and commissions income).
Cost to income – operating costs divided by net operating revenues.
Coverage of non-performing loans by balance sheet impairments – BS impairments divided by NPL.
Debt securities - debt securities issued by the Bank and placed with customers.
Dividends from equity instruments - dividends received from investments classified as financial assets at fair value through other comprehensive income and
from financial assets held for trading.
Equity accounted earnings - results appropriated by the Group related to the consolidation of entities where, despite having a significant influence, the
Group does not control the financial and operational policies.
Loans to customers (gross) – Loans to customers at amortised cost before impairment and loans to customers at fair value through profit or loss before fair
value adjustments.
Loans to customers (net) - Loans to customers at amortised cost net of impairment and balance sheet amount of loans to customers at fair value through
profit or loss.
Loan to Deposits ratio (LTD) – Loans to customers (net) divided by total customer deposits.
Loan to value ratio (LTV) – Mortgage amount divided by the appraised value of property.
Net commissions - net fees and commissions income.
Net interest margin (NIM) - net interest income for the period as a percentage of average interest earning assets.
Net operating revenues - net interest income, dividends from equity instruments, net commissions, net trading income, equity accounted earnings and other
net operating income.
Net trading income - net gains/losses arising from trading and hedging activities, net gains/losses arising from financial assets at fair value through other
comprehensive income and financial assets at amortised cost.
Non-performing exposures (NPE, according to EBA definition) – Non-performing loans and advances to customers more than 90 days past-due or unlikely to
be paid without collateral realisation, even if they recognised as defaulted or impaired.
Non-performing loans (NPL) – Overdue loans more than 90 days including the non-overdue remaining principal of loans, i.e. portion in arrears, plus non-
overdue remaining principal.
86
Glossary (2/2)
Operating costs - staff costs, other administrative costs and depreciation.
Other impairment and provisions - other financial assets impairment, other assets impairment, in particular provision charges related to assets received as
payment in kind not fully covered by collateral, goodwill impairment and other provisions.
Other net income – net commissions, net trading income, other net operating income, dividends from equity instruments and equity accounted earnings.
Other net operating income – net gains from insurance activity, other operating income/(loss) and gains/(losses) arising from sales of subsidiaries and other
assets.
Overdue loans - loans in arrears, including principal and interests.
Overdue loans by more than 90 days coverage ratio - BS impairments divided by total amount of overdue loans including installments of capital and interest
overdue more than 90 days.
Overdue loans coverage ratio – BS impairments divided by total amount of overdue loans including installments of capital and interest overdue.
Return on average assets (Instruction from the Bank of Portugal no. 16/2004) – Net income (before tax) divided by the average total assets.
Return on average assets (ROA) – Net income (before minority interests) divided by the average total assets.
Return on equity (Instruction from the Bank of Portugal no. 16/2004) – Net income (before tax) divided by the average attributable equity + non-
controlling interests.
Return on equity (ROE) – Net income (after minority interests) divided by the average attributable equity, deducted from preference shares and other
capital instruments.
Securities portfolio - financial assets held for trading, financial assets not held for trading mandatorily at fair value through profit or loss, financial assets at
fair value through other comprehensive income, assets with repurchase agreement, other financial assets at amortised cost and other financial assets
held for trading at fair value through profit or loss.
Spread - increase (in percentage points) to the index used by the Bank in loans granting or fund raising.
Total customer funds - balance sheet customer funds, capitalisation products, assets under management and investment funds.
87
Agenda
Macro and Business Overview
Strategic Plan 2013-2018
3M2018 earnings
Other information
88
3.9 +0.2
+0.2
+1.2
+0.8 6.3
NPLs >90d
Cross- default
Quaran -tine*
LLR/gross loans>20% or LLR>€5mn
Other triggers
NPEs
The NPE reduction plan is being implemented Reconciliation of NPLs>90d with NPEs (EBA definition)
NPEs down €6.5 billion from end-2013 NPLs>90d vs NPEs (EBA definition)
(Billion euros, March 2018)
* 9 months following payment is resumed for loans to companies, 3 months for retail loans.
(Billion euros)
-2.1
-3.0
-1.4
12.8
6.3
Dec13 Net new entries
Write offs
Sales Dec17
89
Latest Rating Actions recognized the progress made by
BCP in implementing its strategic plan
+3 notches +3 notches
+2 notches
S&P Stand-alone credit profile (SACP)
Fitch Viability Rating (VR)
Moody’s Baseline Credit Assessment (BCA)
BB-
B+
B
B-
2013 2014 2015 2016 2017
b2
b3
Caa1
Caa2
2013 2014 2015 2016 2017
bb-
b+
b
2013 2014 2015 2016 2017
Rating Agencies have recognized the progress achieved
by Millennium bcp since 2013
Excluding the effect of Government support removal
due to change in Rating Agencies methodology in order
to adjust for the BRRD, the intrinsic rate of BCP was
upgraded by 3 notches by S&P and Moody’s and by 2
notches by Fitch
Future upgrades of the Portuguese Republic rating
should provide room for an upgrade of BCP ratings
90
Ratings
Moody's Standard & Poor's
Intrinsic Baseline Credit Assessment
Adjusted Baseline Credit Assessment
b2
B2
Stand-alone credit profile (SACP) bb-
LT/ST
Counterparty LT/ST
Deposits LT/ST
Senior unsecured LT/ST
Outlook deposits / senior
Ba1 / NP
B1 / NP
B1 / NP
Positive
Counterparty Credit Rating LT/ST
Senior Unsecured LT/ST
Outlook
BB-/ B
BB-/ B
Positive
Other
Subordinated Debt - MTN
Preference Shares
Other short term debt
Covered Bonds
(P) B3
Caa2 (hyb)
P (NP)
A2
Subordinated debt
Preference shares
B-
CCC
Fitch Ratings DBRS
Intrinsic
Viability Rating
Support
Support floor
bb- Intrinsic
Critical obligations
BB (high)
BBB/R-2(high) 5
No floor
LT/ST
Deposits LT/ST
Senior unsecured debt issues LT/ST
Outlook
BB- / B
BB- / B
Positive
Deposits LT / ST
Short-Term Debt LT / ST
Trend
BB (high) / R-3
BB (high) / R-3
Positive
Other
Subordinated Debt Lower Tier 2
Preference Shares
Covered Bonds
B+
B-
BBB+
Dated Subordinated Notes
Covered Bonds
BB (low)
A
91
Progress recognised by the market
CDS 5 yr Portuguese Republic
CDS BCP yield curve (senior)
CDS 5 yr BCP
BCP CDS spreads have narrowed since the end of 2016
and after the completion of the share capital increase in
February 2017 but reflect also the progress made by the
Bank in reducing NPEs as well as the increase in NPEs
coverage
Besides this BCP’s intrinsic factors the BCP CDS spreads
benefitted also from the decrease in Portuguese
Republic CDS spreads
Spreads on senior preferred debt have also narrowed in
recent months because there was the introduction of a
new debt class in the Iberian markets: the senior non
preferred debt
0
200
400
600
800
1 2 3 4 5 6 7 8 9 10
1 year ago
As at March,
31
b.p.
b.p. b.p.
(Years)
0
150
300
450
Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 0
200
400
600
800
1000
Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17
92
New Senior Bond, CB and Subordinated issues signal
Millennium bcp’s return to capital debt markets
Issuer: Banco Comercial Português, S.A.
Issue Rating (M/F/D): A3/BBB+/A
Issue type: Mortgage Bonds
Amount: € 1,000m
Issue date: 23 May 2017
Settlement date: 31 May 2017
Maturity: 31 May 2022
Coupon: 0.750 %
Spread: MS+65bps
Re-offer yield: 0.876 %
Listing / ISIN: Irish Stock Exchange / PTBCPIOM0057
Asset Managers
45%
Central Banks & Official
Institutions 29%
Banks 21%
Insurance & Pension Funds
5%
Portugal 36%
Germany & Austria
25%
Spain 10%
France 10%
Benelux 7%
UK & Ireland
4%
Switzerl. 3%
Italy 3%
Other 2%
3 Yr Senior Unsecured Notes Breakdown by Investor Type and Geography
Breakdown by Investor Type and Geography 5 Yr Covered Bond Issue
Investment Funds 60%
Banks 16%
Hedge Funds 12%
Insurance and Pension Funds 10%
Other 2%
UK 33%
Portugal 20%
Italy 15%
France 11%
Deutschland 6%
Austria 6%
Spain 5%
Switzerland 4%
Issuer: Banco Comercial Português, S.A.
Issue Rating (S/M/F/D): B (Neg.) / B1 (Neg.) / BB- (Neg.) / BBBL (Neg.)
Issue type: Senior Unsecured Unsubordinated
Amount: € 500m
Issue date: 19 February 2014
Settlement date: 27 February 2014
Maturity: 27 February 2017
Coupon: 3.375 %
Spread: MS+285bps
Re-offer yield: 3.422 %
Listing / ISIN: London Stock Exchange / PTBITIOM0057
Breakdown by Investor Type and Geography 5 Yr subordinated Debt Issue
Issuer: Banco Comercial Português, S.A.
Issue Rating (M/S/F/D): B3/B-/B+/BB(L)
Amount: € 300mm
Issue date: 7 December 2017
Maturity: 7 December 2027
Issuer’s Call: 7 December 2022, subject to the prior approval of the
Relevant Authority
Coupon: 4.50 % (Fixed, Annual) until 7th December 2022. One time
reset year 5 to prevailing 5Y MS + 4.267% (initial margin)
Re-offer price: 100%
Listing / ISIN: Irish Stock Exchange / PTBCPWOM0034
Asset Manager
48% Hedge
Fund 37%
Bank & Private
Bank 11%
Insurance & Pension
5%
UK & Ireland 43%
Iberia 17%
Germany, Austria &
Switzerland 15%
FraBeLux 13%
Asia 5%
Other 4% Italy 3%
93