DISCLAIMER - Millenniumbcpind.millenniumbcp.pt/.../EarningsPresentation_1T13.pdf · Commercial gap improvement: reduction by 8.5 billion euros from March 2012, with loan to deposits

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 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

The figures presented do not constitute any form of commitment by BCP in regard to future

earnings

First three months figures for 2012 and 2013 not audited

3

Main Highlights

Group

• Greece

• Liquidity

• Capital

• Profitability

Portugal

International Operations

Conclusions

Agenda

4

Highlights of 1Q2013

Core tier I ratio reaches 12.1% according to BoP, significantly above from 9.2% in March

2012. Core tier I reaches 9.6% according to EBA (11.2% adjusted for 31 March 2013 buffer

values)

Capital comfortably above

requirements

Risk mitigation concerning Greece, continued strengthening of liquidity position and

comfortable capital ratios allows us to be better prepared for future challenges

Consolidated net income at -152 million euros, or -110 million euros (excluding Greece),

comparing with -261 million euros in the previous quarter, in line with the plan and according

with the macroeconomic environment evolution

Reduction in operating costs by 17.3% in Portugal, year on year, following the restructuring

program implementation that will lead to more than 70 million euros of annual savings, in

2013, compared to 2012

Customer funds up 4.9% versus March 2012, with customer deposits growth of +4.5% in

Portugal

Loans to customers evolution in line with liquidity improvement: -6.6% versus March 2012

Commercial gap improvement: reduction by 8.5 billion euros from March 2012, with loan to

deposits ratio (BoP) at 121% and net loans to balance sheet customer funds standing at

108%

Contribution of international operations (excluding Greece) to consolidated net income of 38

million euros, an increase of 12.0%, compared to the first quarter of 2012

Liquidity significantly

reinforced

Profitability in line with the

plan

Signature of a definitive agreement for the sale of the entire share capital of Millennium

Bank (Greece) to Piraeus Bank Greece

disposal agreement

5


Agreement for the sale of the Greek operation

Announcement of the negotiation process: 6 February

2013

Signing of the agreement: 22 April 2013

Next steps: approval process by the regulatory entities

Conclusion of the transaction: date of the Piraeus

Bank‟s share capital increase (by the end of the second

quarter of 2013)

Loan to deposit ratio *

138%

121%

Mar 12 Mar 13

124%

108%

* Calculated with net loans and customer deposits (according to BoP criteria)

Net loans to BS customer

funds ratio

-17pp

(%)

Core tier I

9.2%

12.1%

9.6%

Mar 12 BdP Mar 13 BdP Mar 13 EBA

(%) +2,9pp

Customer funds * (Billion euros)

50.4 52.0

16.9 18.6

67.3 70.6

Mar 12 Mar 13

+4.9%

Portugal International operations

+10.4%

+3.0%

* Adjusted by a Repo operation of 697 million euros as of 31 March 2012

6


Operating costs in Portugal (Million euros)

Net income (Million euros)

Net income (excluding Greece)

40.8

-152.0 -109.7

1Q12 1Q13 1Q13 (excluding Greece)

(Million euros)

224.8 185.9

1Q12 1Q13

-17.3%

51.9

-79.5

-222.7 -261.5

-109.7

1Q12 2Q12 3Q12 4Q12 1Q13

Contribution of the international operations

(excluding Greece) (Million euros)

34.3

38.4

1Q12 1Q13

+12.0%

7

Main Highlights

Group

• Greece

• Liquidity

• Capital

• Profitability

Portugal


Conclusions

Agenda

8

Release of RWA: c. 4 billion euros

Reimbursement of the remaining funding : provided in two tranches (650 million euros on the date

closing of the sale transaction and 250 million euros within 6 months from that date)

No asset transfer from MBG to BCP as part of the transaction

Recapitalisation of MBG by BCP: 400 million euros (261 million euros through the conversion of the

funding of BCP to MBG, in addition to the 139 million euros already contributed in December 2012)

with the use of the provision for potential losses in MBG: 427 million euros (already refleted in

2012‟s results)

Greece: disposal of the Greek operation (MBG)

Disposal of

the

operation

Investment

in Piraeus

Bank

Investment value: 400 million euros in the forthcoming right issue of Piraeus Bank within the

framework of recapitalisation of Greek Banks with the participations of Hellenic Financial Stability

Fund (HFSF)

Entry price in the rights issue: at the sime price as HFSF

Shareholding disposal: Piraeus Bank‟s commitment in the orderly disposal over time of BCP‟s

shareholding

Restrictions to the disposal: 6 month lock-up period and certain temporary voting and orderly

disposal rules for the period where HFSF is also restricted on voting

Accounting of the investment in BCP: the investment in the share capital of Piraeus Bank will not be

consolidated

The final impact from this transaction on BCP‟s capital position will be dependent on the performance of the shareholding in

Piraeus Bank

Greek Risk is limited to the participation in rigths issue of Piraeus Bank

9

Main Highlights

Group

• Greece

• Liquidity

• Capital

• Profitability

Portugal


Conclusions

Agenda

10

34,958 37,037

13,871 14,836

5,695 5,560

12,803 13,188

67,328 70,622

54,525 57,434

Mar 12 Mar 13

Customer Funds *

Focus on balance sheet customer funds increase…

Consolidated (Million euros)

Balance sheet customer funds

+5.3%

Off BS customer

funds

Term Deposits Other BS customer funds

+6.2%

Customer funds in Portugal *

33,118 34,602

17,321 17,374

50,439 51,976

Mar 12 Mar 13

+3.0%

Demand deposits

Deposits Other customer funds

15,711 17,271

1,178 1,375

16,889 18,646

Mar 12 Mar 13

+10.4%

Customer funds in international operations

+4.9% Total Customer Funds

+4.5%

+9.9%

+3.0%


Deposits Other customer funds

11

… and on loans to customers evolution, in line with liquidity plan

Consolidated (Million euros)

Loans to customers (gross)*

36,532 33,179

4,457 4,205

30,254 29,122

71,243 66,507

Mar 12 Mar 13

-6.6%

Mortgage

Consumer

Companies

53,998 49,295

Mar 12 Mar 13

Loans to customers (gross) in international

operations

17,245 17,212

Mar 12 Mar 13

-0.2%

-8.7%

Loans to customers (gross) in Portugal*

-5.7%

-9.2%

-3.7%


12

14.7 10.2

Mar 12 Mar 13

17.0

19.5

Mar 12 Mar 13

Reduction of commercial gap as refinancing driver and reduction

in usage of ECB

Net usage of ECB

Accumulated net repayment of MLT debt

(Medium and long term debt repayments since the beginning of 2009)

Comercial Gap *

Commercial gap improves 8.5 billion euros during

last year and loan to deposit ratio falls to 121%

Repayment of 1.0 billion euros of MLT debt in 1Q13

Decrease in net usage of ECB to 10.2 billion euros

22.6 billion euros of eligible assets (net of

haircuts) available for refinancing with ECB, with a

buffer of 12.3 billion euros

Loan to deposit ratio ** (BoP)

(Billion euros)

* Calculated based on customer deposits and net loans to customers ** According to Bank of Portugal‟s criteria

+2.5

-4.5

Net loans to BS customer

funds ratio

138%

121%

Mar 12 Mar 13

124%

108%

-17pp

-18.8

-10.3

Mar 12 Mar 13

+8.5

13

5.2 4.9

2.9

5.5

1.0 0.0

3.0

0.4 0.6 1.2

0.4

2009 2010 2011 2012 1T13 2013 2014 2015 2016 2017 >2017

Lower refinancing needs on the short, medium and long term

Refinancing needs of medium-long term debt

* Includes repurchase of own debt amounting €0.5 billion

** Includes repayment of €1.6 billion related to liability management transactions

Already repaid

(Billion euros)

Significant improvement of the funding structure

24% 15%

8% 3% 2%

23% 25% 31% 34% 32%

53% 59% 61% 63% 66%

Dec 10 Dec 11 Mar 12 Dec 12 Mar 13

Customer deposits

funding > 1 ano

funding < 1 ano

Reduction of funding needs, benefitting

from the deleveraging process which

proceeds at a good pace

Deposits are the main source of funding

Lower short-term refinancing needs than

in the past

*

**

14

Main Highlights

Group

• Greece

• Liquidity

• Capital

• Profitability

Portugal


Conclusions

Agenda

15

57,188 53,625

mar 12 mar 13

Core tier I ratio reaches 12.1%, allowing the bank to comply with all

regulatory requirements ... Consolidated

RWA

5,272 6,489 Core tier I

9.2%

12.1%

Core tier I ratio (%) - BoP

+23.1%

-6.2%

Compliance with

regulatory requirements +2.9pp

Change

(mn eur)

Reinforcement of core tier I

Hybrid instruments issue +3.000

€500 million rights issue +500

In spite of...

Impairment and results in Greece -717

BoP neutralizations (Pension Fund and SIP) -709

Pension Fund -297

Inspection (OIP) -206

Cost of hybrids -143

Reduction of RWA

IRB extension to retail portfolio in Poland -294

Deleveraging, optimization and other -3.269

10% BdP

9% EBA

March 13 vs. March 12

Core Tier I ratio (EBA) at 9.6% (with €848m

static sovereign buffer). Adjusted to 31 March

2013 values, the sovereign buffer is zero

euros, implying a 11.2% ratio

Core tier I ratio (%) - EBA

9.6% 11.2%

Mar 13 (static) Mar 13 (adjusted)

Core Tier I ratio (EBA) at 9.6% (with €848m

static sovereign buffer). Adjusted to 31 March

2013 values, the sovereign buffer is zero

euros, implying a 11.2% ratio

16

Main Highlights

Group

• Greece

• Liquidity

• Capital

• Profitability

Portugal


Conclusions

Agenda

17

Net income in line with the plan, reflecting the actual level of interest

rates and the current macroeconomic scenario Consolidated

(million euros) 1Q12 1Q13 Δ

Net interest income 309.4 183.0 -126.4

Of which: costs related with hybrids instruments (CoCo's) 0.0 -66.6 -66.6

Net fees and commissions 165.1 163.1 -2.0

Of which: State guarantee costs -15.4 -17.3 -1.8

Other operating income 174.2 80.5 -93.7

Of which: debt repurchase 95.5 0.0 -95.5

Banking income 648.7 426.6 -222.1

Staff costs 194.3 170.0 -24.3

Other admin. costs and depreciation 151.9 135.0 -16.8

Operating costs 346.2 305.0 -41.2

Impairment and provisions 198.1 239.2 41.1

Income tax and non-controlling interests 52.5 -7.9 -60.4

Net income (excluding Greece) 51.9 -109.7 -161.6

Net income from discontinued operations (Greece) -11.2 -42.3 -31.1

Net income 40.8 -152.0 -192.7

18

-34.2

-47.3

-12.3

-93.7

Net income affected by atypical items

Net income

Consolidated

(Million de euros)

Cost with State guarantees

40.8

-152.0

-109.7

1Q12 1Q13 1Q13 (excluding Greece)

Atypical items

Net of taxes *

Liability management 2011

Hybrids (CoCo's) interest

* Considering the marginal tax rate

19

(Million euros)

183.0

66.6

309.4

249.6

1Q12 1Q13

Net interest income reduction as a result of CoCo’s cost, adverse

market interest rates evolution and volumes effect

NIM

-19.3%

0.96% 1.51%

Net interest income

Consolidated

Portugal

International operations

1.31% Excluding hybrid instruments

(CoCo’s)

1Q13

vs.1Q12

Hybrid instruments (CoCo‟s) cost -67

Market interest rates evolution

(ex. Euribor) -31

Volumes effect and other -15

Total -113

The figures for Greek operation were restated in 2012 following the process of discontinuing this operation and aggregated into a single income statement item defined as “Income arising from

discontinued operations”.

132.4 119.5

1Q12 1Q13

-9.8%

-40.9%

20

1Q12 1Q13 YoY

Banking fees and commissions 152.4 151.0 -0.9%

Cards and transfers 42.9 44.6 3.8%

Loans and guarantees 43.7 36.1 -17.4%

Bancassurance 17.9 19.1 6.4%

Current account related 16.0 20.3 26.6%

Other fees and commissions 31.9 31.0 -2.6%

Market related fees and commissions 28.1 29.3 4.3%

Securities operations 18.2 19.4 6.5%

Asset management 9.9 10.0 0.2%

Total fees and comm. excluding State guarantee 180.6 180.4 -0.1%

State guarantee -15.4 -17.3 11.7%

Total fees and commissions 165.1 163.1 -1.2%

Stable fees and commissions with the increase in international

operations

(Million euros)

114.6 106.9

1Q12 1Q13

-6.7%

Fees and commissions

Consolidated

50.5 56.2

1Q12 1Q13

+11.2%



Portugal


21

Net trading income increase in international operations

(Million euros)

Net trading income

Consolidated

55.9 45.6

95.5

151.4

45.6

1Q12 1Q13

Other

Repurchase of own debt

Portugal


22.6 29.2

1Q12 1Q13

+29.0%



-69.9%

174.0

74.7

1Q12 1Q13

-57.1%

22

912 872

800

2011 2012 2013 E Medium Term

Reduction of costs in Portugal and in international operations

(Million euros)

Operating costs

Consolidated

224.8

185.9

1Q12 1Q13

121.3 119.1

1Q12 1Q13

-17.3%

-1.8%



Portugal


194.3 170.0

132.4 117.6

19.5 17.4

346.2 305.0

1Q12 1Q13

Staff costs

Other

administrative

costs

Depreciation -10.8%

-11.1%

-12.5%

-11.9%

Operating costs evolution in Portugal

<

Savings

> €70M

* Excludes extraordinaries

Strategic

Plan

*

23

Provisioning in line with the economic cycle

Cost of risk 91 bp 122 bp



81% of impairment charges (gross) in 1Q13, were related with

companies‟ credit portfolio

(Million euros)

Loan impairments (net of recoveries)

Consolidated

133.2 169.6

1Q12 1Q13

19.1 18.8

1Q12 1Q13

+27.4%

-1.9%

Portugal


152.3 188.4

1Q12 1Q13

+23.7%

Cost of risk evolution in Portugal

208 179

138

<100

2011 2012 1Q13 Medium Term

81% of loan impairments (gross) in 1Q13, were related with

companies‟ credit portfolio

Strategic Plan

24

3,609

4,351

Mar 12 Mar 13

(Million euros)

Credit quality

Past due

> 90 days

Falling due

Consolidated

3,598 4,519

3,388 3,527

6,986 8,046

Mar 12 Mar 13

Loan impairment (balance sheet)

Credit quality and provisioning reflect the economic cycle, but in line

with the plan

Past due over 90 days and falling due loans ratio increased to 12.1%. The coverage ratio increased to 54%

Credit at risk ratio at 13.8% and coverage (by BS impairments and both real estate and financial guarantees)

above 100%

Credit ratio Mar12 Mar13

Past due >90d 5.0% 6.8%

Past due >90d + falling due 9.7% 12.1%

Credit at risk 10.9% 13.8%

Coverage ratio Mar12 Mar13

Past due >90d 100% 96%

Past due >90d + falling due 52% 54%

Credit at risk 46% 47%

25

Diversified and collateralized credit portfolio

14% 9% 11% 23% 10% 20% 12%

0-40 40-50 50-60 60-75 75-80 80-90 >90

Loan portfolio

Loans by collateral

LTV of mortgage portfolio in Portugal

Mortgage 44%

Consumer 6%

Companies 50%

9.9%

6.2%

6.2%

3.0% 3.4% 2.0% 3.4%

15.9% Other sectors

Transp. and communications

Other national activities

Wholewale commerce

Other int. activities

Construction

Real estate – commercial and

retail

Other services

Loans to companies represents 50% of total loan portfolio, with a diversified distribution by

the several activity sectors

93% of the loan portfolio is collateralized

Mortgage loans represent 44% of total loan portfolio, with a low delinquency level and an

average LTV of 67%

64% 29% 7%

With real state guarantees With other guarantees

Without guarantees

Consolidated

26

Main Highlights

Group

• Greece

• Liquidity

• Capital

• Profitability

Portugal


Conclusions

Agenda

27

23,943 25,776

9,175 8,826

5,569 5,446

11,752 11,928

50,439 51,976

38,687 40,048

Mar 12 Mar 13

Deleveraging effort with an increase in customer funds and a reduction

of loans

Customer funds*

Balance sheet customer funds

+3.5%

Off BS customer

funds

Term deposits Other BS customer funds

+4.5%

Demand deposits

+3.0% Total customer funds

+1.5%


(Million de euros)

Loans to customers (gross) *

29,857 26,435

2,631 2,422

21,510 20,438

53,998 49,295

Mar 12 Mar 13

-8.7%

Mortgage

Consumer

Companies

-7.9%

-11.5%

-5.0%

28

17.7

-119.6

-261.1 -292.1

-148.0

1Q12 2Q12 3Q12 4Q12 1Q13

441.4

214.0

1Q12 1Q13

Portugal: results show a reversal in the downward trend

Banking income affected by the

decrease of net interest income and

net trading income

Operating costs decrease 17.3% with

the reestructuring plan

implementation

Net income

Banking income Operating costs

224.8 185.9

1Q12 1Q13

-51.5% -17.3%

(Million euros)

29

Net interest income affected by the volumes effect…

Net interest income 1Q13

vs.4Q12

Past due loans and recoveries effect -31

Volumes effect (less credit, more

deposits) -27

Others -5

Total -63

(Million euros)

177.0 141.0

46.8

126.6

63.5

1Q12 2Q12 3Q12 4Q12 1Q13

51.9 50.8 48.5 47.1 45.8 -1.3 Average loans

33.4 33.3 30.5 29.6 31.6 +2.0 Average customer deposits

1.04

0.70

0.36 0.20 0.21

1Q12 2Q12 3Q12 4Q12 1Q13

Euribor 3 month

(%, quarter average) Evolution penalized by the extraordinary

effect of overdue loans and recoveries in

4Q12 and by the volume effect (less credit,

more deposits), when compared with the

previous quarter

Low market rates continue to constrain net

interest income

30

Credit portfolio spread

… despite the continued repricing effort

(%)

Time deposits rate

(%)

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

S/11 D/11 M/12 J/12 S/12 D/12 M/13

New production Portfolio

1.14 1.15 1.15 1.16 1.16

4.07 4.10

4.19

4.30 4.30

1Q12 2Q12 3Q12 4Q12 1Q13

Companies

Mortgage

Continuous effort to reduce the cost of

deposits, new production with rates

substantially lower when compared with

the previous year

Perfectly in line with the strategic plan

purpose of term deposit's spread reduction

Spread of the companies‟ credit

portfolio remains at a high level

Evolution of term deposits spreads in Portugal

-282 -289 -268

-165

2011 2012 1Q13 Medium

Term

<

Strategic Plan

31

Fees and comissions affected by loans, guarantees and asset

management

(Million euros)

1Q12 1Q13 YoY

Banking fees and commissions 115.9 110.0 -5.0%

Cards and transfers 23.1 22.6 -2.2%

Loans and guarantees 36.9 29.1 -21.2%

Bancassurance 17.9 19.1 6.4%

Current account related 16.0 20.3 26.6%

Other fees and commissions 21.9 19.0 -13.3%

Market related fees and commissions 14.2 14.2 0.0%

Securities operations 9.3 9.9 6.2%

Asset management 4.8 4.2 -12.1%

Total fees and comm. excluding State guarantee 130.0 124.2 -4.5%

State guarantee -15.4 -17.3 11.7%

Total fees and commissions 114.6 106.9 -6.7%

32

Positive results in operating costs in Portugal, following the

restructuring program

(Million de euros)

135.0 110.5

1Q12 1Q13

-€24.5M

Staff costs

Other administrative costs 135.0

110.5

78.9

66.2

11.0

9.2

224.8

185.9

1Q12 1Q13

Staff costs

Other administrative costs

Depreciation

-16.1%

-16.1%

-18.1%

-17.3%

Operating costs

Portugal

532

2012 2013

Savings

> €40M

299

2012 2013

Savings

> €30M

9,944 8,954

Mar 12 Mar 13

-990 Employees

78.9 66.2

1Q12 1Q13

872 802

Mar 12 Mar 13

-70 Branches

-€12.7M

33

(Million euros)

Credit quality and provisioning reflect the economic cycle, but in line

with the plan

2,903 2,942

Mar 12 Mar 13

Credit quality

2,802 3,463

3,071 2,940

5,873 6,403

Mar 12 Mar 13

Loan impairment (balance sheet)

97 bp 138 bp

Past due over 90 days and falling due loans ratio increased to 13.0%, with coverage of 46%

Credit at risk ratio at 13.5%, and coverage (by BS impairments and both real estate and financial guarantees)

above 100%, which compares favourably with the implicit value of the Strategic Plan of 14.5% to 31 March 2013

Credit ratio Mar12 Mar13

Past due >90d 5.1% 7.0%

Past due >90d + falling due 10.7% 13.0%

Credit at risk 11.1% 13.5%

Coverage ratio Mar12 Mar13

Past due >90d 104% 85%

Past due >90d + falling due 49% 46%

Credit at risk 48% 44%

Past due > 90 days Falling due loans

Impairment charges net of recoveries as % of gross loans

34

Main Highlights

Group

• Greece

• Liquidity

• Capital

• Profitability

Portugal


Conclusions

Agenda

35

Net income in international operations

(Million euros)

1Q12 1Q13

Δ %

local

currency

Δ %

euros

International operations 34.3 38.4 12.0%

Poland 26.4 28.7 9.0% 9.0%

Mozambique 20.6 20.3 -1.7% -11.7%

Angola 8.8 6.5 -26.7% -27.3%

Other and non-controlling interests -21.5 -17.1

Note: For the 1st quarter of 2012, subsidiaries presented reflect the exchange rate considered for the 1st quarter of 2013, to allow analysis in local currency

* Excludes Greece

*

36

2,656 2,640

776 848

6,549 6,586

9,981 10,074

Mar 12 Mar 13

10,229

12,012

Mar 12 Mar 13

+17.4% +0.9%

+9.3%

-0.6%

+0.6%

Poland: growth in customer funds and loans to customers

Excluded FX effect. €/PLN rates used: Income Statement 4.17781667; Balance Sheet: 4.1804

Loans to customers (gross) Customer funds

(Million euros)

Companies

Consumer

Mortgage

37

109.5 114.4

1Q12 1Q13

+ 4.5% -3.4%

+ 9.0%

Net income


Growth in net income driven by increase in operating income and by

strict costs control

(Million euros)


26.4 28.7

1Q12 1Q13

67.6 65.3

1Q12 1Q13

Customer funds increase 17.4%

Net income grows by 9.0%

Increase in banking income (+4.5%), despite the

decrease in the reference interest rates that

reached historic minimums (WIBOR3M fell down

from 4.9% in 1Q12 to 3.7% in 1Q13)

Strict costs control (-3.4%)

Positive macroeconomic outlook by the IMF for real

GDP: +1.3% in 2013 and +2.2% in 2014

38

70.7 69.2

1Q12 1Q13

Net interest income decreases 2.2% versus

the same quarter of 2012

Net fees and commissions increased 6.9%

versus 1Q12

-2.2% +6.9%

Net interest income *

NIM evolution *

* 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 (-0.1 M€ in 1Q12 and 5.3 M€ in 1Q13) is presented in net trading income

Net fees and commissions

Growth in net fees and commisions

(Million euros)

31.7 33.9

1Q12 1Q13

2.87% 2.86% 2.96% 3.09% 3.02%

0.19% 0.33%

0.21% 0.07% 0.09%

1Q12 2Q12 3Q12 4Q12 1Q13

2.4%

Loans

Deposits

2.5% 2.3% 2.4% 2.2%


39

Strict costs control and cost to income sustained improvement

Operating costs down by 3.4%

Other administrative costs (including

depreciation) decreased 4.6%, reflecting a strict

costs control

Staff costs down by 2.2% versus 1Q12

Cost to income ratio reduces to 57.1%, in the first

quarter of 2013

-5.6% -3.4%

61.8% 57.1%

- 4.6%

-2.2%

Operating costs Number of employees

Staff costs

Other administrative costs *

Cost to

income ratio

* Including depreciation


34.1 33.3

33.5 32.0

67.6 65.3

1Q12 1Q13

6,272 5,920

Mar 12 Mar 13

(Million euros)

40

247 286

Mar 12 Mar 13

+39.7%

37bp * 52bp * 104% 119%

2.5% 2.8%

* Impairment charges / average net loans for the period (in bps, annualized)

Reinforcement of provisioning

Credit Quality Impairment charges

Overdue loans >

90 days

Overdue loans

>90 days ratio

Overdue loans

>90 days

coverage ratio

Impairment charges increased 40% when compared to the same period of 2012

Overdue loans over 90 days ratio at 2.8%, in line with the previous quarter, maintaining a good mortgage credit

portfolio quality

Overdue loans over 90 days coverage at 104%

Impairment charges as % of

average net loans

(Million euros)

9.0

12.6

1Q12 1Q13


41

641 837

273

251 22

26 936

1,114

Mar 12 Mar 13

1,195

1,480

Mar 12 Mar 13

+23.9%

402% 436%

1.8% 1.6%

+19.0%

+20.2%

-8.2%

+30.6%

Customer funds Loans to customers (gross)

Companies

Consumer

Mortgage

Overdue loans

>90 days ratio

Overdue loans

>90 days

coverage ratio

Mozambique: strong volumes growth, loans with low delinquency level

(Million euros)

Excluded FX effect. €/Metical rates used : Income Statement 40,53333333; Balance Sheet 39,0800

42

20.7 23.6

1Q12 1Q13

50.7 51.4

1Q12 1Q13

+1.3% +14.3%

-1.7%


Net income

Results penalized by reference interest rates and by the expansion

plan

(Million euros)

20.6 20.3

1Q12 1Q13


Increase in volumes: customer funds grow 24% and

loans to customers increase 19%, keeping the

leadership position in the Mozambican market

Fees and commissions and net interest income

increase, despite lower reference interest rates

(MAIBOR12M decreased from 18.2% in 1Q12 to 15.0%

in 1Q13)

Net interest income penalized by public debt

portfolio (lower volumes and lower rates)

Operating costs increase 14% in line with the

expansion plan (+9 branches compared with Mar 12)

Positive macroeconomic outlook by the IMF for real

GDP: +8.4% in 2013 and +8.0% in 2014

43

34.6 28.6

1Q12 1Q13

-17.4%

+26.3%

+14.3%

142 151

Mar 12 Mar 13

2,437 2,426

Mar 12 Mar 13

-0.5% +6.3%

Strong fees and commissions growth and operating costs in line with

the expansion plan

Net interest income


Operating costs

Depreciation


Staff costs

Branches Employees

(Million euros)

7.9 10.0

1Q12 1Q13

10.0 11.7

8.8 9.6

1.9 2.3

20.7 23.6

1Q12 1Q13


44

497 540

Mar 12 Mar 13

843 839

Mar 12 Mar 13

Angola: growth in loans to customers

Customer funds Loans to customers (gross)

-0.5%

+8.8%

238% 177%

3.2% 2.7%

(Million euros)

Overdue loans

>90 days

coverage ratio

Overdue loans

>90 days ratio

Excluded FX effect. €/Kwanza rates used : Income Statement 127,53833333 ; Balance Sheet 122,9900

45

8.8

6.5

1Q12 1Q13

29.5 30.2

1Q12 1Q13

16.9 17.6

1Q12 1Q13

-26.7%

+2.5% +3.6%

Net income penalized by lower market interest rates and higher

level of provisions


Net income

(Million euros)


Loans to costumers increase 9%

Fees and commissions and net interest income increase, despite lower reference interest rates (LUIBOR12M decreased from 12.0% in 1Q12 to 10.3% in 1Q13)

Net interest income penalized by public debt portfolio (lower volumes and lower rates)

Higher level of provisions

Focus on network growth (+13 branches compared with Mar 12)

Positive macroeconomic outlook by the IMF for real GDP: +6.2% in 2013 and +7.3% in 2014

46

5.0 6.5

1Q12 1Q13

6.7 7.4

8.1 8.4

2.2 1.8

1Q12 1Q13

17.2 16.9

1Q12 1Q13

+3.6%

63 76

Mar 12 Mar 13

+10.4% +20.6%

-1.9%

932 1,029

Mar 12 Mar 13

+30.5%

Strong fees and commissions growth and operating costs growth in line

with expansion plan

Net interest income


Operating costs

Depreciation


Staff costs

Branches Employees

(Million euros)

16.9 17.6


47

Main Highlights

Group

• Greece

• Liquidity

• Capital

• Profitability

Portugal


Conclusions

Agenda

48

Strategic Plan conclusions and cycles

Reinforcement

of capital and

liquidity

position

(2012-13)

Comfortable capital ratios

Enhanced liquidity position

Provisions reinforcement

Restructuring Plan in Portugal

Recovery of profitability in Portugal

Sustained growth results, with

improved balance between domestic

and international operations

contributions

Creating

conditions for

growth and

profitability

(2014-15)

Sustained

growth

(2016-17)

Continuous business development in

Poland, Mozambique and Angola

Evolution in line with the strategic plan

STAGES Priorities Initiatives already implemented

Core tier I ratio reaches 12.1%

Loan to deposit ratio reaches 121%

(according to BoP criteria) and net

loans to BS customer funds ratio at

108%

Continuous reinforcement of

balance sheet impairment charges

(+21%)

Significant reduction in operating

costs in Portugal, following the

implementation of the

restructuring program

Net income shows an inversion in

the negative trajectory

Agreement for the sale of the

Greek operation

49

Appendixes

50

Detail of public debt portfolio

Total sovereign debt of 9.3 billion euros, of which 4.6 billion euros with maturity under 2 years

Sovereign Polish debt increases 88% and Portuguese debt increases 32%, whereas Greek debt decreases

from 108 millions euros in March 2012 to 31 millions euros in March 2013

Sovereign debt total maturity

<1 Year 37%

>1 Year e <2 Years 12%

>2 Year e <3 Years 26%

>3 Years 25%

Sovereign debt portfolio

(Million euros)

Mar 12 Mar 13 YoY

Portugal 4,456 5,886 32%

T-bills 1,229 2,177 77%

Bonds 3,227 3,709 15%

Poland 1,261 2,368 88%

Mozambique 329 210 -36%

Angola 354 316 -11%

Greece 108 31 -71%

Romania 87 94 8%

Others 292 346 18%

Total 6,887 9,251 34%

51

Detail of public debt portfolio

(Million euros)

Portugal Poland Mozambique Angola Greece Romania Ireland Others Total

Trading book 173 297 0 0 14 0 0 75 558

< 1 year 1 54 0 0 13 0 0 1 69

> 1 year and <2 years 1 31 0 0 0 0 0 0 33

> 2 year and <3 years 13 92 0 0 0 0 0 0 105

> 3 years 157 120 0 0 1 0 0 73 351

Banking book 5,713 2,071 210 316 17 94 203 69 8,692

< 1 year 1,684 1,016 174 184 0 75 203 14 3,350

> 1 year and <2 years 871 142 23 60 0 19 0 0 1,116

> 2 year and <3 years 2,021 230 2 51 0 0 0 5 2,309

> 3 years 1,137 683 10 20 17 0 0 50 1,918

Total 5,886 2,368 210 316 31 94 203 143 9,251

< 1 year 1,685 1,070 174 184 13 75 203 15 3,419

> 1 year and <2 years 872 174 23 60 0 19 0 0 1,149

> 2 year and <3 years 2,034 322 2 51 0 0 0 5 2,414

> 3 years 1,295 803 10 20 18 0 0 123 2,269

52

293 321

Mar 12 Mar 13

406 446

Mar 12 Mar 13

8.9 8.2

1Q12 1Q13

5.2

7.2

1Q12 1Q13

Loans to customers (gross)

Branches Employees

Customer Deposits

Romania: strong improvement in banking income due to the

maintainance of the cost containment policy and volumes growth

Net income

+9.7%

-80

Net income improvement due to the

increase in banking income and the

reduction in operating costs

Banking income driven by higher net

interest income of 44.9% and 14.7% in fees

and commissions, year on year

Decrease in operating costs as a result of

the cost containment policy and of the

number of employees reduction

Increase of both deposits and credit

volumes, maintaining a conservative risk

management criteria

+10.0%

Banking Income Operating costs

+39.7% -7.3%

(Million euros)

-3.3

-2.1

1Q12 1Q13

65 65

Mar 12 Mar 13

689 609

Mar 12 Mar 13

Excluded FX effect. €/RON rates used : Income Statement 4,38163333 ; Balance Sheet 4,4193

53

Financial statements

54

Consolidated Balance Sheet and Income Statement

31 March

2013

31

December

31 March

2012

Assets

Cash and deposits at central banks 2,720,085 3,580,546 1,883,922

Loans and advances to credit institutions

Repayable on demand 776,815 829,684 1,130,660

Other loans and advances 1,730,770 1,887,389 2,365,719

Loans and advances to customers 62,155,955 62,618,235 68,330,387

Financial assets held for trading 1,939,793 1,690,926 2,066,045

Financial assets available for sale 10,145,753 9,223,411 6,266,559

Assets with repurchase agreement 85,622 4,288 9,251

Hedging derivatives 173,535 186,032 471,523

Financial assets held to maturity 3,415,703 3,568,966 3,908,114

Investments in associated companies 524,976 516,980 386,442

Non current assets held for sale 1,308,406 1,284,126 1,096,777

Investment property 550,879 554,233 562,869

Property and equipment 620,922 626,398 608,427

Goodwill and intangible assets 255,545 259,054 249,317

Current tax assets 29,900 34,037 34,536

Deferred tax assets 1,809,746 1,755,411 1,540,229

Other assets 1,229,963 1,124,323 1,117,871

89,474,368 89,744,039 92,028,648

Liabilities

Amounts owed to credit institutions 13,944,952 15,265,760 18,754,271

Amounts owed to customers 51,873,398 49,389,866 49,526,288

Debt securities 11,884,885 13,548,263 14,560,815

Financial liabilities held for trading 1,256,315 1,393,194 1,265,779

Other financial liabilities at fair value

through profit and loss 479,856 329,267 315,768

Hedging derivatives 267,047 301,315 376,021

Provisions for liabilities and charges 273,485 253,328 252,832

Subordinated debt 4,364,859 4,298,773 1,160,119

Current income tax liabilities 9,633 15,588 13,015

Deferred income tax liabilities 3,019 2,868 1,249

Other liabilities 1,248,453 945,629 1,242,633

Total Liabilities 85,605,902 85,743,851 87,468,790

Equity

Share capital 3,500,000 3,500,000 6,065,000

Treasury stock (16,448) (14,212) (11,448)

Share premium 71,722 71,722 71,722

Preference shares 171,175 171,175 171,175

Other capital instruments 9,853 9,853 9,853

Fair value reserves 18,670 2,668 (292,284)

Reserves and retained earnings (375,930) 850,021 (2,063,529)

Net income for the period attributable to Shareholders (151,962) (1,219,053) 40,759

Total Equity attributable to Shareholders of the Bank 3,227,080 3,372,174 3,991,248

Non-controlling interests 641,386 628,014 568,610

Total Equity 3,868,466 4,000,188 4,559,858

89,474,368 89,744,039 92,028,648

(Thousands of Euros)

31 March

2013

31 March

2012

Interest and similar income 730,463 965,327

Interest expense and similar charges (547,464) (655,943)

Net interest income 182,999 309,384

Dividends from equity instruments 38 295

Net fees and commission income 163,099 165,123

Net gains / losses arising from trading and

hedging activities 33,890 167,771

Net gains / losses arising from available for

sale financial assets 41,105 6,289

Net gains / (losses) arising from financial

assets held to maturity (278) (22)

Other operating income (11,681) (9,631)

409,172 639,209

Other net income from non banking activity 4,809 4,719

Total operating income 413,981 643,928

Staff costs 169,980 194,325

Other administrative costs 117,639 132,353

Depreciation 17,387 19,503

Operating costs 305,006 346,181

Operating net income before provisions and impairments 108,975 297,747

Loans impairment (188,382) (152,297)

Other financial assets impairment (5,828) (816)

Other assets impairment (34,711) (36,955)

Other provisions (10,238) (8,026)

Operating net income (130,184) 99,653

Share of profit of associates under the equity method 14,094 12,851

Gains / (losses) from the sale of subsidiaries and other assets (1,448) (8,058)

Net income before income tax (117,538) 104,446

Income tax

Current (15,190) (20,997)

Deferred 43,186 (12,989)

Income after income tax from continuing operations (89,542) 70,460

Income arising from discontinued operations (42,285) (11,160)

Net income after income tax (131,827) 59,300

Attributable to:

Shareholders of the Bank (151,962) 40,759

Non-controlling interests 20,135 18,541

Net income for the period (131,827) 59,300

Earnings per share (in euros)

Basic (0.03) 0.02

Diluted (0.03) 0.02

(Thousands of Euros)

55

Δ %

13 / 12

Net interest income 309.4 272.7 176.4 252.2 183.0 309.4 183.0 -40.9%

Dividends from equity instruments 0.3 3.3 0.2 0.0 0.0 0.3 0.0 -87.1%

Net fees and commission income 165.1 169.7 163.6 167.7 163.1 165.1 163.1 -1.2%

Other operating income -13.0 -13.2 -10.2 -14.4 -8.3 -13.0 -8.3 35.8%

Net trading income 174.0 133.4 33.2 102.5 74.7 174.0 74.7 -57.1%

Equity accounted earnings 12.9 17.4 12.7 12.7 14.1 12.9 14.1 9.7%

Banking income 648.7 583.2 375.9 520.7 426.6 648.7 426.6 -34.2%

Staff costs 194.3 130.7 189.4 252.4 170.0 194.3 170.0 -12.5%

Other administrative costs 132.4 130.6 121.2 135.4 117.6 132.4 117.6 -11.1%

Depreciation 19.5 18.8 18.4 14.0 17.4 19.5 17.4 -10.8%

Operating costs 346.2 280.2 329.1 401.8 305.0 346.2 305.0 -11.9%

Operating net income bef. imp. 302.5 303.1 46.9 118.9 121.6 302.5 121.6 -59.8%

Loans impairment (net of recoveries) 152.3 314.2 226.6 288.7 188.4 152.3 188.4 23.7%

Other impairm. and provisions 45.8 61.2 76.8 166.5 50.8 45.8 50.8 10.9%

Net income before income tax 104.4 -72.4 -256.5 -336.3 -117.5 104.4 -117.5 <-100%

Income tax 34.0 -13.8 -50.0 -101.0 -28.0 34.0 -28.0 <-100%

Non-controlling interests 18.5 20.9 16.1 26.2 20.1 18.5 20.1 8.6%

Net income (before disc. oper.) 51.9 -79.5 -222.7 -261.5 -109.7 51.9 -109.7 <-100%

Net income arising from discont. operations -11.2 -505.5 -29.4 -161.3 -42.3 -11.2 -42.3 <-100%

Net income 40.8 -585.0 -252.0 -422.7 -152.0 40.8 -152.0 <-100%

Year-to-dateQuarterly

1Q 12 Mar 12 Mar 131Q 134Q 123Q 122Q 12

(Million euros )

Consolidated income statement Quarterly evolution

56

Consolidated income statement (Portugal and International operations)

For the 3 months period ended 31st of March, 2012 and 2013

(Million euros )

M ar 12 M ar 13 Δ % M ar 12 M ar 13 Δ % M ar 12 M ar 13 Δ % M ar 12 M ar 13 Δ % M ar 12 M ar 13 Δ % M ar 12 M ar 13 Δ % M ar 12 M ar 13 Δ %

Interest income 965 730 -24.3% 689 484 -29.7% 277 246 -10.9% 183 170 -6.6% 57 42 -26.5% 25 22 -11.1% 12 12 -1.9%

Interest expense 656 547 -16.5% 512 421 -17.8% 144 127 -12.0% 112 107 -4.6% 19 14 -28.0% 8 5 -30.7% 6 2 -74.9%

N et interest inco me 309 183 -40.9% 177 64 -64.1% 132 119 -9.8% 71 64 -9.8% 39 29 -25.8% 17 17 -2.7% 6 10 78.5%

Dividends from equity instruments 0 0 -87.1% 0 0 -92.7% 0 0 >100% 0 0 -100.0% 0 0 -- 0 0 -- 0 0 100.0%

Intermediat io n margin 310 183 -40.9% 177 64 -64.2% 132 120 -9.7% 71 64 -9.8% 39 29 -25.7% 17 17 -2.7% 6 10 78.5%

Net fees and commission income 165 163 -1.2% 115 107 -6.7% 51 56 11.2% 32 34 7.0% 9 10 13.4% 5 7 29.5% 5 6 15.0%

Other operating income -13 -8 35.8% -14 -16 -14.9% 1 8 >100% -1 -1 35.7% 2 8 >100% 0 0 <-100% 0 0 >100%

B asic inco me 462 338 -26.9% 278 154 -44.4% 184 183 -0.3% 101 97 -4.2% 50 47 -5.8% 23 23 3.1% 10 16 56.7%

Net trading income 174 75 -57.1% 151 46 -69.9% 23 29 29.0% 7 16 >100% 7 5 -32.0% 7 7 -2.6% 1 1 1.7%

Equity accounted earnings 13 14 9.7% 12 14 16.4% 1 0 -100.0% 1 0 -100.0% 0 0 -- 0 0 -- 0 0 100.0%

B anking inco me 649 427 -34.2% 441 214 -51.5% 207 213 2.5% 109 113 3.6% 56 51 -9.0% 30 30 1.8% 12 18 50.4%

Staff costs 194 170 -12.5% 135 111 -18.1% 59 59 0.3% 34 33 -2.2% 11 12 5.5% 7 7 9.8% 7 7 -4.8%

Other administrative costs 132 118 -11.1% 79 66 -16.1% 54 51 -3.8% 29 28 -5.2% 10 10 -1.8% 8 8 2.8% 6 6 -8.9%

Depreciation 20 17 -10.8% 11 9 -16.1% 9 8 -4.1% 3 3 2.4% 2 2 8.4% 2 2 -18.5% 1 1 -23.5%

Operat ing co sts 346 305 -11.9% 225 186 -17.3% 121 119 -1.8% 67 65 -3.3% 23 24 2.6% 17 18 2.8% 14 13 -7.7%

Operat ing net inco me bef . imp. 303 122 -59.8% 217 28 -87.0% 86 93 8.7% 43 49 14.3% 33 28 -17.0% 13 13 0.3% -3 4 >100%

Loans impairment (net of recoveries) 152 188 23.7% 133 170 27.4% 19 19 -1.9% 11 10 -9.8% 6 3 -39.0% 2 4 >100% 1 1 89.0%

Other impairm. and provisions 46 51 10.9% 48 48 0.0% -2 3 >100% -2 3 >100% 0 0 43.0% 0 0 -2.2% 0 0 >100%

N et inco me befo re inco me tax 104 -118 <-100% 36 -189 <-100% 69 72 4.2% 34 36 7.4% 28 25 -13.0% 10 8 -21.3% -3 3 >100%

Income tax 34 -28 <-100% 21 -41 <-100% 13 13 0.3% 7 7 1.7% 5 4 -15.6% 1 2 17.9% 0 0 >100%

Non-contro lling interests 19 20 8.6% -3 0 >100% 21 20 -6.0% 0 0 -- 0 0 -88.9% 0 0 -- 21 20 -5.0%

N et inco me (befo re disc. o per.) 52 -110 <-100% 18 -148 <-100% 34 38 12.0% 26 29 9.0% 23 20 -11.7% 9 6 -27.3% -24 -17 28.5%

Net income arising from discont. operations -11 -42 <-100%

N et inco me 41 -152 <-100%

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) M illennium A ngo la Other int . o perat io ns

57

Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the

Commercial Registry of Oporto, with the single commercial and tax identification number 501 525 882 and the share capital of EUR 3,500,000,000

Investor Relations Division

Rui Coimbra, Head of Investor Relations

Investor Relations Reporting and Ratings

João Godinho Duarte Luís Morais

Paula Dantas Henriques Lina Fernandes

Tl: +351 21 1131 084 Tl: + 351 21 1131 337

Email: [email protected]

Documents

DISCLAIMER - Millenniumbcpind.millenniumbcp.pt/.../EarningsPresentation_1T13.pdf · Commercial gap improvement: reduction by 8.5 billion euros from March 2012, with loan to deposits