CGD | Investor journal n01_2016

CGD INVESTOR’S JOURNAL#01_2016

2015 Full Year Overview01

2015 Full Year Report2

Head OfficeAvenida João XXI, 631000-300 LisboaTel: (+351) 217 953 000Fax: (+351) 217 905 050

[email protected]

EXECUTIVE BOARDJosé Agostinho Martins de MatosCEO

Nuno Maria Pinto de Magalhães Fernandes ThomazExecutive Vice-President

João Nuno de Oliveira Jorge PalmaExecutive Board Member, CFO

José Pedro Cabral dos SantosExecutive Board Member

Ana Cristina de Sousa LealExecutive Board Member, CRO

Maria João Borges Carioca RodriguesExecutive Board Member

CUSTOMER-CENTERED BUSINESS.

SUPPORT OF PORTUGUESE ECONOMIC ACTIVITY.

PROMOTION OF HUMAN TALENT AND TEAMWORK.

HIGHEST ETHICAL STANDARDS.

INNOVATION.

SOCIAL RESPONSIBILITY, GLOBAL SUSTAINABILITY AND INVESTMENT IN THE FUTURE.

CGD INVESTOR’S JOURNAL 3

2015 was an important year for CGD, as we were able to reach a near zero net income before taxes and minority interests. This is a strong development compared to previous years, which, together with efficiency initiatives already in place, will allow us, in the future, to contribute positively to an even more robust balance sheet.

Caixa has reinforced its franchise in the home market maintaining the leadership both in customer resources and in lending activities, while benefiting from its cross-border operations, a seamless network of banks, branches and representative offices across the globe.

As the growth in the Portuguese economy accelerated, Caixa took advantage from the continued confidence from its clients, both individuals and corporates. Deposits continued to grow notwithstanding the repricing, driven by ever low interest rates, and the growth of new production in home loans in 2015 was very strong.

2015: SOLID DEVELOPMENTS

Positive contribution from international operations

Geographical diversification bears its fruits, as Caixa Group spans over 23 countries and 4 continents, benefiting from an exposure to fast-growing economies. Loans and advances to customers have also increased in the international area, driven namely by the support to corporates operating across-borders, either based in Portugal or in the jurisdictions where Caixa Group is present. The contribution of international operations to net operating income has been very positive.

Caixa’s consolidated accounts show an increase in net interest margin and total operating income and its liquidity and solvency indicators remain stable, above mandatory requirements, reflecting the equilibrium of Caixa’s current position and underpinning its sustainability and soundness. Caixa is also the only bank present in every Portuguese municipality.

The only bank present in every Portuguese municipality.

EDITORIAL


BUSINESS PERFORMANCE FY 2015

Income from financial operations

Net Interest Income

M€

M€

Source: 2015 Consolidated Accounts


CGD achieved net interest income of €1,187.9 million in 2015, up 14.4% over 2014, on the back of a decrease in funding costs which more than offset the reduction in interest on lending activities.

Income from financial operations, in 2015, totalled €350.0 million against €201.7 million in the preceding year, benefiting from the good performance of the government debt markets.

Income from equity instrumentsNet interest income

DEC 2014

350.0

201.7

DEC 2015

73.6%

DEC 2014

1,038.3 1,187.9

74.3

1,113.6988.7

49.6

DEC 2015

14.4%

TOTAL


BUSINESS PERFORMANCE

Total Operating Income M€Source: 2015 Consolidated Accounts

Net Operating Income Before ImpairmentsSource: 2015 Consolidated Accounts

M€

Income from financial operationsCommissions (net)Net interest incomeOther operating income (NOT ON SCALE)

Investment bankingInternational activityDomestic commercial bankingOther (NOT ON SCALE)

Net Operating Income Before Impairments was up 58.2% to €649.7 million owing to contributions both from CGD’s domestic activity and the Group’s international operations.

Total operating income was up 17.5% over last year, to €2,042.0 million.

410.8 649.7TOTAL

19.1

-0.5

34.6

-14.5DEC 2014 DEC 2015

390.4

334.3

240.6

56.4

58.2%

-7.4

201.7

-16.5DEC 2014 DEC 2015

511.5515.0

1,187.91,038.3

350.0

TOTAL

1,738.4 2,042.0

17.5%


Cost to IncomeSource: 2015 Consolidated Accounts

Consolidated Net IncomeSource: 2015 Consolidated Accounts

M€

DEC 2014

DEC 2015

Benefiting from the growth of total operating income, the cost-to-income indicator was down to 66.6%.

Consolidated net income of €-171.5 million, an improvement of €454.7 million over 2014 taking adjustments into account.

(a) For comparability purposes, the amounts of net income and net income before tax and non-controlling interests for 2014 have been adjusted to reflect the appropriation of 15% of the net income of Fidelidade and 20% of Cares and Multicare, which correspond to the equity percentages presently held by CGD Group, and the exclusion of the capital gains recognised on the disposal of the referred to insurance companies that occurred in that period.

(b) Value excluding the effects of the provisioning of the ‘Plano Horizonte’ (65M€). This program defines a number of conditions allowing employes to apply for Pre or Voluntary Retirements.

ADJUSTED (a) ADJUSTED (b)

-626.1

-106.5

DEC 2014 DEC 2015

66.6%75.5%

-348.0-171.5

BUSINESS PERFORMANCE


ECB FundsSource: 2015 Consolidated Accounts

CGD Group continued to reduce its borrowings from the Eurosystem to an end of year total of €2,766 million (2.7% of its total assets), down €344 million over 2014.

M€

Balance Sheet Funding Structure

Robust funding structure reflecting a dominant retail contribution (deposits and other retail instruments), due to a large and stable Customer base.Source: 2015 Consolidated Accounts

INSTITUTIONAL INVESTORS AND PORTUGUESE STATE + COCOS

CENTRAL BANKS + CI RESOURCES

OTHER LIABILITIES

DEC 2015DEC 2013 DEC 2014DEC 2012

79%

RETAIL

8%7%6%

8,415

6,335

3,110 2,766

FUNDING, LIQUIDITY AND CAPITAL FY 2015


Liquidity Coverage RatioSource: 2015 Consolidated Accounts

Capital RatiosSource: 2015 Consolidated Accounts

The LCR indicator at 146.4% was significantly above the minimum requirements and indicative of CGD’s comfortable liquidity position.

The CET 1 phased-in and fully implemented ratios, calculated under CRD IV/CRR rules, at 10.8% and 10.0% in December 2015 respectively, confirmed a balanced CGD’s current capital position.

DEC 2014DEC 2015

DEC 2014

COMMON EQUITYTIER 1(PHASED-IN)

COMMON EQUITYTIER 1(FULLY IMPLEMENTED)

TOTAL(PHASED-IN)

TIER 1(PHASED-IN)

DEC 2015

146.4%

103.6%

11.1% 10.8% 11.1%12.9%

10.2%10.8%12.2%

10.0%

FUNDING, LIQUIDITY AND CAPITAL


DEC 2014DEC 2015

Strong contribution to net operating income on the back of sustained growth from international operations.

International Area Top 4 Contributions to Net Income

M€


International Area Contributionsto Net Operating Income before Impairments

M€


DEC 2014 DEC 2015

390.4

334.3

INTERNATIONAL ACTIVITY FY 2015

BNU MACAU

FRANCE BRANCH

BCG ANGOLABCG SPAIN

58.8

41.943.2

-41.1

33.9

18.125.320.1

16.8%


FRANCE

Results - France BranchSource: 2015 Consolidated Accounts

NET INCOME NET OPERATING INCOME BEFORE IMPAIRMENTS

LOANS AND ADVANCES TO CUSTOMERS (NET)

CUSTOMER DEPOSITS

M€

DEC 2014DEC 2015

51.9

2,455

3,727

-41.1

67.8

2,441

4,029

43.2

CHINA/MACAO



CUSTOMER DEPOSITS

Results - BNU MacauSource: 2015 Consolidated Accounts

M€

DEC 2014DEC 2015

4,300

55.7

2,272

41.9

5,837

75.0

3,081

58.8

INTERNATIONAL ACTIVITY


ANGOLA

Results - BCG AngolaSource: 2015 Consolidated Accounts



CUSTOMER DEPOSITS

M€

DEC 2014DEC 2015

85.2

1,442

18.1

506

88.1

1,489

33.9

527

SPAIN

Results - BCG SpainSource: 2015 Consolidated Accounts



CUSTOMER DEPOSITS

M€

DEC 2014DEC 2015

3,145

46.4

2,926

20.1

2,513

54.5

2,324

25.3



CGD’S INTERNATIONAL NETWORKGlobal Reach

Caixa operates across borders through an extensive network of Banks, Branches and Representative Offices.

The international network links the developed markets in Europe and North America with regions of the globe witnessing the most rapid development, as shown by GDP expected growth trends for 2013-2020, according to the IMF – developing Asia (6.5%), Sub-Saharan Africa (4.8%) and Latin America and Caribbean (1.9%).

GDP GROWTH2013-2020 Annual % Average Rate

LATIN AMERICAAND CARIBBEAN

NORTH AMERICA

SUB-SAHARAN AFRICA

DEVELOPING ASIA

Source: IMF statistics, October 2015


Contribution to International Loans and Advances to Customers


Contribution to InternationalCustomer Deposits

(*) Portuguese speaking African Countries

Other France Spain PALOP* Asia7% 14% 15% 24% 40%

Other PALOP* Asia France Spain9% 16% 21% 26% 28%

6.5%2.2%1.9%1.8% 4.8%EURO AREA + UK

LATIN AMERICAAND

CARIBBEAN

NORTH AMERICA

CAYMAN ISLANDS

USA

VENEZUELA

CANADA

BRAZIL



Large network connecting mature and fast growing markets. Extensive network of Banks, Branches and Representative Offices.

GDP GROWTH

764

Number of Branches

INTERNATIONAL NETWORK

ALGERIA

SUB-SAHARAN AFRICA

DEVELOPING ASIA

EURO AREA + UK

SOUTH AFRICA

ANGOLA

CAPE VERDE

UK

SPAIN

FRANCE

PORTUGAL

GERMANY

BELGIUM

LUXEMBOURG

SWITZERLAND

MOZAMBIQUE INDIA

EAST TIMOR

CHINA

Source: www.cgd.pt

20 1422 191 40 44 141

0.9%6.6% 5.0%1.1%2.4% 8.9% 4.6% 3.3% 2.0%2.3%1.3% 1.7%3.8%

2 48 112

PORTUGALCHINA EASTTIMOR

BRAZILUSA MOZAMBIQUE ANGOLA CAPE VERDE

SOUTHAFRICA

UNITED KINGDOM

LUXEMBOURG FRANCE SPAIN



4thQ 2015 TIMELINE CGD ISSUES / SECONDARY MARKET

CGD Issues (% yields)Source: Thomson Reuters

€1BN 7 YEAR COVERED BONDS 2022

€750M 5 YEAR COVERED BONDS 2018€750M 5 YEAR COVERED BONDS 2019

4thQ EventsSource: www.cgd.pt


PRIMARY MARKETCGD DEBT €1bn / 7 YEAR COVERED BONDS

ISSUER Caixa Geral de Depósitos SA

RATINGS Moody´s: Baa2; Fitch: BBB; DBRS: A

FORMAT 7 Year Covered Bonds 2022

PRICING DATE 20-Jan-2015

SETTLEMENT 27-Jan-2015

MATURITY 27-Jan-2022

ISSUE SIZE €1bn

COUPON 1%

REOFFER YIELD 1.099%

REOFFER PRICE 99.336%

BOOKRUNNERS Caixa BI, LBBW, Natixis, Nomura, Santander.

Breakdown by Type of InvestorsSource: www.cgd.pt

Geographic BreakdownSource: www.cgd.pt

€7.0 bn

COVERED BONDS TOTAL OUTSTANDING


MARKET SHARES (AS OF NOVEMBER 2015)

32%

Individuals - Deposits

11%

Corporates - Deposits

Total - Deposits

28%

Corporates - Loans and Advances

18%

Individuals - Loans and Advances

23%

Total - Loans and Advances

Source: Associação Portuguesa de Bancos ‘Statistics and CGD’s calculations.

22%

Leading Customer deposits and loans and advances market share


CGD PRIZES AND DISTINCTIONS These prizes are the sole responsibility of the awarding entities.

CDLI - Carbon Disclosure Leadership Index.[100]

CPLI - Carbon Performance Leadership Index,LEVEL B [Iberia 125 Climate Change Report 2014]

Green Leadership Award, 2014.Sustainability Strategy.

Bank with environmental certification, 2014. [APCER] [ISO 14001]

Silver Award - Web Campaign, 2015. Brand Excellence Award, 2014.

Best Ethical Practices Awards, 2014.Social Responsibility.

Banking - Most Valuable Portuguese Brand, 2015.

Marketeer Awards, 2015.Banking. Marketing, Advertising, Communication.

Portugal Best Bank, 2014.Digital Marketing Innovation Award. Summer Festivals Caixa, 2014.

Marktest Reputation Index, 2014.1st - Banking Category.

Leading Customer deposits and loans and advances market share

BRAND VALUE

$m503BRAND RATING

AA+

2016 CGD BrandSource: The Banker / Brand Finance

Prime Company, 2014. [Oekom Ranking]


11% paper stationaries reduction since 2013.

All paper sources are certified and from sustainable origins.

CGD INVESTMENT IN THE FUTURE ENVIRONMENTAL MANAGEMENT SYSTEM

PAPER CONSUMPTION REDUCTION

Carbon Disclosure Project (CDP) Only company in the financial sector with maximum score (100 points) in the Carbon Disclosure Leadership Index (CDLI) in the “Iberia 125 Climate Report 2014”, and B in the band performance.

Environmental Management System (EMS)CGD obtained environmental certification, according to ISO 14001.

14% electricity power usage per employee reduction since 2006.

28% electric power consumption reduction since 2006, equivalent to 7,000 homes.

ELECTRICITY CONSUMPTION REDUCTION


27% CO2 reduction per employee since 2006 95% of produced waste is recycled

WATER CONSUMPTION REDUCTION11% water consumption reduction since 2013, equivalent to 72,500 ten minute showers.

CARBON FOOTPRINT REDUCTION

ENVIRONMENTAL PERFORMANCE

2012 2013 2014 Fuel consumption of buildings (GJ) 1,653 1,559 1,726

Electricity (GJ) 299,624 291,643 267,555

Total GHG emissions (tCO2e) 32,598 34,334 34,128

Water consumption (m3) 175,877 164,287 146,880

Photocopy paper consumption (t) 452 451 431

Waste production (t) 1007 771 657Cost of energy and water per employee (EUR thousand/FTE) 1.77 1.68 1.72

Source: CGD - 2015 Sustainability Report

RECYCLING


(+351) 217 953 000Fax (+351) 217 953 479

www.cgd.pt/Investor-Relations

INVESTOR RELATIONS OFFICEAv. João XXI, 63, 8º piso1000-300 LisboaPORTUGAL

[email protected]

CONTACT US


FURTHER READING

01_2014 02_2014 03_2014 04_2014

01_2015 02_2015 03_2015 04_2015

INT. NETWORK SPECIAL EDITION

CGD INVESTOR´S FACTSHEET

2014 ANNUALREPORT

2015ANNUALREPORT

LATEST ISSUES


This document is only provided for infor-mation purposes and does not constitute, nor must it be interpreted as, an offer to sell or exchange or acquire, or an invita-tion for offers to buy securities issued by any of the aforementioned companies in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer or sale. Any decision to buy or invest in securities in relation to a specific issue must be made solely and exclusively on the basis of the information set out in the pertinent prospectus filed by the company in relation to such specific issue. Nobody who becomes aware of the information contained in this report must regard it as definitive, because it is subject to changes and modifications. The Company makes no representation or warranty, express or implied, as to the accuracy or complete-ness of the information containeherein.

This document contains or may contain forward looking statements regarding intentions, expectations or projections of Caixa Geral de Depósitos or of its mana-gement on the date thereof that refer to miscellaneous aspects, including pro-jections about the future earnings of the business and involve significant elements of subjective judgment and analysis that may or may not be correct. The state-ments contained herein are based on our current projections, although the said earnings may be substantially modified in the future by certain risks, uncertainty and others factors relevant that may cause the results or final decisions to differ from such intentions, projections or estimates. These factors include, without limitation, (1) the market situation, macroeconomic factors, regulatory, political or government guide-lines, (2) domestic and international stock

DISCLAIMER

market movements, exchange rates and interest rates, (3) competitive pressures, (4) technological changes, (5) alterations in the financial situation, creditworthiness or solvency of our customers, debtors or counterparts. These factors could condi-tion and result in actual events differing from the information and intentions stated, projected or forecast in this document and other past or future documents. Caixa Geral de Depósitos does not undertake to publicly revise the contents of this or any other document, either if the events are not exactly as described herein, or if such events lead to changes in the stated stra-tegies and intentions. The contents of this statement must be taken into account by any persons or entities that may have to make decisions or prepare or disseminate opinions about securities issued by Caixa Geral de Depósitos and, in particular, by the analysts who handle this document and any recipient thereof should conduct its own independent analysis of the Com-pany and the data contained or referred to herein. This document may contain sum-marised information or information that has not been audited, and its recipients are invited to consult the documentation and public information filed by Caixa Geral de Depósitos with stock market supervisory bodies, in particular, the prospectuses and periodical information filed with the Portu-guese Securities Exchange Commission (CMVM).

Unless otherwise indicated all figures were disclosed in latest quarter consolidated operations (unconsolidated accounts).

Distribution of this document in other juris-dictions may be prohibited, and recipients into whose possession this document comes shall be solely responsible for in-forming themselves about, and observing any such restrictions. By accepting this document you agree to be bound by the foregoing restrictions.

WE ARE CGD.


CGD INVESTOR’S JOURNAL#04_october 2014

PRESENCE IN

PORTUGAL | UNITED KINGDOM | SPAIN | LUXEMBOURG | FRANCE | SWITZERLAND | GERMANY | BELGIUM

ALGERIA | ANGOLA | CAPE VERDE | S. TOMÉ AND PRÍNCIPE | MOZAMBIQUE | SOUTH AFRICA

UNITED STATES OF AMERICA | CANADA | CAYMAN ISLANDS | BRAZIL | MEXICO | VENEZUELA

CHINA | INDIA | EAST TIMOR

Presentations & Public Speaking

CGD | Investor journal n01_2016