Standard and Poor's Rating

BANCO COMERCIAL PORTUGUES SA 30 September 1999 Standard & Poor's assigns A+ rating to Seguros & Pensoes Lisbon, September 30, 1999: Banco Comercial Portugues Group (BCP) announced that Standard & Poor's rating agency has assigned a 'A+' long-term counterparty credit and insurer financial strength rating to the following entities of Seguros & Pensoes group: Bonanca Gest, SGPS, BPA Seguros Gest, SGPS and Ocidental Seguros Gest, SGPS. According to the rating agency, it has issued the current rating based 'on the group's extremely strong capitalisation, very strong business position and strong operating performance'. At the same time, the rating was placed on CreditWatch with developing implications in response to BCP's bid for Companhia do Seguros Mundial-Confianca. Seguros & Pensoes, the holding company for the insurance operations of the BCP Group, operates through four leading brand names (Ocidental, Bonanca, Atlantico Seguros and Seguro Directo) and is the Portuguese insurance market leader, with an overall share of 19.5% of total premia as of June 30, 1999. In its report, Standard & Poor's considers a major rating factor to be its 'extremely strong capitalisation' as 'consolidated capital available was 1.87 times (x) the capital required on a risk-adjusted basis at year-end 1998 based on Standard & Poor's capital model'. 'Seguros e Pensoes is a multi-brand, multi-segmented (company) with an excellent distribution network, and very high quality customer service. In addition, Seguros e Pensoes is represented in the major European markets via Eureko' comments the agency, which added 'Following the take-over of Atlantico by BCP, the management team embarked the group in a major strategic reorganisation aiming to create the top ranked insurance group in Portugal. Management is committed to increasing synergies and efficiency among the group's different brands for which it has created common service platforms (Auto Gere, Medis Saude and Medis Acidentes)'. Seguros e Pensoes has shown 'strong operating performance' with a 4-year average Return on Revenue of 4.3%, Return on Assets at 1.6% and 11.7% return on book equity. Consolidated pre-tax operating income improved to 12.1 billion Escudos in 1998 from 7.9 billion Escudos in 1997 despite a very competitive market environment. The agency ends its report 'While Seguros e Pensoes is the biggest insurance group in Portugal, market to which the group is totally committed and with great business potential, it is significantly smaller than the average European insurer (....) However, the group's relationship with Eureko could be a competitive advantage for the development of a European franchise if needed'. In addition, in what concerns the ratings' outlook, Standard & Poor's states that 'Seguros & Pensoes' capital base will remain extremely strong, at a level consistent with a triple-'A' rating.'