Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — Q1 2023 Earnings Presentation
60 slides from Banco Comercial Portugues's earnings presentation, 2023
Slide 1: Earnings Presentation Q1 2023
BANCO COMERCIAL PORTUGUES Earnings Presentation Q1 2023 Millennium Bcp
Slide 2: Disclaimer
Disclaimer l 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, as amended. l The figures present
Slide 3: Agenda
AGENDA 3
Slide 4: Highlights
01 Highlights 4
Slide 5: Highlights: A Bank prepared for the future
Highlights: A Bank prepared for the future ▪ Net income of 215 million, which compares with 112.9 million in Q1’22 despite adverse effects related with Bank Millennium ➢ Increase of 30.7% in Group’s core income to 860 million and strict management of operating costs which grew 5.3% compared with Q1’
Slide 6: Customer base growth
Customer base growth Based on the quality of the Teams and distinctive digital skills ‘000 Customers Group Customer Active 6,215 6,511 recognition +576 4,206 As % of active 3,630 +16% Customers 65% Mobile Mar 22 Mar 23 +437 Digital 4,410 4.847 74% +10% Portugal Active 2,555 2,649 +211 1,219 1,430 As
Slide 7: Our capabilities in digital are widely recognised and recommended
A. Our capabilities in digital are widely recognised and recommended App Millennium Digital Channels Satisfaction leads ratings #1 NPS1 Clientes Digitais 2018 – 2023 (1T), 5 largest Banks “Melhor Banco Digital” Unaided reply by Customers2, 1T 2023 4.8 4.7 38.9 38.9 29.6 28.9 35.0 28.8 40.2 38.4 37.8
Slide 8: Innovation focused on Customer needs translates into accelerated growth in Mobile
Innovation focused on Customer needs translates into accelerated growth in Mobile usage and sales Strong mobile growth Y/Y (Number of operations, Jan-Mar 2023 vs Jan–Mar 2022) +32% +77% P2P +18% National +17% Payments . Transactions Transfers Transfers +32% +31% +12% +34% Sales Cards Personal loans
Slide 9: Net income of 215 million in the 1st quarter of 2023
Net income of 215 million in the 1st quarter of 2023 (Million euros) Q1'22 Q1'23 YoY Net interest income 465.1 664.6 +42.9% Commissions 192.8 195.4 +1.3% Core income 657.9 860.0 +30.7% Operating costs -255.0 -268.5 +5.3% Core operating profit 402.9 591.4 +46.8% 1 Other income 43.6 139.0 +218.7% Of w
Slide 10: Group: Profitability
02 Group Profitability 10
Slide 11: Net interest income
Net interest income Net interest income Portugal (Consolidated, million euros) (Million euros) 1.41% 2.44% Net interest 2.19% 3.25% margin +60.5% 339.9 +42.9% 664.6 211.8 465.1 Q1'22 Q1'23 International operations (Million euros) 4.13% 4.98% +28.2% 324.7 253.3 Q1'22 Q1'23 Q1'22 Q1'23 11
Slide 12: Fees and commissions
Fees and commissions Fees and commissions Portugal (Consolidated, million euros) (Million euros) +3.8% +1.3% 136.5 141.7 192.8 195.4 21.4 20.7 Market-related 25.0 fees and 27.6 commissions 115.0 121.0 Q1'22 Q1'23 International operations (Million euros) Banking fees 165.3 170.4 -4.7% and commissions
Slide 13: Other income
Other income Other income Portugal (Consolidated, million euros) (Million euros) Total 43.6 139.0 76.3 24.7 10.8 16.2 49.3 12.9 1.7 10.2 Q1'22 Q1'23 Sale of Millennium Equity earnings + 127.0 Financial Services dividends 17.1 stake (80%) 3 Net trading income1 43.4 13.8 International operations 13.8
Slide 14: Operating costs
Operating costs Operating costs Portugal (Consolidated, million euros) (Million euros) Cost to income 34% 29% Cost to income 36% 31%* +2.3% 143.2 146.4 +5.3% 268.5 255.0 33.9 Depreciation 34.6 Other 90.3 Q1'22 Q1'23 82.7 administrative costs International operations (Million euros) Cost to income 40
Slide 15: Cost of risk and provisions
Cost of risk and provisions Portugal Impairment and provision charges (Million euros) (Consolidated, million euros) Cost of risk 68bp 53bp -18.0% Cost of risk 62bp 56bp 124.7 102.2 56.2 +25.3% 49.2 318.2 68.5 53.0 Adjustment to provisioning model for l 254.0 71.6 CHF mortgage legal risk Q1'22 Q1'23
Slide 16: Relevant reduction of NPEs
Relevant reduction of NPEs Credit quality Portugal (Consolidated, billion euros) (Billion euros) -509 million -82 million in 1.79 -28.5% Q1’23 -506 millions 1.28 -18.9% NPE 2.68 2.17 Other 1.51 1.44 Mar 22 Mar 23 -438 millions NPL>90d 1.17 NPE loans ratio 4.4% 3.2% -37.5% 0.73 NPE ratio (EBA) 2.9% 2
Slide 17: Group: Business activity
02 Group Business activity 17
Slide 18: Customer funds
Customer funds Total Customers Funds* Total Customers Funds* Portugal (Billion euros) (Consolidated, billion euros) +0.8% +0.5% 66.6 67.0 91.4 92.1 16.2 14.2 1.5 1.4 15.6 16.4 19.5 Off-BS funds 17.9 +5.1% 1.4 32.6 32.0 Other BS funds 1.6 Mar 22 Mar 23 Term deposits 22.4 28.2 Total Customers Funds* i
Slide 19: Loan portfolio
Loan portfolio Loans to Customers (gross) Portugal (Consolidated, billion euros) (Billion euros) -0.38 billion NPE: -18.9% (-0.51 billion) -0.9% 40.32 +0.13 39.94 -2.0% -0.51 58.5 57.3 Mortgage 28.2 27.7 Mar 22 NPE Performing Mar 23 International operations Personal and (Billion euros) -0,80 billion
Slide 20: Group: Capital and liquidity
02 Group Capital and liquidity 20
Slide 21: Capital ratios suited to the Bank's business model
Capital ratios suited to the Bank`s business model Common equity tier 1 (CET1) (Fully implemented) Fully implemented vs CET1mandatory requirement • CET1 ratio stood at 13.6% and total capital +4.2pp 13.6% ratio at 18%, representing an increase of 11.5% 205bp and 245bp compared with the same +7.7pp 9
Slide 22: Stronger capital position
Stronger capital position Leverage ratio (Fully implemented, latest available data) 6.4% 6.2% 5.5% 5.1% 3.8% Leverage ratio in comfortable levels (6.2% as of March 2023) higher when comparing to European banks 3.0% FR DE ES IT RWA density (RWAs as a % of assets, latest available data) 46% 37% RWAs d
Slide 23: MREL requirements and execution of the Funding Plan
MREL requirements and execution of the Funding Plan (Million euros) MREL position (BCP Resolution Group - 31 Mar. 2022) • Resolution strategy: MPE (Multi Point of Entry)2. MREL requirements for the Resolution perimeter centred in Portugal 27.7% 11.1% • Preferred Resolution Measure: Bail-in 27.31% 2.
Slide 24: Robust liquidity position
Robust liquidity position Liquidity ratios (CRD/CRR) Liquidity excess in ECB (Billion euros) Eligible assets 23.9 25.3 +1.4 billion 201% 0.7 -0.7 154% Mar 22 Mar 23 Net loans to deposits ratio 100% 79% 74% NSFR (Net stable LCR (Liquidity Mar 22 Mar 23 funding ratio) coverage ratio) 24
Slide 25: Portugal
03 Portugal 25
Slide 26: Profitability in Portugal
Profitability in Portugal Net income Net operating revenue (Million euros) (Million euros) +58.8% +19.3% 170.8 506.3 424.5 107.6 Q1'22 Q1'23 Q1'22 Q1'23 Operating costs (Million euros) +2.3% • Net income reaches 170.8 million in Q1’23, an 143.2 146.4 increase of 58.8% from Q1’22 • Net income was dri
Slide 27: Net interest income
Net interest income (Million euros) +60.5% +118.9 +45.1 +18.0 339.9 211.8 -1.0 -32.5 +0.4 -20.9 2.44% NIM 1.41% Q1'22 Performing Credit rate Impact of Deposit's rate Impact of Effect of Excess liquidity Q1'23 credit volume effect NPE reduction effect securities wholesale cost and other effect portfo
Slide 28: Commissions and other income
Commissions and other income Commissions Other income (Million euros) (Million euros) Q1'22 Q1'23 YoY Banking fees and commissions 115.0 121.0 +5.2% Total 76.3 24.7 Cards and transfers 31.7 40.5 +27.6% Loans and guarantees 27.8 21.0 -24.3% Other operating income 10.8 Bancassurance 22.1 22.5 +2.1% Eq
Slide 29: Operating costs
Operating costs Operating costs Employees (Million euros) +9 +2.3% 6,264 6,273 146.4 143.2 18.4 Depreciation 20.0 Mar 22 Mar 23 Other administrative costs 43.4 47.9 Branches -13 Staff costs 79.9 80.2 421 408 Q1'22 Q1'23 Mar 22 Mar 23 29
Slide 30: Continued decrease of NPEs
Continued decrease of NPEs Non-performing exposures (NPE) NPE build-up (Million euros) -509 million Mar 23 Mar 23 -28.5% (Million euros) vs. Mar 22 vs. Dez 22 1,788 Opening balance 1,788 1,361 1,279 Net outflows/inflows 89 -21 Other NPE 1,080 Write-offs -362 -27 941 Sales -236 -35 NPL>90d 708 -370 m
Slide 31: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 242% 136% 129% 40% 186% 109% 47% 3% 53% Real estate collateral 109% 48% Real estate collateral 3% 2% Cash, other fin.collat. 69% 2% Cash, other fin.collat. 198% 87% 59% 136% LLRs 2% 74% LLRs 1% 39% 49% Individuals Companies Total Individuals C
Slide 32: Foreclosed assets and corporate restructuring funds
Foreclosed assets and corporate restructuring funds Foreclosed assets Corporate restructuring funds (Million euros) (Million euros) 469 -47.2% Impairment 100 788 220 87 416 Net value 369 67 -216 million 701 55 Industry -58.5% 153 361 RE/tourism Mar 22 Mar 23 Mar 22 Mar 23 Sales of foreclosed assets
Slide 33: Customer funds and loans to Customers
Customer funds and loans to Customers Total Customers Funds* Loans to Customers (gross) (Billion euros) (Billion euros) +0.5% NPE: -28.5% (-0.5 billion) Performing: +0.3% (+0.1 billion) 66.6 67.0 -0.9% 16.2 14.2 Off-BS funds 40.3 39.9 1.4 Other BS funds 1.5 16.4 19.5 18.6 Term deposits Mortgage 18.9
Slide 34: Performing loans in Portugal
Performing loans in Portugal Performing loans portfolio (Billion euros) • Performing loan portfolio in Portugal stable comparing with same period of last year. Loans to individuals' growth, supported in mortgage loans (2.1%) that offset a +0.3% decrease in companies' segment 38.5 38.7 • Corporate lo
Slide 35: International operations
04 International operations 35
Slide 36: Contribution from operations to consolidated net income
Contribution from operations to consolidated net income (Million euros*) Q1’22 Q1’23 Contribution from international operations (Million euros) Poland -26.0 53.6 Excluding effects of +24.1% Mozambique 25.2 28.7 71.6 88.9 Bank Millennium2 Other 0.9 -3.0 44.1 Net income international operations 0.1 79
Slide 37: Positive evolution of net income
Positive evolution of net income Net income Net operating revenue (Million euros *) (Million euros *) +36.9% +77.4% 142.9 437.3 Adjusted net income 4 104.4 246.6 53.6 Net income -26.0 Q1'22 Q1'23 Q1'22 Q1'23 • Bank Millennium delivers a positive net income for the 2nd consecutive quarter 3m WIBOR (a
Slide 38: Net interest income increase significantly
Net interest income increase significantly Net interest income Operating costs (Million euros*) (Million euros*) +7.3% NIM 3.77% 4.58% 103.4 110.9 +31,3% 17.7 Resol. Fund + DGF 268.3 18.2 -2.8% 204.3 40.9 Other 38.8 +5.4% 46.3 +12.9% 52.3 Staff costs Q1'22 Q1'23 Q1'22 Q1'23 Commissions and other inc
Slide 39: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 2.2% 2.0% NPL>90d 137% 159% 529.9 535.9 387.0 337.3 Mar 22 Mar 23 Mar 22 Mar 23 Loan impairment (net of recoveries) (Million euros*) Cost of risk 40bp 63bp • NPL>90d accounted for 2.0% of
Slide 40: Customers funds and loans to Customers
Customers funds and loans to Customers Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +2.3% -4.1% 22,484 23,011 Off-BS funds 1,685 1,458 17,345 16,641 Other BS funds 8 Term deposits 4,865 7,682 Mortgage local currency 7,521 7,584 Mortgage foreign exchange 1,967 1,219 De
Slide 41: CHF mortgages
CHF mortgages CHF mortgage portfolio (gross w/o legal risk provisions) Cumulative provisions for legal risks** (Billion euros*) (Million euros*) As a % of total As a % of CHF 54.6% 10.5% 9.6% 9.4% 8.1% 6.6% loan portfolio 25.7% 30.9% 36.3% 41.3% 46.8% 55.8% mortgage portfolio (gross after legal -16%
Slide 42: Net income reflects resilience in challenging environment
Net income reflects resilience in challenging environment Net income Net operating revenue (Million euros*) (Million euros*) +14.8% +13.9% 28.7 73.9 25.2 64.4 Q1'22 Q1'23 Q1'22 Q1'23 MIMO rate (average) 13.27% 17.25% Operating Costs (Million euros*) • Net income of 28.7 million in Q1’23, +13.9% comp
Slide 43: Increased net interest income and commissions
Increased net interest income and commissions Net Interest income Operating costs (Million euros*) (Million euros*) Cost to income 41.9% 41.1% NIM 7.9% 9.5% +12.6% +20.5% 30.4 27.0 56.4 46.8 Other 16.0 +14.4% 18.3 Staff costs 11.0 +10.0% 12.1 Q1'22 Q1'23 Q1'22 Q1'23 Commissions and other income Empl
Slide 44: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 10.9% 7.7% NPL>90d 83% 107% 59.3 58.8 71.2 54.8 Mar 22 Mar 23 Mar 22 Mar 23 Loan impairment (net of recoveries) (Million euros*) Cost of risk 203bp 201bp • NPL>90d ratio of 7.7% as of Marc
Slide 45: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) -0.6% +9.0% 2,069 2,056 712 653 10 Mortgage 11 166 Personal and 145 other Term deposits 1,118 1,052 535 Companies 497 Demand 1,004 deposits 951 Mar 22 Mar 23 Mar 22 Mar 23 *FX effect excluded. €/Metical con
Slide 46: Key figures
05 Key figures 46
Slide 47: Strategic Plan: Excelling 24
Strategic Plan: Excelling 24 Q1’23 2024 C/I ratio 31%* ✓ ≈40% Cost of risk 56 bp ✓ ≈50 bp RoE 17.7% ✓ ≈10% CET1 ratio 13.6% ✓ >12.5% NPE ratio 3.8% ✓ ≈4% Share of mobile Customers 65% ✓ >65% Growth of high engagement Customers** (vs 2020) +10% ✓ +12% Average ESG rating*** 69% >80% *Adjusted cost to
Slide 48: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Millennium bcp Foundation Society Sustainability In 2023, Millennium bcp joins again, the BCP Group publishes its 2022 Sustainability Museu Nacional de Arte Antiga: The campaign "PORTUGAL CHAMA”, Portuguese Report, with aggregated indicators on ESG Restoration of Jes
Slide 49: Awards
Awards new new Bank Millennium: Awarded with ActivoBank: Consumer Choice Millennium bcp: “Best Investment the "Service Quality Star", 2023,“Digital Bank” category, for Banking 2023 in Portugal" Millennium brand recommended 5th time by consumers Bank Millennium: 1st place in new new new categories of
Slide 50: Appendix
Appendix 50
Slide 51: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) >5y, ≤8y: 33% Mar 22 Jun 22 Sep 22 Dec 22 Mar 23 YoY QoQ Portugal 8,561 7,765 6,882 6,295 6,908 -19% +10% T-bills and other 849 1,222 461 310 810 -5% >100% >8y, ≤10y: 9% Bonds 7,712 6,543 6,421 5,
Slide 52: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book 831 33 0 232 1,097 ≤ 1 year 811 2 0 227 1,040 > 1 year and ≤ 2 years 4 1 0 0 4 > 2 years and ≤ 5 years 6 4 0 0 10 > 5 years and ≤ 8 years 5 26 0 0 31 > 8 years and ≤ 10 years 2 1 0 0 3 > 10 years 3 0 0 5 8 B
Slide 53: Diversified and collateralised portfolio
Diversified and collateralised portfolio Loan portfolio (Consolidated) LTV of the mortgage portfolio Breakdown Loans per collateral in Portugal Other 75-80 Mortgage guarantees 60-75 9% 48% 29% 27% 80-90 12% Companies 41% >90 Real 4% guarantees 57% 50-60 Unsecured 0-40 14% 15% 21% 40-50 12% Personal/
Slide 54: Consolidated net income
Consolidated net income Impact on (Million euros) Q1'22 Q1'23 YoY earnings Net interest income 465.1 664.6 +42.9% +199.4 Net fees and commissions 192.8 195.4 +1.3% +2.6 Other income* 43.6 139.0 +218.7% +95.4 Net operating revenue 701.6 999.0 +42.4% +297.4 Staff costs -137.7 -144.3 +4.8% -6.6 Other a
Slide 55: Consolidated balance sheet
Consolidated balance sheet (Million euros) 31 March 31 March 31 March 31 March 2023 2022 2023 2022 LIABILITIES ASSETS Financial liabilities at amortised cost Cash and deposits at Central Banks 3,035.3 9,829.6 Resources from credit institutions 1,095.2 8,979.7 Loans and advances to credit institution
Slide 56: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) Quarterly 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Net interest income 465.1 520.1 560.7 603.9 664.6 Dividends from equity instruments 0.9 12.0 -3.6 0.8 0.0 Net fees and commission income 192.8 194.7 186.2 198.1 195.4 Other operating income -16.9 -158.5
Slide 57: Income statement
Income statement (Million euros) For the 3-month periods ended March 31th, 2022 and 2023 Int e rna t io na l o pe ra t io ns G ro up P o rt uga l T o tal B a nk M ille nnium ( P o la nd) M ille nnium bim ( M o z.) O t he r int . o pe ra t io ns M ar 2 2 M ar 2 3 Δ % M ar 2 2 M ar 2 3 Δ % M ar 2 2 M
Slide 58: Glossary (1/2)
Glossary (1/2) Assets placed with Customerss – amounts held by Customers in the context of the placement of third-party products that contribute to the recognition of commissions. Balance sheet customer funds – deposits and other resources from Customers and debt securities placed with Customers. Bu
Slide 59: Glossary (2/2)
Glossary (2/2) Net trading income – results from financial operations at fair value through profit or loss, results from foreign exchange, results from hedge accounting operations, results from derecognition of financial assets and financial liabilities measured at amortized cost and results from de
Slide 60: Investor Relations Division
INVESTOR RELATIONS DIVISION Bernardo Collaço, Head EQUITY DEBT AND RATINGS Alexandre Moita Luís Morais +351 211 131 321 +351 211 131 337 investors@millenniumbcp.pt BANCO COMERCIAL PORTUGUÊS, S.A., a public company, having its registered office at Praça D. João I, 28, Oporto, registered at the Commer
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