Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — FY2021 Earnings Presentation
66 slides from Banco Comercial Portugues's earnings presentation, 2022
Slide 1: Earnings Presentation H1 2021
EARNINGS PRESENTATION H1 2021 Banco Comercial Português 1
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: resilience of the business model
Highlights: resilience of the business model ▪ Net profit of 138.1 million, including 532.6* million of costs related with Bank Millennium’s CHF loan portfolio and 56.2 million mandatory contributions for the banking sector in Portugal. Excluding costs associated with CHF loans, the Group’s net prof
Slide 6: Highlights: resilience of the business model
Highlights: resilience of the business model ▪ Consolidated performing loans up by 3.1 billion, +5.9% from December 2020; performing loans in Portugal up by 1.9 billion, +5.2% from December 2020 Business activity ▪ Total Customer funds up by 7.8 billion, +9.5% from December 2020 (+8.7% in Portugal)
Slide 7: Growing Customer base, mobile Customers standing out
Growing Customer base, mobile Customers standing out As % of active ‘000 Customers Customers Group Active Customers 5,903 6,141 +571 3,459 56% 2,889 +20% Mobile Customers Dec 20 Dec 21 +446 Digital Customers 3,802 4,247 69% +12% Active Customers 2,443 2,529 +192 967 1,158 46% Mobile Customers +20% D
Slide 8: Leading Bank in Customer Satisfaction and Recommendation
Leading Bank in Customer Satisfaction and Recommendation and again Consumer's Choice 2022 Leadership in Customer BASEF* - Marktest Leadership in business Satisfaction Quality Indicators recognition programs CSI Global Global Best Bank for companies, closest CSI Branch Channel Service to Customers, m
Slide 9: #1 NPS Digital Customers
A. Our capabilities in digital are widely recognised and recommended App Millennium App Millennium leads ratings lidera ratings # 1 NPS Digital Customers “Best Digital Bank” 1 4.8 2018 - 2021, 5 largest banks Unaided nomination by Customers2, 2021 +3 pp 53.9 45.6 49.0 44.1 50.5 4.8 40.1 41.0 66% 69%
Slide 10: Innovation focused on customer needs drives mobile growth
Innovation focused on customer needs translates into accelerated growth in Mobile usage and sales Strong mobile growth Y/Y (Number of operations, Jan-Dec 2021 vs. Jan–Dec 2020) +53% +216% +40% Transfers National +34% Payments Transactions P2P Transfers +43% +283% +160% +48% Sales Cards Personal loan
Slide 11: Group Profitability
02 Group Profitability 11
Slide 12: Net income of 138.1 million in 2021
Net income of 138.1 million in 2021 Impact on (Million euros) 2020 2021 YoY earnings Net interest income 1,531.7 1,588.6 +3.7% +56.9 Commissions 676.6 727.7 +7.6% +51.2 Core income 2,208.2 2,316.3 +4.9% +108.1 Operating costs -1,090.4 -1,115.6 +2.3% -25.2 Of which: recurring -1,043.9 -1,024.9 -1.8%
Slide 13: Net interest income
Net interest income Net interest income Portugal (Consolidated, million euros) (Million euros) Net interest margin 1.56% 1.44% Net interest +3.2% 2.00% 1.93% margin 805.4 831.3 +3.7% 1,588.6 1,531.7 2020 2021 International operations (Million euros) Net interest margin 2.95% 3.09% +4.3% 726.3 757.3
Slide 14: Fees and commissions
Fees and commissions Fees and commissions Portugal (Consolidated, million euros) (Million euros) +6.8% 481.5 514.3 +7.6% 82.2 727.7 75.8 +8.4% 676.6 112.9 405.7 +6.5% 432.1 Market-related +5.5% fees and 107.0 commissions 2020 2021 International operations (Million euros) Banking fees 614.9 and commi
Slide 15: Other income
Other income Other income Portugal (Consolidated, million euros) (Million euros) 50.8 67.9 62.2 58.4 Total 48.5 18.1 61.5 75.6 -72.9 -66.1 Equity earnings + 72.5 dividends 2020 2021 57.9 Mandatory contributions 70.0 77.2 Net trading income Of which: Banking sector 29.6 33.1 140.6 Resolution fund PT
Slide 16: Operating costs
Operating costs Operating costs Portugal (Consolidated, million euros) (Million euros) Cost to income* 46% 43% Cost to income* 46% 44% 650.3 692.9 -1.8% Recurring 1,043.9 1,024.9 Non-recurring** 31.6 90.7 1,090.4 1,115.6 Recurring 618.7 -2.7% 602.2 Non-recurring** 46.5 90.7 Depreciation 135.3 137.2
Slide 17: Cost of risk and provisions
Cost of risk and provisions Portugal Impairment and provision charges (Million euros) (Consolidated, million euros) Stated cost of risk 92bp 69bp** Stated cost of risk 92bp 60bp -7.2% 472.8 438.7 Adjusted by one-offs - 66bp 118.8 165.4 +26.1% 1,061.1 354.0 273.3 841.3 2020 2021 -13.6% Loan-loss 457.
Slide 18: Relevant reduction of NPEs under a complex context
Relevant reduction of NPEs under a complex context Credit (Consolidadas, milhõesquality de euros) Portugal (Consolidated, billion euros) (Billion euros) -485 million -20.5% -543 million NPE 2.36 -16.5% 1.88 NPE 3.30 2.75 Other 1.53 1.52 Dec 20 Dec 21 NPL>90d 1.77 NPE loans ratio 6.1% 4.7% 1.24 NPE r
Slide 19: Group Business activity
02 Group Business activity 19
Slide 20: Customer funds keep growing
Customer funds keep growing Total Customers Funds* Total Customers Funds* Portugal (Billion euros) (Consolidated, billion euros) +8.7% +9.5% 61.0 66.3 90.1 16.3 17.0 82.3 1.4 1.6 16.1 15.9 18.9 27.2 31.8 Off-BS funds 18.2 1.6 Dec 20 Dec 21 Other BS funds 1.5 20.6 Total Customers Funds* international
Slide 21: Continued increase of the loan portfolio
Continued increase of the loan portfolio Loans to Customers (gross) Portugal (Consolidated, billion euros) (Billion euros) NPE: -16.5% (-0.5 billion) +1.39 billion Performing: +5.9% (+3.1 billion) +3.6% +4.6% +1.88 39.87 38.47 58.2 55.7 -0.48 28.1 Dec 20 NPE Performing Dec 21 Mortgage 26.4 Internati
Slide 22: Group Capital and liquidity
02 Group Capital and liquidity 22
Slide 23: Capital above regulatory requirements
Capital above regulatory requirements Total capital ratio (Fully implemented) • Total capital ratio of 15.8%* (fully Fully implemented implemented) as of December 2021, above +2.1pp 15.6% 15.8% vs requirement SREP requirements 13.75% O-SII buffer +5.3pp** Conservation • Surplus of 2.1pp between the
Slide 24: Annual evolution of the CET1 ratio
Annual evolution of the CET1 ratio Impacts on the CET1 ratio • 84bp recurring capacity of organic capital generation +0.84% -0.54% • -54bp resulting from provisions for legal risks associated with CHF loans in Poland -0.36% 12.2% -0.20% +0.15% -0.49% • -36bp due to the increase in the excess +0.07%
Slide 25: Capital at adequate levels
Capital at adequate levels Leverage ratio (Fully implemented, latest available data) 5.3% 5.7% 5.9% 4.9% Leverage ratio at 5.9% as of December 2021, a 3.8% comfortable and comparatively strong figure in European 3.0% banking FR DE ES IT RWA density (RWAs as a % of assets, latest available data) High
Slide 26: MREL requirements consistent with the funding plan
MREL requirements consistent with the funding plan Requirements for the Resolution Group centred in Portugal As a function of TREA 27.29% • MREL requirements established for the BCP Group are in line 21.42% CBR 3.50% with the 2021-24 Strategic Plan and are consistent with the ongoing funding plan CB
Slide 27: Pension fund
Pension fund Key figures Pension fund (Million euros) Real-estate: Dec 20 Dec 21 15% Bonds: 37% Pension liabilities 3,658 3,498 Pension fund 3,751 3,700 Cash and Liabilities' coverage 103% 106% other: 5% Fund's profitability +5.8% +1.92% Equities: 11% Assumptions Investment Funds: 32% Dec 20 Dec 21
Slide 28: Reinforced liquidity position
Reinforced liquidity position Liquidity ratios (CRD/CRR) ECB funding, net (Billion euros) Eligible assets 22.5 25.5 269% -1.6 billion Net funding 3.3 1.7 TLTRO 7.6 8.2 Deposits and other -4.3 -6.4 150% Dec 20 Dec 21 Net loans to deposits ratio 85% 81% 100% NSFR (Net stable LCR (Liquidity Dec 20 Dec
Slide 29: Portugal
03 Portugal 29
Slide 30: Resilient profitability in Portugal
Resilient profitability in Portugal Net income Net operating revenue (Million euros) (Million euros) +28.5% +5.7% 172.8 1,337.7 1,413.6 134.5 2020 2021 2020 2021 Operating costs (Million euros) 692.9 • Net income of 172.8 million in 2021, an increase of 650.3 28.5% from 2020 Non-recurring* 31.6 90.7
Slide 31: Net interest income
Net interest income (Million euros) +3.2% 805.4 +46.9 +40.5 831.3 +17.3 NIM -45.6 -17.6 -6.0 -10.0 +0.4 1.56% 1.44% 2020 Performing Credit rate Impact of Deposits' rate Excess liquidity Impact of the Effect of Other 2021 credit volume effect NPE reduction effect (ECB, TBills) securities wholsesale c
Slide 32: Continued reduction of the cost of deposits
Continued reduction of the cost of deposits Spread on the book vs 3mof term deposits Euribor Spread on the performing loan book (vs 3m Euribor) (vs 3m Euribor) 2020 2021 2.70% 2.63% -0.52% -0.57% 2020 2021 3m Euribor 3m Euribor (average) -0.43% -0.55% (average) -0.43% -0.55% NIM • Spread of the port
Slide 33: Commissions and other income
Commissions and other income Commissions (Milhões deOther euros) income (Million euros) (Million euros) 2020 2021 YoY Total 50.8 67.9 Banking fees and commissions 405.7 432.1 +6.5% Cards and transfers 99.3 111.4 +12.2% 58.4 Equity earnings+ dividends 62.2 Loans and guarantees 103.5 106.6 +3.0% Banca
Slide 34: Operating costs
Operating costs Operating costs Employees (Million euros) -724 -2.7% Recurring 618.7 602.2 7,013 6,289 692.9 650.3 Non-recurring* 31.6 90.7 Depreciation 76.4 80.3 Dec 20 Dec 21 Other administrative 178.3 costs 176.4 Branches -44 Staff costs 364.0 345.5 478 434 2020 2021 Dec 20 Dec 21 *2020: compensa
Slide 35: Continued decrease of NPEs
Continued decrease of NPEs Non-performing exposures (NPE) NPE build-up (Million euros) Dec 21 Dec 21 (Million euros) -485 million vs.Dec 20 vs.Sep 21 -20.5% Opening balance 2,363 1,931 2,363 Net outflows/inflows 87 73 1,878 Write-offs -286 -78 Other NPE 1,109 1,103 Sales -285 -47 NPL>90d 1,255 776 E
Slide 36: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 202% 140% 127% 20% 168% 91% 41% 40% 29% Real estate collateral 47% Real estate collateral 19% 92% 26% Cash, other fin.collat., Cash, other fin.collat., EL gap 63% 12% EL gap 48% 141% 80% 68% 113% LLRs LLRs 35% 51% Individuals Companies Total I
Slide 37: Foreclosed assets and corporate restructuring funds
Foreclosed assets and corporate restructuring funds Foreclosed assets Corporate restructuring funds (Million euros) (Million euros) -5.0% 809 828 787 Impairment 141 565 106 87 Industry -219 million 116 Net value 667 721 699 RE/tourism -32.8% 448 Dec 20 Dec 21 Dec 20 Dec 21 Sales of foreclosed assets
Slide 38: Growing customer funds and loans to customers
Growing customer funds and loans to customers Total Customers Funds* Loans to Customers (gross) (Billion euros) (Billion euros) +8.7% NPE: -20.5% (-0.5 billion) Performing: +5.2% (+1.9 billion) 66.3 61.0 +3.6% 17.0 39.9 38.5 Off-BS funds 16.3 1.6 Other BS funds 1.4 15.9 Mortgage 17.5 18.4 Term depos
Slide 39: Performing credit grows in Portugal
Performing credit grows in Portugal Performing credit portfolio (Billion euros) • Performing credit portfolio in Portugal up by 1.9 billion +5.2% (+5.2%) from December 2020, supported in growth in 36.1 38.0 mortgage loans and loans to companies Mortgage 17.1 18.1 • Strong support to companies, +766
Slide 40: End of moratoriums without significant impact on overdue loans
End of moratoriums without significant impact on overdue loans Loans by stages total portfolio versus expired moratorium Stages migration in loans with expired moratoriums 61% of this loans were 78.0% already in stage 3 57.5% 11.9% 32.7% 17.3% 9.8% 2.7% 4.7% Total loan Expired Total loan Expired Tot
Slide 41: International operations
04 International operations 41
Slide 42: Contribution from international operations to consolidated net income
Contribution from international operations to consolidated net income (Million euros*) 2020 2020 2021 2021 Contribution from international operations (Million euros*) Poland 5.0 -291.9 Mozambique 60.1 82.8 48.5 Other -6.3 -9.8 Net income international operations 58.9 -218.9 Discontinued Operations**
Slide 43: Net earnings affected by costs related with CHF loans
Net earnings affected by costs related with CHF loans Net income Net operating revenue (Million euros*) (Million euros*) +57.9% Adjusted net income** 152.4 240.7 -0.5% 784.2 779.9 5.0 Net income -291.9 2020 2021 2020 2021 3m WIBOR (average) 0.66% 0.55% • Adjusted net income** up by 57.9% Operating c
Slide 44: Net interest income increase and reduction of operating costs
Net interest income increase and reduction of operating costs Net Interest income Operating costs (Million euros*) (Million euros*) NIM 2.61% +5.0% 2.70% -6.3% 594.7 384.2 360.0 566.2 Resol. Fund and DGF 36.6 -29.3% 25.9 Other 159.8 -2.8% 155.4 Staff costs 187.7 -4.8% 178.7 2020 2021 2020 2021 Commi
Slide 45: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 2.7% 2.2% NPL>90d 122% 135% 543.1 532.4 443.8 393.6 Dec 20 Dec 21 Dec 20 Dec 21 Loan impairment (net of recoveries) (Million euros*) • NPL>90d accounted for 2.2% of total credit as of Cost
Slide 46: Increased Customers funds and loans to Customers
Increased Customers funds and loans to Customers Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +11.3% +6.5% 21,908 17,680 19,691 1,950 16,608 Off-BS funds 9 Other BS funds 1,842 67 3,665 Mortgage Term deposits 3,293 5,812 7,477 local currency Mortgage foreign exchange
Slide 47: CHF mortgages
CHF mortgages CHF mortgage portfolio Cumulative provisions for legal risks (Billion euros*) (Million euros*) As a % of total As a % of CHF 54.6% 19.1% 17.0% 11.4% 1.6% 6.9% 11.3% 14.9% 19.5% 25.7% mortgage portfolio loan portfolio 6.5 -8.1% -17.2% 6.6% 8.4% 10.5% 12.0% TBD Peers’ average** 651.5 3.4
Slide 48: Net income reflects resilience in challenging environment
Net income reflects resilience in challenging environment Net income** Net operating revenue (Million euros*) (Million euros*) +37.7% +10.3% 82.8 210.4 190.8 60.1 2020 2021 2020 2021 MIMO rate (average) 11.15% 13.04% Operating costs (Million euros*) • Net income of 82.8 million in 2021, +37.7% on +3
Slide 49: Increased net interest income and commissions
Increased net interest income and commissions Net Interest income Operating costs (Million euros*) (Million euros*) NIM 7.7% 7.8% Cost to income 46.2% 43.5% +9.1% +3.9% 159.5 88.2 91.6 146.2 Other 51.0 +3.4% 52.8 Staff costs 37.2 +4.5% 38.8 2020 2021 2020 2021 Commissions and other income Employees*
Slide 50: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 12.5% 10.8% NPL>90d 59% 77% 82.2 67.9 48.7 52.2 Dec 20 Dec 21 Dec 20 Dec 21 Loan impairment (net of recoveries) (Million euros*) Cost of risk 503bp 72bp • NPL>90d ratio of 10.8% as of Dece
Slide 51: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) -0.7% -5.0% 1,907 1,894 659 626 Mortgage 11 11 Personal and 117 Term deposits 966 997 other 135 Companies 532 480 Demand 940 deposits 898 Dec 20 Dec 21 Dec 20 Dec 21 FX effect excluded. €/Metical constant a
Slide 52: Key figures
05 Key figures 52
Slide 53: Strategic Plan: Excelling 24
Strategic Plan: Excelling 24 2021 2024 C/I ratio 48% ≈40% (44% excluding non-usual costs) Cost of risk 60 bp ≈50 bp (66 bp excluding one-off reversals) RoE 2.4% ≈10% CET1 ratio 11.7% >12.5% NPE ratio 4.7% ≈4% Share of mobile Customers 56% >65% Growth of high engagement +4% +12% Customers* (vs 2020)
Slide 54: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Millennium bcp Foundation Society Sustainability NARC-Núcleo Arqueológico da Rua dos In 2021, all the electricity consumed by the Millennium bcp carries out its first issue of Correeiros - New Museography: Reopened to Bank in Portugal was 100% green, in a mix of seni
Slide 55: Awards in 2021
Awards in 2021 Millennium bim: Best FX Provider, Best Private Millennium bcp: “PME Líder’20” programme: Bank and Best trade finance provider 2022 in Millennium bcp largest number of awards among participating banks (3rd year in a row) Mozambique Consumer Choice 2022, “Large banks” category” Bank Mil
Slide 56: Appendix
Appendix 56
Slide 57: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Million euros) >5y, ≤8y: 33% Dec 20 Mar 21 Jun 21 Sep 21 Dec 21 YoY QoQ Portugal 7,742 8,420 9,152 8,069 8,013 +3% -1% >8y, ≤10y: 14% T-bills and other 384 514 1,129 497 426 +11% -14% Bonds 7,358 7,906 8,023 7,572 7,587 +3% +
Slide 58: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book 430 19 0 0 449 ≤ 1 year 420 0 0 0 421 > 1 year and ≤ 2 years 1 0 0 0 1 > 2 years and ≤ 5 years 9 15 0 0 24 > 5 years and ≤ 8 years 0 2 0 0 2 > 8 years and ≤ 10 years 0 1 0 0 1 > 10 years 1 0 0 0 1 Banking bo
Slide 59: 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 8% 60-75 80-90 48% 28% 27% 11% Companies >90 41% Real 6% guarantees 58% 50-60 Unsecured 0-40 14% 15% 21% 40-50 12% Personal/
Slide 60: Consolidated net income
Consolidated net income Impact on (Million euros) 2020 2021 YoY earnings Net interest income 1,531.7 1,588.6 +3.7% +56.9 Net fees and commissions 676.6 727.7 +7.6% +51.2 Other income* 48.5 18.1 -62.7% -30.4 Net operating revenue 2,256.7 2,334.4 +3.4% +77.7 Staff costs -624.8 -654.3 +4.7% -29.5 Other
Slide 61: Consolidated balance sheet
Consolidated balance sheet (Million euros) 31 December 31 December 2020 31 December 31 December 2020 2021 (restated) 2021 (restated) ASSETS LIABILITIES Cash and deposits at Central Banks 7,796.3 5,303.9 Financial liabilities at amortised cost Loans and advances to credit institutions repayable on de
Slide 62: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 Net interest income 382.3 374.8 391.0 399.2 423.6 Dividends from equity instruments 0.0 0.0 0.7 0.2 0.1 Net fees and commission income 177.8 171.1 181.8 181.9 192.9 Other operating income -14.1 -25.1 -87.2 -4.5 -
Slide 63: Income statement
Income statement (Million euros) For the 12-month period ended December 31st, 2020 and 2021 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 D ec 2 0 D ec 2 1 Δ % D ec 2 0 D ec 2 1 Δ % D ec 2 0
Slide 64: Glossary (1/2)
Glossary (1/2) Assets placed with customers – 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. Bus
Slide 65: 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 66: Investor Relations Division
INVESTOR RELATIONS DIVISION Bernardo Collaço, Head EQUITY DEBT AND RATINGS Alexandre Moita Luís Morais +351 211 131 084 +351 211 131 337 investors@millenniumbcp.pt BANCO COMERCIAL PORTUGUÊS, S.A., a public company (Sociedade Aberta), having its registered office at Praça D. João I, 28, Oporto, regis
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