Banco Comercial Portugues S.a. · EURONEXT:BCP

Banco Comercial Portugues — H1 2013 Earnings Presentation

59 slides from Banco Comercial Portugues's earnings presentation, July 2013

1. Slide 1: Earnings Presentation 1H 2013

   EARNINGS PRESENTATION JULY 2013 1°" H 2013

2. Slide 2: Disclaimer

   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 registra

3. Slide 3: Agenda

   Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 3

4. Slide 4: Highlights of 1st half of 2013

   Highlights of 1st half of 2013 Conclusion of the sale of the Greek operation, agreement with DG Comp, capitalisation strengthening, comfortable liquidity position and signs of operational recovery in Portugal allow us to be better prepared for future challenges, despite the demanding year of 2013 DG

5. Slide 5: Highlights of 1st half of 2013

   Highlights of 1st half of 2013 DG Comp agreement Loan to deposit ratio* Net loans to BS customer funds ratio 1. Agreement between the European Commission and the 138% -15pp Portuguese authorities regarding the restructuring plan for BCP 123% 2. The Plan includes an improvement in Portugal‟s 121% pro

6. Slide 6: Highlights of 1st half of 2013

   Highlights of 1st half of 2013 Net income Contribution of the international operations (Million euros) (excluding Greece) (Million euros) +12.7% 83.9 74.4 -488.2 -544.3 1H12 1H13 1H12 1H13 Net interest income Core income in Portugal Fees and commissions Operating costs in Portugal * (Million euros)

7. Slide 7: Agenda

   Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 7

8. Slide 8: Focus on the increase in customer funds…

   Focus on the increase in customer funds… (Million euros) Consolidated Customer funds Customer funds in Portugal +0.2% Total +2.1% 50,038 customer 49,920 funds 64,149 65,517 +1.1% 17,631 16,719 Balance sheet customer 51,883 52,474 funds 32,289 +3.2% 33,319 6,531 5,010 13,052 14,397 Jun 12 Jun 13 Depo

9. Slide 9: … and credit evolution, in line with the liquidity plan

   … and credit evolution, in line with the liquidity plan (Million euros) Consolidated Loans to customers (gross) Loans to customers (gross) in Portugal -7.8% 53,062 -6.3% 48,932 65,514 61,401 28,052 -4.4% 26,822 Jun 12 Jun 13 3,894 -6.1% 3,655 Loans to customers (gross) in international 33,568 -7.9%

10. Slide 10: Reduction of commercial gap as refinancing driver

    Reduction of commercial gap as refinancing driver (Billion euros) Commercial Gap* Loans to deposit ratio ** (BoP) Net loans to BS customer Jun 12 Jun 13 funds ratio 138% -15pp 123% -10.4 121% -18.2 110% +7.8 Accumulated net repayment of MLT debt Jun 12 Jun 13 (Medium and long term debt repayments si

11. Slide 11: Lower refinancing needs on the short, medium and long term

    Lower refinancing needs on the short, medium and long term (Billion euros) Refinancing needs of medium-long term debt Already repaid 5.2 4.9 5.5 ** 2.9 * 2.9 1.1 0.6 1.3 0.0 0.4 0.4 2009 2010 2011 2012 1H13 2H13 2014 2015 2016 2017 >2017 Significant improvement of the funding structure Customer depo

12. Slide 12: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 12

13. Slide 13: Core tier I ratio reaches 12.5%, complying with all regulatory requirements

    Core tier I ratio reaches 12.5%, complying with all regulatory requirements Consolidated Core tier I ratio (%) - BoP +0.4pp Compliance with regulatory 10% BdP  12.1% 12.5% requirements 9% EBA  June 13 vs. June 12 Change (mn eur) Change of core tier I -9.5% €500 million rights issue +500 Core tier

14. Slide 14: Pension Fund

    Pension Fund Main indicators Pension Fund (Milhões de euros) Shares 26% Deposits Jun 12 Dec 12 Jun 13 and Others 33% Pension liabilities 2,393 2,293 2,304 Pension fund 2,221 2,432 2,417 Liabilities' coverage 105% 119% 117% Fund's profitability -4.1% 1.6% 0.6% Actuarial differences (155) (164) (45) R

15. Slide 15: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 15

16. Slide 16: Results in line with the plan, reflecting the current macroeconomic scenario

    Results in line with the plan, reflecting the current macroeconomic scenario Consolidated (million euros) 1H12 1H13 Δ Net interest income 582.1 388.1 -194.0 Of which: costs related with hybrids instruments (CoCo's) -1.4 -134.7 -133.3 Net fees and commissions 334.8 338.6 3.7 Of which: State guarantee

17. Slide 17: Net income affected by atypical items

    Net income affected by atypical items (Million euros) Net income Atypical items Consolidated Net of taxes * (gross) -68.2 Liability management 2011 (-96.3) -95.6 Hybrids (CoCo's) interest (-134.7) -25.1 Cost of State guarantees (-35.4) -488.2 Impairment on Piraeus Bank -80.0 participation – Greece (

18. Slide 18: Net interest income reduction as a result of CoCo's cost

    Net interest income reduction as a result of CoCo’s cost, adverse market interest rates evolution and volumes effect (Million euros) Net interest income Portugal Consolidated 1H13 vs.1H12 -10.4% Hybrid instruments (CoCo‟s) cost -133 583.5 1.4 522.8 Market interest rates evolution -22 (ex. Euribor) 1

19. Slide 19: Total fees and commissions increase driven by international operations

    Total fees and commissions increase driven by international operations (Million euros) Fees and commissions Portugal Consolidated -4.8% 230.7 219.7 1H12 1H13 YoY Banking fees and commissions 309.0 308.2 -0.3% Cards and transfers 85.9 89.1 3.8% Loans and guarantees 90.3 76.4 -15.4% Bancassurance 35.6

20. Slide 20: Lower contribution of net trading income

    Lower contribution of net trading income (Million euros) Net trading income Portugal Consolidated 255.5 -81.5% 184.3 307.4 -0.5 78.0 53.1 -6.8 -53.6 1H12 1H13 Repurchase of own debt Sales of credit Other International operations 56.8 +10.3% 51.9 57.3 1H12 1H13 1H12 1H13 20

21. Slide 21: Significant reduction of costs in Portugal

    Significant reduction of costs in Portugal (Million euros) Operating costs* Portugal * Consolidated -11.5% 687.6 -16.5% Depreciation 38.4 608.5 445.1 -10.1% Other 34.5 371.6 Administrative 263.0 -11.2% 233.6 costs Staff costs 386.3 -11.9% 340.5 1H12 1H13 1H12 1H13 International operations Operating

22. Slide 22: Significant increase in provisioning while keeping the target for cost of risk

    Significant increase in provisioning while keeping the target for cost of risk for 2013 (Million euros) Loan impairments (net of recoveries) Portugal Consolidated +3.3% Cost of 142 bp risk 155 bp 439.4 425.4 +2.1% 466.5 476.5 1H12 1H13 1H12 1H13 International operations Cost of risk evolution -9.8%

23. Slide 23: Credit quality and provisioning reflect the economic cycle

    Credit quality and provisioning reflect the economic cycle, but in line with the plan (Million euros) Consolidated Credit quality Loan impairment (balance sheet) Credit ratio Jun12 Jun13 Coverage ratio Jun12 Jun13 Past due>90d 5.9% 6.8% Past due>90d 88% 85% Non-performing loans 11.6% 11.7% Non-perfo

24. Slide 24: Diversified and collateralized credit portfolio

    Diversified and collateralized credit portfolio Loan portfolio Consolidated Loans by collateral 12.1% Other sectors Companies 50% Mortgage 63% 29% 7% 44% 10.0% With real estate guarantees With other guarantees Financial intermediation 3.6% Without guarantees Transp. and communications 3.2% Wholesale

25. Slide 25: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 25

26. Slide 26: Portugal: deleveraging effort with an increase in deposits and a reduction of loans

    Portugal: deleveraging effort with an increase in deposits and a reduction of loans (Million euros) Customer funds Loans to customers (gross) Total +0.2% customer -7.8% funds 49,920 50,038 53,062 Balance sheet 48,932 customer 38,688 38,221 funds 6,400 4,902 21,258 -4.8% 8,844 20,232 8,737 2,670 -10.

27. Slide 27: Comfortable liquidity position already shows some positive signs in financing companies

    Comfortable liquidity position already shows some positive signs in financing companies in Portugal Loans to companies (gross) * Market shares in loans to SME (Billion euros) New production Market share in Loans to companies new production starts to kick off above 22% 29.2 22.4% 28.6 28.4 18.2% 28.0

28. Slide 28: Net income affected by net interest income, net trading income and provisioning

    Net income affected by net interest income, net trading income and reinforcement in provisioning despite the significant cost reduction… (Million euros) Net income  Net income substantially penalised by the decrease of banking income and the reinforcement in provisioning, despite the strong decreas

29. Slide 29: …but with the inversion in net interest income's negative trajectory

    …but with the inversion in net interest income’s negative trajectory … Net interest income Euribor 3 months (Million euros) (%, quarter average) 0.70 141.0 +21.1% 126.6 0.36 76.9 63.5 0.21 0.21 46.8 0.20 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13  Positive evolution compared with the previou

30. Slide 30: Strong effort to reduce the cost of deposits and continuous credit repricing

    …through the strong effort to reduce the cost of deposits and the continuous credit repricing effort Term deposits rate Credit portfolio spread (%) (%) 5.0% New production Companies 4.30 4.30 4.37 4.5% Portfolio 4.19 4.0% 4.10 Mortgage 3.5% 3.0% 1.15 1.15 1.16 1.16 1.16 2.5% 2.0% S/11 D/11 M/12 J/12

31. Slide 31: Fees and commissions to recover in 2Q13 in the main items

    Fees and commissions to recover in 2Q13 in the main items (Million euros) 2Q13/ 1H12 1H13 YoY 1Q13 2Q13 1Q13 Banking fees and commissions 233.3 221.3 -5.1% 109.5 111.8 2.2% Cards and transfers 45.6 45.9 0.7% 22.6 23.2 2.7% Loans and guarantees 75.1 61.4 -18.2% 29.1 32.3 11.3% Bancassurance 35.6 36.7

32. Slide 32: Positive trend in costs in Portugal, comparing favourably with domestic peers

    Positive trend in costs in Portugal, comparing favourably with domestic peers (Million euros) Operating costs* Employees Branches Portugal -1,173 -16.5% 9,917 -65 445.1 8,744 862 797 21.2 -15.3% 371.6 18.0 155.4 -16.4% 130.0 Jun 12 Jun 13 Jun 12 Jun 13 Annualised operating costs ** / Volumes *** 268

33. Slide 33: Credit quality reflects the economic cycle, but in line with the strategic plan

    Credit quality reflects the economic cycle, but in line with the strategic plan (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Jun12 jun13 Coverage ratio Jun12 Jun13 Past due > 90d 6.5% 7.8% Past due > 90d 85% 80% Non-performing loans 13.4% 13.9% Non-performing loans 41%

34. Slide 34: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 34

35. Slide 35: Net income in international operations

    Net income in international operations (Million euros) Δ% Δ% 1H12 1H13 local euros currency International operations * 74.4 83.9 12.7% Poland 52.6 60.5 14.9% 15.3% Mozambique 41.9 40.5 -3.3% -12.2% Angola 17.1 18.3 7.0% 5.6% Other and non-controlling interests -37.2 -35.4 €119 M Note: For the 1st se

36. Slide 36: Poland: growth in customer funds and loans to customers

    Poland: growth in customer funds and loans to customers (Million euros) Customer funds Loans to customers (gross) +12.3% +1.8% 11,635 10,364 9,807 9,979 6,497 -1.4% 6,404 753 +15.4% 869 2,557 +5.8% 2,706 Jun 12 Jun 13 Jun 12 Jun 13 Mortgage Consumer Companies Excluded FX effect. €/PLN rates used: In

37. Slide 37: Growth in net income driven by increase in banking income and strict costs control

    Growth in net income driven by increase in banking income and by strict costs control (Million euros) Net income  Net income grows by 14.9%, with the increase of ROE to 10.4% in 1H13 + 14.9%  Increase in banking income (+4.3%), despite the 60.5 decrease in the reference interest rates that 52.6 re

38. Slide 38: Recovery of net interest income in 2Q13, strong growth in commissions

    Recovery of net interest income in 2Q13, strong growth in commissions and strict cost control (Million euros) Net interest income * Operating costs -1.1% -1.2% 144.9 143.2 133.1 131.6 66.2 - 1.0% 65.6 66.9 - 1.3% 66.0 1H12 1H13 1H12 1H13 Other administrative costs and depreciations Fees and commissi

39. Slide 39: Credit quality and impairments

    Credit quality and impairments (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Jun12 Jun13 Coverage ratio Jun12 Jun13 Non-performing loans 2.6% 2.7% Non-performing loans 114% 107% 295 293 274 259 Jun 12 Jun 13 Loan impairment (net of recoveries) Cost of 55 bp risk * 56 bp

40. Slide 40: Mozambique: strong volumes growth

    Mozambique: strong volumes growth (Million euros) Customer funds Loans to customers (gross) +23.2 1,571 +26.5% 1,191 1,275 26 942 +18.4% 257 22 -1.3% 261 +37.7% 908 659 Jun 12 Jun 13 Jun 12 Jun 13 Mortgage Consumer Companies Excluded FX effect. €/Metical rates used : Income Statement 39.8325; Balanc

41. Slide 41: Net income affected by reference interest rates and by the expansion plan

    Net income affected by reference interest rates and by the expansion plan (Million euros) Net income  Net income decreases 3.3% in 1H13, maintaining high profitability (ROE of 25%) -3.3%  Increase in banking income despite lower 41.9 40.5 reference interest rates (MAIBOR12M rate decreased from 17.

42. Slide 42: Strong fees and commissions growth and operating costs influenced by the expansion plan

    Strong fees and commissions growth and operating costs influenced by the expansion plan (Million euros) Net interest income Operating costs -9.0% +6.6% 43.4 46.2 65.7 59.7 3.9 4.6 18.6 19.6 20.8 22.0 1H12 1H13 1H12 1H13 Fees and commissions Depreciation Other administrative costs Staff costs +26.7%

43. Slide 43: Credit quality improvement and high coverage

    Credit quality improvement and high coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Jun12 Jun13 Coverage ratio Jun12 Jun13 Non-performing loans 5.0% 3.3% Non-performing loans 150% 192% 71 77 47 40 Jun 12 Jun 13 Loan impairment (net of recoveries) Cost of 140 bp 1

44. Slide 44: Angola: volumes growth

    Angola: volumes growth (Million euros) Customer funds Loans to customers (gross) +16.1% 970 836 +4.8% 535 511 Jun 12 Jun 13 Jun 12 Jun 13 Excluded FX effect. €/Kwanza rates used : Income Statement 126.29333333 Balance Sheet 126.02 44

45. Slide 45: Net income increases driven by higher commissions, despite lower reference interest rates

    Net income increases driven by higher commissions, despite lower reference interest rates (Million euros) Net income  Net income increases 7.0% in 1H13, ROE at 16.3% +7.0% 17.1 18.3  Banking income increases despite lower reference rates (LUIBOR12M decreased from 11.9% in 1H12 to 11.3% in 1H13) 

46. Slide 46: Strong fees and commissions growth and stable operating costs

    Strong fees and commissions growth and stable operating costs despite the expansion plan (Million euros) Net interest income Operating costs -2.5% +0.0% 34.2 33.3 35.4 35.4 4.5 3.7 17.0 16.7 13.9 14.9 1H12 1H13 1H12 1H13 Depreciation Fees and commissions Other administrative costs Staff costs +36.2%

47. Slide 47: Improved coverage and increased provisioning

    Improved coverage and increased provisioning (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Jun12 Jun13 Coverage ratio Jun12 Jun13 Non-performing loans 4.8% 5.0% Non-performing loans 105% 111% 26 30 27 25 Jun 12 Jun 13 Loan impairment (net of recoveries) Cost of 139 bp r

48. Slide 48: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 48

49. Slide 49: Strategic Plan conclusions and cycles

    Strategic Plan conclusions and cycles STAGES Priorities Initiatives already implemented  Core tier I ratio reaches 12.5% Comfortable capital ratios Reinforcement of capital and  Loan to deposit ratio already Enhanced liquidity position reaches 123% (according to BoP liquidity Provisions reinforcem

50. Slide 50: Appendixes

    Appendixes 50

51. Slide 51: Main awards in the 1H2013

    Main awards in the 1H2013 Portugal Poland "Ethibel EXCELLENCE Investment Register" "Best Banking Offer in "Market Pearls” ETHIBEL Forum Retailers' Choice Best Corporate Governance and Best “RESPECT Index” integration for the 5th time Investor Relations Team / Capital Warsaw Stock Exchange/Associatio

52. Slide 52: Detail of public debt portfolio

    Detail of public debt portfolio (Million euros) Sovereign debt portfolio Sovereign debt total maturity Jun 12 Jun 13 YoY <1 years 23% >3 years 25% Portugal 4,688 6,552 40% T-bills 1,607 2,681 67% Bonds 3,082 3,871 26% Poland 1,196 2,132 78% Mozambique 360 358 -1% Angola 347 275 -21% Romania 67 98 45

53. Slide 53: Detail of public debt portfolio

    Detail of public debt portfolio (Million euros) Portugal Poland Mozambique Angola Romania Ireland Greece Others Total Trading book 163 256 74 493 < 1 year 1 10 11 > 1 year and <2 years 1 30 31 > 2 year and <3 years 13 86 99 > 3 years 148 130 74 351 Banking book 6,389 1,876 358 275 98 205 55 9,256 <

54. Slide 54: Romania: strong improvement in banking income with cost containment

    Romania: strong improvement in banking income with the maintenance of a cost containment policy and volumes growth (Million euros) Net income Banking Income Operating costs -9.8% +31.8% 16.8 13.8 15.1 10.5 -3.5 -6.6 1H12 1H13 1H12 1H13 1H12 1H13 Loans to customers (gross) Customer Deposits  Net inc

55. Slide 55: Financial statements

    Financial statements DM =:

56. Slide 56: Consolidated Balance Sheet and Income Statement

    Consolidated Balance Sheet and Income Statement 30 June 31 December 30 June 30 June 30 June 2013 2012 2012 2013 2012 (Thousands of Euros) (Thousands of Euros) Assets Interest and similar income 1,453,356 1,834,601 Cash and deposits at central banks 1,735,451 3,580,546 1,717,472 Interest expense and

57. Slide 57: Consolidated income statement

    Consolidated income statement Quarterly evolution (Million euros) Quarterly Year-to-date Δ% 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 Jun 12 Jun 13 13 / 12 Net interest income 272.7 176.4 252.2 183.0 205.1 582.1 388.1 -33.3% Dividends from equity instruments 3.3 0.2 0.0 0.0 1.5 3.6 1.5 -58.8% Net fees and commi

58. Slide 58: Consolidated income statement (Portugal and International operations)

    Consolidated income statement (Portugal and International operations) For the 6 months period ended 30st of June, 2012 and 2013 (Million euros) 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 M ille nnium ( P o la nd) M ille nnium bim ( M o z.) M ille nnium A ngo la O t he r int .

59. Slide 59: Investor Relations Division

    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: Investors@millenniumbcp.pt Banco Comercial Português, S.A., a public co

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