Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — FY2023 Earnings Presentation
60 slides from Banco Comercial Portugues's earnings presentation, Feb 26, 2024
Slide 1: Banco Comercial Português, S.A. Earnings Presentation
Banco Comercial Portugués, S.A. Earnings Presentation 2°25 Millennium bep
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 856 million in 2023 ▪ Group’s core operating profit increased 31.7% to 2,434.8 million, supported by the increase of 23.1% on core income and adequate management of operating costs, which grew 8.3% compared to 2022 Profitability ➢ Effects re
Slide 6: Customer base growth
Customer base growth Based on the quality of the Teams and distinctive digital skills ‘000 Customers Group Customer recognition Active 6,478 6,701 +429 4,525 4,095 +10% As % of active Customers 68% Mobile Dec. 22 Dec. 23 +323 Digital 4,768 5,091 76% +7% Portugal Active 2,654 2,705 +169 1,557 As % of
Slide 7: Innovation focused on Customer needs and 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 2023 vs Jan–Dec 2022) +26% +41% P2P +23% National +16% Payments Transactions1 Transfers Transfers +37% +29% +15% +39% Sales Cards Personal loans S
Slide 8: Net income of 856 million in 2023
Net income of 856 million in 2023 (Million euros) 2022 2023 % D Net interest income 2,149.8 2,825.7 +31.4% +676.0 Commissions 771.9 771.7 -0.0% -0.2 Core income 2,921.7 3,597.4 +23.1% +675.7 Operating costs -1,073.0 -1,162.6 +8.3% -89.5 Core operating profit 1,848.7 2,434.8 +31.7% +586.2 1 Other inc
Slide 9: Group Profitability
02 Group Profitability 9
Slide 10: Net interest income
Net interest income Net interest income Portugal (Consolidated, million euros) (Million euros) Net interest margin 1.53% 2.59% Net interest margin 2.46% 3.36% +54.2% 1,466.6 951.0 +31.4% 2,825.7 2,149.8 2022 2023 International operations (Million euros) Net interest 4.77% 4.93% margin +13.4% 1,359.1
Slide 11: Fees and commissions
Fees and commissions Fees and commissions Portugal (Consolidated, million euros) (Million euros) 560.6 560.3 771.9 771.7 87.7 88.9 Market-related 107.3 108.5 fees and commissions 472.9 471.4 2022 2023 International operations Banking fees (Million euros) and commissions 664.6 663.2 211.4 211.4 19.6
Slide 12: Other income
Other income Other income Portugal (Consolidated, million euros) (Million euros) 59.9 8.5 Total -64.3 172.3 67.0 60.6 69.2 12.9 -76.3 -65.0 Sale of Millennium 139.1 Financial Services stake (80%)3 Mandatory contributions 2022 2023 Equity earnings + 88.5 72.6 dividends 68.7 Of which: Banking sector 3
Slide 13: Operating costs
Operating costs Operating costs Portugal (Consolidated, million euros) (Million euros) Cost to income1 38% 32% Cost to income1 37% 30% +2.5% 601.7 616.7 +8.3% 15.3 1,162.6 Non-recurring2 16.5 1,073.0 15.3 137.5 585.3 601.4 Non-recurring2 16.5 Depreciation 139.2 2022 2023 393.2 Other 353.0 administra
Slide 14: Cost of risk and provisions
Cost of risk and provisions Portugal Impairment and provision charges (Million euros) (Consolidated, million euros) Cost of risk 54bp 54bp -13.1% Cost of risk 52bp 42bp 1 423.7 368.4 +4.1% 1,099.8 205.3 160.8 1,056.2 Goodwill Bank 102.3 218.4 207.6 Millennium 2022 2023 +58.2% +5.8% CHF mortgage lega
Slide 15: Relevant reduction of NPEs
Relevant reduction of NPEs Credit quality Portugal (Consolidated, billion euros) (Billion euros) -255 million -266 million -18.7% 1.36 -12.0% 1.11 NPE 2.22 1.95 Other 1.49 1.20 Dec 22 Dec 23 NPL>90d 0.73 0.75 NPE loans ratio 3.4% 2.9% Dec 22 Dec 23 NPE ratio (EBA) 2.4% 2.0% Dec 22 Dec 23 Internation
Slide 16: Group Business activity
02 Group Business activity 16
Slide 17: Customer funds
Customer funds Total Customers Funds* Total Customers Funds* Portugal (Billion euros) (Consolidated, billion euros) +2.7% -2.3% 68.26 66.67 95.29 92.81 14.19 14.22 1.34 1.29 19.20 22.84 Off-BS funds 15.56 16.08 Other BS funds 1.29 33.53 28.33 1.34 Dec 22 Dec 23 Term deposits 27.23 32.88 Total Custom
Slide 18: Loan portfolio
Loan portfolio Loans to Customers (gross) Portugal (Consolidated, billion euros) (Billion euros) -1.52 billion NPE: -12.0% (-0.266 billion) -3.8% 40.15 38.62 -1.6% -0.25 -1.27 57.71 56.81 Mortgage Dec 22 NPE Performing Dec 23 28.12 27.98 International operations (Billion euros) Personal and other 6.
Slide 19: Group Capital and liquidity
02 Group Capital and liquidity 19
Slide 20: Robust capital ratios
Robust capital ratios Common equity tier 1 (CET1) • Significant strengthening of capital ratios. CET1 (Fully implemented) ratio stood at 15.4% and total capital ratio at Fully implemented vs requirement 19.9%, representing an increase of 293bp and 310bp compared with the same period of last year, 15
Slide 21: Stronger capital position
Stronger capital position Leverage ratio (Fully implemented, latest available data) 6.5% 6.4% 5.3% 5.3% Leverage ratio in comfortable levels (6.4% as of 3.9% December 2023) higher when comparing to European 3.0% banks FR DE ES IT RWA density (RWAs as a % of assets, latest available data) 42% RWAs de
Slide 22: MREL requirements and execution of the Funding Plan
MREL requirements and execution of the Funding Plan MREL position (BCP Resolution Group - 31 Dec 2023) • Resolution strategy: MPE (Multi Point of Entry)2. 32.0% • BCP Resolution Group : Perimeter centred in Portugal 12.5% • Preferred Resolution Measure: Bail-in SP 7.0% • No subordination requirement
Slide 23: Pension fund
Pension fund Pension fund coverage Structure of pension fund (Million euros) Coverage 121% 113% Real-estate: Pension Fund 3,384 3,470 16% 390 Excess 593 Bonds: 58% Cash and other: 2% Equities: 10% Pension liabilities 2,791 3,080 Investment Funds: 14% Fundo de pensões Dec 22 Dec 23 • Discount rate re
Slide 24: Robust liquidity position
Robust liquidity position Liquidity ratios (CRD/CRR) Liquidity excess in ECB (Billion euros) Eligible assets 23.9 25.8 276% -0.5 billion 2.6 2.1 167% Dec 22 Dec 23 Net loans to deposits ratio 100% 74% 71% NSFR (Net stable LCR (Liquidity Dec 22 Dec 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) +111.0% +29.5% 724.9 2,035.4 1,571.5 343.5 2022 2023 2022 2023 Operating costs (Million euros) • Net income reached 724.9 million in 2023, +2.5% representing an increase of 111.0% from 2022 601.7 616.7 • Net i
Slide 27: Net interest income
Net interest income (Million euros) +54.2% +581.7 +200.2 +42.9 1,466.5 -5.9 -153.0 -140.6 951.0 2.59% -9.7 NIM 1.53% 2022 Performing Credit rate Impact of Deposit's rate Impact of Effect of Excess liquidity 2023 credit volume effect including NPE reduction effect securities wholesale cost and other
Slide 28: Commissions and other income
Commissions and other income Commissions Other income (Million euros) (Million euros) 2022 2023 YoY Total 59.9 8.5 Banking fees and commissions 472.9 471.4 -0.3% Cards and transfers 147.7 158.3 +7.2% Loans and guarantees 95.6 81.5 -14.8% Equity earnings+ dividends 67.0 Bancassurance 84.5 84.4 -0.1%
Slide 29: Operating costs
Operating costs Operating costs Employees (Million euros) -10 +2.5% 6,252 6,242 616.7 601.7 15.3 Non-recurring1 16.5 73.1 Depreciation 79.1 Other administrative 188.7 184.0 Dec 22 Dec 23 costs Branches -9 408 399 Staff costs 322.2 339.6 2022 2023 Dec 22 Dec 23 29 1 Includes mainly costs related with
Slide 30: Continued decrease of NPEs
Continued decrease of NPEs Non-performing exposures (NPE) NPE build-up (Million euros) -255 million Dec 23 Dec 23 (Million euros) -18.7% vs. Dec 22 vs. Sep 23 1,361 Opening balance 1,361 1,192 1,107 Net outflows/inflows -20 -31 Other NPE Write-offs -94 -6 1,028 747 Sales -141 -48 NPL>90d 333 360 End
Slide 31: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 162% 208% 142% 160% 34% 43% Real estate collateral 2% 100% Real estate collateral 2% 52% 100% 41% 1% Cash, other fin.collat. 2% Cash, other fin.collat. 69% 51% 172% 117% 1% 117% LLRs 89% LLRs 1% 49% 30% Individuals Companies Total Individuals
Slide 32: Foreclosed assets and corporate restructuring funds
Foreclosed assets and corporate restructuring funds Foreclosed assets Corporate restructuring funds (Million euros) (Million euros) -11.0% 411 262 365 Impairment 78 169 57 28 Industry -83 million 68 Net value 183 353 337 RE/tourism -45.2% 100 Dec 22 Dec 23 Dec 22 Dec 23 Sales of foreclosed assets (M
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) -2.33% NPE: -18.7% (-0.3 billion) 68.26 66.67 Performing: -3.3% (-1.3 billion) -3.80% Off-BS funds 14.19 14.22 40.15 38.62 Other BS funds 1.34 1.29 Term deposits 19.20 Mortgage 22.
Slide 34: Performing loans in Portugal
Performing loans in Portugal The Bank maintains a prominent position in the corporate segment: Performing loans portfolio ✓ Leadership in PME Leader programme for the 6th consecutive (Billion euros) year with a 32% market share -3.3% 38.8 ✓ Leadership in Inovadora COTEC programme for the 3rd consecu
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*) 2022 2023 Contribution from international operations (Million euros) Poland -223.5 126.8 Mozambique 103.4 105.1 +30.7% Excluding effects of Bank Millennium2 304.4 397.9 Other -4.7 -0.7 Net income international operations -124.8
Slide 37: Positive evolution of net income
Positive evolution of net income Net income Net operating revenue (Million euros1) +33.7% (Million euros1) 659.3 +26.2% 1,482.9 493.2 1,174.8 Adjusted net income2 126.8 Net income -223.5 2022 2023 2022 2023 • Net income of 126.8 million in 2023 which compares with -223.5 million in 2022 3m WIBOR (av
Slide 38: Net interest income increase significantly
Net interest income increase significantly Net interest income Operating costs (Million euros*) (Million euros*) -4.8% NIM 4.43% 4.60% 461.1 +12.9% 439.0 Resol. Fund + DGF + 1,159.3 87.5 13.2 1,026.9 IPS*** 197.9 Other 171.8 201.8 227.9 Staff costs 2022 2023 2022 2023 Commissions and other income Co
Slide 39: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 2.0% 2.1% NPL>90d 157% 157% 361.8 368.8 566.3 579.8 Dec 22 Dec 23 Dec 22 Dec 23 Loan impairment (net of recoveries) (Million euros*) Cost of risk 44bp 39bp • NPL>90d accounted for 2.1% 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*) +10.4% 26,548 24,051 -3.6% 1,858 Off-BS funds 1,480 18,193 17,534 8,981 Term deposits 7,476 Mortgage 9,807 9,207 15,709 Personal and Demand deposits 15,094 other 3,984 4,263 Companies
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% 8.1% 6.6% 5.5% 4.6% 3.6% loan portfolio 41.3% 46.8% 55.8% 64.7% 73.5% 82.5% mortgage portfolio (gross after legal -15%
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*) +1.6% 259.6 263.7 +1.6% 103.4 105.1 2022 2023 2022 2023 MIMO rate (average) 15.26% 17.25% Operating Costs • Net income of 105.1 million in 2023, a 1.6% (Million euros*) increa
Slide 43: Increased net interest income
Increased net interest income Net Interest income Operating costs (Million euros*) (Million euros*) NIM 8.3% 8.5% Cost to income 42.6% 47.7% +2.3% +13.7% 201.8 125.7 110.5 197.3 Other 64.5 75.5 Staff costs 46.0 50.1 2022 2023 2022 2023 Commissions and other income Employees Branches (Million euros*)
Slide 44: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 8.2% 3.2% NPL>90d 98% 133% 54.4 53.5 21.0 27.9 Dec 22 Dec 23 Dec 22 Dec 23 Loan impairment (net of recoveries) (Million euros*) • NPL>90d ratio of 3.2% as of December 2023, Cost of risk 11
Slide 45: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) -3.8% -0.9% 2,156 2,075 660 654 Mortgage 11 10 Personal and 1,089 other 156 Term deposits 1,094 201 Companies 494 443 Demand 1,067 deposits 981 Dec 22 Dec 23 Dec 22 Dec 23 *FX effect excluded. €/Metical con
Slide 46: Key figures
05 Key figures 46
Slide 47: Strategic Plan: Excelling 24
Strategic Plan: Excelling 24 2023 2024 C/I ratio 32%1 ✓ ≈40% Cost of risk 42 bp2 ✓ ≈50 bp RoE 16.0% ✓ ≈10% CET1 ratio 15.4% ✓ >12.5% NPE ratio 3.4% ✓ ≈4% Share of mobile Customers 68% ✓ >65% Growth of high engagement Customers3 (vs 2020) +13.5% ✓ +12% Average ESG rating4 67% >80% 1Adjusted cost to i
Slide 48: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Fundação Millennium bcp Sociedade Sustentabilidade Centro de Arte Oliva: exhibition The Revolution Millennium Volunteers present at the Food Millennium bcp begins the process of in the Night - invites visitors to explore the Bank, for the 10th consecutive year, insta
Slide 49: Awards
Awards new new new Millennium bcp: Bank with the Best Service Bank Millennium: "Top Employer Polska Millennium bcp in Portugal in the treasury management 2024", by "HR Best Practices Survey" 2024 Consumer’s Choice, in the “Large category by the Euromoney magazine Banks” category for the 4th consecut
Slide 50: Appendix
Appendix 50
Slide 51: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) >5y, ≤8y: 24% Dec 22 Mar 23 Jun 23 Sep 23 Dec 23 YoY QoQ Portugal 6,295 6,908 6,534 6,188 5,656 -10% -9% T-bills and other 310 810 421 109 104 -67% -5% Bonds 5,985 6,098 6,113 6,079 5,552 -7% -9%
Slide 52: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book 156 25 0 193 375 ≤ 1 year 107 1 0 193 301 > 1 year and ≤ 2 years 34 1 0 0 35 > 2 years and ≤ 5 years 6 16 0 0 22 > 5 years and ≤ 8 years 4 0 0 0 5 > 8 years and ≤ 10 years 1 7 0 0 8 > 10 years 3 0 0 0 4 Bank
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% 49% 27% 28% 80-90 Companies 12% 39% Real >90 guarantees 3% 58% 50-60 Unsecured 0-40 15% 15% 21% 40-50 12% Personal/
Slide 54: Consolidated net income
Consolidated net income Impact on (Million euros) 2022 2023 YoY earnings Net interest income 2,149.8 2,825.7 +31.4% +676.0 Net fees and commissions 771.9 771.7 -0.0% -0.2 Other income* -64.3 172.3 +236.5 Net operating revenue 2,857.4 3,769.7 +31.9% +912.3 Staff costs -580.8 -631.8 +8.8% -51.0 Other
Slide 55: Consolidated balance sheet
Consolidated balance sheet (Million euros) 31 December 31 December 2022 31 December 31 December 2022 2023 (restated) 2023 (restated) LIABILITIES ASSETS Financial liabilities at amortised cost Cash and deposits at Central Banks 4,545.5 6,022.0 Resources from credit institutions 829.1 1,468.4 Loans an
Slide 56: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) Quarterly 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 Net interest income 603.9 664.6 709.8 743.1 708.3 Dividends from equity instruments 0.8 0.0 1.1 0.0 0.6 Net fees and commission income 198.1 195.4 191.6 191.4 193.2 Other operating income -6.2 -6.4 -65.
Slide 57: Income statement
Income statement (Million euros) For the 12-month periods ended December 31st, 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 D ec 2 2 D ec 2 3 Δ % D ec 2 2 D ec 2 3 Δ % D ec 2
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 not measured at fair value through profit or loss. Non-per
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. Registered Office: Praça D. João I, 28, Oporto, Share Capital: EUR 3,000,000,000.00. Registered at the C
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