Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — FY2020 Earnings Presentation
70 slides from Banco Comercial Portugues's earnings presentation, Feb 25, 2021
Slide 1: Earnings Presentation 2020
EARNINGS PRESENTATION 2020 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: 2020: an atypical and very demanding year
2020: an atypical and very demanding year GDP growth Year-on-year growth 2011-2020 (%) Quarter-on-quarter growth (%) Portugal 2020 EMU 2020 13.3 12.4 Portugal 2019 • Sudden inflection of economic 3.5 growth, with unprecedented EMU 0.7 0.5 0.4 0.7 contraction in 2020 0.4 • Confinement-unconfinement -
Slide 6: Priorities set up allowed for a prompt adaptation
Priorities set up allowed for a prompt adaptation. We have permanently supported the economy and the communities we serve 99% +74% Prompt reaction and adaptation to Operating branches App transactions uncertain context Priorities in 2020 • Full operating capacity Protect Employees and €2.3 >102,000
Slide 7: Highlights: resilience and adaptability
Highlights: resilience and adaptability ▪ Net profit of 183 million, influenced by the Covid-19 context and by provisions for legal risk on CHF loans in Poland ▪ Pre-provision profit up by 1.5% to 1,186.2 million in 2020; significant reinforcement of Profitability impairment and other provisions tha
Slide 8: Highlights: resilience and adaptability
Highlights: resilience and adaptability ▪ Performing loans in Portugal up by 2.6 billion, +7.9% from end-2019, with performing loans to companies increasing 16.4%; leadership in Covid-19 credit lines, with more than 18,000 Business operations disbursed (market share in excess of 30%) activity ▪ Tota
Slide 9: Growing Customer base, mobile Customers standing out
Growing Customer base, mobile Customers standing out As a % of active ‘000 Customers Customers Group +489,000 Customers 2,747 48% Mobile Customers 2,258 +22% Dec 19 Dec 20 +401,000 Customers Digital Customers 3,259 3,660 64% +12% Active Customers 5,658 5,701 +216,000 Customers 967 40% Mobile Custome
Slide 10: Our digital capabilities were especially appreciated by Customers during the pandemic
Our digital capabilities were especially appreciated by Customers during the pandemic % Mobile Customers 1 Digital Interactions #(mln) 2 Strong mobile growth Y/Y 320 (Jan-Dec 2020 vs. Jan–Dec 2019) 40 236 31 +68% +68% Logins Payments 2019 2020 2019 2020 % Digital Transactions (#) 3 % Digital Sales (
Slide 11: Best Digital Bank and Leader in Customer Satisfaction
Best Digital Bank and Leader in Customer Satisfaction in 2020 Best Digital Bank Millennium app in 20203 leads ratings # 1 NPS Digital Customers 2020, 5 largest Banks 1 +14% 4.8 66% 49.0 47.7 52% 50% 41.0 38.8 39% 35.0 4.8 Millennium Bank 2 Bank 3 Bank 4 Bank 5 Banking Millennium Banking Millennium B
Slide 12: Digital: More Innovation at the Service of Customers
Digital: More Innovation at the Service of Customers 15 New versions in 2020 Even simpler day-to-day Constant innovation 100% digital, 24x7 Open Banking now management in payments sales journeys includes international banks 1.3 million digital Customers Update to Customer data - no Apple Pay Covers
Slide 13: Group Profitability
02 Group Profitability 13
Slide 14: Net income of 183.0 million in 2020
Net income of 183.0 million in 2020 Impact on (Million euros) 2019 2020 YoY earnings Net interest income 1,548.5 1,533.2 -1.0% -15.4 Commissions 703.5 702.7 -0.1% -0.8 Core income 2,252.0 2,235.8 -0.7% -16.2 Operating costs excluding non-usual items -1,099.8 -1,072.9 -2.4% +26.9 Core earnings 1,152.
Slide 15: Resilient net interest income
Resilient net interest income Net interest income Portugal (Consolidated, million euros) (Million euros) Net interest margin 1.67% 1.56% Net interest +2.1% margin 2.18% 1.99% 789.2 805.4 -1.0% 1,548.5 1,533.2 2019 2020 International operations (Million euros) Net interest 3.21% 2.86% margin -4.2% 75
Slide 16: Stable commissions in an adverse environment
Stable commissions in an adverse environment Fees and commissions Portugal (Consolidated, million euros) (Million euros) -0.1% -0.3% 703.5 702.7 483.2 481.5 Market-related 59.6 +27.3% 75.9 fees and 117.4 +13.8% 133.6 commissions 423.6 -4.2% 405.7 2019 2020 International operations Banking fees (Mill
Slide 17: Other income influenced by specific items
Other income influenced by specific items Other income Portugal (Consolidated, million euros) (Million euros) -13.0% 58.4 50.8 -16.0% Total 83.0 69.8 40.5 62.2 51.5 61.5 -33.6 -73.0 2019 2020 Equity earnings + 72.5 +5.1% dividends 43.8 Mandatory contributions 66.6 70.0 Of which: Banking sector 31.8
Slide 18: Operating costs decreased
Operating costs decreased Operating costs Portugal (Consolidated, million euros) (Million euros) -3.1% -4.0% 670.9 650.3 1,166.1 1,119.3 Depreciation 124.8 137.1 Other administrative 2019 2020 costs 373.1 -1.9% 335.5 Recurring 630.9 618.7 Includes non-usual impact of 66.4 million: • Compensation tem
Slide 19: Millennium bcp: one of the most efficient banks in the Eurozone
Millennium bcp: one of the most efficient banks in the Eurozone Cost to core income* Cost to core income* Latest available data -14pp 80% 66% vs. peers in vs. Eurozone -38pp Portugal banks 50% including non- 50% including non- 86% 50% including non- usual costs usual costs usual costs 48% 48% 48% Ba
Slide 20: Cost of risk and provisions
Cost of risk and provisions Impairment (Consolidated, million euros) and provision charges Portugal (Consolidated, million euros) (Million euros) Cost of risk 76bp 92bp +27.4% Cost of risk 72bp 91bp 472.8 371.1 118.8 +55.3% 91.9 841.2 279.2 354.0 151.9 2019 2020 -20.7% Loan-loss reserves 1,877 1,488
Slide 21: Relevant decrease of NPE, despite difficult context
Relevant decrease of NPE, despite difficult context Credit (Consolidated, millionquality euros) Portugal (Consolidated, billion euros) (Billion euros) -0.88 billion -0.9 billion -368mn from NPE -27.2% NPE 4.2 September 2020 3.25 -338mn from September 2020 -21.7% 2.36 3.3 Other 1.9 1.5 Dec 19 Dec 20
Slide 22: Group Business activity
02 Group Business activity 22
Slide 23: Customer funds keep growing
Customer funds keep growing Total Customers Funds* Total Customers Funds* Portugal (Billion euros) (Consolidated, billion euros) Individuals: +7.1% +7.4% 56.8 61.0 +3.4% 84.5 16.3 81.7 15.8 1.6 1.4 16.7 16.1 19.7 Off-BS funds 19.1 22.7 27.2 1.5 Other BS funds 1.8 Dec 19 Dec 20 20.2 Total Customers F
Slide 24: Continued increase on the performing loan portfolio
Continued increase on the performing loan portfolio Loans to Customers (gross) Portugal (Consolidated, billion euros) (Billion euros) NPE: -21.7% (-0.9 billion) +1.76 billion Performing: +4.6% (+2.3 billion) +4.8% +2.6% 38.47 36.71 +2.64 54.7 56.1 -0.88 Dec 19 NPE Performing Dec 20 Mortgage 25.9 26.
Slide 25: Group Capital and liquidity
02 Group Capital and liquidity 25
Slide 26: Capital above regulatory requirements
Capital above regulatory requirements Total capital ratio (Fully implemented) • Total capital of 15.6%* (fully implemented) Fully implemented +2.3pp vs requirement as of December 2020, comfortably above 15.6% 15.6% SREP requirements 13.3% O-SII buffer +5.3pp** Conservation 2.50% buffer • Surplus of
Slide 27: Capital at adequate levels
Capital at adequate levels Leverage ratio (Fully implemented, latest available data) 5.9% 6.7% 5.3% Leverage ratio at 6.7% as of December 2020, a 4.1% 4.3% 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 28: Pension fund
Pension fund Key figures Pension fund (Million euros) Equities: 14% Cash and Dec 19 Jun 20 Dec 20 other: 28% Pension liabilities 3,490 3,391 3,658 Pension fund 3,501 3,423 3,751 Liabilities' coverage 100% 101% 103% Fund's profitability +8.1% -0.2% +5.8% Real-estate: 6% Bonds: 52% Assumptions Dec 19
Slide 29: Reinforced liquidity position
Reinforced liquidity position Net loans to deposits ratio ECB funding, net (Billion euros) Eligible assets 17.1 22.5 +3.0 billion 3.3 86% 85% Net funding 0.3 7.6 TLTRO 4.0 Deposits and other -3.7 -4.3 Dec 19 Dec 20 Liquidity ratios (CRD/CRR) 230% 140% 100% Dec 19 Dec 20 NSFR (Net stable LCR (Liquidi
Slide 30: Portugal
03 Portugal 30
Slide 31: Net income affected by the Covid-19 context
Net income affected by the Covid-19 context Net income* Net operating revenue (Million euros) (Million euros) -7.2% +0.5% 1,330.7 1,337.7 144.8 134.5 2019 2020 2019 2020 Operating costs (Million euros) 670.9 -3.1% • Compensation temp. salary cuts: • Net income of 134.5 million in 2020, compared to 6
Slide 32: Net interest income
Net interest income (Million euros) +2.1% +36.6 +2.2 805.4 789.2 +18.0 +37.3 NIM -36.3 1.56% 1.67% -13.9 -16.9 -10.7 2019 Performing Credit rate Impact of Impact of the Excess liquidity Effect of Deposits' rate Other 2020 credit volume effect NPE reduction securities (ECB, TBills) wholesale cost eff
Slide 33: Continued effort to reduce the cost of deposits
Continued effort to reduce 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) 2019 2020 2.74% 2.70% -0.52% -0.56% 2019 2020 3m Euribor 3m Euribor (average) -0.36% -0.43% (average) -0.36% -0.43% NIM • Spread of the
Slide 34: Commissions and other income
Commissions and other income Fees and commissions Other income (Million euros) (Million euros) -13.0% Total 58.4 50.8 2019 2020 YoY Banking fees and commissions 423.6 405.7 -4.2% Cards and transfers 111.2 99.3 -10.7% 62.2 Loans and guarantees 112.0 103.5 -7.5% Equity earnings + dividends 40.5 Bancas
Slide 35: Operating costs decreased
Operating costs decreased Operating costs Employees (Million euros) -191 -3.1% 7,204 7,013 670.9 650.3 Depreciation 68.9 76.4 Other 190.6 Dec 19 Dec 20 administrative costs 178.3 Includes non-usual impact of 40.1 million: Includes non-usual impact of 31.6 million: • Compensation temp. salary cuts: 1
Slide 36: Continued decrease of NPEs
Continued decrease of NPEs Non-performing exposures (NPE) NPE build-up (Million euros) Dec 20 Dec 20 (Million euros) -883 million vs.Dec 19 vs.Sep 20 3,246 -27.2% Opening balance 3,246 2,701 2,363 Net exits -7 -1 Other NPE 1,559 Write-offs -106 -20 1,109 Sales -770 -317 NPL>90d 1,688 1,255 Ending ba
Slide 37: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 127% 135% 119% 125% 98% 98% 19% 37% 30% Real estate collateral 44% Real estate collateral 27% 17% 19% Cash, other fin. collat., 63% 12% Cash, other fin. collat., 57% EL gap EL gap 0% 89% 0% 73% 63% LLRs 76% LLRs 35% 42% Individuals Companies T
Slide 38: Foreclosed assets and corporate restructuring funds
Foreclosed assets and corporate restructuring funds Foreclosed assets Corporate restructuring funds (Million euros) (Million euros) -120mn from 1,020 September 2020 -10.4% 809 924 828 Impairment 184 141 130 106 Industry -169 million Net value 837 667 795 721 RE/tourism -20.2% Dec 19 Dec 20 Dec 19 De
Slide 39: Growing customer funds and performing loans to customers
Growing customer funds and performing loans to customers Total Customers Funds* Loans to Customers (gross) (Billion euros) (Billion euros) Individuals: +7.1% +7.4% NPE: -27.2% (-0.9 billion) Performing: +7.9% (+2.6 billion) 61.0 +4.8% 56.8 38.5 36.7 16.3 Off-BS funds 15.8 1.4 Other BS funds 1.6 17.5
Slide 40: Credit grows in Portugal
Credit grows in Portugal Performing credit portfolio (Billion euros) • Performing credit portfolio in Portugal up by 2.6 +7.9% billion (+7.9%) from end-2019 33.5 36.1 • Strong support to companies, which accounted for 92% of the total performing loan growth from end- Mortgage 16.8 +1.9% 17.1 2019. P
Slide 41: Supporting companies and families to tackle the challenges of the pandemic
Supporting companies and families to tackle the challenges of the pandemic Support as a % of GDP Covid-19 credit lines to companies Outstanding moratoriums Moratoriums Government (Amount in million euros) (Million euros) (private sector support) support # operations Amount Amount Reduction* Disburse
Slide 42: Performance of expired moratoriums, franchise resilience and asset quality
Performance of expired moratoriums, franchise resilience and asset quality demonstrate capacity to face the effects of the pandemic Breakdown per stages Solid pre-provision profit NPE Loan portfolio (%) (Billion euros) 78.3% 15.7% 6.0% -10.4 billion Pre-provision profit / Gross loans 12.8 2.01 Stage
Slide 43: International operations
04 International operations 43
Slide 44: Contribution from international operations to consolidated net income
Contribution from international operations to consolidated net income (Million euros*) Δ% Δ% 2019 2020 local currency euros Contribution from international operations Poland 125.8 5.1 -95.9% -96.1% Mozambique 87.7 66.8 -23.8% -32.8% -66.2% 143.8 Contribution of the Angolan operation** 1.6 -7.2 Other
Slide 45: Net earnings affected by provisions for legal risk on CHF loans
Net earnings affected by provisions for legal risk on CHF loans Net income Net operating revenue (Million euros*) (Million euros*) Impact of specific items**: -95.9% -80.9 million 125.8 +3.1% 778.9 802.7 Impact of specific items**: -154.1 million 5.1 2019 2020 2019 2020 Operating costs (Million euro
Slide 46: Euro Bank integration and additional rationalisation measures
Euro Bank integration and additional rationalisation measures Impact of the integration of Euro Bank Employees (Million euros*) Integration -971 costs 26.1 15.0 8,464 7,493 Synergies after taxes 5.3 37.6 2019 2020 Dec 19 Dec 20 Impact, net of taxes -16.9 +18.3 Branches • Euro Bank became earnings-ac
Slide 47: Increased net interest income
Increased net interest income Net interest income* Operating costs (Million euros**) (Million euros**) NIM 2.84% 2.61% +1.5% 387.3 393.3 +3.3% Resol. fund + DGF 27.7 +35.4% 37.5 560.8 579.5 Other 171.9 -4.8% 163.6 Staff costs 187.7 +2.4% 192.1 2019 2020 2019 2020 Commissions and other income Mandato
Slide 48: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 2.7% 2.7% NPL>90d 107% 122% 545.9 419.9 446.1 448.7 Dec 19 Dec 20 Dec 19 Dec 20 Loan impairment (net of recoveries) (Million euros*) Cost of risk 68bp 83bp • NPL>90d accounted for 2.7% of
Slide 49: Stable Customers funds and increased loans to Customers
Stable Customers funds and increased loans to Customers Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +6.7% 0.0% 19,800 19,793 16,792 Off-BS funds 1,800 1,852 15,745 Other BS funds 138 68 3,310 5,842 5,771 Mortgage 4,784 Term deposits local currency 2,930 without Euro
Slide 50: 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% 19.2% 17.4% loan portfolio 1.6% 1.9% 2.8% 3.7% 6.7% mortgage portfolio 6.2 197.4 -8.1% 114.2 85.8 3.2 48.9 61.1 3.0 2008 2019 2020 2019 Q1'20 H1'20 9M'20 2
Slide 51: Net income impacted by provisions and normalisation of interest rates
Net income impacted by provisions and by the normalisation of the interest rate environment Net income Net operating revenue (Million euros*) (Million euros*) -23.8% -7.2% 87.7 218.0 202.4 66.8 2019 2020 2019 2020 Operating costs (Million euros*) • Net income of 66.8 million, impacted by provisions
Slide 52: Net interest income impacted by the normalisation of the interest rate environment
Net interest income impacted by the normalisation of the interest rate environment Net interest income Operating costs (Million euros*) (Million euros*) NIM 9.5% 7.8% Cost to income 39.5% 44.4% +4.3% -7.4% 160.8 86.2 89.9 148.9 Other 49.1 +2.8% 50.4 Staff costs 37.2 +6.4% 39.5 2019 2020 2019 2020 Co
Slide 53: Credit quality performance influenced by challenging environment
Credit quality performance influenced by challenging environment NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 16.7% 12.5% NPL>90d 71% 59% 92.0 65.4 65.7 38.9 Dec 19 Dec 20 Dec 19 Dec 20 Loan impairment (net of recoveries) (Million euros*) • NPL>90d
Slide 54: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +17.7% -4.4% 1,524 551 527 1,294 Mortgage 8 8 Personal and 102 other 93 772 Term deposits +16.8% 661 Companies 440 425 Demand +18.7% 751 deposits 633 Dec 19 Dec 20 Dec 19 Dec 20 *FX effect excluded. €/Metic
Slide 55: Key figures
05 Key figures 55
Slide 56: Strategic Plan
Strategic Plan 2019 2020 Steady state* Franchise growth (original plan) Active Customers 5.6 million 5.7 million ... >6 million Digital Customers 58% 64% ... >60% Value creation Mobile Customers 40% 48% ... >45% Cost to income 50% 49% ... ≈40% (47% excluding non-usual costs) (47% excluding non-usual
Slide 57: Prioritising the incorporation of ESG aspects into the business model
Prioritising the incorporation of ESG aspects into the business model Preparation and adaptation of the organization in the three ESG dimensions (Environmental, Social and Governance) Governance model reinforced with dedicated Multidisciplinary involvement and Highlights structures under the Executi
Slide 58: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Millennium bcp Foundation Society Sustainability The 25th edition of the APOM Awards GOS Programme - Management of Social - Portuguese Association of Millennium bcp signed up to the Organizations - Partnership between AESE "Women’s Empowerment Principles" of Museolog
Slide 59: Awards in 2020
Awards in 2020 Millennium bcp: Closest to Customers, clearest information; most recommended bank; leader in Customer satisfaction, in Bank Millennium: part of the WIG-ESG index of the Warsaw quality of service and in product quality; leader in Customer Stock Exchange for socially responsible compani
Slide 60: Appendix
Appendix 60
Slide 61: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) >5y, ≤8y: 44% Dec 19 Mar 20 Jun 20 Sep 20 Dec 20 YoY QoQ Portugal 6,520 6,802 8,253 8,057 7,742 +19% -4% T-bills and other 1,923 1,872 1,605 1,052 384 -80% -64% >8y, ≤10y: 5% Bonds 4,597 4,930 6,6
Slide 62: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book 378 59 0 0 438 ≤ 1 year 378 3 0 0 381 > 1 year and ≤ 2 years 0 12 0 0 12 > 2 years and ≤ 5 years 0 33 0 0 33 > 5 years and ≤ 8 years 0 8 0 0 8 > 8 years and ≤ 10 years 0 4 0 0 4 > 10 years 0 0 0 0 0 Banking
Slide 63: Diversified and collateralised loan portfolio
Diversified and collateralised loan portfolio Loan portfolio (Consolidated) LTV of the mortgage portfolio Breakdown Loans per collateral in Portugal Other Mortage guarantees 60-75 75-80 47% 29% 26% 8% 80-90 Companies 10% 43% Real 50-60 >90 guarantees 15% 7% 57% Unsecured 14% 40-50 0-40 12% 22% Perso
Slide 64: Consolidated net income
Consolidated net income Impact on (Million euros) 2019 2020 YoY earnings Net interest income 1,548.5 1,533.2 -1.0% -15.4 Net fees and commissions 703.5 702.7 -0.1% -0.8 Other income* 83.0 69.8 -16.0% -13.2 Net operating revenue 2,335.0 2,305.6 -1.3% -29.4 Staff costs -668.2 -646.7 -3.2% +21.5 Other
Slide 65: Consolidated balance sheet
Consolidated balance sheet (Million euros) 31 December 31 December 31 December 31 December 2020 2019 2020 2019 LIABILITIES ASSETS Financial liabilities at amortised cost Cash and deposits at Central Banks 5,303.9 5,166.6 Resources from credit institutions 8,898.8 6,367.0 Loans and advances to credit
Slide 66: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 Net interest income 395.6 385.5 373.6 390.5 383.6 Dividends from equity instruments 0.1 0.1 3.4 1.3 0.0 Net fees and commission income 184.4 179.8 165.4 172.9 184.6 Other operating income -13.8 -40.4 -79.1 -24.2
Slide 67: Income statement
Income statement (Million euros) For the 12-month period ended December 31st, 2019 and 2020 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 19 D ec 2 0 Δ % D ec 19 D ec 2 0 Δ % D ec 19 D
Slide 68: 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 69: 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 70: Investor Relations contacts
Witiltevaalivlan bcp DIREGAO DE RELACOES COM INVESTIDORES Bernardo Collaco, Responsavel EQUITY DiVIDA E RATINGS Luis Pedro Monteiro Luis Morais +351 21 1131 084 +351 211131 337 Vv investors@millenniumbcp.pt Banco Comercial Portugués, S.A., sociedade aberta com sede na Praga D. Jodo |, 28, Porto, mat
Banco Comercial Português — FY2020 Earnings Presentation on 6ix