Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — 9M 2020 Earnings Presentation
65 slides from Banco Comercial Portugues's earnings presentation, Oct 29, 2020
Slide 1: Banco Comercial Português October 2020
OCTOBER 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: Re-defined priorities in response to the pandemic
Re-defined priorities in response to the pandemic led to a uneventful transition after the confinement Immediate reaction to Adapting to a new reality worsening risk scenario Economic activity points to a less severe Priorities in 2020 Business continuity ensured in reaction to scenario than estimat
Slide 6: Highlights: resilience and adaptability
Highlights: resilience and adaptability ▪ Net profit of €146.3 million, influenced by the Covid-19 context; Net income stable core earnings of €862.7 million in the first nine months of €146.3mn 2020); significant reinforcement of impairment (+€173.6 million in excess of the first nine months of 201
Slide 7: Highlights: resilience and adaptability
Highlights: resilience and adaptability Performing loans: +4.9% ▪ Performing loans up by €2.4 billion from September 2019; up by €2.0 Performing loans to billion from year-end 2019; leadership in Covid-19 credit lines, with companies in Portugal Business more than 17,000 operations already disbursed
Slide 8: Growing Customer base, mobile Customers standing out
Growing Customer base, mobile Customers standing out ‘000 Customers +649,000 Customers Active Customers Group 5,051 5,700 +13% +686,000 Customers Mobile Customers Group 1,960 2,646 46% +35% +69,000 Customers +3% Active Customers Portugal 2,361 2,429 +219,000 1,289 53% Digital Customers Portugal 1,08
Slide 9: Best Digital Bank and Leader in Customer Satisfaction in 2020
Best Digital Bank and Leader in Customer Satisfaction in 2020 4.9 rating on Google Play Store Leading bank in Customer Strong mobile satisfaction with digital growth Y/Y 88% channels, in all assessed items: Basef, 5 largest banks, September (Jul-Sep 2020 vs. Jul–Sep 2019) of digital interactions are
Slide 10: Digital: More Innovation at the service of Customers
Digital: More Innovation at the service of Customers LAUNCHED IN Q3 15 New versions in 2020 Even simpler day-to-day Greater customization Open Banking now includes 918k active Customers Individualized limits on cards and instant international banks SEPA immediate transfers contracting Customers >65
Slide 11: Group Profitability
02 Group Profitability 11
Slide 12: Net earnings of €146.3 million in the first nine months of 2020
Net earnings of €146.3 million in the first nine months of 2020 Impact on (Million euros) 9M19 9M20 YoY earnings Net interest income 1,153.0 1,149.6 -0.3% -3.4 Commissions 519.1 518.1 -0.2% -1.0 Core income 1,672.0 1,667.7 -0.3% -4.4 Operating costs excluding non-usual items -805.6 -805.0 -0.1% +0.6
Slide 13: Net interest income
Net interest income Net interest income Portugal • Q3 increases 10% from Q2 (Consolidated, million euros) (Million euros) • Excess liquidity and lower yields on the securities portfolio penalised net interest income by €30 million Net interest margin 1.70% 1.55% Net interest margin 2.19% 2.00% -1.5%
Slide 14: Stable commissions in an adverse environment
Stable commissions in an adverse environment Fees and commissions Portugal (Consolidated, million euros) (Million euros) -0.2% -1.2% 519.1 356.9 352.5 518.1 43.2 +20.0% 51.9 Market-related fees and 88.1 +9.2% 96.2 commissions 313.7 -4.1% 300.7 9M19 9M20 International operations (Million euros) Banki
Slide 15: Other income influenced by specific items
Other income influenced by specific items Other income Portugal (Consolidated, million euros) (Million euros) 23.0 38.1 27.9 48.5 68.6 20.1 48.0 46.8 Equity earnings + -37.8 -72.3 dividends 39.7 59.0 9M19 9M20 +5.1% Mandatory contributions 66.6 70.1 Net trading income 119.1 Of which: Banking sector
Slide 16: Operating costs under control
Operating costs under control Operating costs Portugal (Consolidated, million euros) (Million euros) -0.1% -1.8% Recurring 805.6 805.0 Recurring 468.0 459.7 -3.4% 492.4 475.5 -1.5% 844.9 832.4 Depreciation 89.8 9M19 9M20 103.2 Other administrative International operations costs 267.1 244.8 (Million
Slide 17: 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 18: 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 74bp 90bp +21.2% Cost of risk 73bp 89bp 332.8 274.6 72.3 68.3 206.3 260.4 +46.0% 550.7 Includes provisions for legal risk on CHF mortgages (P
Slide 19: Credit quality
Credit quality Credit (Consolidated, millionquality euros) Portugal (Consolidated, billion euros) (Billion euros) -€1.0 billion NPE total NPE -26.8% -€545mn from end-2019 coverage* 107% 112% 3.7 -€207mn from June 2020 2.7 NPE coverage by LLRs 55% 48% 62% -€0.9 billion -€543mn from end-2019 NPE 4.6 -
Slide 20: Group Business activity
02 Group Business activity 20
Slide 21: Customer funds keep growing
Customer funds keep growing Total Customers Funds* Total Customers Funds* Portugal (Billion euros) (Consolidated, billion euros) Individuals: +6.2% +4.7% Individuals: +3.2% 56.2 58.8 +3.9% 83.3 15.6 80.2 15.7 1.6 1.4 16.9 16.3 18.8 Off-BS funds 18.9 22.0 25.6 1.5 Other BS funds 1.7 Sep 19 Sep 20 21.
Slide 22: 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: -20.4% (-€0.9 billion) +€1.35 billion Performing: +4.9% (+€2.4 billion) +3.6% +2.7% 38.56 37.20 -0.99 +2.34 54.7 56.1 Sep 19 NPE Performing Sep 20 Mortgage 25.6
Slide 23: Group Capital and liquidity
02 Group Capital and liquidity 23
Slide 24: Capital above regulatory requirements
Capital above regulatory requirements Total capital ratio (Fully implemented) • Capital generation of 22bp in the quarter: Fully implemented +2.4pp vs requirement total capital of 15.7%* (fully implemented) 15.7% 15.7% as of September 2020, comfortably above 13.3% +5.5pp** O-SII buffer SREP requirem
Slide 25: Capital at adequate levels
Capital at adequate levels Leverage ratio (Fully implemented, latest available data) 6.1% 6.7% 4.4% 5.2% Leverage ratio at 6.7% as of September 2020, a 3.4% comfortable and comparatively strong figure in European 3.0% banking FR DE ES IT RWA density (RWAs as a % of assets, latest available data) Hig
Slide 26: Reinforced liquidity position
Reinforced liquidity position Net loans to deposits ratio ECB funding, net (Billion euros) Eligible assets 18.4 22.5 +€3.0 billion 88% 4.9 86% Net funding 1.9 7.6 TLTRO TLTRO 4.0 Deposits and other -2.1 -2.7 Other Sep 19 Sep 20 Liquidity ratios (CRD/CRR) 243% 140% 100% Sep 19 Sep 20 NSFR (Net stable
Slide 27: Portugal
03 Portugal 27
Slide 28: 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) -26.7% -2.9% 125.5 995.1 966.7 91.9 9M19 9M20 9M19 9M20 Operating costs (Million euros) -3.4% • Compensation temp. salary cuts: • Net earnings of €91.9 million in the first 492.4 475.5 €5.8m
Slide 29: Net interest income
Net interest income (Million euros) -1.5% +25.3 600.1 591.2 +12.0 +18.0 NIM -23.0 1.70% -11.5 1.55% -18.6 -0.1 -11.1 9M19 Performing Credit rate Impact of Impact of the Excess liquidity Effect of Deposits' rate Other 9M20 credit volume effect NPE reduction securities (ECB, TBills) wholesale cost eff
Slide 30: 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 prforming loan book (vs 3m Euribor) (vs 3m Euribor) 9M19 9M20 2.72% 2.69% -0.51% -0.55% 9M19 9M20 3m Euribor 3m Euribor (average) -0.34% -0.39% (average) -0.34% -0.39% NIM ▪ Spread of the p
Slide 31: Commissions and other income
Commissions and other income Fees and commissions Other income (Million euros) (Million euros) (Million euros) 23.0 9M19 9M20 YoY 38.1 Banking fees and commissions 313.7 300.7 -4.1% 48.5 Equity earnings + dividends 27.9 Cards and transfers 81.6 73.1 -10.4% Loans and guarantees 82.8 76.2 -8.0% Net tr
Slide 32: Operating costs under control
Operating costs under control Operating costs Employees (Million euros) -107 -1.8% Recurring 468.0 459.7 7,259 7,152 -3.4% 492.4 475.5 Depreciation 51.2 57.0 Sep 19 Sep 20 Other administrative costs 139.5 128.8 Branches Includes non-usual impact of €15.8 million: Includes non-usual impact of €24.4 m
Slide 33: Continued decrease of NPE
Continued decrease of NPE Non-performing exposures (NPE) NPE build-up (Million euros) Sep 20 Sep 20 (Million euros) -€1.0 billion vs.Sep 19 vs.Dec 19 3,691 Opening balance 3,691 3,246 -26.8% 2,701 Net exits -164 33 Other NPE 1,673 Write-offs -251 -93 1,354 Sales -575 -485 NPL>90d 2,019 1,348 Ending
Slide 34: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 135% 124% 118% 124% 99% 99% 21% 32% Real estate collateral 36% Real estate collateral 30% 43% 21% Cash, other fin. collat., 17% Cash, other fin. collat., 66% 13% 60% EL gap EL gap 1% 85% 1% 71% 61% LLRs 71% LLRs 32% 38% Individuals Companies T
Slide 35: Foreclosed assets and corporate restructuring funds
Foreclosed assets and corporate restructuring funds Foreclosed assets Corporate restructuring funds (Million euros) (Million euros) -12.3% 1,134 969 Impairment 928 850 187 139 Industry 124 170 Net value -€190 million 948 829 726 RE/tourism 758 -20.0% Sep 19 Sep 20 Sep 19 Sep 20 • Net foreclosed asse
Slide 36: 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: +6.2% +4.7% NPE: -26.8% (-€1.0 billion) Performing: +7.0% (+€2.3 billion) 58.8 +3.6% 56.2 37.2 38.6 15.6 Off-BS funds 15.7 1.4 Other BS funds 1.6 17
Slide 37: Credit grows in Portugal
Credit grows in Portugal Performing credit portfolio (Billion euros) +€2.3 billion (+7.0%) • Strong support to companies, 33.5 35.9 which accounted for 89% of the total performing loan growth from 16.6 16.9 September 2019. Mortgage Personal and other 1.9 1.8 Companies 15.0 17.1 • Performing credit p
Slide 38: Supporting companies and families to tackle the challenges of the pandemic
Supporting companies and families to tackle the challenges of the pandemic Covid-19 credit lines to companies Moratoriums (Amount in billion euros) (Amount in billion euros) DISBURSED # operations Amount HOUSEHOLDS # operations Amount st 1 wave 14,602 2.3 Public 59,560 3.5 nd 2 wave 2,374 0.1 APB 41
Slide 39: Analysis of the loan portfolio under moratoriums
Analysis of the loan portfolio under moratoriums LTV of mortgages and loans to vulnerable Loan portfolio Breakdown of moratoriums sectors under moratoriums 0%-60% 60%-80% Households Non- Moratoriums Personal Mortgages 34% 37% moratoriums 20% and other 80% 91% 9% > 80% 29% 60%-80% 18% More Non- vulne
Slide 40: International operations
04 International operations 40
Slide 41: Contribution from international operations to consolidated net income
Contribution from international operations to consolidated net income (Million euros) Δ% Δ% 9M19 9M20 local currency euros Contribution from international operations Poland 120.6 29.8 -75.3% -76.0% Mozambique 68.1 61.3 -9.9% -17.9% -58.6% 131.4 Contribution of the Angolan operation** 6.7 -6.9 Other
Slide 42: Net earnings affected by provisions, mandatory contributions and Euro Bank’s acquisition
Net earnings affected by provisions, mandatory contributions and Euro Bank’s acquisition Net income Net operating revenue (Million euros) (Million euros) Impact from specific items*: -€25.6 million 120.6 +6.0% 568.7 602.8 Impact from specific items*: -€102.0 million 29.8 9M19 9M20 9M19 9M20 Operatin
Slide 43: Integration of Euro Bank
Integration of Euro Bank Impact of the integration of Euro Bank • Synergies totalled (Million euros) Q1'19 Q2'19 Q3'19 Q4'19 Total Q1'20 Q2'20 Q3'20 Total €25.0 million in the 2019 9M20 first nine months of 2020, exceeding Euro Bank integration costs -0.4 -4.0 -10.0 -11.8 -26.3 -6.8 -1.2 -3.9 -11.9
Slide 44: Increased net interest income
Increased net interest income Net interest income* Operating costs (Million euros) (Million euros) Excluding Euro Bank +9.4% NIM 2.79% 2.63% integration costs 264.8 289.7 +9.4% +8.0% 442.4 279.2 301.6 404.4 Resol. fund + DGF 24.8 +28.1% 31.7 Other 118.1 120.2 +1.8% Staff costs 136.4 +9.8% 149.7 9M19
Slide 45: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros) (Million euros) Credit ratio Coverage ratio NPL>90d 2.6% 2.8% NPL>90d 107% 116% 533.6 404.8 460.6 432.2 Sep 19 Sep 20 Sep 19 Sep 20 Loan impairment (net of recoveries) (Million euros) • NPL>90d accounted for 2.8% of total credit as of Cost of
Slide 46: Growing volumes
Growing volumes Customers funds Loans to Customers (gross) (Million euros) (Million euros) +5.6% +5.0% 20,769 19,662 1,737 16,549 90 15,762 Off-BS funds 1,795 Other BS funds 141 4,245 Mortgage 4,894 5,532 Term deposits 6,299 local currency 3,029 without Euro Bank Mortgage 3,176 3,249 foreign exchang
Slide 47: Net income impacted by provisions and normalisation of the interest rate environment
Net income impacted by provisions and by the normalisation of the interest rate environment Net income Net operating revenue (Million euros) (Million euros) -9.9% -7.9% 68.1 170.6 157.0 61.3 9M19 9M20 9M19 9M20 Operating costs (Million euros) • Net income of €61.3 million +4.2% 66.1 68.9 • Customer
Slide 48: 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 9.8% 8.1% Cost to income 38.7% 43.9% +4.2% -7.4% 127.1 66.1 68.9 117.7 Other 37.7 +3.0% 38.8 Staff costs 28.4 +5.9% 30.1 9M19 9M20 9M19 9M20 Comm
Slide 49: 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 17.0% 20.3% NPL>90d 67% 71% 93.3 100.9 131.1 67.8 Sep 19 Sep 20 Sep 19 Sep 20 Loan impairment (net of recoveries) (Million euros) • NPL>90d
Slide 50: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros) (Million euros) +15.0% +8.9% 1,513 647 594 9 1,315 Mortgage 9 112 Personal and 110 other 751 Term deposits +16.8% 643 526 Companies 475 Demand +13.3% 761 672 deposits Sep 19 Sep 20 Sep 19 Sep 20 FX effect excluded. €/Metical
Slide 51: Key figures
05 Key figures 51
Slide 52: Strategic Plan
Strategic Plan 9M 2019 9M 2020 Steady state* Franchise growth (original plan) Active Customers 5.1 million 5.7 million ... >6 million Digital Customers 58% 63% ... >60% Value creation Mobile Customers 39% 46% ... >45% Cost to income 49% 49% ... ≈40% (46% excluding non-usual costs) (48% excluding non
Slide 53: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Millennium bcp Foundation Society Sustainability “Todos” festival – Cultures walk – the Coach Museum - restoration of the oldest First progress report on Millennium 12th edition took place in two Portuguese vehicle for the transportation bcp's contribution to the SDG
Slide 54: Awards in 2020
Awards in 2020 Bank Millennium: now part of the WIG-ESG index of the Warsaw Stock Exchange for socially responsible Millennium bcp: Closest to Customets, clearest companies, ranking 4th information; most recommended bank; leader in Customer satisfaction, in quality of service and in Bank Millennium:
Slide 55: Appendix
Appendix 55
Slide 56: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) >5y, ≤8y: 41% Sep 19 Dec 19 Mar 20 Jun 20 Sep 20 YoY QoQ Portugal 7,413 6,520 6,802 8,253 8,057 +9% -2% T-bills and other 1,536 1,923 1,872 1,605 1,052 -32% -34% >8y, ≤10y: 8% Bonds 5,876 4,597 4,
Slide 57: Sovereign debt portfolio
Sovereign debt portfolio Portugal Poland Mozambique Other Total Trading book 1,046 72 0 51 1,169 ≤ 1 year 1,046 11 0 50 1,108 > 1 year and ≤ 2 years 0 0 0 0 0 > 2 years and ≤ 5 years 0 40 0 0 41 > 5 years and ≤ 8 years 0 9 0 0 9 > 8 years and ≤ 10 years 0 5 0 0 5 > 10 years 0 6 0 0 6 Banking book* 7
Slide 58: Diversified and collateralised portfolio
Diversified and collateralised portfolio Loan portfolio (Consolidated) LTV of the mortgage portfolio Breakdown Loans per collateral in Portugal Other Mortgage guarantees 60-75 75-80 47% 28% 26% 8% 80-90 Companies 10% 43% Real 50-60 >90 guarantees 15% 7% 57% Unsecured 15% 40-50 0-40 12% 22% Personal/
Slide 59: Consolidated net income
Consolidated net income Impact on (Million euros) 9M19 9M20 YoY earnings Net interest income 1,153.0 1,149.6 -0.3% -3.4 Net fees and commissions 519.1 518.1 -0.2% -1.0 Other income* 68.6 20.1 -70.7% -48.5 Net operating revenue 1,740.6 1,687.8 -3.0% -52.8 Staff costs -488.0 -484.4 -0.7% +3.6 Other ad
Slide 60: Consolidated balance sheet
Consolidated balance sheet (Million euros) 30 September 30 September 30 September 30 September 2020 2019 2020 2019 ASSETS LIABILITIES Cash and deposits at Central Banks 3,843.8 3,766.3 Financial liabilities at amortised cost Loans and advances to credit institutions repayable on demand 239.0 286.3 R
Slide 61: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 Net interest income 412.9 395.6 385.5 373.6 390.5 Dividends from equity instruments 0.1 0.1 0.1 3.4 1.3 Net fees and commission income 176.9 184.4 179.8 165.4 172.9 Other operating income -13.3 -13.8 -40.4 -79.1
Slide 62: Income statement
Income statement (Million euros) For the 9-month periods ended September 30th, 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 Sep 19 Sep 2 0 Δ % Sep 19 Sep 2 0 Δ % Sep 19 Sep 2
Slide 63: 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 64: 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 65: 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
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