Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — 9M 2023 Earnings Presentation
59 slides from Banco Comercial Portugues's earnings presentation, Oct 30, 2023
Slide 1: Millennium bcp
Millennium =) bcp
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 650.7 million in 9M23 ▪ Group’s core operating profit increase 38.2% to 1,841.3 million, supported by the increase of 27.2% on core income and by the strict management of operating costs, which grew 8.5% compared to 9M22 Profitability ➢ Effe
Slide 6: Customer base growth
Customer base growth Based on the quality of the Teams and distinctive digital skills ‘000 Customers Customer Active 6,416 6,644 recognition +448 4,416 As % of active 3,968 +11% Customers 66% Mobile Sep. 22 Sep. 23 +330 Digital 4,672 5,003 75% +7% Portugal Active 2,633 2,688 +163 1,338 1,501 As % of
Slide 7: Innovation focused on Customer needs translates into accelerated growth in Mobile usage and sales
Innovation focused on Customer needs translates into accelerated growth in Mobile usage and sales Strong mobile growth Y/Y (Number of operations, Jan-Set 2023 vs Jan–Set 2022) +29% +61% P2P +18% National +14% Payments Transactions1 Transfers Transfers +27% +17% +8% +30% Sales Cards Personal loans Sa
Slide 8: Net income of 650.7 million in the first nine months of 2023
Net income of 650.7 million in the first nine months of 2023 (Million euros) 9M22 9M23 % D Net interest income 1,545.8 2,117.5 +37.0% +571.6 Commissions 573.8 578.5 +0.8% +4.7 Core income 2,119.6 2,695.9 +27.2% +576.3 Operating costs -787.4 -854.6 +8.5% -67.2 Core operating profit 1,332.2 1,841.3 +3
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 1.45% 2.59% Net interest margin 2.38% 3.39% +63.6% 1,097.7 670.9 +37.0% 2,117.5 9M22 9M23 1,545.8 International operations (Million euros) Net interest margin 4.66% 5.06% +16.5% 1,019.7
Slide 11: Fees and commissions
Fees and commissions Fees and commissions Portugal (Consolidated, million euros) (Million euros) +0.5% +0.8% 417.7 419.8 573.8 578.5 Market-related 63.1 64.5 fees and 78.5 78.7 commissions 354.6 355.4 9M22 9M23 International operations Banking fees (Million euros) and commissions 495.3 499.7 +1.6% 1
Slide 12: Other income
Other income Other income Portugal (Consolidated, million euros) (Million euros) 74.7 -38.9 47.1 Total -55.0 96.7 98.9 45.7 -17.8 -71.3 Sale of Millennium -66.7 Equity earnings + 127.0 Financial Services Mandatory contributions 9M22 9M23 46.9 stake (80%)3 dividends 88.5 72.6 Net trading income1 74.9
Slide 13: Operating costs
Operating costs Operating costs Portugal (Consolidated, million euros) (Million euros) Cost to income1 38% 30% Cost to income1 38% 32% +3.5% 460.0 +8.5% 854.6 Non-recurring2 444.2 12.2 787.4 12.2 6.1 Non-recurring2 6.1 103.2 438.2 447.8 Depreciation 103.9 283.4 9M22 9M23 Other 251.8 administrative c
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 57bp 53bp -15.3% Cost of risk 55bp 50bp 273.9 +5.2% 231.9 813.9 99.7 773.6 74.2 Goodwill Bank 102.3 174.1 157.7 Millennium 9M22 9M23 482.5 -4.6% Loan-loss CHF mortgage leg
Slide 15: Relevant reduction of NPEs
Relevant reduction of NPEs Credit quality Portugal (Consolidated, billion euros) (Billion euros) -344 million -398 million -22.4% 1.54 -16.4% 1.19 NPE 2.42 2.03 Other 1.54 1.23 Sep 22 Sep 23 NPL>90d 0.88 0.79 NPE loans ratio 3.7% 3.0% Sep 22 Sep 23 NPE ratio (EBA) 2.5% 2.2% Sep 22 Sep 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) +1.4% -2.3% 67.17 65.64 92.38 91.07 14.56 13.90 1.34 1.34 15.50 17.59 20.89 Off-BS funds 15.89 Other BS funds 1.34 1.34 33.68 29.51 Sep 22 Sep 23 Term deposits 25.69 30.51 Total Custom
Slide 18: Loan portfolio
Loan portfolio Loans to Customers (gross) Portugal (Consolidated, billion euros) (Billion euros) -1.63 billion NPE: -16.4% (-0.4 billion) -4.0% 41.03 39.40 -3.3% -0.34 -1.29 58.62 56.66 Mortgage 27.94 Sep 22 NPE Performing Sep 23 27.53 International operations (Billion euros) Personal and 5.91 -0.33
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) (Fully implemented) Fully implemented vs CET1 mandatory requirement • Significant strengthening of capital ratios. +5.5pp CET1 ratio stood at 14.9% and total capital 14.9% ratio at 19.4%, representing an increase of 11.4% 357bp and 431bp compared wit
Slide 21: Stronger capital position
Stronger capital position Leverage ratio (Fully implemented, latest available data) 6.4% 6.5% 5.3% 5.5% Leverage ratio in comfortable levels (6.5% as of 3.8% September 2023) higher when comparing to European 3.0% banks FR DE ES IT RWA density (RWAs as a % of assets, latest available data) 44% 39% RW
Slide 22: MREL requirements and execution of the Funding Plan
MREL requirements and execution of the Funding Plan (Million euros) MREL position (BCP Resolution Group - 30 Sep 2023) • Resolution strategy: MPE (Multi Point of Entry)2. • BCP Resolution Group : Perimeter centred in Portugal Proforma ~31.6% * ~12.5% * • Preferred Resolution Measure: Bail-in SP 3NC2
Slide 23: Robust liquidity position
Robust liquidity position Liquidity ratios (CRD/CRR) Liquidity excess in ECB (Billion euros) Eligible assets 24.4 24.4 244% +2.4 billion 1.0 -1.3 160% Sep 22 Sep 23 Net loans to deposits ratio 77% 73% 100% NSFR (Net stable LCR (Liquidity Sep 22 Sep 23 funding ratio) coverage ratio) 23
Slide 24: Portugal
03 Portugal 24
Slide 25: Profitability in Portugal
Profitability in Portugal Net income Net operating revenue (Million euros) (Million euros) +27.1% 1,478.7 1,163.3 +93.1% 556.8 288.4 9M22 9M23 9M22 9M23 Operating costs (Million euros) • Net income of 556.8 million in 9M23 an increase of +3.5% 93.1% from last year same period 444.2 460.0 • Net incom
Slide 26: Net interest income
Net interest income (Million euros) +63.6% +458.6 +179.0 +10.4 1,097.7 -4.5 -91.0 -122.9 670.9 2.59% -2.7 NIM 1.45% 9M22 Performing Credit rate Impact of Deposit's rate Impact of Effect of Excess liquidity 9M23 credit volume effect NPE reduction effect securities wholesale cost and other effect port
Slide 27: Commissions and other income
Commissions and other income Commissions Other income (Million euros) (Million euros) 9M22 9M23 YoY Total 74.7 -38.9 Banking fees and commissions 354.6 355.4 +0.2% Cards and transfers 110.7 120.9 +9.2% Equity earnings+ dividends 47.1 Loans and guarantees 71.8 60.2 -16.1% Bancassurance 64.1 64.0 -0.1
Slide 28: Operating costs
Operating costs Operating costs Employees (Million euros) +18 6,257 6,275 +3.5% 460.0 444.2 12.2 Non-recurring1 6.1 Depreciation 55.1 59.1 Other administrative 140.6 Sep 22 Sep 23 costs 133.5 Branches -8 408 400 Staff costs 245.5 252.0 9M22 9M23 Sep 22 Sep 23 28 1 Includes mainly costs related with
Slide 29: Continued decrease of NPEs
Continued decrease of NPEs Non-performing exposures (NPE) NPE build-up (Million euros) -344 million Sep 23 Sep 23 (Million euros) -22.4% vs. Sep 22 vs. Dec 22 1,537 Opening balance 1,537 1,361 1,192 Net outflows/inflows 9 6 Other NPE 1,091 Write-offs -175 -103 799 Sales -179 -72 NPL>90d 446 394 Endi
Slide 30: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 154% 138% 203% 100% 49% 158% 55% Real estate collateral 37% Real estate collateral 2% 3% 2% Cash, other fin.collat. 100% 46% Cash, other fin.collat. 70% 2% 103% 58% 163% 1% 81% LLRs 110% LLRs 1% 28% 41% Individuals Companies Total Individuals
Slide 31: Foreclosed assets and corporate restructuring funds
Foreclosed assets and corporate restructuring funds Foreclosed assets Corporate restructuring funds (Million euros) (Million euros) 335 -50.9% Impairment 69 793 181 82 390 Net value 265 -149 million 64 711 31 Industry 117 359 RE/tourism -56.0% Sep 22 Sep 23 Sep 22 Sep 23 Sales of foreclosed assets (
Slide 32: Customer funds and loans to Customers
Customer funds and loans to Customers Total Customers Funds* Loans to Customers (gross) (Billion euros) (Billion euros) -2.28% NPE: -22.4% (-0.3 billion) 67.17 65.64 Performing: -3.3% (-1.3 billion) -3.97% Off-BS funds 14.56 13.90 41.03 39.40 Other BS funds 1.34 1.34 Term deposits 17.59 Mortgage 18.
Slide 33: Performing loans in Portugal
Performing loans in Portugal Performing loans portfolio (Billion euros) -3.3% • The Bank maintains a prominent position in the corporate segment: 39.5 38.2 ✓ Leadership in PME Leader programme for the 5th consecutive year with a 31% market share, supporting more than 3,200 companies to achieve this
Slide 34: International operations
04 International operations 34
Slide 35: Contribution from operations to consolidated net income
Contribution from operations to consolidated net income (Million euros*) 9M22 9M23 Contribution from international operations (Million euros) Poland -276.1 100.7 Mozambique 69.0 67.2 Excluding effects of +39.8% Bank Millennium2 207.4 290.0 Other -6.1 -2.5 Net income international operations -213.2 1
Slide 36: Positive evolution of net income
Positive evolution of net income Net income Net operating revenue (Million euros1) (Million euros1) +43.6% +32.1% 492.0 1,126.6 Adjusted net income2 342.5 852.6 100.7 Net income -276.1 9M22 9M23 9M22 9M23 • Net income of 100.7 million in 9M23 which compares with -276.1 million in 9M22 3m WIBOR (aver
Slide 37: Net interest income increase significantly
Net interest income increase significantly Net interest income Operating costs (Million euros*) (Million euros*) -9.9% 355.0 NIM 4.36% 4.72% 319.9 +16.4% 86.7 *** 13.1 Resol. Fund + DGF + 867.4 IPS*** 745.4 139.3 Other 120.1 148.2 167.5 Staff costs 9M22 9M23 9M22 9M23 Commissions and other income Co
Slide 38: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 2.2% 2.2% NPL>90d 144% 153% 549.6 560.0 381.0 365.9 Sep 22 Sep 23 Sep 22 Sep 23 Loan impairment (net of recoveries) (Million euros*) Cost of risk 40bp 44bp • NPL>90d accounted for 2.2% of
Slide 39: Customers funds and loans to Customers
Customers funds and loans to Customers Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +9.0% 24,587 -6.1% 22,547 1,605 Off-BS funds 1,385 17,641 16,573 8,523 Term deposits 7,084 Mortgage local currency 7,633 7,837 Mortgage foreign exchange 1,804 862 Personal and Demand d
Slide 40: 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 loan portfolio As a % of CHF 54.6% 9.4% 8.1% 6.6% 5.5% 4.6% 36.3% 41.3% 46.8% 55.8% 64.7% 73.5% (gross after legal mortgage portfolio -15%
Slide 41: Net income reflects resilience in challenging environment
Net income reflects resilience in challenging environment Net income Net operating revenue (Million euros*) (Million euros*) +6.5% -2.6% 197.3 69.0 67.2 185.3 9M22 9M23 9M22 9M23 MIMO rate (average) 14.60% 17.25% Operating Costs • Net income of 67.2 million in 9M23, a 2.6% (Million euros*) reduction
Slide 42: Increased net interest income
Increased net interest income Net Interest income Operating costs (Million euros*) (Million euros*) NIM 7.9% 8.6% Cost to income 43.8% 46.7% +7.5% 141.6 152.3 +13.5% 92.1 81.2 Other 47.2 55.1 Staff costs 34.0 37.0 9M22 9M23 9M22 9M23 Commissions and other income Employees Branches (Million euros*) +
Slide 43: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 9.7% 4.9% NPL>90d 103% 79% 67.5 69.5 33.7 26.8 Sep 22 Sep 23 Sep 22 Sep 23 Loan impairment (net of recoveries) (Million euros*) Cost of risk 181bp 167bp • NPL>90d ratio of 4.9% as of Septe
Slide 44: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) -2.0% -0.8% 2,108 2,066 697 692 Mortgage 11 11 Personal and other 156 196 Term deposits 1,155 1,049 Companies 530 485 Demand deposits 953 1,018 Sep 22 Sep 23 Sep 22 Sep 23 *FX effect excluded. €/Metical con
Slide 45: Key figures
05 Key figures 45
Slide 46: Strategic Plan: Excelling 24
Strategic Plan: Excelling 24 9M23 2024 C/I ratio 32%* ✓ ≈40% Cost of risk 50 bp ✓ ≈50 bp RoE 16.7% ✓ ≈10% CET1 ratio 14.9% ✓ >12.5% NPE ratio 3.6% ✓ ≈4% Share of mobile Customers 66% ✓ >65% Growth of high engagement Customers** (vs 2020) +12.6% ✓ +12% Average ESG rating*** 69% >80% *Adjusted cost to
Slide 47: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Millennium bcp Foundation Society Sustainability National Museum Soares dos Reis: Portreto de Millennium bcp is, according to Global Millennium Volunteers with Bipp/SEMEAR, in la animo exhibition, which presents portraits Finance magazine, “Best Bank for another pres
Slide 48: Awards
Awards new Bank Millennium: Second place on the Millennium bcp: “Best Digital Bank 2023” Forbes “Poland´s Best Employers 2023” App Millennium: “2023 Product of the Year", in Portugal ranking, on Banks and Financial Services on the “Banking App” category category Millennium bcp: “Best Investment Bank
Slide 49: Appendix
Appendix 49
Slide 50: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) >5y, ≤8y: 32% Sep 22 Dec 22 Mar 23 Jun 23 Sep 23 YoY QoQ Portugal 6,882 6,295 6,908 6,534 6,188 -10% -5% >8y, ≤10y: 8% T-bills and other 461 310 810 421 109 -76% -74% Bonds 6,421 5,985 6,098 6,113
Slide 51: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book 188 51 0 413 652 ≤ 1 year 135 1 0 408 543 > 1 year and ≤ 2 years 4 2 0 0 6 > 2 years and ≤ 5 years 39 4 0 5 48 > 5 years and ≤ 8 years 6 7 0 0 12 > 8 years and ≤ 10 years 2 2 0 0 4 > 10 years 3 35 0 1 38 Ban
Slide 52: 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% 40% Real >90 guarantees 3% 58% 50-60 Unsecured 0-40 15% 15% 21% 40-50 12% Personal/
Slide 53: Consolidated net income
Consolidated net income Impact on (Million euros) 9M22 9M23 YoY earnings Net interest income 1,545.8 2,117.5 +37.0% +571.6 Net fees and commissions 573.8 578.5 +0.8% +4.7 Other income* -55.0 96.7 +151.7 Net operating revenue 2,064.7 2,792.7 +35.3% +728.0 Staff costs -431.8 -468.0 +8.4% -36.2 Other a
Slide 54: Consolidated balance sheet
Consolidated balance sheet (Million euros) 30 September 30 September 2022 30 September 30 September 2022 2023 (restated) 2023 (restated) ASSETS LIABILITIES Cash and deposits at Central Banks 3,525.8 3,122.9 Financial liabilities at amortised cost Loans and advances to credit institutions repayable o
Slide 55: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) Quarterly 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 Net interest income 560.7 603.9 664.6 709.8 743.1 Dividends from equity instruments -3.6 0.8 0.0 1.1 0.0 Net fees and commission income 186.2 198.1 195.4 191.6 191.4 Other operating income -1.5 -6.2 -6.
Slide 56: Income statement
Income statement (Million euros) For the 9-month periods ended September 30th, 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 Sep 2 2 Sep 2 3 Δ % Sep 2 2 Sep 2 3 Δ % Sep 2 2 Sep
Slide 57: 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 58: 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 59: 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
Banco Comercial Português, S.A. (Millennium bcp) — 9M 2023 Earnings Presentation on 6ix