Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — FY2022 Earnings Presentation
62 slides from Banco Comercial Portugues's earnings presentation, Feb 27, 2023
Slide 1: Earnings Presentation 2022
"BANCO COMERCIAL PORTUGUES, S.A. Earnings Presentation 2022 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 ▪ CET1 ratio increase to 12.5% (13.0% on a pro forma1 basis), through organic generation and other initiatives, including securitizations and non-performing assets reduction. At the end of the year, the CET1 ratio stood above regulatory requirement of 9.41%
Slide 6: Customer base growth
Customer base growth Renowned by digital skills and service quality ‘000 Customers Group Customer selection Active Customers 6,141 6,478 +636 4,095 As % of active 3,459 +18% Customers 63% Mobile Customers Dec. 21 Dec. 22 +521 Digital Customers 4,247 4,768 74% +12% Portugal Active Customers 2,529 2,6
Slide 7: #1 NPS Digital Customers
A. Our capabilities in digital are widely recognised and recommended App “Best Consumer Digital Millennium Digital Channels Satisfaction Bank” in Portugal 2022 leads ratings # 1 NPS Digital Customers 1 2018 – 2022, 5 largest Banks “Best Digital Bank” Unaided reply by Customers2, 4.8 2022 44.1 45.6 4
Slide 8: 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-dec 2022 vs jan–dec 2021) +37% +104% P2P +27% National +16% Payments . Transactions Transfers Transfers +46% +74% +97% +41% Sales Cards Personal loans
Slide 9: Net income of 207.5 million in 2022
Net income of 207.5 million in 2022 (Million euros) 2021 2022 YoY Net interest income 1,588.6 2,149.8 +35.3% Commissions 727.7 771.9 +6.1% Core income 2,316.3 2,921.7 +26.1% Operating costs recurring 1 -1,024.9 -1,056.5 +3.1% Recurring core operating profit 1,291.4 1,865.1 +44.4% Operating costs non
Slide 10: Group Profitability
02 Group Profitability 10
Slide 11: Net interest income
Net interest income Net interest income Portugal (Consolidated, million euros) (Million euros) Net interest margin 1.44% 1.53% Net interest 1.93% 2.46% +14.4% margin 951.0 +35.3% 831.3 2,149.8 1,588.6 2021 2022 International operations (Million euros) Net interest margin 3.09% 4.77% +58.3% 1,198.8 7
Slide 12: Fees and commissions
Fees and commissions Fees and commissions Portugal (Consolidated, million euros) (Million euros) +9.0% +6.1% 514.3 560.6 771.9 87.7 727.7 82.2 Market-related 107.3 fees and 112.9 432.1 472.9 commissions 2021 2022 International operations (Million euros) Banking fees and 664.6 -1.0% 614.9 213.4 commi
Slide 13: Other income
Other income Other income Portugal (Consolidated, million euros) (Million euros) 67.9 70.0 Total 18.1 -54.2 58.4 77.1 75.6 69.2 Equity earnings + -66.1 -76.3 dividends 57.9 78.8 2021 2022 Mandatory contributions 77.2 88.5 Net trading income1 86.5 Of which: Banking sector 33.1 36.8 50.0 Resolution fu
Slide 14: Operating costs
Operating costs Operating costs Portugal (Consolidated, million euros) (Million euros) Cost to income 48% 37% Cost to income 49% 38% 692.9 -13.1% -3.8% 601.7 Non-recurring* 90.7 1,115.6 16.5 1,073.0 Non-recurring* 90.7 16.5 Recurring 602.2 -2.8% 585.3 Depreciation 139.2 137.2 2021 2022 Other adminis
Slide 15: Cost of risk and provisions
Cost of risk and provisions Portugal Impairment and provision charges (Million euros) (Consolidated, million euros) Cost of risk 69bp 54bp Cost of risk 60bp 52bp -3.4% -0.5% 438.7 423.7 1,061.1 165.4 205.3 1,056.2 273.3 218.4 102.3 Goodwill Bank Millennium 2021 2022 -27.3% CHF mortgage legal risk 45
Slide 16: Relevant reduction of NPEs
Relevant reduction of NPEs Credit (Consolidadas, quality milhões de euros) Portugal (Consolidated, billion euros) (Billion euros) -517 million 1.88 -27.5% -535 million 1.36 -19.4% NPE 2.75 2.22 Other 1.52 1.49 2021 2022 -512 million NPL>90d 1.24 NPE loans ratio 4.7% 3.4% -41.4% 0.73 NPE ratio (EBA)
Slide 17: Group Business activity
02 Group Business activity 17
Slide 18: Customer funds maintain growth trend
Customer funds maintain growth trend Total Customers Funds* Total Customers Funds* Portugal (Billion euros) (Consolidated, billion euros) +3.0% +3.0% 92.8 66.3 68.3 90.1 17.0 14.2 1.6 1.3 15.6 15.9 19.2 Off-BS funds 18.9 +9.6% 1.3 31.8 33.5 Other BS funds 1.6 27.2 2021 2022 Term deposits 20.6 Total
Slide 19: Loan portfolio
Loan portfolio Loans to Customers (gross) Portugal (Consolidated, billion euros) (Billion euros) +0.28 billion NPE: -19.4% (-0.5 billion) +0.7% -0.9% 39.87 +0.80 40.15 58.2 57.7 -0.52 28.1 28.1 2021 NPE Performing 2022 Mortgage International operations (Billion euros) Personal and other 6.0 6.0 -0.8
Slide 20: Group Capital and liquidity
02 Group Capital and liquidity 20
Slide 21: Capital above regulatory requirements and suited to the Bank's business model
Capital above regulatory requirements and suited to the Bank's business model Total capital ratio (Fully implemented) Fully implemented 17.5%** +3.5pp vs requirement 15.8% Application of article • Total ratio of 16.8% (17.5% on a pro forma** 352 ( 2 ) impact 14.00% O-SII buffer basis) and CET1 of 12
Slide 22: CET1 evolution
CET1 evolution Impacts on the CET1 ratio ✓ +163bp recurring capacity of organic +130bp capital generation +1.63% • Negative Impacts due to extraordinary 13.0%* items from Poland of 50bp resulting +0.15% article from provisions for legal risks associated +0.31% 352 (2) with CHF loans in Poland and 35
Slide 23: Stronger capital position
Stronger capital position Leverage ratio (Fully implemented, latest available data) 6.0% 6.0% 5.0% 5.1% Leverage ratio in comfortable levels (6.0% as of 3.8% December 2022) higher when comparing to European 3.0% banks FR DE ES IT RWA density (RWAs as a % of assets, latest available data) 48% 38% RWA
Slide 24: MREL requirements and execution of the Funding Plan
MREL requirements and execution of the Funding Plan (Million euros) MREL position (BCP Resolution Group - 31 Dec. 2022) • Resolution strategy: MPE (Multi Point of Entry)2. MREL requirements for the Resolution perimeter centred in Portugal 27.70% 10.82% • Preferred Resolution Measure: Bail-in 27.31%
Slide 25: Pension fund
Pension fund Pension fund coverage Structure (Million euros) Coverage 106% 121% Real-estate: 17% Pension Fund 3,700 3,384 Cash and other: 18% Excess 202 593 Equities: Bonds: 3% 33% Pension liabilities 3,498 2,791 Investment Funds: 29% Fundo de pensões 2021 2022 • Discount rate and projected rate of
Slide 26: Robust liquidity position
Robust liquidity position Liquidity ratios (CRD/CRR) Liquidity excess in ECB (Billion euros) Eligible assets 25.5 23.9 +4.3 billion 2.6 -1.7 212% 2021 2022 154% Net loans to deposits ratio 100% 81% 74% NSFR (Net stable LCR (Liquidity 2021 2022 funding ratio) coverage ratio) 26
Slide 27: Portugal
03 Portugal 27
Slide 28: Profitability in Portugal
Profitability in Portugal Net income Net operating revenue (Million euros) (Million euros) Net income on a +51.9% comparable basis* 240.3 364.9 +11.9% 1,581.6 353.6 1,413.6 172.8 2021 2022 2021 2022 Operating costs (Million euros) -13.1% • Net income of 353.6 million in 2022. On a 692.9 601.7 compar
Slide 29: Net interest income
Net interest income (Million euros) +14.4% +75.0 +29.4 951.0 +40.3 831.3 +31.9 -44.0 -2.6 -10.0 NIM 1.53% 1.44% 2021 Performing Credit rate Impact of Deposit's rate Impact of Effect of Excess liquidity 2022 credit volume effect NPE reduction effect securities wholesale cost and other effect portfoli
Slide 30: Commissions and other income
Commissions and other income Commissions (Milhões deOther euros) income (Million euros) (Million euros) 2021 2022 YoY Banking fees and commissions 432.1 472.9 +9.4% Total 67.9 70.0 Cards and transfers 111.4 139.5 +25.2% Loans and guarantees 106.6 99.2 -6.9% Equity earnings+ 58.4 77.1 dividends Banca
Slide 31: Operating costs
Operating costs Operating costs Employees (Million euros) -2.8% -37 Recurring 602.2 585.3 6,289 6,252 692.9 Non-recurring* 90.7 601.7 16.5 Depreciation 80.3 79.1 2021 2022 Other administrative 176.4 costs 184.0 Branches -26 Staff costs 345.5 322.2 434 408 2021 2022 2021 2022 * 2021: Includes mainly
Slide 32: Continued decrease of NPEs
Continued decrease of NPEs Non-performing exposures (NPE) NPE build-up (Million euros) -517 million Dec. 22 Sep. 22 -27.5% (Million euros) 1,878 vs. Dec. 21 vs. Dec. 21 Opening balance 1,878 1,537 1,361 Net outflows/inflows 194 3 Other NPE 1,103 Write-offs -428 -71 1,028 Sales -282 -107 NPL>90d 776
Slide 33: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 226% 132% 126% 106% 37% 171% 51% 3% 55% Real estate collateral Real estate collateral 106% 45% 68% 2% 2% Cash, other fin.collat. 2% Cash, other fin.collat. 55% 186% 1% 79% 69% LLRs 1% 124% LLRs 37% 50% Individuals Companies Total Individuals C
Slide 34: Foreclosed assets and corporate restructuring funds
Foreclosed assets and corporate restructuring funds Foreclosed assets Corporate restructuring funds (Million euros) (Million euros) -47.8% 565 787 Impairment 116 87 411 262 -265 million Net value 448 78 699 57 Industry -59.1% 183 353 RE/tourism 2021 2022 2021 2022 Sales of foreclosed assets (Million
Slide 35: Growing Customer funds and loans to Customers
Growing Customer funds and loans to Customers Total Customers Funds* Loans to Customers (gross) (Billion euros) (Billion euros) +3.0% NPE: -27.5% (-0.5 billion) 66.3 68.3 Performing: +2.1% (+0.8 billion) +0.7% 14.2 Off-BS funds 17.0 39.9 40.1 1.3 Other BS funds 1.6 19.2 Term deposits 15.9 Mortgage 1
Slide 36: Performing loans grows in Portugal
Performing loans grows in Portugal Performing loans portfolio • The commitment to families and companies was reaffirmed. Growth of the (Billion euros) performing loan portfolio in Portugal (2.1%) mainly supported by the growth of mortgage loans (3,9%) +2.1% 38.0 38.8 • Corporate loans with BEI/FEI a
Slide 37: International operations
04 International operations 37
Slide 38: Contribution from operations to consolidated net income
Contribution from operations to consolidated net income (Million euros*) 2021 2022 Contribution from international operations (Million euros) Poland -284.4 -216.7 Mozambique1 95.6 101.9 Other -15.6 -7.3 2021 2022 Net income international operations -204.5 -122.1 -34.7 -43.8 Net income without goodwi
Slide 39: Net earnings affected by extraordinary items
Net earnings affected by extraordinary items Net income Net operating revenue (Million euros 1) (Million euros1) +99.3% +49.9% 478.6 1,138.9 Adjusted net income 4 240.1 759.9 Net income -284.4 -216.7 2021 2022 2021 2022 3m WIBOR • Net income of -216.7 million, mainly influenced by costs related to C
Slide 40: Net interest income increase significantly
Net interest income increase significantly Net interest income Operating costs (Million euros*) (Million euros*) +27.5% NIM 2.70% 4.43% 447.0 350.7 Resol. Fund + DGF +71.8% +236.0% 84.8 995.6 + IPS** 25.2 +10.0% 166.5 Other 579.4 151.4 174.1 +12.4% 195.7 Staff costs 2021 2022 2021 2022 Commissions a
Slide 41: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 2.2% 2.0% NPL>90d 135% 157% 521.3 525.4 385.4 335.7 2021 2022 2021 2022 Loan impairment (net of recoveries) (Million euros*) Cost of risk 37bp 44bp • NPL>90d accounted for 2.0% of total lo
Slide 42: Customers funds and loans to Customers
Customers funds and loans to Customers Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +4.0% -2.5% 22,315 21,451 1,373 17,311 16,880 Off-BS funds 1,909 Other BS funds 8 Term deposits 3,588 6,936 Mortgage local currency 7,321 7,595 Mortgage foreign exchange 2,139 1,504 De
Slide 43: 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% 11.4% 10.5% 9.6% 9.4% 8.1% loan portfolio 6.9% 25.7% 30.9% 36.3% 41.3% 46.8% mortgage portfolio (gross after legal -17%
Slide 44: Net income reflects resilience in challenging environment
Net income reflects resilience in challenging environment Net income** Net operating revenue (Million euros*) (Million euros*) +6.6% +9.6% 95.6 101.9 242.7 266.1 2021 2022 2021 2022 MIMO rate (average) 13.03% 15.26% Operating Costs (Million euros*) • Net income of 101.9 million in 2022, +6.6% on com
Slide 45: Increased net interest income and commissions
Increased net interest income and commissions Net Interest income Operating costs (Million euros*) (Million euros*) Cost to income 43.5% 42.6% NIM 7.8% 8.3% +7.2% +9.9% 105.6 113.3 184.0 202.3 Other 60.9 +8.7% 66.1 Staff costs 44.8 +5.2% 47.1 2021 2022 2021 2022 Commissions and other income Employee
Slide 46: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 10.8% 8.2% NPL>90d 77% 98% 72.6 55.8 55.4 56.3 2021 2022 2021 2022 Loan impairment (net of recoveries) (Million euros*) Cost of risk 72bp 118bp • NPL>90d ratio of 8.2% as of December 2022,
Slide 47: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +10.2% +2.1% 2,232 2,025 683 669 Mortgage 11 11 1,127 Personal and 161 145 other Term deposits 1,066 Companies 513 511 Demand 1,105 deposits 960 2021 2022 2021 2022 *FX effect excluded. €/Metical constant a
Slide 48: Key figures
05 Key figures 48
Slide 49: Strategic Plan: Excelling 24
Strategic Plan: Excelling 24 2022 2024 C/I ratio 37% ✓ ≈40% Cost of risk 52 bp ✓ ≈50 bp RoE 4.0% ≈10% 12.5% CET1 ratio (13.0% pro forma*) ✓ >12.5% NPE ratio 3.8% ✓ ≈4% Share of mobile Customers 63% ✓ >65% Growth of high engagement Customers** (vs 2020) +10% ✓ +12% Average ESG rating*** 69% >80% João
Slide 50: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Millennium bcp Foundation Society Sustainability Social Responsibility Campaign "Millennium Drawing Room – 5th edition: exhibition Solidário 2022", brings together Bank Millennium bcp installs the second dedicated to contemporary drawing held Employees and the Millen
Slide 51: Awards in 2022
Awards in 2022 new Millennium bcp: Best Homebanking site Bank Millennium: Millenet internet banking on the new top of the BANK monthly ranking Millennium bcp Millennium bcp: Best Digital Bank 2022 in Portugal Consumer Choice 2023, Bank Millennium: Distinguish with the CSR Golden “Large Banks” catego
Slide 52: Appendix
Appendix 52
Slide 53: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) >5y, ≤8y: 38% Dec. 21 Mar. 22 Jun. 22 Sep. 22 Dec. 22 YoY QoQ Portugal 8,013 8,561 7,765 6,882 6,295 -21% -9% T-bills and other 426 849 1,222 461 310 -27% -33% >8y, ≤10y: 10% Bonds 7,587 7,712 6,5
Slide 54: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book 330 5 0 4 339 ≤ 1 year 310 1 0 0 311 > 1 year and ≤ 2 years 6 1 0 0 7 > 2 years and ≤ 5 years 7 2 0 0 9 > 5 years and ≤ 8 years 5 0 0 0 5 > 8 years and ≤ 10 years 2 1 0 3 6 > 10 years 1 0 0 0 1 Banking book*
Slide 55: 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% 29% 80-90 27% 12% Companies 41% >90 Real 4% guarantees 58% 50-60 Unsecured 0-40 14% 15% 21% 40-50 12% Personal/
Slide 56: Consolidated net income
Consolidated net income Impact on (Million euros) 2021 2022 YoY earnings Net interest income 1,588.6 2,149.8 +35.3% +561.2 Net fees and commissions 727.7 771.9 +6.1% +44.2 Other income* 18.1 -54.2 -399.7% -72.3 Net operating revenue 2,334.4 2,867.5 +22.8% +533.1 Staff costs -654.3 -580.8 -11.2% +73.
Slide 57: Consolidated balance sheet
Consolidated balance sheet (Million euros) 31 December 31 December 31 December 31 December 2022 2021 2022 2021 ASSETS LIABILITIES Cash and deposits at Central Banks 6,022.0 7,796.3 Financial liabilities at amortised cost Loans and advances to credit institutions repayable on demand 213.5 361.8 Resou
Slide 58: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) Quarterly 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 Net interest income 423.6 465.1 520.1 560.7 603.9 Dividends from equity instruments 0.1 0.9 12.0 -3.6 0.8 Net fees and commission income 192.9 192.8 194.7 186.2 198.1 Other operating income -9.5 -16.9 -
Slide 59: Income statement
Income statement (Million euros) For the 12-month periods ended December 31th, 2021 and 2022 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 1 D ec 2 2 Δ % D ec 2 1 D ec 2 2 Δ % D ec 2
Slide 60: 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 61: 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 62: 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., a public company (Sociedade Aberta), having its registered office at Praça D. João I, 28, Oporto, regis
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