Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — Q1 2021 Earnings Presentation
63 slides from Banco Comercial Portugues's earnings presentation, May 17, 2021
Slide 1: Earnings Presentation Q1 2021
EARNINGS PRESENTATION Q1 2021 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: Highlights: resilience of the business model
Highlights: resilience of the business model ▪ Net profit of 57.8 million, including 112.8 million provisions for legal risk on CHF loans in Poland ▪ Consolidated operating costs 9.2% down, with cost to core income of 47% Profitability ▪ Pre-provision profit up by 5.8% to 329.5 million in the 1st qu
Slide 6: Highlights: resilience of the business model
Highlights: resilience of the business model ▪ Performing loans in Portugal up by 2.0 billion, +5.9% from March 2020, with performing loans to companies increasing 10.9%; consolidated performing loans up by 2.5 billion, +4.9% from March Business 2020 activity ▪ Total Customer funds up by 7.1 billion
Slide 7: Growing Customer base, mobile Customers standing out
Growing Customer base, mobile Customers standing out As % of active ‘000 Customers Customers Group +538,000 Customers 3,036 51% Mobile Customers 2,498 +22% Mar 20 Mar 21 +424,000 Customers Digital Customers 3,490 3,914 66% +12% Active Customers 5,830 5,921 +221,000 Customers 1,013 42% Mobile Custome
Slide 8: Our digital capabilities are particularly appreciated in times of pandemic
Our digital capabilities are particularly appreciated in times of pandemic % Mobile Customers 1 Digital Interactions #(mln) 2 Strong mobile growth Y/Y 90 (Jan-Mar 2021 vs. Jan–Mar 2020) 42 72 34 +27% +57% Logins Payments Q1'20 Q1'21 Q1'20 Q1'21 % Digital Transactions (#)3 % Digital Sales (#)4 +86% +
Slide 9: Best Digital Bank and Leader in Customer Satisfaction in 2021
Best Digital Bank and Leader in Customer Satisfaction in 2021 Millennium App leads ratings #1 NPS1 Digital Customers Mar. 2021, 5 largest Banks ‘Best Digital Bank’ (unaided nomination by Customers)2, 2021 (Q1 YTD) 4.7 +12 pp 55.2 72% 51.3 51.1 45.2 60% 58% 38.6 49% 4.8 Millennium Bank 2 Bank 3 Bank
Slide 10: Digital: More Innovation at the Service of Customers
Digital: More Innovation at the Service of Customers 40 NEW APP FEATURES IN 2021 StayOn - Communication Constant innovation in 100% digital, 24x7 sales Commitment to health ecosystem. Brings Digital, investments journeys protection remote and physical together New investment area with easy Credit ca
Slide 11: Group Profitability
02 Group Profitability 11
Slide 12: Net income of 57.8 million in the 1st quarter of 2021
Net income of 57.8 million in the 1st quarter of 2021 Impact on (Million euros) Q1'20 Q1'21 YoY earnings Net interest income 385.5 376.0 -2.5% -9.5 Commissions 179.8 177.9 -1.0% -1.9 Core income 565.3 554.0 -2.0% -11.3 Operating costs -285.7 -259.3 -9.2% +26.4 Of which: non-recurring -9.5 -2.8 -70.4
Slide 13: Net interest income
Net interest income Net interest income Portugal (Consolidated, million euros) (Million euros) Net interest margin 1.55% 1.50% Net interest +9.7% margin 2.08% 1.91% 186.4 204.5 -2.5% 385.5 376.0 Q1'20 Q1'21 International operations (Million euros) Net interest 3.07% 2.82% margin -13.8% 199.1 171.5 Q
Slide 14: Stable commissions in an adverse environment
Stable commissions in an adverse environment Fees and commissions Portugal (Consolidated, million euros) (Million euros) -1.0% +0.2% 179.8 177.9 119.3 119.6 Market-related 15.2 +18.1% 17.9 fees and 29.8 +8.4% 32.3 commissions 104.1 -2.4% 101.7 Q1'20 Q1'21 International operations Banking fees (Milli
Slide 15: Other income
Other income Other income Portugal (Consolidated, million euros) (Million euros) -3.6% 51.4 49.6 +9.3% Total 31.9 34.9 9.3 2.0 15.0 Equity earnings + 45.3 10.8 32.6 dividends 15.4 -3.3 Q1'20 Q1'21 Net trading income 61.4 42.9 International operations (Million euros) -19.5 -14.7 -23.4 Other operating
Slide 16: Operating costs decreased
Operating costs decreased Operating costs Portugal (Consolidated, million euros) (Million euros) -2.8% -9.2% 155.0 285.7 150.7 2.6 0.7 259.3 Depreciation 34.8 Recurring 152.3 150.0 34.4 Other administrative 86.3 costs Q1'20 Q1'21 78.1 International operations (Million euros) -16.9% 130.8 Staff costs
Slide 17: 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 63bp 94bp -27.2% Cost of risk 63bp 79bp 140.6 102.3 +20.3% 82.2 11.4 242.8 91.0 58.4 201.8 Q1'20 Q1'21 -10.7% CHF mortgage legal risk Loan-lo
Slide 18: Relevant reduction of NPEs under a complex context
Relevant reduction of NPEs under a complex context Credit (Consolidated, millionquality euros) Portugal (Consolidated, billion euros) (Billion euros) -0.72 billion -170mn from December 2020 -24.8% -0.83 billion -195mn from NPE 2.92 December 2020 2.19 NPE 3.9 -21.1% 3.1 Outros 1.9 1.5 Mar 20 Mar 21 N
Slide 19: Group Business activity
02 Group Business activity 19
Slide 20: Customer funds keep growing
Customer funds keep growing Total Customers Funds* Total Customers Funds* Portugal (Billion euros) (Consolidated, billion euros) Individuals: +9.8% +9.9% +8.9% 62.1 56.6 87.0 14.9 16.6 80.0 1.5 1.4 16.6 16.2 20.2 Off-BS funds 17.6 23.7 27.9 1.5 Other BS funds 1.5 Mar 20 Mar 21 20.7 Total Customers F
Slide 21: Continued increase of the loan portfolio
Continued increase of the loan portfolio Loans to Customers (gross) Portugal (Consolidated, billion euros) (Billion euros) NPE: -21.1% (-0.8 billion) +1.31 billion Performing: +4.9% (+2.5 billion) +3.5% +3.0% +2.04 38.64 37.33 56.4 54.7 -0.72 Mar 20 NPE Performing Mar 21 Mortgage 25.7 26.7 Internati
Slide 22: Group Capital and liquidity
02 Group Capital and liquidity 22
Slide 23: Capital above regulatory requirements
Capital above regulatory requirements Total capital ratio (Fully implemented) • Total capital of 15.5%* (fully implemented) Fully implemented +2.2pp vs requirement as of March 2021, above SREP requirements 15.4% 15.5% 13.3% O-SII buffer • Surplus of 2.2pp between the total capital +5.3pp** Conservat
Slide 24: Capital at adequate levels
Capital at adequate levels Leverage ratio (Fully implemented, latest available data) 5.9% 6.4% 4.7% 5.3% 3.6% Leverage ratio at 6.4% as of March 2021, a comfortable and comparatively strong figure in European banking 3.0% FR DE ES IT RWA density (RWAs as a % of assets, latest available data) High RW
Slide 25: Reinforced liquidity position
Reinforced liquidity position Liquidity ratios (CRD/CRR) ECB funding, net (Billion euros) Eligible assets 16.1 23.0 270% +1.0 billion 2.9 Net funding 1.9 8.2 TLTRO 4.0 Deposits and other -2.1 -5.3 Mar 20 Mar 21 144% Net loans to deposits ratio 86% 83% 100% NSFR (Net stable LCR (Liquidity Mar 20 Mar
Slide 26: Portugal
03 Portugal 26
Slide 27: Improved profitability in Portugal
Improved profitability in Portugal Net income* Net operating revenue (Million euros) (Million euros) +4.6% 83.4 Includes initial Covid-19 357.1 373.6 provisions (60 million) 16.2 Q1'20 Q1'21 Q1'20 Q1'21 Operating costs (Million euros) -2.8% • Net income of 83.4 million in the 1st quarter of 155.0 20
Slide 28: Net interest income
Net interest income (Million euros) +9.7% +20.9 204.5 +12.3 186.4 +6.1 -2.7 1.50% NIM 1.55% -11.2 -5.2 -1.7 -0.3 Q1'20 Preforming Credit rate Impact of Deposits' rate Excess liquidity Impact of the Effect of Other Q1'21 credit volume effect NPE reduction effect (ECB, TBills) securities wholesale cos
Slide 29: 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) Q1'20 Q1'21 2.77% 2.66% -0.56% -0.58% Q1'20 Q1'21 3m Euribor 3m Euribor (average) -0.41% -0.54% (average) -0.41% -0.54% NIM • Spread of
Slide 30: Commissions and other income
Commissions and other income Fees and commissions Other income (Million euros) (Million euros) (Million euros) Q1'20 Q1'21 YoY -3.6% 51.4 Banking fees and commissions 104.1 101.7 -2.4% Equity earnings+ 49.6 dividends 9.3 2.0 Cards and transfers 25.6 23.6 -7.8% Loans and guarantees 27.9 25.0 -10.4% 1
Slide 31: Operating costs decreased
Operating costs decreased Operating costs Employees (Million euros) -189 -2.8% 155.0 7,193 150.7 7,004 Depreciation 19.0 19.8 Other administrative costs 43.1 Mar 20 Mar 21 43.0 Branches -25 Staff costs 501 92.8 87.8 476 Q1'20 Q1'21 Mar 20 Mar 21 31
Slide 32: Continued decrease of NPEs
Continued decrease of NPEs Non-performing exposures (NPE) NPE build-up (Million euros) Mar 21 Mar 21 (Million euros) -725 million vs.Mar 20 vs.Dec 20 2,918 -24.8% Opening balance 2,918 2,363 2,193 Net outflows/inflows 4 16 Other NPE 1,424 Write-offs -174 -49 1,118 Sales -555 -137 NPL>90d 1,493 1,075
Slide 33: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 148% 133% 124% 133% 18% 97% 98% Real estate collateral 42% Real estate collateral 28% 29% 47% 19% Cash, other fin.collat., 15% Cash, other fin.collat., EL gap 62% 11% EL gap 54% 102% 84% LLRs 76% 66% LLRs 36% 44% Individuals Companies Total In
Slide 34: Foreclosed assets and corporate restructuring funds
Foreclosed assets and corporate restructuring funds Foreclosed assets Corporate restructuring funds (Million euros) (Million euros) -10.3% 995 914 820 768 Impairment 188 130 136 101 Industry -175 million Net value 807 632 784 719 RE/tourism -21.7% Mar 20 Mar 21 Mar 20 Mar 21 Sales of foreclosed asse
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) Individuals: +9.8% +9.9% NPE: -24.8% (-0.7 billion) Performing: +5.9% (+2.0 billion) 62.1 +3.5% 56.6 37.3 38.6 16.6 Off-BS funds 14.9 1.5 Other BS funds 1.4 17.6 Mortgage 1
Slide 36: Performing credit grows in Portugal
Performing credit grows in Portugal Performing credit portfolio (Billion euros) +5.9% • Performing credit portfolio in Portugal up by 2.0 34.4 36.5 billion (+5.9%) from March 2020 +2.8% Mortgage 16.8 17.3 • Strong support to companies, which accounted for Personal and other 2.0 1.8 84% of the total
Slide 37: 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 Moratoriums (Amount in million euros) (Million euros) # operations Amount Reduction* Outstanding moratoriums Amount % Disbursed 19,161 2,498 Families 3,421 -1,041 -23% Breakdown per company size Micro SM
Slide 38: International operations
04 International operations 38
Slide 39: Contribution from international operations to consolidated net income
Contribution from international operations to consolidated net income (Million euros*) Q1'20 Q1'21 Contributo das operações internacionais (Million euros*) Poland 4.0 -68.6 Mozambique 14.7 15.5 19.1 Other 5.9 -1.6 Net income international operations 24.5 -54.7 Non-controlling int. (Poland+Mozambique
Slide 40: 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*) 40.1 Adjusted net income -5.8% (excluding CHF provisions) 16.2 202.8 190.9 Net income 4.0 -68.6 Q1'20 Q1'21 Q1'20 Q1'21 3m WIBOR (average) 1.62% 0.21% • Adjusted net inc
Slide 41: Significant reduction of operating costs
Significant reduction of operating costs Net interest income* Operating costs (Million euros**) (Million euros**) NIM 2.81% 2.56% -17.5% 114.1 -9.8% 94.1 151.9 Resol. fund + DGF 18.7 -37.5% 137.1 11.7 Other 41.6 -10.8% 37.1 Staff costs 53.7 -15.7% 45.3 Q1'20 Q1'21 Q1'20 Q1'21 Commissions and other i
Slide 42: Credit quality
Credit quality NPL>90d Loan impairment (balanço) (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 2.7% 2.5% NPL>90d 108% 122% 468.4 522.7 433.2 427.1 Mar 20 Mar 21 Mar 20 Mar 21 Loan impairment (net of recoveries) (Million euros*) • NPL>90d accounted for 2.5% of total credit as
Slide 43: Increased Customers funds and loans to Customers
Increased Customers funds and loans to Customers Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +7.4% +4.7% 21,001 19,552 16,758 1,938 16,000 Off-BS funds 1,417 37 Other BS funds 118 3,592 Term deposits 5,328 Mortgage 4,854 6,084 local currency 2,775 without Euro Bank M
Slide 44: 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% 17.4% 16.6% loan portfolio 1.6% 1.9% 2.8% 3.7% 6.7% 10.8% mortgage portfolio 6.1 304.5 -2.5% 194.1 84.3 112.3 2.9 2.8 48.1 60.0 2008 2020 Q1'21 2019 Q1'20
Slide 45: Net income reflects resilience in challenging environment
Net income reflects resilience in challenging environment Net income Net operating revenue (Million euros*) (Million euros*) Includes initial Covid-19 -2.4% provisions (5.0 million) +5.9% 45.8 44.7 14.7 15.5 Q1'20 Q1'21 Q1'20 Q1'21 MIMO rate (average) 12.75% 12.38% Operating costs (Million euros*) •
Slide 46: Stable net interest income
Stable net interest income Net interest income Operating costs (Million euros*) (Million euros*) NIM 8.2% 7.4% Cost to income 43.9% 45.9% +2.0% -0.1% 33.6 33.5 20.1 20.5 Other 11.5 +0.3% 11.6 Staff costs 8.6 +4.3% 8.9 Q1'20 Q1'21 Q1'20 Q1'21 Commissions and other income Employees** Branches (Million
Slide 47: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 17.0% 12.2% NPL>90d 74% 67% 109.1 80.5 70.9 47.3 Mar 20 Mar 21 Mar 20 Mar 21 Loan impairment (net of recoveries) (Million euros*) • NPL>90d ratio of 12.2% as of March 2021, with Cost of ri
Slide 48: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +13.9% -9.2% 640 1,678 Mortgage 10 581 1,473 Personal and 117 9 other 102 826 Term deposits +19.2% 693 513 Companies 469 Demand 781 +9.2% 852 deposits Mar 20 Mar 21 Mar 20 Mar 21 FX effect excluded. €/Metic
Slide 49: Key figures
05 Key figures 49
Slide 50: Strategic Plan
Strategic Plan Q1’20 Q1’21 Steady state* Franchise growth (original plan) Active Customers 5.8 million 5.9 million ... >6 million Digital Customers 60% 66% ... >60% Value creation Mobile Customers 43% 51% ... >45% Cost to income 48% 44% ... ≈40% RoE 2.4% 4.0% ... ≈10% CET1 12.0% 12.2% ... ≈12% Loans
Slide 51: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Millennium bcp Foundation Society Sustainability Eça de Queiroz/Millennium bcp In 2021, Millennium bcp returned to Abem Programme: the Solidary Foundation literary award Biannual literary award that distinguishes Medicines Network is a pioneering “The Sustainability
Slide 52: Awards in 2021
Awards in 2021 Millennium bcp: Book Runner Equity and Local Bank Millennium: Model Bank award by Celent market in Equity awards Millennium bcp Consumer Choice 2021, Bank Millennium: ranked 2nd in “Poland’s Best “Large banks” category Millennium bcp: Best FX Provider 2021 in Portugal Employe”r, banki
Slide 53: Appendix
Appendix 53
Slide 54: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 YoY QoQ >5y, ≤8y: 33% >8y, ≤10y: 25% Portugal 6,802 8,253 8,057 7,742 8,420 +24% +9% T-bills and other 1,872 1,605 1,052 384 514 -73% +34% Bonds 4,930 6,648 7,00
Slide 55: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book 508 35 0 3 547 ≤ 1 year 508 4 0 0 512 > 1 year and ≤ 2 years 0 12 0 0 12 > 2 years and ≤ 5 years 0 14 0 0 14 > 5 years and ≤ 8 years 0 4 0 0 4 > 8 years and ≤ 10 years 0 1 0 0 1 > 10 years 0 0 0 3 3 Banking
Slide 56: Diversified and collateralized portfolio
Diversified and collateralized portfolio Loan portfolio (Consolidated) LTV of the mortgage portfolio Breakdown Loans per collateral in Portugal Other 60-75 Mortgage guarantees 75-80 47% 26% 8% 29% 80-90 Companies 10% 42% Real 50-60 >90 guarantees 15% 7% 57% Unsecured 14% 40-50 0-40 12% 22% Personal/
Slide 57: Consolidated net income
Consolidated net income Impact on (Million euros) Q1'20 Q1'21 YoY earnings Net interest income 385.5 376.0 -2.5% -9.5 Net fees and commissions 179.8 177.9 -1.0% -1.9 Other income* 31.9 34.9 +9.3% +3.0 Net operating revenue 597.2 588.8 -1.4% -8.4 Staff costs -164.7 -146.9 -10.8% +17.8 Other administr
Slide 58: Consolidated balance sheet
Consolidated balance sheet (Million euros) 31 March 31 March 31 March 31 March 2021 2020 2021 2020 ASSETS LIABILITIES Cash and deposits at Central Banks 6,506.6 3,334.8 Financial liabilities at amortised cost Loans and advances to credit institutions repayable on demand 269.5 263.0 Resources from cr
Slide 59: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Net interest income 385.5 373.6 390.5 383.6 376.0 Dividends from equity instruments 0.1 3.4 1.3 0.0 0.0 Net fees and commission income 179.8 165.4 172.9 184.6 177.9 Other operating income -40.4 -79.1 -24.2 -11.8
Slide 60: Income statement
Income statement (Million euros) For the 3-month period ended March 31st, 2020 and 2021 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 M ar 2 0 M ar 2 1 Δ % M ar 2 0 M ar 2 1 Δ % M ar 2 0 M a
Slide 61: Glossário (1/2)
Glossário (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. Bu
Slide 62: Glossário (2/2)
Glossário (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 d
Slide 63: Millennium bcp Investor Relations Division
Millennium bcp INVESTOR RELATIONS DIVISION Bernardo Collaco, Head EQUITY DEBT AND RATINGS Luis Pedro Monteiro —_ Luis Morais +351 21 1131 084 +351 211151 537 Vv investors@millenniumbcp.pt Banco Comercial Portugués, S.A., a public company (sociedade aberta) having its registered office at Praga D. Jo
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