Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — H1 2015 Earnings Presentation
59 slides from Banco Comercial Portugues's earnings presentation, July 2015
Slide 1: Earnings Presentation 1H 2015
EARNINGS PRESENTATION 1H 2015 JULY 2015
Slide 2: Disclaimer
Disclaimer This document is not an offer of securities for sale in the United States, Canada, Australia, Japan or any other jurisdiction. Securities may not be offered or sold in the United States unless they are registered pursuant to the US Securities Act of 1933 or are exempt from such registrati
Slide 3: Agenda
Agenda Highlights Group • Profitability • Liquidity • Capital Portugal International Operations Conclusions 3
Slide 4: Highlights
Highlights • Net profit at €240.7 million in the 1st half of 2015, compared to €62.2 million losses in the same period of 2014. Profitability • Core net income* up by 62.6% to €423.5 million in 1H15 from €260.4 million in 1H14, reflecting increased net interest income (up 26.6%, including a 58.5% in
Slide 5: Highlights
Highlights Net income Contribution from Portuguese activity (Million euros) (Million euros) +€303.0 million 240.7 +€248.5 million 121.4 -62.2 1H14 1H15 -127.1 1H14 1H15 Contribution from international activity Phased-in capital ratios (CET1 – CRD IV / CRR)* (Million euros) (%) +6.1 million 104.6 13.
Slide 6: Destaques
Destaques Banking income in Portugal Net interest income in Portugal (Million euros) (Million euros) +51.8% 960.3 +58.5% 329.2 632.6 207.7 1H14 1H15 1H14 1H15 Operating costs in Portugal Loans to deposits ratio* (Million euros) (%) Net loans to BS -9.3% Customer funds 351.1 318.6 115% -8pp 107% 106%
Slide 7: Agenda
Agenda Highlights Group • Profitability • Liquidity • Capital Portugal International Operations Conclusions 7
Slide 8: 1H2015 earnings: profitability affirmed…
1H2015 earnings: profitability affirmed… Impact on (million euros) 1H14 1H15 YoY earnings Net interest income 496.0 628.0 26.6% +132.0 Of which: costs related with hybrids instruments (CoCos) -130.6 -32.3 -75.3% +98.3 Net fees and commissions 341.2 350.7 2.8% +9.5 Other operating income 251.3 492.6
Slide 9: … after 4 years of losses
… after 4 years of losses (Million euros) Net income Consolidated 240.7 1H: -62.2 -226.6 -740.5 -848.6 -1,219.1 2011 2012 2013 2014 1H15 9
Slide 10: Core net income improves in Portugal
Core net income* improves in Portugal (Million euros) Core net income* Portugal Consolidated +220.5% +62.6% 235.6 423.5 73.5 260.4 1H14 1H15 International operations +0.5% 186.9 187.8 1H14 1H15 1H14 1H15 * Core net income = net interest income + net fees and commission income – operating costs. 10
Slide 11: Net interest income increases, particularly in Portugal
Net interest income increases, particularly in Portugal (Million euros) Net interest income Portugal Consolidated +26.6% +58.5% 628.0 329.2 207.7 496.0 1H14 1H15 International operations +3.6% 288.2 298.8 1H14 1H15 Net interest margin 1.37% 1.84% Excluding (CoCos) 1.73% 1.94% 1H14 1H15 11
Slide 12: Increase in fees and commissions, especially in Portugal
Increase in fees and commissions, especially in Portugal (Milhões de euros) Fees and comissions Portugal Consolidated +3.7% 225.0 1H14 1H15 YoY Banking fees and commissions 270.6 285.9 +5.7% 217.0 Cards and transfers 96.5 86.3 -10.6% Loans and guarantees 79.9 92.4 +15.6% Bancassurance 36.6 37.7 +3.0
Slide 13: Increased net trading income, benefiting from gains from public debt portfolio
Increased net trading income, benefiting from gains from public debt portfolio in Portugal (Milhões de euros) Net trading income Portugal Consolidated +223.5% 426.0 +190.2% 508.3 131.7 1H14 1H15 International operations 175.2 +89.2% 82.3 43.5 1H14 1H15 1H14 1H15 13
Slide 14: Cost reduction proceeds in Portugal
Cost reduction proceeds in Portugal (Million euros) Operating costs Portugal Consolidated -9.3% 351.1 -3.7% 318.6 576.7 555.2 Depreciation 31.8 +4.6% 33.3 Other 221.5 -3.8% adminsitrative 213.0 costs 1H14 1H15 International operations +4.9% 225.6 236.6 Staff costs 323.4 -4.5% 308.9 1H14 1H15 1H14 1H
Slide 15: Higher provisioning charges…
Higher provisioning charges… (Million euros) Loan impairment (net of recoveries) Portugal Consolidated +26.9% Cost of 166bp 419.6 risk 330.6 128bp 475.0 371.6 1H14 1H15 International operations +34.7% 55.3 41.1 1H14 1H15 1H14 1H15 15
Slide 16: … resulting in stronger coverage
… resulting in stronger coverage (Million euros) Credit quality Loan impairment provisions (balance sheet) Credit ratio Jun 14 Jun 15 Coverage ratio jun 14 jun 15 Non-perf. loans 11.3% 12.0% Non-perf. loans 47% 54% Credit at risk 11.9% 12.5% Credit at risk 45% 52% 6,577 6,874 3,676 3,096 NPL Jun 14
Slide 17: Diversified and collateralised loan portfolio
Diversified and collateralised loan portfolio Loan portfolio Consolidated Companies Loans per collateral 48% Mortgage 59% 33% 8% 45% Garantias reais Outras garantias Sem garantias LTV of mortgage portfolio in Portugal 15% 10% 12% 26% 10% 16% 11% 0-40 40-50 50-60 60-75 75-80 80-90 >90 Consumer 7% L
Slide 18: Agenda
Agenda Highlights Group • Profitability • Liquidity • Capital Portugal International Operations Conclusions 18
Slide 19: Deposits increase, with individuals in Portugal and international operations standing out
Deposits increase, with individuals in Portugal and international operations standing out (Million euros) Individuals’ deposits Customer funds Customer deposits in Portugal up by 7.0% from June 2014 Consolidated +1.7% +2.8% Other (inc 33,631 34,211 65,741 public sector) 2,987 -29.1% 2,119 63,976 Com
Slide 20: Credit increases in international operations
Credit increases in international operations (Million euros) New production Mortgage +49% Loans to Customers (gross) Portugal Consumer +8% Companies* +24% Consolidated Factoring +248% -2.0% -5.1% Leasing +39% 45,195 42,872 Loans +16% Other +16% 58,261 57,085 Mortgage 26,043 25,828 Jun 14 Jun 15 Inte
Slide 21: Continued improvement of the liquidity position
Continued improvement of the liquidity position, current ratios exceed future requirements Commercial gap* Loans to deposits ratio** (Bank of Portugal) (Billion euros) Difference between BS Net loans to BS Customer funds and net loans Customer funds Jun 14 Jun 15 115% -8pp 107% -0.3 106% -3.3 100% -
Slide 22: Lower refinancing needs in the medium to long term
Lower refinancing needs in the medium to long term, Customer deposits are the main funding source Refinancing needs of medium-long term debt (Billion euros) Already repaid To be repaid 5.2 4.9 5.5 2.9 3.0 1.1 1.7 0.9 0.4 0.2 0.6 2009 2010 2011 2012 2013 2014 1H15 2H15 2016 2017 >2017 Improvement of
Slide 23: Agenda
Agenda Highlights Group • Profitability • Liquidity • Capital Portugal International Operations Conclusions 23
Slide 24: Profitability and specific measures strengthen capital figures
Profitability and specific measures strengthen capital figures Common Equity Tier 1 ratio* 12.5% +99bp 13.1% 11.8% +38bp 10.7% 9.6% Jun 14 Mar 15 2Q15 earnings Debt-equity Phased-in Fully-imp Fully-imp swap and other with 3/95 without 3/95 Jun 15 RWAs 43,773 45,341 44,127 44,121 43,472 Capital rat
Slide 25: Pension fund
Pension fund Main figures Pension fund (Million euros) Shares 23% Loans to credit Jun 14 Dec 14 Jun 15 institutions, other 27% Pension liabilities 2,759 3,133 3,136 Pension fund 2,786 3,095 3,070 Liabilities' coverage 112% 110% 109% Property 10% Fund's profitability 11.0% 8.1% 0.5% Actuarial differe
Slide 26: Agenda
Agenda Highlights Group • Profitability • Liquidity • Capital Portugal International Operations Conclusions 26
Slide 27: Portugal: deleveraging effort improves with liquidity position
Portugal: deleveraging effort improves with liquidity position (Million euros) Customer funds Loans to customers (gross) Individuals’ deposits up 7.0% vs june 2014 +0.05% -5.1% 47,682 47,704 45,195 Off BS 42,872 funds 10,708 11,044 Other BS 2,449 3,344 Mortgage 19,532 funds 18,868 Consumer Term 21,5
Slide 28: Net income improves, as banking income increases and operating costs decrease
Net income improves, as banking income increases and operating costs decrease (Million euros) Net Income Improved net income, resulting from an increased banking income (+51.8%) and a 9.3% reduction in operating costs 121.4 The increase in banking income reflects higher core income and trading i
Slide 29: Improvement trend on core income and reduction on operating costs in Portugal
Improvement trend on core income and reduction on operating costs in Portugal are in place Core Income* Operating costs* (Million euros) (Million euros) +130 -33 536 554 371 363 351 415 425 339 358 Commissions 319 Net interest income 1H13 2H13 1H14 2H14 1H15 1H13 2H13 1H14 2H14 1H15 Core net income*
Slide 30: Increase on net interest income in Portugal reflects lower cost of deposits
Increase on net interest income in Portugal reflects lower cost of deposits, in spite of the impact of lower loan volumes Net interest income per semester Breakdown of net interest income growth (Million euros) (Million euros) +122 1H15 319 329 202 208 vs.1H14 141 Effect of cost of time deposits +84
Slide 31: Continued effort to reduce the cost of deposits
Continued effort to reduce the cost of deposits Rate on term deposits portfolio Rate on credit portfolio 5.0% Companies 4.3% 4.1% 3.8% 4.0% 3.5% 3.1% 2.9% 2.7% 2.5% 2.4% 3.0% 2.2% 2.0% 1.8% 1.7% 1.5% 2.0% Mortgage 1.3% 1.0% 0.0% D11 M12 J12 S12 D12 M13 J13 S13 D13 M14 J14 S14 D14 M15 J15 D12 M13 J13
Slide 32: Increased commissions, benefiting from early repayment of State-guarantees
Increased commissions, benefiting from early repayment of State-guarantees (Million euros) 1H14 1H15 YoY Banking fees and commissions 182.1 197.7 +8.6% Cards and transfers 50.1 48.8 -2.6% Loans and guarantees 61.9 64.0 +3.5% Bancassurance 36.6 37.7 +3.0% Current account related 38.7 39.8 +2.7% State
Slide 33: Continuation of the plan implementation, on target with strategic goals
Continuation of the plan implementation, on target with strategic goals (Million euros) Operating costs Employees -752 -9.3% 8,351 351.1 7,599 Depreciation 16.5 318.6 -6.1% 15.4 Other administrative 120.7 -4.0% costs 115.9 Jun 14 Jun 15 Branches -49 740 Staff costs 214.0 -12.5% 691 187.2 1H14 1H15 J
Slide 34: Reinforced coverage of delinquent loans
Reinforced coverage of delinquent loans (Million euros) Credit quality Loan impairments provisions (balance sheet) Credit ratio Jun 14 Jun 15 Coverage ratio Jun 14 Jun 15 Non-performing loans 13.7% 14.8% Non-performing loans 43% 50% Credit at risk 13.9% 15.0% Credit at risk 42% 50% 6,188 6,361 3,188
Slide 35: Foreclosed assets sold above book value, confirming appropriate coverage
Foreclosed assets sold above book value, confirming appropriate coverage Foreclosed assets Number of properties sold (Million euros) -20.8% 1,264 Coverage 25.5% 19.1% 1,001 1,308 1,217 249 Impairment 310 1H14 1H15 Book value of sold properties (Million euros) Sale value 119 1,059 -15.3% 100 Net valu
Slide 36: Agenda
Agenda Highlights Group • Profitability • Liquidity • Capital Portugal International Operations Conclusions 36
Slide 37: Significant net income growth in international operations
Significant net income growth in international operations (Million euros) Δ% Δ% 1H14 1H15 local ROE euros currency International operations* Poland 77.4 79.3 +2.4% +3.8% 11.2% Mozambique 45.4 47.9 +5.5% +14.9% 21.0% Angola 25.6 38.2 +49.1% +65.4% 22.5% Net income 148.5 165.4 +11.4% +17.2% Other and
Slide 38: Poland: customer funds and loans to customers growth
Poland: customer funds and loans to customers growth (Million euros) Customer funds Loans to customers (gross) +9.9% 13,808 Off BS 12,559 +8.4% 1,748 funds +16.0% 73 11,565 1,508 Other BS 83 10,673 -11.6% funds 6,962 Term +8.2% 6,930 6,436 +7.8% deposits Mortgage 6,428 Consumer 1,068 + 20.6% 1,288 O
Slide 39: Net income growth
Net income growth (Million euros) Net income Net income up by 2.4% with a 11.2% ROE, in spite +2.4% of a difficult environment as long exchange rates (CHF) and interest rates are concerned 77.4 79.3 Lower banking income (-2.0% compared to 1H2014) reflecting lower net interest income (-4.7%) and
Slide 40: Reduction of profits determined by the difficult environment
Reduction of profits determined by the difficult environment partially offset by the reduction of costs (Million euros) Net interest income* Operating costs -4.7% -1.6% 177.6 169.2 134.1 132.0 Other admin costs + 68.8 65.4 depreciation Staff costs 65.3 66.6 1H14 1H15 1H14 1H15 Fees and commissions E
Slide 41: Stable credit quality, strong coverage
Stable credit quality, strong coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Jun 14 Jun 15 Coverage ratio Jun 14 Jun 15 Non-performing loans 2.9% 3.0% Non-performing loans 105% 102% 324 351 344 308 Jun 14 Jun 15 Loan impairment (net of recoveries) 66bp Cost of 5
Slide 42: Mozambique: strong volume growth
Mozambique: strong volume growth (Million euros) Customer funds Loans to customers (gross) +22.1% +11.4% 1,893 24 Other BS 1,551 1,435 funds 24 -0.2% 22 870 1,288 Mortgage 23 308 Term 650 +33.9% Consumer 266 +15.6% deposits and other On- +10.6% 1,106 +14.0% 1,000 Companies 999 demand 877 deposits Ju
Slide 43: Net income benefited from increased banking income
Net income benefited from increased banking income (Million euros) Net income Net income up by 5.5%, with ROE at +5.5% 21.0% 45.4 47.9 Increase of 14.3% in banking income, as a result of stronger net interest income, commissions and foreign exchange gains Operating costs up by 9.9% (+9 branche
Slide 44: Growth in core income and operating costs driven by network expansion
Growth in core income and operating costs driven by network expansion (Million euros) Net interest income Operating costs +3.2% +9. 9% 72.3 74.7 55.7 50.6 Depreciation 5.4 6.2 Other admin. 21.1 23.7 costs Staff costs 24.1 25.7 1H14 1H15 1H14 1H15 Fees and commissions Employees * Branches +7.2% +35 1
Slide 45: Credit quality and coverage
Credit quality and coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Jun 14 Jun 15 Coverage ratio Jun 14 Jun 15 Non-performing loans 3.5% 5.4% Non-performing loans 151% 107% 82 69 77 Jun 14 Jun 15 Loan impairment (net of recoveries) 46 Cost of 77bp risk 151bp 11.8
Slide 46: Angola: strong volumes growth, keeping a comfortable liquidity position
Angola: strong volumes growth, keeping a comfortable liquidity position (Million euros) Customer funds Loans to customers (gross) +20.9% 1,501 +22.7% 948 1,241 9 94 719 772 + 23.3% Mortage 7 Term +16.9% Consumer 84 +11.5% deposits 616 and other 845 + 24.1% Companies 681 On- 781 demand 626 +24.9% dep
Slide 47: Net income increase driven by higher banking income
Net income increase driven by higher banking income (Million euros) Net income Net income increases 49.1%, with ROE at +49.1% 22.5% 38.2 Increase of 36.3% in banking income, 25.6 strongly influenced by higher net interest income (due to business expansion) and trading gains Operating costs inc
Slide 48: Strong growth in net interest income and operating costs
Strong growth in net interest income income and operating costs driven by network expansion (Million euros) Net interest income Operating costs +25.6% +11.2% 56.5 45.2 40.6 45.0 5.6 Depreciation 4.3 Other admin. 19.7 19.2 costs Staff costs 16.6 20.3 1H14 1H15 1H14 1H15 Fees and commissions Employees
Slide 49: Credit quality and coverage
Credit quality and coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Jun 14 Jun 15 Coverage ratio Jun 14 Jun 15 Non-performing loans 4.3% 9.6% Non-performing loans 113% 57% 52 91 37 Jun 14 Jun 15 Loan impairment (net of recoveries) 33 78bp 212 bp Cost of risk 11.3
Slide 50: Agenda
Agenda Highlights Group • Profitability • Liquidity • Capital Portugal International Operations Conclusions 50
Slide 51: Progress on 2012 strategic plan metrics
Progress on 2012 strategic plan metrics Actual Strategic plan Phases Priorities 1H14 1H15 2015 Demanding economic CET1* 12.5% 13.1% Stronger balance sheet (phased-in) environment 9.0% With 3/95: 10.7% … >10% (fully 2012-2013 implemented)** W/o 3/95: 9.6% LtD*** 106% 100% … <110% Recovery of prof
Slide 52: Appendix
Appendix 52
Slide 53: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Total sovereign debt maturity (Million euros) >10 years Jun 14 Dec 14 Jun 15 YoY YTD 4% <1 year 18% Portugal 6,514 4,688 4,505 -31% -4% T-bills 1,547 815 156 -90% -81% Bonds 4,967 3,873 4,349 -12% +12% >1 year and >5 years and <2 years Poland 1,196 1
Slide 54: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Angola Other Total Trading book 179 905 0 0 73 1,157 ≤ 1 year 4 429 0 0 0 434 > 1 year and ≤ 2 years 0 241 0 0 11 252 > 2 year and ≤ 5 years 171 205 0 0.454 63 439 > 5 year and ≤ 10 years 3 30 0 0 0.0037 33 > 10 years 0 0 0 0 0.0000
Slide 55: Financial Statements
Financial Statements 55
Slide 56: Consolidated Balance Sheet
Consolidated Balance Sheet (Million euros) 30 June 2014 30 June 2015 30 June 2014 30 June 2015 Assets Liabilities Cash and deposits at central banks 1,927.9 2,426.8 Amounts owed to credit institutions 13,080.3 12,412.9 Loans and advances to credit institutions Amounts owed to customers 48,806.8 50,6
Slide 57: Consolidated Income Statement
Consolidated Income Statement Per quarter (Million euros) Quarterly 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 Net interest income 259.6 295.0 325.2 328.4 299.6 Dividends from equity instruments 2.5 0.1 0.1 2.0 3.8 Net fees and commission income 176.5 165.0 174.7 169.9 180.7 Other operating income 62.4 -13.8 -22
Slide 58: Consolidated Income Statement (Portugal and International Operations)
Consolidated Income Statement (Portugal and International Operations) For the 6 months period ended 30th June, 2014 and 2015 (Million euros) 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.) M ille nnium A ngo la O t he r int
Slide 59: Investor Relations Division
Investor Relations Division Rui Coimbra, Head of Investor Relations Investor Relations Reporting and Ratings Luís Pedro Monteiro Luís Morais Paula Dantas Henriques Lina Fernandes Tl: +351 21 1131 084 Tl: + 351 21 1131 337 Email: Investors@millenniumbcp.pt Banco Comercial Português, S.A., a public co
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