Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — 9M 2021 Earnings Presentation
63 slides from Banco Comercial Portugues's earnings presentation, Oct 27, 2021
Slide 1: Earnings Presentation 9M 2021
EARNINGS PRESENTATION H1 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 59.5 million, including 313.5 million provisions for legal risk on CHF loans in Poland and 56.2 million mandatory contributions for the banking sector in Portugal ▪ Excluding 87.6 million of headcount adjustment costs in Portugal, the Grou
Slide 6: Highlights: resilience of the business model
Highlights: resilience of the business model ▪ Consolidated performing loans up by 3.1 billion, +5.8% from September 2020; performing loans in Portugal up by 2.2 billion, +6.2% from September 2020, with companies accounting for 56% of the performing loans’ growth Business ▪ Total Customer funds up b
Slide 7: Growing Customer base, mobile Customers standing out
Growing Customer base, mobile Customers standing out As % of active ‘000 Customers Customers Group +543,000 Customers Mobile Customers +20% 3,318 55% 2,775 Sep 20 Sep 21 +428,000 Customers Digital Customers 3,722 4,150 68% +12% Active Customers 5,896 6,070 +196,000 Customers Mobile Customers 918 +21
Slide 8: Growth in mobile demonstrates the capacity for innovation and adaptation
Growth in mobile demonstrates the capacity for innovation and adaptation Strong mobile growth Y/Y (Number of operations, Jan-Sep 2021 vs. Jan–Sep 2020) +40% +109% +44% Transfers National +39% Payments Transactions P2P Transfers +57% +327% +118% +54% Sales Cards Personal loans Savings % Mobile Custom
Slide 9: Best Digital Bank and Leader in Customer Satisfaction in 2021
A. Best Digital Bank and Leader in Customer Satisfaction in 2021 App Millennium App Millennium leads ratings lidera ratings 4.8 #1 NPS1 Digital Customers 2018 - 2021, 5 largest banks “Best Digital Bank” Unaided nomination by Customers2, Q3’21 YtD 45.6 49.0 54.7 +5 pp 4.8 44.1 49.2 40.1 41.0 70% Bank
Slide 10: Incorporation of ESG dimensions into the operations and the business model
Incorporation of ESG dimensions into the operations and the business model Main scores E S G Inclusion of ESG into the A 100% green Electricity consumption in Portugal Corporate Governance model Exclusion or conditioning of social bonds 500M€ ESG initial issue Board of Directors Committee for Corpor
Slide 11: Group Profitability
02 Group Profitability 11
Slide 12: Net income of 59.5 million in the first nine months of 2021
Net income of 59.5 million in the first nine months of 2021 Impact on (Million euros) 9M20 9M21 YoY earnings Net interest income 1,153.7 1,168.6 +1.3% +15.0 Commissions 498.2 534.2 +7.2% +36.1 Core income 1,651.8 1,702.8 +3.1% +51.0 Operating costs -812.7 -851.7 +4.8% -39.0 Of which: recurring -785.
Slide 13: Net interest income
Net interest income Net interest income Portugal (Consolidated, million euros) (Million euros) Net interest margin 1.55% 1.45% Net interest +4.8% margin 2.03% 1.91% 591.2 619.5 +1.3% 1,153.7 1,168.6 9M20 9M21 International operations (Million euros) Net interest margin 3.01% 2.99% -2.4% 562.5 549.1
Slide 14: Fees and commissions
Fees and commissions Fees and commissions Portugal (Consolidated, million euros) (Million euros) +6.8% +7.2% 376.6 352.5 534.2 51.8 +12.7% 58.4 498.2 Market-related 81.5 +9.3% 300.7 +5.8% 318.2 fees and 74.6 commissions 9M20 9M21 International operations (Million euros) Banking fees +6.9% 452.7 and
Slide 15: Other income
Other income Other income Portugal (Consolidated, million euros) (Million euros) 23.0 39.5 48.5 43.9 Total 10.9 3.6 46.8 64.1 -72.2 -68.6 Equity earnings + dividends 59.0 9M20 9M21 43.0 Mandatory contributions 70.1 77.2 Of which: Banking sector 29.6 33.1 Net trading income 95.2 Resolution fund PT 15
Slide 16: Operating costs
Operating costs Operating costs Portugal (Consolidated, million euros) (Million euros) -2.7% Recurring 785.2 764.1 541.1 475.5 Non-recurring* 15.8 87.6 851.7 812.7 Non-recurring* 27.6 87.6 Recurring 459.7 -1.4% 453.5 Depreciation 101.9 102.8 9M20 9M21 Other administrative costs 236.2 230.6 Internati
Slide 17: Cost of risk and provisions
Cost of risk and provisions Portugal Impairment and provision charges (Million euros) (Consolidated, million euros) Stated cost of risk 90bp 68bp* Stated cost of risk 90bp 60bp -7.7% 332.8 307.0 Adjusted by one-offs - 69bp 72.3 103.3 +31.9% 726.1 260.4 203.7 9M20 9M21 550.6 -19.5% Loan-loss 313.5 1,
Slide 18: Relevant reduction of NPEs under a complex context
Relevant reduction of NPEs under a complex context Credit (Consolidadas, milhõesquality de euros) Portugal (Consolidated, billion euros) (Billion euros) -0.77 billion -433M from December 2020 -28.5% -0.83 billion -463M from NPE 2.70 December 2020 -22.7% 1.93 NPE 3.7 2.8 Other 1.7 1.5 Sep 20 Sep 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) +9.6% +8.7% 58.8 64.5 90.6 +7.9% 16.8 83.3 15.6 1.5 1.4 16.1 16.3 20.7 Off-BS funds +10.1% 25.6 30.0 18.8 1.5 Sep 20 Sep 21 Other BS funds 1.5 20.7 Total Customers Funds*
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: -22.7% (-0.8 billion) +1.44 billion Performing: +5.8% (+3.1 billion) +3.7% +4.0% +2.21 40.00 38.56 58.3 56.1 -0.77 27.5 Sep 20 NPE Performing Sep 21 Mortgage 26.1 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) Fully implemented • Total capital of 15.3%* (fully +2.0pp vs requirement 15.7% 15.3% implemented) as of September 2021, Impact of ongoing sale 13.3% of operation +5.1pp** O-SII buffer above SREP requirements Conservation 2
Slide 24: Capital at adequate levels
Capital at adequate levels Leverage ratio (Fully implemented, latest available data) 5.9% 6.2% 4.8% 5.4% Leverage ratio at 6.2% as of September 2021, a 3.6% comfortable and comparatively strong figure in European 3.0% banking FR DE ES IT RWA density High RWA density (51% as of September 2021), (RWAs
Slide 25: Reinforced liquidity position
Reinforced liquidity position Liquidity ratios (CRD/CRR) ECB funding, net (Billion euros) Eligible assets 22.5 25.2 -1.1 billion 264% Net funding 4.9 3.8 TLTRO 7.6 8.2 Deposits and other -2.7 -4.4 Sep 20 Sep 21 147% Net loans to deposits ratio 85% 83% 100% NSFR (Net stable LCR (Liquidity Sep 20 Sep
Slide 26: Portugal
03 Portugal 26
Slide 27: Resilient profitability in Portugal
Resilient profitability in Portugal Net income Net operating revenue (Million euros) (Million euros) +25.3% +7.1% 115.2 1,035.6 91.9 966.7 9M20 9M21 9M20 9M21 Operating costs (Million euros) 541.1 • Net income of 115.2 million in the first 9 months of 475.5 2021 Non-recurring* 15.8 87.6 • Net income
Slide 28: Net interest income
Net interest income (Million euros) +4.8% 591.2 +35.7 +39.3 619.5 +14.8 -3.4 -1.6 -34.6 -13.9 -7.9 NIM 1.55% 1.45% 9M20 Performing Credit rate Impact of Deposits' rate Excess liquidity Impact of the Effect of Other 9M21 credit volume effect NPE reduction effect (ECB, TBills) securities wholsesale co
Slide 29: Continued reduction of the cost of deposits
Continued reduction of 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) 9M20 9M21 2.69% 2.64% -0.51% -0.57% 9M20 9M21 3m Euribor 3m Euribor (average) -0.39% -0.54% (average) -0.39% -0.54% NIM • Spread of the port
Slide 30: Commissions and other income
Commissions and other income Commissions Other income (Million euros) (Million euros) (Million euros) 9M20 9M21 YoY Total 23.0 39.5 Banking fees and commissions 300.7 318.2 +5.8% Cards and transfers 73.1 80.3 +9.9% 43.9 Equity earnings+ Loans and guarantees 76.2 78.7 +3.3% dividends 48.5 Bancassuran
Slide 31: Operating costs
Operating costs Operating costs Employees (Million euros) -641 -1.4% Recurring 459.7 453.5 7,152 541.1 6,511 475.5 87.6 Non-recurring* 15.8 Sep 20 Sep 21 Depreciation 57.0 60.2 Other administrative Branches 128.8 128.4 costs -42 489 Staff costs 273.9 264.9 447 9M20 9M21 Sep 20 Sep 21 *9M’20: compens
Slide 32: Continued decrease of NPEs
Continued decrease of NPEs Non-performing exposures (NPE) NPE build-up (Million euros) Sep 21 Sep 21 (Million euros) -771 million vs.Sep 20 vs.Dec 20 -28.5% Opening balance 2,701 2,363 2,701 Net outflows/inflows 13 13 1,931 Other NPE 1,354 Write-offs -228 -208 1,047 Sales -555 -238 NPL>90d 1,348 884
Slide 33: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 174% 142% 150% 130% 25% 96% 46% 96% 32% 33% Real estate collateral 50% Real estate collateral 16% 21% Cash, other fin.collat., Cash, other fin.collat., EL gap 63% 11% EL gap 52% 118% 80% 69% 95% LLRs LLRs 35% 46% 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) -7.2% 928 850 789 Impairment 170 641 124 89 Industry -252 million 135 Net value 758 726 700 RE/tourism -33.2% 506 Sep 20 Sep 21 Sep 20 Sep 21 Sales of foreclosed assets
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) +9.6% NPE: -28.5% (-0.8 billion) Performing: +6.2% (+2.2 billion) 64.5 +3.7% 58.8 16.8 38.6 40.0 +7.9% Off-BS funds 15.6 1.5 Other BS funds 1.4 16.1 Mortgage 17.3 18.1 Term
Slide 36: Performing credit grows in Portugal
Performing credit grows in Portugal Performing credit portfolio • Performing credit portfolio in Portugal up by 2.2 billion (Billion euros) (+6.2%) from September 2020 +6.2% 35.9 38.1 • Strong support to companies, which accounted for 56% of the total performing loan growth from September 2020 Mortg
Slide 37: Moratoriums
Moratoriums Evolution of moratoriums expired between Moratoriums to expire from September March and June 2021 (Million euros) (Private moratoria; million euros) Moratoriums expired Moratoriums to expire in September after September Amount % Personal 291 46% Families 3,096 106 M ortgage 339 54% Compa
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*) 9M20 9M21 Contribution from international operations (Million euros*) Poland 29.0 -181.2 54.4 Mozambique 59.3 61.3 Other -0.2 -5.9 Net income international operations 88.1 -125.7 Non-controlling int. (Poland+Mozam
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*) 176.7 Adjusted net income** 116.6 -1.2% 587.4 580.1 Net income 29.0 -181.2 9M20 9M21 9M20 9M21 3m WIBOR (average) 0.81% 0.21% Operating costs • Adjusted net income** up
Slide 41: Significant reduction of operating costs
Significant reduction of operating costs Net Interest income Operating costs (Million euros*) (Million euros*) NIM 2.63% 2.60% -9.5% -0.6% 293.9 266.0 431.1 428.4 Resol. Fund and DGF 30.9 -28.3% 22.2 Other 117.1 -7.1% 108.8 Staff costs 145.9 -7.5% 135.0 9M20 9M21 9M20 9M21 Commissions and other inco
Slide 42: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 2.8% 2.5% NPL>90d 116% 128% 525.6 545.3 453.7 427.0 Sep 20 Sep 21 Sep 20 Sep 21 Loan impairment (net of recoveries) (Million euros*) • NPL>90d accounted for 2.5% of total credit as of Cost
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*) +6.0% +6.4% 21,695 20,459 17,341 Off-BS funds +21.0% 2,071 16,302 1,711 9 Other BS funds 89 3,656 Term deposits 4,181 Mortgage 5,449 6,988 local currency Mortgage foreign exc
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% 19.1% 18.8% 17.0% 12.6% 1.6% 2.0% 2.8% 3.7% 6.7% 10.8% 14.9% 20.3% mortgage portfolio loan portfolio -7.2% -10.8% -15.8% % decrease 1.9% 2.8% 3.8% 6.6% 8.4
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*) +3.4% +5.5% 59.3 61.3 160.3 151.9 9M20 9M21 9M20 9M21 MIMO rate (average) 11.44% 12.93% Operating costs (Million euros*) • Net income of 61.3 million in the first 9 months of
Slide 46: Increased net interest income and commissions
Increased net interest income and commissions Net Interest income Operating costs (Million euros*) (Million euros*) NIM 8.1% 7.7% Cost to income 43.9% 43.1% +4.0% +3.7% 118.4 66.6 69.1 113.8 Other 37.5 +3.1% 38.7 Staff costs 29.1 +4.4% 30.4 9M20 9M21 9M20 9M21 Commissions and other income Employees*
Slide 47: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 20.3% 11.1% NPL>90d 71% 76% 148.6 105.8 69.6 52.8 Sep 20 Sep 21 Sep 20 Sep 21 Loan impairment (net of recoveries) (Million euros*) Cost of risk 197bp 141bp • NPL>90d ratio of 11.1% as of S
Slide 48: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +7.5% -14.8% 1,844 734 1,715 Mortgage 10 Personal and 127 625 other 10 865 125 Term deposits 852 Companies 596 489 Demand 979 863 deposits Sep 20 Sep 21 Sep 20 Sep 21 *FX effect excluded. €/Metical constant
Slide 49: Key figures
05 Key figures 49
Slide 50: Strategic Plan: Excelling 24
Strategic Plan: Excelling 24 9M 2021 2024 C/I ratio 50% ≈40% (45% excluding non-usual costs) Cost of risk 60 bp ≈50 bp (69 bp excluding one-off reversals) RoE 1.4% ≈10% 11.8% CET1 ratio >12.5% (12.0% pro forma*) NPE ratio 4.9% ≈4% Share of mobile Customers 55% >65% Growth of high engagement +3% +12%
Slide 51: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Millennium bcp Foundation Society Sustainability Santa Clara church: Built in the 1st half of the Millennium bcp subscribes manifesto “Rumo Millennium bcp carries out its first issue of 15th century, within the city walls of Porto, it is à COP26" promoted by BCSD Por
Slide 52: Awards in 2021
Awards in 2021 Millennium bim: Best Digital Bank, Best FX Millennium bcp: “PME Líder’20” programme: Provider e Best trade finance provider 2021 in largest number of awards among participating Mozambique banks (3rd year in a row) Millennium bcp Consumer Choice 2021, Millennium bcp: Main bank for comp
Slide 53: Appendix
Appendix 53
Slide 54: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) >5y, ≤8y: 34% Sep 20 Dec 20 Mar 21 Jun 21 Sep 21 YoY QoQ Portugal 8,057 7,742 8,420 9,152 8,069 +0% -12% >8y, ≤10y: 8% T-bills and other 1,052 384 514 1,129 497 -53% -56% Bonds 7,004 7,358 7,906 8
Slide 55: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book 497 33 0 13 543 ≤ 1 year 491 6 0 0 497 > 1 year and ≤ 2 years 0 3 0 0 3 > 2 years and ≤ 5 years 6 12 0 0 18 > 5 years and ≤ 8 years 0 8 0 1 9 > 8 years and ≤ 10 years 0 3 0 10 13 > 10 years 0 1 0 2 3 Banking
Slide 56: 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 60-75 guarantees 8% 47% 26% 29% 80-90 Companies 11% 43% Real 50-60 >90 guarantees 15% 6% 57% Unsecured 14% 40-50 0-40 12% 21% Personal/
Slide 57: Consolidated net income
Consolidated net income Impact on (Million euros) 9M20 9M21 YoY earnings Net interest income 1,153.7 1,168.6 +1.3% +15.0 Net fees and commissions 498.2 534.2 +7.2% +36.1 Other income* 10.9 3.6 -67.3% -7.3 Net operating revenue 1,662.7 1,706.4 +2.6% +43.7 Staff costs -469.9 -518.3 +10.3% -48.4 Other
Slide 58: Consolidated balance sheet
Consolidated balance sheet (Million euros) 30 September 30 September 2020 30 September 30 September 2020 2021 (restated) 2021 (restated) LIABILITIES ASSETS Financial liabilities at amortised cost Cash and deposits at Central Banks 5,557.4 3,843.8 Resources from credit institutions 9,072.0 9,071.7 Lo
Slide 59: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) Quarterly 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 Net interest income 390.7 383.4 375.8 392.4 400.4 Dividends from equity instruments 1.3 0.0 0.0 0.7 0.2 Net fees and commission income 166.7 177.7 171.1 181.5 181.7 Other operating income -24.1 -11.7 -2
Slide 60: Income statement
Income statement (Million euros) For the 9-month periods ended September 30th, 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 Sep 2 0 Sep 2 1 Δ % Sep 2 0 Sep 2 1 Δ % Sep 2 0 Sep
Slide 61: 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 62: 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 63: Investor Relations Division
INVESTOR RELATIONS DIVISION Bernardo Collaço, Head EQUITY DEBT AND RATINGS Alexandre Moita Luís Morais +351 211 131 084 +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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