Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — H1 2022 Earnings Presentation
63 slides from Banco Comercial Portugues's earnings presentation, Jul 27, 2022
Slide 1: Apresentação de Resultados 1S 2021
APRESENTAÇÃO DE RESULTADOS 1S 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: Robust business model
Highlights: Robust business model ▪ Net profit of 74.5 million which compares to 12.3 million in June 2021, influenced by: ➢ Increase of 22.7% in Group's core income and strict management of operating costs (+1.5%) ➢ Mandatory contributions for the banking sector in Portugal of 62.2 million ➢ Extrao
Slide 6: Highlights: Robust business model
Highlights: Robust business model ▪ Consolidated performing loans up by 1.6 billion, +3.0% since June 2021; performing loans in Portugal up by 1.5 billion, +4.1% from June 2021 Business activity ▪ Total Customer funds up by 3.2 billion, +3.6% from June 2021 (+4.6% in Portugal) ▪ On-balance-sheet Cus
Slide 7: Growing Customer base, mobile Customers standing out
Growing Customer base, mobile Customers standing out ‘000 Customers As % of active Customers Group Active Customers 5,989 6,333 +631 3,172 3,802 60% +20% Mobile Customers Jun 21 Jun 22 +520 Digital Customers 4,038 4,558 72% +13% Active Customers 2,466 2,609 +229 1,282 1,053 49% +22% Mobile Customers
Slide 8: Our capabilities in digital are widely recognised and recommended
A. Our capabilities in digital are widely recognised and recommended App Millennium leads Digital Channels Satisfaction ratings #1 NPS1 Digital Customers 2018 – 2022 (Jun.), “Best Digital Bank” Unaided nomination by Customers2, 5 largest banks (Jun.) 4.8 53.9 55.0 45.6 49.0 44.1 50.5 48.8 4.8 40.1 4
Slide 9: 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-jun 2022 vs jan–jun 2021) +27% +69% Transfers +26% National +11% Payments Transactions P2P Transfers +46% +124% +161% +35% Sales Cards Personal loans
Slide 10: Group Profitability
02 Group Profitability 10
Slide 11: Net income of 74.5 million in the 1st half of 2022
Net income of 74.5 million in the 1st half of 2022 Impact on (Million euros) H1'21 H1'22 YoY earnings Net interest income 765.8 985.2 +28.6% +219.4 Commissions 352.9 387.6 +9.8% +34.6 Core income 1,118.7 1,372.7 +22.7% +254.0 Operating costs recurring 1 -502.9 -510.5 +1.5% -7.6 Recurring core operat
Slide 12: Net interest income
Net interest income Net interest income Portugal (Consolidated, million euros) (Million euros) Net interest 1.46% 1.41% Net interest margin margin 1.91% 2.29% +5.2% +28.6% 409.3 430.5 985.2 765.8 H1'21 H1'22 International operations (Million euros) Net interest 2.96% 4.44% margin +55.6% 554.7 356.5
Slide 13: Fees and commissions
Fees and commissions Fees and commissions Portugal (Consolidated, million euros) (Million euros) +12.1% +9.8% 277.2 247.3 387.6 43.8 38.3 352.9 54.9 Market-related 53.8 208.9 233.4 fees and commissions H1'21 H1'22 International operations (Million euros) Banking fees 332.7 +4.4% and commissions 299.
Slide 14: Other income
Other income Other income Portugal (Consolidated, million euros) (Million euros) 27.9 34.1 31.1 46.3 Total -2.1 -89.3 68.0 59.8 Equity earnings + -71.3 -72.0 dividends 30.0 45.7 H1'21 H1'22 Net trading income 80.3 Mandatory contributions 77.2 88.5 42.2 Of which: Banking sector 33.1 36.8 Resolution F
Slide 15: Operating costs
Operating costs Operating costs Portugal (Consolidated, million euros) (Million euros) Cost to income 57% 40% Cost to income 53% 40% -24.5% 389.4 590.1 -12.5% 293.8 Non-recurring* 87.2 5.7 Non-recurring* 87.2 516.2 Recurring 5.7 302.2 288.2 Depreciation 68.3 69.5 H1'21 H1'22 Other administrative 149
Slide 16: Cost of risk and provisions
Cost of risk and provisions Portugal Impairment and provision charges (Million euros) (Consolidated, million euros) Cost of risk 81pb* 69pb -2.6% 195.6 190.5 Cost of risk 68pb* 61pb 68.6 51.0 +19.4% 551.4 127.0 139.5 Goodwill Bank H1'21 H1'22 461.7 102.3 -26.2% Millennium Loan-loss reserves 1.409 1.
Slide 17: 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) -460 million -22.0% -501 millions 2.10 -16.7% 1.64 NPE 3.00 2.50 Other 1.54 Jun 21 Jun 22 1.60 NPL>90d NPE loans ratio 5.3% 4.0% 1.46 0.90 NPE rati
Slide 18: Group Business activity
02 Group Business activity 18
Slide 19: Customer funds maintain growth trend
Customer funds maintain growth trend Total Customers Funds* Total Customers Funds* Portugal (Billion euros) (Consolidated, billion euros) +3.6% +4.6% 64.0 67.0 91.1 87.9 16.8 15.1 1.5 1.4 16.2 17.1 16.5 Off-BS funds 18.9 29.5 33.5 1.4 Other BS funds 1.5 Jun 21 Jun 22 23.7 Term deposits 20.8 Total Cu
Slide 20: Relevant increase of the loan portfolio
Relevant increase of the loan portfolio Loans to Customers (gross) Portugal (Consolidated, billion euros) (Billion euros) NPE: -16.7% (-0.5 billion) +1.06 billion Performing: +3.0% (+1.6 billion) +2.7% 40.58 39.51 +1.52 +2.0% 57.5 58.7 -0.46 28.3 Jun 21 NPE Performing Jun 22 Mortgage 27.2 Internatio
Slide 21: Group Capital and liquidity
02 Group Capital and liquidity 21
Slide 22: Capital above regulatory requirements
Capital above regulatory requirements Total capital ratio • Total capital ratio of 15.3% and CET1 capital (Fully implemented) ratio of 11.3% (fully implemented) as of June +2.2pp Fully implemented 15.9%** vs requirement 2022, above SREP requirements 14.9% application of article +5.4pp 13.75% O-SII b
Slide 23: Capital at adequate levels
Capital at adequate levels Leverage ratio (Fully implemented, latest available data) 5.0% 5.2% 5.6% 5.7% 3.6% Leverage ratio at 5.7% as of June 2022, 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) 48% 37%
Slide 24: Pension fund
Pension fund Key figures Pension Fund (Million euros) Real-estate: 16% Dec 21 Jun 22 Pension liabilities 3,498 2,737 Bonds: 38% Cash and Pension fund 3,700 3,421 other: 8% Liabilities' coverage 106% 125% Fund's profitability +1.9% -5.9% Equities: 11% Assumptions Investment Funds: 27% Dec 21 Jun 22 D
Slide 25: Reinforced liquidity position
Reinforced liquidity position Liquidity ratios (CRD/CRR) ECB funding, net (Billion euros) Eligible assets 25.9 25.2 -2.7 billion 261% Net funding 4.8 2.1 TLTRO 8.2 8.2 Deposits and other -3.3 -6.1 153% Jun 21 Jun 22 Net loans to deposits ratio 82% 78% 100% NSFR (Net stable LCR (Liquidity Jun 21 Jun
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) +8.4% +63.1% Recurring* 109.4 178.4 741.8 684.4 174.5 45.1 H1'21 H1'22 H1'21 H1'22 Operating costs (Million euros) • Net income of 174.5 million in 1st half of 2022. On -24.5% a comparable basis net
Slide 28: Net interest income
Net interest income (Million euros) +5.2% 409.3 +20.2 +2.5 +0.3 430.5 +2.3 +13.6 -12.8 -2.6 -2.4 NIM 1.46% 1.41% H1'21 Performing Credit rate Impact of Deposit's rate Excess liquidity Impact of Effect of Other H1'22 credit volume effect NPE reduction effect (ECB, TBills) securities wholesale cost ef
Slide 29: Stabilization of the cost of deposits
Stabilization 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) H1'21 H1'22 2.65% 2.53% -0.47% -0.57% H1'21 H1'22 3m Euribor 3m Euribor (average) -0.54% -0.44% (average) -0.54% -0.44% NIM • Spread of the portfo
Slide 30: Commissions and other income
Commissions and other income Commissions (Milhões deOther euros) income (Million euros) (Million euros) H1'21 H1'22 YoY Banking fees and commissions 208.9 233.4 +11.7% Total 27.9 34.1 Cards and transfers 50.8 67.1 +32.1% Equity earnings+ Loans and guarantees 52.6 51.4 -2.2% dividends 31.1 46.3 Banca
Slide 31: Operating costs
Operating costs Operating costs Employees (Million euros) -683 -4.6% Recurring 302.2 288.2 6,937 6,254 389.4 Non-recurring* 87.2 293.8 Jun 21 Jun 22 Depreciation 40.0 5.7 39.8 Other administrative Branches costs 85.4 88.4 -43 458 415 Staff costs 176.8 160.0 H1'21 H1'22 Jun 21 Jun 22 *H1’21: Includes
Slide 32: Continued decrease of NPEs
Continued decrease of NPEs Non-performing exposures (NPE) NPE build-up (Million euros) Jun 22 Jun 22 (Million euros) -460 milion vs.Jun 21 vs.Dec 21 Opening balance 2,095 1,878 -22.0% 2,095 Net outflows/inflows 288 199 1,635 Write-offs -573 -341 Other NPE 1,130 Sales -175 -102 1,144 NPL>90d 965 Endi
Slide 33: NPE coverage
NPE coverage NPE total coverage* NPL>90d total coverage* 224% 128% 120% 43% 166% 2% 100% Real estate collateral 51% Real estate collateral 100% 44% 54% 1% Cash, other fin.collat. 62% 3% 180% 2% Cash, other fin.collat. 46% 1% 74% 1% 121% LLRs 64% LLRs 37% 54% 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) -1.5% 687 805 793 Impairment 136 356 102 85 Industry 551 -265 million 70 Net value 704 708 RE/tourism -48.1% 286 Jun 21 Jun 22 Jun 21 Jun 22 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) +4.6% NPE: -22.0% (-0.5 billion) Performing: +4.1% (+1.5 billion) 67.0 64.0 +2.7% 15.1 40.6 Off-BS funds 16.8 39.5 1.4 Other BS funds 1.5 17.1 18.8 Term deposits 16.2 Mortg
Slide 36: Performing credit grows in Portugal
Performing credit grows in Portugal Performing credit portfolio (Billion euros) • Performing credit portfolio in Portugal up by 1.5 billion (+4.1%) from +4.1% June 2021, supported in growth in mortgage loans and loans to companies 37.4 38.9 • Mortgage loans up by 1.0 billion from June 2021 (5.6%) •
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*) H1’21 H1’22 Contribution from international operations (Million euros*) Poland -110.3 -56.6 Mozambique1 40.6 46.4 Other -7.5 -1.7 Net income without 2.3 goodwill impairment Net income international operations -77.2 -12.0 Discon
Slide 39: Net earnings affected by costs related with CHF loans
Net earnings affected by costs related with CHF loans Net income Net operating revenue (Million euros*) (Million euros*) +106.2% +39.5% 243.2 538.4 117.9 385.9 Adjusted net income** -56.6 Net income -110.3 H1'21 H1'22 H1'21 H1'22 3m WIBOR (average) 0.21% 4.87% • Adjusted net income** up by 106.2% Op
Slide 40: Net interest income increase significantly
Net interest income increase significantly Net interest income Operating costs (Million euros*) (Million euros*) +44.3% 250.8 NIM 2.58% 4.14% 173.8 80.3 Resol. Fund + DGF +346.9% + IPS** +67.6% 461.5 18.0 67.2 +10.8% 74.4 Other 275.4 88.6 +8.4% 96.1 Staff costs H1'21 H1'22 H1'21 H1'22 Commissions an
Slide 41: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 2.5% 2.0% NPL>90d 126% 147% 521.3 507.7 412.7 345.9 Jun 21 Jun 22 Jun 21 Jun 22 Loan impairment (net of recoveries) (Million euros*) • NPL>90d accounted for 2.0% of total credit as of June
Slide 42: Increased Customers funds and loans to Customers
Increased Customers funds and loans to Customers Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) +3.4% +4.5% 21,908 21,179 17,398 1,445 16,657 Off-BS funds 2,006 0 Other BS funds 13 3,546 5,474 Term deposits Mortgage local currency 6,448 7,663 Mortgage foreign exchange 2
Slide 43: CHF mortgages
CHF mortgages CHF mortgage portfolio Cumulative provisions for legal risks (Billion euros*) (Million euros*) As a % of CHF As a % of total 6.9% 14.9% 19.5% 25.7% 30.9% 36.3% mortgage portfolio 54.6% 13.9% 11.4% 10.5% 9.6% loan portfolio -20% 15.5% 19.2% 21.5% 26.8% 28.2% TBD Peers’ average** 6.7 831
Slide 44: Credit holidays and capital management
Credit holidays and capital management Credit Holidays Capital Management The Act of July 7, introduced, among others, a handful of measures Capital ratios expected to be temporarily below minimum aimed at support of PLN mortgage borrowers, including: requirements due to the impact of upfront bookin
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*) +14.1% +11.1% 46.4 40.6 111.1 123.5 H1'21 H1'22 H1'21 H1'22 MIMO rate (average) 12.82% 14.27% Operating costs (Million euros*) • Net income of 46.4 million in 1st half of 20
Slide 46: Increased net interest income and commissions
Increased net interest income and commissions Net Interest income Operating costs (Million euros*) (Million euros*) NIM 7.7% 7.8% Cost to income 45.0% 43.2% +7.9% +6.7% 85.5 92.2 49.9 53.3 Other +7.5% 31.2 29.0 Staff Costs 21.0 +5.5% 22.1 H1'21 H1'22 H1'21 H1'22 Commissions and other income Employee
Slide 47: Credit quality
Credit quality NPL>90d Loan-loss reserves (Million euros*) (Million euros*) Credit ratio Coverage ratio NPL>90d 10.3% 9.9% NPL>90d 71% 99% 66.5 77.3 67.2 54.5 Jun 21 Jun 22 Jun 21 Jun 22 Loan impairment (net of recoveries) (Million euros*) Cost of risk 104bp 211bp • NPL>90d ratio of 9.9% as of June
Slide 48: Business volumes
Business volumes Customers funds Loans to Customers (gross) (Million euros*) (Million euros*) -10.2% +8.1% 2,192 753 2,027 Mortgage 12 676 Personal and other 130 12 Term deposits 1,155 153 955 Companies 611 512 Demand 1,073 1,037 deposits Jun 21 Jun 22 Jun 21 Jun 22 *FX effect excluded. €/Metical co
Slide 49: Key figures
05 Key figures 49
Slide 50: Strategic Plan: Excelling 24
Strategic Plan: Excelling 24 H1’22 2024 C/I ratio 40% ≈40% Cost of risk 61 bp ≈50 bp RoE 2.8% ≈10% CET1 ratio 11.3% >12.5% (11.8% pro forma*) NPE ratio 4.3% ≈4% Share of mobile Customers 60% >65% Growth of high engagement +7% +12% Customers** (vs 2020) Average ESG rating*** 70% >80% *Pro forma(subje
Slide 51: Commitment to People and Society
COMMITMENT TO PEOPLE AND SOCIETY Millennium bcp Foundation Society Sustainability Millennium Gallery: exhibition “A outra vida In 2022, Millennium bcp joins, again, the Global Finance magazine, best Bank to dos animais” – containing drawings, paintings, campaign "PORTUGAL CHAMA”, Portuguese Sustaina
Slide 52: Awards in 2022
Awards in 2022 Millennium bcp Millennium bcp: Integrates for 3rd consecutive year the Bloomberg Gender-Equality Index Bank Millennium: “Best Bank” in Poland Consumer Choice 2022, “Large banks” category Millennium bcp: Best Foreign Exchange Provider Bank Millennium: Distinguish with the CSR in Portug
Slide 53: Appendix
Appendix 53
Slide 54: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) >5y, ≤8y: 32% Jun 21 Sep 21 Dec 21 Mar 22 Jun 22 YoY QoQ Portugal 9,152 8,069 8,013 8,561 7,765 -15% -9% T-bills and other 1,129 497 426 849 1,222 +8% +44% >8y, ≤10y: 13% Bonds 8,023 7,572 7,587 7
Slide 55: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book 1,239 6 0 5 1,250 ≤ 1 year 1,221 1 0 0 1,222 > 1 year and ≤ 2 years 4 0 0 0 4 > 2 years and ≤ 5 years 10 4 0 0 14 > 5 years and ≤ 8 years 0 0 0 0 1 > 8 years and ≤ 10 years 1 0 0 4 6 > 10 years 3 0 0 0 3 Ban
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 guarantees 9% 60-75 80-90 48% 28% 27% 12% Companies >90 42% Real 5% guarantees 58% 50-60 Unsecured 0-40 14% 15% 21% 40-50 12% Personal/
Slide 57: Consolidated net income
Consolidated net income Impact on (Million euros) H1'21 H1'22 YoY earnings Net interest income 765.8 985.2 +28.6% +219.4 Net fees and commissions 352.9 387.6 +9.8% +34.6 Other income* -2.1 -89.3 +4227.1% -87.3 Net operating revenue 1,116.6 1,283.4 +14.9% +166.8 Staff costs -372.8 -284.2 -23.8% +88.6
Slide 58: Consolidated balance sheet
Consolidated balance sheet (Million euros) 30 junho 30 junho 30 junho 30 junho 2022 2021 2022 2021 LIABILITIES ASSETS Financial liabilities at amortised cost Cash and deposits at Central Banks 7.930,3 4.688,4 Resources from credit institutions 8,996.1 9,056.1 Loans and advances to credit institution
Slide 59: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) Quarterly 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 Net interest income 391.0 399.2 423.6 465.1 520.1 Dividends from equity instruments 0.7 0.2 0.1 0.9 12.0 Net fees and commission income 181.8 181.9 192.9 192.8 194.7 Other operating income -87.2 -4.5 -9
Slide 60: Income statement
Income statement (Million euros) For the 6-month periods ended June 30th, 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 Jun 2 1 Jun 2 2 Δ % Jun 2 1 Jun 2 2 Δ % Jun 2 1 Jun 2 2
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 +351 211 131 321 +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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