Banco Comercial Portugues S.a. · EURONEXT:BCP

Banco Comercial Portugues — Q1 2013 Earnings Presentation

57 slides from Banco Comercial Portugues's earnings presentation, May 2013

  1. Slide 1: Earnings Presentation 1Q 2013

    EARNINGS PRESENTATION MAY 2013 1°'Q 2013

  2. 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 registra

  3. Slide 3: Agenda

    Agenda  Main Highlights  Group • Greece • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 3

  4. Slide 4: Highlights of 1Q2013

    Highlights of 1Q2013 Risk mitigation concerning Greece, continued strengthening of liquidity position and comfortable capital ratios allows us to be better prepared for future challenges Greece Signature of a definitive agreement for the sale of the entire share capital of Millennium disposal agreem

  5. Slide 5: Highlights of 1Q2013

    Highlights of 1Q2013 Agreement for the sale of the Greek operation Loan to deposit ratio * Net loans to BS customer funds ratio  Announcement of the negotiation process: 6 February 138% -17pp 2013  Signing of the agreement: 22 April 2013 124% 121%  Next steps: approval process by the regulatory e

  6. Slide 6: Highlights of 1Q2013

    Highlights of 1Q2013 Net income Net income (excluding Greece) (Million euros) (Million euros) 40.8 51.9 -79.5 -109.7 -109.7 -152.0 -222.7 -261.5 1Q12 1Q13 1Q13 (excluding 1Q12 2Q12 3Q12 4Q12 1Q13 Greece) Contribution of the international operations Operating costs in Portugal (excluding Greece) (Mil

  7. Slide 7: Agenda

    Agenda  Main Highlights  Group • Greece • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 7

  8. Slide 8: Greece: disposal of the Greek operation (MBG)

    Greece: disposal of the Greek operation (MBG) Greek Risk is limited to the participation in rigths issue of Piraeus Bank  Release of RWA: c. 4 billion euros  Reimbursement of the remaining funding : provided in two tranches (650 million euros on the date closing of the sale transaction and 250 mil

  9. Slide 9: Agenda

    Agenda  Main Highlights  Group • Greece • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 9

  10. Slide 10: Focus on balance sheet customer funds increase

    Focus on balance sheet customer funds increase… (Million euros) Consolidated Customer Funds * Customer funds in Portugal * +4.9% +3.0% Total Customer 70,622 50,439 51,976 Funds 67,328 +5.3% 17,374 17,321 Balance sheet 57,434 54,525 customer funds 5,560 +4.5% 34,602 5,695 33,118 13,871 14,836 Mar 12

  11. Slide 11: Loans to customers evolution, in line with liquidity plan

    … and on loans to customers evolution, in line with liquidity plan (Million euros) Consolidated Loans to customers (gross)* Loans to customers (gross) in Portugal* -8.7% 53,998 49,295 -6.6% 71,243 66,507 30,254 -3.7% 29,122 4,457 -5.7% Mar 12 Mar 13 4,205 Loans to customers (gross) in international

  12. Slide 12: Reduction of commercial gap and reduction in usage of ECB

    Reduction of commercial gap as refinancing driver and reduction in usage of ECB (Billion euros) Comercial Gap * Loan to deposit ratio ** (BoP) Net loans to BS customer Mar 12 Mar 13 funds ratio 138% -17pp 124% 121% -10.3 -18.8 +8.5 108% Accumulated net repayment of MLT debt Mar 12 Mar 13 (Medium and

  13. Slide 13: Lower refinancing needs on the short, medium and long term

    Lower refinancing needs on the short, medium and long term (Billion euros) Refinancing needs of medium-long term debt Already repaid 5.2 5.5 ** 4.9 2.9 * 3.0 1.0 1.2 0.4 0.6 0.4 0.0 2009 2010 2011 2012 1T13 2013 2014 2015 2016 2017 >2017 Significant improvement of the funding structure Customer depo

  14. Slide 14: Agenda

    Agenda  Main Highlights  Group • Greece • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 14

  15. Slide 15: Core tier I ratio reaches 12.1%

    Core tier I ratio reaches 12.1%, allowing the bank to comply with all regulatory requirements ... Consolidated Core tier I ratio (%) - BoP +2.9pp Compliance with 10% BdP  12.1% regulatory requirements 9.2% 9% EBA  Change March 13 vs. March 12 (mn eur) Reinforcement of core tier I +23.1% Core tier

  16. Slide 16: Agenda

    Agenda  Main Highlights  Group • Greece • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 16

  17. Slide 17: Net income in line with the plan

    Net income in line with the plan, reflecting the actual level of interest rates and the current macroeconomic scenario Consolidated (million euros) 1Q12 1Q13 Δ Net interest income 309.4 183.0 -126.4 Of which: costs related with hybrids instruments (CoCo's) 0.0 -66.6 -66.6 Net fees and commissions 16

  18. Slide 18: Net income affected by atypical items

    Net income affected by atypical items (Million de euros) Net income Atypical items Consolidated Net of taxes * 40.8 -34.2 Liability management 2011 -47.3 Hybrids (CoCo's) interest -109.7 -152.0 1Q12 1Q13 1Q13 -12.3 Cost with State guarantees (excluding Greece) -93.7 * Considering the marginal tax ra

  19. Slide 19: Net interest income reduction as a result of CoCo's cost

    Net interest income reduction as a result of CoCo’s cost, adverse market interest rates evolution and volumes effect (Million euros) Net interest income Portugal Consolidated 1Q13 vs.1Q12 -19.3% 309.4 Hybrid instruments (CoCo‟s) cost -67 249.6 Market interest rates evolution -31 (ex. Euribor) 66.6 V

  20. Slide 20: Stable fees and commissions with the increase in international operations

    Stable fees and commissions with the increase in international operations (Million euros) Fees and commissions Portugal Consolidated -6.7% 114.6 106.9 1Q12 1Q13 YoY Banking fees and commissions 152.4 151.0 -0.9% Cards and transfers 42.9 44.6 3.8% Loans and guarantees 43.7 36.1 -17.4% Bancassurance 1

  21. Slide 21: Net trading income increase in international operations

    Net trading income increase in international operations (Million euros) Net trading income Portugal Consolidated -69.9% 151.4 -57.1% 95.5 174.0 45.6 55.9 45.6 1Q12 1Q13 Repurchase of own debt Other 74.7 International operations +29.0% 29.2 22.6 1Q12 1Q13 1Q12 1Q13 The figures for Greek operation wer

  22. Slide 22: Reduction of costs in Portugal and in international operations

    Reduction of costs in Portugal and in international operations (Million euros) Operating costs Portugal Consolidated -11.9% 346.2 Depreciation 19.5 305.0 224.8 -17.3% -10.8% Other 17.4 administrative 132.4 -11.1% 117.6 185.9 costs Staff costs 194.3 -12.5% 170.0 1Q12 1Q13 1Q12 1Q13 International oper

  23. Slide 23: Provisioning in line with the economic cycle

    Provisioning in line with the economic cycle (Million euros) Loan impairments (net of recoveries) Portugal Consolidated Cost of risk +27.4% 91 bp 122 bp 169.6 +23.7% 188.4 133.2 152.3 1Q12 1Q13 1Q12 1Q13 81% of loan impairments (gross) in 1Q13, were related with companies‟ credit portfolio Internati

  24. Slide 24: Credit quality and provisioning reflect the economic cycle

    Credit quality and provisioning reflect the economic cycle, but in line with the plan (Million euros) Consolidated Credit quality Loan impairment (balance sheet) Credit ratio Mar12 Mar13 Coverage ratio Mar12 Mar13 Past due >90d 5.0% 6.8% Past due >90d 100% 96% Past due >90d + falling due 9.7% 12.1%

  25. Slide 25: Diversified and collateralized credit portfolio

    Diversified and collateralized credit portfolio Loan portfolio Consolidated Loans by collateral 15.9% Companies Other sectors 64% 29% 7% 50% Mortgage With real state guarantees With other guarantees 3.4% Transp. and communications 44% Without guarantees 2.0% Other national activities 3.4% Wholewale

  26. Slide 26: Agenda

    Agenda  Main Highlights  Group • Greece • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 26

  27. Slide 27: Deleveraging effort with increase in customer funds and reduction of loans

    Deleveraging effort with an increase in customer funds and a reduction of loans (Million de euros) Customer funds* Loans to customers (gross) * Total +3.0% -8.7% customer 51,976 53,998 funds 50,439 +3.5% 49,295 Balance sheet customer 38,687 40,048 funds 21,510 -5.0% 5,569 5,446 20,438 9,175 8,826 2,

  28. Slide 28: Portugal: results show a reversal in the downward trend

    Portugal: results show a reversal in the downward trend (Million euros) Net income 17.7  Banking income affected by the decrease of net interest income and net trading income -119.6 -148.0 -261.1 -292.1  Operating costs decrease 17.3% with the reestructuring plan implementation 1Q12 2Q12 3Q12 4Q12

  29. Slide 29: Net interest income affected by the volumes effect

    Net interest income affected by the volumes effect… Net interest income 1Q13 vs.4Q12 (Million euros) 177.0 Past due loans and recoveries effect -31 126.6 141.0 Volumes effect (less credit, more -27 63.5 deposits) 46.8 Others -5 Total -63 1Q12 2Q12 3Q12 4Q12 1Q13 51.9 50.8 48.5 47.1 45.8 -1.3 Average

  30. Slide 30: Despite the continued repricing effort

    … despite the continued repricing effort Time deposits rate Credit portfolio spread (%) (%) 5.0% New production Companies 4.30 4.30 4.5% Portfolio 4.0% 4.19 4.10 Mortgage 3.5% 4.07 3.0% 2.5% 1.14 1.15 1.15 1.16 1.16 2.0% S/11 D/11 M/12 J/12 S/12 D/12 M/13 1Q12 2Q12 3Q12 4Q12 1Q13 Evolution of term d

  31. Slide 31: Fees and commissions affected by loans, guarantees and asset management

    Fees and comissions affected by loans, guarantees and asset management (Million euros) 1Q12 1Q13 YoY Banking fees and commissions 115.9 110.0 -5.0% Cards and transfers 23.1 22.6 -2.2% Loans and guarantees 36.9 29.1 -21.2% Bancassurance 17.9 19.1 6.4% Current account related 16.0 20.3 26.6% Other fee

  32. Slide 32: Positive results in operating costs in Portugal

    Positive results in operating costs in Portugal, following the restructuring program (Million de euros) Operating costs Staff costs Portugal -€24.5M 135.0 Savings 110.5 > €40M -17.3% 532 224.8 11.0 1Q12 1Q13 -16.1% 185.9 Employees 9.2 -990 78.9 9,944 -16.1% 8,954 66.2 Mar 12 Mar 13 2012 2013 Other a

  33. Slide 33: Credit quality and provisioning reflect the economic cycle

    Credit quality and provisioning reflect the economic cycle, but in line with the plan (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Mar12 Mar13 Coverage ratio Mar12 Mar13 Past due >90d 5.1% 7.0% Past due >90d 104% 85% Past due >90d + falling due 10.7% 13.0% Past due >90

  34. Slide 34: Agenda

    Agenda  Main Highlights  Group • Greece • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 34

  35. Slide 35: Net income in international operations

    Net income in international operations (Million euros) Δ% Δ% 1Q12 1Q13 local euros currency International operations* 34.3 38.4 12.0% Poland 26.4 28.7 9.0% 9.0% Mozambique 20.6 20.3 -1.7% -11.7% Angola 8.8 6.5 -26.7% -27.3% Other and non-controlling interests -21.5 -17.1 Note: For the 1st quarter of

  36. Slide 36: Poland: growth in customer funds and loans to customers

    Poland: growth in customer funds and loans to customers (Million euros) Customer funds Loans to customers (gross) +17.4% +0.9% 12,012 10,229 9,981 10,074 6,549 +0.6% 6,586 776 +9.3% 848 2,656 2,640 -0.6% Mar 12 Mar 13 Mar 12 Mar 13 Mortgage Consumer Companies Excluded FX effect. €/PLN rates used: In

  37. Slide 37: Growth in net income driven by operating income and cost control

    Growth in net income driven by increase in operating income and by strict costs control (Million euros) Net income  Customer funds increase 17.4% + 9.0%  Net income grows by 9.0% 26.4 28.7  Increase in banking income (+4.5%), despite the decrease in the reference interest rates that reached histo

  38. Slide 38: Growth in net fees and commissions

    Growth in net fees and commisions (Million euros) Net interest income * Net fees and commissions -2.2% +6.9% 70.7 69.2 31.7 33.9 1Q12 1Q13 1Q12 1Q13 NIM evolution * 2.4% 2.5% 2.4% 2.3% 2.2% Loans  Net interest income decreases 2.2% versus 3.09% 3.02% 2.87% 2.86% 2.96% the same quarter of 2012 Depos

  39. Slide 39: Strict costs control and cost to income improvement

    Strict costs control and cost to income sustained improvement Operating costs Number of employees (Million euros) -3.4% -5.6% 67.6 65.3 6,272 5,920 33.5 32.0 - 4.6% Mar 12 Mar 13 34.1 33.3 -2.2% 1Q12 1Q13  Operating costs down by 3.4%  Other administrative costs (including Cost to depreciation) de

  40. Slide 40: Reinforcement of provisioning

    Reinforcement of provisioning (Million euros) Credit Quality Impairment charges Overdue loans 119% >90 days 104% Impairment 37bp * charges as % of 52bp * coverage ratio average net loans 2.5% Overdue loans 2.8% +39.7% >90 days ratio Overdue loans > 286 12.6 247 90 days 9.0 Mar 12 Mar 13 1Q12 1Q13 

  41. Slide 41: Mozambique: strong volumes growth, low delinquency

    Mozambique: strong volumes growth, loans with low delinquency level (Million euros) Customer funds Loans to customers (gross) Overdue loans 436% >90 days 402% +23.9% coverage ratio 1,480 1.8% Overdue loans 1.6% >90 days ratio 1,195 1,114 +19.0% 936 26 +20.2% 251 22 273 -8.2% 837 641 +30.6% Mar 12 Ma

  42. Slide 42: Results penalized by reference interest rates and expansion plan

    Results penalized by reference interest rates and by the expansion plan (Million euros) Net income  Increase in volumes: customer funds grow 24% and loans to customers increase 19%, keeping the -1.7% leadership position in the Mozambican market  Fees and commissions and net interest income 20.6 20

  43. Slide 43: Strong fees and commissions growth and costs in line with expansion

    Strong fees and commissions growth and operating costs in line with the expansion plan (Million euros) Net interest income Operating costs -17.4% +14.3% 34.6 23.6 28.6 20.7 2.3 1.9 8.8 9.6 10.0 11.7 1Q12 1Q13 1Q12 1Q13 Depreciation Fees and commissions Other administrative costs Staff costs +26.3% 1

  44. Slide 44: Angola: growth in loans to customers

    Angola: growth in loans to customers (Million euros) Customer funds Loans to customers (gross) Overdue loans 177% >90 days 238% -0.5% coverage ratio 843 839 Overdue loans 3.2% >90 days ratio 2.7% +8.8% 540 497 Mar 12 Mar 13 Mar 12 Mar 13 Excluded FX effect. €/Kwanza rates used : Income Statement 127

  45. Slide 45: Net income penalized by lower rates and higher provisions

    Net income penalized by lower market interest rates and higher level of provisions (Million euros)  Loans to costumers increase 9% Net income  Fees and commissions and net interest income -26.7% increase, despite lower reference interest rates 8.8 (LUIBOR12M decreased from 12.0% in 1Q12 to 10.3% i

  46. Slide 46: Strong fees and commissions growth and costs growth in line with expansion

    Strong fees and commissions growth and operating costs growth in line with expansion plan (Million euros) Net interest income Operating costs -1.9% 16.9 +3.6% 17.6 17.2 16.9 2.2 1.8 8.1 8.4 6.7 7.4 1Q12 1Q13 1Q12 1Q13 Depreciation Fees and commissions Other administrative costs +30.5% Staff costs 6.

  47. Slide 47: Agenda

    Agenda  Main Highlights  Group • Greece • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 47

  48. Slide 48: Strategic Plan conclusions and cycles

    Strategic Plan conclusions and cycles STAGES Priorities Initiatives already implemented  Core tier I ratio reaches 12.1% Comfortable capital ratios Reinforcement  Loan to deposit ratio reaches 121% of capital and Enhanced liquidity position (according to BoP criteria) and net liquidity loans to BS

  49. Slide 49: Appendixes

    Appendixes 49

  50. Slide 50: Detail of public debt portfolio

    Detail of public debt portfolio (Million euros) Sovereign debt portfolio Sovereign debt total maturity Mar 12 Mar 13 YoY Portugal 4,456 5,886 32% >3 Years 25% <1 Year 37% T-bills 1,229 2,177 77% Bonds 3,227 3,709 15% Poland 1,261 2,368 88% Mozambique 329 210 -36% Angola 354 316 -11% Greece 108 31 -7

  51. Slide 51: Detail of public debt portfolio

    Detail of public debt portfolio (Million euros) Portugal Poland Mozambique Angola Greece Romania Ireland Others Total Trading book 173 297 0 0 14 0 0 75 558 < 1 year 1 54 0 0 13 0 0 1 69 > 1 year and <2 years 1 31 0 0 0 0 0 0 33 > 2 year and <3 years 13 92 0 0 0 0 0 0 105 > 3 years 157 120 0 0 1 0 0

  52. Slide 52: Romania: strong improvement in banking income

    Romania: strong improvement in banking income due to the maintainance of the cost containment policy and volumes growth (Million euros) Net income Banking Income Operating costs +39.7% -7.3% 8.9 8.2 7.2 5.2 -2.1 -3.3 1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 Loans to customers (gross) Customer Deposits  Net in

  53. Slide 53: Financial statements

    Financial statements IM =

  54. Slide 54: Consolidated Balance Sheet and Income Statement

    Consolidated Balance Sheet and Income Statement 31 March 31 March 31 March 31 31 March 2013 2012 2013 December 2012 (Thousands of Euros) (Thousands of Euros) Assets Interest and similar income 730,463 965,327 Interest expense and similar charges (547,464) (655,943) Cash and deposits at central banks

  55. Slide 55: Consolidated income statement

    Consolidated income statement Quarterly evolution (Million euros ) Quarterly Year-to-date Δ% 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 Mar 12 Mar 13 13 / 12 Net interest income 309.4 272.7 176.4 252.2 183.0 309.4 183.0 -40.9% Dividends from equity instruments 0.3 3.3 0.2 0.0 0.0 0.3 0.0 -87.1% Net fees and comm

  56. Slide 56: Consolidated income statement (Portugal and International operations)

    Consolidated income statement (Portugal and International operations) For the 3 months period ended 31st of March, 2012 and 2013 (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

  57. Slide 57: Investor Relations Division

    Investor Relations Division Rui Coimbra, Head of Investor Relations Investor Relations Reporting and Ratings João Godinho Duarte 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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