Banco Comercial Portugues S.a. · EURONEXT:BCP

Banco Comercial Portugues — FY2012 Earnings Presentation

67 slides from Banco Comercial Portugues's earnings presentation, February 2013

1. Slide 1: Earnings Presentation Annual 2012

   EARNINGS PRESENTATION FEBRUARY 2013 ANNUAL 2012

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 • Liquidity • Capital • Profitability  Portugal  International operations  Conclusions 3

4. Slide 4: Highlights 2012

   Highlights 2012 With the restructuring carried out (capital and liquidity reinforcement and organisation streamlining) we are better prepared for the future and to support the economy Commercial gap improvement: commercial gap reduction by 7.3 billion euros from December 2011, with loan to deposits

5. Slide 5: Highlights 2012

   Highlights 2012 Loan to deposit ratio * Net loans to BS customer Balance sheet customer funds (%) funds ratio (Billion euros) 143% -16pp +5.1% 53.1 55.8 129% 15.1 +12.5% 17.0 128% 37.9 +2.2% 38.8 112% Dec 11 Dec 12 International operations Dec 11 Dec 12 * Calculated with net loans and customer depos

6. Slide 6: Highlights 2012

   Highlights 2012 Net income Net Interest income in Portugal (Eur million) (Eur million) 177.5 141.4 126.8 -693.6 -848.6 47.0 -1,219.1 2011 2012 Greece 1Q12 2Q12 3Q12 4Q12 Staff costs in Portugal * New entries in total past due loans in Portugal (Eur million) (Eur million) >50m ** 1,243 544.5 >30m 1,0

7. Slide 7: Agenda

   Agenda  Main highlights  Group • Liquidity • Capital • Profitability  Portugal  International operations  Conclusions 7

8. Slide 8: Focus on balance sheet customer funds increase

   Focus on balance sheet customer funds increase… (Eur million) Consolidated Customer funds Balance sheet customer funds in Portugal +2.2% +4.6% 37,948 38,767 Total customer funds 65,530 68,547 5,425 6,163 +5.1% 55,768 Balance sheet 53,060 customer funds 32,522 32,604 5,544 6,378 13,801 14,411 Dec 11

9. Slide 9: Reducing loans to customers in line with liquidity plan

   … and on reducing loans to customers in line with liquidity plan (Eur million) Consolidated Loans to customers (gross) Loans to customers (gross) in Portugal -9.1% 54,552 49,581 -6.5% 21,768 71,533 -5.1% 20,669 66,861 2,689 -8.2% 2,469 30,308 -2.6% 30,094 -12.1% 26,443 29,509 4,497 -5.6% Dec 11 Dec

10. Slide 10: Reduction of commercial gap as refinancing driver

    Reduction of commercial gap as refinancing driver (Eur billion) Commercial gap * Loan to deposit ratio ** (BoP) 20.5 -7.3 143% 13.2 129% 128% 112% Dec 11 Dec 12 Dec 11 Dec 12 Accumulated net repayment of MLT debt Net loans to BS customer funds ratio (Medium and long term debt repayments since the be

11. Slide 11: Lower refinancing needs on the short, medium and long term

    Lower refinancing needs on the short, medium and long term (Eur billion) Refinancing needs of medium-long term debt Already repaid 5.2 5.5 ** 4.9 2.9 * 3.0 1.0 1.3 0.4 0.6 0.4 2009 2010 2011 2012 2013 2014 2015 2016 2017 >2017 Significant improvement of the funding structure  Reduction of funding n

12. Slide 12: Agenda

    Agenda  Main highlights  Group • Liquidity • Capital • Profitability  Portugal  International operations  Conclusions 12

13. Slide 13: Core tier I ratio reaches 12.4%

    Core tier I ratio reaches 12.4%, allowing the bank to comply with all regulatory requirements ... Consolidated Core tier I ratio (%) - BoP 12.4% Compliance with 9% EBA Jun. 2012  +3.1pp 9.3% regulatory 10% BoP Dec. 2012  requirements Change December 2012 vs. 2011 (mn eur) +28.1% Reinforcement of c

14. Slide 14: Comparing favourably with Euro Zone peers

    … and comparing favourably with Euro Zone peers Core tier I (%) ratio evolution in BCP + 7.8 pp 12.4% The effort to strengthen the capital structure of the Bank, allowed BCP: ~9,0%  To reach a core tier I ratio at historical highs ~6,0% ~5,0%  To become one of the best capitalized 4.7% banks among

15. Slide 15: Pension Fund

    Pension Fund Pension Fund Main indicators 2010 2011 2012 Shares 28% (Euro millions) Deposits Pension liabilities 5,322 2,452 2,293 and others 38% Pension fund 5,149 2,362 2,432 Liabilities' coverage 104% 111% 119% Fund's profitability -5.5% -0.7% 1.6% Actuarial differences (468) (201) (164) Bonds 20

16. Slide 16: Agenda

    Agenda  Main highlights  Group • Liquidity • Capital • Profitability  Portugal  International operations  Conclusions 16

17. Slide 17: Income statement

    Income statement Consolidated (million euros) 2011 2012 Δ Net income (excluding CoCo's and itens related to Greece) Net interest income 1,517.5 1,146.8 -370.7 Of which: liability management 2011 -25.1 -195.3 -170.2 Net fees and commissions 766.7 666.1 -100.6 Of which: State guarantee costs 0.0 -69.2

18. Slide 18: Income statement (2012 vs. 2011)

    Income statement (2012 vs. 2011) (Eur billion) Consolidated -74.8 96.0 -134.9 52.5 -1,221.6 148.0 -1,219.1 -170.2 -1,315.0 86.0 1 2 Pre-tax ∆ items Cost of CoCo's ∆ ∆ ∆ ∆ Pre-tax Taxes and Net income results 2011 related with liability operational operational impairments results 2012 minorities 2012

19. Slide 19: Net income affected by Greek operation and other exceptional items

    Net income affected by Greek operation and other exceptional negative items (Million euros) Net income Negative items Consolidated Net of taxes -49.3 -427 Impairment for Greek risk Greek operation -266 Net income in Greece -694 -694 -139 Liability management 2011 -849 -96 Hybrids (CoCo's) interest O

20. Slide 20: Net interest income affected by adverse market rates and specific items

    Net interest income affected by adverse market rates evolution and specific items… (Eur million) Net interest income Portugal Consolidated 2012 vs.2011 -35.2% Market interest rates evolution -270 (ex. Euribor) 1,579.3 Liability management 2011 -170 Hybrid instruments (CoCo‟s) cost -135 Past due loan

21. Slide 21: Fees and commissions affected by markets and state guarantee

    Fees and commissions affected by markets and state guarantee, in spite of banking fees increase in international operations (Eur million) Fees and commissions Banking fees and commissions Consolidated Portugal * -6.1% 2011 2012 YoY 506.4 475.6 Banking fees and commissions 668.7 655.1 -2.0% Cards and

22. Slide 22: Net trading income

    Net trading income (Eur million) Net trading income Portugal * Portugal +212.9% 312.0 47 43 184 99.7 242 106 -26 2011 2012 -128 International operations * -57 +26.3% 125.9 99.7 2011 2012 Portuguese public debt Repurchase of own debt Sale of credit 2011 2012 Other * Excluding items related with the G

23. Slide 23: Costs containment in Portugal and international operations

    Costs containment in Portugal and costs under control in international operations (Eur million) Operating costs * Consolidated -3.5% Portugal * 1,505.4 1,453.2 -5.0% Depreciation 96.1 -18.8% 78.1 911.6 866.1 Other administrative 584.5 -3.3% 565.1 costs Staff costs 824.9 -1.8% 810.0 2011 2012 2011 20

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

    Credit quality and provisioning reflect the economic cycle (Eur million) Consolidated Credit quality Loan impairment (balance sheet) Credit ratio Dec11 Dec12 Coverage ratio Dec11 Dec12 Credit at risk 10.1% 13.1% Credit at risk 48% 48% Past due >90d + falling due 8.9% 11.3% Past due >90d + falling du

25. Slide 25: Provisioning in line with the economic cycle

    Provisioning in line with the economic cycle Consolidated Loan impairment charges Impairment charges (gross) – 2012 (Eur million) Mortgage 40.2 Impairment Consumer 186 bp charges net of 252 bp 244.6 recoveries as % of gross loans 1,684.2 Impairment 1,331.9 for Greece Companies 702.4 risk 1,423.0 89.

26. Slide 26: Diversified and well collateralized credit portfolio

    Diversified and well collateralized credit portfolio Consolidated Loan portfolio Loans by collateral Companies 15.6% Other sectors 64% 28% 7% 50% Mortgage 3.4% Transp. and communications 44% With real estate guarantees 2.0% Other national activities With other guarantees 3.2% Wholesale commerce With

27. Slide 27: Agenda

    Agenda  Main highlights  Group • Liquidity • Capital • Profitability  Portugal  International operations  Conclusions 27

28. Slide 28: Deleveraging effort: customer funds up, loans reduced

    Clear deleveraging effort with an increase in balance sheet customer funds and a reduction of loans (Eur million) Customer funds Loans to customers (gross) +1.6% -9.1% Total customer 49,615 50,386 54,552 funds 49,581 Balance sheet 37,948 +2.2% 38,767 customer funds 21,768 5,425 +13.6% 6,163 20,669 -

29. Slide 29: Net income in Portugal affected by macroeconomic context

    Net income in Portugal affected by macroeconomic context… (Eur million) Net income  Banking income affected by net interest income and fees and commissions decrease -415.3  Operating costs, excluding specific -669.2 items, decrease 5.0% 2011 2012 Banking income Operating Costs* -17.2% -5.0% 1,514.

30. Slide 30: Reversal of downward trend in net interest income

    …but with a reversal downward trend in net interest income through repricing deposits effort Net interest income 4Q12 (Eur million) vs.3Q12 260 258 244 Deposits repricing effort +10 237 177 Funding and related +20 141 127 Past due loans and recoveries effect +50 47 Total +80 1Q11 2Q11 3Q11 4Q11 1Q12

31. Slide 31: Loans' portfolio repricing effort

    Loans’ portfolio repricing effort Loans to companies Time deposits rates (portfolio spread, %) (%) 5.0% New production 4.5% 4.19 4.30 Portfolio 3.95 4.07 4.10 3.66 4.0% 3.27 2.93 3.5% 2.77 3.0% 2.5% 2.0% 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 S/11 D/11 M/12 J/12 S/12 D/12 Mortgage  Loans to c

32. Slide 32: Fees and commissions recovering in the last quarter

    Fees and commissions affected by markets and demanding macroeconomic environment but recovering in the last quarter (Eur million) 4Q12/ 2011 2012 YoY 3Q12 4Q12 3Q12 Banking fees and commissions 506.4 475.6 -6.1% 114.8 116.7 1.7% Cards and transfers 102.2 95.1 -7.0% 24.6 25.0 1.7% Loans and guarantee

33. Slide 33: Operating costs reduction in Portugal

    Operating costs reduction in Portugal (Eur million) Operating costs* -5.0% 911.6 866.1 47.9 -15.5% 40.5 319.2 -6.4% 298.7 544.5 -3.2% 526.9 2011 2012 Staff costs Other adimn. costs Depreciation * Excluding specific items 33

34. Slide 34: Restructuring programme – Structural organization adjustment

    Restructuring programme – Structural organization adjustment Restructuring programme Number of employees Decrease of employees -977 -977 mutual agreement 10,742 -626 9,959 rescissions 8,982 early retirements -120 natural reductions -231 Total costs +€69M  15% of the reduction on employees with Dec

35. Slide 35: Credit quality in line with economic cycle

    Credit quality in line with economic cycle (%, Eur million) Credit quality Balance sheet loans’ impairment Credit ratio Dec11 Dec12 Coverage ratios Dec11 Dec12 At risk 10.3% 12.9% At risk 50% 45% Past due >90d + falling due 9.9% 12.2% Past due >90d + falling due 52% 47% Past due >90d 4.6% 6.5% Past

36. Slide 36: Reversing trend of increasing new entries in overdue loans

    Reversing trend of increasing new entries in overdue loans Overdue loans ratio >90 days (%) 12% Total 9.6%  Stable overdue loans ratio 10% Mortgage 8% Companies 6.5%  New entries are lower than previous quarters 6%  Impairment charges at high level but stable yoy 4% 2% 0.9% 0% 1Q10 2Q10 3Q10 4Q10

37. Slide 37: Agenda

    Agenda  Main highlights  Group • Liquidity • Capital • Profitability  Portugal  International operations  Conclusions 37

38. Slide 38: Net income in international operations

    Net income in international operations (Eur million) 2011 2012 International operations 122.7 -123.0 Poland * 111.8 113.1 Mozambique 89.4 85.5 Angola 33.3 37.3 Greece -3.5 -266.4 Other and non-controlling interests -109.9 -92.5 Excluded FX effect. €/PLN rates used: Income Statement 4.1739625; Balanc

39. Slide 39: Poland: growth in customer funds, loans decrease due to zloty

    Poland: growth in customer funds and loans to customers decrease due to zloty appreciation (Eur million) Customer funds Loans to customers (gross) +13.0% -2.5% 11,486 10,444 10,179 10,168 797 +5.1% 837 Consumer loans 6,974 -3.6% 6,724 Mortgage loans 2,674 -2.1% 2,618 Companies loans Dec 11 Dec 12 De

40. Slide 40: Poland: net income growth despite provisions increase

    Net income growth, despite provisions increase, mainly in corporate loans (Eur million) Net income + 1.2% 111.8 113.1  Net income increased 1.2% versus 2011  Strict costs control and increase in banking income(+3,4%) 2011 2012 Banking income Operating costs + 3.4% 452.6 467.8 -0,3% 269.3 268.5 201

41. Slide 41: Net interest income growth

    Net interest income growth (Eur million) Net interest income * Net fees and commissions +3.1% - 2,8% 285.3 294.0 134.6 130.8 2011 2012 2011 2012 NIM evolution * 2.4% 2.4% 2.5% 2.4% 2.3%  Net interest income * increases 3.1% Loans versus 2011 3.1% 2.9% 2.9% 3.0% 2.9%  Net fees and commissions decre

42. Slide 42: Cost to income sustained improvement

    Cost to income sustained improvement Operating costs Number of employees (Eur million) -0.3% -4.6% 6,289 6,001 269.3 268.5 139.9 - 3.7% 134.7 Dec 11 Dec 12 129.4 + 3.4% 133.8  Operating costs down by 0,3% 2011 2012  Other administrative costs (including depreciation) decreased 3.7%, reflecting a s

43. Slide 43: Reinforcement of loans to companies' provisioning

    Reinforcement of loans to companies’ provisioning, allowing an increase of overdue loans coverage (Eur million) Credit Quality Impairment charges Overdue loans 123% >90 days 107% Impairment 45pb * charges as % of 58pb * coverage ratio average net loans 2.3% Overdue loans 2.8% >90 days ratio +37% 57.

44. Slide 44: Strategy 2013-15 - Reminder

    Strategy 2013-15 - REMINDER Macroeconomic scenario Bank Strengths GDP estimate 2.9% 3.6%  Well distributed branches network supported by 2.5% 1.9% modern multichannel infrastructure  Utmost quality of service, highly recognize brand 2012 2013 2014 2015  High capital base; comfortable liquidity, s

45. Slide 45: Mozambique: customer funds growth and low delinquency

    Mozambique: customer funds growth and loans with low delinquency level (Eur million) Customer funds Loans to customers (gross) Overdue loans 479% >90 days 354% coverage ratio +4.9% 1.5% Overdue loans 2.0% >90 days ratio 1,338 1,403 -1.2% 1,061 1,049 30 -12.9% 26 303 -19.3% 244 728 +6.8% 778 Dec 11 D

46. Slide 46: Mozambique: banking income improvement

    Banking income improvement with operating costs in line with expansion plan (Eur million) Net income  Net income down 4.4% to 85.5M€, penalized -4.4% by the impact of reference interest rates 89.4 85.5 decrease in interest from loans to customers  ROE reached 26.8%  Net income evolution driven by

47. Slide 47: Strong fees and commissions growth

    Strong fees and commissions growth with operating costs in line with the expansion plan (Eur million) Net interest income Operating costs +7.1% 143.5 133.2 +24.2% 95.4 76.8 9.1 7.2 40.5 34.0 45.8 35.6 2011 2012 2011 2012 Depreciation Fees and commissions Other administrative costs Staff costs +26.4%

48. Slide 48: Strategy 2013-15

    Strategy 2013-15 Macroeconomic scenario Bank Strengths GDP estimated growth  Banking sector market leader with over 30% of deposits 8.4% and 33% of loans to customers market shares 7.5% 7.8% 7.8%  With 151 branches spread over the territory, Millennium bim has the largest branch network of the 201

49. Slide 49: Mozambique has high potential for economic growth

    Mozambique has high potential for economic growth GDP average growth New gas reserves discoveries Expected coal production rate in 2011-13 2005 - 2012 2011 - 2017 GDP growth * Mboe ** Million tons * United States 73,602 7.73% Turkmenistan 20,849 26 Sub Saharan Africa average Australia 17,633 26x 20

50. Slide 50: Angola: growth in customer funds and loans to customers

    Angola: growth in customer funds and loans to customers (Eur million) Customer funds Loans to customers (gross) Overdue loans 216% >90 days 209% coverage ratio +2.7% Overdue loans 895 2.4% >90 days ratio 2.9% 872 +2.8% 506 521 2011 2012 2011 2012 50

51. Slide 51: Angola: net income growth

    Net income growth, driven by income and volumes improvement, despite the ongoing expansion plan (Eur million) Net income  Net income up 12.0% to 37.3M€ +12.0%  ROE of 18.4% 37.3 33.3  Strong growth in net interest income, fees and commissions and trading gains  Costs reflect the ongoing expansio

52. Slide 52: Strong core income growth and operating costs growth

    Strong core income growth and operating costs growth in line with expansion plan (Eur million) Net interest income Operating costs +9.1% +16.6% 68.9 67.1 63.1 57,5 4.8 6.8 34.8 28.3 22.4 27.5 2011 2012 2011 2012 Depreciation Fees and commissions Other administrative costs Staff costs +41.8% 24.6 17.

53. Slide 53: Strategy 2013-15

    Strategy 2013-15 Macroeconomic scenario Bank Strengths GDP estimated growth  Branch network covering the whole territory, with a 6.8% 5.5% 5.4% 5.4% modern and innovative infrastructure  Highly efficient and compliant operation, with a strong brand recognition 2012 2013 2014 2015 Source: IMF  Exp

54. Slide 54: Agenda

    Agenda  Main highlights  Group • Liquidity • Capital • Profitability  Portugal  International operations  Conclusions 54

55. Slide 55: Progress in strategic plan metrics

    Progress in strategic plan metrics . Medium Indicators Dec.11 Dec.12 . Initiatives term . Capitalization plan (hybrids and 500M€ Core tier 1 racio 9.3% 12.4% … >10% rights issue) Net loans/balance sheet 128% 112% … <110% Enhance liquidity position customer funds C/I ratio* 59% 67% … <55% Time deposi

56. Slide 56: Strategic Plan conclusions and cycles

    Strategic Plan conclusions and cycles Stages Priorities Initiatives already implemented Reinforcement Comfortable capital ratios  Core tier I ratio reaches 12.4% of capital and liquidity Enhance liquidity position  Net loan to balance sheet customer position Provisions reinforcement funds reaches

57. Slide 57: Appendixes

    Appendixes 57

58. Slide 58: Sovereign debt exposure

    Sovereign debt exposure (Eur million) Sovereign debt portfolio Sovereign debt total maturity Dec 11 Dec 12 YoY Portugal 4,706 5,439 16% >3 Years 25% Poland 774 1,668 >100% <1 Year 40% Mozambique 273 233 -15% Angola 400 320 -20% Greece 262 45 -83% Romania 49 88 79% Others 299 315 5% >2 Year e <3 Year

59. Slide 59: Detail of public debt portfolio

    Detail of public debt portfolio (Eur million) Portugal Poland Mozambique Angola Greece Romania Ireland Others Total Trading book 180 11 0 0 7 0 0 37 235 < 1 year 18 2 0 0 7 0 0 1 28 > 1 year and <2 years 1 4 0 0 0 0 0 1 6 > 2 year and <3 years 4 1 0 0 0 0 0 0 5 > 3 years 157 5 0 0 0 0 0 36 197 Banki

60. Slide 60: Main Awards in 2012

    Main Awards in 2012 Portugal Poland “Best Bank” in Portugal EMEA Finance “Best and Friendliest Internet Bank” Newsweek “Consumer‟s Choice 2012” “Best Bank for Companies” Consumer choice Forbes magazine “Best Consumer Internet Bank” “Bank of the Year” Marketeer magazine Global Finance “Best Online Ba

61. Slide 61: Greece: results affected by the country's economic recession

    Greece: results affected by the deepening of the country’s economic recession (Eur million) Net income Banking income Operating costs 226.2 -75.1% 129.5 -21.3% -3.5 101.9 56.3 -266.4 2011 2012 2011 2012 2011 2012 Loans to customers (gross) Customer deposits  Net losses of -266.4 million euros as a

62. Slide 62: Romania: strong costs saving policy and volumes growth

    Romania: strong costs saving policy and volumes growth (Eur million) Net income Banking Income Operating costs +0.5% -11.8% 30.0 31.3 38.6 34.1 6.1 * -17.8 24.0 -23.8 2011 2012 2011 2012 2011 2012 Loans to customers (gross) Customer Deposits  Decrease in net income due to the high +9.6% +13.3% leve

63. Slide 63: Financial statements

    Financial statements IM:

64. Slide 64: Consolidated Balance Sheet and Income Statement

    Consolidated Balance Sheet and Income Statement 2012 2011 2012 2011 (Thousands of Euros) (Thousands of Euros) Assets Interest and similar income 3,615,922 4,060,136 Cash and deposits at central banks 3,580,546 2,115,945 Interest expense and similar charges (2,592,337) (2,480,862) Loans and advances

65. Slide 65: Consolidated income statement (quarterly evolution)

    Consolidated income statement (quarterly evolution) For the 12 month period ended 31st December, 2011 and 2012 (Eur million) Quarterly Year-to-date Δ% 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 Dec 11 Dec 12 12 / 11 Net interest income 382.5 317.5 275.4 178.0 252.7 1,579.3 1,023.6 -35.2% Dividends from equity in

66. Slide 66: Consolidated income statement (Portugal and International operations)

    Consolidated income statement (Portugal and International operations) For the 12 month period ended 31st of Dcember, 2011 and 2012 (Eur million) 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

67. Slide 67: Investor Relations Division

    Investor Relations Division: Rui Coimbra, Head of Investor Relations Francisco Pulido Valente João Godinho Duarte Paula Dantas Henriques Tl: +351 21 1131 084 Email: Investors@millenniumbcp.pt Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D

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