Banco Comercial Portugues S.a. · EURONEXT:BCP

Banco Comercial Portugues — FY2013 Earnings Presentation

60 slides from Banco Comercial Portugues's earnings presentation, February 2014

  1. Slide 1: Earnings Presentation FY 2013

    EARNINGS PRESENTATION FEBRUARY 2014 FY 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 • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 3

  4. Slide 4: Highlights

    Highlights Capital reinforced and Core tier I ratio reaches 13.8% according to BoP, above 12.4% on 31 December 2012. Core tier I above ratio of 10.8% according to EBA (12.8% adjusted for 31 December 2013 buffer values) requirements Consolidated net income at -740 million euros, comparing with -1,219

  5. Slide 5: Highlights 2013

    Highlights 2013 Loan to deposit ratio* Customer deposits Net loans to BS customer (%) funds ratio (Billion euros) +5.2% 128% -11bp 46.2 48.6 13.6 +8.3% 14.7 117% 112% 32.6 +4.0% 33.9 108% Dec 12 Dec 13 Portugal International op. Dec 12 Dec 13 ** On a comparable basis: excluding Greece (following the

  6. Slide 6: Highlights 2013

    Highlights 2013 Core income Operating costs in Portugal * (Million euros) (Million euros) -15.1% 402.5 864.8 395.4 373.6 733.8 339.5 1Q13 2Q13 3Q13 4Q13 2012 2013 * Excludes non-recurring specific items: restructuring costs (+69.3 M€ in 2012 and +126.5 M€ in 2013) and the impact of the legislative c

  7. Slide 7: Agenda

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

  8. Slide 8: Focus on the increase in customer deposits…

    Focus on the increase in customer deposits… (Million euros) Consolidated Customer funds Customer deposits in Portugal +0.5% +4.0% 32,618 33,911 63,936 64,261 11,391 11,868 24,214 +2.8% 24,880 6,364 3,797 +7.5% 8,405 9,031 Dec 12 Dec 13 Demand deposits Term deposits 33,359 32,516 Customer deposits in

  9. Slide 9: … and credit evolution in line with the macroeconomic environment

    … and credit evolution in line with the macroeconomic environment (Million euros) Consolidated Loans to customers (gross) Loans to customers (gross) in Portugal -3.2% -4.7% 49,581 47,251 61,715 59,734 27,428 -3.6% 26,444 3,612 -3.3% Dec 12 Dec 13 3,493 Loans to customers (gross) in international ope

  10. Slide 10: Significant improvement in liquidity position

    Significant improvement in liquidity position, expressed by the reduction of commercial gap and ECB net usage (Billion euros) Commercial Gap * Loans to deposit ratio ** (BoP) Net loans to BS customer funds ratio -11pp Dec 12 Dec 13 128% 117% 112% -7.8 108% -13.2 +5.4 Dec 12 Dec 13  Commercial gap i

  11. Slide 11: 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 4.9 5.5 ** 2.9 * 3.0 1.1 0.6 1.2 0.4 0.3 2009 2010 2011 2012 2013 2014 2015 2016 2017 >2017 Significant improvement of the funding structure customer deposits  Re

  12. Slide 12: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 12

  13. Slide 13: Core tier I ratio complying comfortably with all regulatory requirements

    Core tier I ratio complying comfortably with all regulatory requirements Consolidated Core tier I ratio (%) - BdP 13.8% 12.4%  Core tier I ratio at 13.8%, above the 12.7% in September 2013 and 12.4% in December 2012. Core tier I  The reduction in the amount of core 6,579 tier I is explained by neg

  14. Slide 14: Pension Fund

    Pension Fund Main indicators (Million euros) Pension Fund Shares 27% 2012 2013 Deposits and others Pension liabilities 2,293 2,533 32% Pension fund 2,432 2,547 Liabilities' coverage 119% 112% Fund's profitability 1.6% 4.4% Actuarial differences (164) (212) Real Bonds Estate 12% 29% Assumptions 2011

  15. Slide 15: Agenda

    Agenda  Main highlights  Group • Liquidity • Capital • Profitability  Portugal  International operations  Conclusions 15

  16. Slide 16: Net income in line with the plan

    Net income in line with the plan, reflecting the macreoeconomic scenario Consolidated (million euros) 2012 2013 Δ Net interest income 998.0 848.1 -149.9 Of which: costs related with hybrids instruments (CoCo's) -134.9 -269.0 -134.1 Net fees and commissions 655.1 663.0 7.9 Of which: State guarantee c

  17. Slide 17: Net income affected by relevant factors

    Net income affected by relevant factors (Million euros) Net income Relevant factors with impact on net income Consolidated Net of taxes * (gross) -184.3 Hybrids (CoCo‟s) interest (-269.0) -740.4 -131.9 Liability management 2011 (-192.5) -86.6 Reestructuring costs in Pt (-126.5) Contribution to the B

  18. Slide 18: Net interest income reduction as a result of cost of CoCo's

    Net interest income reduction as a result of cost of CoCo’s and credit effect, despite the improvement on cost of deposits (Million euros) Net interest income Portugal Consolidated -2.6% -1.4% 628.2 612.0 1,132.8 1,117.1 134.9 269.0 134.9 269.0 493.3 -30.5% 343.0 998.0 -15.0% 2012 2013 848.1 Interna

  19. Slide 19: Total fees and commissions increase driven by international operations

    Total fees and commissions increase driven by international operations (Million euros) Fees and commissions Portugal Consolidated -3.6% 446.2 430.3 2012 2013 YoY Banking fees and commissions 614.3 598.6 -2.5% Cards and transfers 178.4 181.1 1.5% Loans and guarantees 170.2 154.5 -9.2% Bancassurance 6

  20. Slide 20: Lower contribution of net trading income

    Lower contribution of net trading income (Million euros) Net trading income Portugal Consolidated -49.8% 315.2 -39.5% 436.7 158.1 2012 2013 264.2 International operations -12.7% 121.5 106.1 2012 2013 2012 2013 20

  21. Slide 21: Significant reduction of costs in Portugal

    Significant reduction of costs in Portugal (Million euros) Operating costs * Portugal * Consolidated -15.1% -10.6% 864.8 1,315.9 733.8 Depreciation 68.1 1,176.2 +0.1% 68.1 Other Administrative 501.7 -8.8% costs 457.5 2012 2013 International operations -1.9% Staff costs 451.1 442.4 746.2 -12.8% 650.6

  22. Slide 22: Provisioning in line with strategic plan

    Provisioning in line with strategic plan (Million euros) Loan impairments (net of recoveries) Portugal Consolidated Cost of -16.5% 157 bp risk 137 bp 889.0 742.8 -15.3% 969.6 820.8 2012 2013 2012 2013 International operations Cost of risk evolution (basis points) -3.1% Strategic Plan 186 80.6 78.1 1

  23. Slide 23: Net new entries in NPL allow improvement in credit quality ratios

    Net new entries in NPL allow the improvement in credit quality ratios (Million euros) Consolidated Net new entries in NPL in Portugal Credit quality -53.1% Credit ratio Dec 12 Sep 13 Dec 13 1,352 NPL 10.4% 11.5% 11.0% Credit at risk 11.4% 12.3% 11.8% 634 6,413 6,586 2012 2013 Dec 12 Dec 13 Loan impa

  24. Slide 24: Diversified and collateralized credit portfolio

    Diversified and collateralized credit portfolio Loan portfolio Consolidated Companies Loans by collateral 50% Mortgage 63% 30% 7% 44% With real estate guarantees With other guarantees Without guarantees LTV of mortgage portfolio in Portugal 15% 9% 12% 24% 10% 19% 12% 0-40 40-50 50-60 60-75 75-80 80-

  25. Slide 25: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 25

  26. Slide 26: Portugal: deleveraging effort with increase in deposits and reduction of loans

    Portugal: deleveraging effort with increase in deposits and reduction of loans (Million euros) Customer funds Loans to customers (gross) -1.9% -4.7% 49,047 49,581 48,128 47,252 10,280 10,528 20,669 -3.6% 3,689 19,916 6,149 2,470 -12.5% 2,162 24,214 24,880 +4.0% 26,442 -4.8% 25,173 8,405 9,031 Dec 12

  27. Slide 27: Net income affected by the cost of CoCo's and lower net trading income

    Net income affected by the cost of CoCo’s and lower net trading income despite the significant cost reduction (Million euros) Net income  Net income substantially penalised by the decrease in banking income, despite the strong decrease in operating costs  Banking income affected by the cost of CoC

  28. Slide 28: Reduction of net interest income in Portugal

    Reduction of net interest income in Portugal with the cost of CoCo’s and volume effect of loans, despite deposits cost improvement Net interest income (Million euros) -2.6% 628.2 612.0 105.8 95.8 77.3 134.9 64.0 269.0 493.3 -30.5% 343.0 1Q13 2Q13 3Q13 4Q13 2012 2013 Past due loans effect in 4Q13 (-1

  29. Slide 29: Continuation of strong efforts to reduce the cost of deposits

    Continuation of strong efforts to reduce the cost of deposits, in line with the strategic plan Term deposit rate Credit portfolio rate (%) (%) 5.0% Companies 4.5% New production 4.85 4.76 4.65 4.50 4.0% 4.41 Portfolio 3.5% 3.0% Mortgage 2.5% 2.0% 1.37 1.38 1.39 1.45 1.5% 1.34 1.0% S/11 D/11 M/12 J/1

  30. Slide 30: Positive performance of market related commissions

    Positive performance of market related comissions and lower banking commissions, but improving in the last quarter (Million euros) 4Q13/ 2012 2013 YoY 3Q13 4Q13 3Q13 Banking fees and commissions 463.3 430.1 -7.2% 101.6 103.5 1.8% Cards and transfers 95.1 92.8 -2.4% 23.0 24.0 4.3% Loans and guarantee

  31. Slide 31: Positive results in operating costs in Portugal

    Positive results in operating costs in Portugal, comparing favourably to national peers (Million euros) Agreement with the Unions in order Operating costs* Employees to achieve the targets of the DGComp agreement (employees and Portugal -977 branches), with a cost of 126 M€ in -398 2013 864.8 -15.1%

  32. Slide 32: Projects developed in 2013 enabled to save administrative costs

    Projects developed in 2013 enabled to save administrative costs in all items (Million euros) Other administrative costs 2012 2013 * YoY Consumables 18.9 16.1 -14.5% -12.2% Rents 56.5 53.4 -5.5% 320.0 Legal expenses 8.4 6.7 -20.6% 299.5 Insurance, travel and transportation 17.9 15.4 -14.0% 263.0 Adve

  33. Slide 33: Credit quality shows first signs of recovery

    Credit quality shows the first signs of recovery with reduction on NPL ratios and increase in coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Dec 12 Sep 13 Dec 13 Coverage ratio Dec 12 Sep 13 Dec 13 NPL 12.2% 13.9% 13.1% NPL 47% 46% 48% Credit at risk 12.9% 14.1%

  34. Slide 34: Reduction of foreclosed assets

    Reduction of foreclosed assets, with and increase of properties sold and coverage increase Foreclosed assets portfolio Number of properties sold (Million euros) +28.7% Coverage 21.1% 26.5% 3,434 2,669 1,497 1,395 316 370 2012 2013 Value of properties sold (Million euros) 1,181 1,025 +46.2% 285 195 D

  35. Slide 35: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 35

  36. Slide 36: Net income in international operations

    Net income in international operations (Million euros) Δ% Δ% ROE 2012 2013 local euros (2013) currency International operations * 167.3 178.2 6.5% Poland 112.0 127.1 13.5% 12.4% 11% Mozambique 78.3 85.5 9.2% 0.0% 25% Angola 35.9 40.8 13.6% 9.3% 17% Other and non-controlling interests -58.9 -75.2 €25

  37. Slide 37: Poland: customer funds and loans to customers growth

    Poland: customer funds and loans to customers growth (Million euros) Customer funds Loans to customers (gross) +10.8% 12,486 +3.9% 11,264 10,369 9,982 -1.5% 6,498 6,594 821 +20.2% 987 2,567 +12.4% 2,885 Dec 12 Dec 13 Dec 12 Dec 13 Mortgage Consumer Companies Excluded FX effect. €/PLN rates used : In

  38. Slide 38: Net income growth driven by banking income increase and strict cost control

    Net income growth driven by banking income increase and strict cost control (Million euros) Net income  Net income grows by 13.5%, with ROE at 10.6% + 13.5%  Increase in banking income (+2.8%), despite the 127.1 decrease in the reference interest rates that 112.0 reached historic minimums (WIBOR3M

  39. Slide 39: Steady recovery of net interest income, strong growth in commissions

    Steady recovery of net interest income, strong growth in commissions and strict cost control (Million euros) Net interest income * Operating costs +3.5% 291.2 301.5 -2.8% 265.9 258.5 133.4 - 3.5% 128.7 2012 2013 - 2.0% 132.5 129.8 +7.0% 82.0 74.3 76.7 68.5 2012 2013 Other administrative costs and de

  40. Slide 40: Credit quality stable with high level in coverage

    Credit quality stable with high level in coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Dec12 Dec13 Coverage ratio Dec12 Dec13 NPL 2.8% 2.9% NPL 107% 106% 298 316 279 298 Dec 12 Dec 13 Loan impairment (net of recoveries) Cost of 58 bp risk * 56 bp Dec 12 Dec 13

  41. Slide 41: Mozambique: strong volumes growth

    Mozambique: strong volumes growth (Million euros) Customer funds Loans to customers (gross) +23.9% +19.4% 1,586 1,231 24 1,329 993 266 25 231 +15.1% +27.7% 941 737 Dec 12 Dec 13 Dec 12 Dec 13 Mortgage Consumer Companies Excluded FX effect. €/Metical rates used : Income Statement 40.05270833; Balance

  42. Slide 42: Net income benefited by the increase of banking income

    Net income benefited by the increase of banking income (Million euros) Net income  Net income increases 9.2%, with ROE of 24.8% +9.2%  Increase 7% in banking income: increase in net 85.5 interest income (benefiting from the volume 78.3 effect, despite lower reference interest rates) and increase i

  43. Slide 43: Consistent quarterly increases in net interest income and in commissions

    Consistent quarterly increases in net interest income and in commissions (Million euros) Net interest income Operating costs +3.5% +6.9% 122.0 126.3 87.4 93.4 8.3 9.3 37.1 39.6 2012 2013 41.9 44.5 +4.8% 30.5 32.7 34.2 2012 2013 29.0 Depreciation Other administrative costs 1Q13 2Q13 3Q13 4Q13 Staff c

  44. Slide 44: Improvement of credit quality and high coverage

    Improvement of credit quality and high coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Dec 12 Dec 13 Coverage ratio Dec 12 Dec 13 NPL 4.3% 3.9% NPL 161% 151% 69 72 48 43 Dec 12 Dec 13 Loan impairment (net of recoveries) Cost of 113 bp 88 bp risk Dec 12 Dec 13 11.

  45. Slide 45: Angola: strong volumes growth

    Angola: strong volumes growth (Million euros) Customer funds Loans to customers (gross) +44.9% 1,219 +31.7% 841 644 489 Dec 12 Dec 13 Dec 12 Dec 13 Excluded FX effect. €/Kwanza rates used : Income Statement 128.26875; Balance Sheet 134.5100 45

  46. Slide 46: Net income increases driven by higher banking income

    Net income increases driven by higher banking income, despite the expansion plan (Million euros) Net income  Net income increases 13.6% with ROE at 17.5% +13.6%  Increase in banking income in 10.8%: driven by commissions and net interest income, despite lower reference interest rate 40.8 35.9  Fo

  47. Slide 47: Growth in net interest income and strong growth on fees and commissions

    Growth in Net Interest Income and strong growth on fees and commisions, operating costs in line with the expansion plan (Million euros) Net interest income Operating costs * +2.1% 66.3 67.7 +3.5% 68.4 70.8 8.5 7.4 33.5 34.1 2012 2013 26.4 29.3 +15.1% 2012 2013 16.8 16.0 16.2 18.7 Depreciation Other

  48. Slide 48: Credit quality ratio and coverage

    Credit quality ratio and coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Dec 12 Dec 13 Coverage ratio Dec 12 Dec 13 NPL 5.9% 4.7% NPL 102% 114% 35 29 29 30 Dec 12 Dec 13 Loan impairment (net of recoveries) Cost of 206 bp risk 160 bp Dec 12 Dec 13 10.5 10.8 Non-pe

  49. Slide 49: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 49

  50. Slide 50: Progress on strategic plan metrics

    Progress on strategic plan metrics PHASES Priorities 2012 2013 2015 Initiatives Demanding Maintaining solid capital ratios by CT1 economic Stronger 12.4% 13.8% … ~12% reducing RWA. despite the negative (BoP) environment balance sheet results (2012-13) Strengthening liquidity position with LTD * 112%

  51. Slide 51: Appendixes

    Appendixes 51

  52. Slide 52: Awards 2013

    Awards 2013 PORTUGAL POLAND ANGOLA "Ethibel EXCELLENCE Investment 1st place in the Marktest “Best Banking Offer" in Market “Brands of Excellence in Register" Reputation Index 2013 ranking, Pearls Angola 2012/13" ETHIBEL Fórum in the Insurance category Retailers' Choice Superbrands Best Corporate Gov

  53. Slide 53: Evolution of public debt portfolio

    Evolution of public debt portfolio (Million euros) Public debt portfolio Total maturity of public debt Δ% Δ% <1 year 12% Dec 12 Sep 13 Dec 13 annually quarterly Portugal 5,439 6,762 5,879 8% -13% T-bills 1,979 2,877 2,178 10% -24% Bonds 3,460 3,885 3,701 7% -5% >3 years 46% >1 year and Poland 1,668

  54. Slide 54: Detail of public debt portfolio

    Detail of public debt portfolio (Million euros) Portugal Poland Mozambique Angola Romania Ireland Others Total Trading book 181 104 73 358 < 1 year 0 0 > 1 year and <2 years 0 14 14 > 2 year and <3 years 14 20 34 > 3 years 167 70 73 309 AFS book 3,861 1,261 393 319 39 5 5,878 < 1 year 696 1 72 2 5 7

  55. Slide 55: Romania: strong improvement in banking income

    Romania: strong improvement in banking income with the maintenance of a cost containment policy and volumes growth (Million euros) Net income Banking Income Operating costs +14.4% -16.7% 34.4 27.7 28.7 24.2 -5.9 -24.1 2012 2013 2012 2013 2012 2013  Net income improvement due to the increase in Loan

  56. Slide 56: Financial statements

    Financial statements DI =

  57. Slide 57: Consolidated Balance Sheet and Income Statement

    Consolidated Balance Sheet and Income Statement 2013 2012 2013 2012 (Thousands of Euros) (Thousands of Euros) Assets Interest and similar income 2,832,912 3,422,798 Interest expense and similar charges (1,984,825) (2,424,838) Cash and deposits at central banks 2,939,663 3,580,546 Loans and advances

  58. Slide 58: Consolidated income statement

    Consolidated income statement Quarterly evolution (Million euros) Quarterly Year-to-date Δ% 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 Dec 12 Dec 13 13 / 12 Net interest income 248.6 179.2 201.0 233.5 234.3 998.0 848.1 -15.0% Dividends from equity instruments 0.0 0.0 1.5 0.2 2.0 3.8 3.7 -4.2% Net fees and commis

  59. Slide 59: Consolidated income statement (Portugal and International operations)

    Consolidated income statement (Portugal and International operations) For the 12 months period ended 31th of December, 2012 and 2013 (Million euros) 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 . o pe ra t io ns D ec 12 D

  60. Slide 60: Investor Relations Division

    Portugal Poland Mozambique Angola Investor Relations Division Rui Coimbra. Head of Investor Relations Investor Relations Reporting and Ratings João Godinho Duarte. CFA Luís Morais Paula Dantas Henriques Lina Fernandes Tl: +351 21 1131 084 Tl: + 351 21 1131 337 Email: Investors@millenniumbcp.pt Banco

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