Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — H1 2023 Earnings Presentation
60 slides from Banco Comercial Portugues's earnings presentation, Jul 27, 2023
Slide 1: Millennium bcp Earnings Presentation
Millennium bcp Earnings : Banco comercial Portugues SA
Slide 2: Disclaimer
Disclaimer | 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. | The figures present
Slide 3: Agenda
Slide 4: Highlights
Highlights
Slide 5: Highlights: A Bank prepared for the future
Highlights: A Bank prepared for the future = Net income of 423.2 million in H1’23 = Group’s core operating profit increase 40.1% to 1,199.9 million, supported by the increase of 28.3% on core income and by the strict management of operating costs, which grew 8.8% compared with H1’22. Profitability >
Slide 6: Customer base growth
rr Customer base growth Based on the quality of the Teams and distinctive digital skills ‘000 Customers ——$———— ; / ~ Customer Active (_ 6,333.) 6,570 recognition +507 3,802 Oe 4,310 ‘As % of activo a Customers obit Jun. 22 Jun. 23 Digital 4,558 73% Portugal Active C 2,609 ») 2,666 —— 182 hs As % of
Slide 7: Innovation focused on Customer needs translates into accelerated growth
Innovation focused on Customer needs translates into accelerated growth in Mobile usage and sales Want to pay in full? (Number of operations, Jan-Jun 2023 vs Jan-Jun 2022) *#30% +67% Purchase amount +17% +16% 389.99 cur # Digital Interactions (mio)? % Digital Transactions (#)> %Digital Sales (#)* Ap
Slide 8: Net income of 423.2 million in the 1st half of 2023
Net income of 423.2 million in the 1°* half of 2023 Net interest income 985.2 1,374.4 +39.5% +389.2 Commissions Other income * Of which: sale of 80% of Millennium Financial Services Of which: Regulatory contributions Results on modification 7 Impairment and other provisions Of which: Loans impairmen
Slide 9: Group: Profitability
Group Profitability
Slide 10: Net interest income
Net interest income (Consolidated, million euros) Net interest = (2.29% 3.34% margin 439.5% 1,374.4 985.2 H1'22 H1'23 (Million euros) Net interest (Million euros) margin 1.41% 2.52% +64.3% 707.5 430.5 H1'22 ale) Net interest 4.44% 5.07% margin s +20.2% 666.8 554.7 H1'22 H1'23 10
Slide 11: Fees and commissions
Fees and commissions (Consolidated, million euros) -0.1% 387.6 387.0 Market-related fees and 54.9 52.7 commissions Banking fees and commissions H1'22 H1'23 (Million euros) (Million euros) +1.1% 277.2 280.2 43.8 43.7 H1'22 H1'23 -3.2% 110.4 106.8 41.4 24 H1'22 H1'23 11
Slide 12: Other income
Other income = Other me (Consolidated, million euros) Total -99.8 | 127.0 | Sale of Millennium Equity earnings + 33.3 | Financial Services dividends __| stake (80%)? ws -81.4 Other operating 175.3 income’ H1’22 H1’23 Regulatory 85.6 contributions 4 = Portugal (Million euros) -35.9 28.2 237. 27 -66.8
Slide 13: Operating costs
Operating costs (Consolidated, million euros) (Million euros) Cost to income" 39% 31% Cost to income* 40% 32% +4.4% +8.8% 561.5 Non-recurring? Non-recurring? 68.6 Depreciation Other 184.9 H122 H1'23 administrative costs 162.6 (Million euros) Cost to income" 41% 33% +14.5% 254.7 Staff costs 222.4 - H
Slide 14: Cost of risk and provisions
Cost of risk and provisions = _ Impairment Eonizzal (Million euros) Cost of risk Cost of risk ( 61bp “0.5% 190.5 oo so 51.0 551.4 548.5 (Consolidated, million euros) v 154.7 Goodwill Bank 102.3 Millonnium 331.6 Loan-loss CHF mortgage logal risk 198.1 reserves Poland)" . — Petand) == _International o
Slide 15: Relevant reduction of NPE
Relevant reduction of NPE edit quality (Consolidated, billion euros) NPE 2.50 2.14 Other 1.60 1.35 NPL>90d | 0.90 | Jun 22 Jun 23 NPE total coverage” 112.8% 117.6% NPE coverage by LLRs 64.5% 73.6% NPE specific coverage 47.3% 49.2% NPL>90 days ratio 1.5% 1.4% NPE ratio (loans only) 4.3% 3.7% NPE rati
Slide 16: Group: Business activity
Group Business activity
Slide 17: Customer funds
Customer funds otal Customers Funds’ GR (Consolidated, billion euros) 91.07 Off-BS funds 16.52 15.72 Other BS funds 1.36 4:38 Term deposits 23.68 28.67 Demand deposits 49.51 46.69 Jun 22 Jun 23 == _ Total Customers Funds* Portugal (Billion euros) == Total Customers Funds* international operations (B
Slide 18: Loan portfolio
Loan portfolio = Loans to Customers (gross) (Consolidated, billion euros) (Billion euros) = Portugal coon O9 PAN 14.4% (-0,36 billion) 40.58 4.7% v 1.26% - 39.88 seosntnmstnnenennesnenenne + — 02 58.65 57.91 28.28 27.97 Jun 22 NPE Performing Jun 23 = international operati (Billion euros) 5.93 6.38 -
Slide 19: Group: Capital and liquidity
Group Capital and liquidity
Slide 20: Robust capital
Robust capital (Fully implemented) 14.0% 11.3% +8.1pp 9.41% _, O-Sil buffer 250% afer” Pillar 1 Jun 22 Jun 23 SREP Requirements” (Fully implemented) 18.3% 15.3% +7.8pp 14.00% O°SI buffer Conservation 250% buffer ~ Pillar 2 (P2R) Pillar 1 Jun 22 Jun 23 SREP Requirements representing an increase of 26
Slide 21: Leverage ratio and RWA density
== _ Leverage ratio (Fully implomented, latest available data) Leverage ratio in comfortable levels (6.4% as of June 2023) higher when comparing to European banks = _RWA density (RWAs as a % of assets, latest available data) 46% 37% RWAs density in conservative values (46% as of June 27% 33% 2023),
Slide 22: MREL requirements and execution of the Funding Plan
MREL requirements and execution of the Funding Plan (Million euros) == MREL position (BCP Resolution Group - 30 Jun. 2023) ~27.9% * {28.15% * sP 4.9% i MREL { Requirement! } \. 1 Jan. 2024 / Jun. 23 (%TREA) ~11.3% * / 671% sP 205 f we \ \ Requirement! / \ 1 Jan. 2024 / 12 1.5% ‘ AT1 0.6% Jun. 23 (%L
Slide 23: Pension fund
Pension fund == Pension fund coverage => Structure of pension fund (Million euros) Coverage Real-estate: . 17% Pension Fund 3.384 3.409 Cash and other: 16% Excess 593 568 eg EAuities: 2% Pension liabilities 28 Bonds: 49% investment ZED, Sad. Funds: 16% Dez 22 Jun 23 + Discount rate revised to 4% Ras
Slide 24: Robust liquidity position
Robust liquidity position 155% 214% NSFR (Net stable funding ratio) LCR (Liquidity coverage ratio) (Billion euros) Eligible assets ( 25.2 24.2 0.9 -2.41 Jun 22 Jun 23 78% 75% Jun 22 Jun 23 24
Slide 25: Portugal
Portugal
Slide 26: Profitability in Portugal
Profitability in Portugal == _ Net income (Million euros) +118.1% ad 353.7 162.2 H1'22 H123 = Operating costs (Million euros) +4,4% 293.8 > 306.8 H1'22 H1'23 Net operating revenue (Million euros) 729.5 H1'22 H1'23 Net income of 353.7 million in H1’23 an increase of 118.1% from last year same period
Slide 27: Net interest income
Net interest income (Million euros) +64.3% soovsnintnnntnnnsnnnnnnnnnnnnnnnnnnnnnnsnnsnsnnsninnsannnnannnnnnsennnnensnnanseennee > +270.4 +94.8 +37.5 0.5 53.8 71.4 430.5 -0.3 H1'22 Performing Credit rate Impact of Deposit's rate Impact of Effect of Excess liquidity H1'23 credit volume effect NPE red
Slide 28: Commissions and other income
Commissions and other income = _— Commissions = _ Other income (Million euros) (Million euros) Ht'22H1'23 Total Banking fees and commissions 233.4 236.5 +1.4% , . Equity earnings+ 34.0 dividends 7 Cards and transfers 711 78.6 © +10.5% Loans and guarantees 9.5 40.9 17.4% Not trading income Bancassura
Slide 29: Operating costs
Operating costs (Million euros) Non-recurring' Depreciation Other administrative costs Staff costs +4,4% 88.4 94.3 H1'22 H1'23 +2. 6,254 6,256 Jun 22 Jun 23 13 415 402 Jun 22 Jun 23 29
Slide 30: Continued decrease of NPEs
Continued decrease of NPEs = _Non-performing exposures (NPE) (Million euros) 1,635 Other NPE 1,144 879 NPL>90d 382 Jun 22 Jun 23 == _Loan impairment (net of recoveries) (Million euros) Cost of Risk Loan-loss reserves Ld = H1'22 H1'23 == _ NPE bu Pp Jun 23 Jun 23 (Million euro: vs. Jun 22 vs. Dec 22
Slide 31: NPE coverage
NPE coverage = NPE total coverage* == _—NPL>90d total coverage* 258% 142% 131% 34% 100% 54% Real estate collateral 400% Real estate collateral Cash, other fin.collat. 70% Cash, other fin.collat. LLRs 29% | “ mie Individuals Companies Total Individuals Companies Total == _ Other NPE total coverage* +
Slide 32: Foreclosed assets and corporate restructuring funds
Foreclosed assets and corporate restructuring funds = Foreclosed assets (Million euros) 356 Impairment 70 191 Net value 286 -162 millions oe “ -56.5% Jun 22 Jun 23 = Sales of foreclosed assets (Million euros) Sale value # properties sold Book value 165 H1'22 H1'23 = _ Corporate restructuring funds (
Slide 33: Customer funds and loans to Customers
Customer funds and loans to Customers = Total Customers Funds* =} ‘Loans to Customers (gross) (Billion euros) (Billion euros) 1.38% NPE: -22.8% (-0.4 billion) 66.97 66.04 Performing: -0.8% (-0.3 billion) TET Off-BS funds 15,08 14.09 40.58 30.88 Other BS funds 1:36 p38 Term deposits 17.05 19.73 Mortg
Slide 34: Performing loans portfolio
= Performing loans portfolio (Billion euros) -0.8% 38.9 38.6 v Mortgage 18.5 18.6 Personal and other Companies Jun 22 Jun 23 = _ Breakdown of performing loans growth (Billion euros) -0.3 billion 38.9 +0.1 +0.1 -0.6 Jun 22 Mortgages Personaland Companies other + Loans to individuals increased 1.1%, s
Slide 35: International operations
International operations
Slide 36: International operations net income
(Million euros*) H1’22 H1’23 ernational operations (Million euros) Poland -56.7 77.3 Mozambique 47.0 48.5 Excluding effects of Other 1.4 2.7 Bank Millennium? Net income international operations “11.1 123.1 69.5 Discontinued Operations‘ 1.5 0.0 23 Non-controlling int. (Poland+Mozambique) 12.7 -53.6 E
Slide 37: Positive evolution of net income
Positive evolution of net income = _inet income (Million euros") 312.7 Adjusted net income" 204.9 TALES Net income 1-7 H1'22 H1'23 3m WIBOR (average) = _ Operating costs (Million euros") -16,6% 251.2 . v 209.4 80.3 0 Resol. Fund + DGF+ IPS 170.8 196.5 H1'22 H1'23 t operating revenue (Million euros*)
Slide 38: Net interest income increase significantly
Net interest income increase significantly == _ Net interest income (Million euros*) NIM 561.1 462.2 H1'22 H1'23 = _ Commissions and other income (Million euros*; does not include tax on assets and contribution to the resolution fund and to the DGF) +173.4% > 210.8 77A 123.5% Fees and commisions “15
Slide 39: Credit quality
Credit quality = npPL>9 = __Loan-loss reserves (Million euros*) (Million euros") Credit ratio Coverage ratio Gaoa,) npL>90d (_2-0% NPL>90d C 159% ) 537.9 569.4 366.5 358.9 Jun 22 Jun 23 Jun 22 Jun 23 S oan impairment (net of recoveries) (Million euros") Cost of risk 45bp + NPL>90d accounted for 2.1%
Slide 40: Customers funds and loans to Customers
Customers funds and loans to Customers = é Customers funds =} ‘Loans to Customers (gross) (Million euros*) (Million euros*) +4.8% costes seen -6.2% i 24,323 soouin ennui 23,213 off-BS funds |/4)534 ms 18,495 17,296 Term deposits 5,801 7,942 Mortgage local curroney 81120 8,051 Mortgage foreign exchan
Slide 41: CHF mortgage
CHF mortgage (Billion euros*) 54.6% As a % of total 9.6%) (9.4%) (8.1%) (6.6% 5.5% ) loan portfolio 15% (gross after legal 6.9 % risk provisions) 4% 2.5 2.4 2.3 2.2 2.4 2008 6M22 9M22 2022 3M23. 6M23 (Number of cases) 18,441 16,008 11,070 5,018 2020 2021 2022 Jun 23 (Million euros*) As a % of CHF mo
Slide 42: Net income reflects resilience in challenging environment
Net income reflects resilience in challenging environment == _ Net income == _ Net operating revenue (Million euros*) (Million euros*) +3.3% 47.0 : p 48.5 H1'23 MIMO rate (average) = Operating Costs (Million euros") + Net income of 48.5 million in H1’23, +3.3% comparing with same period of last year
Slide 43: Increased net interest income
Increased net interest income == _ Net Interest income (Million euros*) NIM H1'22 H1'23 = _ Commissions and other income (Million euros") -7.0% 31.6 Y 29.3 Other 13.4 9.8 conisions | sas | BE H1'22 H1'23 == Operating costs (Million euros*) Cost to income 53.9 61-4 Other 31.5 36.7 H1'22 H1'23 = _Empl
Slide 44: Credit quality
Credit quality = inpL> an-loss reserves (Million euros*) (Million euros") Credit ratio Coverage ratio NpL>90d (_9-9%_) wpL-9od (99% _) 117% 64.0 59.7 a 7 L] Jun 22 Jun 23 Jun 22 Jun 23 an impairment (net of recoveries) (Million euros") Cost of risk ( 211bp ) * NPL>90d ratio of 7.1% as of June 2023,
Slide 45: Business volumes
Business volumes = é Customers funds =} ‘Loans to Customers (gross) (Million euros*) (Million euros*) a” +11.4% 2,109 2.007 i 725 ? 651 we Mortgage 11 180 Personal and 4.47 Term deposits 1,111 952 other Companies Demand deposits (MEd 1,055 Jun 22 Jun 23 Jun 22 Jun 23 145
Slide 46: Key figures
Key figures
Slide 47: Strategic Plan: Excelling
Strategic Plan: Excelling 24 — H1’23 2024 C/I ratio 32%" v =40% Cost of risk 50 bp v =50 bp RoE 16.8% via =10% CET1 ratio 14% v >12.5% NPE ratio 3.7% v =4% Share of mobile Customers 66% v >65% Crown ct ith eeaeememt atte vata Average ESG rating*** 69% >80% *Adjusted cost to income: without the posit
Slide 48: Cultural initiatives and social support
6th edition of the contemporary art fair. Support of Millennium Art Talks and the new Millennium bep Foundation Award for tho bost stand at the fair. Cultural initiatives in tho village of Fontes (Leiria), concorts, creation rosidoncies, childron's and youth spaces, got- togethers, with the support
Slide 49: Awards
Awards AN rf ees Y Millennium bep: winner in the “Banca e Financas” category for the fifth time Millennium bep: Best Investment Banking 2023 in Portugal Millennium bep: Distinguished at the 12‘ edition of Euronext Lisbon Awards with "Local Market Member in Equity“ award Millennium bep integrates, fo
Slide 50: Appendix
Slide 51: Sovereign debt portfolio
Sovereign debt portfolio Sovereign debt portfolio Sovereign debt maturity (Consolidated, million euros) >Sy, <By: 33% Jun22 Sep22 Dec22 Mar23 Jun23 YoY Portugal 7,765 6,882 6,295 6,908 6,534 16% 5% Tills and other 1,222 461 310 810 a2 66% -4B% >By, <10y: 8% Bonds 6,543 6,421 5,985 6,098 6,113 Te 40%
Slide 52: Sovereign debt portfolio
Sovereign debt portfolio (Million euros) Mozambique Trading book 464 44 0 491 999 <1 year 423 5 477 905 > 1 year and < 2 years 4 12 15 > 2 years and < 5 years 27 1 13 41 > 5 years and < 8 years 5 i) 5 > 8 years and < 10 years 2 5 7 > 10 years 3 22 1 26 Banking book* 6,070 3,417 530 8,725 18,742 <1 y
Slide 53: Diversified and collateralised portfolio
Diversified and collateralised portfolio an portfolio (Consolidated) LTV of the mortgage portfolio Breakdown Loans per collateral in Portugal Other Mortgage guarantees 48% 28% Companies 41% Real guarantees 57% Unsecured 0-40 14% 21% 40-50 12% Personal/ other 11% = Loans to companies accounted for 41
Slide 54: Consolidated net income
Consolidated net income (Million euros) svines Net interest income 985.2 1,374.4 +39,5% +389.2 Net fees and commissions 387.6 387.0 0.1% 0.5 Other income* -99.8 82.9 -183.1% +182.7 Net operating revenue 1,273.0 1,844.3 +44.9% +571.3 Staff costs -284.2 -308.0 +8.4% -23.8 Other administrative costs an
Slide 55: Consolidated balance sheet
Consolidated balance sheet (Million euros) ASSETS Cash and deposits at Central Banks Loans and advances to credit institutions repayable on demand Financial assets at amortised cost Loans and advances to credit institutions Loans and advances to customers Debt instruments Financial assets at fair va
Slide 56: Consolidated income statement per quarter
Consolidated income statement per quarter (Million euros) Quarterly 2Q22 3Q22 4Q22 1Q23 2Q23 Net interest income 520.1 560.7 603.9 664.6 709.8 Dividends from equity instruments 12.0 -3.6 0.8 0.0 1.1 Net fees and commission income 194.7 186.2 198.1 195.4 191.6 Other operating income -158.5 1.5 6.2 -6
Slide 57: Income statement
Income statement (Million euros) For the 6-month periods ended June 30", 2022 and 2023 Group Total Bank Millennium (Poland) Millennium bim (Moz) Other int. operations ‘Jun22 Jun23.A% Jun2? Jun23|«&% | Jun22 Jun23. a% Jun22 Jun23. 8% Jun22 Jun23. 8% Jun22 Jun23. a 12 2030 788% «= 448,088 OOS OSS IIHS
Slide 58: 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 59: 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 not measured at fair value through profit or loss. Non-per
Slide 60: Investor Relations Division
Millennium bcp INVESTOR RELATIONS DIVISION Bernardo Collaco, Head EQUITY DEBT AND RATINGS Alexandre Moita Luis Morais +351 211 131 321 +351 211 131 337 investors@millenniumbcp. pt BANCO COMERCIAL PORTUGUES, S.A. Registered Office: Praca D. Joao |, 28, Oporto, Share Capital: EUR 3,000,000,000.00. Reg
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