Banco Comercial Portugues S.a. · EURONEXT:BCP

Banco Comercial Portugues — 9M 2013 Earnings Presentation

59 slides from Banco Comercial Portugues's earnings presentation, November 2013

  1. Slide 1: Earnings Presentation 9M 2013

    EARNINGS PRESENTATION NOVEMBER 2013 9M 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 Sale of Piraeus Bank stake already in the 4Q13, formal approval by DG Comp of the restructuring plan, comfortable liquidity situation, strengthening the capital position and signs of operational recovery in Portugal in line with the strategic plan Piraeus Bank Sale of Piraeus Bank stake,

  5. Slide 5: Highlights 9M13

    Highlights 9M13 Customer deposits Loan to deposit ratio* Net loans to BS customer (%) (Billion euros) +5.4% funds ratio 44.5 46.9 -13pp 137% 13.8 +5.8% 14.6 121% 124% 30.7 +5.2% 32.2 111% Sep 12 Sep 13 Portugal International op. Sep 12 Sep 13 On a comparable basis: excluding Greece, following the sa

  6. Slide 6: Highlights 9M13

    Highlights 9M13 Contribution of the international operations Net Interest Income in Portugal (excluding Greece) (Million euros) (Million euros) +13.5% 105.5 128.1 112.9 76.9 63.5 +37.2% 9M12 9M13 1Q13 2Q13 3Q13 Operating costs in Portugal * Net new entries in NPL in Portugal (Million euros) 651.2 -1

  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 funds…

    Focus on the increase in customer funds… (Million euros) Consolidated Customer funds Customer funds in Portugal +0.6% Total +2.1% customer 48,703 49,000 funds 63,679 64,994 +1.1% 18,051 16,755 Balance sheet 51,022 51,603 customer 30,651 +5.2% 32,245 funds 6,566 4,749 12,931 14,837 Sep 12 Sep 13 Depo

  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 -7.6% 51,776 -5.8% 47,826 64,322 60,588 27,836 -4.0% 26,735 3,807 -6.8% Sep 12 Sep 13 3,546 Loans to customers (gross) in international 32,

  10. Slide 10: Significant improvement in liquidity position

    Significant improvement in liquidity position, expressed by the reduction of commercial gap and loans to deposits ratio (Billion euros) Commercial Gap * Loans to deposit ratio ** (BoP) Net loans to BS customer funds ratio Sep 12 Sep 13 -13pp 137% 124% 121% -10.3 111% -17.7 +7.4 Sep 12 Sep 13  Comme

  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 0.0 0.3 0.4 2009 2010 2011 2012 9M13 4Q13 2014 2015 2016 2017 >2017 Significant improvement of the funding structure Customer depo

  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 12.7%  Core tier I ratio at 12.7%, above the 11.9% 12.5% in June 2013 and 11.9% in September 2012.  Over the same period, the reduction in Core tier I the amount of core tier I is expl

  14. Slide 14: Agenda

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

  15. Slide 15: Results in line with the plan reflecting the current macroeconomic scenario

    Results in line with the plan reflecting the current macroeconomic scenario Consolidated (million euros) 9M12 9M13 Δ Net interest income 758.5 625.9 -132.6 Of which: costs related with hybrids instruments (CoCo's) -67.4 -201.1 -133.7 Net fees and commissions 498.4 503.6 5.1 Of which: State guarantee

  16. Slide 16: Net income affected by relevant factors with impact on results

    Net income affected by relevant factors with impact on results (Million euros) Net income Relevant factors with impact on net income Consolidated Net of taxes * (gross) Hybrids (CoCo‟s) interest(-201.1) -142.8 -102.5 Liability management 2011 (-144.4) -597.3 Provision for other risks and liabilities

  17. Slide 17: Net interest income reduction as a result of CoCo's cost

    Net interest income reduction as a result of CoCo’s cost, despite the improvement on cost of deposits that compensates the volume effect (Million euros) Net interest income Portugal Consolidated +3.4% +0.1% 432.1 447.1 825.9 827.0 67.4 67.4 201.1 201.1 364.7 -32.6% 246.0 758.5 -17.5% 9M12 9M13 625.9

  18. Slide 18: 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 -3.9% 340.3 326.9 9M12 9M13 YoY Banking fees and commissions 458.5 450.4 -1.8% Cards and transfers 132.3 134.9 2.0% Loans and guarantees 128.5 114.8 -10.6% Bancassurance

  19. Slide 19: Lower contribution of net trading income

    Lower contribution of net trading income (Million euros) Net trading income Portugal Consolidated 9M12 9M13 Δ -54.6% 340.6 Net trading income 40.5 44.1 3.6 excluding specific items: Specific items: Repurchase of own debt 184.3 0.0 -184.3 Portuguese public debt 42.7 0.2 -42.5 (trading portfolio) Sale

  20. Slide 20: Significant reduction of costs in Portugal

    Significant reduction of costs in Portugal (Million euros) Operating costs * Portugal * Consolidated 651.2 -14.8% -10.7% 1016.7 554.8 Depreciation 56.8 908.0 -11.2% 50.4 Other Administrative 384.2 -9.9% costs 346.4 9M12 9M13 International operations -3.3% Staff costs 575.7 -11.2% 365.5 353.3 511.3 9

  21. Slide 21: Provisioning in line with cost of risk target for the end of the year

    Provisioning in line with cost of risk target for the end of the year (Million euros) Loan impairments (net of recoveries) Portugal Consolidated 144 bp Cost of 137 bp 627.9 -10.2% risk 563.6 693.1 -10.2% 622.7 9M12 9M13 9M12 9M13 International operations Cost of risk evolution (basis points) Strateg

  22. Slide 22: Credit quality improves and provisioning allows coverage increase

    Credit quality improves and provisioning allows coverage increase (Million euros) Consolidated Credit quality Loan impairment (balance sheet) Credit ratio Sep 12 Sep 13 Coverage ratio Sep12 Sep 13 NPL 11.5% 11.5% NPL 45% 50% Credit at risk 12.4% 12.3% Credit at risk 42% 46% 7,420 6,953 3,366 3,481 S

  23. Slide 23: Diversified and collateralized credit portfolio

    Diversified and collateralized credit portfolio Loan portfolio Consolidated Loans by collateral 12.0% Other setors Companies 63% 30% 7% 50% Mortgage With real estate guarantees With Other guarantees 10.0% Financial intermediation 44% Without garantees 3.8% Transp. and comunications 3.6% Wholesale co

  24. Slide 24: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 24

  25. Slide 25: Portugal: deleveraging effort with an increase in deposits and a reduction of loans

    Portugal: deleveraging effort with an increase in deposits and a reduction of loans (Million euros) Customer funds Loans to customers (gross) +0.6% Total -7.6% customer 48,703 49,000 funds 51,776 47,826 Balance sheet 37,083 36,884 customer funds 6,431 4,638 20,994 -4.4% 8,822 20,070 8,501 2,561 -13.

  26. Slide 26: Increasing weight of the Bank in the new financing to companies in Portugal

    Increasing weight of the Bank in the new financing to companies in Portugal, despite the lower demand for credit Credit lines to support business Market share in loans to SME Millennium bcp’s new production Credit line of €200Mio to EIB support Portuguese SME Expressive growth on 22% 21% share in ne

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

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

  28. Slide 28: … but maintaining the positive trend in net interest income…

    … but maintaining the positive trend in net interest income… Net interest income (Million euros) +37.2% 3Q13 vs.2Q13 126.6 105.5 Customer funds margin +14.1 76.9 63.5 46.8 Past due loans and recovery effect +20.2 Volume effect on loans and others -5.7 Total +28.6 3Q12 4Q12 1Q13 2Q13 3Q13  Positive

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

    … through strong efforts to reduce the cost of deposits Term deposits rate Credit portfolio spread (%) (%) 5.0% Companies 4.5% New prodution 4.37 4.36 4.30 4.30 4.0% Portfolio 4.19 3.5% Mortgage 3.0% 1.15 1.16 1.16 1.16 1.16 2.5% 2.0% S/11 D/11 M/12 J/12 S/12 D/12 M/13 J/13 S/13 3Q12 4Q12 1Q13 2Q12

  30. Slide 30: Lower credit commissions, despite the improvement of market related commissions

    Lower credit commissions, despite the improvement of market related commissions (Million euros) 9M12 9M13 YoY Banking fees and commissions 343.4 321.3 -6.4% Cards and transfers 70.1 68.9 -1.8% Loans and guarantees 105.3 91.4 -13.2% Bancassurance 53.0 54.7 3.2% Current account related 48.5 55.4 14.2%

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

    Positive trend in operating costs in Portugal, comparing favourably with domestic peers (Million euros) Operating costs* Employees Branches Portugal -1.163 -14.8% 9,866 -78 651.2 8,703 31.0 861 554.8 783 -15.7% 26.1 222.4 -14.0% 191.2 Sep 12 Sep 13 Sep 12 Sep 13 Annualised operating costs ** / Volum

  32. Slide 32: Credit quality shows the first signals of recovery

    Credit quality shows the first signals of recovery with reduction on NPL and increase coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Sep12 Sep13 Coverage ratio Sep12 Sep13 NPL 13.4% 13.9% NPL 41% 46% Credit at risk 13.9% 14.1% Credit at risk 40% 44% 2,880 3,006

  33. Slide 33: Reduction of foreclosed assets, with an increase of properties sold

    Reduction of foreclosed assets, with an increase of properties sold and coverage stable Foreclosed assets portfolio Number of properties sold (Million euros) +25.7% 2,428 Coverage 22.1% 21.6% 22.4% 1,931 1,474 1,463 1,354 319 328 299 9M12 9M13 Value of properties sold (Million euros) 1,055 1,155 1,1

  34. Slide 34: Agenda

    Agenda  Main Highlights  Group • 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% ROE 9M12 9M13 local euros (9M13) currency International operations * 112.9 128.1 13.5% Poland 82.0 93.0 13.4% 12.7% 10.5% Mozambique 60.9 62.1 1.9% -7.7% 24.6% Angola 23.8 27.5 15.9% 12.6% 16.0% Other and non-controlling interests -53.8 -5

  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) +11.5% 12,200 +3.3% 10,944 10,218 9,896 6,484 -0.1% 6,474 789 +19.0% 939 2,623 +6.9% 2,805 Sep 12 Sep 13 Sep 12 Sep 13 Mortagage Consumer Companie Excluded FX effect. €/PLN rates used: I

  37. Slide 37: Net income growth improved by banking income and strict cost control

    Net income growth improved by the increase of banking income and strict cost control (Million euros) Net income  Net income grows by 13.4%, with ROE at 10.5% + 13.4%  Increase in banking income (+3.2%), despite the 93.0 decrease in the reference interest rates that 82.0 reached historic minimums (

  38. Slide 38: Progressive recovery of net interest income, strong growth in commissions

    Progressive recovery of net interest income, strong growth in commissions and strict cost control (Million euros) Net interest income * Operating costs +0.6% -2.3% 217.8 219.1 197.8 193.2 98.1 - 2.3% 95.8 99.7 - 2.3% 97.4 9M12 9M13 +3.2% 9M13 9M13 74.1 76.5 68.4 Other administrative costs and deprec

  39. Slide 39: Improvement on credit quality with increase in coverage

    Improvement on credit quality with increase in coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Sep12 Sep13 Coverage ratio Sep12 Sep13 NPL 3.1% 2.8% NPL 101% 107% 303 307 305 284 Sep12 Sep13 Loan impairment (net of recoveries) Cost of 56 bp risk * 55 bp Sep 12 Sep

  40. Slide 40: Mozambique: strong volumes growth

    Mozambique: strong volumes growth (Million euros) Customer funds Loans to customers (gross) +22.1% 1,545 +31.2% 1,201 1,266 25 915 261 25 +8.7% 240 915 +40.8% 650 Sep 12 Sep 13 Sep 12 Sep 13 Mortgage Consumer Companies Excluded FX effect. €/Metical rates used : Income Statement 39.77694444; Balance

  41. Slide 41: 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 1.9%, with ROE of 24.6% 1.9%  Consistent quarterly increasing in net interest 60.9 62.1 income (benefiting from the volume effect, despite lower reference interest rates) and increase in commiss

  42. Slide 42: Consistent quarterly increasing in net interest income and commissions

    Consistent quarterly increasing in net interest income and increase in commissions (Million euros) Net interest income Operating costs -2.2% 94.8 92.7 +7.3% 65.3 70.0 6.0 7.0 27.7 29.7 9M12 9M13 31.6 33.4 +7.2% 30.7 32.9 9M12 9M13 29.2 Depreciation Other administrative costs 1Q13 2Q13 3Q13 Staff cos

  43. Slide 43: Improvement of credit quality and high coverage

    Improvement of credit quality and high coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Sep 12 Sep 13 Coverage ratio Sep 12 Sep 13 NPL 4.9% 3.4% NPL 153% 179% 69 73 45 41 Sep 12 Sep 13 Loan impairment (net of recoveries) Cost of 121 bp 97 bp risk Sep 12 Sep 13 8.4

  44. Slide 44: Angola: volumes growth

    Angola: volumes growth (Million euros) Customer funds Loans to customers (gross) +25.8% 1,003 +17.3% 797 573 489 Sep 12 Sep 13 Sep 12 Sep 13 Excluded FX effect. €/Kwanza rates used : Income Statement 126.78722222; Balance Sheet 131.71 44

  45. Slide 45: Net income increases driven by higher commissions

    Net income increases driven by higher commissions, despite the expansion plan (Million euros) Net income  Net income increases 15.9% with ROE at 16.0% +15.9%  Increase in banking income: driven by higher 27.5 commissions and net interest income stable 23.8 despite lower reference interest rate  F

  46. Slide 46: Strong fees and commissions growth and controlled operating costs

    Strong fees and commisions growth and controlled operating costs despite the expansion plan (Million euros) Net interest income Operating costs -0.2% +3.1% 52.6 54.2 49.7 49.6 6.8 5.6 24.9 26.1 9M12 9M13 20.9 22.6 +1.3% 9M12 9M13 17.0 16.2 16.4 Depreciation Other administrative costs 1Q13 2Q13 3Q13

  47. Slide 47: Better credit quality ratio and coverage

    Better credit quality ratio and coverage (Million euros) Credit quality Loan impairment (balance sheet) Credit ratio Sep 12 Sep 13 Coverage ratio Sep 12 Sep 13 NPL 5.1% 4.5% NPL 112% 121% 28 31 25 26 Sep 12 Sep 13 Loan impairment (net of recoveries) Cost of 182 bp risk 153 bp Sep 12 Sep 13 6.9 6.9 N

  48. Slide 48: Agenda

    Agenda  Main Highlights  Group • Liquidity • Capital • Profitability  Portugal  International Operations  Conclusions 48

  49. Slide 49: Progress on strategic plan metrics

    Progress on strategic plan metrics PHASES Priorities 9M12 9M13 2015 Initiatives Demanding Maintaining solid capital ratios by CT1 economic Stronger 11.9% 12.7% … ~12% reducing RWA, despite the negative (BoP) environment balance sheet results (2012-13) Strengthening liquidity position with LTD * 121%

  50. Slide 50: Appendixes

    Appendixes 50

  51. Slide 51: Awards of the first nine months of 2013

    Awards of the first nove months of 2013 “Consumer’s Choice2013 " Portugal Polónia Consumer choice “Friendly Bank for Retail Customers” "Ethibel EXCELLENCE Investment Register" Newsweek Magazine Fórum ETHIBEL “Best Banking Offer" in Market Pearls Corporate Governance e Investor Relations Retailers' C

  52. Slide 52: Evolution of public debt portfolio

    Evolution of public debt portfolio (Million euros) Public debt portfolio Total maturity of public debt Sep 12 Sep 13 YoY <1 year 23% Portugal 4,788 6,762 41% >3 years 24% T-bills 1,529 2,877 88% Bonds 3,259 3,885 19% Poland 1,613 2,079 29% Mozambique 242 358 48% Angola 360 244 -32% Romania 99 64 -36

  53. Slide 53: Detail of public debt portfolio

    Detail of public debt portfolio (Million euros) Portugal Poland Mozambique Angola Romania Ireland Greece Others Total Trading book 162 114 72 348 < 1 year 1 1 > 1 year and <2 years 1 27 29 > 2 year and <3 years 13 42 55 > 3 years 147 44 72 264 AFS book 4,725 1,964 358 244 58 5 7,354 < 1 year 1,115 7

  54. Slide 54: 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 +21.4% -12.2% 25.2 21.0 22.2 17.3 -3.7 -10.1 9M 12 9M 13 9M 12 9M 13 9M 12 9M 13  Net income improvement due to the increase i

  55. Slide 55: Financial statements

    Financial statements DM =:

  56. Slide 56: Consolidated Balance Sheet and Income Statement

    Consolidated Balance Sheet and Income Statement 30 september 31 December 30 september 30 september 30 september 2013 2012 2012 2013 2012 (Thousands of Euros) (Thousands of Euros) Assets Interest and similar income 2,169,740 2,641,485 Cash and deposits at central banks 2,044,901 3,580,546 2,535,908 I

  57. Slide 57: Consolidated income statement

    Consolidated income statement Quarterly evolution (Million euros) Quarterly Year-to-date Δ% 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 Sep 12 Sep 13 13 / 12 Net interest income 176.4 252.2 183.0 205.1 237.8 758.5 625.9 -17.5% Dividends from equity instruments 0.2 0.0 0.0 1.5 0.2 3.8 1.7 -56.6% Net fees and commi

  58. Slide 58: Consolidated income statement (Portugal and International operations)

    Consolidated income statement (Portugal and International operations) For the 9 months period ended 30th of September, 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

  59. Slide 59: Investor Relations Division

    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 Comercial Português, S.A., a publ

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