Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — Q2 2005 Earnings Presentation
48 slides from Banco Comercial Portugues's earnings presentation, Jul 19, 2005
Slide 1: Earnings Presentation 2nd Quarter 2005
Earnings Presentation 2nd Quarter 2005 19th July 2005
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
Slide 3: Earnings Highlights
Earnings Highlights 9 Consolidated net income increases to Euro 302.9 million, up 21% from the first half of 2004 (on a recurring comparable basis); 9 Return on equity (ROE) reaches 22.1%; 9 Capital gains of Euro 85.8 million from sale of financial assets (Crédilar: 50.8 million; Friends Provident:
Slide 4: Earnings Highlights
Earnings Highlights 9 Customers’ funds up 5.7%; 9 Loans to customers up 4.8%; 9 Asset quality continues to improve: overdue loans (over 90 days) stood at 0.7% of total loans and provisions coverage at 391.6%; 9 Reduction of the exposure to non strategic assets: sale of Crédilar, negotiations on Banq
Slide 5: Agenda
Agenda 2nd Quarter 2005 1. Consolidated Earnings, Credit and Customer funds 2. Capital 3. Performance by business segments 4. NovaBank (Greece) 5. Bank Millennium (Poland) 2nd Quarter 2005 - Figures presented according to IFRS 4
Slide 6: Consolidated financial data: Net Income
Consolidated financial data (Eur million) Consolidated Net Income Quarter Accumulated Portugal 275.7 243.4 + 13.3% +21.1% 296.9 302.9 (*) 1H 04 1H 05 250.0 International + 21.5% 27.2 +310.5% 183.1 165.4 (*) 6.6 136.2 2Q 04 2Q 05 1H 04 1H 05 1H 04 1H 05 (*) Refers to non-recurrent gains of € 46.9 m o
Slide 7: Consolidated financial data: Intermediation Margin
Consolidated financial data (Eur million) Intermediation Margin Quarter Accumulated Portugal +12.3% 629.8 +17.5% 560.7 785.3 668.4 54.0 28.8 2.1% Spread 2.2% 1H 04 1H 05 + 19.8% 413.2 International 345.0 43.6 Dividends 731.3 +44.3% 155.5 25.9 639.6 Net Interest Income 107.8 369.6 319.1 2.9% Spread 3
Slide 8: Breakdown of Net Interest Margins
Consolidated financial data Breakdown of Net Interest Margins Portugal Spreads on Corporate Loans Spreads on Mortgage Loans Spreads on Deposits (%) (%) (%) 3.64 SME 2.00 1.80 1.84 1.85 1.78 1.75 1.79 1.80 1.81 Demand Deposits 1.74 1.76 1.61 1.61 1.59 2.70 1.54 1.52 1.52 1.46 1.43 1.46 1.41 1.38 1.38
Slide 9: Net Commissions
Consolidated financial data (Eur million) Net Commissions Quarter Accumulated Portugal 248.7 250.1 +0.6% +3.6% 313.5 302.7 1H 04 1H 05 + 0.7% 159.7 160.9 International 63.4 +17.3% 54.0 2Q 04 2Q 05 1H 04 1H 05 1H 04 1H 05 2nd Quarter 2005 - Figures presented according to IFRS 8
Slide 10: Breakdown of Commissions
Consolidated financial data (Eur million) Breakdown of Commissions Of which Group Portugal International ∆1H 05/1H04 Cards 71.6 +5.5% +2.2% +13.5% Credit related 85.8 -2.5% -3.4% +2.6% Other Banking Commissions 69.9 +15.4% +9.5% +48.6% Securities 47.7 +12.2% +7.8% +35.7% Asset Management 38.5 -12.0%
Slide 11: Operating Costs
Consolidated financial data (Eur million) Operating Costs Quarter Accumulated Portugal 666.4 -9.2% 604.7 -5.2% 859.5 815.2 83.8 Depreciation 69.6 -16.9% 294.6 279.5 1H 04 1H 05 Administrative -5.1% -3.9% Costs International 432.4 415.6 210.4 Depreciation 42.0 32.8 +9.0% 193.1 Administrative 148.4 St
Slide 12: Operating Costs by Unit
Consolidated financial data Operating Costs % change 1st Half 2005 vs 1st Half 2004 Portugal NovaBank Bank Millennium (Greece) (Poland) (at fixed exchange rate) Staff -6.8% +8.8% +3.2% Administrative Costs -10.9% +0.8% -13.3% Depreciation -20.3% -26.5% -21.7% Total -9.2% -0.3% -8.1% 2nd Quarter 2005
Slide 13: Total Efficiency Ratio
Consolidated financial data Total Efficiency Ratio(*) (Cost to Income) (excluding non–recurrent items) 70.8% Consolidated 68.2% 65.1% 64.0% 54.8% considering credit recoveries as revenues Portugal 66.5% 68.0% 61.6% 61.1% 1Q 04 2Q 04 1Q 05 2Q 05 (*) According to Bank of Portugal General Instruction 1
Slide 14: Loans to Customers (gross)
Consolidated financial data (Eur million) Loans to Customers (gross) (*) Group Portugal 46,957 +2.3% 48,044 +4.8% 13,425 + 18.1% 15,852 53,860 51,398 3,601 3,857 + 7.1% 29,931 28,335 - 5.3% Mortgage 14,973 18,142 +21.2% Consumer Jun 04 Jun 05 Loans 4,241 4,621 + 9.0% International +30.9% 5,816 Loans
Slide 15: Credit Quality
Consolidated financial data (Eur million) Credit Quality Group Portugal Provision 414.8% 391.6% coverage > 90 236.0% days 205.9% Provision coverage > Overdue ratio 0.9% 90 days > 90 days 0.6% 496.7 348.9 Overdue ratio 1.1% Total Overdue > 90 days 0.7% 1H 04 1H 05 Total overdue 662.2 International <
Slide 16: Credit Impairment Charges as % of Total Loans
Consolidated financial data (Eur million) Credit Impairment Charges (Net of recoveries) as % of Total Loans (*) excluding non-recurrent items (*) Quarter Accumulated Gross Impairment charges as % of Loans 84.5 -62.8% 95 bp 84 bp 69 bp 55 bp 54 bp 60 bp 48 bp 42.3 -64.9% 46 bp 31.4 34 bp 14.8 30 bp I
Slide 17: Total Customers' Funds
Consolidated financial data (Eur million) Total Customers’ Funds Group Portugal +4.1% 43,295 45,063 +5.7% 54,384 51,456 Off Balance 20,388 19,894 + 2.5% Sheet Jun 04 Jun 05 International 9,321 8,161 +14.2% 31,562 33,996 + 7.7% Deposits Jun 04 Jun 05 Jun 04 Jun 05 2nd Quarter 2005 - Figures presented
Slide 18: Agenda
Agenda 1. Consolidated Earnings, Credit and Customer funds 2. Capital 3. Performance by business segments 4. NovaBank (Greece) 5. Bank Millennium (Poland) 2nd Quarter 2005 - Figures presented according to IFRS 17
Slide 19: Impact of IFRS on Capital
Impact of IFRS on Capital (Eur million) Capital (Bank of Portugal) 2nd Quarter includes Total Capital 11.9% 13.2% 13.8% 12.8% • Acquisition of 50% of Novabank: - 66bp Core Tier 1 ratio 5.8% • Sale of Credilar: + 12bp 5.5% 5.6% 5.2% Core Capital 3,053 2,944 3,040 2,781 31.12.04 01.01.05 31.03.05 30.0
Slide 20: Financial investments (AFS) June 2005
Financial investments (AFS) 30 June 2005 Unrealised Cost net of Market Value Capital Gains impairment (AFS Reserv es) (*) EDP 216.8 219.5 2.7 Intesa 370.4 470.8 100.4 Sabadell 97.9 196.2 98.3 Eureko 123.4 321.5 198.1 808.6 1,208.0 399.4 (*) AFS: Available for Sale 2nd Quarter 2005 - Figures presente
Slide 21: Agenda
Agenda 1. Consolidated Earnings, Credit and Customer funds 2. Capital 3. Performance by business segments 4. NovaBank (Greece) 5. Bank Millennium (Poland) 2nd Quarter 2005 - Figures presented according to IFRS 20
Slide 22: Performance by Business segments
Performance by Business segments (Eur million) Accumulated Net Contribution (1) Allocated Capital Return on Allocated Capital (2) 1H 04 66.2 1H 04 798.3 1H 04 16.7% Retail Banking (Portugal) 1H 05 117.9 1H 05 835.6 1H 05 28.4% 1H 04 87.1 1H 04 1,005.9 1H 04 17.4% Commercial and Corporate Banking (Po
Slide 23: Performance by Business segments: Portugal
Performance by Business segments (Eur million) PORTUGAL Loans to Customers Customer Funds 28,828 +6.5% 30,688 Retail Banking 20,236 +10.1% 22,276 Jun 04 Jun 05 Jun 04 Jun 05 14,752 -4.5% 14,082 Commercial and Corporate Banking 4,225 +21.4% 5,131 Jun 04 Jun 05 Jun 04 Jun 05 2nd Quarter 2005 - Figures
Slide 24: Performance by Business segments: Portugal
Performance by Business segments (Eur million) PORTUGAL Loans to Customers Customer Funds (Assets under management) +2.0% 13,541 13,278 Private Banking and Asset Management -15.6% 4,739 4,001 Jun 04 Jun 05 Jun 04 Jun 05 Investment Banking +13.4% 354 312 Jun 04 Jun 05 2nd Quarter 2005 - Figures prese
Slide 25: Review of Progress
Review of Progress (Eur million) Additional accumulated Accumulated execution rate profitability captured in of total Program by 1H 2005 2004 and 1H 2005 Planned 55% ¾ Reduce Credit Provisions (gross) +83 Actual 83% Planned 55% ¾ Corporate and Commercial Banking + 40 Actual 53% Planned 38% ¾ Retail
Slide 26: Evolution of revenues
Evolution of revenues (Eur million) Corporate and Commercial Banking Retail Banking 559.6 198.1 201.3 524.5 + 6.7% + 1.7% 58.7 65.4 188.5 + 5.6% Commissions 178.5 139.4 136.0 345.9 371.1 + 7.3% NII 1H 04 1H 05 1H 04 1H 05 • Commercial and Corporate Commissions with • Increase in cross-selling from 3
Slide 27: Agenda
Agenda 1. Consolidated Earnings, Credit and Customer funds 2. Capital 3. Performance by business segments 4. NovaBank (Greece) 5. Bank Millennium (Poland) 2nd Quarter 2005 - Figures presented according to IFRS 26
Slide 28: NovaBank
LY NovaBank “a
Slide 29: Heading forward with sustained profitability
Heading forward with sustained profitability (Eur million) Net Income (recurring) 0.5 2002 2003 2004 1H 05 0.5 -9.5 -28.1 -37.9 -6.3 1H 04 1H 05 2nd Quarter 2005 - Figures presented according to IFRS 28
Slide 30: Strong revenue growth
Strong revenue growth (Eur million) Operating revenues 43.1 35.8% 8.2 31.7 9.4% 8.5% 5.9 22.5 19.3 20.6 16.5 17.4 4.4 15.2 3.8 3.5 34.9 Net commissions and fees 3.3 2.9 2.6 25.8 15.8 16.8 18.1 Net interest income 12.6 13.2 14.5 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 1H 04 1H 05 108 109 109 109 111 113
Slide 31: Efficient infrastructure with stable costs
Efficient infrastructure with stable costs (Eur million) Recurring Operating Costs -1.5% 40.6 40.0 2.2% CAGR 6.4% 20.6 21.0 22.0 20.6 20.0 19.4 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 1H 04 1H 05 Cost/assets (annualized) 5.7% 5.3% 5.0% 4.8% 4.2% 4.1% 5.5% 4.1% Number of employees 986 991 992 989 1,013 1
Slide 32: Sustained growth in customer funds
Sustained growth in customer funds (Eur million) Evolution of Customer Funds +2.4% +6.0% +13.0% CAGR 1,893 1,893 1,736 1,786 1,675 1,718 1,675 1,601 348 348 288 300 366 388 146 388 146 Other 391 171 162 179 428 768 428 768 Mutual Funds 410 748 613 694 Time Deposits 362 357 357 Demand Deposits 502 57
Slide 33: Solid profitable growth in credit
Solid profitable growth in credit (Eur million) Loans to Customers +12.6% +60.7% +15.2% 1,671 1,671 CAGR 1,484 Business Loans 1,344 405 405 1,190 (24% of total) 334 1,040 296 1,040 Consumer credit 880 266 406 406 207 378 207 (24% of total) 342 152 303 278 278 246 Mortgages 772 860 860 (52% of total)
Slide 34: Agenda
Agenda 1. Consolidated Earnings, Credit and Customer funds 2. Capital 3. Performance by business segments 4. NovaBank (Greece) 5. Bank Millennium (Poland) 2nd Quarter 2005 - Figures presented according to IFRS 33
Slide 35: Summary of 1st Half 2005 Earnings Presentation
Summary of 1st Half 2005 Earnings Presentation: Source: Company Earnings announcement as 18th July 2005 Exchange rate: fixed exchange rate was used for comparison purposes (balance sheet: 1€ = 4.0388 PLN; P/L: 1€ = 4.0859 PLN)
Slide 36: Improvement of Net Income based on recurrent earnings
Improvement of Net Income based on recurrent earnings (Eur million) Net Income and ROE ROE 13.2% 13.2% • Recurrent Net Income grew by 149% in 1H 2005 (in 2Q 04 Sale of car loans +9.0% 31.6 PZU Bank realized extraordinary and extraordinary 29.0 dividend provisions 5.2 gains from the sale of PTF car l
Slide 37: Solid growth of Net Interest Income and Net Commissions Income
Solid growth of Net Interest Income and Net Commissions Income (Eur million) Net Interest Income • Increase in NII by 4.6% despite the sale of € 481 m car loan portfolio in 74.5 77.9 May 2004 +4.6% • Main drivers: –Strict pricing management –More customer funds 1H 2004 1H 2005 –Improvement of asset
Slide 38: Lower Operating Costs
Lower Operating Costs (Eur million) Operating Costs -2.9% • Operating Costs reduced by 2.9% 94.8 92.1 Depreciation versus 1H 2004. 13.5 -21.7% 10.5 • Cost reduction driven by lower Administrative 43.1 42.0 -2.4% depreciation and administrative costs. Staff costs 38.3 39.5 +3.2% • Main drivers of adm
Slide 39: Customer funds growth driven by deposits and mutual funds
Customer funds growth driven by deposits and mutual funds (Eur million) Customer funds +6.4% • Total Customer Funds increased 3,230 3,437 Other 234 212 by 6.4% of which deposits by +7.6% Deposits 2,996 3,225 +7.6% 30.06. 2004 30.06.2005 proforma • Mutual funds jumped 66% y/y allowing improvement in
Slide 40: Focused credit strategy
Focused credit strategy (Eur million) Loans Evolution Mortgage loans +70% • Mortgage portfolio grew by 70%, 573 already representing 30% of total 336 loans. 30.06. 2004 30.06.2005 proforma (*) • Total loans increased for the New Loans market share 3.4% 10.6% second consecutive quarter, achieving 11%
Slide 41: Improved position in credit cards
Improved position in credit cards (Eur million) Number of credit cards (in thousands) 86.9 +81% • Number of credit cards 47.9 increased by 81% vs 1H 2004 due to: – Selective pre-approved 30.06.2004 30.06.2005 campaigns Credit cards spendings and credit outstanding – Product innovation (Eur million)
Slide 42: Building a solid track record
Building a solid track record Cost-to-income Improving Towards ROE target Cost-to-income ROE (recurrent) (recurrent) 96.9% 93.9% 15.0% (*) 11.0% 84.9% 72.6% 4.1% 65.0% 0.5% -5.2% 2002 2003 2004 1H 2005 Target 2002 2003 2004 1H 2005 Target 2007 2007 (*) Assuming CAR Tier 1 ratio of 8% The matters dis
Slide 43: Financial Statements
9 Financial Statements 2nd Quarter 2005 - Figures presented according to IFRS 42
Slide 44: Consolidated Balance Sheet
Consolidated Balance Sheet As at 30th June, 2005 and 2004 (IFRS) 2nd Quarter 2005 - Figures presented according to IFRS 43
Slide 45: Statement of Income
Statement of Income As at 30th June, 2005 and 2004 (IFRS) 2nd Quarter 2005 - Figures presented according to IFRS 44
Slide 46: Consolidated Statement of Income
Consolidated Statement of Income As at 30th June, 2005 and 2004 and Quarterly evolution (IFRS) Quarterly evolution Accumulated June June ∆% Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 2005 2004 05 / 04 Net interest income 319.1 311.7 340.9 361.7 369.6 731.3 639.6 14% Dividend Income 25.9 0.5 1.1 10.4 43
Slide 47: Income Statement
Income Statement National and International Operations (Eur Thousands, except percentages) 2nd Quarter 2005 - Figures presented according to IFRS 46
Slide 48: ilenniu
ilenniu ee > ee C
Banco Comercial Português — Q2 2005 Earnings Presentation on 6ix