Banco Comercial Portugues S.a. · EURONEXT:BCP
Banco Comercial Portugues — Q3 2004 Earnings Presentation
54 slides from Banco Comercial Portugues's earnings presentation, Oct 19, 2004
Slide 1: Earnings Presentation 3rd Quarter 2004
Earnings Presentation 3rd Quarter 2004 19 October 2004
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 registrati
Slide 3: Earnings Drivers
Earnings Drivers Highlights of 3rd Quarter 2004 earnings ! Accumulated net income for 3rd Quarter 2004 reached 346.5 million euros, an increase of 10% y- o-y. ! Net interest income increased 2.4% versus 2nd Quarter 2004, compensating seasonal slowdown in commissions which, however, in accumulated te
Slide 4: Interim Dividend
Interim Dividend ! For the first time, and according to statutory changes approved in last AGM, an Interim Dividend for the current year will be distributed – a final dividend will be proposed at the Annual Shareholders Meeting • Gross amount = € 0.03 per share (50% of last year dividend). ! Payment
Slide 5: Quarterly Net Income
Quarterly Net Income Consolidated (Eur million) Quarterly Net Income By Quarter Accumulated +10% 346.5 315.3 2.2% Dividend: 26.5 134.2 114.7 122.4 105.1 104.9 107.4 95.6 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 9M 03 9M 04 Pag. 4 ! Net Income for the 3rd quarter 2004 increased by 2.2% versus 2003 a
Slide 6: Revenue and Costs
illennium Revenue and Costs Pag. 5 M
Slide 7: Net Interest Income
Net Interest Income Consolidated (Eur million) Net Interest Income By Quarter Accumulated - 3.5% 1,098.3 1,059.3 -3.5% 364.0 367.3 367.0 367.7 359.5 345.8 354.1 +2.4% 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 9M 03 9M 04 NIM 2.8% 2.6% 2.5% 2.5% 2.5% 2.4% 2.4% 2.7% 2.5% (Quarterly) Pag. 6 ! Although
Slide 8: Net Commissions
Net Commissions Consolidated (Eur million) Net Commissions By Quarter Accumulated +8.5% 463.6 427.5 +2.5% 163.0 164.3 143.1 148.6 147.0 152.3 135.7 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 9M 03 9M 04 Pag. 7 ! Accumulated net commissions increased 8.5% (y-o-y) and + 2.5% quarter- on-quarter, mostly
Slide 9: Break down of Commissions
Break down of Commissions (Eur million) ∆% 1Q 04 2Q 04 3Q 04 9M 04 9M 04 / 9M 03 Cards 38.5 43.5 45.2 127.2 +1.6% Credit Related 45.3 51.5 47.0 143.7 +8.1% Other Banking 22.7 25.4 27.7 +6.1% Commissions 75.8 Securities 19.5 23.0 12.6 55.1 +94.0% Asset -11.1% 21.0 21.0 19.9 61.9 Management Total 463.
Slide 10: Other revenues
Other revenues Consolidated (Eur million) By Quarter Accumulated +3.8% 503.7 485.3 Dividends: 89.3 26.5 205.4 99.0 183.9 186.4 PTF sale: 44.8 21.8 168.9 30 108.4 156.3 154.5 65.5 29.3 143.8 42.6 16.2 20.9 28.2 114.9 75.2 Income from 49.5 Securities 11.7 37.1 31.6 Trading gains 28.6 277.9 258.1 122.0
Slide 11: Operating Costs
Operating Costs Consolidated (Eur million) ∆% By Quarter Accumulated 9M 04 / 9M 03 - 2.9% 1,251.1 1,214.3 153.6 -9.0% 139.8 445.6 435.4 -2.3% - 1.7% 419.3 419.1 412.6 417.4 402.3 406.2 405.7 Depreciation 50.9 51.3 51.4 49.5 46.7 47.0 46.1 651.9 639.1 -2.0% Administrative 149.9 151.0 144.7 155.8 145.
Slide 12: Operating Costs by Operation
Operating Costs % change 3rd Quarter 2004 (Accumulated y-o-y) Domestic NovaBank* Bank Millennium* (Greece) (Poland) Staff -1.1% +17.6% -18.6% in Zlotys (-12.8%) Administrative Costs +0.6% +21.1% -20.2% in Zlotys (-14.6%) Depreciation -3.4% -52.8% -9.4% in Zlotys (-3.0%) Total -0.8% -4.1% -18.3% in Z
Slide 13: Cost to Income Ratio
Cost to Income Ratio Total Efficiency Ratio(1) Staff Costs Ratio(2) (Consolidated, excluding non–recurrent items) (Consolidated, excluding non–recurrent items) - 4.6 pp 63.2% 62.4% 60.2% 57.9% 58.6% - 2.1 pp (*) Domestic Activity 55,0% 54,5% 53,4% 52,6% 53,0% 32.9% 32.3% 31.4% 30.3% 30.9% 3Q 03 4Q 0
Slide 14: Credit and Provisions
Credit and Provisions Pag. 13
Slide 15: Selective Credit Growth
Selective Credit Growth Consolidated (Eur billion) Loans to Customers(Gross) (1) +2.8% ∆% ∆% [+ 3.6% adjusted for the sale of PTF loans in Poland] Sep 04 /Sep 03 Sep 04 /Jun 04 52.0 52.6 53.2 53.1 53.5 +22.0% +4.1% Mortgage 14.2 15.2 15.9 16.6 17.3 (2) Consumer Loans 4.8 4.7 4.7 4.4 -0.8% +0.9% 4.4
Slide 16: Mortgage Loans (Portugal)
Mortgage Loans (Portugal) (Eur million) New Mortgage Production per quarter By Quarter Accumulated Market Share New Production 26.2% 26.3% (year-to-date) +23.4% 2,072.6 1,679.7 +5.9% 865.5 657.1 729.9 685.7 647.7 566.2 465.8 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 9M 03 9M 04 Pag. 15 ! Mortgage bu
Slide 17: Credit Quality
Credit Quality Consolidated (Eur million) Bank of Portugal (*) 217.3% 195.5% Provision coverage > 164.6% 151.1% 151.6% 157.3% 90 days Overdue ratio > 90 1.6% 1.5% 1.5% days 1.4% 1.2% 1.0% 961.2 919.5 < 90 days 160.2 828.6 166.5 89.6 732.8 656.0 75.5 584.2 74.6 0.38% > 90 days 801.0 753.0 738.9 580.5
Slide 18: Domestic and International Credit Quality
Domestic and International Credit Quality (Eur million) Domestic International 142.0% 246.4% Provision 133.8% 218.6% coverage 209.1% 103.6% 97.0% 208.1% > 90 days 80.4% 174.5% Overdue Loans 5.4% 6.3% 1.2% 1.0% 1.0% > 90 days 0.9% 5.8% 0.8% 3.3% 626.4 536.1 2.8% 84.1 525.5 490.7 86.1 75.8 437.1 68.3
Slide 19: Provisions for Loan Losses and Other provisions
Provisions for Loan Losses and Other provisions Consolidated (Eur million) Provision Charges By Quarter Accumulated -1.6% Includes € 54.0 million (Aviso 8/2003) 381.7 Includes € 41.0 375.7 million additional Includes € 12.7 5.2 provision million 39.4 additional provisions 174.7 in Poland 9.9 134.4 1
Slide 20: Provision for Loan Losses and Other Provisions
Provision for Loan Losses and Other Provisions (EUR million) Loan Loss Provision Charges . . . . . . as % of Total Loans 473 Gross Total 95 bp + 127%% - 10.7% provisions as % 88 bp of Loans annualized 376.5 336.3 69 bp 316 378 94.8 12.7 Provisions net of Excl. Extraord. 48 bp Recoveries 208 provisio
Slide 21: Write-offs, New Entries and Credit Recovery
Write-offs, New Entries and Credit Recovery Consolidated (Eur million) Loan Loss Provision Write-offs Net New Entries Credit Recoveries Charges (domestic) (of write-offs credits) 193,4 145,3 106,4 121,2 124,3 111,5 103,6 82,1 70,1 55,5 55,8 51,8 As % of Loan 82 bp 86 bp 88 bp Book(*) 1Q 04 2Q 04 3Q
Slide 22: Customers' Funds
illennium Customers’ Funds Pag. 21 M
Slide 23: Customers' Funds
Customers’ Funds Consolidated (Eur billion) Customers’ funds ∆% 3.1% 30Sep.04 vs. 30Sep.03 • Assets under management • Capitalisation insurance • Structured products 53.1 52.7 51.2 51.4 51.3 +1.4% 20.8 21.3 21.2 20.9 20.9 Off-Balance Sheet 30.2 30.6 30.4 31.8 31.5 +4.3% Deposits 30.Sep.03 31.Dec.03
Slide 24: Evolution per Business Segment
Evolution per Business Segment Pag. 23
Slide 25: Evolution per Business Segment
Evolution per Business Segment (Eur million) Accumulated Net Contribution Allocated Capital Return on Allocated Capital Sept 03 96.6 Sept 03 688 Sept 03 18.8% Domestic Retail Banking Sept 04 141.1 Sept 04 783 Sept 04 24.0% Sept 03 38.0 Sept 03 201 Sept 03 25.3% Private Banking and Asset Management (
Slide 26: Significant Cross-selling potential
Significant Cross-selling potential Current Penetration Rates Mortgage Structured products 19.0% 21% 5.1% 5.9% 6.4% 7.2% 7.3% 7.7% Dec. 02 Dec. 03 Sep. 04 Peer Dec. 02 Dec. 03 Sep. 04 Peer Benchmark Benchmark Credit Cards Overall Penetration Rate (Number of products) 5.8 5.4 45% 3.6 3.8 31.9% 33.5%
Slide 27: Retail Banking (Portugal)
Retail Banking (Portugal) (Eur million) Consistent growth on Retail Banking activity (Portugal) Customer Funds Loans to Customers Operating Revenues (Net Interest Income + Commissions) +4.8% +10.8% +9.2% 22,489 842.3 29,742 771.6 28,367 20,292 30.Sep.03 30.Sep.04 30.Sep.03 30.Sep.04 30.Sep.03 30.Sep
Slide 28: Foreign Activities
illennium Foreign Activities Pag. 27 M
Slide 29: Summary of 3rd Quarter 2004
Summary of 3rd Quarter 2004 Earnings Presentation: Source: Company Earnings announcement as 18th October 2004 Exchange rate: fixed exchange rate was used for comparison purposes (balance sheet: 1€ = 4.3797 Zlotys; P/L: 1€ = 4.6431 Zlotys) Pag. 28
Slide 30: Net Income of Bank Millennium (Poland)
Net Income of Bank Millennium (Poland) (Eur million) Net Income By Quarter Accumulated (*) 27.8 • Includes 19.8 (*) consolidation of PZU. 14.6 Recurrent Profit 7.9 6.5 4.3 3.7 0.8 0.7 0.9 1.2 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 9M 03 9M 04 (*) Includes € 13 million net impact of sale of PTF ca
Slide 31: Key earnings figures
Key earnings figures (Eur million) Net Interest Income + Commissions Operating Costs ∆% +9.3% -11.2% 9m 04 / 9M 03 51.7 [Accumulated Y-o-Y] [Accumulated Y-o-Y] 50.3 45.4 45.2 45.3 (*) 45.8 46.4 45.4 42.6 42.6 41.7 42.5 42.0 37.6 13.2 12.2 13.5 11.6 +14.1% Commissions 11.1 12.8 11.1 Net 33.0 +7.4% 30
Slide 32: Customer Funds and Loans
Customer Funds and Loans (Eur million) Customers’ Funds Loans to Customers Mortgage loans increased 19.5% while remaining credits -12.6%(*) decreased 16.3%(*). -0.7% (*) 2,402 2,274 2,306 2,163 2,100 3,000 3,039 2,978 2,978 2,926 444 444 2,150 2,008 2,031 1,434 1,355 Mortgage 252 267 274 285 301 30.
Slide 33: Illustration of Business Improvement
Illustration of Business Improvement New Mortgage production market Share " New distribution channels 5.0% " New products 2.3% " 31% y-o-y growth on Mortgage Loans (ex- PTF) Dec. 03 Sep. 04 Retail Customer Deposits (Growth y-o-y up to Sep. 04) " Gaining market share in deposits 2.5% " Improved custo
Slide 34: Credit Quality
Credit Quality 122.7% 94.7% Provisions coverage (according to timeliness of payment > 90 days ) 12.4% Non-performing loans 8.9% (according to timeliness of payment - 90 days) 30.Sep.03 30.Sep.04 • Positive impact of Capital Ratio 12.2% PTF transaction 18.5% • Decrease on RWA Pag. 33 ! Credit quality
Slide 35: NovaBank
ZY NovaBank Pag. 34
Slide 36: Net Income of NovaBank (Greece)
Net Income of NovaBank (Greece) (Eur million) Net Income By Quarter Accumulated -3.0 -3.6 -2.7 -3.2 -7.3 -7.5 -10.2 -9.5 -25.0 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 9M 03 9M 04 Pag. 35 ! Quarterly net income stable for the year, and significant improvement versus previous year.
Slide 37: Revenues and Costs
Revenues and Costs (Eur million) Net Interest Income + Commissions Operating Costs +34.0% -7.0% 17.3 22.4 21.5 16.3 19.4 20.0 15.1 2.9 19.0 14.5 3.1 12.9 2.6 2.3 Commissions 2.0 14.5 12.2 12.6 13.2 Net Interest 10.9 Income 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 NIM 3.6% 3.8% 4.3
Slide 38: Customer Funds and Loans
Customer Funds and Loans (Eur million) Retail Customer Funds (*) Loans to Customers (*) 18.7% • Mortgage accounts 1,735 for 50% of Loans 1,675 84.3% 1,552 1,598 1,461 1,190.0 1,041.4 880.5 783.4 645.5 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 (*) Customer Funds include assets under
Slide 39: Seguros e Pensões
SEGUROS E PENSOES Pag. 38
Slide 40: Seguros e Pensões Net Income
Seguros e Pensões Net Income (Eur million) Net Income Net Income Normalised Net Income (per quarter) (per quarter) 72,4 30.1 29.0 26.5 26.2 26.7 24.5 24.1 24.9 23.8 21.6 -5,7 9M03 9M04 3Q03 4Q03 1Q04 2Q04 3Q04 3Q03 4Q03 1Q04 2Q04 3Q04 Pag. 39 ! Quarterly net income in line with previous quarter, acc
Slide 41: Technical Result (Domestic activity)
Seguros e Pensões Technical Result (Domestic activity) (Eur million) Life1) Non-Life2) + 37.4% + 38.2% 142.1 132.9 102.8 96.7 Sept.03 Sept.04 Sept.03 Sept.04 (1) Net of amortisation of 2001 deferred capital gains / losses. (2) Domestic Non-life Technical margin before financial income and non-recurr
Slide 42: Domestic Direct Premiums
Seguros e Pensões Domestic Direct Premiums (Eur million) By Business Accumulated growth compared with homlogous + 10.9% 1,534.7 679.7 period 1,383.6 593.3 - 0.2% Non-Life 594.3 230.3 941.5 + 19.3% 117.9 143.8 129.3 Life 789.3 87.2 46.1 56.7 43.7 C apita l P PR/E R is k M o to r H ealth & Wo rk . M u
Slide 43: Cost Reduction Programme
Seguros e Pensões Cost Reduction Programme (Eur million) - 6,3% 68,9 64,6 General Expenses Staff Costs Set. 03 Set. 04 - 7.4% Number of Employees 2.067 1.932 199.8 185.0 - 12,3% 88,9 77,9 Third Party Supplies + 1,0% 42.0 42.4 Other Administrative Sept. 03 Sept. 04 Costs Note: Excluding restructuring
Slide 44: Evolution of Combined Ratio
Seguros e Pensões Evolution of Combined Ratio Non-life Claims Ratio 73.0% 69.0% Combined Ratio 1) 104.4% 96.3% Sept. 03 Sept. 04 Expense Ratio 31.4% 27.3% Sept. 03 Sept. 04 Sept. 03 Sept. 04 1) Net of Re-insurance. Excludes non-recurrent costs. Pag. 43 ! Improvement on combined ratio to 96.3% reflec
Slide 45: Solvency Capital
Solvency Capital (Eur million) 173.5% (Estimated) 164.8% 152.9% 144.9% Solvency Capital Ratio 613 585 561 116.8% 533 Solvency Capital: 613 433 Capital requirements: 353 Solvency ratio: 173.5% 30.Sep.04 Total Solvency Capital • Equity accounted SeP Value on BCP books 457.7 • Value in Force (net of 61
Slide 46: Delivering on the strategic priorities
Delivering on the strategic priorities Pag. 45
Slide 47: The Bank is delivering on Key Strategic Priorities
The Bank is delivering on Key Strategic Priorities defined in 2003 A leading bank focused on retail distribution in Portugal, Poland and Greece Commit to capital Maximize value of domestic Focus on Poland & Greece discipline franchise as key growth options On the Delivery Path . . . • Sale of Seguro
Slide 48: Capital and Equity Portfolio
Capital and Equity Portfolio Pag. 47
Slide 49: Capital ratios
Capital ratios Consolidated Bank of Portugal Capital Base (BIS) Total Capital 11.3% 11.5% 12.2% 13.1% 5.2% Tier 2 5.1% 4.1% 4.3% 7.9% Tier 1 7.2% 7.2% 7.2% 30.Sept.04 30.Sept.03 30.Sept.04 30.Sept.04 Solvency ratio Proforma including impact of sale of Seguros e Pensões RWA 54.623 (million euros Pag.
Slide 50: Equity Stakes
Equity Stakes (Eur million) Total Equity Exposure as of 30.Sep.04 Book Value Market Value Unrealised Capital losses Investment Stakes (net of provisions) at market value 30.Sep.04 30.Jun.04 30.Sep.04 14.Oct.04 EDP Group 732.2 374.5 (366.0) (357.6) (362.2) Intesa 471.2 380.8 (69.0) (90.4) (72.6) Frie
Slide 51: Financial Statements
Financial Statements Pag. 50
Slide 52: Consolidated Balance Sheet
Consolidated Balance Sheet As at 30 September, 2004 and 2003 Pag. 51
Slide 53: Consolidated Statement of Income
Consolidated Statement of Income As at 30 September, 2004 and 2003 Pag. 52
Slide 54: Hitsalane
Hitsalane PCP, C
Banco Comercial Português — Q3 2004 Earnings Presentation on 6ix