Quarterly Report • Mar 15, 2018
Quarterly Report
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This document is a translation from the Portuguese original "Relatório e Contas Banco BPI 1.º semestre de 2017". In the event of any inconsistency the Portuguese version shall prevail.
1st half 2017
Public held company Registered in Oporto C.R.C. and tax identification under the sole number 501 214 534 Headquarters: Rua Tenente Valadim, n.º 284, 4100-476 Porto, PORTUGAL Share Capital: EUR 1 293 063 324.98 Registered in Oporto C.R.C. and tax identification under the sole number 501 214 534 This page was intentionally left blank.
| (Figures in millions of euros, except where indicated otherwise) | |||
|---|---|---|---|
| Results and profitability | 1st half 17, excl. non-recurring 1 |
1st half 17 | 1st half 16 pro forma |
| Net profit | 187.8 | (101.7) | 105.9 |
| Net profit per share (euros) | 0,129 | (0,070) | 0,073 |
| Weighted average number of shares (in millions) | 1,455.7 | 1,455.7 | 1,450.8 |
| Return on Assets (ROA) (last 12 months) | 1.4% | 0.5% | 1.0% |
| Return on tangible equity (ROTE)2 (last 12 months) | 16.8% | 4.4% | 11.6% |
| Operating income from banking activity | 464.8 | 289.3 | 365.9 |
| Commercial banking income3) | 353.8 | 353.8 | 356.6 |
| Adjusted overhead costs4) | 232.3 | 232.3 | 253.9 |
| Adjusted overhead costs as % of operating income from banking activity (last 12 months) | 65% | 65% | 71% |
| Cost of credit risk5) (last 12 months) | -0.01% | -0.01% | 0.24% |
| Balance sheet, liquidity, risk management and capital | Jun.17 | Dez.16 | |
| Net total assets | 32,751 | 38,285 | |
| Customer loans (gross) | 23,494 | 23,431 | |
| Deposits6) | 20,069 | 19,754 | |
| Total Customer resources | 34,523 | 32,970 | |
| Loan‐to‐deposits ratio | 106% | 106% | |
| Liquidity coverage ratio | 179% | 161% | |
| Credit at risk ratio (IAS/IFRS consolidation perimeter) 7) | 3.6% | 3.7% | |
| Coverage of credit at risk by impairments (IAS/IFRS consolidation perimeter) 8) | 83% | 83% | |
| Total past services pension liabilities | 1,541 | 1,463 | |
| Degree of coverage of pension liabilities 9) | 98% | 98% | |
| Shareholder's equity attributable to BPI shareholders | 2,561 | 2,440 | |
| CRD IV / CRR phasing in | |||
| Common Equity Tier 1 ratio | 11.9% | 11.4% | |
| Total capital ratio | 13.3% | 11.4% | |
| Leverage ratio | 6.7% | 7.6% | |
| CRD IV / CRR fully implemented | |||
| Common Equity Tier 1 Ratio | 10.9% | 11.1% | |
| Total capital ratio | 12.7% | 11.2% | |
| Leverage ratio | 6.0% | 7.4% | |
| Book value per share (euros) | 1,758 | 1,681 | |
| Closing price (euro) | 1,052 | 1,131 | |
| Stock market capitalisation at the end of the period | 1,533 | 1,648 | |
| Distribution network (no.)10) | 531 | 736 | |
| BPI Group staff complement (no.) 11) | 5,406 | 8,157 |
Note: values as reported. The values are presented in the Management Report are "as reported" values, unless stated expressly as pro forma values.
The "pro forma" designation reflects the restatement of the BFA contribution to consolidated profits in accordance with IFRS 5 (see note to the financial statements "1. Financial group").
1) Non-recurring impacts recorded in the first half of 2017: (i) Impact from sale of 2% of BFA's capital and deconsolidation negative by 212.3 M.€; (ii) Costs from early retirement and voluntary termination programme of 77.2 M.€ after taxes (€106.4 M.€ before taxes).
2) Average equity considered in calculating ROTE is deducted from the average balance of intangible assets (average balance in last 12 months: 26.8 M.€ in Jun.17 and 25.2 M.€ in Jun. 16).
3) Operating income from banking activity = Financial margin (RCL) + Income from equity instruments (RCL) + Net commissions income (RCL) + Earnings of associated companies (equity method) (RCL) excluding contributions from equity interests in African banks.
4) Excluding costs from early retirement and voluntary termination programme and (in 2016 only) gain from revision of ACT (Collective Labour Agreement).
5) (Impairment losses and provisions for loans and guarantees ‐ Recovery of loans, interest and expenses) / Average value of the performing loan portfolio in the period
6) Includes retail bonds valued at 95 M.€ in Dec. 16 and at 56 M.€ in Jun. 17.
7) Calculated according to the definition provided for in Bank of Portugal Instruction 23/2011 and considering the IAS/IFRS consolidation perimeter, whereby BPI Vida e Pensões (Life and Pensions) is subject to full consolidation and its portfolio is included in the consolidated loan portfolio (BPI Vida e Pensões is recognised according to the equity method within the scope of Bank of Portugal supervision). Pursuant to Instruction 23/2011 and considering the supervision perimeter, consolidated credit at risk is 838.8 M.€ on 30 June 2017 and the consolidated ratio of credit at risk is 3.8%.
8) Coverage by impairment losses and provisions for loans and guarantees accumulated in the balance sheet and without considering coverage by collaterals associated with these credits.
9) Includes contribution of 75.5 M.€ transferred to pension funds in January 2017.
10) In Dec. 16 includes 191 units related to BFA. In Jun. 17 does not include the BFA distribution network (BFA was recognised by the equity method starting in Jan. 2017).
11) Staff (excludes temporary labour) of subsidiaries consolidated by full consolidation. In Dec. 16 includes BFA staff (2,632 employees).
In the first half of 2017, Banco BPI recorded a consolidated net income, excluding non-recurring impacts, of 188 M.€, a 77% increase from the 106 M.€ recorded during the same period of 2016. Recurring return on tangible equity (recurring ROTE) was 16.8% in the last 12 months (11.4% when excluding the contribution from holdings in African banks).
"As reported" the consolidated net income was negative by 102 M.€ in the first half of 2017, as it was affected by non-recurring negative impacts totalling 290 M.€ (after taxes): 212 M.€ with the sale and deconsolidation of BFA and 77 M.€ with the early retirement and voluntary termination programme.
During the six-month period Banco BPI achieved good commercial results, illustrated by the increase of 1.6 th.M.€ (+4.7%) ytd of customer resources, with growth of 0.3 th.M.€ in deposits and 1.0 th.M.€ in mutual funds, a 3.6% increase in the portfolio of loans to companies in Portugal1 and stabilisation of the mortgage loan portfolio, all of which yielded market share gains (leadership in asset management with 30% share, +2.5% ytd, and ytd increases in market share for loans to companies of +20 bp and in housing loans of +10 bp). The total customer loan portfolio increased 0.3% ytd.
The financial margin fell slightly (yoy and qoq) and net commissions income rose 4.8% yoy. Commercial banking income – an aggregate that includes financial margin, net commissions income and contribution from holdings2, excluding those in African banks, decreased 0.8% yoy.
BPI maintained a path of gradual improvement in operational efficiency levels as a result of the ongoing effort to rationalise and contain costs. Overhead costs excluding non-recurring3 decreased 8.5% (yoy).
During the first half of 2017, BPI completed an early retirement and voluntary termination programme that was announced in April 2017. A total of 617 employees agreed to leave BPI, representing 11% of initial staff. The exit of such employees represented a total cost of 106.4 M.€, which was fully recognised in results for the sixmonth period and will generate annual cost savings of 36 M.€ starting in 2019.
Impairments losses and provisions for loans and guarantees decreased from 35.8 M.€ during the first half of 2016 (0.32% of loan portfolio4) to 16.6 M.€ during the first half of 2017 (0.15% of loan portfolio4). The cost of credit risk – impairments net of recoveries – decreased from 28.6 M.€ (0.25%4) to 7.5 M.€ (0.07%4) in the same period.
The ratio of credit at risk was 3.6% at the end of June 2017 and impairments coverage was 83% without considering associated collateral, and 149% considering impairments and collaterals associated with these credit operations.
BPI has a balanced funding structure and a strong liquidity position. Customer resources on the balance sheet represented 73% of assets, the loan-to-deposits ratio was 106% and the Liquidity Coverage Ratio (LCR) was 179%.
At 30 June 2017, the CET1 ratio fully loaded was 10.9% and the total capital ratio was 12.7%.
At the same date, the phasing-in capital CET1 ratio (2017 rules) was 11.9% and the total capital ratio was 13.3%.
Note: Year-on-year changes calculated in relation to June 2016 pro forma. 1) Does not include loan portfolios of Project Finance and Madrid Branch. 2) Income from equity instruments and earnings of associated companies (equity method).
3) Costs from early retirement and voluntary termination programme. 4) On an annualised basis.
The BPI Group – headed by Banco BPI – is a financial group centred on retail banking businesses in Portugal.
Banco BPI is the fifth largest financial institution operating in Portugal in terms of assets (33 th.M.€), with 9.2% market share in loans and 10.7% in customer resources1) . In Portugal, BPI serves around 2 million customers through a specialised, multi-channel and fully integrated distribution network.
The Commercial Banking business is organised around two main segments: (i) Consumer Retail, Corporate and Business Banking and (ii) Corporate Banking, Project Finance and Institutional Banking, which are served through physical and virtual structures and dedicated teams. Through its distribution network, Banco BPI offers its customers investment funds, capitalisation insurance and pension funds managed by Group subsidiaries. The Bank also offers non-life and life insurance through an Allianz Portugal insurance distribution agreement under
which the BPI Group holds a 35% stake. In credit insurance, the BPI Group holds a 50% interest in COSEC.
The BPI Group is also active in the investment and private equity banking business and holds equity interests in African banks (BFA in Angola and BCI in Mozambique).
| Leading indicators | Amounts in M.€ |
|---|---|
| Jun.17 | |
| Total assets | 32 751 |
| Shareholders' equity attributable to BPI shareholders |
2 561 |
| Gross customer loans | 23 494 |
| Total Customers resources | 34 523 |
| No. of Customers (th.) | 1 949 |
| No. of Employees | 5 406 |
| Distribution network (no.) | 528 |
1) At May 2017.
2) Equity-accounted subsiudiaries.
3) In association with Allianz, which holds 65% of the capital
4) In association with Euler Hermes, a company of Allianz Group.
5) In partnership with Caixa Geral de Depósitos (51%) and a group of Mozambican investors, which together, hold 19% of the share capital
José Villalonga Pons Members
Xavier Coll Escursell Carlos Moreira da Silva
Alternates Armand Reixach de Linares Abel Suárez Busquets
Comissão de Nomeações, Avaliação e Remunerações
Chairman
Tomás Jervell Vogal Lluís Vendrell Pí
Juan Antonio Alcaraz
Chairman Javier Pano Members Cristina Rios Amorim
Carla Bambulo
Chairman Artur Santos Silva Members António Barreto Isabel Jonet José Pena do Amaral Rafael Chueca
Chairman Carlos Osório de Castro
Deputy-Chairman
Agostinho Cardoso Guedes
Secretários Alexandra Magalhães Luís Manuel Amorim
Chairman
Fernando Ulrich Deputy-Chairman
Pablo Forero Calderon António Lobo Xavier
Alexandre Lucena e Vale António Farinha Morais Carla Bambulo Cristina Rios Amorim Francisco Barbeira Gonzalo Gortázar Rotaeche Ignacio Alvarez-Rendueles Javier Pano João Pedro Oliveira e Costa José Pena do Amaral Juan Antonio Alcaraz Juan Ramon Fuertes2) Lluís Vendrell Pí Pedro Barreto Tomás Jervell Vicente Tardio Barutel
Artur Santos Silva
Comissão Executiva do Conselho de Administração
Pablo Forero Calderon
José Pena do Amaral Pedro Barreto João Pedro Oliveira e Costa Alexandre Lucena e Vale António Farinha Morais Francisco Barbeira Ignacio Alvarez-Rendueles Juan Ramon Fuertes2)
Abel António Pinto dos Reis Members
Jorge de Figueiredo Dias Rui Campos Guimarães
Alternates Francisco Javier Olazabal Luis Roque de Pinho Patrício
Revisor Oficial de Contas (até 31 12 2017)
Deloitte & Associados, SROC, S.A.3) Alternate Carlos Luís Oliveira de Melo Loureiro
Revisor Oficial de Contas (de 01 01 2018 a 31 12 2020)
Efective PricewatercooperhouseCoopers & Associados SROC, Lda.4) Alternate
Ana Maria Ávila de Oliveira Lopes Bertrão
Comissão de Auditoria e Controlo Interno
António Lobo Xavier
Members Lluis Vendrell Pí Vicente Tardio Barutel Alfredo Rezende de Almeida
Secretário da Sociedade
João Avides Moreira Alternate Miguel Pessanha Moreira
1) Elected at the General Meeting of Shareholders on 26 April 2017. They began performing their duties on 21 July 2017, the date of the ECB (European Central Bank) decision authorising the performance of such duties.
2) Presented resignation from the office on 4 September 2017.
3) Deloitte & Associados, SROC, S.A. nominated Paulo Alexandre Rosa Pereira Antunes to represent it in the exercise of this position.
4) PricewaterhouseCoopers & Associados SROC, Lda. nominated Aurélio Adriano Rangel Amado to represent it in the exercise of this position.
As of 30 June 2017, the BPI Group had 5 406 employees, 5 309 of whom worked in Portugal and 97 abroad.
During the first half of 2017, the number of employees in the domestic activity fell 59 (-1.1%) to 5,309. Over a one-and-a-half-year span (since Dec. 15), the number of employees decreased by 407 (-7.1%).
BPI completed an early retirement and voluntary termination programme in the first half of 2017 under which 519 employees agreed to leave the group (292 by early retirement and 227 by voluntary terminations), in addition to 98 additional employees to whom the same conditions of the programme were applied. As such, a total of 617 employees agreed to end their employment with the BPI Group.
Of the total number of employees (617) who agreed to end their employment with the BPI Group, 86 of such exits occurred in the first half of 20171. The remaining 531 (9.8% of total staff as of June 2017) will take place during the second half of 2017 (458) and in 2018 (73).
| End of period figures | Average figures | ||||||
|---|---|---|---|---|---|---|---|
| Jun.17 | Dec.16 | Dec.15 | ∆% Jun.17/ Dec.16 |
1st half. 17 | 2016 | ||
| Domestic activity | |||||||
| Banco BPI | 1 | 5 189 | 5 249 | 5 598 | (1.1%) | 5 230 | 5 503 |
| Banco Português de Investimento (BPI) | 2 | 50 | 48 | 52 | 4.2% | 49 | 51 |
| Other subsidiary companies | 3 | 70 | 71 | 66 | (1.4%) | 71 | 68 |
| Domestic activity 1 [= Σ1 to 3] | 4 | 5 309 | 5 368 | 5 716 | (1.1%) | 5 350 | 5 622 |
| Overseas branches and representative offices | 5 | 97 | 157 | 203 | (38.2%) | 125 | 182 |
| Banco de Fomento Angola | 6 | - | 2 632 | 2 610 | (100.0%) | - | 2 621 |
| Total 1 [= Σ4 to 6] | 7 | 5 406 | 8 157 | 8 529 | (33.7%) | 5 475 | 8 425 |
1) Includes fixed-term contracts and excludes temporary employment of persons with no binding work contracts with BPI. At 30 June 2017, the number of Employees with fixed-term contracts in Portugal stood at 25 and in overseas operations was situated at 3. In average terms, in the first half 2017, the number of Employees with fixed-term contracts in Portugal reached 24 and in overseas operations amounted to 3.
On 5 January 2017, BPI sold its 2% stake in BFA to Unitel, after which Banco BPI and Unitel held 48.1% and 51.9%, respectively, of BFA's capital.
After the cited sale of 2% of capital and corresponding governance changes, BPI no longer exercised control over BFA, and, as of such date, the BFA stake began to be recognised according to the equity method and BFA staff (2 632 employees in Jun.2017) were no longer included in BPI Group staff.
1) Some 33 additional employees ended their employment with the BPI Group, such that the total staff declined by 119 during that six-month period (excluding BFA) to 5 406 employees at the end of June 2017.
Banco BPI serves about 2 million customers - individuals, companies and institutional - in Portugal through a specialised, multi-channel and fully integrated distribution network composed of 438 retail branches, 39 investment centres, specialised branches and structures dedicated to the corporate segment (46 centres) and institutional clients (six centres), homebanking service (BPI Net) and telephone banking (BPI Direct).
BPI also has 20 000 commercial partners, four representative offices abroad (Caracas, Geneva, Johannesburg and Newark), two branches in France and a branch in Madrid.
| 30 Jun.17 | |
|---|---|
| Traditional branches | 438 |
| Paris branch (no. branches) | 2 |
| Investment centres | 39 |
| Corporate centres | 52 |
| Automated banking (ATM) | 1,352 |
| Automatic payment terminals (POS) | 30,527 |
| Commercial partners | 20,505 |
| Internet banking (active users): | |
| BPI Net | 800,126 |
| BPI Net Empresas (Corporate Internet | |
| Banking) | 116,795 |
| Telephone banking (active users): | |
| BPI Directo (BPI Direct) | 437,713 |
In July, IMF maintained its forecast for world economic growth at 3.5% for 2017 and 3.6% for 2018. Advanced economies are expected to grow 2.0% this year and 1.9% in 2018, and emerging and developing economies are expected to expand by 4.6% in 2017 and 4.8% in 2018. It should be mentioned that the institution revised its projections for some of the world economy's most important countries. Noteworthy is the downward revision of the US GDP growth rate for 2017 and 2018 by 0.2% and 0.4%, respectively, with a growth rate of 2.1% now expected for both years. Weak performance in the first quarter of the year, and, more significantly, the expectation of a less expansionary fiscal policy than initially expected, contributed to this trend. The IMF also reduced its forecast for this year's growth in the United Kingdom from 2.0% to 1.7% due to weak growth in the first quarter.
Conversely, the expansion of economic activity in the euro area may be more significant than levels forecast by the IMF in April: 0.2% higher to 1.9% in 2017 and 0.1% higher to 1.7% in 2018. Upward revisions were applied to the region's four main economies in both 2017 and 2018, particularly in Spain and Italy. The positive surprise about growth in the first quarter of 2017 and the release of solid macroeconomic indicators suggest that the euro area may grow at a faster pace than initially expected.
According to information from the National Institute of Statistics (INE), the pace of economic growth accelerated to 2.8% in the first half of 2017 as compared to the same period last year. The acceleration of exports of goods and services, particularly tourism services, the resumption of investment and the sustained pace of expansion of private consumption primarily drove this trend. External and internal factors alike contribute to the current scenario. Worthy of mention are the good performance of external economies (particularly the euro zone and Spain); the stabilisation of oil prices at relatively low levels; the favourable external financial environment, particularly interest rates in major markets at minimal historical levels and a low level or risk aversion; internal factors include the return of political stability and a more balanced fiscal policy. Favourable activity in the labour market serves as important support for household consumption. According to the INE, the unemployment rate in 2Q17 was 8.8%, the lowest since 1H09. The employed population has been increasing at a significant
rate of 3.3% y/y in the 1st half of 2017; however, the number of employees remains below that recorded prior to the international financial crisis. The tourism sector has become one of the main drivers of acceleration in activity, leading to contagion effects in other sectors such as real estate and construction. In this context, the following results should be mentioned: the balance of trade surplus from tourism services was 4.8% of GDP in May (one-year moving average), compared to 4.3% in the same period last year. the hotel industry registered 9.3 million guests during the first half of 2017, a 9.7% y/y increase; the unemployment rate in the Algarve region stood at 7.6% in the second quarter of 2017 versus 8.8% nationally; in the first quarter of 2017, the housing price index increased by 7.9% over the same period last year, with approximately 19% more housing transactions.
The economy's financing capacity, which is a combined balance of current and capital accounts balances, stood at 1.5% of GDP in the year ended in the first quarter of 2017, 0.1% above the previous quarter. These developments reflect a trend distinct from institutional residential sectors. Improvements have taken place in the government sector, whose financing needs fell to 1.7% of GDP, and in the non-financial corporate sector, whose financing capacity increased to 0.6% of GDP. Household financing capacity fell to 0.5% of GDP in the first quarter of 2017, reflecting the change in the savings rate to 3.8% as a result of higher growth in final consumption expenditures as compared to income (1.0% and 0.5%, respectively).
Taking into account quarterly values, the government balance stood at around -965.6 M.€ euros in the first quarter of 2017, corresponding to -2.1% of GDP (-3.3% in the same period of the previous year). It should be noted that such government balance in the first quarter of 2017 does not include any impact from the recapitalisation of Caixa Geral de Depósitos.
According to the Bank of Portugal, the public debt ratio stood at 130.5% of GDP in the first quarter of 2017, 1.6% higher than the same period of last year, resulting from an increase in medium- and long-term debt to take advantage of more favourable financing conditions and from expansion of the range of debt eligible for participation in the European Central Bank programme involving the purchase of public debt. The exclusion of central government deposits reduces the ratio to 121.4% of GDP, 0.5% above the level observed in the first quarter of 2016.
Until August 2017, the Treasury issued 12.9 th.M.€ of medium- and long-term debt, including the issuance of 2.2 th.M.€ of FRGB. The average maturity of issues during the period was 8.4 years and the cost of debt issued was 3.0%, 0.5% above 2016. The State has already repaid 16.5 th.M.€ of loans granted by the IMF, reducing the outstanding balance to approximately 10 th.M.€.
The private sector has maintained the deleveraging process. According to the Bank of Portugal, private sector debt represented 142.2% of GDP in the first quarter of 2017 (171.1% at the end of 2012); among individuals, the same ratio was 76.1%, 19.7% less than in September 2009.
Under Article IV, the IMF revised its projections upwards for Portugal in 2017 and 2018 by 0.8% and 0.5%, respectively, to 2.5% and 2%. According to the IMF, activity accelerates in 2017, supported by strong growth in tourism sectors and renewed dynamics generated in the construction sector.
The IMF says that Portugal also has made significant progress in reducing short-term risks. Budgetary performance in 2016 enabled a conclusion of the Excessive Deficit Procedure and the 2017 fiscal deficit target is also likely to be achieved. Notable progress has occurred in the banking system, but the reduction of nonperforming loans and indebtedness of non-financial firms remain as important medium-term challenges. Progress in these areas would support recovery of investment, essential to ensuring stronger growth in the medium term. More sustained growth and an ongoing reduction of public debt have reduced weaknesses arising from high indebtedness and would allow a smoother transition to a less accommodative phase in monetary policy. The government expects to reduce the public deficit to 1.5%,
which is a credible target based on the evolution of public accounts in the first half of 2017 and the upward revision of the growth outlook for the year as a whole.
The second phase of the Caixa Geral de Depósitos recapitalisation plan was completed in March 2017 with public financing of 2.5 th.M.€. The first phase (1.4 th.M.€), included the conversion of contingent convertible bonds (CoCos) into capital. In turn, the sale of Novo Banco is almost complete.
In 2016, the deleveraging process in the Portuguese financial sector continued, with the loans-to-deposit ratio declining to 94.3% in March 2017 (peaking at 158.8% in June 2010) This performance mirrors the fact that the granting of credit remains in a contractionary trend, while deposits have grown moderately. Solvency ratios have improved in the first quarter of 2017: the CET1 ratio was 12.6% and the total solvency ratio stood at 13.9%, up 1.2% and 1.6%, respectively, from the end of 2016. The total ratio of credit at risk improved to 11.8% at the end of 2016 (0.2% below 2015) and the NPL (nonperforming loan) ratio stood at 16.7% (-0.5% below 4Q16).
Funding from the ECB increased to 23.5 B.€, up 5% from the beginning of the year but lower than the 38% increase in the Eurosystem as a whole. Long-term financing operations represent 95% of Portuguese banks' use of the Eurosystem.
In June 2017, loans granted to residents fell by 4.5% y/y, with such reduction extending across all sectors. Loans to non-financial firms and individuals fell by 6.6% and 2.5%, respectively. For the year as a whole, the contractionary scenario is expected to continue, but the decline may be more moderate in light of the rebound in new loans transactions to purchase homes and for consumer purposes.
The persistence of accommodative financial conditions, the cautious management of expectations by monetary authorities and the signs of strengthening of economic activity, especially in the euro area, have been the main factors determining the behaviour of primary prices.
In the foreign exchange market, the euro has appreciated in 2017, with the EUR/USD exchange rate at 1.18 in mid-August, up from 1.03 at the start of the year. Likewise, the euro has appreciated against the pound sterling, with the rate of exchange to the latter currency rising to 0.92 in mid-August from 0.85 at the start of the year. The Brexit issue has played an important role in this context by virtue of eroding the value of the British currency,
In the interbank money market, Euribor rates remain at historical lows in view of the expectation that the ECB will not alter the main refinancing rate before 2019. The levels recorded in mid-August were as follows: -0.329%, - 0.271% and -0.158% for terms of three, six and 12 months, respectively. In the United States, the fed funds rate went from an average target rate of 0.625% to the current average of 1.125%, accompanied by an increase in the three- and six-month USD Libor rate to the highest levels since 2009, 1.315% and 1.456%, respectively.
In the public debt market, yields of the main benchmarks continue to show resistance to an increase, reflecting ultra-accommodative monetary in the euro zone, and some uncertainty in the US concerning the economy. The 10-year treasury yield stood at 2.18% in mid-August, below the level at the beginning of the year and the 2.58% peak in March, and the 10-year Bund yield was around 0.40% in August, down from the July high of 0.6% but considerably above the level observed at the beginning of the year: 0.18%.
In euro area peripheral debt markets, the risk premium narrowed for countries deemed most vulnerable, reflecting greater optimism regarding the evolution of economic activity and the disappearance of risk factors related to the European electoral calendar. Italian debt did not follow this more benign sovereign risk assessment, reflecting concerns about the soundness of some of the country's major banks. In contrast, Portuguese debt benefited the most from this more favourable risk assessment. In this case, in addition to the better-thanexpected economic performance, Fitch also revised its ratings outlook for the country from stable to positive, suggesting that Portugal's risk rating could be revised upwards with the country's return to investment grade status. In mid-August, the 10-year yield was 2.77%, with the benchmark (Bund) spread at around 235 basis points, compared to 3.69% and 350 basis points, respectively, at the beginning of 2017.
In the first half of 2017, BPI recorded a consolidated net loss of 101.7 M.€ due to negative non-recurring impacts of 289.5 M.€ for the six-month period.
Non-recurring impacts on consolidated results for the aforementioned six-month period corresponded to:
Excluding those one-time impacts, consolidated Net income is 187.8 M.€, which corresponds to a 77% increase (+81.9 M.€) from the consolidated net income of 105.9 M.€ recorded during the same six-month period in 2016.
The increase in consolidated net income is above all attributable to the substantial improvement in recurring Net income from the domestic activity of +62 M.€, reaching 88.6 M.€.
The contribution from equity interests in African banks (48.1% of the capital of BFA and 30% of the capital of BCI) was 100.6 M.€ in the first half of 2017, excluding the non-recurring impact (18.2 M.€ compared to the same period in 2016).
Consolidated return on tangible equity (consolidated ROTE), excluding non-recurring impacts, increased to 16.8% during the 12-month period ended June 2017.
Recurring ROTE, excluding the contribution from interests in African banks stood at 11.4% (last 12 months).
| ROTE for the 12 months ended Jun. 17 and Jun. 16 | Amounts in M.€ | |||||
|---|---|---|---|---|---|---|
| Jun. 17 excl. non recurring |
Jun. 17 as reported |
Jun.16 as reported |
||||
| ROTE | ||||||
| Adjusted capital allocated (M.€) 1 |
2 407 | 2 407 | 2 289 | |||
| ROTE | 16.8% | 4.4% | 11.6% | |||
| ROTE excl. contribution from equity interests in African banks |
||||||
| Adjusted capital allocated (M.€) 1) | 1 936 | 1 936 | 1 846 | |||
| ROTE excl. contribution from equity interests in African banks |
11.4% | 6.9% | 6.0% |
1) The average equity considered in calculation of ROTE is deducted from the average balance of intangible assets (average balance in last 12 months: 26.8 M.€ in Jun.17 and 25.2 M.€ in Jun. 16).
Recurring consolidated net income increased 81.9 M.€ compared to the same period of the previous year to 187.8 M.€. The following essentially contributed to this progress:
Certain items income and expenses were reclassified in the Management Report, repositioned in the structure of the income statement according to the format adopted by CaixaBank (BPI consolidating entity). The underlying accounting criteria were not affected by the different form of presentation adopted.
In the "Alternative Performance Indicators" section (page 40), there is a reconciliation of items on the income statement that are reclassified according to the format adopted by CaixaBank with the structure of the income statement presented on page 45.
The presentation of resources and credit also was amended with the same objective of more closely approximating the formats adopted by CaixaBank; the segmentation criteria have not yet been changed.
All occurrences of the aforementioned nature are indicated throughout the Management Report and where appropriate.
1) Impairment losses and provisions for loans and guarantees net of recoveries of loans, interest and expenses.
Items reclassified (RCL) according to format adopted by CaixaBank (BPI consolidating entity). The underlying accounting criteria were not affected by the different form of presentation adopted.
| 1st Half 17 | 1H16 | ||||
|---|---|---|---|---|---|
| As reported |
Non recurring |
Recurring | pro forma2 |
||
| Financial margin (narrow sense) | 1 | 182.3 | 182.3 | 178.9 | |
| Technical result from insurance contracts | 2 | 7.4 | 7.4 | 13.5 | |
| Net commission relating to amortised cost | 3 | 10.3 | 10.3 | 10.6 | |
| Financial margin (RCL) [= 1 to 3] | 4 | 200.1 | 200.1 | 203.0 | |
| Income from equity instruments (RCL) | 5 | 6.4 | 6.4 | 3.9 | |
| Net commission income (RCL) | 6 | 138.3 | 138.3 | 132.0 | |
| Earnings of associated companies (equity method) (RCL) | 7 | 120.7 | 120.7 | 21.4 | |
| Net income on financial operations | 8 | 14.7 | 14.7 | 25.2 | |
| Operating income and expenses | 9 | (191.0) | (175.5) | (15.5) | (19.6) |
| Operating income from banking activity (RCL) [= 4 to 9] | 10 | 289.3 | (175.5) | 464.8 | 365.9 |
| Personnel costs | 11 | (242.0) | (106.4) | (135.6) | (152.3) |
| General administrative costs | 12 | (85.7) | (85.7) | (93.7) | |
| Depreciation and amortisation | 13 | (11.0) | (11.0) | (10.8) | |
| Overhead costs [= 11 to 13] | 14 | (338.7) | (106.4) | (232.3) | (256.8) |
| Net operating income before impairments and provisions [= 10 + 14] | 15 | (49.4) | (281.9) | 232.5 | 109.1 |
| Recovery of loans, interest and expenses | 16 | 9.1 | 9.1 | 7.2 | |
| Impairment losses and provisions for loans and guarantees, net | 17 | (16.6) | (16.6) | (35.8) | |
| Impairment losses and other provisions, net | 18 | 3.0 | 3.0 | (33.9) | |
| Net income before income tax [= 15 to 18] | 19 | (54.0) | (281.9) | 227.9 | 46.6 |
| Income tax | 20 | (47.7) | (7.6) | (40.1) | (22.5) |
| Net income from continuing operations [= 19 + 20] | 21 | (101.7) | (289.5) | 187.8 | 24.1 |
| Net income from discontinued operations | 22 | 163.9 | |||
| Income attributable to non-controlling interests from continuing operations | 23 | (0.0) | (0.0) | (0.0) | |
| Income attributable to non-controlling interests from discontinued operations | 24 | (82.0) | |||
| Net income [= 21 to 24] | 25 | (101.7) | (289.5) | 187.8 | 105.9 |
The consolidated figures for the first half of 2017 for most of the income and expense items as well as for assets and liabilities essentially reflect BPI's domestic activity because the equity interests in African banks (48.1% and 30%, respectively, in the capital of BFA and BCI) are accounted by equity method.
1) Non-recurring impacts recorded in the first half of 2017 correspond to:
Negative impact of 212.3 M.€ from sale of the 2% stake in BFA and deconsolidation (175.5 M.€ recorded in Operating income and expenses and 36.8 M.€ in income tax).
Costs from early retirements and voluntary terminations of 106.4 M.€ after taxes (recorded under Personnel Costs, 10.7 M.€ in the first quarter and 95.6 M.€ in the second quarter) and 77.2 M.€ after taxes.
2) The designation "1st half 2016 pro forma" reflects the restatement of the BFA contribution to consolidated profit or loss according to IFRS Standard 5 (See note to the financial statements "1. Financial group").
Note:
The values presented in the Management Report are "as reported" values, unless stated expressly as pro forma values.
The "pro forma" designation reflects the restatement of the BFA's contribution to consolidated profit or loss in accordance with IFRS 5 (see note to the financial statements "1. Financial group").
In January 2017, BPI's sale to Unitel of a 2% stake in BFA was consummated in order to resolve the situation in which the large exposures limit of Banco BPI was exceeded, resulting from BFA's exposure to Angolan public debt. Following this transaction, Banco BPI and Unitel held 48.1% and 51.9%, respectively, of BFA's capital.
The sale of the 2% stake in BFA and the effects from loss of control, as explained in the note to the financial statements "4.9 Discontinued operations", were recognised in the financial statements of the first quarter of 2017. Accordingly, the financial statements of the first quarter of 2017 reflect:
Additionally, according to international accounting standards, the change in the method for consolidation (deconsolidation) of BFA had the following consequences:
The transfer, between equity captions, of accumulated negative foreign exchange reserves of 182.1 M.€ to results for the financial year, with the resulting negative impact on consolidated profit of 182.1 M.€, but without any impact on equity, to the extent that this item was already deducted from such reserves. The cited reserves reflected adverse changes recorded in the conversion of BFA financial statements from kwanzas to euros, and which were recorded directly under equity, in the foreign exchange reserve.
The increase in the provision for deferred tax liabilities of 36.8 M.€ associated with the potential gain in the 48.1% interest in BFA maintained by BPI.
In summary, the impact from sale of the 2% stake in BFA on consolidated net assets was -30.2 M.€ (gain of 6.6 M.€ and deferred tax liabilities of -36.8 M.€).
The impact on consolidated net income was -212.3 M.€, in addition to the aforementioned 30.2 M.€, a transfer of 182.1 M.€ from negative foreign currency reserves to profit or loss for the financial year.
It should be stated that the cited transfer of 182.1 M.€ in negative foreign exchange reserves to results for the financial year recorded at the time of change in the consolidation (deconsolidation) method constitutes a change of accounting treatment corresponding to a situation that was already recognised and recorded in the financial statements of BPI, which is reflected by the fact that BPI's equity is not allocated in the first quarter of 2017.
| Impact on net income |
Impact on equity attributable to BPI shareholders |
|||||||
|---|---|---|---|---|---|---|---|---|
| Gain on sale of 2% stake | ||||||||
| Value of sale of the 2% BFA stake | 1 | 28.0 | 28.0 | |||||
| (-) Value of BFA equity corresponding to the equity interest | 2 | (18.7) | (18.7) | |||||
| Pre-tax capital gain [= 1 + 2] |
3 | 9.3 | 9.3 | |||||
| (-) Capital gains taxes | 4 | (2.7) | (2.7) | |||||
| Capital gain on sale of 2% stake (after taxes) [= 3 + 4] | 5 | 6.6 | 6.6 | |||||
| Deferred taxes on the potential value in the 48.1% interest in BFA retained by BPI | 6 | (36.8) | (36.8) | |||||
| Recognition in the income statement of (cumulative) foreign exchange differences arising from conversion to euros of the 50.1% BFA stake |
7 | (182.1) | - | |||||
| Total impact [=5 + 6 + 7] | 8 | (212.3) | (30.2) |
Regarding the quarterly evolution of recurring net income, the 7.7 M.€ decline in Net income in the second quarter of 2017 (90.0 M.€) from the first quarter (97.7 M.€) is explained by:
growth in net commissions income (+6.1 M.€) and in earnings of associated companies (equity method) (+8.4 M.€), while the financial margin declines by 3.2 M.€, affected by interest cost (4 M.€) from Tier II sovereign debt issued at the end of March;
Overhead costs increased 4.3 M.€ (+3.8%) compared to the first quarter;
Items reclassified (RCL) according to format adopted by CaixaBank (BPI consolidating entity). The underlying accounting criteria were not affected.
| Recurring | As reported | 2Q16 pro | 1Q16 pro | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 2Q17 | 1Q17 | 2Q17 | 1Q17 | 4Q16 3Q16 pro forma2 |
forma2) | forma2) | |||
| Financial margin (narrow sense) | 1 | 90.1 | 92.3 | 90.1 | 92.3 | 94.2 | 91.1 | 92.8 | 86.1 |
| Technical result from insurance contracts | 2 | 3.8 | 3.6 | 3.8 | 3.6 | 5.7 | 5.4 | 5.6 | 7.9 |
| Net commission relating to amortised cost | 3 | 4.6 | 5.8 | 4.6 | 5.8 | 5.4 | 5.3 | 5.1 | 5.4 |
| Financial margin (RCL) [= 1 to 3] | 4 | 98.5 | 101.6 | 98.5 | 101.6 | 105.3 | 101.8 | 103.6 | 99.4 |
| Income from equity instruments (RCL) | 5 | 6.3 | 0.1 | 6.3 | 0.1 | 4.6 | 0.0 | 3.9 | 0.0 |
| Net commission income (RCL) | 6 | 72.2 | 66.1 | 72.2 | 66.1 | 74.5 | 66.3 | 67.4 | 64.6 |
| Earnings of associated companies (equity method) (RCL) | 7 | 64.6 | 56.1 | 64.6 | 56.1 | 0.8 | 4.0 | 15.8 | 5.6 |
| Net income on financial operations | 8 | 7.1 | 7.7 | 7.1 | 7.7 | 17.7 | 6.1 | 28.7 | (3.6) |
| Operating income and expenses | 9 | (15.0) | -0,462 | (15.0) | (176.0) | (3.2) | (1.0) | (18.3) | (1.2) |
| Operating income from banking activity (RCL) [=4 to 9] | 10 | 233.6 | 231.2 | 233.6 | 55.6 | 199.6 | 177.3 | 201.1 | 164.8 |
| Personnel costs | 11 | (68.4) | (67.2) | (164.1) | (77.9) | (79.8) | (76.0) | (78.3) | (74.0) |
| General administrative costs | 12 | (44.3) | (41.4) | (44.3) | (41.4) | (29.7) | (45.2) | (48.9) | (44.8) |
| Depreciation and amortisation | 13 | (5.5) | (5.5) | (5.5) | (5.5) | (5.4) | (5.2) | (5.3) | (5.5) |
| Overhead costs [= 11 to 13] | 14 | (118.3) | (114.0) | (213.9) | (124.7) | (114.8) | (126.3) | (132.5) | (124.2) |
| Net operating income before impairments and provisions [= 10 + 14] |
15 | 115.3 | 117.2 | 19.7 | (69.1) | 84.8 | 50.9 | 68.6 | 40.5 |
| Recovery of loans, interest and expenses | 16 | 2.9 | 6.2 | 2.9 | 6.2 | 3.1 | 3.4 | 3.3 | 3.9 |
| Impairment losses and provisions for loans and guarantees, net |
17 | (16.7) | 0.1 | (16.7) | 0.1 | 3.9 | (1.1) | (15.6) | (20.1) |
| Impairment losses and other provisions, net | 18 | (0.6) | 3.5 | (0.6) | 3.5 | 2.5 | (5.1) | (30.6) | (3.3) |
| Net income before income tax [= 15 to 18] | 19 | 100.9 | 127.0 | 5.3 | (59.3) | 94.3 | 48.2 | 25.6 | 21.0 |
| Income tax | 20 | (10.9) | (29.2) | 15.3 | (63.1) | (6.5) | (15.8) | (9.0) | (13.4) |
| Net income from continuing operations [= 19 + 20] | 21 | 90.1 | 97.8 | 20.6 | (122.3) | 87.8 | 32.4 | 16.6 | 7.6 |
| Net income from discontinued operations | 22 | 84.8 | 89.0 | 87.2 | 76.6 | ||||
| Income attributable to non-controlling interests from continuing operations |
23 | (0.0) | (0.0) | (0.0) | (0.0) | (0.0) | (0.0) | (0.0) | (0.0) |
| Income attributable to non-controlling interests from discontinued operations |
24 | (42.3) | (44.4) | (43.6) | (38.4) | ||||
| Net income [= 21 to 24] | 25 | 90.0 | 97.7 | 20.6 | (122.3) | 130.3 | 77.0 | 60.2 | 45.8 |
1) Impairment losses and provisions for loans and guarantees net of recoveries of loans, interest and expenses.
2) The "pro forma" designation reflects the restatement of the BFA contribution to consolidated profit or loss in accordance with IFRS 5 (see note to the financial statements "1. Financial group").
Recurring operating income from banking activity was 464.8 M.€ in the first half of 2017. The increase relative to the pro forma operating income from banking activity in the same period of 2016 (365.9 M.€) is in large part explained by the recognition according to the equity method of BFA contribution to the first half 2017 net income, following the sale of the 2% stake in BFA at the beginning of the year. In the pro forma income statement for the first half of 2016, the BFA contribution was reclassified to net income from discontinued operations1.
On a comparable basis2, recurring operating income from banking activity was up 16.5 M.€ (+3.7%) from the same period of the previous year.
Commercial banking income – which includes items of financial margin, net commission income, income from equity instruments and earnings of associated companies (equity method), excluding the contribution from equity interests in African banks – fell slightly (-0.8%) to 353.8 M.€.
Financial margin narrow sense increased 1.9% yoy (+3.4 M.€) in the first half of 2017, supported by improvement in the intermediation margin (margin between interest income from the loan portfolio and the cost of deposits), which increased 5.3% yoy (+9.2 M.€). It bears mentioning that the financial margin narrow sense was negatively affected by the 4 M.€ in interest recorded in the second quarter of 2017 related to subordinated Tier II debt issued at the end of March.
The relevant factor for the increase in the intermediation margin was the reduction of average cost of term deposits, which more than offset the narrowing of loan spreads, in a context of stabilisation of the loan portfolio with the moderate recovery of demand for loans. The unitary intermediation margin increased 0.09% from 1.67% in the first half of 2016 to 1.76% in the first half of 2017.
The financial margin, which includes both financial margin narrow sense and the Technical result of insurance contracts and Net commission relating to amortised cost, fell 1.4% yoy (-2.9 M.€).
| Financial margin (RCL) | Amounts in M.€ | |||||||
|---|---|---|---|---|---|---|---|---|
| Jun. 17 | Jun. 16 pro forma | |||||||
| Average balance |
Average rate (%) |
Interest | Average balance |
Average rate (%) |
Interest | yoy | ||
| Loans to customers | 1 | 20 929 | 1.80 | 187.2 | 20 705 | 1.96 | 201.8 | -7.2% |
| Customer deposits1) | 2 | 19 749 | 0.04 | 3.6 | 19 065 | 0.29 | 27.4 | -86.8% |
| Intermediation margin | 3 | 1.76 | 183.6 | 1.67 | 174.3 | 5.3% | ||
| Other income and expenses | 4 | -1.3 | 4.6 | - | ||||
| Financial margin narrow sense [= 3 + 4] | 5 | 182.3 | 178.9 | 1.9% | ||||
| Technical result of insurance contracts | 6 | 7.4 | 13.5 | -44.9% | ||||
| Net commission relating to amortised cost | 7 | 10.3 | 10.6 | -2.0% | ||||
| Financial margin [= 5 to 7] | 8 | 200.1 | 203.0 | -1.4% |
1) Deposits cheques and orders payable and other resources.
The reduction of the financial margin is essentially explained by the following factors:
With positive impact,
the reduction of the average cost of term deposits, from 0.58% in the first half of 2016 to a value close to zero
(0.08%) in the first half of 2017, having generated a positive price effect of roughly 25 M.€.
With negative impact,
the reduction of loans spreads in the corporate and small businesses segments, particularly in the lower risk segments. The average spread of the loan portfolio
2) Pro forma operating income from banking in the first half of 2016 is added to the BFA contribution for results that are recorded in the items of results corresponding to discontinued operations.
1) The contribution from BFA to consolidated net income (after taxes) was recorded on the Income Statement under "Net income from discontinued activities", and deducted from "Income attributable to non-controlling interests from discontinued operations."
declined by 0.16% and created a negative price effect of approximately 15 M.€.
It should be noted that the financial margin continued to be penalised by the Euribor rate's historic lows at levels
close to zero or even negative, directly reflecting in the contraction of the average margin for demand deposits. The securities portfolio also has made a small contribution to the financial margin, reflecting the low yields for short-term public debt in the primary market, particularly Treasury Bills.
The following is noteworthy with respect to the financial margin in the second quarter of 2017 (compared to the previous quarter):
| Financial margin (RCL) Amounts in M.€ |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2Q17 | 1Q17 | 4Q16 | 3Q16 pro forma |
2Q16 pro forma |
1Q16 pro forma |
qoq 2Q17 / 1Q17 |
|||||
| Customer Loans | 1 | 93.3 | 93.9 | 94.4 | 96.4 | 99.5 | 102.3 | -0.6% | |||
| Average balance | 2 | 20,978 | 20,879 | 20,811 | 20,843 | 20,796 | 20,615 | 0.5% | |||
| Average rate (%) | 3 | 1.78 | 1.81 | 1.81 | 1.84 | 1.92 | 1.99 | ||||
| Customer Deposits1) | 4 | 1.6 | 2.0 | 3.3 | 6.4 | 9.3 | 18.1 | -20.2% | |||
| Average balance | 5 | 19,886 | 19,611 | 19,839 | 19,579 | 19,068 | 19,062 | 1.4% | |||
| Average rate (%) | 6 | 0.03 | 0.04 | 0.07 | 0.13 | 0.20 | 0.38 | ||||
| Intermediation margin [= 1 - 4] | 7 | 91.7 | 91.9 | 91.1 | 90.1 | 90.2 | 84.1 | -0.2% | |||
| Unitary intermediation margin (%) [= 3 - 6] | 8 | 1.75 | 1.77 | 1.74 | 1.72 | 1.72 | 1.61 | ||||
| Other2)) | 9 | 6.8 | 9.8 | 14.2 | 11.7 | 13.4 | 15.2 | -30.7% | |||
| Financial margin [= 7 + 9] | 10 | 98.5 | 101.6 | 105.3 | 101.8 | 103.6 | 99.4 | -3.1% |
1) Deposits cheques and orders payable and other resources.
2) Includes technical result of insurance contracts, Net commission relating to amortised cost and other.
Net commission income increased 4.8% (+6.3 M.€) from the same six-month period in 2016.
Contributions to this trend stemmed from the 3.2% (+2.7 M.€) increase in bank commissions and the 21% increase (+4.2 M.€) in asset management fees due to strong expansion of the volume of funds under management.
It should be noted that the year-on-year evolution of asset management fees is partially influenced by the deconsolidation of the BPI Alternative Fund: Iberian Equities Long/Short Fund (Lux) starting at the end of March 2017, as a result of BPI having held less than 20% of the units of this fund (until then the fund was fully consolidated1). On a comparable basis, considering the deconsolidation of such fund, asset management fees increased 11.7% (+2.7 M.€) from the same period of 2016.
| Net commission income (RCL) | Amounts in M.€ | |||
|---|---|---|---|---|
| 1H17 | 1H16 pro forma |
yoy | ||
| Bank commissions | 1 | 85.7 | 83.1 | 3.2% |
| Insurance Intermediation 2 | 2 | 28.6 | 29.2 | -1.8% |
| Asset management | 3 | 24.0 | 19.8 | 21.1% |
| Total [= 1 to 3] | 4 | 138.3 | 132.0 | 4.8% |
| Pro memoria: | ||||
| Gross margin on unit links | 5 | 6.4 | 7.1 | -8.7% |
In the second quarter of 2017, Net commission income grew by 9.2% from the previous quarter, with increases of 5.6% in banking commissions, 2.8% in insurance intermediation commissions and 33% in asset management (+9.5% on a comparable basis, considering deconsolidation of the BPI Alternative Fund).
| Net commission income (RCL) Amounts in M.€ |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2Q17 | 1Q17 | 4Q16 | 3Q16 pro forma |
Pro forma 2Q16 |
Pro forma 1Q16 |
qoq 2Q17 / 1Q17 |
|||||
| Bank commissions | 1 | 44.0 | 41.7 | 47.1 | 42.1 | 42.7 | 40.4 | 5.6% | |||
| Insurance intermediation2 | 2 | 14.5 | 14.1 | 15.4 | 14.4 | 14.5 | 14.6 | 2.8% | |||
| Asset management | 3 | 13.7 | 10.3 | 11.9 | 9.8 | 10.2 | 9.6 | 32.6% | |||
| Total [= 1 to 3] | 4 | 72.2 | 66.1 | 74.5 | 66.3 | 67.4 | 64.6 | 9.2% | |||
| Pro memoria: | |||||||||||
| Gross margin on unit links | 5 | 3.3 | 3.1 | 3.1 | 3.3 | 3.4 | 3.6 | 6.4% |
1) In the first half of 2016 and the first quarter of 2017, 3.6 M.€ in net commissions were cancelled, in addition to 2.2 M.€ in the consolidation of such fund.
2) Includes gross margin on unit links.
The contribution from associated companies recognised by the equity method totalled 120.7 M.€ in the first half of 2017.
The contribution from associated companies, excluding equity interests in African banks, was 9.0 M.€, down 8.7 M.€ from the same period in 2016. This reduction is mainly explained by the decrease in Unicre's contribution, which in the first half of 2016 benefited from a one-time gain of 8.6 M.€ resulting from the acquisition of Visa Europe by Visa Inc.
The contribution from equity interests in African banks totalled 111.7 M.€1 in the first half of 2017, of which 106.7 M.€ are derived from the 48.1% stake in BFA in Angola, which began to be recognised by the equity method at the start of the year, while 5.1 M.€ are derived from the 30% stake in BCI in Mozambique.
| companies (equity method) (RCL) | Amounts in M.€ | |||
|---|---|---|---|---|
| In M.€ | 1H17 | 1H16 pro forma |
yoy | |
| Insurers: [= 2 + 3] | 1 | 6.3 | 6.9 | -8.9% |
| Allianz Portugal | 2 | 4.3 | 4.9 | -12.2% |
| Cosec | 3 | 2.1 | 2.1 | -1.1% |
| Unicre2 | 4 | 2.7 | 10.8 | -74.8% |
| Inter-Risk | 5 | -0.1 | 0.0 | s.s. |
| Banco de Fomento Angola | 6 | 106.7 | - | - |
| Banco Comercial de Investimento |
7 | 5.1 | 3.6 | 39.2% |
| Total [= 2 to 7] | 8 | 120.7 | 21.4 | s.s. |
In the second quarter of 2017, the earnings of associated companies recognised by equity method was 64.6 M.€, 8.4 M.€ more than in the previous quarter.
The contribution from associated companies, excluding interests in African banks, totalled 4.6 M.€ (+0.2 M.€ from 1Q 17).
| Earnings of associates companies (equity method) | Amounts in M.€ | |||||||
|---|---|---|---|---|---|---|---|---|
| In M.€ | 2Q17 | 1Q17 | 4Q16 | 3Q16 pro forma |
Pro forma 2Q16 |
Pro forma 1Q16 |
qoq 2Q17 / 1Q17 |
|
| Insurers: [= 2 + 3] | 1 | 3.4 | 3.0 | 0.3 | 0.7 | 4.0 | 2.9 | 14.2% |
| Allianz Portugal | 2 | 2.5 | 1.8 | -1.1 | 0.0 | 3.0 | 1.9 | 39.8% |
| Cosec | 3 | 0.9 | 1.2 | 1.3 | 0.7 | 1.1 | 1.0 | -24.6% |
| Unicre3 | 4 | 1.3 | 1.5 | 0.0 | 1.5 | 9.6 | 1.2 | -13.8% |
| Inter Risco | 5 | -0.0 | -0.0 | 0.0 | 0.0 | -0.0 | 0.0 | s.s. |
| Banco de Fomento Angola | 6 | 57.6 | 49.0 | - | - | - | - | 17.6% |
| Banco Comercial de Investimento | 7 | 2.3 | 2.7 | 0.5 | 1.8 | 2.2 | 1.4 | -14.3% |
| Total [= 2 to 7] | 8 | 64.6 | 56.1 | 0.8 | 4.0 | 15.8 | 5.6 | 15.0% |
1)The contribution from equity interests in African banks, excluding the impact from sale of the 2% stake in BFA and deconsolidation, was 100.6 M.€ in the first half of 2017 (96.0 M.€ from BFA and 4.6 M.€ from BCI), because deferred taxes are charged to results recognised by the equity method (recorded under "Income tax") related to distributable results.
3) In the second quarter of 2016 includes 8.6 M.€ from sale of the stake in Visa Europe.
2) In the first half of 2016 includes 8.6 M.€ from sale of the stake in Visa Europe. An additional gain of 22.9 M.€ (16.2 M.€ after taxes) was recorded in net income on financial operations in the first half of 2016.
Net income on financial operations was 14.7 M.€ in the first half of 2017.
During the same period in 2016, net income on financial operations, in the amount of 25.2 M.€, includes a gain from financial assets available for sale of 22.9 M.€ (before taxes)1, with the disposal of a stake in Visa Europe, under the framework of a public offering launched by Visa Inc. concerning Visa Europe.
In the second quarter of 2017, net income on financial operations was 7.1 M.€ (-0.6 M.€ from the previous quarter).
The item "Operating income and expenses" is -15.5 M.€ in the first half of 2017, excluding the impact from sale of the 2% stake in BFA and deconsolidation. This amount essentially refers to cost items: contribution to the Single Resolution Fund under the Single European Resolution Mechanism (-11.4 million), contribution to the National Resolution Fund (-3.9 million), levies and donations (-1.5 M.€) and taxes (-2.7 M.€).
Under the item "Operating income and expenses", there was also a value of -175.5 M.€ associated with sale of the 2% stake in BFA and deconsolidation, such that the "as reported" value of the item is -191.0 M.€ for the first half of 2017.2
| Net operating income and charges | Amounts in M.€ | ||||
|---|---|---|---|---|---|
| 1H17 | 1H16 pro forma |
||||
| Annual contributions to the deposit guarantee fund |
1 | (0.0) | (0.0) | ||
| Contribution to the National Resolution Fund |
2 | (3.9) | (3.2) | ||
| Contribution to the European Resolution Fund |
3 | (11.4) | (14.9) | ||
| Levies and donations | 4 | (1.5) | (1.8) | ||
| Taxes | 5 | (2.7) | (3.2) | ||
| Results in non-financial assets | 6 | 2.8 | 1.1 | ||
| Other | 7 | 1.2 | 2.5 | ||
| Subtotal (recurring) [= 1 to 7] | 8 | (15.5) | (19.6) | ||
| Impact from sale of 2% of BFA and deconsolidation2 |
9 | (175.5) | - | ||
| Total "as reported" [= 9 + 10] | 10 | (191.0) | (19.6) | ||
| Pro memoria: | |||||
| Extraordinary Contribution on the Banking Sector |
11 | (7.1) | (11.1) |
Note: The Extraordinary Contribution concerning the Banking Sector is recorded under "Income tax". With the creation of the National Resolution Fund (Decree-Law no. 31-A/2012, of 10 February), the extraordinary contribution concerning the banking sector has been allocated to funding of the Resolution Fund.
In the second quarter of 2017 the item "Operating income and expenses" is -15.0 M.€ (in the previous quarter, with the value excluding the impact from sale of the 2% stake in BFA and deconsolidation was -0.5 M.€) due to the accounting in that quarter for total annual contributions to the national and European resolution funds.
| Operating income and expenses Amounts in M.€ |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2Q17 | 1Q17 | 4Q16 | 3Q16 pro forma |
2Q16 pro forma |
1Q16 pro forma |
|||||
| Operating income and expenses (recurring) | 1 | (15.0) | (0.5) | (3.2) | (1.0) | (18.3) | (1.2) | |||
| Impact from sale of the 2% stake in BFA and deconsolidation |
2 | 0.0 | (175.5) | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Total "as reported" [= 1 + 2] | 3 | (15.0) | (176.0) | (3.2) | (1.0) | (18.3) | (1.2) |
1) Gain of 16.2 M.€ after taxes. Additionally, the contribution from the stake in Unicre, recognised by the equity method, includes a gain of 8.6 M.€ after taxes related to the acquisition of Visa Europe by Visa Inc.
2) The total impact on consolidated net income from sale of the 2% stake in BFA and deconsolidation was -212.3 M.€ in the first half of 2017. The value of - 175.5 M.€ recorded under "Operating income and expenses" also includes deferred liabilities of 36.8 M.€, recorded under "Income tax".
Recurring overhead costs– recurrent personnel costs, General administrative costs, depreciation and amortisation – fell by 8.5% (-21.6 M.€). Recurring personnel costs decreased by 9.2 (-13.8 M.€), General administrative costs fell by 8.5% (-8.0 M.€) and amortisation and provisions increased by 1.8%, all compared to the same period in 2016.
The described evolution of costs essentially reflects the positive impact (savings) from rationalisation and optimisation measures implemented in 2016, which
involved the closure of 50 branches (8.5% reduction in distribution network in Portugal) and departure from the Group of 394 employees (-6.7%), primarily through early retirement.
BPI therefore continues to show an improving trend in efficiency levels. The ratio of "Adjusted overhead costs1 as percentage of commercial banking income2" has improved (reduction) by 6.6 p.p., from 71% in June 2016 to 65% in June 2017 (last 12 months).
| Overhead costs | Amounts in M.€ | |||
|---|---|---|---|---|
| 1H17 | 1H16 pro forma |
yoy | ||
| Personnel costs, excluding non-recurring costs | 1 | 135.6 | 149.4 | -9.2% |
| General administrative costs | 2 | 85.7 | 93.7 | -8.5% |
| Depreciation and amortisation | 3 | 11.0 | 10.8 | 1.8% |
| Overhead costs, excluding non-recurring [= 1 to 3] | 4 | 232.3 | 253.9 | -8.5% |
| Costs from early retirements and voluntary terminations and (in 2016 only) gain from revision of ACT (Collective Labour Agreement) |
5 | 106.4 | 2.9 | s.s. |
| Overhead costs, as reported [=4 + 5] | 6 | 338.7 | 256.8 | 31.9% |
| Adjusted overhead costs1 as % of commercial banking income2 (last 12 months) | 7 | 65% | 71% | -6.6% |
In the first half of 2017, BPI completed an early retirements and voluntary terminations programme announced in April 2017, under which 519 employees agreed to leave the Group (292 by early retirement and 227 by voluntary terminations), in addition to 98 additional employees to whom the same conditions of the programme were applied.
As such, a total of 617 employees agreed to leave the Group, representing 11% of initial personnel. The cost of such outgoing personnel, corresponding to 106.4 M.€, was fully recognised in the results for the first half of 2017.
The positive impact on results, with an estimated reduction in annual costs of 36 M.€, will only be fully realised in 2019. Of the total number of employees (617) who agreed to end their employment with the BPI Group, 86 of such exits occurred in the first half of 20173. The remaining 531 (9.8% of personnel in June 2017) will occur in the second half of 2017 (458) and in 2018 (73).
The "as reported" overhead costs, including the cost of 106.4 M.€ corresponding to the aforementioned early retirements and voluntary terminations, totalled 338.7 M.€.
1) Overhead costs excluding costs with early retirements and voluntary terminations and (in 2016 only) gain arising from revision of the CBA.
2) Financial margin, net commission income, income from equity instruments and earnings of associated companies (equity method), excluding the contribution from equity interests in African banks.
3) Some 33 additional employees ended their employment with the BPI Group, such that total personnel declined by 119 during that six-month period to 5,406 employees at the end of June 2017.
Recurring overhead costs in the second quarter of 2017 increased 4.3 M.€ as compared to the previous quarter.
Recurring personnel costs increased by 1.3 million (+1.9%) and General administrative costs were up 3.0 M.€.
| Overhead costs | Amounts in M.€ | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2Q17 | 1Q17 | 4Q16 | 3Q16 pro forma |
2Q16 pro forma |
1Q16 pro forma |
Qoq 2Q17 / 1Q17 |
|||||
| Personnel costs, excluding non-recurring costs | 1 | 68.4 | 67.2 | 70.5 | 71.3 | 76.0 | 73.4 | 1.9% | |||
| General administrative costs | 2 | 44.3 | 41.4 | 29.7 | 45.2 | 48.9 | 44.8 | 7.2% | |||
| Depreciation and amortisation | 3 | 5.5 | 5.5 | 5.4 | 5.2 | 5.3 | 5.5 | 1.1% | |||
| Overhead costs, excluding non-recurring [= 1 to 3] | 4 | 118.3 | 114.0 | 105.5 | 121.7 | 130.3 | 123.6 | 3.8% | |||
| Costs from early retirements and voluntary terminations and (in 2016 only) gain from revision of Collective Labour Agreement (ACT) |
5 | 95.6 | 10.7 | 9.3 | 4.7 | 2.3 | 0.6 | s.s. | |||
| Overhead costs, as reported [=4 + 5] | 6 | 213.9 | 124.7 | 114.8 | 126.3 | 132.5 | 124.2 | s.s. |
The present value of the Bank Employees' pension liabilities for past services totals 1 541 M.€ at the end of June 2017, a value that includes the increase in liabilities arising from early retirement agreed upon during the six-month period.
The net assets of the Employees' pension funds were 1 504 M.€, which ensured coverage of 97.6% of pension liabilities.
| Employees' pension liabilities and pension funds | Amounts in M.€ | ||
|---|---|---|---|
| 30 Jun. 17 | 31 Mar. 17 | 31 Dec. 16 | |
| Total past service liabilities | 1,541 | 1,462 | 1,463 |
| Net assets of the pension funds | 1,504 | 1,463 | 1,431 (1) |
| Degree of coverage of pension liabilities | 97.6% | 100.1% | 97.8% |
| Discount rate | 2.08% | 2.00% | 2.00% |
| Pensionable salary increase rate | 1.00% | 1.00% | 1.00% |
| Pension increase rate | 0.50% | 0.50% | 0.50% |
| Mortality table: Male | TV 88/90 | TV 73/77 – 2 years2) | |
| Mortality table: Female | TV 88/90 – 3 years2) | TV 88/ 90 – 3 years2) |
1) Includes contribution of 75.5 M.€ transferred to pension funds in January 2017.
2) For the covered population, an age of 2 years for men and 3 years for women, respectively, below the actual age of beneficiaries is considered, which corresponds to an assumption of higher life expectancy.
In the first half of 2017, the Bank's pension funds recorded a non-annualised return of 6.8%, which was above the discount rate and resulted in an actuarial deviation in revenue of 78.5 M.€.
In June 2017, Banco BPI adopted a more conservative mortality table for men (TV 88/90), resulting in an increase of 63.4 M.€ in pension liabilities (actuarial negative deviation). The mortality table becomes the same as the table adopted for women, whereas in the case of the latter (women) the Bank considers an age of three years lower than the effective age of beneficiaries, which is equivalent to consider a higher life expectancy.
Also in June, the Bank began to use the CDS AA curve to determine the discount rate. The value of the discount rate is adjusted by the values observed in the market at the end of the period. The change in the cited criteria yielded a change in the discount rate from 2.00% to 2.08%, reducing liabilities by 22.7 M.€.
The balance of (cumulative) actuarial deviations improved from -244.0 M.€ at the end of 2016 to - 209.3 M.€ at the end of June 2017.
The actuarial surpluses of 34.7 M.€ are mainly due to the positive deviation in the fund's return of 78.5 M.€, which offset the negative deviation of 40.7 M.€ from the change in actuarial assumptions (change in the mortality table for men and reduction of the discount rate).
| in the 1st half of 2017 | Amounts in M.€ | |||
|---|---|---|---|---|
| Total actuarial deviations at 31 Dec. 16 | 1 | (244.0) | ||
| Change of assumptions1) | 2 | (40.7) | ||
| Deviation in pension funds income | 3 | 78.5 | ||
| Other | 4 | (3.1) | ||
| Total actuarial deviations at 30 Jun. 17 [= 1 to 3] |
5 | (209.3) |
Note: actuarial deviations are recognised directly in shareholders' equity, according to IAS 19.
1) Includes change in mortality table and discount rate.
Total impairment and provisions in the period, net of Recovery of loans, interest and expenses, were 4.5 M.€ in the first half of 2017 and corresponded to:
Impairment losses and provisions for loans and guarantees declined by 35.8 M.€ in the first half of 2016 to 16.6 M.€ in same period of 2017. As a percentage of the average balance of the loan portfolio, in annualised terms, Impairment losses and provisions for loans and guarantees declined from 0.32% in the first half of 2016 to 0.15% in the first half of 2017.
This reduction was due to an improvement in the overall loan portfolio quality indicators, reduction in the flow of new situations with evidence of impairment and maintenance of a high level of impairment coverage.
In the first half, recovery of loans, interest and expenses reached 9.1 M.€ (7.2 M.€ in the same six-month period in 2016).
The cost of credit risk2 stood at 7.5 M.€ in the first half of 2017, which corresponded to 0.07% of the average loan portfolio, in annualised terms, an amount significantly below its average value of 0.29% over the past 15 years, excluding maximum values recorded in 2012 and 20133.
1) Net of recoveries of loans.
2) Impairment losses and provisions for loans and guarantees, net of recoveries of loans, interest and expenses.
3) Maximum values of 0.91% in 2012 and 0.98% in 2013.
| 1st Half 17 | 1st Half 16 pro forma | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Impair ments |
as % loan | portfolio 1) Cost of risk 2) | as % loan portfolio 1) |
Impair ments |
as % loan portfolio 1) |
Cost of risk 2) |
as % loan portfolio 1) |
||
| Loans to individuals | 1 | 0.5 | 0.01% | -2.3 | -0.04% | 1.4 | 0.02% | -1.0 | -0.02% |
| Mortgage loans | 2 | -1.8 | -0.03% | -2.8 | -0.05% | -2.4 | -0.04% | -3.4 | -0.06% |
| Other loans to individuals | 3 | 2.3 | 0.46% | 0.5 | 0.10% | 3.7 | 0.85% | 2.4 | 0.54% |
| Loans to companies | 4 | 15.5 | 0.39% | 9.2 | 0.23% | 30.9 | 0.81% | 26.1 | 0.68% |
| Large- and medium-sized companies |
5 | 13.2 | 0.44% | 11.5 | 0.38% | 30.0 | 1.00% | 28.8 | 0.96% |
| Small businesses | 6 | 2.2 | 0.24% | -2.3 | -0.25% | 0.9 | 0.11% | -2.7 | -0.31% |
| Other | 7 | 0.6 | 0.04% | 0.6 | 0.04% | 3.5 | 0.21% | 3.5 | 0.21% |
| TOTAL [= 1 + 4 + 7] | 8 | 16.6 | 0.15% | 7.5 | 0.07% | 35.8 | 0.32% | 28.6 | 0.25% |
1) In % of average performing loan portfolio, in annualised terms
2) Impairment net of recovery of loans, interest and expenses previously written off.
In the second quarter, impairment losses and provisions for loans and guarantees of 16.7 M.€ were recorded, essentially for the purpose of increasing coverage for the aforementioned situations subject to individual impairment.
The cost of credit risk2 was 13.8 M.€, which corresponded to 0.24% of the loan portfolio, in annualised terms. The cost of credit risk in the last 12 months was -0.01% as percentage of the loan portfolio.
| Impairment losses and provisions for loans and guarantees Amounts in M.€ |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2Q17 | 1Q17 | 4Q16 | 3Q16 proforma |
2Q16 proforma |
1Q16 proforma |
||||
| Impairment losses and provisions for loans and guarantees | 1 | 16.7 | -0.1 | -3.9 | 1.1 | 15.6 | 20.1 | ||
| as % of loan portfolio1) | 2 | 0.30% | 0.00% | -0.07% | 0.02% | 0.28% | 0.36% | ||
| Recovery of loans, interest and expenses | 3 | 2.9 | 6.2 | 3.1 | 3.4 | 3.3 | 3.9 | ||
| Impairment losses and provisions for loans and guarantees, net of recoveries [= 1 - 3] |
4 | 13.8 | -6.3 | -7.0 | -2.3 | 12.4 | 16.2 | ||
| as % of loan portfolio1) | 5 | 0.24% | -0.11% | -0.12% | -0.04% | 0.22% | 0.29% | ||
| Impairment losses and provisions for loans and guarantees, net of Recovery of loans, interest and expenses , as % of loan portfolio (last 12 months) |
6 | -0.01% | -0.01% | 0.09% | 0.16% | 0.24% | 0.32% |
In the first half of 2017, reversals of impairment losses and other provisions (net) of 3.0 M.€ were recorded.
During the same period in 2016, the value of impairment losses and other provisions (net) of 33.9 M.€ included impairments for PT International Finance bonds (OI Group) in the amount of 18.3 M.€.
Consolidated net total assets were 32.8 th.M.€ at the end of June 2017.
The consolidated balance sheet mainly reflects the commercial banking activity conducted in Portugal.
In June 2017, net loans to customers totalled 22.8 th.M.€, representing 70% of assets, and customer resources on the balance sheet (24.1 th.M.€) constitute the main source of financing of the balance sheet (73% of assets).
The equity interests in African banks – BFA and BCI – are equity-accounted and had a book value of 492.1 M.€ and 53.9 M.€, respectively, at the end of June 2017.
BPI maintains a comfortable liquidity position and a balanced funding situation:
| Balance sheet | Amounts in M.€ | |||
|---|---|---|---|---|
| 30 Jun. 17 | 31 Mar. 17 | 31 Dec. 16 | ||
| Assets | ||||
| Cash and deposits at central banks | 1 | 983.4 | 1,300.2 | 876.6 |
| Deposits at other credit institutions | 2 | 300.0 | 272.1 | 300.2 |
| Loans and advances to credit institutions | 3 | 744.6 | 781.8 | 637.6 |
| Loans and advances to Customers | 4 | 22,819.8 | 22,718.4 | 22,735.8 |
| Financial assets held for trading and at fair value through profit or loss | 5 | 2,409.7 | 2,421.4 | 2,197.9 |
| Financial assets available for sale | 6 | 3,779.3 | 3,816.9 | 3,876.4 |
| Held to maturity investments | 7 | 14.4 | 16.3 | 16.3 |
| Investments in associated companies and jointly controlled entities | 8 | 675.0 | 681.6 | 175.7 |
| Non-current assets held for sale and discontinued operations | 9 | 0.0 | 0.0 | 6,295.9 |
| Other tangible assets | 10 | 43.7 | 48.0 | 51.0 |
| Intangible assets | 11 | 24.7 | 24.6 | 25.6 |
| Tax assets | 12 | 472.8 | 447.5 | 471.8 |
| Other assets | 13 | 483.9 | 447.9 | 623.8 |
| Total Assets [= 1 to 13] | 14 | 32,751.4 | 32,976.7 | 38,284.7 |
| Liabilities and shareholders' equity | ||||
| Resources of central banks | 15 | 2,145.4 | 1,999.5 | 2,000.0 |
| Resources of other credit institutions | 16 | 1,624.1 | 1,834.9 | 1,096.4 |
| Resources of Customers and other debts | 17 | 22,335.5 | 22,413.5 | 21,967.7 |
| Debt securities | 18 | 268.9 | 288.6 | 506.8 |
| Technical provisions | 19 | 1,923.6 | 1,985.2 | 2,048.8 |
| Financial liabilities relating to transferred assets | 20 | 511.4 | 525.6 | 555.4 |
| Non-current liabilities held for sale and discontinued operations | 21 | 0.0 | 0.0 | 5,951.4 |
| Provisions | 22 | 68.8 | 69.3 | 70.2 |
| Tax liabilities | 23 | 67.1 | 66.5 | 22.0 |
| Other subordinated debt and participating bonds | 24 | 373.8 | 369.9 | 69.5 |
| Other liabilities | 25 | 870.5 | 889.0 | 1,087.9 |
| Shareholders' equity attributable to the shareholders of BPI | 26 | 2,560.6 | 2,533.0 | 2,440.5 |
| Non controlling interests | 27 | 1.8 | 1.8 | 468.0 |
| Total Shareholders' equity [=26 + 27] | 28 | 2,562.3 | 2,534.7 | 2,908.5 |
| Total liabilities and Shareholders' equity [= 15 to 27] | 29 | 32,751.4 | 32,976.7 | 38,284.7 |
1) Calculated according to Instruction 16/2004.
2) 2.0 th.M.€ from Portugal, 0.5 th.M.€ from Spain and 0.5 th.M.€ from Italy. The average residual maturity of the short-term portfolio is 0.4 years.
The customer loan portfolio has stabilised in the first half of 2017 but shows selective growth with the moderate recovery of loans demand from companies and individuals, signalling a reversal in the trend of portfolio contraction that has been witnessed since 2010.
Growth of 3.6% ytd in the portfolio of loans to companies in Portugal (large- and medium-sized companies in Portugal1 and Small businesses) and 5.3% in consumer loans (personal loans, car loans and outstanding credit cards) were both noteworthy, while the mortgage loan portfolio remained stable (-0.1%).
Credit granted by the Bank to Portuguese companies increased by 233 M.€ from December 2016, of which 166 M.€ is related to loans to large- and medium-sized companies (+3.7%) and 67 M.€ corresponds to loans to Small businesses (+3.5% ytd). The Bank continues to gradually gain market share in this segment, which
reached 7.9% in April 2017 (+0.2% from the end of last year).
Loans to individuals increase 0.3% ytd:
| Customer loans portfolio Amounts in M.€ |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Jun. 17 | Mar. 17 | Dec. 16 | YtD | qoq | |||||||
| Loans to individuals [= 2 + 3] | 1 | 12 146 | 12 118 | 12 107 | 0.3% | 0.2% | |||||
| Mortgage loans | 2 | 11 069 | 11 078 | 11 084 | (0.1%) | (0.1%) | |||||
| Other loans to individuals | 3 | 1 077 | 1 039 | 1 023 | 5.3% | 3.6% | |||||
| Corporate banking [= 5 + 9] | 4 | 8 333 | 8 365 | 8 232 | 1.2% | (0.4%) | |||||
| Large and Medium-sized companies [= 6 to 8] | 5 | 6 350 | 6 415 | 6 315 | 0.5% | (1.0%) | |||||
| Large and Medium-sized companies in Portugal | 6 | 4 701 | 4 718 | 4 535 | 3.7% | (0.4%) | |||||
| Project Finance Portugal | 7 | 995 | 955 | 996 | (0.0%) | 4.2% | |||||
| Madrid branch | 8 | 654 | 742 | 785 | (16.7%) | (11.9%) | |||||
| Small businesses | 9 | 1 983 | 1 950 | 1 916 | 3.5% | 1.7% | |||||
| Portfolio of BPI Vida e Pensões (BPI Life and Pensions)2 | 10 | 1 248 | 1 189 | 1 303 | (4.2%) | 4.9% | |||||
| Public sector | 11 | 1 440 | 1 388 | 1 417 | 1.6% | 3.8% | |||||
| Other | 12 | 327 | 349 | 372 | (12.3%) | (6.5%) | |||||
| Total [= 1 + 4 + 10 to 12] | 13 | 23 494 | 23 409 | 23 431 | 0.3% | 0.4% | |||||
| Pro memoria: | |||||||||||
| Net loan portfolio | 14 | 22 820 | 22 718 | 22 736 | 0.4% | 0.4% |
1 Excludes project finance portfolio and portfolio of Madrid branch.
2) Credit held by BPI Vida e Pensões (consolidated by global integration), BPI Group entity that manages capitalisation insurance. The loan portfolio of BPI Vida e Pensões essentially corresponds to bonds and commercial paper issued by large Portuguese companies.
BPI recorded an improvement in the loan quality indicators, a reduction in the flow of new default situations and in the cost of credit risk:
interest and expenses) was 7.5 M.€ in the first half of 2017, which corresponded to 0.07% of the average loan portfolio, in annualised terms.
At the end of June 2017, the ratios of credit at risk and impairment coverage (IAS/IFRS scope of consolidation) in the main segments were as follows:
| Credit at risk and impairment coverage | Amounts in M.€ | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Jun. 17 | Dec. 16 | ||||||||
| Credit at risk |
Credit at risk ratio |
Impairm ent) |
Coverage | Credit at risk |
Credit at risk ratio |
Impairm ent) |
Coverage | ||
| Loans to individuals [= 2 + 3] | 1 | 374 | 3.1% | 248 | 66% | 388 | 3.2% | 258 | 66% |
| Mortgage loans | 2 | 335 | 3.0% | 204 | 61% | 348 | 3.1% | 212 | 61% |
| Other loans to individuals | 3 | 39 | 3.6% | 44 | 112% | 40 | 4.0% | 46 | 114% |
| Loans to companies [= 5 + 6] | 4 | 459 | 5.5% | 432 | 94% | 470 | 5.7% | 445 | 95% |
| Large and Medium-sized companies | 5 | 364 | 5.7% | 343 | 94% | 361 | 5.7% | 351 | 97% |
| Small businesses | 6 | 95 | 4.8% | 89 | 93% | 109 | 5.7% | 94 | 86% |
| Other | 7 | 5 | 0.2% | 15 | 285% | 5 | 0.1% | 15 | 322% |
| TOTAL [= 1 + 4 + 7] | 8 | 839 | 3.6% | 695 | 83% | 863 | 3.7% | 718 | 83% |
1) Impairment losses and provisions for loans and guarantees.
New entries of credit at risk (measured by the change in credit at risk balance adjusted for write-offs and sales of loans) were 10.8 M.€ in the first half of 2017, down 42.8 M.€ from the same period in 2016 (53.6 M.€). As a percentage of the loan portfolio, New entries of credit at risk in the first half of 2017 represented 0.10%, in annualised terms (0.47% in the same period of 2016, annualised).
2) Considering the IAS/IFRS consolidation perimeter.
1) Calculated according to the definition provided for in Bank of Portugal Instruction 23/2011 and considering the IAS/IFRS consolidation perimeter, whereby BPI Vida e Pensões is subject to global consolidation and its portfolio is included in the consolidated loan portfolio (BPI Vida e Pensões is recognised according to the equity method within Bank of Portugal supervision perimeter).
According to Instruction 23/2011 and considering the supervision perimeter, at 30 June 2017, there was a total of 838.8 M.€ of credit at risk, with a credit at risk ratio of 3.8%.
Change in credit at risk adjusted for write-offs and sales of loans Amounts in M.€
| 1st Half 17 | 2Q17 | 1Q17 | 4Q161) | 3Q161) | 1st Half 161 | 2Q161 | 1Q161 | ||
|---|---|---|---|---|---|---|---|---|---|
| Opening balance in the quarter | 1 | 862.6 | 879.6 | 862.6 | 1,073.5 | 1,104.5 | 1,070.9 | 1,079.0 | 1,070.9 |
| New entries of credit at risk | 2 | 10.8 | -12.0 | 22.8 | -86.9 | 11.1 | 53.6 | 45.5 | 8.1 |
| Write-offs and sales of loans | 3 | 34.6 | 28.7 | 5.9 | 124.0 | 42.0 | 20.1 | 20.1 | 0.0 |
| End of quarter balance [= 1 + 2 - 3] | 4 | 838.8 | 838.8 | 879.6 | 862.6 | 1,073.5 | 1,104.5 | 1,104.5 | 1,079.0 |
| New entries as % of average portfolio | 5 | 0.10% | -0.21% | 0.40% | -1.54% | 0.20% | 0.47% | 0.81% | 0.14% |
Non-performing loans, calculated according to the definition adopted by CaixaBank (BPI consolidating entity), were 1 439 M.€ in June 2017 and corresponded to 5.8% of the portfolio of gross loans and guarantees.
The coverage of non-performing loan by accumulated impairment losses on the balance sheet, excluding the coverage by collaterals, was 48% in June 2017.
Considering the accumulated impairment losses on the balance sheet and associated collateral, non-performing loans coverage is 115%.
| Non-performing loans (CaixaBank criteria) | Amounts in M.€ | ||
|---|---|---|---|
| Jun. 17 | |||
| Gross loans portfolio and guarantees | 1 | 24,906 | |
| Non-performing loans | 2 | 1,439 | |
| Non-performing loans ratio [= 2 / 1] | 3 | 5.8% | |
| Impairments for loans and guarantees | 4 | 695 | |
| Coverage [= 4 / 2] | 5 | 48% |
Restructured loans was 1 407 M.€ at the end of June 2017. Of this amount, 381 M.€ is included in the balance of credit at risk.
The value of restructured loans not included in credit at risk, therefore, totals 1 027 M.€, which corresponds to 4.4% of the gross loan portfolio.
| Restructured loans | Amounts in M.€ | ||||
|---|---|---|---|---|---|
| Jun. 17 | in % of gross credit2 |
Dec. 16 in % of gross credit1 |
|||
| Included in credit at risk |
1 | 380.6 | 1.6% | 367.7 | 1.6% |
| Performing loans | 2 | 1,026.7 | 4.4% | 1,059.8 | 4.5% |
| Total [= 1+2] | 3 | 1,407.3 | 6.0% | 1,427.5 | 6.1% |
At the end of June 2017, BPI held real estate received in settlement of defaulting loans with a gross book value of 101.4 M.€. Of this amount, 42.4 M.€ corresponds to properties repossessed from home-loans recoveries and 59.0 M.€ to properties repossessed from recoveries of other loans.
At the same date, the accumulated impairment losses for real estate received in settlement of defaulting loans totalled 22.1 M.€, which corresponded to 22% of the gross book value thereof. As a result, the net book value of such properties is 79.3 million, as compared to a market value of such real estate of 98.5 M.€.
Banco BPI hold units of participation in specialised loan recoveries funds (Recovery Fund, FCR and Corporate Restructuring Fund FCR) with an offsetting entry corresponding to the transfer of customer loans to such funds.
1) Consolidated amounts excluding BFA (fully consolidated until the end of 2016).
2) Restructured loans in accordance with Bank of Portugal Instruction 32/2013 and considering the IAS/IFRS consolidation perimeter, whereby BPI Vida e Pensões is fully consolidated and its portfolio is included in the consolidated loan portfolio (within Bank of Portugal supervision perimeter, BPI Vida e Pensões is equity-accounted).
At the end of June 2017, the capital subscribed by BPI in the Recovery Fund, FCR and the Corporate Restructuring Fund FCR was 103.5 M.€, which represented only 2% of the overall size of recovery and corporate restructuring funds in the market 4.8 th.M.€).
BPI's realised capital was 92.4 M.€ (88.6 M.€ in the Recoveries Fund, FCR and 3.8 M.€ in the Corporate Restructuring Fund FCR).
With respect to such funds, the Bank had accumulated impairment losses of 33.1 M.€ and potential capital gains of 2.0 M.€, thus making a net exposure of 61.3 M.€.
Total customer resources – on- and off-balance sheet – have strongly increased during the six-month period, by 1.6 th.M.€ (+4.7% ytd).
Customer deposits increased 353 M.€ in the six-month period (+1.8% ytd), although its evolution was conditioned by the downward adjustment in term deposits remuneration.
Customer resources recorded on the balance sheet – deposits, retail bonds, capitalisation insurance and participating units in consolidated funds – totalled 24.1 th.M.€ at the end of June 2017.
The 0.5% increase of on balance sheet resources in the six-month period is influenced by the deconsolidation of the BPI Alternative Fund: Iberian Equities Long/Short Fund (Lux) starting in March 20171. On a comparable basis, balance sheet resources increased by 1.6% ytd (+368 M.€).
The strong placement of mutual in funds during the sixmonth period by the Bank warrants mention. The portfolio of mutual funds increased 1.0 th.M.€, which includes the effect from assets appreciation, representing a change of 19.9% ytd. On a comparable basis, adjusting for the deconsolidation of the BPI Alternative Fund, mutual funds have increased 0.8 th.M.€ ytd (+14.4%).
Assets under management and customer investments in third-party public offerings totalled 10.4 th.M.€ in June 2017 (+16.0% ytd).
| Customer resources portfolio | Amounts in M.€ | |||||
|---|---|---|---|---|---|---|
| Jun. 17 | Mar. 17 | Dec. 16 | YtD | qoq | ||
| On-balance sheet resources [= 2 + 6] | 1 | 24,122 | 24,316 | 24,003 | 0.5% | -0.8% |
| Deposits [= 3 to 5] | 2 | 20,069 | 20,038 | 19,754 | 1.6% | 0.2% |
| Demand deposits | 3 | 11,134 | 10,629 | 10,321 | 7.9% | 4.8% |
| Term and savings deposits | 4 | 8,879 | 9,333 | 9,338 | -4.9% | -4.9% |
| Retail bonds | 5 | 56 | 77 | 95 | -40.4% | -26.3% |
| Capitalisation insurance and other [= 7 a 9] | 6 | 4,053 | 4,278 | 4,250 | -4.6% | -5.3% |
| "Aforro" capitalisation insurance and other (IFRS 4) and guaranteed rate |
7 | 1,943 | 2,005 | 2,070 | -6.1% | -3.1% |
| Unit links capitalisation insurance | 8 | 2,111 | 2,005 | 1,930 | 9.3% | 5.3% |
| Participating units in consolidated mutual funds2 | 9 | 268 | 250 | -100.0% | -100.0% | |
| Assets under management [= 11 + 12] | 10 | 8,907 | 8,293 | 7,662 | 16.2% | 7.4% |
| Mutual funds3 | 11 | 6,286 | 5,738 | 5,244 | 19.9% | 9.5% |
| Pension funds | 12 | 2,621 | 2,555 | 2,418 | 8.4% | 2.6% |
| Subscriptions in public offerings | 13 | 1,494 | 1,312 | 1,304 | 14.6% | 13.8% |
| Total [= 1+ 10 + 13] | 14 | 34,523 | 33,922 | 32,970 | 4.7% | 1.8% |
1) Recorded off-balance sheet.
2) The BPI Alternative Fund ceased to be consolidated as of March 2017 and therefore has been recorded off-balance sheet. In Dec. 16 and Mar. 17, the item "Capitalisation insurance and other" includes 250 M.€ and 268 M.€,
3) Includes BPI Group pension funds of 1,397 in Dec. 16 and 1,556 in Jun. 17.
respectively, with respect to such fund. Adjusted for deconsolidation of the fund, "Capitalisation insurance and other" increased 1.3% YtD and 1.1% qoq and "Mutual Funds" increased 14.4% YtD and 4.7% qoq.
BPI has a balanced funding structure and a comfortable liquidity position.
Customer resources are the main source of balance sheet funding. At the end of June 2017, on-balance sheet customer resources totalled 24.1 th.M.€ and represented 73% of assets.
The loans to deposits ratio was at 106%.
| Amounts in M.€ | ||||
|---|---|---|---|---|
| Jun. 17 |
Mar. 17 | Dec. 16 |
||
| Net loan losses | 1 | 21,585 | 21,542 | 21,445 |
| Deposits | 2 | 20,390 | 20,622 | 20,279 |
| Loans to deposits ratio [= 1 / 2] |
3 | 106% | 104% | 106% |
Recourse to the wholesale debt market is low at 1.1 th.M.€1 (3% of assets).
At the end of June 2017, the Bank had a Liquidity Coverage Ratio (LCR) of 179%.
At the time, the short-term financing gap at the same date was -2.0 th.M.€ (including financing from ECB-TLTRO) and was broken down as follows:
It should be borne in mind with respect to the aforementioned financing gap that there are highly liquid assets on the Bank's balance sheet. In this respect, it should be mentioned that the portfolio of short-term public debt securities from euro area countries is 2.9 th.M.€ (2.0 th.M.€ in Treasury Bills issued by the Portuguese Republic, 0.5 th.M.€ from Spain and 0.5 th.M.€ from Italy) with an average residual maturity of 0.4 years.
| Jun. 17 | Dec. 16 | ||
|---|---|---|---|
| Short-term lending | |||
| Loans to Credit Institutions | 1 | 812 | 569 |
| [=1] | 2 | 812 | 569 |
| Short-term borrowing | |||
| Money market | 3 | (798) | (507) |
| Repos | 4 | (31) | (61) |
| [=3+4] | 5 | (828) | (568) |
| Euro Commercial paper | 6 | 0 | |
| Funding from the ECB (net of deposits) |
7 | (1,996) | (2,000) |
| [=Σ 5 to 7] | 8 | (2,825) | (2,568) |
| Total short-term gap [=2+8] | 9 | (2,013) | (1,998) |
In June 2017, BPI had a portfolio of assets eligible for the Eurosystem of 9.7 th.M.€ (values net of appreciation and haircuts).
Accounting for uses of the portfolio as of this date, repo (repurchase) transactions, collateralisation of various liabilities and ECB financing, BPI had the capacity to raise additional financing from the ECB of 6.9 th.M.€.
| Assets eligible for Eurosystem | Amounts in M.€ | ||
|---|---|---|---|
| Jun. 17 | Dec. 16 | ||
| Total eligible assets2 | 1 | 9 746 | 9 022 |
| of which: assets given as collateral3 | 2 | 802 | 935 |
| Net eligible assets [= 1 - 2] | 3 | 8 944 | 8 087 |
| Used as collateral in funding with the ECB | 4 | 2 001 | 2 001 |
| Available eligible assets [= 3 - 4] | 5 | 6 943 | 6 086 |
2) Total eligible assets, net of valuation and haircuts and prior to uses. 3) Assets committed to entities other than ECB.
Common Equity Tier 1 (CET1) fully implemented (i.e., not benefitting from the phasing in provided for in CRD IV / CRR rules) totalled 1 792 M.€ and the CET1 ratio was 10.9% at the end of June 2017.
The 0.2% decline in the CET1 ratio fully implemented from December 2016 is explained by:
| CET 1 ratio fully-implemented | Amounts in M.€ | ||
|---|---|---|---|
| Jun. 17 | Dec. 16 pro | Dec. 16 | |
| forma1) | |||
| CET 1 | 1 792.0 | 1 665.2 | 2 678.8 |
| Risk-weighted assets | 16 505.5 | 16 144.4 | 24 076.1 |
| CET1 ratio | 10.9% | 10.3% | 11.1% |
1) After impact from the sale of 2% of BFA and deconsolidation. The impact from the sale of 2% of BFA and deconsolidation is explained by:
In June 2017, the fully implemented Tier 1 ratio was 10.9% and the total capital ratio was 12.7%, because the latter benefited from the 300 M.€ Tier II subordinated debt issued at the end of March 20171.
Calculated according to CRD IV / CRR phasing in rules (rules applicable in 2017), the CET1 capital ratio in June 2017 is 11.9%, the Tier 1 ratio was 11.9% and the total capital ratio was 13.3%, and BPI has complied with SREP requirements defined for 2017 (consolidated CET1 ratios of 9.25%, T1 of 9.75% and total of 11.75%).
The leverage ratio is the ratio calculated between Tier 1 capital and the total value of the balance sheet assets and off-balance sheet items, which are therefore not subject to the weighting coefficients as happens in the calculation of risk-weighted assets.
At 30 June 2017 the leverage ratios were as follows:
| Leverage ratios | Amounts in M.€ | |
|---|---|---|
| Jun. 17 | Dec. 16 | |
| Leverage ratio - fully implemented | 6.0% | 7.4% |
| Leverage ratio - phasing in | 6.7% | 7.6% |
| Amounts in M.€ | ||||
|---|---|---|---|---|
| CRD IV / CRR Phasing in | ||||
| Jun. 17 | Dec. 16 | Jun. 17 | Dec. 16 | |
| 1 | 2 556.2 | 2 434.0 | 2 560.6 | 2 440.6 |
| 2 | 0.0 | 382.6 | 0.0 | 390.0 |
| 3 | 2 556.2 | 2 816.6 | 2 560.6 | 2 830.7 |
| 4 | ( 16.8) | ( 18.3) | ( 20.9) | ( 30.6) |
| 5 | ( 29.4) | ( 30.7) | ( 36.6) | ( 49.6) |
| 6 | 2 510.0 | 2 767.5 | 2 503.0 | 2 750.5 |
| 7 | ( 430.6) | ( 6.5) | ( 541.8) | ( 17.8) |
| 8 | 0.0 | 0.0 | 0.0 | 0.0 |
| 9 | ( 48.4) | ( 23.6) | ( 169.2) | ( 54.0) |
| 11 | 28.6 | 52.0 | 0.0 | 0.0 |
| 10 | ( 62.6) | ( 34.7) | 0.0 | 0.0 |
| 12 | 1 997.1 | 2 754.7 | 1 792.0 | 2 678.8 |
| 13 | 1 997.1 | 2 754.7 | 1 792.0 | 2 678.8 |
| 14 | 237.6 | 297.5 | 7.5 | |
| 15 | 2 234.7 | 2 754.7 | 2 089.5 | 2 686.3 |
| 16 | 16 779.9 | 24 122.1 | 16 505.5 | 24 076.1 |
| 17 | 11.9% | 11.4% | 10.9% | 11.1% |
| 18 | 11.9% | 11.4% | 10.9% | 11.1% |
| 19 | 13.3% | 11.4% | 12.7% | 11.2% |
| CRD IV / CRR Fully implemented |
1) Includes additional value adjustments (Delegated Regulation (EU) 2016/101), intangible assets and credit for purchase of shares
Note: the minimum capital requirements (phasing in) established by the ECB for 2017 for consolidated ratios of CET1 and T1 and the total ratio were 9.25%, 9.75% and 11.75%, respectively.
| 30 Jun. 17 as reported |
30 June 17 excl. impact from sale of 2% stake in BFA and deconsolidation |
30 Jun. 16 as reported |
30 Jun. 16 pro forma1) |
|
|---|---|---|---|---|
| Operating income from banking activity and results of equity accounted subsidiaries / ATA |
1.7% | 2.8% | 3.2% | 1.9% |
| Profit before taxation and income attributable to non-controlling interests / ATA |
-0.3% | 0.7% | 1.1% | 1.1% |
| Profit before taxation and income attributable to non-controlling interests / average shareholders' equity (including non-controlling interests) |
-4.3% | 9.6% | 15.3% | 15.4% |
| Personnel costs / Operating income from banking activity and results of equity accounted subsidiaries 1 |
46.9% | 29.2% | 30.8% | 40.8% |
| Overhead costs / Operating income from banking activity and results of equity accounted subsidiaries 2 |
80.3% | 50.0% | 54.0% | 69.4% |
| Loans in arrears for more the 90 days + doubtful loans as % of total gross loans |
3.1% | 4.0% | ||
| Loans in arrears for more the 90 days + doubtful loans, net of accumulated impairment losses, as a % of total net loans |
0.1% | 0.0% | ||
| Credit at risk as % of total loans (gross) 3 | 3.8% | 5.0% | ||
| Credit at risk3, net of accumulated loan impairments as % of total loans (net) |
0.8% | 0.9% | ||
| Restructured loans as % of total loans (gross) 4 | 6.3% | 6.5% | ||
| Restructured loans not included in credit at risk as % of total loans (gross) 4 |
4.6% | 4.5% | ||
| Total capital ratio | 13.3% | 5) | 11.0% | 6) |
| Tier 1 ratio | 11.9% | 5) | 11.0% | 6) |
| Common equity Tier 1 ratio | 11.9% | 5) | 11.0% | 6) |
| Loans (net) to deposits ratio | 106% | 87.5% |
Note: In calculating the aforementioned indicators, the Group's perimeter subject to ECB supervision is considered, that is, BPI Vida e Pensões is equity-accounted (whereas in consolidated accounts, according to IAS/IFRS standards, such entity is fully consolidated).
1) The "pro forma" designation reflects the restatement of the BFA contribution to the consolidated profit or loss according to IFRS Standard 5 (See note to the financial statements "1. Financial group").
2) Excluding early retirement costs and changes to plan (personnel costs).
3) Credit at risk corresponds to the sum of: (1) total amount corresponding to instalments on principal or interest accrued overdue for a period greater than or equal to 90 days; (2) total outstanding amount of loans that have been restructured after having been due for a period of 90 days or more, without having adequately increasing collateral (should be sufficient to cover the total value of principal and interest due) or without the debtor having fully paid for interest and other charges due; (3) total value with instalments on principal or interest overdue for less than 90 days, but over which there is evidence justifying classification thereof as credit at risk, particularly bankruptcy or liquidation of the debtor.
4) According to Bank of Portugal Instruction 32/2013.
5) According to CRD IV/CRR phasing in rules applicable in 2017.
6) According to CRD IV/CRR phasing in rules applicable in 2016.
ATM = Average total assets.
Following the results of the Takeover Bid for Caixabank, the rating agencies reviewed the ratings assigned to Banco BPI in order to reflect the merger of BPI into the Caixabank Group. In the case of Fitch, the long-term rating assigned to BPI is now BBB-, the first level of investment grade and above the Portuguese Republic.
On September 19, rating agency Standard & Poor's upgraded Banco BPI's long-term debt rating from BB+ to BBB-, the first level of investment grade, with stable Outlook. The decision on Banco BPI's rating followed the improvement of the Portuguese Republic rating to investment grade (BBB-), which allowed Banco BPI's
rating to be further supported by the shareholder CaixaBank.
BPI currently has investment grade ratings from two agencies – Fitch Ratings and Standard & Poor's.
The Bank's current long-term ratings and respective Outlook are as follows:
| Long Term | BBB- | BBB- | Ba3 |
|---|---|---|---|
| Short Term | F3 | A-3 | Not prime |
| Outlook | Positive | Stable | Stable |
| Individual rating | Viability rating bb |
Stand-alone credit profile (SACP) bb |
Baseline Credit Assessment b1 |
| Senior collateralised debt | |||
| Mortgage loans | A2 | ||
| Public sector | A3 | ||
| Senior non-collateralised debt | BBB- | Ba3 | |
| Long term | BBB | ||
| Short term | F3 | A-3 | Not prime |
| Subordinated debt | BB+ | BB | B1 |
| Junior subordinated debt | B2 | ||
| Commercial paper | F3 | A-3 | Not prime |
| Other short-term debt | F3 | A-3 | Not prime |
| Long term | BB+ | BBB-u | Ba1 |
|---|---|---|---|
| Short term | B | A-3u | Not prime |
| Outlook | Positive | Stable | Positive |
Fitch Ratings: rating decision on June 21, 2017. Fitch Ratings revised Outlook from stable to positive and affirmed the credit ratings (LP/CP) at BBB- /F3.
Standard & Poor's: rating decision on September 19, 2017. Standard & Poor's upgraded long-term ratings from BB+ to BBB- and short-term ratings from B to A-3. Outlook is Stable.
Moody's: decision on credit ratings (LP/CP) on March 28, 2012. On January 18, 2017, Moody's reaffirmed credit ratings (LP/CP), increased ratings on subordinated debt, subordinate and preferred shares and reviewed Outlook from Reviewing to Stable.
1) The ratings given by S&P to the Portuguese Republic are unsolicited ("u" – unsolicited).
On February 8, 2017, the results of CaixaBank's Takeover Bid for Banco BPI were announced, following which CaixaBank increased its stake in Banco BPI from 45.5% to 84.51%.
The bid (General and Voluntary Takeover Bid) was launched by Caixabank in April 2016 at a price of 1.113 euros per share. On September 21, 2016, the General Meeting had approved the elimination of the statutory limitation on the counting or exercise of voting rights by a single shareholder, which determined the alteration of the nature of the Takeover Bid from voluntary to mandatory, and the revision of the price to 1.134 euros per share.
Since then, with a free float of around 7% and a significantly reduced liquidity (daily average volume of 0.4 M.€ in the 1st quarter 2017 vs. 2.3 M.€ in 2016), the share price of Banco BPI remained relatively stable at around € 1.06 and ended the first half of 2017 at € 1.052 (-7.0% when compared to the end of 2016). The Portuguese PSI 20 index increased 10.1% in the same period and the European banking sector - represented by the DJ Euro Stoxx Banks index - ended the first half with a 7.1% increase.
The following table shows the shareholders holding more than 2% of the capital of Banco BPI at 30 June 2017.
| Shareholder positions in excess of 2% of the capital | |
|---|---|
| of Banco BPI 1 | at 30 June 2017 |
| Shareholders | Number of shares | % capital held |
|---|---|---|
| CaixaBank, S.A. | 1 231 250 696 | 84.510%1,2 |
| Allianz SE | 122 744 370 | 8.425%3 |
Source: Shareholder positions recorded at 30 June 2017 at the securities clearing house (Central de Valores Mobiliários – CVM), based on the information received from the Central de Valores Mobiliários and public information disclosed to the market.
At June 30, 2017, the share capital of Banco BPI was 1 293 063 324.98 euros, represented by 1 456 924 237 ordinary, nominal dematerialized shares, of no par value. All the shares are admitted to trading on the Euronext market. Codes and tickers - ISIN and Euronext code: PTBPI0AM004; Reuters: BBPI.LS; Bloomberg: BPI PL.
1) The Shareholders at the General Meeting of 21 September 2016 approved the elimination of the statutory rule then in force limiting the counting of votes.
| Selected indicators | ||
|---|---|---|
| 1H17 | 2016 | |
| Banco BPI share price (€) | ||
| Closing price | 1.052 | 1.131 |
| Price change | (7.0%) | 3.7% |
| Maximum price | 1.136 | 1.342 |
| Minimum price | 0.781 | 0.863 |
| Average price | 1.038 | 1.113 |
| Data per share (€) | ||
| Net profit | (0.070) | 0.216 |
| Recurring net profit1) | 0.129 | 0.224 |
| Book value | 1.758 | 1.681 |
| Weighted average no. of shares (in millions) | 1 455.7 | 1 451.0 |
| Market valuation indicators | ||
| Price / earnings (P/E) (recurring) | 8.2 | 5.0 |
| Price / book value (PBV) | 0.6 | 0.7 |
| Stock market capitalisation (M.€) | 1 532.7 | 1 647.8 |
| Liquidity | ||
| Annual traded value (M.€) | 53.1 | 572.8 |
| Average daily traded value (M.€) | 0.4 | 2.3 |
| 1) Excluding costs with early retirements, gain in 2016 due to the revision of the ACT and |
impact of the sale of 2% of BFA and deconsolidation.
In the first half of 2017, the transactions described below were carried out in the portfolio of Banco BPI's own shares, for the purpose of executing the variableremuneration scheme (Portuguese initials RVA) for employees and executive directors. As at 30 June 2017, Banco BPI held 150 896 own shares (0.01% of the capital).
| the first half of 2017 | Amount and price in euros | ||||
|---|---|---|---|---|---|
| Banco BPI | No. of shares | Value Average price |
% of share capital |
||
| As at 31 Dec. 164 | 5 227 514 | 0.36% | |||
| Over the counter purchase | 485 190 | 550 019 | 1.134 | 0.03% | |
| Over the counter sale | 5 488 981 6 220 334 | 1.133 | 0.38% | ||
| Stock exchange sale | 72 827 | 82 156 | 1.128 | 0.00% | |
| Total | 6 046 998 | 0.42% | |||
| As at 30 Jun. 17 | 150 896 | 0.01% | |||
4) The balance of own shares at the end of December 2016 does not include:
168,917 shares attributed under resolving conditions under the RVA but not yet made available. The transfer of ownership of the shares attributed under the RVA program is fully carried out on the date of attribution, but the availability is dependent on the permanence of the Employees in the BPI Group, therefore, for accounting purposes, the shares remain in the Banco BPI up to the date of availability.
148 538 shares held in the capitalization insurance asset portfolios unit links managed by BPI Vida e Pensões.
The Bank of Portugal, through the circular-letters 97 / 08 / DSBDR of 3 December 2008 and 58 / 09 / DSBDR of 5 August 2009, has recommended that, in the accounting reporting, a separate chapter or a specific annex is prepared as part of the Annual and Interim Reports, designed to respond to the recommendations of the CEBS and of the FSF, taking into account the principle of proportionality and following the questionnaire presented as an annex to the Bank of
Portugal's circular-letter 46 / 08 / DSBDR. In order to comply with the Bank of Portugal's recommendation, the present chapter provides a response to the aforesaid questionnaire, using cross-references to the more detailed information presented in the Report and Accounts for the first half of 2017.
| Recommendation Summary | References to the Report and Accounts for the first half of 2017 |
|---|---|
| I. BUSINESS MODEL | |
| 1. Description of the business model | RG – Financial structure and business, p. 6. |
| 2. Description of strategies and objectives | RG – Summary of first half 2017 results, p. 5; Financial review, p. 13. |
| 3. Description of the importance of the operations carried out and the respective contribution to business 4. Description of the type of activities undertaken |
RG – Financial structure and business, p. 6; Financial review, p. 13; NDF – 3. Segment Reporting, p. 72. |
| 5. Description of the objective and extent of the institution's involvement relating to each activity undertaken. |
|
| II. RISK AND RISK MANAGEMENT 6. Description of the nature and extent of the risks incurred in relation to the activities carried out and the instruments utilised |
RG – Financial review, p. 13; NDF – 4.47. Financial Risks, p. 169 and following; RG 2016 – Risk management, p. 122. |
| 7. Description of major risk-management practices in operations |
NDF – 4.47. Financial Risks, p. 169 and following; RG 2016 – Risk management, p. 122; RGov 2016– C. Internal organization, III. Internal Control and Risk Management, p. 418. |
| III. IMPACT OF THE FINANCIAL TURBULENCE PERIOD ON RESULTS 8. Qualitative and quantitative description of the results |
RG – Financial review, p. 13. |
| 9. Breakdown of the "write-downs" / losses by types of products and instruments affected by the period of turbulence |
NDF – 4.5. Financial assets available for sale, p. 85, 4.7. Loans and advances to Customers, p. 92, 4.21. Provisions and Impairment losses, p. 127, 4.39. Net income on financial operations, p. 156; 4.47 Financial Risks, p. 169. |
| 10. Description of the reasons and factors responsible for the impact suffered |
RG – Financial review, p. 13; Background to operations, p. 10. |
| 11. Comparison of the i) impacts between (relevant) periods and ii) financial statements before and after the turbulent period |
RG – Financial review, p. 13. |
| 12. Breakdown of the write-downs between realised and unrealised amounts |
RG – Financial review, p. 13; NDF – 4.5. Financial assets available for sale, p. 85; 4.7. Loans and advances to Customers, p. 92; 4.39. Net income on financial operations, p. 156 and 4.21. Provisions and Impairment losses, p. 127. |
| 13. Description of the influence of the financial turbulence on the behaviour of Banco BPI shares |
RG – Banco BPI Shares, p. 37. |
| 14. Disclosure of the maximum loss risk | RG – Financial review, p. 13. NDF – 4.47. Financial Risks, p. 169 and following |
| 15. Disclosure of the impact that the trend in spreads associated with the institution's own liabilities had on earnings |
RG – Financial review, p. 13. The Bank did not revalue its liabilities. |
| IV. EXPOSURE TYPES AND LEVELS AFFECTED BY THE TURBULENT PERIOD 16. Nominal value (or amortised cost) and fair value of exposures 17. Information about credit risk mitigation and respective effects on existing exposures |
NDF – 4.47. Financial Risks, p. 169 and following and 4.5 Financial assets available for sale, p. 85. RG – Financial review, p. 13; NDF – 4.47. Financial Risks, p. 169 |
|---|---|
| 18. Detailed disclosure of exposures | RG – Financial review, p. 13; NDF – 4.47. Financial Risks, p. 169 and following and 4.5 Financial assets available for sale, p. 85 and 4.7. Loans and advances to Customers, p. 92. |
| 19. Movements which occurred in the exposures between the relevant reporting periods and the underlying reasons for these variations (sales, write-downs, purchases, etc.) |
RG – Financial review, p. 13. NDF – 4.7. Loans and advances to Customers, p. 92. |
| 20. Explanations about exposures which have not been consolidated (or which have been recognised during the crisis) and the associated reasons |
The BPI Group consolidates all exposures in which it has control or significant influence, as provided for in IFRS 10, 11, IAS 28, IFRS 3 and IFRS 5. No changes were made to the BPI Group's consolidation scope as a consequence of the turbulent period in the financial markets. |
| 21. Exposure to "mono-line" insurers and quality of insured assets |
At 30 June 2017, BPI had no exposure to monoline insurers. |
| V. ACCOUNTING AND VALUATION POLICIES 22. Classification of transactions and structured products for accounting purposes and the respective accounting treatment |
NDF – 2.3. Financial assets and liabilities, p. 56; 2.3.3. Financial assets available for sale, p. 57; 2.3.4. Loans and other receivables, p. 58; 4.20. Financial liabilities relating to transferred assets, p. 126. |
| 23. Consolidation of Special Purpose Entities (SPE) and other vehicles and their reconciliation with the structured products affected by the turbulent period |
The vehicles through which Banco BPI's debt securitisation operations are effected are recorded in the consolidated financial statements according to the BPI Group's continued involvement in these operations, determined on the basis of the percentage of the equity interest held of the respective vehicles. |
| 24. Detailed disclosure of the fair value of financial instruments |
NDF – 4.47. Financial Risks, p. 169 and following |
| 25. Description of the modelling techniques utilised for valuing financial instruments |
NDF – 2.3. Financial assets and liabilities, p. 56 and 4.47. Financial Risks, p. 169 and following |
| VI. OTHER IMPORTANT DISCLOSURE ASPECTS 26. Description of disclosure policies and principles which are used in financial reporting |
RGov 2016 – C. Internal organization, IV. Investor Support, p. 421 |
RG - Management Report; NDF - Notes to the Financial Statements; RG 2016 - Management Report for 2016; RGov 2016 - BPI Group Government Report for 2016.
The European Securities and Markets Authority or ESMA published on 5 October 2015 a set of guidelines relating to the disclosure of Alternative Performance Measures by entities (ESMA/2015/1415). These guidelines are to be applied obligatorily with effect from 3 July 2016.
BPI utilises a number of indicators when analysing performance and financial position, which are classified as Alternative Performance Indicators, in accordance with the abovementioned ESMA guidelines.
The information relating to those indicators has already been the object of disclosure, as required by the ESMA guidelines.
In the present report, the information previously disclosed is inserted by way of cross-reference. A summarised list of the Alternative Performance Indicators is presented next.
Financial margin (RCL) = Financial margin (narrow sense) + Technical result of insurance contracts + Net commissions relating to amortised cost Net commissions income (RCL) = Net commissions income + Gross margin on unit links
Operating income from banking activity (RCL) = Financial margin (RCL) + Income from equity instruments (RCL) + Net commissions income (RCL) + Earnings of associated companies (equity method) (RCL) + Net income on financial operations + Operating income and expenses
Commercial banking income = Financial margin (RCL) + Income from equity instruments (RCL) + Net commissions income (RCL) + Earnings of associated companies (equity method) (RCL) excluding the contribution of stakes in African banks
Overhead costs = Personnel costs + General administrative expenses + Depreciation and amortisation
Adjusted overhead costs = Personnel costs excluding cost with early retirements and voluntary terminations and (only in 2016) gains with the revision of the Collective Labour Agreement (ACT) + General administrative expenses + Depreciation and amortisation
Net operating income before impairments and provisions (RCL) = Operating income from banking activity (RCL) - Overhead costs
Net income before income tax (RCL) = Net operating income before impairments and provisions (RCL) + Recovery of loans, interest and expenses - Impairment losses and provisions for loans and guarantees, net - Impairment losses and other provisions, net
Cost-to-income ratio (efficiency ratio) 1) = Overhead costs / Operating income from banking activity (RCL)
Adjusted overhead costs-to-commercial banking income 1) = Overhead costs, excluding costs with early-retirements and voluntary terminations and (only in 2016) gains with the revision of the Collective Labour Agreement (ACT) / Commercial banking income
Return on Equity (ROE) 1) = Net income for the period / Average value in the period of shareholders' equity attributable to BPI shareholders after deduction of the fair value reserve (net of deferred taxes) related to financial assets available for sale
Return on Tangible Equity (ROTE) 1) = Net income for the period / Average value in the period of shareholders' equity attributable to BPI shareholders after deduction of intangible net assets.
Return on Assets (ROA) 1) = (Net income attributable to BPI shareholders + Income attributable to non-controlling interests - preference shares dividends paid) / Average value in the period of net total assets
Unitary intermediation margin = Loan portfolio average interest rate - Deposits average interest rate
Note:
The term "RCL" or "Reclassified captions" identifies income and costs captions that have been reclassified in this report, and repositioned in the structure of the income statement according to the format used by CaixaBank (BPI's consolidating entity). The underlying accounting criteria were not affected by the change in the format adopted.
1) Ratio refers to the last 12 months, except when indicated otherwise.
The ratio can be computed for the cumulative period since the beginning of the year, in annualised terms, the cases in which it will be clearly marked.
On-balance sheet Customer resources = Deposits + Capitalisation insurance and others
Note: The amount of on-balance sheet Customer resources is not deducted from the applications of off-balance sheets products (mutual funds and pension plans) in on-balance sheet products.
Being:
Assets under management = Mutual funds + Pension plans
Note: Amounts deducted from participating units in the Group banks' portfolios and from off-balance sheet products investments (mutual funds and pension plans) in other off-balance sheet products.
Mutual funds = Unit trust funds + Real estate investment funds + Retirement-savings and equity-savings plans (PPR and PPA) + Hedge funds + Funds assets under BPI Suisse management + Third-party unit trust funds placed with Customers
Pension plans = pension plans under BPI management (includes pension plans of BPI Group)
Subscriptions in public offerings = Customers subscriptions in third parties' public offerings
Total Customer Resources = On-balance sheet Customer Resources + Assets under management + Subscriptions in public offerings
Loan-to-deposit ratio = Net loans to Customers / Customer deposits
Impairments for loans and guarantees as % of the loan portfolio 1)= Impairment losses and provisions for loans and guarantees, net / Average value in the period of the performing loan portfolio
Cost of credit risk as % of the loan portfolio 1)= (Impairment losses and provisions for loans and guarantees, net - Recovery of loans, interest and expenses) / Average value in the period of the performing loan portfolio
Performing loans portfolio = Gross customer loans - (Overdue loans and interest + Receivable interests and other)
Credit at risk ratio (consolidation perimeter IAS / IFRS) = Credit at risk / Gross loan portfolio
Note: the consolidated financial information prepared in accordance with IAS / IFRS rules is used in the calculation of the indicator. For the disclosure of the indicators defined in Bank of Portugal Instruction 16/2004, the Bank of Portugal's supervision perimeter is considered in their calculation, which, in the case of BPI, implies that BPI Vida e Pensões be recognised through the equity method (whereas under IAS / IFRS accounting rules that company is fully consolidated).
Change in credit at risk, adjusted for write-offs and sales of loans = Balance of credit at risk at the end of the period - Balance of credit at risk at the beginning of the period + Write-offs and adjustment for the sale of loans in the period
Change in credit at risk, adjusted for write-offs and sales of loans as % of the loan portfolio1) = Change in credit at risk, adjusted for write-offs and sales of loans / Average value in the period of the performing loan portfolio
Coverage of credit at risk by impairments = (Loan impairments + Impairments and provisions for guarantees and commitments) / Credit at risk
Coverage of credit at risk by impairments and associated collateral = (Loan impairments + Impairments and provisions for guarantees and commitments + Collateral associated to credit ) / Credit at risk
Non performing loans ratio = Non performing loans (CaixaBank criteria) / (Gross customer loans + guarantees)
Non performing loans coverage ratio = (Loans impairments + Impairments and provisions for guarantees and commitments) / Non performing loans (CaixaBank criteria)
Coverage of non performing loans by impairments and associated collateral = (Loans impairments + Impairments and provisions for guarantees and commitments + Collateral associated to credit) / Non performing loans (CaixaBank criteria)
Impairments cover of foreclosed properties = Impairments for real estate received in settlement of defaulting loans / Gross value of real estate received in settlement of defaulting loans
1) Ratio refers to the last 12 months, except when indicated otherwise. The ratio can be computed for the cumulative period since the beginning of the year, in annualised terms, the cases in which it will be clearly marked.
Earnings per share (EPS) = Net income / Weighted average no. of shares in the period (basic or diluted)
The earnings per shares (basic or diluted) is calculated in accordance with IAS 33 - Earnings per share.
Cash-flow after taxes (CF per share or CFPS) = Cash-flow after taxes / Weighted average no. of shares in the period.
Note: the denominator corresponds to the weighted average no. of shares used in the calculation of earnings per share (basic or diluted).
Book value per share (BV per share or BVPS) = Shareholders' equity attributable to BPI shareholders / No. of shares at the end of the period Note: the denominator corresponds to the outstanding number of shares after deducting the treasury stocks portfolio and is adjusted for capital increases, whether by incorporation of reserves (bonus issue) or subscription reserved for shareholders (rights issue), amongst other events, in a similar way to the calculation of earnings per share.
Price to earnings ratio (PER) = Stock market share price / Earnings per share (EPS)
Price to cash flow (PCH) = Stock market share price / Cash-flow after taxes (CFPS)
Price to book value (PBV) = Stock market share price / Book value per share (BVPS)
Earnings yield = Earnings per share (EPS) in the year / Stock market share price (at beginning or end of the year)
Dividend yield = Dividend per share relating to the year / Stock market share price (at beginning or end of the year)
Banco BPI, S.A.
Interim consolidated financial statements as of June 30, 2017 and 2016
(Translation of statements of income originally issued in Portuguese - Note 5) (Amounts expressed in thousands of Euro)
| Jun . 30 17 , |
De c. 3 1, 16 |
||||||||
|---|---|---|---|---|---|---|---|---|---|
| No tes |
Am nts ou bef ore imp air nt, me dep iati rec on and isa tio ort am n |
Imp air nt, me dep iati rec on and ort isa tio am n |
Net | Net | No tes |
Jun . 30 17 , |
De c. 3 1, 16 |
||
| AS SE TS |
S LIA BIL ITIE |
||||||||
| Ca sh and de its at c ent ral ban ks pos |
4.1 | 983 40 3 |
983 40 3 |
876 62 |
1 of Res tral ba nks our ces cen |
4.1 5 |
2 1 381 45 |
2 0 00 011 |
|
| De its at o the edi t in stit utio pos r cr ns |
4.2 | 300 02 7 |
300 02 7 |
300 19 0 |
Fin ial liab ilitie s h eld for tra din anc g |
4.1 6/4 .4 |
185 78 6 |
212 71 3 |
|
| Fin ial ets he ld f or t rad ing d a t fa ir v alu anc ass an e |
Res of oth red it in stit utio our ces er c ns |
4.1 7 |
1 6 24 144 |
1 0 96 439 |
|||||
| rofi thro h p t or los ug s |
4.3 /4.4 |
2 4 09 731 |
2 4 09 731 |
2 1 97 913 |
Res of tom d o the r de bts our ces cus ers an |
4.1 8 |
22 335 47 0 |
21 967 68 1 |
|
| Fin ial aila ble for le ets anc ass av sa |
4.5 | 3 8 82 030 |
102 76 0 |
3 7 79 270 |
3 8 76 434 |
De bt s ritie ecu s |
4.1 9 |
268 89 1 |
06 770 5 |
| Loa and ad to dit inst itut ion ns van ces cre s |
4.6 | 7 44 557 |
7 44 557 |
637 60 7 |
sfe Fin ial liab ilitie lati to t rred set anc s re ng ran as s |
4.2 0 |
5 11 425 |
55 5 3 85 |
|
| Loa and ad to tom ns van ces cus ers |
4.7 | 23 493 95 4 |
674 10 8 |
22 819 84 6 |
22 735 75 8 |
He dg ing de riva tive s |
4.4 | 77 96 4 |
97 756 |
| He ld t atu rity inv est nts o m me |
4.8 | 14 415 |
14 415 |
16 317 |
|||||
| He dg ing de riva tive s |
4.4 | 20 437 |
20 437 |
25 802 |
No nt l iab ilitie s h eld for le a nd dis tinu ed rati n-c urre sa con ope ons |
4.9 | 5 9 51 398 |
||
| No ts h eld for le a nd dis tinu ed nt a n-c urre sse sa con |
Pro vis ion s |
4.2 1 |
68 791 |
7 0 2 35 |
|||||
| rati ope ons |
4.9 | 6 2 95 910 |
Tec hni cal vis ion pro s |
4.2 2 |
1 9 23 575 |
2 0 48 829 |
|||
| Oth er t ible set ang as s |
4.1 0 |
428 18 7 |
384 48 7 |
43 700 |
5 0 9 55 |
Tax lia bilit ies |
4.2 3 |
67 091 |
22 006 |
| Inta ible set ng as s |
4.1 1 |
122 79 7 |
98 055 |
24 742 |
25 629 |
Oth ubo rdin d d ebt d p arti cip atin bon ds ate er s an g |
4.2 4 |
373 83 2 |
69 500 |
| Inv est nts in oci ate d c ies and jo intly me ass om pan |
Oth er l iab ilitie s |
4.2 5 |
606 73 6 |
7 4 04 77 |
|||||
| trol led titie con en s |
4.1 2 |
674 95 7 |
674 95 7 |
175 67 8 |
Tot al L iab ilitie s |
30 18 9 0 86 |
35 376 12 7 |
||
| Tax set as s |
4.1 3 |
472 82 4 |
472 82 4 |
471 84 8 |
SH AR EH OL DE RS ' EQ UIT Y |
||||
| Oth ts er a sse |
4.1 4 |
486 28 9 |
22 794 |
463 49 5 |
5 97 990 |
Su bsc ribe d s har ital e c ap |
4.2 7 |
1 2 93 063 |
1 2 93 063 |
| Oth ity inst ent er e qu rum s |
4.2 8 |
1 7 22 |
4 3 09 |
||||||
| Rev alu atio n re ser ves |
4.2 9 |
( ) 11 850 |
( ) 21 514 |
||||||
| Oth nd reta ine d e ing er r ese rve s a arn s |
4.3 0 |
1 3 79 731 |
1 0 44 319 |
||||||
| ( Tre har es) asu ry s |
4.2 8 |
( 377 ) |
( 10 809 ) |
||||||
| Oth late d c hen sive inc late d to er a ccu mu om pre om e re |
|||||||||
| dis tinu ed rati con ope ons |
4.9 | ( 182 12 1) |
|||||||
| Co lida ted t in f th e B PI G nso ne com e o rou p |
4.4 5 |
( 101 72 5) |
313 23 0 |
||||||
| Sh hol der s' e ity att rib uta ble to the sh hol der f B PI are qu are s o |
2 5 60 564 |
2 4 40 477 |
|||||||
| No ont roll ing int sts n-c ere |
4.3 1 |
1 7 54 |
468 04 8 |
||||||
| Tot al S har eho lde rs' Eq uity |
2 5 62 318 |
2 9 08 525 |
|||||||
| Tot al A ts sse |
34 033 60 8 |
1 2 82 204 |
32 751 40 4 |
38 284 65 2 |
Tot al L iab iliti and Sh hol der s' E ity es are qu |
32 751 40 4 |
38 284 65 2 |
||
| OF F B AL AN CE SH EE T IT EM S Gu nte ive nd oth ont ing ent lia bilit ies ara es g n a er c |
4.3 2 |
1 4 12 233 |
1 4 66 208 |
||||||
| Of wh ich : |
| [ Gu nte and reti es] ara es su |
[ 1 2 45 023 ] |
[ 1 2 94 856 ] |
|
|---|---|---|---|
| [ Oth ] ers |
[ 167 21 0] |
[ 171 35 2] |
|
| Co itm ent mm s |
4.3 2 |
3 2 24 249 |
3 3 92 479 |
The accompanying notes form an integral part of these balance sheets.
| (Amounts expressed in thousands of Euro) | ||||
|---|---|---|---|---|
| Notes | Jun. 30, 17 | Jun. 30, 16 Proforma |
||
| Interest and similar income | 228 318 | 273 137 | ||
| Interest and similar expenses | ( 45 988) | ( 94 204) | ||
| Financial margin (narrow sense) | 4.33 | 182 330 | 178 933 | |
| Gross margin on unit links | 4.34 | 6 434 | 7 051 | |
| Income from equity instruments | 4.35 | 6 401 | 3 910 | |
| Net commission relating to amortised cost | 4.36 | 10 344 | 10 558 | |
| Financial margin | 205 509 | 200 452 | ||
| Technical result of insurance contracts | 4.37 | 7 437 | 13 495 | |
| Commissions received | 132 243 | 126 117 | ||
| Commissions paid | ( 14 825) | ( 15 355) | ||
| Other income, net | 14 478 | 14 192 | ||
| Net commission income | 4.38 | 131 896 | 124 954 | |
| Gain and loss on operations at fair value | 14 375 | ( 629) | ||
| Gain and loss on assets available for sale | 776 | 24 455 | ||
| Interest and financial gain and loss with pensions | ( 409) | 1 328 | ||
| Net income on financial operations | 4.39 | 14 742 | 25 154 | |
| Operating income | 22 012 | 9 099 | ||
| Operating expenses | ( 207 616) | ( 25 414) | ||
| Other taxes | ( 5 434) | ( 3 236) | ||
| Operating income and expenses | 4.40 | ( 191 038) | ( 19 551) | |
| Operating income from banking activity | 168 546 | 344 504 | ||
| Personnel costs | 4.41 | ( 241 965) | ( 152 276) | |
| General administrative costs | 4.42 | ( 85 713) | ( 93 675) | |
| Depreciation and amortisation | 4.10/4.11 | ( 11 003) | ( 10 809) | |
| Overhead costs | ( 338 681) | ( 256 760) | ||
| Recovery of loans, interest and expenses | 9 088 | 7 160 | ||
| Impairment losses and provisions for loans and guarantees, net | 4.21 | ( 16 583) | ( 35 775) | |
| Impairment losses and other provisions, net | 4.21 | 2 967 | ( 33 868) | |
| Net income before income tax | ( 174 663) | 25 261 | ||
| Income tax | 4.43 | ( 47 749) | ( 22 473) | |
| Earnings of associated companies (equity method) | 4.44 | 120 711 | 21 357 | |
| Net income from continuing operations | ( 101 701) | 24 145 | ||
| Net income from discontinued operations | 4.9 | 163 857 | ||
| Income attributable to non-controlling interests from continuing operations | 4.31 | ( 24) | ( 23) | |
| Income attributable to non-controlling interests from discontinued operations | 4.9 | ( 82 049) | ||
| Income attributable to non-controlling interests | ( 24) | ( 82 072) | ||
| Consolidated net income of the BPI Group | 4.45 | ( 101 725) | 105 930 | |
| Earnings per share (in Euro) | ||||
| Basic | 4.45 | ( 0.070) | 0.073 | |
| Diluted | 4.45 | ( 0.070) | 0.073 | |
| Earnings per share from continuing operations (in Euro) | ||||
| Basic Diluted |
4.45 4.45 |
( 0.070) ( 0.070) |
0.017 0.017 |
|
| Earnings per share from discontinued operations (in Euro) | ||||
| Basic | 4.45 | 0.056 | ||
| Diluted | 4.45 | 0.056 |
(Translation of statements of income originally issued in Portuguese - Note 5)
The accompanying notes form an integral part of these statements.
The Accountant The Board of Directors
INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE PERIODS ENDED JUNE 30, 2017 AND 2016 PROFORMA
(Translation of statements originally issued in Portuguese - Note 5) (Amounts expressed in thousands of Euro)
| n. 3 0, 17 Ju |
n. 3 0, 16 for Ju Pro ma |
||||||||
|---|---|---|---|---|---|---|---|---|---|
| Att rib uta ble to sh ho lde of the BP I are rs Gro up |
Att rib ble uta to no n ntr oll ing in ter est co |
To tal |
Att rib uta ble to sh ho lde of the BP I are rs Gro up |
Att rib ble uta to no n- ntr oll ing in ter est co |
To tal |
||||
| Co lida ted t in nso ne co me |
( 101 72 5) |
24 | ( 101 70 1) |
105 93 0 |
82 072 |
188 00 2 |
|||
| Inc ot inc lud ed in t he lida ted st ate nts of in late d om e n co nso me co me re to nti ed tio co nu op era ns : |
|||||||||
| Item s t hat wi ll n ot be las sif ied to t in rec ne co me |
|||||||||
| Ac tua rial de via tion s |
32 76 3 |
32 763 |
( 126 00 9) |
( 126 00 9) |
|||||
| Tax eff ect |
( 9 5 38) |
( 9 5 38) |
34 600 |
34 600 |
|||||
| 23 22 5 |
23 225 |
( ) 91 409 |
( ) 91 409 |
||||||
| Item s t hat be las sif ied bse ent ly to net in m ay rec su qu co me |
|||||||||
| For eig xch e tr lati diff n e ang ans on ere nce s |
|||||||||
| Tra nsf o in er t com e |
182 12 1 |
182 12 1 |
|||||||
| For eig xch e d iffe n e ang ren ces |
3 9 25 |
3 9 25 |
( 20 247 ) |
( 20 247 ) |
|||||
| Tax eff ect |
4 | 4 | |||||||
| Re val ion of fina nci al a vai lab le f ale uat ts a re ser ves sse or s : |
|||||||||
| Re val uat ion of fina nci al a ts a vai lab le f ale sse or s |
10 236 |
10 236 |
( 18 797 ) |
( 18 797 ) |
|||||
| Tax eff ect |
( 4 3 99) |
( 4 3 99) |
4 1 79 |
4 1 79 |
|||||
| Tra nsf o in sul ting fro ale er t com e re m s s |
( 42 1) |
( 42 1) |
( 22 340 ) |
( 22 340 ) |
|||||
| eff Tax ect |
1 18 |
118 | 6 1 28 |
6 1 28 |
|||||
| Tra nsf er t o in sul ting fro m i airm ent niz ed in t he iod com e re mp re cog per |
272 | 272 | 24 787 |
24 787 |
|||||
| Tax eff ect |
( 71) |
( 71) |
( 6 7 92) |
( 6 7 92) |
|||||
| of of Va lua tion ets oci ate d c ies ass ass om pan |
2 5 93 |
2 5 93 |
( ) 444 |
( ) 444 |
|||||
| Tax eff ect |
( 702 ) |
( 702 ) |
( 174 ) |
( 174 ) |
|||||
| 19 3 6 76 |
193 67 6 |
( ) 33 700 |
( ) 33 700 |
||||||
| Inc ot inc lud ed in t he lida ted st ate nts of in late d om e n co nso me co me re dis nti ed tio to co nu op era ns |
|||||||||
| Item s t hat be las sif ied bse ent ly to net in m ay rec su qu co me |
|||||||||
| For eig xch e tr lati diff n e ang ans on ere nce s |
( 87 804 ) |
( 88 576 ) |
( 176 38 0) |
||||||
| of Inc ot inc lud ed in t he lida ted st ate nts in om e n co nso me co me |
216 90 1 |
216 90 1 |
( 3) 212 91 |
( ) 88 576 |
( 9) 301 48 |
||||
| Co lida ted reh ive in nso co mp ens co me |
115 17 6 |
24 | 115 20 0 |
( 106 98 3) |
( 6 5 04) |
( 113 48 7) |
The accompanying notes form an integral part of these statements.
The Accountant The Board of Directors
| ( Am ts e oun |
ed in t xpr ess |
hou ds of Eu ro) san |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Su bsc rib ed sh ita l are ca p |
Oth uit er eq y ins tru nts me |
Re lua tio va n res erv es |
Oth er d res erv es an ret ain ed nin ear gs |
Tre asu ry sh are s |
Oth er ula ted acc um reh siv co mp en e inc ela ted to om e r dis nti ed co nu tio op era ns |
Ne t in co me |
No n ntr oll ing co int sts ere |
Sh ho lde rs' are uit eq y |
|
| Ba lan at De be r 3 1, 20 15 ce cem |
1 2 93 063 |
5 1 94 |
( 87 564 ) |
972 58 7 |
( 12 797 ) |
236 36 9 |
428 64 7 |
2 8 35 499 |
|
| Oth ula ted reh ive inc ela ted dis tinu ed ion to rat t er acc um co mp ens om e r con ope s a De ber 31 20 15 cem , |
94 27 6 |
( 94 276 ) |
|||||||
| of n fo r 20 15 Ap iati et i to pro pr on nco me res erv es |
23 6 3 69 |
( 236 36 9) |
|||||||
| Div ide nds id o refe sha pa n p ren ce res |
( 22) |
( 22) |
|||||||
| Div ide nds id t tro llin inte ts pa o n on- con g res |
( 40 775 ) |
( 40 775 ) |
|||||||
| Va riab le R rat ion Pr ( RV A) em une ogr am |
( 818 ) |
( 194 ) |
1 2 83 |
27 1 |
|||||
| Oth hen siv e in ela ted dis tinu ed ion to rat er com pre com e r con ope s |
87 804 |
( 87 804 ) |
|||||||
| Co e fo reh ive inc r 20 16 mp ens om |
( 6) 120 88 |
( ) 92 027 |
105 93 0 |
( 04) 6 5 |
( 7) 113 48 |
||||
| Oth er |
( 1 3 36) |
( 1 3 36) |
|||||||
| Ba lan at J e 3 0, 20 16 for ce un pro ma |
1 2 93 063 |
4 3 76 |
( 26 370 ) |
1 1 15 399 |
( 11 514 ) |
( 182 08 0) |
105 93 0 |
38 1 3 46 |
2 6 80 150 |
| Div ide nds id o refe sha pa n p ren ce res |
( 21) |
( 21) |
|||||||
| Div ide nds id t tro llin inte ts pa o n on- con g res |
|||||||||
| Va riab le r rat ion in sha ( RV A) em une res |
( 67) |
( 343 ) |
705 | 295 | |||||
| Sa le o f p refe sha ren ce res |
( 30) |
( 30) |
|||||||
| Oth hen siv e in ela ted dis ntin ued tion to er com pre com e r cco op era s |
( 41 ) |
( 88 616 ) |
( 88 657 ) |
||||||
| Co reh ive inc e in 20 16 mp ens om |
4 856 |
( 70 442 ) |
207 30 0 |
175 36 9 |
317 08 3 |
||||
| Oth er |
( 295 ) |
( 295 ) |
|||||||
| Ba lan at De be r 3 1, 20 16 ce cem |
1 2 93 063 |
4 3 09 |
( 21 514 ) |
1 0 44 319 |
( 10 809 ) |
( 182 12 1) |
313 23 0 |
468 04 8 |
2 9 08 525 |
| Ap iati of net inc e fo r 20 16 to pro pr ons om res erv e |
31 3 2 30 |
( 313 23 0) |
|||||||
| Div ide nds id o refe sha pa n p ren ce res |
( 20) |
( 20) |
|||||||
| ( A) Va riab le R rat ion Pr RV em une ogr am |
( 87) 2 5 |
( 23) 2 9 |
10 432 |
4 9 22 |
|||||
| Sa le / isti of p refe sha ac qu on ren ce res |
( 24) |
( 24) |
|||||||
| Ch e in lida tion tho d o f th art icip atio n in Ba Fo nto An la ang co nso me e p nco me go |
( 466 27 4) |
( 466 27 4) |
|||||||
| Co reh ive inc e fo r th e fi hal f of 20 17 rst mp ens om |
9 6 64 |
25 116 |
182 12 1 |
( 101 72 5) |
24 | 115 20 0 |
|||
| Oth er |
( 11) |
( 11) |
|||||||
| Ba lan at J e 3 0, 20 17 ce un |
1 2 93 063 |
1 7 22 |
( 11 850 ) |
1 3 79 731 |
( 377 ) |
( 101 72 5) |
1 7 54 |
2 5 62 318 |
The accompanying notes form an integral part of these statements.
The Accountant The Board of Directors
(Translation of statements originally in Portuguese - Note 5)
| (Translation of statements originally in Portuguese - Note 5) (Amounts expressed in thousands of Euro) |
||||||||
|---|---|---|---|---|---|---|---|---|
| Jun. 30, 17 | Jun. 30, 16 Proforma | |||||||
| Total | Continued operations |
Discontinued operations |
Total | |||||
| Operating activities | ||||||||
| Interest, commissions and other income received | 588 026 | 690 971 | 241 528 | 932 499 | ||||
| Interest, commissions and other expenses paid | ( 321 951) | ( 419 660) | ( 63 952) | ( 483 612) | ||||
| Recovery of loans and interest in arrears | 9 088 | 7 160 | 1 136 | 8 296 | ||||
| Payments to personnel and suppliers | ( 283 402) | ( 262 019) | ( 80 513) | ( 342 532) | ||||
| Net cash flow from income and expenses | ( 8 239) | 16 452 | 98 199 | 114 651 | ||||
| Decrease (increase) in: | ||||||||
| Financial assets held for trading, available for sale and held to maturity | ( 88 183) | 418 509 | 93 681 | 512 190 | ||||
| Loans and advances to credit institutions | ( 107 147) | ( 120 072) | 357 567 | 237 495 | ||||
| Loans and advances to customers | ( 110 738) | 52 048 | 216 335 | 268 383 | ||||
| Other assets | 225 581 | 90 852 | 6 015 | 96 867 | ||||
| Net cash flow from operating assets | ( 80 487) | 441 337 | 673 598 | 1 114 935 | ||||
| Increase (decrease) in: | ||||||||
| Resources of central banks and other credit institutions | 47 073 | 520 513 | ( 115 627) | 404 886 | ||||
| Resources of customers | 256 452 | ( 601 277) | ( 767 283) | ( 1 368 560) | ||||
| Financial liabilities held for trading | ( 26 926) | ( 6 811) | ( 363) | ( 7 174) | ||||
| Other liabilities | ( 81 704) | ( 178 352) | ( 6 912) | ( 185 264) | ||||
| Net cash flow from operating liabilities | 194 895 | ( 265 927) | ( 890 185) | ( 1 156 112) | ||||
| Contributions to the Pension Funds | ( 84 355) | ( 1 643) | ( 1 643) | |||||
| Income tax paid | ( 17 526) | ( 48 230) | ( 13 483) | ( 61 713) | ||||
| 4 288 | 141 989 | ( 131 871) | 10 118 | |||||
| Investing activities | ||||||||
| Sale of 2% participation of Banco de Fomento Angola | 28 000 | |||||||
| Purchase of other tangible assets and intangible assets | ( 5 220) | ( 1 750) | ( 6 168) | ( 7 918) | ||||
| Sale of other tangible assets Dividends received of Banco de Fomento Angola |
38 864 | 5 | 5 | |||||
| Dividends received and other income | 19 292 | 22 825 | 22 825 | |||||
| 80 936 | 21 080 | ( 6 168) | 14 912 | |||||
| Financing activities | ||||||||
| Liability for assets not derecognised | ( 43 952) | ( 31 905) | ( 31 905) | |||||
| Issuance of debt securities and subordinated debt | 307 270 | 14 215 | 14 215 | |||||
| Redemption of debt securities | ( 244 335) | ( 478 522) | ( 478 522) | |||||
| Purchase and sale of own debt securities and subordinated debt | ( 1 102) | ( 6 112) | ( 6 112) | |||||
| Purchase and sale of preference shares | ( 25) | |||||||
| Interest on debt securities and subordinated debt | ( 1 362) | ( 7 125) | ( 7 125) | |||||
| Dividends paid on preference shares | ( 20) | ( 22) | ( 22) | |||||
| Dividends paid to non-controlling interests | ( 40 775) | ( 40 775) | ||||||
| Purchase and sale of treasury shares | 4 921 | 269 | 269 | |||||
| 21 395 | ( 509 202) | ( 40 775) | ( 549 977) | |||||
| Net increase (decrease) in cash and equivalents | 106 619 | ( 346 133) | ( 178 814) | ( 524 947) | ||||
| Cash and equivalents at the beginning of the period | 1 176 811 | 1 432 162 | 1 908 074 | 3 340 236 | ||||
| Cash and equivalents at the end of the period | 1 283 430 | 1 086 029 | 1 729 260 | 2 815 289 | ||||
| Cash and deposits at central banks | 983 403 | 782 901 | 1 618 157 | 2 401 058 | ||||
| Deposits at other credit institutions | 300 027 | 303 128 | 111 103 | 414 231 | ||||
| Cash and equivalents | 1 283 430 | 1 086 029 | 1 729 260 | 2 815 289 | ||||
| Cash and equivalents by currencies | ||||||||
| EUR | 1 225 339 | 1 034 320 | 7 778 | 1 042 098 | ||||
| USD | 22 969 | 10 512 | 309 778 | 320 290 | ||||
| AKZ | 1 411 160 | 1 411 160 | ||||||
| Other currencies | 35 122 | 41 197 | 544 | 41 741 | ||||
| Cash and equivalents | 1 283 430 | 1 086 029 | 1 729 260 | 2 815 289 |
The accompanying notes form an integral part of these statements.
Alberto Pitôrra Presidente Pablo Forero Vogais Alexandre Lucena e Vale António Farinha de Morais Francisco Manuel Barbeira Ignacio Alvarez-Rendueles João Oliveira e Costa José Pena do Amaral Pedro Barreto
Banco BPI, S.A.
(Unless otherwise indicated, all amounts are expressed in thousands of Euro – t. euro)
(These notes are a translation of notes originally issued in Portuguese – Note 5)
Banco BPI is the central entity of a multi-specialised financial group dedicated to banking, which provides a broad range of banking services and products to companies, institutional investors and private individuals. Banco BPI has been listed on the Stock Exchange since 1986.
The BPI Group started operating in 1981 with the foundation of SPI – Sociedade Portuguesa de Investimentos, S.A.R.L.. By public deed dated December 1984, SPI – Sociedade Portuguesa de Investimentos, S.A.R.L. changed its corporate name to BPI – Banco Português de Investimento, S.A., which was the first private investment bank created after the re-opening, in 1984, of the Portuguese banking sector to private investment. On November 30, 1995 BPI – Banco Português de Investimento, S.A. (BPI Investimentos) was transformed into BPI - SGPS, S.A., which operated exclusively as the BPI Group's holding company. On December 20, 2002, BPI SGPS, S.A. incorporated, by merger, the net assets and operations of Banco BPI and changed its corporate name to Banco BPI, S.A..
In the context of its public tender offer for the acquisition of all outstanding shares of Banco BPI, on February 8, 2017 (date of the "Regulated Market Special Session" conducted to announce the result of the public tender offer), CaixaBank acquired shares representative of 39.01% of Banco BPI voting rights. Considering CaixaBank previously owned 45,5%, its overall share ownership reached 84.51% of Banco BPI's voting rights. From February 2017, Banco BPI is included in the CaixaBank Group consolidation perimeter, and its financial statements are consolidated in accordance with the full consolidation method.
On October 2016, Banco BPI, S.A. entered into an agreement for the sale of 2% of the share capital of Banco de Fomento Angola, S.A. (BFA), which was concluded on January 5, 2017. Following the reduction in the Group's participation in BFA from 50.1% to 48.1%, and the application of the new Shareholders' Agreement, BFA is no longer consolidated in accordance with the full consolidation method, as determined by IFRS 10. Since January 2017, BFA is consolidated by using the equity method of accounting. In the end of 2016 BFA's operations were classified as discontinued operations, in accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, with the comparative balances of the Consolidated Statements of Income and Profit or Loss and Other Comprehensive Income as of June 30, 2016 being restated. Also in accordance with IFRS 5, BFA's total assets and liabilities as of December 31, 2016 are presented in the captions "Non-current assets held for sale and discontinued operations" and "Non-current liabilities held for sale and discontinued operations".
In the first half of 2016 Banco BPI ceased having control over BPI Strategies, Ltd, as defined by IFRS 10, as it holds less than 20% of the participating units of the fund. For this reason, consolidation in accordance with the full consolidation method was terminated for the fund BPI Strategies, Ltd..
In the second half of 2016, Banco BPI ceased having control over BPI Obrigações Mundiais – Fundo de Investimento Aberto de Obrigações, as defined by IFRS 10, as it holds less than 20% of the participating units of the fund. For this reason, consolidation in accordance with the full consolidation method was terminated for the fund BPI Obrigações Mundiais.
In the first half of 2017, Banco BPI ceased having control over BPI Alternative Fund: Iberian Equities Long/Short Fund (Lux), as defined by IFRS 10, as it holds less than 20% of the participating units of the fund. For this reason, consolidation in accordance with the full consolidation method was terminated for the fund BPI Alternative Fund.
The vehicles through which the Bank's loan securitisation operations are carried out are recorded in the consolidated financial statements in accordance with the BPI Group's continuing involvement in these operations, based on the percentage held of the equity piece of the corresponding vehicles. As of June 30, 2017 and 2016, the BPI Group held 100% of the equity pieces of these vehicles and so they were consolidated in accordance with the full consolidation method.
| Head Office | Shareholder´s Equity 2 |
T otal Assets |
Net Income (loss) for the year |
Direct Participation |
Effective Participation |
Consolidation / Recognition method |
|
|---|---|---|---|---|---|---|---|
| Banks | |||||||
| Banco BPI, S.A. | Portugal | 1 947 302 32 827 384 | 106 383 | ||||
| Banco Português de Investimento, S.A. | Portugal | 24 782 | 31 020 | ( 2 574) | 100.00% | 100.00% Full consolidation | |
| Banco Comercial e de Investimentos, S.A.R.L. | Mozambique | 179 680 | 2 282 006 | 16 462 | 30.00% | 30.00% Equity method | |
| Banco de Fomento Angola, S.A. | Angola | 1 023 003 | 7 089 083 | 222 882 | 48.09% | 48.10% Equity method | |
| Banco BPI Cayman, Ltd. | Cayman Islands | 164 816 | 290 550 | 5 266 | 100.00% Full consolidation | ||
| Asset management | |||||||
| BPI Gestão de Activos - Sociedade Gestora de | |||||||
| Fundos de Investimento Mobiliários, S.A | Portugal | 10 382 | 21 648 | 1 728 | 100.00% | 100.00% Full consolidation | |
| BPI – Global Investment Fund Management | |||||||
| Company, S.A. Luxembourg | 1 621 | 4 290 | 1 020 | 100.00% | 100.00% Full consolidation | ||
| BPI (Suisse), S.A. | Switzerland | 13 433 | 13 668 | 1 599 | 100.00% | 100.00% Full consolidation | |
| Venture Capital | |||||||
| BPI Private Equity - Sociedade de Capital de | |||||||
| Risco, S.A. Portugal | 31 986 | 38 535 | 41 | 100.00% | 100.00% Full consolidation | ||
| Inter-Risco – Sociedade de Capital de Risco, S.A. | Portugal | 1 036 | 1 422 | ( 102) | 49.00% Equity method | ||
| Insurance | |||||||
| BPI Vida e Pensões – Companhia de Seguros, S.A. | Portugal | 116 719 | 4 272 681 | 5 818 | 100.00% | 100.00% Full consolidation | |
| Cosec – Companhia de Seguros de Crédito, S.A. | Portugal | 44 193 | 109 450 | 2 772 | 50.00% | 50.00% Equity method | |
| Companhia de Seguros Allianz Portugal, S.A. | Portugal | 179 639 | 1 226 820 | 11 191 | 35.00% | 35.00% Equity method | |
| Other | |||||||
| BPI Capital Finance Ltd.1 | Cayman Islands | 1 814 | 1 824 | 24 | 100.00% | 100.00% Full consolidation | |
| BPI Capital Africa (Proprietary) Limited | South Africa | 154 | 707 | ( 1 290) | 100.00% Full consolidation | ||
| BPI, Inc. | U.S.A | 744 | 745 | ( 4) | 100.00% | 100.00% Full consolidation | |
| BPI Madeira, SGPS, Unipessoal, S.A. | Portugal | 143 415 | 151 460 | ( 10 130) | 100.00% | 100.00% Full consolidation | |
| BPI Moçambique – Sociedade de Investimento, S.A. | Mozambique | 355 | 1 225 | ( 22) | 98.74% | 100.00% Full consolidation | |
| Unicre - Instituição Financeira de Crédito, S.A. | Portugal | 77 247 | 325 484 | 11 004 | 21.01% | 21.01% Equity method |
Note: Unless otherwise indicated, all amounts are as of June 30, 2017 (accounting balances before consolidation adjustments). The financial statements of subsidiaries, associates and jointly controlled entities are pending approval by their respective governing bodies. However, the Board of Directors of Banco BPI believes that there will be no changes with significant impact on the consolidated net income of the Bank.
1 Share capital is made up of 5 000 ordinary shares of 1 Euro each, and 1 786 000 non-voting preference shares of 1 Euro each. Considering the total share capital of the company, the effective participation of the BPI Group in this company corresponds to 0.28%.
2 Includes net income for the period.
The consolidated financial statements were prepared from the accounting records of Banco BPI and its subsidiary and associated companies in conformity with International Accounting Standards/International Financial Reporting Standards (IAS/IFRS), as endorsed by the European Union in accordance with Regulation (EC) 1606/2002 of July 19 of the European Parliament and Council, incorporated into Portuguese legislation through Bank of Portugal Notice 1/2005 of February 21.
The consolidated financial statements have been prepared on a going concern basis, as provided for in IAS 1 – Presentation of financial statements.
The consolidated financial statements as of June 30, 2017 were approved by the Executive Commission of the Board of Directors on September 26, 2017.
During the six month period ended on June 30, 2017 no new standards, interpretations, amendments or revisions, endorsed by the European Union with mandatory application on this date were issued by IASB or IFIRC or entered in to force.
As of June 30, 2017, the following standards (new and revised) and interpretations, already adopted by the European Union, were available for early adoption:
These standards, although endorsed by the European Union, were not adopted by the BPI Group as of June 30, 2017, as their application is not yet mandatory.
In order to adopt IFRS 9, a multidisciplinary team was set up in 2015 at Banco BPI, combining members from different departments and management bodies of the Bank. Following the conceptual design of methodologies and processes, the Bank is in an implementation phase for the complete and timely adoption of the IFRS 9. The Bank considers advisable that disclosure of quantitative impacts should be made available only when the work development allows it to obtain stable and reliable estimates (Note 4.47).
Up to the date of approval of these financial statements, the following standards (new and revised) and interpretations were not yet endorsed by the European Union:
statements information to assess the effects of insurance contracts on the entities' financial position, performance and cashflows. It is mandatory for annual reporting periods beginning on or after January 1, 2021.
These standards were not yet endorsed by the European Union, and therefore, were not applied by the Group on the period ended on June 30, 2017.
The following accounting policies are applicable to the consolidated financial statements of the BPI Group.
On October 6, 2016, Banco BPI, S.A. entered into an agreement for the sale of 2% of the share capital of Banco de Fomento Angola, S.A. (BFA), the implementation of which implies a reduction of the Group's participation in BFA from 50.1% to 48.1%. The implementation of such agreement was dependent upon the fulfilment of a set of conditions, having the sale operation occurred on January 5, 2017. In this context, by the end of 2016 BFA's operations were classified as discontinued operations, in accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, with the comparative balances of the Consolidated Statements of Income and Profit or Loss and Other Comprehensive Income for the period ended on June 30, 2016 being restated. Also in accordance with IFRS 5, BFA's total assets and liabilities as of December 31, 2016 are presented in the captions "Non-current assets held for sale and discontinued operations" and "Non-current liabilities held for sale and discontinued operations". In accordance with IFRS 5, on December 31, 2016, this participation continued to be consolidated by the full consolidation method, because, on this date, Banco BPI maintained the control over BFA.
The consolidated financial statements as of June 30, 2016 were restated to reflect the fact that BFA was classified as a discontinued operation. The contribution of BFA's participation to the consolidated profit (net of taxes), on the period ended on June 30, 2016 is shown in a single line of the Income Statements ("Net income of discontinued operations").
The detail of the captions "Non-current assets held for sale and discontinued operations", "Non-current liabilities held for sale and discontinued operations" and "Net income from discontinued operations" is presented in Note 4.9 Discontinued operations.
On June 30, 2017, the participation on BFA is consolidated in accordance with the equity method of accounting as provided by IAS 28 - Investments in Associates and Joint Ventures.
Banco BPI has direct and indirect participations in subsidiary and associated companies.
Subsidiary companies are entities over which the Bank has control, which is when the following conditions are met, cumulatively: - power over the company;
exposure, or rights, to variable returns from its involvement with the company; and
ability to use this power over the company to affect the amount of the variable returns.
In the case of investment funds managed by BPI Gestão de Activos, it is assumed that there is control whenever the BPI Group has a participation of more than 20%. In the case of investment funds managed by Inter-Risco, the BPI Group does not consolidate the funds in which, despite having a participation greater than 20%, it does not have control over the investment decisions.
Associated companies are entities over which Banco BPI has direct or indirect significant influence over their management and financial policies but over which it does not have control. As a general rule, it is presumed that significant influence exists when the participation exceeds 20%.
The financial statements of subsidiary companies are consolidated using the full consolidation method. Significant intra-group transactions and account balances are eliminated in the consolidation process. The amount of share capital, reserves and net results corresponding to third party participation in these subsidiaries is reflected in the non-controlling interest caption, except for investment funds which are recorded in the caption Resources of Customers. When necessary, adjustments are made to the subsidiary companies' financial statements to ensure their consistency with the BPI Group's accounting policies.
Goodwill arising from the difference between the cost of acquisitions (including expenses) and the fair value of the identifiable assets, liabilities and contingent liabilities of subsidiary companies as of the date of the first consolidation are recorded as assets and are subject to impairment tests. When a subsidiary company is sold, goodwill is included in determining the gain or loss on the sale.
Associated companies are recorded in accordance with the equity method of accounting. In accordance with this method, the amount of the investment, which is initially recognised at cost, is adjusted by post-acquisition changes in the net asset value of the associated companies, in proportion to the BPI Group's participation.
Goodwill related to associated companies is included in the book value of the investment. The book value of associated companies (including goodwill) is subject to impairment tests in accordance with IAS 36 and IAS 39.
In the case of associated companies acquired in stages, goodwill is calculated at the time that the acquired company becomes an associate, being determined by the difference between the total acquisition cost of the investment and the proportion held of the fair value of the identifiable assets and liabilities of the associate as of that date. As provided for in IAS 28, total acquisition cost corresponds to the fair value of the original investment on the date that significant influence is achieved, plus the amount paid for the additional participation. In accordance with the policy established by the BPI Group, gains or losses on the revaluation to fair value of the original investment are recognised in the statement of income on the date the acquired company becomes an associate.
Following the loss of significant influence over an associated company (it is presumed that participation is less than 20%) and in accordance with IAS 28, the participation held is reclassified from the Investments in Associated Companies portfolio to the Financial Assets Available for Sale portfolio, being recorded at its fair value as of the date of the loss of significant influence. The difference between the fair value of the participation held and the cost of investment at that date is recognised in the statement of income.
In accordance with IFRS 1 and the BPI Group's accounting policies, up to the date of transition to IAS/IFRS, goodwill on investments acquired up to January 1, 2004 was deducted in full from shareholders' equity.
Negative goodwill arising from the difference between the cost of acquisitions (including expenses) and the fair value of the identifiable assets, liabilities and contingent liabilities of subsidiary and associated companies as of the date of the first consolidation or the date the equity method is first applied is immediately recognised in the statement of income.
The financial statements of subsidiary or associated companies which are inactive or in liquidation were excluded from the consolidation and from application of the equity method. These participations are classified as financial assets available for sale.
Consolidated net income is the sum of the individual net income of Banco BPI and the percentage of the net income of subsidiary and associated companies, equivalent to Banco BPI's effective participation in them, considering the period the participations are held for, after elimination of income and expenses resulting from inter-group transactions.
The foreign currency financial statements of subsidiary and associated companies were included in the consolidation after being translated to Euro at the exchange rates published by the Bank of Portugal and, in the case of BFA and BCI, by the Central Banks of Angola and Mozambique, respectively:
When a foreign entity is sold, the accumulated exchange difference is recognized in the statement of income as a gain or loss on disposal.
The exchange rates used for the translation to euros of the accounts of foreign subsidiaries and associated companies were as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Kwanza - Angola | 185.3930 | 185.3790 |
| Metical Mozambique | 69.0100 | 75.1600 |
| Swiss Franc | 1.0930 | 1.0739 |
| South Africa Rand | 14.9200 | 14.4570 |
| USA dollar | 1.1412 | 1.0541 |
Financial assets and liabilities are recognised in the BPI Group's balance sheet on the trade or contracting date, unless there is an express contractual stipulation or applicable legal or regulation regime under which the transactions' inherent rights and obligations are transferred at a different date, in which case the latter will be the relevant date.
Financial assets and liabilities are initially recorded at fair value plus direct transaction costs, except for assets and liabilities that have been recognised at fair value through profit or loss, in which case the transaction costs are immediately recorded in the statement of income.
In accordance with IFRS 13, fair value is understood to be the price that would be received from the sale of an asset or paid for the transfer of a liability in a transaction between market participants at the measurement date. On the contracting date or at the beginning of an operation fair value is generally the transaction amount.
Fair value is determined based on:
Financial assets are initially recognised, at the time of their acquisition or inception, under one of the four categories defined in IAS 39:
Following the amendment to IAS 39 in October 2008 entitled "Reclassification of financial assets", it became possible to reclassify financial assets between financial asset categories, as follows: (i) in specific circumstances, non-derivative financial assets (other than those initially designated as financial assets at fair value through profit or loss under the "fair value option") can be reclassified out of the fair value through profit and loss category, and (ii) financial assets which meet the definition of loans and receivables can be reclassified from the available-for-sale financial assets category to the loans and receivables category, provided that the entity has the intention and ability to hold the asset for the foreseeable future or until maturity. For reclassifications made up to November 1, 2008, the reference date of the changes made by the BPI Group was July 1, 2008. The reclassifications made on or after November 1, 2008 are effective only as from the reclassification date.
In Note 4.47 the valuation methods of assets and liabilities recorded at fair value (Financial assets held for trading and at fair value through profit or loss, financial liabilities held for trading and financial assets available for sale) are presented in detail.
These captions include:
Such assets and liabilities are valued daily at fair value, taking into account the own credit risk and counterparty risk of the operations. The book value of bonds and other fixed income securities includes accrued interest.
Gains and losses resulting from changes in fair value are recognised in the statement of income.
Derivative operations are subject to credit risk analysis, their value being adjusted with a corresponding entry to loss on financial operations.
This caption includes non-derivative financial assets with fixed or determinable payments and defined maturities that the BPI Group has the intention and ability to hold until maturity.
These investments are measured at amortised cost, using the effective interest rate method and subject to impairment tests. The impairment losses on financial investments held to maturity are recorded in the income statement. If, in a subsequent period, the amount of an impairment loss decreases and that decrease can be related objectively to an event occurring after the date on which the impairment loss was recognised, the previously recognised impairment loss is reversed through the statement of income for the year.
This caption includes:
Assets classified as available for sale are valued at fair value, except for equity instruments that are not traded on active markets and for which their fair value cannot be reliably measured or estimated. In this case they remain recorded at cost.
Gains and losses resulting from changes in the fair value of financial assets available for sale are recognised directly in shareholders' equity caption fair value revaluation reserve, except for impairment losses and exchange gains and losses on monetary assets, until the asset is sold. At this time, the gain or loss previously recognised in shareholders' equity is transferred to the statement of income.
Interest accrued on bonds and other fixed income securities and differences between their cost and nominal value (premium or discount) are recorded in the statement of income using the effective interest rate method.
Income from variable income securities (dividends in the case of shares) is recorded as income when it is declared or received. In accordance with this procedure, interim dividends are recorded as income in the period in which they are declared.
At the date of preparation of the financial statements, the Bank assesses the existence of objective evidence that financial assets available for sale are impaired, considering the market situation and the available information about the issuers.
In accordance with IAS 39, a financial asset available for sale is impaired and impairment losses are incurred if, and only if: (i) there is objective evidence of impairment as a result of one or more events that occurred after initial recognition of the asset (a "loss event") and (ii) that (those) loss event (s) has (have) an impact on the estimated future cash flows of the financial asset, that can be reliably estimated.
In accordance with IAS 39, objective evidence that a financial asset available for sale is impaired includes observable data regarding the following loss events:
In addition to the events relating to debt instruments referred to above, the existence of objective evidence of impairment on equity instruments also takes into consideration information about the following loss events:
When there is objective evidence that a financial asset available for sale is impaired, the accumulated loss in the fair value revaluation reserve is removed from equity and recognised in the statement of income.
Impairment losses recorded on fixed income securities are reversed through the statement of income if there is a positive change in the fair value of the security resulting from an event which has occurred after determination of the impairment. Impairment losses on variable income securities cannot be reversed. In the case of securities for which impairment losses have been recognised, subsequent negative changes in fair value are always recognised in the statement of income.
Exchange differences on non-monetary assets (equity instruments) classified in the available-for-sale portfolio are recognised in the exchange difference revaluation reserve. Exchange differences on other securities are recorded in the statement of income.
Financial assets available for sale, designated as hedged assets, are valued as explained in Note 2.3.7. Hedge Accounting – derivatives and hedged instruments.
Loans and other receivables include loans and advances made by the Bank to customers and to credit institutions, including finance lease operations, factoring operations, participation in syndicated loans and securitised loans (commercial paper and bonds issued by companies) that are not traded on an active market and which are not intended to be sold.
Loans and securitised loans traded on active markets are included in the caption "Financial assets available for sale".
At the inception date, loans and other receivables are recognised at fair value. In general, fair value at the inception date corresponds to the amount of the transaction and includes commission, taxes and other costs and income related to the credit operations. Loans and other receivables are subsequently valued at amortised cost, using the effective interest rate method and are subject to impairment tests.
Interest income, commission, fees and other costs and income on credit operations are recognised on an accruals basis over the period of the operations, regardless of when they are received or paid. Commission received relating to credit commitments is deferred and recognised on a straight-line basis over the period of the commitment.
The Bank classifies as overdue credit, instalments of principal and interest overdue for more than 30 days. Credits under legal collection procedures include the full amount of the principal (both overdue and not yet due).
The BPI Group writes off loans on operations considered to be unrecoverable, for which impairment losses have been recorded for their full amount in the month preceding the write-off.
Gains and losses on the sale of loans to customers on a definitive basis are recognized in net income on financial operations in the caption "Gain and loss on the sale of loans and advances to customers." These gains or losses correspond to the difference between the sale price and the book value of those assets, net of impairment losses.
Loans designated as hedged assets are valued as explained in Note 2.3.7. Hedge Accounting - derivatives and hedged instruments.
Lease operations in which the Bank transfers substantially all the risks and rewards of ownership of an asset to a customer or to a third party, are reflected on the balance sheet, at the inception date, as loans granted, at the net amount paid to acquire the leased asset. Lease instalments are composed of an interest income component and a principal repayment component. The interest income component for each period reflects an effective interest rate of return on the outstanding amount of principal.
Assets resulting from factoring operations with recourse are recorded on the balance sheet as loans granted, by the amount advanced on account under the terms of the corresponding contracts.
Assets resulting from factoring operations without recourse are recorded on the balance sheet as loans granted, by the amount of the credit taken, with a corresponding entry to the liability caption "Creditors for factoring operations". Amounts advanced under the contracts are debited to the caption "Creditors for factoring operations".
Invoices received under factoring contracts with recourse, in which amounts are not advanced, are recorded in the off-balance sheet caption, "Contracts with recourse – invoices not financed", by the amount of the invoices received. The balance of this caption is reduced as the invoices are settled.
Commitments resulting from unused credit lines negotiated with customers are recorded as off-balance sheet items.
The Bank does not derecognise credits sold in securitisation operations when:
Credits sold that have not been derecognised are recorded in the caption "Loans and advances to customers" and are subject to the accounting principles used for other credit operations. Interest, commission and fees relating to the securitised loan portfolio are accrued over the period of the credit operation.
Amounts received relating to securitisation operations are recorded under the caption "Financial liabilities relating to transferred assets". The respective interest, commission and fees are accrued based on the remuneration ceded by the Bank, in accordance with the expected average life of the securitisation operation at the launching date.
The risks and/or benefits maintained are represented by the bonds with the highest degree of risk, issued by the securitisation vehicle. The amount recorded in assets and liabilities represents the proportion of risk/benefit held by the Bank (continuing involvement).
Bonds issued by securitisation vehicles and held by the BPI Group entities are eliminated in the consolidation process.
Securities purchased with resale agreements are not recorded in the securities portfolio. Funds paid are recorded as loans at the settlement date, while interest is accrued.
Securities sold with repurchase agreements are maintained in their original securities portfolio. Funds received are recorded in the corresponding liability caption at the settlement date, while interest is accrued.
Guarantees given and irrevocable commitments are recorded in off-balance sheet accounts by the amount at risk, while interest, commission, fees and other income are recorded in the statement of income over the period of the operations. These operations are subject to impairment tests.
Loans, other receivables and guarantees given are subject to monthly impairment tests. Impairment losses identified are recorded by corresponding charge to the statement of income for the year. If, in subsequent periods, there is a decrease in the estimated impairment loss, the impairment loss initially recorded is reversed by credit to the statement of income.
In accordance with IAS 39 a financial asset is considered to be impaired when there is evidence that one or more loss events have occurred after initial recognition of an asset, and such events have an impact on the estimated recoverable value of the future cash flows of the financial asset considered.
IAS 39 defines some events that may be considered as objective evidence of impairment (breach of contract, such as delay in the payment of principal or interest; probability that the borrower will become bankrupt, etc.). However, in certain circumstances determination of impairment losses requires professional judgement.
Objective evidence of impairment is assessed as of the date of the financial statements.
Impairment assessment is made based on individual or collective basis for loans of significant amount and on collective basis where the loans are not significant in amount.
BPI's loan portfolio, guarantees and irrevocable commitments are segmented as follows for purposes of determining impairment:
Customer groups with exposures above 250 t. euros, included in the following segments, are subject to an individual impairment assessment:
The Bank ensures that the mentioned analysis is carried out at least once a year for all exposures referred to above and whenever the credits show signs of impairment or are in default.
The loan operations included in the aforementioned segments, which from the individual analysis did not reveal the need to record impairment losses, as well as the operations recorded in other segments not subject to individual analysis, are subject to collective analysis in order to determine the corresponding amount of impairment.
In the case of assets for which there is objective evidence of impairment on an individual basis, impairment is calculated operation by operation, based on the information included in the Bank's credit risk analysis models which consider, among others, the following factors:
In such situations the amount of the loss is calculated based on the difference between the book value and the estimated recoverable amount of the credit, after recovery costs, discounted at the effective rate of interest during the period from the date the impairment to the expected date of recovery.
The expected recoverable amount of the credit reflects the cash flows that can result from execution of the guarantees or collateral relating to the credit granted, less costs of the recovery process.
Assets evaluated individually, for which there are no objective signs of impairment, are included in a group of assets with similar credit risks, and impairment losses are assessed collectively.
Impairment for these groups of assets is assessed as explained in the following section – Collective assessment.
Assets assessed individually, for which an impairment loss is recognised, are excluded from the collective assessment.
Future cash flows of groups of credit subject to collective impairment assessment are estimated based on the past experience of losses on assets with similar credit risk characteristics.
Collective assessment involves estimating the following risk factors:
For purposes of determining the percentage of estimated loss on operations or customers in default, the Bank considers payments by customers after default, less direct costs of the recovery process. The flows considered are discounted at the interest rate of the operations and compared to the exposure at the time of default.
The inputs used for calculating collective impairment are determined based on statistical models for credit groups and revised regularly to approximate the estimated amounts to the actual amounts.
The amount of the loss results from a comparison of the book value with the present value of the estimated future cash flows. The interest rate of the operations at the date of each assessment is used to calculate the present value of the future cash flows.
After initial recognition, deposits and other financial resources of customers and credit institutions are valued at amortised cost, using the effective interest rate.
This category includes life capitalisation insurance without a discretionary participation feature.
Deposits designated as hedged liabilities are valued as explained in Note 2.3.7. Hedge Accounting – derivatives and hedged instruments.
Debt securities issued by the Bank are recorded under the captions Debt Securities and Other Subordinated debt.
At the date of issue, debt securities are recorded at fair value (issue value), including transaction expenses, commission and fees, and subsequently valued at amortised cost using the effective interest rate method.
Derivatives embedded in bonds are recorded separately and revalued at fair value through the statement of income.
Bonds designated as hedged liabilities are valued as explained in Note 2.3.7. Hedge Accounting – derivatives and hedged instruments.
Bonds issued by the Bank can be listed, or not, on the Stock Exchange.
The Bank repurchases bonds issued in the secondary market. Purchases and sales of own debt securities are included proportionately in the respective captions of debt issued (principal, interest, commission, fees and derivatives), and the differences between the amount liquidated and the decrease or increase in the amount of the liability are immediately recognised in the statement of income.
The BPI Group designates as hedging instruments, derivatives contracted to hedge interest rate and foreign exchange rate risk (fair value hedge operations) on financial assets and liabilities identified individually (bond portfolio, issuance of own debt securities and loans), and on groups of operations (term deposits and fixed rate loans).
The BPI Group has formal documentation of the hedge relationship identifying, at the inception of the transaction, the instrument (or part of the instrument, or part of the risk) that is being hedged, the strategy and type of risk being hedged, the hedging derivative and the methods used to demonstrate the effectiveness of the hedge.
Monthly, the Bank tests the effectiveness of the hedge by comparing changes in the fair value of the hedged instrument, attributable to the hedged risk, with changes in the fair value of the hedging derivative, the relationship between them being within the range of 80% to 125%.
Hedging derivative instruments are recorded at fair value and the gains and losses resulting from their revaluation are recognised in the statement of income. Gains and losses resulting from changes in the fair value of hedged financial assets or liabilities, attributable to the hedged risk, are also recognised in the statement of income, by corresponding entry to the book value of the hedged asset or liability in the case of operations at amortised cost (loans, deposits and debt issued) or to the fair value revaluation reserve in case of financial assets available for sale (bonds portfolio).
A hedged asset or liability may have only one part or one component of its fair value hedged (interest rate risk, foreign exchange rate risk or credit risk), provided that the effectiveness of the hedge can be measured separately.
When using hedge accounting, the Bank does not value the commercial spreads of the hedged assets or liabilities.
If the hedging relationship ceases to exist as a result of the relationship between the fair value changes of the derivatives and the hedged instruments being outside the 80% to 125% range, the derivatives are reclassified to trading instruments and the amount of the revaluation of the hedged instrument is recognised in the statement of income for the remaining period of the operation.
Hedging effectiveness tests are duly documented on a monthly basis, thus ensuring the existence of evidence during the period of the operation.
Foreign currency financial assets and liabilities are recorded in conformity with the multi-currency system that is in their original currencies.
Foreign currency assets and liabilities are translated to Euro at the official market rates published by the Bank of Portugal.
Foreign currency income and expenses are translated to Euro at the exchange rates in force on the dates they are recognised.
Tangible assets used by the Bank in its operations are stated at cost (including directly attributable costs) less accumulated depreciation and impairment losses.
Depreciation of tangible assets is recorded on a straight-line basis over their estimated useful lives, which corresponds to the period the assets are expected to be available for use:
| Useful life | |
|---|---|
| (years) | |
| Property | 20 to 50 |
| Improvements in owned property | 10 to 50 |
| Non-recoverable expenditure capitalised on leasehold buildings | 3 to 10 |
| Equipment | 3 to 12 |
| Other tangible assets | 3 to 10 |
Non-recoverable expenditure on improvements in leasehold buildings is depreciated in accordance with its estimated useful life or the remaining period of the lease contract.
As established in IFRS 1, tangible assets acquired by the BPI Group up to January 1, 2004 have been recorded at their book value at the date of transition to IAS/IFRS, which corresponds to cost adjusted for revaluations recorded in accordance with legislation, based on price level indices. In accordance with current tax legislation, 40% of the additional depreciation charge resulting from such revaluations is not deductible for income tax purposes, the resulting deferred tax liability being recognised.
Tangible assets acquired under finance lease operations, in which the Bank has all the risks and rewards of ownership, are depreciated in accordance with the procedures explained in the preceding section.
Lease instalments comprise an interest charge and a principal repayment component. The liability is reduced by the amount corresponding to the principal repayment component of each of the instalments and the interest is reflected in the statement of income over the term of the lease.
Assets (property, equipment and other assets) received in settlement of defaulting loans are recorded in the caption "Other assets" as they are not always in condition to be sold immediately and may be held for periods in excess of one year. Such assets are recorded at the legal or tax acquisition amount or the amount stated in the settlement agreement. Assets recovered following the resolution of lease contracts are recorded at the outstanding amount due not invoiced. Such property is subject to periodic appraisals, with impairment losses being recorded whenever the appraised value net of costs to sell is lower than its book value.
The caption "Other assets" also includes the Bank's tangible assets retired from use (unused property and equipment) which are in the process of sale. Such assets are transferred from tangible assets at their book value in accordance with IAS 16 (cost less accumulated depreciation and impairment losses) when they become available for sale, and are subject to periodic appraisals with impairment losses being recorded whenever the appraised value (net of selling costs) is lower than their book value.
The appraisals are carried out by independent appraisers registered at "Comissão do Mercado de Valores Mobiliários" (Portuguese Securities Market Regulator). Unrealized gains on these assets are not recognised in the balance sheet.
Tangible assets available for sale are not depreciated.
IFRS 5 - Non-current assets held for sale and discontinued operations applies to separate assets but also to disposal groups of assets and liabilities, when the entity intends to dispose of a group of assets with certain directly associated liabilities, together in a single transaction.
Non-current assets, or disposal groups of assets and liabilities, are classified as held for sale whenever it is expected that their book value will be recovered through sale rather than through their continued use. In order to be classified as such, an asset (or a disposal group of assets and liabilities) must meet the following conditions:
A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale, and (i) represents either a separate major line of business or a geographical area of operations, (ii) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or (iii) is a subsidiary acquired exclusively with a view to resale.
Assets classified in this caption are not amortized, being valued at the lower of cost and fair value, less costs to be incurred with the sale.
If book value is greater than fair value less costs to sell, an impairment loss is recognized in the caption "Impairment losses and other provisions, net".
In 2016, as a result of the agreement established between Banco BPI and Unitel for the sale of 2% of the share capital of Banco de Fomento Angola,SA (BFA), BFA's assets and liabilities were reclassified to the captions "Non-current assets held for sale and discontinued operations" and "Non-current liabilities held for sale and discontinued operations", respectively, in accordance to IFRS 5 - Non-current assets held for sale and discontinued operations.
The Bank recognises, in this caption, expenses relating to the development stage of projects implemented and to be implemented, as well as the cost of acquiring software, in both cases where the impact extends beyond the financial year in which the cost is incurred.
Intangible assets are amortised on a straight-line monthly basis over the estimated period of useful life of the assets which, in general, corresponds to a period of three years.
To date the Bank has not recognised any intangible assets generated internally.
The BPI Group companies that have adhered to the Collective Vertical Labour Agreement for the Portuguese Banking Sector (Acordo Colectivo de Trabalho Vertical para o Sector Bancário Português) have assumed the commitment to pay their employees or their families, pensions for retirement due to age or incapacity, pensions for early retirement or survivor pensions (defined benefit plan). The pensions consist of a percentage, which increases with the number of years of service of the employees, applied to their salaries.
Up to December 31, 2010 the majority of employees of the BPI Group was not covered by the Portuguese Social Security system. With the publication of Decree-Law 1-A/2011 of January 3, all the bank employees that benefit from CAFEB – Caixa de Abono de Família dos Empregados Bancários were incorporated into the General Social Security Regime as from January 1, 2011, becoming covered by this regime as regards old age pensions and possible maternity, paternity and adoption, the cost of which the Bank no longer covers. Given the complementary nature of the rules of the Collective Labour Agreement for the Portuguese Banking Sector, the Bank will continue to cover the difference between the amount of the benefits paid under the General Social Security Regime for the items covered and the benefits established in the Collective Labour Agreement.
Incapacity and survivor pensions and sickness subsidy of these employees will continue to be the Bank's responsibility.
Following the Three Party Agreement between the Government, the Credit Institutions and the Labour Unions for the Banking Sector, Decree-Law 127/2011 of December 31 was published, which establishes transfer to the Social Security of the liability for retirement and survivor pensions of retirees and pensioners which at December 31, 2011 were in that situation and were covered by the substitute social security regime included in the collective labour regulations in force for the banking sector (Pillar 1), as well as transfer to the Portuguese State of the part of the pension fund assets covering these liabilities.
Through its pension fund, Banco BPI retains the liability for payment of (i) the amount of updates of the pensions mentioned above, according to the criteria set out in the Collective Labour Agreement (Acordo Colectivo de Trabalho); (ii) the complementary benefits to the retirement and survivor pensions assumed by the Collective Labour Agreement; (iii) the contribution on retirement and survivor pensions for Social Medical Support Services (Serviços de Apoio Médico-Social - SAMS); (iv) death subsidy; (v) survivor pensions to children and surviving spouse related to the same employee and (vi) survivor pension due to the family of a retired employee, in which the conditions for being granted occurred as from January 1, 2012.
The value of the pension fund assets transferred to the Portuguese State was equal to the amount of the liabilities assumed by the Social Security and was determined taking into account the following assumptions: (i) discount rate of 4%; (ii) mortality tables in accordance with the regulations defined by the Portuguese Insurance Authority (Autoridade de Supervisão de Seguros e Fundos de Pensões): male population: TV 73/77 less 1 year; female population: TV 88/90.
Transfer of the Bank's pension fund assets was made entirely in cash.
The Bank transferred ownership of the assets under the following conditions: (i) up to December 31, 2011, the amount equivalent to 55% of the provisional present value of the liabilities; (ii) by June 30, 2012, the remaining amount to complete the current definitive amount of the liabilities, as a result of the final determination of the liabilities transferred, made by an expert independent entity hired for the purpose by the Ministry of Finance.
Since the transfer to the Social Security corresponds to settlement, with extinction of the corresponding liability of Banco BPI, the difference between the amount of the pension fund assets transferred to the Portuguese State and the amount of the liabilities transferred based on the actuarial assumptions used by Banco BPI was recorded in the statement of income caption "Operating gains and losses", as provided for in paragraph 110 of IAS 19.
In accordance with the Decree-Law 127/2011 of December 31, the cost incurred as a result of the transfer of the liability for retirement and survivor pensions of retired personnel and pensioners to the Social Security is tax deductible, in equal amounts, in the tax years beginning on or after January 1, 2012 based on the estimated average number of years of life expectancy of the pensioners whose liabilities were transferred, which is estimated at 18 years, and so the corresponding deferred tax asset relating to the amount settled was recognised in the statement of income.
On June 14, 2016 a new Collective Labour Agreement (ACT) was signed with the labour unions. It was published in the Labour and Employment Bulletin ("Boletim do Trabalho e do Emprego") on August 8, 2016 and entered into force on the following day.
The new ACT maintained the pension regime as well as the supplementary health system (SAMS) applicable to employees and pensioners of Banco BPI unchanged, having, however, established new rules for the financing of SAMS for which financial institutions are responsible.
Following this change the BPI Group's SAMS liability with respect to retirees and pensioners changed from a percentage (6.5%) over the amount of the pension to a fixed per capita amount for each type of beneficiary (retired or survivor pensioner).
The impact of this change was a decrease in the past service liability in the amount of 22 215 t. euro. To the extent that is a change in the benefits of the pension plan, this impact was recorded in the statement of income caption "Personnel costs", as provided for in paragraph 103 of IAS 19 (Note 4.41).
Additionally, with the new ACT mandatory promotions due to time of service were eliminated, except for the next promotion for employees that have been promoted up to December 31, 2014. The impact of the elimination of mandatory promotions due to time of service resulted in a reduction of 9 593 t. euro in the past service liability, which was recorded by corresponding entry to equity (actuarial deviations) (Note 4.26), since the mandatory promotions due to time of service were incorporated into the salary growth assumption used by Banco BPI.
The BPI Group determines the amount of its past service liability by actuarial calculation using the "Projected Unit Credit" method in the case of retirement due to age, and the "Single Successive Premiums" method in the case of retirement due to incapacity and survivor benefits. The actuarial assumptions used (financial and demographic) are based on the expectations, as of the balance sheet date, regarding salary and pension increases, using mortality tables adapted to the Bank's population. The discount rate is determined based on market rates for low risk bonds with similar terms to those of the related pension liability. The current economic situation and sovereign debt crisis in Southern of Europe have caused volatility and disruption in the debt market in the Eurozone, with an abrupt decrease in market yields on corporate bonds with better ratings and also a reduction in the available portfolio of these bonds. In order to maintain the representativeness of the discount rate in these circumstances, Banco BPI incorporated in its determination, information on interest rates that can be obtained on bonds of the Eurozone universe and that it considers to be of high quality in terms of credit risk, as of the date of the financial statements. An analysis of the actuarial assumptions and, if applicable, their corresponding change, is carried out by the BPI Group as of June 30 and December 31 of each year. In 2016, the BPI Group updated the assumptions (discount rate) as of December, 31. As of June 30, 2017, BPI group updated again the discount rate and the mortality table in regard with the life expectancy of the male population (employees, retired and pensioners). The update of the referred assumptions is reflected in the determination of the actuarial deviations and prospectively in pension costs. The amount of the liability includes, in addition to the retirement pension benefits, postemployment healthcare benefits (SAMS) and death subsidy during retirement.
In accordance with the requirements of IAS 19, the BPI Group recognizes the effect of re-measuring the net liability (asset) of defined benefit pension plans and other post-employment benefits, directly in equity, in the Statement of Comprehensive Income, in the period in which it occurs, including actuarial gains and losses and deviations relating to the return on pension fund assets.
The increase in the past service liability resulting from early retirements is fully recognised as cost in the statement of income for the year.
Increases in the past service liability resulting from changes in the conditions of the Pension Plans are recognised in full in the statements of income.
The past service liability (post-employment benefits) is covered by Pension Funds. The value of the Pension Funds corresponds to the fair value of their assets at the balance sheet date.
The funding requirements of the Pension Fund are defined in Bank of Portugal Notice no. 4/2005, which establishes the requirement to fully fund (100%) pensions under payment and a minimum of 95% of the past service liability for current personnel.
The past service liability for retirement pensions net of the amount of the pension fund is recorded in the BPI Group's financial statements under the caption "Other liabilities" (insufficient coverage) or "Other assets" (excess coverage).
The following costs relating to retirement and survivor pensions are included in the consolidated statement of income of the BPI Group:
The above components are recognised in personnel costs, except the cost of the interest of all liabilities and expected return on pension funds that are recorded in net income on financial operations – interest and financial gain and loss with pensions.
At the transition date to IAS/IFRS, the BPI Group adopted the option, allowed under IFRS 1, of not recomputing actuarial gains and losses deferred since the inception of the pension plans (reset option). Consequently, deferred actuarial gains and losses reflected in the BPI Group's financial statements as of December 31, 2003 were reversed by corresponding entry to retained earnings at the transition date (January 1, 2004).
Up to June 2016, under the Collective Labour Agreement for the banking sector there was a commitment to pay employees (of domestic operations) a long service premium in the month in which they reach 15, 25 and 30 years of good and effective service in the banking sector, corresponding, respectively, to one, two and three months of their effective monthly remuneration (in the year the premium was attributed).
With the entry into force of the new ACT, the long service premium was eliminated. However, the new ACT established the payment of the proportional part of the long service premium for the current 15, 25 or 30 years anniversary of banking service corresponding to the time of good and effective service in the banking sector at the time of the entry into force of the new ACT.
The new ACT provides for the payment of a final career premium corresponding to 1.5 times the effective monthly remuneration of the employee at the time of termination of the labour contract due to retirement. Considering that the final career premium corresponds to a post-employment benefit in accordance with IAS 19, the corresponding actuarial deviations are recognized in equity.
The net impact of the elimination of the long service premium and the creation of the final career premium corresponded to a decrease of 20 673 t. euro in the past service liability (Note 4.25). To the extent that this is a change of benefits of the pension plan, this impact was recorded in the statement of income caption "Personnel costs", as provided for in paragraph 103 of IAS 19 (Note 4.41).
Annually, the BPI Group determines the present value of the liability for long service premiums (until June 2016) and for final career premiums by actuarial calculation using the "Projected Unit Credit" method. The actuarial assumptions used (financial and demographic) are based on the expectations, as of the balance sheet date, regarding salary increases, using mortality tables adapted to the Bank's population. The discount rate used is determined based on market rates for high quality corporate bonds with similar terms to those of payment of the liability. The assumptions are mutually compatible.
The liabilities for long service premiums (up to June 2016) and for final career premiums are reflected under the caption "Other liabilities" (Note 4.25).
The following costs relating to the liability for long service premiums are included in the consolidated statement of income of the BPI Group:
Long service premiums and final career premiums are only paid to employees of domestic operations.
Treasury shares are recorded at cost in equity captions and are not subject to revaluation. Realised gains and losses, as well as the resulting taxes, are recorded directly in shareholders' equity, not affecting net income for the year.
As described in the Annual Report and Accounts as of December 31, 2016, the share-based payment programme (RVA) is a remuneration plan under which, whenever it is decided to grant variable remuneration to Executive Directors and employees of the BPI Group (in the latter case provided that it exceeds 2 500 euro), it is partly made up of BPI shares and BPI share options. The individual remuneration under the RVA programme varies between 10% and 50%, the percentage increasing with the responsibility level of the beneficiary.
The only exception to this rule relates to the remuneration of the employees responsible for control functions which, in spite of being based principally on a fixed remuneration component, may include variable remuneration provided that it does not exceed 25% of their total remuneration which, however, will always be paid in cash
Costs relating to the share-based payment programme (RVA programme) are accrued under the caption "Personnel costs" with a corresponding entry to "Other equity instruments", as established by IFRS 2 for share-based payments. The cost of the shares and option premiums, as of the date they are granted, is accrued on a straight-line basis from the beginning of the year of the programme (January 1) to the moment they become available to the employees.
For the purpose of share-based payments, the Bank has created a portfolio of BPI shares transferring ownership of the shares to employees on the grant date (in the case of Executive Directors, after verifying the suspension terms and conditions). However, for accounting purposes, the shares remain in the Bank's treasury share portfolio until the date they are made available. The shares are then derecognised by corresponding entry to the amounts accumulated under the caption "Other equity instruments".
For purposes of the share-based payment in options, the BPI Group has created a portfolio of BPI shares in order to hedge the liability resulting from issuing call options over the BPI shares, following a delta hedging strategy (determined using a model to evaluate the BPI share options, developed in-house based on Black-Scholes methodology).
This strategy corresponds to the creation of a portfolio with delta shares for each option granted, delta corresponding to the relationship between evolution of the price of an option and evolution of the price of the underlying shares. The treasury shares held to hedge the risk of variation in the value of the options sold are recorded under the caption "Treasury shares hedging the share-based payment programme", where they remain while they are held for that purpose.
When the options are exercised, the treasury shares are derecognised together with transfer of their ownership to the employees. At that time the Bank recognises a gain or loss resulting from the difference between the exercise price and the average cost of the treasury share portfolio hedging each programme, less the cost of the option premiums accumulated in the caption "Other equity instruments".
Realised gains and losses on treasury shares in the coverage and exercise of the options of the share-based payment programme, as well as the related taxes, are recorded directly in shareholders' equity, not affecting net income for the year.
2.10.2 New Policy for the Executive Directors – as resolved by the Shareholders on the General Meeting held on April 26, 2017 On April 26, 2017 the Shareholders of Banco BPI aproved the new remuneration policy applicable to the Executive Directors ("Política de Remuneração do Banco BPI aplicável aos membros do Conselho de Administração e do Conselho aprovada na Assembleia Geral de Accionistas de 26 de Abril de 2017" available on www.ir.bpi.pt).
In accordance with this Policy the remuneration of Executive Directors is composed by a fixed remuneration and a variable remuneration distributed as a bonus.
The variable remuneration distributed as a bonus includes:
The distribution of instruments will be made, preferably, with CaixaBank shares, however Banco BPI can distribute other instruments in accordance with article 115-E of RGIC, on Delegated Regulation 527/2014 and with EBA Orientations.
The variable remuneration distributed as a bonus must fulfil the following requirements in terms of payment tranches:
The deferred remuneration corresponds to 60% of the variable remuneration of the Executive Directors.
In addition, all instruments distributed are subjet to a retention period of one year, starting on the distribution/payment date, during which the Executive Director cannot liquidate the distributed instruments. During this period the Executive Director is the owner of the inherent rights of the distributed instruments.
With the approval of the new remuneration policy, the share-based payment programme (RVA) for Executive Directors, described in 2.10.1, is no longer valid for the year 2017 and subsequent years.
Considering that:
The Bank is developing a new remuneration policy for the employees which is being prepared for approval.
The BPI Group sells capitalisation life insurance products through its subsidiary BPI Vida. Capitalisation insurance products without discretionary participation features are recorded in accordance with IAS 39 and included in the caption "Resources of customers and other debts". Capitalisation insurance products with discretionary participation features are recorded in accordance with IFRS 4, in the caption "Technical provisions".
The technical provisions recorded for life insurance contracts represent, collectively, the liability to the insured customers and include:
This caption includes provisions to cover other specific risks, namely tax contingencies, legal processes and other losses arising from the operations of the BPI Group.
All the Group companies are taxed individually.
Banco BPI and its subsidiary and associated companies with head offices in Portugal are subject to the tax regimes established in the Corporation Income Tax Code (Portuguese initials - CIRC) and in the Statute of Tax Benefits.
Current taxes are calculated based on the legal tax rates in force in the countries in which the Bank operates during the reporting period.
Deferred tax assets and liabilities correspond to the tax recoverable and payable in future periods resulting from temporary differences between the carrying value of assets and liabilities and their respective tax bases. Tax losses carried forward and tax credits also give rise to the recognition of deferred tax assets.
Deferred tax assets are recognised only to the extent of the probable existence of sufficient expected future taxable income to absorb the deductible temporary differences.
Deferred tax assets and liabilities have been calculated using the tax rates decreed for the period in which the respective assets or liabilities are expected to be realised.
Current and deferred taxes are recognised in the statement of income, except for those relating to amounts recorded directly in shareholders' equity (namely gains and losses on treasury shares and securities available for sale and actuarial deviations in retirement and survivor pension liabilities).
The BPI Group does not recognize deferred tax assets and liabilities for deductible or taxable temporary differences relating to investments in subsidiaries as it is unlikely that such differences will be reversed in the foreseeable future. Until December 31, 2016 deferred tax liabilities were recorded relating to taxation in Angola of the dividends to be distributed to the companies of the BPI Group, in the following year, over the net result for the year of Banco de Fomento Angola.
The BPI Group does not recognize deferred tax assets and liabilities for deductible or taxable temporary differences relating to investments in associated companies, as the participation held by the BPI Group exceeds 10% for more than one year, which enables it to be considered in the Participation Exemption regime, except for Banco Comercial e de Investimentos and Banco Fomento Angola, in which the deferred tax liabilities related to taxation in Mozambique and Angola of all the distributable profits are recognized.
Net income distributed to Banco BPI by subsidiary and associated companies in Portugal are not taxed in Banco BPI as a result of applying the regime established in article 51 of the Corporation Income Tax Code, which provides for the elimination of double taxation for distributed net income.
Preference shares are classified as equity instruments when:
The BPI Group classified the preference shares issued by BPI Capital Finance Ltd. as equity instruments. The payment of dividends and redemption of the shares are guaranteed by Banco BPI.
The preference shares classified as equity instruments, held by third parties, are presented in the consolidated financial statements in the caption "Non-controlling interest".
Realized gain and loss on the repurchase and sale of preference shares classified as equity instruments, as well as the corresponding tax effect, are recorded directly in shareholders' equity, not affecting net result for the year.
Banco BPI is duly authorized by the Portuguese Insurance Authority (Autoridade de Supervisão de Seguros e Fundos de Pensões) to provide insurance brokerage services in the Insurance Brokerage Services area, in accordance with the article 8, paragraph a), subparagraph i) of Decree-Law 144/2006 of July 31, and operates in the life and non-life insurance brokerage areas.
In the insurance brokerage services area, Banco BPI sells insurance contracts. As remuneration for insurance brokerage services rendered, Banco BPI receives commission for brokering insurance contracts, which is defined in agreements/protocols established between Banco BPI and the Insurance Companies.
Commission received for insurance brokerage services refers to:
Commission received for insurance brokerage services are recognized on an accruals basis. Fees received in a different period from that to which they relate are recorded as receivables in the caption "Other assets" by corresponding entry to "Commissions received - for insurance brokerage services".
Banco BPI does not collect insurance premiums on behalf of Insurance Companies, or receive or pay funds relating to insurance contracts. Thus, there are no other assets, liabilities, income or expenses to be recognized relating to the insurance brokerage services rendered by Banco BPI, from those already referred to.
The BPI Group's financial statements have been prepared using estimates and expected future amounts in the following areas:
Retirement and survivor pension liabilities have been estimated based on actuarial tables and assumptions of the increase in pensions and salaries and discount rates. These assumptions are based on BPI Group's expectations for the period during which the liabilities will be settled.
Loan impairment has been determined based on expected future cash flows and estimated recoverable amounts. The estimates are made using assumptions based on the available historical information and assessment of the situation of the customers. Possible differences between the assumptions used and the actual future behaviour of the loans and changes in the assumptions used by the BPI Group have an impact on the estimates.
Current and deferred taxes have been recognised based on the tax legislation currently in force for the BPI Group companies or on legislation already published for future application. Different interpretations of tax legislation can influence the amount of income taxes. Additionally, deferred tax assets are recognised based on the assumption of the existence of future taxable income.
The fair value of derivatives and unlisted financial assets was estimated based on valuation methods and financial theories, the results of which depend on the assumptions used.
The financial market environment, particularly in terms of liquidity, can influence the realisable value of these financial instruments in some specific situations, including their sale prior to maturity.
The BPI Group's segment reporting is made up as follows:
The BPI Group's operations are focused mainly on commercial banking. Commercial banking includes:
Investment banking covers the following business areas:
This segment includes essentially Financial Investments and Private Equity activities. The BPI Group Private Equity area invests essentially in unlisted companies with the following objectives: the development of new products and technologies, financing of investments in working capital, acquisitions and the strengthening of financial autonomy.
This segment also includes the Bank's residual activity, such segments representing individually less than 10% of total income, net profit and the Group's assets.
Inter-segment operations are presented based on the effective conditions of the operations and application of the accounting policies used to prepare the BPI Group's consolidated financial statements.
The reports used by Management consist essentially of accounting information based on IFRS.
| Do | sti rat me c o pe |
ion s |
Int ati al tio ern on op era ns |
||||||
|---|---|---|---|---|---|---|---|---|---|
| Co ial mm erc ban kin g |
Inv est nt me ban kin g |
Eq uity inv est nts me and oth ers |
Inte r nt seg me rati ope ons |
T o tal |
An la ( go BF A) |
Oth ers |
T o tal |
BP I G rou p |
|
| AS SE TS |
|||||||||
| Cas h a nd dep osi ts a t ce ntra l ba nks |
983 40 3 |
983 40 3 |
983 40 3 |
||||||
| Dep osi her dit ins titu tion ts a t ot cre s |
462 110 |
5 2 68 |
12 0 55 |
( 179 40 7) |
300 02 6 |
1 | 1 | 300 02 7 |
|
| ld f Fin ial ets he or t rad ing anc ass |
|||||||||
| and at fair lue thr h p rofi t or los va oug s |
2 4 09 732 |
( 1) |
2 4 09 731 |
2 4 09 731 |
|||||
| Fin ial ets aila ble for le anc ass av sa |
3 6 36 330 |
6 11 |
142 32 9 |
3 7 79 270 |
3 7 79 270 |
||||
| Loa and ad to dit ins titu tion ns van ces cre s |
1 01 9 9 27 |
16 0 00 |
2 8 95 |
( 294 87 3) |
743 94 9 |
6 08 |
608 | 744 55 7 |
|
| Loa and ad to tom ns van ces cus ers |
23 171 415 |
( 351 56 9) |
22 819 84 6 |
22 819 84 6 |
|||||
| Hel d to ity inv tur est nts ma me |
14 4 15 |
14 4 15 |
14 4 15 |
||||||
| Hed ing de riva tive g s |
20 673 |
( ) 236 |
20 437 |
20 437 |
|||||
| Oth er t ible set ang as s |
42 726 |
871 | 43 597 |
103 | 103 | 43 700 |
|||
| Inta ible set ng as s |
24 557 |
171 | 24 728 |
14 | 14 | 24 742 |
|||
| Inv est nt i cia ted ani and jo intl ont roll ed ent itie me n a sso co mp es y c s |
67 504 |
61 4 85 |
128 98 9 |
492 06 4 |
53 904 |
545 96 8 |
67 4 9 57 |
||
| Tax set as s |
470 27 0 |
2 5 54 |
( 749 ) |
472 07 5 |
49 7 |
749 | 472 82 4 |
||
| Oth ts er a sse |
501 45 0 |
5 4 03 |
111 | ( ) 43 971 |
462 99 3 |
5 02 |
502 | 463 49 5 |
|
| TO TA L A SS ET S |
32 824 51 2 |
30 878 |
218 12 6 |
( 870 05 7) |
32 20 3 4 59 |
49 2 0 64 |
88 1 55 |
47 94 5 5 |
32 1 4 04 75 |
| ES LIA BIL ITI |
|||||||||
| Res of tral ba nks our ces cen |
2 14 5 3 81 |
2 14 5 3 81 |
2 14 5 3 81 |
||||||
| Fin ial liab iliti hel d fo din r tra anc es g |
185 78 7 |
( 1) |
185 78 6 |
185 78 6 |
|||||
| Res of oth red it in stit utio our ces er c ns |
1 57 7 8 62 |
08 5 |
96 455 |
( 51 5 02) |
1 62 3 3 23 |
8 21 |
821 | 1 62 4 14 4 |
|
| of Res tom d o the r de bts our ces cus ers an |
22 775 39 2 |
( 2) 439 92 |
22 335 47 0 |
22 335 47 0 |
|||||
| Deb t se itie cur s |
619 05 1 |
( 350 160 ) |
268 89 1 |
268 89 1 |
|||||
| Fin ial liab iliti rela ting to tran sfe rred set anc es as s |
511 425 |
511 425 |
511 425 |
||||||
| Hed ing de riva tive g s |
77 964 |
77 964 |
77 964 |
||||||
| Pro vis ion s |
65 100 |
3 2 04 |
68 304 |
487 | 487 | 68 791 |
|||
| Te chn ica l pr ovi sio ns |
1 92 3 5 75 |
1 92 3 5 75 |
1 92 3 5 75 |
||||||
| Tax lia bili ties |
14 3 61 |
5 63 |
( 1 36 4) |
13 5 60 |
47 754 |
5 7 77 |
53 531 |
67 091 |
|
| Oth ubo rdin ate d d ebt d p arti cip atin bon ds er s an g |
375 62 4 |
( 1 79 2) |
373 83 2 |
373 83 2 |
|||||
| Oth er l iab iliti es |
610 02 3 |
5 4 20 |
17 8 12 |
( 26 680 ) |
606 57 5 |
16 1 |
161 | 606 73 6 |
|
| T OT AL LI AB ILI T IES |
30 88 1 5 45 |
6 4 91 |
116 10 7 |
( 870 05 7) |
30 134 08 6 |
47 754 |
7 2 46 |
55 000 |
30 189 08 6 |
| SH AR EH OL DE RS ' E QU ITY |
|||||||||
| Sh hol der s' e ity attr ibu tab le t o th har eho lde f B PI are qu e s rs o |
1 94 1 21 3 |
24 387 |
102 019 |
2 0 67 619 |
444 310 |
48 635 |
492 94 5 |
2 5 60 564 |
|
| Non ntro llin inte ts -co g res |
1 75 4 |
1 75 4 |
1 75 4 |
||||||
| T OT AL SH AR EH OL DE RS ' E QU IT Y |
1 9 42 96 7 |
24 387 |
102 01 9 |
2 0 69 373 |
4 44 310 |
48 635 |
49 2 9 45 |
2 5 62 318 |
|
| T OT AL LI AB ILI T IES AN D S HA RE HO LD ER S' EQ UIT Y |
32 824 51 2 |
30 878 |
218 12 6 |
( 870 05 7) |
32 20 3 4 59 |
49 2 0 64 |
55 88 1 |
547 94 5 |
32 75 1 4 04 |
| Inv ad e i est nts me m n: |
|||||||||
| Pro ty per |
46 | 46 | 46 | ||||||
| Eq uip nt a nd oth er t ible set me ang as s |
789 | 789 | 11 | 11 | 800 | ||||
| Inta ible set ng as s |
4 3 64 |
4 3 64 |
9 | 9 | 4 3 73 |
| Do me |
sti rat c o pe |
ion s |
Int ati ern |
al on op |
tio era ns |
|||||
|---|---|---|---|---|---|---|---|---|---|---|
| Co ial mm erc ban kin g |
Inv est nt me ban kin g |
Eq uity inv est nt me and oth ers |
Inte r nt seg me rati ope ons |
T o tal |
An la ( go BF A) |
Oth ers |
T o tal |
Inte r nt seg me rati ope ons |
BP I G rou p |
|
| Inte t an d s imi lar inc res om e |
228 35 8 |
( 122 ) |
174 | ( 102 ) |
228 30 8 |
3 4 |
34 | ( 24) |
228 318 |
|
| Inte d s imi lar t an res exp ens es |
( 45 658 ) |
( 308 ) |
102 | ( 45 864 ) |
( 148 ) |
( 148 ) |
24 | ( 45 988 ) |
||
| Fin cia l m in (na ) an arg rro w s en se |
182 70 0 |
( 43 0) |
174 | 182 44 4 |
( 114 ) |
( 114 ) |
182 33 0 |
|||
| Gro in o nit link ss ma rg n u s |
6 4 34 |
6 4 34 |
6 4 34 |
|||||||
| Inc e fr uity ins tru nts om om eq me |
3 9 80 |
2 4 21 |
6 4 01 |
6 4 01 |
||||||
| Net iss ion rel atin rtis ed to a t co mm g mo cos |
10 3 44 |
10 3 44 |
10 3 44 |
|||||||
| Fin cia l m in an arg |
20 3 4 58 |
( 43 0) |
2 5 95 |
20 5 6 23 |
( 114 ) |
( 114 ) |
20 5 5 09 |
|||
| t of Te chn ica l re sul ins ntra cts ura nce co |
7 4 37 |
7 4 37 |
7 4 37 |
|||||||
| Co iss ion cei ved mm s re |
14 6 2 61 |
7 0 15 |
( 21 6 08) |
131 668 |
5 75 |
575 | 132 24 3 |
|||
| Co iss ion aid mm s p |
( 32 515 ) |
( 3 9 16) |
( 2) |
21 6 08 |
( 14 8 25) |
( 14 8 25) |
||||
| Oth er i t nco me , ne |
14 47 8 |
14 4 78 |
14 4 78 |
|||||||
| Ne t c mi ion in om ss co me |
12 8 2 24 |
3 0 99 |
( 2) |
131 32 1 |
575 | 575 | 131 89 6 |
|||
| Ga in a nd los atio at f air val s o n o per ns ue |
11 567 |
2 8 08 |
14 3 75 |
14 3 75 |
||||||
| Ga le f in a nd los ts a vai lab ale s o n a sse or s |
776 | 776 | 776 | |||||||
| Inte t an d f ina nci al g ain d lo wit h p ion res an ss ens s |
( 405 ) |
( 4) |
( 409 ) |
( 409 ) |
||||||
| fin Ne t in cia l o rat ion co me on an pe s |
11 93 8 |
2 8 04 |
14 742 |
14 742 |
||||||
| Op ting inc era om e |
21 97 7 |
21 9 77 |
35 | 35 | 22 012 |
|||||
| Op ting era ex pen ses |
( 32 720 ) |
( 16) |
( 28) |
( 32 764 ) |
( 174 85 1) |
( 1) |
( 174 85 2) |
( 207 616 ) |
||
| Oth er t axe s |
( 5 3 11) |
( 93) |
( 5 4 04) |
( 30) |
( 30) |
( 5 4 34) |
||||
| Ne t o rat ing pe ex pe ns es |
( 16 054 ) |
( 109 ) |
( 28 ) |
( 16 191 ) |
( 174 85 1) |
4 | ( 174 84 7) |
( 191 03 8) |
||
| Op e f tin inc ba nk ing tiv ity era g om rom ac |
3 35 003 |
5 3 64 |
2 5 65 |
342 93 2 |
( 174 85 1) |
4 65 |
( 174 38 6) |
168 54 6 |
||
| Per nel sts son co |
( 235 139 ) |
( 5 9 00) |
( 105 ) |
( 241 144 ) |
( 821 ) |
( 821 ) |
( 241 96 5) |
|||
| Ge al a dm inis trat ive sts ner co |
( 83 574 ) |
( 1 87 6) |
( 13) |
( 85 463 ) |
( 250 ) |
( 250 ) |
( 85 713 ) |
|||
| Dep iati and orti sat ion rec on am |
( 10 8 93) |
( 83) |
( 10 9 76) |
( 27) |
( 27) |
( 11 0 03) |
||||
| Ov erh d c ost ea s |
( 6) 329 60 |
( 59) 7 8 |
( ) 118 |
( 83) 33 7 5 |
( 98) 1 0 |
( 98) 1 0 |
( 1) 338 68 |
|||
| Rec f lo inte t an d e ove ry o ans res xpe nse s , |
9 0 88 |
9 0 88 |
9 0 88 |
|||||||
| Imp airm los d p isio for loa and ent nte ses an rov ns ns gu ara es, |
( 16 5 83) |
( 16 5 83) |
( 16 5 83) |
|||||||
| Imp airm ent los d o the ovi sio t ses an r pr ns, ne |
3 8 43 |
2 | ( ) 179 |
3 6 66 |
( ) 699 |
( ) 699 |
2 9 67 |
|||
| Ne t in be for e i e t co me nc om ax |
1 7 45 |
( 2 4 93) |
2 2 68 |
1 5 20 |
( 174 85 1) |
( 1 3 32) |
( 176 18 3) |
( 174 66 3) |
||
| Inc e ta om x |
517 | 776 | ( 1 09 8) |
19 5 |
( 47 469 ) |
( 475 ) |
( 47 944 ) |
( 47 749 ) |
||
| Ear nin of a cia ted ani (eq uity tho d) gs sso co mp es me |
4 2 60 |
4 7 30 |
8 9 90 |
106 67 0 |
5 0 51 |
111 721 |
120 71 1 |
|||
| Ne t in fr nti ing tio co me om co nu op era ns |
6 5 22 |
( 1 7 17) |
5 9 00 |
10 705 |
( 115 65 0) |
3 2 44 |
( 112 40 6) |
( 101 70 1) |
||
| Ne t in fr di tin d o ion rat co me om sc on ue pe s |
||||||||||
| ts f Inc ttrib uta ble to ntro llin inte om e a non -co g res rom |
||||||||||
| tinu ing tion con op era s |
( 24) |
( 24) |
( 24) |
|||||||
| Inc ttri bu tab le to tro llin int sts om e a no n-c on g ere |
( 24 ) |
( 24 ) |
( 24 ) |
|||||||
| Co lid ate d n et inc f th e B PI Gr nso om e o ou p |
6 49 8 |
( 1 7 17) |
90 0 5 |
10 68 1 |
( 115 65 0) |
3 244 |
( 112 40 6) |
( 101 72 5) |
||
| Cas h fl afte r ta ow xes |
30 131 |
( 1 63 6) |
6 0 79 |
34 574 |
( 115 650 ) |
3 9 70 |
( 111 680 ) |
( 77 106 ) |
| Do sti rat ion me c o pe s |
ati al on op |
tio era ns |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Co ial mm erc ban kin g |
Inv est nt me ban kin g |
Eq uity inv est nts me and oth ers |
Inte r nt seg me rati ope ons |
To tal |
An la ( go A) BF |
Oth ers |
To tal |
Inte ent tion r se gm op era s |
BP I G rou p |
|
| AS SE TS Cas h a nd dep osi ts a t ce ntra l ba nks Dep osi ts a t ot her dit ins titu tion cre s Fin ial he ld f rad ing ets or t anc ass |
87 6 6 21 553 73 0 |
47 60 0 |
11 45 3 |
( 4) 312 59 |
87 6 6 21 30 0 18 9 |
1 | 1 | 87 6 6 21 30 0 19 0 |
||
| and at fair lue thr h p rofi t or los va oug s Fin ial ets aila ble for le anc ass av sa Loa and ad to dit ins titu tion ns van ces cre s Loa and ad to tom ns van ces cus ers Hel d to tur ity inv est nts ma me Hed ing de riva tive s |
1 9 51 3 17 3 8 11 4 36 975 75 7 23 08 7 2 52 28 53 0 26 32 2 |
25 1 77 7 6 12 58 99 9 |
64 38 6 2 895 |
( 5 18 1) ( ) 401 169 ( 351 49 4) ( 12 2 13) ( 520 ) |
2 1 97 913 3 8 76 434 63 6 4 82 22 73 5 7 58 16 317 25 80 2 |
1 125 |
1 125 |
2 1 97 913 3 8 76 434 63 7 6 07 22 73 5 7 58 16 317 25 80 2 |
||
| g Non t as set s h eld for le a nd dis tinu ed rati -cu rren sa con ope ons Oth er t ible set ang as s Inta ible set ng as s Inv est nt i cia ted ani and jo intl ont roll ed me n a sso co mp es y c |
49 95 5 25 38 7 |
8 89 2 29 |
50 84 4 25 616 |
6 9 24 678 |
1 11 13 |
6 9 24 678 1 11 13 |
( 628 76 8) |
6 2 95 910 50 95 5 25 62 9 |
||
| ent itie s Tax set as s Oth ts er a sse |
67 951 46 9 9 33 70 2 3 91 |
1 7 35 5 134 |
62 88 3 ( ) 554 15 5 |
( 65 015 ) |
13 0 8 34 1 114 47 64 2 6 65 |
44 84 4 34 7 4 97 |
44 84 4 34 7 4 97 |
( 45 172 ) |
17 5 6 78 1 84 8 47 59 7 9 90 |
|
| TO SS S TA L A ET |
32 62 6 5 82 |
3 66 97 5 |
14 1 2 18 |
( 1 14 8 1 86) |
31 98 6 5 89 |
6 924 67 8 |
4 7 3 25 |
6 972 00 3 |
( 673 94 0) |
38 28 4 6 52 |
| LIA BIL ITI ES of Res tral ba nks our ces cen Fin ial liab iliti hel d fo r tra din anc es g Res of oth red it in stit utio our ces er c ns Res of tom d o the r de bts our ces cus ers an Deb t se itie cur s Fin ial liab iliti rela ting sfe rred to tran set anc es as s Hed ing de riva tive g s Non t lia bili ties he ld f ale d d isc ont inu ed -cu rren or s an |
2 0 00 011 21 4 8 45 1 7 34 950 22 42 0 0 09 85 6 9 42 55 5 3 85 97 84 9 |
2 157 ( 182 ) 24 9 5 81 |
26 818 |
( 4 2 89) ( 37 134 ) ( 701 90 9) ( ) 350 172 ( 93) |
2 0 00 011 21 2 7 13 1 7 24 452 21 967 68 1 50 6 7 70 55 5 3 85 97 75 6 |
7 55 |
7 55 |
( 628 76 8) |
2 0 00 011 21 2 7 13 1 0 96 439 21 967 68 1 50 6 7 70 55 5 3 85 97 75 6 |
|
| rati ope ons Pro vis ion s Te chn ica l pr ovi sio ns Tax lia bili ties Oth ubo rdin d d ebt d p arti cip atin bon ds ate er s an g Oth er l iab iliti |
67 03 1 2 0 48 829 10 132 83 50 4 4 4 56 |
3 58 104 |
3 204 ( 510 ) 954 |
( 14 0 04) 40 585 |
70 23 5 2 0 48 829 9 980 69 50 0 6 9 29 |
5 9 90 262 6 693 |
333 5 783 |
5 9 90 262 12 02 6 783 |
( 38 864 ) 6 3 |
5 9 51 3 98 70 23 5 2 0 48 829 22 00 6 69 50 0 77 7 4 |
| es TO TA IAB ILI TIE S L L |
80 30 893 94 3 |
6 2 58 018 |
6 3 6 4 66 |
( ) ( 1 14 8 1 86) |
77 30 04 0 2 41 |
99 6 9 5 55 |
6 12 87 1 |
6 6 009 82 6 |
( 08) ( 673 94 0) |
04 35 37 6 1 27 |
| SH AR EH OL DE RS ' E QU ITY Sh hol der s' e ity ibu tab le t o th har eho lde f B PI attr are qu e s rs o Non ntro llin inte ts -co g res |
1 7 30 865 1 7 74 |
10 8 9 57 |
10 4 7 52 |
1 9 44 574 1 7 74 |
46 1 44 9 46 6 2 74 |
34 45 4 |
49 5 9 03 46 6 2 74 |
2 4 40 477 46 8 0 48 |
||
| TO TA L S HA RE HO LD ER S' EQ UIT Y |
1 7 32 639 |
10 8 9 57 |
10 4 7 52 |
1 9 46 34 8 |
9 27 723 |
3 4 4 54 |
9 62 177 |
2 90 8 5 25 |
||
| TO TA L L IAB ILI TIE S A ND SH AR EH OL DE RS ' E QU ITY |
32 62 6 5 82 |
3 66 97 5 |
14 1 2 18 |
( 1 14 8 1 86) |
31 98 6 5 89 |
6 924 67 8 |
4 7 3 25 |
6 972 00 3 |
( 673 94 0) |
38 28 4 6 52 |
| Inv est nts ad e i me m n: Pro ty per Eq uip nt a nd oth er t ible set me ang as s Inta ible set ng as s |
781 9 12 4 8 4 14 |
81 7 9 124 8 414 |
8 24 11 48 2 6 511 |
1 1 10 |
8 24 11 493 6 521 |
1 6 05 20 617 14 93 5 |
The column "Inter segment operations" of the Non-current assets held for sale and discontinued operations caption corresponds to applications of BFA in Banco BPI and BPI Cayman in USD, EUR and GBP remunerated at an average interest rate of 0.5%.
The caption Other assets – Inter segment operations at December 31, 2016 includes 38 864 t.euro relating to dividends payable by BFA to Banco BPI for the year 2015. These dividends were received in January 2017.
| Do me |
sti rat c o pe |
ion s |
Int ern |
ati al on op |
tio era ns |
|||||
|---|---|---|---|---|---|---|---|---|---|---|
| Co ial mm erc ban kin g |
Inv est nt me ban kin g |
Eq uity inv est nt me and oth ers |
Inte r nt seg me rati ope ons |
T o tal |
An la go |
Oth ers |
To tal |
Inte r nt seg me rati ope ons |
BP I G rou p |
|
| Inte t an d s imi lar inc res om e |
273 88 5 |
76 | ( 658 ) |
273 30 3 |
37 | 37 | ( 203 ) |
273 13 7 |
||
| Inte t an d s imi lar res exp ens es |
( 95 159 ) |
( 716 ) |
( 135 ) |
658 | ( 95 352 ) |
( 249 ) |
( 249 ) |
1 39 7 |
( 94 204 ) |
|
| (na ) Fin cia l m in an arg rro w s en se |
178 72 6 |
( 0) 64 |
( ) 135 |
177 95 1 |
( ) 212 |
( ) 212 |
1 19 4 |
178 93 3 |
||
| Gro in o nit link ss ma rg n u s |
7 0 51 |
7 0 51 |
7 0 51 |
|||||||
| Inc e fr uity ins tru nts om om eq me |
1 85 7 |
2 0 53 |
3 9 10 |
3 9 10 |
||||||
| Net iss ion lati to a rtis ed t co mm re ng mo cos |
10 5 58 |
10 5 58 |
10 5 58 |
|||||||
| Fin cia l m in an arg |
198 19 2 |
( 64 0) |
1 9 18 |
199 47 0 |
( 212 ) |
( 212 ) |
1 19 4 |
20 0 4 52 |
||
| Te chn ica l re sul t of ins ntr act ura nce co s |
13 4 95 |
13 4 95 |
13 4 95 |
|||||||
| Co iss ion cei ved mm s re |
14 5 5 83 |
6 14 7 |
( ) 25 349 |
126 38 1 |
3 61 |
361 | ( ) 625 |
126 117 |
||
| Co iss ion aid mm s p |
( 35 380 ) |
( 5 3 21) |
( 3) |
25 349 |
( 15 3 55) |
( 15 3 55) |
||||
| Oth er i t nco me , ne |
14 193 |
( 1) |
14 1 92 |
14 1 92 |
||||||
| Ne t c mi ion in om ss co me |
12 4 3 96 |
82 5 |
( 3) |
125 21 8 |
36 1 |
36 1 |
( 62 5) |
124 95 4 |
||
| Ga in a nd los atio at f air val s o n o per ns ue |
( 6 7 43) |
6 0 65 |
( 678 ) |
49 | 49 | ( 629 ) |
||||
| Ga in a nd los ts a vai lab le f ale s o n a sse or s |
24 413 |
42 | 24 455 |
24 455 |
||||||
| Inte t an d f ina nci al g ain d lo wit h p ion res an ss ens s |
1 3 32 |
( 4) |
1 32 8 |
1 32 8 |
||||||
| Ne t in fi ial tio co me on na nc op era ns |
19 00 2 |
6 1 03 |
25 10 5 |
49 | 49 | 25 15 4 |
||||
| Op ting inc era om e |
9 051 |
9 0 51 |
48 | 48 | 9 0 99 |
|||||
| Op ting era ex pen ses |
( 25 407 ) |
( 6) |
( 25 413 ) |
( 1) |
( 1) |
( 25 414 ) |
||||
| Oth er t axe s |
( 2 4 28) |
( 760 ) |
( 3 18 8) |
( 48) |
( 48) |
( 3 2 36) |
||||
| Ne t o rat ing pe ex pe ns es |
( 4) 18 78 |
( 6) 76 |
( 0) 19 55 |
( 1) |
( 1) |
( 1) 19 55 |
||||
| Op tin inc e f ba nk ing tiv ity era g om rom ac |
3 36 30 1 |
5 5 22 |
1 9 15 |
34 3 7 38 |
197 | 197 | 56 9 |
34 4 5 04 |
||
| Pe el c ost rso nn s |
( 147 92 2) |
( 3 3 29) |
( 112) |
( 151 363 ) |
( 913 ) |
( 913 ) |
( 152 27 6) |
|||
| Ge al a dm inis trat ive sts ner co |
( 90 971 ) |
( 2 3 59) |
( 12) |
( 93 342 ) |
( 333 ) |
( 333 ) |
( 93 675 ) |
|||
| De cia tion d a rtis atio pre an mo n |
( 10 7 00) |
( 53) |
( 10 7 53) |
( 56) |
( 56) |
( 10 8 09) |
||||
| Ov erh d c ts ea os |
( 24 9 5 93 ) |
( 5 7 41) |
( 124 ) |
( 25 5 4 58 ) |
( 1 3 02 ) |
( 1 3 02 ) |
( 25 6 7 60 ) |
|||
| Rec f lo inte t an d e ove ry o ans res xpe nse s , |
7 16 0 |
7 16 0 |
7 16 0 |
|||||||
| for Imp airm ent los d p isio loa and ses an rov ns ns gu ara |
( ) 35 775 |
( ) 35 775 |
( ) 35 775 |
|||||||
| Imp airm ent los d o the isio t ses an r p rov ns, ne |
( 33 141) |
4 | ( 731 ) |
( 33 868 ) |
( 33 868 ) |
|||||
| Ne t in be for e i e t co me nc om ax |
24 95 2 |
( 215 ) |
1 0 60 |
25 79 7 |
( 1 10 5) |
( 1 1 05 ) |
56 9 |
25 26 1 |
||
| Inc e ta om x |
( 19 0 17) |
( 57) |
103 | ( 18 9 71) |
( 3 2 95) |
( 207 ) |
( 3 5 02) |
( 22 473 ) |
||
| Ea rni f as iate d c ies (eq uity tho d) ng s o soc om pan me |
4 8 54 |
12 8 76 |
17 73 0 |
3 6 27 |
3 6 27 |
21 3 57 |
||||
| Ne t in nti ing tio co me on co nu op era ns |
10 78 9 |
( 27 2) |
14 03 9 |
24 55 6 |
( 3 2 95 ) |
2 3 15 |
( 98 0) |
56 9 |
24 14 5 |
|
| Ne t in di tin d o rat ion co me on sc on ue pe s |
16 4 4 26 |
164 42 6 |
( 56 9) |
163 85 7 |
||||||
| fro Inc ttri but abl e to ont roll ing int sts om e a no n-c ere m |
||||||||||
| tin uin atio con g o per ns |
( 23) |
( 23) |
( 23) |
|||||||
| Inc ttri but abl roll ing int fro e to ont sts om e a no n-c ere m |
||||||||||
| dis tin ued tion con op era s |
( 82 049 ) |
( 82 049 ) |
( 82 049 ) |
|||||||
| Inc ibu tab le llin int ttr to tro om e a no n-c on g ere |
( 23 ) s |
( 23 ) |
( 82 04 9) |
( 82 04 9) |
( 82 07 2) |
|||||
| Co oli da ted t in of th e B PI Gr ns ne co me ou p |
10 76 6 |
( 27 2) |
14 03 9 |
24 53 3 |
79 08 2 |
2 3 15 |
81 39 7 |
105 93 0 |
||
| Ca sh flow aft er t axe s |
90 382 |
( 223 ) |
14 7 70 |
104 92 9 |
79 082 |
2 3 71 |
81 4 53 |
186 38 2 |
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Cash | 189 235 | 219 778 |
| Demand deposits at the Bank of Portugal | 791 225 | 653 066 |
| Demand deposits at foreign Central Banks | 2 943 | 3 777 |
| 983 403 | 876 621 |
The caption "Demand deposits at the Bank of Portugal" includes deposits made to comply with the minimum cash reserve requirements of the Eurosystem. Currently, the component of these deposits made to comply with the minimum cash reserve requirements is remunerated at 0% and the surplus funds have an interest rate of -0.40%. The minimum cash reserve corresponds to 1% of the amount of deposits and debt securities issued maturing in up to 2 years, excluding liabilities to other institutions subject to and not exempt from the same minimum cash reserve system and the liabilities to the European Central Bank and national central banks that participate in the euro.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Domestic Credit Institutions | ||
| Demand deposits | 18 681 | 13 365 |
| Cheques for collection | 62 506 | 62 299 |
| Other | 124 | 257 |
| Foreign Credit Institutions | ||
| Demand deposits | 217 194 | 221 487 |
| Cheques for collection | 1 522 | 2 782 |
| 300 027 | 300 190 |
Cheques for collection from domestic Credit Institutions correspond to cheques drawn by third parties against domestic credit institutions, which in general do not remain in this account for more than one business day.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Final assets held for trading | ||
| Debt Instruments | ||
| Bonds issued by Portuguese government entities | 33 604 | 27 009 |
| Bonds issued by foreign government entities | 9 444 | 51 090 |
| Bonds issued by other Portuguese entities | ||
| Non-subordinated debt | 4 232 | 9 870 |
| Subordinated debt | 108 | |
| Bonds issued by other foreign entities | ||
| Non-subordinated debt | 7 478 | 14 534 |
| Subordinated debt | 56 | 294 |
| 54 814 | 102 905 | |
| Equity instruments | ||
| Shares issued by Portuguese entities | 102 332 | 121 368 |
| Shares issued by foreign entities | 169 550 | |
| 102 332 | 290 918 | |
| Other securities | ||
| Participating units issued by Portuguese entities | 203 | 208 |
| Participating units issued by foreign entities | 19 901 | 2 |
| 20 104 | 210 | |
| 177 250 | 394 033 | |
| Financial assets at fair value through profit or loss | ||
| Debt Instruments | ||
| Bonds issued by Portuguese government entities | 133 066 | 129 760 |
| Bonds issued by foreign government entities | 485 320 | 365 038 |
| Bonds issued by other Portuguese entities | ||
| Non-subordinated debt | 87 191 | 138 759 |
| Bonds issued by foreign financial entities | 61 864 | |
| Bonds issued by other foreign entities | ||
| Non-subordinated debt | 453 620 | 238 664 |
| Subordinated debt | 1 089 | 4 702 |
| 1 160 286 | 938 787 | |
| Equity instruments | ||
| Shares issued by Portuguese entities | 53 | 91 |
| Shares issued by foreign entities | 24 | 132 |
| 77 | 223 | |
| Other securities | ||
| Participating units issued by Portuguese entities | 37 808 | 92 845 |
| Participating units issued by foreign entities | 865 816 | 592 104 |
| 903 624 2 063 987 |
684 949 1 623 959 |
|
| Derivative instruments with positive fair value (Note 4.4) | 168 494 | 179 921 |
| 2 409 731 | 2 197 913 |
This caption includes the following assets hedging capitalisation insurance products issued by BPI Vida e Pensões:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Debt Instruments | ||
| Of public entities | 618 387 | 494 798 |
| Other entities | 541 901 | 443 989 |
| Equity Instruments | 216 | 367 |
| Other securities | 897 382 | 678 203 |
| 2 057 886 | 1 617 357 |
The caption "Derivative instruments held for trading" (Notes 4.3 and 4.16) is made up as follows:
| Jun. 30, 17 Dec. 31, 16 |
||||||
|---|---|---|---|---|---|---|
| Notional | Book value | Notional | Book value | |||
| value1 | Assets | Liabilities | value1 | Assets | Liabilities | |
| Exchange rate contracts | ||||||
| Futures | 2 760 | 2 | 26 | 2 010 | 21 | |
| Exchange rate sw aps and forw ards | 1 697 264 | 751 | 228 | 1 099 467 | 1 906 | 139 |
| Interest rate contracts | ||||||
| Futures | 37 538 | 41 | 5 | 40 821 | 2 | 5 |
| Options | 451 394 | 2 262 | 2 120 | 530 759 | 3 153 | 3 151 |
| Sw aps | 4 421 624 | 151 508 | 164 468 | 4 581 330 | 165 415 | 194 127 |
| Contracts over shares | ||||||
| Futures | 550 | 19 | 10 759 | 172 | ||
| Sw aps | 702 518 | 7 656 | 14 032 | 388 401 | 1 005 | 12 478 |
| Options | 31 | 44 | ||||
| Contracts over other underlying items | ||||||
| Futures | 184 615 | 180 629 | ||||
| Other | ||||||
| Options2 | 59 388 | 6 | 1 | 468 566 | 2 267 | 2 641 |
| Other3 | 1 432 544 | 3 054 | 1 507 533 | 3 705 | ||
| Overdue derivatives | 3 195 | 2 447 | ||||
| 8 990 226 | 168 494 | 180 880 | 8 810 319 | 179 921 | 212 713 |
1 In the case of swaps and forwards only the asset amounts were considered.
2 Part of operations that are autonomous for accounting purposes, commonly referred to as "embedded derivatives".
3 Corresponds to derivatives associated to financial liabilities relating to transferred assets (Note 4.20).
The caption "Hedging derivatives" is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | ||||||
|---|---|---|---|---|---|---|---|
| Notional | Book value | Notional | Book value | ||||
| value1 | Assets | Liabilities | value1 | Assets | Liabilities | ||
| Interest rate contracts | |||||||
| Futures | 12 862 | 35 | 21 646 | 26 | |||
| Swaps | 7 067 413 | 20 402 | 77 964 | 6 986 033 | 25 797 | 97 574 | |
| Contracts over shares | |||||||
| Swaps | 225 046 | 5 | 156 | ||||
| 7 080 275 | 20 437 | 77 964 | 7 232 725 | 25 802 | 97 756 |
1 In the case of swaps and forwards only the asset amounts were considered.
The BPI Group's operations include carrying out derivative transactions to manage its own positions based on expectations regarding market evolution, to meet the needs of its customers or hedge positions of a structural nature (hedging).
The BPI Group carries out financial derivative transactions in the form of contracts over exchange rates, interest rates, goods and metals future prices, shares or share indices (relating, among others, to inflation, shares) or a combination of these. These transactions are realised in over-the-counter (OTC) markets and in organised markets (especially stock exchanges).
Derivatives traded on organised markets follow the standards and rules of these markets.
Derivatives traded on the over-the-counter (OTC) markets are normally based on a standard bilateral contract that covers the group of operations over derivatives between the parties. In the case of inter-professional relationships, there is an ISDA – International Swaps and Derivatives Association Master Agreement. In the case of relations with customers there is a standard BPI contract.
These types of contract include offsetting responsibilities in the event of non-compliance (the scope of the offsetting is established in the contract itself and is regulated by Portuguese legislation and, in the case of contracts with foreign counterparties or subject to foreign legislation, by the appropriate legislation).
Derivative contracts can also include an agreement to collateralise the credit risk generated by the transactions covered by them. Derivative contracts between two parties normally include all the derivative OTC transactions carried out between the two parties, irrespective of whether they are for hedging purposes or not.
In accordance with IAS 39, the parts of operations normally known as "embedded derivatives" are also considered separately and recorded as derivatives, in order to recognise, in net income, the fair value of these operations.
All derivatives (embedded or autonomous) are recorded at market value.
Derivatives are also recorded as off balance sheet items by their theoretical value (notional value). Notional value is the reference value for purposes of calculating the flow of payments and receipts resulting from the operation.
Market value (fair value) corresponds to the value of the derivatives if they were traded on the market on the reference date. Changes in the market value of derivatives are recognised in the appropriate balance sheet accounts and have an immediate effect on net income.
Note 4.47 includes details of the valuation methods used to determine the fair value of derivative financial instruments.
The amount of the exposure corresponds to the present value of the estimated loss, in the case of counterparty default. In the case of a derivative contract that establishes the compensation of responsibilities in the event of non-compliance, the amount of the exposure is the sum of the market values of the operations covered by the contract, when positive. In the case of operations for which the contract does not establish the compensation of responsibilities, the amount of the exposure is equal to the sum of the market values of each individual transaction, when positive. The scope of the compensation clauses, in the case of default, is considered by the BPI Group on a conservative perspective, considering that, in the case of doubt, compensation does not exist.
The potential loss in a group of derivative operations on a given date corresponds to the amount of the exposure on that date. In futures contracts, the stock markets being the counterparties for the BPI Group's operations, the credit risk is eliminated daily through financial settlement. For medium and long term derivatives, contracts usually provide for the netting of outstanding balances with the same counterparty, which eliminates or reduces credit risk. Additionally, in order to control credit risk on OTC derivatives, some agreements have also been signed under which the Bank receives from, or transfers to, the counterparty assets (in cash or in securities) to guarantee fulfilment of the obligations.
At June 30, 2017 the notional value, by term remaining to maturity was as follows:
| <= 3 months | > 3 months | >6 months | > 1 year | > 5 years | Total | |
|---|---|---|---|---|---|---|
| <= 6 months | <= 1 year | <= 5 years | ||||
| Over-the-counter market | ||||||
| Exchange rate contracts | 1 591 147 | 80 674 | 25 443 | 1 697 264 | ||
| Forwards | 85 185 | 56 119 | 12 193 | 153 497 | ||
| Swaps | 1 505 962 | 24 555 | 13 250 | 1 543 767 | ||
| Interest rate contracts | 974 379 | 637 623 | 1 469 089 | 6 062 199 | 2 797 141 | 11 940 431 |
| Swaps | 850 954 | 547 918 | 1 387 554 | 5 918 348 | 2 784 263 | 11 489 037 |
| Options | 123 425 | 89 705 | 81 535 | 143 851 | 12 878 | 451 394 |
| Contracts over indexes and shares | 593 505 | 69 953 | 20 060 | 19 031 | 702 549 | |
| Swaps | 593 505 | 69 953 | 20 060 | 19 000 | 702 518 | |
| Options | 31 | 31 | ||||
| Other | 1 149 013 | 342 919 | 1 491 932 | |||
| Options | 37 263 | 22 125 | 59 388 | |||
| Other | 1 111 750 | 320 794 | 1 432 544 | |||
| 3 159 031 | 788 250 | 1 514 592 | 7 230 243 | 3 140 060 | 15 832 176 | |
| Organized markets | ||||||
| Exchange rate contracts | 2 760 | 2 760 | ||||
| Futures | 2 760 | 2 760 | ||||
| Interest rate contracts | 30 400 | 20 000 | 50 400 | |||
| Futures | 30 400 | 20 000 | 50 400 | |||
| Contracts over indexes and shares | 550 | 550 | ||||
| Futures | 550 | 550 | ||||
| Contracts over other underlying items | 184 615 | 184 615 | ||||
| Futures | 184 615 | 184 615 | ||||
| 218 325 | 20 000 | 238 325 | ||||
| 3 377 356 | 788 250 | 1 514 592 | 7 250 243 | 3 140 060 | 16 070 501 |
At December 31, 2016 the notional value, by term remaining to maturity was as follows:
| <= 3 months | > 3 months | >6 months | > 1 year | > 5 years | Total | |
|---|---|---|---|---|---|---|
| <= 6 months | <= 1 year | <= 5 years | ||||
| Over-the-counter market | ||||||
| Exchange rate contracts | 1 031 323 | 47 320 | 20 824 | 1 099 467 | ||
| Forw ards | 111 964 | 46 060 | 19 680 | 177 704 | ||
| Sw aps | 919 359 | 1 260 | 1 144 | 921 763 | ||
| Interest rate contracts | 975 477 | 706 728 | 1 632 201 | 5 998 379 | 2 785 337 | 12 098 122 |
| Sw aps | 918 943 | 531 166 | 1 509 630 | 5 833 478 | 2 774 146 | 11 567 363 |
| Options | 56 534 | 175 562 | 122 571 | 164 901 | 11 191 | 530 759 |
| Contracts over indexes and shares | 435 160 | 146 883 | 12 404 | 19 044 | 613 491 | |
| Sw aps | 435 160 | 146 883 | 12 404 | 19 000 | 613 447 | |
| Options | 44 | 44 | ||||
| Other | 200 366 | 242 195 | 1 171 492 | 362 046 | 1 976 099 | |
| Options | 200 366 | 242 195 | 3 002 | 23 003 | 468 566 | |
| Other | 1 168 490 | 339 043 | 1 507 533 | |||
| 2 642 326 | 1 143 126 | 1 665 429 | 7 188 915 | 3 147 383 | 15 787 179 | |
| Organized markets | ||||||
| Exchange rate contracts | 2 010 | 2 010 | ||||
| Futures | 2 010 | 2 010 | ||||
| Interest rate contracts | 62 467 | 62 467 | ||||
| Futures | 62 467 | 62 467 | ||||
| Contracts over indexes and shares | 10 759 | 10 759 | ||||
| Futures | 10 759 | 10 759 | ||||
| Contracts over other underlying items | 180 629 | 180 629 | ||||
| Futures | 180 629 | 180 629 | ||||
| 255 865 | 255 865 | |||||
| 2 898 191 | 1 143 126 | 1 665 429 | 7 188 915 | 3 147 383 | 16 043 044 |
At June 30, 2017 the distribution of derivative operations, by counterparty external rating, was as follows:
| Jun. 30, 17 | ||||
|---|---|---|---|---|
| Notional Value1 |
Gross exposure 2 |
Exposure considerin g netting3 |
Net exposure4 |
|
| Over-the-counter market (OTC) | ||||
| AA- | 147 132 | 505 | ||
| A+ | 1 485 591 | 6 439 | ||
| A | 3 093 227 | 8 702 | 349 | 189 |
| A- | 75 137 | 3 787 | ||
| BBB+ | 1 171 261 | 6 772 | 5 289 | 2 006 |
| BBB | 1 764 101 | 7 251 | 1 262 | |
| BB | 35 720 | |||
| BB- | 301 508 | 5 200 | 1 918 | |
| Rating Project Finance | ||||
| Strong | 47 457 | 6 334 | 6 334 | 6 247 |
| Good | 634 977 | 92 074 | 92 074 | 88 425 |
| Satisfactory | 87 304 | 21 993 | 21 993 | 18 901 |
| Weak | 40 750 | 10 449 | 10 448 | 9 926 |
| Default | 38 462 | 9 529 | 9 528 | 7 888 |
| Other internal ratings | ||||
| 1 a 3 | 88 299 | 1 174 | 1 106 | 1 109 |
| 4 a 6 | 446 610 | 1 815 | 1 527 | 1 523 |
| 7 a 10 | 4 510 | 336 | 327 | 317 |
| D1 a D3 | 1 771 | 128 | 128 | 96 |
| No Rating | ||||
| N.R. | 1 032 109 | 1 209 | 865 | 857 |
| Traded on Central Counterparties | 3 844 318 | 10 544 | 6 511 | 2 568 |
| Traded on the stock exchange | ||||
| Futures5 | 238 325 | |||
| 14 578 569 | 194 241 | 159 659 | 140 052 |
Note: The amounts were accumulated by rating levels of the counterparties, considering the senior medium and long term debt ratings attributted by M oodys, Standard & Poor and Fitch agencies as of the reference date. The selection of a rating for a given counterparty follows the rules recommended by the Basel Committee in force on the reference date (where there were diverging ratings the second best was selected). The operations with entities without ratings (N.R.) correspond essentially to Customers subject to internal ratings.
1 Does not include embedded derivatives and other options in the amount of 1 491 932 t. euro.
2 Gross exposure used for risk management purposes, without considering netting agreements, collateral and value adjustment due to credit risk.
3 Amount of exposure without considering collateral and value adjustment due to credit risk.
4 Amount of exposure considering netting agreements and collateral. The amount of possible exposure from excess collateral placed by BPI in its counterparties is not classified as derivative exposure.
5 The exposure of the futures is nil, because they are traded on organised stock exchanges and there is daily financial settlement.
At December 31, 2016 the distribution of derivative operations, by counterparty external rating, was as follows:
| Dec. 31, 16 | ||||
|---|---|---|---|---|
| Notional Value1 |
Gross exposure 2 |
Exposure considering netting3 |
Net exposure4 |
|
| Over-the-counter market (OTC) | ||||
| AA- | 474 322 | 2 417 | 278 | |
| A+ | 1 718 698 | 10 572 | ||
| A | 3 235 100 | 17 456 | 10 919 | 525 |
| A- | 282 076 | 6 088 | 9 | 9 |
| BBB+ | 1 329 795 | 12 090 | 3 580 | 1 450 |
| BBB | 1 550 200 | 6 793 | ||
| BBB | ||||
| BB | 24 239 | 249 | 249 | 249 |
| BB- | 63 824 | 5 936 | 2 297 | 137 |
| Rating Project Finance | ||||
| Strong | 87 500 | 16 131 | 16 131 | 15 876 |
| Good | 524 884 | 93 545 | 93 545 | 88 115 |
| Satisfactory | 124 764 | 28 482 | 28 482 | 24 508 |
| Weak | ||||
| Default | 80 749 | 22 606 | 22 606 | 20 174 |
| Other internal ratings | ||||
| 1 a 3 | 93 493 | 2 508 | 2 272 | 2 269 |
| 4 a 6 | 467 516 | 3 808 | 2 953 | 2 945 |
| 7 a 10 | 19 385 | 1 003 | 797 | 756 |
| D1 a D3 | 13 348 | 1 535 | 1 535 | 320 |
| No Rating | ||||
| N.R. | 1 113 167 | 2 172 | 2 117 | 2 090 |
| Traded on Central Counterparties | 2 608 020 | 1 334 | ||
| Traded on the stock exchange | ||||
| Futures5 | 255 865 | |||
| 14 066 945 | 234 725 | 187 770 | 159 423 |
Note: The amounts were accumulated by rating levels of the counterparties, considering the senior medium and long term debt ratings attributted by Moodys, Standard & Poor and Fitch agencies as of the reference date. The selection of a rating for a given counterparty follows the rules recommended by the Basel Committee in force on the reference date (where there were diverging ratings the second best was selected). The operations with entities without ratings (N.R.) correspond essentially to Customers subject to internal ratings.
1 Does not include embedded derivatives and other options in the amount of 1 976 099 t. euro.
2 Gross exposure used for risk management purposes, without considering netting agreements, collateral and value adjustment due to credit risk.
3 Amount of exposure without considering collateral and value adjustment due to credit risk.
4 Amount of exposure considering netting agreements and collateral. The amount of possible exposure from excess collateral placed by BPI in its counterparties is not classified as derivative exposure.
5 The exposure of the futures is nil, because they are traded on organised stock exchanges and there is daily financial settlement.
This caption is made up as follows:
| Jun 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Debt instruments | ||
| Bonds issued by Portuguese government entities | ||
| Treasury bills | 1 951 135 | 1 909 026 |
| Treasury bonds | 328 223 | 338 548 |
| Bonds issued by foreign government entities | 1 144 224 | 1 180 982 |
| Bonds issued by other Portuguese entities | 30 762 | 30 512 |
| Bonds issued by other foreign entities | 54 979 | 123 873 |
| 3 509 323 | 3 582 941 | |
| Equity instruments | ||
| Shares issued by Portuguese entities | 62 297 | 62 161 |
| Impairment | ( 28 280) | ( 28 187) |
| Quotas | 56 567 | 58 934 |
| Shares issued by foreign entities | 31 980 | 42 843 |
| Impairment | ( 18 605) | ( 18 680) |
| 103 959 | 117 071 | |
| Other securities | ||
| Participating units issued by Portuguese entities | 202 817 | 214 037 |
| Impairment | ( 54 091) | ( 53 958) |
| Participating units issued by foreign entities | 18 638 | 17 719 |
| Impairment | ( 1 784) | ( 1 784) |
| 165 580 | 176 014 | |
| Loans and other receivables | 408 | 4 794 |
| Impairment | ( 4 386) | |
| 408 | 408 | |
| 3 779 270 | 3 876 434 |
Banco BPI holds a portfolio of fixed rate bonds, issued by national and international entities, in which the interest rate risk is hedged by derivative instruments.
The caption "Loans and other receivables" corresponds to shareholders' loans to, and supplementary capital contributions in, companies classified as financial assets available for sale.
In the review made by the Bank, no impaired securities were identified, other than the amounts already recognised.
The changes in impairment losses and provisions during the first half of 2017 and 2016 are shown in Note 4.21.
| A mo unt s p er unit | ||||||||
|---|---|---|---|---|---|---|---|---|
| N at ure and t ype of securit y | Quant it y | N o minal | List ing / Price |
Cost | B ook V alue / Fair V alue 1 |
Net gain/ ( loss) on securit ies 2 |
Hedge account ing effect 2 |
Imp airment |
| D eb t Inst rument s Issued by Port uguese Ent it ies Port uguese Public debt Treasury bills |
||||||||
| BILHETES DO TESOURO-CZ-16.03.2018 BILHETES DO TESOURO-CZ-17.11.2017 BILHETES DO TESOURO-CZ-18.05.2018 BILHETES DO TESOURO-CZ-19.01.2018 BILHETES DO TESOURO-CZ-21.07.2017 |
252 288 000 403 574 000 262 092 000 407 130 000 204 570 000 |
1.00 1.00 1.00 1.00 1.00 |
1.00 1.00 1.00 1.00 1.00 |
252 582 403 883 262 625 407 486 204 578 |
252 692 404 038 262 590 407 688 204 605 |
173 234 ( 13) 299 30 |
||
| BILHETES DO TESOURO-CZ-22.09.2017 Treasury Bonds |
419 216 000 | 1.00 | 1.00 | 419 332 1 9 50 4 8 6 |
419 522 1 9 51 13 5 |
249 9 72 |
||
| OT - 4.35% (16.10.2017) OT - 4.35% (16.10.2017) OT-4.75%-14.06.2019 OT-4.8%-15.06.2020 |
60 000 500 000 300 000 000 70 000 |
0.01 0.01 0.01 0.01 |
101.25 0.01 0.01 113.08 |
93 525 318 513 79 |
63 522 327 559 79 |
4 22 622 2 |
( 21 779) | |
| 3 19 2 10 | 3 2 8 2 2 3 | 2 2 6 2 8 | ( 2 1 779 ) | |||||
| Ot her R esident s N on - Subordinat ed debt Other Bonds VIOLAS-SGPS SA-TV-06.11.2023 |
30 000 000 | 102.21 | 30 000 | 30 762 | 663 | |||
| 30 000 | 30 762 | 663 | ||||||
| Issued by non - resident s B y f o reig n g o vernment ent it ies Bonds |
||||||||
| BUONI ORDINARI DEL TES.-CZ-29.12.2017 BUONI ORDINARI DEL TES-31.08.2017-CZ |
100 000 000 50 000 000 |
1 000.00 1 000.00 |
1 001.84 1 000.63 |
100 186 50 057 |
100 183 50 032 |
1 ( 1) |
||
| BUONI ORDINARI DEL TES-CZ-13.10.2017 BUONI ORDINARI DEL TES-CZ-14.03.2018 BUONI ORDINARI DEL TES-CZ-14.08.2017 |
40 000 000 50 000 000 60 000 000 |
1 000.00 1 000.00 1 000.00 |
1 001.19 1 002.54 1 000.59 |
40 094 50 112 60 095 |
40 048 50 127 60 035 |
21 49 18 |
||
| BUONI ORDINARI DEL TES-CZ-14.11.2017 BUONI ORDINARI DEL TES-CZ-29.09.2017 BUONI ORDINARI DEL TES-CZ-30.11.2017 |
50 000 000 110 000 000 40 000 000 |
1 000.00 1 000.00 1 000.00 |
1 001.45 1 000.92 1 001.53 |
50 108 110 159 40 065 |
50 073 110 101 40 061 |
23 5 ( 3) |
||
| BUONI POLIENNALI DEL T-4.5%-01.03.2019 SPAIN LETRAS DEL TESORO-08.12.2017-CZ |
175 000 000 67 000 000 |
1 000.00 1 000.00 |
1 076.92 1 001.67 |
185 458 67 156 |
191 064 67 112 |
11 638 10 |
( 12 105) | |
| SPAIN LETRAS DEL TESORO-13.10.2017-CZ SPAIN LETRAS DEL TESORO-18.08.2017-CZ SPAIN LETRAS DEL TESORO-CZ-15.09.2017 SPAIN LETRAS DEL TESORO-CZ-17.11.2017 |
135 000 000 80 000 000 90 000 000 80 000 000 |
1 000.00 1 000.00 1 000.00 1 000.00 |
1 001.10 1 000.50 1 000.90 1 001.48 |
135 266 80 146 90 172 80 160 |
135 149 80 040 90 081 80 118 |
16 2 15 4 |
||
| 1 13 9 2 3 4 | 1 14 4 2 2 4 | 11 79 8 | ( 12 10 5) | |||||
| Ot hers non resident s N on - subordinat ed debt Bonds |
||||||||
| BARCLAYS BANK PLC-TV-19.06.2018 C8 CAPITAL SPV -TV - PERPETUA EIRLES TWO LIM ITED-TV. PERP. |
2 127 189 56 957 589 800 000 |
30 388.42 876.27 100 000.00 |
23 583.23 806.17 71 970.00 |
1 536 56 718 794 |
1 651 52 401 579 |
( 474) ( 4 557) ( 224) |
||
| KION M ORTGAGE FIN SR.06-1 CL.A-15.07.51 M ADRID RM BS FTA-SR.06-1 CL.A2-22.06.2049 |
45 009 157 573 |
703.26 39 393.27 |
606.64 38 337.32 |
45 155 |
39 153 |
( 6) ( 2) |
||
| Subordinat ed debt Bonds |
59 248 | 54 823 | ( 5 263) | |||||
| LUSITANO M TGE-SR.1-CL.D-TV (15.12.2035) | 200 000 | 100 000.00 | 77 750.00 | 198 19 8 59 446 |
156 156 54 979 |
( 45) ( 4 5) ( 5 308) |
1 Net of impairment.
2 Amount recorded in revaluation reserves (Note 4.29).
| A mo unt s p er unit | ||||||||
|---|---|---|---|---|---|---|---|---|
| N at ure and t ype of securit y | Quant it y | N o minal | List ing / Price |
Cost | B ook V alue / Fair V alue 1 |
Net gain/ ( loss) on securit ies 2 |
Hedge account ing effect 2 |
Imp airment |
| Eq uit y inst rument s | ||||||||
| Issued by resident s | ||||||||
| Shares | ||||||||
| AGROGARANTE SA | 84 850 | 1.00 | 1.00 | 85 | 85 | |||
| ALBERTO GASPAR, SA (CÓD LB0001: 92020020501) | 60 000 | 5.00 | 0,000 | 141 | 141 | |||
| APOR-AG.P/M ODERNIZAÇAO PORTO - CL.B | 5 665 | 5.00 | 26 | 26 | ||||
| BOAVISTA FUTEBOL CLUBE, FUTEBOL,SAD | 21 900 | 5.00 | 110 | 110 | ||||
| BOM BARDIER TRANSPORTATION PORTUGAL SA | 1 | 5.00 | ||||||
| BUCIQUEIRA SGPS | 8 | 5.00 | 1 | 1 | ||||
| Cª AG.FONTE SANTA M ONFORTINHO-D.SUB/E.98 | 10 | 5.00 | ||||||
| CIM POR - CIM .DE PORTUGAL-SGPS | 3 565 | 1.00 | 0.35 | 6 | 1 | ( 5) | ||
| CITEVE-QUOTA ASSOCIACAO | 20 | 498.80 | 10 | 10 | ||||
| COM Pª AURIFICIA - N | 1 186 | 7.00 | 1 388.90 | 24 | 1 647 | 1 623 | ||
| COM Pª PRESTAM ISTA PORTUGUEZA | 10 | 1.00 | ||||||
| COM Pª.FIAÇAO E TECIDOS DE FAFE - P | 168 | 4.99 | ||||||
| CONDURIL, SA ( C) | 184 262 | 5.00 | 45.26 | 805 | 8 340 | 7 535 | ||
| CORTICEIRA AM ORIM - SGPS | 127 419 | 1.00 | 12.86 | 315 | 1 639 | 1 564 | 241 | |
| DIGITM ARKET-SIST.INF.-N | 4 950 | 1.00 | 743 | 743 | ||||
| EM P.CINEM ATOGRAFICA S.PEDRO | 100 | 4.99 | ||||||
| ESENCE - SOC.NAC.CORTICEIRA - N | 54 545 | 4.99 | ||||||
| ESTAM PARIA IM PERIO-EM P.IND.IM OBILIARIOS | 170 | 4.99 | 1 | 1 | ||||
| EURODEL-IND.M ETALURGICAS E PARTICIPAÇOES | 8 | 5.00 | ||||||
| F.I.T.-FOM .IND.TOM ATE - P | 148 | 4.99 | 3 | 3 | ||||
| FAB. VASCO DA GAM A - IND.TRANSF. | 33 | 4.99 | 1 | 1 | ||||
| GARVAL - SOCIEDADE DE GARANTIA M UTUA | 154 110 | 1.00 | 1.00 | 154 | 154 | |||
| GEIE - GESTÃO ESPAÇOS INC.EM PRESARIAL(C) | 12 500 | 1.00 | 13 | 13 | ||||
| GESTINSUA - AQ.AL.PATRIM ONIOS IM OB.M OB. | 430 | 5.00 | 2 | 2 | ||||
| IM PRESA SGPS | 6 200 000 | 0.50 | 0.48 | 22 791 | 2 957 | 1 778 | 21 613 | |
| INEGI-INST.ENG.M ECANICA-QUOTA ASSOCIAÇAO | 5 000 | 1.00 | 25 | 25 | ||||
| INTERSIS AUTOM AÇAO, ENG.DE SISTEM AS | 42 147 | 4.99 | 1 307 | 1 307 | ||||
| J.SOARES CORREIA-ARM AZENS DE FERRO | 84 | 5.00 | 2 | 2 | ||||
| LISGARANTE - SOC.DE GARANTIA M UTUA | 74 695 | 1.00 | 1.00 | 75 | 75 | |||
| LISNAVE - EST.NAVAIS | 180 | 5.00 | 1 | 1 | ||||
| M ARGUEIRA-SOC.GEST.DE FUNDOS INV.IM OB.-N | 3 511 | 5.00 | 18 | 18 | ||||
| M ATUR-SOC.EM PREEND.TURISTICOS M ADEIRA-N | 4 | 5.00 | ||||||
| M ATUR-SOC.EM PREEND.TURISTICOS M ADEIRA-P | 13 175 | 5.00 | 143 | 143 | ||||
| M ETALURGIA CASAL - P | 128 | 4.99 | 1 | 1 | ||||
| M IM ALHA, SA (CÓD LB0001: 92017022101) | 40 557 | 4.99 0,000 | 335 | 335 | ||||
| M ORETEXTILE,SGPS,SA | 711 | 1.00 | 1 | 1 | ||||
| NET - NOVAS EM PRESAS E TECNOLOGIAS - N | 20 097 | 5.00 | 1.55 | 73 | 31 | ( 42) | ||
| NEWPLASTICS | 1 445 | 1.00 | 1 | 1 | ||||
| NEXPONOR-SICAFI | 1 933 840 | 5.00 | 3.97 | 9 669 | 7 687 | 282 | 2 264 | |
| NORGARANTE - SOC.DE GARANTIA M UTUA | 104 610 | 1.00 | 1.00 | 105 | 105 | |||
| NOTORIOUSWAY, SA | 2 500 | 1.00 | 3 | 3 | ||||
| NUTROTON SGPS - C | 11 395 | 5.00 | 4.38 | 50 | 50 | |||
| OFICINA DA INOVACAO | 10 000 | 5.00 | 6.88 | 50 | 69 | 29 | 10 | |
| PORTUGAL CAP. VENTURES-SOC.CAP.RISCO | 500 641 | 5.00 | 5.71 | 2 691 | 2 859 | 168 | ||
| SANJIM O - SOCIEDADE IM OBILIARIA | 1 620 | 4.99 | 8 | 8 | ||||
1 Net of impairment.
2 Amount recorded in revaluation reserves (Note 4.29).
| A mo unt s p er unit | ||||||||
|---|---|---|---|---|---|---|---|---|
| N at ure and t ype of securit y | Quant it y | N o minal | List ing / Price |
Cost | B ook V alue / Fair V alue 1 |
Net gain/ ( loss) on securit ies 2 |
Hedge account ing effect 2 |
Imp airment |
| Shares (cont.) | ||||||||
| SAPHETY LEVEL - TRUSTED SERVICES | 5 069 | 1.00 | 98 | 98 | ||||
| SDEM -SOC.DE DESENV.EM PR.M ADEIRA,SGPS-N | 937 500 | 1.00 | 0.12 | 937 | 116 | 821 | ||
| SENAL-SOC.NAC.DE PROM OÇÃO DE EM PRESAS-P | 450 | 0.50 | ||||||
| SIBS - SGPS, SA | 738 455 | 5.00 | 3 115 | 3 115 | ||||
| SOC.CONSTRUÇÕES ERG | 50 | 4.99 | ||||||
| SOC.CONSTRUÇÕES ERG (EM .93) - IR (C) | 6 | 4.99 | ||||||
| SOC.INDUSTRIAL ALIANÇA (VN 500.\$00) | 1 | 2.49 | ||||||
| SOFID-SOC.P/FIN.DES.-INST.FIN.CREDITO SA | 1 000 000 | 0.90 | 0.88 | 1 250 | 885 | 365 | ||
| SOM OTEL-SOC.PORTUGUESA DE M OTEIS | 1 420 | 2.50 | ||||||
| SONAE - SGPS | 36 868 | 1.00 | 0.97 | 69 | 36 | 22 | 55 | |
| SOPEAL-SOC.PROM .EDUC.ALCACERENSE | 100 | 4.99 | ||||||
| SPI-SOC PORTUGUESA DE INOVACAO | 1 500 | 5.00 | 7 | 7 | ||||
| STAR - SOC. TURISM O E AGENCIAS RIBAM AR | 533 | 4.99 | 3 | 3 | ||||
| TAEM - PROCESSAM ENTO ALIM ENTAR,SGPS, SA | 125 | 1.00 | ||||||
| TAGUSPARQUE - N | 436 407 | 5.00 | 2 177 | 2 177 | ||||
| TEXTIL LOPES DA COSTA | 4 900 | 4.99 | 8 | 8 | ||||
| TUROPA-OPERADORES TURISTICOS | 5 | 4.99 | ||||||
| UNICER - BEBIDAS DE PORTUGAL | 1 002 | 1.00 | 8.07 | 8 | 8 | |||
| VIALITORAL - CONC. RODOVIARIA M ADEIRA | 4 750 | 161.25 | 395.74 | 792 | 1 880 | 1 088 | ||
| VNCORK SGPS | 151 | 1.00 | ||||||
| 4 8 2 53 | 3 4 0 17 | 14 0 4 2 | 2 8 2 8 0 | |||||
| Quotas | ||||||||
| VIACER - SOC.GEST.PART.SOCIAIS, SA | 1.00 | 48 160 | 56 567 | 8 408 | ||||
| 4 8 16 0 | 56 56 7 | 8 4 0 8 | ||||||
| Issued by non resident s Shares |
||||||||
| ABANCA CORPORACION BANCARIA SA | 18 588 | 1.00 | 29 | 29 | ||||
| ALTITUDE SOFTWARE B.V. | 6 386 243 | 0.04 | 13 810 | 13 810 | ||||
| AM SCO -USD | 1 807 | 876.27 | 876 | 876 | ||||
| CAIXABANK ELECTRONIC M ONEY, EDE, SL | 35 000 | 1.00 | 88 | 88 | ||||
| CLUB FINANCIERO VIGO | 1 | 15 626.31 | 18 | 12 | 6 | |||
| CORPORACIÓN FINANCIERA ARCO (TROCA ARCO BODEGAS | 7 786 | 100.00 | 72.77 | 4 398 | 566 | 3 832 | ||
| CREDIT LOGEM EN DEVELOPM ENT | 20 | 70.00 | 70.00 | 1 | 1 | |||
| EASDAQ NV | 100 | 1.42 | 25 | 25 | ||||
| EUROPEAN INVESTM ENT FUND | 14 | 1 000 000.00 | 423 006.03 | 4 125 | 5 922 | 1 797 | ||
| INTERBANCOS | ||||||||
| OSEO - SOFARIS | 13 | 107.89 | 107.89 | 2 | 2 | |||
| S.W.I.F.T. | 97 | 125.00 | 216 | 216 | ||||
| THARWA FINANCE - M AD | 20 895 | 193 | 270 | 77 | ||||
| UNIRISCO GALICIA | 80 | 1 202.02 | 1 322.30 | 96 | 106 | 36 | 27 | |
| VISA INC-CLASS C | 6 002 | 0.00 | 1 031.58 | 5 108 | 6 192 | 1 084 | ||
| 2 8 9 8 5 | 13 3 75 | 2 9 9 4 | 18 6 0 5 |
1 Net of impairment.
2 Amount recorded in revaluation reserves (Note 4.29).
| A mo unt s p er unit | ||||||||
|---|---|---|---|---|---|---|---|---|
| N at ure and t ype of securit y | Quant it y | N o minal | List ing / Price |
Cost | B ook V alue / Fair V alue 1 |
Net gain/ ( loss) on securit ies 2 |
Hedge account ing effect 2 |
Imp airment |
| Ot her | ||||||||
| Issued by resident s | ||||||||
| Participating Units | ||||||||
| EGP-UNIVERSITY OF PORTO BUS.SCHOOL ASS. | 2 | 4.99 | 70 | 70 | ||||
| FCR-F-HITEC (ES VENTURES) | 500 000 | 1.00 | 1.04 | 500 | 521 | 21 | ||
| FCR-FUNDO CARAVELA | 3 121 | 3 080.46 | 2 227.89 | 9 696 | 6 953 | 700 | 3 443 | |
| FCR-FUNDO INTER-RISCO II - CL.A | 7 500 | 3 481.27 | 1 901.26 | 26 110 | 14 260 | 365 | 12 215 | |
| FCR-FUNDO INTER-RISCO II CI-CLASSE A | 6 000 | 5 000.00 | 4 540.35 | 30 144 | 27 242 | ( 2 902) | ||
| FCR-FUNDO RECUPERACAO-CATEGORIA B | 80 896 | 1 000.00 | 684.52 | 80 896 | 55 375 | 1 829 | 27 350 | |
| FCR-FUNDO RECUPERACAO-CATEGORIA C | 17 031 | 1 000.00 | 684.52 | 17 031 | 11 658 | 385 | 5 758 | |
| FCR-FUNDO REESTRUTURAÇÃO EM PRESARIAL | 5 607 | 1 000.00 | 954.22 | 5 607 | 5 350 | ( 257) | ||
| FCR-FUNDO REVITALIZAR CENTRO | 7 272 727 | 1.00 | 1.06 | 7 273 | 7 711 | 438 | ||
| FCR-FUNDO REVITALIZAR NORTE | 7 156 881 | 1.00 | 0.93 | 7 157 | 6 674 | ( 483) | ||
| FCR-FUNDO REVITALIZAR SUL - CAT.A2 | 1 685 919 | 1.00 | 1.00 | 1 686 | 1 682 | ( 4) | ||
| FCR-FUNDO REVITALIZAR SUL - CAT.B2 | 1 774 612 | 1.00 | 1.00 | 1 775 | 1 770 | ( 5) | ||
| FCR-FUNDO REVITALIZAR SUL - CAT.C2 | 1 190 442 | 1.00 | 1.00 | 1 190 | 1 187 | ( 3) | ||
| FCR-PORTUGAL GLOBAL VENTURES I | 6 269 | 10.00 | 8.27 | 69 | 52 | 17 | ||
| FCR-PORTUGAL VENTURES GPI | 6 | 25 000.00 | 20 504.72 | 130 | 122 | 7 | 15 | |
| FCR-PORTUGAL VENTURES TURISM O | 164 | 24 939.89 | 9 094.13 | 3 568 | 1 492 | 233 | 2 309 | |
| FCR-PORTUGAL VENTURES VALOR 2 | 131 | 3 420.24 | 4 179.26 | 2 630 | 546 | 101 | 2 185 | |
| FCR-PORTUGAL VENTURES-FIEP | 2 808 | 1 000.00 | 928.74 | 2 808 | 2 608 | 525 | 725 | |
| FCR-PV ACTEC II - CATEGORIA A1 | 9 096 | 1.00 | 0.37 | 10 | 3 | 7 | ||
| FCR-PV ACTEC II - CATEGORIA B1 | 285 659 | 1.00 | 0.92 | 331 | 264 | 67 | ||
| FCR-TURISM O INOVACAO CAT.B | 10 | 50 000.00 | 16 201.38 | 504 | 163 | ( 341) | ||
| FEIIF-UNICAM PUS | 3 000 | 1 000.00 | 1 007.66 | 3 000 | 3 023 | 23 | ||
| 2 0 2 18 5 | 14 8 72 6 | 6 3 2 | 54 0 9 1 | |||||
| Issued by non resident s Participating Units |
||||||||
| FUNDO BPI-EUROPA | 23 405 | 0.01 | 12.70 | 171 | 297 | 126 | ||
| FUNDO PATHENA SCA SICAR (B ) | 10 000 000 | 1.00 | 0.96 | 10 096 | 9 629 | ( 467) | ||
| PORTUGAL VENTURE CAPITAL INITIATIVE-PVCI | 7 486 729 | 1.00 | 0.93 | 7 487 | 6 928 | 1 225 | 1 784 | |
| 17 754 | 16 8 54 | 8 8 4 | 1 78 4 | |||||
| Loans and ot hers receivables | ||||||||
| Loans and Shareholder's loans | ||||||||
| PETROCER SGPS, LDA | 200 | |||||||
| SAPHETY LEVEL - TRUSTED SERVICES SA | 208 | |||||||
| 408 | ||||||||
| 3 8 4 3 713 | 3 779 2 70 | 57 713 | ( 3 3 8 8 4 ) | 10 2 76 0 |
1 Net of impairment.
2 Amount recorded in revaluation reserves (Note 4.29).
In the last quarter of 2015 Visa Inc. launched a public offering to acquire 100% of the share capital of Visa Europe Limited, an operation which was concluded on June 21, 2016. At December 31, 2015 the total amount receivable by Banco BPI, S.A. was estimated at 20.8 million euro, of which 15.5 million euro in cash and the remainder in Visa Inc. preference shares. At that date Banco BPI valued its participation in Visa Europe considering only the cash component, by corresponding entry to the equity caption "Revaluation reserves". In addition, also by corresponding entry to equity in the caption "Deferred tax reserves", the Bank recorded the related deferred tax liability relating to the tax expected to be paid on the date of completion of the transaction. At that date, in the valuation of the share in Visa Europe the Bank attributed zero value to the component receivable in preference shares of Visa Inc. This decision was based on the fact that at December 31, 2015 the Bank had no information to enable it to reliably value that component.
On June 21, 2016 this transaction was closed with the following amount for Banco BPI:
(i) cash of 16 528 t. euro received on the closing date of the transaction (June 21, 2016);
(ii) deferred cash in the amount of 1 427 t euro receivable in a single payment on the third anniversary of the closing of the transaction (June 21, 2019). At the closing date of the transaction the Bank recorded the present value of the amount receivable from Visa Inc. in 2019, considering a discount rate of 4%, at the amount of 1 274 t.euro;
(iii) receipt of 6 002 preference shares of Visa Inc.. In determining the fair value of the preference shares, Banco BPI used the conversion factor of the preference shares into the ordinary shares initially established by Visa Inc. and the market price of the ordinary shares of Visa Inc. on the closing date of the transaction. Banco BPI applied an haircut to the amount obtained, to reflect a discount due to the lack of liquidity of the preference shares and the uncertainty relating to the outcome of current and possible lawsuits. The fair value of the preferred shares of Visa Inc. calculated by the Bank on the closing date of this transaction amounted to 5 143 t.euro.
Thus, Banco BPI, S.A. recognized a gain, before tax, in the first half of 2016 in the amount of 22 945 t. euro, which was recorded in the statement of income caption Net income on financial operations (Note 4.39).
Banco BPI carried out a series of operations relating to the transfer of financial assets (Loans to customers) to specialized credit recovery funds (Fundo de Recuperação, FCR and Fundo de Reestruturação Empresarial FCR). These funds aim to recover companies that, despite having financial difficulties, have sustainable business models.
In addition, under the transfer of asset operations, the Bank subscribed:
participating units in the credit recovery funds and in the companies controlled by those funds;
shares and shareholders' loans of companies controlled by those funds.
The credit recovery funds in which Banco BPI participates have a specific management structure, fully independent of the Bank and are held by several banks in the market (which are credit transferors). The Bank holds a minority interest in these funds.
At June 30, 2017 and December 31, 2016, the portfolio of financial assets available for sale included 61 302 t. euro and 64 815 t. euro, respectively, relating to securities and shareholders' loans subscribed for by Banco BPI under transfer of assets operations:
| Jun. 30, 17 Subscribed securities under operations of transfer of assets |
||||||
|---|---|---|---|---|---|---|
| Participating units and shares |
Impairment in participating units and shares |
Net Value | ||||
| Fundo de Recuperação, FCR 1 | 90 864 | ( 33 107) | 57 757 | |||
| Fundo de Reestruturação Empresarial, FCR | 3 545 | 3 545 | ||||
| 94 409 | ( 33 107) | 61 302 |
Notes: Amounts net of unrealized subscribed capital recorded in the caption Other liabilities.
1Includes the companies controlled by Fundo de Recuperação, FCR: Notoriousway SA, Newplastics SA, Vncork SGPS SA, TAEM - Processamento Alimentar SGPS SA and Moretextile SA.
| Dec. 31, 16 Subscribed securities under operations of transfer of assets |
|||||||
|---|---|---|---|---|---|---|---|
| Participating units and shares |
Impairment in participating units and shares |
Net Value | |||||
| Fundo de Recuperação, FCR 1 | 94 384 | ( 33 107) | 61 277 | ||||
| Fundo de Reestruturação Empresarial, FCR | 3 538 | 3 538 | |||||
| 97 922 | ( 33 107) | 64 815 |
Notes: Amounts net of unrealized subscribed capital recorded in the caption Other liabilities.
In 2016, the shareholder's loans associated with securities subscribed under the transfer of assets operations, were subject to asset write off.
1 Includes the companies controlled by Fundo de Recuperação, FCR: Notoriousway SA, Newplastics SA, Vncork SGPS SA, TAEM - Processamento Alimentar SGPS SA and Moretextile SA.
Operations relating to the transfer of assets carried out by Banco BPI include the sale of loans granted to operating industrial and hospitality companies, which, because of the change of the economic environment, were having difficulties in complying with their financial commitments to the Bank. All the assets sold correspond to loans to corporate customers of Banco BPI, no real estate having been traded.
Following the ceding of loan operations, they were derecognized from the balance sheet, as all the requirements of IAS 39 on this matter were fulfilled, namely transfer of a substantial part of the risks and benefits relating to the ceded loan operations, and therefore control. Additionally, Banco BPI does not consolidate the funds and companies that own the assets as it only holds a minority participation in them. The loans sold, net of impairment, totalled 78 497 t. euro at June 30, 2017 and December 31, 2016.
| Jun. 30, 17 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Amounts related to the transferred assets | |||||||||
| Gross | Impairment on | ||||||||
| assets | transferred | Result on the | |||||||
| transferred | assets | Sale amount | sale date1 | ||||||
| Fundo de Recuperação, FCR 2 | 123 730 | 48 967 | 98 289 | 10 635 | |||||
| Fundo de Reestruturação Empresarial, FCR | 3 734 | 3 734 | |||||||
| 127 464 | 48 967 | 102 023 | 10 635 |
1 The result determined on the sale date is deducted from impairment recorded for shareholders' loans on the transaction date.
2 Includes sales to companies controlled by Fundo de Recuperação, FCR.
| Dec. 31, 16 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Amounts related to the transferred assets | |||||||||
| Gross assets | Impairment on transferred |
Result on the sale date 1 |
|||||||
| Fundo de Recuperação, FCR 2 | transferred 123 730 |
assets 48 967 |
Sale amount 98 289 |
10 635 | |||||
| Fundo de Reestruturação Empresarial, FCR | 3 734 | 3 734 | |||||||
| 127 464 | 48 967 | 102 023 | 10 635 |
1 The result determined on the sale date is deducted from impairment recorded for shareholders' loans on the transaction date.
2 Includes sales to companies controlled by Fundo de Recuperação, FCR.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Loans to the Bank of Portugal | 4 500 | |
| Loans and advances to other Portuguese credit institutions | ||
| Very short term applications | 8 415 | |
| Deposits | 149 017 | 142 252 |
| Other loans | 126 600 | 81 500 |
| Purchased transactions w ith resale agreement | 99 981 | |
| Other advances | 98 | 26 |
| Accrued interest | 282 | 251 |
| 384 393 | 224 029 | |
| Loans and advances to other foreign Central Banks | ||
| Loans and advances to other foreign credit institutions | ||
| Very short term applications | 50 450 | 68 968 |
| Deposits | 37 006 | 54 861 |
| Loans | 44 | 44 |
| Other loans and advances | 5 226 | 957 |
| Other applications | 262 757 | 288 339 |
| Interest receivable | 177 | 409 |
| 355 660 | 413 578 | |
| Commission relating to amortised cost (net) | 4 | |
| 744 557 | 637 607 |
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Loans | ||
| Domestic loans | ||
| Companies | ||
| Discount | 80 923 | 81 704 |
| Loans | 5 338 071 | 5 272 738 |
| Commercial lines of credit | 174 583 | 139 649 |
| Demand deposits - overdrafts | 224 300 | 142 672 |
| Invoices received - factoring | 397 051 | 494 599 |
| Finance leasing | 417 887 | 384 554 |
| Real estate leasing | 353 115 | 341 367 |
| Other loans | 51 427 | 48 280 |
| Loans to individuals | ||
| Housing | 10 827 391 | 10 838 706 |
| Consumer | 866 302 | 807 909 |
| Other loans | 579 015 | 429 418 |
| Foreign loans | ||
| Companies | ||
| Discount | 1 537 | 3 042 |
| Loans | 871 892 | 1 027 035 |
| Commercial lines of credit | 28 737 | 43 965 |
| Demand deposits - overdrafts | 3 367 | 5 455 |
| Invoices received - factoring | 536 | 1 175 |
| Finance leasing | 973 | 1 022 |
| Real estate leasing | 311 | 360 |
| Other loans | ||
| Loans to individuals | ||
| Housing | 26 871 | 31 816 |
| Consumer | 9 688 | 11 038 |
| Other loans | 21 210 | 21 183 |
| Accrued interest | 35 737 | 44 989 |
| 20 310 924 | 20 172 676 | |
| Securities | ||
| Issued by Portuguese government entities | 191 342 | 137 030 |
| Issued by other Portuguese entities | ||
| Non subordinated debt securities | ||
| Bonds | 1 310 900 | 1 318 667 |
| Commercial paper | 787 941 | 818 546 |
| Subordinated debt securities | 11 800 | 11 800 |
| Issued by other foreign entities | ||
| Non subordinated debt securities | ||
| Bonds | 183 935 | 240 168 |
| Commercial paper | 7 492 | |
| Accrued interest | 12 109 | 10 989 |
| Deferred interest | ( 114) | ( 142) |
| 2 505 405 | 2 537 058 | |
| Correction of the amount of hedged assets | 22 730 | 29 890 |
| Commissions relating to amortised cost (net) | 222 | 508 |
| 22 839 281 | 22 740 132 | |
| Overdue loans and interest | 654 673 | 690 826 |
| Loan impairment | ( 674 108) | ( 695 200) |
| 22 819 846 | 22 735 758 |
Loans and Advances to Customers include the following non-derecognised securitised assets:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Non-derecognised securitised assets 1 | ||
| Loans | ||
| Housing | 1 366 360 | 1 444 486 |
| Loans to SME's | 3 335 262 | 3 245 545 |
| Accrued interest | 9 415 | 11 142 |
| 4 711 037 | 4 701 173 |
1 Excluding overdue loans and interest.
The loans subject to securitisation operations carried out by Banco BPI were not derecognised from the Bank's balance sheet and are recorded under the caption "Loans". The amounts received by Banco BPI from these operations are recorded under the caption "Liabilities relating to assets not derecognised in securitisation operations" (Notes 2.3.4 and 4.20).
At June 30, 2017 and December 31, 2016 the caption "Loans and advances to customers" also included operations allocated to the Cover Pool given as collateral for Covered Bonds issued by Banco BPI (Note 4.19), namely:
The securities portfolio includes the following assets to cover capitalisation insurance contracts issued by BPI Vida e Pensões:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Debt instruments | ||
| Issued by Portuguese government entities | 50 000 | 50 000 |
| Issued by other Portuguese entities | 1 002 558 | 1 010 398 |
| Issued by other foreign entities | 186 622 | 234 983 |
| 1 239 180 | 1 295 381 |
The changes in impairment losses and provisions during the first half of 2017 and 2016 are presented in Note 4.21.
At June 30, 2017 the amount of the exposure and impairment of loans and advances to customers was made up as follows:
| Ex p os ure |
Imp irm t a en |
|||||||
|---|---|---|---|---|---|---|---|---|
| Se nt |
1 To ta l Ex |
Cre d it-n ot at- |
O f w hic h |
Cre d it-a t-ri k |
O f w hic h |
To ta |
Cre d it-n ot at- |
Cre d it-a t-r is k |
| g me |
p os ure |
ris k |
tru ctu d res re |
s | tru ctu d res re |
l imp irm t a en |
ris k |
|
| Co ate ba nk ing rp or |
4 7 0 0 95 9 |
4 4 15 25 6 |
37 9 10 4 |
28 0 3 5 7 |
20 8 197 |
25 2 8 9 3 |
8 4 3 3 9 |
16 8 5 4 5 |
| La Co ies rg e mp an |
1 7 72 8 8 3 |
1 6 8 4 9 5 9 |
19 0 23 2 |
87 9 24 |
5 9 6 20 |
9 4 5 6 1 |
3 9 40 8 |
55 15 3 |
| Me d ium ize d Co ies -s mp an |
2 9 28 07 6 |
2 7 3 0 29 7 |
18 8 87 2 |
197 9 77 |
148 57 7 |
15 8 3 3 2 |
44 9 3 1 |
113 40 1 |
| Pr j t Fin - P tug l o ec an ce or a |
9 95 3 6 4 |
95 0 5 21 |
197 5 8 1 |
44 8 43 |
10 47 7 |
28 3 3 6 |
8 3 3 9 |
19 9 97 |
| Ma dr id |
65 3 7 6 2 |
6 20 0 0 9 |
140 16 4 |
3 3 7 5 3 |
23 0 3 2 |
42 57 3 |
23 05 4 |
19 5 19 |
| Pro j t F ina ec nc e |
41 0 16 8 |
3 85 40 9 |
114 49 6 |
24 9 75 |
15 6 43 |
27 28 1 |
15 26 6 |
12 0 15 |
| Co te rp ora |
24 3 5 9 4 |
23 4 6 0 0 |
25 6 6 8 |
8 9 9 4 |
7 3 8 9 |
15 29 2 |
7 7 8 8 |
7 5 0 4 |
| Pu b lic Se cto r |
1 4 40 0 29 |
1 4 3 9 7 67 |
76 9 9 5 |
26 2 |
2 8 3 0 |
2 8 3 0 |
||
| Ce l A dm inis tion ntr tra a |
18 6 7 3 4 |
18 6 7 3 4 |
4 | 4 | ||||
| Re ion l an d loc l a dm inis tra tion g a a |
8 9 2 9 9 4 |
8 9 2 9 9 4 |
3 9 7 9 1 |
67 9 |
67 9 |
|||
| Sta Co Se in the bu dg ime te te cto et ter rp ora r – p er |
3 15 6 5 |
3 15 6 5 |
||||||
| Sta te Co te Se cto ts ide th bu dg et ime ter rp ora r – ou e p er |
27 4 1 18 |
27 4 1 18 |
3 6 6 95 |
2 1 3 0 |
2 1 3 0 |
|||
| Ot he r in st itut ion l a |
3 3 0 27 |
3 2 7 65 |
113 | 26 2 |
17 | 17 | ||
| Sm Ind ivi du ls d ll B ine Ba nk ing a an a us ss es |
14 129 6 0 1 |
13 6 6 0 46 5 |
23 3 25 2 |
46 9 13 6 |
13 8 9 13 |
3 35 0 8 2 |
10 9 7 57 |
22 5 3 25 |
| Mo rtg loa to ind ivid ls ag e ns ua |
11 0 6 9 3 22 |
10 73 4 2 9 4 |
167 3 8 9 |
3 35 0 28 |
8 0 05 5 |
20 3 6 22 |
77 3 18 |
126 3 0 4 |
| Co loa / o the ns um er ns r p urp os es |
72 7 8 43 |
6 9 6 47 0 |
17 9 8 4 |
3 1 3 73 |
13 176 |
35 3 13 |
8 6 15 |
26 6 9 8 |
| Cre d it c ds ar |
15 6 6 27 |
15 1 2 6 2 |
7 | 5 3 65 |
3 | 6 5 15 |
1 5 5 9 |
4 9 5 6 |
| Ca fin ing r an c |
19 2 6 6 6 |
19 0 25 3 |
21 | 2 4 13 |
6 2 |
2 1 18 |
70 3 |
1 4 15 |
| Sm ll b ine a us ss es |
1 9 8 3 143 |
1 8 8 8 18 6 |
47 85 1 |
9 4 9 57 |
45 6 17 |
87 5 14 |
21 5 6 2 |
65 95 2 |
| 2 Ot he r |
1 5 0 3 5 55 |
1 4 9 8 45 1 |
5 10 4 |
12 3 9 4 |
12 26 1 |
13 3 |
||
| 23 42 3 27 0 |
22 8 4 4 6 9 5 |
1 0 26 70 0 |
8 3 8 8 0 1 |
3 8 0 6 19 |
67 4 1 0 8 |
24 0 5 8 0 |
43 3 5 28 |
1 Excludes accrued interest and deferred interest, correction of the amount of hedged assets and commissions relating to amortised cost.
2 Includes 1 239 180 t. euro of securities held by BPI Vida, essentially allocated to the coverage of capitalization insurance products.
At December 31, 2016 the amount of the exposure and impairment of loans and advances to customers was made up as follows:
| Ex p os ure |
Imp irm t a en |
|||||||
|---|---|---|---|---|---|---|---|---|
| Se nt me |
1 To ta l Ex os ure |
Cre d it-n ot at- |
O f w hic h |
Cre d it-a t-ri k s |
O f w hic h |
l imp To ta |
Cre d it-n ot at- |
Cre d it-a t-r is k |
| g | p | ris k |
tru ctu d res re |
tru ctu d res re |
irm t a en |
ris k |
||
| Co ate ba nk ing rp or |
4 5 35 24 1 |
4 2 6 0 26 0 |
3 40 5 40 |
27 4 9 8 1 |
18 3 5 10 |
25 4 2 5 4 |
9 1 2 8 4 |
16 2 9 70 |
| La Co ies rg e mp an |
1 7 9 0 20 2 |
1 7 0 9 0 6 0 |
127 23 6 |
8 1 1 42 |
49 6 20 |
8 6 7 6 1 |
40 6 20 |
46 14 1 |
| Me d ium ize d Co ies -s mp an |
2 7 45 0 3 9 |
2 5 1 2 0 0 5 |
21 3 3 0 4 |
19 3 8 3 9 |
13 3 8 9 0 |
167 49 3 |
0 6 6 4 5 |
116 8 29 |
| Pr j Fin - P l t tug o ec an ce or a |
9 95 5 0 6 |
95 0 6 6 3 |
22 3 6 6 3 |
44 8 43 |
10 47 7 |
3 0 28 8 |
10 3 26 |
19 9 6 2 |
| Ma dr id |
78 4 7 21 |
74 3 3 44 |
16 6 8 9 8 |
41 37 7 |
3 0 5 6 9 |
45 16 2 |
24 6 3 1 |
20 5 3 1 |
| Pro j t F ina ec nc e |
45 6 6 20 |
42 4 2 3 6 |
14 1 1 0 0 |
3 2 3 8 4 |
23 18 0 |
29 70 8 |
16 57 1 |
13 137 |
| Co te rp ora |
3 28 10 1 |
3 19 10 8 |
25 79 8 |
8 9 9 3 |
7 3 8 9 |
15 45 4 |
8 0 6 0 |
7 3 9 4 |
| Pu b lic Se cto r |
1 4 17 40 8 |
1 4 17 28 0 |
8 1 5 3 4 |
128 | 120 | 2 1 78 |
2 1 8 5 |
20 |
| Ce ntr l A dm inis tra tion a |
18 9 46 8 |
18 9 46 8 |
||||||
| Re ion l an d loc l a dm inis tion tra g a a |
78 0 7 3 5 |
78 0 7 3 5 |
44 8 3 9 |
2 | 2 | |||
| Sta te Co te Se cto in the bu dg et ime ter rp ora r – p er |
5 1 8 10 |
5 1 8 10 |
||||||
| Sta Co Se te te cto ts ide th bu dg et ime ter rp ora r – ou e p er |
3 65 6 0 0 |
3 65 6 0 0 |
3 6 6 95 |
2 1 3 9 |
2 1 3 9 |
|||
| Ot he r in itut ion l st a |
29 77 7 |
29 6 49 |
128 | 120 | 37 | 17 | 20 | |
| Ind ivi du ls d Sm ll B ine Ba nk ing a an a us ss es |
14 0 22 95 1 |
13 5 26 0 8 1 |
24 7 1 8 6 |
49 6 87 0 |
143 0 43 |
35 0 8 42 |
113 95 0 |
23 6 8 9 2 |
| Mo loa ind ivid ls rtg to ag e ns ua |
11 0 8 4 2 14 |
10 73 6 5 6 4 |
16 8 6 10 |
3 47 65 0 |
79 8 3 1 |
21 1 5 6 6 |
8 2 0 0 8 |
129 8 55 |
| Co loa / o the ns um er ns r p urp os es |
6 9 0 23 9 |
65 7 8 25 |
19 70 8 |
3 2 4 14 |
13 6 21 |
37 0 95 |
9 0 6 6 |
28 0 29 |
| Cre d it c ds ar |
16 4 2 85 |
15 8 6 17 |
10 | 5 6 6 8 |
3 | 6 8 25 |
1 6 5 1 |
5 174 |
| Ca fin ing r an c |
16 8 0 9 1 |
165 67 3 |
95 | 2 4 18 |
19 | 2 4 5 1 |
85 2 |
1 5 9 9 |
| Sm ll b ine a us ss es |
1 9 16 122 |
1 8 07 40 2 |
5 8 7 6 3 |
10 8 7 20 |
49 5 6 9 |
9 2 9 05 |
20 37 3 |
72 5 3 2 |
| 2 Ot he r |
1 5 8 8 8 97 |
1 5 8 4 4 6 4 |
4 4 3 3 |
12 47 6 |
12 28 8 |
18 8 |
||
| 23 3 44 72 4 |
22 48 2 0 9 2 |
1 0 5 9 8 21 |
8 6 2 6 3 2 |
3 67 71 9 |
6 95 20 0 |
25 4 6 37 |
44 0 5 6 3 |
1 Excludes accrued interest and deferred interest, correction of the amount of hedged assets and commissions relating to amortised cost.
2 Includes 1 295 381 t. euro of securities held by BPI Vida, essentially allocated to the coverage of capitalization insurance products.
At June 30, 2017 the amount of the exposure and impairment of loans and advances to customers was made up as follows:
| Tot al e xpo |
sur e |
Tot al Imp |
airm ent |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Cre dit - n |
- ri sk ot at |
Cre dit |
ris k t - - a |
Cre dit - n |
- ri sk ot at |
Cre dit - a |
ris k t - |
|||
| Se t gm en |
To tal |
Da in ys arr ea rs |
Da in ys arr ea rs |
To tal |
Da in ys arr ea rs |
Da in ys arr ea rs |
||||
| 1 Ex po su re |
2 < 3 0 |
be tw n 3 0 - ee 90 |
90 <= |
90 da > ys |
Im irm t pa en |
2 < 3 0 |
be tw 0 - 90 n 3 ee |
90 <= |
90 da > ys |
|
| Co rat e b kin rpo an g |
4 7 00 959 |
4 4 10 007 |
5 2 49 |
11 88 1 |
273 82 2 |
252 89 3 |
82 710 |
1 6 29 |
4 0 53 |
164 50 1 |
| Lar Co ani ge mp es |
1 7 72 883 |
1 6 84 156 |
803 | 636 | 87 288 |
94 56 1 |
39 382 |
26 | 339 | 54 814 |
| Me diu siz ed Co ani m- mp es |
2 9 28 076 |
2 7 25 85 1 |
4 4 46 |
11 245 |
186 53 4 |
158 33 2 |
43 328 |
1 6 03 |
3 7 14 |
109 68 7 |
| Pro jec t F ina - P ort al nce ug |
99 5 3 64 |
950 52 1 |
843 44 |
28 336 |
8 3 39 |
19 997 |
||||
| Ma dri d |
65 3 7 62 |
620 00 9 |
33 753 |
42 573 |
23 054 |
19 519 |
||||
| Pro jec t F ina nce |
410 16 8 |
385 40 9 |
24 759 |
27 28 1 |
15 266 |
12 015 |
||||
| Co rat rpo e |
243 59 4 |
234 60 0 |
8 9 94 |
15 292 |
7 7 88 |
7 5 04 |
||||
| Pu bli c S tor ec |
1 4 40 029 |
1 4 39 767 |
254 | 8 | 2 8 30 |
2 8 30 |
||||
| Ce ntr al A dm inis tra tio n |
186 73 4 |
186 73 4 |
4 | 4 | ||||||
| Re ion al a nd loc al a dm inis tra tio g n |
892 99 4 |
892 99 4 |
679 | 679 | ||||||
| Sta Co e S – i he bud erim te rat ect n t t p ete rpo or ge r |
53 156 |
53 156 |
||||||||
| Sta Co e S ide th e b udg ime te rat ect uts et ter rpo or – o per |
274 11 8 |
274 11 8 |
2 1 30 |
2 1 30 |
||||||
| Oth ins titu tio nal er |
33 027 |
32 765 |
254 | 8 | 17 | 17 | ||||
| Ind ivi du als d S ll B usi s B kin an ma ne sse an g |
14 129 60 1 |
13 567 50 0 |
92 965 |
3 8 42 |
465 29 4 |
335 08 2 |
91 514 |
18 243 |
18 7 |
224 60 7 |
| Mo rtg lo to ind ivid ual age ans s |
11 069 32 2 |
10 66 1 2 84 |
73 010 |
1 8 43 |
333 18 5 |
203 62 2 |
64 352 |
12 966 |
305 | 125 99 9 |
| Co r lo / o the nsu me ans r p urp ose s |
727 84 3 |
688 73 4 |
7 7 36 |
172 | 31 20 1 |
35 313 |
5 9 15 |
2 7 00 |
73 | 26 625 |
| Cre dit ds car |
156 62 7 |
150 52 3 |
739 | 37 | 5 3 28 |
6 5 15 |
1 2 55 |
304 | 26 | 4 9 30 |
| Ca r fin ing anc |
192 66 6 |
189 32 0 |
933 | 109 | 2 3 04 |
2 1 18 |
528 | 175 | 14 | 1 4 01 |
| Sm all bus ine sse s |
1 9 83 143 |
1 8 77 639 |
10 547 |
1 6 81 |
93 276 |
87 514 |
19 464 |
2 0 98 |
300 | 65 652 |
| 3 Oth er |
1 5 03 555 |
1 4 98 45 1 |
5 1 04 |
12 394 |
12 26 1 |
133 | ||||
| 23 423 27 0 |
22 486 25 5 |
98 214 |
15 977 |
822 82 4 |
674 10 8 |
220 70 8 |
19 872 |
4 7 71 |
428 75 7 |
1 Excludes accrued interest and deferred interest, correction of the amount of hedged assets and commissions relating to amortised cost.
2 Includes non-defaulting loans (no days in arrears).
3 Includes 1 239 180 t. euro of securities held by BPI Vida, essentially allocated to the coverage of capitalization insurance.
| At De mb 31 20 16 the f th d i nt ce er am ou o e e xp os ure an mp , |
air f lo nd ad nt s t me o an s a va nce |
ad fol low ust o c om ers wa s m e u p a s s: |
|---|---|---|
| -------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- |
| Tot al e xpo |
sur e |
Tot al I airm mp |
ent | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Cre dit |
ot at - ri sk - n |
Cre dit |
t - risk - a |
Cre dit |
ot at - ri sk - n |
Cre dit - a |
t - risk |
|||
| Se t gm en |
To tal Ex 1 |
Da in ys arr ea rs |
Da in ys arr ea rs |
To tal Im irm t en |
Da in ys arr ea rs |
Da in ys arr ea rs |
||||
| po sur e |
2 < 3 0 |
be tw n 3 0 - 90 ee |
90 <= |
90 da > ys |
pa | 2 < 3 0 |
be tw n 3 0 - 90 ee |
90 <= |
90 da > ys |
|
| Co rat e b kin rpo an g |
4 5 35 241 |
4 2 154 57 |
3 1 06 |
10 080 |
264 90 1 |
254 25 4 |
90 255 |
1 0 29 |
3 3 96 |
159 4 57 |
| Lar Co ani ge mp es |
1 7 90 202 |
1 7 09 025 |
35 | 8 | 81 134 |
86 761 |
40 619 |
1 | 2 | 46 139 |
| Me diu ize d C ies m-s om pan |
2 7 45 039 |
2 5 48 129 |
3 0 71 |
10 072 |
183 76 7 |
167 49 3 |
49 636 |
1 0 28 |
3 3 94 |
113 43 5 |
| Pro jec t F ina - P ort al nce ug |
99 5 5 06 |
950 66 3 |
44 843 |
30 288 |
10 326 |
19 962 |
||||
| Ma dri d |
78 21 4 7 |
743 34 4 |
41 377 |
162 45 |
24 631 |
20 531 |
||||
| Pro jec t F ina nce |
456 62 0 |
424 23 6 |
32 384 |
29 708 |
16 571 |
13 137 |
||||
| Co rate rpo |
328 10 1 |
319 10 8 |
8 9 93 |
15 454 |
8 0 60 |
7 3 94 |
||||
| Pu bli c S ect or |
1 4 17 408 |
1 4 17 280 |
128 | 2 1 78 |
2 1 58 |
20 | ||||
| Ce ntra l A dm inis trat ion |
189 46 8 |
189 46 8 |
||||||||
| Re ion al a nd loc al a dm inis trat ion g |
780 75 3 |
780 75 3 |
2 | 2 | ||||||
| Sta te Co rate Se cto in t he bud t p erim ete rpo r – ge r |
51 810 |
51 810 |
||||||||
| Sta Co Se sid he bud erim te rate cto out e t t p ete rpo r – ge r |
365 60 0 |
365 60 0 |
2 1 39 |
2 1 39 |
||||||
| Oth ins titu tion al er |
29 777 |
29 649 |
128 | 37 | 17 | 20 | ||||
| Ind ivid ls a nd Sm all Bu sin Ba nki ua ess es ng |
14 022 95 1 |
13 448 49 5 |
77 586 |
5 7 62 |
49 1 1 08 |
350 84 2 |
97 883 |
16 067 |
1 054 |
235 83 8 |
| Mo rtga loa to ind ivid ual ge ns s |
11 084 21 4 |
10 676 05 3 |
60 511 |
2 3 84 |
345 26 6 |
211 56 6 |
70 574 |
11 434 |
342 | 129 21 6 |
| Co r lo / o the nsu me ans r pu rpo ses |
690 23 9 |
653 42 9 |
4 3 96 |
149 | 32 265 |
37 095 |
6 9 99 |
2 0 67 |
44 | 27 985 |
| Cre dit ds car |
164 28 5 |
157 81 8 |
799 | 10 | 5 6 58 |
6 8 25 |
1 3 19 |
332 | 6 | 5 168 |
| Ca r fin ing anc |
168 09 1 |
164 79 1 |
882 | 58 | 2 3 60 |
2 4 51 |
659 | 193 | 3 | 1 596 |
| Sm all bus ine sse s |
1 9 16 122 |
1 7 96 404 |
10 998 |
3 1 61 |
105 55 9 |
92 905 |
18 332 |
2 0 41 |
659 | 71 873 |
| 3 Oth er |
1 5 88 897 |
1 5 84 464 |
4 4 33 |
12 476 |
12 288 |
188 | ||||
| 23 344 72 4 |
22 401 40 0 |
80 692 |
15 842 |
846 79 0 |
695 20 0 |
237 54 1 |
17 096 |
4 4 50 |
436 11 3 |
1 Excludes accrued interest and deferred interest, correction of the amount of hedged assets and commissions relating to amortised cost.
2 Includes non-defaulting loans (no days in arrears).
3 Includes 1 295 381 t. euro of securities held by BPI Vida, essentially allocated to the coverage of capitalization insurance.
At June 30, 2017 the amount of the exposure and impairment of loans and advances to customers assessed individually and collectively, by segment, was made up as follows:
| o f wh |
ich : |
|||||||
|---|---|---|---|---|---|---|---|---|
| P e rfo ing rm Lo an s |
Ov erd ue Lo an s |
Ex re 1 po su |
Ind ivi du all y As 2 ed se ss |
C o ly As lle cti ve ed se ss |
al Im Ind ivi du irm t pa en |
Co lle cti ve Im irm t pa en |
To tal Im irm t pa en |
|
| Co rat e b kin rpo an g |
4 4 70 899 |
23 0 0 60 |
4 7 00 959 |
42 1 80 0 |
4 2 79 159 |
213 53 8 |
39 35 5 |
25 2 8 93 |
| Lar Co ani ge mp es |
1 71 6 6 44 |
56 23 9 |
1 77 2 8 83 |
141 49 0 |
1 63 1 39 3 |
82 77 1 |
11 7 90 |
94 56 1 |
| M e diu ized Co ani m-s mp es |
2 7 54 255 |
173 82 1 |
2 9 28 076 |
28 0 3 10 |
2 6 47 766 |
130 76 7 |
27 56 5 |
158 33 2 |
| P r oje ct Fin - P ort al an ce ug |
98 2 9 37 |
12 427 |
99 5 3 64 |
65 32 0 |
93 0 0 44 |
21 021 |
7 3 15 |
28 33 6 |
| M a dri d |
63 4 2 95 |
19 467 |
65 3 7 62 |
85 68 8 |
56 8 0 74 |
38 43 3 |
4 1 40 |
42 57 3 |
| Pro jec t Fi nan ce |
39 9 6 95 |
10 473 |
410 168 |
51 026 |
35 9 14 2 |
24 32 5 |
2 9 56 |
27 28 1 |
| Co rate rpo |
23 4 6 00 |
8 9 94 |
24 3 5 94 |
34 66 2 |
20 8 9 32 |
14 108 |
1 18 4 |
15 292 |
| P u bli c S tor ec |
1 44 0 0 21 |
8 | 1 44 0 0 29 |
37 53 9 |
1 40 2 4 90 |
2 0 02 |
82 8 |
2 8 30 |
| Ce ntra l Ad min istr atio n |
186 73 4 |
186 73 4 |
186 73 4 |
4 | 4 | |||
| Re ion al a nd loc al a dm inis trat ion g |
89 2 9 94 |
89 2 9 94 |
89 2 9 94 |
67 9 |
67 9 |
|||
| Sta te C te S ect in t he bud t pe rim ete orp ora or - ge r |
53 156 |
53 156 |
53 156 |
|||||
| Sta te C te S ect tsid e th e b udg et p erim ete orp ora or - ou r |
27 4 11 8 |
27 4 11 8 |
36 69 5 |
23 7 4 23 |
1 9 85 |
14 5 |
2 1 30 |
|
| Oth er i nst itut ion al |
33 019 |
8 | 33 02 7 |
84 4 |
32 183 |
17 | 17 | |
| Ind ivi du als d S ll B ine Ba nk ing an ma us ss es |
13 7 39 070 |
39 0 5 31 |
14 1 29 601 |
53 410 |
14 0 76 191 |
17 303 |
317 77 9 |
33 5 0 82 |
| M o rtga loa to i ndi vid ual ge ns s |
10 7 99 758 |
26 9 5 64 |
11 0 69 322 |
11 0 69 322 |
20 3 6 22 |
20 3 6 22 |
||
| Co / ot r lo her nsu me ans pu rpo ses |
70 1 96 8 |
25 87 5 |
72 7 8 43 |
72 7 8 43 |
35 313 |
35 313 |
||
| Cre dit ds car |
150 86 5 |
5 7 62 |
156 62 7 |
156 62 7 |
6 5 15 |
6 5 15 |
||
| le f Ve hic ina nci ng |
190 69 9 |
1 9 67 |
192 66 6 |
192 66 6 |
2 1 18 |
2 1 18 |
||
| Sm all b usi nes ses |
1 89 80 5 7 |
87 36 3 |
1 98 3 14 3 |
53 410 |
1 92 9 7 33 |
17 303 |
70 211 |
87 514 |
| r 2 Ot he |
1 50 1 37 5 |
2 1 80 |
1 50 3 5 55 |
11 9 33 |
1 49 1 62 2 |
11 9 33 |
46 1 |
12 394 |
| 22 76 8 5 97 |
65 4 6 73 |
23 42 3 2 70 |
67 5 6 90 |
22 74 80 7 5 |
30 4 2 30 |
36 9 8 78 |
67 4 1 08 |
1 Excludes accrued interest and deferred interest, correction of the amount of hedged assets and commissions relating to amortised cost.
2 The information included in this column refers to the individually assessed exposures for which the Bank concluded for the need to record individual impairment. The remaining individual exposures for which the Bank concluded there was
no need for impairment on an individual basis, were subject to collective assessment for the determination of the associated impairment and are therefore presented in the "Collectively assessed" column. The Bank's segment of loan portfolio subject to individual impairment analysis are described in Note 2.3.4.
3 Includes 1 239 180 t. euro of securities held by BPI Vida, essentially allocated to the coverage of capitalization insurance products.
At December 31, 2016 the amount of the exposure and impairment of loans and advances to customers assessed individually and collectively, by segment, was made up as follows:
| f w hic o |
h: | |||||||
|---|---|---|---|---|---|---|---|---|
| P e rfo ing rm Lo an s |
Ov erd ue Lo an s |
1 Ex po su re |
Ind ivi du all y 2 ed as se ss |
C o lle cti ly ve ed as se ss |
al Im Ind ivi du irm t pa en |
Co lle cti ve Im irm t pa en |
To tal Im irm t pa en |
|
| Co rat e b kin rpo an g |
4 3 00 002 |
23 5 2 39 |
4 5 35 241 |
45 2 4 99 |
4 0 82 742 |
22 6 4 33 |
27 82 1 |
25 4 2 54 |
| Lar Co ani ge mp es |
1 73 3 6 30 |
56 2 57 |
1 79 0 2 02 |
145 32 1 |
1 64 4 8 81 |
76 30 0 |
10 461 |
86 76 1 |
| M e diu ized Co ani m-s mp es |
2 5 66 372 |
178 66 7 |
2 7 45 039 |
30 7 17 8 |
2 4 37 861 |
150 133 |
17 360 |
167 49 3 |
| P r oje Fin - P al ct tug an ce or |
98 3 7 80 |
11 7 26 |
99 5 5 06 |
60 54 4 |
93 4 9 62 |
20 74 6 |
9 5 42 |
30 28 8 |
| M a dri d |
76 3 3 62 |
21 359 |
78 4 7 21 |
98 74 1 |
68 5 9 80 |
39 183 |
5 9 79 |
45 162 |
| Pro jec t F ina nce |
4 2 44 54 |
12 366 |
6 6 20 45 |
63 93 2 |
39 2 6 88 |
25 39 9 |
4 3 09 |
29 70 8 |
| Co rate rpo |
319 108 |
8 9 93 |
32 8 10 1 |
34 80 9 |
29 3 2 92 |
13 784 |
1 6 70 |
15 454 |
| c S P u bli to ec r |
1 41 7 2 80 |
12 8 |
1 41 7 4 08 |
37 66 7 |
1 37 9 7 41 |
2 0 22 |
15 6 |
2 1 78 |
| Ce l Ad min istr atio ntra n |
189 46 8 |
189 46 8 |
189 46 8 |
|||||
| Re ion al a nd loc al a dm inis trat ion g |
78 0 7 53 |
78 0 7 53 |
78 0 7 53 |
2 | 2 | |||
| Sta te C te S ect in t he bud t pe rim ete orp ora or - ge r |
51 810 |
51 810 |
51 810 |
|||||
| Sta te C te S ect tsid e th e b udg et p erim ete orp ora or - ou r |
36 5 6 00 |
36 5 6 00 |
36 69 5 |
32 8 9 05 |
1 9 85 |
15 4 |
2 1 39 |
|
| Oth er i itut ion al nst |
29 64 9 |
12 8 |
29 77 7 |
97 2 |
28 80 5 |
37 | 37 | |
| Ind ivi du als d S ll B ine Ba nk ing an ma us ss es |
13 6 02 951 |
42 0 0 00 |
14 0 22 951 |
65 95 5 |
13 9 56 996 |
18 393 |
33 2 4 49 |
35 0 8 42 |
| M o rtga loa to ind ivid ual ge ns s |
10 8 00 292 |
28 3 9 22 |
11 0 84 214 |
11 0 84 214 |
211 56 6 |
211 56 6 |
||
| Co r lo / ot her nsu me ans pu rpo ses |
66 2 9 52 |
27 28 7 |
69 0 2 39 |
69 0 2 39 |
37 09 5 |
37 09 5 |
||
| Cre dit ds car |
158 192 |
6 0 93 |
164 28 5 |
164 28 5 |
6 8 25 |
6 8 25 |
||
| Ve hic le f ina nci ng |
165 98 1 |
2 1 10 |
168 09 1 |
168 09 1 |
2 4 51 |
2 4 51 |
||
| Sm all b usi nes ses |
1 81 5 5 34 |
100 58 8 |
1 91 6 12 2 |
65 95 5 |
1 85 0 16 7 |
18 393 |
74 512 |
92 90 5 |
| r 2 Ot he |
1 58 6 5 23 |
2 3 74 |
1 58 8 8 97 |
12 391 |
1 57 6 5 06 |
11 9 87 |
48 9 |
12 476 |
| 22 65 3 8 98 |
69 0 8 26 |
23 34 4 7 24 |
72 7 7 97 |
22 61 6 9 27 |
31 8 7 64 |
37 6 4 36 |
69 5 2 00 |
1 Excludes accrued interest and deferred interest, correction of the amount of hedged assets and commissions relating to amortised cost.
2 The information included in this column refers to the individually assessed exposures for which the Bank concluded for the need to record individual impairment. The remaining individual exposures for which the Bank concluded there was no need for impairment on an individual basis, were subject to collective assessment for the determination of the associated impairment and are therefore presented in the "Collectively assessed" column. The Bank's segment of loan portfolio subject to individual impairment analysis are described in Note 2.3.4.
3 Includes 1 295 381 t. euro of securities held by BPI Vida, essentially allocated to the coverage of capitalization insurance products.
At June 30, 2017 the amount of exposure and impairment of Loans and advances to customers assessed individually and collectively, by business sector, was made up as follows:
| P e rfo ing Ov erd Ind ivid ual Co llec tiv To tal rm ue e Imp 1 Exp Imp Imp ly ass Ind ivid ual C o llec tiv ely o s ure Loa Loa air nt air nt air ass ns ns me me me 2 ed ed ess ess Co rat 10 4 61 2 64 336 135 10 7 97 3 99 662 787 10 1 34 6 13 298 612 112 267 410 rpo e Agr icul ture ima l pro duc tion and hun ting 274 490 4 8 77 279 367 10 9 23 268 444 3 9 49 4 0 16 7 9 , an For est nd f st o tion 20 083 22 6 20 309 3 20 306 33 9 33 ry a ore pera s Fis hing 24 729 11 1 26 35 855 26 037 9 8 18 25 835 54 25 M in ing 12 2 26 96 0 13 186 1 23 0 11 9 56 45 6 175 63 Bev tob nd f ood 464 392 3 4 98 467 890 22 417 445 473 5 7 44 3 6 91 9 4 era ge, acc o a Tex tiles and clo thin 100 626 14 0 01 114 627 19 192 95 435 12 3 58 1 54 9 13 9 g Lea the d re late d pr odu 31 0 93 615 31 7 08 31 7 08 9 cts 57 57 r an Wo od and rk 135 277 5 4 43 140 720 4 7 74 135 946 2 8 06 1 48 3 4 2 co Pul d ca rdbo ard and phic art 195 197 2 9 92 198 189 3 8 02 194 387 2 7 96 1 22 4 4 0 p, p ape r an gra s Co ke, refi ned pet role duc ts a nd f uel pell ets um pro 50 312 50 312 50 312 2 Che mic als, the tic o r art ifici al fi bres ept pha tica l pro duc ts syn , exc rma ceu 69 117 16 1 69 278 15 69 263 15 36 2 37 Bas e ph utic al p rod ucts and pha tica l mi xtur arm ace rma ceu es 17 8 54 17 8 54 17 8 54 97 97 Rub ber and pla stic teri als 89 641 1 23 2 90 873 1 33 7 89 536 80 9 80 6 1 6 15 ma Oth iner al n allic duc 242 532 1 42 243 957 2 16 3 24 1 79 4 37 1 79 3 2 17 met ts 5 7 er m on- pro M e talw ork ing indu stri 22 1 72 9 9 8 34 23 1 56 3 12 6 62 218 90 1 8 8 81 2 9 98 11 8 79 es Co ute lect ic, e lect rica l an d o ptic al e quip nt 108 009 1 37 2 109 38 1 2 4 16 106 965 71 1 1 02 5 1 73 mp rs, e ron me Tra ort ipm ent 81 7 74 77 0 82 544 95 4 81 5 90 65 7 83 1 1 48 nsp equ Oth fac turi ng i ndu stri 58 984 3 8 10 62 794 2 4 80 60 314 1 54 2 1 99 6 3 5 38 er m anu es Elec tric ity, g nd w ate 680 274 2 680 276 7 9 50 672 326 3 2 92 4 6 69 7 9 61 as a r Wa ter trea tme nt a nd c olle ctio 313 792 1 09 5 314 887 53 869 26 1 018 4 0 91 1 44 1 5 5 32 n Co nst ruct ion 418 684 93 383 512 067 119 511 392 556 66 157 13 5 55 79 712 Wh ole sale and ail t rade veh icle and ycle airs ret tor torc ; mo mo rep 1 35 3 08 6 73 800 1 42 6 88 6 61 121 1 36 5 76 5 34 816 28 604 63 Tra ort and sto 950 768 18 3 22 969 090 91 115 877 975 34 565 6 6 71 41 2 nsp rage Res tau rant d ho tels 409 788 32 985 442 773 60 421 382 352 15 4 61 5 3 15 20 s an Info tion and unic atio tivit ies 295 572 3 6 50 299 222 12 5 51 286 67 1 6 8 42 1 53 2 8 3 rma co mm n ac Fina ncia l int edia tion ept for insu nd p ion fun ds 642 812 9 9 93 652 805 35 484 617 32 1 17 8 05 3 5 96 21 4 erm , exc ran ce a ens Insu insu nd p ion fun ds, ept for nda tory cial ranc e, re ran ce a ens exc ma so 26 26 26 urity sec Aux iliar tivit ies to f inan cial vice d in 119 832 83 119 915 52 119 863 10 145 y ac ser s an sur anc e Rea l es tate 514 151 20 580 534 73 1 42 725 492 006 14 8 94 5 8 43 20 Co lting ient ific, hnic al a nd s imil ctiv ities 83 1 38 9 6 8 15 838 204 50 232 787 973 30 614 7 9 25 38 tec nsu , sc ar a Adm inis ive and rvic 210 579 3 4 95 214 074 2 19 9 211 875 1 08 3 5 04 4 5 trat t se 5 sup por es fen Pub lic a dm inis trat ion , de nd m and ato oci al s rity 1 17 2 44 3 1 17 2 44 3 1 17 2 44 3 67 6 67 ce a ry s ecu Edu cat ion 42 205 1 26 9 43 474 6 2 30 37 244 1 22 7 82 8 2 0 |
o f wh |
ich : |
||||
|---|---|---|---|---|---|---|
| nt | ||||||
| 879 | ||||||
| 65 | ||||||
| 9 | ||||||
| 889 | ||||||
| 1 | ||||||
| 35 | ||||||
| 07 | ||||||
| 9 | ||||||
| 89 | ||||||
| 20 | ||||||
| 2 | ||||||
| 7 | ||||||
| 0 | ||||||
| 6 | ||||||
| 8 | ||||||
| 420 | ||||||
| 36 | ||||||
| 776 | ||||||
| 74 | ||||||
| 01 | ||||||
| 155 | ||||||
| 737 | ||||||
| 539 | ||||||
| 89 | ||||||
| 6 | ||||||
| 55 | ||||||
| Hea lthc and lfare 161 273 2 19 9 163 472 2 3 24 161 148 53 2 1 57 0 2 10 are we |
2 | |||||
| Leis ltura l an d sp orts act iviti 55 488 4 9 05 60 393 4 7 50 55 643 106 1 06 1 1 16 ure , cu es |
7 | |||||
| Oth ice ies 44 250 41 7 44 667 1 73 7 42 930 62 69 8 76 er s erv com pan |
0 | |||||
| Co nies wit hou t CA E co de ( Bus ines s A ctiv ity C lass ifica tion 46 7 87 80 0 47 587 111 47 476 117 1 6 14 1 73 mpa - |
1 | |||||
| 12 3 07 3 33 318 538 12 6 25 8 71 12 9 03 12 6 12 9 67 5 6 18 257 611 263 Ind ivid ual s |
229 | |||||
| Ho usin g lo 10 7 99 7 74 269 570 11 0 69 3 44 11 0 69 3 44 203 530 203 ans |
530 | |||||
| Oth 1 50 9 48 968 1 55 6 52 12 9 03 1 54 3 62 3 5 6 18 54 081 59 7 55 7 er 22 768 59 65 4 6 73 23 423 27 0 67 5 6 90 22 747 58 0 30 4 2 30 36 9 8 78 67 4 1 08 7 |
699 |
1 Excludes accrued interest and deferred interest, correction of the amount of hedged assets and commissions relating to amortised cost.
2 The information included in this column refers to the individually assessed exposures for which the Bank concluded for the need to record individual impairment. The remaining individual exposures for which the Bank concluded there was no need for impairment on an individual basis, were subject to collective assessment for the determination of the associated impairment and are therefore presented in the "Collectively assessed" column. The Bank's segment of loan portfolio subject to individual impairment analysis are described in Note 2.3.4.
At December 31, 2016 the amount of exposure and impairment of Loans and advances to customers assessed individually and collectively, by business sector, was made up as follows:
| o f wh |
ich : |
|||||||
|---|---|---|---|---|---|---|---|---|
| P e rfo rmi ng Loa ns |
Ov erd ue Loa ns |
Exp 1 o s ure |
Ind ivid ual ly ed 2 ass ess |
C o llec tive ly ed ass ess |
Ind ivid ual Imp air nt me |
Co llec tive Imp air nt me |
tal Imp To air nt me |
|
| Co rat rpo e |
10 4 40 5 46 |
35 1 70 0 |
10 7 92 2 46 |
709 553 |
10 0 82 6 93 |
312 817 |
108 144 |
420 961 |
| Agr icul ture ima l pro duc tion and hun ting , an |
26 1 25 9 |
5 2 34 |
266 493 |
11 3 78 |
255 115 |
3 8 52 |
4 17 7 |
8 0 29 |
| For nd f tion est st o ry a ore pera s |
19 7 57 |
23 9 |
19 9 96 |
19 9 96 |
34 5 |
34 5 |
||
| Fish ing |
26 132 |
10 9 12 |
37 044 |
27 150 |
9 8 94 |
24 452 |
74 | 24 526 |
| M in ing |
49 449 |
64 4 |
50 093 |
1 90 3 |
48 190 |
55 6 |
35 1 |
90 7 |
| Bev bac nd f ood e, to erag co a |
435 785 |
4 3 27 |
440 112 |
10 148 |
429 964 |
5 0 14 |
4 14 1 |
9 15 5 |
| Tex tiles and clo thin g |
89 290 |
13 9 82 |
103 272 |
19 6 48 |
83 624 |
12 6 80 |
1 15 3 |
13 8 33 |
| Lea the d re late d pr odu cts r an |
33 386 |
60 2 |
33 988 |
29 3 |
33 695 |
26 7 |
418 | 68 5 |
| Wo od a nd c ork |
120 211 |
2 7 64 |
122 975 |
5 4 96 |
117 479 |
3 2 50 |
1 19 4 |
4 4 44 |
| Pul d ca rdbo ard and phic art p, p ape r an gra s |
339 384 |
4 3 78 |
343 762 |
4 7 00 |
339 062 |
3 0 06 |
1 73 8 |
4 7 44 |
| 50 425 |
50 425 |
50 425 |
2 | 2 | ||||
| Co ke, refin ed p etro leum duc ts a nd f uel pell ets pro |
||||||||
| Che mic als, thet ic o r art ifici al fi bres ept pha tica l pro duc ts syn , exc rma ceu |
76 587 |
34 1 |
76 928 |
71 | 76 857 |
71 | 50 0 |
57 1 |
| Bas e ph utic al p rod ucts and pha tica l mi xtur arm ace rma ceu es |
53 448 |
1 | 53 449 |
53 449 |
153 | 153 | ||
| Rub ber and pla stic teria ls ma |
84 259 |
1 24 4 |
85 503 |
1 3 18 |
84 185 |
72 0 |
70 5 |
1 42 5 |
| Oth iner al n met allic duc ts er m on- pro |
257 704 |
2 5 77 |
260 281 |
3 9 83 |
256 298 |
1 52 2 |
1 53 7 |
3 0 59 |
| M e talw ork ing indu strie s |
191 042 |
9 5 38 |
200 580 |
13 3 76 |
187 204 |
8 9 38 |
2 9 16 |
11 8 54 |
| Co ters , ele ctro nic, ele ctric al a nd o ptic al e quip t mpu men |
121 607 |
1 35 9 |
122 966 |
2 7 98 |
120 168 |
68 4 |
1 28 3 |
1 96 7 |
| Tra ort ipm ent nsp equ |
71 5 28 |
1 24 3 |
72 771 |
1 53 7 |
71 2 34 |
84 7 |
75 0 |
1 59 7 |
| Oth fact urin g in dus tries er m anu |
54 564 |
3 8 42 |
58 406 |
4 19 4 |
54 212 |
1 86 8 |
1 50 0 |
3 3 68 |
| Elec tric ity, g nd w ate as a r |
643 520 |
2 5 20 |
646 040 |
7 9 02 |
638 138 |
3 2 71 |
5 9 13 |
9 18 4 |
| Wat d co llec tion er t reat t an men |
374 492 |
1 09 8 |
375 590 |
54 475 |
32 1 115 |
4 2 99 |
1 53 6 |
5 8 35 |
| Con stru ctio n |
425 857 |
102 082 |
527 939 |
131 766 |
396 173 |
67 196 |
13 188 |
80 384 |
| Wh oles ale and ret ail t rade tor veh icle and torc ycle airs ; mo mo rep |
1 23 4 83 8 |
76 939 |
1 31 1 77 7 |
76 231 |
1 23 5 54 6 |
45 334 |
26 599 |
71 9 33 |
| Tra ort and sto nsp rage |
1 02 7 04 8 |
16 8 86 |
1 04 3 93 4 |
87 884 |
956 050 |
32 245 |
6 3 73 |
38 618 |
| Res tau rant d ho tels s an |
337 076 |
29 103 |
366 179 |
62 186 |
303 993 |
15 7 45 |
4 8 39 |
20 584 |
| Info tion and unic atio tivit ies rma co mm n ac |
283 644 |
3 7 33 |
287 377 |
13 2 81 |
274 096 |
6 5 11 |
1 39 8 |
7 9 09 |
| Fina ncia l int edia tion ept for insu d pe nsio n fu nds erm , exc ranc e an |
667 193 |
10 8 30 |
678 023 |
37 364 |
640 659 |
18 3 35 |
3 8 13 |
22 148 |
| Insu insu d pe nsio n fu nds for dato ocia l ept ranc e, re ranc e an , exc man ry s |
||||||||
| urity sec |
27 | 27 | 27 | |||||
| Aux iliar tivit ies to f inan cial vice d in y ac ser s an sura nce |
120 497 |
110 | 120 607 |
55 | 120 552 |
11 | 127 | 138 |
| Rea l es tate |
481 576 |
23 006 |
504 582 |
46 398 |
458 184 |
12 183 |
4 9 55 |
17 138 |
| Co lting ient ific, tec hnic al a nd s imil ctiv ities nsu , sc ar a |
814 218 |
8 8 03 |
823 021 |
53 653 |
769 368 |
30 136 |
7 9 34 |
38 070 |
| Adm inis trat ive and t se rvic sup por es |
229 843 |
3 4 83 |
233 326 |
2 3 04 |
231 022 |
1 16 2 |
4 2 90 |
5 4 52 |
| Pub lic a dm inis ion , de fen nd m and ocia l se ity trat ato ce a ry s cur |
1 07 1 192 |
1 07 1 192 |
1 07 1 192 |
1 | 1 | |||
| Edu cat ion |
42 277 |
1 20 6 |
43 483 |
6 4 09 |
37 074 |
97 0 |
80 7 |
1 77 7 |
| lfare Hea lthc and are we |
163 399 |
2 2 49 |
165 648 |
2 5 15 |
163 133 |
37 3 |
1 59 3 |
1 96 6 |
| Leis ltura l an d sp orts act iviti ure , cu es |
47 918 |
5 0 65 |
52 983 |
5 0 70 |
47 913 |
150 | 63 0 |
78 0 |
| Oth ice ies er s erv com pan |
89 203 |
56 7 |
89 770 |
1 80 2 |
87 968 |
65 | 79 1 |
85 6 |
| Co t CA de ( ity C ifica nies wit hou E co Bus ines s A ctiv lass tion mpa - |
||||||||
| "Cla ssif icaç ão d as A ctiv idad es E óm icas ") con |
50 911 |
79 3 |
51 7 04 |
12 2 65 |
39 439 |
7 10 4 |
42 0 |
7 5 24 |
| Ind ivid ual s |
12 2 13 3 52 |
339 126 |
12 5 52 4 78 |
18 2 44 |
12 5 34 2 34 |
5 9 47 |
268 292 |
274 239 |
| Hou sing loa ns |
10 8 02 3 25 |
283 928 |
11 0 86 2 53 |
55 | 11 0 86 1 98 |
8 | 211 568 |
211 576 |
| Oth er |
1 411 027 |
55 198 |
1 46 6 22 5 |
18 189 |
1 44 8 03 6 |
5 9 39 |
56 724 |
62 663 |
| 22 653 89 8 |
69 0 8 26 |
23 344 72 4 |
72 7 7 97 |
22 616 92 7 |
31 8 7 64 |
37 6 4 36 |
69 5 2 00 |
1 Excludes accrued interest and deferred interest, correction of the amount of hedged assets and commissions relating to amortised cost.
2 The information included in this column refers to the individually assessed exposures for which the Bank concluded for the need to record individual impairment. The remaining individual exposures for which the Bank concluded there was no need for impairment on an individual basis, were subject to collective assessment for the determination of the associated impairment and are therefore presented in the "Collectively assessed" column. The Bank's segment of loan portfolio subject to individual impairment analysis are described in Note 2.3.4.
At June 30, 2017 the caption "Loans" was made up as follows by country:
| fro wh m |
ich : |
|||||||
|---|---|---|---|---|---|---|---|---|
| P e rfo ing rm loa ns |
Ov erd ue loa ns |
re 1 Ex po su |
As ed se ss ind 2 ivi du all y |
As ed se ss co lle cti ly ve |
Ind ivi du al Im irm t pa en |
C o lle cti ly ve Im irm t pa en |
To tal Im irm t pa en |
|
| Po rtug al |
19 9 46 443 |
60 5 9 85 |
20 552 42 8 |
56 0 7 92 |
19 9 91 6 36 |
25 2 9 88 |
35 1 80 8 |
60 96 4 7 |
| Spa in |
20 7 16 8 |
39 4 |
20 7 5 62 |
8 | 20 7 5 54 |
8 | 2 4 35 |
2 4 43 |
| Sw itze rlan d |
188 164 |
2 7 33 |
190 89 7 |
190 89 7 |
2 2 29 |
2 2 29 |
||
| An la go |
168 93 5 |
1 3 15 |
170 25 0 |
170 25 0 |
1 2 00 |
1 2 00 |
||
| Oth er |
1 0 18 7 07 |
44 24 6 |
1 06 2 9 53 |
103 08 8 |
95 9 8 65 |
39 43 4 |
12 206 |
51 640 |
| 21 52 9 4 17 |
65 4 6 73 |
22 18 4 0 90 |
66 3 8 88 |
21 52 0 2 02 |
29 2 4 30 |
36 9 8 78 |
66 2 3 08 |
1 Does not include 1 239 180 t. euro of securities held by BPI Vida, allocated essentially to coverage of capitalization insurance.
2 The information included in this column refers to the individually assessed exposures for which the Bank concluded for the need to record individual impairment. The remaining individual exposures for which the Bank concluded there was no need for impairment on an individual basis were subject to collective assessment for the determination of the associated impairment and are therefore presented in the "Collectively assessed" column. The Bank's segment of loan portfolio subject to individual impairment analysis are described in Note 2.3.4.
At December 31, 2016 the caption "Loans" was made up as follows by country:
| fro m w |
hic h: |
|||||||
|---|---|---|---|---|---|---|---|---|
| P e rfo rmi ng loa ns |
Ov erd ue loa ns |
Exp 1 o s ure |
As sed As sed ses ses ly2 ind ivid ual Co llec tiv ely |
Ind ivid ual Imp air nt me |
C o llec tive ly Imp air nt me |
To tal Imp air nt me |
||
| DO ST IC AC M E TIV ITY |
||||||||
| Por tug al |
20 0 26 9 00 |
655 141 |
20 6 82 0 40 |
597 601 |
20 0 84 4 39 |
266 390 |
367 558 |
633 947 |
| Spa in |
617 471 |
20 746 |
638 217 |
71 3 28 |
566 889 |
24 647 |
5 3 42 |
29 988 |
| Ang ola |
151 005 |
126 | 151 131 |
151 131 |
45 0 |
45 0 |
||
| Net herl and s |
108 034 |
2 | 108 036 |
108 036 |
60 1 |
60 1 |
||
| Oth er |
455 108 |
14 8 12 |
469 919 |
47 069 |
422 850 |
15 9 28 |
2 4 85 |
18 4 14 |
| 21 3 58 517 |
69 0 8 26 |
22 049 34 3 |
71 5 9 98 |
21 333 34 5 |
30 6 9 64 |
37 6 4 36 |
68 3 4 00 |
1 Does not include 1 295 381 t. euro of securities held by BPI Vida, allocated essentially to coverage of capitalization insurance.
2 The information included in this column refers to the individually assessed exposures for which the Bank concluded for the need to record individual impairment. The remaining individual exposures for which the Bank concluded there was no need for impairment on an individual basis were subject to collective assessment for the determination of the associated impairment and are therefore presented in the "Collectively assessed" column. The Bank's segment of loan portfolio subject to individual impairment analysis are described in Note 2.3.4.
At June 30, 2017 the mortgage loans to individual Customers, by year of production, granted by Banco BPI (non-consolidated) was made up as follows:
| Year of production | Number of operations |
Amount | Impairment recorded |
|---|---|---|---|
| 2004 or previous | 83 304 | 2 458 392 | 64 949 |
| 2005 | 13 145 | 591 109 | 15 815 |
| 2006 | 17 169 | 892 217 | 19 966 |
| 2007 | 24 046 | 1 280 400 | 32 975 |
| 2008 | 20 912 | 1 150 191 | 20 555 |
| 2009 | 13 415 | 853 989 | 14 844 |
| 2010 | 14 851 | 1 031 586 | 18 227 |
| 2011 | 4 764 | 318 950 | 5 525 |
| 2012 | 3 429 | 216 993 | 1 945 |
| 2013 | 3 493 | 207 673 | 1 419 |
| 2014 | 3 733 | 235 670 | 1 173 |
| 2015 | 7 067 | 512 520 | 1 802 |
| 2016 | 10 909 | 842 781 | 3 088 |
| 2017 | 6 155 | 476 851 | 1 339 |
| 226 392 | 11 069 322 | 203 622 |
At December 31, 2016 the mortgage loans to individual Customers, by year of production, granted by Banco BPI (non-consolidated) was made up as follows:
| Year of production | Number of operations |
Amount | Impairment recorded |
|---|---|---|---|
| 2004 or previous | 86 018 | 2 609 136 | 68 718 |
| 2005 | 13 467 | 622 488 | 16 249 |
| 2006 | 17 581 | 932 610 | 21 071 |
| 2007 | 24 605 | 1 334 916 | 34 100 |
| 2008 | 21 326 | 1 197 257 | 21 892 |
| 2009 | 13 728 | 888 957 | 15 751 |
| 2010 | 15 257 | 1 073 239 | 19 310 |
| 2011 | 4 950 | 335 120 | 5 648 |
| 2012 | 3 624 | 230 666 | 1 986 |
| 2013 | 3 712 | 219 494 | 1 254 |
| 2014 | 3 976 | 252 427 | 1 221 |
| 2015 | 7 195 | 529 782 | 1 907 |
| 2016 | 11 106 | 858 124 | 2 459 |
| 226 545 | 11 084 214 | 211 566 |
| Nature and type of security | Quantity | Cost | Gross Book Value |
Impairment 1 |
|---|---|---|---|---|
| Debt Instruments | ||||
| Issued by Portuguese Entities | ||||
| Portuguese Public Debt | ||||
| EDIA SA-TV-30.01.2027 | 16 180 000 | 16 180 | 16 180 | |
| EDIA-EMP.DES.DO ALQUEVA - TV-11.08.2030 | 18 562 500 | 18 563 | 18 733 | |
| REGIAO AUTONOMA ACORES 2016/2023-1ª SR | 35 000 000 | 35 000 | 35 304 | |
| REGIAO AUTONOMA DA MADEIRA 2017-2022 | 55 000 000 | 55 000 | 55 051 | |
| REGIAO AUTONOMA DOS ACORES-TV-16.11.2025 | 16 600 000 | 16 600 | 16 649 | |
| REPUBLICA DE PORTUGAL TV - 29.01.2018 | 50 000 000 | 50 000 | 50 473 | |
| Other Residents | 191 343 | 192 390 | ||
| Non - subordinated Debt | ||||
| Bonds | ||||
| Obrigações | ||||
| Asset Backed Securities (ABS's) | ||||
| TAGUS-SOC.TIT.CREDITO-CL.A-12.02.2025 | 61 397 528 | 61 398 | 61 435 | |
| TAGUS-SOC.TIT.CREDITO-CL.B-12.02.2025 | 50 000 | 50 | 50 | |
| 61 448 | 61 485 | |||
| Other Bonds ADP SGPS SA-TV-15.02.2028 |
75 000 000 | 75 000 | 75 492 | |
| ADP-AGUAS DE PORTUGAL,SGPS-TV-20.06.2022 | 50 000 000 | 46 274 | 50 003 | |
| ALTRI - 2014/2020 | 50 000 000 | 50 000 | 50 342 | |
| ANCORA WIND - 2017/2030 | 29 166 027 | 29 166 | 29 166 | |
| AUTO-SUECO - 2013 / 2018 | 30 000 000 | 30 000 | 30 684 | |
| BRISA-CONCESSAO RODOVIARIA TV 07.01.2022 | 60 000 000 | 60 000 | 60 092 | |
| CGD-3.75%-18.01.2018 | 9 000 000 | 8 996 | 9 147 | |
| CIN - 2014/2019 | 15 000 000 | 15 000 | 15 014 | |
| COLEP PORTUGAL SA -TV-10.10.2017 | 9 000 000 | 9 000 | 9 055 | |
| DANIPACK 2016-2021 | 7 000 000 | 7 000 | 7 000 | |
| EFANOR INVESTIMENTOS SGPS SA-2014/2019 | 15 000 000 | 15 000 | 15 111 | |
| ENERFER -TV- 20.12.2026 | 6 181 867 | 6 182 | 6 186 | |
| FIRST STATE WIND ENERGY-BONDS A DUE 2021 | 9 809 879 | 9 810 | 9 833 | |
| FIRST STATE WIND ENERGY-BONDS B DUE 2030 | 24 500 000 | 24 500 | 24 558 | |
| FREZITE-2016/2021 | 842 105 | 842 | 843 | |
| GALP 2013/2018 | 150 000 000 | 152 620 | 152 147 | |
| GRUPO PESTANA 2014/2020 GRUPO VISABEIRA SGPS-TV-14.07.2019 |
46 000 000 5 000 000 |
46 000 5 000 |
46 541 5 086 |
|
| INOVAFIL 2017-2022 | 2 000 000 | 2 000 | 2 002 | |
| JMR - 2015 / 2017 | 75 000 000 | 75 000 | 75 017 | |
| LITOCAR 2017/2024 | 4 600 000 | 4 600 | 4 611 | |
| LUSIAVES - 2017/2032 | 15 000 000 | 15 000 | 15 038 | |
| LUSIAVES 2016-2026 | 10 000 000 | 10 000 | 10 052 | |
| MEDIA CAPITAL 2014-2019 | 50 000 000 | 50 000 | 50 863 | |
| MOTA-ENGIL-TV 2015/2018 | 7 500 000 | 7 500 | 7 514 | |
| NOS SGPS-2015-2022 | 25 000 000 | 24 875 | 25 113 | |
| PARQUE EÓLICO DO PISCO- TV 11.07.2026 | 10 948 438 | 10 948 | 11 194 | |
| POLIMAIA / 1989 - SR.C (AC.CRED.) | 7 | |||
| PORTUCEL SA-TV-22.09.2023 | 50 000 000 | 50 000 | 50 264 | |
| RENOVA 2.SÉRIE 2016-2021 | 9 000 000 | 9 000 | 9 000 | |
| RENOVA-1.6%-2015-2021 REN-REDES ENERG.NAC.-TV-16.01.2020 |
18 000 000 60 000 000 |
18 189 60 000 |
18 000 60 538 |
|
| SECIL 2015-2020 | 80 000 000 | 80 000 | 80 200 | |
| SEMAPA 2014/2019 | 28 487 000 | 28 511 | 28 688 | |
| SEMAPA 2014/2020 | 41 500 000 | 41 500 | 41 597 | |
| VIOLAS-SGPS SA-TV-06.11.2023 | 70 000 000 | 70 000 | 70 232 | |
| ZON OPTIMUS 2014-2019 | 100 000 000 | 99 893 | 100 218 | |
| 1 247 406 | 1 256 441 | |||
| Commercial Paper | 788 495 | 1 327 | ||
| 788 495 | 1 327 | |||
| Subordinated Debt | ||||
| Bonds | ||||
| BANIF - TAX.VAR. (30.12.2015) 2 | 11 800 000 | 11 800 | 11 800 | 11 800 |
| 11 800 | 11 800 | 11 800 |
1 Additionally, the Bank recorded collective impairment of 6 009 t. euro.
2 Securities reclassified from the caption "Financial assets at fair value through profit or loss" in 2008, under the amendments to IAS 39 and IFRS 7 (Notes 2 and 4.47).
| N ature and type o f security | Quantity | Cost | Gross Book Value |
Impairment 1 |
|---|---|---|---|---|
| Issuued by o thers no n-residents | ||||
| Non-subordinated Debt | ||||
| Other Bonds | ||||
| BANCO DE SABADELL SA-3.375%-13.01.2018 | 16 000 000 | 15 991 | 16 225 | |
| EDDYSTONE FIN.SR2006-1 CLA1B 19.04.2021 2 | 185 426 | 158 | 158 | |
| EDP FINANCE BV-4.875%-14.09.2020 | 80 000 000 | 79 735 | 82 823 | |
| EDP FINANCE BV-TV 26.06.2019 | 83 245 706 | 69 822 | 83 276 | |
| EURO-VIP / 1990 3 | 5 257 624 | 4 943 | 4 818 | |
| 170 649 | 187 300 | |||
| Commercial Paper | 7 494 | |||
| 7 494 | ||||
| 1 682 646 | 2 505 405 | 13 127 |
1 Additionally, the Bank recorded collective impairment of 6 009 t. euro.
2 Securities reclassified from the caption "Financial assets held for trading" in 2009, under the amendments to IAS 39 and IFRS 7 (Notes 2 and 4.47). 3 Securities reclassified from the caption "Financial assets held for trading" in 2013, under the amendments to IAS 39 and IFRS 7 (Notes 2 and 4.47).
Evidence of possible impairment of the Asset Backed Securities (ABSs) portfolio is determined through regular monitoring of the performance indicators of the underlying transactions. At June 30, 2017 this analysis did not show evidence of impaired securities.
| This caption is made up as follows: | ||
|---|---|---|
| Jun. 30, 17 | Dec. 31, 16 | |
| Debt Instruments | ||
| Bonds issued by other foreign entities | ||
| Non-subordinated debt | 14 400 | 14 400 |
| Subordinated debt | 1 900 | |
| Accrued interest | 15 | 17 |
| 14 415 | 16 317 |
The portfolio of held to maturity investments includes assets to cover capitalisation insurance contracts issued by BPI Vida e Pensões.
At June 30, 2017 this caption was made up as follows:
| Nature and type of security | Quantity | Cost | Gross Book Value |
Impairment 1 |
|---|---|---|---|---|
| Debt Instruments | ||||
| Issued by non - residents Non - Subordinated debt Other bonds |
||||
| IBERCAJA(CA.ZARAGOZA A.R.)TV-20.04.2018 1 | 6 000 000 | 6.000 | 6.006 | |
| IBERCAJA(CA.ZARAGOZA A.R.)TV-25.04.2019 1 | 8 400 000 | 8.400 | 8.409 | |
| 14.400 | 14.415 | |||
| 14.400 | 14.415 |
1 Securities reclassified from the caption "Financial Assets held for trading" under the amendments to IAS 39 and IFRS 7, in 2008 (Notes 2 and 4.47).
On October 7, 2016, Banco BPI, SA entered into an agreement with Unitel, S.A. (Unitel) regarding the sale of 2% of the share capital of Banco de Fomento Angola, SA (BFA), the implementation of which implies a reduction of the Group's participation in BFA from 50.1% to 48.1%. On that same date, a new shareholders' agreement related to BFA was also signed.
The realization of this operation was dependent upon the verification of the following precedent conditions:
On December 13, 2016, the Shareholder's General Meeting of Banco BPI met with a single agenda regarding the sale by Banco BPI to Unitel of 26 111 shares, representative of 2% of BFA's share capital, under the purchase agreement established between the two entities. This operation was approved by 83.23% of the votes.
On December 12, 2016, Banco Nacional de Angola announced that it would not oppose to the following:
(i) Partial amendment to BFA's statutes;
(ii) Increase in Unitel's qualifying holding of BFA's share capital throughout the acquisition, from Banco BPI, of 26 111 ordinary shares representative of 2% of the share capital;
(iii) Indirect acquisition of the qualified holding representative of 48.10% of BFA's share capital, under the settlement of the mandatory takeover bid launched by CaixaBank regarding all shares representative of Banco BPI share capital.
BNA has established that the three operations mentioned above are indivisible, meaning, it is expected for them to occur simultaneously or almost simultaneously or, if it is not possible to ensure their simultaneity, the operation referred in (ii) should precede the operations referred in (i) and (iii).
The sale of the shareholding representative of 2% of the share capital of BFA from Banco BPI to Unitel, under the purchasing agreement established in 2016 was carried out on January 5, 2017. On this date: (i) Banco BPI received the sale price of the shares (28 million euro), (ii) Unitel issued the document related to the transfer of shares on sale and, (iii) the shareholder's agreement related to the participation in BFA entered into force.
From this date (January 2017), Banco BPI ceased to control BFA as established by IFRS 10 – Consolidated Financial Statements. Therefore, the consolidation through full consolidation method of the participation of 48.1% in BFA was discontinued and the retained participation was recorded at the estimated fair value. Considering that Banco BPI still has a significate influence on BFA, this participation was classified under "Investments in associated companies and jointly controlled entities" and is accounted for in accordance with the equity method as stated by IAS 28 (note 4.12).
In accordance with IFRS 10, the sale of the 2% participation and the non-consolidation of BFA had the following impacts on Banco BPI's1 consolidated accounts:
"Revaluation reserves" on the consolidated balance sheet (- 182 121 t. euros). These amounts relate to the foreign exchange differences originated in the consolidation process with the conversion of the financial statements of BFA from kwanzas to euros, that were recorded as "Other comprehensive income", as stated by IAS 21;
(vii) Recognition of deferred tax liabilities associated to the difference between the acquisition cost and the fair value of the 48.1% participation in BFA (36 770 t. euros). As stated by IAS 12, when the entity losses control over a subsidiary which becomes an associate, the entity must record deferred tax liabilities in relation to the taxable differences in the investment owned in the associate.
On the first half of 2017, the global impact of the sale of the 2% participation and the non-consolidation of BFA, on Group BPI's income and equity was as follows:
| Net income | Shareholder's equity atributtable to the Banco BPI of Shareholders |
Total shareholder's equity |
|
|---|---|---|---|
| Capital gain on the sale of 2% of the share capital of BFA, net of taxes | 6 593 | 6 593 | 6 593 |
| Revaluation to fair value of the participation retained in BFA (48.1%) | 0 | 0 | 0 |
| Reclassification of foreign exchange reserves to profit and loss | ( 182 121) | 0 | 0 |
| Deferred tax liabilities | ( 36 770) | ( 36 770) | ( 36 770) |
| Total | ( 212 298) | ( 30 177) | ( 30 177) |
| Derecognition of non-controlling interests | ( 466 273) | ||
| ( 496 450) |
As of December 31, 2016, Banco BPI retained control over BFA considering the requirements of IFRS 10 - Consolidated financial statements, and therefore this investment remained in the consolidation perimeter on the financial statements of Banco BPI for 2016.
Considering that as of December 31, 2016 (i) the sale of 2% of BFA's share capital was very likely to occur, (ii) the 2% shareholding was available for immediate sale in its current situation being exclusively subject to the terms usually defined for this type of operation, and (iii) this sale transaction would involve the loss of control of BFA by Banco BPI, BFA's operations were classified in the consolidated financial statements of Banco BPI as discontinued operations, in accordance with the requirements of IFRS 5 - Non-current assets held for sale and discontinued operations.
In accordance, BFA's total assets and liabilities as of December 31, 2016 are shown in the consolidated balance sheet of Banco BPI under the captions "Non-current assets held for sale and discontinued operations" and "Non-current liabilities held for sale and discontinued operations". Also, in accordance with IFRS 5, the contribution of BFA's operations to the consolidated income and comprehensive income for 2016 of BPI Group is presented under the caption "Income from discontinued operations" and "Income not included in the consolidated statement of income associated with discontinued operations", respectively, with the comparative balances of the Consolidated Statements of Income and the Consolidated Statements of Profit or Loss and Other Comprehensive Income for the period ended on June 30, 2016 being restated.
At December 31, 2016 the consolidated balance sheets of BPI Group include the following amounts related to BFA, following the exclusion of intragroup balances:
| Dec. 31, 16 | |
|---|---|
| ASSETS (1) | |
| Cash and deposits at central banks | 1 505 858 |
| Deposits at other credit institutions | 8 653 |
| Financial assets held for trading | 1 822 979 |
| Financial assets available for sale | 1 398 106 |
| Loans and advances to credit institutions | 146 071 |
| Loans and advances to customers | 1 269 351 |
| Tangible assets | 103 919 |
| Intangible assets | 7 063 |
| Tax assets | 9 721 |
| Other assets | 24 189 |
| 6 295 910 | |
| LIABILITIES (2) | |
| Financial liabilities held for trading | 8 150 |
| Resources of other credit institutions | 59 |
| Resources of customers and other debts | 5 842 822 |
| Provisions | 23 588 |
| Tax liabilities | 23 730 |
| Other liabilities | 53 049 |
| 5 951 398 |
1Does not include 628.768 euros of cash and BFA investments in the BPI Group.
2 Does not include 38.864 euros of dividends payable by BFA to Banco BPI.
At December 31, 2016 these balances are presented under the caption "Non-current assets held for sale and discontinued operations" and "Non-current liabilities held for sale and discontinued operations".
At December 31, 2016, the balance sheet caption "Other accumulated comprehensive income related to discontinued operations" in the amount of 182 121 t.euro refers to negative reserves arising from exchange rate differences regarding the conversion of BFA's equity to euro.
As of December 31, 2016, the caption "Loans and advances to customers" is made up as follows:
| Dec. 31, 16 | |
|---|---|
| Loans | |
| Foreign loans | |
| Companies | |
| Loans | 694 991 |
| Commercial lines of credit | 211 291 |
| Demand deposits - overdrafts | 6 586 |
| Other loans | 1 096 |
| Loans to individuals | |
| Housing | 116 268 |
| Consumer | 208 643 |
| Other loans | 19 353 |
| Accrued interest | 25 152 |
| 1 283 380 | |
| Overdue loans and interest | 62 771 |
| Loan impairment | ( 76 800) |
| 1 269 351 |
At December 31, 2016, the financial assets held for trading and available for sale items are made up as follows:
| Dec. 31, 16 | |
|---|---|
| Financial assets held for trading | |
| Debt Instruments | |
| Bonds issued by foreign government entities | |
| Treasury Bills - Angola | 1 582 996 |
| Treasury Bonds - Angola in AKZ | 231 700 |
| Equity instruments | |
| Shares issued by foreign entities | 970 |
| Derivative instruments w ith positive fair value | 7 313 |
| 1 822 979 | |
| Financial assets held for sale | |
| Debt instruments | |
| Bonds issued by foreign government entities | |
| Bonds | |
| Treasury Bills - Angola | |
| Treasury Bonds - Angola in AKZ | 787 628 |
| Treasury Bonds - Angola in USD | 608 108 |
| Equity instruments | |
| Shares issued by foreign entities | 2 265 |
| Loans and other receivables | 105 |
| 1 398 106 |
At December 31, 2016, the Treasury Bills - Angola and Treasury Bonds - Angola are recorded at their acquisition cost, since it reflects the best estimate of their market value, as there is no price in an active market with regular transactions.
As of December 31, 2016, the caption "Resources of customers and other loans" is as follows:
| Dec. 31, 16 | |
|---|---|
| Demand deposits | 3 316 814 |
| Term deposits | 2 487 622 |
| Cheques and orders payable | 9 325 |
| Other resources of customers | 9 202 |
| Accrued interest | 19 859 |
| 5 842 822 |
On the first half of 2016, the income of BFA is presented in a single line of the Income Statement under the caption "Net income from discontinued operations", with the following detail:
| Jun. 30, 16 | |
|---|---|
| Interest and similar income | 203 037 |
| Interest and similar expenses | ( 43 234) |
| Financial margin (narrow sense) | 159 803 |
| Financial margin | 159 803 |
| Commissions received | 24 989 |
| Commissions paid | ( 4 926) |
| Other income, net | 8 874 |
| Net commission income | 28 937 |
| Gain and loss on operations at fair value | 80 064 |
| Net income on financial operations | 80 064 |
| Operating income | 45 |
| Operating expenses | ( 976) |
| Other taxes | ( 10 016) |
| Net operating expenses | ( 10 947) |
| Operating income from banking activity | 257 857 |
| Personnel costs | ( 42 584) |
| General administrative costs | ( 33 957) |
| Depreciation and amortisation | ( 6 193) |
| Overhead costs | ( 82 734) |
| Recovery of loans, interest and expenses | 1 136 |
| Impairment losses and provisions for loans and guarantees, net | ( 11 510) |
| Impairment losses and other provisions, net | ( 1 819) |
| Net income before income tax | 162 930 |
| Income tax | 927 |
| Net income | 163 857 |
The changes in other tangible assets during the first half of 2017 were as follows:
| Gro ss |
Dep iati rec on |
Net | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Bal t De anc e a c. 31, 16 |
Pur cha ses |
Sal and es wr ite- off s |
Tra nsf ers and ot her s |
For eig n han exc ge diff ere nce s |
Bal t anc e a Jun . 30 , 17 |
Bal t anc e a Dec . 31 , 16 |
Dep iati rec on for the ye ar |
Sal and es wr ite- off s |
Tra nsf ers and ot her s |
For eig n han exc ge diff ere nce s |
Bal t Jun anc e a . 30 , 17 |
Bal t anc e a Jun . 30 , 17 |
Bal t Dec anc e a . 31 , 16 |
|
| Pro ty per |
||||||||||||||
| for P erty rop ow n u se |
24 80 3 |
( 636 ) |
24 16 7 |
11 94 9 |
20 5 |
( 344 ) |
11 81 0 |
12 35 7 |
12 85 4 |
|||||
| L eho ld im ent eas pro vem s |
57 25 4 |
46 | ( 5 81) |
8 | 8 | 56 73 5 |
56 92 2 |
49 | ( 5 68) |
2 | 56 40 5 |
33 0 |
33 2 |
|
| 82 05 7 |
46 | ( 5 81) |
( 628 ) |
8 | 80 90 2 |
68 87 1 |
25 4 |
( 5 68) |
( 344 ) |
2 | 68 21 5 |
12 68 7 |
13 18 6 |
|
| Equ ipm ent |
||||||||||||||
| F itur nd f ixtu urn e a res |
37 13 5 |
16 | ( 67) |
1 | ( 11) |
37 07 4 |
36 36 9 |
12 9 |
( 67) |
( 10) |
36 42 1 |
65 3 |
76 6 |
|
| M ach iner nd t ools y a |
8 7 50 |
( 125 ) |
1 | 8 6 26 |
8 5 69 |
33 | ( 125 ) |
8 4 77 |
14 9 |
18 1 |
||||
| C ute r ha rdw omp are |
14 4 2 31 |
26 2 |
( 7 86) |
1 9 20 |
( 25) |
14 5 6 02 |
13 8 6 02 |
2 0 59 |
( 7 81) |
( 20) |
13 9 8 60 |
5 7 42 |
5 6 29 |
|
| In teri or i nst alla tion s |
10 8 9 50 |
90 | ( ) 337 |
1 8 94 |
( 12) |
11 0 5 85 |
96 77 0 |
2 1 02 |
( ) 216 |
( 22) |
( 10) |
98 62 4 |
11 96 1 |
12 18 0 |
| V ehic les |
1 1 50 |
66 | ( 81) |
7 | 1 1 42 |
1 0 87 |
29 | ( 81) |
8 | 1 0 43 |
99 | 63 | ||
| S rity ipm ent ecu equ |
18 35 6 |
( 139 ) |
5 | 18 22 2 |
18 01 0 |
89 | ( 139 ) |
( 25) |
17 93 5 |
28 7 |
34 6 |
|||
| O the uipm ent r eq |
76 | 76 | 74 | 74 | 2 | 2 | ||||||||
| 31 8 6 48 |
43 4 |
( 1 5 35) |
3 8 21 |
( 41) |
32 1 32 7 |
29 9 4 81 |
4 4 41 |
( 1 4 09) |
( 47) |
( 32) |
30 2 4 34 |
18 89 3 |
19 16 7 |
|
| Equ ipm ent in f inan leas ce e |
10 73 4 |
13 9 |
10 87 3 |
3 6 34 |
1 2 95 |
4 9 29 |
5 9 44 |
7 1 00 |
||||||
| Tan ible set s in g as pro gre ss |
9 2 75 |
22 7 |
( 5 545 ) |
3 9 57 |
3 9 57 |
9 2 75 |
||||||||
| Oth ible er t set ang as s |
11 27 7 |
( 110 ) |
( 39) |
11 12 8 |
9 0 50 |
8 | ( 110 ) |
( 39) |
8 9 09 |
2 2 19 |
2 2 27 |
|||
| 31 28 6 |
36 6 |
( 110 ) |
( 5 584 ) |
25 95 8 |
12 68 4 |
1 3 03 |
( 110 ) |
( 39) |
13 83 8 |
12 12 0 |
18 60 2 |
|||
| 43 1 99 1 |
84 6 |
( 2 2 26) |
( 2 3 91) |
( 33) |
42 8 1 87 |
38 1 0 36 |
5 9 98 |
( 2 0 87) |
( 430 ) |
( 30) |
38 4 4 87 |
43 70 0 |
50 95 5 |
The changes in other tangible assets during the first half of 2016 were as follows:
| Gr os s |
De cia tio pre n |
Ne t |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ba lan at ce De c. 3 1, 15 |
Pu rch as es |
Sa les d w rite an off s |
Tra fer ns s d o the an rs |
Fo rei gn ch ex an ge dif fer en ce s |
Ba lan at ce Ju 30, n. 16 |
Ba lan at ce De c. 3 1, 15 |
De cia tio pre n for th e rio d pe |
Sa les d an ite wr off s |
Tra fer ns s d o the an rs |
Fo rei gn ch ex an ge dif fer en ce s |
Ba lan at ce Ju 30, 16 n. |
Ba lan at ce Ju 30, 16 n. |
Ba lan at ce De c. 3 1, 15 |
|
| Pro ty per |
||||||||||||||
| for P ert rop y ow n u se |
142 20 1 |
177 | ( 81) |
923 | ( 20 ) 744 |
122 6 47 |
31 423 |
1 1 48 |
( 242 ) |
( 2 6 58) |
29 67 1 |
92 805 |
110 8 77 |
|
| O the ert r p rop y |
12 | 12 | 2 | 2 | 10 | 10 | ||||||||
| L eho ld i ent eas mp rov em s |
104 18 7 |
99 | ( 5) |
45 1 |
( 8 5 53) |
96 179 |
91 820 |
1 0 66 |
( 5) |
( 6 1 43 ) |
86 738 |
9 4 41 |
12 367 |
|
| 24 6 4 00 |
276 | ( 86) |
1 3 74 |
( ) 29 297 |
218 66 7 |
123 24 5 |
2 2 14 |
( 5) |
( ) 242 |
( 01) 8 8 |
116 41 1 |
102 25 6 |
123 15 5 |
|
| Equ ipm ent |
||||||||||||||
| F itur nd fixt urn e a ure s |
49 908 |
165 | ( 133 ) |
51 | ( 2 5 28) |
47 463 |
43 92 0 |
643 | ( 129 ) |
( 1 5 19) |
42 915 |
4 5 48 |
5 9 88 |
|
| M ach ine and ls too ry |
13 330 |
92 | ( 45 ) |
( 909 ) |
12 468 |
11 634 |
205 | ( 44 ) |
( 620 ) |
11 175 |
1 2 93 |
1 6 96 |
||
| C ter ha rdw om pu are |
175 01 5 |
2 0 20 |
( 90 1) |
512 | ( 6 5 18) |
170 12 8 |
162 00 6 |
3 8 05 |
( 898 ) |
( 10) |
( 5 2 41 ) |
159 66 2 |
10 466 |
13 009 |
| In ior ins tall atio ter ns |
136 56 3 |
29 1 |
( 13 016 ) |
156 | ( 2 0 28) |
121 96 6 |
113 94 3 |
3 0 21 |
( 12 28 1) |
( 10) |
( 953 ) |
103 72 0 |
18 246 |
22 620 |
| V ehi cle s |
12 592 |
589 | ( 73) |
( 144 ) |
( 2 3 20) |
10 644 |
9 9 77 |
700 | ( 73) |
( 144 ) |
( 1 8 24) |
8 6 36 |
2 0 08 |
2 6 15 |
| S rity uip nt ecu eq me |
26 265 |
124 | ( 1 8 20) |
( 2) |
( 1 0 45) |
23 522 |
23 490 |
387 | ( 1 8 13) |
( 1) |
( 619 ) |
21 444 |
2 0 78 |
2 7 75 |
| O the ipm ent r e qu |
522 | 1 | ( 2) |
( 90) |
43 1 |
125 | 2 | ( 2) |
( 9) |
116 | 315 | 397 | ||
| 41 4 1 95 |
3 2 82 |
( ) 15 990 |
573 | ( ) 15 438 |
386 62 2 |
365 09 5 |
8 7 63 |
( ) 15 240 |
( ) 165 |
( ) 10 785 |
347 66 8 |
38 954 |
49 100 |
|
| Equ ipm ent in fina lea nce se |
10 72 3 |
11 | 10 734 |
1 0 68 |
1 2 83 |
2 3 51 |
8 3 83 |
9 6 55 |
||||||
| Tan ible set s in g as pr ogr ess |
10 906 |
1 6 78 |
( 2 9 15) |
( 952 ) |
8 7 17 |
8 7 17 |
10 906 |
|||||||
| Oth tan ible set er g as s |
11 725 |
( 234 ) |
( 9) |
11 482 |
9 4 46 |
40 | ( 234 ) |
( 10) |
9 2 42 |
2 2 40 |
2 2 79 |
|||
| 33 35 4 |
1 6 89 |
( 234 ) |
( 2 9 24) |
( 952 ) |
30 933 |
10 514 |
1 3 23 |
( 234 ) |
( 10) |
11 59 3 |
19 340 |
22 840 |
||
| 69 3 9 49 |
5 2 47 |
( 16 310 ) |
( 977 ) |
( 45 687 ) |
636 22 2 |
498 85 4 |
12 300 |
( 15 479 ) |
( 417 ) |
( 19 586 ) |
475 67 2 |
160 0 55 |
195 09 5 |
1 Includes 5 308 t.euros of depreciation for the year of BFA regarding the classification of BFA as discontinued operations in the proforma income statement (Notes 2.1 and 4.9).
The changes in intangible assets on the first semester of 2017 were as follows:
| Gr os s |
De cia tio pre n |
Ne t |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Ba lan at De ce c. 31, 16 |
Pu rch as es |
Sa les d an ite -of fs wr |
Tra fer ns s d o the an rs |
Ba lan at ce Ju 30, 17 n. |
Ba lan at ce De c. 3 1, 16 |
De cia tio n f pre or the ye ar |
Sa les d an ite -of fs wr |
Ba lan at ce Ju 30, 17 n. |
Ba lan at ce Ju n. 3 0, 17 |
Ba lan at ce De c. 3 1, 16 |
|
| So ftw are |
93 92 7 |
39 | ( 8) |
5 0 37 |
98 99 5 |
77 437 |
4 9 99 |
( 8) |
82 428 |
16 56 7 |
16 490 |
| Oth inta ible set er ng as s |
17 940 |
( 12) |
17 92 8 |
15 633 |
6 | ( 12) |
15 627 |
2 3 01 |
2 3 07 |
||
| 11 1 8 67 |
39 | ( 20) |
5 0 37 |
116 92 3 |
93 070 |
5 0 05 |
( 20) |
98 055 |
18 868 |
18 797 |
|
| Inta ible set s in ng as pr ogr ess |
6 8 32 |
4 3 34 |
( 5 2 92) |
5 8 74 |
5 8 74 |
6 8 32 |
|||||
| 11 8 6 99 |
4 3 73 |
( 20) |
( 255 ) |
122 79 7 |
93 070 |
5 0 05 |
( 20) |
98 055 |
24 742 |
25 629 |
The changes in intangible assets on the first semester of 2016 were as follows:
| Gr os s |
De cia tio pre n |
Ne t |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Ba lan at De ce c. 31, 15 |
Pu rch as es |
Tra fer ns s d o the an rs |
Fo rei gn ch ex an ge dif fer en ce s |
Ba at Ju lan ce n. 3 0, 16 |
Ba at De lan ce c. 3 1, 15 |
De cia tio n f pre or the 1 ye ar |
Fo rei gn ch ex an ge dif fer en ce s |
Ba at Ju lan ce n. 3 0, 16 |
Ba lan at ce Ju n. 3 0, 16 |
Ba lan at ce De c. 3 1, 15 |
|
| Sof tw are |
94 31 6 |
1 4 88 |
( 2 1 27) |
93 67 7 |
76 078 |
4 6 95 |
( 1 3 58) |
79 415 |
14 26 2 |
18 238 |
|
| Oth inta ible set er ng as s |
21 365 |
( 268 ) |
21 09 7 |
18 716 |
6 | ( 268 ) |
18 454 |
2 6 43 |
2 6 49 |
||
| 11 5 6 81 |
1 4 88 |
( 2 3 95) |
114 77 4 |
94 794 |
4 7 01 |
( 1 6 26) |
97 869 |
16 905 |
20 887 |
||
| Inta ible set s in ng as pr ogr ess |
8 2 51 |
1 184 |
325 | 9 7 60 |
9 7 60 |
8 2 51 |
|||||
| 12 3 9 32 |
2 6 72 |
325 | ( 95) 2 3 |
124 53 4 |
94 794 |
4 7 01 |
( 26) 1 6 |
97 869 |
26 66 5 |
29 138 |
1 Includes 884 t. euro of depreciation for the year of BFA reclassified to the caption "Net income from discontinued operations" in the proforma income statement (Notes 2.1 and 4.9).
Investments in associated companies and jointly controlled entities, recorded in accordance with the equity method, are as follows:
| Effective participation (%) | Book value | ||||
|---|---|---|---|---|---|
| Jun. 30, 17 | Dec. 31, 16 | Jun. 30, 17 | Dec. 31, 16 | ||
| Banco de Fomento Angola, S.A. | 48.1 | 492 065 | |||
| Banco Comercial e de Investimentos, S.A.R.L. | 30.0 | 30.0 | 53 904 | 44 845 | |
| Companhia de Seguros Allianz Portugal, S.A. | 35.0 | 35.0 | 67 503 | 67 950 | |
| Cosec – Companhia de Seguros de Crédito, S.A. | 50.0 | 50.0 | 31 434 | 32 065 | |
| Inter-Risco - Sociedade de Capital de Risco, S.A. | 49.0 | 49.0 | 508 | 559 | |
| Unicre - Instituição Financeira de Crédito, S.A. | 21.0 | 21.0 | 29 543 | 30 259 | |
| 674 957 | 175 678 |
The remaining share capital of BCI is held essentially by the Caixa Geral de Depósitos Group (51.00%) and the Insitec Group (18.12%). Two agreements serving different purposes were signed between the shareholders, the terms of which are as follows:
During the first half of 2017 and the year 2016, the BPI Group recorded the following dividends from associated companies:
| Jun. 30, 2017 Dec. 31, 2016 | ||
|---|---|---|
| Banco de Fomento Angola, S.A. | 64 045 | n.a. |
| Companhia de Seguros Allianz Portugal, S.A. | 6 035 | 9 855 |
| Cosec – Companhia de Seguros de Crédito, S.A. | 2 780 | 3 615 |
| Unicre - Instituição Financeira de Crédito, S.A. | 4 076 | 17 337 |
| 76 936 | 30 807 |
In some of the associated companies, Banco BPI is party to shareholder agreements that contain, among others, rules on the composition of the governing bodies and on the transfer of shares of such companies.
None of the associated companies of the BPI Group are listed on the stock exchange.
At June 30, 2017, the financial information regarding the associated companies of the BPI Group is as follows:
| Current assets | Non-current assets | Current liabilities |
Non-current liabilities |
|
|---|---|---|---|---|
| Banco de Fomento Angola, S.A. | 3 909 024 | 3 180 059 | 6 041 380 | 24 700 |
| Banco Comercial e de Investimentos, S.A.R.L. | 900 161 | 1 381 845 | 358 805 | 1 743 521 |
| Companhia de Seguros Allianz Portugal, S.A. | 230 948 | 995 871 | 117 895 | 929 285 |
| Cosec – Companhia de Seguros de Crédito, S.A. | 94 330 | 15 120 | 65 204 | 52 |
| Inter-Risco - Sociedade de Capital de Risco, S.A. | 1 163 | 259 | 365 | 21 |
| Unicre - Instituição Financeira de Crédito, S.A. | 68 382 | 257 102 | 121 081 | 127 156 |
| Income from continuing operations |
Net income from continuing operations |
Other comprehensive income |
Total comprehensive income 1 |
|
|---|---|---|---|---|
| Banco de Fomento Angola, S.A. | 321 291 | 222 882 | 222 882 | |
| Banco Comercial e de Investimentos, S.A.R.L. | 79 570 | 16 462 | 99 | 16 560 |
| Companhia de Seguros Allianz Portugal, S.A. | n.d. | 11 191 | 1 181 | 12 372 |
| Cosec – Companhia de Seguros de Crédito, S.A. | n.d. | 2 772 | 1 335 | 4 107 |
| Inter-Risco - Sociedade de Capital de Risco, S.A. | 574 | ( 102) | ( 102) | |
| Unicre - Instituição Financeira de Crédito, S.A. | 37 772 | 11 004 | 2 225 | 13 229 |
1 Corresponds to the sum of net income from continuing operations with other comprehensive income.
On January 16, 2017, the Government of Mozambique announced that it would not pay the interest coupon of the Mozambique International bonds with maturity in 2023, which led the country to default. In this context:
On January 2017, the sale of the 2% participation in BFA agreed in October 2016 between Banco BPI and Unitel was concluded. With the conclusion of this operation Banco BPI and Unitel own a participation on BFA of 48.1% and 51.9% respectively. From this date Banco BPI ceased to control BFA as stated by IFRS 10 – Consolidated financial statements. As a result, the 48.1% participation on BFA ceased being consolidated in accordance with the full consolidation method and was initially valued based on its estimated fair value (Note 4.9). Considering that Banco BPI still has a significant influence on BFA, this participation was recorded on the caption "Investments in associated companies and jointly controlled entities" using the equity method as stated by IAS 28 - Investments in associates and joint ventures.
The new BFA Shareholders Agreement between Banco BPI and Unitel establishes the rules regarding the composition of its governing bodies, the dividend distribution policy and the rules for BFA shares' transmission. The rules for the transmission of BFA shares include a right of precedence granted by Banco BPI to Unitel for the onerous transmission of shares owned by Banco BPI, as well as a right granted by Unitel to Banco BPI to ensure a "tag along" right in case of sale of the participation owned by Unitel.
On January 30, 2017, Banco BPI was notified of a legal action challenging a corporate resolution. Such legal action challenges the validity of Banco BPI's General Meeting resolution passed on December 13th 2016, which approved Banco BPI's Board of Directors proposal to sell to Unitel, S.A. a stockholding comprised of 26 111 shares, representing 2% of the share capital of Banco de Fomento Angola, S.A., pursuant to the Sale and Purchase Agreement entered into between such entities on October, 2016. The legal action was filed by 4 shareholders holding together 175 920 shares, representing 0.0121% of Banco BPI's share capital. Banco BPI disagrees on the arguments presented by the authors of this claim and contested the case.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Current tax assets | ||
| Corporate income tax recoverable | 27 777 | 27 277 |
| Other | 1 859 | 1 864 |
| 29 636 | 29 141 | |
| Deferred tax assets | ||
| Due to temporary differences | 422 239 | 412 126 |
| Due to tax losses carried forward | 20 949 | 30 581 |
| 443 188 | 442 707 | |
| 472 824 | 471 848 |
Details of deferred tax assets are presented in Note 4.43.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Debtors, other applications and other assets | ||
| Debtors for future operations | 14 590 | 19 173 |
| Collaterals | ||
| Of derivatives | 10 404 | 18 596 |
| Reports w ith central counterparties (CCP) | 25 002 | 14 987 |
| Single Resolution Fund | 4 640 | 2 636 |
| Other | 2 170 | 2 170 |
| Other applications | 4 070 | 3 444 |
| VAT recoverable | 18 183 | 13 705 |
| Debtors for loan interest subsidy receivable | 3 502 | 3 144 |
| Other debtors | 7 383 | 7 837 |
| Overdue debtors and other applications | 9 | 248 |
| Impairment of overdue debtors and other applications | ( 4) | ( 7) |
| Other assets | ||
| Gold | 102 | 49 |
| Other available funds and other assets | 400 | 369 |
| 90 451 | 86 351 | |
| Assets received in settlement of defaulting loans and other | 103 044 | 137 082 |
| Impairment | ( 22 790) | ( 33 762) |
| 80 254 | 103 320 | |
| Accrued income | ||
| For irrevocable commitments assumed in relation to third parties | 245 | 239 |
| For banking services rendered to third parties | 3 711 | 2 463 |
| Other accrued income | ||
| Dividends receivable from BFA | 57 641 | |
| Dividends receivable from Unicre | 6 618 | |
| Fee's for Allianz's profit sharing ( Notes 2.15 and 4.38) | 10 615 | 22 558 |
| Other receivables | 10 929 | 10 026 |
| 83 141 | 41 904 | |
| Deferred expenses | ||
| Insurance | 7 | 1 |
| Rent | 1 601 | 1 523 |
| Other deferred expenses | 10 291 | 7 424 |
| 11 899 | 8 948 | |
| Other accounts | ||
| Exchange transactions pending settlement | 14 346 | |
| Stock exchange transactions pending settlement | 798 | 1 083 |
| Asset operation pending settlement | 196 952 | 342 038 |
| 197 750 | 357 467 | |
| 463 495 | 597 990 |
The caption "Collaterals of derivatives" at June 30, 2017 and December 31, 2016 includes 5 094 t. euro and 4 169 t. euro, respectively, relating to collateral pledged in guarantee under derivative transactions relating to bonds issued through Sagres – Sociedade de Titularização de Créditos, S.A..
The caption "Other debtors" at June 30, 2017 and December 31, 2016 includes 1 427 t. euro relating to the cash receivable in 2019 relating to the public tender offer to acquire 100% of the share capital of Visa Europe Limited by Visa Inc. (Note 4.5).
The changes in assets received in settlement of defaulting loans and other tangible assets during the first semester of 2017 were as follows:
| Balance at Dec. 31, 16 | Acquisitions | Sales and writte-offs | Increase / | Balance at Jun. 30, 17 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross | Impairment | Net | and transfers | Gross | Reversals of impairment Impairment |
Gross | Impairment | Net | |||
| Assets received in settlement of defaulting loans |
|||||||||||
| Real estate | 131 714 | ( 30 987) 100 727 | 9 407 | ( 39 769) | 4 421 | 4 496 | 101 352 | ( 22 070) | 79 282 | ||
| Equipment | 531 | ( 578) | ( 47) | 267 | ( 330) | 132 | 141 | 468 | ( 305) | 163 | |
| Other | 61 | ( 62) | ( 1) | 11 | 61 | ( 51) | 10 | ||||
| Other tangible assets | |||||||||||
| Real estate | 4 775 | ( 2 135) | 2 640 | 295 | ( 3 908) | 1 705 | 66 | 1 162 | ( 364) | 798 | |
| 137 082 | ( 33 762) 103 320 | 9 969 | ( 44 007) | 6 258 | 4 714 | 103 044 | ( 22 790) | 80 254 |
The changes in assets received in settlement of defaulting loans and other tangible assets during the first semester of 2016 were as follows:
| Balance at Dec. 31, 15 | Acquisitions and |
Sales and write-offs | Increase / Reversals of |
Foreign exchange |
Balance at Dec. 31, 16 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross | Impairment | Net | transfers | Gross | Impairment | impairment | translation difference |
Gross | Impairment | Net | |
| Assets received in settlement of defaulting loans |
|||||||||||
| Real estate | 153 535 | ( 27 263) 126 272 | 18 297 ( 28 511) | 4 188 | ( 6 183) | ( 9) | 143 312 | ( 29 258) 114 054 | |||
| Equipment | 655 | ( 485) | 170 | 121 | ( 150) | 49 | ( 6) | 626 | ( 442) | 184 | |
| Other | 61 | ( 61) | 61 | ( 61) | |||||||
| Other tangible assets | |||||||||||
| Real estate | 4 597 | ( 1 493) | 3 104 | 208 | ( 181) | 4 805 | ( 1 674) | 3 131 | |||
| 158 848 | ( 29 302) 129 546 | 18 626 ( 28 661) | 4 237 | ( 6 370) | ( 9) | 148 804 | ( 31 435) 117 369 |
At June 30, 2017, the real estate received in settlement of defaulting loans was made up as follows, by type of property:
| Nr. of | |||
|---|---|---|---|
| Assets | properties | Fair value | Book value |
| Land | 53 | 3 685 | 2 510 |
| Urban | 32 | 3 264 | 2 186 |
| Rural | 21 | 421 | 324 |
| Buildings | 911 | 94 809 | 76 736 |
| Business | 206 | 15 653 | 13 396 |
| Housing | 598 | 53 192 | 41 561 |
| Other 1 | 107 | 25 964 | 21 779 |
| Other | 1 | 52 | 36 |
| 965 | 98 546 | 79 282 |
1 This category includes all buildings that are not exclusively business or housing.
At December 31, 2016, the real estate received in settlement of defaulting loans was made up as follows, by type of property:
| Nr. of | Fair Value | Book value | |
|---|---|---|---|
| Assets | properties | ||
| Land | 58 | 19 970 | 12 150 |
| Urban | 36 | 19 486 | 11 762 |
| Rural | 22 | 484 | 388 |
| Buildings | 1 055 | 107 752 | 88 248 |
| Business | 213 | 15 988 | 13 598 |
| Housing | 695 | 62 334 | 48 774 |
| Other 1 | 147 | 29 430 | 25 876 |
| Other | 6 | 415 | 329 |
| 1 119 | 128 137 | 100 727 |
1 This category includes all buildings that are not exclusively business or housing.
At June 30, 2017 the real estate received in settlement of defaulting loans was made up as follows, by aging:
| Time since the settlement / | >= 1 year and | >= 2.5 years | >= 5 years | Book value | ||
|---|---|---|---|---|---|---|
| execution | < 1 year | < 2.5 years | and < 5 years | |||
| Land | 28 | 254 | 1 190 | 1 038 | 2 510 | |
| Urban | 13 | 246 | 1 073 | 854 | 2 186 | |
| Rural | 15 | 8 | 117 | 184 | 324 | |
| Buildings | 15 384 | 17 721 | 17 618 | 26 013 | 76 736 | |
| Business | 546 | 1 598 | 4 158 | 7 094 | 13 396 | |
| Housing | 13 816 | 14 373 | 7 498 | 5 874 | 41 560 | |
| Other 1 | 1 022 | 1 750 | 5 962 | 13 045 | 21 779 | |
| Other | 36 | 36 | ||||
| 15 448 | 17 975 | 18 808 | 27 051 | 79 282 |
1 This category includes all buildings that are not exclusive for business or housing.
At December 31, 2016 the real estate received in settlement of defaulting loans was made up as follows, by aging:
| Time since the settlement / execution |
< 1 year | >= 1 year and < 2.5 years |
>= 2.5 years and < 5 years |
>= 5 years | Book value |
|---|---|---|---|---|---|
| Land | 248 | 9 815 | 883 | 1 204 | 12 150 |
| Urban | 243 | 9 804 | 766 | 949 | 11 762 |
| Rural | 5 | 11 | 117 | 255 | 388 |
| Buildings | 23 108 | 17 423 | 25 918 | 21 799 | 88 248 |
| Business | 870 | 1 214 | 6 242 | 5 272 | 13 598 |
| Housing | 20 338 | 14 082 | 8 515 | 5 839 | 48 774 |
| Other 1 | 1 900 | 2 127 | 11 161 | 10 688 | 25 876 |
| Other | 253 | 76 | 329 | ||
| 23 609 | 27 238 | 26 877 | 23 003 | 100 727 |
1 This category includes all buildings that are not exclusive for business or housing.
At June 30, 2017 the variation in the recoverable VAT caption refers to the increase in the volume of leasing and ALD contracted operations.
At June 30, 2017 and December 31, 2016, the caption "Other deferred expenses" includes 5 829 t.euro and 5 416 t.euro for current contracts with service suppliers.
At June 30, 2017 the caption "Stock Exchange transactions pending settlement" is related to the acquisition of securities for which settlement only occurred on the following month.
At June 30, 2017 and December 31, 2016 the caption "Asset operations pending settlement" includes:
The changes in impairment losses and provisions during the first half of 2017 and 2016 are shown in Note 4.21.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Resources of the Bank of Portugal | ||
| Deposits | 2 148 043 | 2 000 000 |
| Accrued interest | ( 2 663) | 10 |
| Resources of other Central Banks | ||
| Deposits | 1 | 1 |
| 2 145 381 | 2 000 011 |
During the first half of 2017 and the year of 2016 Banco BPI took funds from the EuroSystem, using part of its portfolio of eligible assets for this purpose (Note 4.32).
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Short sales | ||
| Debt instruments | ||
| From foreign public issuers | 4 906 | |
| Derivative instruments with negative fair value (Note 4.4) | 180 880 | 212 713 |
| 185 786 | 212 713 |
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Resources of Portuguese credit institutions | ||
| Very short-term resources | 35 051 | |
| Deposits | 149 322 | 168 247 |
| Other resources | 2 408 | 2 160 |
| Accrued interest | 20 | 18 |
| 186 801 | 170 425 | |
| Resources of foreign credit institutions | ||
| Deposits of international financial organisations | 689 268 | 689 293 |
| Very short term resources | 78 563 | 2 077 |
| Deposits | 649 293 | 198 963 |
| Other resources | 19 301 | 34 668 |
| Accrued interest | 918 | 1 013 |
| 1 437 343 | 926 014 | |
| 1 624 144 | 1 096 439 |
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Demand deposits | 11 133 835 | 10 320 787 |
| Term deposits | 8 767 592 | 9 207 114 |
| Savings deposits | 54 229 | 58 179 |
| Compulsory deposits | 12 750 | 12 781 |
| Cheques and orders payable | 64 099 | 53 796 |
| Debt securities sold with repurchase agreement | 135 884 | 61 542 |
| Other resources of customers | 23 121 | 22 915 |
| Non-controlling interests in investment funds | ||
| BPI Alternative Fund (Lux) | 249 581 | |
| Capitalisation insurance products - Unit links | 2 110 653 | 1 930 352 |
| Capitalisation insurance products - Guaranteed Rate and Guaranteed Retirem | 18 974 | 20 806 |
| Accrued interest | 15 337 | 29 399 |
| 22 336 474 | 21 967 252 | |
| Correction of the amount of hedged liabilities | ( 1 020) | 558 |
| Commissions relating to amortised cost (net) | 16 | ( 129) |
| 22 335 470 | 21 967 681 |
At June 30, 2017 and December 31, 2016, the caption "Debt securities sold with repurchase agreement" relates to transactions with Central Counterparties (Note 4.14) and are an instrument of the Bank's treasury management. During 2016 Banco BPI settled these transactions preferentially through Central Counterparties.
The caption "Resources of customers" at June 30, 2017 included 636 346 t. euro and 304 028 t. euro, respectively, relating to deposits of investment funds and pension funds managed by the BPI Group (580 060 t. euro and 168 661 t. euro, respectively, at December 31, 2016).
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |||||||
|---|---|---|---|---|---|---|---|---|
| Average | Average | |||||||
| Issued | Repurchased | Balance | interest rate | Issued | Repurchased | Balance | interest rate | |
| Covered bonds | ||||||||
| EUR | 5 700 000 | (5 500 000) | 200 000 | 0,5% | 5 200 000 | (4 800 000) | 400 000 | 0,5% |
| 5 700 000 | (5 500 000) | 200 000 | 5 200 000 | (4 800 000) | 400 000 | |||
| Fixed rate cash bonds | ||||||||
| EUR | 72 786 | ( 4 886) | 67 900 | 0,1% | 98 051 | ( 8 432) | 89 619 | 1,3% |
| 72 786 | ( 4 886) | 67 900 | 98 051 | ( 8 432) | 89 619 | |||
| Variable income cash bonds | ||||||||
| EUR | 20 100 | ( 7 457) | 12 643 | |||||
| USD | 5 028 | ( 1 423) | 3 605 | |||||
| 25 128 | ( 8 880) | 16 248 | ||||||
| 5 772 786 | (5 504 886) | 267 900 | 5 323 179 | (4 817 312) | 505 867 | |||
| Accrued interest | 1 313 | 1 204 | ||||||
| Correction of the amount of hedged liabilities | 83 | 177 | ||||||
| Premiums and commission (net) | ( 405) | ( 478) | ||||||
| 991 | 903 | |||||||
| 268 891 | 506 770 |
The average interest rates mentioned in the preceding table were calculated based on the interest rate of each issue in relation to the nominal value of the bonds. It is not possible to calculate the rate for the Variable Income Bonds as the income is only known when it is due.
The BPI Group issues bonds on a regular basis, with different remuneration conditions:
Cash bonds can only be issued by institutions under the Bank of Portugal's supervision. Currently Banco BPI has only one issue of this type.
As part of its medium and long term funding plan, the BPI Group issues bonds. Some of the bonds are issued under the Euro Medium Term Notes (EMTN) programme. The maximum amount for issues under the EMTN programme is 7 000 000 000 euro. Bonds can be issued in different currencies.
The BPI Group set up two guaranteed bond issuance programmes under Decree-Law 59/2006. Under these programmes the BPI Group issued mortgage bonds and bonds over the public sector as described bellow.
In accordance with this law, the holders of the guaranteed bonds benefit from a special credit privilege over the autonomous cover pool of assets, which consists of a guarantee of the debt to which the bondholders have access in the event of the issuer's insolvency.
The mortgage bonds programme was set up for up to a maximum of 7 000 000 000 euro.
The mortgage bonds are secured by a portfolio of mortgage loans and other assets that together constitute an autonomous cover pool.
Assets allocated to the cover pool include mortgage loans for housing or commercial purposes located in a EU Member State and other eligible assets, such as deposits at the Bank of Portugal, deposits at financial institutions with ratings equal to or greater than " A - " and other low risk and highly liquid assets. The total value of the other assets cannot exceed 20% of the cover pool. The amount of the allocated mortgage loans cannot exceed 80% of the value of the mortgaged property in the case of residential property, or 60% of the value of the mortgaged property, in the case of commercial property.
The legislation applicable to mortgage bonds imposes prudential limits, which must be met during the period of the bonds:
At June 30, 2017 the amount of mortgage bonds issued by the BPI Group was 5 200 000 000 euro, split into nine issues as follows:
| OH - Serie 9 | OH - Serie 10 | OH - Serie 11 | OH - Serie 12 | |
|---|---|---|---|---|
| Issue date | 21/05/2010 | 05/08/2010 | 25/01/2011 | 25/08/2011 |
| Nominal amount | EUR 350 000 000 | EUR 600 000 000 | EUR 200 000 000 | EUR 600 000 000 |
| ISIN | PTBBP6OE0023 | PTBBQQOE0024 | PTBBPMOE0029 | PTBBWAOE0024 |
| Maturity date | 21/05/2025 | 05/08/2020 | 25/01/2018 | 25/08/2021 |
| Rating ( Moody's/S&P/Fitch ) | Aaa/-/-/- | -/-/AAA/- | Aa1/AA/AA+/- | A3/A+/A-/- |
| Reimbursement | At maturity | At maturity | At maturity | At maturity |
| Interest payment frequency | Quarterly | Quarterly | Quarterly | Quarterly |
| Coupon | Euribor 3 m + 0,65% | Euribor 3 m + 0,65% | Euribor 3 m + 4,60% | Euribor 3 m + 0,65% |
| Repurchases | EUR 350 000 000 | EUR 600 000 000 | - | EUR 600 000 000 |
| OH - Serie 13 | OH - Serie 14 | OH - Serie 15 | OH - Serie 16 | |
|---|---|---|---|---|
| Issue date | 20/07/2012 | 30/03/2015 | 07/10/2015 | 30/05/2016 |
| Nominal amount | EUR 800 000 000 | EUR 1 250 000 000 | EUR 200 000 000 | EUR 500 000 000 |
| ISIN | PTBBR3OE0030 | PTBBRROE0048 | PTBBPSOE0031 | PTBBP7OE0022 |
| Maturity date | 20/07/2017 | 27/03/2025 | 07/10/2022 | 30/05/2023 |
| Rating ( Moody's/S&P/Fitch ) | Baa3/A-/-/- | Baa2/-/-/- | A3/-/-/A(High) | A3/-/-/A(High) |
| Reimbursement | At maturity | At maturity | At maturity | At maturity |
| Interest payment frequency | Quarterly | Quarterly | Quarterly | Quarterly |
| Coupon | Euribor 3 m + 0,65% | Euribor 3 m + 0,50% | Euribor 3 m + 0,50% | Euribor 3 m + 0,80% |
| Repurchases | EUR 800 000 000 | EUR 1 250 000 000 | EUR 200 000 000 | EUR 500 000 000 |
| OH - Serie 17 | |
|---|---|
| Issue Date | 22/02/2017 |
| Nominal Amount | EUR 700 000 000 |
| ISIN | PTBBBGOE0023 |
| Maturity Date | 22/02/2024 |
| Rating ( Moody's/S&P/Fitch/DBRS ) | A2/-/-/A(High) |
| Reimbursement | At maturity |
| Interest Payment frequency | Quarterly |
| Coupon | Euribor 3 m + 1,00% |
| Repurchases | EUR 700 000 000 |
At June 30, 2017 and December 31, 2016, the cover pool allocated to the mortgage bonds amounted to 6 852 082 t. euro and 6 518 035 t. euro, respectively, of which 6 834 284 t. euro and 6 501 785 t. euro corresponded to mortgage loans (Note 4.7).
The bond program over the public sector was constituted for up to a maximum of 2 000 000 000 euro.
The bonds over the public sector are secured by a portfolio of public sector loans and other assets that together constitute the cover pool.
Loans granted to central public administrations, regional or local authorities of any EU Member State as well as loans with a specific guarantee from these entities may be allocated to the cover pool.
The prudential limits applicable to public sector bonds are similar to those applicable to the mortgage bonds, except for the limit on the maximum nominal amount of outstanding bonds in relation to the loans and other assets allocated to the cover pool, which in the case of bonds over the public sector is 100%.
At June 30, 2017 BPI Group held three outstanding issues of bonds over the public sector amounting to 500 000 000 euro, as follows:
| OSP - Serie 2 | OSP - Serie 3 | OSP - Serie 4 | |
|---|---|---|---|
| Issue date | 30/09/2010 | 07/10/2015 | 15/06/2016 |
| Nominal amount | EUR 250 000 000 | EUR 100 000 000 | EUR 150 000 000 |
| ISIN | PTBBRHOE0024 | PTBBPROE0032 | PTBBPGOE0035 |
| Maturity date | 30/09/2017 | 07/10/2022 | 15/06/2023 |
| Rating ( Moody's/S&P/Fitch ) | -/A/- | Baa1/-/- | Baa1/-/- |
| Reimbursement | At maturity | At maturity | At maturity |
| Interest payment frequency | Quarterly | Quarterly | Quarterly |
| Coupon | Euribor 3 m + 0,4% | Euribor 3 m + 0,65% | Euribor 3 m + 0,80% |
| Repurchases | EUR 250 000 000 | EUR 100 000 000 | EUR 150 000 000 |
At June 30, 2017 and December 31, 2016 the cover pool allocated to bonds over the public sector amounted to 723 565 t. euro and 718 734 t. euro, respectively, of which 707 665 t. euro and 715 120 t. euro corresponded to loans (Note 4.7).
The changes in the bonds issued by the BPI Group during the first half of 2017 were as follows:
| Covered Bonds |
Fixed rate bonds |
Variable income bonds |
Total | |
|---|---|---|---|---|
| Balance at December 31, 2016 | 400 000 | 89 619 | 16 248 | 505 867 |
| Bonds issued during the period | 700 000 | 7 270 | 707 270 | |
| Bonds redeemed | ( 200 000) | ( 27 887) | ( 16 248) | ( 244 135) |
| Repurchases (net of resales) | ( 700 000) | ( 1 102) | ( 701 102) | |
| Balance at June 30, 2017 | 200 000 | 67 900 | 267 900 |
The changes in the bonds issued by the BPI Group in 2016 were as follows:
| Covered Bonds |
Fixed rate bonds |
Variable income bonds |
Total | |
|---|---|---|---|---|
| Balance at December 31, 2015 | 725 000 | 323 941 | 23 746 | 1 072 687 |
| Bonds issued during the period | 650 000 | 18 419 | 668 419 | |
| Bonds redeemed | ( 325 000) | ( 246 312) | ( 5 858) | ( 577 170) |
| Repurchases (net of resales) | ( 650 000) | ( 6 429) | ( 1 777) | ( 658 206) |
| Exchange difference | 137 | 137 | ||
| Balance at December 31, 2016 | 400 000 | 89 619 | 16 248 | 505 867 |
Bonds issued by the BPI Group at June 30, 2017, by maturity date, are as follows:
| Maturity | |||||||
|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020-2023 | > 2023 | Total | ||
| Covered bonds | |||||||
| EUR | 200 000 | 200 000 | |||||
| 200 000 | 200 000 | ||||||
| Fixed rate bonds | |||||||
| EUR | 14 466 | 16 930 | 11 935 | 4 569 | 20 000 | 67 900 | |
| 14 466 | 16 930 | 11 935 | 4 569 | 20 000 | 67 900 | ||
| Total | 14 466 | 216 930 | 11 935 | 4 569 | 20 000 | 267 900 |
Bonds issued by the BPI Group at December 31, 2016, by maturity date, are as follows:
| Maturity | |||||||
|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020-2023 | > 2023 | Total | ||
| Covered Bonds | |||||||
| EUR | 200 000 | 200 000 | 400 000 | ||||
| 200 000 | 200 000 | 400 000 | |||||
| Fixed rate bonds | |||||||
| EUR | 42 533 | 17 486 | 9 600 | 20 000 | 89 619 | ||
| 42 533 | 17 486 | 9 600 | 20 000 | 89 619 | |||
| Variable income bonds | |||||||
| EUR | 12 643 | 12 643 | |||||
| USD | 3 605 | 3 605 | |||||
| 16 248 | 16 248 | ||||||
| Total | 258 781 | 217 486 | 9 600 | 20 000 | 505 867 |
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Liabilities relating to assets not derecognised in securitisation operations (Note 4.7) |
||
| Loans | ||
| Housing loans | 1 422 792 | 1 498 597 |
| Loans to SME's | 3 390 400 | 3 404 200 |
| Liabilities held by the BPI Group | (4 301 578) | (4 347 231) |
| Accrued costs | ( 760) | 556 |
| Commissions relating to amortised cost (net) | 571 | ( 737) |
| 511 425 | 555 385 |
Banco BPI launched securitisation operations, the main features of which are summarised in the tables below. These were issued through Sagres – Sociedade de Titularização de Créditos S.A..
The bonds issued by securitisation vehicles and held by BPI Group entities were eliminated in the consolidation process.
On February 11, 2011 Banco BPI launched its second small and medium company securitisation operation, in the amount of 3 472 400 t. euro, under the name of Douro SME Series 2. The operation was issued through Sagres – Sociedade de Titularização de Créditos S.A..The operation was issued in 4 lots, their main characteristics being as follows:
| Description | Amount | Estimated residual average life (years) |
Rating (Fitch, DBRS) |
Spread/fixed rate |
|---|---|---|---|---|
| Class A Notes | 1 819 400 | 4,01 | A+/AA | 0,15% |
| Class B Notes | 1 317 500 | 4,01 | n/r | n/a |
| Class C Notes | n/a | n/r | n/a | |
| Residual Note | 253 500 | 4,01 | n/r | Residual Interest |
| Total of the issues | 3 390 400 | |||
| Liabilities held by BPI Group | (3 390 400) | |||
| Total |
This issue was made in order to be eligible for possible funding from the European Central Bank.
On November 24, 2005 Banco BPI launched its first housing loan securitisation operation, in the amount of 1 500 000 t. euro, under the name of DOURO Mortgages No. 1. The operation was issued in 5 lots, their main characteristics being as follows:
| Description | Amount | Estimated residual average life (years) |
Rating (Moody's, S&P, Fitch) |
Spread |
|---|---|---|---|---|
| Class A Notes | 288 746 | 4.50 | A2/A-/A+ | 0,28% |
| Class B Notes | 6 110 | 4.50 | Ba2/BB+/A | 0,34% |
| Class C Notes | 5 554 | 4.50 | B1/B+/BBB | 0,54% |
| Class D Notes | 4 629 | 4.50 | B2/B-/BB+ | 0,94% |
| Class E Notes | 6 000 | 4.50 | nr/nr/nr | Residual |
| Total of the issues | 311 039 | |||
| Other funds | 3 | |||
| Liabilities held by BPI Group | ( 142 070) | |||
| Total | 168 972 |
On September 28, 2006 Banco BPI launched its second housing loan securitisation operation in the amount of 1 500 000 t. euro under the name of DOURO Mortgages No. 2. The operation was issued in 6 lots, their main characteristics being as follows:
| Description | Amount | Estimated residual average life (years) |
Rating (Moody's, S&P, Fitch) |
Spread |
|---|---|---|---|---|
| Class A1 Notes | 4 061 | 5,83 | A1/BBB+/A | 0,10% |
| Class A2 Notes | 410 437 | 5,83 | A2/BBB+/A | 0,28% |
| Class B Notes | 10 124 | 5,83 | Ba2/B+/BBB | 0,34% |
| Class C Notes | 6 567 | 5,83 | B1/B-/BB+ | 0,46% |
| Class D Notes | 5 199 | 5,83 | B3/B-/BB- | 0,96% |
| Class E Notes | 5 237 | 5,83 | nr/nr/nr | Residual interest |
| Total of the issues | 441 625 | |||
| Liabilities held by BPI Group | ( 330 318) | |||
| Total | 111 307 |
On July 31, 2007 Banco BPI launched its third housing loan securitisation operation in the amount of 1 500 000 t. euro under the name of DOURO Mortgages No. 3.The operation was issued in 6 lots, their main characteristics being as follows:
| Description | Amount | Estimated residual average life (years) |
Rating (Moody's, S&P, Fitch) |
Spread1 |
|---|---|---|---|---|
| Class A Notes | 634 576 | 7,32 | A3/BB+/BBB+ | 0,24% |
| Class B Notes | 16 270 | 7,32 | nr/B/BB+ | 0,255% |
| Class C Notes | 9 674 | 7,32 | nr/B-/BB | 0,35% |
| Class D Notes | 8 355 | 7,32 | nr/B-/B | 0,72% |
| Class E Notes | n/a | n/a | n/a | |
| Class F Notes | 1 251 | 7,32 | nr/nr/nr | Residual interest |
| Total of the issues | 670 126 | |||
| Reserve fund | 1 | |||
| Liabilities held by BPI Group | ( 438 790) | |||
| Total | 231 337 |
1 In August 2016, as the option was not exercised, the spread was multiplied by 1.5.
On March 30, 2015 the housing loan securitisation operation in the amount of 1 522 500 t. euro under the name of DOURO Mortgages No. 4 was fully repaid by exercise of the call option.
On July 21, 2015 the housing loan securitisation operation in the amount of 1 421 000 t. euro under the name of DOURO Mortgages No. 5 was fully repaid by exercise of the call option.
The liability caption "Provisions" is made up as follows:
| Jun. 30, 17 Dec. 31, 16 | ||
|---|---|---|
| Impairment losses and provisions for | ||
| guarantees and commitments | 20 557 | 22 473 |
| Other provisions | ||
| VAT's Recovery processes (2013 to 2014) | 28 729 | 28 729 |
| Tax contingencies | 10 247 | 9 575 |
| Other provisions | 9 258 | 9 458 |
| 68 791 | 70 235 |
The changes in provisions and impairment losses of the Group during the first half of 2017 were as follows:
| Balance at | Dec. 31, 16 Increases | Decreases and reversals |
Utilisation | Exchange differences and others |
Balance at Jun. 30, 17 |
|
|---|---|---|---|---|---|---|
| Impairment losses of loans and advances | 674 108 | |||||
| to customers (Note 4.7) | 695 200 | 28 853 | ( 10 354) | ( 39 591) | ||
| Impairment losses and provisions for guarantees and commitments |
22 473 | 467 | ( 2 383) | 20 557 | ||
| 717 673 | 29 320 | ( 12 737) | ( 39 591) | 694 665 | ||
| Impairment losses of financial assets available for sale (Note 4.5) |
||||||
| Equity instruments | 46 867 | 93 | ( 3) | ( 72) | 46 885 | |
| Other securitites | 55 742 | 179 | ( 46) | 55 875 | ||
| Loans and other receivables | 4 386 | ( 14) | ( 4 372) | |||
| Impairment losses of other assets (Note 4.14) | ||||||
| Tangible assets held for sale | 33 762 | 397 | ( 5 111) | ( 6 258) | 22 790 | |
| Debtors, other applications and other assets | 7 | ( 3) | 4 | |||
| Other provisions | 47 762 | 1 586 | ( 94) | ( 1 011) | ( 9) | 48 234 |
| 188 526 | 2 255 | ( 5 222) | ( 11 690) | ( 81) | 173 788 | |
| 906 199 | 31 575 | ( 17 959) | ( 51 281) | ( 81) | 868 453 |
The utilisation of impairment losses of loans and advances to customers during the first half of 2017 include 27 415 t. euro of credit write-offs and 12 176 t. euro related to credit sales.
The changes in provisions and impairment losses of the Group during the first half of 2016 were as follows:
| Balance at Dec. 31, 15 |
Increases | Decreases and reversals |
Utilisation | Exchange differences and others |
Balance at Jun. 30, 16 |
|
|---|---|---|---|---|---|---|
| Impairment losses of loans and advances to | 971 411 | |||||
| customers (Note 4.7) | 978 654 | 77 710 | ( 23 706) | ( 47 689) | ( 13 558) | |
| Impairment losses and provisions for guarantees and commitments |
34 132 | 363 | ( 7 082) | ( 325) | 27 088 | |
| 1 012 786 | 78 073 | ( 30 788) | ( 47 689) | ( 13 883) | 998 499 | |
| Impairment losses of deposits at other credit institutions (Note 4.2) |
3 | ( 3) | ||||
| Impairment losses of financial assets available for | ||||||
| sale (Note 4.5) | ||||||
| Debt instruments 1 | 20 170 | ( 808) | 19 362 | |||
| Equity instruments | 47 051 | 769 | ( 1 152) | ( 18) | 46 650 | |
| Other securitites | 50 828 | 4 005 | ( 29) | 54 804 | ||
| Loans and other receivables | 21 672 | 276 | 21 948 | |||
| Impairment losses of other assets (Note 4.14) | ||||||
| Tangible assets held for sale | 29 302 | 7 008 | ( 638) | ( 4 237) | 31 435 | |
| Debtors, other applications and other assets | 169 | ( 2) | 167 | |||
| Other provisions | 65 732 | 4 409 | ( 308) | ( 1 052) | ( 62) | 68 719 |
| 214 757 | 36 637 | ( 951) | ( 6 470) | ( 888) | 243 085 | |
| 1 227 543 | 114 710 | ( 31 739) | ( 54 159) | ( 14 771) | 1 241 584 |
1 Impairment refers to debt instruments of Portugal Telecom International Finance 4.375% 24.3.2017.
Utilisation of impairment losses of loans and advances to customers during the first half of 2016 corresponds to credit write-offs.
The caption "Impairment losses of loans and advances to customers - exchange differences and others" corresponds essentially to the exchange variations of BFA's opening balance.
In the first half of 2016, net increases in impairment of loans and advances to customers and net increases of other provisions, include 11 510 t. euro and 1 819 t. euro respectively, regarding the classification of BFA as a discontinued operation and that were included under the caption "Net Income from discontinued operations" (Note 4.9).
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Immediate Life Annuity / Individual | 4 | |
| Immediate Life Annuity / Group | 8 | 22 |
| Family Savings | 2 | 2 |
| BPI New Family Savings | 993 529 | 1 066 033 |
| BPI Retirement Guaranteed PPR | 677 888 | 712 282 |
| BPI Non Resident Savings | 245 231 | 263 423 |
| Planor | 5 138 | 5 060 |
| PPR BBI Vida | 1 745 | 1 955 |
| South PPR | 34 | 48 |
| 1 923 575 | 2 048 829 |
The technical provisions were computed on a prospective actuarial basis, contract by contract, in accordance with the technical bases of the products.
| Individual | Interest Rate 6% |
|---|---|
| Mortality Table PF 60/64 | |
| Group | Interest Rate 6% |
| Mortality Table PF 60/64 |
| Group | Interest Rate 4% and 0% |
|---|---|
| Mortality Table PF 60/64, TV 73-77 and GRF 80 |
The technical provisions also include a provision for rate commitments, which is recorded when the effective profitability of the assets that represent the mathematical provisions of a determined product is lower than the technical interest rate used to calculate the mathematical provisions.
The BPI New Family Savings, BPI Retirement Savings PPR and BPI Non Resident Savings are capitalisation products with guaranteed capital and participation in the results.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Current tax liability | ||
| Corporation income tax payable | 6 490 | 3 752 |
| 6 490 | 3 752 | |
| Deferred tax liability | ||
| Temporary differences | 60 601 | 18 254 |
| 60 601 | 18 254 | |
| 67 091 | 22 006 |
Details of the deferred tax liability are presented in Note 4.43.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |||||||
|---|---|---|---|---|---|---|---|---|
| Issued | Repurchased | Balance | Average interest rate |
Issued | Repurchased | Balance | Average interest rate |
|
| Other subordinated debt | ||||||||
| Perpetual bonds | ||||||||
| EUR | 310 000 | ( 250 000) | 60 000 | 2.0% | 310 000 | ( 250 000) | 60 000 | 2.1% |
| 310 000 | ( 250 000) | 60 000 | 310 000 | ( 250 000) | 60 000 | |||
| Other bonds | ||||||||
| EUR | 600 000 | ( 291 493) | 308 507 | 3.4% | 400 000 | ( 391 293) | 8 707 | 1.2% |
| 600 000 | ( 291 493) | 308 507 | 400 000 | ( 391 293) | 8 707 | |||
| 910 000 | ( 541 493) | 368 507 | 710 000 | ( 641 293) | 68 707 | |||
| Participating bonds | ||||||||
| EUR | 28 081 | ( 27 350) | 731 | 0.2% | 28 081 | ( 27 350) | 731 | 0.2% |
| 28 081 | ( 27 350) | 731 | 28 081 | ( 27 350) | 731 | |||
| Accrued interest | 4 594 | 62 | ||||||
| 4 594 | 62 | |||||||
| 373 832 | 69 500 |
The changes in debt issued by the BPI Group during the first semester of 2017 were as follows:
| Perpetual bonds |
Other bonds |
Participating bonds |
Total | |
|---|---|---|---|---|
| Balance at December 31, 2016 | 60 000 | 8 707 | 731 | 69 438 |
| Bonds issued during the period | 300 000 | 300 000 | ||
| Bonds redeemed | ( 200) | ( 200) | ||
| Balance at June 30, 2017 | 60 000 | 308 507 | 731 | 369 238 |
The changes in debt issued by the BPI Group during 2016 were as follows:
| Perpetual bonds |
Other bonds |
Participating bonds |
Total | |
|---|---|---|---|---|
| Balance at December 31, 2015 | 60 000 | 8 707 | 731 | 69 438 |
| Repurchases (net of resales) | ||||
| Balance at December 31, 2016 | 60 000 | 8 707 | 731 | 69 438 |
Perpetual and other bonds issued by the BPI Group at June 30, 2017 are made up as follows, by maturity date:
| Maturity | ||||||
|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020-2023 | > 2023 | Total | |
| Perpetual bonds | ||||||
| EUR 1 | 60 000 | 60 000 | ||||
| Other bonds | ||||||
| EUR | 8 507 | 300 000 | 308 507 | |||
| Total | 68 507 | 300 000 | 368 507 |
1 In September 2012 the call option was not exercised, so these bonds now have a quarterly call option. In September 2012 the remuneration had a step-up due to the fact that the option was not exercised.
Perpetual and other bonds issued by the BPI Group at December 31, 2016 are made up as follows, by maturity date:
| Maturity | |||||
|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020-2023 | > 2023 | |
| Perpetual bonds EUR 1 |
60 000 | ||||
| Other bonds | |||||
| EUR | 8 707 | ||||
| Total | 68 707 |
1 In September 2012 the call option was not exercised, so these bonds now have a quarterly call option. In September 2012 the remuneration had a step-up due to the fact that the option was not exercised.
The participating bonds can be redeemed at par value upon request of the participants, with the approval of the Bank or upon the Bank's decision, with a six months' notice.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Creditors and other resources | ||
| Creditors for futures operations | 12 736 | 14 752 |
| Consigned resources | 14 255 | 15 020 |
| Captive account resources | 7 060 | 7 346 |
| Guarantee account resources | 9 709 | 8 394 |
| Public Sector | ||
| Value Added Tax (VAT) payable | 310 | 239 |
| Tax w ithheld at source | 15 470 | 13 245 |
| Social Security contributions | 4 182 | 4 490 |
| Other | 2 953 | 133 |
| Contributions to other health systems | 1 348 | 1 417 |
| Creditors for factoring contracts | 34 448 | 32 992 |
| Creditors for the supply of assets | 10 665 | 14 190 |
| Contributions ow ed to the Pension Fund | ||
| Pensioners and employees | 75 455 | |
| Directors | 8 900 | |
| Other creditors | 45 442 | 63 184 |
| Deferred costs | ( 263) | ( 74) |
| 158 315 | 259 683 | |
| Liabilities with pensions and other benefits (Note 4.26) | ||
| Pension Funds Assets | ||
| Pensioners and employees | (1 504 019) | (1 355 356) |
| Directors | ( 51 296) | ( 41 790) |
| Past Service Liabilities | ||
| Pensioners and employees | 1 540 699 | 1 463 137 |
| Directors | 56 252 | 52 266 |
| 41 636 | 118 257 | |
| Accrued costs | ||
| Personnel costs | 104 851 | 59 519 |
| General administrative costs | 17 954 | 19 009 |
| Contribution over the banking sector | 7 133 | 14 291 |
| Other | 2 120 | 2 546 |
| 132 058 | 95 365 | |
| Deferred income | ||
| On guarantees given and other contingent liabilities | 3 365 | 3 152 |
| Other | 10 559 | 11 041 |
| 13 924 | 14 193 | |
| Other accounts | ||
| Foreign exchange transactions pending settlement | 17 824 | |
| Securities operations pending settlement - non stock exchange operations | 25 466 | 18 779 |
| Liabilities pending settlement | 71 551 | 124 921 |
| Other operations pending settlement | 145 962 | 146 206 |
| 260 803 | 289 906 | |
| 606 736 | 777 404 |
The caption "Other creditors" at June 30, 2017 and December 31, 2016 includes 28 777 t. euro and 42 305 t. euro, respectively, relating to unrealized capital subscribed for in Venture Capital Funds:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Fundo de Recuperação, FCR | 9 282 | 9 529 |
| Fundo InterRisco II CI | 8 707 | 9 050 |
| Fundo InterRisco II - Fundo de Capital de Risco | 2 821 | 4 388 |
| Fundo de Reestruturação Empresarial, FCR | 1 805 | 1 828 |
| Fundo Pathena SCA Sicar | 6 145 | 6 293 |
| Other funds | 17 | 11 217 |
| 28 777 | 42 305 |
At June 30, 2017 and December 31, 2016 the caption "Other creditors" also includes:
As mentioned in Note 2.8, in 2016 with the entry into force of the new Collective Labour Agreement, long service premium was eliminated and the proportional share of the long service premium for the anniversary in progress relating to 15, 25 or 30 years of good and effective service in the banking sector was established. At June 30, 2017 and December 31, 2016, the caption "Accrued costs – Personnel costs" includes 6 252 t. euro and 6 685 t. euros, respectively, relating to final career premiums.
The main actuarial and financial assumptions used to calculate the final career and long service premium liability are as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Demographic assumptions: | ||
| Mortality table 1 | TV 88/90-H TV 88/90-M - 3 years 2 |
TV 73/77-H - 2 years 1 TV 88/90-M - 3 years 2 |
| Financial assumptions: | ||
| Discount rate | ||
| Beginning of the year | 2.00% | 2.50% |
| End of the year | 2.08% | 2.00% |
| Salary grow th rate | ||
| Beginning of the year | 1.00% | 1.00% |
| End of the year | 1.00% | 1.00% |
| 1 Life expectancy considered was 2 years greater than the mortality table used for men. |
2 Life expectancy considered was 3 years greater than the mortality table used for woman.
The changes in the final career premium and long service premium liability during the first half of 2017 and the year of 2016 were as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Long service premiums at the beginning of the period | 32 512 | |
| Long service premiums payments | ( 3) | ( 7 662) |
| Personnel Costs (Note 4.41): | ||
| Current service cost | 3 | 1 123 |
| Interest cost | 424 | |
| Other | ||
| Gain from the extinction of the long service premium | ( 26 397) | |
| Long service premium at the end of the year | ||
| Final career premium at the beginning of the period | 6 685 | |
| Personnel costs (Note 4.41): | ||
| Expenses w ith the introduction of the final career premium | 5 724 | |
| Current service cost | 188 | 159 |
| Interest cost | 70 | 76 |
| Voluntary termination program | ( 540) | |
| Final career premium payment | ( 101) | ( 50) |
| Actuarial (Gains) and losses | ||
| Change in the mortability table | 51 | 589 |
| Change in discount rate | ( 101) | |
| Other deviations | 187 | |
| Final career premium at the end of the year | 6 252 | 6 685 |
IFRIC 21 identifies the obligating event for the recognition of a liability as the activity that triggers the payment of the rate in accordance with the relevant legislation. As a result of the entry into force of IFRIC 21, and based on the interpretation of the legislation in force, in 2015 Banco BPI changed its accounting policy for recognizing the extraordinary contribution over the banking sector as it believes that the event which creates the obligation to pay the extraordinary contribution over the banking sector is the activity carried out in the year preceding its payment, which is June of the following year. Therefore, the amount recorded in the caption "Accrued costs – Contribution over the banking sector" corresponds to the contribution payable in June of the following year.
The caption "Securities operations pending settlement – non stock exchange operations" at June 30, 2017 and December 31, 2016 refers to the acquisition of securities to be settled in the following month.
The caption "Liabilities pending settlement" at June 30, 2017 and December 31, 2016 includes:
The caption "Other operations pending settlement", at June 30, 2017 and December 31, 2016 includes 136 721 t. euro and 117 676 t. euro, respectively, relating to transfers under SEPA (Single Euro Payment Area).
The past service liability relating to pensioners, personnel and Directors that are, or have been, employees of BPI Group companies1, is calculated in accordance with IAS 19.
Benefits established by BPI Group are defined benefits based on the last salary earned and the length of service, involving the payment of benefits in the event of retirement due to old age or disability, death and final career premium (previsously long service premiums). The rules for calculating the benefits result mainly from the provisions of the Collective Labour Agreement for the Portuguese Banking Sector. There is also a restricted group of management employees that is covered by a supplementary defined benefit pension plan, based on the last salary earned and length of service.
1 Companies consolidated by the full consolidation method (Banco BPI, BPI Investimentos, BPI Gestão de Activos, BPI Private Equity and BPI Vida e Pensões)
With the publication of Decree-Law 1-A/2011 of January 3, all the bank employees that benefit from CAFEB – Caixa de Abono de Família dos Empregados Bancários were incorporated into the General Social Security Regime, as of January 1, 2011, being covered by this regime as regards old age pensions and in the case of maternity, paternity and adoption leave, the cost of which the Bank no longer covers. Given the complementary nature of the rules under the Collective Labour Agreement for the Portuguese Banking Sector, the Bank will continue to guarantee the difference between the amount of the benefits that will be paid under the General Social Security Regime for the eventualities covered and the benefits established in the Collective Labour Agreement.
Following the instructions of the National Council of Financial Supervisors (Conselho Nacional dos Supervisores Financeiros), the amount of the past service liability remained unchanged at December 31, 2010. Current service cost decreased as from 2011 and the Bank became subject to the Single Social Tax (Taxa Social Única) of 23.6%.
Incapacity and survivor pensions and sickness subsidy of these employees will continue to be the Bank's responsibility.
Decree-Law 127/2011 of December 31, established the transfer to the Social Security of the liability for costs of the retirement and survivor pension liabilities of retired personnel and pensioners that were in that situation at December 31, 2011 and were covered by the substitute social security regime included in the collective labour regulations instrument in force for the banking sector (Pillar 1), as well as transfer to the Portuguese State of the corresponding pension fund assets covering these liabilities.
Through its pension fund, Banco BPI maintains the liability for payment of (i) the amount of the updates of the pensions mentioned above, in accordance with the criteria set out in the Collective Labour Agreement for the Banking Sector; (ii) the benefits complementary to the retirement and survivor pensions assumed by the Collective Labour Agreement for the Banking Sector; (iii) the contribution to Social Medical Support Services (Serviços de Apoio Médico-Social - SAMS); (iv) death subsidy; (v) survivor pensions to children and surviving spouse related to the same employee and (vi) survivor pensions due to the family of current retired employees, in which the conditions for granting the pensions occurred as of January 1, 2012.
The value of the pension fund assets transferred to the Portuguese State corresponds to the value of the liabilities undertaken by Social Security and was determined taking into account the following assumptions: (i) discount rate of 4%; (ii) mortality tables under the regulations defined by the Portuguese Insurance Authority (ASF): male population: TV 73/77 less 1 year; female population: TV 88/90.
Transfer of the pension fund assets was made entirely in cash.
Transfer of ownership of the assets was carried out by the Bank under the following conditions: (i) in December 2011, the amount equivalent to 55% of the preliminary present value of the liability; (ii) in 2012, the remaining amount to complete the definitive present value of the liability, as a result of the calculation of the definitive amount of the liability transferred, made by an independent expert hired for that purpose by the Ministry of Finance.
Since the transfer to the Social Security corresponded to a settlement, extinguishing the corresponding liability of Banco BPI, the negative difference between the amount of the pension fund assets transferred to the Portuguese State and the amount of the liability transferred based on actuarial assumptions used by Banco BPI in the amount of 99 652 t. euro was recorded in 2011 in the statement of income caption "Operating income and expenses", as established in paragraph 110 of IAS 19. As a result of the final determination of the liability transferred to the Portuguese State and the corresponding total and definitive transmission of the Pension Funds' assets, differences in relation to the provisional amounts at the end of 2011 were determined, of which 1 542 t. relates to the amount of the liability and 1 688 t. euro to the value of the fund. The positive difference between these two amounts, totalling 145 t. euro, was recorded in 2012 in the caption "Operating income and expenses".
On June 14, 2016 a new Collective Labour Agreement ("Acordo Colectivo de Trabalho" – ACT) was signed with the labour unions. It was published in the Labour and Employment Bulletin ("Boletim do Trabalho e Emprego") on August 8, 2016 and entered into force the following day.
The new ACT established new rules for the financing of SAMS (Note 2.7), the impact of which was to decrease past service liability in the amount of 22 215 t. euro. As this is a change in benefits of the pension plan, the impact was recorded in the statement of income caption "Personnel costs", as provided for in paragraph 103 of IAS 19 (Note 4.41).
Additionally, with the new Collective Labour Agreement, mandatory promotions due to time of service were eliminated, except for the next promotion of employees who were promoted up to December 31, 2014 (Note 2.7).
The impact of the elimination of mandatory promotions due to time of service corresponded to a decrease of 9 593 t. euro in the past service liability, which was recorded by corresponding entry to equity (actuarial deviations) (Note 4.30), since the mandatory promotions due to time of service corresponded to an actuarial assumption used by Banco BPI.
BPI Vida e Pensões is the entity responsible for the actuarial calculations used to determine the amounts of the retirement and survivor pension liability, as well as for managing the respective Pension Funds.
The "Projected Unit Credit" method was used to calculate the normal cost and past service liability due to old age, and the "Single Successive Premiums" method was used to calculate the cost of the incapacity and survivor benefits.
The BPI Vida e Pensões pension plan was changed in accordance with the new Collective Labour Agreement (Contrato Colectivo de Trabalho – CCT) for the Portuguese Insurance Sector, signed in December 2011, and published in Labour and Employment Bulletin (Boletim do Trabalho e Emprego), n. 2, of January 15, 2012, the defined benefit plan ceasing to exist and a defined contribution plan being introduced. Therefore, the amount of the past service liability at December 31, 2011, relating to retirement pensions of current employees, hired up to June 22, 1995, which was covered by clause 51, item 4 of the Collective Labour Agreement (the consolidated text of which was published in Labour and Employment Bulletin, n. 32, of August 29, 2008), that was fully funded, was converted into individual accounts of the employees in 2012. This change does not apply to the pension liability under payment relating to employees that at December 31, 2011 were retired or pre-retired.
The commitments assumed in the regulations of Banco BPI Pension Plans are funded by Pension Funds and therefore Banco BPI is exposed to risks resulting from the valuation of the liability and the value of the related pension funds. The Pension Funds of Banco BPI are disclosed in Note 4.50.
As regards determination of the liability, Banco BPI is exposed to adverse changes in interest rates and credit spreads, since the discount rate used to determine the liability results from the income of corporate bonds with AA ratings and so includes exposure to the risk-free yields and credit spreads. In addition to the risks inherent in the discount of the future liabilities, there is exposure to the longterm inflation and mortality rates. Any change in these rates could affect positively or negatively the amount of liabilities payable by Banco BPI.
In the case of financial assets included in the Pension Fund assets, there is exposure of the equity component to market risk, of the bond component to interest rate risk and credit risk, as well as to currency risk. In the case of real estate assets, the main risks result from the nature of the composition of the portfolio, quality and diversification of the assets and from factors inherent to the economic developments and government policies for the sector.
The investment policy was defined considering a long-term strategy, with an allocation of assets that includes shares, bonds, real estate and short-term investments. This strategy ensures suitability to the type of liability and also contributes to the appropriate diversification of investments through the long-term expectation of different returns and volatilities of the different asset classes.
The main actuarial assumptions used to calculate the pension liability are as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Demographic assumptions: | ||
| TV 88/90-H | TV 73/77-H - 2 years 1 | |
| Mortality table | TV 88/90-M - 3 years 2 TV 88/90-M - 3 years 2 | |
| Incapacity table | EKV 80 | EKV 80 |
| Personnel turnover | 0% | 0% |
| Decreases | By mortality | By mortality |
| Financial assumptions: | ||
| Discount rate | ||
| Beginning of the period | 2.00% | 2.50% |
| End of the period | 2.08% | 2.00% |
| Pensionable salary increase rate 3 4 | 1.00% | 1.00% |
| Pension increase rate 4 | 0.50% | 0.50% |
1 Life expectancy considered was 2 years greater than the mortality table used for men.
2 Life expectancy considered was 3 years greater than the mortality table used for women.
3 The mandatory promotions resulting from the current ACT and the projections of diuturnities are considered autonomously, directly in the estimation of the evolution of salaries, equivalent to an increase of 0.5%.
4 Having considered a growth rate of pensionable wages and pensions for 2016 and 2017 of 1.25% and 0.75%, respectively, in accordance with the new ACT.
The actual results obtained in relation to the main financial assumptions were:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Pensionable salary increase rate 1 | 1 | 2.40% 2 |
| Pension increase rate 2 | 1 | 0.75% 3 |
| Pension fund income rate | ||
| Banco BPI | 6.86% 4 | (1.17)% |
| Other companies | 2.91% 4 | 0.86% |
1 Rate calculated only annually.
2 Calculated based on average pensionable salary changes for current employees in the beginning and in the end of the year (including changes in remuneration levels, the effect on mandatory promotions due to time of service and seniority payments and does not consider the new entrees and leaves).
3 Corresponds to the ACT table update rate.
4 Rate relative to the first half of 2017, not annualized.
The following assumptions were used to calculate the amount of the social security pension which, under the provisions of the Collective Labour Agreement (ACT), must be deducted from the pension established in the ACT:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Salary increase rate for purposes of calculating the Social Security pension 1 | 2.00% | 2.00% |
| Salary revaluation rate for purposes of calculating the Social Security pension | 1.00% | 1.00% |
| Social Security pension increase rate | 0.50% | 0.50% |
| 1 Pensionable salary for Social Security includes all wages, while the pensionable salary under ACT consists only on the portion of the level base salary and seniority |
payments, with an estimated evolution of the total pensionable salary for Social Security larger than the pensionable salary under ACT.
Calculation of the liability for retirement and survivor pensions of the BPI Group at June 30, 2017 was based on projections of the amounts of the actuarial valuation as of December 31, 2016.
At December 31, 2016 the number of pensioners and employees covered by the pension plans funded by the pension funds was as follows:
| Dec. 31, 16 | |
|---|---|
| Retired pensioners | 7 248 |
| Survivor pensioners | 1 388 |
| Current employees | 5 576 |
| Former employees (clauses 137 A and 140 of the ACT) | 3 671 |
| 17 883 |
The past service liability for pensioners and employees of the BPI Group and respective coverage by the Pension Fund at June 30, 2017 and December 31, 2016 are as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Total past service liability | ||
| Liability for pensions under payment | 868 434 | 810 215 |
| Of which: [increase in the liability resulting from early retirements during | ||
| the year] | [ 54 068] | [ 53 952] |
| Past service liability of current and former employees | ||
| active and former employees | 672 265 | 652 922 |
| 1 540 699 | 1 463 137 | |
| Net assets of the Pension Fund | 1 504 019 | 1 355 356 |
| Contributions to be transferred to the Pension Fund | 75 455 | |
| Excess/(Insufficient) coverage | ( 36 680) | ( 32 326) |
| Degree of coverage | 98% | 98% |
In accordance with Decree Law 12/2006 of January 20, only in very special conditions is it possible to return excess funding, so it is assumed that any excess will be used to reduce future contributions.
The average duration of the pension liability of BPI Group employees is 18.1 years, including both current employees and pensioners.
As at December 31, 2016, the Bank recorded in the caption Other Liabilities – contributions owed to the Pension Fund (Note 4.25) 75 455 t. Euro related to the 2016 contribution made in January 2017, after which the percentage of liabilities coverage corresponds to 98%.
The degree of coverage of the liability complies with the rule defined in Bank of Portugal Notice 4/2005, which establishes the requirement of full funding of pensions in payment and a 95% minimum level of funding of the past service liability for current employees, at the end of each year.
Evolution of the degree of coverage of the liability in the past five years was as follows:
| Jun. 30, 17 | 2016 | 2015 | 2014 Proforma |
2013 Proforma |
|
|---|---|---|---|---|---|
| Total past service liability | 1 540 699 | 1 463 137 | 1 279 923 | 1 278 394 | 1 082 369 |
| Net assets of the Pension Fund | 1 504 019 | 1 355 356 | 1 391 069 | 1 201 648 | 1 129 067 |
| Contributions to be transferred to the Pension Fund | 75 455 | 1 279 | 47 008 | 2 853 | |
| Excess/ (insufficient) coverage | ( 36 680) | ( 32 326) | 112 425 | ( 29 738) | 49 551 |
| Degree of coverage | 98% | 98% | 109% | 98% | 105% |
The changes in the present value of the past service liability during the first half of 2017 and in 2016 were as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Liability at the beginning of the period | 1 463 137 | 1 279 923 |
| Current cost: | ||
| Of the BPI Group | ( 3 423) | ( 4 112) |
| Of the employees | 1 863 | 3 712 |
| Interest cost | 14 419 | 31 257 |
| Actuarial (gain) and loss in the liability | 40 682 | 153 080 |
| Early retirements | 54 068 | 53 952 |
| Change in the pension plan conditions - SAMS | ( 22 215) | |
| Pensions payable (estimate) | ( 18 074) | ( 32 460) |
| Voluntary terminations | ( 11 973) | |
| Liability at the end of the period | 1 540 699 | 1 463 137 |
The sensitivity analysis to a change of the main financial assumptions for the entire period covered by the actuarial valuation (and not just a change in a given year) at June 30, 2017 would result in the following impact on the present value of the past service liability (1):
| (decrease)/increase | ||
|---|---|---|
| by % | amount | |
| Change in the discount rate | ||
| Increase by 0.25% | -4.6% | ( 70 866) |
| Decrease by 0.25% | -4.9% | 75 933 |
| Change in the salary increase rate 2 | ||
| Increase by 0.25% | 1.5% | 22 948 |
| Change in the pension increase rate 3 | ||
| Increase by 0.25% | 5.4% | 83 914 |
| Mortality Table | ||
| +1 year | 3.3% | 51 385 |
1 The same calculation method and assumptions used in the calculation of the liabilities were used, only the assumptions under analysis are changing.
2 The increase in the changes in salaries applies only to the pensionable salary pension scheme component according with the Collective Labour Agreement (ACT), without any change in the pensionable salary increase for Social Security purposes, since it is the maximum risk of the salary evolution component.
3 The change in the pension increase applies to pensions and supplements provided by the Bank, as well as pensions transferred to the Social Security, for which the Bank remains responsible for future updates.
The changes in the pension funds in the first half of 2017 and in 2016 are as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Net assets of the Pension Funds at the beginning of the period | 1 355 356 | 1 391 069 |
| Contributions: | ||
| by BPI Group | 75 455 | 11 050 |
| by employees | 1 863 | 3 712 |
| Pension Fund income (net) | ||
| Income on plan assets computed w ith the discount rate | 14 033 | 32 357 |
| Deviation of return on assets | 78 483 | ( 48 392) |
| Pensions paid by the Pension Funds | ( 21 171) | ( 34 440) |
| Net assets of the Pension Funds at the end of the period | 1 504 019 | 1 355 356 |
The estimated contribution to the pension plan to be made by the employees in 2017 amounts to 1 903 t. euros.
At June 30, 2017 and December 31, 2016 the assets that compose Banco BPI's Employees' Pension Funds were as follows:
| Jun. 30, 17 | Dec. 31, 16 | |||
|---|---|---|---|---|
| Value | % | Value | % | |
| Liquidity | 253 581 | 16,9% | 131 154 | 9,7% |
| Fixed rate bonds | ||||
| Listed | 194 873 | 13,0% | 225 650 | 16,6% |
| Floating rate bonds | ||||
| Listed | 160 217 | 10,7% | 168 602 | 12,5% |
| Shares | ||||
| Listed | 417 235 | 27,7% | 366 529 | 27,0% |
| Not listed | 44 402 | 3,0% | 46 351 | 3,4% |
| Real estate | 327 894 | 21,8% | 312 842 | 23,1% |
| Other | ||||
| Listed | 105 817 | 6,9% | 104 228 | 7,7% |
| 1 504 019 | 100,0% | 1 355 356 | 100,0% |
In the first half of 2017 and in 2016 the contributions made by the Group to the Pension Fund were made in cash.
The changes in the fair value of the Pension Fund assets used by entities of the BPI Group or representing securities issued by these entities in the first half of 2017 were as follows:
| Dec. 31, 16 | Acquisitions | Changes in fair value |
Sales | Jun. 30, 17 | |
|---|---|---|---|---|---|
| Fair value of the plan assets: | |||||
| Financial instruments issued by the BPI Group | |||||
| Bonds | 51 386 | 4 053 | 55 439 | ||
| 51 386 | 4 053 | 55 439 | |||
| Premises used by the BPI Group | 193 934 | 510 | 10 405 | 930 | 203 919 |
| 245 320 | 510 | 14 458 | 930 | 259 358 |
The changes in the fair value of the Pension Fund assets used by entities of the BPI Group or representing securities issued by these entities in 2016 were as follows:
| Dec. 31, 15 | Acquisitions | Changes in fair value |
Sales | Dec. 31, 16 | |
|---|---|---|---|---|---|
| Fair value of the plan assets: | |||||
| Financial instruments issued by the BPI Group | |||||
| Bonds | 60 067 | ( 8 681) | 51 386 | ||
| 60 067 | ( 8 681) | 51 386 | |||
| Premises used by the BPI Group | 193 535 | 13 077 | 5 011 | 17 689 | 193 934 |
| 253 602 | 13 077 | ( 3 670) | 17 689 | 245 320 |
As mentioned in Note 2.7, and in accordance with the requirements of IAS 19, the Bank recognizes the effects of re-measuring the net liability (asset) of the defined benefits relating to the pension plans and other post-employment benefits, directly in equity, in the Statement of comprehensive income, in the period in which they occur, including the actuarial gains and losses and deviations relating to the return on the pension fund assets.
The changes in actuarial deviations1 from 2013 to 2016 and in the first half of 2017 were as follows:
| Amount at December 31, 2012 Proforma 2 | ( 89 393) |
|---|---|
| Adjustment in the ACT Table below the estimate | 22 467 |
| Change in the actuarial assumptions | |
| Discount rate and pension increase rate | ( 93 721) |
| Mortality table | ( 42 635) |
| Deviation in pension fund income | 114 986 |
| Deviation in pensions paid | 441 |
| Other | ( 4 452) |
| Amount at December 31, 2013 Proforma | ( 92 307) |
| Adjustment in the ACT Table below the estimate | 18 305 |
| Change in the financial and demographic assumptions | |
| Discount rate and pension and salary increase rate | ( 149 225) |
| Other | ( 2 400) |
| Deviation in pension fund income | 44 594 |
| Deviation in pensions paid | ( 1 516) |
| Other | ( 1 345) |
| Amount at December 31, 2014 Proforma | ( 183 894) |
| Adjustment in the ACT Table below the estimate | 13 830 |
| Change in the financial and demographic assumptions | |
| Other | ( 1 029) |
| Deviation in pension fund income | 138 042 |
| Deviation in pensions paid | ( 88) |
| Deviation resulting from the increase in the national minimum salary | ( 6 000) |
| Other | ( 1 402) |
| Amount at December 31, 2015 (Note 4.30) | ( 40 541) |
| Adjustment in the ACT Table above the estimate | ( 13 017) |
| Change in the financial and demographic assumptions | |
| Mortality table | ( 10 985) |
| Discount rate | ( 129 409) |
| Elimination of automatic promotions - ACT | 9 593 |
| Deviation in pension fund income | ( 48 392) |
| Deviation in pensions paid | ( 1 978) |
| Other 3 | ( 9 262) |
| Amount at December 31, 2016 (Note 4.30) | ( 243 991) |
| Change in the financial and demographic assumptions | |
| Mortability table | ( 63 384) |
| Discount rate | 22 702 |
| Deviation in pension fund income | 78 483 |
| Deviation in pensions paid | ( 3 099) |
| Amount at June 30, 2017 (Note 4.30) | ( 209 289) |
1 Actuarial gains and losses due to differences between the actuarial assumptions and the amounts effectively realised and changes in the actuarial assumptions.
2 Excluding deviations relating to transferred liabilities.
3 Includes (3 920) t. euro relating to deviations of mortality and (2 684) t.euro from incapacity pension.
The consolidated financial statements as of June 30, 2017 and 2016 proforma include the following amounts relating to coverage of the pension liability, in the captions "Interest and financial gain and loss with pensions" (Note 4.39) and "Personnel costs" (Note 4.41):
| Jun. 30, 17 | Dec. 31, 16 Proforma |
|
|---|---|---|
| Interest and financial gain and loss w ith pensions | ||
| Interest cost relating to the liabilities | 14 419 | 15 153 |
| Income on Plan assets computed w ith the discount rate | ( 14 033) | ( 16 497) |
| 386 | ( 1 344) | |
| Personnel costs | ||
| Current service cost | ( 3 423) | ( 1 594) |
| Increase in liabilities for early retirements 1 | 54 349 | 42 995 |
| Compensation for early retirements | 13 551 | 4 155 |
| Change in the pension plan conditions - SAMS | ( 22 215) | |
| Voluntary termination | ( 11 973) | |
| 52 504 | 23 341 |
1 In June 2017 includes 281 m. related to the early retirement program still occurring.
The Members of the Executive Committee of the Board of Directors of Banco BPI, S.A. and the remaining Board Members of Banco Português de Investimento benefit from a supplementary retirement and survivor pension plan. At December 31, 2006 a pension fund was started to cover this liability.
The main actuarial assumptions used to calculate the pension liability were as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Demographic assumptions: | ||
| TV 88/90-H | TV 73/77-H - 2 years 1 | |
| Mortality table | TV 88/90-M - 3 years 2 TV 88/90-M - 3 years 2 | |
| Incapacity table | EKV 80 | EKV 80 |
| Personnel turnover | 0% | 0% |
| Decreases | By mortality | By mortality |
| Financial assumptions: | ||
| Discount rate | ||
| Beginning of the period | 2.00% | 2.5% |
| End of the period | 2.08% | 2.00% |
| Pensionable salary increase rate | 0.5% | 0.5% |
| Pension increase rate 3 | 0.5% | 0.5% |
1 Life expectancy considered was 2 years greater than the mortality table used for men.
2 Life expectancy considered was 3 years greater than the mortality table used for women.
3 Corresponds to the ACT table update rate.
The actual results obtained in relation to the main financial assumptions were as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Pensionable salary increase rate | 1 | 0.40% 2 |
| Pension increase rate | 1 | 0.52% 3 |
| Pension fund income rate | 3.43% 4 | 0,90% |
1 Rate only verified annually.
2 Calculated based on average pensionable salary changes for current Directors in the beginning and in the end of the year.
3 Corresponds to the ACT table update rate.
4 Rate relative to the first half of 2017, not annualized.
At June 30, 2017 and December 31, 2016 the past service liability of this plan and respective coverage by the Pension Fund were as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Total past service liability | ||
| Liability for pensions under payment | 22 629 | 20 732 |
| Of w hich: [increase in the liability resulting from early retirements during | ||
| the period] | [ 705] | |
| Past service liability of current and former Directors | 33 623 | 31 534 |
| 56 252 | 52 266 | |
| Net assets of the Pension Funds | 51 296 | 41 790 |
| Contributions to be transferred to the Pension Fund | 8 900 | |
| Excess/(Insufficient) coverage | ( 4 956) | ( 1 576) |
| Degree of coverage | 91% | 97% |
The average duration of the pension liability of Directors is 11.8 years, including both current and retired Directors.
As of December 31, 2016, the Bank recorded in the caption "Other Liabilities - Contribution owed to the Pension Fund" (Note 4.25) the amount of 8 900 t. Euros relating to the contribution for 2016 made in January 2017, after which the degree of coverage of liabilities at that date amounts to 97%.
The degree of coverage complies with the rule defined in Bank of Portugal Notice 4/2005, which establishes the requirement of full funding of pensions in payment and a 95% minimum level of funding of the past service liability for current employees.
The changes in the degree of coverage of the liabilities in the past five years were as follows:
| Jun. 30, 17 | 2016 | 2015 | 2014 Proforma |
2013 Proforma |
|
|---|---|---|---|---|---|
| Total past service liability | 56 252 | 52 266 | 43 979 | 43 744 | 39 137 |
| Net assets of the Pension Fund | 51 296 | 41 790 | 42 311 | 39 098 | 35 262 |
| Contributions to be transferred to the Pension Fund | 8 900 | 364 | 3 393 | 2 805 | |
| Excess / (insufficient) coverage | ( 4 956) | ( 1 576) | ( 1 304) | ( 1 253) | ( 1 070) |
| Degree of coverage | 91% | 97% | 97% | 97% | 97% |
The changes in the present value of the past service liability of the plan in the first half of 2017 and in 2016 were as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Liability at the beginning of the year | 52 266 | 43 979 |
| Current service cost | 660 | 1 648 |
| Interest cost | 528 | 1 132 |
| Actuarial (gains)/losses on liabilities | 2 856 | 6 888 |
| Early retirements during the period | 705 | |
| Pensions payable (estimate) | ( 763) | ( 1 381) |
| Liability at the end of the period | 56 252 | 52 266 |
At June 30, 2017, the sensitivity analysis to a variation of the main financial assumptions for the entire period covered by the actuarial valuation (and not just a variation in a given year) would result in the following impact on the present value of the past service liability (1):
| (decrease)/increase | |||
|---|---|---|---|
| by % | amount | ||
| Change in the discount rate | |||
| Increase by 0.25% | -3.1% | ( 1 747) | |
| Decrease by 0.25% | 3.3% | 1 838 | |
| Change in the salary increase rate 2 | |||
| Increase by 0.25% | 0.3% | 164 | |
| Change in the pension increase rate 3 | |||
| Increase by 0.25% | 3.2% | 1 798 | |
| Mortality Table | |||
| +1 year | 3.3% | 1 856 |
1 The same calculation method and assumptions used in the calculation of the liabilities were used, only the assumptions under analysis are changing.
2 The increase in the changes in salaries applies only to the pensionable salary pension scheme component according with the Collective Labour Agreement (ACT), without any change in the pensionable salary increase for Social Security purposes, since it is the maximum risk of the salary evolution component.
3 The change in the pension increase applies to pensions and supplements provided by the Bank, as well as pensions transferred to the Social Security, for which the Bank remains responsible for future updates.
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Net assets of the Pension Fund at the beginning of the period | 41 790 | 42 311 |
| Contributions made | 8 900 | 364 |
| Pension Fund income (net) | ||
| Income on Plan assets computed with the discount rate | 505 | 1 072 |
| Deviation of return on assets | 929 | ( 686) |
| Pensions paid by the Pension Fund | ( 828) | ( 1 271) |
| Net assets of the Pension Fund at the end of the period | 51 296 | 41 790 |
In the first half of 2017 and in 2016 there were no assets in the Pension Funds of the Directors being used by BPI Group entities or representative securities issued by these entities.
At June 30, 2017 and December 31, 2016 the net assets of the Banco BPI Directors' Pension Fund were as follows:
| Jun. 30, 17 | Dec. 31, 16 | |||
|---|---|---|---|---|
| Value | % | Value | % | |
| Liquidity | 1 411 | 2,8% | 1 387 | 3,3% |
| Fixed rate bonds | ||||
| Listed | 27 249 | 53,1% | 21 898 | 52,4% |
| Floating rate bonds | ||||
| Listed | 5 613 | 10,9% | 2 875 | 6,9% |
| Shares | ||||
| Listed | 13 183 | 25,7% | 12 278 | 29,4% |
| Real Estate | 384 | 0,7% | 351 | 0,8% |
| Other | ||||
| Listed | 3 456 | 6,8% | 3 001 | 7,2% |
| 51 296 | 100,0% | 41 790 | 100,0% |
Contributions to the Pension Funds in the first half of 2017 and in 2016 were paid in cash.
As mentioned in Note 2.7, and in accordance with the requirements of IAS 19, the Bank recognizes the effects of re-measuring the net liability (asset) of the defined benefit pension plans and other post-employment benefits, directly in equity, in the Statement of Comprehensive Income, in the period in which they occur, including the actuarial gains and losses and deviations in the return on pension fund assets.
The changes in actuarial deviations from 2013 to 2016 and in the first half of 2017 were as follows:
| Amount at December 31, 2012 Proforma | ( 1 432) |
|---|---|
| Change in the financial and demographic assumptions | |
| Discount rate and pension increase rate | ( 2 262) |
| Mortality table | ( 1 192) |
| Deviation in pension fund income | ( 238) |
| Deviation in pensions paid | 236 |
| Other | 1 236 |
| Amount at December 31, 2013 Proforma | ( 3 652) |
| Change in the financial and demographic assumptions | |
| Discount rate pension and salary increase rate | ( 4 897) |
| Changes on the retirement age assumptions | 1 709 |
| Deviation in pension fund income | 816 |
| Deviation in pensions paid | 163 |
| Other | 505 |
| Amount at December 31, 2014 Proforma | ( 5 356) |
| Deviation in pension fund income | ( 68) |
| Deviation in pensions paid | 10 |
| Changes on the retirement age assumptions | 1 029 |
| Other | 459 |
| Amount at December 31, 2015 | ( 3 926) |
| Deviation in pension fund income | ( 686) |
| Deviation in pensions paid | 108 |
| Changes on financial and demographic assumptions | |
| Discount rate | ( 3 038) |
| Other 1 | ( 3 850) |
| Amount at December 31, 2016 (Note 4.30) | ( 11 392) |
| Deviation in pension fund income | 929 |
| Deviation in pensions paid | ( 63) |
| Changes on financial and demographic assumptions | |
| Mortality table | ( 3 414) |
| Discount rate | 558 |
| Amount at June 30, 2017 (Note 4.30) | ( 13 382) |
1 Includes 4 100 t.euro in deviation regarding changes in retirement age for some Directors.
The consolidated financial statements as of June 30, 2017 and December 31, 2016 include the following amounts relating to coverage of the pension liability for Directors, in the captions "Interest and financial gain and loss with pensions" (Note 4.39) and "Personnel costs" (Note 4.41):
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Interest and financial gain and loss w ith pensions | ||
| Interest cost relating to the liabilities | 528 | 561 |
| Income on Plan assets computed w ith the discount rate | ( 505) | ( 545) |
| 23 | 16 | |
| Personnel costs | ||
| Current service cost | 660 | 824 |
| Costs w ith increased liability for early retirement | 705 | |
| 1 365 | 824 |
At June 30, 2017 and December 31, 2016 Banco BPI's share capital amounted to 1 293 063 t. euro, represented by 1 456 924 237 ordinary shares, with no par value.
The Shareholders' General Meeting held on April 26, 2017 approved the following:
These captions are made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Other equity instruments | ||
| Cost of shares to be made available to Group employees | ||
| RVA 2013 | 99 | 578 |
| RVA 2014 | 76 | 63 |
| RVA 2015 | 556 | 545 |
| RVA 2016 | 243 | |
| Costs of options not exercised (premiums) | ||
| RVA 2010 | 369 | |
| RVA 2011 | 37 | |
| RVA 2012 | 903 | 1 249 |
| RVA 2013 | 88 | 1 225 |
| 1 722 | 4 309 | |
| Treasury shares | ||
| Shares to be made available to Group employees | ||
| RVA 2013 | 305 | |
| Shares hedging RVA options | ||
| RVA 2010 | 5 847 | |
| RVA 2011 | 1 904 | |
| RVA 2012 | 374 | 2 558 |
| RVA 2013 | 3 | 27 |
| Other shares | 168 | |
| 377 | 10 809 |
The caption "Other equity instruments" includes accrued share-based payment program (RVA) costs relating to shares to be made available and options not yet exercised.
Details of the share-based Variable Remuneration Programme (RVA) are included in Note 4.48.
The BPI Group's financial statements as of December 31, 2016 reflect 5 544 969 treasury shares, including 168 917 treasury shares to be made available under the RVA programme for which ownership was transferred to the employees on the grant date.
In the first half of 2017 and in 2016 the Bank recorded directly in shareholders' equity losses of (4 026) t. euro and (739) t. euro, respectively, on the sale of treasury shares hedging the variable remuneration (RVA) programme.
This caption is made up as follows
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Revaluation reserves | ||
| Reserves resulting from valuation to fair value of financial assets available for sale | ||
| (Note 4.5): | ||
| Debt Instruments | ||
| Securities | 30 753 | 30 464 |
| Hedging derivatives | ( 33 884) | ( 43 424) |
| Equity Instruments | 25 444 | 26 548 |
| Other | 1 516 | 154 |
| Reserve for foreign exchange difference on investments in foreign entities | ||
| Subsidiary and associated companies | ( 34 855) | ( 38 789) |
| Equity instruments available for sale | ( 1) | 8 |
| Legal revaluation reserve | 703 | 703 |
| ( 10 324) | ( 24 336) | |
| Deferred tax reserve | ||
| Resulting from valuation to fair value of financial assets available for sale: | ||
| Tax assets | 2 687 | 4 912 |
| Tax liabilities | ( 4 217) | ( 2 090) |
| Resulting from foreign exchange differences on investments in foreign entities | ||
| Tax assets | 4 | |
| ( 1 526) | 2 822 | |
| ( 11 850) | ( 21 514) |
Deferred taxes have been calculated in accordance with current legislation and correspond to the best estimate of the impact of recognising the unrealized gains and losses included in the caption "Revaluation Reserves".
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Legal reserve | 130 081 | 104 499 |
| Merger reserve | 2 530 | 2 530 |
| Consolidation reserves and retained earnings | 826 070 | 766 771 |
| Other reserves | 739 073 | 508 844 |
| Actuarial deviations - Pensions liabilities | ||
| Associated with the transferred liabilities | ( 193 538) | ( 193 538) |
| Associated with the liabilities that remain with the Bank | ( 222 670) | ( 255 383) |
| Actuarial deviations - final career premium | ( 726) | ( 776) |
| Taxes related to actuarial deviations | 105 212 | 114 750 |
| Loss on treasury shares | ( 9 110) | ( 5 084) |
| Taxes relating to gain on treasury shares | 2 809 | 1 706 |
| 1 379 731 | 1 044 319 |
In accordance with Article 97 of the General Regime for Credit Institutions and Financial Companies, approved by Decree-Law 298/91 of December 31 and amended by Decree-Law 201/2002 of September 25, Banco BPI must appropriate at least 10% of its net income each year to a legal reserve until the amount of the reserve equals the greater of the amount of share capital or the sum of the free reserves plus retained earnings.
As mentioned in Note 2.8, with application of the new ACT in 2016, a final career premium was set corresponding to 1.5 times the effective monthly remuneration of the employee at the time of termination of the labour contract due to retirement. Considering that the final career premium corresponds to a post-employment benefit in accordance with IAS 19, the corresponding actuarial deviations are recognized through equity.
At June 30, 2017 and December 31, 2016 the share premium account and legal reserve of the BPI Group companies which, under the applicable regulations, may not be distributed, amounted to 194 466 t. euro and 156 619 t. euro, respectively which, weighted by Banco BPI's effective participation percentage in these companies, amounted to 93 184 t. euro and 77 226 t. euro, respectively. These reserves are included in the captions consolidation reserves and retained earnings and revaluation reserves.
The caption "Consolidation reserves" at June 30, 2017 and December 31, 2016 includes 15 023 t. euro and 11 656 t. euro, respectively, relating to the amount of the revaluation reserves of the companies recorded in accordance with the equity method, weighted by the BPI Group's (effective) participation in them.
This caption is made up as follows:
| Balance | Income Statement | |||
|---|---|---|---|---|
| Jun. 30, 17 | Dec. 31, 16 | Jun. 30, 17 | Jun. 30, 16 Proforma |
|
| Non-controlling interests: | ||||
| Banco de Fomento Angola, S.A. | 466 273 | 82 049 | ||
| BPI Capital Finance Ltd | 1 754 | 1 775 | 24 | 23 |
| 1 754 | 468 048 | 24 | 82 072 |
In December 2008, as part of the sale of 49.9% of BFA´s capital to Unitel, a shareholders´ agreement between Banco BPI and Unitel as regards BFA, was entered into. The agreement is valid for a period of 20 years as from the date of its signature (which took place on December 9, 2008), being automatically renewable for similar periods, unless terminated by either party up to the end of the fifteenth year of the initial term or the resulting ongoing renewal period. The agreement contains, among other provisions, rules on the composition of the governing bodies and on the transfer of BFA´s shares, rules which, in the latter case, include a reciprocal preference right over the onerous transfer of BFA´s shares.
As part of the sale of 2% of BFA share capital to Unitel, which took place on January 5, 2017, Banco BPI and Unitel entered into a new Shareholders' Agreement relating to BFA. This new Shareholders Agreement came into effect on the date of the sale. The full implementation of the new Shareholders' Agreement will automatically put the term to the Shareholder Agreement of 2008, without the need for any additional formality.
Non-controlling interests in BPI Capital Finance at June 30, 2017 and December 31, 2016 includes respectively 1 731 t. euro and 1 756 t. euro, relating to preference shares:
| Jun. 30, 17 | Dec. 31, 16 | |||||
|---|---|---|---|---|---|---|
| Issued | Repurchased | Balance | Issued | Repurchased | Balance | |
| "C" Series Shares | 250 000 | ( 248 269) | 1 731 | 250 000 | ( 248 244) | 1 756 |
| 250 000 | ( 248 269) | 1 731 | 250 000 | ( 248 244) | 1 756 |
The C Series preference shares, with a nominal value of 1 000 euro each, issued in August 2003, entitle the holders to a non-cumulative preference dividend, if and when declared by the Directors of BPI Capital Finance, Ltd., at an annual rate equal to the three month Euribor rate plus a spread of 1.55 percentage points up to August 12, 2013 and thereafter to a non-cumulative preference dividend at a rate equal to the three month Euribor rate plus a spread of 2.55 percentage points. The dividends are payable quarterly on February 12, May 12, August 12 and November 12 of each year. The payment of dividends and redemption of the preference shares are guaranteed by Banco BPI.
BPI Capital Finance, Ltd. will not pay any dividend on the preference shares if, during the year or quarter in progress, such dividend plus amounts already paid exceed Banco BPI's distributable funds.
The C Series preference shares are redeemable in whole or in part at their nominal value, at the option of BPI Capital Finance, Ltd. on any dividend payment date as from August 2013, subject to prior consent of the Bank of Portugal and Banco BPI. The C series preference shares are also redeemable in whole, but not in part, at the option of BPI Capital Finance, Ltd, with prior approval of the Bank of Portugal and Banco BPI, if a disqualifying capital event or tax event occurs.
These shares are subordinate to all liabilities of Banco BPI and "pari passu" with any other preference shares that might be issued by the Group in the future.
This caption is made up as follows:
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Guarantees provided and other contingent liabilities | ||
| Guarantees and sureties | 1 245 023 | 1 294 856 |
| Stand-by letters of credit | 50 217 | 62 954 |
| Documentary credits | 116 911 | 108 316 |
| Sureties and indemnities | 82 | 82 |
| 1 412 233 | 1 466 208 | |
| Assets pledged as collateral | 7 622 109 | 7 703 222 |
| Commitments to third parties | ||
| Irrevocable commitments | ||
| Options on assets | 6 | 8 271 |
| Irrevocable credit lines | 473 | 1 356 |
| Securities subscription | 411 340 | 409 638 |
| Term commitment to make annual contributions to the Deposit | ||
| Guarantee Fund | 38 714 | 38 714 |
| Term liabilities for annual contributions to the Resolution Fund | 4 640 | 2 636 |
| Potencial responsability for the investor compensation scheme | ||
| 10 118 | 9 910 | |
| Other irrevocable commitments | 4 536 | 531 |
| Revocable commitments | 2 754 422 | 2 921 423 |
| 3 224 249 | 3 392 479 | |
| Responsibility for services provided | ||
| Deposit and safeguard of assets | 29 450 616 | 26 297 858 |
| Amounts for collection | 702 569 | 187 091 |
| Assets managed by the institution | 7 597 350 | 6 367 046 |
| 37 750 535 | 32 851 995 |
The structure, by sector, of the guarantees provided by the BPI Group at June 30, 2017 and December 31, 2016 is as follows:
| Jun. 30, 17 | Dec. 31, 16 | |||
|---|---|---|---|---|
| Value | % | Value | % | |
| Domestic activity: | ||||
| Agriculture, animal production and hunting | 3 906 | 0,3 | 3 278 | 0,2 |
| Forestry and forest operations | 435 | 526 | ||
| Fishing | 285 | 176 | ||
| Mining | 3 221 | 0,2 | 3 179 | 0,2 |
| Beverage, tobacco and food | 22 910 | 1,6 | 43 303 | 3,0 |
| Textiles and clothing | 12 452 | 0,9 | 11 853 | 0,8 |
| Leather and related products | 1 995 | 0,1 | 1 673 | 0,1 |
| Wood and cork | 16 200 | 1,1 | 18 123 | 1,2 |
| Pulp, paper, cardboard and graphic arts | 9 578 | 0,7 | 9 543 | 0,7 |
| Coke, refined petroleum products and fuel pellets | 746 | 0,1 | 767 | 0,1 |
| Chemicals, synthetic or artificial fibres, except | ||||
| pharmaceutical products | 7 692 | 0,5 | 8 957 | 0,6 |
| Base pharmaceutical products and pharmaceutical mixtures | 625 | 2 215 | 0,2 | |
| Rubber and plastic materials | 4 180 | 0,3 | 7 896 | 0,5 |
| Other mineral non-metallic products | 61 554 | 4,4 | 28 051 | 1,9 |
| Metalw orking industries | 33 212 | 2,4 | 38 271 | 2,6 |
| Computers, electronic, electrical and optical equipment | 13 754 | 1,0 | 11 981 | 0,8 |
| Transport equipment | 22 442 | 1,6 | 24 969 | 1,7 |
| Other manufacturing industries | 7 832 | 0,6 | 8 420 | 0,6 |
| Electricity, gas and w ater | 38 839 | 2,8 | 35 887 | 2,4 |
| Water treatment and collection | 42 681 | 3,0 | 49 181 | 3,4 |
| Construction | 251 953 | 17,8 | 278 586 | 19,0 |
| Wholesale and retail trade; motor vehicle and motorcycle | ||||
| repairs | 188 315 | 13,3 | 199 299 | 13,6 |
| Transport and storage | 180 654 | 12,9 | 176 409 | 12,1 |
| Restaurants and hotels | 24 067 | 1,7 | 26 514 | 1,8 |
| Information and communication activities | 68 494 | 4,9 | 78 368 | 5,3 |
| Investment holding companies | 10 945 | 0,8 | 8 745 | 0,6 |
| Financial intermediation, except for insurance and pension | ||||
| funds | 71 106 | 5,0 | 34 259 | 2,3 |
| Insurance, reinsurance and pension funds, except for | ||||
| mandatory social security | 1 018 | 0,1 | 973 | 0,1 |
| Auxiliary activities to financial services and insurance | 301 | 425 | ||
| Real estate | 22 956 | 1,6 | 20 516 | 1,4 |
| Consulting, scientific, technical and similar activities | 172 957 | 12,2 | 194 434 | 13,3 |
| Administrative and support services | 15 420 | 1,1 | 15 166 | 1,0 |
| Public administration, defence and mandatory social security | 6 737 | 0,5 | 8 441 | 0,6 |
| Education | 206 | 206 | ||
| Healthcare and w elfare | 13 308 | 0,9 | 9 391 | 0,6 |
| Leisure, cultural and sports activities | 8 894 | 0,6 | 36 053 | 2,5 |
| Other service companies Individuals |
14 660 | 1,0 | 15 825 | 1,1 |
| Other | 55 703 | 3,9 | 54 349 | 3,7 |
| 1 412 233 | 100,0 | 1 466 208 | 100,0 |
At December 31, 2016 the amount of Guarantees provided by BFA present the following structure by sector (in t. euro):
| Dec. 31, 16 | |||
|---|---|---|---|
| Value | % | ||
| Credit and financial institutions | 36 251 | 17.4 | |
| Non financial enterprises | 171 788 | 82.6 | |
| Individuals | 81 | ||
| 208 120 | 100.0 |
The caption "Assets pledged as collateral" at June 30, 2017 and December 31, 2016 includes:
Additionally, at June 30, 2017 and December 31, 2016 the caption "Assets pledged as collateral" includes, respectively, 855 000 t. euro and 831 905 t. euro of securities and 30 087 t. euro and 32 617 t. euro of loans, pledged as collateral to the European Investment Bank.
The caption "Commitments to third parties - Options on assets" at June 30, 2017 and December 31, 2016 corresponds to share options issued by the BPI Group under the share-based payments programme (RVA).
The caption "Commitments to third parties - Securities subscription" at June 30, 2017 and December 31, 2016 corresponds to Banco BPI's commitment to subscribe for commercial paper if the securities issued are not totally or partially subscribed for by the market.
The caption "Term commitment to make annual contributions to the Deposit Guarantee Fund" at June 30, 2017 and December 31, 2016 corresponds to BPI's legally required irrevocable commitment, to pay to the Fund, upon its request, the amount of the annual contributions not yet paid.
The caption "Commitment to the Investor Indemnity System" at June 30, 2017 and December 31, 2016 corresponds to BPI's irrevocable commitment, legally required under the applicable legislation, to pay to the System, if required to do so, its share of the amounts necessary to indemnify investors.
At June 30, 2017 the BPI Group managed the following third party assets:
| Investment Funds and PPRs | 4 193 900 |
|---|---|
| Pension Funds 1 | 2 620 856 |
1 Includes the Group companies' Pension Funds.
This caption is made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Interest and similar income | ||
| Interest on deposits with banks | 42 | 30 |
| Interest on placements with credit institutions | 4 010 | 2 061 |
| Interest on loans to customers | 146 002 | 153 565 |
| Interest on credit in arrears | 3 082 | 3 345 |
| Interest on securities held for trading and available for sale | 10 740 | 20 216 |
| Interest on securitised assets not derecognised | 41 881 | 49 305 |
| Interest on derivatives | 20 986 | 42 470 |
| Interest on debtors and other aplications | 13 | 573 |
| Other interest and similar income | 1 562 | 1 572 |
| 228 318 | 273 137 | |
| Interest and similar expense | ||
| Interest on resources | ||
| Of central banks | ( 1 143) | 663 |
| Of other credit institutions | 2 769 | 2 119 |
| Deposits and other resources of customers | 10 349 | 33 282 |
| Debt securities | 1 052 | 5 584 |
| Interest from short selling | 522 | 663 |
| Interest on derivatives | 23 293 | 45 783 |
| Interest on liabilities relating to assets not derecognised on securitised | ||
| operations | 3 584 | 4 256 |
| Interest on subordinated debt | 5 014 | 547 |
| Other interest and similar expenses | 548 | 1 307 |
| 45 988 | 94 204 |
This caption is made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Income from financial instruments | ||
| Interest | 319 | 529 |
| Gains and losses on financial instruments | 34 092 | ( 46 836) |
| Gains and losses on capitalisation insurance - unit links | ( 34 411) | 46 307 |
| Management and redemption commission | 6 434 | 7 051 |
| 6 434 | 7 051 |
This caption is made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Conduril | 92 | 92 |
| SIBS | 2 788 | |
| Viacer | 2 366 | 1 960 |
| Via Litoral | 936 | 1 663 |
| Others | 219 | 195 |
| 6 401 | 3 910 |
This caption is made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Commission received relating to amortised cost | ||
| Loans to customers | 13 965 | 13 516 |
| Other operations | 634 | 539 |
| Commission paid relating to amortised cost | ||
| Loans to customers | ( 4 207) | ( 3 308) |
| Other operations | ( 48) | ( 189) |
| 10 344 | 10 558 |
This caption is made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Premiums | 91 024 | 129 751 |
| Income from financial instruments | 14 100 | 24 933 |
| Cost of claims, net of reinsurance | ( 224 248) | (1 126 567) |
| Changes in technical provisions, net of reinsurance | 133 238 | 996 612 |
| Participation in results | ( 6 677) | ( 11 234) |
| 7 437 | 13 495 |
This caption includes the result of capitalization insurance with a discretionary participation feature (IFRS 4). Participation in the results of capitalization insurance is attributed at the end of each year and is calculated in accordance with the technical basis of each product, duly approved by the Insurance and Pension Funds Authority (Note 2.11).
| This caption is made up as follows: | |||
|---|---|---|---|
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Commissions received | ||
| On guarantees provided | 6 227 | 6 858 |
| On commitments to third parties | 1 102 | 1 215 |
| On insurance brokerage services | 22 214 | 22 111 |
| On banking services rendered | 95 448 | 87 875 |
| On operations performed on behalf of third parties | 6 989 | 7 627 |
| Other | 263 | 431 |
| 132 243 | 126 117 | |
| Commissions paid | ||
| On guarantees received | 28 | 30 |
| On financial instrument operations | 98 | 61 |
| On banking services rendered by third parties | 12 432 | 12 810 |
| On operations realised by third parties | 1 876 | 2 175 |
| Other | 391 | 279 |
| 14 825 | 15 355 | |
| Other income, net | ||
| Refund of expenses | 14 848 | 14 723 |
| Income from banking services | 3 129 | 3 619 |
| Charges similar to fees | ( 3 499) | ( 4 150) |
| 14 478 | 14 192 |
At June 30, 2017 and 2016 the caption "Refund of expenses" includes 9 917 t. euro and 9 985 t. euro, respectively, regarding the collection of account maintenance costs.
At June 30, 2017 and 2016 commissions received for insurance brokerage services or reinsurance are made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Life insurance | ||
| Housing | 10 421 | 10 193 |
| Consumer | 988 | 1 111 |
| Other | 3 164 | 3 439 |
| 14 573 | 14 743 | |
| Non-life insurance | ||
| Housing | 2 848 | 2 763 |
| Consumer | 394 | 470 |
| Other | 4 399 | 4 135 |
| 7 641 | 7 368 | |
| 22 214 | 22 111 |
Remuneration for insurance brokerage services were received fully in cash, and about 98% of the commission relates to insurance brokerage services for Allianz.
This caption is made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Gain and loss on operations at fair value | ||
| Foreign exchange gain, net | 4 263 | 4 823 |
| Gain and loss on financial assets held for trading | ||
| Debt instruments | ( 4 425) | 1 197 |
| Equity instruments | 38 280 | ( 48 897) |
| Other securities | ( 268) | 407 |
| Gain and loss on trading derivative instruments | ( 24 107) | 42 058 |
| Gain and loss on other financial assets valued at fair value through profit | ||
| or loss | 13 | 1 |
| Gain and loss on financial liabilities held for trading | ( 329) | 206 |
| Gain and loss on the revaluation of assets and liabilities hedged by | ||
| derivatives | ( 13 386) | 29 025 |
| Gain and loss on hedging derivative instruments | 13 241 | ( 29 618) |
| Other gain and loss on financial operations | 1 093 | 169 |
| 14 375 | ( 629) | |
| Gain and loss on assets available for sale | ||
| Gain and loss on the sale of loans and advances to customers | 29 | 1 229 |
| Gain and loss on financial assets available for sale | ||
| Debt instruments | 811 | 252 |
| Equity instruments | ( 1) | 22 945 |
| Other securities | ( 63) | 29 |
| 776 | 24 455 | |
| Interest and financial gain and loss with pensions | ||
| Interest cost | ( 14 947) | ( 15 714) |
| Income on plan assets computed with the discount rate | 14 538 | 17 042 |
| ( 409) | 1 328 |
The captions "Gain and loss on trading derivative instruments" and "Gain and loss on financial assets held for trading – equity instruments" at June 30, 2017 and 2016 include (15 017) t. euro and 38 370 t. euro, respectively, related to equity swaps contracted with Customers, hedged with shares. The remaining amounts in these captions are related mainly with derivative operations with customers and their respective coverage with the market.
The caption "Other gain and loss on financial operations" at June 30, 2017 and 2016, includes 807 t. euro and (25) t. euro, respectively, relating to gains on the repurchase of financial liabilities on securitization operations. The gain of 22 945 t. euro in the caption "Gain and loss on financial assets available for sale – Equity instruments" at June 30, 2016, refers to the impact of the public tender offer for the acquisition of 100% of the share capital of Visa Europe Limited by Visa Inc. (Note 4.5.).
This caption is made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Operating income | ||
| Gains on tangible assets held for sale | 3 159 | 2 781 |
| Gains on other tangible assets | 6 973 | 2 656 |
| Gains in investments in subsidiaries and associated companies | 9 333 | |
| Other operating income | 2 547 | 3 662 |
| 22 012 | 9 099 | |
| Operating expenses | ||
| Subscriptions and donations | 1 526 | 1 796 |
| Contributions to the Deposit Guarantee Fund | 18 | 12 |
| Contributions to the Resolution Fund | 3 876 | 3 205 |
| Contributions to the Single Resolution Fund | 11 355 | 14 939 |
| Contribution to the Investor Indemnity System | 10 | 8 |
| Loss on tangible assets held for sale | 2 484 | |
| Loss on other tangible and intangible assets | 6 697 | 759 |
| Loss in investments in subsidiaries and associated companies | 182 121 | |
| Other operating expenses | 2 013 | 2 211 |
| 207 616 | 25 414 | |
| Other taxes | ||
| Indirect taxes | 1 678 | 1 505 |
| Direct taxes | 3 756 | 1 731 |
| 5 434 | 3 236 |
On June 30, 2017, this caption includes the following values regarding the sale of 2% and the deconsolidation of Banco de Fomento Angola (note 4.9):
IFRIC 21 identifies the obligating event for the recognition of a liability as the activity that triggers the payment of the tax in accordance with the relevant legislation. As a result of the entry into force of IFRIC 21, and based on the interpretation of the legislation in force, in 2015 Banco BPI changed its accounting policy for the recognition of the periodic contributions to the Deposit Guarantee Fund and Resolution Fund, with the expense being fully recognized upon receipt of the payment notifications for the year which, according to the legal terms, is in the first half year.
In April 2017 and 2016 Banco BPI made contributions to the Resolution Fund in the amount of 3 876 t. euro and 3 205 t. euro, in accordance with the Article 14 of Law 23-A/2015 of March 26, in conjunction with the regime established by Decree-Law 24/2013 of February 19.
In May 2017 and 2016, Banco BPI paid contributions of 11 354 t. euro and 14 937 t. euro, respectively, to the Single Resolution Fund. In 2017 and 2016, the total contribution attributable to Banco BPI amounted to 13 358 t.euro and 17 613 t. euro, respectively, the Bank having decided to constitute an irrevocable commitment for the difference (Note 4.14 and 4.32) which was determined by the Single Resolution Board in accordance with the methodology established in Delegated Resolution (EU) 2015/63 of the Commission of October 21, 2014 and the conditions established in Execution Regulation (EU) 2015/81 of the Council of December 19, 2014.
This caption is made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Remuneration | 106 088 | 114 138 |
| Long service premium (Note 4.25) | 3 | ( 26 256) |
| Final career premium (Note 4.25) | 258 | 5 724 |
| Pension costs (Note 4.26) | ( 2 587) | ( 613) |
| Changes in the conditions of the pension plan - SAMS (Note 4.26) | ( 22 215) | |
| Other mandatory social costs | 27 094 | 30 255 |
| Early retirements and termination programs | ||
| Early retirements (Note 4.26) | 68 605 | 47 150 |
| Termination | 37 753 | |
| Other personnel costs | 4 751 | 4 093 |
| 241 965 | 152 276 |
The caption "Remuneration" at June 30, 2017 and 2016 includes the following costs relating to remuneration granted to the members of Banco BPI's Board of Directors:
This caption is made up as follows:
| Jun.30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| General administrative costs | ||
| Supplies | ||
| Water, energy and fuel | 3 485 | 4 170 |
| Consumable material | 1 089 | 1 222 |
| Other | 262 | 328 |
| Services | ||
| Rent and leasing | 20 036 | 21 001 |
| Communications and computer costs | 16 023 | 16 412 |
| Travel, lodging and representation | 2 438 | 2 788 |
| Advertising and publishing | 4 751 | 5 101 |
| Maintenance and repairs | 6 420 | 6 524 |
| Insurance | 1 408 | 1 597 |
| Fees | 2 426 | 2 123 |
| Legal expenses | 2 716 | 2 856 |
| Security and cleaning | 1 942 | 2 002 |
| Information services | 3 007 | 2 803 |
| Temporary labour | 1 320 | 1 424 |
| Studies, consultancy and auditing | 2 638 | 7 701 |
| SIBS | 7 311 | 7 508 |
| Other services | 8 441 | 8 115 |
| 85 713 | 93 675 |
At June 30, 2017 and 2016 Proforma, income tax recognised in the statement of income, as well as the tax burden, measured by the relationship between the tax charge and profit before tax, were as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Current income tax | ||
| For the period | 11 579 | 25 219 |
| Correction of prior years | ( 24) | ( 646) |
| 11 555 | 24 573 | |
| Deferred tax | ||
| Recognition and reversal of temporary differences | 19 493 | ( 26 776) |
| Change in tax rate | 23 | |
| On tax losses carried forw ard 1 | 9 632 | 13 525 |
| 29 125 | ( 13 228) | |
| Contribution over the banking sector | 7 069 | 11 128 |
| Total tax charged to the statement of income | 47 749 | 22 473 |
| Net income before income tax2 | ( 174 663) | 25 261 |
| Tax burden | -27.3% | 89.0% |
1 At June 30, 2017, it includes the use of tax losses carried forward amounting to 82 864 t. euro pursuant to Article no. 3 of the Regulatory Decree no. 5/2016 of November 18. This utilization was made in addition to the amount recorded in the closing accounts for 2016 (350 078 t. euros) and only occurred during the 2016 tax return to the authorities (May 2017).
2 Considering net income of the BPI Group plus income tax and income attributable to non-controlling interests less the earnings of associated companies (not consolidated).
In the first half of 2017 and 2016 Proforma the Bank recorded directly in retained earnings, income tax of 8 435 t. euro and (32 887) t. euro, respectively, resulting from actuarial deviations in pensions for the period, net gain/loss on treasury shares recognized in equity and cancellation of Bank of Portugal Notice 3/95.
Current taxes are calculated based on the nominal tax rates legally in force:
| Jun. 30, 17 | Jun. 30, 16 Proforma | |||
|---|---|---|---|---|
| Net income before income tax 1 |
Current tax rate | Net income before income tax |
Current tax rate | |
| Companies w ith income tax rate of 21% and Surcharge betw een [1.5% ; 8.5%[ | ( 1 875) | 22,9% | 24 539 | 26,0% |
| Investment funds2 | 722 | |||
| ( 1 875) | 22,9% | 25 261 | 25,2% | |
| 1 Excluding impacts related with BFA sale (2%) and deconsolidation. |
Applicable regime under the provisions of article 22 of the EBF.
Deferred tax assets and liabilities correspond to the amount of tax recoverable and payable in future periods resulting from temporary differences between the amount of assets and liabilities on the balance sheet and their tax base. Deferred tax assets are also recognized on tax losses carried forward and tax credits.
Deferred tax assets and liabilities are calculated using the tax rates approved for the periods in which they are expected to reverse.
Reconciliation between the nominal rate of income tax and the tax burden in June 2017 and 2016 Proforma, as well as between the tax cost/income and the product of multiplying the accounting profit by the nominal tax rate are as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma | |||
|---|---|---|---|---|
| Tax rate | Amount | Tax rate | Amount | |
| Net income before income tax | ( 174 663) | 25 261 | ||
| Impact of the sale of 2% of BFA | ( 172 788) | |||
| Net income before tax adjusted fo the sale of 2% of BFA | ( 1 875) | 25 261 | ||
| Income tax computed based on the nominal tax rate | 22,9% | ( 430) | 25,2% | 6 376 |
| Effect of tax rates applicable to foreign branches | -37,3% | 699 | 0,1% | 16 |
| Capital gain and impairment of investments (net) | -48,7% | 913 | -3,8% | ( 950) |
| Capital gain of tangible assets (net) | 47,7% | ( 894) | -3,0% | ( 749) |
| Non taxable dividends | 76,2% | ( 1 428) | -0,5% | ( 126) |
| Taxable temporary differences on subsidiary and associated companies | -447,6% | 8 393 | 14,3% | 3 612 |
| Tax benefits | 8,4% | ( 157) | -1,1% | ( 283) |
| Change of the tax regime of provisions 1 | -928,1% | 17 401 | ||
| Impairment and provision for loans | 695,5% | ( 13 040) | -2,0% | ( 517) |
| Non-deductible pension costs | 68,9% | ( 1 292) | 1,8% | 459 |
| Correction of prior year income taxes | 1,3% | ( 24) | -2,6% | ( 646) |
| Extraordinary investment tax credit | 4,2% | 1 065 | ||
| Differenctial tax rate on deferred charges 2 | 7,0% | 1 762 | ||
| Correction of prior years tax losses carried forw ard | 410,7% | ( 7 701) | -0,3% | ( 88) |
| Contribution over the banking sector | -377,0% | 7 069 | 44,1% | 11 128 |
| Autonomous taxation | -38,0% | 712 | 3,6% | 903 |
| Other non taxable income and expenses | 105,7% | ( 1 982) | 2,0% | 511 |
| -439,4% | 8 239 | 89,0% | 22 473 | |
| Taxes associated w ith the sale (2%) and deconsolidation of BFA | 39 510 | |||
| -27,3% | 47 749 | 89,0% | 22 473 |
(1) In June 2017, it corresponds to changes made in the fiscal report for the 2016 fiscal year and result from the application of paragraph 3 of Regulatory Decree No. 5/2016
(2) The effective current income tax rate may differ from that used to calculated deferred taxes.
On January 1, 2016, Bank of Portugal Notice No. 5/2015 came into force. This regulation establishes that entities subject to the supervision of Bank of Portugal should prepare their separate financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). For this purpose, impairment losses for loans are determined and recorded in accordance with IAS 39 - Financial instruments: recognition and measurement, replacing the previous recording of provisions established by the Bank of Portugal Notice 3/95.
de 18 de Novembro.
Regulatory Decree no. 5/2016 of November 18, introduced a tax regime applicable to the transition to IFRS referred to above. This Decree-Law establishes the following:
In this context, Regulatory Decree No. 5/2016 contains a transitional rule that established the possibility for the Bank to reduce to the balance of tax losses generated in periods of taxation started on or after January 1, 2012 and not yet used, any positive difference between the amount of provisions recognized under Bank of Portugal Notice 3/95 and the amount of impairment losses recognized under IAS 39 on January, 1 2016.
The Bank decided to apply the aforementioned transitional rule, with a positive difference calculated as of January 1, 2016 between the amount of provisions for impairment losses established under Bank of Portugal Notice 3/95 and the impairments constituted on January, 1 2016 for the same credits in the amount of 432 942 t. euro (350 078 t. euro considered in the 2016 financial statements and an additional 82 864 t. euro on the tax return for the 2016 financial year, as a result of changes in the interpretation of the referred standard), which was not accounted as a positive equity change for tax purposes in 2016, since it was fully deducted from the accumulated losses from previous years at that date (489 993 t. euro) which had been generated in 2013 and 2014. The application of this rule allowed for the annulment of 90 918 t. euro of deferred tax assets regarding tax losses carried forward, under the scope of Banco BPI non-consolidated basis.
In addition, the combination of these legislative changes implied the application of the legal disposition included in article 4 of Law no. 61/2014, of August 25. This disposition establishes a rule that does not allow for the expenses and negative equity changes that generated deferred tax assets guaranteed by the Portuguese State until December 31, 2015 to be subject to a tax deduction that entails the determination of tax loss for the year.
After all the required tax adjustments, in 2016 the final value of taxable losses was 36 325 t. euro, which implied the constitution of deferred tax assets of 7 628 t. euro included in the caption "Previous exercises corrections tax losses" in the map above.
In 2014, the Bank adhered to the Special Regime Applicable to Deferred Tax Assets (REAID) approved by Law no. 61/2014, of August 26. The special regime regards to deferred tax assets that result from the non-deduction of expenses and negative equity changes with impairment losses for loans and post-employment or long-term employee benefits. Expenses that were not considered for the determination of taxable income in the period in which they were incurred or recorded and which resulted in the recognition of deferred tax assets for the aforementioned realities are eligible for this regime.
Under the terms of REAID, deduction of losses or equity changes that generated deferred tax assets until December 31, 2015 protected under this regime can only occur up to limit of the taxable income for the year and thus cannot contribute to the tax loss formation, being deducted in the following years for which taxable income is determined, provided the same limit is complied with.
Also according to REAID, the book value of the mentioned deferred tax assets is converted into tax credit when the taxable entity determines a negative net income or enters into bankruptcy/ insolvency. The amount of deferred tax assets to be converted into tax credits corresponds to a ratio between negative net income and shareholders' equity in the same period, excluding net income. In the scenario of the conversion of deferred tax assets into a tax credit, a compensatory scheme is created that provides for the creation of a special reserve in the amount of the tax credit, increased by 10% (may be subject to adjustments) and the simultaneous creation of conversion rights granted to the Portuguese State. The exercise of the conversion rights by the Portuguese State implies an increase of the share capital of the taxable entity by means of the incorporation of the special reserve and the issuance of new shares allocated free of charge to the Portuguese State (the shareholders, at the date of the creation of the conversion rights granted to the Portuguese State have the option to acquire such rights in proportion to their respective shareholdings).
This regime applies to expenses accounted in the tax periods beginning on January 1, 2015 and to deferred tax assets which were recorded in the annual accounts referred to December 31, 2014. However, Law No 23/2016, of August 19, provided for the termination of the application of this regime to deferred tax assets arising from expenses and negative equity changes recognized in the taxation periods after January 1, 2016, safeguarding deferred tax assets accounted for in previous years.
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Deferred tax | ||
| Assets (Nota 4.13) | 443 188 | 442 707 |
| Liabilities (Nota 4.23) | ( 60 601) | ( 18 254) |
| 382 587 | 424 453 | |
| Recorded by corresponding entry to: | ||
| Retained earnings | 332 729 | 325 206 |
| Other reserves - Actuarial deviations | 80 509 | 107 357 |
| Fair value reserve (Note 4.29) | ( 1 526) | ( 2 245) |
| Financial instruments available for sale | ( 1 526) | 2 822 |
| Discontinued operations | ( 5 067) | |
| Net income | ( 29 125) | ( 5 865) |
| 382 587 | 424 453 |
At June 30, 2017 and December 31, 2016, deferred tax assets and liabilities were as follows:
In accordance with IAS 12 – Income taxes, the recognition of deferred tax assets requires the probable existence of future taxable income. As such, Banco BPI prepared future taxable income projections to support the deferred tax assets accounted for as at June 30, 2017. These projections were prepared considering the scope of the Capital and Funding Plans defined in the Instruction 18/2015 of the Bank of Portugal, assuming the maintenance of the tax regime of Notice 3/95 of the Bank of Portugal for impairment losses for loans.
As of June 30, 2017, the consolidated balance sheet of BPI Group includes 443 188 t. euros of deferred tax assets, of which:
| Date of origin | Entity | Tax losses carried forward |
Deferred asset taxes |
Number of years available for use |
Limit end date |
|---|---|---|---|---|---|
| 2014 | Banco BPI , SA | 57 052 | 11 981 | 12 | 2026 |
| 2016 | Banco BPI , SA | 36 325 | 7 629 | 12 | 2028 |
| 2016 | Banco Português de Investimento, SA | 2 779 | 584 | 12 | 2028 |
| 2016 | BPI Madeira , SGPS | 81 | 17 | 12 | 2028 |
| [2012 , 2017] | BPI Moçambique - Soc. Investimentos | 2 310 | 739 | 5 | [2017 , 2022] |
| 98 547 | 20 950 |
Banco BPI made use of 90 918 t.euro of deferred tax assets for tax losses carried forward of 2013 and 2014, within the framework of Regulatory-Decree No. 5/2016 of November 18.
The changes in deferred taxes in the first half of 2017 were as follows:
| Ba lan at ce De 31 16 c. , |
Co din ntr to t rre sp on g e y ne inc om e |
Co din ntr to rre sp on g e y res erv es d r eta ine d e ing an arn s |
Ba lan at ce Ju 30 17 n. , |
||||
|---|---|---|---|---|---|---|---|
| Co sts |
Inc om e |
Inc rea ses |
De cre ase s |
||||
| De fer red ta ts x a sse |
|||||||
| Tax lo ss es |
30 582 |
( 9 7 74 ) |
82 | 60 | 20 950 |
||
| Tax lo rrie d fo rd ss es ca rwa |
70 47 1 |
( 9 3 73 ) |
15 939 |
038 77 |
|||
| Tax ed vis ion nd imp air nt pro s a me |
171 51 2 |
( ) 3 8 66 |
167 64 6 |
||||
| Tax de fer ral of t he imp act of the tra nsf of sio er pen ns |
19 713 |
( 2) |
( 756 ) |
18 955 |
|||
| Ac tua rial de via tio ns |
43 872 |
( 4 0 92 ) |
( 29 5) |
39 48 5 |
|||
| Ac tua rial de via tio afte r 2 01 1 ns |
55 005 |
( 4 9 18) |
17 | ( 9 5 91 ) |
40 513 |
||
| Vo lun tar ter min atio y n p rog ram |
11 61 2 |
11 612 |
|||||
| Ea rly irem ret ent s |
31 86 1 |
10 815 |
42 676 |
||||
| Lon ice ium g s erv pr em |
1 8 48 |
( 4) |
( 150 ) |
13 | 1 7 07 |
||
| Tax r d ivid end es ove s |
11 214 |
6 3 29 |
17 543 |
||||
| Fin cia l in str ent vai lab le f le an um s a or sa |
5 5 68 |
( 18) |
737 | ( 2 1 92 ) |
4 0 95 |
||
| Ot her |
1 06 1 |
( 550 ) |
42 0 |
40 | ( 3) |
968 | |
| 44 2 7 07 |
( 32 59 7) |
44 75 1 |
113 | ( 11 786 ) |
44 3 1 88 |
||
| De fer red ta x l iab ilit ies |
|||||||
| Div ide nds be di ibu ted by bsi dia and cia ted ies to str su ry as so co mp an |
( 12 024 ) |
( 47 920 ) |
6 4 26 |
4 | ( 15) |
( 53 529 ) |
|
| RV A's |
( ) 1 1 03 |
1 1 03 |
|||||
| Fin cia l in str ent vai lab le f le an um s a or sa |
( 2 2 84 ) |
2 | ( 2 1 60 ) |
( 4 4 42 ) |
|||
| Re cha of liab iliti pur se es |
( 1 2 36 ) |
773 | ( 46 3) |
||||
| Ot her |
( 2 7 10) |
60 | 48 5 |
( 2) |
( 2 1 67 ) |
||
| ( 18 254 ) |
( 48 963 ) |
7 6 84 |
1 1 09 |
( 2 1 77 ) |
( 60 60 1) |
||
| 42 4 4 53 |
( 81 560 ) |
52 43 5 |
1 2 22 |
( 13 96 3) |
382 58 7 |
The changes in deferred taxes in the first half of 2016 were as follows:
| Ba lan t ce a |
Co d ing rre sp on inc om |
try to t en ne e |
Co d rre sp on re se rve s a |
ing try to en d r ine d ta n e |
Ba lan t ce a |
|
|---|---|---|---|---|---|---|
| De 3 1, 15 c. |
Co ts s |
Inc om e |
Inc re as es |
De cre as es |
Ju 3 0, 1 6 n. |
|
| De fe d tax ts rre as se |
||||||
| F isc l los a se s |
1 0 3 6 1 4 |
( 1 4 0 1 1 ) |
6 0 3 |
( 25 0 ) |
8 9 9 5 6 |
|
| Ta d p is ion d imp irm t xe rov s a n a en |
1 6 0 3 0 2 |
8 9 4 |
1 4 8 0 9 |
1 7 8 7 |
( 8 9 4 ) |
17 6 8 9 8 |
| Ta de fer l o f t he imp t o f t he tra fer f p ion err a ac ns o en s s x |
2 1 2 3 2 |
( 7 6 1 ) |
2 0 47 1 |
|||
| Ac tua ia l de iat ion r v s |
5 2 6 4 6 |
( 4 3 8 7 ) |
4 8 25 9 |
|||
| Ac tua ia l de iat ion fte 2 0 1 1 r s a r v |
15 5 4 3 |
( 3 25 8 ) |
( 6 8 ) |
3 1 3 25 |
4 3 5 4 2 |
|
| Ea ly ret ire nts r me |
2 4 6 9 1 |
( 1 3 ) |
8 8 9 1 |
3 3 5 6 9 |
||
| Lo ice ium ng se rv p rem |
8 9 1 3 |
( 5 8 5 1 ) |
3 0 6 2 |
|||
| Ta d iv i de ds xe s o ve r n |
8 8 2 9 |
1 1 2 1 4 |
2 0 0 4 3 |
|||
| F ina ia l ins tru nts i la b le for le nc me av a sa |
7 6 0 4 |
25 | 4 8 4 |
1 0 9 9 |
( 2 0 8 9 ) |
7 1 2 3 |
| Ot he r |
8 1 6 2 |
( 2 0 6 2 ) |
2 2 2 |
5 4 8 |
6 8 7 0 |
|
| 4 1 1 5 3 6 |
( 2 9 4 2 4 ) |
3 6 15 5 |
3 4 7 5 9 |
( 3 2 3 3 ) |
4 4 9 7 9 3 |
|
| De fe d l ia b i l it ies tax rre |
||||||
| D iv i de ds to be d istr i bu te d by bs i d iar d a iate d c ies n su an ss oc om p an y |
( 1 0 0 0 5 ) |
( 3 6 0 3 ) |
4 0 9 4 |
1 1 6 8 |
( 8 3 4 6 ) |
|
| R V A 's |
( 7 4 ) |
7 4 |
||||
| F ina ia l ins tru nts i la b le for le nc me av a sa |
( 8 25 6 ) |
1 3 4 |
5 9 9 7 |
( 2 1 ) |
( 2 1 4 6 ) |
|
| Re ha f l ia b i l it ies p urc se o |
( 3 4 1 0 ) |
3 5 15 |
( 1 5 1 3 ) |
( 1 4 0 8 ) |
||
| Ot he r |
( 6 3 3 7 ) |
1 17 2 |
1 25 9 |
4 2 |
( 3 8 6 4 ) |
|
| ( 2 8 0 0 8 ) |
( 2 3 7 1 ) |
8 8 6 8 |
7 2 8 1 |
( 1 5 3 4 ) |
( 15 7 6 4 ) |
|
| 3 8 3 2 8 5 |
( 3 1 7 9 ) 5 |
45 0 2 3 |
4 2 0 4 0 |
( 4 7 6 ) 7 |
4 3 4 0 2 9 |
The BPI Group does not recognize deferred tax assets or liabilities for deductible or taxable temporary differences relating to investments in subsidiaries as it is unlikely that such differences will be reversed in the foreseeable future. Until December 31, 2016 deferred tax liabilities were recorded with respect to the taxation in Angola of dividends to be distributed to Grupo BPI companies, in the following year, originated by Banco de Fomento Angola annual net income.
The BPI Group does not record deferred tax assets and liabilities for deductible or taxable temporary differences relating to investments in associated companies, as the participation held by the BPI Group exceeds 10% for more than one year, which enables it to be considered in the Participation Exemption regime, except for Banco Comercial e de Investimentos and Banco de Fomento Angola, in which the deferred tax liabilities relating to taxation in Mozambique and Angola, respectively, of all the distributable profits are recognized.
Profits distributed to Banco BPI by subsidiary and associated companies in Portugal are not taxed in Banco BPI as a result of applying the regime established in article 46 of the Corporation Income Tax Code, which eliminates double taxation of profits distributed.
This caption is made up as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Banco de Fomento Angola, S.A. | 106 671 | |
| Banco Comercial e de Investimentos, S.A.R.L. | 5 051 | 3 627 |
| Companhia de Seguros Allianz Portugal, S.A. | 4 260 | 4 854 |
| Cosec – Companhia de Seguros de Crédito, S.A. | 2 062 | 2 085 |
| InterRisco - Sociedade de Capital de Risco, S.A. | ( 51) | 3 |
| Unicre - Instituição Financeira de Crédito, S.A. | 2 718 | 10 788 |
| 120 711 | 21 357 |
Net income of Unicre at June 30, 2016 reflects the gain due to the closing of the public tender offer for the acquisition of Visa Europe Limited by Visa Inc. (Note 4.5).
Contribution of the associated companies of Banco BPI to the consolidated comprehensive income is as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Contribution to consolidated net income | 120 711 | 21 357 |
| Income not included in the consolidated statement of income | 1 891 | ( 618) |
| Contribution to consolidated comprehensive income | 122 602 | 20 739 |
Contribution of Banco BPI and subsidiary and associated companies to consolidated net income in the first half of 2017 and 2016 is as follows:
| Jun. 30, 17 | Jun. 30, 16 Proforma |
|
|---|---|---|
| Banks | ||
| Banco BPI, S.A.1 | ( 12 120) | ( 9 985) |
| Banco Português de Investimento, S.A.1 | ( 2 237) | ( 1 288) |
| Banco de Fomento Angola, S.A.1 | ( 115 650) | 79 082 |
| Banco Comercial e de Investimentos, S.A.R.L.1 | 4 621 | 3 319 |
| Banco BPI Cayman, Ltd 1 | 4 913 | 5 290 |
| Asset management | ||
| BPI Gestão de Activos - Sociedade Gestora de Fundos de Investimento Mobiliários, S.A. | 1 729 | 2 398 |
| BPI - Global Investment Fund Management Company, S.A. | 1 020 | 925 |
| BPI (Suisse), S.A.1 | 1 615 | 1 050 |
| BPI Alternative Fund: Iberian Equities Long/Short Fund Luxemburgo 1 2 | 794 | 691 |
| BPI Obrigações Mundiais - Fundo de Investimento Aberto de Obrigações 1 2 | 111 | |
| BPI Strategies, Ltd1 2 | ( 122) | |
| Venture capital / development | ||
| BPI Private Equity - Sociedade de Capital de Risco, S.A.1 | 41 | ( 82) |
| Inter-Risco - Sociedade de Capital de Risco, S.A. | ( 51) | 3 |
| Insurance | ||
| BPI Vida e Pensões - Companhia de Seguros, S.A.1 | 5 947 | 8 295 |
| Cosec - Companhia de Seguros de Crédito, S.A. 1 | 2 062 | 2 085 |
| Companhia de Seguros Allianz Portugal, S.A. 1 | 4 260 | 4 854 |
| Other | ||
| BPI, Inc | ( 4) | ( 4) |
| BPI Madeira, SGPS, Unipessoal, S.A.1 | ( 6) | ( 478) |
| BPI Moçambique - Sociedade de Investimento, S.A. 1 | ( 21) | ( 274) |
| BPI Capital Africa 1 | ( 1 356) | ( 728) |
| Unicre - Instituição Financeira de Crédito, S.A.1 | 2 718 | 10 788 |
| ( 101 725) | 105 930 |
1 Adjusted net income.
2 Participation that ceased being consolidated by the BPI Group as explained in Note 1.
Basic earnings per share are calculated by dividing net income attributable to the shareholders of Banco BPI by the weighted average number of ordinary shares outstanding in the period, excluding treasury shares acquired by the Group.
The following table shows the calculation of basic earnings per share:
| Jun. 30, 17 | Jun. 30, 16 | |
|---|---|---|
| proforma | ||
| Numerator | ||
| Net income attributable to the shareholders of BPI from continuing operations | ( 101 725) | 24 122 |
| Net income attributable to the shareholders of BPI from discontinued operations | 81 808 | |
| Numerator: Net income attributable to the shareholders of BPI (in thousands of euro) | ( 101 725) | 105 930 |
| Denominator | ||
| Issued ordinary shares (x 1000): | ||
| No. at the beginning of the year | 1 456 924 | 1 456 924 |
| No. at the end of the year | 1 456 924 | 1 456 924 |
| Weighted average number of shares | 1 456 924 | 1 456 924 |
| Treasury shares, w eighted average number (x 1000) | 1 268 | 6 155 |
| Denominator: w eighted average number of shares, net of treasury shares (x 1000) | 1 455 657 | 1 450 769 |
| Basic earnings per share (in euro) | ||
| Net basic earnings per share from continuing operations | ( 0.070) | 0.017 |
| Net basic earnings per share from discontinued operations | 0.000 | 0.056 |
| Consolidated basic earnings per share (in euro) | ( 0.070) | 0.073 |
Diluted earnings per share includes in its calculation the potential dilutive effect on earnings per share of any existing financial instruments, by adjusting the average number of shares and / or the net results.
In the calculation of diluted earnings per share of Banco BPI the following adjustments to the weighted average number of shares were considered:
The following table shows the calculation of diluted earnings per share:
| Jun. 30, 17 | Jun. 30, 16 proforma |
|
|---|---|---|
| Numerator | ||
| Net income attributable to the shareholders of BPI from continuing operations | ( 101 725) | 24 122 |
| Net income attributable to the shareholders of BPI from discontinued operations | 81 808 | |
| Numerator: Net income attributable to the shareholders of BPI (in thousands of euro) | ( 101 725) | 105 930 |
| Denominator | ||
| Weighted average number of shares, net of treasury shares (x 1000) | 1 455 657 | 1 450 769 |
| Average w eighted ordinary shares w ith dilutive effect (x 1000): | ||
| Shares granted to employees, under the RVA programme, under resolutive conditions | 42 | 298 |
| Treasury shares allocated to cover the RVA option plan | 1 188 | 5 708 |
| Denominator: w eighted average number of shares adjusted (x 1000) | 1 456 887 | 1 456 776 |
| Consolidated diluted earnings per share (in euro) | ||
| Net diluted earnings per share from continuing activities | ( 0.070) | 0.017 |
| Net diluted earnings per share from discontinued activities | 0.000 | 0.056 |
| Consolidated diluted earnings per share (in euro) | ( 0.070) | 0.073 |
The average and period-end number of employees1 in the first half of 2017 and 2016 were as follows:
| Jun. 30, 17 | Jun. 30, 16 | ||||
|---|---|---|---|---|---|
| Average | End of | Average | End of | ||
| for the period | period | for the period | period | ||
| Directors2 | 7 | 7 | 9 | 9 | |
| Management staff | 3 960 | 4 249 | 651 | 653 | |
| Other staff | 889 | 553 | 5 384 | 5 428 | |
| Other employees | 737 | 715 | 2 574 | 2 516 | |
| 5 593 | 5 524 | 8 618 | 8 606 |
1 Personnel of the Group's entities consolidated by the full consolidation method. This includes personnel of the foreign branches of Banco BPI.
2 This includes the executive directors of Banco BPI and Banco Português do Investimento.
Fair value of financial instruments is determined whenever possible based on the price in an active market. A market is considered to be active and liquid, when it is accessed by equally knowledgeable counterparties and is traded on a regular basis. In the case of financial instruments with no prices in active markets, due to lack of liquidity and absence of regular transactions, valuation methods and techniques to estimate fair value are used.
Financial instruments recorded in the balance sheet at fair value were classified by levels in accordance with the hierarchy of IFRS 13.
Debt instruments and equity instruments
This category includes, in addition to financial instruments listed on regulated Stock Exchanges, bonds and participating units in harmonized funds, valued based on prices / quotations in active markets, published in trading platforms, taking into account also the liquidity and quality of the prices.
The classification of fair value in level 1 is made automatically by SIVA ("Sistema Integrado de Valorização de Activos") whenever the related financial instruments are traded in an active market, considering, for this purpose, that this is the case when: i. daily prices are given for the financial instruments by at least 6 contributors, at least three of them with firm offers, or there is a multicontributed price (price formed by several firm offers from contributors available in the market) (active market), or; ii. such financial instruments have been classified as level 1, in accordance with the rule referred to in the preceding paragraph, in at least 50% of the last 30 calendar days.
For financial instruments that do not have a history of 30 calendar days available in the system, allocation of fair value level will be carried out considering the history available in SIVA.
Financial instruments that have not been traded on an active market or that are valued by reference to valuation techniques based on market data for financial instruments having the same or similar characteristics in accordance with the rules referred to below are considered as level 2.
Level 2 fair value classification is determined automatically by SIVA in accordance with the following rules:
a) Financial instruments are classified daily in Level 2 if they are:
i. Quoted by less than 6 contributors, regardless of the type of price, or;
ii. Valued based on models using inputs which are mainly observable in the market (such as interest rate curves or exchange rates), or;
iii. Valued based on third party indicative purchase prices, based on observable market data, and
iv. Have been classified as level 1 and level 2, in accordance with the rules mentioned above, in at least 50% of the last 30 calendar days.
b) For instruments that do not have a history of 30 calendar days available in the system, allocation of the fair value level will be carried out taking considering the history available in SIVA.
• Level 3 – Valuation techniques using inputs not based on observable market data
Financial assets are classified as Level 3 when they do not meet the criteria to be classified as Level 1 or Level 2, or if their value is the result of inputs not based on observable market data, namely:
a) financial instruments not admitted to trading on a regulated market, which are valued based on valuation models for which there is no generally accepted market consensus as to the inputs to be used, namely:
i. valuation based on Net Asset Value of non-harmonized funds, updated and disclosed by their managing companies;
ii. valuation based on indicative prices disclosed by the entities involved in the issue of certain financial instruments, without an active market; or
iii. valuation based on impairment tests, using indicators of the performance of the underlying operations (degree of protection by subordination of notes held, delinquency rates of the underlying assets, evolution of ratings, among others).
b) financial instruments valued at indicative purchase prices based on theoretical models, disclosed by specialized third parties.
Automatic classification proposed by SIVA relating to the level of fair value is made on the day of measurement, being supervised by a specialized team, in order to ensure that the classification of the fair value level is considered the most appropriate, according to the principles set forth herein.
If a market value is not available and it is not possible to determine fair value reliably, equity instruments are recognized at historical cost and are subject to impairment tests.
Financial derivative transactions in the form of foreign exchange contracts, interest rate contracts, contracts on shares or share indices, inflation contracts or a combination of these, are carried out in over-the-counter (OTC) markets and in organized markets (mainly stock exchanges). For the over-the-counter derivatives (swaps and options) the valuation is based on generally accepted methods, always giving priority to values from the market.
• Level 1 – Price in an active market
This category includes futures and options and other financial derivative instruments traded on stock exchanges.
Level 2 includes derivatives, traded on over-the-counter markets, without an optional component (swaps and similar) and that have been contracted with counterparties with which the Bank has collateralization agreements and therefore are not subject to adjustments for credit risk, to the extent that credit risk is mitigated.
Valuation of these derivatives is made by discounting the cash flows of the operations, using interest rate market curves deemed appropriate for the currency concerned, prevailing at the time of calculation. The interest rates are obtained from reliable sources of information (e.g. Bloomberg or Reuters). The same interest rate curves are used in the projection of non-deterministic cash flows such as interest calculated from indices. The rates for required specific periods are determined by appropriate interpolation methods.
• Level 3 – Valuation techniques using mainly inputs not based on observable market data
Level 3 includes options and derivatives traded in the over-the-counter market, with embedded optional elements or derivatives that have been contracted with counterparties with which the Bank does not have collateralization agreements.
Derivative financial instruments traded in the over-the-counter market, that have been contracted with counterparties with which the Bank does not have collateralization agreements were classified as Level 3 since their credit risk adjustments are estimated mainly by using inputs not based on observable market data – default probability and loss given default. With the exception of the adjustments for credit risk, the estimated fair value of these instruments is calculated in the same way as described for the Level 2 financial instruments derivatives.
The valuation of derivatives with optional elements is carried out using statistical models that consider the market value of the underlying assets and their volatilities (considering that the latter are not directly observable in the market).The theoretical models used to value derivatives classified in Level 3 are of two types:
(i) For simpler operations (plain vanilla) option and optional elements are valued based on the Black-Scholes models or their derivatives (commonly used models by the market in the valuation of this type of operation). The inputs for these models, price and volatility, are collected from Bloomberg. On June 30, 2017 the values of the unobservable market inputs (implied volatility of the underlying assets) are included in the following ranges by type of underlying asset:
| Underlying | Min | Max |
|---|---|---|
| Euribor 1 month | 89.94% | 90.00% |
| Euribor 3 months | 40.37% | 135.91% |
| Euribor 6 months | 24.39% | 130.94% |
| Euribor 12 months | 47.20% | 140.69% |
| Exchange EUR/USD | 6.31% | 15.47% |
Valuation of the non-optional components is made based on discounted cash flows, using methodology similar to that used for derivatives without an optional component.
The quantity and volume of these types of operations have been declining, in particular those with underlying interest rates.
(ii) For the more exotic options or complex derivatives incorporating optional elements (for which there are no other valuations available) the Bank contracted a specialized entity that performs the valuation based on specific models, constructed using criteria and methodologies generally accepted for this type of operations. Nevertheless, due to the reduction in the Bank's activity in this market, on June 30, 2017 the Bank did not use valuations prepared by this entity.
In accordance with the policy defined by the BPI Group as regards the management of exposure of options, significant open positions are not maintained, the risk being managed mainly through "back-to-back" hedges. Thus, the impact of possible changes in the inputs used in the valuation of the options, in terms of the income statement of the BPI Group, tends to be negligible.
Valuations thus obtained are, in the case of interbank transactions, valued against those used by the counterparties and whenever there are significant differences the models or assumptions are reviewed.
The Bank includes counterparty credit risk and own credit risk in the calculation of the book value of derivative financial instruments contracted in the over-the-counter market. This methodology includes the following main items:
• derivative financial instruments contracted with counterparties with which the Bank has collateralization agreements are not subject to adjustment for credit risk, to the extent that it is mitigated;
• counterparty credit risk and own credit risk adjustments relating to derivative financial instruments not collateralized are estimated throughout a model, whose parameters are estimated using mainly historical information regarding non-performance, except for operations in which the Bank considers that the credit risk of the counterparty is comparable to the risk of the Portuguese Republic. In these cases, the adjustments for credit risk are estimated based on risk parameters implicit in the spread of Portuguese public debt against the German public debt.
The credit risk adjustments, considered by the Bank in determining the book value of derivative financial instruments contracted in the over-the-counter market, were estimated based on this methodology, except for the cases in which individual impairment losses were recorded. In these cases the adjustments considered by the Bank corresponded the amount of the impairment losses.
When computing the adjustments for counterparty credit risk at June 30, 2017, the following loss given default and probability of default were used:
| Min | Max | |
|---|---|---|
| Loss given default | 37.40% | 45.00% |
| Probability of default | 0.09% | 22.02% |
Note: Operations in default (PD of 100%) were not considered for the calculation of this gap.
When computing adjustments to own credit risk at June 30, 2017, the following losses given default and probabilities of default were used:
| Min | Max | |
|---|---|---|
| Loss given default | 60.00% | 60.00% |
| Probability of default | 2.48% | 6.14% |
Considering that the determination of the assumptions used in the calculation of the adjustments to the credit risk of derivative financial instruments is a significant matter, it will continue to be monitored by the Bank in order to introduce the improvements that are identified based on practical experience in applying these methodologies.
The fair value of financial instruments recorded in the balance sheet at amortized cost is determined by BPI Group through valuation techniques.
Fair value may not correspond to the realizable value of these financial instruments in a sale or liquidation scenario, as it was determined for that purpose.
The valuation techniques used are based on market conditions applicable to similar operations as of the date of the financial statements, such as the value of their discounted cash flows based on interest rates considered as most appropriate, namely:
The reference rates used to calculate the discount factors as at June 30, 2017 are listed in the following table and refer to the interbank market rates:
| 1 month | 3 months | 6 months | 1 year | 2 years | 3 years | 5 years | 7 years | 10 years | 30 years | |
|---|---|---|---|---|---|---|---|---|---|---|
| EUR | -0.37% | -0.33% | -0.27% | -0.16% | -0.13% | 0.00% | 0.27% | 0.54% | 0.91% | 1.53% |
| GBP | 0.26% | 0.31% | 0.46% | 0.68% | 0.69% | 0.79% | 0.99% | 1.15% | 1.34% | 1.61% |
| USD | 1.23% | 1.30% | 1.45% | 1.74% | 1.58% | 1.71% | 1.92% | 2.08% | 2.25% | 2.52% |
| JPY | -0.01% | 0.00% | 0.02% | 0.12% | 0.05% | 0.06% | 2.87% | 3.11% | 3.35% | 3.59% |
| 1 year | 2 years | 3 years | 4 years | 5 years | 6 years | 7 years | 8 years | 9 years | 10 years | |
|---|---|---|---|---|---|---|---|---|---|---|
| Portuguese Public Debt | 0.14% | 0.14% | 0.32% | 0.63% | 1.31% | 1.84% | 2.09% | 2.55% | 2.81% | 3.03% |
| German Public Debt | -0.65% | -0.57% | -0.52% | -0.38% | -0.22% | -0.11% | 0.01% | 0.16% | 0.31% | 0.47% |
| Spread PT/DE | 0.79% | 0.71% | 0.85% | 1.01% | 1.54% | 1.95% | 2.09% | 2.39% | 2.50% | 2.56% |
The fair value of "Held to maturity investments" is based on market prices or third party purchase prices, when available. If these are not available, fair value is estimated based on the discounted value of the expected cash flows of principal and interest.
The fair value of spot operations (including Cash and deposits at central banks, Deposits at other credit institutions and Demand deposits included in Resources of customers and other debts) corresponds to their respective book value.
The fair value of financial instruments at June 30, 2017 is made up as follows:
| Fa ir v a |
lue f f ina ia l o nc |
ins tru |
nts me |
|||||
|---|---|---|---|---|---|---|---|---|
| Ty f f ina ia l ins tru nt p e o nc me |
Ne t bo k o lue va |
Re de d in co r t he ba lan ce he et at fa ir s lue va |
Re de d in co r t he ba lan ce he et at s ort ise d c t am os |
To ta l |
D i f fer en ce |
As lue d ts se va h isto ica l at r 1 st co |
To ta l bo k o lue va |
|
| As ts se |
||||||||
| Ca h a d de its Ce l Ba ks at ntr s n p os a n |
9 8 3 4 0 3 |
9 8 3 4 0 3 |
9 8 3 4 0 3 |
9 8 3 4 0 3 |
||||
| De its he d it ins itut ion at ot t p os r c re s |
3 0 0 0 27 |
3 0 0 0 27 |
3 0 0 0 27 |
3 0 0 0 27 |
||||
| F ina ia l as he l d for d ing d a fa ir v lue ts tra t nc se an a |
||||||||
| hro h p f it o los t ug ro r s |
2 2 4 1 2 3 7 |
2 2 4 1 2 3 7 |
2 2 4 1 2 3 7 |
2 2 4 1 2 3 7 |
||||
| F ina ia l as i la b le for le ts nc se av a sa |
3 3 4 9 1 77 |
3 3 4 9 1 77 |
3 3 4 9 1 77 |
9 5 77 |
3 9 27 0 77 |
|||
| Lo d a dv d it ins itut ion s t t an s a n an ce o c re s |
4 4 5 7 5 7 |
45 4 6 7 7 |
3 | 45 4 6 7 7 |
1 1 8 9 |
4 4 5 7 5 7 |
||
| Lo d a dv s t tom an s a n an ce o c us ers |
2 2 8 1 9 8 4 6 |
2 1 3 3 0 4 45 |
4 | 2 1 3 3 0 4 45 |
( 1 4 8 9 4 0 1 ) |
2 2 8 1 9 8 4 6 |
||
| He l d t ity inv atu tme nts o m r es |
1 4 4 15 |
1 3 3 9 8 |
5 | 1 3 3 9 8 |
( 1 0 17 ) |
1 4 4 15 |
||
| 2 Tra d ing de iva ive t r s |
1 6 8 4 9 4 |
1 6 8 4 9 4 |
1 6 8 4 9 4 |
1 6 8 4 9 4 |
||||
| He dg ing de iva ive t r s |
2 0 4 3 7 |
2 0 4 3 7 |
2 0 4 3 7 |
2 0 4 3 7 |
||||
| 3 1 0 6 9 0 5 7 |
6 2 0 3 6 9 5 |
2 3 3 3 0 1 8 7 |
2 9 6 6 8 5 7 7 |
( 1 4 8 9 2 2 9 ) |
9 5 77 |
3 1 0 1 6 8 6 7 |
||
| L ia b i l it ies |
||||||||
| f c Re tra l ba ks so urc es o en n |
2 1 3 8 1 45 |
2 1 6 17 0 4 |
3 | 2 1 6 17 0 4 |
( 8 9 ) 7 |
2 1 3 8 1 45 |
||
| F ina ia l l ia b i l it ies he l d for d ing tra nc |
4 9 0 6 |
4 9 0 6 |
4 9 0 6 |
4 9 0 6 |
||||
| f o Re t he d it ins t itut ion so urc es o r c re s |
1 6 2 1 4 4 4 |
1 6 1 1 2 4 4 |
3 | 1 6 1 1 2 4 4 |
1 0 0 2 0 |
1 6 2 1 4 4 4 |
||
| Re f c d o he de bts tom t so urc es o us ers an r |
2 2 3 3 47 0 5 |
2 2 3 3 1 6 0 4 |
6 | 2 2 3 3 1 6 0 4 |
3 8 6 6 |
2 2 3 3 47 0 5 |
||
| De bt it ies se cu r |
2 6 8 8 9 1 |
2 6 6 2 2 7 |
3 | 2 6 6 2 2 7 |
1 2 6 9 |
2 6 8 8 9 1 |
||
| F ina ia l l ia b i l it ies lat ing fer d a to tra ets nc re ns re ss |
1 1 4 25 5 |
4 6 4 0 3 7 |
4 | 4 6 4 0 3 7 |
4 4 0 2 2 |
1 1 4 25 5 |
||
| Tra d ing de iva t ive r s |
1 8 0 8 8 0 |
1 8 0 8 8 0 |
1 8 0 8 8 0 |
1 8 0 8 8 0 |
||||
| He dg ing de iva ive t r s |
9 6 4 77 |
9 6 4 77 |
9 6 4 77 |
9 6 4 77 |
||||
| Te hn ica l p is ion c rov s |
1 9 2 3 5 75 |
1 9 2 3 5 75 |
3 | 1 9 2 3 5 75 |
1 9 2 3 5 75 |
|||
| Ot he bo d ina d de bt d p ic ip ing bo ds te art at r s u r an n |
3 3 8 3 2 7 |
3 6 8 3 1 5 |
3 | 3 6 8 3 1 5 |
17 0 0 1 |
3 3 8 3 2 7 |
||
| 2 9 4 4 6 4 6 8 |
2 6 3 75 0 |
2 9 1 0 7 3 2 9 |
2 9 3 7 1 0 7 9 |
75 3 8 9 |
2 9 4 4 6 4 6 8 |
|||
| 1 6 1 9 4 3 9 |
2 0 9 9 5 5 |
( 1 4 1 3 8 4 0 ) |
9 5 77 |
1 6 25 2 1 8 |
||||
| f fer f Va lua t ion d i in ina ia l as ts ise d in r en ce s nc se rec og n |
lua t ion ev a re se |
rve s |
2 3 8 2 8 |
|||||
| To ta l |
( 1 3 9 0 0 1 2 ) |
1 Unlisted securities for which it was not possible to determine fair value on a reliable basis.
2 This caption is presented in the balance sheet as Financial assets held for trading and at fair value through profit or loss. 3 Financial instruments recognized in the balance sheet at amortized cost classified as Level 2, in accordance with the fair value hierarchy established in IFRS 13. 4 Financial instruments recognized in the balance sheet at amortized cost classified as Level 3, in accordance with the fair value hierarchy established in IFRS 13. 5 Financial instruments recorded in the balance sheet at amortized cost classified as Level 1 and 3 amounting to 7 736 t. euro and 5 662 t. euro respectively, according to the fair value hierarchy of IFRS 13.
6 Demand deposits valued at their nominal amount. Term deposits and other resources not payable on demand classified as Level 3, in accordance with the fair value hierarchy established in IFRS 13.
The fair value of financial instruments at December 31, 2016 is made up as follows:
| Fa ir v alu f fin cia l in str ent e o an um s |
||||||||
|---|---|---|---|---|---|---|---|---|
| of f Ty ina nci al ins tru nt pe me |
Ne t b k oo val ue |
Re rde d i co n the ba lan ce sh eet at fa ir val ue |
Re rde d i co n the ba lan ce sh eet at ise d ort am t cos |
Tot al |
Dif fer enc e |
As set alu ed s v his ica l at tor 1 t cos |
Tot al boo k v alu e |
|
| As set s |
||||||||
| Ca Ce sh and de its at ntr al Ba nks pos |
876 62 1 |
876 62 1 |
876 62 1 |
876 62 1 |
||||
| De its oth dit ins titu tio at pos er cre ns |
300 19 0 |
300 19 0 |
300 19 0 |
300 19 0 |
||||
| Fin cia l as set s h eld fo r tr ad ing d a t fa ir v alu e t hro h an an ug |
||||||||
| fit los pro or s |
2 0 17 992 |
2 0 17 992 |
2 0 17 992 |
2 0 17 992 |
||||
| le f Fin cia l as set vai lab le an s a or sa |
3 8 70 65 1 |
3 8 70 65 1 |
3 8 70 65 1 |
5 7 83 |
3 8 76 434 |
|||
| Loa and ad to ed it in stit utio ns van ces cr ns |
63 7 6 07 |
63 7 2 36 |
3 | 63 7 2 36 |
( 37 1) |
63 7 6 07 |
||
| Loa and ad to sto ns van ces cu me rs |
22 735 75 8 |
21 23 3 7 17 |
4 | 21 23 3 7 17 |
( 1 5 02 04 1) |
22 735 75 8 |
||
| He ld t rity in atu tm ent o m ves s |
16 31 7 |
15 23 7 |
5 | 15 23 7 |
( ) 1 0 80 |
16 31 7 |
||
| 2 Tra din de riva tive g s |
17 9 9 21 |
179 92 1 |
179 92 1 |
179 92 1 |
||||
| He dg ing de riva tive s |
25 802 |
25 802 |
25 802 |
25 802 |
||||
| 30 66 0 8 59 |
6 0 94 366 |
23 063 00 1 |
29 157 36 7 |
( 1 5 03 49 2) |
83 5 7 |
30 666 64 2 |
||
| Lia bil itie s |
||||||||
| Re of al ban ks ntr so urc es ce |
2 0 00 01 1 |
2 0 01 69 7 |
3 | 2 0 01 69 7 |
( 1 6 86 ) |
2 0 00 01 1 |
||
| Re of o the red it in stit utio so urc es r c ns |
1 0 96 43 9 |
1 0 84 82 1 |
3 | 1 0 84 82 1 |
11 61 8 |
1 0 96 43 9 |
||
| Re of tom d o the r d ebt so urc es cus ers an s |
21 96 7 6 81 |
21 949 68 9 |
6 | 21 949 68 9 |
17 992 |
21 96 7 6 81 |
||
| De bt ritie se cu s |
506 0 77 |
48 9 6 43 |
3 | 48 9 6 43 |
17 127 |
506 0 77 |
||
| Fin cia l lia bili tie ela tin to tra nsf ed ets an s r g err ass |
555 38 5 |
508 30 0 |
4 | 50 8 3 00 |
47 085 |
555 38 5 |
||
| Tra din de riva tive g s |
212 71 3 |
212 71 3 |
212 71 3 |
212 71 3 |
||||
| He dg ing de riva tive s |
97 756 |
97 756 |
97 756 |
97 756 |
||||
| Te ch nic al vis ion pro s |
2 0 48 829 |
2 0 48 829 |
3 | 2 0 48 829 |
2 0 48 829 |
|||
| Ot her bor din ate d d ebt d p art icip ati bon ds su an ng |
69 500 |
62 47 6 |
3 | 62 47 6 |
7 0 24 |
69 500 |
||
| 28 555 08 4 |
310 46 9 |
28 145 45 5 |
28 45 5 9 24 |
99 160 |
28 555 08 4 |
|||
| 2 1 05 775 |
83 89 5 7 7 |
( 5 0 82 454 ) |
70 1 4 43 |
( 1 4 04 332 ) |
83 5 7 |
2 1 11 558 |
||
| Va lua tio n d iffe in fina nci al a ets nis ed in r lua tio ren ces ss re cog eva |
n r ese rve s |
13 75 0 |
||||||
| Tot al |
( 1 3 90 582 ) |
1 Unlisted securities for which it was not possible to determine fair value on a reliable basis.
2 This caption is presented in the balance sheet as Financial assets held for trading and at fair value through profit or loss.
3 Financial instruments recognized in the balance sheet at amortized cost classified as Level 2, in accordance with the fair value hierarchy established in IFRS 13.
4 Financial instruments recognized in the balance sheet at amortized cost classified as Level 3, in accordance with the fair value hierarchy established in IFRS 13.
5 Financial instruments recorded in the balance sheet at amortized cost classified as Level 1, 2 and 3 amounting to 7 695 t. euro, 5 677 t. euro and 1 865 t. euro respectively, according to the fair value hierarchy of IFRS 13. 6 Demand deposits valued at their nominal amount. Term deposits and other resources not payable on demand classified as Level 3, in accordance with the fair value hierarchy established in IFRS 13.
The fair value of non-current assets and liabilities held for sale and discontinued operations is not presented in the table above, since the participation in Banco de Fomento Angola was valued at the
lower of acquisition cost and fair value less costs of sale, as provided for in IFRS 5.
The fair value of the financial instruments recorded in the balance sheet at June 30, 2017, is made up as follows by valuation methodologies:
| Valuation techniques | ||||
|---|---|---|---|---|
| Type of financial instrument | Active market listings (Level 1) |
Market data (Level 2) |
Models (Level 3) | Total fair value |
| Assets | ||||
| Financial assets held for trading and at fair value | ||||
| through profit or loss | 2 077 286 | 17 206 | 146 745 | 2 241 237 |
| Financial assets available for sale | 3 428 511 | 58 593 | 286 387 | 3 773 491 |
| Trading derivatives | 62 | 26 360 | 142 072 | 168 494 |
| Hedging derivatives | 35 | 20 402 | 20 437 | |
| 5 505 894 | 122 561 | 575 204 | 6 203 659 | |
| Liabilities | ||||
| Financial liabilities held for trading | 4 906 | 4 906 | ||
| Trading derivatives | 31 | 178 252 | 2 597 | 180 880 |
| Hedging derivatives | 77 964 | 77 964 | ||
| 4 937 | 256 216 | 2 597 | 263 750 |
The fair value of the financial instruments recorded in the balance sheet at December 31, 2016 is made up as follows by valuation methodologies:
| Valuation techniques | ||||
|---|---|---|---|---|
| Type of financial instrument | Active market listings (Level 1) |
Market data (Level 2) |
Models (Level 3) | Total fair value |
| Assets | ||||
| Financial assets held for trading and at fair value | ||||
| through profit or loss | 1 935 444 | 20 612 | 61 936 | 2 017 992 |
| Financial assets available for sale | 3 500 024 | 5 587 | 365 040 | 3 870 651 |
| Trading derivatives | 23 | 15 563 | 164 335 | 179 921 |
| Hedging derivatives | 25 797 | 5 | 25 802 | |
| Non-current assets held for sale and discontinued | ||||
| operations | 7 313 | 3 213 768 | 3 221 081 | |
| 5 435 491 | 74 872 | 3 805 084 | 9 315 447 | |
| Liabilities | ||||
| Trading derivatives | 177 | 206 181 | 6 355 | 212 713 |
| Hedging derivatives | 26 | 97 574 | 156 | 97 756 |
| Non-current liabilities held for sale and discontinued | ||||
| operations | 8 150 | 8 150 | ||
| 203 | 311 905 | 6 511 | 318 619 |
At June 30, 2017 and December 31, 2016, financial assets held for trading and at fair value through profit or loss included in Level 3 correspond essentially to bonds valued through indicative bid prices based on theoretical models or through models developed internally. They also include participating units in a non-harmonized investment fund.
At June 30, 2017 and December 31, 2016, financial assets available for sale included in Level 3 correspond essentially to non-listed shares, investments in private equity, participating units in venture capital funds and bonds valued through models developed in-house.
At June 30, 2017 and December 31, 2016 trading and hedging derivatives included in Level 3 refer mainly to:
The book value of financial instruments at the beginning of the reporting period was used for the presentation of transfers between levels.
During the first half of 2017 and 2016, the following securities were transferred from level 2 to level 1 due to an increase in their liquidity in the market, as a result of the increase in the number of contributors to quote the bond with binding offers:
| Net book value | |||||
|---|---|---|---|---|---|
| Jun. 30, 17 | Dec.31, 16 | ||||
| LLOYDS BANK PLC-TV-29.05.2017 | 802 | ||||
| SAUDACOR-TX.VR.-03.07.2017 | 586 | ||||
| GALP 2013/2018 | 517 | ||||
| GALP-ENERGIA SGPS - TV - 08.03.2018 | 410 | ||||
| MOTA ENGIL SGPS SA-5.5%-22.04.2019 | 319 | ||||
| GALP 2013/2018 | 1 137 | ||||
| JOSE DE MELLO SAUDE-TV-09.06.2019 | 567 | ||||
| PEPSICO INC-TX.VR.-13.10.2017 | 37 | ||||
| 3 573 | 802 |
During 2016, the following securities were transferred from level 1 to level 2 due to the decrease in liquidity of the respective market:
| Net book value | |
|---|---|
| Dec. 31, 16 | |
| COLEP PORTUGAL SA -TV-10.10.2017 | 1 610 |
| SAUDACOR-TX.VR.-03.07.2017 | 1 018 |
| 2 628 |
For financial instruments recorded at fair value on the balance sheet, the changes between December 31, 2016 and June 30, 2017 in assets and liabilities classified as Level 3, are as follows:
| Held for trading and at fair value through profit or loss |
Available for sale |
Trading derivatives (net) |
Hedging derivatives (net) |
Total | |
|---|---|---|---|---|---|
| Financial assets and liabilities | |||||
| Net book value at December 31, 2016 | 61 936 | 365 040 | 157 980 | ( 151) | 584 805 |
| Accrued interest and premiums (amount at December 31, 2016) |
( 253) | ( 965) | ( 8 245) | 356 | ( 9 107) |
| Gain / (loss) recognised in net income | |||||
| Net income on financial operations | |||||
| Potential gain / (loss) | 840 | ( 1 288) | ( 19 224) | ( 205) | ( 19 877) |
| Effective gain / (loss) | 199 | ( 64) | 352 | ( 790) | ( 303) |
| Impairment losses and other provisions | 4 162 | 4 162 | |||
| Gain / (loss) recognised in revaluation reserves | ( 579) | ( 579) | |||
| Foreign exchange | |||||
| Purchases | 92 519 | 674 | 93 193 | ||
| Sales | ( 4 251) | ( 175) | ( 352) | 790 | ( 3 988) |
| Reimbursements | ( 584) | ( 16 913) | ( 17 497) | ||
| Transfers in | 1 009 | 1 009 | |||
| Transfers out | ( 4 895) | ( 53 031) | ( 57 926) | ||
| Accounting reclassificaton | ( 11 200) | ( 11 200) | |||
| Accrued interest and premiums (amount at June 30, 2017) | 225 | 726 | 8 964 | 9 915 | |
| Net book value at June 30, 2017 | 146 745 | 286 387 | 139 475 | 572 607 |
Note: The effective gain / (loss) on derivatives corresponds to amounts paid / received in the course of early settlement of the operations.
The purchases of assets held for trading include 85 743 t. euro related to bonds purchased by BPI Vida.
The reimbursements of assets available for sale include (11 244) t. euro related to venture capital funds.
The transfers into financial assets held for trading and at fair value through profit or loss correspond to the Saudacor 2017-2019 issue, transferred from level 2 as there has been a reduction in liquidity in its market.
The transfers out of assets held for trading and at fair value through profit or loss correspond to the issues of Media Capital 2014-2019, Daimler Finance NA LLC-TV-30.10.2019, Semapa 2014/2020 and OTRV November 2021, due to the liquidity increase in their market.
The transfers out of financial assets available for sale corresponds to the C8 Capital SPV issue, transferred to level 2 as there has been an increase in liquidity in its market.
Net income on financial operations – potential gain/(loss) on trading derivatives correspond mainly to the change in fair value of operations contracted with customers, coverage of which is carried out with counterparties with which the Bank has collateralization agreements and therefore are not subject to adjustments relating to credit risk and are classified at level 2.
For financial instruments recorded at fair value on the balance sheet, the changes between December 31, 2015 and December 31, 2016 in assets and liabilities classified in Level 3, are as follows:
| Held for trading and at fair value through profit or loss |
Available for sale |
Trading derivatives (net) |
Hedging derivatives (net) |
Total | |
|---|---|---|---|---|---|
| Financial assets and liabilities | |||||
| Net book value at December 31, 2015 | 582 342 | 3 136 248 | 175 563 | 31 086 | 3 925 239 |
| Accrued interest and premiums (amount at December 31, 2015) | ( 125) | ( 645) | ( 10 455) | 1 302 | ( 9 923) |
| Gain / (loss) recognised in net income | |||||
| Net income on financial operations | |||||
| Potential gain / (loss) | ( 767) | 732 | ( 15 373) | ( 32 183) | ( 47 591) |
| Effective gain / (loss) | 704 | ( 373) | 11 462 | 332 | 12 125 |
| Impairment losses and other provisions | ( 5 195) | ( 5 195) | |||
| Gain / (loss) recognised in revaluation reserves | ( 1 962) | ( 1 962) | |||
| Foreign exchange | 17 204 | ( 233 092) | ( 215 888) | ||
| Purchases | 2 688 553 | 46 465 | 2 735 018 | ||
| Sales | (1 402 812) | (1 201 500) | ( 11 462) | ( 332) | (2 616 106) |
| Reimbursements | ( 10 509) | ( 30 441) | ( 40 950) | ||
| Transfers in | 2 759 | 51 943 | 54 702 | ||
| Transfers out | ( 3) | ( 3) | |||
| Transfers to non-current assets held for sale and discontinued | |||||
| operations (Note 4.9) | (1 815 666) | (1 398 102) | (3 213 768) | ||
| Accrued interest and premiums (amount at December 31, 2016) | 253 | 965 | 8 245 | ( 356) | 9 107 |
| Net book value at December 31, 2016 | 61 936 | 365 040 | 157 980 | ( 151) | 584 805 |
Note: The effective gain / (loss) on derivatives corresponds to amounts paid / received in the course of early settlement of the operations.
The purchase of financial assets held for trading and at fair value through profit or loss and financial assets available for sale corresponds mainly to public debt securities of Angola and of Banco Nacional de Angola through Banco de Fomento Angola.
The transfers of other levels of financial assets available for sale corresponds to the C8 Capital SPV issue, transferred from level 2 as there has been a reduction in liquidity in its market.
At December 31, 2016, financial assets held for trading and at fair value through profit or loss and available-for-sale financial assets regarding BFA and included in level 3 were reclassified to "Non-current assets held for sale and operations in discontinued operations" (Note 4.9), under the classification of BFA's operations as discontinued operations in accordance with the requirements of IFRS 5 - Noncurrent assets held for sale and discontinued operations.
Net income on financial operations – potential gain/(loss) on trading derivatives correspond mainly to the change in fair value of operations contracted with customers, coverage of which is carried out with counterparties with which the Bank has collateralization agreements and therefore are not subject to adjustments relating to credit risk and are classified at level 2.
In the first half of 2017 and in 2016 no financial instruments for which it was not possible to reliably determine their fair value were derecognised and so there was no impact on net income for the period arising from this.
The BPI Group reclassified bonds from Financial assets held for trading to Loans and advances to customers (Note 4.7) and held to maturity investments (Note 4.8) and from Financial assets available for sale (Note 4.5) to Loans and advances to customers (Note 4.7), as follows:
| Jun. 30, 17 | Dec. 31, 16 | ||||||
|---|---|---|---|---|---|---|---|
| Book value on reclassification date |
Book value at Jun. 30, 17 |
Fair value at Jun. 30, 17 |
Book value on reclassification date |
Book value at Dec. 31, 16 |
Fair value at Dec. 31, 16 |
Effective interest rate on reclassification date |
|
| Reclassification of bonds in 2008 | |||||||
| Financial assets held for trading | ( 24 308) | ( 24 448) | |||||
| Loans represented by securities | 11 393 | 11 393 | 6.37% | ||||
| Held to maturity investments | 12 915 | 14 416 | 13 383 | 13 055 | 14 416 | 13 371 | 6.29% |
| Reclassification of bonds in 2009 | |||||||
| Financial assets held for trading | ( 111) | ( 979) | |||||
| Loans represented by securities | 111 | 158 | 185 | 131 | 181 | 215 | 5.34% |
| Held to maturity investments | 848 | 1 902 | 1 866 | 5.98% | |||
| Reclassification of bonds in 2013 | |||||||
| Financial assets available for sale | ( 4 093) | ( 4 093) | |||||
| Loans represented by securities | 4 093 | 4 984 | 5 298 | 4 093 | 5 199 | 3 928 | 1.94% |
| 19 558 | 18 866 | 21 698 | 19 380 |
In 2009 and 2008, in the context of the lack of liquidity in the bond market, the valuation prices that can be obtained for these securities did not reflect the prices on an active market traded on a regular basis. Therefore, the BPI Group decided to reclassify these bonds from financial assets held for trading to loans and advances to customers and held to maturity investments.
In 2013 a security recorded in the financial assets available for sale portfolio was reclassified to the loans to customers portfolio as, due to the lack of liquidity, its valuation did not reflect the price on an active market with regular transactions.
For purposes of determining the effective interest rate of the reclassified assets at their reclassification date, the BPI Group estimated that it would recover all future cash flows relating to the reclassified securities.
After the reclassification date, the gain / (loss) relating to fair value changes of these securities not recognised in the statement of income in the first half of 2017 and in 2016 and other gain / (loss) recognised in reserves and in the statement of income for these periods for securities reclassified from financial assets held for trading, were as follows:
| Jun. 30, 17 | Dec. 31, 16 | ||||||
|---|---|---|---|---|---|---|---|
| Gain/ (loss) associated with fair value changes not |
Other gain / (loss) recognised in: |
Gain/ (loss) associated with fair value changes not |
Other gain / (loss) recognised in: |
||||
| recognised in the statement of income |
Statement of Reserves income |
recognised in the statement of income |
Reserves | Statement of income |
|||
| Loans represented by securities | ( 7) | 130 | ( 420) | 257 | |||
| Held-to-maturity investments | 27 | 4 | 152 | 34 | |||
| 20 | 133 | ( 268) | 291 |
The amounts of gain / (loss) relating to fair value changes not recognised in the statement of income correspond to gain / (loss) that would affect net income if the bonds had remained in the "Financial assets held for trading" portfolio. Part of these amounts would be offset by opposite results under the caption "Technical Provisions", namely in the case of gain / (loss) on securities allocated to insurance portfolios with profit participation.
The amounts presented in other gain / (loss) recognised in the statement of income include interest, premiums / discounts and other expenses. The amounts presented in other gain / (loss) recognised in reserves correspond to the fair value changes of financial assets available for sale after the reclassification date.
The BPI Group assesses and controls risk in accordance with best practices and in compliance with the prudential rules and regulations, following the precepts, definitions and valuation methods recommended by the Basel Banking Supervision Committee in its three pillars.
The Directors' Report, presented together with the notes to Banco BPI's financial statements, also includes a section relating to "Risk management", which contains additional information about the nature and extent of the BPI Group's financial risks.
The BPI Group's exposure to the debt of countries that have requested financial support from the European Union, the European Central Bank and the International Monetary Fund at June 30, 2017, excluding the insurance capitalization portfolios of BPI Vida e Pensões, was as follows:
| BPI Group excluding insurance capitalization portfolios |
Nominal Value |
Net book value / fair value |
Net gain/ (loss) on securities |
Hedge accounting effect |
Impairment recognized |
|---|---|---|---|---|---|
| Held for trading and at fair value through profit or loss |
32 274 | 32 842 | 194 | ||
| Portugal | 32 274 | 32 842 | 194 | ||
| Available for sale | 2 249 500 | 2 279 358 | 23 600 | ( 21 779) | |
| Portugal | 2 249 500 | 2 279 358 | 23 600 | ( 21 779) | |
| Total exposure | 2 281 774 | 2 312 200 | 23 794 | ( 21 779) |
The net book value presented above corresponds to the fair value. Fair value was determined based on prices in international markets, the unrealised gains / (losses) and hedge accounting effect being reflected in specific reserve captions or in the statement of income,
depending on whether the securities are classified in the available for sale securities portfolio or in the held for trading securities portfolio, respectively. Banco BPI considers that at June 30, 2017 there was no objective evidence of impairment.
At June 30, 2017 the BPI Group had no exposure to Greek sovereign debt. The BPI Group has in the financial assets available for sale portfolio, KION MORTGAGE Class A bonds (securitisation of mortgage loans originated by the Greek Millennium bank) in the amount of 39 t. euro (Note 4.5).
The BPI Group's exposure, excluding the insurance capitalisation portfolios of BPI Vida e Pensões, to the debt of countries that have requested financial support from the European Union, the European Central Bank and the International Monetary Fund at June 30, 2017 is as follows, by maturity date:
| Maturity | 2017 | 2018 a 2021 | > 2022 | Total |
|---|---|---|---|---|
| Portugal | 1 043 637 | 1 265 716 | 2 847 | 2 312 200 |
| 1 043 637 | 1 265 716 | 2 847 | 2 312 200 |
The ratings of Portugal are the following:
| Jun. 30, 17 | Dec. 31, 16 | |||||||
|---|---|---|---|---|---|---|---|---|
| S&P | Moody's | Fitch | S&P | Moody's | Fitch | |||
| Portugal | BB+ | Ba1 | BB+ | BB+ | Ba1 | BB+ |
In addition, at June 30, 2017, some insurance capitalization portfolios of BPI Vida e Pensões, fully consolidated in the financial statements of the BPI Group, held Portuguese sovereign debt bonds.
| Insurance capitalization portfolios | Nominal Value |
Net book value |
Market value |
Impairment | |
|---|---|---|---|---|---|
| Held for trading and at fair value through profit or | |||||
| loss | 131 113 | 133 066 | 133 066 | ||
| Portugal | 131 113 | 133 066 | 133 066 | ||
| Loans and other receivables | 50 000 | 50 000 | |||
| Portugal | 50 000 | 50 000 | |||
| Total exposure | 181 113 | 183 066 | 133 066 |
Exposure of the insurance capitalization portfolios of BPI Vida e Pensões to the sovereign debt of Portugal, at June 30, 2017 is made up as follows, by maturity date:
| Maturity | 2017 | 2018 a 2021 | > 2022 | Total |
|---|---|---|---|---|
| Portugal | 116 274 | 66 476 | 183 066 | |
| 116 274 | 66 476 | 316 | 183 066 |
Credit risk is one of the most significant risks of the BPI Group's operations. More information about this risk, particularly about the management process for the various segments of credit, can be found in the section "Risk Management" in the Directors' Report.
Maximum exposure to credit risk at June 30, 2017, by type of financial instrument, is as follows:
| Type | Gross | Net | |
|---|---|---|---|
| of financial | book | Impairment | book |
| instrument | value | value | |
| Balance sheet items | |||
| Deposits at other credit institutions | 300 027 | 300 027 | |
| Financial assets held for trading and | |||
| at fair value through profit or loss | 2 241 237 | 2 241 237 | |
| Financial assets available for sale | 3 882 030 | ( 102 760) | 3 779 270 |
| Loans and advances to credit institutions | 744 557 | 744 557 | |
| Loans and advances to customers | 23 493 954 | ( 674 108) | 22 819 846 |
| Held to maturity investments | 14 415 | 14 415 | |
| Derivatives | |||
| Hedging derivatives | 20 437 | 20 437 | |
| Trading derivatives1 | 168 494 | 168 494 | |
| 30 865 151 | ( 776 868) | 30 088 283 | |
| Off balance sheet items | |||
| Guarantees provided | 1 245 023 | ( 19 176) | 1 225 847 |
| Irrevocable credit lines | 473 | 473 | |
| Underw riting of commercial paper | 411 340 | ( 1 382) | 409 958 |
| 1 656 836 | ( 20 558) | 1 636 278 | |
| 32 521 987 | ( 797 426) | 31 724 561 |
1 This caption is presented in the balance sheet as financial assets held for trading and at fair value through profit or loss.
Maximum exposure to credit risk at December 31, 2016, by type of financial instrument, is as follows:
| Type | Gross | Net | |
|---|---|---|---|
| of financial | book | Impairment | book |
| instrument | value | value | |
| Balance sheet items | |||
| Deposits at other credit institutions | 300 190 | 300 190 | |
| Financial assets held for trading and | |||
| at fair value through profit or loss | 2 017 992 | 2 017 992 | |
| Financial assets available for sale | 3 983 429 | ( 106 995) | 3 876 434 |
| Loans and advances to credit institutions | 637 607 | 637 607 | |
| Loans and advances to customers | 23 430 958 | ( 695 200) | 22 735 758 |
| Held to maturity investments | 16 317 | 16 317 | |
| Derivatives | |||
| Hedging derivatives | 25 802 | 25 802 | |
| Trading derivatives1 | 179 921 | 179 921 | |
| 30 592 216 | ( 802 195) | 29 790 021 | |
| Off balance sheet items | |||
| Guarantees provided | 1 294 856 | ( 21 194) | 1 273 662 |
| Irrevocable credit lines | 1 356 | ( 1) | 1 355 |
| Underw riting of commercial paper | 409 638 | ( 1 278) | 408 360 |
| 1 705 850 | ( 22 473) | 1 683 377 | |
| 32 298 066 | ( 824 668) | 31 473 398 |
1 This caption is presented in the balance sheet as financial assets held for trading and at fair value through profit or loss.
Overdue loans and interest at June 30, 2017, by non performing classes, are as follows:
| Non performing classes | ||||||
|---|---|---|---|---|---|---|
| up to 1 month |
from 1 to 3 months |
from 3 months to 1 year |
from 1 to 5 years |
more than 5 years |
Total | |
| Loans and advances to customers | ||||||
| Subject to individual assessment | ||||||
| Overdue loans and interest | 2 150 | 10 950 | 175 802 | 83 354 | 272 256 | |
| Impairment | ( 1 475) | ( 5 420) | ( 112 730) | ( 47 069) | ( 166 694) | |
| 675 | 5 530 | 63 072 | 36 285 | 105 562 | ||
| Subject to collective assessment | ||||||
| Overdue loans and interest | 15 | 3 596 | 24 601 | 199 665 | 154 540 | 382 417 |
| Impairment | ( 4) | ( 1 056) | ( 9 620) | ( 90 949) | ( 100 770) | ( 202 399) |
| 11 | 2 540 | 14 981 | 108 716 | 53 770 | 180 018 |
In addition, at June 30, 2017 collective impairment of 305 015 t. euro is recorded for performing loans to customers and loans and advances to credit institutions.
Overdue loans and interest at December 31, 2016, by non performing classes, are as follows:
| Non performing classes | ||||||
|---|---|---|---|---|---|---|
| up to 1 month |
from 1 to 3 months |
from 3 months to 1 year |
from 1 to 5 years |
more than 5 years |
Total | |
| Loans and advances to customers | ||||||
| Subject to individual assessment | ||||||
| Overdue loans and interest | 967 | 41 636 | 196 438 | 59 750 | 298 791 | |
| Impairment | ( 546) | ( 31 945) | ( 103 869) | ( 39 181) | ( 175 541) | |
| 421 | 9 691 | 92 569 | 20 569 | 123 250 | ||
| Subject to collective assessment | ||||||
| Overdue loans and interest | 20 | 4 566 | 25 392 | 221 697 | 140 360 | 392 035 |
| Impairment | ( 1) | ( 1 150) | ( 8 971) | ( 102 057) | ( 91 701) | ( 203 880) |
| 19 | 3 416 | 16 421 | 119 640 | 48 659 | 188 155 | |
| Non-current assets held for sale and discontinued operations |
||||||
| Overdue loans and interest | 6 932 | 12 711 | 25 155 | 17 973 | 62 771 | |
| Impairment | ( 5 221) | ( 11 679) | ( 18 629) | ( 10 550) | ( 46 079) | |
| 1 711 | 1 032 | 6 526 | 7 423 | 16 692 |
In addition, at December 31, 2016 collective impairment of 315 779 t. euro is recorded for performing loans to customers and loans and advances to credit institutions. BFA recognized impairment for loans to regular customers amounting to 30 721 t. euro.
Banco BPI receives, among others, the following collateral in its loan granting business:
The fair value of collateral received is determined based on market value considering its nature. For example, property received in guarantee is valued by external appraisers or by Banco BPI's units using methods considered appropriate.
The coverage of overdue loans by collateral received at June 30, 2017 was as follows:
| Loans w ith default | Collateral 1 | |||||
|---|---|---|---|---|---|---|
| Performing | ||||||
| Coverage | amount | Overdue | Total | Mortgages | Other Collateral 2 | Impairment 3 |
| associated w ith | ||||||
| defaulting loans | ||||||
| >=100% | 122 113 | 172 275 | 294 388 | 290 877 | 3 511 | 94 146 |
| >=75% and <100% | 47 063 | 111 621 | 158 684 | 137 321 | 4 973 | 80 330 |
| >=50% and <75% | 1 497 | 53 929 | 55 426 | 34 155 | 1 590 | 33 912 |
| >=25% and <50% | 1 126 | 20 827 | 21 953 | 8 719 | 617 | 15 682 |
| >=0 and <25% | 32 591 | 7 705 | 40 296 | 622 | 1 263 | 16 427 |
| Without collateral | 64 702 | 288 316 | 353 018 | 209 507 | ||
| Total | 269 092 | 654 673 | 923 765 | 471 694 | 11 954 | 450 004 |
1 The value of collateral presented is the lower of the fair value of the collateral received and the amount owed at June 30, 2017.
2 Other collateral includes pledged deposits and securities.
3 For purposes of determining impairment, pledged property is valued at the amount in the event of execution, which is lower than market value. The amount of impairment shown includes 80 911 t. euro relating to performing loans associated with overdue loans.
The coverage of performing loans on which impairment was determined on an individual basis at June 30, 2017 was as follows:
| Loans w ith impairment | Collateral 1 | |||
|---|---|---|---|---|
| Coverage | Performing amount |
Mortgages | Other Collateral 2 | Impairment 3 |
| Loans not represented by securities | ||||
| >=100% | 77 759 | 71 360 | 6 399 | 12 983 |
| >=75% and <100% | 4 325 | 4 226 | 855 | |
| >=50% and <75% | 1 257 | 168 | 640 | 308 |
| >=25% and <50% | 6 929 | 2 781 | 2 732 | |
| >=0 and <25% | 84 272 | 3 068 | 5 616 | 16 714 |
| Without collateral | 115 506 | 48 302 | ||
| 290 048 | 81 603 | 12 655 | 81 894 | |
| Guarantees provided | ||||
| >=100% | 8 803 | 4 708 | 4 095 | 910 |
| >=75% and <100% | 60 | 54 | 3 | |
| >=50% and <75% | 17 | 10 | 17 | |
| >=25% and <50% | 2 127 | 602 | 708 | |
| >=0 and <25% | 5 403 | 270 | ||
| Without collateral | 72 835 | 12 054 | ||
| 89 245 | 5 310 | 4 159 | 13 962 | |
| 379 293 | 86 913 | 16 814 | 95 856 |
1 The value of collateral shown is the lower of the fair value of the collateral received and the amount owed at June 30, 2017.
2 Other collateral includes pledged deposits and securities.
3 For purposes of determining impairment, pledged property is valued at the amount in the event of execution, which is lower than market value. At June 30, 2017 the fair value of the underlying collateral of the domestic Corporate, Construction and CRE and Housing portfolio was as follows:
| Corporate | Construction and CRE | Housing | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair value of the | Properties | Other collateral 1 | Properties | Other collateral 1 | Properties | Other collateral 1 | ||||||
| collateral | Number | Amount | Number | Amount Number | Amount | Number | Amount | Number | Amount Number | Amount | ||
| < 0.5 M€ | 564 | 95 809 | 1 827 | 74 320 | 1 711 | 229 028 | 3 662 | 87 413 | 148 473 | 21 108 145 | 2 897 | 92 832 |
| ≥ 0.5 M€ and < 1 M€ | 152 | 106 531 | 56 | 37 797 | 132 | 91 390 | 39 | 25 420 | 1 117 | 708 459 | 10 | 6 349 |
| ≥ 1 M€ and < 5 M€ | 259 | 531 783 | 87 | 186 451 | 116 | 228 021 | 25 | 48 312 | 94 | 132 725 | 4 | 6 210 |
| ≥ 5 M€ and < 10 M€ | 51 | 348 049 | 20 | 134 111 | 7 | 47 282 | 1 | 5 150 | 1 | 5 533 | ||
| ≥ 10 M€ and < 20 M€ | 23 | 288 907 | 5 | 74 567 | 3 | 35 108 | 1 | 19 614 | ||||
| ≥ 20 M€ and < 50 M€ | 5 | 109 852 | 5 | 180 915 | 2 | 44 085 | ||||||
| ≥ 50 M€ | 2 | 103 853 | 5 | 434 886 | ||||||||
| Total | 1 054 | 1 480 931 | 2 002 | 792 014 | 1 976 | 1 109 800 | 3 728 | 185 909 | 149 685 | 21 954 862 | 2 911 | 105 391 |
1 Includes financial collaterals (shares, bonds, deposits) and other items.
At June 30, 2017 the loan-to-value ratio (LTV) for the domestic Corporate, Construction and CRE and Housing portfolio was as follows:
| Segment / Loan-to-value ratio | Number of | Without signs | With signs of | Default | Impairment |
|---|---|---|---|---|---|
| properties | of impairment | impairment | |||
| Corporate | |||||
| Without collateral | 4 014 455 | 71 159 | 114 866 | 114 409 | |
| < 60% | 650 | 367 880 | 15 199 | 23 872 | 23 425 |
| ≥ 60% and <80% | 163 | 99 644 | 16 975 | 34 632 | 14 139 |
| ≥ 80% and <100% | 95 | 102 755 | 211 | 2 704 | 2 011 |
| ≥ 100% | 146 | 762 668 | 46 137 | 94 059 | 92 539 |
| Construction and CRE | |||||
| Without collateral | 313 990 | 13 958 | 41 689 | 41 322 | |
| < 60% | 1 399 | 167 657 | 28 648 | 30 780 | 13 574 |
| ≥ 60% and <80% | 267 | 66 906 | 748 | 43 769 | 27 788 |
| ≥ 80% and <100% | 108 | 53 633 | 1 367 | 2 272 | 1 813 |
| ≥ 100% | 202 | 137 101 | 4 256 | 15 034 | 12 261 |
| Housing | |||||
| Without collateral | 19 058 | 211 | 12 456 | 9 544 | |
| < 60% | 83 507 | 4 163 852 | 16 074 | 93 229 | 26 219 |
| ≥ 60% and <80% | 38 958 | 3 689 750 | 15 001 | 105 505 | 39 926 |
| ≥ 80% and <100% | 24 489 | 2 467 410 | 11 324 | 154 994 | 61 464 |
| ≥ 100% | 2 731 | 172 737 | 2 108 | 145 613 | 66 469 |
| 152 715 | 16 599 496 | 243 376 | 915 474 | 546 903 |
The coverage of overdue loans by collateral received at December 31, 2016 was as follows:
| Loans w ith default | Collateral 1 | |||||
|---|---|---|---|---|---|---|
| Performing | ||||||
| Coverage | amount | Overdue | Total | Mortgages | Other Collateral 2 | Impairment 3 |
| associated w ith | ||||||
| defaulting loans | ||||||
| >=100% | 101 262 | 166 985 | 287 798 | 265 759 | 2 489 | 86 182 |
| >=75% and <100% | 53 339 | 128 630 | 208 447 | 155 450 | 6 192 | 87 572 |
| >=50% and <75% | 747 | 60 438 | 61 055 | 38 737 | 1 434 | 36 370 |
| >=25% and <50% | 814 | 14 949 | 20 135 | 6 022 | 228 | 10 207 |
| >=0 and <25% | 31 359 | 5 982 | 46 876 | 402 | 1 274 | 15 279 |
| Without collateral | 52 291 | 313 842 | 558 263 | 218 913 | ||
| Total | 239 812 | 690 826 | 1 182 574 | 466 370 | 11 617 | 454 523 |
1 The value of collateral presented is the lower of the fair value of the collateral received and the amount owed at December 31, 2016.
2 Other collateral includes pledged deposits and securities.
3 For purposes of determining impairment, pledged property is valued at the amount in the event of execution, which is lower than market value. The amount of impairment shown includes 75 102 t. euro relating to performing loans associated with overdue loans.
The coverage of performing loans on which impairment was determined on an individual basis at December 31, 2016 was as follows:
| Loans w ith impairment | Collateral1 | |||
|---|---|---|---|---|
| Coverage | Performing loans |
Mortgages | Other collateral 2 | Impairment 3 |
| Loans not represented by securities | ||||
| >=100% | 107 328 | 90 595 | 16 733 | 14 661 |
| >=75% and <100% | 8 791 | 7 080 | 204 | 5 530 |
| >=50% and <75% | 2 937 | 1 265 | 467 | 840 |
| >=25% and <50% | 20 780 | 4 875 | 2 125 | 8 963 |
| >=0 and <25% | 64 209 | 153 | 4 359 | 10 128 |
| Without collateral | 119 650 | 50 498 | ||
| 323 695 | 103 968 | 23 888 | 90 620 | |
| Loans represented by securities | ||||
| Without collateral | ||||
| Guarantees provided | ||||
| >=100% | 15 042 | 10 673 | 4 369 | 1 134 |
| >=75% and <100% | 60 | 54 | 3 | |
| >=25% and <50% | 2 206 | 602 | 20 | 412 |
| Without collateral | 91 282 | 14 727 | ||
| 108 590 | 11 275 | 4 443 | 16 276 | |
| 432 285 | 115 243 | 28 331 | 106 896 |
1 The value of collateral shown is the lower of the fair value of the collateral received and the amount owed at December 31, 2016.
2 Other collateral includes pledged deposits and securities.
3 For purposes of determining impairment, pledged property is valued at the amount in the event of execution, which is lower than market value.
At December 31, 2016 the fair value of the underlying collateral of the domestic Corporate, Construction and CRE and Housing portfolio was as follows:
| Corporate | Construction and CRE | Housing | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair value of the | Properties | Other collateral 1 | Properties | Other collateral 1 | Properties | Other collateral 1 | |||||||
| collateral | Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | |
| < 0.5 M€ | 641 | 108 734 | 1 770 | 84 578 | 1 689 | 216 258 | 3 741 | 69 043 | 147 879 | 20 395 799 | 3 285 | 90 168 | |
| ≥ 0.5 M€ and < 1 M€ | 158 | 111 153 | 69 | 46 735 | 116 | 79 417 | 19 | 11 676 | 977 | 618 951 | 9 | 5 963 | |
| ≥ 1 M€ and < 5 M€ | 254 | 522 708 | 90 | 187 287 | 98 | 179 672 | 13 | 21 599 | 78 | 103 457 | 2 | 3 000 | |
| ≥ 5 M€ and < 10 M€ | 49 | 340 131 | 23 | 156 851 | 5 | 30 580 | 1 | 5 150 | 2 | 11 463 | |||
| ≥ 10 M€ and < 20 M€ | 22 | 285 180 | 7 | 105 537 | 2 | 22 994 | |||||||
| ≥ 20 M€ and < 50 M€ | 7 | 173 918 | 7 | 229 570 | 2 | 44 085 | |||||||
| ≥ 50 M€ | 1 | 62 873 | 3 | 287 787 | 4 | 372 014 | |||||||
| Total | 1 132 | 1 604 697 | 1 969 | 1 098 345 | 1 916 | 945 019 | 3 774 | 107 468 | 148 936 | 21 129 670 | 3 296 | 99 131 | |
1 Includes financial collaterals (shares, bonds, deposits) and other items.
At December 31, 2016 the loan-to-value ratio (LTV) for the domestic Corporate, Construction and CRE and Housing portfolio was as follows:
| Segment / Loan-to-value ratio | Number of | Without signs | With signs of | Default | Impairment |
|---|---|---|---|---|---|
| properties | of impairment | impairment | |||
| Corporate | |||||
| Without collateral | 3 771 353 | 95 600 | 118 408 | 129 478 | |
| < 60% | 721 | 430 412 | 12 333 | 26 744 | 19 999 |
| ≥ 60% and <80% | 162 | 163 001 | 19 783 | 21 093 | 13 712 |
| ≥ 80% and <100% | 60 | 96 608 | 3 567 | 3 119 | 2 059 |
| ≥ 100% | 189 | 962 525 | 63 963 | 101 589 | 94 929 |
| Construction and CRE | |||||
| Without collateral | 302 144 | 2 354 | 38 522 | 34 106 | |
| < 60% | 1 354 | 115 334 | 29 933 | 29 543 | 12 691 |
| ≥ 60% and <80% | 277 | 43 395 | 273 | 44 401 | 25 540 |
| ≥ 80% and <100% | 96 | 59 448 | 1 021 | 3 529 | 2 161 |
| ≥ 100% | 189 | 65 775 | 4 178 | 26 129 | 16 400 |
| Housing | |||||
| Without collateral | 18 843 | 56 | 12 038 | 8 994 | |
| < 60% | 79 499 | 3 871 666 | 10 441 | 85 309 | 24 558 |
| ≥ 60% and <80% | 36 447 | 3 373 917 | 9 585 | 95 197 | 35 090 |
| ≥ 80% and <100% | 28 542 | 2 917 038 | 10 995 | 162 345 | 65 472 |
| ≥ 100% | 4 448 | 339 568 | 3 273 | 173 942 | 77 451 |
| 151 984 | 16 531 026 | 267 355 | 941 908 | 562 641 |
This section presents information concerning the quality of the credit risk of the BPI Group's main financial assets, excluding derivatives which are analysed in detail in Note 4.4. In the case of financial assets with ratings assigned by international rating agencies (Moody, Standard & Poor and Fitch) the rules set in the prudential regulations issued by the Bank of Portugal were followed, selecting the second best in the case of different external ratings for the same instrument. When no specific external ratings were found, Banco BPI used external ratings assigned to the issuer for instruments with the same degree of subordination. In the case of local authorities, banks and other similar institutions, the ratings used are based on the external ratings assigned to the State where the entity has its headquarters. External rating is an important element to consider in the management of positions, especially in security portfolios, and is also used for calculating weights used to determine prudential capital by the standard method, in accordance with the regulations issued by the Bank of Portugal.
Loan exposures without external ratings were distributed by quality levels (project finance), rating classes (for company and entrepreneurs and business exposures), or by scorings (private customer exposure). External and internal ratings, where they exist, are an indicator of increasing importance to the BPI Group's internal management of loans, being used by the teams responsible for monitoring customers in order to inform the decisions regarding new loans or the situation of existing exposure. This internal classification does not include all the Group's exposure, namely it excludes sovereign exposures or exposure to other banks, in which case external ratings are used and the loans granted locally by Banco de Fomento Angola which uses its own methodologies.
Actual internal ratings and scorings include ten classes for regular operations, from E01/N01/01 (less probability of default) to E10/N10/10 (more probability of default); two classes (ED1/ND1/D01 and ED2/ND2/D02) for "incidents" (delays in payment of less than 60 and 90 days, respectively) and finally one class for default (ED3/ND3/D03), when delay in payment of a given amount by a counterparty exceeds 90 days.
Project finance operations have a separate internal classification from other loan operations due to their specific nature, so that at any moment the quality of the credit risk can be determined (from Weak to Strong).
Renegotiated operations are kept at least at the same risk level as that in which they were classified in the month preceding the renegotiation. The reclassification to a lower level of risk occurs only if there is a regular and significant repayment of the operation, payment of accrued interest in arrears, or based on the quality and value of new collateral provided in the renegotiated operation. Gain or income resulting from the renegotiation is recorded when effectively received.
Deposits and loans and advances to credit institutions, by ratings, at June 30, 2017 were as follows:
| Type of financial instrument | Origin | Rating Grade Class | Gross exposure | Impairment | Net exposure |
|---|---|---|---|---|---|
| Deposits and loans and advances to | AAA to AA- | 134 626 | 134 626 | ||
| credit institutions | A+ to A- | 273 408 | 273 408 | ||
| External | BBB+ to BBB- | 97 135 | 97 135 | ||
| rating | BB+ to BB- | 247 503 | 247 503 | ||
| B+ to B- | 37 557 | 37 557 | |||
| < B- | 3 487 | 3 487 | |||
| NR | NR | 186 377 | 186 377 | ||
| 980 093 | 980 093 |
Note: Gross exposure corresponds to the nominal value adjusted for corrections of value and does not include cheques for collection.
Loans and advances to customers, by ratings, at June 30, 2017 were as follows:
| Type of financial instrument | Origin | Rating Grade Class | Gross exposure | Impairment | Net exposure |
|---|---|---|---|---|---|
| Loands and advances to customers | AAA to AA- | 27 037 | 27 037 | ||
| A+ to A- | 61 557 | 749 | 60 808 | ||
| External rating | BBB+ to BBB- | 295 610 | 4 | 295 606 | |
| BB+ to BB- | 1 294 510 | 1 311 | 1 293 199 | ||
| B+ to B- | 188 232 | 188 232 | |||
| < B- | 139 | 139 | |||
| Strong | 95 882 | 575 | 95 307 | ||
| Project Finance | Good | 1 047 475 | 8 506 | 1 038 969 | |
| rating | Satisfactory | 151 716 | 1 186 | 150 530 | |
| Weak | 20 476 | 1 024 | 19 452 | ||
| Default | 133 713 | 46 314 | 87 399 | ||
| E01 to E03 | 910 477 | 4 104 | 906 373 | ||
| Corporate | E04 to E06 | 2 389 537 | 13 313 | 2 376 224 | |
| Rating | E07 to E10 | 959 462 | 12 442 | 947 020 | |
| ED1 to ED3 | 445 143 | 224 857 | 220 286 | ||
| N01 to N03 | 27 736 | 141 | 27 595 | ||
| Entrepreneurs and Business |
N04 to N06 | 453 641 | 2 327 | 451 314 | |
| Rating | N07 to N10 | 595 535 | 5 615 | 589 920 | |
| ND1 to ND3 | 161 560 | 84 461 | 77 099 | ||
| 01 to 03 | 7 694 014 | 7 467 | 7 686 547 | ||
| Scoring | 04 to 06 | 2 753 069 | 5 941 | 2 747 128 | |
| 07 to 10 | 823 429 | 19 692 | 803 737 | ||
| D01 to D03 | 761 965 | 203 688 | 558 277 | ||
| NR | NR | 2 154 085 | 30 391 | 2 123 694 | |
| 23 446 000 | 674 108 | 22 771 892 |
Note: Gross exposure corresponds to the nominal value adjusted for corrections of value.
The securities portfolio, by ratings, at June 30, 2017 was as follows:
| Type of financial instrument | Origin | Rating Grade Class | Gross exposure | Impairment | Net exposure |
|---|---|---|---|---|---|
| Securities | AAA to AA- | 22 769 | 22 769 | ||
| A+ to A- | 191 771 | 191 771 | |||
| External rating | BBB+ to BBB- | 1 859 126 | 1 859 126 | ||
| BB+ to BB- | 2 462 959 | 396 | 2 462 563 | ||
| B+ to B- | 67 021 | 67 021 | |||
| E01 to E03 | 27 369 | 27 369 | |||
| Internal rating | E04 to E06 | 186 | 186 | ||
| E07 to E10 | 811 | 811 | |||
| ED1 to ED3 | |||||
| NR | NR | 1 505 655 | 102 364 | 1 403 291 | |
| 6 137 667 | 102 760 | 6 034 907 |
Deposits and loans and advances to credit institutions, by ratings, at December 31, 2016 were as follows:
| Type of financial instrument | Origin | Rating Grade Class | Gross exposure | Impairment | Net exposure |
|---|---|---|---|---|---|
| Deposits, loans and advances to | AAA to AA- | 173 022 | 173 022 | ||
| credit institutions | A+ to A- | 239 938 | 239 938 | ||
| External rating |
BBB+ to BBB- | 207 114 | 207 114 | ||
| BB+ to BB- | 188 984 | 188 984 | |||
| B+ to B- | 259 | 259 | |||
| < B- | 9 090 | 9 090 | |||
| NR | NR | 53 649 | 53 649 | ||
| 872 056 | 872 056 |
Note: Gross exposure corresponds to the nominal value adjusted for corrections of value and does not includes cheques for collection.
Loans and advances to customers, by ratings, at December 31, 2016 were as follows:
| Type of financial instrument | Origin | Rating Grade Class | Gross exposure | Impairment | Net exposure |
|---|---|---|---|---|---|
| Loans and advances to customers | AAA to AA- | 24 262 | 24 262 | ||
| A+ to A- | 65 314 | 716 | 64 598 | ||
| External | BBB+ to BBB- | 335 999 | 335 999 | ||
| Rating | BB+ to BB- | 1 231 657 | 844 | 1 230 813 | |
| B+ to B- | 198 328 | 198 328 | |||
| Strong | 159 530 | 2 824 | 156 706 | ||
| Project Finance |
Good | 915 376 | 7 904 | 907 472 | |
| rating | Satisfactory | 246 915 | 3 061 | 243 854 | |
| Default | 162 090 | 48 142 | 113 948 | ||
| E01 to E03 | 814 902 | 4 531 | 810 371 | ||
| Corporate | E04 to E06 | 2 276 956 | 11 886 | 2 265 070 | |
| Rating | E07 to E10 | 1 038 496 | 14 624 | 1 023 872 | |
| ED1 to ED3 | 493 866 | 231 762 | 262 104 | ||
| Entrepreneur | N01 to N03 | 28 697 | 120 | 28 577 | |
| s and | N04 to N06 | 442 306 | 2 348 | 439 958 | |
| Business | N07 to N10 | 595 680 | 5 033 | 590 647 | |
| Rating | ND1 to ND3 | 184 098 | 86 021 | 98 077 | |
| 01 to 03 | 7 769 164 | 7 840 | 7 761 324 | ||
| Scoring | 04 to 06 | 2 661 524 | 5 960 | 2 655 564 | |
| 07 to 10 | 755 001 | 19 723 | 735 278 | ||
| D01 to D03 | 817 377 | 213 374 | 604 003 | ||
| NR | NR | 2 157 076 | 28 487 | 2 128 589 | |
| 23 374 614 | 695 200 | 22 679 414 |
Note: Gross exposure corresponds to the nominal value adjusted for corrections of value.
The securities portfolio, by ratings, at December 31, 2016 was as follows:
| Type of financial instrument | Origin | Rating Grade Class | Gross exposure | Impairment | Net exposure |
|---|---|---|---|---|---|
| Securities | AAA to AA- | 305 417 | 305 417 | ||
| A+ to A- | 126 569 | 126 569 | |||
| External | BBB+ to BBB- | 1 762 051 | 1 762 051 | ||
| rating | BB+ to BB- | 2 434 150 | 367 | 2 433 783 | |
| B+ to B- | 71 660 | 29 | 71 631 | ||
| < B- | 41 | 41 | |||
| E01 to E03 | 2 454 | 2 454 | |||
| Internal | E04 to E06 | 27 168 | 27 168 | ||
| rating | E07 to E10 | 734 | 734 | ||
| ED1 to ED3 | 24 | 24 | |||
| NR | NR | 1 287 453 | 106 599 | 1 180 854 | |
| 6 017 721 | 106 995 | 5 910 726 |
At December 31, 2016, the composition of BFA's customer credit ratings, classified as Non-current assets held for sale and discontinued operations, was as follows:
| Type of financial instrument | Origin | Rating Grade Class | Gross exposure | Impairment | Net exposure |
|---|---|---|---|---|---|
| Loans and advances to customers | Level A | 510 722 | 510 722 | ||
| Level B | 704 266 | 8 091 | 696 175 | ||
| Regulation | Level C | 16 944 | 807 | 16 137 | |
| 11/2014 of Nacional Bank |
Level D | 3 672 | 658 | 3 014 | |
| of Angola | Level E | 13 078 | 3 685 | 9 393 | |
| Level F | 24 877 | 16 119 | 8 758 | ||
| Level G | 47 440 | 47 440 | |||
| 1 320 999 | 76 800 | 1 244 199 |
Note: The gross exposure corresponds to the nominal value adjusted for corrections of value.
At June 30, 2017 and at December 31, 2016 the restructured loan operations were identified in accordance with Bank of Portugal Instruction 32/2013 (which replaces Instruction 18/2012) which defines restructured loans due to financial difficulties of the customer.
In accordance with this Instruction, institutions must identify and mark in their information systems, loan contracts with customers in situations of financial difficulty, whenever there are changes to the terms and conditions of the contracts (namely, extension of the repayment term, introduction of grace periods, capitalization of interest, reduction of interest rates, waiver of interest or capital), or the institution agrees to grant new credit facilities for total or partial payment of the existing debt service, and for this purpose include the words "restructured loans due to financial difficulty of the customer."
A customer is considered to be in a position of financial difficulty when it has failed to fulfil any of its financial obligations to the institution or if it is foreseeable that this will occur, given the information available.
The existence of restructured loans has a direct impact on the rating models of the Bank, affecting their rating notation for at least 3 years after the loan restructuring.
The unmarking of restructured loans due to customers' financial difficulties can only be made after a minimum period of two years from the date of their restructuring, provided that the following conditions are met cumulatively:
The following restructured loan operations have been identified for domestic operations of the BPI Group at June 30, 2017 and December 31, 2016:
| Jun. 30, 17 | Dec. 31, 16 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Loans | Loans | ||||||||
| Performing | Overdue | Total | Impairment | Performing Overdue Total |
Impairment | ||||
| Domestic Activity | |||||||||
| Companies | 853 027 | 182 127 | 1 035 154 | 226 427 | 860 286 | 177 025 | 1 037 311 | 225 275 | |
| Loans to individuals | |||||||||
| Housing | 190 375 | 57 117 | 247 492 | 50 284 | 191 649 | 56 843 | 248 492 | 53 500 | |
| Other loans | 74 419 | 50 254 | 124 673 | 50 726 | 86 135 | 55 602 | 141 737 | 52 873 | |
| 1 117 821 | 289 498 | 1 407 319 | 327 437 | 1 138 070 | 289 470 | 1 427 540 | 331 648 |
At December 31, 2016 restructured loan operations identified by Banco de Fomento de Angola amounted to 25 550 t. euro.
The schedules presented below were prepared based on the requirements of IFRS 7 relating to Liquidity Risk, considering the total contractual undiscounted cash flows expected to be paid or received in the periods relating to outstanding transactions on the reference dates.
The main assumptions used in preparing the tables below were as follows:
trading portfolio operations and all derivatives are considered in these schedules by their projected or estimated cash flows, on the contractual dates, and not by the market values that would be obtained by their possible sale in the short term.
The contractual undiscounted cash flows of financial assets and liabilities at June 30, 2017 were as follows:
| de d on ma n |
3 m hs to t on |
fro 3 m t hs m on |
fro 1 to 5 m |
t ha n 5 mo re |
de ine d ter un m |
To l ta |
|
|---|---|---|---|---|---|---|---|
| up | to 1 y ea r |
ea rs y |
ea rs y |
||||
| As ts se |
|||||||
| Ca h a d de its at Ce ntr l Ba ks s n p os a n |
9 8 3 4 0 3 |
9 8 3 4 0 3 |
|||||
| De its at ot he d it ins t itut ion p os r c re s |
3 0 0 0 27 |
3 0 0 0 27 |
|||||
| F ina ia l as ts he l d for tra d ing d a t fa ir v lue t hro h nc se an a ug |
|||||||
| f it o los p ro r s |
1 9 8 7 9 4 |
47 4 1 3 7 |
4 15 4 6 6 |
9 8 5 1 0 |
1 0 25 9 3 4 |
2 2 1 2 8 4 2 |
|
| F ina ia l as ts i la b le for le nc se av a sa |
1 0 7 0 7 47 |
1 8 9 0 5 1 1 |
5 0 0 0 0 0 |
3 1 2 1 6 |
3 7 2 7 0 8 |
3 8 6 5 1 8 2 |
|
| He l d-t atu ity inv tme nts o-m r es |
2 7 0 0 |
8 1 0 0 |
3 6 0 0 |
1 4 4 0 0 |
|||
| Lo d a dv s t d it ins t itut ion an s a n an ce o c re s |
4 4 6 3 2 6 |
1 6 7 5 7 3 |
1 2 9 3 3 2 |
8 6 3 |
7 4 4 0 9 4 |
||
| Lo d a dv s t tom an s a n an ce o c us ers |
2 1 8 7 8 1 8 |
2 5 3 8 3 6 3 |
6 6 1 3 3 4 9 |
1 1 4 2 9 0 6 7 |
6 5 4 6 7 3 |
2 3 4 2 3 27 0 |
|
| 1 He dg ing de iva t ive r s |
8 1 8 8 0 6 |
1 8 6 4 3 0 4 |
4 2 0 0 6 4 4 |
1 8 3 6 5 9 |
7 0 6 7 4 1 3 |
||
| 1 Tra d ing de iva t ive r s |
2 1 4 0 2 2 1 |
3 9 3 0 6 4 |
2 25 6 75 1 |
2 0 3 1 3 7 2 |
6 8 2 1 4 0 7 |
||
| Co ntr tua l inte t c h f low f de iva t ive ac res as s o r s |
7 7 8 3 |
3 1 6 7 9 |
9 6 6 6 6 |
6 7 25 8 |
2 0 3 3 8 5 |
||
| Co ntr tua l inte t c h f low f o t he ets ac res as s o r a ss |
1 3 3 9 0 3 |
4 1 4 7 4 6 |
1 5 3 8 4 4 9 |
1 9 9 9 3 3 7 |
4 0 8 6 4 3 6 |
||
| 1 2 8 3 4 3 0 |
7 0 0 7 0 9 9 |
7 7 8 2 47 7 |
15 75 4 25 6 |
15 8 4 1 2 8 2 |
2 0 5 3 3 1 6 |
4 9 7 2 1 8 5 9 |
|
| L ia b i l it ies |
|||||||
| Re f c tra l ba ks so urc es o en n |
1 47 2 1 3 |
2 0 0 0 8 3 1 |
2 1 4 8 0 4 4 |
||||
| F ina ia l l ia b i l it ies he l d for tra d ing nc |
4 6 9 8 |
4 6 9 8 |
|||||
| Re f o t he d it ins t itut ion so urc es o r c re s |
7 6 5 5 5 0 |
1 45 3 8 9 |
3 2 2 8 4 6 |
3 8 9 4 2 1 |
1 6 2 3 2 0 6 |
||
| Re f c tom d o t he de bts so urc es o us ers an r |
1 1 1 3 3 8 3 4 |
2 6 4 3 2 8 3 |
3 7 9 9 1 8 9 |
3 0 8 5 1 8 3 |
1 6 5 9 6 4 8 |
2 2 3 2 1 1 3 7 |
|
| De bt it ies se cu r |
15 6 5 6 6 |
6 8 3 1 1 |
2 3 0 27 |
1 9 9 9 6 |
2 6 7 9 0 0 |
||
| F ina ia l l ia b i l it ies lat ing to tra fer d a ets nc re ns re ss |
5 1 1 6 1 4 |
5 1 1 6 1 4 |
|||||
| 1 He dg ing de iva t ive r s |
8 1 8 77 3 |
1 8 7 2 5 8 6 |
4 2 0 0 9 8 9 |
1 8 3 6 5 9 |
7 0 7 6 0 0 7 |
||
| 1 Tra d ing de iva t ive r s |
2 0 9 9 0 6 0 |
3 8 5 1 0 3 |
2 2 0 5 7 4 1 |
1 9 8 5 45 6 |
6 6 75 3 6 0 |
||
| Te hn ica l p is ion c rov s |
17 6 4 1 6 |
6 7 1 1 2 9 |
45 6 8 47 |
6 1 9 1 8 2 |
1 9 2 3 5 75 |
||
| Ot he bo d ina te d de bt d p art ic ip at ing bo ds r s r an n u |
6 0 7 3 1 |
8 5 0 7 |
3 0 0 0 0 0 |
3 6 9 2 3 8 |
|||
| Co ntr tua l inte t c h f low f de iva t ive ac res as s o r s |
7 1 0 4 |
4 4 5 7 3 |
1 3 9 6 9 1 |
8 2 6 3 3 |
27 4 0 0 1 |
||
| Co ntr tua l inte t c h f low f o t he l ia b i l it ies ac res as s o r |
8 3 0 1 0 |
3 9 3 1 6 |
25 8 7 2 |
8 1 9 15 |
2 3 0 1 1 3 |
||
| 1 1 1 3 3 8 3 4 |
6 9 5 7 7 0 6 |
7 0 3 8 8 0 1 |
1 2 4 6 1 0 27 |
5 8 3 3 5 25 |
4 3 4 2 4 8 9 3 |
1 Includes the notional amount of swap operations.
The contractual undiscounted cash flows of financial assets and liabilities at December 31, 2016 were as follows:
| de nd on ma |
to 3 nth up mo s |
fro m 3 nth s to mo |
fro m 1 to 5 |
tha n 5 mo re |
und ete rmi ned |
Tot al |
|
|---|---|---|---|---|---|---|---|
| 1 y ear |
yea rs |
yea rs |
|||||
| As ts se Ca sh and de its at C ent ral Ba nks |
876 62 1 |
87 6 6 21 |
|||||
| pos De its at o the red it in stit utio |
235 10 9 |
65 08 1 |
30 0 1 |
||||
| pos r c ns |
90 | ||||||
| Fin ial ets he ld f tra din nd at f air lue th h p rof it o anc ass or g a va rou g r |
|||||||
| los s |
41 9 6 47 |
203 29 0 |
363 95 3 |
54 803 |
976 29 9 |
2 0 17 992 |
|
| Fin ial aila ble fo ale ets anc ass av r s |
858 14 2 |
2 1 44 602 |
495 32 1 |
84 875 |
40 0 4 89 |
3 9 83 429 |
|
| He ld-t atu rity inv est nts o-m me |
2 6 08 |
7 8 25 |
5 8 67 |
16 300 |
|||
| Loa and ad s to ed it in stit utio ns va nce cr ns |
377 77 6 |
120 56 4 |
138 01 7 |
590 | 636 94 7 |
||
| Loa and ad s to sto ns va nce cu me rs 1 |
2 4 15 906 |
2 2 74 137 |
6 8 09 865 |
11 153 99 0 |
690 82 6 |
23 344 72 4 |
|
| He dg ing de riva tive s |
89 3 6 47 |
2 0 82 563 |
4 0 54 027 |
180 84 2 |
7 2 11 079 |
||
| 1 Tra din der iva tive g s |
1 5 07 748 |
35 1 8 46 |
2 2 23 824 |
1 9 85 780 |
6 0 69 198 |
||
| No ent lia bilit ies he ld f le a nd dis tinu ed rat ion n-c urr or sa con ope s |
|||||||
| Ca sh and de its at c red it in stit utio pos ns |
1 5 14 512 |
138 64 8 |
1 6 53 160 |
||||
| Fin ial ets he ld f tra din ilab le f sal anc ass or g o r a va or e |
492 56 7 |
1 6 93 412 |
828 83 9 |
34 1 1 69 |
3 3 40 |
3 3 59 327 |
|
| Loa and ad s to sto ns va nce cu me rs |
99 264 |
178 10 7 |
56 1 0 12 |
419 79 4 |
62 822 |
1 3 20 999 |
|
| Co ntr act ual int st c ash flo of de riva tive ere w s s |
7 3 05 |
41 960 |
102 91 6 |
72 859 |
225 04 0 |
||
| Co ntr act ual int st c ash flo of ot her set ere w s as s |
161 72 4 |
41 5 1 18 |
1 5 31 045 |
1 8 20 052 |
3 9 27 939 |
||
| Co flo of d f ntr act ual int st c ash nt a ts hel ere w non -cu rre sse or |
|||||||
| le a nd dis ntin ued tion sa co op era s |
9 9 81 |
362 6 75 |
444 05 5 |
160 08 9 |
976 88 1 |
||
| 2 6 26 242 |
7 4 50 045 |
9 8 76 180 |
17 558 74 1 |
16 274 84 3 |
2 1 33 776 |
55 919 82 6 |
|
| Lia bil itie s |
|||||||
| Re of ntr al b ank so urc es ce s |
1 | 2 0 00 000 |
2 0 00 00 1 |
||||
| of Re oth dit ins titu tion so urc es er cre s |
259 83 4 |
108 32 9 |
20 404 |
706 84 1 |
1 0 95 408 |
||
| Re of d o the r d ebt tom so urc es cus ers an s |
10 320 78 6 |
2 4 72 323 |
4 1 22 347 |
3 2 503 55 |
1 7 66 894 |
21 937 85 3 |
|
| De bt s ritie ecu s |
24 8 5 16 |
10 080 |
247 27 1 |
505 86 7 |
|||
| Fin ial liab ilitie ela ting to tra nsf ed ets anc s r err ass |
55 5 5 66 |
555 56 6 |
|||||
| 1 He dg ing de riva tive s |
88 8 8 50 |
2 0 68 317 |
4 0 52 644 |
180 84 2 |
7 1 90 653 |
||
| 1 Tra din der iva tive g s |
1 5 11 419 |
35 1 9 66 |
2 2 23 824 |
1 9 85 780 |
6 0 72 990 |
||
| No lia bilit ies he ld f le a nd dis tinu ed ion ent rat n-c urr or sa con |
|||||||
| ope s Re of tom d o the r d ebt so urc es cus ers an s |
3 8 73 665 |
1 1 07 337 |
840 79 4 |
1 1 67 |
5 8 22 963 |
||
| Oth fina nci al i nst ent |
151 75 8 |
15 1 7 58 |
|||||
| er rum s Tec hni cal ovi sio |
209 62 0 |
60 1 9 46 |
0 454 47 |
782 79 3 |
2 0 48 829 |
||
| pr ns Oth bor din d d ebt atin bon ds ate art |
56 957 |
12 48 1 |
69 | ||||
| d p icip er su an g |
438 | ||||||
| Co ntr act ual int st c ash flo of de riva tive ere w s s |
5 0 38 |
52 078 |
159 69 1 |
88 529 |
305 33 6 |
||
| Co ntr act ual int st c ash flo of ot her lia bilit ies ere w s |
81 480 |
4 4 32 |
4 0 02 |
37 086 |
127 00 0 |
||
| Co ual int ash flo of nt l iab ilitie s h eld fo ntr act st c ere w non -cu rre r |
|||||||
| le a nd dis ntin ued tion sa co op era s |
16 190 |
38 675 |
54 865 |
||||
| 14 194 45 1 |
7 0 09 323 |
8 2 11 444 |
12 417 81 0 |
6 1 05 498 |
47 938 52 6 |
1 Includes the notional amount of swap operations.
The Bank continuously tracks the evolution of its liquidity, monitoring the incoming and outgoing of funds in real time in accordance with the various origins and destinations. Projections of liquidity are carried out periodically in order to help plan the short and medium term funding strategy.
Net funding obtained from the ECB remains at 2 000 million euro in June 2017, relating to the funds obtained under the Targeted Longer – Term Refinancing Operations (TLTRO) (4 year operation at a fixed rate launched by the ECB at the end of 2014 to promote the granting of credit to the economy, maturing in September 2018) and the TLTRO 2, second loan incentive program which began in June 2016 with a maturity of 4 years.
More information about the management of liquidity risks of the BPI Group is contained in the "Liquidity risk" section of the Directors' Report.
Market risk (interest rate, exchange rate, share price, commodity price and spread) is defined as the potential to incur losses due to unexpected changes in the price of instruments or operations ("price" includes index value, interest rate or exchange rate). Spread risk is the risk resulting from the variability of interest rates of some counterparties in relation to the interest rate used as a reference.
The Executive Board for Global Risks (EBGR) is responsible for managing the BPI Group's market risk and differentiates between the trading portfolio (trading) and the remaining businesses. In the specific case of exchange risk, the assessment is made for the activity as a whole (trading and non-trading).
More information about market risks in the BPI Group is contained in the "Risk Management" section of the Directors' Report.
Trading positions are managed autonomously by the traders, within the limits established by the Trading Department Manual for the entire BPI Group, approved by the Executive Committee of the Board of Directors. The trading portfolio is defined for financial and risk management purposes independently of the accounting classification (although the concepts largely match) and includes all types of financial instruments traded by the Trading Rooms (derivatives, repurchases, shares and bonds) that cause various types of market risk, namely interest rate, shares, exchange, commodities and spread risks.
Market risk in trading operations is assessed and controlled daily through the calculation of VaR - Value at Risk – using a standard model (of the "variance co-variance" type), based on the activity of the Banks of the BPI Group as a whole.
Calculated VaR corresponds to the maximum potential loss, with a confidence level of 99%, resulting from an adverse evolution of risk factors within a timeframe of two weeks (risk factors are price increase rates, indexes and interest rates that affect the value of the portfolio, or that are taken as representative of those prices, indexes and rates). The model uses, as risk factor volatility, the standard deviation of historical samples of their amounts on an annual basis and uniform weight. In calculating the overall risk, the effect of the diversification of investments is included in the model through the statistical effect of the correlation between risk factors (the correlation is calculated from annual historical samples and uniform weight of relevant pairs of risk factors). A normal distribution of risk factors is assumed, with average of zero and standard deviation leading to the above mentioned confidence level.
In the first half of 2017 and 2016 the average VaR in the Bank's trading books was as follows:
| Jun. 30, 17 | Jun. 30, 16 | ||||
|---|---|---|---|---|---|
| VaR (average) | VaR (maximum) | VaR (average) | VaR (maximum) | ||
| Interest rate risk | 344 | 1 031 | 2 071 | 5 679 | |
| Currency risk | 162 | 373 | 46 | 247 | |
| Equity risk | 600 | 1 203 | 893 | 2 871 |
In compliance with its legal obligations, the Group also produces prudential information for purposes of control by the supervisor and calculates regulatory capital relating to market risks in accordance with the standard methodology established by the Bank of Portugal.
The Financial Committee, chaired by the Executive Board's member responsible for the financial portfolio, monitors and manages the positions that are part of the banking portfolio, from reports produced for the purpose and within the guidelines of EBGR. When necessary an extraordinary meeting of EBGR is requested to make the more important decisions.
BPI Group has contracts that allow the offsetting of financial assets and liabilities on a net basis per counterparty, namely derivative operations and repo security transactions.
The Group has the policy of contracting its derivative operations with its professional counterparties (through "ISDA Master Agreements") or with its customers (through framework contracts), in order to have the possibility, in both cases, of netting positions by counterparty or customer. Credit Support Annexes (CSA's) are also signed with professional counterparties that allow the transfer of collateral in order to minimize the risk.
Repo transactions are made mostly under a standard ISMA contract called "Global Master Repurchase Agreement", which is considered as a compensation agreement, allowing the offsetting of the positive and negative values of all transactions negotiated with the counterparty.
Derivatives and repo transactions relating to securities are not compensated for the purpose of presentation in the financial statements of the BPI Group - the amount of each transaction is recorded as an asset or a liability, depending on whether the operation has a positive or negative fair value, respectively.
At June 30, 2017 and December 31, 2016 the amount of asset derivative financial instruments1 traded in the over-the-counter market, offset by related liability derivatives, by counterparty type, were as follows:
| Financial assets | Related amounts not offset in the financial statements |
|||
|---|---|---|---|---|
| Counterparty | presented in the financial statements |
Financial instruments |
Cash collateral received as guarantee |
Net value |
| Jun. 30, 17 | ||||
| Financial Institutions Local and Administrative Public Sector Other Financial Intermediaries Companies Individuals Total |
37 258 260 13 902 137 285 129 188 834 |
( 26 827) ( 4 033) ( 1 671) ( 32 531) Dec. 31, 16 |
( 6 669) ( 6 669) |
3 762 260 9 869 135 614 129 149 634 |
| Financial Institutions Local and Administrative Public Sector Other Financial Intermediaries Companies Individuals |
40 431 300 5 465 157 095 159 |
( 28 229) ( 1 331) 43 |
( 5 970) | 6 232 300 4 134 157 138 159 |
| Total | 203 450 | ( 29 517) | ( 5 970) | 167 963 |
1 Does not include embedded derivatives and listed derivatives in the amounts of 66 t. euro and 1 643 t. euro, at June 30, 2017 and December 31, 2016, respectively.
At June 30, 2017 and December 31, 2016 the amount of liability derivative financial instruments1 traded in the over-the-counter market, offset by related asset derivatives, by counterparty type, was as follows:
| Financial assets | Related amounts not offset in the financial statements |
||||
|---|---|---|---|---|---|
| Counterparty | presented in the financial statements |
Financial Cash collateral instruments received as guarantee Jun. 30, 17 239 979 ( 27 664) ( 194 607) 9 816 ( 4 033) ( 33) 8 980 ( 7 507) 38 258 813 ( 39 204) ( 194 640) Dec. 31, 16 296 269 ( 28 229) ( 254 025) 12 852 ( 1 331) ( 3 122) |
Net value | ||
| Financial Institutions | 17 708 | ||||
| Other Financial Intermediaries | 5 750 | ||||
| Companies | 1 473 | ||||
| Individuals | 38 | ||||
| Total | 24 969 | ||||
| Financial Institutions | 14 015 | ||||
| Other Financial Intermediaries | 8 399 | ||||
| Companies | 642 | 43 | 685 | ||
| Individuals | 77 | 77 | |||
| Total | 309 840 | ( 29 517) | ( 257 147) | 23 176 |
At June 30, 2017 and December 31, 2016 the amount of securities purchased with resale agreements, by counterparty type, was as follows:
| Counterparty | Financial assets presented in the financial statements |
Securities received with resale agreements |
Net value |
|---|---|---|---|
| Financial Institutions | 105 194 | ( 105 194) | |
| Total | 105 194 | ( 105 194) | |
| Dec. 31, 16 | |||
| Financial Institutions | 957 | ( 957) | |
| Total | 957 | ( 957) |
At June 30, 2017 and December 31, 2016 the amount of debt securities sold with repurchase agreements, by counterparty type, was as follows:
| Counterparty | Financial liabilities presented in the financial statements |
Securities received with resale agreements |
Net value |
|---|---|---|---|
| Jun. 30, 17 | |||
| Other Financial Intermediaries | 135 900 | ( 135 900) | |
| Total | 135 900 | ( 135 900) | |
| Dec. 31, 16 | |||
| Other Financial Intermediaries | 61 545 | ( 61 545) | |
| Total | 61 545 | ( 61 545) |
Following is a sensitivity analysis of the BPI Group's financial margin and shareholders' equity to a 2% increase in the reference interest rate, considering all the instruments of the banking portfolio sensitive to interest rate variations:
| Jun. 30, 17 | Jun. 30, 16 | ||||
|---|---|---|---|---|---|
| Financial margin | Financial margin | ||||
| Time Band | Position | Impact | Position | Impact 1 | |
| on demand | (6 028 862) | ( 120 247) | (4 499 371) | ( 89 987) | |
| on demand - 1 month | 3 024 472 | 53 668 | 858 634 | 16 486 | |
| 1 - 3 months | 2 623 309 | 41 821 | 6 024 678 | 97 688 | |
| 3 - 6 months | 3 582 855 | 39 789 | 2 111 010 | 24 795 | |
| 6 - 9 months | 1 531 243 | 12 847 | 258 557 | 2 090 | |
| 9 months - 1 year | 842 264 | 1 902 | ( 10 246) | ( 293) | |
| Total | 5 575 281 | 29 780 | 4 743 262 | 50 779 |
1 The 2016 position does not consider the assumptions considered as of May 2017, legal caps and floors, rates of early repayment of the fixed rate loans and rates of early withdrawal of time deposits.
The positions were distributed according to the next repricing date and assuming a constant balance sheet. It has been assumed that fixed rate operations will be renewed at their maturity date.
This analysis included regulatory assumptions (BCBS) on the stability of demand deposits and behavioral option for term deposits and fixed rate loans. The demand deposits portfolio was distributed by repricing gaps in accordance with its historical stability. To the fixed rate term deposits and loan portfolios have been applied expected rates of early withdrawal / repayment (respectively), in accordance with the historical analysis of the evolution of these portfolios.
Legal floors and caps to the rates of each type of portfolio were also considered..
The amounts of impact indicate an estimate of the impact on the financial margin obtained at the end of 12 months starting on July 1 of each year resulting from a single and instantaneous change of 2% in the overall market interest rates affecting the respective positions. Therefore, the impact on each date depends on the existence and time distribution of the repricing gaps.
The interest rate risk of the remaining fixed interest rate assets and liabilities is hedged through derivatives, or is offset by balance sheet operations with a reverse risk profile.
In accordance with prudential requirements, the BPI Group calculates the impact of a 20% decrease in share prices and participating units classified as financial assets available for sale and financial assets at fair value through profit or loss2. This stress test was based on the following exposures in shares and participating units:
| Jun. 30, 17 | Jun. 30, 16 | |
|---|---|---|
| Financial assets at fair value through profit or loss | 6 242 | 6 463 |
| Financial assets available for sale - at fair value and without impairment | 133 172 | 130 151 |
| Financial assets available for sale - at fair value and with impairment | 102 219 | 107 537 |
| Financial assets available for sale at historical cost | 5 779 | 6 058 |
| Participating units in liquidity, bond and real estate funds | 3 794 | |
| 247 412 | 254 003 |
Note: Does not include the trading portfolio which is considered in market risk.
A 20% decrease in the price of the above securities (except for securities recorded at cost and participating units in liquidity, bond and real estate funds) at June 30, 2017 and 2016, would result in a decrease of 48 327 t. euro and 48 830 t. euro, respectively, in their fair value, implying the recognition of a loss of 21 692 t. euro and 22 800 t. euro, the remaining devaluation being reflected in the fair value reserve.
2 Excluding securities held by BPI Vida e Pensões.
Financial assets and liabilities at June 30, 2017, by currency, were as follows:
| EUR | USD | AKZ | Other currencies |
Total | |
|---|---|---|---|---|---|
| Assets | |||||
| Cash and deposits at Central Banks | 1 225 339 | 22 969 | 35 122 | 1 283 430 | |
| Financial assets held for trading and at fair value through profit or loss | 2 265 795 | 141 126 | 2 810 | 2 409 731 | |
| Financial assets available for sale | 3 720 407 | 58 593 | 270 | 3 779 270 | |
| Loans and advances to credit institutions | 586 788 | 135 013 | 22 756 | 744 557 | |
| Loans and advances to customers | 22 631 693 | 151 818 | 36 335 | 22 819 846 | |
| Held-to-maturity investments | 14 415 | 14 415 | |||
| Hedging derivatives | 19 057 | 1 335 | 45 | 20 437 | |
| Tangible and intangible assets | 67 831 | 611 | 68 442 | ||
| Investments in associates and jointly controlled entities | 128 989 | 492 064 | 53 904 | 674 957 | |
| Tax assets | 472 075 | 749 | 472 824 | ||
| Other assets 1 | 395 174 | 6 062 | 57 633 | 4 626 | 463 495 |
| 31 527 563 | 516 916 | 549 697 | 157 228 | 32 751 404 | |
| Liabilities | |||||
| Resources of central banks | 1 998 163 | 147 218 | 2 145 381 | ||
| Financial liabilities held for trading | 183 819 | 1 906 | 61 | 185 786 | |
| Resources of other credit institutions | 1 222 607 | 394 542 | 6 995 | 1 624 144 | |
| Resources of customers and other debts | 20 849 325 | 1 324 807 | 161 338 | 22 335 470 | |
| Debt securities | 268 891 | 268 891 | |||
| Financial liabilities relating to transferred assets | 511 425 | 511 425 | |||
| Hedging derivatives | 77 342 | 589 | 33 | 77 964 | |
| Provisions | 68 304 | 487 | 68 791 | ||
| Technical provisions | 1 923 575 | 1 923 575 | |||
| Tax liabilities | 67 091 | 67 091 | |||
| Other subordinated debt and participating bonds | 373 832 | 373 832 | |||
| Other liabilities 1 | 579 869 | 7 368 | 1 675 | 588 912 | |
| Foreigh exchange operations to be settled and position for forw ard transactions | 1 502 097 | (1 398 810) | ( 85 463) | 17 824 | |
| 29 626 340 | 477 620 | 85 126 | 30 189 086 | ||
| Shareholders' equity attributable to the shareholders of BPI | 2 004 094 | ( 3 439) | 492 064 | 67 845 | 2 560 564 |
| Non-controlling interests | 1 754 | 1 754 | |||
| Foreign exchange position | ( 104 625) | 42 735 | 57 633 | 4 257 | |
| Stress Test | 8 547 | 17 290 | 851 |
1 Excludes the amount recorded in foreign exchange transactions pending settlement and position for term operations.
Financial assets and liabilities at December 31, 2016, by currency, were as follows:
| EUR | USD | AKZ | Other | Total | |
|---|---|---|---|---|---|
| currencies | |||||
| Assets | |||||
| Cash and deposits at Central Banks | 1 117 797 | 20 249 | 38 765 | 1 176 811 | |
| Financial assets held for trading and at fair value through profit or loss | 2 099 280 | 96 387 | 2 246 | 2 197 913 | |
| Financial assets available for sale | 3 798 066 | 78 089 | 279 | 3 876 434 | |
| Loans and advances to credit institutions | 452 060 | 153 927 | 31 620 | 637 607 | |
| Loans and advances to customers | 22 524 505 | 181 389 | 29 864 | 22 735 758 | |
| Held-to-maturity investments | 16 317 | 16 317 | |||
| Hedging derivatives | 23 794 | 1 926 | 82 | 25 802 | |
| Non-current assets held for sale and discontinued operations | 13 262 | 1 940 802 | 4 339 210 | 2 636 | 6 295 910 |
| Tangible and intangible assets | 75 936 | 648 | 76 584 | ||
| Investments in associates and jointly controlled entities | 130 833 | 44 845 | 175 678 | ||
| Tax assets | 471 114 | 734 | 471 848 | ||
| Other assets 1 | 559 910 | 12 910 | 10 823 | 583 643 | |
| Foreign exchange transactions pending settlement and position for term | |||||
| operations | (1 151 423) | 1 089 022 | 76 748 | 14 347 | |
| 30 131 451 | 3 574 701 | 4 339 210 | 239 290 | 38 284 652 | |
| Liabilities | |||||
| Resources of central banks | 2 000 011 | 2 000 011 | |||
| Financial liabilities held for trading | 209 057 | 3 574 | 82 | 212 713 | |
| Resources of other credit institutions | 1 029 298 | 65 235 | 1 906 | 1 096 439 | |
| Resources of customers and other debts | 20 403 199 | 1 399 144 | 165 338 | 21 967 681 | |
| Debt securities | 503 181 | 3 589 | 506 770 | ||
| Financial liabilities relating to transferred assets | 555 385 | 555 385 | |||
| Hedging derivatives | 97 047 | 705 | 4 | 97 756 | |
| Non-current liabilities held for sale and discontinued operations | 256 504 | 1 932 594 | 3 753 819 | 8 481 | 5 951 398 |
| Provisions | 70 235 | 70 235 | |||
| Technical provisions | 2 048 829 | 2 048 829 | |||
| Tax liabilities | 22 006 | 22 006 | |||
| Other subordinated debt and participating bonds | 69 500 | 69 500 | |||
| Other liabilities | 766 197 | 8 882 | 2 325 | 777 404 | |
| 28 030 449 | 3 413 723 | 3 753 819 | 178 136 | 35 376 127 | |
| Shareholders' equity attributable to the shareholders of BPI | 1 928 952 | ( 8 449) | 468 143 | 51 831 | 2 440 477 |
| Non-controlling interests | 1 775 | 466 274 | 468 048 | ||
| Foreign exchange position | 170 275 | 169 427 | ( 349 026) | 9 323 | |
| Stress Test | 33 885 | 104 708 | 1 865 |
1 Excludes the amount recorded in foreign exchange transactions pending settlement and position for term operations.
The stress test consists of assessing the impact of a 20% variation in the exchange rate of each currency against the euro, with the exception of the Kwanza (AKZ) in which the impact of a 30% variation against the euro was assessed. The amounts presented above are absolute amounts, and correspond to the potential impact (before taxes) on total equity including non-controlling interests.
The participations in Banco de Fomento Angola (BFA), Banco Comercial e de Investimentos (BCI) and BPI Mozambique expose the BPI Group to exchange risk which is reflected mainly in the translation to euro of the balance sheet and results of these companies in terms of their consolidation. Consequently the changes in exchange rates of the respective functional currencies against the euro: (i) local currencies – kwanza and metical, in Angola and Mozambique, respectively – in relation to the euro and (ii) dollars in relation to the euro, due to the significant use of the American dollar in these economies, influence the evolution of the balance sheet captions and results of the BPI Group. Exchange differences resulting from the translation to euro of shareholders' equity of BFA, BCI and BPI Mozambique are recognized directly in the equity caption revaluation reserves.
In Angola and Mozambique there are restrictions resulting from currency exchange control policies, both in currency exchange and in capital transferred to other countries. Currency transfer, including the repatriation of profits or dividends, is subject to official authorization of these countries.
BFA strictly manages its foreign exchange exposure resulting from structural positions held in the various currencies or transaction needs of its customers, seeking to actively control its risk by maintaining its asset and liability positions in each currency balanced.
As a basic criterion, the currency exposure of BFA (to currencies other than the kwanza) should tend to be zero, there being the possibility of temporary fluctuations in short or long positions. In situations of expected currency devaluation of the kwanza, BFA established long positions in dollars, within the limits defined for this purpose.
As part of its activity, BFA operates mainly in kwanzas and dollars, holding positions in other currencies at residual levels, simplifying the process of managing the exchange position. In order to ensure the timely satisfaction of the needs for currencies of its Customers, BFA purchases currencies in the primary market through the mechanism of BNA´s foreign exchange auctions and purchases from Customers. The financial management rules and foreign exchange risks are set out in the Limits and Procedures Manual of the Financial and International Department.
At December 31, 2016 the consolidated balance sheet of the BPI Group includes a significant portion of assets and liabilities in kwanzas, included under the caption Non-current assets held for sale and discontinued operations and Non-current liabilities held for sale and discontinued operations, respectively (Note 4.9). Financial information expressed in this currency, disclosed in the consolidated financial statements and accompanying notes, has been translated to euro for presentation purposes based on the criteria defined in IAS 21 (Note 2.2.). These amounts should not be interpreted as a representation that the amounts in kwanzas could have been, or could be, converted to euros.
At December 31, 2016 US dollar loans granted by BFA to customers, are presented in the above table in the "USD" column. However, in accordance with item 2, article 4 of Notice. 3/2012 of the National Bank of Angola financial institutions should, in the collection of installments of loans granted, accept available funds in the accounts of its customers expressed in any currency, regardless of the contracted currency. This requirement applies only to loans contracted after the entry into force of that standard. BFA customers have generally paid the installments of principal and interest of US dollar loans with the equivalent in kwanzas at the settlement date, under the option given in BNA Notice 3/2012.
The BPI Group applies fair value hedge accounting to several business lines, including hedging for:
The BPI Group uses "back-to-back" hedging relationships and macro-hedging.
The BPI Group hedges interest rate risk and currency risk relating to the above hedged items.
Interest rate swaps and forward currency operations are the main hedging instruments used.
Application of Hedge Accounting eliminates the "accounting mismatch" that would result from the recognition of the hedged items at amortized cost, while the hedging instruments (derivative financial instruments) would have to be recorded at fair value through profit or loss. The value of hedged financial instruments is their exposure (nominal value contracted).
The book value of hedged instruments and fair value of hedging instruments at June 30, 2017 is made up as follows:
| He dge d it em s |
He dg ing in str ent um s |
||||||||
|---|---|---|---|---|---|---|---|---|---|
| of Fa ir v alu e t hed yp es ge |
No al am min nt ou |
t, pre Inte res miu ms and ten tia l po in/l ga oss |
Imp air nt me |
Va lue ctio co rre ns |
Tot al |
No tio nal nt am ou |
Inte t res and miu pre ms |
Re val uat ion |
Fa ir V alu e |
| As ts se |
|||||||||
| Loa to tom ns cus ers |
774 42 7 |
1 2 06 |
( 3 1 63 ) |
22 730 |
795 20 0 |
785 51 0 |
( 6 4 41 ) |
( 26 61 0) |
( 33 05 1) |
| rtfo Fix ed rat urit ies lio e s ec po |
47 5 0 00 |
9 7 39 |
33 884 |
518 62 3 |
48 1 8 62 |
( ) 2 9 98 |
( ) 33 805 |
( ) 36 803 |
|
| 1 2 49 42 7 |
10 945 |
( 3 1 63 ) |
56 614 |
1 3 13 823 |
1 2 67 372 |
( 9 4 39 ) |
( 60 41 5) |
( 69 854 ) |
|
| Lia bil itie s |
|||||||||
| Cu sto r d sits me epo |
5 1 51 876 |
2 7 02 |
( 1 0 20 ) |
5 1 53 558 |
5 7 62 903 |
( 11 77 1) |
( 42 0) |
( 12 191 ) |
|
| De bt iss ues |
47 900 |
1 | 83 | 47 984 |
50 000 |
( 56 ) |
( 80 ) |
( 136 ) |
|
| 5 1 99 776 |
2 7 03 |
( 93 7) |
5 2 01 542 |
5 8 12 903 |
( 11 82 7) |
( 500 ) |
( 12 32 7) |
Note: Embedded options were not included.
The book value of hedged instruments and fair value of hedging instruments at December 31, 2016 is made up as follows:
| He dg d item e s |
He dg ing ins tru nts me |
||||||||
|---|---|---|---|---|---|---|---|---|---|
| Fa ir v lue f he dg ty a p es o e |
No ina l m nt am ou |
Inte t, p res ium d rem s a n ia l ote nt p in / los g a s |
Imp irm t a en |
Va lue ion ct co rre s |
To l ta |
No t ion l a nt am ou |
Inte t res d an ium p rem s |
Re lua ion t va |
Fa ir Va lue |
| As ts se |
|||||||||
| Lo s t tom an o c us ers |
5 0 6 8 8 1 |
1 1 8 6 |
( ) 2 3 4 6 |
2 9 8 9 0 |
5 3 5 6 1 1 |
5 3 0 47 9 |
( ) 6 1 0 2 |
( ) 3 3 2 8 6 |
( ) 3 9 3 8 8 |
| F ixe d r ate it ies ort fo l io se cu r p |
47 5 0 0 0 |
1 4 6 4 2 |
4 3 0 7 3 |
5 3 2 7 15 |
47 4 8 0 0 |
( 8 4 3 3 ) |
( 4 3 0 1 8 ) |
( 5 1 45 1 ) |
|
| 9 8 1 8 8 1 |
15 8 2 8 |
( 2 3 4 6 ) |
7 2 9 6 3 |
1 0 6 8 3 2 6 |
1 0 0 5 27 9 |
( 1 4 5 3 5 ) |
( 7 6 3 0 4 ) |
( 9 0 8 3 9 ) |
|
| Lia b ilit ies |
|||||||||
| Cu de its sto me r p os |
6 8 0 2 5 7 7 |
1 1 5 47 |
8 5 5 |
6 9 9 17 5 7 |
6 1 1 6 1 9 5 |
( 1 6 3 ) 7 7 |
( 2 1 2 0 ) |
( 1 8 8 ) 5 7 |
|
| De bt iss ue s |
8 5 8 6 7 |
( ) 1 4 2 |
17 7 |
8 5 9 0 2 |
1 1 0 9 27 |
1 4 4 |
( ) 17 2 |
( ) 2 8 |
|
| 5 77 2 9 3 9 |
1 1 4 0 5 |
7 3 5 |
5 7 8 5 0 7 9 |
6 2 27 4 4 6 |
( 1 6 5 9 3 ) |
( 2 2 9 2 ) |
( 1 8 8 8 5 ) |
Note: Embedded options were not included.
The tables above include the nominal amounts of hedged items for which hedge accounting is being applied. The notional amount of hedging instruments corresponds to the sum of the notional amounts of the hedging derivative contracts, including forward start operations (swaps and futures), and therefore the notional amount may be higher than the nominal amounts of the hedged items. For a given asset or liability (namely fixed rate securities) there may be several derivatives to hedge the corresponding future flows.
Net income on financial operations recognized in hedging derivative financial instruments and in hedged items in the first half of 2017 and 2016 were as follows:
| Fair value types of hedge | Jun. 30, 17 | Jun. 30, 16 |
|---|---|---|
| Hedging derivatives | 13 241 | ( 29 618) |
| Hedged items | ||
| Loans to customers | ( 7 118) | 3 067 |
| Fixed rate securities portfolio | ( 9 149) | ( 6 351) |
| Resources of credit institutions | 13 792 | |
| Customer deposits | 2 124 | 16 925 |
| Debt issues | 756 | 1 592 |
| ( 13 387) | 29 025 | |
| ( 146) | ( 593) |
In July 2014 the IASB (International Accounting Standards Board) published IFRS 9 "Financial Instruments". This standard, which is of mandatory application for years beginning on or after January 1, 2018, after its adoption by the European Union, will replace IAS 39 "Financial instruments: recognition and measurement".
IFRS 9 introduces changes in the way in which financial institutions calculate impairment loss on their financial instruments, in particular as regards Loans to Customers. IFRS 9 uses an expected loss model (Expected Credit Loss – ECL) replacing the incurred loss model used by IAS 39. In accordance with this new model, entities must recognize expected losses prior to the occurrence of the loss events. There is also the need to include forward-looking information in the estimates of expected loss, with the inclusion of future trends and scenarios, namely macroeconomic scenarios. The ECL concept required by IFRS 9 also has differences in relation to the Expected Loss concept set out in CRD IV.
In the ECL model, assets subject to the impairment calculation should be classified in one of the following categories ("stages"), due to credit risk changes since the initial recognition of the asset and not based on the credit risk at the reporting date.
In order to adopt IFRS 9, Banco BPI set up in 2015 a multidisciplinary working team including members from multiple departments as well as management. The work of this team is regularly monitored by the CECA (Executive Commission of the Board of Directors). Following the conceptual design of the methodologies and processes, the Bank is in an implementation phase for the full and timely adoption of IFRS 9.
By the end of 2016, the Bank implemented a number of significant changes in the classification process for exposures in default, agreed with the ECB's Joint Supervisory Team. Due to this reason, among others, the Bank considers it advisable for the disclosure of quantitative impacts to be carried out only when the stage of development of the work allows for stable and reliable estimates.
As described in Note 2.10, the share-based variable remuneration programme (Remuneração Variável em Acções - RVA) is a remuneration plan under which, whenever it is decided to grant variable remuneration to Executive Directors and employees of the BPI Group (in the latter case provided that it exceeds 2 500 euro) it is made up of BPI shares and BPI share options.
The price of the shares granted corresponds to the weighted average list price of the BPI shares traded in the last ten stock exchange sessions prior to the date the shares are granted. The price of the shares granted also corresponds to the strike price of the options.
Taking into consideration the Public Tender Offer launched by CaixaBank on February 2017 and the impact of this operation in the terms of the RVA , the Executive Committee decided to make available to the Employees the shares that were granted to them under the RVA and which were subject to a suspensive condition. It was also offered to the Employees that were holding options the possibility of reconverting the options granted into shares, by dividing the value in cash underlying the options granted and not exercised in each RVA for the value of each share defined for granting the shares, as well as their immediate distribution.
Following this decision of the Executive Committee and taking into account that almost all employees accepted the proposed terms, the RVA programmes in force to date were terminated with the exception of the 2013 programme, in which two employees kept the granted options.
Regarding the RVA Remuneration programmes granted to Executive Directors, the rules under the Remuneration Policy continue to be fully applicable, namely the rules regarding the deferral and the application of the suspensive condition.
In determining the number of options to be granted to employees and directors, the BPI Group determines the financial value of the options as of the date they are granted.
The premium of the options over Banco BPI shares was determined in accordance with an internally developed model, based on the Black-Scholes model, for the RVA 2003 to RVA 2015 programmes.
The critical factors of the model used to manage the RVA programmes are as follows:
The model also enables the number of shares of Banco BPI necessary to ensure adequate coverage of the inherent risk of issuing options under the RVA programme to be determined.
The parameters used to determine the financial value of the options under each RVA programme, as of the date the options are granted, are as follows:
| RVA 2010 | RVA 2011 | RVA 2012 | RVA 2013 | RVA 2014 2 | RVA 2015 2 |
|
|---|---|---|---|---|---|---|
| BPI listing | 1.25 | 0.37 | 0.87 | 1.81 | 1.40 | 1.02 |
| Strike price 1 | 1.25 | 0.37 | 0.87 | 1.81 | 1.40 | 1.02 |
| Implicit volatility | 35.97% | 41.70% | 39.78% | 37.29% | 36.90% | 40.50% |
| Interest rate | 5.15% | 3.87% | 3.18% | 1.48% | 1.38% | 1.35% |
| Expected dividends | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Value of the option | 0.25 | 0.12 | 0.28 | 0.44 | 0.33 | 0.24 |
1 The strike price does not consider the effect of the adjustment relating to the capital increases in June 2008, May 2011, August 2012 and June 2014. 2 Programmes that are only related to Directors whose referece years for options granted are 2012 and 2013 respectively.
The Bank, for purposes of the share-based payment programme, acquires a portfolio of BPI shares and transfers ownership of the shares on the date the RVA remuneration is granted.
In the case of death, incapacity or retirement of the employee, the shares not yet made available are made available early, becoming freely available to the person or to the respective heirs.
The shares refused include shares granted but not made available, to which the employee has lost his/her right because he/she has left the BPI Group.
When an employee of the BPI Group leaves the Group he/she loses the right to the options attributed and not yet made available. In the case of options made available but not yet exercised, the employee has a maximum period of 30 days from the date the labour relationship ends to exercise the option, after which the option expires (options cancelled).
In the case of death, incapacity or retirement of employees, the options attributed become immediately exercisable, having to be exercised within a period of 2 years from the date of the event, otherwise they expire. Cancelled options include options not exercised within this period.
In the first half of 2017 and in 2016, the average price of the shares on the date in which the options were exercised was as follows:
| Options exercised in 2017 | Options exercised in 2016 | ||||
|---|---|---|---|---|---|
| Programme | Number of | Average price | Number of | Average price | |
| options | of the shares | options | of the shares | ||
| RVA 2010 | 338 218 | 1.26 | |||
| RVA 2011 | 300 672 | 1.13 | 77 075 | 1.10 | |
| RVA 2012 | 1 300 | 1.13 | 306 748 | 1.16 |
The following table presents the changes occurred in 2017 in the number of options in circulation, held by Directors and Employees of the BPI Group:
| Movement | RVA 2010 1 RVA 2011 | RVA 2012 | RVA 2013 | RVA 2014 1 | RVA 2015 1 | |
|---|---|---|---|---|---|---|
| Number of outstanding options on Dec 31, 2016 | 1 502 410 | 300 672 | 1 240 591 | 2 988 429 | 3 584 433 | 772 299 |
| Options canceled due to termination | 426 820 | 128 894 | 645 027 | 233 270 | ||
| Options exercised | 300 672 | 1 300 | ||||
| Options converted into shares | 1 239 291 | 2 856 237 | ||||
| Number of outstanding options on Jun 30, 2017 | 1 075 590 | 3 298 | 2 939 406 | 539 029 |
1 Programmes that are only related to Directors whose referece years for options granted are 2010, 2012 and 2013 respectively.
Following the decision made by the Executive Committee under the Public Tender Offer launched by Caixabank, related to the possibility of conversion of the options held by the Employees into shares marketable in the Public Tender Offer, the factors for calculating the number of shares granted in the conversion are presented in the following table.
| RVA 2012 | RVA 2013 | Total | |
|---|---|---|---|
| Options converted | 1 239 291 | 2 856 237 | |
| Price granted | 0.277 | 0.443 | |
| Amount granted | 343 284 | 1 265 313 | |
| Price of the shares granted | 0.866 | 1.806 | |
| Number of shares resulting from conversion | 396 401 | 700 616 | 1 097 018 |
| Shares attributed as a result of the rounding-up to w hole number of shares | 4 065 | ||
| Total number of shares | 1 101 083 |
In order to cover the share-based payments, the Bank acquires a portfolio of treasury shares at the time the RVA remuneration is granted. The shares remain in Banco BPI's portfolio until they are made available to the beneficiaries. At that time they are derecognized by corresponding charge to the accumulated costs caption "Other equity instruments".
The BPI Group has created a portfolio of BPI shares to cover its share-based payment programme responsibilities resulting from the issuance of options to purchase BPI shares in accordance with a delta strategy (determined in accordance with BPI's options evaluation model developed in-house based on the Black-Scholes model). The strategy corresponds to the creation of a portfolio with delta shares for each option issued, the delta number corresponding to the relationship between the variation in the price of an option and variation in the price of the underlying share. The treasury shares held to hedge the risk of variation in the amount of the options sold are recorded in the caption "Treasury shares hedging the RVA", where they remain while they are held for that purpose.
The existing RVA programmes on June 30, 2017 as well as its features, outstanding amounts and amounts recognized for the components of shares and options in each programme are presented in the following table:
| Init | ial allo cat ion |
of P e rio ds sha tra nch re op |
f th rel eas e o e / e cis es xer e tio ns |
Op tio ns rci sed exe o r rte d co nve int har o s es und the er Te nde r O ffe r |
Ju n. 3 |
0, 17 |
Co st niz ed in rec og uit eq y |
C o st t ye t no niz ed in rec og uit eq y |
Ow har n s es to hed ge tio op ns |
|||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Re fer enc e yea r |
P ro gra mm e |
Gr ant da te |
Va lue gra nte d |
Str ike pri 1 ce |
Nu mb er |
Va lue |
Be gin nin g |
En d |
Nu mb er |
Nu mb er |
Va lue |
Va lue |
Va lue |
Va lue |
| Em plo yee s |
||||||||||||||
| 201 3 |
Op tio ns RV A 2 013 |
14-0 5-2 014 |
0.44 30 |
1.80 60 |
3 0 05 8 60 |
1 33 2 |
15-0 8-2 014 |
14-0 5-2 019 |
2 98 5 13 1 |
3 29 8 |
1 | 1 | ||
| 3 0 05 860 |
1 3 32 |
2 9 85 131 |
3 2 98 |
1 | 1 | |||||||||
| Dir ect ors |
De let ed sha d res an 3 tio op ns |
|||||||||||||
| Sh are s |
||||||||||||||
| 201 2 |
RV A 2 014 2 |
03- 09- 201 4 |
1.40 10 |
57 627 |
81 | 03- 09- 201 7 |
57 627 |
81 | 76 | 5 | ||||
| 201 3 |
RV A 2 015 2 |
10-0 7-2 015 |
1.02 06 |
145 00 9 |
148 | 10-0 7-2 018 |
145 00 9 |
148 | 99 | 49 | ||||
| 201 5 |
2 RV A 2 016 |
1 18 1 |
198 | 983 | 556 | 427 | ||||||||
| 20 2 6 36 |
1 4 10 |
198 | 202 63 6 |
1 2 12 |
73 1 |
48 1 |
||||||||
| Op tio ns |
||||||||||||||
| 201 0 |
4 RV A 2 010 |
29- 04- 201 1 |
0.24 60 |
1.24 50 |
1 07 5 59 0 |
265 | 29- 04- 201 4 |
29- 04- 201 7 |
1 07 5 59 0 |
265 | 265 | 0 | ||
| 201 2 |
2 RV A 2 014 |
03- 09- 201 4 |
0.32 50 |
1.40 10 |
3 5 84 4 33 |
1 16 5 |
03- 09- 201 7 |
03- 09- 202 0 |
64 5 02 7 |
2 93 9 40 6 |
955 | 902 | 53 | |
| 201 3 |
2 RV A 2 015 |
10-0 7-2 015 |
0.24 11 |
1.02 06 |
77 2 29 9 |
186 | 10-0 7-2 018 |
10-0 7-2 021 |
23 3 27 0 |
539 02 9 |
130 | 87 | 43 | |
| 5 4 32 322 |
1 6 16 |
878 29 7 |
4 5 54 025 |
1 3 50 |
1 2 54 |
96 | 377 | |||||||
| 3 025 |
2 5 62 |
1 9 85 |
578 | 377 |
1 Exercise price after the effect of Banco BPI capital increase in M ay 2011, August 2012 and June 2014.
2 Amount in suspensive condition equal to 50% of the value granted, which will be settled in cash.
3 Shares and options elimitated following the exit of a member of the Board of Directors.
4 Programme that has been reclassified into an accrued costs account and awaits a decision of the Board of Directors.
The existing RVA programs on December 31, 2016 as well as its features, outstanding amounts and amounts recognized for the components of shares and options in each programme are presented in the following table:
| Ini | tia l a llo tio ca n |
P e rio ds of re sh tra he are nc tio op |
lea of th se e s / ise ex erc ns |
D e c. |
31, 16 |
Co st niz ed rec og in uit eq y |
C o st t y et no niz ed rec og in uit eq y |
Ow ha n s res to he dg e tio op ns |
|||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Re fer en ce yea r |
P r og ram me |
Gr t d ate an |
Va lue gra nte d |
Str ike pr 1 ice |
Nu mb er |
Va lue |
Be inn ing g |
En d |
Nu mb er |
Va lue |
Va lue |
Va lue |
Va lue |
| Em lo y p ee s |
|||||||||||||
| Sh are s |
|||||||||||||
| 201 3 |
RV A 2 013 |
14- 05- 201 4 |
1.80 60 |
70 2 8 79 |
1 2 69 |
14-0 5-2 014 |
14- 05- 201 7 |
168 917 |
305 | 284 | 21 | ||
| 77 2 9 70 |
1 3 26 |
168 91 7 |
30 5 |
28 4 |
21 | ||||||||
| Op tio ns |
|||||||||||||
| 201 0 |
RV A 2 010 |
29- 04- 201 1 |
0.2 460 |
1.10 80 |
2 8 95 965 |
712 | 30- 07- 201 1 |
29- 04- 201 6 |
42 6 8 20 |
105 | 105 | 0 | |
| 201 1 |
RV A 2 011 |
28- 05- 201 2 |
0.12 40 |
0.3 580 |
1 19 4 0 11 |
148 | 29- 08- 201 2 |
28- 05- 201 7 |
30 0 6 72 |
36 | 36 | 0 | |
| 201 2 |
RV A 2 012 |
19- 12-2 012 |
0.2 770 |
0.8 660 |
2 6 16 6 53 |
725 | 19-0 3-2 013 |
19- 12-2 017 |
1 24 0 5 91 |
344 | 344 | 0 | |
| 201 3 |
RV A 2 013 |
14- 05- 201 4 |
0.4 430 |
1.80 60 |
3 0 05 860 |
1 33 2 |
15-0 8-2 014 |
14- 05- 201 9 |
2 9 88 429 |
1 32 4 |
1 32 4 |
0 | |
| 9 7 12 48 9 |
2 9 17 |
4 9 56 51 2 |
1 8 09 |
1 8 08 |
0 | ||||||||
| 4 24 2 |
2 1 14 |
2 0 92 |
21 | ||||||||||
| Dir to ec rs |
|||||||||||||
| Sh are s |
|||||||||||||
| 201 2 |
A 2 014 RV |
03- 09- 201 4 |
1.40 10 |
57 62 7 |
81 | 03- 09- 201 7 |
57 62 7 |
81 | 63 | 18 | |||
| 201 3 |
RV A 2 015 |
10- 07- 201 5 |
1.02 06 |
145 00 9 |
148 | 10-0 7-2 018 |
145 00 9 |
148 | 86 | 62 | |||
| RV A 2 016 3 |
2 2 35 |
789 | 1 44 6 |
||||||||||
| 20 2 6 36 |
2 4 64 |
20 2 6 36 |
22 9 |
93 8 |
1 5 26 |
||||||||
| Op tio ns |
|||||||||||||
| 201 0 |
RV A 2 010 |
29- 04- 201 1 |
0.2 460 |
1.24 50 |
1 07 5 5 90 |
265 | 29- 04- 201 4 |
29- 04- 201 7 |
1 07 5 5 90 |
265 | 265 | 0 | |
| 201 2 |
RV A 2 014 |
03- 09- 201 4 |
0.3 250 |
1.40 10 |
3 5 84 433 |
1 16 5 |
03- 09- 201 7 |
03- 09- 202 0 |
3 5 84 433 |
1 16 5 |
906 | 259 | |
| 201 3 |
RV A 2 015 |
10- 07- 201 5 |
0.2 411 |
1.02 06 |
77 2 2 99 |
186 | 10-0 7-2 018 |
10- 07- 202 1 |
77 2 2 99 |
186 | 109 | 77 | |
| 5 4 32 32 2 |
1 6 16 |
5 4 32 32 2 |
1 6 16 |
1 2 80 |
33 6 |
||||||||
| 4 07 9 |
1 8 44 |
2 2 18 |
1 8 62 |
10 33 6 2 58 |
1 Exercise price after the effect of Banco BPI capital increase in M ay 2011, August 2012 and June 2014.
2 Incudes options of Employees and Directors.
3 Amount in suspensive condition equal to 50% of the value granted
When the options are exercised, the treasury shares are derecognised together with transfer of share ownership to the Employees. At that time a gain or loss is recognised, in the amount corresponding to the difference between the strike price and the average cost of acquiring the treasury share portfolio covering each of the programmes, less the cost of the option premiums accumulated in the caption "Other equity instruments".
The gain and loss realised on treasury shares hedging the exercise of RVA options, as well as the respective taxes, are recorded directly in shareholders' equity, not affecting net income.
The gain and (loss) recorded in making the shares available and in exercising the options, as well as in the corresponding hedge, recorded in shareholders' equity in the first half of 2017 and in 2016 were as follows:
| Gain or loss | Programme | Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|---|---|
| RVA 2010 | ( 4) | |||
| Shares | In making the shares available | RVA 2011 | ||
| RVA 2012 | ||||
| RVA 2013 | ||||
| ( 4) | ||||
| RVA 2010 | ( 1 519) | 29 | ||
| Options | RVA 2011 | ( 839) | ( 215) | |
| In the exercise of options / conversion of options into shares under the Tender Offer |
RVA 2012 | ( 2 493) | ( 553) | |
| RVA 2013 | 829 | |||
| ( 4 022) | ( 739) | |||
| ( 4 026) | ( 739) |
The costs relating to the share-based payment programme of the Employees of Banco BPI and of its subsidiaries are accrued under the captions "Personnel costs" and "Investments in subsidiaries and associates", respectively, with a corresponding entry to "Other equity instruments" caption, as established by IFRS 2 for share-based payment programmes. The cost of the shares and option premiums, as of the date they are granted, is accrued on a straight-line basis from the beginning of the year of the programme (January 1) to the moment they become available to the Employees.
In the first half of 2017, following the Executive Committee decision referred previously, the costs accrued to date related to RVA programmes for Employees were reversed. The total cost recognized for share-based payment programmes can be summarized as follows:
| Programme | Jun. 30, 17 | Jun. 30, 16 | |||||
|---|---|---|---|---|---|---|---|
| Shares | Options | Total | Shares | Options | Total | ||
| RVA 2010 | ( 98) | ( 98) | |||||
| RVA2013 | 27 | ( 31) | ( 4) | 125 | ( 6) | 119 | |
| RVA 2014 | 13 | 16 | 30 | 13 | 194 | 207 | |
| RVA 2015 and 2016 1 | 11 | ( 166) | ( 450) | ( 616) | |||
| Total | 41 | ( 113) | ( 62) | ( 28) | ( 262) | ( 290) | |
1 RVA's in suspensive condition that will be settled in cash.
At June 30, 2017 and at December 31, 2016 the Group had the following capital ratios calculated in accordance with the transitional provisions of Directive 2013/36/EU and Regulation (EU) 575/2013, CRD IV / CRR, approved on June 26, 2013 by the European Parliament and the Council of the European Union in force as of January 1, 2014.
| Jun. 30, 17 | Dec. 31, 16 | |
|---|---|---|
| Accounting Shareholders' Equity 1 | 2 712 753 | 2 621 371 |
| Potential gains on fair value reserve | 17 449 | 9 900 |
| Eligible minority interests | 382 557 | |
| Actuarial deviations | ( 145 374) | ( 145 235) |
| Deferred tax assets arising from tax losses | ( 16 760) | ( 18 349) |
| Loans granted for the acquisition of shares, intangible assets and AVA 2 | ( 29 430) | ( 30 740) |
| Investment in banking and insurance institutions | ( 478 959) | ( 30 175) |
| Negative additional Tier 1 | ( 62 591) | ( 34 664) |
| Common Equity Tier 1 | 1 997 088 | 2 754 665 |
| Tier 2 | 237 606 | |
| Total equity | 2 234 694 | 2 754 665 |
| Risk-weighted assets | 16 779 861 | 24 122 127 |
| Common Equity Tier 1 | 11.9% | 11.4% |
| Tier 1 | 11.9% | 11.4% |
| Total Ratio | 13.3% | 11.4% |
1 Excluding fair value reserve and actuarial deviations
2 Additional Valuation Adjustment, adjustment of additional valuation according to the delegated regulation (UE) 2016/101
Considering full implementation of the CRV IV/CRR rules, Banco BPI's "fully implemented" Common Equity Tier 1 at June 30, 2017 was 10.9%. At December 31, 2016 the "fully implemented" Common Equity Tier 1 was 11.1%.
In December 2016, Banco BPI received the ECB's decision on the minimum prudential requirements to be in force as of January 1, 2017, which was based on the results of the Supervisory Review and Evaluation Process (SREP).
| Minimum requirements for 2017 | |||||||
|---|---|---|---|---|---|---|---|
| Consolidated | |||||||
| Phasing-in | Of which: | ||||||
| Total | Pillar 1 | Pillar 2 | Buffers 1 | Guidance Pillar 2 |
Total | ||
| CET1 | 9.25% | 4.50% | 2.50% | 1.25% | 1.0% | 8.25% 2 | |
| T1 | 9.75% | 6.00% | 2.50% | 1.25% | - | 9.75% | |
| Total ratio | 11.75% | 8.00% | 2.50% | 1.25% | - | 11.75% |
1 As determined by Banco de Portugal, the capital preservation buffer for 2017 is 1.25%, the counter-cyclical buffer is currently set at 0% and the O-SII buffer is null in 2017.
2 The difference between the requirement for individual CET1 and consolidated CET1 arises from the guidance in Pillar 2 only applicable to consolidated CET1. Pillar 2 guidance is not relevant to determine the maximum distributable amount (MDA).
On June 30, 2017, Banco BPI complied with the minimum capital requirements at consolidated and non-consolidated levels.
During the first half of 2017, Banco BPI issued 300 million euro of subordinated debt eligible as Tier 2.
For 2016, the minimum capital requirements established by the ECB were:
| Minimum requirements for 2016 |
||||
|---|---|---|---|---|
| Phasing-in | Consolidated(1) | Individual | ||
| CET1 | 9.75% | 5.125% | ||
| T1 | 9.75% | 6.625% | ||
| Total Ratio | 9.75% | 8.625% |
(1) In addition, for 2016 an early warning buffer of 0.25% was established on CET1 on a consolidated basis.
At December 31, 2016, Banco BPI complied with the minimum capital requirements.
As from the amendment to the articles of association of Banco BPI approved in the Shareholders' General Meeting held on April 20, 2006, the following rule was included (Article 26 item 3): "The Shareholders' General Meeting should decide on the long term dividend policy by proposal of the Board of Directors which should justify possible deviations from that policy."
In complying with this statutory rule, the Shareholders' General Meeting held on April 19, 2007 approved the Long Term Dividend Policy of Banco BPI, the main guideline being to distribute an annual dividend of not less than 40% of consolidated net income for the year, except in special circumstances.
In accordance with IAS 24, the entities considered to be related to Banco BPI are:
Those in which the Bank has direct or indirect significant influence in decisions relating to their financial and operating policies – Associated and jointly controlled entities and pension funds;
Entities that have direct or indirect significant influence on the management and financial policies of the Bank – Shareholders, presuming that this happens when the equity interest exceeds 20%.
Key management personnel of Banco BPI, considering for this purpose executive and non-executive members of the Board of Directors and individual persons and companies associated with them.
The BPI Group's related parties at June 30, 2017 were as follows:
| Name of related entity Head Office participation participation Associated and jointly controlled entities of Banco BPI Banco de Fomento Angola, S.A. Angola 48.1% 48.1% Banco Comercial e de Investimentos, S.A.R.L. Mozambique 30.0% 30.0% Companhia de Seguros Allianz Portugal, SA Portugal 35.0% 35.0% Cosec - Companhia de Seguros de Crédito, SA Portugal 50.0% 50.0% Inter-Risco – Sociedade de Capital de Risco, S.A. Portugal 49.0% Unicre - Instituição Financeira de Crédito, SA Portugal 21.0% 21.0% Pension funds of Employees of the BPI Group Fundo de Pensões Banco BPI Portugal 100.0% Fundo de Pensões Aberto BPI Acções Portugal 9.0% Fundo de Pensões Aberto BPI Valorização Portugal 41.9% Fundo de Pensões Aberto BPI Segurança Portugal 22.9% Fundo de Pensões Aberto BPI Garantia Portugal 9.0% Shareholders of Banco BPI Grupo La Caixa Spain 84.51% Members of the Board of Directors of Banco BPI Artur Santos Silva Fernando Ulrich Alfredo Rezende de Almeida Allianz Europe Ltd. - that appointed Carla Bambulo as representative to act in her ow n name António Lobo Xavier Gonzalo Gortázar Rotaeche Ignacio Alvarez-Rendueles João Pedro Oliveira e Costa |
|---|
| José Pena do Amaral |
| Lluís Vendrell |
| Manuel Ferreira da Silva |
| Maria Celeste Hagatong |
| Pablo Forero Calderon |
| Pedro Barreto |
| Tomás Jervell |
| Vicente Tardio Barutel |
The BPI Group's related parties at December 31, 2016 were as follows
| Effective | Direct | |||||||
|---|---|---|---|---|---|---|---|---|
| Name of related entity | Head Office participation | participation | ||||||
| Associated and jointly controlled entities of Banco BPI | ||||||||
| Banco Comercial e de Investimentos, S.A.R.L. | Mozambique | 30.0% | 30.0% | |||||
| Companhia de Seguros Allianz Portugal, SA | Portugal | 35.0% | 35.0% | |||||
| Cosec - Companhia de Seguros de Crédito, SA | Portugal | 50.0% | 50.0% | |||||
| Inter-Risco – Sociedade de Capital de Risco, S.A. | Portugal | 49.0% | ||||||
| Unicre - Instituição Financeira de Crédito, SA | Portugal | 21.0% | 21.0% | |||||
| Pension funds of Employees of the BPI Group | ||||||||
| Fundo de Pensões Banco BPI | Portugal | 100.0% | ||||||
| Fundo de Pensões Aberto BPI Acções | Portugal | 9.2% | ||||||
| Fundo de Pensões Aberto BPI Valorização | Portugal | 39.6% | ||||||
| Fundo de Pensões Aberto BPI Segurança | Portugal | 22.4% | ||||||
| Fundo de Pensões Aberto BPI Garantia | Portugal | 9.7% | ||||||
| Shareholders of Banco BPI | ||||||||
| Grupo La Caixa | Spain | 45.50% | ||||||
| Members of the Board of Directors of Banco BPI | ||||||||
| Artur Santos Silva | ||||||||
| Fernando Ulrich | ||||||||
| Alfredo Rezende de Almeida | ||||||||
| Allianz Europe Ltd. - que nomeou para exercer o cargo em nome próprio Carla Bambulo | ||||||||
| António Lobo Xavier | ||||||||
| Armando Leite de Pinho | ||||||||
| Carlos Moreira da Silva | ||||||||
| Gonzalo Gortázar Rotaeche | ||||||||
| Ignacio Alvarez-Rendueles | ||||||||
| João Pedro Oliveira e Costa | ||||||||
| José Pena do Amaral | ||||||||
| Lluís Vendrell | ||||||||
| Manuel Ferreira da Silva | ||||||||
| Maria Celeste Hagatong | ||||||||
| Mário Leite da Silva | ||||||||
| Pablo Forero Calderon | ||||||||
| Pedro Barreto | ||||||||
| Santoro Finance – Prestação de Serviços, S.A. | ||||||||
| Tomás Jervell | ||||||||
| Vicente Tardio Barutel | ||||||||
The total assets, liabilities and off-balance sheet responsibilities relating to operations with associated and jointly controlled companies and pension funds of employees of the BPI Group at June 30, 2017 were as follows:
| Associated and | Pension funds of | ||
|---|---|---|---|
| jointly controlled | Employees of the | ||
| entities | BPI Group | Total | |
| Assets Financial applications and deposits |
17 892 | 17 892 | |
| Financial assets held for trading and at fair value through | |||
| profit or loss | 137 | ||
| 137 | |||
| Loans net of impairment | 16 | 16 | |
| Other assets | 68 544 | 733 | 69 277 |
| 86 452 | 870 | 87 322 | |
| Liabilities | |||
| Deposits and technical provisions | 18 599 | 275 798 | 294 397 |
| Resources of other credit institutions | 589 266 | 589 266 | |
| Provisions | 29 | 29 | |
| Other financial resources | 60 053 | 60 053 | |
| Other liabilities | 15 | 15 | |
| 607 909 | 335 851 | 943 760 | |
| Off balance sheet items | |||
| Guarantees provided and other contingent liabilities | |||
| Guarantees and sureties | 11 788 | 60 | 11 848 |
| Documentary credits open | 40 221 | 40 221 | |
| Guarantees received | 35 076 | 35 076 | |
| Commitments to third parties | |||
| Revocable commitments | 5 119 | 5 119 | |
| Irrevocable commitments | 4 032 | 4 032 | |
| Responsabilities for services rendered | |||
| Deposit and safeguard of assets | 1 108 656 | 1 188 248 | 2 296 904 |
| Foreign exchange transactions and derivative instruments | |||
| Purchase | 6 275 | 6 275 | |
| Sale | ( 6 266) | ( 6 266) | |
| 1 204 901 | 1 188 308 | 2 393 209 |
The total assets, liabilities and off-balance sheet responsibilities relating to operations with shareholders, members of the Board of Directors and companies in which members of the Board of Directors have significant influence at June 30, 2017 are as follows:
| Shareholders of Banco BPI 1 |
Members of the Board of Directors of Banco BPI 2 |
Companies in which Members of the Board of Directors of Banco BPI have significant influence 3 |
Total | |
|---|---|---|---|---|
| Assets | ||||
| Financial applications and deposits | 22 601 | 22 601 | ||
| Financial assets held for trading and at fair value through | ||||
| profit or loss | 206 | 21 775 | 1 681 | 23 662 |
| Financial assets available for sale | 88 | 84 847 | 84 935 | |
| Loans net of impairment | 5 | 9 524 | 209 040 | 218 569 |
| Derivatives | 537 | 537 | ||
| Other assets | 14 242 | 1 | 201 | 14 444 |
| 37 679 | 31 300 | 295 769 | 364 748 | |
| Liabilities | ||||
| Deposits and technical provisions | 712 | 11 297 | 8 172 | 20 181 |
| Resources of other credit institutions | 3 390 | 3 390 | ||
| Hedging derivatives | 613 | 613 | ||
| Provisions | 2 | 229 | 231 | |
| Other subornidated liabilities | 304 536 | 304 536 | ||
| Other liabilities | 1 621 | 25 | 15 446 | 17 092 |
| 310 874 | 11 322 | 23 847 | 346 043 | |
| Off balance sheet items | ||||
| Guarantees provided and other contingent liabilities | ||||
| Guarantees and sureties | 1 078 | 31 011 | 32 089 | |
| Stand-by Letters of credit | 1 353 | 1 353 | ||
| Guarantees received | 3 764 | 33 493 | 37 257 | |
| Commitments to third parties | ||||
| Irrevocable commitments | 14 803 | 14 803 | ||
| Revocable commitments | 221 | 903 | 35 946 | 37 070 |
| Responsabilities for services rendered | ||||
| Deposit and safeguard of assets | 1 618 576 | 186 254 | 173 950 | 1 978 780 |
| Other | 2 362 | 2 362 | ||
| Foreign exchange operations and derivative instruments | ||||
| Purchases | 414 879 | 414 879 | ||
| Sales | ( 414 178) | ( 414 178) | ||
| 1 620 576 | 190 921 | 292 918 | 2 104 415 |
1 Includes the La Caixa Group led by the "Fundação Bancária La Caixa" and the companies controlled by it.
2 Includes the Members of the Board of Directors, also including Allianz Europe Ltd, the companies that control it, including Allianz SE, and the companies controlled by it, except Allianz Portugal, which was considered in associated companies.
3 Includes the companies in which the Members of the Board of Directors have significant influence not included in other categories. The total assets, liabilities and off-balance sheet responsibilities relating to operations with associated and jointly controlled companies and pension funds of employees of the BPI Group at December 31, 2016 are as follows:
| Associated and | Pension funds of | ||
|---|---|---|---|
| jointly controlled | Employees of the | ||
| entities | BPI Group | Total | |
| Assets | |||
| Financial applications and deposits | 9 065 | 9 065 | |
| Financial assets held for trading and at fair value through | |||
| profit or loss | 142 | 142 | |
| Loans net of impairment | 10 | 10 | |
| Other assets | 22 856 | 303 | 23 159 |
| 31 931 | 445 | 32 376 | |
| Liabilities | |||
| Deposits and technical provisions | 27 582 | 139 135 | 166 717 |
| Resources of other credit institutions | 2 534 | 2 534 | |
| Provisions | 24 | 24 | |
| Other financial resources | 60 056 | 60 056 | |
| Other liabilities | 8 | 84 355 | 84 363 |
| 30 148 | 283 546 | 313 694 | |
| Off balance sheet items | |||
| Guarantees provided and other contingent liabilities | |||
| Guarantees and sureties | 12 613 | 60 | 12 673 |
| Commitments to third parties | |||
| Revocable commitments | 5 134 | 5 134 | |
| Responsabilities for services rendered | |||
| Deposit and safeguard of assets | 1 093 720 | 1 155 890 | 2 249 610 |
| 1 111 467 | 1 155 950 | 2 267 417 |
The total assets, liabilities and off-balance sheet responsibilities relating to operations with shareholders, members of the Board of Directors and companies in which members of the Board of Directors have significant influence at December 31, 2016 are as follows:
| Shareholders of Banco BPI 1 |
Members of the Board of Directors of Banco BPI 2 |
Companies in which Members of the Board of Directors of Banco BPI have significant influence 3 |
Total | |
|---|---|---|---|---|
| Assets | ||||
| Financial applications and deposits | 12 531 | 12 531 | ||
| Financial assets held for trading and at fair value | ||||
| through profit or loss | 12 037 | 7 082 | 8 432 | 27 551 |
| Financial assets available for sale | 88 | 74 393 | 58 941 | 133 422 |
| Loans net of impairment | 10 | 76 351 | 287 113 | 363 474 |
| Derivatives | 930 | 930 | ||
| Non-current assets held for sale and discontinued | ||||
| operations | 44 821 | 22 820 | 67 641 | |
| Other assets | 1 | 203 | 204 | |
| 70 417 | 180 647 | 354 689 | 605 753 | |
| Liabilities | ||||
| Deposits and technical provisions | 596 | 187 535 | 14 791 | 202 922 |
| Resources of other credit institutions | 2 318 | 2 318 | ||
| Coverage derivatives | 73 | 73 | ||
| Non-current liabilities held for sale and discontinued | ||||
| operations | 1 | 17 532 | 467 269 | 484 802 |
| Provisions | 2 | 107 | 659 | 768 |
| Other liabilities | 3 231 | 2 901 | 6 910 | 13 042 |
| 6 221 | 208 075 | 489 629 | 703 925 | |
| Off balance sheet items | ||||
| Guarantees provided and other contingent liabilities | ||||
| Guarantees and sureties | 1 101 | 31 627 | 65 327 | 98 055 |
| Open documentary credits | 47 973 | 47 973 | ||
| Guarantees received | 51 857 | 47 878 | 99 735 | |
| Commitments to third parties | ||||
| Revocable commitments | 72 159 | 72 159 | ||
| Irrevocable commitments | 210 | 13 487 | 47 979 | 61 676 |
| Responsabilities for services rendered | ||||
| Deposit and safeguard of assets | 749 727 | 276 576 | 185 884 | 1 212 187 |
| Other | 68 458 | 68 458 | ||
| Foreign exchange operations and derivatives | ||||
| instruments | ||||
| Purchases | 280 190 | 280 190 | ||
| Sales | ( 283 084) | ( 283 084) | ||
| 748 144 | 373 547 | 535 658 | 1 657 349 |
1 Includes the La Caixa Group led by the "Fundação Bancária La Caixa" and the companies controlled by it.
2 Includes the Members of the Board of Directors, also including: (i) Allianz Europe Ltd, the companies that control it, including Allianz SE, and the companies controlled by it, except Allianz Portugal, which was considered in associated companies; and (ii) Santoro Financial Holdings, SGPS, as it is the sole shareholder of Santoro Finance, Mrs. Isabel José dos Santos, as shareholder of Santoro Financial Holdings, SGPS to whom, under the terms of paragraph b) item 1 of article 20 and article 21 of the Portuguese Securities Code, the investment of Santoro Finance in Banco BPI is attributed, and the companies controlled by Mrs. Isabel José dos Santos.
3 Includes the companies in which the Members of the Board of Directors have significant influence not included in other categories.
The total profit or loss relating to operations with associated and jointly controlled companies and pension funds of employees of the BPI Group at June, 30 2017 were as follows:
| Associated | |||
|---|---|---|---|
| companies and | BPI Group | ||
| joint control | Pension Funds | Total | |
| Profit or loss | |||
| Financial margin (narrow sense) | ( 123) | ( 795) | ( 918) |
| Net commissions | 22 156 | 1 430 | 23 586 |
| General administrative expenses | ( 476) | ( 1 714) | ( 2 190) |
| Impairment losses and provisions for loans and guarantees | ( 5) | ( 5) | |
| 21 552 | ( 1 079) | 20 473 |
The total profit or loss responsibilities relating to operations with shareholders, members of the Board of Directors and companies in which members of the Board of Directors have significant influence at June 30, 2017 are as follows:
| Companies in which Members of the Board of Directors of Banco |
||||
|---|---|---|---|---|
| Shareholders of Banco BPI 1 |
Members of the Board of Directors of Banco BPI 2 |
BPI have significant influence 3 |
Total | |
| Profit or loss | ||||
| Financial margin (narrow sense) | ( 3 209) | ( 120) | 1 974 | ( 1 355) |
| Income from equity instruments | 5 154 | 5 154 | ||
| Net commission income | 144 | 27 | 177 | 348 |
| Net income on financial operations | ( 1) | 113 | 1 | 113 |
| Impairment losses and provisions for loans and guarantees | ( 4) | 47 | ( 225) | ( 182) |
| ( 3 070) | 67 | 7 081 | 4 078 |
1 Includes the La Caixa Group led by the "Fundação Bancária La Caixa" and the companies controlled by it.
2 Includes the Members of the Board of Directors, also including Allianz Europe Ltd, the companies that control it, including Allianz SE, and the companies controlled by it, except Allianz Portugal, which was considered in associated companies.
3 Includes the companies in which the Members of the Board of Directors have significant influence not included in other categories.
The total profit or loss relating to operations with associated and jointly controlled companies and pension funds of employees of the BPI Group at June, 30 2016 were as follows:
| Associated | |||
|---|---|---|---|
| companies and | BPI Group | ||
| joint control | Pension Funds | Total | |
| Profit or loss | |||
| Financial margin (narrow sense) | 133 | ( 850) | ( 717) |
| Net commissions | 21 966 | 1 296 | 23 262 |
| General administrative expenses | ( 433) | ( 7 708) | ( 8 141) |
| 21 666 | ( 7 262) | 14 404 |
The total profit or loss responsibilities relating to operations with shareholders, members of the Board of Directors and companies in which members of the Board of Directors have significant influence at June 30, 2016 are as follows:
| Companies in | ||||||
|---|---|---|---|---|---|---|
| the Board of | ||||||
| Directors of Banco | ||||||
| Members of the | BPI have | |||||
| Shareholders of | Board of Directors | significant | ||||
| Banco BPI 1 | of Banco BPI 2 | influence 3 | Total | |||
| Profit or loss | ||||||
| Financial margin (narrow sense) | 1 167 | 2 392 | 1 695 | 5 254 | ||
| Income from equity instruments | 1 961 | 1 961 | ||||
| Net commission income | 67 | 51 | 118 | |||
| Net income on financial operations | 6 | ( 2 354) | 14 | ( 2 334) | ||
| Impairment losses and provisions for loans and guarantees | 11 | 122 | 184 | 317 | ||
| 1 184 | 227 | 3 905 | 5 316 |
1 Includes the La Caixa Group led by the "Fundação Bancária La Caixa" and the companies controlled by it.
2 Includes the Members of the Board of Directors, also including: (i) Allianz Europe Ltd, the companies that control it, including Allianz SE, and the companies controlled by it, except Allianz Portugal, which was considered in associated companies; and (ii) Santoro Financial Holdings, SGPS, as it is the sole shareholder of Santoro Finance, Mrs. Isabel José dos Santos, as shareholder of Santoro Financial Holdings, SGPS to whom, under the terms of paragraph b) item 1 of article 20 and article 21 of the Portuguese Securities Code, the investment of Santoro Finance in Banco BPI is attributed, and the companies controlled by Mrs. Isabel José dos Santos.
3 Includes the companies in which the Members of the Board of Directors have significant influence not included in other categories.
Indication of the annual amount of remuneration received, in aggregate and individually, by the members of the Company's management body, by the Company, including fixed and variable remuneration and, in relation to this, mention of the different components that gave rise to it.
In the first half of 2017 the fixed remuneration of the members of the Board of Directors amounted to 1 325 339 euro.
To this amount it must be added, specifically as regards fixed remuneration of the members of the Executive Commission, 19 400 euro relating to seniority and in the case of non-executive members, 70 300 euro relating to attendance allowance for their participation in meetings of the advisory and support committees of the Board of Directors as established in the statutes.
The individual amounts were as follows:
| Amounts in euro | ||||
|---|---|---|---|---|
| Board of Directors | Fixed | Attendance | Seniority | Long Service |
| Remuneration | Allowance | Payments | Premiums | |
| Artur Santos Silva | 63 000 | 18 500 | n/a | n/a |
| Fernando Ulrich | 234 477 | n/a | 4 499 | n/a |
| Alfredo Rezende | 24 500 | 11 100 | n/a | n/a |
| António Lobo Xavier | 24 500 | 3 700 | n/a | n/a |
| Armando Leite de Pinho | 8 166 | n/a | n/a | n/a |
| Carla Sofia Bambulo | 24 500 | 3 700 | n/a | n/a |
| Carlos Moreira da Silva | 8 166 | n/a | n/a | n/a |
| Ignacio Alvarez Rendueles | 24 500 | 14 800 | n/a | n/a |
| João Pedro Oliveira Costa | 165 556 | n/a | 1 968 | n/a |
| José Pena do Amaral | 165 556 | n/a | 3 655 | n/a |
| Lluís Vendrell | 24 500 | 3 700 | n/a | n/a |
| Manuel Ferreira da Silva | 165 556 | n/a | 3 655 | n/a |
| Maria Celeste Hagatong | 165 556 | n/a | 3 655 | n/a |
| Mário Leite da Silva | 12 250 | n/a | n/a | n/a |
| Pedro Barreto | 165 556 | n/a | 1 968 | n/a |
| Tomás Jervell | 24 500 | n/a | n/a | n/a |
| Vicente Tardio Barutel | 24 500 | 14 800 | n/a | n/a |
The Remuneration Committee decided to grant the members of the Executive Committee who were in office in 2016, variable remuneration for their performance in that year. As a result of that decision, in addition to the regular amounts of fixed income and attendance allowance (referred to in the above table) the members of the Executive Committee of the Board of Directors who were in office in 2016 were also remunerated in the first half of 2017 with the amounts detailed in the following table:
| Amounts in euro | |||
|---|---|---|---|
| Executive Committee of the Board of Directors | Total | In cash | Variable remuneration stocks (deferred) |
| Fernando Ulrich | 465 465 | 232 733 | 232 733 |
| António Domingues1 | 53 335 | 53 335 | |
| João Oliveira Costa | 328 647 | 164 323 | 164 323 |
| José Pena do Amaral | 328 647 | 164 323 | 164 323 |
| Manuel Ferreira da Silva 2 | 328 647 | 164 323 | 164 323 |
| Maria Celeste Hagatong | 328 647 | 164 323 | 164 323 |
| Pedro Barreto 3 | 328 647 | 164 323 | 164 323 |
1 Ceased functions by resigning on June 30, 2016.
2 To the stated amount, 67 000 euros were deducted for the performance of functions in other companies representing the Bank.
3 To the stated amount, 15 122 euros were deducted for the performance of functions in other companies representing the Bank.
With the exception of the Director Manuel Ferreira da Silva, for which part – in the amount of 127 822 euro – of the fixed remuneration referred to in the preceding paragraph was paid by Banco Português de Investimento, S.A., no other member of the Executive Committee received any remuneration from a Group company other than Banco BPI.
Compensation paid or owed to former executive directors in respect of early termination of service during the year. In the first half of 2017 no payments were made for early termination.
In the first half of 2017, the total remuneration of the members of the Supervisory Board was 99 400 euro. The amounts earned individually were as follows:
| Amounts in euro | |||
|---|---|---|---|
| Supervisory Board | Fixed | ||
| Remuneration | |||
| Abel Reis | 36 400 | ||
| Jorge Figueiredo Dias | 31 500 | ||
| Rui Guimarães | 31 500 |
In the first half of 2017 the overall remuneration for exercising the function of Chairman of the Shareholders' General Meeting Board was 7 000 euro, paid in 7 instalments.
The members of the Shareholders' General Meeting Board do not benefit, as a result of this circumstance, from any retirement entitlement.
The Directors covered by the defined benefit pension plan and the liabilities related to this plan, on June 30, 2017, were as follows:
| Current | Retired | Total | |
|---|---|---|---|
| Number of persons | 9 | 4 | 13 |
| Past service liabilities (t.euro) | 16 466 | 12 736 | 29 202 |
If the remaining Directors of Banks of the BPI Group covered by a defined benefit pension plan are added to the previous table, the figures are the following:
| Current | Retired | Total | |
|---|---|---|---|
| Number of persons | 12 | 10 | 22 |
| Past service liabilities (t.euro) | 33 614 | 22 637 | 56 251 |
The pension rights acquired in the first half of 2017 related to retirement pensions of members of the Executive Committee amounted to 50 496 euros.
At June 30, 2017 the overall balance of mortgage loans granted to members of the Executive Committee of the Board of Directors for the purpose of acquiring their own homes amounted to 1 183 t. euro.
Banco BPI's Executive Directors (as well as its Employees) benefit from a credit line for the acquisition and maintenance in portfolio of BPI shares resulting from the exercise of options awarded under the RVA. At June 30, 2017, the balance of credit given to the members of Banco BPI's Executive Committee was 4 916 t. euro.
In 2008 a credit line was made available to the Directors of the Group companies (as well as to Employees and Retirees) who wished to subscribe for BPI shares in the capital increase to keep in the portfolio of shares thus acquired. At June 30, 2017 the credit line balance relating to the members of Banco BPI's Executive Committee was 873 t. euro.
Balance at June 30, 2017
| Credit line for the exercise of options 1 |
Credit line for subscription for BPI shares |
|
|---|---|---|
| Banco BPI Executive Committee | 4 916 | 873 |
| Directors of Banco Português de Investimento2 | 89 | 39 |
| Managers and other employees | 1 592 | 163 |
| Total | 6 597 | 1 075 |
1 Financing obtained for maintenance of the BPI shares which resulted in the exercise of the RVA options.
2 The members of the Executive Committee of the Board of Directors of Banco BPI are not included.
The information provided in this section has the purpose of complying with the requirements of Bank of Portugal Notice 10/2011 and includes the universe of Employees covered in 2017 by the " Remuneration Policy of Holders of Essential Functions" in force.
In the first half of 2017, the universe defined above encompassed 50 employees.
In the first half of 2017, the aggregate remuneration of the universe referred to above amounted to 3 531 t. euro, relating only to fixed remuneration. Since no variable remuneration has yet been paid relating to 2017, the amounts disclosed refer to the variable remuneration paid in 2017 relating to 2016.
At June 30, 2017 the aggregate amount of annual pension rights acquired by the employees under review was 27 155 t. euro.
The breakdown of the remuneration and pension rights indicated above between the above-mentioned groups was the following (value in t. euro):
| 1 – Responsible for risk taking |
2 – Responsible for the control functions |
3 – Operational functions |
4 - Trading/Sales |
TOTAL | |
|---|---|---|---|---|---|
| Nº Employees | 15 | 3 | 28 | 4 | 50 |
| Fixed remuneration | 1 288 | 168 | 1 872 | 203 | 3 531 |
| Variable remuneration paid 1 | 664 | 105 | 944 | 127 | 1 840 |
| Deferred variable remuneration 1 | 395 | 418 | 103 | 916 | |
| Responsability paid | 5 334 | 468 | 7 278 | 202 | 13 282 |
1 For de financial year 2016.
No new employees were recruited in the first half of 2017 who fall within this universe.
No payments were made in the first half of 2017 for early termination of employment contracts.
In accordance with the terms of article 477 of the Commercial Company Code (Código das Sociedades Comerciais), the shareholdings of the members of the Board of Directors at June 30, 2017 were as follows:
| Sh are s |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| He ld at De c. 31 16 , |
Pu rch ase s |
Sa les |
He ld at Ju n. 30 17 , |
Va lue at De 31 16 c. , 1 |
Sh are s led d i p ge n nte gu ara e A |
Sh are s led d i p ge n nte gu ara e B |
Lo an s C |
Lo an s D |
|
| Art Sa s S ilva nto ur |
500 00 0 |
40 0 0 00 |
100 00 0 |
105 | |||||
| 2 3 Fe ndo Ul rich rna |
2 0 92 180 |
58 72 4 |
2 0 33 45 6 |
2 1 39 |
1 5 85 040 |
348 51 0 |
4 1 73 |
19 7 |
|
| Alf red o R nde de Al ida eze me |
2 2 50 000 |
2 2 40 000 |
10 000 |
11 | |||||
| An tón io Lob o X avi er |
|||||||||
| 4 Arm and o C ost a L eite de Pi nho |
|||||||||
| Ca rla Ba mb ulo |
|||||||||
| 4 Ca rlos M ira da Sil ore va |
66 33 3 |
66 33 3 |
70 | ||||||
| Go lo G áza ort nza r |
|||||||||
| Ign io A lva -Re ndu ele ac rez s |
|||||||||
| 7 Ca Isid Fa iné ro sas |
|||||||||
| 2 Joã o P ed Oli vei e C ost ro ra a |
10 70 8 |
33 710 |
44 41 8 |
||||||
| 2 Jos é P do Am l ena ara |
18 4 9 13 |
18 4 9 13 |
1 69 |
||||||
| Lllu ís V end rell |
|||||||||
| 2 5 Ma l F eira da Si lva nue err |
93 0 8 84 |
10 884 |
94 1 7 68 |
||||||
| 2 6 Ma ria Ce les Ha te ton ga g |
88 5 1 51 |
47 7 8 35 |
40 7 3 16 |
42 8 |
|||||
| 7 Má Sil rio Lei te da va |
|||||||||
| Pa blo Fo rer o |
|||||||||
| 2 Pe dro Ba to rre |
50 0 0 00 |
50 0 0 00 |
526 | 378 39 9 |
94 60 0 |
6 15 |
1 54 |
||
| To má s J ell erv |
|||||||||
| Vic e T ard io Ba el ent rut |
|||||||||
| Sa nto Fin - P taç ão de ro an ce res |
|||||||||
| Se S.A rviç os , |
27 0 6 43 372 |
27 0 6 43 372 |
A - Shares which at June 30, 2017 were pledged in guarantee of loans to finance their acquisition resulting from the exercise of options granted under the RVA programme
B - Shares which at June 30, 2017 were pledged in guarantee of loans to finance their acquisition resulting from exercise of BPI share subscription rights under the capital increase.
C - Amount owed at June 30, 2017 on the loan referred to in A.
D - Amount owed at June 30, 2017 on the loan referred to in B.
1 Fair value of the shares.
2 Member of the Executive Committee.
3 Includes 58 724 shares held by the spouse, sold on the Public Tender Offer of CaixaBank on February 8, 2017.
4 Ceased functions by resigning on February 28, 2017.
5 Includes 271 768 shares held by the spouse, (of which 10 884 were granted as a result of the conversion of 44 371 options of the RVA 2013), sold on the Public Tender Offer of Caixa Bank on February 8, 2017.
6 Includes 407 316 shares held by the spouse.
7 Submitted his resignation on February 7, 2017, that is effective as from March 31, 2017.
In accordance with the terms of article 477 of the Commercial Company Code, the shareholder position of the members of the Board of Directors in terms of options held at June 30, 2017 were as follows:
| Op tio ns |
|||||
|---|---|---|---|---|---|
| He ld at De c. |
He ld at Ju n. |
||||
| 31 16 , |
Pu rch ase s |
1 Ex ise erc |
30 17 , |
||
| Art Sa nto s S ilva ur |
|||||
| 2 Fe ndo Ul rich rna |
|||||
| Alf red o R nde de Al ida eze me |
|||||
| An tón io Lob o X avi er |
|||||
| 3 Arm and o C a L eite de Pi nho ost |
|||||
| Ca rla Ba mb ulo |
|||||
| 3 Ca rlos M ira da Sil ore va |
|||||
| Go lo G ort áza nza r |
|||||
| Ign io A lva -Re ndu ele ac rez s |
|||||
| 5 Ca Isid Fa iné ro sas |
|||||
| 2 Oli e C Joã o P ed vei ost ro ra a |
12 7 2 49 |
12 7 2 49 |
|||
| 2 Jos é P do Am l ena ara |
35 8 5 30 |
35 8 5 30 |
|||
| Lllu ís V end rell |
|||||
| 2 4 Ma l F eira da Si lva nue err |
40 2 9 01 |
44 37 1 |
358 53 0 |
||
| 2 Ma ria Ce les te Ha ton ga g |
|||||
| 5 Má rio Lei te da Sil va |
|||||
| Pa blo Fo rer o |
|||||
| 2 Pe dro Ba to rre |
35 8 5 30 |
35 8 5 30 |
|||
| To má s J ell erv |
|||||
| Vic e T ard io Ba el ent rut |
|||||
| Sa nto Fin - P taç ão de ro an ce res Se rviç S.A os , |
|||||
| 1 In clu des tinc tion by lap sin ex g. |
2 Member of the Executive Committee.
3 Ceased functions by resigning on February 28, 2017.
4 Includes 44 371 shares held by the spouse, sold on the Public Tender Offer of Caixa Bank on February 8, 2017.
5 Submitted his resignation on February 7, 2017, that is effective as from March 31, 2017.
In accordance with the terms of article 477 of the Commercial Company Code, the shareholding position of the other directors of Banco BPI, members of the Board of Directors of Banco Português de Investimento, in terms of the shares held at June 30, 2017 were as follows:
| Ac õe ç s |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| He ld at De c. 31 16 , |
Pu rch ase s |
Sa les |
He ld at Ju n. 30 17 , |
Va lue at Ju 30 n. , 1 17 |
Sh are s led d i p ge n nte gu ara e A |
Sh are s led d i p ge n nte gu ara e B |
Lo an s C |
Lo an s D |
|
| 2 Ale ndr e L e V ale xa uce na Fe ndo Co sta Li rna ma 3 An a S tley Fe ira pra rre 3 Bru Mig uel Si lva no 3 Lu ís G a M raç ou ra 3 Pe dro M ont eiro Co elh o 4 Ru i C arlo s L op es |
15 5 3 08 212 77 8 |
29 756 15 948 |
125 78 0 |
59 284 22 8 7 26 |
62 24 1 |
40 594 |
18 69 0 |
8 9 |
3 9 |
A - Shares which at June 30, 2017 were pledged in guarantee of loans to finance their acquisition resulting from the exercise of options granted under the RVA programme.
B - Shares which at June 30, 2017 were pledged in guarantee of loans to finance their acquisition resulting from exercise of BPI share subscription rights under the capital increase.
C - Amount owed at June 30, 2017, on the loan referred to in A.
D - Amount owed at June 30, 2017, on the loan referred to in B.
1 Fair value of the shares.
2 Ceased functions by resigning on May 8, 2017, so the final position reports to that date.
3 Started functions on May 9, 2017, the initial position refers to this date.
4 Started functions on May 9, 2017, the initial position refers to this date. Ceased functions by resigning on August 31.
In accordance with the terms of article 477 of the Commercial Company Code, the shareholding position of the other directors of Banco BPI, members of the Board of Directors of Banco Português de Investimento, in terms of the options held at June 30, 2017 were as follows:
| Op tio ns |
||||
|---|---|---|---|---|
| He ld at De c. 31 16 , |
Pu rch ase s |
1 Ex ise erc |
He ld at Ju n. 30 17 , |
|
| 2 Ale ndr e L e V ale xa uce na Fe ndo Co sta Li rna ma 3 a S An tley Fe ira pra rre 3 Bru Mig uel Si lva no 3 Lu ís G a M raç ou ra 3 Pe dro M eiro Co elh ont o 4 i C Ru arlo s L op es |
12 1 3 05 65 012 |
12 1 3 05 65 01 2 |
1 Includes extinction by lapsing.
2Ceased functions by resigning on May 8, 2017, so the final position reports to that date.
3 Started functions on May 9, 2017, the initial position refers to this date.
4 Started functions on May 9, 2017, the initial position refers to this date. Ceased functions by resigning on August 31.
In accordance with the terms of article 477 of the Commercial Company Code (Código das Sociedades Comerciais), the shareholding position of the other directors of Banco BPI, in terms of shares and options held at June 30, 2017 were as follows:
| 1 Sh are s |
Op tio |
1 ns |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| He ld at De c. 31 16 , |
Pu rch ase s |
Sa les |
He ld at Ju n. 30 17 , |
Ju 30 n. , 2 17 |
He ld at De c. 31 16 , |
Pu rch ase s |
3 Ex ise erc |
He ld at Ju n. 30 17 , |
|
| Ma l M aria M nue ene ses |
11 4 1 79 |
10 47 5 |
124 65 4 |
42 70 2 |
42 70 2 |
||||
| Fra nci Xa vie r A vill sco ez |
20 0 0 01 |
90 752 |
29 0 7 53 |
31 10 4 4 |
31 10 4 4 |
||||
| Su Tri Ca bra l sa na go |
38 18 1 |
38 18 1 |
|||||||
| Lui s R ica rdo Ar aúj o |
52 00 0 |
83 42 5 |
62 514 |
72 91 1 |
77 | 134 15 2 |
13 4 1 52 |
||
| 4 Gra Gra Mo ça ça ura |
31 12 5 |
31 12 5 |
|||||||
| 5 Oli An a R vei os as ra |
22 09 8 |
16 41 2 |
38 510 |
51 30 6 |
51 306 |
||||
| Joã o A vid Mo reir es a |
20 892 |
41 191 |
62 083 |
61 24 0 |
61 24 0 |
1 Includes securities held by their spouses.
2 Fair value of shares
3 Includes extinction by lapsing.
4 Includes 18 574 shares held by the spouse, sold in the Public Tender Offer of CaixaBank on February 8, 2017.
5 Includes 7 177 shares held by the spouse, (of which 2 518 were granted as a result of the conversion of 7 871 options of the RVA 2012), sold in the Public Tender Offer of CaixaBank on February 8, 2017.
On February 8, 2017 sold 400 000 shares at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 8, 2017 his spouse sold 58 724 shares at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 8, 2017 sold 2 240 000 shares at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
Does not hold and has not traded any Banco BPI shares.
Ceased functions by resigning on February 28, 2017. Has not traded any shares until that date.
At December 31, Arsopi – Holding, SGPS, S.A., of which he is the President of the Board of Directors, owned 2 942 267 shares of Banco BPI, which were sold on February 8, 2017 at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
At December 31, ROE, SGPS, S.A., of which he is the President of the Board of Directors, owned 4 442 291 shares of Banco BPI, which were sold on February 8, 2017 at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
At December 31, ROE, SGPS, S.A., of which he is the President of the Board of Directors, owned 3 414 404 shares of Banco BPI, which were sold on February 8, 2017 at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
Ceased functions by resigning on February 28, 2017. Has not traded any shares until that date.
Does not hold and has not traded any Banco BPI shares.
At June 30 Allianz Europe, Ltd. owned 120 553 986 of Banco BPI shares, representing 8.27% of its share capital.
Started functions on May 9, 2017. Does not hold and has not traded any Banco BPI shares.
Is the Chief Executive Officer of CaixaBank, S.A., which owns 1 231 250 696 Banco BPI shares at June 30, 2017, representing 84.51% of its share capital.
Does not hold and has not traded any Banco BPI shares.
For further information about the transactions and the participation of CaixaBank, S.A. in Banco BPI's share capital, see the information above concerning Gonzalo Gortázar.
On February 3, 2017 he was attributed 10 708 and 23 002 Banco BPI shares, as a consequence of the conversion of 33 476 options of RVA 2012 and 93 773 options of RVA 2013, respectively.
On February 8, 2017 sold 44 418 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 8, 2017 sold 184 913 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
Does not hold and has not traded any Banco BPI shares.
For further information about the transactions and the participation of CaixaBank, S.A. in Banco BPI's share capital, see the information above concerning Gonzalo Gortázar.
On February 8, 2017 sold 670 000 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 3, 2017 were attributed to his spouse 10 884 Banco BPI shares, resulting from the conversion of 44 371 options of RVA 2013.
On February 8, 2017 his spouse sold 271 768 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 8, 2017 sold 477 835 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
At June 30, 2017 her spouse held 407 316 shares of Banco BPI.
Ceased functions by resigning on March 31, 2017. Has not traded any shares until that date.
Is President of the Board of Directors of Santoro Finance – Prestação de Serviços, S.A. and President of the Board of Directors of Santoro Financial Holdings, SGPS, S.A. which has full control over it.
On February 8, 2017 sold 270 643 372 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
Started functions on May 9, 2017. Does not hold and has not traded any Banco BPI shares.
For further information about the transactions and the participation of CaixaBank, S.A. in Banco BPI's share capital, see the information above concerning Gonzalo Gortázar.
Has not traded any shares.
Does not hold and has not traded any Banco BPI shares.
Does not hold and has not traded any Banco BPI shares.
On February 3, 2017 were attributed to him 29 756 Banco BPI shares, resulting from the conversion of 121 305 options of RVA 2013.
On February 8, 2017 sold 125 780 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 3, 2017 were attributed to him 15 948 Banco BPI shares, resulting from the conversion of 65 012 options of RVA 2013.
Started functions on May 9, 2017. Does not hold and has not traded any Banco BPI shares between that date and June 30, 2017.
Started functions on May 9, 2017. Does not hold and has not traded any Banco BPI shares between that date and June 30, 2017.
Started functions on May 9, 2017. Does not hold and has not traded any Banco BPI shares between that date and June 30, 2017.
Started functions on May 9, 2017. Does not hold and has not traded any Banco BPI shares between that date and June 30, 2017.
Started functions on May 9, 2017. Does not hold and has not traded any Banco BPI shares between that date and June 30, 2017.
On February 3, 2017 were attributed to him 10 475 Banco BPI shares, resulting from the conversion of 42 702 options of RVA 2013.
On February 8, 2017 sold 124 654 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 3, 2017 were attributed to him 58 459 and 32 293 shares of the Bank, resulting from the conversion of 182 762 options of RVA 2012 and 131 648 options of RVA 2013, respectively.
On February 8, 2017 sold 290 753 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 8, 2017 sold 38 181 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 2, 2017 acquired 62 514 shares, through the exercise of an equal number of options under the RVA 2011 atributted on May 28, 2012 at an exercise price of 0.358 euro (adjusted for capital increases) defined at the moment of attribution.
Sold on February 2, 62 514 shares at the price of 1.132 euro.
On February 3, 2017 were attributed to him 14 319 and 6 592 shares of the Bank, resulting from the conversion of 44 766 options of RVA 2012 and 26 872 options of RVA 2013 options, respectively.
On February 8, 2017 sold 12 551 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 8, 2017 her spouse sold 18 574 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 3, 2017 were attributed to her 13 894 shares of the Bank, resulting from the conversion of 43 435 options of RVA 2012.
On February 8, 2017 sold 31 333 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 3, 2017 were attributed to her spouse 2 518 shares of the Bank, resulting from the conversion of 7 871 options of RVA 2012.
On February 8, 2017 her spouse sold 7 177 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On February 2, 2017 acquired 32 962 shares, through the exercise of an equal number of options under the RVA 2011 atributted on May 28, 2012 at an exercise price of 0.358 euro (adjusted for capital increases) defined at the moment of attribution.
Sold on February 2, 32 962 shares at a price of 1.132 euros.
On February 3, 2017 were attributed to him 5 543 and 2 686 shares of the Bank, resulting from the conversion of 17 329 options of RVA 2012 and 10 949 options of RVA 2013, respectively.
On February 8, 2017 sold 29 121 shares of Banco BPI at the price of 1.134 euro under the Public Tender Offer launched by CaixaBank, S.A.
On August 3, 2014, the Bank of Portugal (Banco de Portugal) applied a resolution measure to Banco Espírito Santo, S.A. (BES) pursuant to paragraph b) of number 1 of article 145 C of the General Regulation of Credit Institutions and Companies (RGICSF), in the form of a partial transfer of assets, liabilities, off-balance sheet items and assets under management into a transition bank, Novo Banco, S.A. (Novo Banco), incorporated by a decision of the Bank of Portugal on the same date. As part of this process, the Resolution Fund made a capital contribution to Novo Banco amounting to 4 900 000 t. euros, becoming the sole shareholder.
In this context, the Resolution Fund contracted loans amounting to 4 600 000 t.euro, of which 3 900 000 t.euro granted by the Portuguese State and a syndicated loan of 700 000 t.euro granted by a group of credit institutions to which the Bank contributed with 116 200 t.euro.
On December 29, 2015, the Bank of Portugal issued a public anouncement that it had "(...) adjusted the scope of assets, liabilities, offbalance sheet items and assets under management transferred to Novo Banco, among which:
a. The clarification that no responsibilities that were contingent or unknown were transferred to Novo Banco at the date of application of the resolution measure to Banco Espírito Santo, S.A.;
b. The retransfer of the share capital in BES Finance to Banco Espírito Santo, S.A., which is necessary to ensure full compliance with and enforcement of the resolution measure regarding the non-transfer to Novo Banco of subordinated debt instruments issued by Banco Espírito Santo, S.A.;
c. The clarification that the Resolution Fund is responsible for neutralizing, through compensating Novo Banco, the possible adverse effects of future decisions, resulting from the resolution process, which result in liabilities or contingencies.
At July 7, 2016, the Resolution Fund stated that it would analyze and evaluate the diligencies required following the publication of the results regarding the independent evaluation, carried out to estimate the level of credit recovery for each class of creditors under a hypothetical scenario of a normal insolvency process of BES.
According to the applicable law, if, at liquidation proceeding of BES, creditors whose claims have not been transferred to Novo Banco, suffer a loss greater than they would have been hypothetically if BES had gone into liquidation proceedings immediately prior to the application of the resolution measure, these creditors are entitled to receive the difference from the Resolution Fund.
Finally, there have been public notices that judicial proceedings against the Resolution Fund have been initiated.
On December 19, 2015, the Board of Directors of the Bank of Portugal declared that Banif was at risk or in an insolvency situation (failing or likely to fail) and decided to commence a process of urgent resolution of the institution in the form of partial or total sale of its activity, which ended in the sale of Banif's activity on December 20, 2015 to Banco Santander Totta, S.A. (BST) for an amount of 150 000 t.euro.
Most of the assets not subject to the sale were transferred to an asset management vehicle, called Oitante, S.A. (Oitante), created specifically for this purpose, the sole shareholder of which is the Resolution Fund. As a way of offsetting this transference, Oitante issued debt securities of 746 000 t.euro, having been given a guarantee by the Resolution Fund and a counter-guarantee by the Portuguese State.
The operation involved additional support of around 2 255 000 t.euro to cover future contingencies, of which 489 000 t. euro by the Resolution Fund and 1 766 000 t.euro directly by the Portuguese State. The referred state support is deducted from the amount due by BST for the acquisition of the set of assets, liabilities and activity of former Banif. The amount of 489 000 t.euro granted by the Resolution Fund was funded by a loan granted by the Portuguese State.
Following the resolution measures applied to Banco Espírito Santo, S.A. and Banif, S.A., the Resolution Fund currently holds the entire share capital of Novo Banco, S.A. and of Oitante, S.A..
In order to reimburse the loans obtained by the Resolution Fund and any other responsibilities that the Resolution Fund may have to take on with respect to the above-mentioned resolution measures, the Resolution Fund is entitled essentially to the contributions of participating credit institutions (including the Bank) and to the contribution of the banking sector.
From 2013 to 2016, contributions to the Resolution Fund were made in the form of initial contributions, periodic contributions and contribution over the banking sector. In 2016, Bank made periodic contributions to the Resolution Fund and over the banking sector in the amounts of 3 205 t.euro and 16 476 t.euro, respectively.
By a public statement on September 28, 2016, the Resolution Fund announced that it had agreed with the Portuguese Ministry of Finance to revise the terms of the 3 900 000 t.euro loan originally granted by the Portuguese State to the Resolution Fund in 2014 to finance the resolution measure applied to BES. According to the Resolution Fund, the extention of the maturity of the loan was intended to ensure the ability of the Resolution Fund to meet its obligations through its regular revenues, regardless of the contingencies to which the Resolution Fund is exposed. On the same day, the Office of the Portuguese Minister of Finance also announced that increases in liabilities arising from the materialization of future contingencies will determine the maturity adjustment of Portuguese State and bank loans to the Resolution Fund in order to maintain the current levels of the required effort regarding the contribution over the banking sector.
According to the communication of the Resolution Fund on March 21, 2017:
On March 31, 2017, the Bank of Portugal made a communication in which was stated, among others, the following aspects:
"Bank of Portugal today selected LONE STAR to complete the sale of Novo Banco. The Resolution Fund has consequently signed the contractual documents of the transaction."
On July 7, 2017, the European Comission decided not to oppose the notified concentration and to declare it compatible with the internal market.
Additionally, Novo Banco announced on July 24, 2017, a tender offer operation for the acquisition of several senior debt issues issued directly and indirectly by Novo Banco, with the purpose of strengthening its equity capital, an operation provided for in the sale process to Lone Star announced on March 31. The cash offer provides for the purchase of securities with a minimum nominal amount of 6,276 million euros, of which at least 1,000 million issued by the London Branch of Novo Banco and is accompanied by an operation of consent solicitation for early redemption.
Additionally, it should be mentioned that on September 1, 2017, Banco Comercial Português, S.A., announced the following: "Banco Comercial Português informs that, after having conveyed reservations regarding the contigent capitalization obligation by the Portuguese Resolution Fund which was announced to be included in a sale agreement of Novo Banco, has decided, in light of the legal deadline and for caution, to request the respective appreciation through administrative legal proceedings.
This diligence, which centres exclusively on the referred capitalization obligation, does not comprise the request by the Bank of, nor entail, the production of any suspensive effects on the sale of Novo Banco, S.A. and, consequently, brings legally no impediment to such sale within the foreseen delays."
Currently it is not possible to predict the possible effects for the Resolution Fund arising from: (i) the sale of the participation in Novo Banco (particularly given that the sale is not yet completed); (ii) the application of the principle that no creditor from the credit institution under resolution may incur in a loss greater than it would have if the institution had entered into liquidation; (iii) the guarantee provided to the obligations issued by Oitante; and (iv) other liabilities to be assumed by the Resolution Fund.
Notwithstanding the possibility provided for in the applicable legislation for the collection of special contributions, considering the recent developments regarding the renegotiation of the terms of the loans granted to the Resolution Fund by the Portuguese State and by a group of banks, including the Bank, and the public announcements made by the Resolution Fund and the Office of the Portuguese Minister of Finance which indicate that this possibility will not be used, the financial statements as of June 30, 2017 reflect the Board of Directors' expectation that the Bank will not be required to make any special or extraordinary contribution to finance the resolution measures applied to BES and Banif.
Possible changes regarding these subjects may have implications in the Bank's financial statements.
On April 18, 2016 CaixaBank, S.A., holder on that date of 44.1% of the share capital of Banco BPI, published a preliminary announcement of a public, general and voluntary tender offer (the Offer) covering all shares of Banco BPI, at the price of 1.113 euro per share.
The launch of the Offer was subject to the following conditions set out in paragraph 11 of the preliminary announcement:
Once launched, in the terms of paragraph 12 of the preliminary announcement, the effectiveness of the Offer was subject to the verification of the following conditions:
On May 17, 2016 the Board of Directors of Banco BPI, S.A. published its report, prepared in accordance with the terms of item 1, article 181 of the Securities Market Code, on the opportunity and conditions of the Offer. The report is available on the website of the Portuguese Securities Market Commission and of the Bank.
Following the approval on the Shareholders' General Meeting of September 21 related to the removal of the single shareholder voting cap, the Portuguese Securities Market Commission determined that according to the terms of the law, the voluntary public tender offer presented by the shareholder CaixaBank, S.A, which held a 45.5% of the share capital and whose exercise of voting rights was limited to 20% of the share capital prior to this date, was now a mandatory public tender offer.
On September 21, 2016, CaixaBank published a revised preliminary announcement of a general and mandatory tender offer for the acquisition of the shares of Banco BPI, S.A. at a price of 1.134 euro per share.The launch of the Offer was subject to the following conditions set in item 11 of the preliminary announcement:
i) Obtain prior registration of the Offer with the Portuguese Securities Market Commission ("CMVM"), pursuant to article 114 of the Securities Market Code, with a consideration of 1.134 euro (one euro and thirteen comma four cents) for Share.
On October 13, 2016, the Board of Directors of Banco BPI presented its report, prepared under the terms of item 1 of article 181 of the Securities Market Code, on the opportunity and terms of the Offer. This report was made available on the website of the Portuguese Securities Market Commission and on the Bank's website.
After the conditions presented on the preliminary announcement were verified, on January 16, 2017, CaixaBank published the Launch Announcement of the General and Mandatory Tender Offer for the acquisition of the shares representing the share capital of Banco BPI, at a price of 1.134 euro per share, and the corresponding Prospectus.
The Offer took place between January 17, 2017 (beginning at 8:30 am) and February 7, 2017 (up to 3:30 pm), after which, on February 8, 2017 took place the Special Session of Regulated Market destined to present the results of the Offer.
Within this context, it was disclosed that during the Offer, CaixaBank acquired shares representing 39.01% of the voting rights of Banco BPI, which, considering the participation already held before the Offer – 45.50% - determined CaixaBank to be the holder of a share capital representing 84.51% of the voting rights of Banco BPI.
These consolidated financial statements are a translation of financial statements originally issued in Portuguese in conformity with the International Financial Reporting Standards as endorsed by the European Union, some of which may not conform to or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.
Article 246 (1) (c) of the Securities Code prescribes that each one of the persons responsible for the company issues a declaration, the content of which is defined therein.
The Members of the Executive Committee of Banco BPI's Board of Directors, identified here by name, individually subscribe to the declaration transcribed as follows:
"I declare in the terms and for the purposes for article 246 (1) (c) of the Securities Code that, to the best of my knowledge, the financial statements and the directors' report of Banco BPI, S.A., relating to the 1st half of 2017, were prepared in conformity with the applicable accounting standards, giving a true and fair view of the assets and liabilities, the financial situation and the results of that company and of the companies included in the consolidation perimeter, and that the directors' report contains an indication of the important events which occurred in the 1st half of 2017 and their impact on the respective financial statements, as well as a description of the principal risks and uncertainties for the six following months."
| Pablo Forero Calderon | (Chairman) |
|---|---|
| José Pena do Amaral | (Member) |
| Pedro Barreto | (Member) |
| João Pedro Oliveira e Costa | (Member) |
| Alexandre Lucena e Vale | (Member) |
| António Farinha de Morais | (Member) |
| Francisco Manuel Barbeira | (Member) |
| Ignacio Alvarez Rendueles | (Member) |
Porto, 26 September 2017
Deloitte & Associados, SROC S.A. Registo na OROC nº 43 Registo na CMVM nº 20161389 Av. Eng. Duarte Pacheco, n.º7 1070-100 Lisboa Portugal
Tel: +(351) 210 422 500 Fax: +(351) 210 427 950 www.deloitte.pt
(Amounts expressed in thousands of euros – t.euros)
(Translation of a report originally issued in Portuguese – in case of discrepancies, the original version in Portuguese prevails – Note 5)
We have audited the accompanying interim consolidated financial statements of Banco BPI, S.A. ("Bank" or "Banco BPI") and of its subsidiaries ("the Group"), which comprise the consolidated Balance Sheet as of June 30, 2017 (that presents a total of 32,751,404 t.euros and total equity of 2,562,318 t.euros, including a consolidated net loss attributable to the shareholders of the Bank of 101,725 t.euros), the Interim Consolidated Statements of Income, Profit and Loss and Other Comprehensive Income, Changes in Shareholders' Equity and Cash Flows for the six-month period then ended, and the Notes to the interim consolidated financial statements, which include a summary of significant accounting policies.
In our opinion, the accompanying interim consolidated financial statements present true and fairly, in all material respects, the consolidated financial position of Banco BPI, S.A. and its subsidiaries as of June 30, 2017 and its consolidated financial performance and cash flows for the six-month period then ended in accordance with the International Financial Reporting Standards as endorsed by the European Union (IFRS).
We conducted our audit in accordance with International Standards on Auditing (ISAs) and further standards and technical and ethical directives of the Portuguese Institute of Statutory Auditors ("Ordem dos Revisores Oficiais de Contas"). Our responsibilities under those standards are described in the "Auditor's responsibilities for the audit of the interim consolidated financial statements" section below. We are independent from the entities that constitute the Group in the terms of the law and we have fulfilled the other ethical requirements under the ethical code of the Portuguese Institute of Statutory Auditors ("Ordem dos Revisores Oficiais de Contas").
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
"Deloitte" refere-se a Deloitte Touche Tohmatsu Limited, uma sociedade privada de responsabilidade limitada do Reino Unido (DTTL), ou a uma ou mais entidades da sua rede de firmas membro e respetivas entidades relacionadas. A DTTL e cada uma das firmas membro da sua rede são entidades legais separadas e independentes. A DTTL (também referida como "Deloitte Global") não presta serviços a clientes. Aceda a www.deloitte.com/pt/about para saber mais sobre a nossa rede global de firmas membro.
Tipo: Sociedade Anónima | NIPC e Matrícula: 501776311 | Capital social: € 500.000 | Sede: Av. Eng. Duarte Pacheco, n.º7, 1070-100 Lisboa | Escritório no Porto: Bom Sucesso Trade Center, Praça do Bom Sucesso, 61 – 13º, 4150-146 Porto
Page 2 of 11
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the interim consolidated financial statements for the six-month period ended on June 30, 2017. Those matters were addressed in the context of our audit of the interim consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on those matters.
| Description of the most significant risks of | Summary of the auditor's response to the assessed risks |
|---|---|
| material misstatement identified | of material misstatement |
Loss of control over Banco de Fomento Angola, S.A. and valuation of the retained participation (Notes 4.9 and 4.12)
| In October 2016 Banco BPI entered into an agreement for the sale of 2% of the share capital of Banco de Fomento Angola, S.A. (BFA), whose execution, on January 5, 2017, implied the reduction of the BPI Group's participation in BFA |
Our audit procedures to address the identified risks of material misstatement included: Analysis of the Bank's internal control procedures in the context of recording unusual transactions. |
|---|---|
| from 50.1% to 48.1%. Following this operation, the management understands that as from the date of its execution, Banco BPI ceased to control BFA, in accordance with IFRS 10 - Consolidated Financial Statements (IFRS 10). |
Obtention and analysis of the documentation related to the sale of 2% of BFA's share capital. Obtaining the analysis prepared by the Bank with respect to the impact of the loss of control over BFA. |
| According to IFRS 10, in the context of recording the loss of control, the 48.1% interest retained by Banco BPI in BFA was initially recognized by its estimated fair value. Considering that Banco BPI |
Analysis of the accounting treatment and impact of this transaction in the consolidated accounts of the Bank, considering the requirements of the International Financial Reporting Standards as adopted by the European Union (IFRS). |
| maintained significant influence over the decisions on BFA's financial and operating policies, the participation retained by Banco BPI in BFA was subsequently measured using the equity method, in accordance with the |
Analysis of the application of the equity method for the valuation of the participation retained by Banco BPI in BFA as of June 30, 2017; |
| requirements of IAS 28 - Investments in Associates and Joint Ventures. On June 30, 2017, the book value of the 48.1% |
Preparation and delivery of audit instructions to the BFA auditors, follow-up of the work performed and analysis of the respective conclusions, as expressed in the reporting documents issued by these auditors; |
| participation in BFA held by Banco BPI amounts to 492,065 t.euros, and the contribution of BFA's net income to the consolidated net income for the six-month period then ended was 106,671 t.euros. In addition, the consolidated net income for the six-month period ended on June 30, 2017 also includes the impact of the sale of 2% of the participation in BFA and the consequent loss of control, that resulted in a total loss of 212,298 t.euros, which includes the reclassification to profit and loss of the negative |
Obtention and analysis of the study prepared by the Bank to assess the existence of any evidence of impairment applicable to the participation held in BFA as of June 30, 2017, in order to assess the reasonableness of the assumptions considered and the results obtained; |
| foreign exchange reserves generated in prior years, in the amount of 182,121 t.euros. |
material misstatement identified
| Description of the most significant risks of | Summary of the auditor's response to the assessed risks |
|---|---|
| material misstatement identified | of material misstatement |
Loss of control over Banco de Fomento Angola, S.A. and valuation of the retained participation (Notes 4.9 and 4.12) (continued)
| To the extent that the identification and recording of the loss of control over BFA constitutes a relevant non-recurring event and that this transaction and the subsequent valuation of the retained holding have a significant impact on Banco BPI's interim consolidated financial statements, this area was considered as a key audit matter. |
Review of the disclosures related to the sale of 2% of the share capital of BFA and consequent loss of control, and to the subsequent valuation of the retained participation included in the interim consolidated financial statements as of June 30, 2017, considering the applicable accounting framework. |
|---|---|
| Description of the most significant risks of | Summary of the auditor's response to the assessed risks |
of material misstatement
Impairment for loans to customers (Notes 2.3.4, 2.16, 4.7, 4.21 and 4.47)
Page 4 of 11
| Description of the most significant risks of | Summary of the auditor's response to the assessed risks |
|---|---|
| material misstatement identified | of material misstatement |
Impairment for loans to customers (Notes 2.3.4, 2.16, 4.7, 4.21 and 4.47) (continued)
| The determination of impairment losses through individual analysis has an inherent strong judgmental component from Management about the information available, namely in identifying evidence of impairment and in estimating the present value of the recoverable amount expected by the Bank, that incorporates also assumptions about future events that may not occur as expected. |
Regarding the collective impairment model: (i) understanding of the main characteristics of the impairment model and critical analysis of the reasonableness of the methodologies used by the Bank; (ii) analysis on a sample basis of the calculation of risk parameters and collective impairment; and (iii) validation on a sample basis of the inputs used to determine the main risk parameters. |
|---|---|
| On the other hand, collective impairment is based on a model with a certain degree of complexity, as it incorporates in the computation of the impairment several variables, namely operations characteristics, the value of collateral and risk parameters, such as the probability of a performing loan showing signs of impairment, probability of transition to default and loss given default. |
Review of the disclosures included in the interim consolidated financial statements related to impairment for loans to customers, considering the applicable accounting framework. |
| Different assumptions or methodologies used in the impairment analysis and different recovery strategies affect the estimate of the recovery cash flows and their expected timing, which may have a relevant impact on the determination of impairment. |
|
| Considering this is an area in which Management has to make estimates that incorporate a high degree of subjectivity or some complexity, as well as the materiality of the involved amounts in the context of the Bank's consolidated financial statements, impairment for loans to customers was considered as a key audit matter. |
Page 5 of 11
| Description of the most significant risks of | Summary of the auditor's response to the assessed |
|---|---|
| material misstatement identified | risks of material misstatement |
Liabilities with retirement pensions of pensioners and employees (Notes 2.7.1, 2.8, 2.16, 4.25, 4.26 and 4.41)
| The Group assumed the responsibility of paying | Our audit procedures to address the identified risks of |
|---|---|
| to its pensioners and employees retirement | material misstatement included: |
| pensions and other associated benefits under the | |
| terms defined in the Collective Labour Agreement | Analysis of the relevant internal control procedures |
| (CLA) of the Banking Sector. As of June 30, 2017 | implemented by the Bank in determining the main |
| the Group's liabilities for past services of its | actuarial assumptions used in the calculation of |
| pensioners and employees with retirement | liabilities with past services related to pensions. |
| pensions and other benefits amount to 1,540,699 | |
| t.euros. | Verification of the existence of registration of the |
| The Group's liabilities associated with the defined | responsible actuary within the Insurance and |
| benefit plans as of June 30, 2017 were | Pension Funds Supervisory Authority ("Autoridade |
| determined by the responsible actuary, based on | de Supervisão de Seguros e Fundos de Pensões" |
| projections of the amounts in the actuarial | (ASF)) and confirmation that its independence |
| valuation at December 31, 2016. A set of | statement included in the actuarial study of |
| actuarial assumptions were considered, including | December 31, 2016, as provided in the Regulatory |
| discount rate, wage and pensions growth rate and | Standard No. 7/2007-R, of May 17, of the ASF, |
| mortality table. | remains applicable as of June 30, 2017. |
| During the first half of 2017, the Group conducted | |
| a program of early retirements and voluntary | Reading the actuarial study with reference to June |
| terminations, under which it has incurred total | 30, 2017 and discussion with the responsible |
| costs of 106,358 t.euros, that includes, regarding | actuary of the main actuarial assumptions used. |
| the defined benefit liabilities, an increase, net of | Analysis of the reasonableness of the main actuarial |
| reductions, of past service liabilities amounting to | |
| 42,095 t.euros. | assumptions used in the quantification of pension |
| Any changes in actuarial assumptions may have a | liabilities, considering: (i) the actuarial study; (ii) |
| relevant impact in the liabilities with past services | available market data; (iii) historical information |
| related to pensions. | (experience gains or losses); and (iv) information |
| Considering the importance of the actuarial | provided by Management. |
| assumptions for the purposes of determining | |
| liabilities with past services related to pensions in | Review of the disclosures included in the interim |
| the context of the Bank's consolidated interim | consolidated financial statements of the Bank |
| financial statements, this area was considered as | regarding these matters, considering the applicable |
| a key audit matter. | accounting framework. |
| Description of the most significant risks of | Summary of the auditor's response to the assessed |
|---|---|
| material misstatement identified | risks of material misstatement |
| As of June 30, 2017, the Group's interim consolidated balance sheet includes deferred tax assets in the amount of 443,188 t.euros, of which 214,608 t.euros are dependent on the existence of future taxable income (deferred tax assets not eligible under the Special Regime applicable to deferred tax assets, approved by Law no. |
Our audit procedures to address the identified risks of material misstatement included: Analysis of the relevant internal control procedures implemented by the Bank in the analysis of the recoverability of deferred tax assets. |
|---|---|
| 61/2014, of 26 August), including: 97,547 t.euros related to impairment losses for loans and guarantees; |
Analysis of the consistency of the pre-tax profits considered by the Bank in its estimation of future taxable income with the Funding and Capital Plan sent by Banco BPI to the supervisory entities in |
| 64,230 t.euros related to employee benefits (actuarial deviations, transfer of liabilities to the Social Security, early retirements, final career premium, compensation payable and other commitments under the voluntary terminations program occurred during the semester); and 20,950 t.euros of tax losses carried forward (19,610 t.euros originated in 2014 and 2016 related to the non-consolidated activity of Banco BPI). According to Law No. 2/2014 of 16 January, the use of tax losses in future periods of taxation cannot exceed 70% of the taxable income in each of those periods, and the tax losses originated in 2014 and 2016 have a 12-year reporting period. |
March 2017 and subsequent developments, which are contained in internal documentation. Analysis of the interpretation of the relevant tax legislation considered by the Bank in the estimation of future taxable profits. Review of the calculations made by the Bank to demonstrate the recoverability of deferred tax assets, considering the review of the assumptions and the interpretation of the tax legislation described above. Review of the disclosures included in the interim consolidated financial statements regarding this matter, considering the applicable accounting framework. |
| In the six-month period ended June 30, 2017, deferred taxes associated with reportable tax losses decreased by 9,773 t.euros as a result of interpretative changes, particularly regarding the Regulatory Decree No. 5/2016, of 18 November (DR 5/2016), introduced during the 2016 fiscal report. |
|
| In accordance with IAS 12 - Income Taxes, deferred tax assets can only be recorded up to the extent that it is probable that future taxable income will exist on the estimated date of their reversal. |
| Description of the most significant risks of | Summary of the auditor's response to the assessed |
|---|---|
| material misstatement identified | risks of material misstatement |
Recoverability of deferred tax assets (Notes 2.13, 2.16 and 4.43) (continued)
| The Bank prepared an estimate of its taxable income for the period 2017-2022 to assess the recoverability of deferred tax assets. This estimate is by its own nature judgmental and depends on the assumptions made by Management to calculate the evolution of pre tax profits and its interpretation of the tax legislation. |
|
|---|---|
| Any changes in the assumptions used to estimate the future earnings or in the interpretation of the tax legislation may have a relevant impact on deferred tax assets. |
|
| Given the materiality of deferred tax assets in the Bank's consolidated financial statements and the need to use estimates to determine their recoverability, this area was considered as a key audit matter. |
Page 8 of 11
| Description of the most significant risks of | Summary of the auditor's response to the assessed risks |
|---|---|
| material misstatement identified | of material misstatement |
Following the resolution measures applied to Banco Espírito Santo, S.A. (BES) and Banif - Banco Internacional do Funchal, S.A. (Banif), the Resolution Fund became the owner of the entire share capital of Novo Banco, S.A. (Novo Banco) and Oitante, S.A.. In this context the Resolution Fund has obtained loans from the Portuguese State and a banking syndicate and has assumed other liabilities and contingent liabilities. The Bank participated in the banking syndicate through a loan agreement.
In order to reimburse these loans and to meet other responsibilities it may assume, the proceeds of the Resolution Fund are essentially the periodic contributions from participating institutions (including the Bank) and the contributions over the banking sector. It is also provided the possibility of the member of the Portuguese Government responsible for the finance area to determine by ministerial order that the participating institutions have to make special contributions in the situations provided for in the applicable legislation, particularly in the event that the Resolution Fund does not have sufficient own funds for the fulfilment of its obligations.
The cost with periodic contributions and with the contribution over the banking sector is recorded on an annual basis, as provided in IFRIC 21 - Levies.
According to a public notice from the Resolution Fund dated March 21, 2017, the conditions of the loans that the Resolution Fund has obtained to finance the resolution measures applied to BES and Banif, namely the Portuguese State's loan to the Resolution Fund of 3,900,000 t.euros and the banking syndicate's loan of 700,000 t.euros, were renegotiated in the first quarter of 2017, including the extension of the maturity date for December 31, 2046 and the possibility of adjusting that date, with the purpose of guaranteeing the ability of the Resolution Fund to fully meet its obligations based on regular revenues and without the need to resort to special contributions or any other type of extraordinary contributions from the banking sector.
Our audit procedures to address the identified risks of material misstatement included:
| Description of the most significant risks of | Summary of the auditor's response to the assessed risks |
|---|---|
| material misstatement identified | of material misstatement |
| It was also established the pari passu treatment of the Resolution Fund's obligations arising from the loan agreement entered into with the banking syndicate of which the Bank is a part, and the loan agreements entered into with the Portuguese State. |
|
|---|---|
| On March 31, 2017 Banco de Portugal communicated the selection of LONE STAR to complete the sale of Novo Banco. After the capital injection, LONE STAR will hold 75% of the share capital of Novo Banco and the Resolution Fund will keep a 25% participation. The terms agreed include a contingent capital mechanism, under which the Resolution Fund commits to making capital injections in case certain cumulative conditions are verified. The completion of the transaction is dependent on the necessary regulatory approvals and also on a liability management operation, subject to bondholders' acceptance, which was initiated by Novo Banco on July 25, 2017, and is expected to end on October 2, 2017. |
|
| On September 1, 2017 it was announced by another banking institution that it has decided to ask the legal assessment in administrative action of the above mentioned contingent capital mechanism. |
|
| The interim consolidated financial statements as of June 30, 2017 reflect the Bank's expectation that no special contributions or any other extraordinary contributions will be required by it to finance the resolution measures applied to BES and Banif. |
|
| Taking into account the responsibilities of the Resolution Fund and the judgments of the Management in this matter as described above, this was considered a key audit matter. |
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Management is responsible for:
The Supervisory Body is responsible for overseeing the Group's financial closing and reporting process.
Our responsibility consists in obtaining a reasonable assurance on whether the interim consolidated financial statements as a whole are free from material misstatements due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of those ínterim consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
Page 11 of 11
Our responsibility includes also the verification of the agreement of the information included in the Management report with the interim consolidated financial statements.
We conclude that the Management report was prepared in accordance with the current applicable law and regulations and the financial information included therein is in agreement with the interim audited consolidated financial statements, and considering our knowledge of the Group, we did not identify material misstatements.
Lisbon, September 28, 2017
_________________________________________________ Deloitte & Associados, SROC S.A. Represented by Paulo Alexandre Rosa Pereira Antunes, ROC
EXPLANATION ADDED FOR TRANSLATION
(This report is a translation of a report originally issued in Portuguese. Therefore according to Deloitte & Associados, SROC S.A. internal procedures, the report is not to be signed. In the event of discrepancies, the Portuguese language version prevails.)
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