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Banco Comercial Portugues

Interim / Quarterly Report Jul 27, 2022

1913_iss_2022-07-27_249a1595-876e-4673-a6ae-db186c7786d2.pdf

Interim / Quarterly Report

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APRESENTAÇÃO DE RESULTADOS 1S 2021

Disclaimer

l The information in this presentation has been prepared under the scope of the International Financial Reporting Standards ('IFRS') of BCP Group for the purposes of the preparation of the consolidated financial statements under Regulation (CE) 1606/2002, as amended.

l The figures presented do not constitute any form of commitment by BCP in regard to future earnings.

l Figures for 2022 not audited.

l During 2021, BCP Group sold the entire share capital of Banque Privée BCP (Suisse) S.A. and 70% of the share capital of Seguradora Internacional de Moçambique, S.A. ("SIM"). As defined in IFRS 5, the contribution of these entities to the consolidated net income of the Group is reflected as income arising from discontinued operations, and the historical information has been restated since January 2020 to ensure its comparability.

l Due to changes in the accounting policies of Bank Millennium (Poland), the previously published financial statements were restated from 1 January 2020 for comparability.

l The information in this presentation is for information purposes only, and should be read in conjunction with all other information made public by the BCP Group.

Highlights

Highlights: Robust business model

  • Net profit of 74.5 million which compares to 12.3 million in June 2021, influenced by:
  • Increase of 22.7% in Group's core income and strict management of operating costs (+1.5%)
  • ➢ Mandatory contributions for the banking sector in Portugal of 62.2 million
  • ➢ Extraordinary effects related with Bank Millennium including 257.8 1 million of costs related with CHF mortgage loan portfolio, contribution of 54.3 million for the Institutional Protection Scheme (IPS)2 and booking of Bank Millennium goodwill impairment of 102.3 million
  • Group's profit before impairment and provisions up by 45.7% compared to the 1st half of 2021
  • Net Profit of 174.5 million in Portugal. Excluding specific items, on a comparable basis, it corresponds to an increase of 63.1% in relation to the 1 st half of 2021

Capital and liquidity

  • Total capital ratio3 of 15.3% and CET1 ratio3 of 11.3%, (on a pro forma4 basis, total capital ratio of 15.9% and CET1 ratio of 11.8% subject to the already requested approval for the application of article 352 (2) of the CRR) above regulatory requirements of 13.75% and of 9.16%, respectively.
  • Strong liquidity, well in excess of regulatory requirements, and eligible assets for ECB funding of 25.2 billion

2 New Polish fund aimed to guarantee the stability of the financial system, ensuring the liquidity and solvency of member banks (Before non-controlling interests).

3 Fully implemented ratio including unaudited net income for 1 st half of 2022.

4 Subject to ECB authorization.

1 Before taxes and non-controlling interests and includes provisions for legal risks, costs with out-of-court settlements and legal advice.

Highlights: Robust business model

Growing Customer base, mobile Customers standing out

'000 Customers

Our capabilities in digital are widely recognised and recommended

1 NPS1Digital Customers 2018 – 2022 (Jun.), 5 largest banks

53.9 55.0
44.1 45.6 49.0
40.1 41.0 50.5 48.8
Bank 1
Bank 2
38.7 28.9 35.0 38.9 39.7
Bank 3 28.8
37.4
44.3 47.7 49.5 47.6
Bank 4 33.0 42.0 38.8 40.2 41.2
2018 2019 2020 2021 2022
Jun

"Best Digital Bank"

Unaided nomination by Customers2 , (Jun.)

App Millennium leads ratings 4.8 4.8 4.7

8

1 Digital channels satisfaction (NPS), 5 largest banks, Source: BASEF-Marktest

2 Which bank do you choose as the 'Best Digital Bank'? (Unaided reply) | Sample: Banking sector, total number of banking Customers, aged> 15 years - 70 years, Portugal (N 2022 = 2,000 per quarter; 8,000 per year))

3 Banking Sector - Corresponds to the Simple Average of the scores obtained from 6 Banks : NB, BPI, Caixa, Millennium BCP, Santander and Montepio Awards are the exclusive responsibility of the of the attributing entity

The "Product of the Year" award is based on a consumer survey of product innovation. Appraising entity - Product of the Year Portugal Lda.

1 Customers definition according to 2024 Strategic Plan

2 Interactions (Millennium website and app), individuals includes AB

3 Includes mobile, online and ATMs, excludes branches and contact center that counts for 0,4% of total transactions

4 Digital sales (Millennium website and app) in number of operations

Net income of 74.5 million in the 1st half of 2022

(Million euros) H1'21 H1'22 YoY Impact on
earnings
Net interest income 765.8 985.2 +28.6% +219.4
Commissions 352.9 387.6 +9.8% +34.6
Core income 1,118.7 1,372.7 +22.7% +254.0
Operating costs recurring1 -502.9 -510.5 +1.5% -7.6
Recurring core operating profit 615.8 862.2 +40.0% +246.4
Operating costs non-recurring -87.2 -5.7 -93.5% +81.5
Other income2 -2.1 -89.3 -87.3
Of which: regulatory contributions including IPS -129.1 -205.3 +59.1% -76.3
Operating net income 526.6 767.2 +45.7% +240.7
Impairment and other provisions -461.7 -551.4 +19.4% -89.6
3
Of which: legal risk on CHF mortgages (Poland)
-214.2 -198.1 -7.5% +16.1
Of which: Bank Millennium goodwill - -102.3 - -102.3
Net income before income tax 64.8 215.8 +233.0% +151.0
Income taxes4, non-controlling interests and discontinued operations -52.5 -141.3 +169.0% -88.8
Net income 12.3 74.5 +507.4% +62.2
Net income excluding costs related with CHF loan portfolio5 126.5 200.9 +58.8% +74.4
ROE 0.43% 2.81%

1H1'22: Excludes mainly compensation of 5.7 million for the temporary reduction of remuneration in the period 2014/2017. H1'21: Excludes mainly headcount adjustment costs of 87.2 million. 2Dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.| 3Does not include provisions for legal risk on CHF mortgages of Euro Bank (guaranteed by Société Générale): 20.7 million in H1'22 and 16.4 million in H1'21. |4 Includes impact of provisions for legal risk on CHF mortgages in Poland and of mandatory contributions (non-tax-deductible amounts in H1'22: 62.4 and 51.8 in H1'21).|5Excludes impacts with provisions for legal risks, costs with out-of-court settlements and legal advice of 126.4 millions in H1'22 and 114.2 millions in H1'21, net of non-controlling interests.

Net interest income

Fees and commissions

Other income

Other operating income includes +16.4 million compensation for provisions for legal risk on CHF mortgages of Euro Bank (guaranteed by Société Générale) in H1'21 and +20.7 million in H1'22; Net trading income include -15.6 million of out-ofcourt settlements with customers related with CHF loans portfolio in H1'21 and -49.3 million in H1'22.

*New Polish fund aimed to guarantee the stability of the financial system, ensuring the liquidity and solvency of member banks

Operating costs

*H1'21: Includes mainly headcount adjustment costs. H1'22: Includes mainly compensation for the temporary reduction of remuneration in the period 2014/2017. **Includes 5.5 million of legal advice costs related with CHF loans in H1'22 and 3,7 million in H1'21.

Cost of risk and provisions

* Cost of risk adjusted by one-offs. Stated cost of risk in June 2021 of 55bp in the Group, 64bp in Portugal and 33bp in international operations. **Does not include provisions for legal risk on CHF mortgages of Euro Bank (guaranteed by Société Générale): 20.7 million in H1'22 and 16.4 million in H1'21.

Relevant reduction of NPEs under a complex context

*By loan-loss reserves, expected loss gap and collaterals.

NPE include loans to Customers only, except if otherwise indicated.

Customer funds maintain growth trend

*Deposits, debt securities, assets under management, assets placed with Customers and insurance products (savings and investments). Customer funds on a proforma basis due to Banque Privée sale

Relevant increase of the loan portfolio

NPE include loans to Customers only..

Loans to Customers on a proforma basis due to Banque Privée sale.

Group Capital and liquidity

Capital above regulatory requirements

  • Total capital ratio of 15.3% and CET1 capital ratio of 11.3% (fully implemented) as of June 2022, above SREP requirements
  • Total capital ratio pro forma of 15.9% and CET1 capital ratio pro forma of 11.8%

subject to the already requested approval for the application of article 352 (2) CRR (Capital Requirements Regulation) that excludes from capital requirements the structural FX positions held to hedge the capital ratios

  • Surplus of 2.2pp between the total capital ratio and the SREP requirement not using the capital conservation and the O-SII buffers, and of 5.4pp if such buffers are used
  • Buffers (considering pro forma ratios) from which there are limitations to distributions stood as end of June at: 1.2 billion for CET1, 0.8 billion for T1 and 1.0 billion for total capital

**Subject to ECB authorization

***Minimum phased-in regulatory requirements from March 1, 2022.

Capital at adequate levels

Leverage ratio

(Fully implemented, latest available data)

Leverage ratio at 5.7% as of June 2022, a comfortable and comparatively strong figure in European banking

(RWAs as a % of assets, latest available data)

High RWA density (48% as of June 2022), compared to lower figures in most European banking markets

Pension fund

Key figures

(Million euros)

Dec
21
Jun
22
Pension
liabilities
3
498
,
2
737
,
fund
Pension
3
700
,
3
421
,
Liabilities'
coverage
106% 125%
Fund's
profitability
+1
9%
-5
9%
Assumptions
Dec
21
1.35%

Assumptions

Dec
21
Jun
22
Discount
rate
3.30%
Salary
growth
rate
0.75% 2.25%
year 2023;
0.75%
following
years
Pensions
growth
rate
0.50% 2%
year 2023;
0.5%
following
years
Projected
of
of
fund
rate
return
assets
1.35% 3.30%
Mortality
Tables
Men TV
88/90
TV
88/90
Women 88/90-3
Tv
years
88/90-3
Tv
years
  • Discount rate and projected rate of return revised upwards to 3.30%, mainly reflecting higher market rates registered on 2022
  • Liabilities fully covered (125%)
  • The level of coverage of pension fund liabilities by assets provides room to absorb adverse impacts in the pension fund of up to 684 million with no impact on capital ratios

Reinforced liquidity position

Change in loans to Customers and Customer funds on a proforma basis due to Banque Privée sale.

Portugal

Resilient profitability in Portugal

  • Net income of 174.5 million in 1st half of 2022. On a comparable basis net income amounted to 178.4 million, an increase of 63.1% compared to 1st half of 2021
  • Net income was driven by stronger net operating income, lower operating costs, compensation for temporary salary cuts and headcount adjustment costs in 1st half of 2021

Net interest income

Net interest income stood at 430.5 million in the 1st half of 2022, up 5.2% (+21.2 million) from 409.3 million in the same period of 2021. The positive impacts of the growing performing portfolio, higher yields of the securities portfolio, lower wholesale funding cost and the continued decline in the remuneration of term deposits have more than compensated the negative impacts of the loan portfolio, reduction of NPEs and excess liquidity.

Stabilization of the cost of deposits

Spread on the performing loan book

(vs 3m Euribor)

  • Spread of the portfolio of term deposits of -0.47% in the 1st half of 2022 (-0.57% in the same period of 2021); Customer rate down to 0.02% in 1 st half of 2022 from 0.03% in 1 st half of 2021
  • Spread on the performing loan portfolio stood at 2.53% in 1 st half of 2022, compared to 2.65% same period last year
  • NIM stood at 1.41%

Commissions and other income

(Million euros) (Million euros)

H1'21 H1'22 YoY
Banking
fees
and
commissions
208
9
233
4
+11
7%
Cards
and
transfers
50
8
67
1
+32
1%
Loans
and
guarantees
52
6
51
4
-2
2%
Bancassurance 42
7
43
0
+0
6%
related
Customer
account
58
9
67
6
+14
7%
Other
fees
and
commissions
3
9
4
3
+9
4%
Market
related
fees
and
commissions
38
3
43
8
+14
3%
Securities
operations
16
1
18
4
+14
5%
Asset
management
22
2
25
4
+14
2%
Total
fees
and
commissions
247
3
277
2
+12
1%

(Milhões de euros) Commissions Other income

Operating costs

*H1'21: Includes mainly headcount adjustment costs. H1'22: Includes mainly compensation for the temporary reduction of remuneration in the period 2014/2017. 31

Continued decrease of NPEs

Non-performing exposures (NPE)

(Million euros)

NPE build-up

Jun
22
Jun
22
(Million
euros)
vs.Jun
21
vs.Dec
21
Opening
balance
2
095
,
1
878
,
outflows/inflows
Net
288 199
Write-offs -573 -341
Sales -175 -102
Ending
balance
1
635
,
1
635
,
  • NPEs in Portugal total 1,635 million at end-June 2022, a decrease of 460 million from June 2021 and 243 million down from end 2021
  • The decrease from June 2021 results from net inflows of 288 million, write-offs of 573 million and sales of 175 million
  • The decrease of NPEs from June 2021 is attributable to a 474 million reduction of NPL>90d
  • Cost of risk of 69bp in 1 st half of 2022 (81bp* in same period of 2021), with a NPE coverage by loan-loss reserves of 67% to 64%, respectively

*Cost of risk adjusted by one-offs. Stated cost of risk in June 2021 of 64bp..

NPE coverage

NPL>90d total coverage*

  • Total coverage* ≥100%, for both individuals and companies, and for both NPE categories (NPL>90d and other NPE)
  • Coverage by loan-loss reserves is stronger in loans to companies, where real-estate collateral, usually more liquid and with a more predictable market value, accounts for a lower coverage than in loans to individuals: coverage by loan-losses was 64% for companies NPE as of June 2022, reaching 121% for companies NPL>90d (122% and 166%, respectively, if cash and financial collateral are included)

NPE include loans to Customers only.

*By loan-loss reserves, expected loss gap and collaterals.

Foreclosed assets and corporate restructuring funds

704 708 102 85 805 793 Jun 21 Jun 22 RE/tourism Industry -1.5% Corporate restructuring funds (Million euros)

  • Net foreclosed assets were down by 48.1% between June 2021 and June 2022 and 36.3% when compared to December 2021. Valuation of foreclosed assets by independent providers exceeded book value by 31%
  • 957 properties were sold during the 1st half of 2022 (942 properties in same period of 2021), with sale values exceeding book value by 25 million
  • Corporate restructuring funds decreased 1.5% to 793 million at end-June 2022.The original credit exposure on these funds totals 2,006 million, with total reserves (original credit, plus restructuring funds) corresponding to a 60% coverage

Growing customer funds and loans to customers

Performing credit grows in Portugal

  • Performing credit portfolio in Portugal up by 1.5 billion (+4.1%) from June 2021, supported in growth in mortgage loans and loans to companies
  • Mortgage loans up by 1.0 billion from June 2021 (5.6%)
  • Loans to companies with a 417 million increase from June 2021 (+2.3%)
  • Ledersheap in PME Líder 21 programme for 4th year in a row with a 31% market share, supporting more than 3,500 companies to achieve this award
  • Leadership in the Inovadora COTEC programme for the 2nd year in a row, with a 61% market share, supporting more than 360 companies to achieve this award
  • Best bank for companies; Main bank for companies; Most innovative; Closest to Customers and More Adequate Products (DataE 2022)
  • Leading bank in Factoring and Confirming: factoring invoicing of 5.1 billion in the 1 st half of 2022 and market share of 28%*
  • Leading bank in Leasing: 311 million new leasing business the 1 st half of 2022 and market share of 29%*
  • 21% market share (up to March 2022) in the placement of loans with State Guarantees, in partnership with Banco Português de Fomento (BPF)

International operations

Contribution from operations to consolidated net income

(Million euros*)

H1'21 H1'22
Poland -110
3
-56
6
Mozambique1 40
6
46
4
Other -7
5
-1
7
international
Net
income
operations
-77
2
-12
0
Operations2
Discontinued
6
8
1
5
Non-controlling
int
(Poland+Mozambique)
40
4
12
8
Exchange
effect
rate
-2
8
--
Contribution
from
international
operations
-32
9
2
3
Contribution
excluding
related
with
CHF
loan
costs
(Poland)3
portfolio
81
4
128
7
Bank
Millennium
goodwill
impairment
-- -102
3

*Subsidiaries' net income presented for H121 at the same exchange rate as of H122 for comparison purposes. | 1 Not including results arising from discontinued operations | Includes the sale of 100% of Banque Privée's capital, in Switzerland, and of 70% of SIM, in Mozambique, by Millennium bim | Impacts mainly related with provisions for legal risks, costs with out-of-court settlements and legal advice of 126.4 millions in H1'22 and 114.2 millions in H1'21, net of non-controlling interests.

Net earnings affected by costs related with CHF loans

• CET1 ratio of 12.1% with total capital of 15.2%

*FX effect excluded. €/Zloty constant at June 2022 levels: Income Statement 4.64; Balance Sheet 4.70. | **Excludes FX-mortgage legal risk provisions, costs of litigations and settlements with clients and with linear distribution of BFG resolution fund fee (without net impact of IPS contribution); in 2021 also material revaluation of financial investments (VISA). | *** After taxes and before non-controlling interests (257.8 million before taxes), includes impacts with provisions for legal risks, costs with out-of-court settlements and legal advice

Net interest income increase significantly

Commissions and other income

(Million euros*; does not include tax on assets and contribution to the resolution fund and to the DGF)

Credit quality

  • NPL>90d accounted for 2.0% of total credit as of June 2022 (2.5% as of June 2021)
  • Coverage of NPL>90d by loan-loss reserves at 147% (126% as of June 2021)
  • Cost of risk of 37bp, compared to 33bp in 1st half of 2021

Increased Customers funds and loans to Customers

CHF mortgages

(Number of cases)

Excludes Euro Bank. | *FX effect excluded. €/Zloty constant at June 2022 levels: Income Statement 4.64; Balance Sheet 4.70. | **Peers average excluding settlement's provisions. | *** Agreements amount mostly booked in financial operations

Credit holidays and capital management

The Act of July 7, introduced, among others, a handful of measures aimed at support of PLN mortgage borrowers, including:

  • Ability to suspend up to 8 monthly instalments (2 instalments in 3Q22 and 4Q22 each and one in each quarter of 2023, only one loan per household, only loans for housing purposes, only loans granted before July 1, 2022)
  • Enforcement of additional PLN 1.4bn1 sector's contribution to Borrowers Support Fund (FWK)
  • Replacement of WIBOR as the main benchmark for loans

Expected impact on BM's results in 3Q22:

  • Maximum cost of credit holidays at PLN1.8bn2 at the Group level if 100% of eligible borrowers would use such option
  • Upfront cost of credit holidays to be booked in 3Q22 based on an expected participation rate between 75% to 90%, above market average (66%) announced so far

Other considerations:

• Application for/use of credit holidays does not trigger a loan reclassification to Stage 2

Credit Holidays Capital Management

Capital ratios expected to be temporarily below minimum requirements due to the impact of upfront booking of credit holidays, but the recovery is expected in a relatively short term

  • Upfront recognition of costs of credit holidays is expected to result in a negative net result for 3Q22
  • As a result, capital ratios will drop by c300 bp, and Group's T1 ratio may fall 118-174 bps below the current minimum requirements set by the Polish Financial Supervision Authority ('PFSA'). T1 ratio is where the highest deficit is expected
  • Risk of a breach of respective capital ratios triggered the decision to launch the recovery plan
  • Each bank is required to have a ready and at least once a year updated recovery plan filed with the PFSA. Bank Millennium's current recovery plan was approved by the regulator in February this year
  • The Management Board of the Bank intends to increase capital ratios comfortably above the minimum required levels through a combination of further improvement of operational profitability and capital optimisation initiatives such as management of risk weighted assets (including securitisations). While in the recovery procedure, the Bank will not pay banking tax (PLN80mn+ per quarter)

Net income reflects resilience in challenging environment

111.1 123.5 H1'21 H1'22 +11.1% Net operating revenue (Million euros*) • Net income of 46.4 million in 1 st half of 2022, +14.1% on comparable basis • Customer funds increased by 8.1%; loans to Customers decreased by 10.2%

• Capital ratio of 44.2%

Increased net interest income and commissions

FX effect excluded. €/Metical constant at June 2022 levels: Income Statement 70.13; Balance Sheet 67.08. **Excludes employees from SIM (insurance company).

Credit quality

• Cost of risk of 211bp in the 1 st half of 2022 (104 bp in same period of 2021)

Business volumes

Loans to Customers (gross)

(Million euros*)

Key figures

Strategic Plan: Excelling 24

H1'22 2024
C/I ratio 40% ≈40%
Cost of risk 61 bp ≈50 bp
RoE 2.8% ≈10%
CET1 ratio 11.3%
(11.8% pro forma*)
>12.5%
NPE ratio 4.3% ≈4%
Share of mobile Customers 60% >65%
Growth of high engagement
Customers** (vs 2020)
+7% +12%
Average ESG rating*** 70% >80%

*Pro forma(subject to ECB authorization) considering the already requested approval (ECB) for the application of article 352 (2) CRR (Capital Requirements Regulation) that excludes from capital requirements the structural FX positions held to hedge the capital ratios **Active Customers with card transactions in the previous 90 days or funds > €100 (>MZM 1,000 in Mozambique) | ***Average of Top 3 indices (DJSI, CDP and MSCI) | NPE include loans to Customers only.

Millennium bcp Foundation Society Sustainability

Millennium Gallery: exhibition "A outra vida dos animais" – containing drawings, paintings, photography, ceramics, sculpture and media art, having been designed for a younger audience. In exhibition from May 5th to August 28th .

Estudo "Património Cultural em Portugal: Avaliação do Valor Económico e Social" Faro Municipal Museum: Exhibition "Itinerários da Pintura/Arte Moderna no Algarve através da coleção Millennium bcp" – covers a chronological period from the beginning of the 20th century and the 60s. Open to the public from June 25th to October 16th.

Anozero: Coimbra Contemporary Art Biennial - an initiative of the Coimbra Visual Arts Circle, presented from April 9 th to June 26th , a curatorial program with the objective of sharing and communicating unexpected and marginal creative ways of producing knowledge.

Pedipedia: Pediatric Medical-Surgical online encyclopedia, coordinated by a group of doctors and university professors. It is freeaccess and has two versions: one for families and another one for professionals.

Millennium bcp supports, in Portugal and Poland, refugees caused by the war in Ukraine with a set of social and integration support as well as temporary preferential conditions as Customers.

collection campaign.

music and dance.

In 2022, Millennium bcp joins, again, the campaign "PORTUGAL CHAMA", Portuguese State initiative aimed to prevent and reduce the forest fires and to raise public awareness for risk behaviours.

In May, Millennium bcp volunteers return to Banco Alimentar central warehouse, supporting, at a national level, the usual food

"Millennium Festival ao Largo" returns to promote culture in Lisbon, through democratic and inclusive access to selected shows of classic

Global Finance magazine, best Bank to Sustainable Finance in Portugal, recognizing its leadership in financing projects to prevent climate changes and improve people's life quality.

Millennium bcp integrates, for the 2nd consecutive year, the ranking "Europe's Climate Leaders" of Financial Times and Statista, being one of the 400 european companies that have done most progress in reducing greenhouse gas emissions (GEE).

Millennium bcp creates a community garden for its Employees on Taguspark, making the first 12 spaces available to grow biological products, healthy and sustainable.

Millennium bcp continues to reduce its ecological footprint in Portugal, with less 51% of Electricity consumption and less 83% of GEE emission on the last 5 years (2016/2021).

51

Awards in 2022

Millennium bcp: Integrates for 3rd consecutive year the Bloomberg Gender-Equality Index

Millennium bcp: Best Foreign Exchange Provider in Portugal

Millennium bcp: Best Investment Banking 2022 in Portugal"

ActivoBank: Distinguished as Powerful Brand 21/22 in the "Online Banking" category, in recognition of the progress in the areas of Sustainability and Technological Innovation

Bank Millennium: Achieved third place in the competition for the "Best of Bank 2022", in Large Commercial Banks category, in a choice organized by "Gazeta Bankowa"

Bank Millennium: Awarded with "Service Quality Star" on a Customers' choice, carried out through a multi-platform and the SecretClient website

Bank Millennium: Bank Millennium's app was chosen as the "Most Friendly" by customers, in the ranking of the MojeBankowanie.pl portal

Millennium bim: Best Trade Finance Bank in Mozambique

Millennium bim: Best Foreign Exchange Provider

Mozambique, Euromoney – Awards for Excellence

Bank Millennium: "Best Bank" in Poland

categoria Bancos e Serviços Financeiros

Millennium bim: Bank of the year in

Responsibility Practices

in Mozambique

& Market Leaders 2022

Bank Millennium: Distinguish with the CSR Golden Leaf Award for Corporate Social

Millennium bim: Best Private Bank in Mozambique

Millennium bcp

Consumer Choice 2022, "Large banks" category

ActivoBank

Consumer Choice 2022, "Digital banks" category

App Millennium

"2022 Product of the Year",on "Banking App" category, by the Product of the Year Portugal.

Millennium bcp Main Bank for Companies in the

DATA E 2022 Study

Millennium bcp

Number 1 Bank of Innovative Companies supporting 363 companies to achieve the COTEC Innovative award

Appendix

Sovereign debt portfolio

(Consolidated, million euros)

Jun
21
Sep
21
Dec
21
Mar
22
Jun
22
YoY QoQ
Portugal 9,152 8,069 8,013 8,561 7,765 -15% -9%
T-bills
and
other
1,129 497 426 849 1,222 +8% +44%
Bonds 8,023 7,572 7,587 7,712 6,543 -18% -15%
Poland 4,235 4,042 3,844 3,908 4,030 -5% +3%
Mozambique 462 494 412 424 408 -12% -4%
Other 4,977 4,981 5,435 3,689 5,451 +10% +48%
Total 18,827 17,585 17,704 16,582 17,653 -6% +6%

Sovereign debt portfolio Sovereign debt maturity

The sovereign debt portfolio totalled 17.7 billion, 14.1 billion of which maturing in more than 2 years

The Portuguese sovereign debt portfolio totalled 7.8 billion, the Polish and Mozambican portfolios amounted to 4.0 billion and to 0.4 billion, respectively; "other" includes sovereign debt from Spain (2.0 billion), France (1.9 billion), Belgium (0.7 billion), Ireland (0.6 billion) and USA (0.2 billion)

Sovereign debt portfolio

(Million euros)

Portugal Poland Mozambique Other Total
Trading
book
1
239
,
6 0 5 1
250
,
1

year
1
221
,
1 0 0 1
222
,
1
and
2
>
year

years
4 0 0 0 4
2
and
5
>
years

years
10 4 0 0 14
5
and
8
>
years

years
0 0 0 0 1
8
and
10
years
years
>
1 0 0 4 6
10
>
years
3 0 0 0 3
Banking
book*
6
526
,
4
023
,
408 5
446
,
16
403
,
1

year
9 1
610
,
56 14 1
688
,
and
2
1
year

years
>
11 569 57 21 658
2
and
5
>
years

years
3
698
,
1
617
,
184 388 5
888
,
5
and
8
>
years

years
2
207
,
166 38 3
214
,
624
5
,
8
and
10
>
years

years
403 61 0 809
1
,
2
273
,
10
>
years
199 0 72 0 271
Total 7
765
,
4
030
,
408 5
451
,
17
653
,
1

year
1
230
,
1
611
,
56 14 2
911
,
1
and
2
>
year

years
15 569 57 21 662
2
and
5
>
years

years
3
708
,
1
622
,
184 388 5
902
,
5
and
8
>
years

years
2
207
,
166 38 3
214
,
5
625
,
8
and
10
>
years

years
404 62 0 1
813
,
2
279
,
10
>
years
202 0 72 0 274

*Includes financial assets at fair value through other comprehensive income (6,949 million) and financial assets at amortised cost (9,455 million).

Diversified and collateralised portfolio

Loan portfolio

▪ Loans to companies accounted for 42% of the loan portfolio as of June 2022, including 6% to construction and real-estate sectors

  • Mortgage accounted for 48% of the loan portfolio, with low delinquency levels and an average LTV of 60%
  • 86% of the loan portfolio is collateralised

Consolidated net income

(Million
euros)
H1'21 H1'22 YoY Impact
on
earnings
Net
interest
income
765
8
985
2
+28
6%
+219
4
Net
fees
and
commissions
352
9
387
6
+9
8%
+34
6
Other
income*
-2
1
-89
3
+4227
1%
-87
3
Net
operating
revenue
1
116
6
,
1
283
4
,
+14
9%
+166
8
Staff
costs
-372
8
-284
2
-23
8%
+88
6
Other
administrative
and
depreciation
costs
-217
3
-232
0
+6
8%
-14
7
Operating
costs
-590
1
-516
2
-12
5%
+73
9
Profit
before
and
impairment
provisions
526
6
767
2
+45
7%
+240
7
of
Loans
impairment
(net
recoveries)
-156
9
-179
4
+14
3%
-22
5
Other
and
impairment
provisions
-304
8
-371
9
+22
0%
-67
1
and
Impairment
provisions
-461
7
-551
4
+19
4%
-89
6
Net
income
before
income
tax
64
8
215
8
+233
0%
+151
0
Income
taxes
-101
9
-155
8
+52
9%
-53
9
from
discontinued
be
discontinued
Net
income
operations
to
or
6
4
1
5
-76
8%
9
-4
Non-controlling
interests
43
0
13
0
-69
8%
-30
0
income
Net
12
3
74
5
+507
4%
+62
2

*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.

Consolidated balance sheet

(Million euros)

30
junho
30
junho
2022 2021
ASSETS
Cash
and
deposits
at Central
Banks
7.930,3 4.688,4
Loans
and
advances
to credit
institutions
repayable
on demand
329,6 256,4
Financial
assets at amortised
cost
Loans
and
advances
to credit
institutions
875,3 671,3
Loans
and
advances
to customers
55.187,2 53.994,8
Debt
instruments
12.102,0 8.331,0
Financial
assets at fair
value
through
profit
or loss
Financial
assets held
for
trading
1.758,4 1.704,5
Financial
assets not held
for
trading
mandatorily
at fair
value
through
profit
or loss
932,2 1.290,1
Financial
assets designated
at fair
value
through
profit
or loss
- -
Financial
assets at fair
value
through
other
comprehensive
income
8.644,9 13.882,9
Hedging
derivatives
531,5 55,9
associated
Investments
in
companies
443,5 436,3
Non-current
assets held
for
sale
630,7 905,0
Investment
property
2,9 6,7
Other
tangible
assets
586,2 620,8
Goodwill
and
intangible
assets
151,8 242,7
Current
tax assets
13,8 14,3
Deferred
tax assets
2.845,5 2.663,7
Other
assets
3.107,5 1.599,7
TOTAL
ASSETS
96.073,5 91.364,5
30 junho 30 junho
2022 2021
LIABILITIES
Financial
liabilities
at amortised
cost
Resources from
credit
institutions
8,996.1 9,056.1
Resources from
customers
73,190.3 68,101.3
Non subordinated
debt
securities issued
1,114.6 1,751.9
Subordinated
debt
1,350.2 1,199.7
Financial
liabilities
at fair
value
through
profit
or loss
Financial
liabilities
held
for
trading
192.9 372.2
Financial
liabilities
at fair
value
through
profit
or loss
1,344.0 1,481.5
Hedging
derivatives
1,677.2 173.7
Provisions 503.2 404.9
Current tax liabilities 8.7 6.6
Deferred
tax liabilities
9.2 7.3
Other
liabilities
1,396.0 1,423.1
TOTAL LIABILITIES 89,782.4 83,978.2
EQUITY
Share
capital
4,725.0 4,725.0
Share
premium
16.5 16.5
Other
equity instruments
400.0 400.0
Legal
and
statutory reserves
268.5 259.5
Treasury shares - -
Reserves and
retained
earnings
8.4 855.5
Net income for
the
period
attributable
to Bank's
Shareholders
74.5 12.3
TOTAL EQUITY ATTRIBUTABLE TO BANK'S SHAREHOLDERS 5,492.9 6,268.7
Non-controlling
interests
798.2 1,117.5
TOTAL EQUITY 6,291.1 7,386.3
TOTAL LIABILITIES AND EQUITY 96,073.5 91,364.5

Consolidated income statement per quarter

(Million euros)

Quarterly
2Q
21
3Q
21
4Q
21
1Q
22
2Q
22
Net
interest
income
391
0
399
2
423
6
465
1
520
1
Dividends
from
equity
instruments
0
7
0
2
0
1
0
9
12
0
Net
fees
and
commission
income
181
8
181
9
192
9
192
8
194
7
Other
operating
income
-87
2
-4
5
-9
5
-17
7
-159
5
Net
trading
income
38
5
-8
8
15
0
43
4
-1
2
accounted
Equity
earnings
13
9
12
8
14
8
16
2
16
6
Banking
income
538
7
580
9
636
9
700
7
582
7
Staff
costs
231
3
143
4
138
1
137
7
146
4
Other
administrative
costs
72
3
81
4
93
8
82
7
79
9
Depreciation 34
3
34
4
34
4
34
6
34
9
Operating
costs
338
0
259
2
266
3
255
0
261
2
Profit
bef
impairment
and
provisions
200
8
321
7
370
5
445
7
321
5
Loans
impairment
(net
of
recoveries)
45
9
107
1
84
9
89
9
89
6
Other
. and
impairm
provisions
173
1
157
3
250
1
164
1
207
8
income
before
income
Net
tax
-18
3
3
57
35
6
191
8
24
1
Income
tax
45
0
39
6
62
2
85
5
70
3
(before
disc
Net
income
. oper.)
-63
3
17
8
-26
6
106
3
-46
2
Net
income
arising
from
discont
. operations
3
5
3
2
61
3
1
4
0
1
Non-controlling
interests
-14
2
-26
3
-43
8
-5
2
-7
8
Net
income
-45
5
47
2
78
6
112
9
-38
4

Income statement

(Million euros)

For the 6-month periods ended June 30th, 2021 and 2022

Internatio nal o peratio ns
Gro up P o rtugal T o tal B ank M illennium (P o land) M illennium bim (M o z.) Other int. o peratio ns
Jun 2 1 Jun 2 2 Δ % Jun 2 1 Jun 2 2 Δ % Jun 2 1 Jun 2 2 Δ % Jun 2 1 Jun 2 2 Δ % Jun 2 1 Jun 2 2 Δ % Jun 2 1 Jun 2 2 Δ %
Interest income 825 1,142 38.4% 427 446 4.4% 398 696 74.8% 295 561 90.2% 102 134 31.8% 2 1 -37.1%
Interest expense 59 157 >100% 18 15 -13.8% 42 141 >100% 14 100 >100% 28 42 49.0% 0 0 -86.0%
N et interest inco me 766 985 28.6% 409 431 5.2% 356 555 55.6% 281 461 64.0% 7 4 9 2 25.3% 2 1 -37.1%
Dividends from equity instruments 1 13 >100% 0 12 >100% 1 1 10.8% 1 1 10.8% 0 0 -- 0 0 --
Intermediatio n margin 766 998 30.2% 409 443 8.1% 357 555 55.5% 282 462 63.9% 7 4 9 2 25.3% 2 1 -37.1%
Net fees and commission income 353 388 9.8% 247 277 12.1% 106 110 4.4% 91 92 0.9% 14 18 26.7% 0 0 -21.2%
Other operating income -112 -177 -57.7% -71 -72 -1.0% -41 -105 <-100% -41 -107 <-100% 1 1 44.2% -1 0 96.8%
B asic inco me 1,007 1,208 20.0% 585 648 10.7% 422 560 32.9% 332 447 34.8% 8 9 112 25.7% 1 1 91.3%
Net trading income 80 42 -47.4% 68 60 -12.1% 12 -18 <-100% 6 -28 <-100% 7 11 60.0% 0 0 >100%
Equity accounted earnings 29 33 12.0% 31 34 9.9% -2 -1 24.8% 0 0 -- 0 1 -- -2 -2 -26.1%
B anking inco me 1,117 1,283 14.9% 684 742 8.4% 432 542 25.3% 338 419 24.2% 9 6 123 29.0% - 1 - 1 2.3%
Staff costs 373 284 -23.8% 264 166 -37.2% 109 118 8.9% 91 96 6.1% 18 22 22.5% 0 0 29.2%
Other administrative costs 149 163 9.1% 85 88 3.5% 64 74 16.7% 45 50 12.4% 19 24 27.2% 0 0 -15.4%
Depreciation 68 69 1.7% 40 40 -0.6% 28 30 4.9% 22 22 1.4% 6 7 17.5% 0 0 -7.5%
Operating co sts 590 516 -12.5% 389 294 -24.5% 201 222 10.8% 157 169 7.2% 43 53 23.9% 0 1 8.4%
P ro fit bef. impairment and pro visio ns 527 767 45.7% 295 448 51.8% 231 319 37.9% 181 251 38.9% 5 3 7 0 33.2% - 2 - 2 -0.6%
Loans impairment (net of recoveries) 157 179 14.3% 127 139 9.8% 30 40 33.5% 27 33 24.1% 3 7 >100% 0 0 -13.5%
Other impairm. and provisions 305 372 22.0% 69 51 -25.7% 236 321 35.9% 231 218 -5.3% 2 0 -88.5% 3 102 >100%
N et inco me befo re inco me tax 6 5 216 >100% 9 9 258 >100% -35 -42 -20.4% -77 - 1 99.0% 4 7 6 3 33.9% - 5 -104 <-100%
Income tax 102 156 52.9% 54 83 54.3% 48 73 51.3% 36 56 55.9% 12 17 37.8% 0 0 --
N et inco me (befo re disc. o per.) -37 6 0 >100% 4 6 174 >100% -83 -114 -38.3% -113 -57 49.8% 3 5 4 6 32.5% - 5 -104 <-100%
Net income arising from discont. operations 6 1 -76.8% 0 0 -- 6 1 -76.8% 3 0 -97.1%
Non-controlling interests -43 -13 69.8% 0 0 <-100% -43 -13 70.5% 0 0 -- 0 0 -100.0% -44 -13 70.7%
N et inco me 12 7 5 >100% 4 5 175 >100% -33 -100 <-100% -113 -57 49.8% 3 8 4 6 22.7% 3 9 -91 <-100%

Glossary (1/2)

Assets placed with customers – amounts held by customers in the context of the placement of third-party products that contribute to the recognition of commissions.

Balance sheet customer funds – deposits and other resources from customers and debt securities placed with customers.

Business Volumes - corresponds to the sum of total customer funds and loans to customers (gross).

Commercial gap – loans to customers (gross) minus on-balance sheet customer funds.

Core income - net interest income plus net fees and commissions income.

Core net income - net interest income plus net fees and commissions income deducted from operating costs.

Cost of risk, net (expressed in basis points) - ratio of loans impairment (P&L) accounted in the period to loans to customers at amortized cost and debt instruments at amortized cost related to credit operations before impairment at the end of the period.

Cost to core income - operating costs divided by core income.

Cost to income – operating costs divided by net operating revenues.

Coverage of non-performing exposures by impairments – loans impairments (balance sheet) divided by the stock of NPE.

Coverage of non-performing loans by impairments – loans impairments (balance sheet) divided by the stock of NPL.

Coverage of overdue loans by impairments - loans impairments (balance sheet) divided by overdue loans.

Coverage of overdue loans by more than 90 days by impairments - loans impairments (balance sheet) divided by overdue loans by more than 90 days.

Debt instruments – non-subordinated debt instruments at amortized cost and financial liabilities measured at fair value through profit or loss (debt securities and certificates).

Debt securities placed with customers - debt securities issued by the Bank and placed with customers.

Deposits and other resources from customers – resources from customers at amortized cost and customer deposits at fair value through profit or loss.

Dividends from equity instruments - dividends received from investments classified as financial assets at fair value through other comprehensive income and from financial assets held for trading.

Equity accounted earnings - results appropriated by the Group related to the consolidation of entities where, despite having some influence, the Group does not control the financial and operational policies.

Insurance products – includes unit linked saving products and retirement saving plans ("PPR", "PPE" and "PPR/E").

Loans impairment (balance sheet) – balance sheet impairment related to loans to customers at amortized cost, balance sheet impairment associated with debt instruments at amortized cost related to credit operations and fair value adjustments related to loans to customers at fair value through profit or loss.

Loans impairment (P&L) – impairment (net of reversals and net of recoveries - principal and accrual) of financial assets at amortized cost for loans to customers and for debt instruments related to credit operations. Loans to customers (gross) – loans to customers at amortized cost before impairment, debt instruments at amortized cost associated to credit operations before impairment and loans to customers at fair value through profit or loss before fair value adjustments.

Loans to customers (net) - loans to customers at amortized cost net of impairment, debt instruments at amortized cost associated to credit operations net of impairment and balance sheet amount of loans to customers at fair value through profit or loss.

Loan to Deposits ratio (LTD) – loans to customers (net) divided by deposits and other resources from customers.

Loan to value ratio (LTV) – mortgage amount divided by the appraised value of property.

Net commissions - net fees and commissions income.

Net interest margin (NIM) - net interest income for the period as a percentage of average interest earning assets.

Net operating revenues - net interest income, dividends from equity instruments, net commissions, net trading income, other net operating income and equity accounted earnings.

Glossary (2/2)

Net trading income – results from financial operations at fair value through profit or loss, results from foreign exchange, results from hedge accounting operations, results from derecognition of financial assets and financial liabilities measured at amortized cost and results from derecognition of financial assets measured at fair value through other comprehensive income.

Non-performing exposures (NPE) – non-performing loans and advances to customers (loans to customers at amortized cost and loans to customers at fair value through profit or loss) more than 90 days past-due or unlikely to be paid without collateral realization, if they recognized as defaulted or impaired.

Non-performing loans (NPL) – overdue loans (loans to customers at amortized cost and loans to customers at fair value through profit or loss) more than 90 days past due including the non-overdue remaining principal of loans, i.e. portion in arrears, plus non-overdue remaining principal.

Off-balance sheet customer funds – assets under management, assets placed with customers and insurance products (savings and investment) subscribed by customers.

Operating costs - staff costs, other administrative costs and depreciation.

Other impairment and provisions – impairment (net of reversals) for loans and advances of credit institutions classified at amortized cost, impairment for financial assets (classified at fair value through other comprehensive income and at amortized cost not associated with credit operations), impairment for other assets, namely assets received as payment in kind, investments in associated companies and goodwill of subsidiaries and other provisions.

Other net income – dividends from equity instruments, net commissions, net trading income, other net operating income and equity accounted earnings.

Other net operating income – other operating income/(loss) and gains/(losses) arising from sales of subsidiaries and other assets.

Overdue loans – total outstanding amount of past due loans to customers (loans to customers at amortized cost, debt instruments at amortized cost associated to credit operations and loans to customers at fair value through profit or loss), including principal and interests.

Overdue loans by more than 90 days – total outstanding amount of past due loans to customers by more than 90 days (loans to customers at amortized cost, debt instruments at amortized cost associated to credit operations and loans to customers at fair value through profit or loss), including principal and interests.

Profit before impairment and provisions – net operating revenues deducted from operating costs.

Resources from credit institutions – resources and other financing from Central Banks and resources from other credit institutions.

Return on average assets (Instruction from the Bank of Portugal no. 16/2004) – net income (before tax) divided by the average total assets (weighted average of the average of monthly net assets in the period).

Return on average assets (ROA) – net income (before minority interests) divided by the average total assets (weighted average of the average of monthly net assets in the period).

Return on equity (Instruction from the Bank of Portugal no. 16/2004) – net income (before tax) divided by the average attributable equity + non-controlling interests (weighted average of the average of monthly equity in the period).

Return on equity (ROE) – net income (after minority interests) divided by the average attributable equity, deducted from preference shares and other capital instruments (weighted average of the average of monthly equity in the period).

Securities portfolio - debt instruments at amortized cost not associated with credit operations (net of impairment), financial assets at fair value through profit or loss (excluding the ones related to loans to customers and trading derivatives), financial assets at fair value through other comprehensive income and assets with repurchase agreement.

Spread - increase (in percentage points) to the index used by the Bank in loans granting or fund raising.

Total customer funds - balance sheet customer funds and off-balance sheet customer fund.

Total customer funds - balance sheet customer funds and off-balance sheet customer funds.

INVESTOR RELATIONS DIVISION Bernardo Collaço, Head

EQUITY Alexandre Moita +351 211 131 321 DEBT AND RATINGS Luís Morais +351 211 131 337

[email protected]

BANCO COMERCIAL PORTUGUÊS, S.A., a public company (Sociedade Aberta), having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number 501 525 882 and the share capital of EUR 4,725,000,000.00. LEI: JU1U6SODG9YLT7N8ZV32

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