Banco Comercial Portugues

Earnings Release • May 9, 2019

Disclaimer

• 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.
• The figures presented do not constitute any form of commitment by BCP in regard to future earnings.
• Figures for the first three months of 2019 not audited.
• 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.

Agenda

• Highlights
• Group
• Profitability
• Business activity
• Capital
• Portugal
• International operations
• Key figures

³

• Improved profitability, with net earnings of €153.8 million in the 1st quarter of 2019 1

• Contribution of activity in Portugal of €94.3 million, more than doubling the contribution of the first 3 months of 2018 2

• Improved credit quality, with decreasing NPEs (-€1.9 billion from March 31, 2018) and cost of risk (68bp in the 1st quarter of 2019) 3

• NPE coverage by loan-loss reserves increases to 55%, total* coverage rises to 110% 4

• Capital ratio raised to15.2%*, boosted by earnings in the last 12 months and by AT1 issue in January 2019, and comfortably above SREP requirements 5

• Increasing business volumes, with performing loans up by €2.4 billion and total Customers funds up €3.7 billion from March 31, 2018 6

*Including unaudited earnings for the 1st quarter of 2019. Includes impact of IFRS16.

**Deposits, debt securities, assets under management, assets placed with Customers and insurance products (savings and investments).

• +326,000 active Customers from March 31, 2018, of which 134,000 in Portugal
• Best ranked bank (among the top 5 banks) in Bank of Portugal's 2018 Behavioural Supervision Report**
• Customer acquisition supported by innovating digital solutions, among which a new Millennium app and a new Mtrader app in Portugal

*Customer counting criteria used in the 2021 Strategic Plan.

**Top ranked among the top 5 banks in all 3 categories (current accounts, personal loans and mortgage loans) of Customer complaints.

Highlights New digital solutions support transformation process

• Faster, simpler and more intuitive
• Created based on Customers' ideas and experience: an app that's focused on Customers and their needs
• Always visible menu bar, bureaucracy-free online personal and car loans, real time alerts, privacy mode (app can be used in public without revealing account information), easier and quicker savings

• Launched on April 26th on (App Store and Google Play)

• Simple and intuitive layout, including both information and trading under a single app

• Real-time streaming of main world markets and access to order book
• Quick trading to accelerate the placement of market orders, with trading performed directly through the app
• News and research , dividend map and events calendar

8• Recent rating upgrades recognise Millennium bcp's improvement over the last years

Standard & Poor's

• Most recent rating upgrade: Moody's (April 1, 2019)
• Moody's rating action reflects Millennium bcp's improved credit profile through a significant reduction of the stock of problematic assets and enhanced domestic profitability, as well as Moody's expectation that the bank's financial fundamentals will further progress in 2019
• The intrinsic rating of BCP was upgraded by 5 notches by Moody's and by 4 notches by S&P since 2013

Agenda

• Highlights
• Group
• Profitability
• Business activity
• Capital
• Portugal
• International operations
• Key figures

¹⁰

Profit of €153.8 million in the 1 st quarter of 2019

(million euros)	1Q18	1Q19	YoY	Impact on earnings
Net interest income	344.8	362.7	+5.2%	+17.9
Commissions	167.8	166.6	-0.7%	-1.2
Core income	512.6	529.3	+3.3%	+16.7
Other income*	25.2	68.3	+171.4%	+43.2
Banking income	537.8	597.7	+11.1%	+59.9
Operating costs	-246.0	-259.5	+5.5%	-13.5
Of which: recurring	-242.6	-253.5	+4.5%	-10.9
Of which: non-usual items**	-3.5	-6.0	+73.8%	-2.6
Operating net income	291.8	338.1	+15.9%	+46.4
Impairment and provisions	-129.9	-103.9	-20.0%	+26.0
Net income before income tax	161.8	234.2	+44.7%	+72.4
Income taxes, non-controlling interests and discontinued operations	-76.2	-80.4	+5.4%	-4.1
Net income	85.6	153.8	+79.7%	+68.3

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

Net interest income increases

Fees and commissions: in Portugal, stronger banking business more than compensates for lower market-related fees and commissions

Other income* expands significantly

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

Recurring operating costs under control

Millennium bcp: one of the most efficient banks in the Eurozone

Cost of risk continues trending to normalisation

Relevant NPE reduction and strengthened coverage

Agenda

• Highlights
• Group
• Profitability
• Business activity
• Capital
• Portugal
• International operations
• Key figures

¹⁹

Strong business dynamics results in growing Customer funds…

(Billion euros)

*Deposits, debt securities, assets under management, assets placed with Customers and insurance products (savings and investments).

… together with an increasing loan portfolio

Comfortable liquidity position

Agenda

• Highlights
• Group
• Profitability
• Business activity
• Capital
• Portugal
• International operations
• Key figures

²³

Strengthened capital

• CET1 capital ratio of 12.7%* (fully implemented) as of
• Increase from 11.8% as of March 31, 2018 and from 12.0% as of December 31, 2018 due to earnings for the last 4 quarters and lower DTA deductions, partially offset by increased risk-weighted assets
• Total capital ratio of 15.2%* (fully implemented) as of March 31, 2019, boosted by the AT1 issue completed in January 31, 2019, and comfortably above SREP

Capital at adequate levels

• Leverage ratio at 7.2% as of March 31, 2019, a comfortable and comparatively strong figure in European banking
• High RWA density (55% as of March 31, 2019), comparing favourably to most European banking markets

Agenda

• Highlights
• Group
• Profitability
• Business activity
• Capital
• Portugal
• International operations
• Key figures

²⁶

Increased net income

	(Million euros)
				+4.9%
			+3.2	+6.6				201.5
	192.0	+2.9			-2.1	-0.6	-0.4
NIM	1.8%							1.8%
	1Q18	Credit volume effect	Effect of cost of time deposits	Effect of wholesale cost	Credit rate effect	Effect of securities portfolio	Other (includes IFRS9)	1Q19

• Net interest income stood at €201.5 million in the 1st quarter of 2019, comparing to €192.0 million in the same period of 2018. The negative effects of lower credit yields, reflecting the normalisation of the macro-economic environment and of the securities portfolio (increased balance yielding lower interest, reflecting lower sovereign yields from March 31,2018); were more than compensated by the favourable impacts of a lower wholesale funding cost, of the continued decline in the remuneration of time deposits and of a growing credit portfolio (as the expansion of the performing portfolio now exceeds the decrease in NPEs)
• Net interest income stood at €201.5 million in the 1st quarter of 2019, comparing to €207.5 million in the 4th quarter of 2018. The positive impacts from a lower wholesale funding, from the declining remuneration of time deposits and from a growing credit portfolio were more than offset by the negative effects resulting from a lower number of days (90 days in the 1st quarter of 2019, comparing to 92 days in the 4th quarter of 2018), of lower credit yields and of the securities portfolio (increased balance yielding lower interest)

Continued effort to reduce the cost of deposits

Commissions and other income*

Fees and commissions				Other income*
	1Q18	1Q19	YoY
Banking fees and commissions	98.9	104.0	+5.1%
Cards and transfers	26.4	26.1	-1.3%
Loans and guarantees	25.4	27.7	+8.9%
Bancassurance	20.6	22.2	+7.7%
Customer account related	23.4	24.7	+6.0%
Other fees and commissions	3.1	3.3	+5.2%
Market related fees and commissions	14.1	10.9	-22.6%	related fees
Securities operations	12.3	9.3	-23.9%
Asset management	1.8	1.6	-14.1%
Total fees and commissions	113.0	114.9	+1.7%

• Growing commissions in Portugal, with income related to loans and guarantees, to bancassurance and to accounts standing out, more than compensating for lower marketrelated fees
• Increased other income due to trading income of €40.0 million (€19.0 million in the 1st quarter of 2018), reflecting gains on the sale of sovereign and corporate debt, as well as of lower losses on credit sales

Operating costs

Lower NPEs, with reinforced coverage

	Non-performing exposures (NPE)		NPE build-up
	-29.4%			Mar 19	Mar 19
Other NPE NPL>90d	6,286 2,413 3,872 Mar 18	4,437 2,056 2,381 Mar 19	Opening balance Net exits Write-offs Sales Ending balance	vs.Mar 18 6,286 -719 -488 -641 4,437	vs.Dec 18 4,797 -209 -77 -74 4,437
Loan impairment Cost of risk	(net of recoveries) 96bp	73bp	 NPE in Portugal down by €1.8 billion, from €6.3 billion as at March 31, 2018 to €4.4 billion as at the same date of 2019  This decrease results from net outflows of €0.7 billion, sales of €0.6 billion and write-offs of €0.5 billion
	89.0 1Q18 2,915	68.0 1Q19 2,310	 The decrease of NPE from March 31, 2018 is attributable to a €1.5 billion reduction of NPL>90d and to a €0.4 billion decrease of other NPE  Significant NPE reduction in the quarter, from €4.8 billion as at December 31, 2018 to €4.4 billion as at March 31, 2019  Reduction of the cost of risk to 73bp in the 1st same period of 2018, with a reinforcement of NPE coverage by loan-loss reserves to 52% from 46%, respectively		quarter of 2019 from 96bp in the

NPE 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 loanlosses was 60% for companies NPE as at March 31, 2019, reaching 68% for companies NPL>90d (80% and 90%, respectively, if cash, financial collateral and expected loss gap are included)

Foreclosed assets and corporate restructuring funds

• Net foreclosed assets were down by 20.9% between March 31, 2018 and March 31, 2019. Valuation of foreclosed assets by independent providers exceeded book value by 27%
• 1,054 properties were sold during the 1st quarter of 2019, up from 919 properties in the same period of 2018, with capital gains doubling from €12 million to €24 million
• Corporate restructuring funds decreased 2.7% to €995 million at March 31, 2019. The original credit exposure on these funds totals €2,006 million, with total reserves (original credit, plus restructuring funds) corresponding to a 50% coverage

Strong business dynamics leads to increased Customer funds and performing credit portfolio

(Billion euros)

• Total Customers funds in Portugal up by 5.0% from March 31, 2018, with total Customers funds held by individuals growing 6.1%
• Performing credit portfolio in Portugal expands by €1.2 billion (+3.7%) from March 31, 2018, of which 44% related to mortgages, 40% of loans to companies and 16% of personal/other loans
• Millennium bcp reinforced its role as the Bank of Companies in Portugal:
• Strong performance of loans to companies, up by €470 million, with new leasing and factoring business, up by 37.3% and by 49.8% from March 31, 2018, respectively, being particularly outstanding
• Millennium bcp was the leader for the SME Excelência'18 and SME Líder'18 programmes, with the largest number of submissions and awards among participating banks

*Deposits, debt securities, assets under management, assets placed with Customers and insurance products (savings and investments).

Agenda

• Highlights
• Group
• Profitability
• Business activity
• Capital
• Portugal
• International operations
• Key figures

36

Positive contribution from international operations

(Million euros)

	1Q18	1Q19	Δ % local currency	Δ % euros	ROE	Capital ratio*
Poland	36.3	37.3	+3.0%	+0.3%	10.3%	25.6%
Mozambique	25.9	27.3	+5.5%	+10.8%	23.3%	38.5%
Angola**
Before IAS 29 impact	2.9	4.9
IAS 29 impact***	-0.8	0.7
Total Angola including IAS 29 impact	2.1	5.6
Other	3.1	3.6
Net income	67.4	73.9
Non-controlling interests (Poland and Mozambique)	-26.7	-27.7
Exchange rate effect	0.4	--
Contribution from international operations	41.1	46.1		+12.1%

*Including earnings for the year. | **Contribution of the Angolan operation. | ***Includes goodwill impairment (-€2.2 million in the 1st quarter of 2019, -€4.6 million in the 1st quarter of 2018) and contribution revaluation (+€2.9 million in the 1st quarter of 2019, +€3.5 million in the 1st quarter of 2018). Subsidiaries' net income presented for 2018 at the same exchange rate as of 2019 for comparison purposes.

Growing net income

FX effect excluded. €/Zloty constant at March 2019 levels: Income Statement 4.28290000; Balance Sheet 4.3046. | *Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in accounting terms, part of this margin (€3.8 million in the 1st quarter of 2019 and €2.0 million in the 1st quarter of 2018) is presented in net trading income.

Increased net interest income

*Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in accounting terms, part of this margin (€3.8 million in the 1st quarter of 2019 and €2.0 million in the 1st quarter of 2018) is presented in net trading income. FX effect excluded. €/Zloty constant at March 2019 levels: Income Statement 4.28290000; Balance Sheet 4.3046.

Credit quality

Growing volumes

(Million euros)

FX effect excluded. €/Zloty constant at March 2019 levels: Income Statement 4.28290000; Balance Sheet 4.3046.

Growing net income

Growing income partially offset by the increase in operating costs

FX effect excluded. €/Metical constant at March 2019 levels: Income Statement 71.19666667; Balance Sheet 71.1600.

Credit quality performance influenced by challenging environment

Business volumes reflect a conservative approach under a challenging environment

FX effect excluded. €/Metical constant at March 2019 levels: Income Statement 71.19666667; Balance Sheet 71.1600.

Agenda

• Highlights
• Group
• Profitability
• Business activity
• Capital
• Portugal
• International operations
• Key figures

46

Key figures Consolidated

		1Q18	1Q19	2021
	Active Customers	4.6 million	4.9 million	>6 million
Franchise growth	Digital Customers	52%	56%	>60%
	Mobile Customers	29%	35%	>45%
	Cost to Income	46% (45% excluding non-usual items)	43% (42% excluding non-usual items)	≈40%
	RoE	6.1%	10.6%	≈10%
Value creation	CET1	11.8%	12.7%**	≈12%
	Loans to Deposits	91%	87%	<100%
	Dividend Payout	--	--	≈40%
Asset quality	NPE stock	€7.1 billion	€5.2 billion	≈€3 billion down by ≈60% from 2017
	Cost of risk	85 bp	68 bp	<50 bp

Appendix

Sovereign debt portfolio

• The sovereign debt portfolio totalled €14.1 billion, €11.9 billion of which maturing until 5 years
• The Portuguese sovereign debt portfolio totalled €7.4 billion, whereas the Polish and Mozambican portfolios amounted to €5.4 billion and to €0.3 billion, respectively; "other" includes Spanish and Italian sovereign debt (€0.5 billion each)

49

Sovereign debt portfolio

(Million euros)

	Portugal	Poland	Mozambique	Other	Total
Trading book*	40	180	0	1	220
≤ 1 year	0	42	0	0	42
> 1 year and ≤ 2 years	34	61	0	0	95
> 2 years and ≤ 5 years	4	33	0	0	37
> 5 years and ≤ 8 years	1	29	0	0	30
> 8 years and ≤ 10 years	0	15	0	0	15
> 10 years	1	1	0	1	2
Banking book**	7,335	5,206	263	1,091	13,895
≤ 1 year	1,933	1,260	50	581	3,824
> 1 year and ≤ 2 years	19	1,970	23	236	2,248
> 2 years and ≤ 5 years	3,639	1,693	80	225	5,636
> 5 years and ≤ 8 years	1,335	276	0	0	1,612
> 8 years and ≤ 10 years	185	6	38	49	279
> 10 years	224	1	72	0	297
Total	7,375	5,385	263	1,091	14,115
≤ 1 year	1,933	1,301	50	581	3,865
> 1 year and ≤ 2 years	54	2,031	23	236	2,343
> 2 years and ≤ 5 years	3,643	1,726	80	225	5,673
> 5 years and ≤ 8 years	1,336	305	0	0	1,642
> 8 years and ≤ 10 years	185	21	38	49	294
> 10 years	225	1	72	1	299

*Includes financial assets held for trading at fair value through net income (€33 million).

**Includes financial assets at fair value through other comprehensive income (€13,544 million) and financial assets at amortised cost (€350 million).

Diversified and collateralised portfolio

Loans

• Loans to companies accounted for 46% of the loan portfolio as at March 31, 2019, including 7% to construction and real-estate sectors
• Mortgage accounted for 47% of the loan portfolio, with low delinquency levels and an average LTV of 65%
• 88% of the loan portfolio is collateralised

Collaterals

• Real estate accounts for 93% of total collateral value
• 80% of the real estate collateral is residential

Consolidated earnings

(million euros)	1Q18	1Q19	YoY	Impact on earnings
Net interest income	344.8	362.7	+5.2%	+17.9
Net fees and commissions	167.8	166.6	-0.7%	-1.2
Other income*	25.2	68.3	+171.4%	+43.2
Banking income	537.8	597.7	+11.1%	+59.9
Staff costs	-142.3	-152.2	+7.0%	-9.9
Other administrative costs and depreciation	-103.7	-107.3	+3.4%	-3.6
Operating costs	-246.0	-259.5	+5.5%	-13.5
Profit before impairment and provisions	291.8	338.1	+15.9%	+46.4
Loans impairment (net of recoveries)	-106.0	-86.5	-18.4%	+19.5
Other impairment and provisions	-23.9	-17.4	-27.1%	+6.5
Impairment and provisions	-129.9	-103.9	-20.0%	+26.0
Net income before income tax	161.8	234.2	+44.7%	+72.4
Income taxes	-49.3	-65.4	+32.7%	-16.1
Non-controlling interests	-26.9	-28.4	+5.3%	-1.4
Net income from discontinued or to be discontinued operations	0.0	13.5		+13.5
Net income	85.6	153.8	+79.7%	+68.3

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

Consolidated balance sheet

	31 March 2019	31 March 2018
ASSETS			LIABILITIES
Cash and deposits at Central Banks	2,292.1	2,265.8	Financial liabilities at amortised cost
Loans and advances to credit institutions repayable on demand	288.2	254.5
Financial assets at amortised cost
Loans and advances to credit institutions	1,021.6	864.0
Loans and advances to customers	45,971.8	45,039.9
Debt instruments	3,465.3	2,900.3	Financial liabilities at fair value through profit or loss
Financial assets at fair value through profit or loss
Financial assets held for trading	907.4	1,234.6
Financial assets not held for trading mandatorily at fair value through profit or loss	1,393.2	1,608.5
Financial assets designated at fair value through profit or loss	33.0	142.4
Financial assets at fair value through other comprehensive income	14,663.6	10,814.4
Assets with repurchase agreement	185.2	33.5
Hedging derivatives	162.1	141.7
Investments in associated companies	444.4	498.8
Non-current assets held for sale	1,674.8	2,144.7
Investment property	63.8	12.5	EQUITY
Other tangible assets	621.9	481.6
Goodwill and intangible assets	170.9	179.8
Current tax assets	39.2	24.8
Deferred tax assets	2,844.6	2,956.9
Other assets	875.4	1,075.2
TOTAL ASSETS	77,118.3	72,673.9

	31 March 2019	31 March 2018
LIABILITIES
Financial liabilities at amortised cost
Resources from credit institutions	7,397.5	7,427.1
Resources from customers	53,321.6	49,535.1
Non subordinated debt securities issued	1,639.8	1,982.7
Subordinated debt	1,270.4	1,179.4
Financial liabilities at fair value through profit or loss
Financial liabilities held for trading	331.6	408.7
Financial liabilities at fair value through profit or loss	3,636.3	3,775.0
Hedging derivatives	272.8	140.8
Provisions	360.1	340.4
Current tax liabilities	14.7	12.8
Deferred tax liabilities	6.7	5.5
Other liabilities	1,278.2	1,041.3
TOTAL LIABILITIES	69,529.6	65,848.7
EQUITY
Share capital	4,725.0	5,600.7
Share premium	16.5	16.5
Preference shares	-	59.9
Other equity instruments	402.9	2.9
Legal and statutory reserves	264.6	252.8
Treasury shares	(0.1)	(0.3)
Reserves and retained earnings	852.5	(249.2)
Net income for the period attributable to Bank's Shareholders	153.8	85.6
TOTAL EQUITY ATTRIBUTABLE TO BANK'S SHAREHOLDERS	6,415.2	5,769.0
Non-controlling interests	1,173.5	1,056.2
TOTAL EQUITY	7,588.7	6,825.2
TOTAL LIABILITIES AND EQUITY	77,118.3	72,673.9

Consolidated income statement Per quarter

(Million euros)			Quarterly
	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19
Net interest income	344.8	342.8	365.2	370.8	362.7
Dividends from equity instruments	0.1	0.6	0.0	0.0	0.0
Net fees and commission income	167.8	172.4	169.9	174.0	166.6
Other operating income	-29.1	-61.0	1.7	-1.0	-10.6
Net trading income	34.4	42.6	12.6	-11.0	60.3
Equity accounted earnings	19.8	21.6	30.5	17.3	18.6
Banking income	537.8	519.0	579.7	550.1	597.7
Staff costs	142.3	147.5	145.8	157.2	152.2
Other administrative costs	89.5	93.1	93.1	100.9	80.5
Depreciation	14.2	14.2	14.5	14.8	26.8
Operating costs	246.0	254.8	253.4	273.0	259.5
Profit bef. impairment and provisions	291.8	264.2	326.3	277.1	338.1
Loans impairment (net of recoveries)	106.0	114.6	116.2	127.9	86.5
Other impairm. and provisions	23.9	35.3	33.0	44.2	17.4
Net income before income tax	161.8	114.3	177.1	105.0	234.2
Income tax	49.3	22.6	37.6	28.5	65.4
Non-controlling interests	26.9	28.5	30.5	31.9	28.4
Net income (before disc. oper.)	85.6	63.3	109.0	44.5	140.4
Net income arising from discont. operations	0.0	1.8	-2.2	-0.9	13.5
Net income	85.6	65.1	106.8	43.6	153.8

Income statement (Portugal and International operations) For the 3-month periods ended March 31st, 2018 and 2019

For the 3-month periods ended March 31st, 2018 and 2019
(Million euros)												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
	M ar 18	M ar 19	Δ %	M ar 18	M ar 19	Δ %	M ar 18	M ar 19	Δ %	M ar 18	M ar 19	Δ %	M ar 18	M ar 19	Δ %	M ar 18	M ar 19	Δ %
Interest income	473	472	-0.2%	251	244	-2.7%	222	228	2.5%	146	162	11.0%	75	63	-15.4%	2	3	69.8%
Interest expense	128	109	-14.8%	59	43	-27.5%	69	67	-4.1%	43	49	13.1%	27	17	-35.3%	-1	0	>100%
N et interest inco me	345	363	5.2%	192	201	4.9%	153	161	5.5%	103	113	10.1%	4 8	4 6	-4.2%	2	3	2.6%
Dividends from equity instruments	0	0	-33.2%	0	0	<-100%	0	0	29.7%	0	0	29.7%	0	0	100.0%	0	0	--
Intermediatio n margin	345	363	5.2%	192	201	4.9%	153	161	5.5%	103	113	10.1%	4 8	4 6	-4.2%	2	3	2.6%
Net fees and commission income	168	167	-0.7%	113	115	1.7%	55	52	-5.6%	41	38	-7.9%	7	7	4.0%	6	6	-1.6%
Other operating income	-29	-11	63.5%	-3	16	>100%	-26	-26	-0.5%	-26	-34	-30.4%	0	8	>100%	0	0	18.8%
B asic inco me	484	519	7.3%	302	332	9.9%	182	187	2.9%	118	117	-0.8%	5 5	6 1	11.1%	9	9	-0.0%
Net trading income	34	60	75.1%	19	40	>100%	15	20	31.4%	13	15	20.3%	2	4	95.7%	1	1	41.0%
Equity accounted earnings	20	19	-5.9%	12	11	-11.7%	8	8	3.5%	0	0	--	0	0	--	8	8	3.5%
B anking inco me	538	598	11.1%	333	383	14.9%	205	215	5.1%	130	132	1.3%	5 7	6 5	14.2%	17	17	3.4%
Staff costs	142	152	7.0%	91	97	6.6%	51	55	7.7%	38	40	6.6%	9	10	14.5%	5	5	3.7%
Other administrative costs	90	80	-10.1%	53	46	-13.1%	36	34	-5.7%	25	22	-12.4%	10	11	11.1%	2	2	-7.8%
Depreciation	14	27	88.9%	9	17	84.0%	5	10	97.4%	3	8	>100%	2	2	10.3%	0	0	>100%
Operating co sts	246	260	5.5%	153	160	4.3%	93	100	7.5%	66	70	6.2%	21	23	12.4%	6	7	5.2%
P ro fit bef. impairment and pro visio ns	292	338	15.9%	180	223	23.9%	112	115	3.0%	6 5	6 3	-3.7%	3 6	4 2	15.2%	11	11	2.4%
Loans impairment (net of recoveries)	106	87	-18.4%	89	68	-23.6%	17	19	8.5%	12	15	32.5%	6	6	-8.3%	-1	-2	<-100%
Other impairm. and provisions	24	17	-27.1%	19	21	12.6%	5	-4	<-100%	1	-7	<-100%	0	1	>100%	5	2	-52.1%
N et inco me befo re inco me tax	162	234	44.7%	7 2	133	85.7%	9 0	101	12.0%	5 2	5 4	3.5%	3 1	3 5	14.5%	7	11	68.3%
Income tax	49	65	32.7%	27	39	43.1%	22	26	19.7%	15	17	11.3%	6	8	29.4%	1	1	>100%
Non-controlling interests	27	28	5.3%	0	0	<-100%	27	29	5.7%	0	0	--	0	0	16.1%	27	28	5.6%
N et inco me (befo re disc. o per.)	8 6	140	64.0%	4 4	9 4	>100%	4 1	4 6	12.1%	3 7	3 7	0.3%	2 5	2 7	10.8%	-21	-19	10.5%
Net income arising from discont. operations	0	13	--
N et inco me	8 6	154	79.7%

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.

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 amortised cost and debt instruments at amortised 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 amortised 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 amortised 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 a significant 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 amortised cost, balance sheet impairment associated with debt instruments at amortised 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 amortised cost for loans to customers and for debt instruments related to credit operations.

Loans to customers (gross) – loans to customers at amortised cost before impairment, debt instruments at amortised 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 amortised cost net of impairment, debt instruments at amortised 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 amortised cost and results from derecognition of financial assets measured at fair value through other comprehensive.
• Non-performing exposures (NPE) non-performing loans and advances to customers (loans to customers at amortised 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 realisation, if they recognised as defaulted or impaired.
• Non-performing loans (NPL) overdue loans (loans to customers at amortised cost, debt instruments at amortised cost associated to credit operations 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) of financial assets at amortised cost for loans and advances of credit institutions, impairment of financial assets (at fair value through other comprehensive income and at amortised cost not associated with credit operations), other assets impairment, in particular provision charges related to assets received as payment in kind not fully covered by collateral, 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 – net gains from insurance activity, 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 amortised cost, debt instruments at amortised 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 amortised cost, debt instruments at amortised cost associated to credit operations and loans to customers at fair value through profit or loss), including principal and interests.

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 amortised 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.