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Banco Comercial Portugues

Investor Presentation • Apr 20, 2018

1913_iss_2018-04-20_29603d42-0603-45e4-a2a8-05ed83da3197.pdf

Investor Presentation

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Banco BPI

Consolidated resultsin the 1st quarter 2018

20 April 2018

In accordance with IFRS 5 ‐ Non‐current assets held for sale and discontinued operations, BPI Vida e Pensões, BPI Gestão de Activos and BPI GIF were classified as discontinued operations on December 31, 2017, following the signature of the sale contracts disclosed to the market on November 23, 2017.

Consequently, the assets and liabilities of these units are presented in the consolidated balance sheet of Banco BPI under the captions "Non‐current assets / liabilities held for sale and discontinued operations" and the respective contribution to consolidated results is presented under the caption "Results of discontinued operations".

The items in the profit and loss account of 2017 (and respective quarters) were restated recognizing the contribution of BPI Vida e Pensões, BPI Gestão de Ativos and BPI GIF to the consolidated results in accordance with IFRS 5 (Proforma figures).

Acronyms and designations adopted

Units, conventional signs and abbreviations

d
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"Disclaimer"

The purpose of this presentation is purely informative and should not be considered as a service or offer of any financial product, service or advice, nor should it be interpreted as, an offer to sell or exchange or acquire, or an invitation for offers to buy securities issued by Banco BPI ("BPI") or any of the companies mentioned herein. The information contained herein is subject to, and must be read in conjunction with, all other publicly available information. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information set out in the relevant documentation filed by the issuer, having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in this presentation.

BPI cautions that this presentation might contain forward‐looking statements concerning the development of its business and economic performance. While these statements are based on BPI's current projections, judgments and future expectations concerning the development of the Bank's business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from BPI's expectations. Such factors include, but are not limited to the market general situation, macroeconomic factors, regulatory, political or government guidelines and trends, movements in domestic and international securities markets, currency exchange rates and interest rates, changes in the financial position, creditworthiness or solvency of BPI customers, debtors or counterparts.

Statements as to historical performance, historical share price or financial accretion are not intended to mean that future performance, future share price or future earnings for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast. In addition, it should be noted that although this presentation has been prepared based on accounting registers kept by BPI and by the rest of the Group companies it may contain certain adjustments and reclassifications in order to harmonize the accounting principles and criteria followed by such companies with those followed by BPI.

In particular, regarding the data provided by third parties, neither BPI, nor any of its administrators, directors or employees, either explicitly or implicitly, guarantees that these contents are exact, accurate, comprehensive or complete, nor are they obliged to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in reproducing these contents by any means, BPI may introduce any changes it deems suitable, may omit partially or completely any of the elements of this document, and in case of any deviation between such a version and this one, BPI assumes no liability for any discrepancy.

In relation to Alternative Performance Measures (APMs) as defined in the guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority on 5 October 2015 (ESMA/2015/1415), this report uses certain APMs, which have not been audited, for a better understanding of the company's financial performance. These measures are considered additional disclosures and in no case replace the financial information prepared under the International Financial Reporting Standards (IFRS). Moreover, the way the Group defines and calculates these measures may differ to the way similar measures are calculated by other companies. Accordingly, they may not be comparable. Please refer to the Glossary section for a list of the APMs used along with the relevant reconciliation between certain indicators.

This document has not been submitted to the Comissão do Mercado of Valores Mobiliários (CMVM) (Autoridade Portuguesa do Mercado of Capitais) for review or for approval. Its content is regulated by the Portuguese law applicable at the date hereto, and it is not addressed to any person or any legal entity located in any other jurisdiction. For this reason it may not necessarily comply with the prevailing norms or legal requisites as required in other jurisdictions.

Notwithstanding any legal requirements, or any limitations imposed by BPI which may be applicable, permission is hereby expressly refused for any type of use or exploitation of the content of this presentation, and for any use of the signs, trademarks and logotypes contained herein. This prohibition extends to any kind of reproduction, distribution, transmission to third parties, public communication or conversion by any other mean, for commercial purposes, without the previous express consent of BPI and/or other respective proprietary title holders. Any failure to observe this restriction may constitute a legal offence which may be sanctioned by the prevailing laws in such cases.

Index

du
In
tro
to
te
c
ry
n
o
s		 2
la
D
isc
im
er		 3

Results in the 1st quarter 2018

BPI consolidated results in the 1st quarter 2018

l
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C
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1) Costs from voluntary terminations and early retirements.

2) Recoveries from loans previously written off.

3) According to EBA (European Banking Authority) criteria; considering the prudential supervision perimeter.

54) As there is no decision on the earnings distribution for the year, for regulatory and prudential reasons, the net income for the first quarter of 2018 was deducted in the calculation of the capital ratios.

Consolidated net income of 210 M.€

1)In the first quarter of 2017, it includes the negative impact of 212 M.€ from the sale of 2% of BFA and deconsolidation, of which ‐182 M.€ corresponded to the transfer to the income statement of accumulated negative foreign exchange reserves that resulted from the translation of BFA financial statements from AKZ to EUR.

  • Consolidated net income of 210 M.€ in the 1st quarter 2018
  • Activity in Portugal contributes with 56% of consolidated profit

Net income of 118 M.€ in Portugal

N
E
T
I
N
C
O
M
E
F
R
O
M
T
H
E
A
C
T
I
V
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Y
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G
A
L
In
M
€		 1
Q
1
7		 2
Q
1
7		 3
Q
1
7		 4
Q
1
7		 2
0
1
7		 1
Q
1
8
inc
Ne
t
om
e		 4
3		 3
2
‐		 6
5		 4
8		 1
2
4		 1
1
8
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ing
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ts
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re
cu
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p
ac
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lun
d
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ina
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ts
t
ta
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s
w
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ry
rm
ns
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n
ly
ire
t
ts
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en		 ‐8 6
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7		 ‐2
1)
h
he
le
f s
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0
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3		 2
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Re
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cu
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2		 5
8		 3
3		 1
7
0		 5
8

SALE OF SUBSIDIARIES AND BUSINESSES ANNOUNCED IN NOVEMBER AND DECEMBER 2017

  • The sale of BPI Vida e Pensões took place in Dec.17 and was recognized in the financial accounts for the year.
  • BPI obtained the necessary authorizations related to the sale of BPI Gestão de Activos and BPI GIF
  • These transactions (BPI GA and BPI GIF) are expected to be completed in the 2nd quarter 2018

Transactions to be completed in 2018

  • BPI Gestão de Activos
  • BPI GIF
  • Equities and corporate finance
  • Cards issuance
  • Merchant acquiring

Net profit from the activity in Portugal of 118 M.€ in the 1st quarter 2018 benefits from the 60 M.€ gain with the revaluation of Viacer's stake to the agreed value of the sale, following the signing of the sale contract in February 2018.

Recurring net income of the activity in Portugal of 58 M.€ increases 24% when compared to the same quarter of 2017.

1)In the fourth quarter of 2017, gain with the sale of BPI Vida e Pensões; in the 1st quarter of 2018, revaluation of the stake in Viacer to the agreed value of the sale.

Contribution from BFA and BCI of 91 M.€

C
O
N
T
R
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B
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Contribution from BFA of 86 M.€ in the 1st quarter 2018, includes impacts from the recognition of BFA stake in accordance with IAS 29 and depreciation of AKZ.

  • During the 1Q 2108 the Angolan local currency (AKZ) showed a devaluation of 30% vs EUR, and BFA recorded strong, non‐recurrent trading gains, of which BPI appropriated 62 M.€ (after taxes). This compares with an average quarterly appropriation of 6 M.€ in 2017.
  • Contribution from BCI of 5 M.€ in the 1st quarter 2018.

IMPACT OF AKZ DEVALUATION ON THE EVOLUTION OF THE VALUE OF STAKE IN BFA

  • On 4 Jan.18, the National Bank of Angola (BNA) adopted a new exchange regime with an exchange rate fluctuation band. The exchange rate is now determined in currency auctions.
  • In the 1st quarter 2018, AKZ devaluated about 30% against the Euro.

EVOLUTION OF THE VALUE OF THE STAKE IN BFA

M
€
k v
lue
f s
ke
in
3
de
Bo
B
F
A
1
1
7
ta
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a
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s		 ‐1
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Bo
B
F
A
3
1 m
1
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ta
t
o
a
o
a
ar		 5
3
0

Note: amounts before deferred taxes.

BNA REFERENCE RATES

3
1
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1
7
c.		 3
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1
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1
r.
%
3)
/
1
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K
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x
/
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8
5.
4		 2
6
4.
4		 3
0
%
‐
/
A
K
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1
U
S
D		 1
6
5.
9		 2
1
4.
6		 ‐2
3
%

Average rate of purchase and sale.

3) Change in the AKZ value when expressed in EUR or USD.

1)Includes results booked in earnings of associated companies (equity method) (100 M.€), net income on financial operations (‐6 M.€) and income taxes (8 M.€).

2)In the fourth quarter 2017 it includes the impact of the application of IAS 29 ("high inflation") and the constitution of a provision for general risks in BFA.

In the first quarter 2018 it includes the adjustment to the impact of IAS 29 and the reversal of the abovementioned provision.

Recurring ROTE in Portugal of 8.8%

l
i
d
d
C
R
O
T
E
t
o
n
s
o
a
e
f
1
3.
0
%
o

Recurring ROTE in the activity in Portugal of 8.8%

M
1
7
ar		 M
1
8
ar
(
la
hs
)
(
la
1
2 m
t
t
s
on
s		 hs
)
1
2 m
t
on
2
0
9
5		 2
6
0
4
%
5.
8		 %
1
3.
0
1
8
7
4		 2
0
5
8
9.
%
7		 8.
8
%
t

RETURN ON TANGIBLE EQUITY (ROTE) (last 12 months)

The evolution of the recurring ROTE in the activity in Portugal reflects the increase in tangible capital (denominator) through the retention of earnings generated.

1) The average capital considered in the calculation of ROTE excludes the average balance of intangible assets (average consolidated balance in 12 months until march 2018: 30 M.€.) and other comprehensive income (reserves) (average consolidated balance in 12 months until march 2018: 56 M.€.)

Results in the 1st quarter 2018

  1. Highlights

2. Commercial activity

    1. Results
    1. Balance Sheet
    1. Closing remarks

Annexes

Total Customer deposits increase 3.1% ytd

C
U
S
T
O
M
E
R
R
E
S
O
U
R
C
E
S
In
M
€		 ‐1
8
m
ar		 de
1
7
c‐		 Y
D
t
‐b
lan
he
I.
On
t r
a
ce
s
e
es
ou
rce
s		 2
0
6
0
3		 2
0
6
8
6		 0.
4
%
‐
1
de
Cu
i
to
ts
s
me
r
p
os		 9
6
1
1
5		 9
0
2
1
5		 3.
%
1
l a
d
f
l
Ins
i
io
in
ia
t
tu
t
na
n
an
c
de
inv
i
to
ts
es
rs
p
os		 9
8
8		 1
6
6
1		 %
4
0.
5
‐
de
I
I.
As
ts
t
se
un
r m
an
ag
em
en		 1
0
0
7
9		 1
0
1
2
3		 0.
4
%
‐
l
fu
ds
M
tu
u
a
n		 5
9
5
9		 6
0
2
7		 1.
1
%
‐
l
Ca
i
isa
io
in
ta
t
p
n
su
ra
nc
e		 4
1
2
0		 4
0
9
6		 0.
6
%
b
l
f
fe
I
I
I.
Pu
ic
ing
o
r
s		 2
0
2
6		 2
1
5
1		 5.
8
%
‐
l
To
ta		 3
2
7
0
8		 3
2
9
6
0		 0.
8
%
‐
ke
ha
Ma
t s
r
re
s		 b.
2
8
Fe
1
8
2
l
de
its
To
ta
p
os		 9.
9
%
3
l
fu
ds
Mu
tu
a
n		 1
5.
9
%
3
's
P
P
R		 1
2.
6
%
3
l
Ca
ita
isa
ion
ins
t
p
ur
an
ce		 1
4.
7
%

1) Includes retail obligations of 28 M.€ on Mar.18 and 35 M.€ on Dec.17.

2) Market share in Jan.18. Does not include the effect of securitization operations (BPI calculation).

3) PPR's include PPR in the form of mutual funds and capitalization insurance. For that reason those PPRs are excluded in the calculation of the mutual funds and insurance capitalisation market shares. The market share of BPI Gestão de Activos in mutual funds is 24.8% in Feb.18(25.3% in Mar.18).

32 96032 708+590 ‐673‐68 +23 ‐12531 Dez.201731 Mar.18GROWTH DRIVERSIn M.€Customer deposits Mutual funds‐83 M.€ ‐45 M.€ ‐0.3 Bi.€‐0.8%4) Capitalis. InsurancePublic subscript. offersDeposits of institutional investors and othersOn balance sheet resourcesAssets under management 31 Dec. 201731 Mar. 2018

Customer deposits increased by 3.1% ytd (+ 590 M.€)

The Bank has been actively reducing its deposits offer to institutional investors to optimize liquidity ratios (LCR).

Loans to companies in Portugal increase by 3.5% YtD

fo
l
Gr
io,
in
M
€
t
os
s p
or		 1
8
ma
r‐		 de
1
7
c‐		 Y
D
t
in
d
iv
i
du
ls
I.
Lo
to
an
s
a		 1
2
3
7
1		 1
2
2
8
0		 0.
7
%
loa
Mo
tg
r
ag
e
ns		 1
1
1
2
7		 1
1
0
8
4		 0.
4
%
he
loa
in
d
iv
i
du
ls
O
t
to
r
ns
a		 1
2
4
4		 1
1
9
6		 %
4.
0
I
I.
Lo
Co
ies
to
an
s
m
p
an		 8
7
3
4		 8
5
1
5		 %
2.
6
d
&
La
Co
tes
te
rg
e c
or
p
or
a
a
n
rp
or
a
k
ing
Inv
Ba
tm
t
es
en
n		 2
4
5
6		 2
2
3
8		 9.
8
%
d
iu
ize
d c
ies
Me
m
s
om
p
an		 2
8
2
0		 2
8
3
1		 0.
3
%
Sm
l
l
bu
ine
a
s
ss
es		 2
3
1
4		 2
1
1
7		 2
%
1.
l
l
To
Co
ies
in
Po
ta
tu
mp
an
r
g
a		 7
4
2
0		 7
1
6
8		 3.
5
%
f
d
dr
d
h
Pr
j
ina
Ma
i
Br
t
o
ec
nc
e a
n
an
c		 1
3
1
4		 1
3
4
7		 (
)
2.
4
%
b
l
ic s
I
I
I.
Pu
to
ec
r		 1
4
2
4		 1
3
0
5		 9.
1
%
he
I
V.
O
t
r		 1
6
8		 1
4
4		 1
7.
2
%
l
To
ta		 2
2
6
9
7		 2
2
2
4
4		 2.
0
%
No
te
:
fo
loa
l
io
Ne
t
t
n p
or		 2
2
0
8
5		 2
1
6
5
9		 2.
0
%
  • Loans to corporates and small businesses increase by +3.5% ytd.
  • Mortgage loan portfolio increases 0.4% and consumer loans increase 4.0% ytd.
  • Total loan portfolio increases 2% ytd.

Mortgage loan origination increases by 35% yoy in the 1st quarter 2018

Mortgage loans

  • Origination of mortgage loans increases by 35% yoy to 326 M.€ in the 1st quarter 2018.
  • Origination exceeds amortisations since the 3rd quarter of 2017 and signals reversal of the reduction trend of the portfolio.
  • Consistent increase in the loan portfolio market share (11.2% as of January 2018) in a segment of the market that is still shrinking.

Corporate and small businesses loans in Portugal increase by 3.5% YtD. Increase in BPI market share

Corporate and small businesses loans

  • Growth of 4.5% (YtD) in loans to Large and Medium‐sized companies in Portugal (excludes project finance and Madrid branch loan portfolio).
  • Growth of 1.2% (YtD) in loans to small businesses.
  • Gradual increase in market share (8.3% in January 2018).

Results in the 1st quarter 2018

    1. Highlights
    1. Commercial activity

3. Results

    1. Balance Sheet
    1. Closing remarks

Annexes

Financial margin increases 3.6% yoy in the 1st quarter 2018

Financial margin increases 3.6% yoy, despite the cost of 4 M.€ with subordinated debt issued in Mar. 17

Trends in margin evolution:

  • Reduction in the average cost of term deposits (in euro) to 0.07% in 1Q18
  • Growth of loan portfolio in Portugal
  • Reduction in the spreads of corporate loans
  • Cost of 4 M.€ in 1Q18 from the subordinated Tier II debt issued on 24 Mar.17 (remuneration Euribor 6M + 5.74%)

The designation "proforma" reflects the restatement of the contribution of BPI Vida e Pensões, BPI Gestão de Activos and BPI GIF for the consolidated net income in conformity with IFRS 5 rules, that is recorded in the net income from discontinued operations.

Intermediation margin improves slightly to 174 basis points

  • Adjustment of the cost of time deposits has been the main factor for the improvement of the intermediation margin, more than compensating the narrowing of loans spreads.
  • Average remuneration of time‐deposits is close to zero.
  • Average remuneration of the loan portfolio is stable.

1) From 4Q16 onwards (inclusive) it refers to the deposits' remuneration contracted in euros.

Commissions increase by 11.9% yoy

Commissions

Commissions by business area

In
M
€		 1
Q
1
8		 1
Q
1
7
f.
pro		 Yo
Y
k
Ba
in
iss
io
n
g
co
mm
ns		 5
0		 4
4		 1
3.
0
%
d
In
in
ia
io
te
t
su
ra
nc
e
rm
e
n		 1
6		 1
5		 8.
6
%
1)
As
t m
t
se
an
ag
em
en		 3 2 1
1.
7
%
l
To
ta		 6
9		 6
2		 1
1.
9
%

1)BPI Alternative Fund ceased to be consolidated in Banco BPI accounts from March 2017 onwards. In the consolidation of that fund, net commissions paid by the BPI Alternative Fund of 2.2 M.€ in the 1Q17 were recorded.

Net commissions increase 11.9% yoy in 1Q18 (+8.1% yoy, adjusted by the deconsolidation of BPI Alternative Fund).

  • Banking commissions increase 13.0% yoy in 1Q18
  • The reduction in total comissions vis‐à‐vis the 4Q17 reflects the seasonality in the collection of commissions.

The designation "proforma" reflects the restatement of the contribution of BPI Vida e Pensões, BPI Gestão de Activos and BPI GIF for the consolidated net income in conformity with IFRS 5 rules, that is recorded in the net income from discontinued operations.

Recurring overhead costs decrease 0.5% yoy

Overhead costs excluding costs from voluntary terminations and early retirements decrease by 0.5 M.€ (‐0.5%) yoy

  • Recurring personnel costs fell by 4.8 M.€ (‐7.3%) yoy
  • BPI expects to reach a cost‐to‐income close to 50% in 2020

1) Additionally, at Mar.18, BPI had 39 investment centres and 35 corporate centers in Portugal, thus totalling 503 business units.

The designation "proforma" reflects the restatement of the contribution of BPI Vida e Pensões, BPI Gestão de Activos and BPI GIF for the consolidated net income in conformity with IFRS 5 rules, that is recorded in the net income from discontinued operations.

Evolution of general administrative costs in 1Q18 in line with expected

  • General administrative costs of 45.2 M. € in the first quarter 2018 are in line with budget forecast.
  • The year‐on‐year increase (+11%) in general administrative costs is mainly explained by the investment required to implement the synergies plan, IT costs and legal and adaptation costs, which will not be meaningful in the evolution of costs in the following year.
  • It is expected that a path of cost reduction will begin in 2019.
  • The synergies impact (in personnel costs and general administrative costs) in the 1Q18 is around 16 M.€, of which 3 M.€ refer to general and administrative costs.
  • As previously reported to the market, this impact is still partial in 2018 and only after 2019 will

Amortizations are expected to increase in line with the investment plan foreseen for the coming years.

The designation "proforma" reflects the restatement of the contribution of BPI Vida e Pensões, BPI Gestão de Activos and BPI GIF for the consolidated net income in conformity with IFRS 5 rules, that is recorded in the net income from discontinued operations.

Employee pension liabilities covered at 104%

Pension fund return (March 2018) 4.4%

EMPLOYEE PENSION LIABILITIES, M.€

M.
€		 3
1
De
1
7
c.		 3
1
Ma
1
8
r.
l p
l
b
l
To
ice
ia
i
ity
ta
ast
se
rv		 1
6
0
4		 1
5
7
6
f t
he
fu
ds
Ne
ion
t a
ts
sse
o
p
en
s
n		 1
5
6
8		 1
6
3
2
f c
f p
l
b
l
De
ion
ia
i
it
ies
g
ree
o
ov
era
g
e o
en
s		 9
8
%		 1
0
4
%
isc
D
nt
rat
ou
e		 2.
0
0
%		 2.
0
8
%
lar
h r
Sa
t
ate
row
y
g		 1.
0
0
%		 1.
0
0
%
ion
h r
Pe
t
ate
ns
s g
row		 0.
0
%
5		 0.
0
%
5
l
b
le:
Mo
ity
Me
rta
ta
n		 /
T
V
8
8
9
0		 /
T
V
8
8
9
0
l
b
le:
Mo
ity
W
rta
ta
om
en		 1)
/
T
V
8
8
9
0 –
3 y
ea
rs		 1)
/
T
V
8
8
9
0 –
3 y
ea
rs

1) For the target population, the age below the actual age of beneficiaries is two years for men and three years for women respectively, which is equivalent to considering a higher life expectancy.

ACTUARIAL DEVIATIONS IN THE PERIOD2), M.€

€
M.
l a
ia
l
de
iat
ion
To
3
1
De
1
7
ta
ctu
t
ar
s a
c.
v		 (
)
2
1
1
fu
Pe
io
ds
in
de
ia
io
t
ns
n
n
co
me
v
n		 6
0
ha
he
d
C
in
i s c
t
nt
te
ng
e
ou
ra		 2
3
he
Ot
r		 (
)
1
l a
ia
l
de
iat
ion
To
3
1
Ma
1
8
ta
ctu
t
ar
v
s a
r.		 (
)
1
2
9

2) Recognised directly in shareholders, in accordance with IAS19.

Pension fund return of 4.4% (non anualized) in 1Q18 with a positive impact of 60 M.€ in actuarial deviations.

Employee pension liabilities covered at 104%.

Loan impairment reversals of 7.7 M.€ and recoveries of 3.5 M.€ in 1Q18

Cost of credit risk1)

COST OF CREDIT RISK

(Impairments after deducting recoveries from loans previously written off)

20
12		 20
13		 20
14		 20
15		 20
16		 20
17		 1Q
18
€
M.		 2
2
4		 2
9
4		 8
1
5		 8
7		 9
1		 5
‐		 ‐1
1
loa
%
n
fo
lio
po
r		 0.
9
1
%		 0.
9
8
%		 0.
6
6
%		 0.
3
8
%		 0.
0
9
%		 0.
0
2
%
‐		 ‐0.
2
1
%
  • Impairment reversals of 7.7 M.€ were recorded in 1Q18.
  • Loan recoveries previously written off amounted to 3.5 M.€ in 1Q18.
  • The application of IFRS 9 led to an increase of 35 M.€ in loan impairments, which was directly recognized in shareholders' equity, and an impact in shareholders' equity of ‐26 M.€.

1) In annualised terms. In the annualisation of the indicator, a recovery of 14.2 M.€ in 3Q17 related to a single situation was not annualised.

Results in the 1st quarter 2018

    1. Highlights
    1. Commercial activity
    1. Results

4. Balance Sheet

  1. Closing remarks

Annexes

NPE ratio decreases from 5.1% to 4.6%

NPE ratio (EBA criteria)

  • NPE ratio decreases 0.5 p.p. in 1Q18, to 4.6%;
  • Coverage of 50%1) by impairments and 122% by impairments and collateral

Forborne exposures (EBA criteria2))

3
1
Ma
2
0
1
8		 fo
ing
Pe
r
rm		 lu
de
d
in
Inc		 l
To
r. loa
ns		 N
P
E		 ta
bo
(
)
Fo
M.
€
r
rn
e		 4
7
4		 6
6
0		 1
1
3
4
bo
(
f g
d
)
Fo
io
%
i
t
t e
r
rn
e r
a
a s
o
ro
s s
cr
e
xp
os
ur
e		 1.
6
%		 2.
2
%		 3.
7
%

1) Cover by impairments accumulated in the balance sheet for loans and guarantees; does not consider collaterals. 2) NPE ratio and forborne ratio considering the prudential supervision perimeter.

Non‐performing exposures ‐ NPE (EBA criteria2))

Non performing loans ratio (Bank of Spain criteria)

Non performing loans ratio (Bank of Spain criteria)

  • Non performing loans ratio of 4.7%
  • Coverage of 55% by impairments and 123% by impairments and collaterals

Forborne exposures (EBA criteria)

42% of forborne exposures are performing loans

Foreclosed properties at very low levels in BPI

Sale of 103 properties in 1Q18 for 9 M.€. Positive impact in profits before taxes of 0.8 M.€.

Balanced funding structure and comfortable liquidity position

  • Client Resources are the main source of funding of the balance sheet (72% of assets).
  • Loan to Deposit ratio of 107%.
  • 2.0 Bi.€ of funds obtained with the ECB (TLTRO). BPI still has 8.3 Bi.€ of high quality liquid assets and assets eligible as collateral for additional funding from the ECB.
  • Portfolio of short term public debt of 1.2 Bi.€
  • Portfolio of medium and long term public debt of 2.2 Bi.€. In 1Q18 BPI bought a portfolio of MLT public debt of 1.7 Bi.€, with an average residual maturity of 3 years.
  • Recourse to wholesale debt market is small (2% of assets).
l
Pot
ia
ent
l
ita
cap
/
ins
ga
(
los
)
ses		 du
l
Re
si
a
ity
tur
ma
,
ye
ars
fai
lue
hro
h o
he
At
t
t
r v
a
ug
r
he
nsi
in
com
pre
ve
com
e
S
ho
b
lic
rt‐t
erm
pu
3)
de
bt		 1 2
06		 0 0.5
4)
b
lic
de
bt
ML
T p
u		 3
51		 1 1.1
ui
bo
nd
Eq
ty,
te
co
rpo
ra
s
d o
he
t
an
r		 77 59 0
ise
d c
At
ort
ost
am
5)
b
lic
de
bt
ML
T p
u		 1 6
73		 ‐ 3.0
l
To
ta		 3 4
69		 60 0

1) Includes 300 M.€ of subordinated debt issued in the 1Q17.

2) Average amount (last 12 months) of LCR components calculation: Liquidity Reserves (3 974 M.€); Total net outflows (2 317 M.€).

3) Portugal. 4) Portugal (64%), Italy (36%). 5) Portugal (33%), Spain (37%), Italy (30%).

Investment Grade

Non‐Investment grade

BPI has investment grade long‐term credit rating from two agencies

A (
h),
… A
A, A
hig
AA
… A
A‐,
AA
, AA
nd
AA
A
+ a		 and
… A
a3,
Aa
2, A
a1
Aa
a		 … A
A‐,
AA
, AA
nd
AA
A
+ a		 (
)
bo
low
Mo
A
A
rtg
ag
e
n
A
+		 A
1
bo
ds
Mo
rtg
ag
e
n		 A
+		 (
h
h
)
A
ig
A A
2		 A k
A
Ba
1
n
A‐ A
3		 A‐ (
low
)
A
B
B
B
+		 Ba
1
a		 B
B
B
k
Ba
1
+
n		 (
h
h
)
ig
B
B
B
B
B
B		 Ba
2
a		 l
Po
B
B
B
rtu
g
a		 B
B
B
B
B
B‐
k
l
Ba
1
Po
rtu
n
g
a		 3
Ba
a		 B
B
B‐		 (
low
)
l
k
3
B
B
B
Po
Ba
rtu
n
g
a
B
B
+		 k
Ba
1
Ba
1
l
Po
rtu
n
g
a		 B
B
+		 (
h
h
)
B
B
ig
k
Ba
2
n
B
B		 Ba
2		 B
B		 k
B
B
Ba
4
n
B
B‐
k
Ba
2
n		 k
Ba
3
Ba
3
n		 B
B‐
k
k
Ba
2
Ba
3
n
n		 (
low
)
B
B
B
+		 k
Ba
2
B
1
n		 k
4
Ba
B
n
+		 (
h
h
)
ig
B
B 2
B		 B B
B‐ k
B
3
Ba
4
n		 B‐ (
low
)
B
C
C
C
+		 Ca
1
a		 C
C
C
+		 (
)
h
h
C
C
C
ig
k
Ba
5
n
… C
CC,
CC
C‐,
CC,
C a
nd
D		 k
Ca
2
Ba
5
n
a		 … C
CC,
CC
C‐,
CC,
C a
nd
D		 C (
),
(
h),
(
),
… C
CC,
CC
low
CC
hig
CC,
CC
low
C (
hig
h),
C (
low
),
C,
D
de
Inv
B
B
B ‐
tm
t g
es
en
ra		 3,
and
Caa
Ca
C
…		 de
Inv
B
B
B ‐
tm
t g
es
en
ra
  • BPI has "investment grade" ratings from Standard & Poor's and Fitch Ratings
  • BPI is one of two banks in Portugal to have investment grade ratings from 2 or more rating agencies, which is a necessary condition to be able to grant international guarantees.

Results in the 1st quarter 2018

    1. Highlights
    1. Commercial activity
    1. Results
    1. Balance Sheet
  • 5. Closing remarks

Annexes

Results in 1Q18 ‐ highlights

1) As there is no decision on the earnings distribution for the year, for regulatory and prudential reasons, the net income for the first quarter of 2018 was deducted in the calculation of the capital ratios.

1Q18 results

Annexes

  • Income Statements and Balance sheet in accordance with IAS / IFRS
  • Profitability and efficiency as in the Bank of Portugal's Instruction no. 16/2004
  • Alternative Performance Measures

Income Statement of activity in Portugal

Income Statement

1st
q		 2
rte
ua
r		 0
1
8		 1st
rte
q
ua
In
M.
€		 As
d
ort
rep
e		 No
n
2)
rec
urr		 l. n
Ex
c
on
2)
rec
urr		 As
d
ort
rep
e		 7 p
No
n
2)
rec
ur
r.		 l.
Ex
c
no
n
2)
rec
urr		 l. n
Ex
c
on
2)
rec
urr
l m
F
ina
ia
in
R
C
L
nc
arg
‐		 1
0
2		 1
0
2		 9
8		 9
8		 3.
6
%
fro
ity
ins
C
Inc
R
L
tru
nts
om
e
m
eq
u
me
‐		 0 0 0 0 8
0.
8
%
‐
f a
d c
(
Ea
ing
iat
ies
ity
rn
s o
sso
c
e
om
p
an
eq
u
ho
) ‐
d
R
C
L
t
me		 3 3 4 4 4
2.
2
%
‐
Ne
iss
ion
inc
R
C
L
t c
om
m
om
e
‐		 6
9		 6
9		 6
2		 6
2		 1
1.
9
%
f
l o
Ne
inc
ina
ia
ion
t
t
om
e o
n
nc
p
era
s		 7
2		 6
0		 1
3		 7 7 7
2.
5
%
Op
ing
inc
d e
t
era
om
e a
n
xp
en
ses		 0 0 (
)
1		 (
)
1		 0 s.s
ing
inc
fro
ba
k
ing
iv
ity
Op
R
C
L
t
t
era
om
e
m
n
ac
‐		 2
4
6		 6
0		 1
8
6		 1
7
1		 (
)
1		 1
7
2		 %
8.
5
l co
Pe
sts
rso
nn
e		 (
)
6
4		 (
)
3		 (
)
6
1		 (
)
7
6		 (
)
1
1		 (
)
6
6		 7.
3
%
‐
l a
dm
Ge
in
ist
ive
rat
sts
ne
ra
co		 (
)
4
5		 (
)
4
5		 (
)
4
1		 (
)
4
1		 1
1.
1
%
iat
ion
d a
isa
ion
De
rt
t
p
rec
an
mo		 (
)
5		 (
)
5		 (
)
5		 (
)
5		 %
4.
5
‐
he
d c
Ov
ts
er
a
os		 (
)
1
1
4		 (
)
3		 (
)
1
1
1		 (
)
1
2
3		 (
)
1
1		 (
)
1
1
2		 0.
5
%
‐
be
for
d
Ne
ing
inc
im
irm
t o
t
ts
p
era
om
e
e
p
a
en
an
is
ion
p
rov
s		 1
3
2		 5
7		 7
5		 4
8		 (
)
1
1		 6
0		 2
5.
4
%
d p
f r
f
Im
irm
is
ion
ies
ts
et
p
a
en
an
rov
s n
o
eco
ve
r
o
loa
d e
int
st
ns,
ere
an
xp
en
ses		 1
0		 1
0		 1
0		 1
0		 3.
1
%
for
Ne
inc
be
inc
t
e t
om
e
e
om
ax		 1
4
2		 5
7		 8
5		 8
5		 (
)
1
1		 0
7		 2
2.
2
%
Inc
e t
om
ax		 (
)
2
6		 1 (
)
2
7		 (
)
2
0		 3 (
)
2
3		 %
1
8.
0
inc
fro
inu
ing
ion
Ne
t
nt
t
om
e
m
co
op
era
s		 1
1
6		 5
8		 5
8		 3
8		 (
)
8		 4
7		 2
4.
3
%
fro
d
d o
Ne
inc
isc
inu
ion
t
t
t
om
e
m
on
e
p
era
s		 2 2 5 5
i
bu
b
le t
l
l
ing
int
Inc
ttr
ta
ntr
sts
om
e a
o n
on
‐co
o
ere		 (
)
0		 (
)
0
Ne
inc
t
om
e		 1
1
8		 6
0		 5
8		 4
3		 (
)
4		 4
7		 2
4.
3
%

Net profit of 118 M.€ in 1Q18 from activity in Portugal

Recurring net profit of 58 M.€ in Portugal, increases 24% yoy

Recurring operating income increases +8.5% yoy (+15 M.€):

  • Commissions grow 11.9% yoy (+7 M.€)
  • Financial margin goes up 3.6% (+4 M.€)

Recurring overhead costs fall by 0.5% yoy (‐0.5 M.€);

Personnel costs decrease by 7.3% yoy (‐5 M.€)

Impairment reversals (net of recoveries) of 10 M.€ in 1Q18

Non recurring items in 1Q18:

  • Gain of 60 M.€ (after taxes) with revaluation of the stake in Viacer to the agreed sale price
  • Costs with early retirements of 2 M.€ (3 M.€ before taxes)
  • Income from discontinued operations of 2 M.€

1) The designation "proforma" reflects the restatement of the contribution of BPI Vida e Pensões, BPI Gestão de Activos and BPI GIF for the consolidated net income in conformity with IFRS 5 rules, that is recorded in the net income from discontinued operations.

2) Costs from voluntary terminations and early retirements and (in 1Q17) impact of the sale of 2% of BFA (‐0.7 M.€ recorded in the activity in Portugal) and (in 1Q18) gain with the revaluation of the stake in Viacer to the agreed sale price.

Income Statement of activity in Portugal

With reclassification of the contribution of BPI Vida e Pensões, BPI Gestão de Activos and BPI GIF to "Net income from discontinued operations" (IFRS 5)

Captions reclassified 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.

In
M.
€		 1Q
17
1)
for
pro
ma		 2Q
17
1)
for
pro
ma		 3Q
17
1)
for
pro
ma		 4Q
17
1)
for
pro
ma		 20
17		 1Q
18
l m
F
ina
ia
in
R
C
L
nc
arg
‐		 9
8.
0		 9
4.
5		 9
6.
5		 9
9.
3		 3
8
8.
3		 1
0
1.
5
fro
Inc
ity
ins
R
C
L
tru
nts
om
e
m
eq
u
me
‐		 0.
1		 6.
3		 0.
1		 0.
1		 6.
5		 0.
0
f a
d c
(
ho
d
) ‐
Ea
ing
iat
ies
ity
R
C
L
et
rn
s o
sso
c
e
om
p
an
eq
u
m		 4.
4		 4.
6		 5.
8		 (
)
1.
4		 1
3.
4		 2.
5
Ne
iss
ion
inc
R
C
L
t c
om
m
om
e
‐		 6
1.
7		 6
7.
4		 7
0.
8		 7
5.
5		 2
7
5.
4		 6
9.
0
f
l o
Ne
inc
ina
ia
ion
t
at
om
e o
n
nc
p
er
s		 7.
4		 6.
8		 7.
8		 (
)
8.
2		 1
3.
8		 7
2.
4
Op
ing
inc
d e
t
era
om
e a
n
xp
en
se
s		 (
)
0.
7		 (
)
1
4.
7		 (
)
0.
9		 2
7.		 (
)
9.
1		 0.
3
fro
ba
k
Op
ing
inc
ing
iv
ity
R
C
L
t
t
era
om
e
m
n
ac
‐		 1
7
0.
9		 1
6
4.
9		 1
8
0.
1		 1
7
2.
5		 6
8
8.
4		 2
4
5.
8
l co
Pe
sts
rso
nn
e		 (
)
7
6.
5		 (
)
1
6
1.
2		 (
)
6
5.
7		 (
)
6
4.
7		 (
)
3
6
8.
1		 (
)
6
3.
6
f w
h
h:
l co
O
ic
Re
ing
sts
cu
rr
p
ers
on
na		 (
)
6
5.
7		 (
)
6
6.
8		 (
)
6
5.
7		 (
)
6
4.
1		 (
)
2
6
2.
3		 (
)
6
0.
9
2)
No
ing
sts
n‐
rec
ur
r
co		 (
)
1
0.
7		 (
)
9
4.
4		 (
)
0.
1		 (
)
0.
6		 (
)
1
0
5.
8		 (
)
2.
7
Ge
l a
dm
in
ist
ive
rat
sts
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ra
co		 (
)
4
0.
7		 (
)
4
3.
6		 (
)
4
1.
3		 (
)
3
4
7.		 (
)
1
6
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)
4
2
5.
d a
De
iat
ion
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rt
t
p
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)
5.
5		 (
)
5.
5		 (
)
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6		 (
)
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)
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1.
8		 (
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os		 (
)
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6		 (
)
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)
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)
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)
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)
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ing
inc
be
fo
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t o
t
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re
p
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en
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s		 4
8.
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)
4
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3
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7
d p
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irm
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ies
int
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t a
p
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ex
p
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s		 9.
8		 (
)
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)
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3		 5.
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0.
1
inc
be
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inc
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t
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ax		 5
8.
1		 (
)
5
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1		 8
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8		 1
4
1.
9
Inc
e t
om
ax		 (
)
1
9.
7		 2
2.
6		 (
)
2
1.
7		 (
)
2
1.
1		 (
)
3
9.
8		 (
)
2
5.
9
inc
fro
inu
ing
ion
Ne
t
nt
at
om
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m
co
op
er
s		 3
8.
5		 (
)
3
6.
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3
5		 0.
4
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1
1.		 9
1
1
5.
fro
d
d o
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inc
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ion
t
t
at
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e
m
on
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p
er
s		 4.
6		 4.
1		 6.
3		 7.
7		 2
2.
7		 2.
5
i
bu
b
le
l
l
ing
int
Inc
ttr
ta
to
tro
sts
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e a
no
n‐c
on
ere		 (
)
0.
0		 (
)
0.
0		 0.
0		 (
)
0.
0
inc
Ne
t
om
e		 4
3.
1		 (
)
3
2.
4		 6
4.
6		 4
8.
4		 1
2
3.
7		 1
1
8.
4

1) The designation "proforma" reflects the reclassification of the contribution of BPI Vida e Pensões, BPI Gestão de Activos e BPI GIF to the consolidated net income in accordance with IFRS 5 rules, that is recorded in the net income from discontinued operations.

2) Costs from voluntary terminations and early retirements.

Consolidated income statement

With reclassification of the contribution of BPI Vida e Pensões, BPI Gestão de Activos and BPI GIF to "Net income from discontinued operations" (IFRS 5)

Captions reclassified 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.

€
In
M.		 1Q
17		 2Q
17		 3Q
17		 4Q
17		 20
17		 1Q
18
1)
for
pro
ma		 1)
for
pro
ma		 1)
for
pro
ma		 1)
for
pro
ma
ina
ia
l m
in
C
L
F
R
nc
arg
‐		 9
9
7.		 9
4.
5		 9
6.
4		 9
9.
2		 3
8
8.
1		 1
0
1.
5
fro
Inc
ity
ins
R
C
L
tru
nts
om
e
m
eq
u
me
‐		 0.
1		 6.
3		 0.
1		 0.
1		 6.
5		 0.
0
f a
d c
(
ho
d
) ‐
Ea
ing
iat
ies
ity
R
C
L
et
rn
s o
sso
c
e
om
p
an
eq
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m		 5
6.
1		 6
4.
6		 7
2.
1		 (
)
6
8.
0		 1
2
4.
8		 1
0
8.
6
Ne
iss
ion
inc
R
C
L
t c
om
m
om
e
‐		 6
2.
0		 6
7.
7		 7
1.
1		 7
5.
6		 2
7
6.
4		 6
9.
0
inc
f
ina
ia
l o
ion
Ne
t
at
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n
nc
p
er
s		 7.
4		 6.
8		 8
7.		 (
)
8.
2		 3.
8
1		 6
6.
5
d e
Op
ing
inc
t
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n
xp
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se
s		 (
)
1
7
5.
5		 (
)
1
4.
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)
0.
9		 6.
4		 (
)
1
8
4.
7		 0.
3
ing
inc
fro
ba
k
ing
iv
ity
Op
R
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L
t
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m
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ac
‐		 4
8.
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2
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4
6.
0
l co
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sts
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e		 (
)
7
6.
9		 (
)
1
6
1.
6		 (
)
6
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)
6
4.
7		 (
)
3
6
9.
1		 (
)
6
3.
6
f w
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p
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)
6
6.
1		 (
)
6
7.
2		 (
)
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5.
8		 (
)
6
4.
1		 (
)
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6
3.
3		 (
)
6
0.
9
2)
No
ing
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n‐
rec
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co		 (
)
1
0.
7		 (
)
9
4.
4		 (
)
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1		 (
)
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6		 (
)
1
0
8
5.		 (
)
2.
7
l a
dm
Ge
in
ist
ive
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sts
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ra
co		 (
)
4
0.
8		 (
)
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8		 (
)
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1.
3		 (
)
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5		 (
)
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)
4
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2
d a
De
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ion
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)
5.
5		 (
)
5.
5		 (
)
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6		 (
)
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3		 (
)
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1.
9		 (
)
5.
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d c
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os		 (
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)
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)
1
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)
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)
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)
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inc
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irm
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p
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re
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)
7
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1		 2
1
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8
1		 (
)
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4		 0.
6
7		 2
3
9
1.
d p
f r
f
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irm
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ies
int
ts
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t a
p
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en
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s n
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,
ex
p
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se
s		 9.
8		 (
)
1
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4		 (
)
3.
3		 4.
6		 1
0.
3
inc
be
fo
inc
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t
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om
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re
om
ax		 (
)
6
5.
3		 (
)
0.
1		 1
4
6.
2		 (
)
5.
6		 7
5.
2		 2
4
2.
3
Inc
e t
om
ax		 (
)
6
1.
6		 1
6.
7		 (
)
2
8.
3		 (
)
1
4.
4		 (
)
8
7.
7		 (
)
3
8
4.
fro
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inc
inu
ing
ion
t
nt
at
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m
co
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er
s		 (
)
1
2
6.
9		 1
6.
5		 1
1
7.
9		 (
)
2
0.
0		 (
)
1
2.
5		 2
0
7.
4
fro
d
d o
Ne
inc
isc
inu
ion
t
t
at
om
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m
on
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p
er
s		 4.
6		 4.
1		 6.
3		 7.
7		 2
2.
7		 2.
5
bu
b
le
l
l
Inc
i
ing
int
ttr
ta
to
tro
sts
om
e a
no
n‐c
on
ere		 (
)
0.
0		 (
)
0.
0		 0.
0		 (
)
0.
0
inc
Ne
t
om
e		 (
)
2
2.
3
1		 2
0.
6		 2
3
1
4.		 (
)
2.
3
1		 0.
2
1		 2
0
9.
9

1) The designation "proforma" reflects the reclassification of the contribution of BPI Vida e Pensões, BPI Gestão de Activos e BPI GIF to the consolidated net income in accordance with IFRS 5 rules, that is recorded in the net income from discontinued operations. 2) Costs from voluntary terminations and early

retirements.

Consolidated Balance Sheet

In M. $\epsilon$ 31 Mar. 17 30 Jun. 17 30 Sep. 17 31 Dec. 17 31 Mar. 18
With the entry into force of IFRS 9, Assets
Banco BPI decided to adopt a structure Cash, deposits at Central Banks and other demand deposits 1 5 1 2 . 4 1 2 1 9 . 3 1 400.6 1 0 94.1 826.8
of the individual and consolidated Financial assets held for trading, at fair value through profit or loss and
at fair value through other comprehensive income		 6 2 3 8 . 3 6 189.0 6 5 9 0.2 4 175.9 2 4 6 7.2
financial statements in line with the Financial assets at amortised cost 23 657.7 23 711.8 23 676.3 22 529.3 24 448.7
Of which: 0.0 0.0 0.0 0.0 0.0
guidelines of Regulation (EU) Loans to Customers 22 718.4 22 819.8 22 708.0 21 658.8 22 085.1
2017/1443 of June 29, 2017 and with Investments in subsidiaries, associated companies and jointly 681.6 675.0 749.3 794.5 752.2
Tangible assets 48.0 43.7 41.7 45.3 42.4
the structure of the financial Intangible assets 24.6 24.7 24.3 42.3 40.1
statements presented by CaixaBank Taxassets 462.0 491.0 459.6 453.2 401.5
Non-current assets held for sale and discontinued operations 87.1 80.3 77.2 73.3 64.8
(the consolidating entity of Banco BPI). Other assets 265.0 316.6 259.7 432.3 320.5
Total assets 32 976.7 32 751.4 33 279.0 29 640.2 29 364.2
Liabilities and shareholders' equity
Financial liabilities held for trading 208.7 185.8 179.0 170.0 170.3
Financial liabilities at amortised cost 29 569.0 29 341.0 29 548.5 25 961.6 25 802.0
Central Banks and Credit Institutions deposits 3 8 3 4 . 5 3 7 6 9.5 3 960.1 3 978.0 4 0 38.7
Customers deposits 22 413.5 22 321.1 22 4 24.6 20 769.7 20 966.7
Technical provisions 1985.2 1923.6 1868.3 0.0 0.0
Debt securities issued 658.5 642.7 633.7 542.1 328.2
Of which: subordinated debt 369.9 373.8 369.6 305.1 300.3
Other financial liabilities 677.5 684.1 661.8 671.9 468.4
Provisions 69.3 68.8 66.5 64.2 64.2
Tax liabilities 66.5 67.1 71.2 70.6 73.8
Non-current liabilities held for sale and discontinued operations 0.0 0.0 0.0 4.5 4.6
Other liabilities 528.4 526.4 693.0 545.6 316.6
Total liabilities 30 442.0 30 189.1 30 558.1 26 816.6 26 431.5
Shareholders' equity attributable to the shareholders of BPI 2 5 3 3 . 0 2 5 6 0.6 2 7 2 0.9 2 8 2 3 . 6 2 9 3 2.7
Non controlling interests 1.8 1.8 0.0 0.0 0.0
Total Shareholders' equity 2 5 3 4 . 7 2 5 6 2 . 3 2 7 2 0.9 2 8 2 3 . 6 2 9 3 2.7
Total liabilities and Shareholders' equity 32 976.7 32 751.4 33 279.0 29 640.2 29 364.2

Consolidated profitability and efficiency metrics

According to Bank of Portugal Instruction no. 16/2004 with the amendments of Instruction 6/2018

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1) Excluding early‐retirement costs, revaluation of the stake in Viacer and contribution of subsidiaries reclassified to discontinued operations. Figures not adjusted for non‐recurring impacts in BFA and BCI contribution.

2) Excluding early‐retirement costs.

ALTERNATIVE PERFORMANCE MEASURES

In addition to the financial information prepared in accordance with the International Financial Reporting Standards (IFRS), BPI uses a number of indicators in the analysis of the performance and financial position which are classified as Alternative Performance Indicators (APM) in accordance with the guidelines set by the European Securities and Markets Authority or ESMA about the disclosure of Alternative Performance Measures by entities published on 5 October 2015 ( ESMA / 2015/ 1415). These indicators, which were not audited, are considered additional disclosures and in no case replace the financial information prepared in accordance with the IFRS. In addition, the way Banco BPI defined and calculated these indicators may differ from the way similar indicators are computed by other companies and may therefore not be comparable. The following is a list of alternative performance indicators used by BPI, together with a reconciliation between certain management indicators and the consolidated financial statements and their notes prepared in accordance with IFRS.

EARNINGS, EFFICIENCY AND PROFITABILITY INDICATORS

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 and other comprehensive income (reserves).

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, excluding loans to Employees ‐ Deposits average interest rate

Note:

The term "RCL" or "Reclassified captions" identifies income and costs captions that have been reclassified in this earnings release, 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 referring 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.

ALTERNATIVE PERFORMANCE MEASURES

BALANCE SHEET AND FUNDING INDICATORS

On‐balance sheet Customer resources = Deposits + Capitalisation insurance of subsidiaries fully consolidated + Participating units in consolidated mutual funds

Being:

  • Deposits = Demand deposits and other + Term and savings deposits + Accrued interest + Retail bonds (Fixed / variable rate bonds and structured products placed with Customers + Deposits certificates + Subordinated bonds placed with Customers)
  • Capitalisation insurance of subsidiaries fully consolidated (BPI Vida e Pensões sold on Dec.17) = Unit links capitalisation insurance and "Aforro" capitalisation insurance and others (Technical provisions + Guaranteed rate and guaranteed retirement capitalisation insurance)

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.

Assets under management = Mutual funds + Capitalisation insurance + Pension plans

  • 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
  • Capitalisation Insurance = Third‐party capitalisation insurance placed with Customers
  • Pension plans = pension plans under BPI management (includes pension plans of BPI Group)

Notes:

(i) 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. (ii) Following the sale of BPI Vida e Pensões in Dec.17, the capitalisation insurance placed with BPI's Customers are recorded off balance sheet, as "third‐party capitalisation insurance placed with Customers", and pension funds management is excluded from BPI's consolidation perimeter.

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

ASSET QUALITY INDICATORS

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)

NPE ratio = Ratio of non‐performing exposures (NPE) according to EBA criteria (prudential perimeter)

Coverage of NPE by impairments = (Loan impairments + Impairments and provisions for guarantees and commitments) / Non‐performing exposures (NPE)

Coverage of NPE by impairments and associated collateral = (Loan impairments + Impairments and provisions for guarantees and commitments + Collateral associated to credit ) / Non‐performing exposures (NPE)

1)Ratio referring to the last 12 months, except when indicated otherwise.

2)The ratio can be computed for the cumulative period since the beginning of the year or for the quarter, both in annualised terms, the cases in which it will be clearly marked.

ALTERNATIVE PERFORMANCE MEASURES

ASSET QUALITY INDICATORS

Non performing loans ratio (Bank of Spain criteria) =Non performing loans (Bank of Spain criteria) / (Gross customer loans + guarantees)

Non performing loans (Bank of Spain criteria) coverage ratio = (Loans impairments + Impairments and provisions for guarantees and commitments) / Non performing loans (Bank of Spain criteria)

Coverage of non performing loans (Bank of Spain criteria) by impairments and associated collateral = (Loans impairments + Impairments and provisions for guarantees and commitments + Collateral associated to credit) / Non performing loans (Bank of Spain 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

MARKET INDICATORS

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)

Investor Relations

Tel. +351 226 073 337E-mail: [email protected]

Website: www.ir.bpi.pt

Ricardo Araújo (IR Officer)

Tel: +351 226 073 119

E-mail: [email protected]

Banco BPI, S.A. Publicly held company Head Office: Rua Tenente Valadim, no. 284, Porto, Portugal Share capital: € 1 293 063 324.98 Registered in Oporto C.R.C. and corporate body no. 501 214 534

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