Banco Comercial Portugues

Investor Presentation • Feb 14, 2018

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

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

Figures for 2017 not audited

• Highlights
• Group
• Profitability
• Liquidity
• Capital
• Portugal
• International operations

• Conclusions

• Net profit of €186.4 million (€23.9 million in 2016), on the back of improved earnings from the domestic activity. Stable recurring international contribution 1

• NPEs in Portugal, down by €1.8 billion in the year to €6.8 billion at year-end 2017, were clearly lower than the €7.5 billion target. Total coverage, including guarantees, increased to 106% 2
• The performing credit portfolio increased in Portugal in 2017 for the first time in 8 years 3
• Strong business performance, with Customer acquisition standing out. Active Customers for the Group total 5.4 million, an increase in excess of 300,000 Customers from December 31, 2016 4

1 Highlights: improved profitability

• Net earnings of €186.4 million in 2017, a substantial improvement from previous years
• Improved earnings from domestic activity, whose contribution amounted to €39.0 million
• Stable recurring international contribution
• Core net income increased to €1,104 million in 2017, supported by the continued expansion of net interest income: NIM stood at 2.2% in 2017, compared to 1.9% in 2016 and to 1.1% in 2013
• One of the most efficient banks in the Eurozone, with cost to core income of 46% (cost to income of 43%, compared to 73% in 2013)

2 Highlights: improved asset quality

• NPEs in Portugal down to €6.8 billion as at December 31, 2017, showing a strong pace of reduction from 2013 (-€1.5 billion per year, in average)
• €1.8 billion NPE reduction in 2017, exceeding the annual €1 billion reduction target
• The NPE decrease from December 31, 2016 is attributable to a €1.0 billion NPL>90d reduction and to a €0.8 billion reduction of other NPEs
• NPE total coverage* of 106%, broken down as follows:
• coverage by loan-loss reserves of 42%
• coverage by real estate collateral of 45%
• coverage by cash and other financial collateral of 13%
• coverage by expected loss gap of 6%

3 Highlights: credit now growing in Portugal

• The performing portfolio increased in Portugal in 2017 for the first time in 8 years
• Structural change to the portfolio of loans to companies over recent years, with a lower weight of construction and real estate activities and of non-financial holding companies
• Strong credit activity:
• Individuals: more than €2.0 billion in new credit
• Companies: more than €600 million granted under the "Portugal 2020" programme; 17.2% market share in loans to exporting companies

Highlights: strong business performance, especially as long as Customers and service are concerned ⁴

• Highlights
• Group
• Profitability
• Liquidity
• Capital
• Portugal
• International operations
• Conclusions

(million euros)		2016	2017	YoY	Impact on earnings
Net interest income + Commissions		1,874.0	2,058.0	+9.8%	+184.0
Operating costs	€965.7 million excluding impact from revision of collective labour agreement,	-780.0	-954.2	+22.3%	-174.2
Core net income	net of restructuring costs (€185.7 million)	1,094.0	1,103.8	+0.9%	+9.8
Other income*	€126.5 million excluding gains on Visa transaction (€96.2 million)	222.7	139.5	-37.4%	-83.2
Operating net income	€1,034.8 million excluding impact	1,316.7	1,243.3	-5.6%	-73.4
Impairment and provisions	from revision of collective labour agreement, net of restructuring	-1,598.0	-924.8	-42.1%	+673.2
Net income before income tax	costs, and gains on Visa transaction	-281.3	318.5		+599.8
Income taxes, non-controlling interests and disc. operations	305.2	-132.1		-437.3
Net income	23.9	186.4		+162.5

Net interest income boosted by the continued reduction in the cost of deposits and by CoCo repayment

Increase of commissions in international operations stands out, stable in Portugal

Fees and commissions		Consolidated
	2016	2017	YoY
Banking fees and commissions	532.3	546.6	+2.7%
Cards and transfers	144.4	155.5	+7.7%
Loans and guarantees	157.9	158.0	+0.1%
Bancassurance	89.1	94.7	+6.3%
Customer account related	101.9	103.8	+1.9%
Other fees and commissions	39.0	34.5	-11.5%
Market related fees and commissions	111.5	120.1	+7.6%
Securities operations	73.3	77.5	+5.7%
Asset management	38.3	42.6	+11.3%
Total fees and commissions	643.8	666.7	+3.6%

Other income* influenced by higher mandatory contributions and by gains on Visa transaction in 2016

Operating costs

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

Strengthening the balance sheet: cost of risk now trending towards normalisation

Lower delinquency and increased coverage

• Highlights
• Group
• Profitability
• Liquidity
• Capital
• Portugal
• International operations
• Conclusions

Strong business dynamics results in growing Customer funds in Portugal and in international operations

Credit volumes reflect increasing performing portfolio, in spite of continued NPE reduction

Comfortable liquidity position

• Highlights
• Group
• Profitability
• Liquidity
• Capital
• Portugal
• International operations
• Conclusions

Strengthened capital, in line with European peers

Successful subordinated debt issue signals Millennium bcp's return to Tier 2 market

Capital at comfortable levels, strong leverage ratios

Pension fund

Key figures

(Million euros)

	Dec 16	Dec 17
Pension liabilities	3,093	3,050
Pension fund	3,124	3,166
Liabilities' coverage	101%	104%
Fund's profitability	-2.6%	+4.2%
Actuarial differences	(303)	+29

Assumptions

	Dec 16	Dec 17
Discount rate	2.10%	2.10%
	0.25% until 2019	0.25% until 2019
Salary growth rate	0.75% after 2019	0.75% after 2019
	0.00% until 2019	0.00% until 2019
Pensions growth rate	0.50% after 2019	0.50% after 2019
Projected rate of return of fund assets	2.10%	2.10%
Mortality Tables
Men	Tv 88/90	Tv 88/90
Women	Tv 88/90-3 years	Tv 88/90-3 years

• Assumptions of the fund unchanged from December 31, 2016
• Pension liabilities coverage at 104%

• Positive actuarial differences in 2017 (+€29 million), reflecting the fund's performance above the assumptions

• Highlights

• Group
• Profitability
• Liquidity
• Capital
• Portugal
• International operations
• Conclusions

Increased net income

Lower cost of time deposits more than compensates for the decreases of credit volumes and Euribor

• Increase in net interest income compared to 2016, reflecting the impact of the consistent reduction of the cost of time deposits, the repayment of CoCos and the reduction of NPLs, more than compensating for the negative effects of the reduction of Euribor rates and of lower credit volumes, reflecting, to a large extent, the focus on NPE reduction
• The increase of the net interest income from €201.6 million in 3Q17 to €216.0 million in 4Q17 is mainly attributable to the reduction of the cost of funding (retail and wholesale including the impact of TLTRO)

Continued effort to reduce the cost of deposits

Commissions and other income*

Fees and commissions
2016 2017 YoY
Banking fees and commissions 397.0 392.2 -1.2%
Cards and transfers 100.2 104.9 +4.7%
Loans and guarantees 107.6 104.6 -2.8%
Bancassurance 76.7 78.1 +1.8%
Customer account related 90.5 92.5 +2.2%
Other fees and commissions 22.0 12.1 -45.2%
Market related fees and commissions 59.6 63.4 +6.4%
Securities operations 53.5 56.7 +6.0%
Asset management 6.1 6.6 +9.7%
Total fees and commissions 456.6 455.5 -0.2%

• Stable commissions in spite of the booking of investment banking operations in 2016 (under "other commissions")
• Other income* was influenced by higher mandatory contributions and by gains on the Visa transaction in 2016

Operating costs

Lower NPL>90d, with reinforced coverage

Lower NPEs

	Dec 17	Dec 17
	vs.Dec 16	vs.Sep 17
Opening balance	8,538	7,168
+/- Net entries	-613	-218
- Write-offs	-500	-99
- Sales	-670	-97
Ending balance	6,754	6,754

• NPEs in Portugal down by €1.8 billion, from €8.5 billion as at December 30, 2016 to €6.8 billion as at the same date of 2017
• This decrease results from net exits of €613 million, sales of €670 million and write-offs of €500 million
• The decrease in NPE from December 30, 2016 is attributable to a €1.0 billion reduction of NPL>90d and to a €0.9 decrease of other NPE
• Significant NPE decrease during the 4th quarter, to €6.8 billion at end-December from €7.2 billion at end-September (-€0.4 billion)

Reinforced NPE coverage

Foreclosed assets and corporate restructuring funds

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

• Highlights
• Group
• Profitability
• Liquidity
• Capital
• Portugal
• International operations
• Conclusions

Contribution from international operations

	2016	2017	Δ % local currency	Δ % euros	ROE
Poland	164.9	160.2	-2.9%	-0.0%	9.3%
Mozambique	69.1	85.1	+23.2%	+19.5%	24.2%
Angola*
Before IAS 29 impact	30.3	28.5
IAS 29 impact	--	-28.4
Total Angola including IAS 29 impact	30.3	0.1
Other	13.2	9.0	-31.4%	-31.9%
Net income	277.4	254.5	-8.3%	-8.0%
Non-controlling interests Poland and Mozambique	-105.3	-108.3
Exchange rate effect	0.7	--
Contribution from international operations	172.8	146.2		-15.4%
On a comparable basis:
Contribution international op. excluding IAS 29 (Angola)	172.8	174.6		+1.0%

Strong performance of net earnings adjusted by Visa transaction in 2016

(Million euros)

FX effect excluded. €/Zloty constant at December 2017 levels: Income Statement 4.25142917; Balance Sheet 4.1756. | *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 (€9.5 million in 2017 and €11.9 million in 2016) is presented in net trading income.

Increased net interest income and commissions

(Million euros)

*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 (€9.5 million in 2017 and €11.9 million in 2016) is presented in net trading income. | FX effect excluded. €/Zloty constant at December 2017 levels: Income Statement 4.25142917; Balance Sheet 4.1756.

Credit quality

Growing volumes

Growing net earnings

Growing income partially offset by the increase in operating costs

Credit quality

Growing deposits and lower credit

• Highlights
• Group
• Profitability
• Liquidity
• Capital
• Portugal
• International operations
• Conclusions

			Consolidated
	2016	2017	2018
CT1 / CET11	Phased-in: 12.8%2 Fully implemented: 11.1%2	Phased-in: 13.2% Fully implemented: 11.9%	≈11%
Loans to Deposits	98%	93%	<100%
Cost–Income	37.2% (48.5% excluding non-usual items)	43.4%	<43%
Cost-Core Income3	41.6% (51.5% excluding non-usual items)	46.4%	<50%
Cost of risk	216 bp	122 bp	<75 bp
RoE4	0.5%	4.4%	≈10%
Cumulative NPE reduction (PT) - Target (€ billion) - Actual (€ billion)	-1.0 -1.2	-2.0 -3.0	-3.0

1 Estimates including earnings for the year. | 2 Estimates as at January 1, 2017, adjusted by the impact of the capital increase and of CoCo repayment, both completed in February 2017. | 3 Core income = net interest income + net fees and commissions income. | 4 Based on a fully implemented CET1 of 11%.

Millennium bcp: a bank ready for the future

Profitability and balance-sheet indicators in line with targets for 2017/2018

• Largest private sector bank based in Portugal with a balanced shareholder structure and a sound balance sheet (phased-in CET1 ratio of 13.2%, loans to deposits of 93%) 1
• Successful implementation of the NPE reduction plan in Portugal: €1.8 billion down in 2017 to €6.8 billion, exceeding the annual reduction target to <€7.5 billion 2
• Profitable operation with a recurring capacity to generate operating results in excess of €1.2 billion per year; positive and growing contribution from domestic activity 3
• One of the most efficient banks in the Eurozone, with a cost to core income ratio of 46% (Eurozone: 76%) and a cost to income ratio of 44% (Eurozone: 64%) 4
• Well-positioned in a rapidly changing landscape, following the completion of the restructuring plan successfully implemented over the last years: 6.3% increase in new active Customers to 5.4 million,16.0% increase in active digital Customers to 2.5 million 5

Appendix

Sovereign debt portfolio

• The sovereign debt portfolio totalled €7.8 billion, €2.3 billion of which maturing within one year
• The Portuguese sovereign debt portfolio totalled €3.6 billion, whereas the Polish and Mozambican portfolios amounted to €3.2 billion and to €0.5 billion, respectively; "other" includes US sovereign debt of €0.5 billion

Sovereign debt portfolio

	Portugal	Poland	Mozambique	Other	Total
Trading book*	152	81	0	1	234
≤ 1 year	114	6	0	0	120
> 1 year and ≤ 2 years	0	34	0	0	34
> 2 years and ≤ 5 years	37	27	0	0	64
> 5 years and ≤ 8 years	1	8	0	0	10
> 8 years and ≤ 10 years	0	6	0	0	6
> 10 years	0	0	0	1	1
Banking book**	3,483	3,079	491	552	7,606
≤ 1 year	585	699	299	548	2,131
> 1 year and ≤ 2 years	228	852	64	0	1,144
> 2 years and ≤ 5 years	889	1,521	22	1	2,432
> 5 years and ≤ 8 years	1,723	1	0	2	1,726
> 8 years and ≤ 10 years	56	6	37	1	100
> 10 years	2	0	70	0	73
Total	3,636	3,160	491	553	7,841
≤ 1 year	699	705	299	548	2,251
> 1 year and ≤ 2 years	228	886	64	0	1,178
> 2 years and ≤ 5 years	925	1,548	22	1	2,496
> 5 years and ≤ 8 years	1,725	9	0	2	1,736
> 8 years and ≤ 10 years	56	12	37	1	106
> 10 years	2	0	70	1	73

Diversified and collaterised portfolio

• Mortgage accounted for 46% of the loan portfolio, with low delinquency levels and an average LTV of 65%
• 83% 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)	2016	2017	YoY	Impact on earnings
Net interest income	1,230.1	1,391.3	13.1%	+161.1
Net fees and commissions	643.8	666.7	3.6%	+22.9
Other income*	222.7	139.5	-37.4%	-83.2
Banking income	2,096.7	2,197.5	4.8%	+100.8
Staff costs	-356.6	-526.6	47.7%	-170.0
Other administrative costs and depreciation	-423.4	-427.6	1.0%	-4.2
Operating costs	-780.0	-954.2	22.3%	-174.2
Operating net income (before impairment and provisions)	1,316.7	1,243.3	-5.6%	-73.4
Of which: core net income**	1,094.0	1,103.8	0.9%	+9.8
Loans impairment (net of recoveries)	-1,116.9	-623.7	-44.2%	+493.2
Other impairment and provisions	-481.1	-301.1	-37.4%	+180.0
Impairment and provisions	-1,598.0	-924.8	-42.1%	+673.2
Net income before income tax	-281.3	318.5		+599.8
Income taxes	381.9	-30.2		-412.0
Non-controlling interests	-121.9	-103.2		+18.7
Net income from discontinued or to be discontinued operations	45.2	1.2		-44.0
Net income	23.9	186.4		+162.5

Consolidated balance sheet

(Million euros)

	31 December	31 December		31 December	31 December
	2017	2016		2017	2016
Assets			Liabilities
Cash and deposits at central banks	2,167.9	1,573.9	Resources from credit institutions	7,487.4	9,938.4
Loans and advances to credit institutions			Resources from customers	51,187.8	48,797.6
Repayable on demand	295.5	448.2	Debt securities issued	3,007.8	3,512.8
Other loans and advances	1,065.6	1,056.7	Financial liabilities held for trading	399.1	547.6
Loans and advances to customers	47,633.5	48,017.6	Hedging derivatives	177.3	384.0
Financial assets held for trading	897.7	1,048.8	Provisions	324.2	321.1
Other financial assets held for trading			Subordinated debt	1,169.1	1,544.6
at fair value through profit or loss	142.3	146.7	Current tax liabilities	12.6	35.4
Financial assets available for sale	11,471.8	10,596.3	Deferred tax liabilities	6.0	2.7
Assets with repurchase agreement	-	20.5	Other liabilities	988.5	915.5
Hedging derivatives	234.3	57.0	Total Liabilities	64,759.7	65,999.6
Financial assets held to maturity	411.8	511.2
Investments in associated companies	571.4	598.9	Equity
Non current assets held for sale	2,164.6	2,250.2	Share capital	5,600.7	4,268.8
Investment property	12.4	12.7	Treasury shares	(0.3)	(2.9)
Other tangible assets	490.4	473.9	Share premium	16.5	16.5
Goodwill and intangible assets	164.4	162.1	Preference shares	59.9	59.9
Current tax assets	25.9	17.5	Other capital instruments	2.9	2.9
Deferred tax assets	3,137.8	3,184.9	Legal and statutory reserves	252.8	245.9
Other assets	1,052.0	1,087.8	Fair value reserves	82.1	(130.6)
	71,939.5	71,264.8	Reserves and retained earnings	(120.2)	(102.3)
			Net income for the period attrib. to Shareholders	186.4	23.9
			Total equity attrib. to Shareholders of the Bank	6,080.8	4,382.1
			Non-controlling interests	1,098.9	883.1

71,939.5 71,264.8

Total Equity 7,179.7 5,265.2

	4Q 16	1Q 17	2Q 17	3Q 17	4Q 17
Net interest income	323.1	332.3	346.2	344.7	368.1
Dividends from equity instruments	0.8	0.1	1.5	0.1	0.1
Net fees and commission income	162.7	160.8	169.5	164.3	172.1
Other operating income	-9.5	-15.2	-71.4	-10.4	-5.2
Net trading income	27.9	36.4	53.5	25.1	33.4
Equity accounted earnings	19.9	19.6	15.5	21.7	34.8
Banking income	524.8	534.0	514.8	545.5	603.2
Staff costs	-53.8	136.9	104.6	138.6	146.5
Other administrative costs	98.6	88.7	94.0	92.2	99.3
Depreciation	12.8	12.7	13.4	13.6	13.9
Operating costs	57.6	238.3	211.9	244.4	259.6
Operating net income bef. imp.	467.2	295.8	302.9	301.1	343.6
Loans impairment (net of recoveries)	246.7	148.9	156.1	153.6	165.1
Other impairm. and provisions	238.2	54.3	56.0	59.6	131.2
Net income before income tax	-17.8	92.5	90.8	87.9	47.3
Income tax	-313.7	19.1	24.3	19.7	-33.0
Non-controlling interests	20.8	23.3	27.9	24.8	27.1
Net income (before disc. oper.)	275.0	50.1	38.6	43.4	53.1
Net income arising from discont. operations	0.0	0.0	1.3	0.0	0.0
Net income	275.0	50.1	39.8	43.4	53.1

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 D ec 16 D ec 17 Δ % D ec 16 D ec 17 Δ % D ec 16 D ec 17 Δ % D ec 16 D ec 17 Δ % D ec 16 D ec 17 Δ % D ec 16 D ec 17 Δ % Interest income 1,910 1,914 0.2% 1,172 1,054 -10.0% 738 860 16.5% 520 564 8.4% 211 289 36.8% 6 6 5.2% Interest expense 680 523 -23.1% 436 247 -43.4% 244 276 13.3% 176 165 -6.3% 72 116 61.8% -4 -5 -18.9% N et interest inco me 1,230 1,391 13.1% 736 808 9.7% 494 583 18.1% 344 399 16.0% 140 173 24.0% 10 11 10.6% Dividends from equity instruments 8 2 -77.3% 7 1 -84.6% 0 1 37.5% 0 1 40.8% 0 0 -27.3% 0 0 -- Intermediatio n margin 1,238 1,393 12.5% 743 809 8.8% 494 584 18.1% 345 400 16.0% 140 173 23.9% 10 11 10.6% Net fees and commission income 644 667 3.6% 457 456 -0.2% 187 211 12.8% 133 156 17.5% 31 30 -0.7% 24 25 3.6% Other operating income -106 -102 3.4% -42 -50 -20.1% -64 -52 18.7% -72 -61 15.0% 9 10 11.5% -1 0 25.2% B asic inco me 1,776 1,957 10.2% 1,158 1,214 4.8% 618 743 20.3% 405 494 22.0% 179 213 19.1% 3 3 3 5 6.2% Net trading income 240 148 -38.3% 100 85 -14.9% 140 63 -55.0% 112 51 -54.3% 25 11 -57.1% 3 1 -64.3% Equity accounted earnings 81 92 13.8% 68 52 -23.3% 13 40 >100% 0 0 100.0% 0 0 -- 13 40 >100% B anking inco me 2,097 2,197 4.8% 1,326 1,352 1.9% 771 846 9.8% 516 545 5.6% 204 224 9.7% 5 0 7 6 53.3% Staff costs 357 527 47.7% 176 332 88.7% 181 194 7.6% 128 140 9.9% 36 37 3.1% 17 17 0.0% Other administrative costs 374 374 0.1% 233 222 -4.6% 141 152 7.9% 98 105 7.3% 37 40 9.4% 6 6 7.2% Depreciation 50 54 7.5% 29 33 12.7% 20 20 0.1% 13 12 -0.6% 8 8 1.8% 0 0 -22.6% Operating co sts 780 954 22.3% 438 588 34.1% 342 367 7.3% 238 258 8.3% 80 85 5.9% 23 23 1.7% Operating net inco me bef. imp. 1,317 1,243 -5.6% 888 764 -14.0% 429 479 11.8% 278 287 3.3% 124 139 12.2% 2 7 5 3 97.6% Loans impairment (net of recoveries) 1,117 624 -44.2% 1,045 533 -49.0% 72 91 26.4% 50 61 22.1% 24 28 18.1% -2 2 >100% Other impairm. and provisions 481 301 -37.4% 471 254 -46.1% 10 47 >100% 10 9 -15.5% 0 -1 <-100% 0 40 >100% N et inco me befo re inco me tax -281 318 >100% -628 -23 96.4% 347 341 -1.5% 218 218 -0.1% 100 112 12.0% 2 8 11 -60.3% Income tax -382 30 >100% -470 -56 88.1% 88 86 -1.8% 58 57 -0.3% 28 27 -6.0% 2 2 16.2% Non-controlling interests 122 103 -15.4% -1 -6 <-100% 123 109 -11.3% 0 0 -- 1 1 -8.8% 122 108 -11.3% N et inco me (befo re disc. o per.) -21 185 >100% -157 3 9 >100% 136 146 7.5% 160 160 -0.0% 7 1 8 5 19.5% -95 -99 -3.9% Net income arising from discont. operations 45 1 -97.3% 37 0 -100.0% 37 0 -100.0% N et inco me 2 4 186 >100% 173 146 -15.4% -59 -99 -69.0%

Glossary (1/2)

Balance sheet total customer funds - debt securities and customer deposits.

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

Commercial gap – total loans to customers net of BS impairments accumulated for risk of credit minus on-balance sheet total customer funds.

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

Core net income - corresponding to net interest income plus net fees and commission income deducted from operating costs.

Cost of risk, gross (expressed in bp) - ratio of impairment charges accounted in the period to loans to customers (gross).

Cost of risk, net (expressed in bp) - ratio of impairment charges (net of recoveries) accounted in the period to loans to customers (gross).

Cost to core income - operating costs divided by core income (net interest income and net fees and commission income).

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

Coverage of credit at risk by balance sheet impairments – total BS impairments accumulated for risks of credit divided by credit at risk (gross).

Coverage of credit at risk by balance sheet impairments and real and financial guarantees – total BS impairments accumulated for risks of credit plus real and financial guarantees divided by credit at risk (gross).

Coverage of non-performing loans by balance sheet impairments – total BS impairments accumulated for risks of credit divided by NPL.

Credit at risk – definition broader than the non performing loans which includes also restructured loans whose changes from initial terms have resulted in the bank being in a higher risk position than previously; restructured loans which have resulted in the bank becoming in a lower risk position (e.g. reinforced collateral) are not included in credit at risk.

Credit at risk (net) – credit at risk deducted from BS impairments accumulated for risks of credit.

Credit at risk (net) ratio – credit at risk (net) divided by loans to customers deducted from total BS impairments accumulated for risks of credit.

Credit at risk ratio – credit at risk divided by loans to customers (gross).

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

Dividends from equity instruments - dividends received from investments in financial assets held for trading and available for sale.

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.

Loan to Deposits ratio (LTD) – Total loans to customers net of accumulated BS impairments for risks of credit divided by total customer deposits.

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

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, equity accounted earnings and other net operating income.

Net trading income - net gains/losses arising from trading and hedging activities, net gains/losses arising from available for sale financial assets, net gains/losses arising from financial assets held to maturity.

Non-performing exposures (NPE, according to EBA definition) – Non-performing loans and advances to customers more than 90 days past-due or unlikely to be paid without collateral realisation, even if they recognised as defaulted or impaired. Considers also all the exposures if the on-BS 90 days past due reaches 20% of the outstanding amount of total on-BS exposure of the debtor, even if no pull effect is used for default or impairment classification. Includes also the loans in quarantine period over which the debtor has to prove its ability to meet the restructured conditions, even if forbearance has led to the exit form default or impairments classes.

Non-performing loans (NPL) – Overdue loans more than 90 days including the non-overdue remaining principal of loans, i.e. portion in arrears, plus non-overdue remaining principal.

Non-performing loans ratio – Loans more than 90 days overdue and doubtful loans reclassified as overdue for provisioning purposes divided by total loans (gross).

Glossary (2/2)

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

Other impairment and provisions - other financial assets impairment, other assets impairment, in particular provision charges related to assets received as payment in kind not fully covered by collateral, goodwill impairment and other provisions.

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

Other net operating income - other operating income, other net income from non-banking activities and gains from the sale of subsidiaries and other assets.

Overdue and doubtful loans - loans overdue by more than 90 days and the doubtful loans reclassified as overdue loans for provisioning purposes.

Overdue and doubtful loans (net) - overdue and doubtful loans deducted from BS impairments accumulated for risks of credit.

Overdue and doubtful loans (net) ratio - overdue loans and doubtful loans (net) divided by loans to customers deducted from total BS impairments accumulated for risks of credit.

Overdue and doubtful loans coverage by BS impairments - BS impairments accumulated for risks of credit divided by overdue loans and doubtful loans (gross).

Overdue and doubtful loans ratio - overdue and doubtful loans divided by loans to customers (gross).

Overdue loans - loans in arrears, not including the non-overdue remaining principal.

Overdue loans by more than 90 days coverage ratio - total BS impairments accumulated for risk of credit divided by total amount of loans overdue with installments of capital and interest overdue more than 90 days.

Overdue loans coverage ratio – total BS impairments accumulated for risks of credit divided by total amount of overdue loans.

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

Return on average assets (ROA) – Net income (before minority interests) divided by the average total assets.

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.

Return on equity (ROE) – Net income (after minority interests) divided by the average attributable equity, deducted from preference shares and other capital instruments.

Securities portfolio - financial assets held for trading, financial assets available for sale, assets with repurchase agreement, financial assets held to maturity and other financial assets held for trading at fair value through net income.

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, assets under management and capitalisation products.