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Banco Comercial Portugues

Investor Presentation Oct 19, 2017

1913_iss_2017-10-19_e5adac4d-782a-4522-8f8c-d0af44730857.pdf

Investor Presentation

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Banco BPI

Consolidated resultsJanuary to September 2017

19 October 2017

Note on captions' reclassification

  • Certain captions of income and costs were reclassified in this results' presentation, and repositioned in the Profit an Loss account in accordance with the format used by CaixaBank (BPI's consolidating entity). The underlying accounting criteria were not affected by the change in the format adopted.
  • The presentation of the loans and resources' portfolios was also modified, with the same objective of approaching the formats used by CaixaBank; however, the segmentation criteria have not been changed.
  • All the cases of the above mentioned nature are highlighted throughout the presentation and, where appropriate, an annexe is included with information that allows to reconcile the information currently presented with the one previously presented.

Acronyms and designations adopted

Units, conventional signs and abbreviations

d
t
y
da
Ye
to‐
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Ye
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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 de Valores Mobiliários (CMVM) (Autoridade Portuguesa do Mercado de 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

io
' r
la
i
f
ica
io
No
te
t
t
o
n
ca
p
ns
ec
ss
n
3
la
isc
im
D
er
4

Results in the nine months ending 30 September 2017

h
l
h
1.
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6
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k
5.
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9
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ne
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p.
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v
e
y,
y
:
,

Note: yoy changes calculated in relation to September 2016 proforma.

  • 1) Costs from voluntary terminations and early retirements.
  • 2) In annualised terms.
  • 3) Recoveries from loans previously written off

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

Results in the nine months ending 30 September 2017

  1. Highlights

2. Commercial activity

    1. Results
    1. Balance Sheet
    1. Closing remarks
  • Annexes

Total Customer resources increase 1 800 M.€ ytd

Customer resources


In
M
1
7
t‐
se
de
6
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z‐
Y
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t
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oq
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7
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1.
0.
%
5
1
De
i
ts
p
os
2
0
1
4
1
1
9
2
4
7
2.
1
%
0.
%
5
2
l
d o
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Ca
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io
in
ta
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p
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su
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r
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de
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8
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la
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%

1) Includes bonds placed with customers of 94 M.€ in Dec.16 and 51 M.€ in Sep.17.

2) BPI Alternative Fund ceased to be consolidated from March 2017 onwards and started being consolidated off balance sheet. In Dec. 16 the caption "capitalisation insurance and others" included 250 M.€ relative to that fund. Adjusted by the deconsolidation of the fund, the caption "capitalisation insurance and others" increased by 1.9% ytd and "Mutual Funds" increase by 8.1% ytd. 3) Includes BPI Group employee pension funds of 1 397 in Dec.16 and 1 574 in Sep.17.

ke
ha
M
t s
ar
re
s
l.
3
0
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1
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l
de
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ta
ts
p
os
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u
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%
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's
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4
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l
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e
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4.
8
la
io
Pe
ns
n p
ns
1
3.
8
%

Growth drivers

4) Does not include the effect of the securitisation operations (BPI calculation).

5) Excludes PPR's in the form of mutual funds. Including PPR's in the form of mutual funds, BPI Gestão de Activos market share in mutual funds is 28.7%.

6) PPR's in the form of mutual funds and capitalisation insurance.

7) Excludes PPR in the form of capitalisation insurance.

8) In 30 June 2017

Sources: Banco BPI, Bank of Portugal, APS – Ass. Portuguesa de Seguradores (Portuguese Association of Insurers), APFIPP – Ass. Portuguesa de Fundos de Investimento, Pensões e Patrimónios (Portuguese Association of Mutual Funds, Pensions and Assets), IGCP (Portuguese Treasury and Debt Management Agency), ASF ‐ Autoridade de Supervisão de Seguros e Fundos de Pensões (Supervision Authority of Insurance and Pension Funds).

Total Customer Resources increased by 1.8 Bi.€ ytd:

  • Deposits grew 417 M.€ (+2.1%)
  • Strong growth in mutual funds +696 M.€, +13.3% (+8.1% adjusted by the deconsolidation of BPIAlternative Fund) and pension funds increased 272 M.€ ,+11.3%
  • Public offerings placed with Customers increased 591 M.€ (almost entirely OTRV). In the 3rd quarter, BPI placed with Customers 436 M.€ of OTRV (Floating Rate Treasury Bonds).

Note: the format used for presenting customer resources after the 2nd quarter results and so also in the current document is different from the one used in previous quarters. A reconciliation between the two formats is included in the annex.

BPI financing to companies in Portugal increases 5% (ytd)

Loans to customers by segments

fo
l
Gr
io,
in
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os
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(
)
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%
+
he
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a
1
1
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9
1
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8.
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1) Debt securities portfolio, mainly from large companies.

2) Large and medium‐sized companies and small business in Portugal. Excludes project finance and Madrid branch loan portfolio.

Growth trends are maintained in the 3rd quarter

  • Growth in the segments of corporates and small business.
  • Stabilisation of the mortgage loan portfolio and growth in consumer loans.
  • After deleveraging 6 Bi.€ between 2010 and 2015, total loan portfolio stabilised and shows signs of selective growth in 2017.

Note: the format used for presenting loans to customers after the 2nd quarter results and so also in the current document is different from the one used in previous quarters. A reconciliation between the two formats is included in the annex.

1 109

Mortgage loan origination increases by 19% yoy

Mortgage loans

  • Origination of mortgage loans increases by 19% yoy to 769 M.€ (accumulated in Sep.17).
  • Origination exceeds amortisations in the 3rd quarter and signals the inversion of the portfolio's downward trend (mortgage loan portfolio grows 0.1% qoq).
  • Consistent increase in the loan portfolio market share (11.1% as of July 2017) in a market segment that is still shrinking.

Corporate and small business loans in Portugal increase by 320 M€. Increase in BPI market share

Corporate and small business loans

  • Growth of 4.8% (ytd) in loans to Large and Medium‐sized companies in Portugal (excludes project finance and Madrid branch loan portfolio).
  • Growth of 5.4% (ytd) in loans to small business.
  • Gradual increase in market share (8.2% in July 2017).

Results in the nine months ending 30 September 2017

    1. Highlights
    1. Commercial activity

3. Results

    1. Balance Sheet
    1. Closing remarks

Annexes

Recurring net income of 312 M.€ of which 152 M.€ in Portugal (Jan.‐Sep. 2017).

  • Recurring consolidated net income increases to 312 M.€.
  • Net income in Portugal increases 96 M.€ and contribution from BFA and BCI increases 33 M.€
  • Consolidated net income "as reported" of 23 M.€ is penalised by the impact of BFA deconsolidation (‐212 M.€1)) and costs from early retirements and voluntary terminations (‐77 M.€1)).
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2) The average capital considered in the calculation of ROTE excludes the average balance of intangible assets (average balance of last 12 months until Sep.17: 26 M.€.) and the fair value reserve (after deferred taxes) related to the financial assets available for sale portfolio (average balance of last 12 months until Sep.17: 19 M.€.)

  • ROTE, excluding contribution from stakes in African banks:
  • As reported of 8.4% at Sep.17
  • Recurring of 12.7% at Sep.17.

Net income of 65 M.€ in Portugal in the 3rd quarter

1)In the 2nd quarter, the net income from the activity in Portugal was affected by the accounting of the annual contributions to the national and the European resolution funds (‐15.2 M. €).

  • Recurring net income of 312 M.€ from Jan. to Sep.17, of which 152 M.€ from the activity in Portugal
  • Consolidated net income of 124 M.€ in the third quarter of 2017, of which 65 M.€ in Portugal
  • Increase of 129 M.€ in consolidated net income is mainly explained by the improvement in net income from the activity in Portugal, which increased by 96 M.€ yoy.

Increase of 71% of recurring consolidated net income to 312 M.€

Consolidated Income Statement

PRESENTATION REORGANISED ACCORDING TO THE FORMAT USED BY CAIXABANK

Captions reclassified (RCL) 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. The annex presents a reconciliation of this income statement with the one presented in previous earnings presentation.

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Increase of recurring net income by +129 M.€

Activity in Portugal

  • Recurring costs decrease 7.6% yoy (‐29 M.€);
  • Total impairments decrease from 76 M.€ in Sep.16 to 18 M.€ in Sep.17;
  • Recoveries from loans previously written off increased from 11 M.€ in Sep.16 to 26 M.€ in Sep.17 (+16 M.€)
  • Commissions increase 8.8% yoy (+17 M.€)

Stakes in African banks (+33 M.€ yoy)

Increase in BFA contribution to consolidated results from 122 M.€ to 154 M.€ (after taxes).

1)Includes:

  • Impact of the sale of 2% of BFA capital and deconsolidation negative by 212 M.€ (176 M.€ recorded in Net Operating Income and 36 M.€ in taxes).
  • Costs from terminations and voluntary early retirements of 106 M.€ before taxes and 77 M.€ after taxes.
  • 2) The designation "proforma" reflects the restatement of the contribution of BFA to consolidated results according to IFRS 5 standards, that is recorded in net income from discontinued operations.

Financial margin increases 2.2% qoq

Financial margin (narrow sense) at Sep.17 (accumulated) increases 1.4% (yoy)

Decrease in accumulated financial margin by 5 M.€ reflects the cost of 9 M.€ from the subordinated debt issued in Mar. 2017

Trends in margin evolution:

  • Reduction in the average cost of term deposits to 0.05% in 3Q17
  • Loan portfolio in Portugal shows signs of growth trend to resume
  • Reduction in the spreads of corporate loans
  • Minimal contribution from the securities portfolio
  • Cost of 9 M.€ until Sep.17 from the subordinated Tier II debt issued on 24 Mar.17 (remuneration Euribor 6M + 5.74%)

Intermediation margin grows slightly to 175 basis points

New time deposits with an average remuneration of 2 bp in September 2017

Slight decrease in the loan spread offset by a slight decrease in the cost of funding in the 3rd quarter

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

Commissions increased by 8.8% yoy

Commissions

Commissions by business area

In
M
Se
1
7
p
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1
6
p
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3
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oq
k
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1)
d
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1
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4 2
%
7.

1)Includes unit links gross margin.

2) BPI Alternative Fund ceased to be consolidated from March 2017 onwards. In the consolidation of that fund, net commissions paid by the BPI Alternative Fund of 5.4 M.€ from Jan. to Sep.16 and 2.2 M.€ in the first quarter 17 were recorded. Taking into account the deconsolidation, the year‐on‐year change (yoy) in asset management commissions, on a comparable basis, was 18.7%.

  • Net commissions increased 8.8% in Sep.17 (vs. Sep.16) and 7.2% in the 3rd quarter (qoq).
  • Banking commissions increased 6.4% yoy and 7.9% in the 3rd quarter (qoq).
  • Asset management commissions show strong growth: + 18.7% yoy (adjusted by the deconsolidation of BPI Alternative Fund) and 12.1 % qoq.

Overhead costs decreased 7.6% (yoy, excluding non‐recurring items)

  • Overhead costs excluding costs from voluntary terminations and early retirements decreased by 29 M.€ (‐7.6%) yoy.
  • Personnel costs (excluding non‐recurring items) decreased by 18 M.€ (‐8.2%) yoy.

1) Additionally, at Sep.17, BPI had 39 investment centers and 35 corporate centers in Portugal, thus totalling 508 business units. 2) Calculated using 2015 costs and revenue proforma for the restatement of BFA's contribution to the consolidated result in accordance with IFRS 5.

Synergies target of 120 M.€ per year from 2019 onwards

  • c.103 M.€ of synergies of costs and revenues from initiatives completed or under way.
  • Target of 120 M.€ of synergies reiterated.
  • Restructuring costs should be significantly lower than the 250 M.€initially announced.

  • The bulk of the staff restructuring has been met with the reduction of c. 900 people coming from the departures occurred at 2016 year‐end and as a result of the voluntary terminations and early retirements programme launched in 2017.

  • Initiatives under way to generate c. 23 M.€ of cost synergies.
  • Identified synergies of revenues of c. 25 M.€.

Programme of voluntary terminations and early retirements

  • Agreement for the departure of 617 employees representing 11% of total staff
  • 316 people left the bank until 30 September; expected departure of 228 until end of 2017 and 73 in 2018.
  • Cost of 106 M.€fully recognised in the 1st half 2017
  • Estimated annual savings of 36 M.€ from 2019 onwards

Employee pension liabilities covered at 101%

Pension fund return (2017, ytd) 8.8%

M.
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1)In Dec. 16 includes 75.5 M.€ of contributions transferred to the pension funds in the beginning of 2017. 2)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.

EMPLOYEE PENSION LIABILITIES, M.€ ACTUARIAL DEVIATIONS IN THE PERIOD3), M.€

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Pension fund return of 8.8% ytd with a positive impact of 98 M.€ in actuarial deviations.

BPI adopted in June 2017 a more conservative mortality table for men (TV 88/90).

Amount of liabilities already includes the increase from the programme of early retirements and voluntary terminations of 2017.

Loan impairments of 21 M.€ and recoveries of 26 M.€ (Jan.‐Sep. 2017)

Cost of credit risk1)

COST OF CREDIT RISK

(Impairments after deducting recoveries from loans previously written off)

20
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20
13
20
14
20
15
20
16
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Note: amounts from Dec.12 to Dec.15 relate to the domestic activity.

(Impairments after deducting recoveries from loans previously written off)

1Q
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2Q
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1Q
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t 1
2 m
t
on
0.
3
2
%
0.
2
4
%
0.
1
6
%
0.
0
9
%
0.
0
1
%
0.
0
1
%
0.
0
6
%

Impairments from Jan.‐Sep.17 amounted to 21 M.€, which corresponds to 0.12% of the loan portfolio in annualised terms.

Loan recoveries previously written off amounted to 26 M.€ in the same period, of which 14.2 M.€ (recorded in the third quarter) relate to a single recovery situation.

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

Results in the nine months ending 30 September 2017

    1. Highlights
    1. Commercial activity
    1. Results

4. Balance Sheet

  1. Closing remarks

Annexes

Credit at risk at low levels and high impairments coverage

Credit at risk (Bank of Portugal rules)

Credit at risk (Bank of Portugal rules)

  • Credit at risk ratio continues to decline, standing at 3.3% in Sep.17. This ratio improved significantly vis‐à‐vis the maximum recorded at the end of 2014 (5.0%).
  • Impairments coverage of credit at risk of 84%1).
  • Impairments coverage of credit at risk of 151%, including collateral.

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

Non performing loans (CaixaBank definition)

Non‐performing exposures ‐ NPE (EBA criteria2))

3
0
Se
1
7
p.
"N
fo
"
(
)
in
N
P
E
on
‐p
er
rm
g
ex
p
os
ur
es
2

1
5
4
M
N
P
E
io
t
ra
5.
5
%
1)
io
Co
t
ve
ra
g
e
ra
%
4
2

Non performing loans ratio (CaixaBank definition)

Non performing loans ratio of 5.5%; impairments coverage of 48%1) and of 114% by impairments including collateral

NPE ratio (EBA criteria)

NPE ratio of 5.5%; impairments coverage of 42%1) and of 114% by impairments including collateral

Foreclosed properties at very low levels in BPI

Sale of 389 properties in the first nine months of 2017 for 48.9 M.€. Positive impact in profits before taxes of 9.3 M.€.

Balanced funding structure and comfortable liquidity position

  • Loan to Deposit ratio of 105%.
  • 2.0 Bi.€ of funds obtained with the ECB (TLTRO). BPI still has € 8.8 billion of high quality liquid assets and assets eligible as collateral for additional funding from the ECB.
  • Portfolio of financial assets available for sale of 3.7 Bi.€, of which 2.9 Bi.€ of short term public debt and 0.5 Bi.€ of medium and long term public debt with a residual maturity of 1.6 years.
  • Recourse to wholesale debt market is small (3% of assets).

1) High Quality Liquid Asset.

M
k
Bo
o
lue
va
(
)
M
/
ins
Ga
(
)
los
se
s
i
du
l
Re
s
a
i
tu
ty
m
a
r
,
y
ea
rs
ho
b
l
S
ic
t‐
te
r
rm
p
u
3)
de
b
t
2
8
6
4
1 0.
5
4)
b
l
de
b
M
L
T
ic
t
p
u
5
1
7
1 1.
6
i
Eq
ty
te
u
co
rp
or
a
,
bo
ds
d o
he
t
n
a
n
r
3
2
5
2
5
l
To
ta
3
7
3
2
2
7
)
(
),
(
) a
(
).
3
l
92
%
ly
%
d S
in
3.9
%
Po
rtu
Ita
4.5
ga
n
pa

4) Portugal (64%), Italy (36%).

Common Equity Tier 1 ratio (fully loaded)

Evolution of CET1 fully loaded ratio

  • Phasing in capital ratios: CET1 of 12.5% and total capital of 13.9%.
  • BPI complies with minimum SREP requirements of CET1, T1 and total ratio.
  • Fully loaded capital ratios: CET1 of 11.5% and total capital of 13.3%.
  • Leverage ratio of 7.0% phase‐in and 6.3% fully loaded.

2) Excluding DTA and equity risk class.

3) Includes BFA contribution (equity accounted) to consolidated net profit and other.

Evolution of the total capital fully loaded ratio

Leverage ratio 7.0% 6.3%

1) Excluding impact from the sale of 2% of BFA capital and deconsolidation.

BPI with investment grade long‐term ratings from two agencies

d A
… A
A‐,
AA
AA
AA
+ a
n
,
d A
… A
a3,
Aa
2,
Aa
1 a
n
aa
d A
… A
A‐,
AA
AA
AA
+ a
n
,
e
d
A
+
A
1
A
+
(
h
h
)
A
i
g
a
r
G
A 2
A
ds
B
P
I
M
Bo
tg
or
ag
e
n
A A
t
n
e
A‐ A
3
A‐ (
l
)
A
o
w
m
t
s
e
B
B
B
+
B
1
a
a
B
B
B
+
(
)
h
i
h
B
B
B
g
v
n
I
B
B
B
B
2
a
a
k
Ba
1
B
B
B
n
B
B
B
k
B
B
B‐
l
1
Po
Ba
tu
n
r
g
a
B
3
a
a
B
B
B‐
(
)
l
B
B
B
o
w
B
B
+
B
1
k
l
Ba
1
Po
tu
n
a
r
g
a
l
B
B
Po
tu
+
r
g
a
(
h
h
)
B
B
i
g
e
d
a
r
B
B
B
2
a
B
B
B
B
g
t
n
k
3
Ba
B
B‐
n
3
B
a
B
B‐
k
k
Ba
2
Ba
3
n
n
(
l
)
B
B
o
w
e
m
t
B
+
k
k
Ba
2
Ba
3
B
1
n
n
B
+
(
)
h
h
B
i
g
s
e
v
n
B 2
B
B
k
Ba
4
n
B
I

n
o
B‐ k
B
3
Ba
4
n
B‐ (
l
)
B
o
w
N C
C
C
+
C
1
a
a
C
C
C
+
(
h
h
)
C
C
C
i
g
d D
… C
CC
CC
C‐,
CC
C a
n
,
,
k
C
2
Ba
5
a
a
n
d D
… C
CC
CC
C‐,
CC
C a
n
,
,
d C
Ca
a3,
Ca
an
(
hig
… A
AA
AA
,
h
),
(
AA
AA
,
low
)
B P
I
M
tg
or
ds
Bo
ag
e
n
k
Ba
1
n
l
Po
tu
r
g
a
k
Ba
2
n
k
Ba
3
n
k
Ba
4
n
(
h
h
)
C
C
C
i
g
k
Ba
5
n

… CCC, CCC (low), CC (high), CC, CC (low), C (high), C, C (low), D

Investment grade BBB ‐

Investment grade BBB ‐

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 of 2 or more rating agencies, condition necessary to be able to grant international guarantees.

Results in the nine months ending 30 September 2017

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

Annexes

Results in the nine months ending 30 September 2017 ‐ Highlights

d
l
G
t
o
o
r
e
s
s
u
f
r
o
m
i
l
c
o
m
m
e
r
c
a
i
i
i
t
t
a
c
v
y
n
l
P
t
o
r
a
u
g
L
t
o
a
n
s
o
i
c
o
m
p
a
n
e
s
3
2
0

M
+
J
S
1
7
t.
a
n.
e
C
t
u
s
o
m
e
r
r
e
s
o
u
r
c
e
s
8
0
0

1
M
+
J
S
1
7
t.
a
n.
e
i
i
l
F
n
a
n
c
a
i
m
a
r
g
n
2
%
+
i
3.
º
2
0
1
7
t
r
m
i
i
C
o
m
m
s
s
o
n
s
8
8
%
+
J
S
1
7
t.
a
n.
e
d
I
m
p
r
o
v
e
f
f
k
i
i
i
e
c
e
n
c
y
r
s
,
d
a
n
l
i
i
i
t
t
c
a
p
a
s
a
o
n
C
t
o
s
s
6
%
7

J
S
1
7
t.
a
n.
e
C
t
t
o
s
o


i
n
o
m
e
c
%
6
3
d
i
C
t
r
e
k
i
t
a
r
s
%
3
3
C
E
T
1
F
L
%
1
1
5
l
L
T
F
t
o
a
1
3
3
%
f
i
i
P
t
r
o
n
c
r
e
a
s
e
s
i
l
d
P
t
n
o
r
u
g
a
a
n
l
d
d
i
i
t
n
c
o
n
s
o
a
e
f
i
i
N
t
t
e
p
r
o
n
l
P
t
o
r
u
g
a
1
5
2
M

J
S
1
7
t.
a
n.
e
l
d
d
i
C
t
o
n
s
o
a
e
f
i
t
t
n
e
p
r
o
3
1
2
M

J
S
1
7
t.
a
n.
e
i
R
t
a
n
g
s
I
t
t
n
v
e
s
m
e
n
d
g
r
a
e
&
S
P
B
B
B

i
h
F
t
c
B
B
B

Results in the nine months ending 30 September 2017

Annexes

  • Profitability, efficiency, credit quality and solvency, as in the Bank of Portugal's Instruction no. 23/2011
  • Quarterly Income Statements, Profitability and Balance sheets
  • Tables of historical reconciliation of information
  • Alternative Performance Measures

Profitability, efficiency, credit quality and solvency

According to Bank of Portugal's Instruction no. 23/2011

l. t
he
3
0
Se
1
7 e
p.
xc
3
0
Se
1
6
p.
3
0
Se
1
6
p.
3
0
Se
1
7
p.
im
f t
he
le
f
t o
p
ac
sa
o
d
te
a s
re
p
or
fo
p
ro
rm
a
d
ort
as
re
p
e
d
2
%
B
F
A a
n
de
l
i
da
ion
t
co
ns
o
/
in
in
fro
ba
k
in
iv
i
d r
l
f e
i
d
bs
i
d
ia
ie
Op
A
T
A
t
t
ty
ts
ty
te
er
a
g
co
me
m
n
g
a c
an
es
u
o
q
u
ac
co
un
s u
r
s
%
3.
2
%
1.
8
2.
2
%
2.
9
%
f
fo
/
i
be
io
d
in
i
bu
b
le
l
l
in
in
A
A
Pro
T
t
ta
t
ttr
ta
to
nt
te
ts
re
xa
n a
n
co
me
a
n
on
‐co
ro
g
re
s
1.
2
%
1.
2
%
0.
4
%
1.
1
%
/
f
i
be
fo
io
d
in
i
bu
b
le
l
l
in
in
Pro
t
ta
t
ttr
ta
to
nt
te
ts
re
xa
n a
n
co
me
a
n
on
‐co
ro
g
re
s
av
er
ag
e
ha
ho
l
de
' e
(
lu
d
l
l
)
ity
in
in
in
int
nt
ts
s
rs
u
c
no
n‐
co
ro
er
es
1
6.
9
%
1
6.
9
%
5.
2
%
1
4.
4
%
re
q
g
g
/
l c
fro
ba
k
d r
l
f e
d
Pe
Op
in
in
in
iv
i
i
ts
t
t
ty
ts
ty
te
rs
on
ne
os
er
a
g
co
me
m
n
g
ac
a n
es
u
o
q
u
a c
co
un
1
bs
d
i
ia
ie
s
su
r
3
0.
5
%
4
0.
6
%
3
7.
1
%
2
8.
1
%
he
d c
/
fro
ba
k
d r
l
f e
d
Ov
Op
in
in
in
iv
i
i
ts
t
t
ty
ts
ty
te
er
a
os
er
a
g
co
me
m
n
g
ac
an
es
u
o
q
u
ac
co
un
1
bs
i
d
ia
ie
s
su
r
%
5
3.
4
%
6
9.
2
%
6
3.
5
%
4
8.
1
fo
ha
da
do
bt
fu
l
l o
/
l o
fo
l
(
)
Lo
i n
9
0
io
e t
t
s +
a n
s
a r
re
a r
s
r m
or
n
y
u
a n
s
a n
p
or
g
ro
s s
4.
0
%
2.
8
%
fo
ha
da
do
bt
fu
l
lo
f a
la
d
lo
Lo
in
9
0
e t
t o
te
a n
s
a r
re
a r
s
r m
or
n
y
s +
u
a n
s,
ne
cc
um
u
an
/
lo
fo
l
(
)
im
i rm
io
ts
t
t
p
a
en
an
p
or
ne
%
0.
1
%
0.
1
2
d
k a
f t
l
lo
(
)
Cre
i
i s
%
t a
t r
ot
s
o
a
a n
s
ro
s s
g
4.
8
%
3.
5
%
2,
d
k
f a
la
d
lo
f t
l
lo
(
)
Cre
i
i s
im
i rm
%
t a
t r
t o
te
ts
ot
t
ne
cc
um
an
p
a
en
a s
o
a
a n
s
ne
u
0.
9
%
0.
%
7
3
d
lo
f t
l
lo
(
)
Re
%
tru
ctu
ot
s
re
a n
s a
s
o
a
an
s
g
ro
s s
6.
%
5
6.
0
%
3
d
lo
lu
de
d
d
k a
f t
l
lo
(
)
Re
in
in
i
i s
%
tru
ctu
ot
t a
t r
ot
s
re
a n
s n
c
cre
s
o
a
an
s
g
ro
s s
%
4.
5
%
4.
5
l c
i
l r
io
To
ta
ta
t
a p
a
4)
%
1
1.
4
5)
3.
9
%
1
ie
io
T
I r
t
r
a
4)
%
1
1.
4
5)
2.
%
1
5
ie
io
Co
T
I r
t
re
r
a
4)
%
1
1.
4
5)
%
1
2.
5
(
)
de
Lo
i
io
t
to
ts
t
a n
s
ne
p
os
ra
8
6
%
1
0
5
%

1) Excluding early‐retirement costs and changes to the plan (personnel costs).

3) According to Bank of Portugal Instruction 32/2013. 2) The credit at risk is the sum of: (1) the total amount outstanding on a loan in respect of which there are instalments of principal or interest in arrears for 90 days or more; (2) the total amount outstanding on loans which have been restructured, after having been in arrears for a period of 90 days or more, without adequate reinforcement of guarantees (these should be sufficient to cover the full amount of the outstanding principal and interest) or full payment of interest and other charges in arrears; (3) the total value of loans with instalments of principal and accrued interest in arrears for less than 90 days but in respect of which there is evidence to justify their classification as credit‐at‐risk, namely the debtor's bankruptcy or winding up.

4) According to CRD IV/CRR phasing in rules for 2016.

5) According to CRD IV/CRR phasing in rules for 2017.

Consolidated Income Statement

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.

Se
20
17
p.
3Q
17
2Q
17
1Q
17
20
16
4Q
16
Se
16
p.
3Q
16
2Q
16
1Q
16
1)
for
pro
ma
1)
for
pro
ma
1)
for
pro
ma
1)
for
pro
ma
l m
F
ina
ia
in
nc
arg
na
rro
w
se
ns
e
2
7
3.
9
9
1.
5
9
0.
1
9
2.
3
3
6
4.
2
9
4.
2
2
7
0.
1
9
1.
1
9
2.
8
8
6.
1
hn
l re
lt o
f
Te
ica
ins
tra
cts
c
su
ura
nc
e c
on
1
1.
5
4.
1
3.
8
3.
6
2
4.
6
5.
7
1
8.
9
5.
4
5.
6
7.
9
lat
d c
Ne
is
ion
ing
ise
t c
to
ort
t
om
m
s r
e
am
os
1
5.
4
5.
1
4.
6
5.
8
2
1.
2
5.
4
1
5.
8
5.
3
5.
1
5.
4
l m
F
ina
ia
in
R
C
L
nc
arg
3
0
0.
8
1
0
0.
7
9
8.
5
1
0
1.
6
4
1
0.
0
1
0
5.
3
3
0
4.
7
1
0
1.
8
1
0
3.
6
9
9.
4
fro
Inc
ity
ins
R
C
L
tru
nts
om
e
m
eq
u
me
6.
5
0.
1
6.
3
0.
1
8.
5
4.
6
3.
9
0.
0
3.
9
0.
0
Ne
iss
ion
inc
R
C
L
t c
om
m
om
e ‐
2
1
5.
7
7
7.
4
7
2.
2
6
6.
1
2
7
2.
8
7
4.
5
1
9
8.
3
6
6.
3
6
7.
4
6
4.
6
d r
lts
(
d c
) ‐
Eq
ity
ing
iat
ies
R
C
L
te
u
ac
co
un
es
u
ea
rn
s a
sso
c
e
om
p
an
1
9
2.
8
7
2.
1
6
4.
6
5
6.
1
2
6.
2
0.
8
2
5.
4
4.
0
1
5.
8
5.
6
f
l o
Ne
inc
ina
ia
ion
t
t
om
e o
n
nc
p
era
s
2
2.
7
7.
9
7.
1
7.
7
4
8.
9
1
7.
7
3
1.
2
6.
1
2
8.
7
(
)
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6
Ne
ing
inc
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t
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1
9
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2
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1
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0
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)
1
7
6.
0
(
)
2
3.
8
(
)
3.
2
(
)
2
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5
(
)
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0
(
)
1
8.
3
(
)
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2
fro
ba
k
Op
ing
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ing
iv
ity
R
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t
t
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e
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ac
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4
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2
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5
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9
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3
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6
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6
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1
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3
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0
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8
l co
Pe
sts
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(
)
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0
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9
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2
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3
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f w
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l co
O
ic
No
ing
sts
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ur
r
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ers
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(
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3
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9
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6
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7
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1
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8
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3
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5
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7
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3
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)
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6
l a
Ge
dm
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ive
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sts
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ra
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(
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(
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)
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3
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4
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)
1
6
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6
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)
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7
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8
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De
rt
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5
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2
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7
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)
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9
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1
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8
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2
f
fo
Op
ing
it
be
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irm
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(
)
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f
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Re
st
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xp
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2
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1
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2.
9
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1
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4
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9
fo
Im
irm
los
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is
ion
loa
d g
t
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t
p
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se
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ran
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(
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6
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0
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1
6.
7
0.
1
(
)
3
3.
0
3.
9
(
)
3
6.
9
(
)
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6
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(
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1
irm
los
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is
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Im
t
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p
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r p
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2
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)
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8
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6
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5
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)
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5
(
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3
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9
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3
fo
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(
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Inc
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(
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9.
0
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1
4
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ing
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m
co
op
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s
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6
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3
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2
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6
(
)
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3
1
1
4
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4
8
8
7.
6.
5
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3
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4
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6
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6
7.
inc
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t
om
e
m
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p
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s
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3
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7
8
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8
2
5
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9
8
9.
0
8
7.
2
7
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6
bu
b
le
l
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fro
Inc
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ing
int
inu
ing
ttr
ta
to
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om
e a
no
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m
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ion
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s
(
)
0.
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(
)
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(
)
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0
(
)
0.
0
(
)
0.
0
(
)
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)
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0
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)
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)
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0
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b
le
l
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d
Inc
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ing
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ttr
ta
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om
e a
no
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m
on
e
ion
at
op
er
s
(
)
1
6
8.
8
(
)
4
2.
3
(
)
1
2
6.
5
(
)
4
4.
4
(
)
4
3.
6
(
)
3
8.
4
Ne
inc
t
om
e
2
2.
6
1
2
4.
3
2
0.
6
(
)
1
2
2.
3
3
1
3.
2
1
3
0.
3
1
8
2.
9
7
7.
0
6
0.
2
4
5.
8

1) The designation "proforma" reflects the restatement of BFA's contribution to 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 (only in 2016) gains with the revision of the Collective Labour Agreement (Acordo Colectivo de Trabalho ‐ ACT).

Consolidated Balance sheet (as reported)

In
M.
30
Se
17
p.
30
Ju
17
n.
31
M
17
ar.
31
De
c. 1
6
As
ts
se
h a
d
de
l
ba
ks
Ca
sit
t c
tra
s
n
po
s a
en
n
1 2
09
.0
98
3.4
1 3
00
.2
87
6.6
he
dit
De
sit
in
sti
ion
t o
t
tut
po
s a
r c
re
s
25
2.9
30
0.0
27
2.1
30
0.2
d a
dv
dit
Lo
in
sti
ion
s t
tut
an
s a
n
an
ce
o c
re
s
82
0.8
74
4.6
78
1.8
63
7.6
d a
dv
Lo
o C
s t
ust
an
s a
n
an
ce
om
ers
22
70
8.0
22
81
9.8
22
71
8.4
22
73
5.8
Fin
cia
l a
he
l
d
for
din
d a
fai
lue
hro
h p
fit
los
ts
tr
t
t
an
sse
a
g a
n
r v
a
ug
ro
or
s
2 8
58
.1
2 4
09
.7
2 4
21
.4
2 1
97
.9
Fin
cia
l a
ai
la
b
le
for
le
ts
an
sse
av
sa
3 7
32
.1
3 7
79
.3
3 8
16
.9
3 8
76
.4
He
l
d t
rit
inv
atu
tm
ts
o m
y
es
en
14
.4
14
.4
16
.3
16
.3
He
dg
ing
de
riv
ati
ve
s
15
.2
20
.4
21
.1
25
.8
d c
d j
ly c
l
le
d e
Inv
in
cia
nie
oin
nti
tie
tm
ts
te
t
tro
es
en
as
so
om
pa
s a
n
on
s
74
9.3
67
5.0
68
1.6
17
5.7
Inv
ies
tm
t p
ert
es
en
rop
0.0 0.0 0.0 0.0
he
l
d
for
le
d
dis
d o
No
nti
ion
t a
ts
rat
n‐c
urr
en
sse
sa
an
co
nu
e
pe
s
0.0 0.0 0.0 6 2
95
.9
he
b
le
Ot
i
r ta
ts
ng
as
se
41
.7
43
.7
48
.0
51
.0
b
le
Int
i
ts
an
g
as
se
24
.3
24
.7
24
.6
25
.6
Ta
ts
x a
sse
44
2.7
47
2.8
44
7.5
47
1.8
he
Ot
ts
r a
sse
41
0.5
46
3.5
42
6.8
59
8.0
l as
To
ta
set
s
33
27
9.0
32
75
1.4
32
97
6.7
38
28
4.7
Lia
bi
liti
d s
ha
ho
l
de
' eq
uit
es
an
re
rs
y
f ce
l
ba
ks
Re
ntr
so
urc
es
o
a
n
2 1
44
.2
2 1
45
.4
1 9
99
.5
2 0
00
.0
l
lia
bi
liti
he
l
d
for
din
Fin
cia
tr
an
es
a
g
17
9.0
18
5.8
20
8.7
21
2.7
f o
he
dit
Re
in
sti
ion
t
tut
so
urc
es
o
r c
re
s
1 8
16
.0
1 6
24
.1
1 8
34
.9
1 0
96
.4
f C
d o
he
de
bts
Re
ust
t
so
urc
es
o
om
ers
an
r
22
44
0.1
22
33
5.5
22
41
3.5
21
96
7.7
bts
De
rit
ies
se
cu
26
4.1
26
8.9
28
8.6
50
6.8
hn
l p
Te
ica
isi
c
rov
on
s
1 8
68
.3
1 9
23
.6
1 9
85
.2
2 0
48
.8
l
lia
bi
liti
lat
fer
d a
Fin
cia
ing
to
tr
ts
an
es
re
an
s
re
sse
49
2.0
51
1.4
52
5.6
55
5.4
dg
ing
de
riv
ati
He
ve
s
71
.9
78
.0
93
.0
97
.8
lia
bi
liti
he
l
d
for
le
d
dis
nti
d o
ion
No
t
rat
n‐c
urr
en
es
sa
an
co
nu
e
pe
s
0.0 0.0 0.0 5 9
51
.4
vis
ion
Pro
s
66
.5
68
.8
69
.3
70
.2
lia
bi
liti
Ta
x
es
71
.2
67
.1
66
.5
22
.0
he
bo
din
d
de
bt
d p
bo
ds
Ot
ici
tin
ate
art
r s
r
an
pa
g
n
u
36
9.6
37
3.8
36
9.9
69
.5
he
lia
bi
liti
Ot
r
es
77
5.3
60
6.7
58
7.3
77
7.4
ha
ho
l
de
' eq
bu
b
le t
he
ha
ho
l
de
f B
S
uit
i
PI
ttr
ta
o t
re
rs
y a
s
re
rs
o
2 7
20
.9
2 5
60
.6
2 5
33
.0
2 4
40
.5
l
lin
No
int
tro
sts
n‐c
on
g
ere
0.0 1.8 1.8 46
8.0
ha
ho
l
de
' e
ity
S
re
rs
qu
2 7
20
.9
2 5
62
.3
2 5
34
.7
2 9
08
.5
l
l
ia
b
i
l
it
ies
d s
ha
ho
l
de
' e
ity
To
ta
an
re
rs
qu
33
27
9.0
32
75
1.4
32
97
6.7
38
28
4.7

Consolidated Income Statement – Reconciliation with the structure previously used

Captions restated (RST) 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

l
S
i
d
I
t
t
t –
t
t
n
c
o
m
e
a
e
m
e
n
s
r
u
c
u
r
e
p
r
e
v
o
u
s
y
u
s
e
d
d
i
h
l
f
I
S
1
2
0
1
7
t
t
t –
t
t
t
t
n
o
m
e
a
e
m
e
n
s
r
r
e
a
o
p
e
n
s
a
c
u
c
u
(
)
i
l
i
l
1
2
0
1
7
t
t
t
n
s
q
a
r
e
r
e
a
r
n
n
g
s
r
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e
a
s
e
u
u
(
)
d
ing
he
fo
d
by
Ca
ixa
k,
's
l
i
da
ing
i
Ba
B
P
I
to
t
t u
t
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ty
ac
co
r
rm
a
se
n
co
ns
o
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(na
)
F
ina
ia
in
nc
arg
rro
w
sen
se
l
ks
Gr
in o
it
in
oss
m
arg
n u
n
ina
ia
l m
in
(na
)
F
nc
arg
rro
w
sen
se
fro
ity
ins
Inc
tru
nts
om
e
m
eq
u
me
hn
l re
lt o
f
Te
ica
ins
ntr
act
c
su
ura
nce
co
s
lat
d c
Ne
iss
ion
ing
ise
t c
to
ort
ost
om
m
s re
am
iss
ion
lat
ing
ise
d c
Ne
t c
to
ort
ost
om
m
s r
e
am
l m
F
ina
ia
in
nc
arg
ina
ia
l m
in
F
‐ R
CL
nc
arg
hn
ica
l re
lt o
f
ins
Te
ntr
act
c
su
ura
nce
co
s
fro
Inc
ity
ins
‐ R
CL
tru
nts
om
e
m
eq
me
u
Ne
iss
ion
inc
t c
om
m
om
e
iss
ion
inc
RC
Ne
L
t c
om
m
om
e ‐
inc
f
ina
ia
l op
ion
Ne
t
t
om
e o
n
nc
era
s
d r
lts
Eq
ity
‐ R
CL
te
u
ac
co
un
esu
Ne
ing
inc
t o
t
p
era
om
e
f
inc
ina
ia
l o
ion
Ne
t
t
om
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n
nc
p
era
s
fro
ba
k
Op
ing
inc
ing
iv
ity
t
t
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om
e
m
n
ac
Ne
ing
inc
t o
t
p
era
om
e
l co
Pe
sts
rso
nn
e
fro
ba
k
Op
ing
inc
ing
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ity
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CL
t
t
era
om
e
m
n
ac
1)
f w
h
ic
h:
ing
l co
O
sts
no
n‐r
ec
urr
ers
on
ne
l co
Pe
sts
rso
nn
e
p
l a
dm
Ge
in
istr
ive
at
sts
ne
ra
co
1)
f w
h
h:
l co
O
ic
ing
sts
no
n‐r
ec
urr
p
ers
on
ne
iat
ion
d a
isa
ion
De
rt
t
p
rec
an
mo
Ge
l a
dm
in
ist
ive
rat
sts
ne
ra
co
he
d c
Ov
ts
er
a
os
d a
De
iat
ion
isa
ion
rt
t
p
rec
an
mo
f
be
for
d p
Op
ing
it
im
irm
is
ion
t
ts
era
ro
e
a
en
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rov
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he
d c
Ov
ts
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a
os
p
p
f
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cov
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en
Op
ing
f
it
be
for
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irm
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is
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t
ts
era
p
ro
e
p
a
en
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rov
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ery
ns,
xp
ses
los
for
loa
Im
irm
is
ion
t
tee
f
loa
d e
Re
int
st
cov
ery
o
ns,
ere
an
xp
en
ses
d p
d g
et
p
a
en
ses
an
rov
s
ns
an
ua
ran
s, n
Im
irm
los
d o
he
is
ion
for
Im
irm
los
d p
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ion
loa
d g
t
tee
et
p
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en
ses
an
rov
s
ns
an
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ran
s, n
t
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et
p
a
en
ses
an
r p
rov
s, n
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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 + Commissions relating to amortised cost

Net commissions (RCL) = Net commissions + Gross margin on unit links

Operating income from banking activity (RCL) = Financial margin (RCL) + Income from equity instruments (RCL) + Net commissions income (RCL) + Equity accounted results (RCL) + Net income on financial operations + Net operating income

Commercial banking income = Financial margin (RCL) + Income from equity instruments (RCL) + Net commissions income (RCL) + Equity accounted results (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

Operating profit before impairments and provisions (RCL) = Operating income from banking activity (RCL) ‐ Overhead costs

Net income before income tax (RCL) = Operating profit (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 available‐for‐sale financial assets

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 the fair value reserve (after deferred taxes) related to the financial assets available for sale portfolio.

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

Intermediation margin = Loan portfolio average interest rate ‐ Deposits average interest rate

Note:

The term "RCL" or "Reclassified captions" identifies income and costs captions that have been reclassified in this 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 and others

Note: The amount of on‐balance sheet Customer resources is not deducted from the applications of off‐balance sheets products (mutual funds and pension plans) in on‐balance sheet products.

Being:

Deposits = Sight deposits and other + Time and savings deposits + Accrued interest + Bonds placed with customers (Fixed / variable rate bonds and structured products placed with Customers + Deposits certificates + Subordinated bonds placed with Customers)

Capitalisation insurance and others = Unit links insurance capitalisation + "Aforro" capitalisation insurance and others (Technical provisions + Guaranteed rate and guaranteed retirement insurance capitalisation) + Participating units in consolidated mutual funds

Assets under management = Mutual funds + Pension plans

Note: Amounts deducted from participating units in the Group banks' portfolios and from off‐balance sheet products investments (mutual funds and pension plans) in other off‐balance sheet products.

Mutual funds = Unit trust funds + Real estate investment funds + Retirement‐savings and equity‐savings plans (PPR and PPA) + Hedge funds + Funds assets under BPI Suisse management + Third‐party unit trust funds placed with Customers

Pension plans = pension plans under BPI management (includes pension plans of BPI Group)

Subscriptions in public offerings = Customers subscriptions in third parties' public offerings

Total Customer Resources = On‐balance sheet Customer Resources + Assets under management + Subscriptions in public offerings

Loan‐to‐deposit ratio = Net loans to Customers / Customer deposits

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)= (Impairments and provisions for loans and guarantees, net ‐ Recovery of loans, interest and expenses) / Average value in the period of the performing loan portfolio

Performing Loans portfolio = Gross customer loans ‐ (Overdue loans and interest + Receivable interests and other)

Credit at risk ratio (consolidation perimeter IAS / IFRS) = Credit at risk / Gross loan portfolio

Note: the consolidated financial information prepared in accordance with IAS / IFRS rules is used in the calculation of the indicator.

For the disclosure of the indicators defined in Bank of Portugal Instruction 16/2004, the Bank of Portugal's supervision perimeter is considered in their calculation, which, in the case of BPI, implies that BPI Vida e Pensões be recognised through the equity method (whereas under IAS / IFRS accounting rules that company is fully consolidated).

Coverage of credit at risk by impairments = (Loan impairments + Impairments and provisions for guarantees and commitments) / Credit at risk

Coverage of credit at risk by impairments and associated collateral = (Loan impairments + Impairments and provisions for guarantees and commitments + Collateral associated to credit ) / Credit at risk

Non performing loans ratio = Non performing loans (CaixaBank criteria) / (Gross customer loans + guarantees)

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

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

Impairments cover of foreclosed properties = Impairments for foreclosed properties / Gross value of foreclosed properties

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

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 119E-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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