Banco Comercial Portugues

Earnings Release • Jul 27, 2017

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

• First 6 months figures for 2016 and 2017 not audited

• Highlights

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

1 Highlights: improved profitability

(Million euros)

• Core net income increases to €558.6 million in 1H17 (€534.9 million excluding a positive non-usual impact of €23.7 million on staff costs), with a noteworthy expansion in net interest income
• Significant expansion in core net income from €117.0 million in the 1st half of 2013
• One of the most efficient banks in the Euro-zone, with cost to core income 45% (43% cost to income)
• Net earnings of €89.9 million in the 1st half of 2017
• Substantial improvement from €488.2 million losses in the 1st half of 2013

2 Highlights: improved asset quality

• at June 30, 2017, showing a strong pace of reduction from 2013: €1.4 billion per year, on average
• NPE reduction in 1H17 in excess of €700 million, more than 70% of the annual reduction target to <€7.5 billion at year-end 2017
• NPE total* coverage at 105%
• NPL>90 days down to €4.6 billion as at June 30, 2017, with a significant reduction in net new entries in the 1st half of 2017 to €37 million

3 Highlights: credit stabilising in Portugal

• Non-NPE portfolio stable from end-2016
• Structural change to the portfolio of loans to companies over recent years, with a growing weight of exporting industries, together with a lower weight of construction and real estate activities and of non-financial holding companies
• Strong credit activity, both for individuals (new business up by 20.1% vs 1H16) and for companies (new leasing business: +43.3%; factoring invoicing: +32.8%)

Highlights: strong business performance, especially in Customer acquisition and Customer experience ⁴

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

Profit of €89.9 million in 1H17, with a significant improvement of core net income

(million euros)		1H16	1H17	YoY	Impact on earnings
Core net income (net int income+commissions–oper. costs)		437.1	558.6	+27.8%	+121.5
Non-usual items (staff costs)	-1.2	23.7		+24.9
Core net income excluding non-usual items		438.3	534.9	+22.0%	+96.6
Other operating income	Includes €91.0 million gains on Visa transaction	138.3	40.0	-71.1%	-98.3
Operating net income (bef. impairment and provisions)		575.4	598.6	+4.0%	+23.2
Impairment and provisions		-816.6	-415.3	-49.1%	+401.3
Net income before income tax		-241.3	183.3		+424.6
Income taxes, non-controlling interests and disc. operations		44.0	-93.4		-137.4
Net income		-197.3	89.9		+287.2

Core net income increases in all geographies

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

Fees and comissions			Consolidated	Portugal
	1H16	1H17	YoY	229.5	-1.9% 225.2
Banking fees and commissions	263.1	265.9	+1.1%
Cards and transfers	71.1	75.2	+5.8%
Loans and guarantees	79.9	78.5	-1.7%	1H16	1H17
Bancassurance	43.6	47.5	+8.9%
Customer account related	45.4	46.5	+2.3%	International operations	+17.1% w/o FX
Other fees and commissions	23.1	18.2	-21.1%		impact +15.7%
Market related fees and commissions	57.3	64.4	+12.5%	90.9	105.1
Securities operations	38.9	43.8	+12.6%
Asset management	18.3	20.6	+12.5%
Total fees and commissions	320.3	330.3	+3.1%	1H16	1H17

Increased other income influenced by higher mandatory contributions and by gains on Visa transaction in 1H16

Cost reduction continues…

… making 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

Growing deposits in Portugal and in international operations

Credit portfolio reflects NPE reduction, in spite of support to economy

Growing new loans to individuals, new leasing business and factoring invoicing

Comfortable liquidity position

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

Strengthened capital, in line with European peers

Capital at comfortable levels, high leverage ratios

Pension fund

Key figures				Pension fund
(Million euros)
		Dec 16	Jun 17	Cash and
	Pension liabilities	3,093	3,056	other 38%
	Pension fund	3,124	3,187
	Liabilities' coverage	112%	115%
	Fund's profitability	-2.6%	+3.5%
	Actuarial differences	(303)	+46

Assumptions

	Dec 16	Jun 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 115%

• Positive actuarial differences in 1st half 2017 (+€46 million), reflecting the fund's performance above the assumptions

• Highlights

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

Increased net income

Improvement trend on core income and operating costs continues in Portugal

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

• Increase in net interest income compared to 1st half 2016, reflecting the impact of the consistent reduction of the cost of term deposits, the repayment of CoCos, the reduction of NPLs, more than compensating for the negative effect of the reduction of Euribor rates and lower credit volumes
• Increased net interest income vs previous quarter, from €194.1 million in the 1Q17 to €196.1 million in the 2Q17 mainly attributable to the reduction of the cost of term deposits and to the repayment of CoCos

Continued effort to reduce the cost of deposits

Commissions affected by the booking of non-recurring operations in the 1st half of 2016

1H16 1H17 YoY Banking fees and commissions 203.3 194.0 -4.6% Cards and transfers 47.7 51.4 +7.7% Loans and guarantees 54.5 51.7 -5.1% Bancassurance 39.1 39.3 +0.5% Customer account related 45.4 46.4 +2.4% Other fees and commissions 16.6 5.2 -68.8% Market related fees and commissions 26.2 31.2 +19.0% Securities operations 23.6 28.0 +18.7% Asset management 2.6 3.2 +22.1% Total fees and commissions 229.5 225.2 -1.9%

Continuous reduction of costs, in line with the new commercial approach

Lower NPEs with reinforced coverage

Foreclosed assets sold and corporate restructuring funds

Improved liquidity position

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

Contribution from international operations

	1H16	1H17	Δ % local currency	Δ % euros	ROE
International operations
Poland	101.2	73.7	-27.1%	-25.1%	8.9%
Mozambique	30.0	42.8	+42.6%	+16.3%	25.8%
Angola*	21.1	15.8	-25.3%	-26.3%
Other	4.3	5.9	+37.5%	+39.5%
Net income	156.5	138.1	-11.8%	-14.1%
Non-controlling interests Poland and Mozambique	-60.5	-51.0
Exchange rate effect	3.3	--
Total contribution international operations	99.4	87.1		-12.4%
Same as above without FX effect	96.1	87.1		-9.3%

Strong performance of net earnings influenced by Visa transaction in 1H16 and higher mandatory contributions in 1H17

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 (€6.3 million in 1H17 and €5.2 million in 1H16) is presented in net trading income. | FX effect excluded. €/Zloty constant at June 2017 levels: Income Statement 4.26037500; Balance Sheet 4.2252.

Stable credit quality, comfortable coverage

Growing volumes

6,059 7,473 6,570 6,014 102 1,506 102 1,834 14,236 15,423 Jun 16 Jun 17 3,375 3,638 1,425 1,554 6,651 6,351 11,451 11,542 Jun 16 Jun 17 +0.8% -4.5% +9.0% +7.8% +8.3% +23.3% -8.5% 0.0% +21.8% (Million euros) Customer funds Loans to Customers (gross) Ondemand deposits Term deposits Other BS funds Off-BS funds Companies Consumer and other Mortgage

Significant activity and net income growth, in a demanding environment

Growth in core income partially offset by the increase in operating costs

Credit quality

Growing volumes

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

			Consolidated
	1H16	1H17	2018
CT1 / CET1*	Phased-in: 12.3% Fully implemented: 9.7%	Phased-in: 13.0% Fully implemented: 11.3%	≈ 11%
Loans to Deposits	101%	95%	< 100%
Cost–Income	Stated: 45.7% 45.6% Excluding non-usual items:	Stated: 42.9% 45.2% Excluding non-usual items:	< 43%
Cost-Core Income**	Stated: 52.5% Excluding non-usual items: 52.4%	Stated: 44.6% 47.0% Excluding non-usual items:	< 50%
Cost of risk	234 bp	118 bp	< 75 bp
ROE	-8.8%	3.3%	≈ 10% Based on a 11% fully implemented CET1

Millennium bcp: a solid 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 13.0%, loans to deposits of 95%) • Profitable operation with a recurring capacity to generate operating results in excess of €1 billion per annum (€589 million in 1H2017) Well-positioned in a rapidly changing landscape, following the completion • of the restructuring plan successfully implemented over the last years: one of the most efficient banks in the Eurozone, with cost to core income ratio of 45% (Eurozone: 84%) and cost to income ratio of 43% (Eurozone: 63%)

Strong business performance in Portugal, with a strong focus on innovation and on Customer experience

• Increased Customer acquisition and stabilization of the credit portfolio • Strong focus on innovation and on Customer experience. Recent solutions include: – Consumer credit now available at the Millennium mobile banking app – New services in the Millennium Teller Machine (MTM): cardless access, 24/7 withdrawal of cheques, remote assistance – Digital POS on the mobile phone: new "Moove" payment app

Appendix

Sovereign debt portfolio

• Sovereign debt portfolio totalled €9.9 billion, €2.4 billion of which maturing in less than 1 year
• Sovereign Portuguese debt totalled €5.1 billion, while Polish and Mozambican sovereign debts totalled €3.8 billion and €0.4 billion, respectively; "other" include North-American sovereign debt of €0.5 billion

Sovereign debt portfolio

	Portugal	Poland	Mozambique	Other	Total
Trading book*	158	98	0	37	292
≤ 1 year	119	7	0	36	162
> 1 year and ≤ 2 years	0	38	0	0	38
> 2 years and ≤ 5 years	36	41	0	0	78
> 5 years and ≤ 8 years	1	0	0	0	1
> 8 years and ≤ 10 years	1	11	0	0	12
> 10 years	0	0	0	0	0
Banking book**	4,931	3,749	379	575	9,635
≤ 1 year	848	605	291	521	2,266
> 1 year and ≤ 2 years	751	1,911	27	51	2,740
> 2 years and ≤ 5 years	552	1,053	60	1	1,666
> 5 years and ≤ 8 years	2,422	175	0	2	2,599
> 8 years and ≤ 10 years	358	6	0	0	364
> 10 years	1	0	0	0	1
Total	5,089	3,847	379	612	9,928
≤ 1 year	967	612	291	557	2,427
> 1 year and ≤ 2 years	751	1,949	27	51	2,778
> 2 years and ≤ 5 years	588	1,094	60	1	1,744
> 5 years and ≤ 8 years	2,423	175	0	2	2,600
> 8 years and ≤ 10 years	359	17	0	0	376
> 10 years	1	0	0	1	2

Diversified and collaterised portfolio

• Loans to companies accounted for 46% of the loan portfolio at June 30, 2017, including 8% to construction and real-estate sectors
• 84% of the loan portfolio is collateralised
• Mortgage accounted for 46% of the loan portfolio, with low delinquency levels and an average LTV of 65%
• Real estate accounts for 95% of total collateral value
• 80% of the real estate collateral is residential

Consolidated earnings

(million euros)	1H16	1H17	YoY	Impact on earnings
Net interest income	600.8	678.5	12.9%	+77.7
Net fees and commissions	320.3	330.3	3.1%	+10.0
Other operating income	138.3	40.0	-71.1%	-98.3
Banking income	1,059.4	1,048.8	-1.0%	-10.6
Staff costs	-273.7	-241.5	-11.8%	+32.2
Other administrative costs and depreciation	-210.4	-208.7	-0.8%	+1.6
Operating costs	-484.1	-450.2	-7.0%	+33.8
Operating net income (before impairment and provisions)	575.4	598.6	4.0%	+23.2
Of which: core net income	437.1	558.6	27.8%	+121.5
Loans impairment (net of recoveries)	-618.7	-305.0	-50.7%	+313.7
Other impairment and provisions	-198.0	-110.3	-44.3%	+87.6
Impairment and provisions	-816.6	-415.3	-49.1%	+401.3
Net income before income tax	-241.3	183.3	-176.0%	+424.6
Income taxes	78.3	-43.4	-155.5%	-121.7
Non-controlling interests	-79.5	-51.2	-35.6%	+28.3
Net income from discontinued or to be discontinued operations	45.2	1.3	-97.2%	-44.0
Net income	-197.3	89.9	-145.6%	+287.2

Consolidated balance sheet

(Million euros)

	30 June 2017	30 June 2016		30 June 2017	30 June 2016
Assets			Liabilities
Cash and deposits at central banks	1,650.9	2,178.3	Resources from credit institutions	9,373.2	11,228.6
Loans and advances to credit institutions			Resources from customers	50,635.7	48,762.0
Repayable on demand	491.5	415.5	Debt securities issued	3,121.4	4,018.1
Other loans and advances	895.9	1,389.2	Financial liabilities held for trading	476.2	613.6
Loans and advances to customers	48,066.0	49,186.1	Hedging derivatives	289.3	484.3
Financial assets held for trading	974.0	1,234.3	Provisions	339.1	290.5
Other financial assets held for trading			Subordinated debt	850.6	1,659.5
at fair value through profit or loss	142.0	144.9	Current tax liabilities	8.9	18.2
Financial assets available for sale	12,384.7	11,023.4	Deferred tax liabilities	1.6	1.7
Assets with repurchase agreement	15.4	10.6	Other liabilities	981.9	977.3
Hedging derivatives	113.9	115.0	Total Liabilities	66,078.0	68,053.9
Financial assets held to maturity	451.3	419.0
Investments in associated companies	596.0	558.7	Equity
Non current assets held for sale	2,224.0	1,906.1	Share capital	5,600.7	4,094.2
Investment property	12.3	133.2	Treasury shares	(0.3)	(3.7)
Other tangible assets	487.4	475.2	Share premium	16.5	16.5
Goodwill and intangible assets	164.3	195.0	Preference shares	59.9	59.9
Current tax assets	7.6	36.1	Other capital instruments	2.9	2.9
Deferred tax assets	3,165.4	2,767.4	Legal and statutory reserves	252.8	245.9
Other assets	1,181.3	879.4	Fair value reserves	(23.3)	(52.1)
	73,023.7	73,067.5	Reserves and retained earnings	(51.3)	(7.7)
			Net income for the period attrib. to Shareholders	89.9	(197.3)
			Total equity attrib. to Shareholders of the Bank	5,947.9	4,158.6
			Non-controlling interests	997.8	855.0

73,023.7 73,067.5

Total Equity 6,945.7 5,013.6

	2Q 16	3Q 16	4Q 16	1Q 17	2Q 17
Net interest income	308.4	306.2	323.1	332.3	346.2
Dividends from equity instruments	3.8	1.2	0.8	0.1	1.5
Net fees and commission income	156.4	160.8	162.7	160.8	169.5
Other operating income	-75.6	-8.3	-9.5	-15.2	-71.4
Net trading income	154.5	29.7	27.9	36.4	53.5
Equity accounted earnings	23.8	22.9	19.9	19.6	15.5
Banking income	571.3	512.5	524.8	534.0	514.8
Staff costs	135.2	136.7	-53.8	136.9	104.6
Other administrative costs	93.1	90.1	98.6	88.7	94.0
Depreciation	12.7	11.5	12.8	12.7	13.4
Operating costs	241.0	238.3	57.6	238.3	211.9
Operating net income bef. imp.	330.3	274.2	467.2	295.8	302.9
Loans impairment (net of recoveries)	458.0	251.5	246.7	148.9	156.1
Other impairm. and provisions	182.6	44.9	238.2	54.3	56.0
Net income before income tax	-310.3	-22.2	-17.8	92.5	90.8
Income tax	-93.3	10.1	-313.7	19.1	24.3
Non-controlling interests	43.1	21.5	20.8	23.3	27.9
Net income (before disc. oper.)	-260.2	-53.8	275.0	50.1	38.6
Net income arising from discont. operations	16.2	0.0	0.0	0.0	1.3
Net income	-243.9	-53.8	275.0	50.1	39.8

												Internatio nal o	peratio	ns
		Gro up			P o rtugal			T o tal		B ank M	illennium (P	o land)	M	illennium bim (M	o z.)	Other int. o	peratio	ns
	Jun 16	Jun 17	Δ %	Jun 16	Jun 17	Δ %	Jun 16	Jun 17	Δ %	Jun 16	Jun 17	Δ %	Jun 16	Jun 17	Δ %	Jun 16	Jun 17	Δ %
Interest income	965	957	-0.9%	598	532	-11.2%	367	425	15.8%	258	275	6.3%	106	147	39.1%	3	3	7.3%
Interest expense	365	278	-23.7%	240	141	-41.2%	125	137	9.8%	91	83	-8.1%	36	56	57.7%	-2	-3	-50.0%
N et interest inco me	601	678	12.9%	358	390	9.0%	243	288	18.8%	168	191	14.1%	7 0	9 1	29.7%	5	6	23.6%
Dividends from equity instruments	6	2	-72.3%	5	1	-80.4%	0	1	35.2%	0	1	34.6%	0	0	--	0	0	--
Intermediatio n margin	607	680	12.1%	364	391	7.6%	243	289	18.8%	168	192	14.1%	7 0	9 1	29.7%	5	6	23.6%
Net fees and commission income	320	330	3.1%	229	225	-1.9%	91	105	15.7%	63	77	23.2%	17	16	-6.8%	12	12	7.6%
Other operating income	-88	-87	1.6%	-55	-53	3.1%	-33	-34	-0.8%	-37	-37	-1.2%	3	3	3.2%	0	0	26.9%
B asic inco me	839	924	10.1%	538	564	4.7%	300	360	19.9%	194	232	19.5%	9 0	110	22.0%	16	18	13.0%
Net trading income	183	90	-50.8%	76	59	-22.2%	107	31	-71.1%	88	25	-72.0%	18	5	-70.1%	2	1	-30.5%
Equity accounted earnings	38	35	-6.9%	35	19	-44.4%	3	16	>100%	0	0	--	0	0	--	3	16	>100%
B anking inco me	1,059	1,049	-1.0%	649	642	-1.1%	410	407	-0.8%	282	256	-9.0%	108	116	7.0%	2 0	3 5	70.4%
Staff costs Other administrative costs	274 185	241 183	-11.8% -1.2%	181 114	145 110	-20.0% -3.6%	92 71	96 73	4.5% 2.6%	63 48	69 49	9.1% 1.4%	20 19	19 20	-7.1% 5.3%	9 3	9 3	-2.5% 3.7%
Depreciation	25	26	2.5%	14	16	12.3%	11	10	-10.1%	6	6	-2.6%	5	4	-20.3%	0	0	-19.7%
Operating co sts	484	450	-7.0%	310	271	-12.5%	174	179	2.8%	118	125	5.3%	44	43	-3.0%	12	12	-1.0%
Operating net inco me bef. imp.	575	599	4.0%	339	371	9.3%	236	228	-3.5%	164	132	-19.4%	6 4	7 3	13.9%	9	2 3	>100%
Loans impairment (net of recoveries)	619	305	-50.7%	583	258	-55.8%	36	47	31.1%	23	29	28.5%	13	18	38.6%	1	0	-40.5%
Other impairm. and provisions	198	110	-44.3%	190	112	-41.0%	8	-2	<-100%	8	1	-90.7%	-1	-3	<-100%	0	0	<-100%
N et inco me befo re inco me tax	-241	183	>100%	-434	1	>100%	192	183	-5.1%	133	102	-23.2%	5 2	5 8	11.9%	8	2 3	>100%
Income tax	-78	43	>100%	-128	-1	99.6%	50	44	-11.2%	34	28	-17.8%	15	15	2.1%	1	1	30.2%
Non-controlling interests	80	51	-35.6%	-1	0	68.2%	80	51	-35.9%	0	0	--	1	0	-26.3%	80	51	-36.0%
N et inco me (befo re disc. o per.)	-242	8 9	>100%	-305	2	>100%	6 3	8 7	39.1%	9 8	7 4	-25.1%	3 7	4 3	16.3%	-73	-29	59.5%
Net income arising from discont. operations	45	1	-97.2%				37	0	-100.0%							37	0	-100.0%
N et inco me	-197	9 0	>100%				9 9	8 7	-12.4%							-36	-29	17.8%

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.