Quarterly Report • Jul 27, 2017
Quarterly Report
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Improvement supported by core net income*
NPE reduction (more than targeted) and significant coverage reinforce
Favourably performance maintaining balance sheet quality
Capital Adequate position
* Core net income = core income – operating costs; Core income = net interest income + net fees and commission income. ** Euro 534.9 million excluding the positive impact of specific items *** Specific items in 2017: positive impact of Euro 23.7 million in staff costs, including Collective Lab. Agreem.'s negotiation and restructuring costs; in 2016: Euro 1.2 million from restructuring costs. ****By loan-loss reserves, expected loss gap and collaterals.
BANCO COMERCIAL PORTUGUÊS, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number 501 525 882 and the share capital of EUR 5,600,738,053.72
INVESTOR RELATIONS Rui Coimbra Phone +351 211 131 084 [email protected] [email protected] [email protected]
MEDIA CONTACT Erik T. Burns Phone +351 211 131 242 Mobile +351 917 265 020 [email protected] [email protected]
| Financial Highlights | Euro million | ||
|---|---|---|---|
| 30 Jun. 17 | 30 Jun. 16 | Change 17 / 16 |
|
| Balance sheet | |||
| Total assets | 73,024 | 73,068 | -0.1% |
| Loans to customers (gross) | 51,684 | 52,930 | -2.4% |
| Total customer funds | 66,070 | 62,823 | 5.2% |
| Balance sheet total customer funds | 52,228 | 50,500 | 3.4% |
| Resources from customers | 50,636 | 48,762 | 3.8% |
| Loans to customers, net / Resources from customers (1) | 95% | 102% | |
| Loans to customers, net / Balance sheet total customer funds | 92% | 97% | |
| Results | |||
| Net income | 89.9 | (197.3) | 145.6% |
| Net interest income | 678.5 | 600.8 | 12.9% |
| Net operating revenues | 1,048.8 | 1,059.4 | -1.0% |
| Operating costs | 450.2 | 484.1 | -7.0% |
| Recurring operating costs (2) | 473.9 | 482.8 | -1.8% |
| Loan impairment charges (net of recoveries) | 305.0 | 618.7 | -50.7% |
| Other impairment and provisions | 110.3 | 198.0 | -44.3% |
| Income taxes | |||
| Current | 54.5 | 56.4 | |
| Deferred | (11.1) | (134.7) | |
| Profitability | |||
| Net operating revenues / Average net assets (1) | 2.9% | 2.8% | |
| Return on average assets (ROA) (3) | 0.4% | -0.3% | |
| Income before tax and non-controlling interests / Average net assets (1) | 0.5% | -0.5% | |
| Return on average equity (ROE) | 3.3% | -8.8% | |
| Income before tax and non-controlling interests / Average equity (1) | 5.8% | -7.2% | |
| Credit quality | |||
| Overdue loans and doubtful loans / Total loans (1) | 8.1% | 9.7% | |
| Overdue loans and doubtful loans, net / Total loans, net (1) | 1.2% | 2.8% | |
| Credit at risk / Total loans (1) | 10.1% | 11.9% | |
| Credit at risk, net / Total loans, net (1) | 3.4% | 5.2% | |
| Impairment for loan losses / Overdue loans by more than 90 days | 110.1% | 93.9% | |
| Efficiency ratios (1) (2) | |||
| Operating costs / Net operating revenues | 45.2% | 45.6% | |
| Operating costs / Net operating revenues (Portugal activity) | 45.9% | 47.5% | |
| Staff costs / Net operating revenues | 25.3% | 25.7% | |
| Capital (4) | |||
| Common equity tier I phased-in | 13.0% | 12.3% | |
| Common equity tier I fully-implemented | 11.3% | 9.7% | |
| Branches | |||
| Portugal activity | 596 | 646 | -7.7% |
| Foreign activity | 540 | 563 | -4.1% |
| Employees | |||
| Portugal activity | 7,303 | 7,402 | -1.3% |
| Foreign activity | 8,506 | 8,496 | 0.1% |
73,024 82,348 -0.1% (1) According to Instruction from the Bank of Portugal no. 16/2004, as the currently existing version. Given the booking of Banco Millennium Angola as a discontinued operation between March and May 2016, the consolidated balance sheet includes Banco Millennium Angola until its derecognition, determined by the completion of the merger with Banco Privado Atlântico, in May 2016, while the respective contribution to consolidated result is reflected in income from discontinued operations and non-controlling interests during that period, not influencing the remaining items of the consolidated income statement.
(2) Excludes specific items: Euro 23.7 million profit in staff costs related to Collective Labour Agreement negotiation and restructuring costs in 2017 and Euro 1.2 million from restructuring costs in 2016.
(3) Considering net income before non-controlling interests.
(4) June 2017 and June 2016 include the accumulated net income of each period. June 2017 figures are estimated.
In the context of the merger process between Banco Millennium Angola and Banco Privado Atlântico, Banco Millennium Angola was considered a discontinued operation in March 2016 with the impact of its results presented as "income arising from discontinued operations". On the consolidated balance sheet, the assets and liabilities of Banco Millennium Angola, S.A. continued to be consolidated by the full consolidation method up to April 2016.
After the completion of the merger, in May 2016, the assets and liabilities of Banco Millennium Angola stopped being considered in the consolidated balance sheet and the investment of 22.5% in Banco Millennium Atlântico, the new entity arising from the merger, started being consolidated using the equity method, while its contribution to the Group's results have been recognised in the consolidated accounts from May 2016 onwards.
The core net income of Millennium bcp amounted to Euro 558.6 million in the first half of 2017, increasing 27.8% from Euro 437.1 million posted in the first half of the previous year, reflecting not only the 12.9% growth in net interest income and the 3.1% growth in net fees and commissions income, but also the 7.0% decrease in operating costs. Excluding the effect of specific items (a Euro 23.7 million profit in 2017 including the negotiation of the Bank's Collective Labour Agreement net of restructuring costs and Euro 1.2 million in restructuring costs in 2016), core net income increased 22.0% from the first half of 2016, reaching Euro 534.9 million in the first half of 2017.
The performance of core net income benefited from both the performance of the activity in Portugal and the international activity, and reflected an improvement of operating efficiency, as shown by the decrease in the cost to core income ratio, excluding specific items, from 52.4% in the first half of 2016 to 47.0% in the first half of 2017.
Net income in the first half of 2017 totalled Euro 89.9 million comparing very favourably to Euro -197.3 million posted in the first half of the previous year.
This performance was determined by the activity in Portugal, where net income increased by Euro 306.7 million compared to the first half of 2016, to Euro 1.6 million, mainly induced by the growth of core net income and a noteworthy decrease in impairment and provisions, net of tax effects. The positive impact, net of tax, due to the above-mentioned specific items of 2017 reached Euro 16.7 million, comparing to Euro 20.9 million from the gain related to the purchase of Visa Europe by Visa Inc in the same period of 2016.
In the international activity, net income stood at Euro 87.1 million in the first half of the year, comparing to Euro 99.4 million achieved in the first half of the previous year, mainly reflecting the lower contributions from the operations in Angola and especially Poland, the latter conditioned by both, the gain booked in the first half of 2016 associated with the purchase of Visa Europe by Visa Inc (Euro 26.2 million) and by the penalising effect of the mandatory contributions, namely the recognition of the total annual cost of the contribution to the Resolution Fund in March 2017, which was accrued in 2016, and the new banking tax introduced in February 2016.
Net interest income increased 12.9% in the first half of 2017, reaching Euro 678.5 million comparing to Euro 600.8 million registered in the same period of previous year benefiting from the contribution of both, Portugal and the international activity.
In the activity in Portugal, net interest income totalled Euro 390.2 million in the first half of 2017 showing an increase of 9.0% compared to the first half of the previous year, reflecting essentially the lower cost of funding largely justified by the positive impact of CoCos' repayment and by the continued reduction of interest rates of term deposits, despite the lower gains in loans and the securities portfolio.
In the international activity, net interest income excluding exchange rate effects increased 23.0% in the first half of 2017, compared to the same period of previous year, reflecting the positive performance of all subsidiaries, in particular Mozambique and Poland.
Net interest margin stood at 2.18% in the first half of 2017, compared to 1.86% in the same period of the previous year. Excluding the impact from the cost of CoCos, net interest margin reached 2.20% in the first half of 2017 and 1.96% in the same period of 2016.
| AVERAGE BALANCES | 30 Jun.17 | Euro million 30 Jun.16 |
||
|---|---|---|---|---|
| Amount | Yield % | Amount | Yield % | |
| Deposits in banks | 2,816 | 0.95 | 3,194 | 0.56 |
| Financial assets | 10,698 | 2.30 | 10,479 | 2.09 |
| Loans and advances to customers | 48,285 | 3.33 | 50,141 | 3.26 |
| Interest earning assets | 61,799 | 3.04 | 63,814 | 2.93 |
| Discontinued operations (1) | 0 | 1,471 | ||
| Non-interest earning assets | 10,554 | 9,920 | ||
| 72,353 | 75,205 | |||
| Amounts owed to credit institutions | 9,426 | 0.22 | 10,513 | 0.36 |
| Resources from customers | 50,086 | 0.68 | 49,124 | 0.76 |
| Debt issued | 3,221 | 3.12 | 4,460 | 3.28 |
| Subordinated debt | 992 | 6.96 | 1,654 | 7.40 |
| Interest bearing liabilities | 63,725 | 0.83 | 65,751 | 1.04 |
| Discontinued operations (1) | 0 | 1,375 | ||
| Non-interest bearing liabilities | 2,203 | 2,511 | ||
| Shareholders' equity and non-controlling | ||||
| interests | 6,425 | 5,568 | ||
| 72,353 | 75,205 | |||
| Net interest margin | 2.18 | 1.86 | ||
| Net interest margin (excl. cost of CoCos) | 2.20 | 1.96 |
(1) Includes the activity of the subsidiary in Angola (in 2016), as well as the respective consolidation adjustments.
Net commissions reached Euro 330.3 million in the first half of 2017, compared to Euro 320.3 million achieved in the same period of the previous year, benefiting from the performance of the international activity, namely in Poland, partially offset by the contribution of the activity in Portugal which reflects a higher one-off amount recorded in the first quarter of 2016 in banking commissions.
The performance of net commissions mainly reflects the increase in market commissions which grew 12.5% compared to the first half of 2016.
Net trading income amounted to Euro 89.9 million in the first half of 2017, compared to Euro 182.8 million accounted in the same period of 2016, reflecting the gain of Euro 91.0 million related to the purchase, by Visa Inc., of the shareholdings held by the Bank in Portugal and Bank Millennium in Poland in Visa Europe in the second quarter of 2016.
Other net operating income was negative by Euro 86.6 million in the first half of 2017, compared to the negative Euro 88.1 million posted in the same period of the previous year. This item includes the costs
associated with mandatory contributions as well as with Resolution Fund, largely recognized in the second quarter of the year, both in Portugal and in the international activity.
The favourable performance of other net operating income was determined by the activity in Portugal, while the contribution of the international activity was in line with the first half of 2016 (having grown up 3.9% excluding exchange rate effects).
The contribution from the international activity was hindered by both the accounting in the first half of 2017, of the estimated annual contribution for the Resolution Fund in Poland, which was accrued in 2016, and by the new tax on Polish banks, which was only introduced in February 2016.
Dividends from equity instruments, which comprises dividends received from investments in financial assets available for sale, and equity accounted earnings, jointly totalled Euro 36.7 million in the first half of 2017, compared to Euro 43.5 million reached in the same period of 2016, conditioned by the positive impact of the gains from UNICRE related to the transaction of its shareholding in Visa Europe during the first half of 2016, despite the higher gains in the first half of 2017 from the shareholding in Banco Millennium Atlântico, the new entity that resulted from the merger of Banco Millennium Angola with Banco Privado Atlântico, from May 2016 onwards.
| OTHER NET INCOME | Euro million | ||
|---|---|---|---|
| 30 Jun. 17 | 30 Jun. 16 | Change 17/16 |
|
| Net commissions | 330.3 | 320.3 | 3.1% |
| Banking commissions | 265.9 | 263.1 | 1.1% |
| Cards and transfers | 75.2 | 71.1 | 5.8% |
| Credit and guarantees | 78.5 | 79.9 | -1.7% |
| Bancassurance | 47.5 | 43.6 | 8.9% |
| Current account related | 46.5 | 45.4 | 2.3% |
| Other commissions | 18.2 | 23.1 | -21.1% |
| Market related commissions | 64.4 | 57.3 | 12.5% |
| Securities | 43.8 | 38.9 | 12.6% |
| Asset management | 20.6 | 18.3 | 12.5% |
| Net trading income | 89.9 | 182.8 | -50.8% |
| Other net operating income | (86.6) | (88.1) | 1.6% |
| Dividends from equity instruments | 1.6 | 5.8 | -72.3% |
| Equity accounted earnings | 35.1 | 37.7 | -6.9% |
| Total other net income | 370.3 | 458.6 | -19.3% |
| Other net income / Net operating revenues | 35.3% | 43.3% |
Operating costs, excluding the effect of specific items (a Euro 23.7 million profit that includes gains from the Collective Labour Agreement negotiation and restructuring costs in 2017, and Euro 1.2 million from restructuring costs in 2016), totalled Euro 473.9 million in the first half of 2017, decreasing 1.8% from the Euro 482.8 million accounted in the first half of the previous year, due to the contribution of the activity in Portugal which reflects the cost saving initiatives that have been implemented.
In the activity in Portugal, operating costs, excluding the above-mentioned specific items, showed a decrease of 4.5% compared to the first half of 2016, mainly determined by the impact of the reduction in the number of employees on staff costs and also by other administrative costs savings, amounting to Euro 294.8 million in the first half of 2017.
In the international activity, operating costs increased 2.8% from the amount accounted in the first half of 2016 mainly influenced by the performance of the subsidiary in Poland. Excluding the exchange rate effect, operating costs increased 5.5%, induced by the performance of the subsidiary in Mozambique.
Staff costs, excluding the impact of the above-mentioned specific items, amounted to Euro 265.2 million in the first half of 2017, showing a 2.7% reduction compared to Euro 272.5 million registered in the same period of the previous year, benefiting from the impact of the decrease of 99 employees in the activity in Portugal from the end of June 2016, while in the international activity, staff costs increased 6.5% excluding exchange rate effects determined by the operation in Poland and in Mozambique.
Other administrative costs stood at Euro 182.6 million in the first half of 2017, decreasing 1.2% from the Euro 184.9 million registered in the same period of 2016, reflecting the performance of the activity in Portugal, namely the resizing of the distribution network related to the rationalisation and cost containment measures that have been implemented, which translated into a reduction of 50 branches from the end of June 2016 to 596 at the end of June 2017.
In the international activity, excluding exchange rate effects, there was a 5.8% increase in other administrative costs determined by the activity in Mozambique.
Depreciation costs totalled Euro 26.1 million in the first half of 2017, compared to Euro 25.5 million posted in the same period of 2016, determined by the performance of the activity in Portugal, namely by the higher IT equipment and software depreciation costs. In the international activity, excluding the exchange rate effect, depreciation costs decreased 4.4% compared to the amount registered in the first half of 2016.
| OPERATING COSTS | Euro million | ||
|---|---|---|---|
| 30 Jun. 17 | 30 Jun. 16 | Change 17/16 |
|
| Staff costs | 265.2 | 272.5 | -2.7% |
| Other administrative costs | 182.6 | 184.9 | -1.2% |
| Depreciation | 26.1 | 25.5 | 2.5% |
| Subtotal (1) | 473.9 | 482.8 | -1.8% |
| Specific items | |||
| Restructuring costs and Collect. Lab. Agreem. revision | (23.7) | 1.2 | |
| Operating costs | 450.2 | 484.1 | -7.0% |
| Of which: | |||
| Portugal activity (1) | 294.8 | 308.6 | -4.5% |
| Foreign activity | 179.1 | 174.3 | 2.8% |
(1) Excludes the impact of specific items presented in the table.
Impairment for loan losses (net of recoveries) fell by 50.7% compared to Euro 618.7 million accounted in the first half of 2016, to stand at Euro 305.0 million in the first half of 2017, reflecting a trend towards normalization of the cost of risk in the activity in Portugal that allowed the improvement of the cost of risk for the group that decreased from 234 basis points in the first half of 2016 to 118 basis points in the same period of 2017.
Other impairment and provisions totalled Euro 110.3 million in the first half of 2017, decreasing 44.3% compared to Euro 198.0 million registered in the same period of the previous year, essentially reflecting the lower level of provisions related to corporate restructuring funds and other debt instruments, despite the reinforcement that occurred in other assets.
Income tax (current and deferred) achieved Euro 43.4 million, in the first half of 2017, compared to Euro -78.3 million posted in the same period of the previous year.
These taxes include current tax costs of Euro 54.5 million (Euro 56.4 million in the first half of 2016), net of deferred tax income of Euro 11.1 million (Euro 134.7 million in the first half of 2016).
Total assets stood at Euro 73,024 million as at 30 June 2017, comparing to Euro 73,068 million as at 30 June 2016, essentially reflecting the reduction of loans to customers and also deposits at central banks and loans and advances to credit institutions, partially offset by the increase in financial assets available for sale, deferred tax assets and other assets.
Loans to customers (gross) amounted to Euro 51,684 million as at 30 June 2017, compared to Euro 52,930 million recorded as at 30 June 2016, hindered by the decrease in the activity in Portugal, despite the increase showed by the international activity.
In the activity in Portugal, loans to customers decreased 4.9% from 30 June 2016, induced by the performance of loans to companies (-6.5%) and mortgage loans (-4.6%), despite the growth of consumer loans (5.5%). These performances reflect the aim of reducing NPEs, notwithstanding the initiatives focused on meeting the financing needs of companies and individuals. It is worth noting the stabilization of the performing loans portfolio in the first half of 2017, reflecting significant increases in loans to individuals and to companies.
The performance of loans to companies was also accompanied by a structural change in order to reduce the weight of construction and real estate activities and non-financial holding companies against exporting industries.
Loans to customers in the international activity increased 6.3% from 30 June 2016, mainly reflecting the growth of loans to companies in the operations in Poland and Mozambique. Excluding the exchange rate effects, loans to customers would have increased 1.2%.
The structure of the loans to customers' portfolio showed identical and stable levels of diversification between the end of June 2016 and June 2017, with loans to companies representing 46% of total loans to customers as at 30 June 2017.
Credit quality, determined by loans overdue by more than 90 days as a percentage of total loans, showed a favourable performance, dropping from 7.5% as at 30 June 2016 to 6.4% as at 30 June 2017, while the corresponding coverage ratio for loans overdue by more than 90 days improved from 93.9% as at 30 June 2016 to 110.1% in the same date of 2017.
The credit at risk ratio reached 10.1% as at 30 June 2017, which compares favourably with 11.9% on the same date of the previous year. As at 30 June 2017, the restructured loans ratio stood at 9.6% of total loans, from 10.0% registered as at 30 June 2016, and the ratio of restructured loans not included in the credit at risk stood at 5.5% of total loans compared to 5.4% at the same date of 2016.
| LOANS TO CUSTOMERS (GROSS) | Euro million | ||
|---|---|---|---|
| 30 Jun. 17 | 30 Jun. 16 | Change 17/16 |
|
| Individuals | 27,912 | 28,413 | -1.8% |
| Mortgage | 23,678 | 24,494 | -3.3% |
| Consumer and others | 4,233 | 3,918 | 8.0% |
| Companies | 23,773 | 24,518 | -3.0% |
| Services | 8,833 | 9,686 | -8.8% |
| Commerce | 3,295 | 3,132 | 5.2% |
| Construction | 2,779 | 3,166 | -12.2% |
| Other | 8,865 | 8,534 | 3.9% |
| Total | 51,684 | 52,930 | -2.4% |
| Of which: | |||
| Portugal activity | 38,709 | 40,719 | -4.9% |
| Foreign activity | 12,975 | 12,211 | 6.3% |
| Euro million | ||||
|---|---|---|---|---|
| Overdue loans by more than 90 days |
Impairment for loan losses |
Overdue loans by more than 90 days /Total loans |
Coverage ratio (Impairment/ Overdue >90 days) |
|
| Individuals | 686 | 716 | 2.5% | 104.4% |
| Mortgage | 256 | 324 | 1.1% | 126.6% |
| Consumer and others | 430 | 392 | 10.2% | 91.2% |
| Companies | 2,602 | 2,902 | 10.9% | 111.5% |
| Services | 965 | 1,564 | 10.9% | 162.1% |
| Commerce | 226 | 198 | 6.9% | 87.5% |
| Construction | 823 | 647 | 29.6% | 78.6% |
| Other | 587 | 493 | 6.6% | 84.0% |
| Total | 3,288 | 3,618 | 6.4% | 110.1% |
Total customer funds, reached Euro 66,070 million as at 30 June 2017, showing an increase of 5.2% compared to Euro 62,823 million as at 30 June 2016, supported by the performance of both the international and the activity in Portugal.
Total customers funds in the activity in Portugal, reached Euro 48,645 million as at 30 June 2017, increasing 3.0% compared to Euro 47,213 million at the same date of 2016, benefiting from both, the growth in offbalance sheet customer funds, which increased by Euro 1,272 million, and on balance sheet customer funds, highlighting the performance of resources from customers, which increased by Euro 312 million from 30 June 2016.
In the international activity, total customer funds, totalled Euro 17,425 million as at 30 June 2017, increasing 11.6% from Euro 15,610 million as at 30 June 2016, highlighting the performance of the subsidiary in Poland, namely in what concerns to resources from customers. Excluding the exchange rate effects total customer funds of the international activity grew 6.5%.
As at 30 June 2017, balance sheet total customer funds represented 79% of total customer funds, with resources from customers representing 77% of total customer funds.
According to Bank of Portugal's Instruction no. 16/2004, the loan to deposits ratio improved from 102% as at 30 June 2016 to 95% as at 30 June 2017, benefiting from the Euro 3.0 billion reduction of the commercial gap. The same ratio, considering the total on-balance sheet customers' funds, stood at 92% (97% as at 30 June 2016).
| TOTAL CUSTOMER FUNDS | Euro million | ||
|---|---|---|---|
| 30 Jun. 17 | 30 Jun. 16 | Change 17/16 |
|
| Balance sheet total customer funds | 52,228 | 50,500 | 3.4% |
| Resources from customers | 50,636 | 48,762 | 3.8% |
| Debt securities | 1,592 | 1,738 | -8.4% |
| Off-balance sheet customer funds | 13,842 | 12,323 | 12.3% |
| Assets under management | 4,461 | 3,847 | 16.0% |
| Capitalisation products | 9,382 | 8,476 | 10.7% |
| Total | 66,070 | 62,823 | 5.2% |
The securities portfolio stood at Euro 13,967 million as at 30 June 2017, compared to Euro 12,832 million posted at the same date of the previous year, mainly reflecting the performance of the subsidiary in Poland, and representing 19.1% of total assets (17.6% as at 30 June 2016).
During the first half of 2017 the consolidated wholesale funding needs of the bank decreased by approximately Euro 1.3 billion, mainly due to the share capital increase of the Bank (Euro 1.3 billion) and to the reduction of the commercial gap in Portugal (Euro -1.3 billion), which were partially offset by the increase of the sovereign debt and corporate portfolio by Euro 1.4 billion.
The decrease of liquidity needs involved a change in the funding structure through the full repayment of CoCos (Euro 0.7 billion), the redemption of MTN (Euro 0.3 billion), the increased use of repos in Portugal (by Euro 0.8 billion, to a balance of Euro 3.1 billion) and the decrease of collateralized funding from the Eurosystem (by Euro 0.9 billion, to Euro 4.0 billion, which corresponds to the balance of the targeted long term refinancing operations named TLTRO). It should be highlighted that the remaining issue of covered bonds placed in the market was refinanced in June through a similar issue of Euro 1.0 billion, with a five year maturity, marking the return of the bank to the medium-long term debt market, three years after the placement of an MTN, already amortized last February.
In net terms, the funding from Eurosystem decreased by Euro 0.8 billion from December 2016, to Euro 3.6 billion.
The significant decrease of the exposure to the Eurosystem allowed a reinforcement of the liquidity buffer with the ECB by Euro 0.7 billion, facing December 2016 figures, to Euro 8.4 billion. If on a pro forma basis the collateral currently allocated in excess to the covered bond program (which, under the form of an issue to be retained at the portfolio of ECB eligible assets, would allow its increase by an amount of at least Euro 1.0 billion after haircuts, assuming the use of the valuation criteria of the ECB concerning the other retained issues), were added to the buffer, as well as a portfolio of Treasury Bills amounting to USD 0.6 billion, its value would increase Euro 0.8 billion, facing the comparable figure of December 2016, to Euro 9.9 billion.
CRD IV/CRR establishes Pillar 1 capital requirements of 4.5%, 6% and 8% for CET1, Tier 1 and Total Capital, respectively. However, under SREP, the European Central Bank notified BCP about the need to comply with phased-in capital ratios, during 2017, of 8.15% (CET1), 9.65% (Tier 1) and 11.65% (Total), including 2.4% of additional Pilar 2 requirements and 1.25% of a capital conservation buffer.
The estimated phased-in and fully-implemented CET1 ratios as at 30 June 2017 stood at 13.0% and 11.3%, respectively, reflecting an increase of 70 and 165 basis points, comparing to the 12.3% and 9.7% ratios recorded in the same period of 2016.
This reinforcement of the capital levels was mainly determined by the CET1 improvement, which included, on one hand, the share capital increases performed in the fourth quarter of 2016 and in the first quarter of 2017, even though these were partially used for the full reimbursement of the remaining CoCo bonds, and, on the other hand, the positive net income and the favourable contributions of the fair value and FX reserves during this period, notwithstanding an higher level of deductions related to deferred tax assets and to the shortfall of impairment to expected loss, as well as the phase-in effects that also affected the CET1 computed on this basis.
| SOLVENCY RATIOS (CRD IV/CRR) | Euro million | |||
|---|---|---|---|---|
| 30 Jun. 17 | 30 Jun. 16 | 30 Jun. 17 | 30 Jun. 16 | |
| PHASED-IN | FULLY IMPLEMENTED | |||
| Own funds | ||||
| Common equity tier 1 (CET1) | 4,951 | 4,719 | 4,273 | 3,672 |
| Tier 1 | 4,951 | 4,719 | 4,337 | 3,685 |
| Total Capital | 5,351 | 5,133 | 4,679 | 4,050 |
| Risk weighted assets | 38,135 | 38,415 | 37,708 | 37,929 |
| Solvency ratios | ||||
| CET1 | 13.0% | 12.3% | 11.3% | 9.7% |
| Tier 1 | 13.0% | 12.3% | 11.5% | 9.7% |
| Total capital | 14.0% | 13.4% | 12.4% | 10.7% |
Notes:
The capital ratios of June 2017 are estimated and include the positive net income of the year.
A covered bond issue marking Millennium bcp's return to the capital debt markets more than 7 years after its most recent mortgage bond issue and the strengthening of BCP's corporate governance model, with the increase of the number of directors to 22, 14 of which are non-executive.
Highlights during this period include:
The International Monetary Fund (IMF) forecasts an acceleration of the world economy in 2017 (3.5%), reflecting the recent improvement of the key activity indicators in most of the main economies. Nevertheless, the expansion pace of the developed countries should remain moderate, possibly due to the reduction of their potential growth. The IMF considers that its scenario is subject to a set of downside risks, specifically those derived from the possibility of intensification of international trade protectionism.
Despite the favorable evolution of the European economy and the stabilization of the euro against the major international currencies, the ECB decided not to modify the stance of monetary policy that was defined in March as it considers that the recovery of activity and inflation still lacks confirmation. In the US, dwindling growth and the stabilization of inflation have not precluded the continuation of the process of slow normalization of the Federal Reserve's monetary policy, which hiked its key rate in June, for the second time this year, to 1.25%.
The expectation of sustainable growth of the world economy, the dissipation of risks among the commodityproducing countries and the maintenance of extremely accommodative monetary conditions have contributed to create a favorable context for financial markets, which translated into an appreciation of the majority of asset classes and in a fall of the volatility levels to the lowest values. Within the equity segment, it should be mentioned that all of the main US indices have reached historical highs. In the interest rate domain, the fact that oil prices have stabilized led to the mitigation of inflationary pressures, which in turn allowed for the stabilization of the government bond yields of the low-risk countries, such as Germany and the US, after the strong increases of the second half of 2016, especially for the longer maturities. Regarding the Euro money markets, the continuation of ECB's policy of generous liquidity provision has kept the Euribor rates in negative territory for all maturities.
According to Statistics Portugal, Portugal's GDP rose by 2.8% annually during the first three months of 2017, clearly above the 2.0% observed in the previous quarter. The increase in the pace of economic activity stemmed from the strong acceleration of investment as well as a material rise in the contribution of net exports. The favorable evolution of these two components has more than compensated for the loss of vigor in consumption, both in the public and in the private sector. In this improved context, the IMF has revised upwards its forecasts for Portugal's economic growth in 2017 to 2.5%, a value that significantly exceeds the growth observed last year (1.4%). The unequivocal improvement of the economic outlook as well as the strong fiscal performance and the fading out of the risks concerning the financial condition of the banking system, accompanied by a more stable climate in international financial markets, have contributed to the appreciation of the main domestic equity index by more than 10% in the first half and also a meaningful decline in public and private debt's risk premia.
During 2017's first quarter, the Polish economy expanded at the highest pace among the countries of the European Union, with an annual 4.0% growth rate. This performance benefited essentially from the acceleration of private consumption, stimulated by negative real interest rates and from the strong growth of households' disposable income. The investment in construction, partly co-financed by European funds also contributed decisively to the expansion of activity. Despite the economy's dynamism and the rise in inflation associated to the recovery of international commodity prices, Poland's National Bank maintained the level of its key rate at 1.50% and has not hinted at any change in the near future. The good macroeconomic performance and the reduced volatility in the global financial markets favored the appreciation of the zloty against the main international currencies, including the euro and the dollar. After the steep deceleration of activity recorded in 2016, the Mozambican economy has been recovering, leading to the appreciation of the metical, the decline of the inflation rate and the return of foreign investment. In this context, Mozambique's central bank reduced the interest rate on the permanent lending facility from 23.25% to 22.75% in April. In Angola, the recovery of the oil price with respect to the previous year has contributed to a greater economic dynamism, despite the subsistence of financial frailties, namely at the level of net international foreign reserves, which have continued to decline.
| CONSOLIDATED INDICATORS, ACTIVITY IN PORTUGAL AND INTERNATIONAL ACTIVITY | Consolidated | Activity in Portugal | International activity | Euro million | |||||
|---|---|---|---|---|---|---|---|---|---|
| Jun 17 | Jun 16 | Change | Jun 17 | Jun 16 | Change | Jun 17 | Jun 16 | Change | |
| Income statement | |||||||||
| Net interest income | 678.5 | 600.8 | 12.9% | 390.2 | 358.1 | 9.0% | 288.3 | 242.7 | 18.8% |
| Dividends from equity instruments | 1.6 | 5.8 | $-72.3%$ | 1.1 | 5.4 | $-80.4%$ | 0.5 | 0.4 | 35.2% |
| Net fees and commission income | 330.3 | 320.3 | 3.1% | 225.2 | 229.5 | $-1.9%$ | 105.1 | 90.9 | 15.7% |
| Other operating income | (86.6) | (88.1) | 1.6% | (52.9) | (54.6) | 3.1% | (33.7) | (33.5) | $-0.8%$ |
| Net trading income | 89.9 | 182.8 | $-50.8%$ | 59.0 | 75.9 | $-22.2%$ | 30.9 | 107.0 | $-71.1%$ |
| Equity accounted earnings | 35.1 | 37.7 | $-6.9%$ | 19.3 | 34.8 | $-44.4%$ | 15.8 | 3.0 | >200% |
| Net operating revenues | 1,048.8 | 1,059.4 | $-1.0%$ | 641.9 | 649.0 | $-1.1%$ | 406.9 | 410.4 | $-0.8%$ |
| Staff costs | 241.5 | 273.7 | $-11.8%$ | 145.1 | 181.5 | $-20.0%$ | 96.4 | 92.2 | 4.5% |
| Other administrative costs | 182.6 | 184.9 | $-1.2%$ | 109.9 | 114.0 | $-3.6%$ | 72.7 | 70.9 | 2.6% |
| Depreciation | 26.1 | 25.5 | 2.5% | 16.1 | 14.3 | 12.3% | 10.0 | 11.2 | $-10.1%$ |
| Operating costs | 450.2 | 484.1 | $-7.0%$ | 271.1 | 309.8 | $-12.5%$ | 179.1 | 174.3 | 2.8% |
| Recurring operating costs (1) | 473.9 | 482.8 | $-1.8%$ | 294.8 | 308.6 | $-4.5%$ | 179.1 | 174.3 | 2.8% |
| Operating profit before impairment and provisions | 598.6 | 575.4 | 4.0% | 370.8 | 339.2 | 9.3% | 227.8 | 236.1 | $-3.5%$ |
| Loans impairment (net of recoveries) | 305.0 | 618.7 | $-50.7%$ | 257.7 | 582.6 | $-55.8%$ | 47.3 | 36.1 | 31.1% |
| Other impairment and provisions | 110.3 | 198.0 | $-44.3%$ | 112.3 | 190.3 | $-41.0%$ | (2.0) | 7.6 | $-126.0%$ |
| Profit before income tax | 183.3 | (241.3) | 176.0% | 0.8 | (433.7) | 100.2% | 182.5 | 192.4 | $-5.1%$ |
| Income tax | 43.4 | (78.3) | 155.5% | (0.6) | (127.9) | 99.6% | 44.0 | 49.6 | $-11.2%$ |
| Income after income tax from continuing operations | 139.9 | (163.0) | 185.8% | 1.3 | (305.8) | 100.4% | 138.5 | 142.9 | $-3.0%$ |
| Income arising from discontinued operations | 1.3 | 45.2 | $-97.2%$ | ٠ | × | 36.8 | $-100.0%$ | ||
| Non-controlling interests | 51.2 | 79.5 | $-35.6%$ | (0.2) | (0.7) | 68.2% | 51.4 | 80.2 | $-35.9%$ |
| Net income | 89.9 | (197.3) | 145.6% | 1.6 | (305.1) | 100.5% | 87.1 | 99.4 | $-12.4%$ |
| Balance sheet and activity indicators | |||||||||
| Total assets | 73,024 | 73,068 | $-0.1%$ | 53,240 | 54,833 | $-2.9%$ | 19,784 | 18,234 | 8.5% |
| Total customer funds | 66,070 | 62,823 | 5.2% | 48,645 | 47,213 | 3.0% | 17,425 | 15,610 | 11.6% |
| Balance sheet total customer funds | 52,228 | 50,500 | 3.4% | 36,334 | 36,173 | 0.4% | 15,894 | 14,327 | 10.9% |
| Resources from customers | 50,636 | 48,762 | 3.8% | 34,843 | 34,531 | 0.9% | 15,793 | 14,231 | 11.0% |
| Debt securities | 1,592 | 1,738 | $-8.4%$ | 1,491 | 1,641 | $-9.2%$ | 102 | 97 | 5.0% |
| Off-balance sheet customer funds | 13,842 | 12,323 | 12.3% | 12,311 | 11,040 | 11.5% | 1,531 | 1,283 | 19.4% |
| Assets under management | 4,461 | 3,847 | 16.0% | 3,372 | 3,000 | 12.4% | 1,089 | 846 | 28.6% |
| Capitalisation products | 9,382 | 8,476 | 10.7% | 8,939 | 8,040 | 11.2% | 442 | 436 | 1.4% |
| Loans to customers (gross) | 51,684 | 52,930 | $-2.4%$ | 38,709 | 40,719 | $-4.9%$ | 12,975 | 12,211 | 6.3% |
| Individuals | 27,912 | 28,413 | $-1.8%$ | 19,791 | 20,493 | $-3.4%$ | 8,120 | 7,920 | 2.5% |
| Mortgage | 23,678 | 24,494 | $-3.3%$ | 17,314 | 18,145 | $-4.6%$ | 6,364 | 6,349 | 0.2% |
| Consumer and others | 4,233 | 3,918 | 8.0% | 2,477 | 2,348 | 5.5% | 1,757 | 1,571 | 11.8% |
| Companies | 23,773 | 24,518 | $-3.0%$ | 18,918 | 20,226 | $-6.5%$ | 4,855 | 4,292 | 13.1% |
| Services | 8,833 | 9,686 | $-8.8%$ | 7,830 | 8,859 | $-11.6%$ | 1,003 | 828 | 21.2% |
| Commerce | 3,295 | 3,132 | 5.2% | 2,221 | 2,182 | 1.8% | 1,074 | 951 | 13.0% |
| Construction | 2,779 | 3,166 | $-12.2%$ | 2,438 | 2,849 | $-14.4%$ | 342 | 316 | 8.0% |
| Other | 8,865 | 8,534 | 3.9% | 6,429 | 6,336 | 1.5% | 2,436 | 2,197 | 10.9% |
| Credit quality | |||||||||
| Total overdue loans | 3,704 | 4,130 | $-10.3%$ | 3,355 | 3,848 | $-12.8%$ | 348 | 283 | 23.2% |
| Overdue loans by more than 90 days | 3,288 | 3,989 | $-17.6%$ | 2,985 | 3,749 | $-20.4%$ | 302 | 241 | 25.6% |
| Overdue loans by more than 90 days /Total loans | 6.4% | 7.5% | 7.7% | 9.2% | 2.3% | 2.0% | |||
| Total impairment (balance sheet) | 3,618 | 3,744 | $-3.4%$ | 3,165 | 3,348 | $-5.5%$ | 453 | 396 | 14.4% |
| Total impairment (balance sheet) /Total loans | 7.0% | 7.1% | 8.2% | 8.2% | 3.5% | 3.2% | |||
| Total impairment (balance sheet) /Overdue loans by more than 90 days | 110.1% | 93.9% | 106.0% | 89.3% | 149.7% | 164.5% | |||
| Cost of risk (net of recoveries, in b.p.) | 118 | 234 | 133 | 286 | 73 | 59 | |||
| Restructured loans / Total loans (2) | 9.6% | 10.0% | |||||||
| Restructured loans not included in the credit at risk / Total loans (2) | 5.5% | 5.4% | |||||||
| Cost-to-income (1) | 45.2% | 45.6% | 45.9% | 47.5% | 44.0% | 42.5% | |||
| (1) Excludes the impact of specific itens. |
Interim Condensed Consolidated Income Statements for the six months periods ended 30 June 2017 and 2016
| 30 June 2017 |
30 June 2016 |
|
|---|---|---|
| (Thousands of Euros) | ||
| Interest and similar income | 956,582 | 965,476 |
| Interest expense and similar charges | (278,083) | (364,672) |
| Net interest income | 678,499 | 600,804 |
| Dividends from equity instruments | 1,605 | 5,804 |
| Net fees and commission income | 330,324 | 320,331 |
| Net gains / (losses) arising from trading and | ||
| hedging activities | 58,596 | 74,564 |
| Net gains / (losses) arising from available for | ||
| sale financial assets Net gains from insurance activity |
31,308 2,713 |
108,259 2,748 |
| Other operating income / (costs) | (85,869) | (86,328) |
| Total operating income | 1,017,176 | 1,026,182 |
| Staff costs | 241,480 | 273,686 |
| Other administrative costs | 182,609 | 184,885 |
| Depreciation | 26,119 | 25,480 |
| Operating costs | 450,208 | 484,051 |
| Operating net income before provisions and impairments | 566,968 | 542,131 |
| Loans impairment | (304,990) | (618,678) |
| Other financial assets impairment | (31,926) | (171,996) |
| Other assets impairment | (61,267) | (13,971) |
| Goodwill impairment for subsidiaries | (4) | (2,512) |
| Goodwill impairment for associated companies | (9,006) | - |
| Other provisions | (8,109) | (9,472) |
| Operating net income | 151,666 | (274,498) |
| Share of profit of associates under the equity method | 35,104 | 37,716 |
| Gains / (losses) from the sale of subsidiaries and other assets | (3,466) | (4,480) |
| Net (loss) / income before income tax Income tax |
183,304 | (241,262) |
| Current | (54,548) | (56,447) |
| Deferred | 11,109 | 134,748 |
| Net (loss) / income after income tax from continuing operations | 139,865 | (162,961) |
| Income arising from discontinued operations | 1,250 | 45,227 |
| Net income after income tax | 141,115 | (117,734) |
| Attributable to: | ||
| Shareholders of the Bank | 89,928 | (197,251) |
| Non-controlling interests | 51,187 | 79,517 |
| Net income for the period | 141,115 | (117,734) |
| Earnings per share (in euros) | ||
| Basic Diluted |
0.015 0.015 |
(0.329) (0.329) |
| 31 | |||
|---|---|---|---|
| 30 June 2017 |
December 2016 |
30 June 2016 |
|
| (Thousands of Euros) | |||
| Assets | |||
| Cash and deposits at central banks | 1,650,857 | 1,573,912 | 2,178,315 |
| Loans and advances to credit institutions | |||
| Repayable on demand | 491,497 | 448,225 | 415,547 |
| Other loans and advances | 895,899 | 1,056,701 | 1,389,207 |
| Loans and advances to customers | 48,065,976 | 48,017,602 | 49, 186, 077 |
| Financial assets held for trading | 973,978 | 1,048,797 | 1,234,270 |
| Other financial assets held for trading | |||
| at fair value through profit or loss | 141,973 | 146,664 | 144,946 |
| Financial assets available for sale | 12,384,733 | 10,596,273 | 11,023,430 |
| Assets with repurchase agreement | 15,419 | 20,525 | 10,561 |
| Hedging derivatives Financial assets held to maturity |
113,860 451,254 |
57,038 511,181 |
115,022 419,025 |
| Investments in associated companies | 596,005 | 598,866 | 558,736 |
| Non current assets held for sale | |||
| 2,223,967 | 2,250,159 | 1,906,134 | |
| Investment property | 12,293 | 12,692 | 133,228 |
| Other tangible assets | 487,425 | 473,866 | 475,150 |
| Goodwill and intangible assets Current tax assets |
164,293 7,576 |
162,106 17,465 |
194,975 36,113 |
| Deferred tax assets | 3,165,443 | 3,184,925 | 2,767,402 |
| Other assets | 1,181,290 | 1,087,814 | 879,395 |
| 71,264,811 | |||
| 73,023,738 | 73,067,533 | ||
| Liabilities | |||
| Resources from credit institutions | 9,373,181 | 9,938,395 | 11,228,648 |
| Resources from customers | 50,635,749 | 48,797,647 | 48,762,037 |
| Debt securities issued | 3, 121, 425 | 3,512,820 | 4,018,060 |
| Financial liabilities held for trading | 476,192 | 547,587 | 613,595 |
| Hedging derivatives | 289,292 | 383,992 | 484,329 |
| Provisions | 339,096 | 321,050 | 290,491 |
| Subordinated debt | 850,603 | 1,544,555 | 1,659,530 |
| Current tax liabilities | 8,912 | 35,367 | 18,151 |
| Deferred tax liabilities | 1,635 | 2,689 | 1,722 |
| Other liabilities | 981,941 | 915,528 | 977,325 |
| Total Liabilities | 66,078,026 | 65,999,630 | 68,053,888 |
| Equity | |||
| Share capital | 5,600,738 | 4,268,818 | 4,094,235 |
| Treasury shares | (279) | (2,880) | (3,671) |
| Share premium | 16,471 | 16,471 | 16,471 |
| Preference shares | 59,910 | 59,910 | 59,910 |
| Other capital instruments | 2,922 | 2,922 | 2,922 |
| Legal and statutory reserves | 252,806 | 245,875 | 245,875 |
| Fair value reserves | (23, 262) | (130, 632) | (52, 122) |
| Reserves and retained earnings | (51, 314) | (102, 306) | (7, 725) |
| Net income for the period attributable to Shareholders | 89,928 | 23,938 | (197, 251) |
| Total Equity attributable to Shareholders of the Bank | 5,947,920 | 4,382,116 | 4,158,644 |
| Non-controlling interests | 997,792 | 883,065 | 855,001 |
| Total Equity | 6,945,712 | 5,265,181 | 5,013,645 |
| 73.023.738 | 71 764 811 | 73.067.533 |
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 pastdue 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).
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.
The financial 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 interim condensed consolidated financial statements, for the six month period ended 30 June 2017, were prepared in terms of recognition and measurement in accordance with the IAS 34 - Interim Financial Reporting adopted by the EU.
The figures presented do not constitute any form of commitment by BCP in regard to future earnings.
The six month periods ended 30 June 2016 and 30 June 2017 figures were not audited or reviewed.
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