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Banco Comercial Portugues

Earnings Release Jul 25, 2017

1913_iss_2017-07-25_00ab2be1-b9bc-40d1-93ed-b6fd2a06a150.pdf

Earnings Release

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Banco BPI

Consolidated resultsin 1st half 2017

25 July 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‐
te
ar‐
y
oy
Ye
ar‐
on
‐y
ea
r
q
oq
rte
rte
q
ua
r‐o
n‐q
ua
r
R
C
L
las
f
d
Re
i
ie
c
s
n.a
E
C
B
l
k
Eu
Ce
Ba
ntr
ro
p
ea
n
a
n
Bo
P
k o
f
l
Ba
Po
rtu
n
g
a
vs
C
M
V
M
(
)
Co
iss
ão
do
do
de
lor
b
i
l
i
ár
ios
Se
it
ies
ke
Co
iss
ion
Me
Va
Mo
Ma
t
m
rca
es
cu
r
r
mm
A
P
M
lte
fo
A
ive
Pe
Me
t
rna
r
rm
an
ce
as
ure
s
I
M
M
ba
k
ke
Int
Mo
Ma
t
er
n
ne
y
r
E
T
1
T
ier
1
F
C
E
T
1
Co
Eq
ity
T
ier
1
mm
on
u
R
W
A
is
k w
ig
hte
d a
R
ts
e
sse
O
T
L
T
R
d
lon
f
ina
ing
ion
Ta
ete
te
t
rg
g
er‐
rm
re
nc
op
era
s
L
C
R
d
L
iq
i
ity
io
at
u
co
ve
rag
e r
€,
Eu
E
U
R
ro
s,
eu
ros
M
€,
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. e
ur
os
l
l
i
ion
m
eu
ros
h.
h.
€,
t
t
eu
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us
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uro
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ng
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la
b
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l
l o
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lev
t
nu
r
e
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rsu
s
b.p ba
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p.
p.
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tag
p
erc
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e p
o
E Est
im
ate
F Fo
ast
rec

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

'
l
f
i
i
i
i
N
t
t
t
o
e
o
n
c
a
p
o
n
s
r
e
c
a
s
s
c
a
o
n
3
l
D
i
i
s
c
a
m
e
r
4

1st half 2017 results

l
d
d
(
l
d
)
f
i
i
i
i
i
C
1
8
8
M

t
t
t
o
n
s
o
a
e
n
e
n
c
o
m
e
e
x
c
u
n
g
n
o
n
r
e
c
u
r
r
n
g
e
m
s
o
f
in
1
8
8

in
Ne
M
t
co
m
e
o
1
H
(
l. n
)
ing
ite
ex
c
on
re
cu
rr
ms
l
i
da
d
in
lu
d
in
in
i
in
by
%
fro
in
he
ha
l
f
Co
7
7
1
0
6
M

1s
2
0
1
6
te
t
te
t
t
to

ns
o
ne
co
m
e,
e
xc
g
no
n‐
re
cu
rr
g
m
s,
cr
ea
se
s
m
,
in
he
ha
l
f
1
8
8
M
€,
1s
2
0
1
7.
t
t
No
in
i
te
n
re
cu
rr
g
m
s
f ‐
2
9
0
M

o
l
"a
" n
by
he
ha
l
f
f
lec
he
Co
i
da
d
in
d
ive
0
2

in
2
0
in
ive
1
M
1s
1
7,
te
t
te
t
t
t
ts
t
t

ns
o
ne
co
m
e
s r
ep
or
eg
a
re
n
on
re
cu
rr
g
ne
g
a
im
f
(
f
)
h
he
le
d
de
l
da
f
d
h
he
lu
2
9
0
M

2
1
2
M

i
i
io
B
F
A
7
7
M

i
ts
te
ta
t
t
t
t
t
ta
p
ac
o
a
r
xe
s
w
sa
an
co
ns
o
n o
an
w
v
o
n
ry
:
d
ly
in
io
ire
te
t
t
ts
rm
a
ns
a
n
ea
r
re
m
en
p
ro
g
ra
m
Cu
Re
to
s
m
er
so
ur
ce
s
in
d
by
i.
1.
6
B

cr
ea
se
fo
l
io
in
Lo
t
an
p
or
cr
ea
se
s
f
in
i
ic
ts
sp
ec
se
g
m
en
l c
d
by
(
)
d,
f w
h
h:
f
de
d
l
in
1.
6
i.

4.
%
ic
0.
3
i.

in
in
i
1.
0
i.

in
To
B
7
B
B
ta
to
t
ts
tu

us
m
er
re
so
ur
ce
s
cr
ea
se
+
y
o
cr
ea
se
o
p
os
an
m
u
a
fu
ds
n
1).
l
lo
fo
l
d.
h
f
f c
lo
l
b
l
f m
lo
To
io
in
0.
3
%
Gr
3.
6
%
in
Po
S
i
isa
io
ta
t
t
t
te
tu
ta
t
tg

an
p
or
cr
ea
se
s
ow
o
o
or
p
or
a
an
s
r
g
a
n o
or
ag
e
an
s
y
fo
l
io
t
p
or
h
f c
Gr
t
ow
o
or
e
re
ve
nu
es
d
du
io
f
t
an
re
c
n
o
in
ts
re
cu
rr
g
co
s
l m
he
f
ha
l
f
fa
l
ls
l
h
ly
(
d
)
F
in
ia
in
in
irs
ig
t
t
t

an
c
ar
g
s
oy
an
q
oq
y
iss
io
%
Co
4.
8

m
m
ns
g
ro
w
y
oy
2)
du
io
f o
he
d
lu
d
by
(
).
Re
in
in
i
8.
5
%
t
ts
te

c
n
o
ve
r
a
co
s
e
xc
g
no
n
re
cu
rr
g
m
s
y
oy
du
io
in
f
Re
t
t o
c
n
co
s
d
k
i
is
t r
cr
e
3)
fo
fro
f
(
f
fo
irm
lo
d
de
in
he
ha
l
%
he
lo
l
io
6.
6
Im
3
5.
8
M

1s
2
0
1
6
0.
3
2
1
ts
te
t
t
t
t
to

p
a
en
r
an
s a
n
g
ua
ra
n
es
cr
ea
se
m
o
an
p
or
3).
he
ha
l
f
(
f
he
lo
fo
l
M

in
1s
2
0
1
7
0.
1
5
%
io
t
t
t
t
o
an
p
or
4)
3)
3)
f r
de
fro
(
(
he
ds
irm
ies
2
8.
6

0.
2
%

0.
0
%
in
io
Im
M
5
7.
5
M
7
ts
t o
to
t

p
a
en
ne
ec
ov
er
cr
ea
se
m
sa
m
e
p
er
l
i
d
la
he
d
So
Ba
S
t a
nc
e
e
n
h
H
ig
im
irm
t
p
a
en
f c
d
i
is
k
t r
co
ve
ra
g
e
o
re
d
i
is
k r
io
f
%
d
by
im
irm
f
%
i
ho
i
de
in
he
ia
d
l
la
l,
d
%
Cr
3.
6
8
3
1
4
9
t a
t r
t
ts
t
t c
t
te
te

e
a
o
an
co
ve
ra
g
e
p
a
en
o
w
u
on
s
r
g
a
ss
oc
co
ra
an
,
de
he
d
l
la
l.
i
in
ia
t
te
te
co
ns
r
g
a
ss
oc
co
ra
5)
f
d
ho
de
he
d
l
la
l,
f
io
8
%
im
irm
i
i
in
ia
8
%
N
P
L
5.
4
t
ts
t
t c
t
te
te

ra
o
an
p
a
en
co
ve
ra
g
e,
w
u
on
s
r
g
a
ss
oc
co
ra
o
d
de
he
d
l
la
l.
1
1
5
%
i
in
ia
t
te
te
an
co
ns
r
g
a
ss
oc
co
ra
f
Lo
De
i
io
1
0
6
%
to
t r
t

an
p
os
a
o
f
f
ha
in
in
i
l r
io
%
d
l r
io
%
P
C
E
T
1 o
1
1.
9
1
3.
3
ta
t
to
ta
t

s
g
ca
p
a
s:
an
a
o
l
ly
de
d
l r
f
d
l r
f
Fu
Lo
i
io
C
E
T
1
1
0.
9
%
io
1
2.
7
%
ta
t
to
ta
t

a
ca
p
a
s:
o
an
a
o

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

1) Does not include Project Finance and Madrid branch loans portfolio.

2) Costs from voluntary terminations and early retirements.

3) In annualized terms. 4) Recoveries from loans previously written off 5) According to CaixaBank criteria.

1st half 2017 results

  1. Highlights

2. Commercial activity

    1. Results
    1. Balance Sheet
    1. Closing remarks

Annexes

Strong increase in Customer resources: +1.6 Bi.€ (+4.7%) ytd

Customer resources

In

M.
Ju
1
7
n‐
1
6
De
c‐
Y
D
t
q
oq
‐ba
lan
he
I.
On
t r
ce
s
e
es
ou
rce
s
2
4
1
2
2
2
4
0
0
3
0.
5
%
0.
8
%
1
De
i
ts
p
os
2
0
0
6
9
1
9
7
5
4
1.
6
%
0.
2
%
2
l
d o
he
Ca
i
i sa
io
i n
ta
t
t
p
n
s u
ra
nc
e a
n
r
4
0
5
3
4
2
5
0
4.
6
%
5.
3
%
de
I
I.
As
ts
t
se
un
r m
an
ag
em
en
8
9
0
7
7
6
6
2
1
6.
2
%
7.
4
%
2
l
fu
ds
Mu
tu
a
n
6
2
8
6
5
2
4
4
1
9.
9
%
9.
5
%
3
i o
la
Pe
ns
n p
ns
2
6
2
1
2
4
1
8
8.
4
%
2.
6
%
b
l
f
fe
I
I
I.
Pu
ic
ing
o
r
s
1
4
9
4
1
3
0
4
1
4.
6
%
1
3.
8
%
l
To
ta
3
4
5
2
3
3
2
9
7
0
4.
7
%
1.
8
%

1) Includes bonds placed with customers of 95 M.€ in Dec.16 and 56 M.€ in Jun.17.

2) BPI Alternative Fund ceased to be consolidated from March 2017 onwards and started being consolidated off balance sheet. In Dec. 16 and Mar. 17 the caption "capitalisation insurance and others" included 250 M.€ and 268 M.€, respectively, relative to that fund. Adjusted by the deconsolidation of the fund, the caption "capitalisation insurance and others" increased by 1.3% ytd and 1.1% qoq and "Mutual Funds" increase by 14.4% ytd and 4.7% qoq.

3) Includes BPI Group employee pension funds of 1 397 in Dec.16 and 1 556 in Jun.17.

ke
ha
M
t s
ar
re
s
3
0
Ap
1
7
r.
4
l
de
To
i
ta
ts
p
os
9.
6
%
5
l
fu
ds
M
tu
u
a
n
2
3.
9
%
6
's
P
P
R
2.
2
%
1
7
l
Ca
i
isa
io
ins
ta
t
p
n
ur
an
ce
1
4.
0
%
8
lan
Pe
io
ns
n p
s
3.
6
%
1

Growth drivers

4) Does not include the effect of the securitization 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 30%.

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

7) Excludes PPR in the form of capitalisation insurance.

8) In 31 Mar. 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 1.6 Bi.€ ytd:

Deposits grew 315 M.€ (+1.6%)

Strong growth in mutual funds +1.0 Bi.€; +19.9% (+ 0.8 Bi.€; + 14.4% adjusted by the deconsolidation of BPI Alternative Fund).

Note: the format used for presenting customer resources in the current document is different from the one used in previous quarters. A reconciliation between the two formats is included in the annex.

Growth in Corporate and Consumer Loans

Loans to customers by segments

fo
l
io
in
Gr
M

t
os
s p
or
,
Ju
1
7
n.
De
1
6
c.
Y
D
t
q
oq
in
d
iv
i
du
ls
I.
Lo
to
an
s
a
1
2
1
4
6
1
2
1
0
7
0.
3
%
0.
2
%
lo
M
tg
or
ag
e
an
s
1
1
0
6
9
1
1
0
8
4
(
)
%
0.
1
(
)
%
0.
1
he
lo
d
du
ls
O
in
iv
i
t
to
r
an
s
a
1
0
7
7
1
0
2
3
5.
3
%
3.
6
%
ies
I
I.
Lo
Co
to
an
s
m
p
an
8
3
3
3
8
2
3
2
2
%
1.
(
)
0.
%
4
1
d m
d
iu
ize
d c
La
tes
rg
e a
n
e
m
s
or
p
or
a
6
3
5
0
6
3
1
5
0.
5
%
(
)
1.
0
%
Sm
l
l
bu
in
a
s
es
se
s
9
8
3
1
9
6
1
1
3.
%
5
%
1.
7
2
da
fo
l
I
I
I.
B
P
I
V
i
Pe
õe
io
t
e
ns
s p
or
1
2
4
8
1
3
0
3
(
)
4.
2
%
4.
9
%
b
l
ic
I
V.
Pu
to
se
c
r
1
4
4
0
1
4
1
7
1.
6
%
3.
8
%
he
V.
O
t
r
3
2
7
3
7
2
(
)
1
2.
3
%
(
)
6.
5
%
l
To
ta
2
3
4
9
4
2
3
4
3
1
0.
3
%
0.
4
%
No
te
:
0 0 0.
0
%
0.
0
%
fo
l
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io
t
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p
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2
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%
0.
4
%
0.
4

1) Includes loans to large and medium‐sized companies in Portugal (4 701 M.€ in June 2017 and 4 535 M.€ in December 2016), project finance (995 M.€ in June 2017, 996 M.€ in December 2016) and the Madrid branch loan portfolio (654 M.€ in June 2017, 785 M. € in December 2016).

2) Debt securities portfolio, mainly from large companies.

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

Growth trends are maintained in the 2nd quarter

  • Growth in the segments of corporates and small business and stabilisation of the mortgage loan portfolio (vs. Dec.16). Total loan portfolio stable.
  • After deleveraging 6 Bi.€ between 2010 and 2015, total loan portfolio stabilized and shows signs of selective growth in 2017.

Mortgage loan origination increases by 19% yoy

Mortgage loans

  • Origination of mortgage loans increases by 19% in the 1st half (yoy) to 494 M.€.
  • Consistent increase in the loan portfolio market share (11.1% as of April 2017) in a market segment that is still shrinking.

Corporate and small business loans increase by 3.6%1). Increase in BPI market share

Corporate and small business loans

  • Growth of 3.7% (ytd) in loans to Large and Medium‐sized companies in Portugal (excludes project finance and Madrid branch loan portfolio).
  • Growth of 3.5% (ytd) in loans to small business.
  • Gradual increase in market share (7.9% in April 2017).

1st half 2017 results

    1. Highlights
    1. Commercial activity

4. Results

    1. Balance Sheet
    1. Closing remarks

Annexes

Increase of 77% in recurring consolidated net income to 188 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.

ha
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Main "drivers" of recurring net profit increase

Recurring net profit increases by +82 M.€:

  • Recurring costs decrease 8.5% yoy (‐22 M.€);
  • Total impairments net of recoveries decrease from 62 M.€ in the 1st half 16 to 5 M.€ in the 1st half 2017;
  • Increase in the contribution of BFA to profits from 79 M.€ to 96 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.

Strong increase in recurring profits and ROTE

RETURN ON TANGIBLE EQUITY (ROTE) IN JUN. 2017 (last 12 months)

Excluding impact of the sale of 2% of BFA and costs from early retirements and voluntary terminations

Co
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)
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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: 26.8 M.€.)

  • Recurring consolidated net income increases to 188 M.€.
  • Consolidated net income "as reported" is negative by 102 M.€ due to the impact of BFA deconsolidation (‐212 M.€1)) and costs from early retirements and voluntary terminations (‐77 M.€1)).

Recurring ROTE excluding the contribution of shareholdings in African banks of 11.4% in June 2017.

Financial margin falls slightly

Financial margin falls slightly in 2nd quarter 17... ... penalised by the cost of the subordinated debt issued in Mar. 2017

Trends in margin evolution:

  • Reduction in the average cost of term deposits to 0.07% in 2Q17
  • Reduction in the spreads of corporate loans

Stabilisation of the credit portfolio

Minimal contribution from the securities portfolio

Cost of 4 M.€ in the first half 2017 related to the subordinated Tier II debt issued on 24 Mar.17 (remuneration Euribor 6M + 5.74%)

Intermediation margin improved slightly

Fall in term deposits costs...

... has been the main driver behind the improvement in intermediation margin

  • 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 showing signs of stabilisation.

Commissions increased by 4.8% yoy

Commissions

Commissions by business area

In
M
1
H
1
7
1
H
1
6
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2
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1)
d
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i
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%
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1)Includes unit links gross margin.

2) BPI Alternative Fund ceased to be consolidated from March 2017 onwards. In the consolidation of that fund in the 1st half 2016 and 1st quarter 2017, net commissions of 3.6 M.€ and 2.2 M.€ were annulled, respectively. Adjusting the variations by the deconsolidation of BPI Alternative Fund, asset management fees increased 11.7% yoy in the first half 2017 and 9.5% qoq in the 2nd quarter 2017.

  • Net commissions increased 9.2% in the 2nd quarter (qoq) and 4.8% in the first half, in year‐on‐year terms (vs. the 1st half of 2016)
  • Asset management commissions show strong growth in the semester: + 21% yoy and 32.6% qoq

Overhead costs (excluding non‐recurring items) decreased 8.5% yoy

  • Overhead costs excluding costs from voluntary terminations and early retirements decrease 22 M. € (‐8.5%) in the first half of 2017 (vs. 1st half of 2016)
  • Personnel costs (excluding non‐recurring items) decreased by 14 M.€ (‐9.2%) yoy.

Programme of voluntary terminations and early retirements

Agreement for the departure of 617 employees representing 11% of total staff

544people leaving the Bank in 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

Programme of voluntary terminations and early retirements: 617 departures agreed

The decrease of 8.5% in overhead costs (excluding non‐recurring items) in 1H17, does not reflect the departures agreed in 2017.

1) Excluding non recurring items.

Employees' pension liabilities covered at 98%

Pension fund return (2017, ytd) 6.8%

M.
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la
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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.

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

M.
l a
ia
l
de
iat
ion
3
1
1
6
To
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ar
v
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f a
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)
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)
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ha
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Pension fund return of 6.8% ytd with a positive impact of 78.5 M.€ in actuarial deviations.

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

Amount of liabilities at 30 June 2017 already includes the increase from the programme of early retirements and voluntary terminations.

Cost of credit risk drops from 0.09% in 2016 to 0.07%1) in the 1st half 2017

Cost of credit risk1)

  • Impairments in the first half of 2017 amounted to 16.6 M.€, which corresponds to 0.15% of the loan portfolio in annualised terms.
  • The cost of credit risk, net of recoveries from loans previously written off, of 7.5 M.€ in the first half corresponds to 0.07% of the loan portfolio in annualised terms.

1st half 2017 results

    1. Highlights
    1. Commercial activity
    1. Results

5. Balance Sheet

  1. Closing remarks

Annexes

Credit at risk at low levels and with a high impairments coverage

Credit at risk

Note: amounts from Dec.12 to Dec.15 relate to the domestic activity.

Credit at risk (Bank of Portugal rules)

  • Ratio of credit at risk decreased in the first half to 3.6%. This ratio improved significantly vis‐à‐vis the maximum recorded at the end of 2014 (5.0%)
  • Impairments coverage of credit at risk of 83%1)
  • Impairments coverage of credit at risk of 149%, including collateral

1) Not considering collateral.

Non performing loans (CaixaBank definition)

NON PERFORMING LOANS (M.€), NON PERFORMING LOANS RATIO (%) AND IMPAIRMENTS COVERAGE (%) 31 Mar. 17 30 Jun. 17 Non performing loans 1 508 M.€ 1 439 M.€ Non performing loans ratio 6.1% 5.8%

Coverage ratio 47% 48%

Non performing loans (CaixaBank definition)

  • Non performing loans ratio of 5.8%;
  • Impairments coverage of 48%1)
  • Impairments coverage of 115% including collateral

Properties foreclosure at very low levels

Sale of 280 properties in the first half for 40 M.€. Positive impact in profits before taxes of 7.9 M.€.

Balanced funding structure and comfortable liquidity position

  • Client Resources are the main source of funding in the Balance sheet (73% of assets).
  • Loan to Deposit ratio of 106%.
  • 2.0 Bi.€ of funds obtained with the ECB (TLTRO). BPI still has eligible assets to raise 6.9 Bi.€ of additional funding from the ECB.
  • Portfolio of financial assets available for sale of 3.8 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 1.8 years.
  • Recourse to wholesale debt market is small (3% of assets).

ASSETS ELIGIBLE FOR ECB FUNDING

M
k
Bo
o
lue
va
(
)

M
/
ins
Ga
(
los
)
se
s
i
du
l
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s
a
i
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ty
m
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r
,
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3)
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ta
3
7
7
9
2
4

3) Portugal (67%), Italy (17%) and Spain (16%). 4) Portugal (63%), Italy (37%).

utilisation.

CET1 FL ratio

Evolution of CET1 fully loaded ratio Capital ratios

  • Phasing in capital ratios: CET1 of 11.9% and total capital of 13.3%.
  • BPI fulfils minimum SREP requirements of CET1, T1 and total ratio
  • Fully loaded capital ratios: CET1 of 10.9% and total capital of 12.7%
  • Leverage ratio of 6.7% phase‐in and 6.0% fully loaded.
  • 1) Excluding impact from the sale of 2% of BFA capital and deconsolidation.
  • 2) Excluding DTA and equity risk class.

Rating levels

  • 1) As of 21/06/17
  • 2) As of 13/02/17
  • 3) As of 18/01/17
  • 4) As of 20/01/17
  • 5) As of 31/03/17

1st half 2017 results

    1. Highlights
    1. Commercial activity
    1. Results
    1. Balance Sheet

6. Closing remarks

Annexes

Results at 30 June 2017: Summary

Consolidated net income, excluding non‐recurring items, increases by 77%, from 106 M.€ in the 1st half 2016 to 188 M.€ in the 1st half 2017.

Positive commercial results in the semester: 4.7% ytd growth in customer resources, 3.6% ytd growth in corporate loans in Portugal, with market share gains in mortgage loans (+10bps) and corporate loans (+20bps).

Voluntary terminations and early retirements: reduction of 617 employees (11% total staff in 31.12.16) with a total cost of 106 M.€ which will allow for annual savings of 36 M.€ from 2019 onwards.

Strong liquidity position: Client Resources represent 73% of assets, Loan to Deposit ratio of 106% and Liquidity Coverage Ratio of 179%.

Quality of the loan portfolio allowed for a decrease in the cost of credit risk to 0.07% in the first half 2017; Portuguese economy improving.

1st half 2017 results

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

As in the Bank of Portugal's Instruction no. 23/2011

3
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(
)
Re
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4.
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To
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5)
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ier
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(
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8
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1
0
6
%

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

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.

3) According to Bank of Portugal Instruction 32/2013.

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

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

32

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.

1st half 2017 2Q17 1Q17 2016 4Q16 3Q16 1st half 16 2Q16 1Q16
proforma 1) proforma 1) proforma 1) proforma 1
Financial margin narrow sense 182.3 90.1 92.3 364.2 94.2 91.1 178.9 92.8 86.1
Technical result of insurance contracts 7.4 3.8 3.6 24.6 5.7 5.4 13.5 5.6 7.9
Net commisions relating to amortised cost 10.3 4.6 5.8 21.2 5.4 5.3 10.6 5.1 5.4
Financial margin - RCL 200.1 98.5 101.6 410.0 105.3 101.8 203.0 103.6 99.4
Income from equity instruments - RCL 6.4 6.3 0.1 8.5 4.6 0.0 3.9 3.9 $0.0\,$
Net commission income - RCL 138.3 72.2 66.1 272.8 74.5 66.3 132.0 67.4 64.6
Equity accounted results (earnings associated companies) - RCL 120.7 64.6 56.1 26.2 0.8 4.0 21.4 15.8 5.6
Net income on financial operations 14.7 7.1 7.7 48.9 17.7 6.1 25.2 28.7 (3.6)
Net operating income (191.0) (15.0) (176.0) (23.8) (3.2) (1.0) (19.6) (18.3) (1.2)
Operating income from banking activity - RCL 289.3 233.6 55.6 742.7 199.6 177.3 365.9 201.1 164.8
Personnel costs (242.0) (164.1) (77.9) (308.0) (79.8) (76.0) (152.3) (78.3) (74.0)
Of which: Non-recurring personnal costs 2) (106.4) (95.6) (10.7) (16.8) (9.3) (4.7) (2.9) (2.3) (0.6)
General administrative costs (85.7) (44.3) (41.4) (168.6) (29.7) (45.2) (93.7) (48.9) (44.8)
Depreciation and amortisation (11.0) (5.5) (5.5) (21.4) (5.4) (5.2) (10.8) (5.3) (5.5)
Overhead costs (338.7) (213.9) (124.7) (497.9) (114.8) (126.3) (256.8) (132.5) (124.2)
Operating profit before impairments and provisions (49.4) 19.7 (69.1) 244.8 84.8 50.9 109.1 68.6 40.5
Recovery of loans, interest and expenses 9.1 2.9 $6.2$ 13.7 3.1 3.4 7.2 3.3 3.9
Impairment losses and provisions for loans and guarantees, net (16.6) (16.7) 0.1 (33.0) 3.9 (1.1) (35.8) (15.6) (20.1)
Impairment losses and other provisions, net 3.0 (0.6) 3.5 (36.5) 2.5 (5.1) (33.9) (30.6) (3.3)
Net income before income tax (54.0) 5.3 (59.3) 189.0 94.3 48.2 46.6 25.6 21.0
Income tax (47.7) 15.3 (63.1) (44.7) (6.5) (15.8) (22.5) (9.0) (13.4)
Net income from continuing operations (101.7) 20.6 (122.3) 144.4 87.8 32.4 24.1 16.6 7.6
Net income from discontinued operations 337.7 84.8 89.0 163.9 87.2 76.6
Income attributable to non-controlling interests from continuing
operations (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0)
Income attributable to non-controlling interests from
discontinued operations (168.8) (42.3) (44.4) (82.0) (43.6) (38.4)
Net income (101.7) 20.6 (122.3) 313.2 130.3 77.0 105.9 60.2 45.8

1) The designation "proforma" reflects the reclassification (RCL) of the contribution of BFA for consolidated results according to 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).

Increase of 77% in consolidated net income to 188 M.€

Consolidated income statement

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

ha
lf 2
1st
01
7
ha
lf 2
1st
01
6
In M
.€
As
ed
ort
rep
No
n
rec
urr
lud
Exc
ing
no
n
ing
ite
rec
urr
ms
1)
for
Pro
ma
l m
Fi n
cia
i n
‐ R
CL
a n
a rg
20
0
20
0
20
3
lu
de
s in
f 4
.€ w
it
h s
bo
din
d T
ier
de
bt
iss
d
by
he
d o
f M
17
Inc
ter
est
st o
M
ate
II
t
co
u
r
ue
en
ar.
(
)
30
0 M
.€,
tio
uri
bo
6M
4%
n E
5.7
+
rem
un
era
r
fro
Inc
ui
i ns
‐ R
CL
ty
tru
nts
om
e
m
eq
me
6 6 4
mi
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in
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‐ R
CL
t c
om
s s
co
me
13
8
13
8
13
2
ha
l
f 1
he
ha
ho
l
din
in
(
.1%
)
is
1st
7:
BFA
48
t
s
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g
d
by
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d.
uit
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t
et
acc
ou
eq
y m
ui
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Eq
ty
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co
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es
u
12
1
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1
21
fi n
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n
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ra
ns
15 15 25 lu
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ain
f 2
it
h t
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in
Inc
3 M
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sta
s g
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sa
Vis
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uro
pe
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tin
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t o
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ra
g
om
e
(
)
19
1
(
)
17
6
(
)
16
(
)
20
fro
Op
ing
inc
ba
k
ing
iv
ity
‐ R
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t
t
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e
m
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ac
28
9
(
)
17
6
46
5
36
6
bu
for
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da
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i
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17
ntr
te
n
co
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l an
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Inc
i
tio
ion
ntr
t
nat
s a
nn
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a
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d c
Ov
ost
er
a
s
(
)
33
9
(
)
10
6
(
)
23
2
(
)
25
7
fit:
pro
lut
fun
ds
(
d 1
Eu
ion
15
M.
€ i
n 1
H1
7 a
8 M
.€
rop
ea
n r
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n
)
in
1H
16
ing
f
it
be
for
im
irm
d p
is
ion
Op
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ts
era
pr
o
e
pa
en
an
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s
(
)
49
(
)
28
2
23
2
10
9
l. im
f sa
le a
d
BFA
96
M.
€ e
t o

xc
pac
n
,
(+
)
de
li
dat
ion
16
.9 M
.€ y
co
nso
oy
f
loa
int
d e
Re
t a
co
ve
ry
o
ns
e re
s
n
xp
en
se
s
,
9 9 7 (+
)
BC
4.6
M
.€
1.3
M
l os
d p
fo
l oa
d
Im
i rm
i s
ion
t
pa
en
se
s a
n
rov
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r
ns
a n
te
t
gu
a ra
n
es
, n
e
(
)
17
(
)
17
(
)
36
I,
.€ y
oy
Im
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l os
d o
he
i s
ion
t
t
t
pa
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se
s a
n
r p
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s,
ne
3 3 (
)
34
lu
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d 2
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l
Inc
0 M
.€ o
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PT
Int
ati
ts
pa
en
ern
on
a
bo
Fin
ds
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Gr
inc
be
for
inc
Ne
t
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om
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om
ax
(
)
54
(
)
28
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22
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47 (
)
an
ce
n
ou
p
Inc
e t
om
ax
(
)
48
(
)
8
(
)
40
(
)
22
lu
de
din
bu
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ba
kin
Inc
i
tio
tra
ntr
t
ex
or
ary
co
ns
ov
er
n
g
(
d 1
)
7 M
.€ i
n 1
H1
7 a
1 M
.€ i
n 1
H1
6
tor
sec
n
inc
fro
inu
ing
ion
Ne
t
nt
t
om
e
m
co
op
era
s
(
)
10
2
(
)
29
0
18
8
24
fro
di s
d o
Ne
t i
nti
tio
nc
om
e
m
co
nu
e
pe
ra
ns
164 f p
for
f B
1st
ha
l
he
i
bu
tio
FA
: t
ntr
ro
ma
co
n o
wa
s
fro
de
d i
inc
dis
nti
d
et
rec
or
n n
om
e
m
co
nu
e
bu
b
le
l
lin
Inc
i
i n
ttr
ta
to
tro
te
ts
om
e a
no
n‐c
on
g
res
(
)
0
(
)
0
(
)
82
tio
op
era
ns.
inc
Ne
t
om
e
(
)
10
2
(
)
29
0
18
8
10
6

Recurring net profit increases by +82M.€:

  • Recurring costs decrease 8.5% yoy (‐22 M.€, before taxes);
  • Loan impairments for loans and guarantees (before taxes) decrease from 62 M.€ in 1H16 to 5 M.€ in 1H17;
  • Increase in contribution of BFA to the result from 79 M.€ to 96 M.€, after taxes.

Non recurring impacts in 1st half 2017 negative by 290 M.€:

  • Costs from early retirements and voluntary terminations of 77.2 M.€ (106.4 M.€ before taxes)
  • Sale of 2% of BFA capital and deconsolidation, already recognised in the 1st quarter 2017:
  • The impact in consolidated shareholders equity was negative by 30.2 M.€ 2)
  • The impact in consolidated net profit was negative by 212.3 M.€ 3)

1)The designation "proforma" reflects the restatement of the contribution of BFA for consolidated results according to IFRS 5 accounting standards, that is recorded in the net income from discontinued operations. 2)Impact from the sale of 2% of BFA and deconsolidation in shareholders equity: capital gain of 6.6 M.€ and, with a negative sign, deferred tax liabilities of 36.8 M.€.

333)Impact from the sale of 2% of BFA and deconsolidation in consolidated net profit: negative by 212.3 M.€, as, in addition to the negative impact in shareholders equity (‐30.2 M.€), there was a transfer of 182.1 M.€ of negative foreign exchange reserves to net profit in the period.

Return on Equity (ROE) and Return on Tangible Equity (ROTE) YtD (annualised) vs Last 12 months

Y
D
t
La
1
2
t
s
(
l
d
)
i
a
n
nu
a
s
e
h
t
m
o
n
s
l
f
1st
Ha
1
7
(
)
Ja
Ju
1
7
n.
n.
l.
Ju
1
6 ‐
Ju
1
7
n.
ing
O
Re
R
E
cu
rr
[
]
ha
ho
l
de
'Eq
bu
d t
ha
ho
l
de
A.
S
ity
i
B
P
I
S
at
tr
te
re
rs
u
o
re
rs
(
ba
lan
)
M.

av
era
g
e
ce
,
2
4
9
4
2
4
3
4
[
]
ir v
lue
f t
he
f
ina
ia
l a
i
la
b
le
B.
Fa
ts
a
re
se
rve
o
nc
sse
av
a
fo
le
fo
l
(
ba
lan
)
io
M.

ort
r s
a
p
av
era
g
e
ce
,
2
0
1
6
[
]
d
d a
l
loc
d c
l
(
)
[=
]
C.
A
j
ita
M.

A.‐
B.
ust
ate
e
ap
2
4
7
4
2
4
1
8
[
]
(
)
D.
Ne
ing
inc
M.

t r
ec
urr
om
e
1
8
8
4
0
5
[
]
[
/
]
ing
O
C.
E.
Re
R
E
D.
cu
rr
2
%
1
5.
6.
8
%
1
ing
lu
d
ing
i
bu
ion
f s
ke
in
Re
R
O
E,
nt
t
ta
cu
rr
ex
c
co
r
o
s
fr
ica
ks
A
Ba
n
n
[
]
'Eq
S
ha
ho
l
de
ity
i
bu
d t
I
S
ha
ho
l
de
F.
at
tr
te
B
P
re
rs
u
o
re
rs
(
)
ba
lan

M.
av
era
g
e
ce
,
1
9
9
9
1
9
6
0
[
]
lue
f t
he
f
l a
la
b
le
G.
Fa
ir v
ina
ia
i
ts
a
re
se
rve
o
nc
sse
av
a
fo
le
fo
l
(
ba
lan
)
io
M.

ort
r s
a
p
av
era
e
ce
g
,
2
0
6
1
(
)
[
]
d
j
d a
l
loc
d c
ita
l

[=
G.
]
H.
A
M.
F.‐
ust
ate
e
ap
9
8
1
7
9
1
4
4
[
]
(
)
I.
ing
inc

Ne
M.
t r
ec
urr
om
e
8
9
2
2
1
[
]
ing
lu
d
ing
i
bu
ion
f s
ke
in
J.
Re
R
O
E,
nt
t
ta
cu
rr
ex
c
co
r
o
s
/
fr
ica
ks
[
]
A
Ba
I.
H.
n
n
9.
0
%
1
1.
4
%
[
]
"as
d
"
(
)
K.
Ne
inc
M.

t
ort
om
e
re
p
e
(
)
1
0
2
1
0
6
1)
/
[
]
"as
d
"
[
]
L.
R
O
E
K.
C.
ort
re
p
e
3.
5
%
4.
4
%

Return on Equity (ROE) Return on Tangible Equity (ROTE)

Y
D
t
La
1
2
t
s
(
)
l
i
d
a
n
nu
a
s
e
h
t
m
o
n
s
l
f
1st
Ha
1
7
(
)
Ja
Ju
1
7
l.
6 ‐
Ju
1
Ju
1
7
n.
Re
ing
R
O
T
E
cu
rr
n.
n.
[
]
S
ha
ho
l
de
'Eq
ity
i
bu
d t
S
ha
ho
l
de
A.
B
P
I
at
tr
te
re
rs
u
o
re
rs
(
)
ba
lan
M.

av
era
g
e
ce
,
2
4
9
4
2
4
3
4
[
]
b
le
(
ba
lan
)
B.
Int
i
M.

ets
an
g
ass
av
era
g
e
ce
,
2
5
2
7
[
]
d
d a
l
loc
d c
l
(
)
[=
]
C.
A
j
ita
M.

A.‐
B.
ust
ate
e
ap
2
4
6
9
2
4
0
7
(
)
[
]
ing
inc

D.
Ne
M.
t r
ec
urr
om
e
8
8
1
0
4
5
/
[
]
[
]
E.
Re
ing
R
O
T
E
D.
C.
cu
rr
1
5.
2
%
1
6.
8
%
lu
d
bu
f s
ke
Re
ing
R
O
T
E,
ing
i
ion
in
nt
t
ta
cu
rr
ex
c
co
r
o
s
fr
A
ica
ks
Ba
n
n
[
]
ha
ho
l
de
'Eq
bu
d t
ha
ho
l
de
F.
S
ity
i
B
P
I
S
at
tr
te
re
rs
o
re
rs
u
(
ba
lan
)
M.

av
era
g
e
ce
,
1
9
9
9
1
9
6
0
[
]
b
le
(
ba
lan
)
G.
Int
i
M.

ets
an
g
ass
av
era
g
e
ce
,
2
5
2
4
[
]
d
d a
l
loc
d c
l
(
)
[=
]
H.
A
j
ita
M.

F.‐
G.
ust
ate
e
ap
1
9
7
4
1
9
3
6
[
]
(
)
I.
Ne
ing
inc
M.

t r
ec
urr
om
e
8
9
2
2
1
[
]
lu
d
bu
f s
ke
J.
Re
ing
R
O
T
E,
ing
i
ion
nt
t
ta
cu
rr
ex
c
co
r
o
s
[
/
]
in
fr
ica
ks
A
Ba
I.
H.
n
n
9.
0
%
1
1.
4
%
[
]
inc
"as
d
"
(
)
K.
Ne
M.

t
ort
om
e
re
p
e
(
)
1
0
2
1
0
6
1)
/
[
]
"as
d
"
[
]
L.
R
O
T
E
K.
C.
ort
re
p
e
3.
%
5
4.
4
%

1) In the annualization of the ROE and ROTE "as reported" in the 1st half 2017 the non recurring impacts (negative by 290 M.€) were not annualised.

Consolidated Balance sheet (as reported)

In
M.
30
Ju
17
n.
31
M
17
ar.
31
De
16
c.
As
set
s
h a
d
de
l
ba
ks
Ca
sit
t c
tra
s
n
po
s a
en
n
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
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
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
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 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
79
.3
3 8
16
.9
3 8
76
.4
l
d t
rit
inv
He
atu
tm
ts
o m
y
es
en
14
.4
16
.3
16
.3
He
dg
ing
de
riv
ati
ve
s
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
67
5.0
68
1.6
17
5.7
Inv
ies
tm
t p
ert
es
en
rop
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 6 2
95
.9
he
b
le
Ot
i
r ta
ts
ng
as
se
43
.7
48
.0
51
.0
b
le
Int
i
ts
an
g
as
se
24
.7
24
.6
25
.6
Ta
ts
x a
sse
47
2.8
44
7.5
47
1.8
he
Ot
ts
r a
sse
46
3.5
42
6.8
59
8.0
l as
To
ta
set
s
32
75
1.4
32
97
6.7
38
28
4.7
ia
b
i
l
it
ies
d s
ha
ho
l
de
' e
ity
L
an
re
rs
qu
f ce
l
ba
ks
Re
ntr
so
urc
es
o
a
n
2 1
45
.4
1 9
99
.5
2 0
00
.0
for
Fin
cia
l
lia
bi
liti
he
l
d
din
tr
an
es
a
g
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 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
33
5.5
22
41
3.5
21
96
7.7
bts
De
rit
ies
se
cu
26
8.9
28
8.6
50
6.8
hn
l p
Te
ica
isi
c
rov
on
s
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
51
1.4
52
5.6
55
5.4
dg
de
He
ing
riv
ati
ve
s
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 5 9
51
.4
vis
ion
Pro
s
68
.8
69
.3
70
.2
lia
bi
liti
Ta
x
es
67
.1
66
.5
22
.0
Ot
he
bo
din
d
de
bt
d p
ici
tin
bo
ds
ate
art
r s
r
an
pa
n
u
g
37
3.8
36
9.9
69
.5
Ot
he
lia
bi
liti
r
es
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 5
60
.6
2 5
33
.0
2 4
40
.5
l
lin
No
int
tro
sts
n‐c
on
g
ere
1.8 1.8 46
8.0
ha
ho
l
de
' e
S
ity
re
rs
qu
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
32
75
1.4
32
97
6.7
38
28
4.7

Consolidated Income Statement 1st half 17 – 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

Income Statement – structure previously used (until 1st quarter 2017 earnings release)

l m
(na
)
Fin
cia
in
an
rro
w s
en
se
arg 1
8
2.
3
Gr
in
it
lin
ks
os
s m
arg
on
un
6.
4
fro
Inc
uit
ins
tru
nts
om
e
m
eq
y
me
6.
4
mi
ssi
lat
ing
ise
d c
Ne
t c
to
ort
t
om
on
s r
e
am
os
1
0.
3
Fin
cia
l m
in
an
arg
2
0
5.
5
hn
l re
lt o
f in
Te
ica
ntr
ts
c
su
su
ran
ce
co
ac
7.
4
mi
ssi
in
Ne
t c
om
on
co
me
1
3
1.
9
fin
l o
Ne
t in
cia
ion
rat
co
me
on
an
pe
s
1
4.
7
Ne
ing
in
t o
rat
pe
co
me
(
)
9
0
1
1.
Op
ing
inc
fro
ba
k
ing
iv
ity
t
t
era
om
e
m
n
ac
1
6
8.
5
l co
Pe
sts
rso
nn
e
(
)
2
4
2.
0
1)
f w
hic
h:
l co
O
ing
sts
no
n‐r
ec
urr
pe
rso
nn
e
(
)
1
0
6.
4
Ge
l a
dm
ini
ati
str
sts
ne
ra
ve
co
(
)
8
5.
7
d a
De
cia
tio
rti
tio
pre
n a
n
mo
sa
n
(
)
1
1.
0
he
d c
Ov
ost
er
a
s
(
)
3
3
8.
7
f
be
for
d p
Op
ing
it
im
irm
is
ion
t
ts a
era
pr
o
e
pa
en
n
rov
s
(
)
1
7
0.
1
f
loa
d e
Re
int
st
co
ve
ry
o
ns
ere
an
xp
en
se
s
,
9.
1
irm
los
d p
isi
for
loa
d g
Im
t
tee
et
pa
en
se
s a
n
rov
on
s
ns
an
ua
ran
s, n
(
)
1
6.
6
los
d o
he
Im
irm
isi
t
t
et
pa
en
se
s a
n
r p
rov
on
s, n
3.
0
inc
be
for
inc
Ne
t
e t
om
e
e
om
ax
(
)
1
4.
7
7
Inc
e t
om
ax
(
)
4
7.
7
f a
d c
(eq
ho
d
)
Ea
rni
cia
nie
uit
te
et
ng
s o
sso
om
pa
s
y m
1
2
0.
7
inc
fro
inu
ing
ion
Ne
t
nt
t
om
e
m
co
op
era
s
(
)
1
0
1.
7
fro
Ne
t in
dis
nti
d o
ion
rat
co
me
m
co
nu
e
pe
s
0.
0
bu
l
lin
fro
Inc
i
int
nti
ing
tio
ttr
t. t
ntr
sts
om
e a
o n
on
‐co
o
g
ere
m
co
nu
op
era
ns
(
)
0.
0
i
bu
l
lin
int
fro
dis
nti
d o
ion
Inc
ttr
t. t
ntr
sts
rat
om
e a
o n
on
‐co
o
g
ere
m
co
nu
e
pe
s
0.
0
Ne
t In
co
me
(
)
1
0
1.
7

6.4131.9

Income Statement – structure adopted in 1st half 2017 (according to the format used by CaixaBank, BPI's consolidating entity)

ha
l
f 2
1st
01
7
In
M.
1
8
2.
3
(na
)
Fin
cia
l m
in
an
arg
rro
w s
en
se
7.
4
hn
l re
lt o
f in
Te
ica
ntr
ts
c
su
su
ran
ce
co
ac
1
0.
3
mi
ssi
lat
ing
ise
d c
Ne
t c
to
ort
t
om
on
s r
e
am
os
2
0
0.
1
l m
Fin
cia
in
‐ R
CL
an
arg
6.
4
fro
Inc
uit
ins
‐ R
CL
tru
nts
om
e
m
eq
y
me
1
3
8.
3
mi
ssi
in
CL
Ne
‐ R
t c
om
on
co
me
1
2
0.
7
d r
lts
Eq
uit
‐ R
CL
te
y a
cco
un
es
u
1
4.
7
fin
l o
Ne
t in
cia
ion
rat
co
me
on
an
pe
s
(
)
1
9
1.
0
ing
in
Ne
t o
rat
pe
co
me
2
8
9.
3
ing
inc
fro
ba
k
ing
iv
ity
Op
‐ R
CL
t
t
era
om
e
m
n
ac
(
)
2
4
2.
0
l co
Pe
sts
rso
nn
e
(
)
1
0
6.
4
1)
f w
hic
h:
l co
O
ing
sts
no
n‐r
ec
urr
pe
rso
nn
e
(
)
8
5.
7
l a
dm
Ge
ini
ati
str
sts
ne
ra
ve
co
(
)
1
1.
0
cia
tio
d a
rti
tio
De
pre
n a
n
mo
sa
n
(
)
3
3
8.
7
he
d c
Ov
ost
er
a
s
(
)
4
9.
4
ing
f
it
be
for
im
irm
d p
is
ion
Op
t
ts a
era
pr
o
e
pa
en
n
rov
s
9.
1
f
loa
int
d e
Re
st
co
ve
ry
o
ns
ere
an
xp
en
se
s
,
(
)
1
6.
6
los
d p
for
loa
d g
Im
irm
isi
t
tee
et
pa
en
se
s a
n
rov
on
s
ns
an
ua
ran
s, n
3.
0
los
d o
he
Im
irm
isi
t
t
et
pa
en
se
s a
n
r p
rov
on
s, n
(
)
5
4.
0
Ne
inc
be
for
inc
t
e t
om
e
e
om
ax
(
)
4
7.
7
Inc
e t
om
ax
(
)
1
0
1.
7
inc
fro
inu
ing
ion
Ne
t
nt
t
om
e
m
co
op
era
s
0.
0
fro
dis
d o
Ne
t in
nti
ion
rat
co
me
m
co
nu
e
pe
s
(
)
0.
0
bu
l
lin
fro
Inc
i
int
nti
ing
tio
ttr
t. t
ntr
sts
om
e a
o n
on
‐co
o
g
ere
m
co
nu
op
era
ns
0.
0
i
bu
l
lin
int
fro
dis
nti
d o
ion
Inc
ttr
t. t
ntr
sts
rat
om
e a
o n
on
‐co
o
g
ere
m
co
nu
e
pe
s
(
)
1
0
1.
7
Ne
t In
co
me

Adjusted overhead costs as a % of comercial banking income

Calculated according to the structure of the income statement previously used (until 1st quarter 2017 earnings release)

Calculated according to the structure of the income statement adopted in the 1st half 2017 (according to the format used by CaixaBank, BPI's consolidating entity)

ha
l
f
1s
1
7
t
(
)
Ja
Ju
1
7
n.
n.
l.
Ju
1
6 ‐
Ju
1
7
n.
(
la
1
2
t
s
hs
)
t
mo
n
l m
(
)
F
in
ia
in
an
c
ar
g
na
rro
w
se
ns
e
1
8
2.
3
3
6
7.
6
l
ks
Gr
in
i
in
t
os
s m
ar
g
on
u
n
6.
4
1
2.
8
fro
In
i
in
ty
tru
ts
co
me
m
eq
u
s
me
n
6.
4
1
1.
0
la
d c
Ne
is
io
in
ise
t c
t
to
t
t
om
m
ns
re
g
a
mo
r
os
1
0.
3
2
1.
0
l m
F
in
ia
in
an
c
ar
g
2
0
5.
5
4
1
2.
5
hn
l r
l
f
Te
ica
in
t o
tra
ts
c
es
u
su
ra
nc
e c
on
c
7.
4
1
8.
6
d o
he
(
)
Co
iss
io
in
t
t
mm
ns
a
n
r
co
me
ne
1
3
1.
9
2
6
6.
3
ia
l
ba
k
ing
inc
Co
m
m
er
c
n
om
e
34
4.8
6
9
7.
4
1)
d
d o
he
d c
A
j
te
ts
us
ve
r
a
os
2
3
2.
3
4
5
9.
5
d
d o
he
d c
f c
l
A
j
%
ia
te
ts
us
ve
r
a
os
as
a
o
om
m
er
c
ba
k
ing
inc
n
om
e
6
7
%
6
6
%
ha
l
f
1s
1
7
t
l.
6 ‐
Ju
1
Ju
1
7
n.
(
)
Ja
Ju
1
7
n.
n.
(
la
1
2
t
s
hs
)
t
mo
n
l m
(
)
F
in
ia
in
an
c
ar
g
na
rro
w
se
ns
e
1
8
2.
3
3
6
7.
6
hn
l r
l
f
Te
ica
in
R
C
L
t o
tra
ts
c
es
u
su
ra
nc
e c
on
c
7.
4
1
8.
6
la
d c
Ne
is
io
in
ise
t c
t
to
t
t
om
m
ns
re
g
a
mo
r
os
1
0.
3
2
1.
0
in
ia
l m
in
F
R
C
L
an
c
ar
g
2
0
0.
1
4
0
7.
2
(
) ‐
iss
io
d o
he
in
Co
R
C
L
t
t
mm
ns
a
n
r
co
me
ne
1
3
8.
3
2
7
9.
2
d r
l
lu
d
bu
fro
i
in
i
io
Eq
ty
te
ts,
tr
t
u
ac
co
un
es
u
ex
c
g
co
n
n
m
9.
0
1
1.
6
fr
ke
in
ica
ba
ks
C
A
R
L
ta
s
s
n
n

fro
In
i
in
R
C
L
ty
tru
ts
co
me
m
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Customer resources at 30 Jun.2017 ‐ reconciliation with the structure previously used

Similar structure to the one used by CaixaBank (BPI's consolidating entity). The underlying accounting criteria were not affected by the change in the format adopted.

Customer Resources at 30 Jun.17 - structure previously used
(until 1st quarter 2017 earnings release)
Customer Resources at 30 Jun.17 -
structure adopted in 1st half 2017
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sheet resources
Other Jun. 17 In M. $\epsilon$
On-balance sheet resources 27
$ $ esources
24 122 I. On balance sheet resources
Customers' deposits 19 0 30 636 304 19 971
Bonds placed with Customers and other 56 56 20 069 Deposits
Deposits and Bonds 19 087 636 304 20 027
Insurance capitalisation and other 4 0 5 3 4 0 5 3 19 998 Sight and term-deposits
Unit links insurance capitalisation 2 1 1 1 2 1 1 1
"Aforro" insurance capitalis. products and other 1943 1943 56 Retail bonds
Participating units in consolidated trust funds 15 Interests from deposits
On-balance sheet resources 23 140 636 304 24 080
Off-balance sheet resources 4 0 5 3 Capitalisation insurance and
Unit trust funds, PPR and PPA 4 1 9 4 4 1 9 4 other
BPI Suisse 1419 1419 8 9 0 7 II. Assets under management
Off-balance sheet resources 5 6 1 3 5 6 13 $5613 +$
Total Customer resources 28752 636 304 29 693 673 6 2 8 6 Mutual funds
Other customer resources
Public offerings 1494 1 4 9 4 2 6 2 1 Pension plans
Third-party funds placed with customers 673 673
Other customer securities 2) 2 4 2 0 2 4 2 0 1494 III. Public offerings
Other customer resources 4 5 8 7 4587
Total 33 339 636 304 34 280 34523 Total
Pension Funds 2621 2621
BPI Group 1556 1556
Other 1 0 6 5 1 0 6 5

1) Placements of investment funds managed by BPI Group in on‐balance sheet resources.

2) Excludes BPI securities.

Loan portfolio at 30 June 2017‐ Reconciliation with the structure previously used

Similar structure to the one used by CaixaBank (BPI's consolidating entity). The underlying accounting criteria were not affected by the change in the format adopted.

Loan portfolio at 30 Jun.17 – structure previously used (until 1st quarter 2017 earnings release) Loan portfolio at 30 Jun.17 – structure adopted in 1st half 2017 (close to the format used by CaixaBank, BPI's consolidating entity) 4 701995654Gross portfolio 30 Jun. 2017, in M.€ 12 146 I. Loans to individuals 11 069 Mortgage loa ns 1 077 Other loans to individual s 8 333 II. Loans to corporates 6 350 La rge a nd medium‐si zed corpora tes 1 983 Small busines ses 1 248 III. BPI Vida e Pensões portfolio 1 440 IV. Public sector 327 V. Other 23 494 Total 30 Jun. 2017, in M.€ [A] Net portfolio [B] Loans in arrears + 30 days [C] Interests and other [D] Gross portfolio [=A+B+C] Corporate banking 4 471 230 0 4 701 Large companies 1 717 56 0 1 773 Medium‐sized companies 2 754 174 0 2 928 Project Finance ‐ Portugal 983 12 0 995 Madrid branch 634 19 0 654 Project Finance 400 10 0 410 Corporates 235 9 0 244 Public Sector 1 440 0 0 1 440 Central Administration 187 0 0 187 Regional and local administrations 893 0 0 893 State Corporate Sector ‐ in the budget perimeter 53 0 0 53 State Corporate Sector ‐ outside the budget perimeter 274 0 0 274 Other Institutional 33 0 0 33 Individuals and Small Businesses Banking 13 739 391 0 14 130 Mortgage loans to individuals 10 800 270 0 11 069 Consumer credit / other purposes 702 26 0 728 Credit Cards 151 6 0 157 Car financing 191 2 0 193 Small businesses 1 896 87 0 1 983 BPI Vida e Pensões 1 239 0 9 1 248 Loans in arrears net of impairments ( 19) ‐ ‐ ‐ Loans in arrears 655 ‐ ‐ ‐ Loan impairments ( 674) ‐ ‐ ‐ Other 333 2 62 327 Other loans 262 2 62 327 Interests and other 71 ‐ ‐ ‐ Total 22 820 655 71 23 494

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 amortization

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 amortization

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

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 + Capitalization 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)

Capitalization insurance and others = Unit links insurance capitalisation + "Aforro" capitalization 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 – Loan impairments)

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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