Earnings Release • Apr 26, 2017
Earnings Release
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(Unaudited) Oporto, 26 April 2017 (Consolidated figures and y-o-y changes, except where indicated otherwise)
1) Overhead costs excluding early retirement costs and indemnities related with the branch in France.
In January 2017, the sale by BPI to Unitel of a 2% stake in BFA's share capital, which was intended to resolve the situation of exceeding the limit of the large risks with which Banco BPI was confronted, resulting from BFA's exposure to Angolan public debt, took place. Following that transaction, Banco BPI now holds 48.1% of BFA's capital and Unitel 51.9%. The consolidated financial statements for the first quarter of 2017 reflect:
In addition, in accordance with International Accounting Standards, the change in BFA's consolidation method (deconsolidation) had the following consequences, already indicated in the Bank statement published on the 11 November 2016:
In summary, the impact of the sale of 2% of BFA on consolidated shareholders equity was negative by 30.2 M.€ (capital gain of 6.6 M.€ and, with a negative sign, deferred tax liabilities of 36.8 M.€).
The impact on consolidated net income was negative by 212.3 M.€, due to the fact that in addition to the aforementioned negative amount of 30.2 M.€, there was a transfer of 182.1 M.€ of negative foreign exchange reserves to the net income for the year.
It should be noted that the above mentioned transfer, now recorded, of 182.1 M.€ of negative foreign exchange reserves to the net income for the year, constitutes a change in the accounting treatment of a situation that was already recognised and recorded in BPI's financial statements and does not constitute a loss of economic value in the 1st quarter 2017, as evidenced by the fact that BPI shareholders' equity is not affected.
| Of which | ||||
|---|---|---|---|---|
| Amounts in M.€ | Consolidated | Domestic | International | |
| Proceeds from the sale of the 2% stake | 28.0 | 28.0 | 0.0 | |
| 2% of BFA shareholders' equity | -18.7 | -18.7 | 0.0 | |
| Realised capital gain | 9.3 | 9.3 | 0.0 | |
| Taxes on the capital gain (@10%) | -2.7 | -2.7 | 0.0 | |
| Realised capital gains net of taxes | 6.6 | 6.6 | 0.0 | |
| Annulment of the foreign exchange reserve related to the 50.1% stake in BFA | -182.1 | -7.3 | -174.9 | |
| Deferred taxes on the gain on the 48.1% stake kept by BFA | -36.8 | 0.0 | -36.8 | |
| Total impact of the sale in net income | -212.3 | -0.7 | -211.6 | |
| Transfer of 2% of BFA shareholders equity | 0.0 | 18.7 | -18.7 | |
| Total impact on shareholders' equity | -30.2 | 25.3 | -55.4 |
1) Realised gain (before taxes) of 9.3 M.€, deducted of taxes (2.7 M.€) on the gain recorded in the individual accounts that has as reference the respective cost of acquisition of the participation.
Net income of -122.3 M.€ – BANCO BPI (Euronext Lisbon - Reuters BBPI.LS; Bloomberg BPI PL) recorded a negative consolidated net income of 122.3 million euro (M.€) in the 1st quarter 2017, which reflects a negative impact of 212.3 M.€ from the sale of 2% of BFA and consequent deconsolidation of this entity which is now recognized in the financial accounts of BPI Group by the equity method. Earnings per share (Basic EPS) were -0.084€ (0.032 € in the 1st quarter 2016).
When excluding the aforementioned impact from the sale of the 2% stake in Banco de Fomento Angola and consequent deconsolidation, consolidated net income amounts to 90 M.€, with contributions of 43.8 M.€ from domestic activity (7.9 M.€ in the same period of 2016) and 46.2 M.€ from international activity (37.9 M.€ in the same period of 2016).
The return on shareholders' equity (ROE) was 14.7% in the 1st quarter 2017 (7.8% in the same period of 2016), excluding the impact from the sale of the 2% stake in BFA and deconsolidation.
The return on shareholders' equity in the domestic activity, in the same periods and in accordance with the above criteria, improved from 1.7% to 8.9%.
In the international activity, in its individual accounts, BFA's posted a return on shareholders' equity (nonconsolidated ROE) of 42% in the 1st quarter 2017 (39% in 1st Q. 2016) and BCI's non-consolidated ROE reached 21% (9.6% in 1st Q. 2016). The ROE of the international activity (after consolidation adjustments) stood at 38.8% (34.4% in the 1st Q. 2016).
| 1st Q. 2016 (as reported) | 1st Q. 2017, excluding the impact of the 2% sale of BFA and deconsolidation |
|||||
|---|---|---|---|---|---|---|
| Domestic activity |
International activity |
BPI Group (consolidated ) |
Domestic activity |
International activity |
BPI Group (consolidated ) |
|
| Capital allocated adjusted1 | 1 900.9 | 440.8 | 2 341.7 | 1 966.9 | 476.6 | 2 443.5 |
| As % of total | 81.2% | 18.8% | 100.0% | 80.5% | 19.5% | 100.0% |
| Net income | 7.9 | 37.9 | 45.8 | 43.8 | 46.2 | 90.0 |
| Return on Shareholders' Equity (ROE) | 1.7% | 34.4% | 7.8% | 8.9% | 38.8% | 14.7% |
| Net income "as reported" | 43.1 | ( 165.4) | ( 122.3) | |||
| ROE "as reported" | 8.8% | -138.8% | -20.0% |
1) In the calculation of the ROE the average accounting capital is considered excluding the fair value reserve (net of deferred taxes) relating to the portfolio of available-for-sale financial assets.
| Mar. 16 | Mar. 16 | Mar. 17 | |
|---|---|---|---|
| as reported | proforma | as reported | |
| Financial margin | 167.8 | 95.2 | 101.2 |
| Technical result of insurance contracts | 7.9 | 7.9 | 3.6 |
| Net commission income | 74.1 | 60.9 | 63.0 |
| Net income on financial operations | 51.9 | ( 3.6) | 7.7 |
| Net operating income | ( 5.0) | ( 1.2) | ( 176.0) |
| Operating income from banking activity | 296.7 | 159.2 | ( 0.5) |
| Personnel costs | 95.3 | 74.0 | 77.9 |
| General administrative costs | 60.5 | 44.8 | 41.4 |
| Depreciation and amortisation | 8.6 | 5.5 | 5.5 |
| Overhead costs | 164.5 | 124.2 | 124.7 |
| Operating profit before impairments and provisions | 132.3 | 35.0 | ( 125.2) |
| Recovery of loans, interest and expenses | 4.7 | 3.9 | 6.2 |
| Impairment losses and provisions for loans and guarantees, net | 30.7 | 20.1 | ( 0.1) |
| Impairment losses and other provisions, net | 4.2 | 3.3 | ( 3.5) |
| Net income before income tax | 102.1 | 15.5 | ( 115.4) |
| Income tax | 23.5 | 13.4 | 63.1 |
| Earnings of associated companies (equity method) | 5.6 | 5.6 | 56.1 |
| Net income from continuing operations | 84.2 | 7.6 | ( 122.3) |
| Net income from discontinued operations | 0.0 | 76.6 | 0.0 |
| Income attributable to non-controlling interests from continuing operations |
38.4 | 0.0 | 0.0 |
| Income attributable to non-controlling interests from discontinued operations |
0.0 | 38.4 | 0.0 |
| Net Income | 45.8 | 45.8 | ( 122.3) |
Note: The designation "Mar. 16 proforma "reflects the expression of BFA's contribution to consolidated income in accordance with IFRS 5.
At 31 March 2017, the consolidated Common Equity Tier 1 (CET1) ratio calculated according to CRD IV / CRR rules stands at:
31 Mar. 16 (rules for 2016) 31 Dec. 16 (rules for 2016) 31 Mar. 17 (rules for 2017) 31 Mar. 16 31 Dez. 16 31 Mar. 17 Common Equity Tier 1 capital 2 493.6 2 754.7 1 971.7 2 297.3 2 678.8 1 770.9 Risk weighted assets 22 986.4 24 122.1 16 622.6 22 943.9 24 076.1 16 353.3 Common Equity Tier 1 ratio 10.8% 11.4% 11.9% 10.0% 11.1% 10.8% Common Equity Tier 1 ratio 10.8% 11.4% 11.9% 10.2% 11.1% 10.8% Common Equity Tier 1 ratio 10.8% 11.4% 13.3% 10.3% 11.2% 12.6% CRD IV / CRR Phasing in CRD IV / CRR Fully implemented
In the domestic activity, the Common Equity Tier 1 (CET1) calculated according to CRD IV / CRR rules were as follows:
According to the Supervisory Review and Evaluation Process (SREP) decision for 2017, the following are the minimum capital ratios that BPI has to meet from 1 January:
| Individual | ||||||
|---|---|---|---|---|---|---|
| Phasing-in Of which: |
||||||
| Total | Pillar 1 | Pillar 2 | Buffers 1) | Guidance Pillar 2 | Total | |
| CET1 | 9.25% | 4.50% | 2.50% | 1.25% | 1.0% | 8.25% 2) |
| T1 | 9.75% | 6.00% | 2.50% | 1.25% | - | 9.75% |
| Rácio total | 11.75% | 8.00% | 2.50% | 1.25% | - | 11.75% |
1) As determined by the Bank of Portugal, the capital conservation buffer for 2017 was set at 1.25%, the counter-cyclical buffer is currently 0% and the O-SII buffer is zero in 2017.
2) The difference between the requirement for individual CET1 and consolidated CET1 results from the fact that the Pillar 2 guidance only applies to consolidated CET1. The Pillar 2 guidance is not Maximum Distributable Amount (MDA) relevant.
At 31 March 2017 the Bank complies with all new SREP minimum capital ratios.
To comply with the total capital ratio of 12.0% (minimum SREP of 11.75% + 0.25% buffer), the issuance of 300 M.€ of Tier II subordinated debt in the quarter was decisive. This issue has a remuneration rate equivalent to Euribor + 5.74% and was fully subscribed by Caixabank.
At 31 March 2017, the Leverage and Liquidity ratios calculated according to CRD IV / CRR rules are as follows:
The net income from domestic operations increased by 35.2 M.€ yoy to 43.1 M.€ in the 1st quarter 2017. The return on shareholders' equity in the domestic activity increased from 1.7% in the 1st quarter 2016 to 8.8%1 in the 1st quarter 2017.
| Mar. 16 | Mar. 17 | Mar.16 / Mar . 17 | ||
|---|---|---|---|---|
| as reported |
as reported |
Chg. M.€ | Chg.% | |
| Financial margin | 94.6 | 101.3 | 6.7 | 7.1% |
| Technical result of insurance contracts | 7.9 | 3.6 | ( 4.3) | -54.2% |
| Net commission income | 61.0 | 62.7 | 1.7 | 2.8% |
| Net income on financial operations | ( 3.6) | 7.7 | 11.2 | 314.1% |
| Net operating income | ( 1.2) | ( 1.1) | 0.1 | 5.5% |
| Operating income from banking activity | 158.7 | 174.1 | 15.5 | 9.7% |
| Personnel costs | 73.5 | 77.5 | 3.9 | 5.4% |
| General administrative costs | 44.6 | 41.2 | ( 3.3) | -7.5% |
| Depreciation and amortisation | 5.5 | 5.5 | 0.0 | 0.0% |
| Overhead costs | 123.6 | 124.2 | 0.6 | 0.5% |
| Operating profit before impairments and provisions | 35.1 | 49.9 | 14.9 | 42.3% |
| Recovery of loans, interest and expenses | 3.9 | 6.2 | 2.3 | 58.2% |
| Impairment losses and provisions for loans and guarantees, net | 20.1 | ( 0.1) | ( 20.2) | -100.6% |
| Impairment losses and other provisions, net | 3.3 | ( 3.5) | ( 6.8) | -207.8% |
| Net income before income tax | 15.6 | 59.8 | 44.2 | 284.0% |
| Income tax | 11.8 | 21.1 | 9.3 | 78.8% |
| Earnings of associated companies (equity method) | 4.1 | 4.4 | 0.3 | 7.3% |
| Income attributable to non-controlling interests | 0.0 | 0.0 | 0.0 | 30.0% |
| Net Income | 7.9 | 43.1 | 35.2 | 447.4% |
Banco BPI 1st quarter 2017 consolidated results 7/33
1) ROE of 8.9% in the 1st quarter 2017 excluding the impact of the sale of 2% of BFA and its deconsolidation.
Customer deposits increased by 5.6% yoy (+1 060 M.€) to 19.9 Bi.€ at the end of March 2017 and the offbalance sheet Customer resources (unit trust funds, Retirements savings – PPR - and equity savings – PPA plans) increased by 17.1% (+766 M.€) yoy to 5.2 Bi.€.
The capitalisation insurance products with guaranteed invested capital and participation in the portfolios results registered a decrease of 37.5% (-1.2 Bi.€).
Total Customer resources in the domestic activity (on-balance sheet and off-balance sheet) stood at 28.4 Bi.€ at March 2017, increasing by 1.0% year-on-year (+270 M.€).
In the assessment of the trend in Customer resources, it should be bear in mind the placement by BPI, through its distribution network, of an amount of 1.2 B € of Variable Income Treasury Bonds (third-party financial products) from March 2016, which does not integrate the aggregate Total Customer Resources.
The aggregate "Global Customer Resources", which also includes Client applications in third-party financial products, registers a 4.4% increase yoy (+1.4 Bi €), totalling 32.7 Bi.€ at the end of March 2017.
| Mar. 16 | Dec.16 | Mar. 17 | Chg.% Mar.16/ Mar.17 |
|
|---|---|---|---|---|
| On-balance sheet resources | ||||
| Sight and other deposits | 9 253.9 | 10 335.5 | 10 643.3 | 15.0% |
| Term and savings deposits | 9 601.4 | 9 265.3 | 9 272.0 | (3.4%) |
| Customers' deposits | 18 855.2 | 19 600.8 | 19 915.3 | 5.6% |
| Bonds placed with Customers | 270.5 | 94.4 | 76.3 | (71.8%) |
| Subtotal | 19 125.7 | 19 695.1 | 19 991.6 | 4.5% |
| Capitalisation insurance and PPR (BPI Vida) and other | 5 399.0 | 4 249.6 | 4 277.9 | (20.8%) |
| Unit links insurance capitalisation | 1 906.0 | 1 930.4 | 2 004.7 | 5.2% |
| "Aforro" insurance capitalisation products and other 1) | 3 205.8 | 2 069.6 | 2 005.2 | (37.5%) |
| Participating units in consolidated trust funds | 287.2 | 249.6 | 267.9 | (6.7%) |
| On-balance sheet resources | 24 524.7 | 23 944.7 | 24 269.5 | (1.0%) |
| Off-balance sheet resources2) | 4 483.2 | 4 842.7 | 5 248.7 | 17.1% |
| Corrections for double counting 3) | ( 549.8) | ( 587.2) | ( 654.2) | |
| Deduction of placements of pension funds under management4) | ( 346.3) | ( 372.2) | ( 482.6) | |
| Total Customer resources5) | 28 111.8 | 27 827.9 | 28 381.5 | 1.0% |
| Other customer resources | ||||
| Public offerings | 314.1 | 1 304.3 | 1 312.5 | 317.9% |
| Third-party funds placed with customers | 441.2 | 506.0 | 600.9 | 36.2% |
| Other customer securities | 2 456.9 | 2 319.9 | 2 413.4 | (1.8%) |
| Other customer resources | 3 212.1 | 4 130.2 | 4 326.8 | 34.7% |
| Global Customer resources | 31 323.9 | 31 958.1 | 32 708.2 | 4.4% |
| Pension funds under management | 2 366.9 | 2 418.3 | 2 555.1 | 8.0% |
| BPI Group | 1 391.3 | 1 397.5 | 1 514.7 | 8.9% |
| Other | 975.5 | 1 020.8 | 1 040.4 | 6.6% |
1) Includes insurance capitalisation products that guarantee the invested capital and whose remuneration corresponds to the participation in the results and guaranteed rate and guaranteed retirement capitalisation products.
2) Unit trust funds, PPR and PPA.
3) Placements of the unit trust funds managed by the BPI Group in deposits and structured products.
4) Placements of pension funds under management in on-balance sheet and off-balance sheet resources.
5) Corrected for double counting and deducted of placements of pension funds under management .
The domestic loan portfolio registered a moderate year-on-year growth of 0.3%, signalling the reversal of the downward trend in the portfolio registered since 2010, as a result of the resumption in credit growth for large and medium-sized companies, the increase in mortgage loans contracting, the expansion of consumer credit and the expansion of loans to small businesses that remains at high levels.
In March 2017, relative to March 2016, it should be noted that:
| Mar. 16 | Dec.16 | Mar. 17 Chg.% Mar.16/ Mar.17 |
||
|---|---|---|---|---|
| Corporate banking | 3 883.2 | 4 300.0 | 4 478.7 | 15.3% |
| Large companies | 1 498.0 | 1 733.6 | 1 751.5 | 16.9% |
| Medium-sized companies | 2 385.2 | 2 566.4 | 2 727.2 | 14.3% |
| Project Finance - Portugal | 1 148.6 | 983.8 | 942.7 | (17.9%) |
| Madrid branch | 938.1 | 763.4 | 720.1 | (23.2%) |
| Project Finance | 535.3 | 444.3 | 441.6 | (17.5%) |
| Corporates | 402.9 | 319.1 | 278.5 | (30.9%) |
| Public Sector | 1 495.0 | 1 417.3 | 1 387.6 | (7.2%) |
| Central Administration | 204.7 | 189.5 | 191.1 | (6.6%) |
| Regional and local administrations | 807.7 | 780.8 | 812.0 | 0.5% |
| State Corporate Sector - in the budget perimeter | 51.6 | 51.8 | 50.2 | (2.7%) |
| State Corporate Sector - outside the budget perimeter | 400.3 | 365.6 | 305.3 | (23.7%) |
| Other Institutional | 30.7 | 29.6 | 28.9 | (5.8%) |
| Individuals and Small Businesses Banking | 13 358.1 | 13 603.0 | 13 653.0 | 2.2% |
| Mortgage loans to individuals | 10 789.7 | 10 800.3 | 10 796.3 | 0.1% |
| Loans contracted before 2011 | 8 937.5 | 8 387.6 | 8 189.7 | (8.4%) |
| Loans contracted in 2011 and thereafter | 1 852.2 | 2 412.7 | 2 606.6 | 40.7% |
| Consumer credit / other purposes | 595.6 | 663.0 | 681.8 | 14.5% |
| Credit Cards | 136.8 | 158.2 | 144.3 | 5.5% |
| Car financing | 139.7 | 166.0 | 176.3 | 26.2% |
| Small businesses | 1 696.4 | 1 815.5 | 1 854.3 | 9.3% |
| BPI Vida | 1 440.3 | 1 295.4 | 1 179.9 | (18.1%) |
| Loans in arrears net of impairments | - 42.3 | - 4.4 | - 0.6 | (98.6%) |
| Other | 424.6 | 377.4 | 356.9 | (16.0%) |
| Total | 22 645.6 | 22 735.8 | 22 718.4 | 0.3% |
1) Excludes BPI Vida e Pensões securities loan portfolio (corresponds essentially to bonds and commercial paper issued by large Portuguese companies).
At the end of March 2017, the portfolio of financial assets available for sale amounted to 3.8 Bi.€, at market prices. The fair value reserve (before deferred taxes) was positive by 18 M.€.
At 31 March 2017 the portfolio of financial assets available for sale comprised by 2.9 Bi.€ of EU sovereign short term debt (1.9 Bi.€ of Portuguese Treasury Bills, 501 M.€ of Italian debt and 496 M.€ of Spanish debt), 0.5 Bi.€ of EU sovereign medium and long term debt (339 M.€ of Portuguese Treasury Bonds and 190 M.€ of MLT Italian public debt), 87 M.€ of corporate bonds, 118 M.€ of equities and 173 M.€ of participating units.
| 31 Dec. 16 | 31 Mar. 17 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| M.€ | Acquisition | Gains / (losses) 1) | Acquisition | Gains / (losses) 1) | |||||||
| value | Book value | in securities |
in derivatives |
Total | value | Book value | in securities |
in derivatives |
Total | ||
| Public debt | 3 400 | 3 429 | 40 | - 43 | - 3 | 3 414 | 3 439 | 36 | - 38 | - 3 | |
| Portugal | 2 228 | 2 248 | 25 | - 27 | - 2 | 2 232 | 2 252 | 23 | - 24 | - 2 | |
| Of which | |||||||||||
| TBonds | 319 | 339 | 25 | - 27 | - 3 | 319 | 339 | 22 | - 24 | - 2 | |
| TBills | 1 909 | 1 909 | 0 | 0 | 1 912 | 1 913 | 1 | 1 | |||
| Italy | 185 | 195 | 15 | - 16 | - 1 | 185 | 190 | 13 | - 14 | - 1 | |
| T-Bills Spain | 486 | 485 | 0 | 0 | 496 | 496 | 0 | 0 | |||
| T-Bills Italy | 501 | 501 | 0 | 0 | 501 | 501 | 0 | 0 | |||
| Corporate Bonds | 158 | 154 | - 10 | 0 | - 10 | 93 | 87 | - 8 | - 8 | ||
| Equities | 137 | 117 | 27 | 27 | 138 | 118 | 27 | 27 | |||
| Other | 232 | 176 | 0 | 0 | 227 | 173 | 2 | 2 | |||
| Total | 3 927 | 3 876 | 57 | - 43 | 14 | 3 872 | 3 817 | 57 | - 38 | 18 |
Portfolio of financial assets available for sale Amounts in M.€
1) Fair value reserve before deferred taxes. Includes the impact of interest rate hedging.
Total funding obtained by BPI from the European Central Bank (ECB) amounted to 2.0 Bi.€ at the end of March 2017, corresponding entirely to funds raised under the TLTRO.
At the end of March 2017 BPI still had 6.8 Bi.€ of additional assets (net of haircuts) not used, capable of being transformed into liquidity via operations with the ECB.
It must also be noted that the refinancing needs for medium and long-term debt up till the end of 2022, net of redemptions in the bonds portfolio, are of 0.7 Bi.€.
Operating income from banking activity generated by domestic operations increased by 9.7% (+15.5 M.€) yoy, to 174.1 M.€ in the 1st quarter 2017. The financial margin increased 7.1% (+6.7 M.€), commissions increased 2.8% (+1.7 M.€) and financial operations income increased from -3.6 M. € in the first quarter 2016 to 7.7 M. € in the first quarter 2017, whereas the technical result of insurance contracts decreased by 4.3 M. €, year on year, mainly explained by the reduction in the portfolio of these resources.
Financial margin in the domestic activity increased by 7.1% (+6.7 M.€) yoy.
The growth in financial margin mainly reflects the reduction in the cost of term deposits. The margin (negative) on term deposits relative to the Euribor improved from 0.6% in the 1st quarter 2016 to 0.2% in the 1st quarter 2017, reflecting the lower remuneration in the renewal of deposits and in new deposits taken.
Also contributing to the positive trend in financial margin was the recovery in credit demand, which was reflected in the expansion of the loan portfolios of the corporates, small businesses and personal credit segments, whereas the mortgage loan portfolio remained stable.
It should be noted however that the financial margin continued to be penalized by:
Net commissions income were 1.7 M.€ higher (+2.8%).
| Net commission income Amounts in M.€ |
|---|
| ----------------------------------------- |
| 31 Mar. 16 | 31 Mar. 17 | Chg. M.€ | Chg.% | |
|---|---|---|---|---|
| Commercial banking | 49.8 | 50.3 | +0.5 | 1.0% |
| Asset management | 9.6 | 10.3 | +0.7 | 7.5% |
| Investment banking | 1.6 | 2.1 | +0.5 | 29.4% |
| Total | 61.0 | 62.7 | +1.7 | 2.8% |
Net income on financial operations amounted to 7.7 M.€ in the 1st quarter 2017 (negative by 3.6 M.€ in the same quarter of 2016).
The earnings of associated companies (equity-accounted) in domestic operations amounted to 4.4 M.€ in the 1st quarter 2017, increasing by 7.3% (+0.3 M.€), yoy.
The contribution of the subsidiaries from the insurance sector amounted to 3.0 M.€ (contribution of 1.8 M.€ from Allianz Portugal and 1.2 M.€ from Cosec).
| Earnings of associated companies (equity-accounted earnings) | Amounts in M.€ | ||
|---|---|---|---|
| 31 Mar. 16 | 31 Mar. 17 | Chg. M.€ | |
| Insurance companies | 2.9 | 3.0 | +0.1 |
| Allianz Portugal | 1.9 | 1.8 | - 0.1 |
| Cosec | 1.0 | 1.2 | +0.1 |
| Unicre | 1.2 | 1.5 | +0.3 |
| Other | 0.0 | ( 0.0) | - 0.0 |
| Total | 4.1 | 4.4 | +0.3 |
Overhead costs increased by 0.5% (+0.6 M.€) yoy. It included in the 1st quarter 2017 the following costs which totalled 10.7 M.€:
Excluding the above mentioned costs (10.7 M.€), the overhead costs decrease 7.7% (-9.5 M.€), from 123.0 M.€ in the 1st quarter 2016 to 113.5 M.€ in the 1st quarter 2017.
| Amounts in M. $\epsilon$ | |||
|---|---|---|---|
| -------------------------- | -- | -- | -- |
| 31 Mar. 16 | 31 Mar. 17 | Chg. M.€ | Chg.% |
|---|---|---|---|
| 73.5 | 77.5 | +3.9 | 5.4% |
| 44.6 | 41.2 | - 3.3 | (7.5%) |
| 5.5 | 5.5 | +0.0 | 0.0% |
| 123.6 | 124.2 | +0.6 | 0.5% |
| 0.6 | 7.2 | +6.6 | |
| 0.0 | 3.5 | +3.5 | |
| 72.9 | 66.8 | - 6.2 | (8.5%) |
| 44.6 | 41.2 | - 3.3 | (7.5%) |
| 5.5 | 5.5 | +0.0 | 0.0% |
| 123.0 | 113.5 | - 9.5 | (7.7%) |
| 77.9% | 71.3% | ||
| 75.2% | 67.7% | ||
1) Overhead costs as a % of Operating income from banking activity.
2) Overhead costs excluding costs with early-retirements and indemnities related with the branch in France as a % of commercial banking income.
where, commercial banking income = financial margin + technical result of insurance contracts + net commissions income
The cost-to-income ratio in domestic operations – overhead costs as a percentage of operating income from banking activity – improved by 6.6 p.p., from 77.9% in the 1st quarter 2016 to 71.3% in the 1st quarter 2017.
The ratio of adjusted overhead costs-to-commercial banking income in domestic operations stood at 67.7% in the 1st quarter 2017, representing an improvement of 7.5 pp in relation to the ratio of 75.2% in the first quarter 2016.
Reversals of impairment and provisions allowances for loans and guarantees of 0.1 M.€ were recorded in the 1st quarter 2017, which compares with charges of 20.1 M.€ of impairment losses and provisions for loans and guarantees in the same quarter of 2016.
On the other hand, arrear loans and interest previously written off and expenses of 6.2 M.€ were recovered in the 1st quarter 2017. As a result, the reversals of impairments and provisions for loans and guarantees plus the recoveries in the first quarter of 2017 corresponded to a positive 6.3 M.€ impact (before taxes) in the income for the quarter, representing 0.11% of the loan portfolio in annualized terms, whereas in the same quarter of 2016 a cost of credit risk net of recoveries1 of 16.2 M. € (0.29% of the loan portfolio, in annualized terms) was recorded.
| Mar. 16 | Mar. 17 | ||||
|---|---|---|---|---|---|
| M.€ | % of loan portfolio1) |
M.€ | % of loan portfolio1) |
||
| Impairment losses and provisions for loans and guarantees, net | 20.1 | 0.36% | - 0.1 | 0.00% | |
| Recovery of loans, interest and expenses | 3.9 | 0.07% | 6.2 | 0.11% | |
| Impairment losses and provisions for loans and guarantees (net), after deducting the recovery of loans, interest and expenses |
16.2 | 0.29% | - 6.3 | -0.11% |
1) As percentage of the average balance of the performing loans portfolio. In annualised terms.
The ratio of Customer loans in arrears for more than 90 days in the domestic operations' accounts decreased from 3.6% in March in 2016 to 2.9% in March 2017.
Cover for loans in arrears for more than 90 days by accumulated impairment allowances and provisions for loans and guarantees in the balance sheet (without considering cover from associated guarantees) was situated at 105% in March 2017.
The credit at risk ratio (consolidation perimeter IAS/IFRS), calculated in accordance with Bank of Portugal Instruction 23/2011 and considering the consolidation perimeter IAS/IFRS2), decreased from 4.6% in March 2016 to 3.8% in March 2017.
The accumulated impairment allowances and provisions for loans and guarantees in the balance sheet represented 81% of the credit at risk considering the consolidation perimeter IAS/IFRS in March 2017.
1) Impairment and provisions for loans and guarantees.
2) For purposes of calculating the credit at risk ratio (non-performing ratio), the Group consolidation perimeter according to IAS/IFRS rules was taken into account, and therefore BPI Vida e Pensões is consolidated in full and its loan portfolio (securities loan portfolio) included in the consolidated loan portfolio (whereas in Bank of Portugal supervision perimeter, in the case of BPI, that subsidiary is recognised using the equity method).
| Mar. 16 | Dec. 16 | Mar.17 | ||||
|---|---|---|---|---|---|---|
| M.€ | % of loan portfolio 1) |
M.€ | % of loan portfolio 1) |
M.€ | % of loan portfolio 1) |
|
| Loans in arrears for more than 90 days | 843.1 | 3.6% | 685.3 | 2.9% | 675.7 | 2.9% |
| Credit at risk (consolidation perimeter IAS/IFRS) 2) | 1 079.0 | 4.6% | 862.6 | 3.7% | 879.6 | 3.8% |
| Impairments and provisions for loans and guarantees (in the balance sheet) |
925.6 | 3.9% | 717.7 | 3.1% | 711.7 | 3.0% |
| Write offs (in the period) | 186.1 | 5.9 | ||||
| Impairments cover of loans in arrears for more than 90 days |
110% | 105% | 105% | |||
| Impairments cover of credit at risk | 86% | 83% | 81% | |||
| Note: | ||||||
| Gross loan portfolio | 23 544.7 | 23 431.0 | 23 408.7 |
1) As % of the gross loan portfolio.
2) Calculated in accordance with credit at risk definition of Bank of Portugal Instruction 23/2011 and considering the IAS /IFRS consolidation perimeter which results in the consolidation in full of BPI Vida e Pensões (whereas in Bank of Portugal supervision perimeter that subsidiary is recognised using the equity method). According to Instruction 23/2011 and taken into account the supervision perimeter, at 31 Mar. 2017 the credit at risk amounts to 879.6 M.€ and the credit at risk ratio to 4.0% in the domestic activity.
The following table details by major credit segments the credit at risk ratio, calculated in accordance with Bank of Portugal Instruction 23/2011 and considering the consolidation perimeter IAS/IFRS, and the impairments coverage.
According to Bank of Portugal Instruction 23/2011 and considering the consolidation perimeter IAS/IFRS
| Mar. 16 | Mar. 17 | |||||
|---|---|---|---|---|---|---|
| M.€ | % of loan portfolio1) |
Impairments coverage |
M.€ | % of loan portfolio1) |
Impairments coverage |
|
| Corporate banking | 537.1 | 6.8% | 97% | 386.8 | 5.0% | 90% |
| Individuals Banking | 539.0 | 3.9% | 73% | 489.0 | 3.5% | 72% |
| Mortgage loans | 372.0 | 3.4% | 63% | 343.4 | 3.1% | 62% |
| Other loans to individuals | 41.8 | 4.6% | 101% | 42.3 | 4.1% | 111% |
| Small businesses | 125.2 | 6.9% | 92% | 103.3 | 5.3% | 91% |
| Other | 2.9 | 0.2% | 3.8 | 0.2% | ||
| Domestic activity | 1 079.0 | 4.6% | 86% | 879.6 | 3.8% | 81% |
1) As % of the gross loan portfolio
At 31 March 2017, foreclosed properties amounted to 110.2 M.€, in terms of gross balance sheet value (131.7 M.€ in December 2016). The accumulated amount of impairment allowances for foreclosed properties of 23.8 M.€, covered 21.6% of their gross balance sheet value (23.5% in December 2016). The net value of these properties was therefore 86.4 M.€ (100.7 M.€ in December 2016), which compared to a market value of these properties, according to the valuation of the Bank, of 106.9 M.€.
| Coverage by impairments Gross value |
Net | Appraisal | |||
|---|---|---|---|---|---|
| Amount | % | value | |||
| Mortgage | 46.7 | 1.5 | 3.2% | 45.2 | 57.6 |
| Other | 63.4 | 22.3 | 35.2% | 41.1 | 49.4 |
| Total | 110.2 | 23.8 | 21.6% | 86.4 | 106.9 |
In the first quarter of 2017 reversals of impairments and other provisions of 3.5 M.€ were booked, which were mainly explained by the reversal of impairments arising from the sale of foreclosure properties.
At 31 March 2017 BPI's pension liabilities (total past service liability) amounted to 1 461.8 M.€ and were 100% covered by the pension fund.
| Financing of pension liabilities | Amounts in M.€ | ||
|---|---|---|---|
| Mar. 16 | Dec.16 | Mar. 17 | |
| Total past service liability | 1 281.1 | 1 463.1 | 1 461.8 |
| Net assets of the pension funds1) | 1 349.1 | 1 430.8 | 1 463.3 |
| Excess / (insufficient) cover | 68.0 | ( 32.3) | 1.4 |
| Degree of coverage of pension liabilities | 105.3% | 97.8% | 100.1% |
| Total actuarial deviations2) | ( 86.4) | ( 244.0) | ( 211.7) |
| Pension fund return3 | -2.7% | -1.2% | 3.0% |
1) In Dec.16 includes 75.5 M.€ of contributions transferred to the pension funds in the beginning 2017.
2) Recognized directly in Shareholders' equity (OCI - Other Comprehensive Income), in accordance with IAS19.
3) Year-to-date non-annualised return
The Bank's pension funds posted a non-annualised return of 3.0% in the 1st quarter 2017.
It should be pointed out that, up till the end of March 2017, the actual return achieved by Banco BPI's since its creation, in 1991, was 9.1% per year, and that in the last ten, five and three years, the actual annual returns were 5.7%, 10.5% and 5.7%, respectively.
The following table sets forth the main actuarial assumptions used in calculating pension liabilities.
In the first quarter of 2017 there were no changes in actuarial assumptions.
| Dec.15 | Jun.16 | Dec.16 | Mar. 17 | ||
|---|---|---|---|---|---|
| Discount rate - current employees | 2.83% | 2.50% | 2.00% | 2.00% | |
| Discount rate - retirees | 2.00% | 2.50% | 2.00% | 2.00% | |
| Salary growth rate | 1.00% | 1.00% | 1.00% | 1.00% | |
| Pensions growth rate | 0.50% | 0.50% | 0.50% | 0.50% | |
| Expected pension fund rate of return | 2.50% | 2.50% | 2.00% | 2.00% | |
| Mortality table | (M): TV 73/77 – 2 years (1) | ||||
| (W): TV 88/ 90 – 3 years (1) |
1) Men (M) and Women (W) were assumed to be two years and three years younger than
their actual age, respectively, that procedure translating into a higher life expectancy.
BFA recorded in 1st quarter 2017 a non-consolidated net profit of 103.0 M.€, which corresponds to a 33.8% growth (+26.0 M.€) relative to the 1st quarter 2016.
The return on Shareholders' equity (non-consolidated) reached 42% in the 1st quarter 2017 (39% in the 1st quarter 2016).
Operating income from banking increased 8.8%, primarily led by the expansion of the financial margin. Overhead costs increased 12.2% year-on-year. BFA maintains high efficiency levels, which are reflected in a cost-to-income ratio (overhead costs as percentage of operating income from banking) of 30% in the 1st quarter 2017 (29% in the same quarter of 2016).
BFA net profit attributable to BPI amounted to 44.1 M.€1 corresponding to the appropriation of 48.1% of its individual net profit (excluding the impact of 2% sale of BFA and deconsolidation).
Mar.16 Mar.17 as reported as reported Chg. M.€ Chg.% Financial margin 73.3 118.2 44.9 61.2% Technical result of insurance contracts 0.0 0.0 0.0 0.0% Net commission income 12.8 19.8 6.9 54.1% Net income on financial operations 55.5 21.3 ( 34.2) -61.6% Net operating income ( 3.8) ( 9.2) ( 5.4) -144.1% Operating income from banking activity 137.9 150.1 12.2 8.8% Personnel costs 21.4 23.6 2.2 10.4% General administrative costs 15.7 18.0 2.3 14.5% Depreciation and amortisation 3.2 3.6 0.4 12.6% Overhead costs 40.2 45.2 4.9 12.2% Operating profit before impairments and provisions 97.7 104.9 7.2 7.4% Recovery of loans, interest and expenses 0.8 0.2 ( 0.7) -80.9% Impairment losses and provisions, net 11.4 1.4 ( 10.1) -88.0% Net income before income tax 87.1 103.7 16.6 19.1% Income tax 10.0 0.7 ( 9.4) -93.3% BFA non-consolidated net income 77.0 103.0 26.0 33.8% Result attributable to BPI 38.6 49.6 11.0 28.4% Taxes on dividends and other 1.5 5.5 3.9 254.5% BFA contribution to consolidated net income 37.0 44.1 7.0 19.0% Mar.16 / Mar.17
1) BFA contribution net of deferred taxes on dividends.
BFA total Customer resources, measured in euro (consolidation currency), recorded a year-on-year decrease of 7.3%, to 5 711 M.€ in March 2017.
The BFA loans to Customers portfolio, expressed in euro, decreased by 6.9% yoy, to 1 222 M.€ in March 2017. BFA has a very liquid balance sheet and a high capitalization:
The number of Customers amounted to 1.6 million at the end of March 2017, representing a year-on-year growth of 11.9%. These were served by a distribution network with a strong presence in Luanda and a wide coverage of the entire Angolan territory. At the end of March 2017, BFA's distribution network comprised 166 branches, 9 investment centers and 16 business centers. BFA's workforce stood at 2 630 Employees in March 2017 (+ 0.9% year-on-year).
| BFA major indicators | Amounts in M.€ | ||
|---|---|---|---|
| M.€ | Mar. 16 | Mar. 17 | Chg. % |
| Net profit | 77.0 | 103.0 | 33.8% |
| ROE | 39% | 42% | |
| Cost-to-income ratio | 29% | 30% | |
| Total assets | 7 138 | 7 067 | -1.0% |
| Deposits | 6 159 | 5 711 | -7.3% |
| Loan portfolio | 1 311 | 1 222 | -6.9% |
| Loans-to-deposits ratio | 21% | 21% | |
| Securities portfolio | 2 999 | 3 617 | 20.6% |
| Shareholders' equity | 779 | 1 036 | 33.0% |
| Solvency ratio (BNA rules) | 26% | 33% | |
| Employees | 2 606 | 2 630 | 0.9% |
| Distribution network (units) | 191 | 191 | 0.0% |
| Customers (thousand) | 1,415 | 1,583 | 11.9% |
| Exchange rates | |||
|---|---|---|---|
| Mar. 16 | Mar. 17 | Chg. % | |
| Average exchange rate (year-to-date) | |||
| AKZ / 1 EUR | 175.7 | 185.4 | 5.5% |
| USD / 1 EUR * | 1.109 | 1.117 | 0.8% |
| End of period exchange rate | |||
| AKZ / 1 EUR | 179.5 | 185.4 | 3.3% |
| USD / 1 EUR * | 1.117 | 1.117 | 0.0% |
*) Cross rate implicit in the AKZ/ USD and AKZ/EUR exchange rates published by BNA.
BCI (Mozambique)'s total contribution to consolidated net profit, relating to the appropriation of 30% of its individual net profit (recognised using the equity-method1 ), stood at 2.5 M.€ in the 1st quarter 2017 (1.3 M.€ in the same quarter 2016).
1) Corresponds to the equity-accounted results relating to the appropriation of 30% of BCI individual net profit, being deducted of deferred taxes on BCI distributable earnings (recorded in the caption "Income tax").
BCI recorded a 3.8% yoy decrease in net total assets. Customer deposits fell by 5.7% year-on-year, to 1 546 M.€ at the end of March 2017 and the Customer loan portfolio decreased 11.8%, year-on-year, to 1 127 M.€. BCI market shares in deposits and loans, at the end of February 2017, reached 29.6% and 30.7%, respectively.
At the end of March 2017, BCI served 1.5 million clients (+10.3% relative to March 2016) through a network of 193 branches, representing 29.9%1 of the total Mozambican banking system distribution network. The staff complement reached 2 958 Employees at March 2017 (-2.1% than in March 2016).
BFA net profit attributable to BPI amounted to 44.1 M.€2 in the 1st quarter 2017, corresponding to the appropriation of 48.1% of its individual net profit.
To that figure it is added in the first quarter of 2017 the negative impact of 211.6 M.€ from the sale of the 2% stake in BFA and its deconsolidation. BFA's contribution to consolidated net income was therefore negative by 167.5 M.€.
BCI and remaining subsidiaries that made up the international activity perimeter contributed 2.1 M.€ to the consolidated net income in the 1st quarter 2017.
Hence, the international activity's contribution to the consolidated net income was negative by 165.4 M.€ in the 1st quarter 2017. Excluding the impact of the sale of 2% of BFA and its deconsolidation, international activity contribution stands at a positive 46.2 M.€.
| Contribution of international activity to consolidated income | Amounts in M.€ |
|---|---|
| --------------------------------------------------------------- | ---------------- |
| 31 Mar. 16 | 31 Mar. 17 | Chg. M.€ | |
|---|---|---|---|
| BFA individual net income | 77.0 | 103.0 | +26.0 |
| BFA net income attributable to BPI 1) | 37.0 | 44.1 | +7.0 |
| Impact from the sale of 2% of BFA and deconsolidation | -211.6 | - 211.6 | |
| Contribution of BFA to consolidated net income | 37.0 | -167.5 | - 204.6 |
| Contribution of BCI and other | 0.8 | 2.1 | +1.3 |
| International activity contribution | 37.9 | -165.4 | - 203.3 |
1) Deducted of deferred taxes on dividends.
Investor Relations Officer Ricardo Araújo Tel. direct: (351) 22 607 31 19 Fax: direct: (351) 22 600 47 38 e-mail: [email protected]
1) In December 2016.
2) BFA contribution net of deferred taxes on dividends.
| Leading indicators | Amounts in M.€ | |||||
|---|---|---|---|---|---|---|
| Domestic activity | International activity | Consolidated | ||||
| Mar. 16 | Mar. 17 | Mar. 16 | Mar. 17 | Mar. 16 | Mar. 17 | |
| as reported | as reported | as reported | as reported | as reported | as reported | |
| Net income, efficiency and profitability | ||||||
| Net income (as reported) | 7.9 | 43.1 | 37.9 | - 165.4 | 45.8 | - 122.3 |
| Net income (as reported) per share (EPS) | 0.005 | 0.030 | 0.026 | -0.114 | 0.032 | -0.084 |
| Weighted average number of shares 1) | 1,451 | 1,454 | 1,451 | 1,454 | 1,451 | 1,454 |
| Cost-to-income ratio 2) | 77.9% | 71.3% | 29.6% | n.s. | 55.4% | n.s. |
| Adjusted overhead costs-to-commercial banking income 3) | 75.2% | 67.7% | 47.4% | n.s. | 65.6% | 67.9% |
| Net income, excl. the impact of sale of 2% BFA and deconsolidation | 7.9 | 43.8 | 37.9 | 46.2 | 45.8 | 90.0 |
| Return on total assets (ROA), excl. the impact of sale of 2% BFA and deconsolidation | 0.1% | 0.5% | 4.1% | n.s. | 0.8% | 1.1% |
| Return on Shareholders' equity (ROE), excl. the impact of sale of 2% BFA and deconsolidation | 1.7% | 8.9% | 34.4% | 38.8% | 7.8% | 14.7% |
| Balance sheet | ||||||
| Net total assets 4) | 32 911 | 32 427 | 7 195 | 550 | 39 412 | 32 977 |
| Loans to Customers | 22 646 | 22 718 | 1 311 | - | 23 957 | 22 718 |
| Sight, term and savings deposits | 18 855 | 19 915 | 6 115 | - | 24 970 | 19 915 |
| On-balance sheet Customer resources | 24 525 | 24 269 | 6 115 | - | 30 639 | 24 269 |
| Off-balance sheet Customer resources5) | 4 483 | 5 249 | - | 4 483 | 5 249 | |
| Total Customer resources6) | 28 112 | 28 381 | 6 115 | - | 34 227 | 28 381 |
| Loans to deposits ratio (Instruction 23/2011 BoP) | 108% | 104% | 21% | - | 88% | 104% |
| Asset quality | ||||||
| Loans in arrears for more than 90 days | 843 | 676 | 69 | - | 912 | 676 |
| Ratio of loans in arrears for more than 90 days | 3.6% | 2.9% | 4.9% | - | 3.7% | 2.9% |
| Impairments cover of loans in arrears for more than 90 days | 110% | 105% | 150% | - | 113% | 105% |
| Credit at risk (consolidation perimeter IAS/IFRS) 7) | 1 079 | 880 | 91 | - | 1 170 | 880 |
| Ratio of credit at risk (consolidation perimeter IAS/IFRS)7) | 4.6% | 3.8% | 6.4% | - | 4.7% | 3.8% |
| Impairments cover of credit at risk (consolidation perimeter IAS/IFRS) 7) | 86% | 81% | 114% | - | 88% | 81% |
| Cost of credit risk net of recoveries8) | 0.29% | -0.11% | 2.84% | - | 0.43% | -0.11% |
| Employees pension liabilities | ||||||
| Total past service liability | 1 281 | 1 462 | 1 281 | 1 462 | ||
| Net assets of the pension funds | 1 349 | 1 463 | 1 349 | 1 463 | ||
| Degree of coverage of pension liabilities | 105% | 100% | 105% | 100% | ||
| Capital | ||||||
| Shareholders' equity attributable to the shareholders of BPI | 1 899 | 2 038 | 432 | 495 | 2 331 | 2 533 |
| Shareholders' equity attributable to the shareholders of BPI and non-controlling interests | 1 901 | 2 040 | 821 | 495 | 2 721 | 2 535 |
| CRD IV/CRR phasing in | ||||||
| Common Equity Tier I | ||||||
| Risk weighted assets | 1 728 | 1 907 | 2 494 | 1 972 | ||
| Common Equity Tier I ratio | 15 639 | 16 269 | 22 986 | 16 623 | ||
| Leverage ratio | 11.0% | 11.7% | 10.8% | 11.9% | ||
| LCR = Liquidity coverage ratio | 6.8% | 6.5% | ||||
| 157% | 162% | |||||
| NSFR = Net Stable Funding Ratio | 113% | 111% | ||||
| CRD IV/CRR fully implemented | ||||||
| Common Equity Tier I | 1 610 | 1 835 | 2 297 | 1 771 | ||
| Risk weighted assets | 15 615 | 16 209 | 22 944 | 16 353 | ||
| Common Equity Tier I ratio | 10.3% | 11.3% | 10.0% | 10.8% | ||
| Leverage ratio | 6.5% | 5.9% | ||||
| LCR = Liquidity coverage ratio | 157% | 162% | ||||
| NSFR = Net Stable Funding Ratio | 113% | 111% | ||||
| Distribution network and staff | ||||||
| Distribution network 9) 10) |
595 | 538 | 191 | - | 786 | 538 |
| BPI Group staff | 5 875 | 5 445 | 2 626 | 18 | 8 501 | 5 463 |
1) Average outstanding number of shares, deducted of treasury stock.
2) Overhead costs as a % of Operating income from banking activity.
3) Overhead costs excluding costs with early-retirements and indemnities related with the branch in France as a % of commercial banking income.
where, commercial banking income = financial margin + technical result of insurance contracts + net commissions income
4) The total assets for each of the geographical segments presented above has not been corrected for the balances resulting from operations between these segments.
5) Unit trust funds, PPR and PPA (excludes pension funds).
6) Corrected for double counting (placements of unit trust funds managed by BPI in the Group's deposits, structured products and unit trust funds) and deducted of placements of pension funds under management in on-balance sheet and off-balance sheet resources.
7) Calculated in accordance with credit at risk definition of Bank of Portugal Instruction 23/2011 and considering the IAS /IFRS consolidation perimeter which results in the consolidation in full of BPI Vida e Pensões (whereas in Bank of Portugal supervision perimeter that subsidiary is recognised using the equity method).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.
8) Impairment losses and provisions for loans and guarantees in the period (P&L account), net of recovery of loans, interest and expenses, as percentage of the average performing loan portfolio.
In annualised terms.
9) Includes traditional branches, housing shops, investment centres, corporate centres, Institutionals and one Project Finance centre. Domestic activity distribution network includes branches in Paris. In Mar.17, the distribution network of BFA (equity accounted) was excluded (made up of 191 branches).
10) Staff complement (excluding temporary work) of subsidiaries fully consolidated. In Mar.17, BFA staff complement (2 630 Employees) was excluded.
| Mar. 16 | Mar. 16 | Mar. 17 | |
|---|---|---|---|
| as reported | proforma | as reported | |
| Financial margin (narrow sense) | 158.7 | 86.1 | 92.3 |
| Gross margin on unit links | 3.6 | 3.6 | 3.1 |
| Income from equity instruments | 0.0 | 0.0 | 0.1 |
| Net commissions relating to amortised cost | 5.4 | 5.4 | 5.8 |
| Financial margin | 167.8 | 95.2 | 101.2 |
| Technical result of insurance contracts | 7.9 | 7.9 | 3.6 |
| Net commission income | 74.1 | 60.9 | 63.0 |
| Net income on financial operations | 51.9 | ( 3.6) | 7.7 |
| Net operating income | ( 5.0) | ( 1.2) | ( 176.0) |
| Operating income from banking activity | 296.7 | 159.2 | ( 0.5) |
| Personnel costs | 95.3 | 74.0 | 77.9 |
| General administrative costs | 60.5 | 44.8 | 41.4 |
| Depreciation and amortisation | 8.6 | 5.5 | 5.5 |
| Overhead costs | 164.5 | 124.2 | 124.7 |
| Operating profit before impairments and provisions | 132.3 | 35.0 | ( 125.2) |
| Recovery of loans, interest and expenses | 4.7 | 3.9 | 6.2 |
| Impairment losses and provisions for loans and guarantees, net | 30.7 | 20.1 | ( 0.1) |
| Impairment losses and other provisions, net | 4.2 | 3.3 | ( 3.5) |
| Net income before income tax | 102.1 | 15.5 | ( 115.4) |
| Income tax | 23.5 | 13.4 | 63.1 |
| Earnings of associated companies (equity method) | 5.6 | 5.6 | 56.1 |
| Net income from continuing operations | 84.2 | 7.6 | ( 122.3) |
| Net income from discontinued operations | 76.6 | ||
| Income attributable to non-controlling interests from continuing operations | 38.4 | 0.0 | 0.0 |
| Income attributable to non-controlling interests from discontinued operations | 38.4 | ||
| Net Income | 45.8 | 45.8 | ( 122.3) |
Note: The designation "Mar. 16 proforma "reflects the expression of BFA's contribution to consolidated income in accordance with IFRS 5.
Consolidated balance sheet Amounts in M.€
31 Mar. 16 as reported 31 Dec. 16 as reported 31 Mar. 17 as reported Assets Cash and deposits at central banks 2 615.2 876.6 1 300.2 Deposits at other credit institutions 404.0 300.2 272.1 Loans and advances to credit institutions 1 252.6 637.6 781.8 Loans and advances to Customers 23 957.0 22 735.8 22 718.4 Financial assets held for trading and at fair value through profit or loss 3 843.4 2 197.9 2 421.4 Financial assets available for sale 5 864.4 3 876.4 3 816.9 Held to maturity investments 21.4 16.3 16.3 Hedging derivatives 46.8 25.8 21.1 Investments in associated companies and jointly controlled entities 212.3 175.7 681.6 Investment properties Non-current assets held for sale and discontinued operations 6 295.9 Other tangible assets 168.8 51.0 48.0 Intangible assets 26.7 25.6 24.6 Tax assets 437.3 471.8 447.5 Other assets 562.3 598.0 426.8 Total assets 39 412.1 38 284.7 32 976.7 Liabilities and shareholders' equity Resources of central banks 1 652.8 2 000.0 1 999.5 Financial liabilities held for trading 296.8 212.7 208.7 Resources of other credit institutions 1 309.1 1 096.4 1 834.9 Resources of Customers and other debts 27 485.3 21 967.7 22 413.5 Debts securities 1 010.5 506.8 288.6 Technical provisions 3 181.0 2 048.8 1 985.2 Financial liabilities relating to transferred assets 674.5 555.4 525.6 Hedging derivatives 162.4 97.8 93.0 Non-current liabilities held for sale and discontinued operations 5 951.4 Provisions 95.0 70.2 69.3 Tax liabilities 104.3 22.0 66.5 Contingent convertible subordinated bonds Other subordinated debt and participating bonds 69.5 69.5 369.9 Other liabilities 649.4 777.4 587.3 Subscribed share capital 1 293.1 1 293.1 1 293.1 Reserves 998.0 840.7 1 361.1 Other equity instruments 6.0 4.3 1.6 Treasury shares ( 12.1) ( 10.8) ( 0.4) Net profit 45.8 313.2 ( 122.3)
Shareholders' equity attributable to the shareholders of BPI 2 330.7 2 440.5 2 533.0 Non-controlling interests 390.7 468.0 1.8 Shareholders' equity 2 721.5 2 908.5 2 534.7 Total liabilities and shareholders' equity 39 412.1 38 284.7 32 976.7
Domestic activity income statement Amounts in M.€
| Mar. 16 | Mar. 17 | Chg.% | |
|---|---|---|---|
| as reported | as reported | Mar16 / Mar17 |
|
| Financial margin (narrow sense) | 85.5 | 92.3 | 8.0% |
| Gross margin on unit links | 3.6 | 3.1 | (14.2%) |
| Income from equity instruments | 0.0 | 0.1 | 71.4% |
| Net commissions relating to amortised cost | 5.4 | 5.8 | 6.5% |
| Financial margin | 94.6 | 101.3 | 7.1% |
| Technical result of insurance contracts | 7.9 | 3.6 | (54.2%) |
| Net commission income | 61.0 | 62.7 | 2.8% |
| Net income on financial operations | ( 3.6) | 7.7 | 314.1% |
| Net operating income | ( 1.2) | ( 1.1) | 5.5% |
| Operating income from banking activity | 158.7 | 174.1 | 9.7% |
| Personnel costs | 73.5 | 77.5 | 5.4% |
| General administrative costs | 44.6 | 41.2 | (7.5%) |
| Depreciation and amortisation | 5.5 | 5.5 | 0.0% |
| Overhead costs | 123.6 | 124.2 | 0.5% |
| Operating profit before impairments and provisions | 35.1 | 49.9 | 42.3% |
| Recovery of loans, interest and expenses | 3.9 | 6.2 | 58.2% |
| Impairment losses and provisions for loans and guarantees, net | 20.1 | ( 0.1) | (100.6%) |
| Impairment losses and other provisions, net | 3.3 | ( 3.5) | (207.8%) |
| Net income before income tax | 15.6 | 59.8 | 284.0% |
| Income tax | 11.8 | 21.1 | 78.8% |
| Earnings of associated companies (equity method) | 4.1 | 4.4 | 7.3% |
| Income attributable to non-controlling interests | 0.0 | 0.0 | 30.0% |
| Net Income | 7.9 | 43.1 | 447.4% |
Domestic activity balance sheet Amounts in M.€
| 31 Mar. 16 as reported |
31 Dec. 16 as reported |
31 Mar. 17 as reported |
Chg.% Mar.16/ Mar.17 |
|
|---|---|---|---|---|
| Assets | ||||
| Cash and deposits at central banks | 1 071.2 | 876.6 | 1 300.2 | 21.4% |
| Deposits at other credit institutions | 337.9 | 300.2 | 272.1 | (19.5%) |
| Loans and advances to credit institutions | 826.9 | 636.5 | 780.6 | (5.6%) |
| Loans and advances to Customers | 22 645.6 | 22 735.8 | 22 718.4 | 0.3% |
| Financial assets held for trading and at fair value through profit or loss | 3 012.7 | 2 197.9 | 2 421.4 | (19.6%) |
| Financial assets available for sale | 3 695.6 | 3 876.4 | 3 816.9 | 3.3% |
| Held to maturity investments | 21.4 | 16.3 | 16.3 | (23.9%) |
| Hedging derivatives | 46.8 | 25.8 | 21.1 | (54.9%) |
| Investments in associated companies and jointly controlled entities | 156.5 | 130.8 | 134.3 | (14.1%) |
| Investment properties | ||||
| Non-current assets held for sale and discontinued operations | ||||
| Other tangible assets | 62.5 | 50.8 | 47.9 | (23.3%) |
| Intangible assets | 23.6 | 25.6 | 24.5 | 4.1% |
| Tax assets | 428.4 | 471.1 | 446.8 | 4.3% |
| Other assets | 582.1 | 642.7 | 426.3 | (26.8%) |
| Total assets | 32 911.2 | 31 986.6 | 32 426.9 | (1.5%) |
| Liabilities and shareholders' equity | ||||
| Resources of central banks | 1 652.8 | 2 000.0 | 1 999.5 | 21.0% |
| Financial liabilities held for trading | 267.5 | 212.7 | 208.7 | (22.0%) |
| Resources of other credit institutions | 1 963.5 | 1 724.5 | 1 834.1 | (6.6%) |
| Resources of Customers and other debts | 21 326.2 | 21 967.7 | 22 413.5 | 5.1% |
| Debts securities | 1 010.5 | 506.8 | 288.6 | (71.4%) |
| Technical provisions | 3 181.0 | 2 048.8 | 1 985.2 | (37.6%) |
| Financial liabilities relating to transferred assets | 674.5 | 555.4 | 525.6 | (22.1%) |
| Hedging derivatives | 162.4 | 97.8 | 93.0 | (42.8%) |
| Non-current liabilities held for sale and discontinued operations | ||||
| Provisions | 73.2 | 70.2 | 69.3 | (5.4%) |
| Tax liabilities | 56.6 | 10.0 | 12.6 | (77.8%) |
| Contingent convertible subordinated bonds | ||||
| Other subordinated debt and participating bonds | 69.5 | 69.5 | 369.9 | 432.1% |
| Other liabilities | 572.7 | 776.9 | 587.1 | 2.5% |
| Shareholders' equity attributable to the shareholders of BPI | 1 899.0 | 1 944.6 | 2 038.1 | 7.3% |
| Non-controlling interests | 1.8 | 1.8 | 1.8 | (2.7%) |
| Shareholders' equity | 1 900.8 | 1 946.3 | 2 039.9 | 7.3% |
| Total liabilities and shareholders' equity | 32 911.2 | 31 986.6 | 32 426.9 | (1.5%) |
Note: The balance sheet relating to domestic operations presented above has not been corrected for the balances resulting from operations with the "International Operations" geographical segment.
| Mar. 16 | Mar. 16 | Mar. 17 | |
|---|---|---|---|
| as reported | proforma | as reported | |
| Financial margin (narrow sense) | 73.3 | 0.6 | ( 0.1) |
| Gross margin on unit links | |||
| Income from equity instruments | |||
| Net commissions relating to amortised cost | |||
| Financial margin | 73.3 | 0.6 | ( 0.1) |
| Technical result of insurance contracts | |||
| Net commission income | 13.1 | ( 0.1) | 0.3 |
| Net income on financial operations | 55.5 | ( 0.0) | |
| Net operating income | ( 3.8) | ( 0.0) | ( 174.9) |
| Operating income from banking activity | 138.1 | 0.6 | ( 174.6) |
| Personnel costs | 21.8 | 0.4 | 0.4 |
| General administrative costs | 15.9 | 0.2 | 0.1 |
| Depreciation and amortisation | 3.2 | 0.0 | 0.0 |
| Overhead costs | 40.9 | 0.7 | 0.5 |
| Operating profit before impairments and provisions | 97.2 | ( 0.1) | ( 175.2) |
| Recovery of loans, interest and expenses | 0.8 | ||
| Impairment losses and provisions for loans and guarantees, net | 10.5 | ||
| Impairment losses and other provisions, net | 0.9 | ||
| Net income before income tax | 86.6 | ( 0.1) | ( 175.2) |
| Income tax | 11.7 | 1.6 | 42.0 |
| Earnings of associated companies (equity method) | 1.4 | 1.4 | 51.7 |
| Net income from continuing operations | 76.3 | ( 0.3) | ( 165.4) |
| Net income from discontinued operations | 76.6 | ||
| Income attributable to non-controlling interests from continuing operations | 38.4 | ||
| Income attributable to non-controlling interests from discontinued operations | 38.4 | ||
| Net Income | 37.9 | 37.9 | ( 165.4) |
Note: The designation "Mar. 16 proforma "reflects the expression of BFA's contribution to consolidated income in accordance with IFRS 5.
International activity balance sheet Amounts in M.€
| 31 Mar. 16 as reported |
31 Dec. 16 as reported |
31 Mar. 17 as reported |
|
|---|---|---|---|
| Assets | |||
| Cash and deposits at central banks | 1 544.0 | 0.0 | 0.0 |
| Deposits at other credit institutions | 286.7 | 0.0 | 0.0 |
| Loans and advances to credit institutions | 864.9 | 1.1 | 1.2 |
| Loans and advances to Customers | 1 311.4 | ||
| Financial assets held for trading and at fair value through profit or loss | 830.6 | ||
| Financial assets available for sale | 2 168.8 | ||
| Held to maturity investments | |||
| Hedging derivatives | |||
| Investments in associated companies and jointly controlled entities | 55.8 | 44.8 | 547.3 |
| Investment properties | |||
| Non-current assets held for sale and discontinued operations | 6 924.7 | ||
| Other tangible assets | 106.3 | 0.1 | 0.1 |
| Intangible assets | 3.2 | 0.0 | 0.0 |
| Tax assets | 8.9 | 0.7 | 0.7 |
| Other assets | 14.1 | 0.5 | 0.5 |
| Total assets | 7 194.6 | 6 972.0 | 549.8 |
| Liabilities and shareholders' equity | |||
| Resources of central banks | |||
| Financial liabilities held for trading | 29.3 | ||
| Resources of other credit institutions | 5.4 | 0.8 | 0.8 |
| Resources of Customers and other debts | 6 159.1 | ||
| Debts securities | |||
| Technical provisions | |||
| Financial liabilities relating to transferred assets | |||
| Hedging derivatives | |||
| Non-current liabilities held for sale and discontinued operations | 5 990.3 | ||
| Provisions | 21.8 | ||
| Tax liabilities | 47.7 | 12.0 | 54.0 |
| Contingent convertible subordinated bonds | |||
| Other subordinated debt and participating bonds | |||
| Other liabilities | 110.6 | 6.8 | 0.3 |
| Shareholders' equity attributable to the shareholders of BPI | 431.8 | 495.9 | 494.8 |
| Non-controlling interests | 388.9 | 466.3 | |
| Shareholders' equity | 820.7 | 962.2 | 494.8 |
| Total liabilities and shareholders' equity | 7 194.6 | 6 972.0 | 549.8 |
Note:
The balance sheet relating to international operations presented above has not been corrected for the balances resulting from operations with the "Domestic Operations" geographical segment.
| Mar.16 Mar.17 |
Mar.16 / Mar.17 | ||||
|---|---|---|---|---|---|
| as reported | as reported | Chg. M.€ | Chg.% | ||
| Financial margin | 73.3 | 118.2 | 44.9 | 61.2% | |
| Technical result of insurance contracts | 0.0 | 0.0 | 0.0 | 0.0% | |
| Net commission income | 12.8 | 19.8 | 6.9 | 54.1% | |
| Net income on financial operations | 55.5 | 21.3 | ( 34.2) | -61.6% | |
| Net operating income | ( 3.8) | ( 9.2) | ( 5.4) | -144.1% | |
| Operating income from banking activity | 137.9 | 150.1 | 12.2 | 8.8% | |
| Personnel costs | 21.4 | 23.6 | 2.2 | 10.4% | |
| General administrative costs | 15.7 | 18.0 | 2.3 | 14.5% | |
| Depreciation and amortisation | 3.2 | 3.6 | 0.4 | 12.6% | |
| Overhead costs | 40.2 | 45.2 | 4.9 | 12.2% | |
| Operating profit before impairments and provisions | 97.7 | 104.9 | 7.2 | 7.4% | |
| Recovery of loans, interest and expenses | 0.8 | 0.2 | ( 0.7) | -80.9% | |
| Impairment losses and provisions, net | 11.4 | 1.4 | ( 10.1) | -88.0% | |
| Net income before income tax | 87.1 | 103.7 | 16.6 | 19.1% | |
| Income tax | 10.0 | 0.7 | ( 9.4) | -93.3% | |
| BFA non-consolidated net income | 77.0 | 103.0 | 26.0 | 33.8% | |
| Result attributable to BPI | 38.6 | 49.6 | 11.0 | 28.4% | |
| Taxes on dividends and other | 1.5 | 5.5 | 3.9 | 254.5% | |
| BFA contribution to consolidated net income | 37.0 | 44.1 | 7.0 | 19.0% |
BFA individual balance sheet Amounts in M.€
| 31 Mar.16 as reported |
31 Dec. 16 as reported |
31 Mar. 17 as reported |
Chg.% Mar.16/ Mar.17 |
|
|---|---|---|---|---|
| Assets | ||||
| Cash and deposits at central banks | 1 544.0 | 1 505.9 | 963.5 | (37.6%) |
| Deposits at other credit institutions | 285.4 | 205.2 | 321.5 | 12.6% |
| Loans and advances to credit institutions | 864.2 | 578.3 | 610.3 | (29.4%) |
| Loans and advances to Customers | 1 311.4 | 1 269.4 | 1 221.5 | (6.9%) |
| Financial assets held for trading and at fair value through profit or loss |
830.6 | 1 823.0 | 1 939.4 | 133.5% |
| Financial assets available for sale | 2 168.8 | 1 398.1 | 1 677.4 | (22.7%) |
| Non-current assets held for sale | 0.4 | |||
| Other tangible assets | 106.1 | 103.9 | 103.0 | (2.9%) |
| Intangible assets | 3.2 | 7.1 | 6.6 | 109.6% |
| Tax assets | 8.1 | 9.7 | 6.7 | (16.4%) |
| Other assets | 16.3 | 25.1 | 216.7 | 1228.7% |
| Total assets | 7 138.1 | 6 925.6 | 7 067.1 | (1.0%) |
| Liabilities and shareholders' equity | ||||
| Resources of central banks | ||||
| Financial liabilities held for trading | 29.3 | 8.1 | 6.9 | (76.4%) |
| Resources of other credit institutions | 5.1 | 0.1 | 24.3 | 380.7% |
| Resources of Customers and other debts | 6 159.1 | 5 842.8 | 5 711.2 | (7.3%) |
| Debts securities | ||||
| Provisions | 21.8 | 23.6 | 25.9 | 19.1% |
| Tax liabilities | 36.1 | 23.7 | 28.3 | (21.5%) |
| Other subordinated debt and participating bonds | ||||
| Other liabilities | 107.4 | 92.9 | 234.0 | 118.0% |
| Shareholders' equity | 779.4 | 934.4 | 1 036.3 | 33.0% |
| Total liabilities and shareholders' equity | 7 138.1 | 6 925.6 | 7 067.1 | (1.0%) |
| 31 Mar. 16 as reported |
31 Mar. 16 proforma |
31 Mar. 17 as reported |
31 Mar. 17, excluding the impact of the sale of 2% of BFA and deconsolidation |
|
|---|---|---|---|---|
| Operating income from banking activity and results of equity accounted subsidiaries / ATA |
3.0% | 1.7% | 0.7% | 2.8% |
| Profit before taxation and income attributable to non-controlling interests / ATA |
1.1% | 1.0% | -0.7% | 1.4% |
| Profit before taxation and income attributable to non-controlling interests / average shareholders' equity (including non-controlling interests) |
15.7% | 14.2% | -9.3% | 18.3% |
| Personnel costs / Operating income from banking activity and results of equity accounted subsidiaries 1 |
31.3% | 44.5% | 120.7% | 29.1% |
| Overhead costs / Operating income from banking activity and results of equity accounted subsidiaries 1 |
54.2% | 75.0% | 204.9% | 49.3% |
| Loans in arrears for more than 90 days + doubtful loans / loan portfolio (gross) |
4.0% | 3.2% | ||
| Loans in arrears for more than 90 days + doubtful loans, net of accumulated loan impairments / loan portfolio (net) |
-0.2% | 0.1% | ||
| Credit at risk as % of total loans (gross) 2 | 5.0% | 4.0% | ||
| Credit at risk2 , net of accumulated loan impairments as % of total loans (net) |
0.8% | 0.9% | ||
| Restructured loans as % of total loans (gross) 3 | 6.8% | 6.3% | ||
| Restructured loans not included in credit at risk as % of total loans (gross) 3 | 4.8% | 4.6% | ||
| Total capital ratio | 10.8% 4) | 13.3% 5) | ||
| Tier I ratio | 10.8% 4) | 11.9% 5) | ||
| Core Tier I ratio | 10.8% 4) | 11.9% 5) | ||
| Loans (net) to deposits ratio | 88% | 104% |
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.
ATA = Average total assets.
Note: The designation "Mar. 16 proforma "reflects the expression of BFA's contribution to consolidated income in accordance with IFRS 5.
The European Securities and Markets Authority (ESMA) published on 5 October 2015 a set of guidelines for the disclosure of Alternative Performance Measures (APM) by issuers (ESMA / 2015/1415). These guidelines are mandatory for issuers from 3 July 2016.
BPI uses a set of indicators in the analysis of its performance and financial position, which are classified as Alternative Performance Measures, in accordance with the ESMA Guidelines mentioned above.
The information on those indicators has been previously disclosed, as required by the ESMA Guidelines, which is hereby incorporated by reference1 .
1) The information on Alternative Performance Measures (APM) was disclosed in the annex to the consolidated quarterly information for 30 September 2016, published on the 30 November 2016, and in the 2016 Report and Accounts, which are available at CMVM website (www.cmvm.pt) and at BPI Investor Relations website (www.ir.bpi.pt), and in the annex to the base prospectus, dated 17 February 2017, of the 7 billion Euro Medium Term Notes Program (EMTN), which is available at the Luxembourg Stock Exchange website (www.bourse.lu) and at BPI Investor Relations website (www.ir.bpi.pt).
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