Banco Comercial Portugues

Earnings Release • May 2, 2016

EARNINGS PRESENTATION 3M 2016

MAY 2016

The information in this presentation has been prepared under the scope of the International Financial Reporting Standards ('IFRS') of BCP Group for the purposes of the preparation of the consolidated financial statements under Regulation (CE) 1606/2002

The figures presented do not constitute any form of commitment by BCP in regard to future earnings

First 3 months figures for 2015 and 2016 not audited

The business figures presented exclude Banco Millennium in Angola

Agenda

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

Profitability and efficiency Recurring profits reinforced	• Net profit of €46.7 million in the 1st quarter of 2016, compared to €70.4 million in the same period of 2015, despite the significant reduction of gains on Portuguese sovereign debt (-€115.8 million, net of taxes). • Core net income up 3.6% to €213.2 million (+9.7% in Portugal), reflecting substantial commercial discipline and lower operating costs (-4.4%, with a 2.1% reduction in Portugal), resulting in cost to core income decreasing to 53.3% (cost to income of 49.4%).
Business performance Healthy balance sheet	• Commercial gap improved further, with net loans as a percentage of on-balance sheet Customers funds now standing at 97%. As a percentage of deposits (BoP criteria)**, net loans improved to 103% (109% as at March 31, 2015). Customer deposits totalled €49.6 billion, 0.7% up from March 31, 2015. •
Asset quality Lower delinquency and reinforced coverage	• Provision charges still sizable, but trending downwards: €160.7 million in the 1st quarter of 2016 (€201.0 million in the 1st quarter of 2015). • Decrease of the non-performing loans ratio to 11.1% at March 31, 2016 from 11.6% at the same date of 2015. Coverage of non-performing loans reinforced to 57.2% (53.5% at March 31, 2015).
Capital and liquidity Reinforced position	• Common equity tier 1 ratio at 13.2% according to phased-in criteria, compared to 11.6% as at March 31, 2015. This figure stood at 10.1% on a fully implemented basis. Pro forma estimates including net earnings for the 1st quarter and the impact of the merger in Angola. • ECB funding usage down to €5.3 billion (€1.5 billion of which TLTRO) from €6.2 billion as at March 31, 2015.
Merger in Angola	• Merger between Millennium Angola and Banco Privado Atlântico, S.A. completed on April 22, with an estimated impact of +0.4 percentage points on the phased-in common equity tier 1 ratio.

* Core net income = net interest income + net fees and commission income – operating costs, core income = net interest income + net fees and commission income. ** According to the current version of Notice 16/2004 of the Bank of Portugal, excluding Angola.

* Core net income = net interest income + net fees and commission income – operating costs.

** According to the current version of Notice 16/2004 of the Bank of Portugal, excluding Angola.

*** Pro forma estimates including net earnings for the 1st quarter s and the impact of the merger in Angola.

* Core net income = net interest income + net fees and commission income – operating costs.

** Core Income = net interest income + net fees and commissions.

Significant transformation of Millennium bcp: a more sustainable business model

branches already renovated

mortgages, +30% for personal

Accelerating new loans to individuals (+50% for

Increased capture of new

Customers (+7 yoy)

loans)

Retail Companies and Corporate Best benchmark scores +4% YTD increase on loans to exporting companies (+€100 million), equivalent to a 0.4pp market share growth New funding totalling €250 million under the "Millennium BEI" funding line New €60 million line for requalifying tourism Continuing increase in the number of mobile banking users and in the number of products subscribed through digital platforms, that now account for 13% of total subscriptions of savings products and for 10% of investment products in retail Kick-off to the renovation of the branch network: 174

• Support to 845 investment projects under the "Portugal 2020" programme for a total amount of €442 million
• Convening of the "Fórum Empresarial Portugal 2020", a Millennium bcp partnership with the main Portuguese companies'associations

"Basef Banca", March 2016 scores

• Increased penetration as 1st bank (+1.4pp from March 2015): largest private sector bank
• Main bank among upper and upper-middle classes: market share up by 1.0pp from March 2015
• Best bank in "proximity to Customers" (among 5 largest banks)

• Website with the most useful information, most technologically advanced, with the most diversified information and best designed (among 5 largest banks)

• Highlights

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

Recurring line items lead to net profits

(million euros)	1Q15	1Q16	YoY	Impact on earnings
Net interest income	297.8	292.4	-1.8%	-5.5
Net fees and commissions	162.3	163.9	1.0%	+1.7
Other operating income	182.1	31.8	-82.5%	-150.3
Of which: capital gains on Portuguese sovereign debt	164.0	-0.3		-164.3
Banking income	642.2	488.1	-24.0%	-154.1
Staff costs	-143.4	-138.4	-3.5%	+5.0
Other administrative costs and depreciation	-110.9	-104.6	-5.6%	+6.3
Operating costs	-254.3	-243.1	-4.4%	+11.3
Operating net income (before impairment and provisions)	387.9	245.1	-36.8%	-142.8
Loans impairment (net of recoveries)	-201.0	-160.7	-20.1%	+40.4
Other impairment and provisions	-70.1	-15.4	-78.1%	+54.8
Impairment and provisions	-271.2	-176.0	-35.1%	+95.2
Net income before income tax	116.7	69.1	-40.8%	-47.6
Income taxes	-32.8	-15.0	-54.3%	+17.8
Non-controlling interests	-22.2	-21.9	-1.4%	+0.3
Net income from discontinued or to be discontinued operations	8.7	14.5	66.3%	+5.8
Net income	70.4	46.7	-33.7%	-23.7

Core net income improves, reflecting strong performance in Portugal

Net interest income: impact of the significant decrease of Euribor rates dampened by a lower cost of deposits

Stable commissions on a demanding regulatory environment

Other income: significant gains on sovereign debt in the 1st quarter of 2015

(Million euros)

Cost reduction proceeds

Millennium bcp is one of the most efficient banks in Portugal and in the Eurozone

• Millennium bcp is the most efficient bank in Portugal and is among the most efficient in the Eurozone, with a cost to core income* of 53% in the 1st quarter of 2016
• Millennium bcp is also the most improved bank in Portugal in terms of cost to core income* in recent years: 32pp down from 2013

Impairment slowing down in Portugal…

(Million euros)

… with lower delinquency and increased coverage

Diversified and collateralised portfolio

• Loans to companies accounted for 47% of the loan portfolio at March 31, 2016, including 9% to construction and real-estate sectors
• 93% of the loan portfolio is collateralised

• Mortgage accounted for 46% of the loan portfolio, with low delinquency levels and an average LTV of 67%

• Highlights

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

Deposits increase in spite of FX effect in international operations; individuals in Portugal stand out

Credit influenced by FX impact

(Million euros)

Continued improvement of the liquidity position, current ratios exceed future requirements

** According to the current version of Notice 16/2004 of the Bank of Portugal, excluding Angola.

Lower refinancing needs in the medium to long term, Customer deposits are the main funding source

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

Stronger capital, supported by profitability and specific measures

Phase-in transition and devaluation (FX and sovereign portfolio) more than compensate positive impact of profits and of merger in Angola

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

Portugal: deleveraging improves liquidity position

On a comparable basis: excludes Millennium bcp Gestão de Activos, following the discontinuation processes.

Recurring line items dampen the decrease of net earnings resulting from significant non-recurring gains in the 1st quarter of 2015

(Million euros)

Improvement trend on core income and operating costs in Portugal proceeds

* Core net income = net interest income + net fees and commission income – operating costs.

Increase on net interest income in Portugal reflects lower cost of deposits, in spite of the impact of lower loan volumes

• Net interest income decreased from 4Q15, mainly driven by:
• Non-recurring interest recovery from NPLs in 4Q15
• Decrease of the Euribor rates
• Lower number of days (91d in 1Q16, 92d in 4Q15)
• Lower credit volumes
• These impacts were partially compensated by the continued reduction of spreads on time deposits
• The decrease in net interest income from 1Q2015 reflects the impact of lower Euribor rates, lower credit volumes and a decreasing contribution from the sovereign debt portfolio, that more than offset the favourable impacts stemming from the continued reduction of time deposit pricing and from lower NPLs

Continued effort to reduce the cost of deposits

• Continued reduction of the spread of the portfolio of term deposits, down to -92bp in 1Q16; March's front book priced at an average yield of 46bp, substantially below current back book's
• The decrease in the average spread on loans to companies in 1Q16 was compensated by an improvement in mortgage loans, resulting in a stable spread on the total loan book

	1Q15	1Q16	YoY
Banking fees and commissions	93.7	106.4	+13.6%
Cards and transfers	23.3	22.5	-3.3%
Loans and guarantees	28.3	27.5	-3.1%
Bancassurance	19.1	20.2	+5.6%
Customer account related	18.9	22.5	+19.6%
Other fees and commissions	4.1	13.8	+231.8%
Market related fees and commissions	12.0	11.8	-2.3%
Securities operations	10.2	10.4	+1.6%
Asset management	1.8	1.4	-24.7%
Total fees and commissions	105.8	118.2	+11.8%

The implementation of the plan proceeded, on target with strategic goals

(Million euros)

Reinforced coverage of delinquent loans

(Million euros)

Foreclosed assets sold above book value, confirming appropriate coverage

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

Contribution from international operations

Contribution

international operations increases on a comparable basis

from

	1Q15	1Q16	Δ % local currency	Δ % euros	ROE
International operations
Poland	37.1	31.3	-15.6%	-19.7%	8.4%
Mozambique	19.1	19.3	+1.0%	-25.5%	19.7%
Angola	10.9	29.0	+167.2%	+82.5%	39.1%
Other	4.0	1.7	-57.4%	-58.2%
Net income	71.1	81.3	+14.4%	-4.2%
Non-controlling interests	-24.6	-36.5
Exchange rate effect	8.4	--
Total contribution international operations	54.9	44.8		-18.3%
On a comparable basis:
BM Poland shareholding at 50.1% in 1Q15	48.8	44.8		-8.3%
Same as above without FX effect	40.8	44.8		+9.9%

Poland: growing Customer funds

FX effect excluded. €/Zloty constant at March 2016 levels: Income Statement 4.38093333; Balance Sheet 4.2576.

Net income penalised by new banking tax from February 2016

Stronger net interest income and lower operating costs

(Million euros)

* Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in accounting terms, part of this margin (€4.1 million in 1Q15 and €3.1 million in 1Q16) is presented in net trading income. FX effect excluded. €/Zloty constant at March 2016 levels: Income Statement 4.38093333; Balance Sheet 4.2576.

Improved credit quality and coverage

Mozambique: strong volume growth

Stable net income

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

(Million euros)

FX effect excluded. €/Metical constant at March 2016 levels: Income Statement 52.00583333; Balance Sheet 57.9800.

Credit quality and coverage

BCP creates conditions to increase profitability in Angola through a very favourable transaction for its shareholders and Customers

Stake in Banco Millennium Atlantico to be equity-consolidated in BCP's financials A reference bank in Angola, with a

• BCP's stake to be booked under "Investments in associated companies"

• 22.5% of net earnings to be equityconsolidated

• reinforced partnership

• Transaction estimated to yield an extra 5pp to return on invested capital

• Positive impact on phased-in capital ratio estimated at 0.4pp

• Highlights

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

Road to 2018: targets

Business targets
	1Q15	1Q16	Target 2018
Customers with digital access [percentage of total Customers]	25%	28%	> 35%
Digital transactions [percentage of total transactions]	37.1%	37.4%	> 50%
Branches	695	662	< 570
Cost per Customer [Retail, euros, annualised]	176	170	< 160
Customer satisfaction [ranking in Marktest's Customer satisfaction index]	#3	#2	#1
New Prestige Customers [x1,000, annualised]	7	7	> 10 Average p.a. 2016-2018
Credit at risk in Portugal [billion euros]	6.3	5.6	≤ 4.5

Road to 2018: financial targets

	1Q15	1Q16	Target 2018
CET1 phased-in ratio*	11.6%	13.2%	≥11%
CET1 fully implemented ratio*	8.9%	10.1%
Loans to Deposits	109%	103%	<100%
Cost-core income	55.3%	53.3%	<50%
Cost-income	39.6%	49.4%	<43%
Cost of risk	141 bp	119 bp	<75 bp
ROE *	6.9%	4.1%	>11%**

* Pro forma estimates including net earnings for the 1st quarter and the impact of the merger in Angola. **Consistent with a 11% CET1 ratio.

Appendix

Sovereign debt portfolio

• Sovereign debt portfolio totals €9.4 billion, €2.5 billion of which maturing in less than 1 year
• The value of Portuguese, Polish and Angolan sovereign portfolios increased from March 31, 2015; exposure to Mozambican sovereign debt decreased

Sovereign debt portfolio

(Million euros, March 2016)

	Portugal	Poland	Angola	Mozambique	Other	Total
Trading book	992	92	0	2	38	1,124
≤ 1 year	741	3	0	1	0	745
> 1 year and ≤ 2 years	0	25	0	0	38	63
> 2 years and ≤ 5 years	242	24	0	0	0	266
> 5 years and ≤ 8 years	6	40	0	0	0	46
> 8 years and ≤ 10 years	2	0	0	0	0	2
> 10 years	1	0	0	0	0	1
Banking book*	4,507	2,674	409	624	53	8,267
≤ 1 year	758	547	222	243	0	1,769
> 1 year and ≤ 2 years	288	878	85	94	0	1,346
> 2 years and ≤ 5 years	822	947	102	225	50	2,146
> 5 years and ≤ 8 years	2,276	303	0	63	1	2,643
> 8 years and ≤ 10 years	351	0	0	0	1	353
> 10 years	11	0	0	0	0	11
Total	5,499	2,766	409	626	91	9,391
≤ 1 year	1,499	550	222	244	0	2,514
> 1 year and ≤ 2 years	288	903	85	94	38	1,409
> 2 years and ≤ 5 years	1,064	970	102	225	50	2,412
> 5 years and ≤ 8 years	2,282	343	0	63	1	2,689
> 8 years and ≤ 10 years	354	0	0	0	1	355
> 10 years	12	0	0	0	0	12

Financial Statements

Consolidated Balance Sheet

(Million euros)

	31 March	31 March		31 March	31 March
	2016	2015		2016	2015
Assets			Liabilities
Cash and deposits at central banks	2,210.4	2,383.0	Amounts owed to credit institutions	10,813.9	11,066.0
Loans and advances to credit institutions			Amounts owed to customers	51,014.4	50,758.8
Repayable on demand	739.8	1,127.1	Debt securities	4,463.2	5,575.8
Other loans and advances	1,300.5	1,303.4	Financial liabilities held for trading	847.6	1,024.8
Loans and advances to customers	51,183.0	54,495.1	Hedging derivatives	470.5	745.6
Financial assets held for trading	2,009.4	2,069.5	Provisions for liabilities and charges	273.2	314.3
Financial assets available for sale	11,459.6	10,088.1	Subordinated debt	1,671.4	2,048.0
Assets with repurchase agreement	50.8	19.9	Current income tax liabilities	20.3	24.9
Hedging derivatives	128.7	71.0	Deferred income tax liabilities	16.0	9.7
Financial assets held to maturity	474.0	438.9	Other liabilities	1,052.4	1,178.0
Investments in associated companies	331.5	318.3	Total Liabilities	70,643.0	72,745.7
Non current assets held for sale	1,783.6	1,668.7
Investment property	141.9	169.9	Equity
Property and equipment	626.9	775.5	Share capital	4,094.2	3,706.7
Goodwill and intangible assets	207.8	208.5	Treasury stock	(0.9)	(13.9)
Current tax assets	43.3	40.9	Share premium	16.5	-
Deferred tax assets	2,571.4	2,326.6	Preference shares	59.9	171.2
Other assets	881.7	809.3	Other capital instruments	2.9	9.9
	76,295.3	78,313.5	Fair value reserves	15.5	276.6
			Reserves and retained earnings	364.0	302.2
			Net income for the year attrib. to Shareholders	46.7	70.4
			Total equity attrib. to Shareholders of the Bank	4,598.9	4,523.0

-

-

76,295.3 78,313.5

Non-controlling interests 1,053.4 1,044.7

Total Equity 5,652.3 5,567.7

Consolidated Income Statement Per quarter

(Million euros) Net interest income 297.8 273.6 305.1 314.0 292.4 Dividends from equity instruments 2.0 1.3 0.3 6.2 2.0 Net fees and commission income 162.3 173.8 161.8 162.3 163.9 Other operating income -17.2 -24.0 -12.3 -66.4 -12.4 Net trading income 191.3 287.7 26.9 33.5 28.3 Equity accounted earnings 6.1 14.6 4.5 -1.6 13.9 Banking income 642.2 727.0 486.4 447.9 488.1 Staff costs 143.4 145.2 141.6 143.7 138.4 Other administrative costs 97.1 97.8 94.4 100.0 91.8 Depreciation 13.8 13.9 13.3 13.1 12.8 Operating costs 254.3 256.9 249.3 256.8 243.1 Operating net income bef. imp. 387.9 470.1 237.1 191.1 245.1 Loans impairment (net of recoveries) 201.0 262.6 150.0 204.2 160.7 Other impairm. and provisions 70.1 21.4 25.5 43.0 15.4 Net income before income tax 116.7 186.1 61.7 -56.1 69.1 Income tax 32.8 13.3 21.0 -29.4 15.0 Non-controlling interests 22.2 27.6 26.5 11.6 21.9 Net income (before disc. oper.) 61.7 145.2 14.1 -38.2 32.1 Net income arising from discont. operations 8.7 25.2 9.6 9.0 14.5 Net income 70.4 170.3 23.8 -29.2 46.7 Quarterly 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16

(Million euros)
												Internatio nal o	peratio	ns
		Gro up			P o rtugal			T o tal		B ank M	illennium (P	o land)	M	illennium bim (M	o z.)	Other int. o peratio ns
	M ar 15	M ar 16	Δ %	M ar 15	M ar 16	Δ %	M ar 15	M ar 16	Δ %	M ar 15	M ar 16	Δ %	M ar 15	M ar 16	Δ %	M ar 15	M ar 16	Δ %
Interest income	567	487	-14.2%	366	301	-17.8%	201	186	-7.7%	140	127	-9.1%	60	57	-4.5%	2	2	0.8%
Interest expense	270	194	-27.9%	191	129	-32.2%	79	65	-17.6%	60	47	-21.7%	21	19	-8.4%	-2	-1	50.2%
N et interest inco me	298	292	-1.8%	175	172	-2.2%	122	121	-1.3%	8 0	8 0	0.2%	3 9	3 8	-2.4%	3	2	-26.7%
Dividends from equity instruments	2	2	4.8%	2	2	4.8%	0	0	-100.0%	0	0	-100.0%	0	0	--	0	0	--
Intermediatio n margin	300	294	-1.8%	177	174	-2.1%	122	121	-1.3%	8 0	8 0	0.2%	3 9	3 8	-2.4%	3	2	-26.7%
Net fees and commission income	162	164	1.0%	106	118	11.8%	57	46	-19.1%	38	31	-18.4%	13	9	-25.2%	6	6	-10.4%
Other operating income	-17	-12	27.7%	-14	-2	87.2%	-3	-11	<-100%	-6	-13	<-100%	3	2	-15.7%	0	0	29.7%
B asic inco me	445	446	0.2%	269	290	7.8%	176	156	-11.3%	112	9 8	-12.4%	5 5	5 0	-8.4%	9	8	-15.6%
Net trading income	191	28	-85.2%	164	5	-97.1%	28	24	-14.1%	15	14	-5.0%	11	9	-18.4%	1	0	-74.4%
Equity accounted earnings	6	14	>100%	6	14	>100%	0	0	100.0%	0	0	100.0%	0	0	--	0	0	--
B anking inco me	642	488	-24.0%	439	309	-29.7%	203	180	-11.6%	126	112	-11.3%	6 6	5 9	-10.1%	11	8	-23.5%
Staff costs	143	138	-3.5%	93	92	-1.4%	51	47	-7.4%	33	32	-4.4%	13	11	-17.4%	4	4	0.3%
Other administrative costs	97	92	-5.4%	58	56	-2.4%	39	36	-9.8%	25	23	-8.6%	12	11	-13.3%	2	2	-2.1%
Depreciation	14	13	-7.1%	8	7	-8.4%	6	6	-5.5%	3	3	7.6%	3	3	-17.2%	0	0	-0.8%
Operating co sts	254	243	-4.4%	158	155	-2.1%	96	88	-8.3%	62	58	-5.6%	29	24	-15.6%	6	6	-0.4%
Operating net inco me bef. imp.	388	245	-36.8%	281	154	-45.3%	107	9 1	-14.5%	6 5	5 4	-16.7%	3 8	3 5	-5.9%	5	2	-54.0%
Loans impairment (net of recoveries)	201	161	-20.1%	179	142	-20.9%	22	19	-13.8%	17	10	-38.8%	5	9	66.3%	0	0	48.8%
Other impairm. and provisions	70	15	-78.1%	70	16	-77.3%	0	-1	<-100%	0	0	>100%	0	-1	<-100%	0	0	-98.7%
N et inco me befo re inco me tax	117	6 9	-40.8%	3 1	- 4	<-100%	8 5	7 3	-14.2%	4 8	4 4	-10.1%	3 2	2 8	-14.5%	5	2	-54.4%
Income tax	33	15	-54.3%	17	-6	<-100%	16	21	28.8%	9	12	29.6%	6	8	32.1%	1	0	-24.9%
Non-controlling interests	22	22	-1.4%	0	0	<-100%	22	22	-0.3%	0	0	--	0	0	-12.1%	22	22	-0.1%
N et inco me (befo re disc. o per.)	6 2	3 2	-47.9%	15	2	-87.3%	4 7	3 0	-35.5%	3 9	3 1	-19.7%	2 6	19	-25.5%	-18	-20	-12.9%
Net income arising from discont. operations	9	15	66.3%				8	15	82.5%							8	15	82.5%
N et inco me	7 0	4 7	-33.7%				5 5	4 5	-18.3%							-10	- 6	42.1%

Consolidated Pro Forma Balance Sheet with Banco Millennium Atlantico (Angola) equity-consolidated

(Million euros)
	31 March		31 March
	2016		2016
Assets		Liabilities
Cash and deposits at central banks Loans and advances to credit institutions Repayable on demand Other loans and advances Loans and advances to customers Financial assets held for trading Financial assets available for sale Assets with repurchase agreement	1,896 731 1,171 50,381 2,158 10,872 51	Amounts owed to credit institutions Amounts owed to customers Debt securities Financial liabilities held for trading Hedging derivatives Provisions for liabilities and charges Subordinated debt Current income tax liabilities	10,586 49,553 4,463 847 471 270 1,671 17
Hedging derivatives Financial assets held to maturity	129 422	Deferred income tax liabilities Other liabilities	0 1,002
Investments in associated companies Non current assets held for sale Investment property	481 1,774 142	Total Liabilities Equity	68,880
Property and equipment Goodwill and intangible assets Current tax assets Deferred tax assets Other assets	498 205 43 2,571 857 74,383	Share capital Treasury stock Share premium Preference shares Other capital instruments Fair value reserves Reserves and retained earnings	4,094 -1 16 60 3 16 364
		Net income for the year attrib. to Shareholders	47

Total equity attrib. to Shareholders of the Bank 4,599 Non-controlling interests 904 Total Equity 5,503 74,383

Glossary (1/2)

Capitalisation products – includes unit linked saving products and retirement saving plans ("PPR", "PPE" and "PPR/E").

Commercial gap – total loans to customers net of BS impairments accumulated minus on-balance sheet customer funds.

Cost of risk, gross (expressed in bp)- ratio of impairment charges accounted in the period to customer loans (gross).

Cost of risk, net (expressed in bp)- ratio of impairment charges (net of recoveries) accounted to customer loans (gross).

Cost to income – operating costs divided by net operating revenues.

Cost to core income - operating costs divided by the net interest income and net fees and commission income.

Core income - net interest income plus net fees and commission income.

Core net income - corresponding to net interest income plus net commissions deducted from operating costs.

Coverage of credit at risk by balance sheet impairments – total BS impairments accumulated for risks of credit divided by credit at risk (gross)

Coverage of credit at risk by balance sheet impairments and real/financial guarantees –total BS impairments accumulated for risks of credit plus real and financial guarantees divided by credit at risk (gross).

Coverage of non-performing loans by balance sheet impairments – total BS impairments accumulated for risks of credit divided by NPL

Credit at risk – definition broader than the non performing loans which includes also restructured loans whose changes from initial terms have resulted in the bank being in a higher risk position than previously; restructured loans which have resulted in the bank becoming in a lower risk position (e.g. reinforced collateral) are not included in credit at risk.

Credit at risk (net) – credit at risk deducted from BS impairments accumulated for risks of credit.

Customer spread – Difference between the spread on the loans to customers book over 3 months Euribor and the spread on the customers' deposits portfolio over 3 months Euribor.

Debt securities - debt securities issued by the Bank and placed with customers.

Dividends from equity instruments - dividends received from investments in financial assets held for trading and available for sale.

Equity accounted earnings - results appropriated by the Group related to the consolidation of entities where, despite having a significant influence, the Group does not control the financial and operational policies.

Loan book spread - average spread on the loan portfolio over 3 months Euribor.

Loan to value ratio (LTV) – Mortgage amount divided by the appraised value of property.

Loan to Deposits ratio (LTD) – Total loans to customers net of accumulated BS impairments for risks of credit to total customer deposits.

Net interest margin - net interest income for the period as a percentage of average interest earning assets.

Net operating revenues - net interest income, dividends from equity instruments, net commissions, net trading income, equity accounted earnings and other net operating income.

Net trading income - net gains/losses arising from trading and hedging activities, net gains/losses arising from available for sale financial assets, net gains/losses arising from financial assets held to maturity.

Non-performing loans – Overdue loans more than 90 days including the non-overdue remaining principal of loans, i.e. portion in arrears, plus non-overdue remaining principal.

Non-performing loans ratio (net) – Loans more than 90 days overdue and doubtful loans reclassified as overdue for provisioning purposes less BS impairments accumulated for credit risk divided by total loans (gross).

Non-performing loans coverage ratio – total BS impairments accumulated for credit risk divided by overdue and doubtful loans divided.

Glossary (2/2)

Loans more than 90 days overdue coverage - total BS impairments accumulated for risk of credit divided by total amount of loans overdue with installments of capital and interest overdue more than 90 days.

Operating costs - staff costs, other administrative costs and depreciation.

Other impairment and provisions - other financial assets impairment, other assets impairment, in particular provision charges related to assets received as payment in kind not fully covered by collateral, goodwill impairment and other provisions.

Other net income – net commissions, net trading income, other net operating income, dividends from equity instruments and equity accounted earnings.

Other net operating income - other operating income, other net income from non-banking activities and gains from the sale of subsidiaries and other assets.

Overdue loans - loans in arrears, not including the non-overdue remaining principal.

Overdue loans coverage ratio – total BS impairments accumulated for risks of credit divided by total amount of loans overdue with installments of capital and interest overdue.

Overdue and doubtful loans - loans overdue by more than 90 days and the doubtful loans reclassified as overdue loans for provisioning purposes.

Return on equity (ROE) – Net income (including the minority interests) divided by the average attributable equity, deducted from preference shares and other capital instruments.

Return on average assets (ROA) – Net income (including minority interests) divided by the average total assets.

Securities portfolio - financial assets held for trading, financial assets available for sale, assets with repurchase agreement, financial assets held to maturity and other financial assets held for trading at fair value through net income.

Spread on term deposits portfolio – average spread on terms deposits portfolio over 3 months Euribor.

Total customer funds - amounts due to customers (including debt securities), assets under management and capitalisation products.

Total operating income – net interest income, dividends from equity instruments, net fees and commissions income, trading income, equity accounted earnings and other operating income.