Earnings Release • Nov 13, 2017
Earnings Release
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Improvement supported by core net income*
NPE reduction exceeds the annual target showing a significant coverage reinforcement
Favourable performance maintaining balance sheet quality
* Core net income = core income – operating costs; Core income = net interest income + net fees and commission income. ** Euro 799.6 million excluding the positive impact of specific items *** Specific items in 2017: positive impact of Euro 23.7 million in staff costs, including Collective Lab. Agt.'s negotiation and restructuring costs; in 2016: Euro 1.7 million from restructuring costs. ****By loan-loss reserves, expected loss gap and collaterals.
Adequate position
BANCO COMERCIAL PORTUGUÊS, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number 501 525 882 and the share capital of EUR 5,600,738,053.72
INVESTOR RELATIONS Rui Coimbra Phone +351 211 131 084 [email protected] [email protected] [email protected]
MEDIA CONTACT Erik T. Burns Phone +351 211 131 242 Mobile +351 917 265 020 [email protected]
| Financial Highlights | Euro million | ||
|---|---|---|---|
| 30 Sep. 17 | 30 Sep. 16 | Change 17 / 16 |
|
| Balance sheet | |||
| Total assets | 72,990 | 73,042 | -0.1% |
| Loans to customers (gross) | 50,754 | 52,610 | -3.5% |
| Total customer funds | 70,231 | 66,781 | 5.2% |
| Balance sheet total customer funds | 52,265 | 50,576 | 3.3% |
| Resources from customers | 50,690 | 48,937 | 3.6% |
| Loans to customers, net / Resources from customers (1) | 94% | 101% | |
| Loans to customers, net / Balance sheet total customer funds | 91% | 97% | |
| Results | |||
| Net income | 133.3 | (251.1) | |
| Net interest income | 1,023.2 | 907.0 | 12.8% |
| Net operating revenues | 1,594.3 | 1,571.9 | 1.4% |
| Operating costs | 694.6 | 722.4 | -3.8% |
| Recurring operating costs (2) | 718.3 | 720.6 | -0.3% |
| Loan impairment charges (net of recoveries) | 458.6 | 870.2 | -47.3% |
| Other impairment and provisions | 169.9 | 242.8 | -30.0% |
| Income taxes | |||
| Current | 82.8 | 76.5 | |
| Deferred | (19.7) | (144.7) | |
| Profitability | |||
| Net operating revenues / Average net assets (1) (3) | 2.9% | 2.8% | |
| Return on average assets (ROA) (4) | 0.4% | -0.3% | |
| Income before tax and non-controlling interests / Average net assets (1) (3) | 0.5% | -0.4% | |
| Return on average equity (ROE) | 3.2% | -7.7% | |
| Income before tax and non-controlling interests / Average equity (1) (3) | 5.6% | -5.5% | |
| Credit quality | |||
| Overdue loans and doubtful loans / Total loans (1) | 7.8% | 9.3% | |
| Overdue loans and doubtful loans, net / Total loans, net (1) | 1.2% | 2.3% | |
| Credit at risk / Total loans (1) | 9.7% | 11.4% | |
| Credit at risk, net / Total loans, net (1) | 3.3% | 4.5% | |
| Impairment for loan losses / Overdue loans by more than 90 days | 108.9% | 100.9% | |
| Efficiency ratios (1) (2) (3) | |||
| Operating costs / Net operating revenues | 45.1% | 45.8% | |
| Operating costs / Net operating revenues (Portugal activity) | 45.7% | 47.0% | |
| Staff costs / Net operating revenues | 25.3% | 26.0% | |
| Capital (5) | |||
| Common equity tier I phased-in | 13.2% | 12.2% | |
| Common equity tier I fully-implemented | 11.7% | 9.5% | |
| Branches | |||
| Portugal activity | 589 | 634 | -7.1% |
| Foreign activity | 542 | 555 | -2.3% |
| Employees | |||
| Portugal activity | 7,281 | 7,429 | -2.0% |
| Foreign activity | 8,538 | 8,452 | 1.0% |
(1) According to Instruction from the Bank of Portugal no. 16/2004, as the currently existing version.
(2) Excludes specific items: Euro 23.7 million income in staff costs related to Collective Labour Agreement negotiation and restructuring costs in the first nine months of 2017 and Euro 1.7 million from restructuring costs in the first nine months of 2016.
(3) Given the booking of Banco Millennium Angola as a discontinued operation between March and May 2016, the consolidated balance sheet includes Banco Millennium Angola until its derecognition, determined by the completion of the merger with Banco Privado Atlântico, in May 2016, while the respective contribution to consolidated result is reflected in income from discontinued operations and non-controlling interests during that period, not influencing the remaining items of the consolidated income statement. (4) Considering net income before non-controlling interests.
(5) September 2017 and September 2016 include the accumulated net income of each period. September 2017 figures are estimated.
In the context of the merger process between Banco Millennium Angola and Banco Privado Atlântico, Banco Millennium Angola was considered a discontinued operation in March 2016 with the impact of its results presented as "income arising from discontinued operations". On the consolidated balance sheet, the assets and liabilities of Banco Millennium Angola, S.A. continued to be consolidated by the full consolidation method up to April 2016.
After the completion of the merger, in May 2016, the assets and liabilities of Banco Millennium Angola were no longer considered in the consolidated balance sheet and the investment of 22.5% in Banco Millennium Atlântico, the new entity arising from the merger, started being consolidated using the equity method, while its contribution to the Group's results have been recognised in the consolidated accounts from May 2016 onwards.
The core net income of Millennium bcp increased 23.7% from Euro 665.8 million in the first nine months of 2016, amounting to Euro 823.2 million in the same period of 2017, benefiting, on the one hand, from the 12.8% growth in net interest income and 2.8% in net commissions and, on the other, from the 3.8% reduction of operating costs. Excluding the effect of specific items (a Euro 23.7 million income from the negotiation of the Bank's Collective Labour Agreement net of restructuring costs, in the first nine months of 2017, and a Euro 1.7 million cost in restructuring costs, in the first nine months of 2016), core net income achieved Euro 799.6 million in the first nine months of 2017, an increase of 19.8% comparing to the same period of the previous year.
The performance of core net income, on a comparable basis, reflects both the positive performance of the activity in Portugal (+13.9%) and of the international activity (+30.0%), leading to a decrease in the cost to income ratio, excluding specific items, to 45.1% in the first nine months of 2017, compared to 45.8% posted in the same period of 2016, highlighting that, without considering the adjustment of the specific items, the cost to income ratio of 30 September 2017 is more favorable and shows an even more positive progression from the end of September 2016.
Net income in the first nine months of 2017 achieved a profit of Euro 133.3 million, showing an increase compared to a loss of Euro 251.1 million registered in the same period of the previous year, sustained by the performance of the activity in Portugal.
In the activity in Portugal, net income increased by Euro 395.0 million compared to the first nine months of 2016, reaching Euro 0.8 million in the first nine months of 2017, supported by the reduction of impairments and provisions and by the growth of core net income.
The positive impact, net of tax, of the above-mentioned specific items, amounted to Euro 16.7 million, in the first nine months of 2017, which compares with the Euro 20.9 million gain (net of tax) related to the purchase of Visa Europe by Visa Inc in the same period of 2016.
In the international activity, net income totalled Euro 131.3 million in the first nine months of 2017 and Euro 134.8 million in the same period of the previous year, reflecting the lower contributions from the operations in Poland and Angola, despite the increase in the contribution of the remaining operations, notwithstanding negative exchange rate effects. However, it should be noted that the performance of the contribution of Poland is penalised by the gain booked in 2016 associated with the purchase of Visa Europe by Visa Inc (Euro 26.3 million) and by the recognition of the mandatory contributions, namely of the contribution to the Resolution Fund, which was accrued in 2016 and whose value of 2017 was fully recognised in March 2017, and the new Polish banking tax introduced in February 2016.
Net interest income increased 12.8% from Euro 907.0 million registered in the first nine months of 2016, reaching Euro 1,023.2 million in the first nine months of 2017. This performance benefited from the favourable contribution of both, Portugal and international activity.
In the activity in Portugal, net interest income achieved Euro 591.8 million in the first nine months of 2017, showing an increase of 9.0% compared to the same period of the previous year, essentially reflecting the lower
cost of funding determined by the positive impact of CoCos' repayment and by the continued reduction of interest rates of term deposits, despite the lower gains in the loans and the securities portfolios.
In the international activity, net interest income excluding exchange rate effects increased 19.2% in the first nine months of 2017, compared to the same period of the previous year, reflecting the positive performance of all subsidiaries, in particular Mozambique and Poland.
Net interest margin in the first nine months of 2017 stood at 2.17%, which compares with 1.88% in the same period of 2016. Excluding the impact from the cost of CoCos, net interest margin reached 2.19% in the first nine months of 2017 and 1.98% in the same period of 2016.
| AVERAGE BALANCES | Euro million | |||
|---|---|---|---|---|
| 30 Sep.17 | 30 Sep.16 | |||
| Amount | Yield % | Amount | Yield % | |
| Deposits in banks | 2,937 | 0.91 | 3,208 | 0.58 |
| Financial assets | 11,090 | 2.27 | 10,540 | 2.07 |
| Loans and advances to customers | 48,033 | 3.30 | 49,750 | 3.22 |
| Interest earning assets | 62,060 | 3.00 | 63,498 | 2.90 |
| Discontinued operations (1) | 0 | 977 | ||
| Non-interest earning assets | 10,571 | 9,962 | ||
| 72,631 | 74,437 | |||
| Amounts owed to credit institutions | 9,354 | 0.24 | 10,624 | 0.30 |
| Resources from customers | 50,363 | 0.66 | 49,090 | 0.73 |
| Debt issued | 3,188 | 2.88 | 4,301 | 3.24 |
| Subordinated debt | 941 | 6.87 | 1,654 | 7.31 |
| Interest bearing liabilities | 63,846 | 0.80 | 65,669 | 0.99 |
| Discontinued operations (1) | 0 | 914 | ||
| Non-interest bearing liabilities | 2,166 | 2,457 | ||
| Shareholders' equity and non-controlling | ||||
| interests | 6,619 | 5,397 | ||
| 72,631 | 74,437 | |||
| Net interest margin | 2.17 | 1.88 | ||
| Net interest margin (excl. cost of CoCos) | 2.19 | 1.98 |
Note: Interest related to hedge derivatives were allocated, in September 2017 and 2016, to the respective balance sheet item. (1) Includes the activity of the subsidiary in Angola (in 2016), as well as the respective consolidation adjustments.
Net commissions reached Euro 494.6 million in the first nine months of 2017, increasing 2.8% from Euro 481.1 million registered in the same period of the previous year, boosted by the performance of the international activity, in particular in Poland (+16.5% excluding exchange rate effects), with the performance of the activity in Portugal being affected by a higher one-off amount recorded in other banking commissions in the first quarter of 2016.
The increase of net commissions in the first nine months of 2017 reflects both the performance of banking commissions and the increase in market commissions which grew 2.1% and 5.8%, respectively, compared to the same period of 2016.
Net trading income amounted to Euro 115.0 million in the first nine months of 2017, compared to Euro 212.5 million accounted in the same period of 2016, which reflects the gain of Euro 91.1 million related to the purchase, by Visa Inc., of the shareholdings held by the Bank in Portugal and by Bank Millennium in Poland in Visa Europe in the second quarter of 2016.
Other net operating income was negative by Euro 97.0 million in the first nine months of 2017, in line with the negative Euro 96.3 million accounted in the same period of the previous year.
This item includes the costs associated with mandatory contributions as well as with the Resolution Fund and the Deposit Guarantee Fund in both Portugal and the international activity.
In the activity in Portugal, other net operating income in the first nine months of 2017 were Euro 6.7 million lower than in the same period of 2016, mainly due to the higher amount of mandatory contributions recorded in 2017.
Inversely, other net operating income in the international activity increased 12.2% (15.2%, excluding exchange rate effects) in the first nine months of 2017, compared to the same period of the previous year, despite the accounting in the first half of 2017 of the estimated annual contribution for the Resolution Fund in Poland, which was accrued in 2016, and the new tax on Polish banks, which was only introduced in February 2016.
Dividends from equity instruments, which comprises dividends received from investments in financial assets available for sale, and equity accounted earnings, jointly totalled Euro 58.5 million in the first nine months of 2017, compared to Euro 67.6 million reached in the same period of 2016, with this performance being conditioned by the positive impact of the gains from UNICRE related to the transaction of its shareholding in Visa Europe during the first half of 2016, despite the higher gains in the first nine months of 2017 from the shareholding in Banco Millennium Atlântico, the new entity that resulted from the merger of Banco Millennium Angola with Banco Privado Atlântico, from May 2016 onwards.
| OTHER NET INCOME | Euro million | ||
|---|---|---|---|
| 30 Sep. 17 | 30 Sep. 16 | Change 17/16 |
|
| Net commissions | 494.6 | 481.1 | 2.8% |
| Banking commissions | 400.0 | 391.7 | 2.1% |
| Cards and transfers | 115.3 | 107.8 | 6.9% |
| Credit and guarantees | 117.9 | 117.9 | -0.1% |
| Bancassurance | 71.4 | 66.4 | 7.6% |
| Current account related | 69.4 | 68.1 | 1.8% |
| Other commissions | 26.1 | 31.4 | -16.7% |
| Market related commissions | 94.6 | 89.5 | 5.8% |
| Securities | 63.2 | 61.2 | 3.3% |
| Asset management | 31.4 | 28.3 | 11.0% |
| Net trading income | 115.0 | 212.5 | -45.9% |
| Other net operating income | (97.0) | (96.3) | -0.7% |
| Dividends from equity instruments | 1.7 | 7.0 | -75.8% |
| Equity accounted earnings | 56.8 | 60.6 | -6.3% |
| Total other net income | 571.1 | 664.9 | -14.1% |
| Other net income / Net operating revenues | 35.8% | 42.3% |
In the activity in Portugal, operating costs, excluding the above-mentioned specific items, showed a decrease of 3.3% compared to the first nine months of 2016, determined by the decline of staff costs and also by other administrative costs savings, amounting to Euro 447.5 million in the first nine months of 2017.
In the international activity, excluding the exchange rate effect, operating costs increased 5.3%, from the amount accounted in the first nine months of 2016, mainly influenced by the performance of the subsidiary in Mozambique and Poland.
Staff costs, excluding the impact of the above mentioned specific items, amounted to Euro 403.8 million in the first nine months of 2017, showing a 1.2% reduction from Euro 408.7 million registered in the same period of the previous year. This reduction was determined by the performance of the activity in Portugal, which benefited from the impact of the decrease of 148 employees from the end of September 2016, notwithstanding the decision of the Board of Directors of the Bank to end, in advance, the temporary adjustment that has been in force since July 2014, following the full reimbursement of CoCos with effect from 30 June 2017.
In the international activity, staff costs increased 6.1%, excluding exchange rate effects induced by the operations in Poland and in Mozambique.
Other administrative costs stood at Euro 274.8 million in the first nine months of 2017 (Euro 274.9 million in the same period of the previous year), supported by the positive impact of the rationalisation and cost containment measures that have been implemented in Portugal, and which translated into a reduction of Euro 5.4 million from the first nine months of 2016.
In the international activity, excluding exchange rate effects, there was a 5.4% increase in other administrative costs mainly influenced by the activity in Mozambique.
Depreciation costs totalled Euro 39.7 million in the first nine months of 2017, comparing to Euro 37.0 million posted in the same period of 2016, determined by the performance of the activity in Portugal, namely by the higher IT equipment, real estate properties and software depreciation costs. In the international activity, not considering the exchange rate effect, depreciation costs decreased 1.7% compared to the amount registered in the first nine months of 2016.
| OPERATING COSTS | Euro million | ||
|---|---|---|---|
| 30 Sep. 17 | 30 Sep. 16 | Change 17/16 |
|
| Staff costs | 403.8 | 408.7 | -1.2% |
| Other administrative costs | 274.8 | 274.9 | -0.1% |
| Depreciation | 39.7 | 37.0 | 7.3% |
| Subtotal (1) | 718.3 | 720.6 | -0.3% |
| Specific items | |||
| Restructuring costs and Collect. Lab. Agt. revision | (23.7) | 1.7 | |
| Operating costs | 694.6 | 722.4 | -3.8% |
| Of which: | |||
| Portugal activity (1) | 447.5 | 462.9 | -3.3% |
| Foreign activity | 270.8 | 257.7 | 5.1% |
(1) Excludes the impact of specific items presented in the table.
Impairment for loan losses (net of recoveries) fell by 47.3% from Euro 870.2 million accounted in the first nine months of 2016, to stand at Euro 458.6 million in the first nine months of 2017, due to the favourable performance of the activity in Portugal, shown on the improvement in the Group's cost of risk from 221 basis points in the first nine months of 2016 to 120 basis points in the same period of 2017.
Other impairment and provisions totalled Euro 169.9 million in the first nine months of 2017, decreasing 30.0% from Euro 242.8 million recorded in the same period of the previous year, reflecting the lower level of provisions related to corporate restructuring funds and other debt instruments, despite the reinforcement that occurred in other assets.
Income tax (current and deferred) stood at Euro 63.1 million, in the first nine months of 2017, compared to Euro -68.2 million posted in the same period of 2016.
These taxes include current tax costs of Euro 82.8 million (Euro 76.5 million in the first nine months of 2016), net of deferred tax income of Euro 19.7 million (Euro 144.7 million in the first nine months of 2016).
Total assets stood at Euro 72,990 million as at 30 September 2017, comparing to Euro 73,042 million as at 30 September 2016. It is worth noting the reduction of loans to customers and the increase in financial assets available for sale.
Loans to customers (gross) amounted to Euro 50,754 million as at 30 September 2017, down from Euro 52,610 million recorded as at 30 September 2016, influenced by the decrease of the activity in Portugal, partially offset by the increase showed by the international activity.
In the activity in Portugal, loans to customers decreased 5.8% from 30 September 2016, amounting to Euro 37,947 million as at 30 September 2017, as a result of the measures to reduce NPEs, since the continued development of initiatives to support financing needs of companies and individuals reflected on the significant increases in loans to individuals and to companies production, favoured the stabilization of the performing loans portfolio in the first nine months of 2017.
The performance of loans to companies was also accompanied by a structural change in order to reduce the weight of construction and real estate activities and non-financial holding companies against exporting industries.
In the international activity, loans to customers increased 4.0% (2.0% excluding exchange rate effects) from 30 September 2016, mainly supported by the contribution of the operations in Poland and Mozambique, namely the growth of loans to companies.
The structure of the loans to customers' portfolio showed identical and stable levels of diversification between the end of September 2016 and September 2017, with loans to companies representing 46% of total loans to customers as at 30 September 2017.
Credit quality, determined by loans overdue by more than 90 days as a percentage of total loans, showed a favourable performance, dropping from 7.2% as at 30 September 2016 to 6.1% as at 30 September 2017, while the corresponding coverage ratio for loans overdue by more than 90 days improved from 100.9% as at 30 September 2016 to 108.9% in the same date of 2017.
The credit at risk ratio reached 9.7% as at 30 September 2017, which compares favourably with 11.4% on the same date of the previous year. As at 30 September 2017, the restructured loans ratio stood at 8.9% of total loans, from 10.1% registered as at 30 September 2016, and the ratio of restructured loans not included in the credit at risk stood at 4.9% of total loans compared to 6.0% at the same date of 2016.
| LOANS TO CUSTOMERS (GROSS) | Euro million | ||
|---|---|---|---|
| 30 Sep. 17 | 30 Sep. 16 | Change 17/16 |
|
| Individuals | 27,174 | 28,346 | -4.1% |
| Mortgage | 23,406 | 24,273 | -3.6% |
| Consumer and others | 3,768 | 4,074 | -7.5% |
| Companies | 23,580 | 24,263 | -2.8% |
| Services | 8,831 | 9,474 | -6.8% |
| Commerce | 3,287 | 3,136 | 4.8% |
| Construction | 2,624 | 3,063 | -14.3% |
| Other | 8,838 | 8,590 | 2.9% |
| Total | 50,754 | 52,610 | -3.5% |
| Of which: | |||
| Portugal activity | 37,947 | 40,291 | -5.8% |
| Foreign activity | 12,807 | 12,319 | 4.0% |
| Euro million | ||||
|---|---|---|---|---|
| Overdue loans by more than 90 days |
Impairment for loan losses |
Overdue loans by more than 90 days /Total loans |
Coverage ratio (Impairment/ Overdue >90 days) |
|
| Individuals | 628 | 669 | 2.3% | 106.5% |
| Mortgage | 246 | 314 | 1.1% | 127.6% |
| Consumer and others | 382 | 355 | 10.1% | 92.9% |
| Companies | 2,481 | 2,718 | 10.5% | 109.6% |
| Services | 979 | 1,396 | 11.1% | 142.6% |
| Commerce | 218 | 194 | 6.6% | 89.1% |
| Construction | 706 | 622 | 26.9% | 88.1% |
| Other | 577 | 506 | 6.5% | 87.6% |
| Total | 3,109 | 3,387 | 6.1% | 108.9% |
Total customer funds were redefined, with reference to 30 September 2017 and, consequently, on a comparable basis to the end of September 2016, reflecting a broader concept in order to include amounts held by customers as part of existing agreements for its placement and management.
Total customer funds, increased 5.2% from Euro 66,781 million registered as at 30 September 2016, amounting to Euro 70,231 million as at 30 September 2017. This increase was supported by the performance of both, Portugal and the international activity.
In the activity in Portugal, total customers funds, reached Euro 51,493 million as at 30 September 2017, showing an increase of 4.5% comparing to Euro 49,294 million at the same date of the previous year, benefiting from both the growth in off-balance sheet customer funds (+ Euro 1,321 million), and on balance sheet customer funds, highlighting the performance of resources from customers, which increased by Euro 947 million from 30 September 2016.
Total customer funds in the international activity registered an increase of 7.2% from Euro 17,487 million as at 30 September 2016, reaching Euro 18,738 million as at 30 September 2017, mainly influenced by the performance of the subsidiary in Poland, particularly in customer deposits. Not considering the exchange rate effects, total customer funds of the international activity grew 5.8%.
As at 30 September 2017, balance sheet total customer funds represented 74% of total customer funds, with resources from customers representing 72% of total customer funds.
According to the Bank of Portugal's Instruction no. 16/2004, the loan to deposits ratio improved from 101% as at 30 September 2016 to 94% as at 30 September 2017. The same ratio, considering the total on-balance sheet customers' funds, stood at 91% (97% as at 30 September 2016).
| TOTAL CUSTOMER FUNDS | Euro million | ||
|---|---|---|---|
| 30 Sep. 17 | 30 Sep. 16 | Change 17/16 |
|
| Balance sheet total customer funds | 52,265 | 50,576 | 3.3% |
| Resources from customers | 50,690 | 48,937 | 3.6% |
| Debt securities | 1,575 | 1,638 | -3.9% |
| Off-balance sheet customer funds | 17,966 | 16,206 | 10.9% |
| Assets under management and investment funds | 8,354 | 7,505 | 11.3% |
| Capitalisation products | 9,612 | 8,701 | 10.5% |
| Total | 70,231 | 66,781 | 5.2% |
The securities portfolio reached Euro 13,487 million as at 30 September 2017, compared to Euro 12,352 million posted at the same date of the previous year, representing 18.5% of total assets as at 30 September 2017, above the 16.9% observed as at 30 September 2016, mainly reflecting the performance of Portugal's securities portfolio.
During the first nine months of 2017 the consolidated wholesale funding needs of the Bank decreased by approximately Euro 1.8 billion, mainly due to the share capital increase of the Bank and to the reduction of the commercial gap in Portugal, the effects of which were partially offset by the increase of the securities debt portfolio.
In this period, the Bank fully repaid the CoCos (Euro 0.7 billion), slightly increased the use of REPOS in Portugal (by Euro 0.1 billion, to a balance of Euro 2.4 billion) and reduced the collateralised funding from the Eurosystem (by Euro 0.9 billion, to Euro 4.0 billion, which represents the balance of the targeted long term refinancing operations (TLTRO)).
As far as medium-long term debt is concerned, in addition to the amortisation of the remaining Medium Term Notes (MTN) in the amount of Euro 0.3 billion, the Bank also repaid in June the remaining issue of covered bonds placed in the market, and refinancing through a similar issue of Euro 1.0 billion, with a five year maturity. This issue marked the return of the Bank to the medium-long term debt market, three years after the placement of an MTN amortised in last February. The Bank also booked a new loan of Euro 0.3 billion from the European Investment Bank (EIB), which total balance grew to Euro 1.5 billion.
In net terms, the funding with the Eurosystem decreased by Euro 1.0 billion from December 2016, to Euro 3.4 billion. The significant decrease of the exposure to the Eurosystem allowed a reinforcement of the liquidity buffer with the ECB by Euro 1.5 billion compared with December 2016, to Euro 9.1 billion. On a pro forma basis the collateral currently allocated in excess to the covered bond program (which, under the form of an issue to be retained at the portfolio of ECB eligible assets, would allow its increase by an amount of at least Euro 1.0 billion after haircuts, assuming the use of the valuation criteria of the ECB concerning the other retained issues), were added to the buffer, as well as a portfolio of Treasury Bills amounting to USD 0.6 billion, its value would increase to Euro 10.6 billion, an increase of Euro 1.5 billion compared with December 2016.
CRD IV/CRR(1) establishes Pillar 1 capital requirements of 4.5%, 6% and 8% for CET1, Tier 1 and Total Capital, respectively. However, under SREP(2), the European Central Bank notified BCP about the need to comply with phased-in capital ratios, during 2017, of 8.15% (CET1), 9.65% (Tier 1) and 11.65% (Total), including 2.4% of additional Pillar 2 requirements and 1.25% of a capital conservation buffer.
The estimated phased-in and fully-implemented CET1 ratios as at 30 September 2017 stood at 13.2% and 11.7%, respectively, reflecting an increase of 102 and 222 basis points, compared to the 12.2% and 9.5% ratios recorded in the same period of 2016.
This reinforcement of the capital levels was mainly determined by the CET1 improvement, which included, on one hand, the share capital increases performed in the fourth quarter of 2016 and in the first quarter of 2017, even though these were partially used for the full reimbursement of the remaining CoCo bonds, and, on the other hand, the positive net income and the favourable contributions of the fair value and FX reserves during this period, notwithstanding a higher level of deductions related to deferred tax assets and to the shortfall of impairment to expected loss, as well as the phase-in effects that also affected the CET1 computed on this basis.
| SOLVENCY RATIOS (CRD IV/CRR) | Euro million | |||
|---|---|---|---|---|
| 30 Sep. 17 | 30 Sep. 16 | 30 Sep. 17 | 30 Sep. 16 | |
| PHASED-IN | FULLY IMPLEMENTED | |||
| Own funds | ||||
| Common equity tier 1 (CET1) | 5,062 | 4,669 | 4,423 | 3,570 |
| Tier 1 | 5,062 | 4,669 | 4,491 | 3,583 |
| Total Capital | 5,448 | 5,052 | 4,813 | 3,914 |
| Risk weighted assets | 38,306 | 38,287 | 37,910 | 37,769 |
| Solvency ratios | ||||
| CET1 | 13.2% | 12.2% | 11.7% | 9.5% |
| Tier 1 | 13.2% | 12.2% | 11.8% | 9.5% |
| Total capital | 14.2% | 13.2% | 12.7% | 10.4% |
Notes:
The capital ratios of September 2017 are estimated and include the positive accumulated net income.
(1) Capital Requirements Directive IV / Capital Requirements Regulation (Directive 2013/36/EU and Regulation (EU) no. 575/2013).
(2) Supervisory Review and Evaluation Process.
Millennium bcp continued to implement its Strategic Plan. Highlights during this period include:
The International Monetary Fund (IMF) projects an acceleration of the global economy in 2017 (3.6%), reflecting the improvement observed in the first half of the year in the activity indicators of most economies, in particular among the developed countries, as well as the favourable climate in the international financial markets. In the medium term the continuity of the global expansionary cycle is nonetheless subject to important risks, which according to the IMF relate to the stability of the global financial system and the resurgence of geopolitical tensions.
Despite the positive evolution of the global economic activity and investors' optimism, the monetary policy of the main central banks has not suffered any additional tightening. In effect, the European Central Bank pressed forward with its asset purchase program and the US Federal Reserve kept their key interest rates unaltered during the third quarter.
Notwithstanding the worsening of the world geopolitical risks, in particular, coming out of the Korean peninsula, the climate resulting from the combination of the improved global economy with the lingering degree of extreme accommodative global monetary conditions favoured the widespread appreciation of the main financial asset classes. Within the equity segment it should be highlighted that all of the main US indices have reached consecutive historical highs, in line to what occurred in the previous quarters. In the interest rates domain, the stability of the oil price and the modest wage growth in the developed economies contributed to reinforce the expectations of a slow normalisation of the monetary policy in the main economic blocks, which led to an absence of defined direction in the evolution of the government bond yields of the low-risk countries, such as Germany and the US. The elevated quantity of existing liquidity in the interbank money market of the Euro and the perspective that the ECB's key interest rates will remain at the current levels for a protracted period of time meant that the Euribor rates stood at negative values for all maturities.
According to Statistics Portugal, during the first six months of 2017, Portugal's GDP rose by 2.9% annually, which represents a strong acceleration relative to that recorded in the analogous period of 2016 (1.1%). The increased pace of economic activity reflected the strong recovery of investment and the improvement in the contribution of the net external demand, which attenuated the deceleration of private consumption and the contraction of public spending. The context of greater economic dynamism along with the process of stabilisation of the banking setor and the reduction of the fiscal balance to the levels demanded by the European Union contributed to the announcement by the ratings agency Standard & Poors' of an one notch upgrade of the rating of the Portuguese Republic to investment grade, which translated positively into the performance of the domestic financial assets. In the third quarter, the main Portuguese equity index appreciated by 5% and the risk premia of the Portuguese government debt securities vis-à-vis the German counterparts tightened significantly.
In Poland, the continuation of an expansionary fiscal policy together with the rise in construction investment co-funded with European funds translated into a strong acceleration of private consumption and the recovery of investment. The performance of these two components pushed GDP to annual growth levels around 4% in the first two quarters of 2017. Despite the dynamism of economic activity, inflationary pressures remained controlled, allowing the Polish central bank to maintain its monetary policy unaltered by keeping the key interest rate at 1.50%. The Zloty remained relatively stable during the third quarter when compared to the previous one.
After the strong deceleration of activity recorded in 2016, the Mozambican economy has been showing signs of recovery, stimulated by the strong rise in exports associated to the megaprojects, which has translated into an improvement of the current account deficit and the stabilisation of the foreign Exchange rate of the Metical against the dollar. At the same time, the government has been presenting a set of measures aimed at raising the robustness of the public finances. In this context of improvement of the economic situation, the IMF has forecast a GDP expansion rate of 4.7% in 2017, which compares with 3.8% in 2016. In Angola, despite the increase in oil prices relative to the previous year, the level of the net foreign exchange reserves continue to dwindle and the economic activity still presents important frailties, with the IMF forecasting GDP growth to be 1.5% this year.
| Consolidated | Activity in Portugal | International activity | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Sep 17 | Sep 16 | Change | Sep 17 | Sep 16 | Change | Sep 17 | Sep 16 | Change | |
| Income statement | |||||||||
| Net interest income | 1,023.2 | 907.0 | 12.8% | 591.8 | 543.0 | 9.0% | 431.4 | 364.0 | 18.5% |
| Dividends from equity instruments | 1.7 | 7.0 | $-75.8%$ | 1.1 | 6.5 | $-83.3%$ | 0.6 | 0.5 | 29.4% |
| Net fees and commission income | 494.6 | 481.1 | 2.8% | 337.7 | 343.2 | $-1.6%$ | 157.0 | 138.0 | 13.8% |
| Other operating income | (97.0) | (96.3) | $-0.7%$ | (53.7) | (47.0) | $-14.3%$ | (43.3) | (49.4) | 12.2% |
| Net trading income | 115.0 | 212.5 | -45.9% | 69.3 | 88.4 | $-21.6%$ | 45.7 | 124.1 | $-63.2%$ |
| Equity accounted earnings | 56.8 | 60.6 | $-6.3%$ | 32.4 | 50.6 | $-35.9%$ | 24.4 | 10.0 | 142.8% |
| Net operating revenues | 1,594.3 | 1,571.9 | 1.4% | 978.6 | 984.6 | $-0.6%$ | 615.7 | 587.2 | 4.8% |
| Staff costs | 380.1 | 410.4 | $-7.4%$ | 235.2 | 273.9 | $-14.1%$ | 144.9 | 136.5 | 6.2% |
| Other administrative costs | 274.8 | 274.9 | $-0.1%$ | 164.1 | 169.5 | $-3.2%$ | 110.7 | 105.4 | 5.0% |
| Depreciation | 39.7 | 37.0 | 7.3% | 24.5 | 21.2 | 15.4% | 15.2 | 15.8 | $-3.5%$ |
| Operating costs | 694.6 | 722.4 | $-3.8%$ | 423.8 | 464.7 | $-8.8%$ | 270.8 | 257.7 | 5.1% |
| Recurring operating costs (1) | 718.3 | 720.6 | $-0.3%$ | 447.5 | 462.9 | $-3.3%$ | 270.8 | 257.7 | 5.1% |
| Operating profit before impairment and provisions | 899.7 | 849.5 | 5.9% | 554.8 | 520.0 | 6.7% | 344.9 | 329.6 | 4.7% |
| Loans impairment (net of recoveries) | 458.6 | 870.2 | $-47.3%$ | 390.0 | 816.7 | $-52.3%$ | 68.6 | 53.4 | 28.4% |
| Other impairment and provisions | 169.9 | 242.8 | $-30.0%$ | 168.5 | 234.2 | $-28.1%$ | 1.4 | 8.6 | $-83.4%$ |
| Profit before income tax | 271.2 | (263.5) | >200% | (3.6) | (531.0) | 99.3% | 274.8 | 267.5 | 2.8% |
| Income tax | 63.1 | (68.2) | 192.5% | (0.9) | (136.4) | 99.3% | 64.0 | 68.2 | $-6.1%$ |
| Income after income tax from continuing operations | 208.1 | (195.3) | >200% | (2.7) | (394.6) | 99.3% | 210.8 | 199.3 | 5.8% |
| Income arising from discontinued operations | 1.3 | 45.2 | $-97.2%$ | ÷ | ٠ | ÷ | ÷ | 36.8 | $-100.0%$ |
| Non-controlling interests | 76.0 | 101.0 | $-24.7%$ | (3.5) | (0.3) | >200% | 79.5 | 101.3 | $-21.5%$ |
| Net income | 133.3 | (251.1) | 153.1% | 0.8 | (394.3) | 100.2% | 131.3 | 134.8 | $-2.6%$ |
| Balance sheet and activity indicators | |||||||||
| Total assets | 72,990 | 73,042 | $-0.1%$ | 53,436 | 54,410 | $-1.8%$ | 19,554 | 18,632 | 4.9% |
| Total customer funds | 70,231 | 66,781 | 5.2% | 51,493 | 49,294 | 4.5% | 18,738 | 17,487 | 7.2% |
| Balance sheet total customer funds | 52,265 | 50,576 | 3.3% | 36,750 | 35,873 | 2.4% | 15,515 | 14,703 | 5.5% |
| Resources from customers | 50,690 | 48,937 | 3.6% | 35,281 | 34,334 | 2.8% | 15,410 | 14,603 | 5.5% |
| Debt securities | 1,575 | 1,638 | $-3.9%$ | 1,469 | 1,539 | $-4.5%$ | 105 | 100 | 5.6% |
| Off-balance sheet customer funds | 17,966 | 16,206 | 10.9% | 14,743 | 13,422 | 9.8% | 3,223 | 2,784 | 15.8% |
| Assets under management and investment funds | 8,354 | 7,505 | 11.3% | 5,635 | 5,168 | 9.0% | 2,719 | 2,337 | 16.4% |
| Capitalisation products | 9,612 | 8,701 | 10.5% | 9,108 | 8,254 | 10.3% | 504 | 447 | 12.9% |
| Loans to customers (gross) | 50,754 | 52,610 | $-3.5%$ | 37,947 | 40,291 | $-5.8%$ | 12,807 | 12,319 | 4.0% |
| Individuals | 27,174 | 28,346 | $-4.1%$ | 19,217 | 20,375 | $-5.7%$ | 7,957 | 7,971 | $-0.2%$ |
| Mortgage | 23,406 | 24,273 | $-3.6%$ | 17,203 | 17,902 | $-3.9%$ | 6,202 | 6,371 | $-2.6%$ |
| Consumer and others | 3,768 | 4,074 | $-7.5%$ | 2,013 | 2,473 | $-18.6%$ | 1,755 | 1,600 | 9.7% |
| Companies | 23,580 | 24,263 | $-2.8%$ | 18,730 | 19,916 | $-6.0%$ | 4,850 | 4,347 | 11.6% |
| Services | 8,831 | 9,474 | $-6.8%$ | 7,844 | 8,641 | $-9.2%$ | 987 | 833 | 18.5% |
| Commerce | 3,287 | 3,136 | 4.8% | 2,231 | 2,164 | 3.1% | 1,056 | 973 | 8.6% |
| Construction | 2,624 | 3,063 | $-14.3%$ | 2,294 | 2,756 | $-16.8%$ | 330 | 307 | 7.6% |
| Other | 8,838 | 8,590 | 2.9% | 6,361 | 6,356 | 0.1% | 2,476 | 2,235 | 10.8% |
| Credit quality | |||||||||
| Total overdue loans | 3,216 | 3,914 | $-17.8%$ | 2,868 | 3,615 | $-20.7%$ | 349 | 299 | 16.6% |
| Overdue loans by more than 90 days | 3,109 | 3,770 | $-17.5%$ | 2,807 | 3,517 | $-20.2%$ | 302 | 253 | 19.3% |
| Overdue loans by more than 90 days /Total loans | 6.1% | 7.2% | 7.4% | 8.7% | 2.4% | 2.1% | |||
| Total impairment (balance sheet) | 3,387 | 3,804 | $-11.0%$ | 2,932 | 3,408 | $-14.0%$ | 455 | 396 | 14.9% |
| Total impairment (balance sheet) /Total loans | 6.7% | 7.2% | 7.7% | 8.5% | 3.6% | 3.2% | |||
| Total impairment (balance sheet) /Overdue loans by more than 90 days | 108.9% | 100.9% | 104.5% | 96.9% | 150.8% | 156.5% | |||
| Cost of risk (net of recoveries, in b.p.) | 120 | 221 | 137 | 270 | 71 | 58 | |||
| Restructured loans / Total loans (2) | 8.9% | 10.1% | |||||||
| Restructured loans not included in the credit at risk / Total loans (2) | 4.9% | 6.0% | |||||||
| Cost-to-income (1) | 45.1% | 45.8% | 45.7% | 47.0% | 44.0% | 43.9% |
| 30 September 2017 |
30 September 2016 |
|
|---|---|---|
| (Thousands of Euros) | ||
| Interest and similar income | 1,431,812 | 1,429,522 |
| Interest expense and similar charges | (408, 610) | (522, 534) |
| Net interest income | 1,023,202 | 906,988 |
| Dividends from equity instruments | 1,686 | 6,961 |
| Net fees and commission income | 494,640 | 481,146 |
| Net gains / (losses) arising from trading and | ||
| hedging activities | 70,651 | 85,719 |
| Net gains / (losses) arising from available for | ||
| sale financial assets | 44,348 | 126,794 |
| Net gains from insurance activity | 3,668 | 2,499 |
| Other operating income / (costs) | (102, 147) | (94, 586) |
| Total operating income | 1,536,048 | 1,515,521 |
| Staff costs | 380,118 | 410,409 |
| Other administrative costs | 274,764 | 274,946 |
| Depreciation | 39,715 | 37,001 |
| Operating costs | 694,597 | 722,356 |
| Operating net income before provisions and impairments | 841,451 | 793,165 |
| Loans impairment | (458, 594) | (870, 188) |
| Other financial assets impairment | (48, 485) | (178, 650) |
| Other assets impairment | (94, 036) | (35, 145) |
| Goodwill impairment for subsidiaries | (4) | (10, 097) |
| Goodwill impairment for associated companies | (9,006) | |
| Other provisions | (18, 378) | (18, 937) |
| Operating net income | 212,948 | (319, 852) |
| Share of profit of associates under the equity method | 56,791 | 60,608 |
| Gains / (losses) from the sale of subsidiaries and other assets | 1,459 | (4, 243) |
| Net (loss) / income before income tax | 271,198 | (263, 487) |
| Income tax Current |
||
| Deferred | (82, 831) 19,720 |
(76, 537) 144,750 |
| Net (loss) / income after income tax from continuing operation | 208,087 | (195, 274) |
| Income arising from discontinued operations | 1,250 | 45,227 |
| Net income after income tax | 209,337 | (150, 047) |
| Attributable to: | ||
| Shareholders of the Bank | 133,309 | (251,080) |
| Non-controlling interests | 76,028 | 101,033 |
| Net income for the period | 209,337 | (150, 047) |
| arnings per share (in euros) | ||
| Basic | 0.014 | (0.278) |
| Diluted | 0.014 | (0.278) |
| 30 September 2017 |
31 December 2016 |
30 September 2016 |
|
|---|---|---|---|
| (Thousands of Euros) | |||
| Assets | |||
| Cash and deposits at central banks | 2, 144, 795 | 1,573,912 | 2,618,275 |
| Loans and advances to credit institutions | |||
| Repayable on demand | 1,113,371 | 448,225 | 421,850 |
| Other loans and advances | 805,331 | 1,056,701 | 1,628,151 |
| Loans and advances to customers | 47, 367, 178 | 48,017,602 | 48,805,818 |
| Financial assets held for trading | 922,677 | 1,048,797 | 1,090,767 |
| Other financial assets held for trading | |||
| at fair value through profit or loss | 142,253 | 146,664 | 145,605 |
| Financial assets available for sale | 11,914,693 | 10,596,273 | 10,680,030 |
| Assets with repurchase agreement | 70,959 | 20,525 | 19,983 |
| Hedging derivatives | 165,322 | 57,038 | 106,115 |
| Financial assets held to maturity | 436,278 | 511,181 | 415,611 |
| Investments in associated companies | 612,807 | 598,866 | 574,626 |
| Non current assets held for sale | 2,286,122 | 2,250,159 | 2,112,762 |
| Investment property | 14,234 | 12,692 | 61,929 |
| Other tangible assets | 478,975 | 473,866 | 463,459 |
| Goodwill and intangible assets | 164,560 | 162,106 | 188,823 |
| Current tax assets | 7,583 | 17,465 | 35,011 |
| Deferred tax assets | 3, 135, 169 | 3,184,925 | 2,790,693 |
| Other assets | 1,207,424 | 1,087,814 | 882,088 |
| 72,989,731 | 71,264,811 | 73,041,596 | |
| Liabilities | |||
| Resources from credit institutions | 9,185,514 | 9,938,395 | 11,302,736 |
| Resources from customers | 50,690,359 | 48,797,647 | 48,937,144 |
| Debt securities issued | 3,096,181 | 3,512,820 | 3,919,170 |
| Financial liabilities held for trading | 461,806 | 547,587 | 610,479 |
| Hedging derivatives | 216,295 | 383,992 | 383,149 |
| Provisions | 340,989 | 321,050 | 279,997 |
| Subordinated debt | 858,167 | 1,544,555 | 1,682,860 |
| Current tax liabilities | 8,835 | 35,367 | 5,508 |
| Deferred tax liabilities | 2,235 | 2,689 | 2,151 |
| Other liabilities | 1,071,302 | 915,528 | 970,040 |
| Total Liabilities | 65,931,683 | 65,999,630 | 68,093,234 |
| Equity | |||
| Share capital | 5,600,738 | 4,268,818 | 4,094,235 |
| Treasury shares | (282) | (2,880) | (3, 106) |
| Share premium | 16,471 | 16,471 | 16,471 |
| Preference shares | 59,910 | 59,910 | 59,910 |
| Other capital instruments | 2,922 | 2,922 | 2,922 |
| Legal and statutory reserves | 252,806 | 245,875 | 245,875 |
| Fair value reserves | 44,033 | (130, 632) | (66, 067) |
| Reserves and retained earnings | (58, 028) | (102, 306) | (22, 820) |
| Net income for the period attributable to Shareholders | 133,309 | 23,938 | (251,080) |
| Total Equity attributable to Shareholders of the Bank | 6,051,879 | 4,382,116 | 4,076,340 |
| Non-controlling interests | 1,006,169 | 883,065 | 872,022 |
| Total Equity | 7,058,048 | 5,265,181 | 4,948,362 |
| 72,989,731 | 71,264,811 | 73,041,596 |
Balance sheet total customer funds - debt securities and customer deposits.
Capitalisation products – includes unit linked saving products and retirement saving plans ("PPR", "PPE" and "PPR/E").
Commercial gap – total loans to customers net of BS impairments accumulated for risk of credit minus on-balance sheet total customer funds.
Core income - net interest income plus net fees and commission income.
Core net income - corresponding to net interest income plus net fees and commission income deducted from operating costs.
Cost of risk, gross (expressed in bp) - ratio of impairment charges accounted in the period to loans to customers (gross).
Cost of risk, net (expressed in bp) - ratio of impairment charges (net of recoveries) accounted in the period to loans to customers (gross).
Cost to core income - operating costs divided by core income (net interest income and net fees and commission income).
Cost to income – operating costs divided by net operating revenues.
Coverage of credit at risk by balance sheet impairments – total BS impairments accumulated for risks of credit divided by credit at risk (gross).
Coverage of credit at risk by balance sheet impairments and real and financial guarantees – total BS impairments accumulated for risks of credit plus real and financial guarantees divided by credit at risk (gross).
Coverage of non-performing loans by balance sheet impairments – total BS impairments accumulated for risks of credit divided by NPL.
Credit at risk – definition broader than the non performing loans which includes also restructured loans whose changes from initial terms have resulted in the bank being in a higher risk position than previously; restructured loans which have resulted in the bank becoming in a lower risk position (e.g. reinforced collateral) are not included in credit at risk.
Credit at risk (net) – credit at risk deducted from BS impairments accumulated for risks of credit.
Credit at risk (net) ratio – credit at risk (net) divided by loans to customers deducted from total BS impairments accumulated for risks of credit.
Credit at risk ratio – credit at risk divided by loans to customers (gross).
Debt securities - debt securities issued by the Bank and placed with customers.
Dividends from equity instruments - dividends received from investments in financial assets held for trading and available for sale.
Equity accounted earnings - results appropriated by the Group related to the consolidation of entities where, despite having a significant influence, the Group does not control the financial and operational policies.
Loan to Deposits ratio (LTD) – Total loans to customers net of accumulated BS impairments for risks of credit divided by total customer deposits.
Loan to value ratio (LTV) – Mortgage amount divided by the appraised value of property.
Net interest margin (NIM) - net interest income for the period as a percentage of average interest earning assets.
Net operating revenues - net interest income, dividends from equity instruments, net commissions, net trading income, equity accounted earnings and other net operating income.
Net trading income - net gains/losses arising from trading and hedging activities, net gains/losses arising from available for sale financial assets, net gains/losses arising from financial assets held to maturity.
Non-performing exposures (NPE, according to EBA definition) – Non-performing loans and advances to customers more than 90 days pastdue or unlikely to be paid without collateral realisation, even if they recognised as defaulted or impaired. Considers also all the exposures if the on-BS 90 days past due reaches 20% of the outstanding amount of total on-BS exposure of the debtor, even if no pull effect is used for default or impairment classification. Includes also the loans in quarantine period over which the debtor has to prove its ability to meet the restructured conditions, even if forbearance has led to the exit form default or impairments classes.
Non-performing loans (NPL) – Overdue loans more than 90 days including the non-overdue remaining principal of loans, i.e. portion in arrears, plus non-overdue remaining principal.
Non-performing loans ratio – Loans more than 90 days overdue and doubtful loans reclassified as overdue for provisioning purposes divided by total loans (gross).
Operating costs - staff costs, other administrative costs and depreciation.
Other impairment and provisions - other financial assets impairment, other assets impairment, in particular provision charges related to assets received as payment in kind not fully covered by collateral, goodwill impairment and other provisions.
Other net income – net commissions, net trading income, other net operating income, dividends from equity instruments and equity accounted earnings.
Other net operating income - other operating income, other net income from non-banking activities and gains from the sale of subsidiaries and other assets.
Overdue and doubtful loans - loans overdue by more than 90 days and the doubtful loans reclassified as overdue loans for provisioning purposes.
Overdue and doubtful loans (net) - overdue and doubtful loans deducted from BS impairments accumulated for risks of credit.
Overdue and doubtful loans (net) ratio - overdue loans and doubtful loans (net) divided by loans to customers deducted from total BS impairments accumulated for risks of credit.
Overdue and doubtful loans coverage by BS impairments - BS impairments accumulated for risks of credit divided by overdue loans and doubtful loans (gross).
Overdue and doubtful loans ratio - overdue and doubtful loans divided by loans to customers (gross).
Overdue loans - loans in arrears, not including the non-overdue remaining principal.
Overdue loans by more than 90 days coverage ratio - total BS impairments accumulated for risk of credit divided by total amount of loans overdue with installments of capital and interest overdue more than 90 days.
Overdue loans coverage ratio – total BS impairments accumulated for risks of credit divided by total amount of overdue loans.
Return on average assets (Instruction from the Bank of Portugal no. 16/2004) – Net income (before tax) divided by the average total assets.
Return on average assets (ROA) – Net income (before minority interests) divided by the average total assets.
Return on equity (Instruction from the Bank of Portugal no. 16/2004) – Net income (before tax) divided by the average attributable equity + non-controlling interests.
Return on equity (ROE) – Net income (after minority interests) divided by the average attributable equity, deducted from preference shares and other capital instruments.
Securities portfolio - financial assets held for trading, financial assets available for sale, assets with repurchase agreement, financial assets held to maturity and other financial assets held for trading at fair value through net income.
Spread - increase (in percentage points) to the index used by the Bank in loans granting or fund raising.
Total customer funds - balance sheet customer funds, capitalisation products, assets under management and investment funds.
The financial information in this presentation has been prepared under the scope of the International Financial Reporting Standards ("IFRS") of BCP Group for the purposes of the preparation of the consolidated financial statements under Regulation (CE) 1606/2002.
The interim condensed consolidated financial statements, for the nine month period ended 30 September 2017, were prepared in terms of recognition and measurement in accordance with the IAS 34 - Interim Financial Reporting adopted by the EU.
The figures presented do not constitute any form of commitment by BCP in regard to future earnings.
The nine month periods ended 30 September 2016 and 30 September 2017 figures were not audited or reviewed.
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