Earnings Release • Nov 8, 2018
Earnings Release
Open in ViewerOpens in native device viewer
Improved profitability supported by the strong performance in Portugal and sustained growth of the international activity
Improved credit quality, with significant NPE reduction and strengthened coverage
Strong business dynamics; expansion of Customer base; capture of digital Customers
Stress tests
Expansion of activity in Poland
*By loan-loss reserves, expected loss gap and collaterals.
BANCO COMERCIAL PORTUGUÊS, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number 501 525 882 and the share capital of EUR 5,600,738,053.72 LEI: JU1U6S0DG9YLT7N8ZV32
INVESTOR RELATIONS Rui Coimbra Phone +351 211 131 084 [email protected] [email protected] [email protected]
MEDIA CONTACT Erik T. Burns Phone +351 211 131 242 Mobile +351 917 265 020 [email protected] [email protected]
| Change 30 Sep. 18 30 Sep. 17 18/17 BALANCE SHEET Total assets 73,745 72,990 1.0% Loans to customers (gross) 51,150 50,754 0.8% Total customer funds (2) 72,786 68,984 5.5% Balance sheet customer funds 54,922 52,265 5.1% Deposits and other resources from customers 53,624 50,690 5.8% Loans to customers (net) / Deposits and other resources from customers (3) 89% 93% Loans to customers (net) / Balance sheet customer funds 87% 91% RESULTS Net income 257.5 133.3 93.1% Net interest income 1,052.8 1,023.2 2.9% Net operating revenues 1,634.6 1,594.3 2.5% Operating costs 754.2 694.6 8.6% Operating costs excluding specific items (4) 742.2 718.3 3.3% Loan impairment charges (net of recoveries) 337.1 458.6 -26.5% Other impairment and provisions 94.2 169.9 -44.5% Income taxes Current 77.6 82.8 Deferred 32.0 (19.7) PROFITABILITY Net operating revenues / Average net assets (3) 3.0% 2.9% Return on average assets (ROA) 0.6% 0.4% Income before tax and non-controlling interests / Average net assets (3) 0.8% 0.5% Return on average equity (ROE) 6.0% 3.2% Income before tax and non-controlling interests / Average equity (3) 8.8% 5.6% CREDIT QUALITY Total impairment (balance sheet) / Loans to customers 6.3% 6.7% Cost of risk (net of recoveries, in b.p.) 88 120 Non-Performing Exposures / Loans to customers 12.3% 15.9% Restructured loans / Loans to customers 7.7% 8.9% EFFICIENCY RATIOS (3) (4) Operating costs / Net operating revenues 45.4% 45.1% Operating costs / Net operating revenues (Portugal activity) 46.3% 45.7% Staff costs / Net operating revenues 25.9% 25.3% CAPITAL (5) Common equity tier I phased-in ratio 11.8% 13.2% Common equity tier I fully implemented ratio 11.8% 11.7% BRANCHES Portugal activity 568 589 -3.6% Foreign activity 548 542 1.1% EMPLOYEES Portugal activity 7,130 7,281 -2.1% Foreign activity 8,656 8,538 1.4% |
Euro million | |||
|---|---|---|---|---|
| (1) Some indicators are presented according to management criteria of the Group, which descriptions Performance M |
and concepts are described |
and detailed at the |
and at "Alternative |
|
| glossary | (2) As at 30 June 2018, the concepts underlying the determination of off-balance sheet customer funds |
adjusted to reflect the |
legal and regulatory |
imposed by the |
| easures" chapter, being reconciled with the accounting values published in the consolidated financial statements. were new framework |
Financial Instruments M arkets Directive II (M iFID II), as well as changes implemented regarding the |
considered and the |
adopted, namely with |
to the inclusion |
| perimeter criteria regard |
of amounts held by customers in the context of the placement of third-party products that contribute |
the recognition of |
("assets placed |
customers"). The |
| to commissions with |
||||
| information with reference to 30 September 2017 is presented according to the new criteria. | ||||
| (3) According to Instruction from the Bank of Portugal no. 16/2004, as the currently existing version. | ||||
| (4) Excludes specific items: negative impact of Euro 12.0 million in the first nine months of 2018, related to restructuring costs in the activity in Portugal and positive impact of Euro |
||||
| 23.7 million in the first nine months of 2017 related to restructuring costs and the revision of Collective Lab. Agt. also in the activity in Portugal, both in staff costs. | ||||
| (5) September 2018 and September 2017 include the accumulated net income of each period. September 2018 figures are estimated. | ||||
On 1 January 2018, IFRS 9 - Financial Instruments entered into force, replacing IAS 39 - Financial Instruments: recognition and measurement, and establishing new rules for the recognition of financial instruments, introducing relevant changes, particularly as regards the methodology for impairment calculation. The adoption of this accounting standard had an impact on the structure of the Millennium bcp financial statements compared to 31 December 2017, largely influenced by the adjustments associated with the transition, and did not materially affect the profit and loss account for the first nine months of 2018.
In this context, some indicators were defined according to management criteria intended to favour comparability with financial information of prior periods. Following the guidelines on Alternative Performance Measures published by the European Securities and Markets Authority (ESMA), the relevant indicators that allow a full understanding of the evolution of the Group's economic and financial position are detailed at the end of this document, being reconciled with the accounting values published in the consolidated financial statements.
The net income of Millennium bcp reached Euro 257.5 million, in the first nine months of 2018, an 93.1% increase from Euro 133.3 million registered in the same period of the previous year, driven strongly by the performance of the activity in Portugal, also benefiting from the favourable performance of the international activity.
In the activity in Portugal, net income increased significantly compared to Euro 0.8 million achieved in the first nine months of 2017, totalling Euro 114.9 million in the same period of 2018, highlighting the significant reduction of impairments and provisions.
In the international activity, net income in the first nine months of 2018 stood at Euro 140.8 million increasing 7.2% from Euro 131.3 million registered in the same period of the previous year, benefitting from the favourable performance of the subsidiaries in Poland and Mozambique, despite the lower contribution from Banco Millennium Atlântico.
Net interest income totalled Euro 1,052.8 million in the first nine months of 2018, comparing favourably to Euro 1,023.2 million in the same period of the previous year.
In the activity in Portugal, net interest income stood at Euro 595.8 million in the first nine months of 2018 compared to Euro 591.8 million accounted in the same period of the previous year, benefiting from the reduction of the cost of funding, namely the decrease of the cost of issued debt and the decreasing trend in costs for term deposits, despite the reduction in the interest from loans and debt securities portfolios.
In the international activity, net interest income reached Euro 457.0 million in the first nine months of 2018, reflecting a 5.9% increase from the Euro 431.4 million registered in the same period of 2017, mainly due to the performance of the subsidiary in Poland and also, to a lesser extent, to the subsidiary in Mozambique.
Net interest margin in the first nine months of 2018 stood at 2.20%, compared to 2.17% (2.19%, excluding the impact from the cost of CoCos) in the same period of 2017.
| Euro million | ||||
|---|---|---|---|---|
| 30 Sep. 18 | 30 Sep. 17 | |||
| Amount | Yield % | Amount | Yield % | |
| Deposits in banks | 2,611 | 0.85 | 2,937 | 0.91 |
| Financial assets | 13,013 | 2.22 | 11,090 | 2.27 |
| Loans and advances to customers | 47,498 | 3.18 | 48,033 | 3.30 |
| INTEREST EARNING ASSETS | 63,122 | 2.89 | 62,060 | 3.00 |
| Non-interest earning assets | 9,943 | 10,571 | ||
| 73,065 | 72,631 | |||
| Amounts owed to credit institutions | 7,414 | 0.07 | 9,354 | 0.24 |
| Resources from customers | 52,852 | 0.59 | 50,363 | 0.66 |
| Debt issued | 2,820 | 1.76 | 3,188 | 2.88 |
| Subordinated debt | 1,135 | 5.86 | 941 | 6.87 |
| INTEREST BEARING LIABILITIES | 64,221 | 0.68 | 63,846 | 0.80 |
| Non-interest bearing liabilities | 1,955 | 2,166 | ||
| Shareholders' equity and non-controlling interests | 6,889 | 6,619 | ||
| 73,065 | 72,631 | |||
| Net interest margin | 2.20 | 2.17 | ||
| Net interest margin (excl. cost of CoCos) | 2.19 |
Note: Interest related to hedge derivatives was allocated, in September 2018 and 2017, to the respective balance sheet item.
Net commissions evolved positively, from Euro 494.6 million in the first nine months of 2017 to Euro 510.1 million in the same period of 2018. This evolution mainly benefited from the favourable performance of the activity in Portugal, where net commissions rose 4.4%.
The evolution of net commissions in the first nine months of 2018 reflects the increase of both banking and market related commissions, which improved 2.4% and 6.5% respectively, from the figures booked in the same period of the previous year.
Net trading income totalled Euro 89.6 million in the first nine months of 2018, compared to Euro 115.0 million accounted in the same period the previous year, conditioned by the performance of the activity in Portugal, mainly due to loan sales.
Other net operating income, which, among others, includes the costs associated with mandatory contributions as well as with the Resolution Fund and the Deposit Guarantee Fund in both Portugal and international activity, was negative by Euro 90.3 million in the first nine months of 2018, comparing favourably to the also negative Euro 97.0 million accounted in the same period of the previous year, induced by the performance of the activity in Portugal.
In the activity in Portugal, other net operating income stood negative by Euro 45.6 million in the first nine months of 2018, showing an improvement compared to the also negative Euro 53.7 million registered in the same period of the previous year, mainly benefiting from the increased income associated with non-current assets held for sale, despite the increase of costs related to mandatory contributions. In the first nine months of 2018, these contributions totalled Euro 66.5 million compared to Euro 57.9 million in the same period of the previous year.
In the international activity, other net operating income was negative by Euro 44.7 million in the first nine months of 2018, which compares with the also negative Euro 43.3 million registered in the same period of the previous year. This evolution was conditioned by the increase of mandatory contributions, which stood at Euro 55.7 million in the first nine months of 2018 compared to Euro 53.2 million in the same period of 2017, supported by the Polish subsidiary. The performance of other net operating income also reflects the recognized gains related to real estate disposal and indemnity received in the first nine months of 2017 by the Polish subsidiary and, in 2018, the higher income from the subsidiary in Mozambique.
Dividends from equity instruments, which comprise dividends received from investments classified as financial assets at fair value through other comprehensive income and as financial assets held for trading, together with equity accounted earnings, were up 23.9% from the amount achieved in the first nine months of 2017, totalling Euro 72.5 million in the same period of 2018.
| Euro million | |||
|---|---|---|---|
| 9M 18 | 9M 17 | Change 18/17 | |
| NET COMMISSIONS | 510.1 | 494.6 | 3.1% |
| Banking commissions | 418.3 | 408.5 | 2.4% |
| Cards and transfers | 122.3 | 115.3 | 6.1% |
| Credit and guarantees | 121.6 | 117.9 | 3.2% |
| Bancassurance | 71.7 | 71.4 | 0.4% |
| Current account related | 79.1 | 77.8 | 1.6% |
| Other commissions | 23.6 | 26.1 | -9.7% |
| Market related commissions | 91.8 | 86.2 | 6.5% |
| Securities | 59.0 | 54.7 | 7.7% |
| Asset management | 32.8 | 31.4 | 4.4% |
| NET TRADING INCOME | 89.6 | 115.0 | -22.1% |
| OTHER NET OPERATING INCOME | (90.3) | (97.0) | 6.9% |
| DIVIDENDS FROM EQUITY INSTRUMENTS | 0.6 | 1.7 | -64.9% |
| EQUITY ACCOUNTED EARNINGS | 71.9 | 56.8 | 26.5% |
| TOTAL OTHER NET INCOME | 581.8 | 571.1 | 1.9% |
| Other net income / Net operating revenues | 35.6% | 35.8% |
Operating costs, excluding the effect of specific items*, stood at Euro 742.2 million in the first nine months of 2018, compared to Euro 718.3 million in the same period of the previous year.
In the activity in Portugal, operating costs, not considering the impact of specific items, totalled Euro 456.9 million in the first nine months of 2018, increasing 2.1% from the Euro 447.5 million accounted in the same period of 2017. This evolution was determined by the growth of staff costs mainly influenced by the salary replacement that occurred from July 2017 as well as, to a lesser extent, the higher level of depreciation costs, despite other administrative cost savings.
In the international activity, operating costs stood at Euro 285.3 million in the first nine months of 2018, increasing 5.4% from the amount accounted in the same period of the previous year, mainly due to the performance of the Polish subsidiary.
Staff costs, excluding the impact of specific items, totalled Euro 423.6 million in the first nine months of 2018 showing a 4.9% increase from the same period of previous year, justified by the higher level of costs in both the activity in Portugal and the international activity.
In the activity in Portugal, staff costs excluding the impact of specific items, totalled Euro 269.2 million in the first nine months of 2018, representing an increase of 4.0% from the amount of the same period of 2017. This increase was particularly influenced by the decision of the Board of Directors of the Bank to end, in advance, with effect from 30 June 2017, the temporary salary adjustment that had been in force since July 2014, following the full reimbursement of CoCos, despite the positive impact associated with the decrease of 151 employees, between the end of the third quarter of 2017 and 2018.
In the international activity, staff costs stood at Euro 154.4 million in the first nine months of 2018, showing an increase of 6.5% from the same period of the previous year, mainly due to the performance of the Polish subsidiary.
Other administrative costs amounted to Euro 275.8 million in the first nine months of 2018, in line with the amount accounted in the same period of the previous year (Euro 274.8 million), with the decrease of costs in the activity in Portugal offset by the growth of costs in the international activity.
The reduction of other administrative costs in Portugal, -2.1% compared to the amounts registered in the first nine months of 2017, was driven by cost containment measures, namely the resizing of the distribution network (589 branches as at 30 September 2017, compared to 568 branches at the end of September 2018).
The evolution of other administrative costs in the international activity, reflects the higher level of costs reported by the subsidiaries in Poland and in Mozambique, compared to the amounts accounted in the first nine months of 2017.
Depreciation costs totalled Euro 42.9 million in the first nine months of 2018, which compares to Euro 39.7 million registered in the same period of the previous year, mainly reflecting the increase in depreciation costs in the activity in Portugal, in particularly those related to software and IT equipment, but also, to a lesser extent, in the international activity, mainly due to the subsidiary in Mozambique.
* Negative impact of Euro 12.0 million in the first nine months of 2018, related to restructuring costs in the activity in Portugal and positive impact of Euro 23.7 million in the first nine months of 2017, related to restructuring costs and the revision of Collective Lab. Agt, also in the activity in Portugal, both in staff costs.
| Euro million | |||
|---|---|---|---|
| 9M 18 | 9M 17 | Change 18/17 |
|
| Staff costs | 423.6 | 403.8 | 4.9% |
| Other administrative costs | 275.8 | 274.8 | 0.4% |
| Depreciation | 42.9 | 39.7 | 8.0% |
| OPERATING COSTS EXCLUDING SPECIFIC ITEMS | 742.2 | 718.3 | 3.3% |
| OPERATING COSTS | 754.2 | 694.6 | 8.6% |
| Of which: | |||
| Portugal activity (1) | 456.9 | 447.5 | 2.1% |
| Foreign activity | 285.3 | 270.8 | 5.4% |
(1) Excludes the impact of specific items.
Impairment for loan losses (net of recoveries) showed a 26.5% reduction from Euro 458.6 million accounted in the first nine months of 2017, totalling Euro 337.1 million in the same period of 2018. In this evolution, it is worth noting the decrease in the activity in Portugal, but also the contribution of the international activity, which benefited from the favourable performance of all subsidiaries, highlighting the contribution of the operation in Poland and, to a lesser extent, the operation in Mozambique.
The Group's cost of risk (net) showed a favourable change, falling from 120 basis points in the first nine months of 2017 to 88 basis points in the same period of 2018.
Other impairment and provisions showed a significant decrease from Euro 169.9 million accounted in the first nine months of 2017, to Euro 94.2 million in the first nine months of 2018, determined essentially by the lower level of provisions required by other financial and non-financial assets of the Group, namely those related to real estate, despite the strengthening of provisions to guarantees and other commitments.
Income tax (current and deferred) totalled Euro 109.5 million in the first nine months of 2018, compared to Euro 63.1 million obtained in the same period of the previous year.
Income tax includes, in the first nine months of 2018, current tax costs of Euro 77.6 million (cost of Euro 82.8 million in the same period of 2017) and deferred tax costs of Euro 32.0 million (income of Euro 19.7 million in the first nine months of 2017).
Total assets rose to Euro 73,745 million as at 30 September 2018, compared to Euro 72,990 million registered at the same date of the previous year, reflecting essentially the growth of securities and loans to customers portfolios, partially offset by the reduction of loans and advances to credit institutions and of non-current assets held for sale, namely regarding foreclose assets.
Loans to customers (gross) stood at Euro 51,150 million as at 30 September 2018, compared to Euro 50,754 million as at 30 September 2017, boosted by the growth of the international activity.
In the activity in Portugal, loans to customers (gross) amounted to Euro 37,629 million as at 30 September 2018, comparing to Euro 37,947 million at the same date of the previous year.
The evolution of loans to customers in the activity in Portugal was determined, on the one hand, by an important reduction of NPE (Euro -1.6 billion from the end of September 2017, to Euro 5.5 billion as at 30 September 2018) and, on the other hand, by the 4.2% increase of performing loans in the same period.
In this context, it is worth noting the increase in new consumer and mortgage loans from the first nine months of 2017, largely supported by the significant development of digital channels in progress.
In the international activity, loans to customers (gross) amounted to Euro 13,521 million as at 30 September 2018, increasing 5.6% from Euro 12,807 million in the same date of the previous year, determined by the growth in the subsidiary in Poland.
The structure of the loans to customers' portfolio showed identical and stable levels of diversification between the end of September 2017 and 2018, with loans to companies representing 46% of total loans to customers as at 30 September 2018.
| Euro million | |||
|---|---|---|---|
| 30 Sep. 18 | 30 Sep. 17 | Change 18/17 | |
| INDIVIDUALS | 27,604 | 27,174 | 1.6% |
| Mortgage | 23,640 | 23,406 | 1.0% |
| Consumer and others | 3,965 | 3,768 | 5.2% |
| COMPANIES | 23,546 | 23,580 | -0.1% |
| Services | 8,882 | 8,831 | 0.6% |
| Commerce | 3,511 | 3,287 | 6.8% |
| Construction | 2,208 | 2,624 | -15.8% |
| Others | 8,945 | 8,838 | 1.2% |
| TOTAL | 51,150 | 50,754 | 0.8% |
| Of which: | |||
| Portugal activity | 37,629 | 37,947 | -0.8% |
| Foreign activity | 13,521 | 12,807 | 5.6% |
Credit quality evolved favourably, improving the respective indicators. The ratios of overdue loans by more than 90 days, NPLs by more than 90 days and NPE as a percentage of total loans to customers saw a generalized decrease as of 30 September 2018 compared to the same date of the previous year, mainly supported by the performance of the domestic loan portfolio. At the same time, there was an increase of coverage for impairment, common to all indicators, with the reinforcement of the coverage of NPE for impairment assuming particular relevance, standing at 50.8% as at 30 September 2018, compared to 41.9% on the same date of 2017. In Portugal, the same ratio increased from 40.9% as at 30 September 2017 to 48.4% as at 30 September 2018.
| Stock of loans (Euro million) |
As percentage of loans to customers |
Coverage by impairments |
||||
|---|---|---|---|---|---|---|
| 30 Sep. 18 |
30 Sep. 17 |
30 Sep. 18 |
30 Sep. 17 |
30 Sep. 18 |
30 Sep. 17 |
|
| OVERDUE LOANS > 90 DAYS | ||||||
| Group | 2,462 | 3,109 | 4.8% | 6.1% | 130.3% | 108.9% |
| Activity in Portugal | 2,175 | 2,807 | 5.8% | 7.4% | 123.4% | 104.5% |
| NON-PERFORMING LOANS (NPL) > 90 DAYS |
||||||
| Group | 3,792 | 4,729 | 7.4% | 9.3% | 84.5% | 71.6% |
| Activity in Portugal | 3,324 | 4,255 | 8.8% | 11.2% | 80.8% | 68.9% |
| NON-PERFORMING EXPOSURES (NPE) | ||||||
| Group | 6,307 | 8,079 | 12.3% | 15.9% | 50.8% | 41.9% |
| Activity in Portugal | 5,546 | 7,168 | 14.7% | 18.9% | 48.4% | 40.9% |
Total customer funds(*) increased 5.5% from Euro 68,984 million booked as at 30 September 2017, reaching Euro 72,786 million at the same date of 2018, mainly benefiting from the performance of the activity in Portugal, but also from the positive performance of the international activity. The growth of customer funds reflects both, the performance of balance sheet customer funds, particularly deposits and other resources from customers, which increased 5.8% from September 2017, and of off-balance sheet customer funds, which went up 6.8% in the same period.
In the activity in Portugal, total customer funds increased 5.8% comparing to Euro 50,246 million registered at the end of September 2017, reaching Euro 53,171 million as at 30 September 2018, highlighting the Euro 2,146 million growth in deposits and other resources from customers and the Euro 1,051 million increase of off-balance sheet customer funds compared to the same date of the previous year.
Total customer funds in the international activity rose to Euro 19,614 million as at 30 September 2018, increasing 4.7% from Euro 18,738 million registered at 30 September 2017, based on the growth in deposits and other resources from customers, which registered an increase of 5.1%, boosted by the performance of the Polish subsidiary.
(*) As at 30 June 2018, the concepts underlying the determination of off-balance sheet customer funds were adjusted to reflect the new legal and regulatory framework imposed by the Financial Instruments Markets Directive II (MiFID II), as well as changes implemented regarding the perimeter considered and the criteria adopted, namely with regard to the inclusion of amounts held by customers in the context of the placement of third-party products that contribute to the recognition of commissions ("assets placed with customers"). The information with reference to the end of September 2017 is presented according to the new criteria.
As at 30 September 2018, balance sheet customer funds represented 75% of total customer funds, with deposits and other resources from customers representing 74% of total customer funds.
The loans to deposits ratio, in accordance with the Bank of Portugal's Instruction no. 16/2004, improved from 93% as at 30 September 2017 to 89% at the same date of 2018. The same ratio, considering on-balance sheet customers' funds, stood at 87% as at 30 September 2018 (91% as at 30 September 2017).
| Euro million | |||
|---|---|---|---|
| 30 Sep. 18 | 30 Sep. 17 | Change 18/17 | |
| BALANCE SHEET CUSTOMER FUNDS | 54,922 | 52,265 | 5.1% |
| Deposits and other resources from customers | 53,624 | 50,690 | 5.8% |
| Debt securities | 1,298 | 1,575 | -17.6% |
| OFF-BALANCE SHEET CUSTOMER FUNDS | 17,863 | 16,719 | 6.8% |
| Assets under management | 5,291 | 4,903 | 7.9% |
| Assets placed with customers | 4,151 | 3,707 | 12.0% |
| Insurance products (savings and investment) | 8,421 | 8,109 | 3.8% |
| TOTAL | 72,786 | 68,984 | 5.5% |
| Of which: | |||
| Portugal Activity | 53,171 | 50,246 | 5.8% |
| Foreign activity | 19,614 | 18,738 | 4.7% |
The securities portfolio stood at Euro 15,302 million as at 30 September 2018, compared to Euro 13,487 million posted as at 30 September 2017, representing 20.7% of total assets (18.5% at the same date of the previous year). This evolution was mainly due to the growth of the securities portfolio of the activity in Portugal, mainly from the increase in public debt portfolio, while the increase in the international activity was due to the operations in Mozambique and in Poland.
The Liquidity Coverage Ratio (LCR) stood at 182% at the end of September 2018, on a consolidated basis, comfortably above the minimum requirement of 100%, supported by highly liquid asset portfolios in an amount compatible with the prudent management of the Group's short-term liquidity, having evolved favourably compared to the same date last year (158%).
At the same time, the Group has a strong and stable financing base, characterized by the large share of customer deposits in the funding structure, collateralized financing and medium and long-term instruments, which enabled the stable financing ratio (NSFR; Net Stable Funding Ratio) as determined in 30 September 2018 to stand at 128% (124% as at 30 September 2017).
The consolidated wholesale financing decreased, between the end of September 2017 and the end of September 2018, mainly attributable to the reduction in liquidity needs due to the decrease of the commercial gap in Portugal and to the cash flow of the activity, partially offset by the increase in the sovereign debt portfolio. The decrease in liquidity needs was mainly seen in the reduction of repo in Portugal, and incorporated an increase in the balance of subordinated loans placed with institutional investors, through an operation occurred at the end of 2017.
The net funding with the ECB stood at Euro 3.1 billion as at 30 September 2018, decreasing from Euro 3.4 billion on the same date of the last year, standing at a materially lower level than the average balance observed in 2017. The liquidity buffer with the ECB, of Euro 12.5 billion, remained in line with the amount of the previous quarter and showed a Euro 3.4 billion reinforcement compared to the same date of the previous year. Considering other assets that are highly liquid or likely to be converted into eligible collateral with the ECB in the short term, the buffer would amount to Euro 13.5 billion (Euro 10.6 billion at the end of September 2017).
The estimated CET1 ratio as at 30 September 2018 on a phased-in and on a fully implemented basis stood at 11.8%, -140 basis points and +10 basis points, respectively, comparing to the 13.2% and 11.7% ratios recorded in the same period of 2017 and above the minimum ratios defined in the SREP(*) for 2018 (CET1 8.81%, T1 10.31% and Total 12.31%).
The favourable evolution of CET1 on a fully implemented basis was mainly determined by net income, partially offset by the IFRS9 adoption impact, by the deduction of irrevocable payment commitments for the Single Resolution Fund and the Deposits Guarantee Fund and by the increase of the Risk Weighted Assets. The fully implemented total capital ratio additionally benefited from subordinated bond placements in Poland and Portugal.
| SOLVENCY RATIOS | ||
|---|---|---|
| Euro million | ||
| 30 Sep. 18 | 30 Sep. 17 | |
| FULLY IMPLEMENTED | ||
| Own funds | ||
| Common Equity Tier 1 (CET1) | 4,954 | 4,423 |
| Tier 1 | 5,034 | 4,491 |
| Total Capital | 5,622 | 4,813 |
| Risk weighted assets | 42,108 | 37,910 |
| Solvency ratios | ||
| CET1 | 11.8% | 11.7% |
| Tier 1 | 12.0% | 11.8% |
| Total capital | 13.4% | 12.7% |
| PHASED-IN | ||
| CET1 | 11.8% | 13.2% |
Note: The capital ratios as at September 2018 are estimated and include the positive accumulated net income.
The capital ratios as at September 2017 include the positive accumulated net income.
(*) Supervisory Review and Evaluation Process.
Millennium bcp started to implement its Strategic Plan 2018-2021. Highlights during this period include:
*€/Zloty: 4.2807.
The International Monetary Fund (IMF) forecasts that the growth pace of the world economy is bound to remain robust in 2018 and 2019. The current phase of activity expansion has been, however, displaying greater disparity between the main economic blocs. Amid the developed countries the performance of the US has stood out, and amongst the emergent markets it is the commodity-exporting countries that have been more dynamic. This environment, together with the risks of a worsening of protectionist tensions and of added instability in international financial markets might jeopardise the on-going expansion trajectory of the world economy, according to the IMF.
The strong performance of the North-American economy translated into a high growth pace for activity and employment, and led the Federal Reserve to raise its key interest rate in September for the third consecutive time this year (to 2.25%), and also to keep in place the plan to wind down its portfolio of debt securities accumulated during the quantitative easing programmes. The European Central Bank (ECB) hasn't made any alteration to the course of its monetary policy during the third quarter, in a context of consolidation of the economic recovery and the absence of inflationary pressures in the euro area.
The stabilisation of the dollar, of long-term U.S. interest rates and of the financial situation of emerging markets allowed for a recovery of the equity markets in the US, with the respective key indices reaching new all-time highs in September, an evolution that contrasted with the debility of the European counterparts, which have been hurt by the strong devaluations recorded by the banking sector. In the interest rates domain, expectations that the rising trajectory of the Federal Reserve's key rates might extend into 2019 fuelled an increase of the yields of the US government bonds, with special acuteness in the shorter maturities, a development that ended up affecting, albeit in a rather mild fashion, European medium- and long-term interest rates. The expansionary stance of the fiscal policy of the new government of Italy continued to exert an upward pressure on the yields of Italian public debt, with contagion effects that proved quite limited to the Portuguese treasury bonds. The assurance given by the ECB officials that the Euro's key interest rates won't be raised until the summer of 2019 maintained the Euribor rates in negative territory for all the maturities.
The Portuguese Economy continues to record growth rates above its potential level. According to Statistics Portugal, in the first half of 2018, the Portuguese GDP increased 2.3% in annual terms, driven by the expansion of private consumption and the on-going recovery of investment, amid the improvement in the levels of business confidence. As for external demand, exports continue to advance in a very favourable manner, supported by the vigour of the tourism sector and of the auto cluster. However, in net terms the contribution of external demand to GDP growth worsened in the first half of the year as imports rose more than exports. Against this background, the falling trajectory of the unemployment rate has intensified in the second quarter to levels not witnessed since 2004 (6.7%). For the whole year, the IMF foresees a growth of the Portuguese GDP of 2.3% and, in 2019, the expectation is that the economy´s rate of expansion decelerates to 1.8%, in a climate marked by slowing external demand and of deceleration of private consumption, after the strong growth observed in the latest quarters.
In Poland, the economic climate continues to be characterised by a strong dynamism of aggregate demand, with GDP growing 5.0% in the first half of the year compared to the same period of last year. The robustness of consumption, in a setting of rising households' disposable incomes and increasing investment fed by the European Union structural funds have been the main drivers of economic activity. In terms of foreign exchange, in the third quarter the Zloty appreciated against the Euro, benefiting from a greater stability of international financial markets.
The Mozambican Economy has been showing moderate levels of GDP growth, which together with reduced inflationary pressures has allowed the central bank to keep in place the expansionary cycle started in mid-2017. According to the IMF, the Mozambican economy should continue to recover gradually, with GDP growth expected at 3.5% in 2018 and 4.0% in 2019. In the third quarter, the Metical deprecated, thereby interrupting the appreciation trajectory recorded in the preceding months. In Angola, the IMF revised downward its forecasts for economic growth in 2018, from 2.2% to -0.1%, but anticipates that in 2019 the GDP rate of expansion will reach 3.1%.
| EARNINGS PRESS RELEASE CONSOLIDATED INDICATORS, ACTIVITY IN PORTUGAL AND INTERNATIONAL ACTIVITY |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Reuters>bcp.Is | Exchange>BCP | Bloomberg>bcp pl | ISIN | PTBCP0AM0015 | |||||
| Euro million | |||||||||
| Consolidated | Activity in Portugal | International activity | |||||||
| Sep. 18 | Sep. 17 | Change | Sep. 18 | Sep. 17 | Change | Sep. 18 | Sep. 17 | Change | |
| 18/17 | 18/17 | 18/17 | |||||||
| INCOME STATEMENT Net interest income |
1,052.8 | 1,023.2 | 2.9% | 595.8 | 591.8 | 0.7% | 457.0 | 431.4 | 5.9% |
| Dividends from equity instruments | 0.6 1.7 |
-64.9% | – | 1.1 | -100.1% | 0.6 | 0.6 | -1.0% | |
| Net fees and commission income | 510.1 | 494.6 | 3.1% | 352.5 | 337.7 | 4.4% | 157.6 | 157.0 | 0.4% |
| Net trading income Other net operating income |
89.6 (90.3) |
115.0 (97.0) |
-22.1% 6.9% |
41.5 (45.6) |
69.3 (53.7) |
-40.1% 15.0% |
48.0 (44.7) |
45.7 (43.3) |
5.1% -3.2% |
| Equity accounted earnings | 71.9 | 56.8 | 26.5% | 43.1 | 32.4 | 33.1% | 28.7 | 24.4 | 17.8% |
| Net operating revenues | 1,634.6 | 1,594.3 | 2.5% | 987.4 | 978.6 | 0.9% | 647.2 | 615.7 | 5.1% |
| Staff costs Other administrative costs |
435.6 275.8 |
380.1 274.8 |
14.6% 0.4% |
281.2 160.6 |
235.2 164.1 |
19.5% -2.1% |
154.4 115.1 |
144.9 110.7 |
6.5% 4.0% |
| Depreciation | 42.9 | 39.7 | 8.0% | 27.1 | 24.5 | 10.6% | 15.8 | 15.2 | 3.9% |
| Operating costs | 754.2 | 694.6 | 8.6% | 468.9 | 423.8 | 10.6% | 285.3 | 270.8 | 5.4% |
| Operating costs excluding specific items Profit before impairment and provisions |
742.2 880.3 |
718.3 899.7 |
3.3% -2.2% |
456.9 518.5 |
447.5 554.8 |
2.1% -6.5% |
285.3 361.9 |
270.8 344.9 |
5.4% 4.9% |
| Loans impairment (net of recoveries) | 337.1 | 458.6 | -26.5% | 288.5 | 390.0 | -26.0% | 48.6 | 68.6 | -29.2% |
| Other impairment and provisions | 94.2 | 169.9 | -44.5% | 78.6 | 168.5 | -53.4% | 15.7 | 1.4 | >200% |
| Profit before income tax | 449.0 | 271.2 | 65.6% | 151.3 | (3.6) | >200% | 297.6 | 274.8 | 8.3% |
| Income tax Income after income tax from continuing operations |
109.5 339.5 |
63.1 208.1 |
73.5% 63.1% |
42.8 108.6 |
(0.9) (2.7) |
>200% >200% |
66.7 230.9 |
64.0 210.8 |
4.2% 9.5% |
| Income arising from discontinued operations | 1.8 | 1.3 | 40.0% | – | – | - | – | – | - |
| Non-controlling interests | 83.8 | 76.0 | 10.2% | (6.3) | (3.5) | -81.8% | 90.1 | 79.5 | 13.3% |
| Net income BALANCE SHEET AND ACTIVITY INDICATORS |
257.5 | 133.3 | 93.1% | 114.9 | 0.8 | >200% | 140.8 | 131.3 | 7.2% |
| Total assets | 73,745 | 72,990 | 1.0% | 53,364 | 53,436 | -0.1% | 20,381 | 19,554 | 4.2% |
| Total customer funds (1) | 72,786 | 68,984 | 5.5% | 53,171 | 50,246 | 5.8% | 19,614 | 18,738 | 4.7% |
| Balance sheet customer funds | 54,922 | 52,265 | 5.1% | 38,625 | 36,750 | 5.1% | 16,297 | 15,515 | 5.0% |
| Deposits and other resources from customers Debt securities |
53,624 1,298 |
50,690 1,575 |
5.8% -17.6% |
37,427 1,198 |
35,281 1,469 |
6.1% -18.5% |
16,198 100 |
15,410 105 |
5.1% -5.1% |
| Off-balance sheet customer funds | 17,863 | 16,719 | 6.8% | 14,547 | 13,496 | 7.8% | 3,317 | 3,223 | 2.9% |
| Assets under management | 5,291 | 4,903 | 7.9% | 3,058 | 2,571 | 19.0% | 2,233 | 2,333 | -4.3% |
| Assets placed w ith customers Insurance products (savings and investment) |
4,151 8,421 |
3,707 8,109 |
12.0% 3.8% |
3,595 7,893 |
3,320 7,605 |
8.3% 3.8% |
556 528 |
386 504 |
43.8% 4.8% |
| Loans to customers (gross) | 51,150 | 50,754 | 0.8% | 37,629 | 37,947 | -0.8% | 13,521 | 12,807 | 5.6% |
| Individuals | 27,604 | 27,174 | 1.6% | 19,148 | 19,217 | -0.4% | 8,456 | 7,957 | 6.3% |
| Mortgage | 23,640 | 23,406 | 1.0% | 17,141 | 17,203 | -0.4% | 6,499 | 6,202 | 4.8% |
| Consumer and others Companies |
3,965 23,546 |
3,768 23,580 |
5.2% -0.1% |
2,008 18,481 |
2,013 18,730 |
-0.3% -1.3% |
1,957 5,066 |
1,755 4,850 |
11.5% 4.4% |
| CREDIT QUALITY | |||||||||
| Total overdue loans | 2,566 | 3,216 | -20.2% | 2,213 | 2,868 | -22.8% | 352 | 349 | 1.0% |
| Overdue loans by more than 90 days | 2,462 | 3,109 | -20.8% | 2,175 | 2,807 | -22.5% | 287 | 302 | -4.9% |
| Overdue loans by more than 90 days / Loans to customers Total impairment (balance sheet) |
4.8% 3,206 |
6.1% 3,387 |
-5.3% | 5.8% 2,684 |
7.4% 2,932 |
-8.5% | 2.1% 522 |
2.4% 455 |
14.9% |
| Total impairment (balance sheet) / Loans to customers | 6.3% | 6.7% | 7.1% | 7.7% | 3.9% | 3.6% | |||
| Total impairment (balance sheet) /Overdue loans by more than 90 days | 130.3% | 108.9% | 123.4% | 104.5% | 182.1% | 150.8% | |||
| Non-Performing Exposures Non-Performing Exposures / Loans to customers |
6,307 12.3% |
8,079 15.9% |
-21.9% | 5,546 14.7% |
7,168 18.9% |
-22.6% | 761 5.6% |
911 7.1% |
-16.5% |
| Restructured loans | 3,934 | 4,509 | -12.8% | 3,390 | 3,954 | -14.3% | 544 | 555 | -2.0% |
| Restructured loans / Loans to customers | 7.7% | 8.9% | 9.0% | 10.4% | 4.0% | 4.3% | |||
| 88 | 120 | 102 | 137 | 49 | 71 | ||||
| Cost of risk (net of recoveries, in b.p.) Cost-to-income (2) |
45.4% | 45.1% | 46.3% | 45.7% | 44.1% | 44.0% |
| (Thousands of euros) | ||
|---|---|---|
| 30 SEPTEMBER | 30 SEPTEMBER | |
| 2018 | 2017 (*) | |
| Interest income | 1,407,861 | 1,431,812 |
| Interest expense | (355,056) | (408,610) |
| NET INTEREST INCOME | 1,052,805 | 1,023,202 |
| Dividends from equity instruments | 592 | 1,686 |
| Net fees and commissions income | 510,068 | 494,640 |
| Net gains / (losses) from financial operations at fair value through profit or loss | 12,315 | 17,848 |
| Net gains / (losses) from foreign exchange | 53,846 | 63,402 |
| Net gains / (losses) from hedge accounting operations | (1,547) | (6,672) |
| Net gains / (losses) from derecognition of assets and financial liabilities at amortised cost | (21,598) | (3,927) |
| Net gains / (losses) from derecognition of financial assets at fair value | ||
| through other comprehensive income | 46,560 | n.a. |
| Net gains / (losses) from financial assets available for sale | n.a. | 44,348 |
| Net gains / (losses) from insurance activity | 4,001 | 3,668 |
| Other operating income / (losses) | (121,592) | (102,147) |
| TOTAL OPERATING INCOME | 1,535,450 | 1,536,048 |
| Staff costs | 435,551 | 380,118 |
| Other administrative costs | 275,778 | 274,764 |
| Amortizations and depreciations | 42,896 | 39,715 |
| TOTAL OPERATING EXPENSES | 754,225 | 694,597 |
| OPERATING NET INCOME BEFORE PROVISIONS AND IMPAIRMENTS | 781,225 | 841,451 |
| Impairment for financial assets at amortised cost | (335,668) | (458,594) |
| Impairment for financial assets at fair value | ||
| through other comprehensive income | 3,643 | n.a. |
| Impairment for financial assets available for sale | (48,485) | |
| n.a. | ||
| Impairment for other assets | (68,398) | (103,046) |
| Other provisions | (30,928) | (18,378) |
| NET OPERATING INCOME | 349,874 | 212,948 |
| Share of profit of associates under the equity method | 71,868 | 56,791 |
| Gains / (losses) arising from sales of subsidiaries and other assets | 27,255 | 1,459 |
| NET INCOME BEFORE INCOME TAXES | 448,997 | 271,198 |
| Income taxes | ||
| Current | (77,550) | (82,831) |
| Deferred | (31,955) | 19,720 |
| INCOME AFTER INCOME TAXES FROM CONTINUING OPERATIONS | 339,492 | 208,087 |
| Income arising from discontinued or discontinuing operations | 1,750 | 1,250 |
| NET INCOME AFTER INCOME TAXES | 341,242 | 209,337 |
| Net income for the period attributable to: | ||
| Bank's Shareholders | 257,469 | 133,309 |
| Non-controlling interests | 83,773 | 76,028 |
| NET INCOME FOR THE PERIOD | 341,242 | 209,337 |
| Earnings per share (in Euros) | ||
| 0.023 | 0.014 | |
| Basic | 0.023 | 0.014 |
| (Thousands of euros) | |||
|---|---|---|---|
| 30 SEPTEMBER | 31 DECEMBER | 30 SEPTEMBER | |
| 2018 | 2017 (*) | 2017 (*) | |
| ASSETS | |||
| Cash and deposits at Central Banks | 2,192,517 | 2,167,934 | 2,144,795 |
| Loans and advances to credit institutions repayable on demand | 330,321 | 295,532 | 1,113,371 |
| Financial assets at amortised cost | |||
| Loans and advances to credit institutions | 868,186 | 1,065,568 | 805,331 |
| Loans and advances to customers | 45,355,357 | 45,625,972 | 45,199,645 |
| Debt instruments | 3,347,745 | 2,007,520 | 2,167,534 |
| Financial assets at fair value through profit or loss | |||
| Financial assets held for trading | 1,024,778 | 897,734 | 922,677 |
| Financial assets not held for trading mandatorily at fair value through profit or loss | 1,405,460 | n.a. | n.a. |
| Financial assets designated at fair value through profit or loss | 32,921 | 142,336 | 142,253 |
| Financial assets at fair value through other comprehensive income | 12,063,815 | n.a. | n.a. |
| Financial assets available for sale | n.a. | 11,471,847 | 11,914,693 |
| Financial assets held to maturity | n.a. | 411,799 | 436,278 |
| Assets w ith repurchase agreement | 15,531 | - | 70,959 |
| Hedging derivatives | 76,598 | 234,345 | 165,322 |
| Investments in associated companies | 488,175 | 571,362 | 612,807 |
| Non-current assets held for sale | 1,940,000 | 2,164,567 | 2,286,122 |
| Investment property | 12,020 | 12,400 | 14,234 |
| Other tangible assets | 484,236 | 490,423 | 478,975 |
| Goodw ill and intangible assets | 168,745 | 164,406 | 164,560 |
| Current tax assets | 12,892 | 25,914 | 7,583 |
| Deferred tax assets | 2,945,304 | 3,137,767 | 3,135,169 |
| Other assets | 980,005 | 1,052,024 | 1,207,424 |
| TOTAL ASSETS | 73,744,606 | 71,939,450 | 72,989,732 |
| LIABILITIES | |||
| Financial liabilities at amortised cost | |||
| Resources from credit institutions | 7,563,524 | 7,487,357 | 9,185,514 |
| Resources from customers | 50,760,519 | 48,285,425 | 47,825,589 |
| Non subordinated debt securities issued | 1,707,696 | 2,066,538 | 2,187,133 |
| Subordinated debt | 1,097,692 | 1,169,062 | 858,167 |
| Financial liabilities at fair value through profit or loss | |||
| Financial liabilities held for trading | 310,597 | 399,101 | 461,807 |
| Financial liabilities at fair value through profit or loss | 3,831,932 | 3,843,645 | 3,773,817 |
| Hedging derivatives | 170,474 | 177,337 | 216,295 |
| Provisions | 331,896 | 324,158 | 340,989 |
| Current tax liabilities | 4,742 | 12,568 | 8,835 |
| Deferred tax liabilities | 4,993 | 6,030 | 2,235 |
| Other liabilities | 1,015,889 | 988,493 | 1,071,303 |
| TOTAL LIABILITIES | 66,799,954 | 64,759,714 | 65,931,684 |
| EQUITY | |||
| Share capital | 5,600,738 | 5,600,738 | 5,600,738 |
| Share premium | 16,471 | 16,471 | 16,471 |
| Preference shares | 59,910 | 59,910 | 59,910 |
| Other equity instruments | 2,922 | 2,922 | 2,922 |
| Legal and statutory reserves | 264,608 | 252,806 | 252,806 |
| Treasury shares | (291) | (293) | (282) |
| Reserves and retained earnings | (393,211) | (38,130) | (13,995) |
| Net income for the period attributable to Bank's Shareholders | 257,469 | 186,391 | 133,309 |
| TOTAL EQUITY ATTRIBUTABLE TO BANK'S SHAREHOLDERS | 5,808,616 | 6,080,815 | 6,051,879 |
| Non-controlling interests | 1,136,036 | 1,098,921 | 1,006,169 |
| TOTAL EQUITY | 6,944,652 | 7,179,736 | 7,058,048 |
| 73,744,606 | 71,939,450 | 72,989,732 |
(*) The balances as at 31 December 2017 and 30 September 2017, correspond to the statutory accounts at that date. These balances are presented exclusively for comparative purposes and have not been restated follow ing the adoption of IFRS 9, w ith reference to 1 January 2018, as allow ed by IFRS 9.
The BCP Group prepares financial information in accordance with International Financial Reporting Standards (IFRS) endorsed by European Union. As a complement to that information, the BCP Group uses a set of alternative performance measures that allow monitoring the evolution of its activity over the time. Following the guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on October 2015 (ESMA/2015/1415), the BCP Group presents some indicators related to the assessment of profitability and efficiency and the quality of the credit portfolio, among others, which are intended to facilitate comprehension of the evolution of the economic and financial position of the Group. The information presented in this context has not been audited and does not, under any circumstance, replace the financial information prepared in accordance with IFRS. It should also be noted that the definitions and concepts used by the BCP Group for the calculation of these indicators may differ from those used by other entities in the determination of other similar measures and may therefore not be directly comparable. In accordance with the above-mentioned guidelines, alternative performance measures, which are detailed below, are presented together with additional information that reconciles the accounting figures presented in the consolidated financial statements prepared in accordance with IFRS and financial information reflecting the management criteria adopted by the BCP Group. These indicators and their components are also described in more detail in the glossary.
Relevance of the indicator: loans to deposits ratio is an indicator of liquidity that allows the evaluation of the Group's retail funding structure.
| Euro million | |||
|---|---|---|---|
| Se p. 18 | Se p. 17 | ||
| Loans to customers (net) (1) | 47,944 | 47,367 | |
| Balance sheet customer funds (2) | 54,922 | 52,265 | |
| (1) / (2) | 87% | 91% |
Relevance of the indicator: it allows evaluation of the level of efficiency of the Group, measuring its capacity to generate results with the volume of available assets.
| Euro million | |||
|---|---|---|---|
| 9M 18 | 9M 17 | ||
| Net income (1) | 257 | 133 | |
| Non-controlling interests 2) | 84 | 76 | |
| Average total assets (3) | 73,065 | 72,631 | |
| [(1) + (2), annualised] / (3) | 0.6% | 0.4% |
Relevance of the indicator: allows assessment of the capacity of the Group to remunerate its shareholders, assessing the level of profitability generated by the funds invested by the shareholders in the Group.
| Euro million | |||
|---|---|---|---|
| 9M 18 | 9M 17 | ||
| Net income (1) | 257 | 133 | |
| Average equity (2) | 5,736 | 5,590 | |
| [(1), annualised] / (2) | 6.0% | 3.2% |
Relevance of the indicator: it allows for the monitoring of the level of efficiency of the Group, evaluating the volume of operating costs (excluding specific items) to generate net operating revenues.
| Euro million | |||
|---|---|---|---|
| 9M 18 | 9M 17 | ||
| Operating costs (1) | 754 | 695 | |
| Specific item s (2) | 12 | -24 | |
| Net operating revenues (3) | 1,635 | 1,594 | |
| [(1) - (2)] / (3) | 45.4% | 45.1% |
Relevance of the indicator: allows assessment of the quality of the loan portfolio by evaluating the ratio between impairment charges (net of reversals and recoveries of credit and interest) recognized in the period and the stock of loans to customers at the end of that period.
| Euro million | |||
|---|---|---|---|
| 9M 18 | 9M 17 | ||
| Loans to customers at amortised cost, before impairment (1) | 50,856 | 50,754 | |
| Loan impairment charges (net of recoveries) (2) | 337 | 459 | |
| [(2), annualised] / (1) | 88 | 120 |
Relevance of the indicator: allows to assess the level of credit risk to which the Group is exposed based on the proportion of the NPE loan portfolio in the loans to customers total portfolio (gross).
| Euro million | ||||
|---|---|---|---|---|
| Sep. 18 | Sep. 17 | |||
| Non-Performing Exposures (1) | 6,307 | 8,079 | ||
| Loans to customers (gross) (2) | 51,150 | 50,754 | ||
| (1) / (2) | 12.3% | 15.9% |
Relevance of the indicator: it allows assessing the level of coverage of the NPE portfolio by balance sheet impairment.
| Euro million | |||
|---|---|---|---|
| Se p. 18 | Se p. 17 | ||
| Non-Performing Exposures (1) | 6,307 | 8,079 | |
| Loans impairments (balance sheet) (2) | 3,206 | 3,387 | |
| (2) / (1) | 50.8% | 41.9% |
| EARNINGS PRESS RELEASE Reuters>bcp.Is Exchange>BCP Bloomberg>bcp pl ISIN |
PTBCP0AM0015 |
|---|---|
| RECONCILIATION OF ACCOUNTING INFORMATION WITH THE MANAGEMENT CRITERIA OF THE GROUP | |
| 1) Loans to customers |
|
| Euro million | |
| Sep. 18 | |
| Loans to customers at amortised cost (disclosed Balance Sheet) | 45,355 |
| Debt instruments at amortised cost associated to credit operations | 2,310 |
| Balance sheet amount of loans to customers at fair value through profit or loss | 279 |
| Loan to customers (net) considering management criteria | 47,944 |
| Balance sheet impairment related to loans to customers at amortised cost | 3,149 |
| Balance sheet impairment associated with debt instruments at amortised cost related to credit operations | 41 |
| Fair value adjustments related to loans to customers at fair value through profit or loss | 16 |
| Loan to customers (gross) considering management criteria | 51,150 |
| 2) Loans impairment (P&L) |
|
| Euro million |
| Euro million | |
|---|---|
| 9M 18 | |
| Impairment of financial assets at amortised cost (disclosed P&L) (1) | 336 |
| Impairment of financial assets at amortised cost not associated with credit operations (2) | -1 |
| Loans impairment considering management criteria* (1)-(2) | 337 |
* Includes impairment for loans and advances to credit institutions (0.4M€), which is excluded for purposes of cost of risk calculation.
| Euro million | |
|---|---|
| Sep. 18 | |
| Financial liabilities at fair value through profit or loss (disclosed Balance sheet) | 3,832 |
| Debt securities at fair value through profit or loss and certificates | -968 |
| Customer deposits at fair value through profit or loss considering management criteria | 2,864 |
| Resources from customers at amortised cost (disclosed Balance sheet) | 50,761 |
| Deposits and other resources from customers considering management criteria (1) | 53,624 |
| Non subordinated debt securities issued at amortised cost (disclosed Balance sheet) | 1,708 |
| Debt securities at fair value through profit or loss and certificates | 968 |
| Non subordinated debt securities placed with institucional customers | -1,378 |
| Debt securities placed with customers considering management criteria (2) | 1,298 |
| Balance sheet customer funds considering management criteria (1)+(2) | 54,922 |
| Euro million | |
|---|---|
| Sep. 18 | |
| Debt instruments at amortised cost (disclosed Balace sheet) | 3,348 |
| Debt instruments at amortised cost associated to credit operations net of impairment | -2,310 |
| Debt instruments at amortised cost considering management criteria (1) | 1,038 |
| Financial assets not held for trading mandatorily at fair value through profit or loss (disclosed Balance sheet) |
1,405 |
| Balance sheet amount of loans to customers at fair value through profit or loss | -279 |
| Financial assets not held for trading mandatorily at fair value through profit or loss considering management criteria (2) |
1,127 |
| Financial assets held for trading (disclosed Balance sheet) (3) | 1,025 |
| Financial assets designated at fair value through profit or loss (disclosed Balance sheet) (4) | 33 |
| Financial assets at fair value through other comprehensive income (disclosed Balance sheet) (5) | 12,064 |
| Assets with repurchase agreement (disclosed Balance sheet) (6) | 16 |
| Securities portfolio considering management criteria (1)+(2)+(3)+(4)+(5)+(6) | 15,302 |
Assets placed with customers – amounts held by customers in the context of the placement of third-party products that contribute to the recognition of commissions.
Balance sheet customer funds – deposits and other resources from customers and debt securities placed with customers.
Commercial gap – loans to customers (gross) minus on-balance sheet customer funds.
Core income - net interest income plus net fees and commissions income.
Core net income - net interest income plus net fees and commissions income deducted from operating costs.
Cost of risk, net (expressed in basis points) - ratio of loan impairment charges for loans to customers at amortised cost and debt instruments at amortised cost related to credit operations (net of recoveries) accounted in the period to loans to customers at amortised cost and debt instruments at amortised cost related to credit operations before impairment.
Cost to core income - operating costs divided by core income.
Cost to income – operating costs divided by net operating revenues.
Coverage of non-performing exposures by impairments – loans impairments (balance sheet) divided by the stock of NPE.
Coverage of non-performing loans by impairments – loans impairments (balance sheet) divided by the stock of NPL.
Coverage of overdue loans by impairments - loans impairments (balance sheet) divided by overdue loans.
Coverage of overdue loans by more than 90 days by impairments - loans impairments (balance sheet) divided by overdue loans by more than 90 days.
Debt instruments – non-subordinated debt instruments at amortised cost and financial liabilities measured at fair value through profit or loss (debt securities and certificates).
Debt securities placed with customers - debt securities issued by the Bank and placed with customers.
Deposits and other resources from customers – resources from customers at amortised cost and customer deposits at fair value through profit or loss.
Dividends from equity instruments - dividends received from investments classified as financial assets at fair value through other comprehensive income and from financial assets held for trading and, until 2017, financial assets 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.
Insurance products – includes unit linked saving products and retirement saving plans ("PPR", "PPE" and "PPR/E").
Loans impairment (balance sheet) – balance sheet impairment related to loans to customers at amortised cost, balance sheet impairment associated with debt instruments at amortised cost related to credit operations and fair value adjustments related to loans to customers at fair value through profit or loss.
Loans impairment (P&L) – impairment of financial assets at amortised cost for loans and advances of credit institutions, for loans to customers (net of recoveries - principal and accrual) and for debt instruments related to credit operations.
Loans to customers (gross) – loans to customers at amortised cost before impairment, debt instruments at amortised cost associated to credit operations before impairment and loans to customers at fair value through profit or loss before fair value adjustments.
Loans to customers (net) - loans to customers at amortised cost net of impairment, debt instruments at amortised cost associated to credit operations net of impairment and balance sheet amount of loans to customers at fair value through profit or loss.
Loan to Deposits ratio (LTD) – loans to customers (net) divided by deposits and other resources from customers.
Loan to value ratio (LTV) – mortgage amount divided by the appraised value of property.
Net commissions - net fees and commissions income.
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, other net operating income and equity accounted earnings.
Net trading income – results from financial operations at fair value through profit or loss, results from foreign exchange, results from hedge accounting operations, results from derecognition of financial assets and financial liabilities measured at amortised cost, results from derecognition of financial assets measured at fair value through other comprehensive income and results from financial assets available for sale (till 2017).
Non-performing exposures (NPE) – non-performing loans and advances to customers (loans to customers at amortised cost and loans to customers at fair value through profit or loss) more than 90 days past-due or unlikely to be paid without collateral realisation, if they recognised as defaulted or impaired.
Non-performing loans (NPL) – overdue loans (loans to customers at amortised cost, debt instruments at amortised cost associated to credit operations and loans to customers at fair value through profit or loss) more than 90 days past due including the non-overdue remaining principal of loans, i.e. portion in arrears, plus non-overdue remaining principal.
Off-balance sheet customer funds – assets from customers under management, assets placed with customers and insurance products (savings and investment) subscribed by customers.
Operating costs - staff costs, other administrative costs and depreciation.
Other impairment and provisions – impairment of financial assets (at fair value through other comprehensive income, at amortised cost not associated with credit operations and available for sale, in this case till 2017), other assets impairment, in particular provision charges related to assets received as payment in kind not fully covered by collateral, investments in associated companies and goodwill of subsidiaries and other provisions.
Other net income – dividends from equity instruments, net commissions, net trading income, other net operating income and equity accounted earnings.
Other net operating income – net gains from insurance activity, other operating income/(loss) and gains/(losses) arising from sales of subsidiaries and other assets.
Overdue loans – total outstanding amount of past due loans to customers (loans to customers at amortised cost, debt instruments at amortised cost associated to credit operations and loans to customers at fair value through profit or loss), including principal and interests.
Overdue loans by more than 90 days – total outstanding amount of past due loans to customers by more than 90 days (loans to customers at amortised cost, debt instruments at amortised cost associated to credit operations and loans to customers at fair value through profit or loss), including principal and interests.
Resources from credit institutions – resources and other financing from Central Banks and resources from other credit institutions.
Return on average assets (Instruction from the Bank of Portugal no. 16/2004) – net income (before tax) divided by the average total assets (weighted average of the average of monthly net assets in the period).
Return on average assets (ROA) – net income (before minority interests) divided by the average total assets (weighted average of the average of monthly net assets in the period).
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 (weighted average of the average of monthly equity in the period).
Return on equity (ROE) – net income (after minority interests) divided by the average attributable equity, deducted from preference shares and other capital instruments (weighted average of the average of monthly equity in the period).
Securities portfolio - debt instruments at amortised cost not associated with credit operations (net of impairment), financial assets at fair value through profit or loss (excluding the ones related to loans to customers), financial assets at fair value through other comprehensive income (net of impairment), assets with repurchase agreement, financial assets available for sale and financial assets held to maturity (in the latter two cases until 2017).
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 and off-balance sheet customer fund.
The financial information in this presentation has been prepared under the scope of the International Financial Reporting Standards ("IFRS") of the 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 months period ended 30 September 2018, 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.
September 2018 and September 2017 figures were not audited.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.