Banco Comercial Portugues

Investor Presentation • Jul 27, 2015

EARNINGS PRESENTATION 1H 2015

This document is not an offer of securities for sale in the United States, Canada, Australia, Japan or any other jurisdiction. Securities may not be offered or sold in the United States unless they are registered pursuant to the US Securities Act of 1933 or are exempt from such registration. Any public offering of securities in the United States, Canada, Australia or Japan would be made by means of a prospectus that will contain detailed information about the company and management, including financial statements

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

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

First 6 months figures for 2014 and 2015 not audited

Agenda

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

Highlights

Profitability Profits reinforced	Net profit at €240.7 million in the 1st • half of 2015, compared to €62.2 million losses in the same period of 2014. • Core net income* up by 62.6% to €423.5 million in 1H15 from €260.4 million in 1H14, reflecting increased net interest income (up 26.6%, including a 58.5% increase in Portugal) and lower operating costs (down 3.7% overall and 9.3% in Portugal). • Impairment and provision charges of €566.8 million in the 6-month period to June 30, 2015, taking advantage of gains on sovereign debt to reinforce coverage.
Liquidity Healthy balance sheet	• Customer deposits up by 4.4% to €50.6 billion at June 30, 2015, with total Customer funds up by 2.8% to €65.7 billion on the same date. Commercial gap narrowed further, with net loans as a percentage of total Customer funds now • standing at 100%. As a percentage of deposits (BoP criteria), net loans stood at 107% (115% at June 30, 2014; 120% recommended). ECB funding usage at €6.1 billion (€1.5 billion of which TLTRO-related), down from €8.7 billion at • end-June 2014.
Capital On course to European benchmark levels, reflecting profitability and specific measures	Common equity tier 1 ratio at 13.1% according to phased-in criteria**, compared to 12.5% at June • 30, 2014. • Capital boosted by improved recurring profitability, by the sale of a 15.4% shareholding in Bank Millennium (Poland) and by the impact of the debt-equity swap successfully completed at June 11, 2015.

* Core net income = net interest income + net fees and commission income – operating costs. | ** Includes 1H2015 earnings. The ratio at 30 June 2014 includes the impact of the new DTAs regime for capital purposes (IAS), of the July 2014 rights issue, of the repayment of €1,850 million of CoCos and of the deconsolidation of the Romanian operation.

Highlights

* Estimate including 1H2015 earnings. New regimen of DTAs based on the values on the consolidated financial statements. Pro forma ratio as at 30 june 2014, including the July 2014 rights issue, the repayment of €1,850 euros of CoCos and the deconsolidation of the Romanian operation. ** Assuming 1H14 shareholding in Bank Millennium to be the same as 1H15 (65.5% in 1Q, 50.1% in 2Q).

Destaques

* According to the instruction nr. 16/2004 of Bank of Portugal

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

1H2015 earnings: profitability affirmed…

(million euros)	1H14	1H15	YoY	Impact on earnings
Net interest income	496.0	628.0	26.6%	+132.0
Of which: costs related with hybrids instruments (CoCos)	-130.6	-32.3	-75.3%	+98.3
Net fees and commissions	341.2	350.7	2.8%	+9.5
Other operating income	251.3	492.6	96.0%	+241.4
Banking income	1,088.4	1,471.3	35.2%	+382.9
Staff costs	-323.4	-308.9	-4.5%	+14.5
Other administrative costs and depreciation	-253.3	-246.3	-2.8%	+7.0
Operating costs	-576.7	-555.2	-3.7%	+21.5
Operating net income (before impairment and provisions)	511.7	916.1	79.0%	+404.4
Loans impairment (net of recoveries)	-371.6	-475.0	27.8%	-103.3
Other impairment and provisions	-114.0	-91.8	-19.4%	+22.1
Net income before income tax	26.1	349.3	1236.2%	+323.1
Income taxes	-2.2	-54.4	2390.6%	-52.3
Non-controlling interests	-52.6	-68.9	30.9%	-16.3
Net income from discontinued or to be discontinued operations	-33.6	14.8	--	+48.4
Net income	-62.2	240.7	--	+303.0

… after 4 years of losses

Core net income* improves in Portugal

(Million euros)

Net interest income increases, particularly in Portugal

(Million euros)

Increase in fees and commissions, especially in Portugal

(Milhões de euros)

Fees and comissions
Consolidated
	1H14	1H15	YoY
Banking fees and commissions	270.6	285.9	+5.7%
Cards and transfers	96.5	86.3	-10.6%
Loans and guarantees	79.9	92.4	+15.6%
Bancassurance	36.6	37.7	+3.0%
Current account related State guarantee	38.8 -16.4	39.8 0.0	+2.7% +100.0%
Other fees and commissions	35.2	29.7	-15.6%
Market related fees and commissions	70.6	64.7	-8.3%
Securities operations	50.9	44.8	-11.9%
Asset management	19.7	19.9	+1.2%
Total fees and commissions	341.2	350.7	+2.8%

Increased net trading income, benefiting from gains from public debt portfolio in Portugal

(Milhões de euros)

Cost reduction proceeds in Portugal

(Million euros)

Higher provisioning charges…

(Million euros)

… resulting in stronger coverage

Diversified and collateralised loan portfolio

• Loans to companies accounted for 48% of the loan portfolio at end-June 2015, including 15% to construction and real estate sectors
• 92% of the loan portfolio is collateralised

• Mortgages accounted for 45% of the loan portfolio, with low delinquency levels and a 66% average LTV

• Highlights

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

Deposits increase, with individuals in Portugal and international operations standing out

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

Credit increases in international operations

(Million euros)

On a comparable basis: excludes Romania and Millennium bcp Gestão de Activos, following the discontinuation processes. * Excludes public sector and credit recovery areas.

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

* Based on Customer deposits and net loans to Customers.

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

*** Estimated in accordance with CRD IV current interpretation.

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

• Lower funding needs, reflecting a lower commercial gap

• Customer deposits are the main funding source

• Highlights

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

Profitability and specific measures strengthen capital figures

• Capital ratios strengthened to 13.1% according to phased-in criteria and to 10.7% on a fully implemented basis, reflecting the impact of the debt-equity swap, of earnings for 1H15 and of lower RWAs
• Revocation of Bank of Portugal's Notice 3/95, currently under discussion, would lead to deferred tax assets no longer being calculated based on it for capital purposes
• Leverage ratio at 6.7% according to phased-in criteria; on a fully implemented basis, this ratio stood at 5.5% including Notice 3/95 and at 4.9% without the impact of Notice 3/95

Pension fund

Main figures
(Million euros)
	Jun 14	Dec 14	Jun 15
Pension liabilities	2,759	3,133	3,136
Pension fund	2,786	3,095	3,070
Liabilities' coverage	112%	110%	109%
Fund's profitability	11.0%	8.1%	0.5%
Actuarial differences	(2)	(477)	(38)

Assumptions

	Dec 13	Jun 14	Dec 14	Jun 15
Discount rate	4,00%	3,50%	2,50%	2,50%
	1,00%	until 2016	0,75% until 2017
Salary growth rate	1,75%	after 2016	1,00% after 2017
	0,00%	until 2016	0,00% until 2017
Pensions growth rate	0,75%	after 2016	0,50% after 2017
Projected rate of return of fund assets	4,00%	3,50%	2,50%
Mortality Tables
Men	TV 73/77 -1 year		TV 73/77 -2 years
Women	Tv 88/90 -2 years		Tv 88/90 -3 years

• Pension liabilities coverage at 109%
• Fund's profitability below assumptions in 1H2015, resulting in negative actuarial differences

• Assumptions unchanged in 1H2015

• Highlights

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

Portugal: deleveraging effort improves with liquidity position

On a comparabel basis: excludes Millennium bcp Gestão de Activos (following the process of discontinuation).

Net income improves, as banking income increases and operating costs decrease

(Million euros)

Improvement trend on core income and reduction on operating costs in Portugal are in place

• Core income at €554 million in 1H2015
• Operating costs down to €319 million
• Continuation of the core net income ** expansion trend began two years ago: €236 million in 1H2015. It is worth highlighting that this figure was negative (-€12 million) in

* Excludes non recurring specific items.

** Core net income = net interest income + net fees and commission income – operating costs. Excludes non recurring specific items.

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

(Million euros)
	1H15
	vs.1H14
Effect of cost of time deposits	+84
CoCos effect	+98
Performing loans volume effect	-49
NPL effect	-4
Other	-7

• Net interest income increases versus 1H 2014, driven by:
• Consistent reduction of the cost of time deposits and partial repayment of CoCos
• These effects were partially offset by the continued reduction of loan volumes
• Quarter-on-quarter increase of net interest income from commercial business, as the impact of the continued decline of the remuneration of term deposits exceeded the unfavourable effects from a lower volume of credit, on one hand, and from increased overdue loans, on the other
• The quarter-on-quarter decline of total net interest income was chiefly due to lower yields on the new public debt portfolio

Continued effort to reduce the cost of deposits

• Continued effort to bring the cost of the time deposits book down: to 1,3% in 1H2015 from 2.0% in 1H2014
• Average interest rate on the front book of time deposits significantly down to 48bp
• Spreads on the mortgage book were roughly stable; spreads on the companies loan portfolio still comparatively high, following a continued decrease

Increased commissions, benefiting from early repayment of State-guarantees

	1H14	1H15	YoY
Banking fees and commissions	182.1	197.7	+8.6%
Cards and transfers	50.1	48.8	-2.6%
Loans and guarantees	61.9	64.0	+3.5%
Bancassurance	36.6	37.7	+3.0%
Current account related	38.7	39.8	+2.7%
State guarantee	-16.4	0.0	+100.0%
Other fees and commissions	11.2	7.5	-33.5%
Market related fees and commissions	34.9	27.2	-21.9%
Securities operations	31.0	23.8	-23.2%
Asset management	3.9	3.4	-11.6%
Total fees and commissions	217.0	225.0	+3.7%

Continuation of the plan implementation, on target with strategic goals

(Million euros)

Foreclosed assets sold above book value, confirming appropriate

coverage

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

Significant net income growth in international operations

euros)
	1H14	1H15	Δ % local currency	Δ % euros	ROE
International operations*
Poland	77.4	79.3	+2.4%	+3.8%	11.2%
Mozambique	45.4	47.9	+5.5%	+14.9%	21.0%
Angola	25.6	38.2	+49.1%	+65.4%	22.5%
Net income	148.5	165.4	+11.4%	+17.2%
Other and non-controlling interests	-49.9	-60.8
Total contribution int. operations	98.5	104.6		+6.2%

Poland: customer funds and loans to customers growth

Net income growth

(Million euros)

Reduction of profits determined by the difficult environment partially offset by the reduction of costs

(Million euros)

* Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in accounting terms, part of this margin (0.6M€ in 1H14 and 7.9M€ in 1H15) is presented in net trading income.

Stable credit quality, strong coverage

(Million euros)

Mozambique: strong volume growth

Growth in core income and operating costs driven by network expansion

(Million euros)

FX effect excluded. €/Metical constant as at June 2015: Income Statement 39.45458333; Balance Sheet 43.215.

Credit quality and coverage

(Million euros)

Angola: strong volumes growth, keeping a comfortable liquidity position

Net income increase driven by higher banking income

(Million euros)

Strong growth in net interest income income and operating costs driven by network expansion

(Million euros)

Credit quality and coverage

(Million euros)

Coverage ratio Jun 14 Jun 15 Non-performing loans 113% 57% 37 52 Jun 14 Jun 15 3.4 11.3 1H14 1H15 Cost of risk 78bp 212 bp Loan impairment (net of recoveries)

FX effect excluded. €/Kwanza constant as at June 2015: Income Statement 120.54833333 ; Balance Sheet 135.7100.

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

Progress on 2012 strategic plan metrics

				Actual	Strategic plan
Phases	Priorities		1H14	1H15		2015
Demanding economic environment 2012-2013	Stronger balance sheet	CET1 (phased-in) (fully implemented)*	12.5% 9.0%	13.1% 3/95: 10.7% With W/o 3/95: 9.6%	…	>10%	
	Recovery of profitability in	LtD***	106%	100%	…	<110%	
Creating growth and profitability	Portugal	C/I	57%	38%	…	≈50%	
conditions 2014-2015	Continued development of	Oper. costs****	€702M	€637M	…	≈€660M	
	business in Poland, Mozambique and Angola	Cost of risk (bp)	128	166	…	≈100	
Sustained growth 2016-2017	Sustained net income growth, greater balance between domestic and international operations	ROE	-5%	11%	…	≈7%	

* Estimate including 1H2015 earnings. | ** Revocation of Bank of Portugal's Notice 3/95, currently under discussion, would lead to deferred tax assets no longer being calculated based on it for capital purposes. | *** LtD ratio (Loans to deposits) calculated based on net loans and balance sheet customer funds. | **** Annualised.

Appendix

Sovereign debt portfolio

Total sovereign debt at €9.1 billion, of which €1.6 billion maturing up to one year

Portuguese sovereign debt decreased, whereas exposure to Polish, Mozambican and Angolan have increased from June 2014

Sovereign debt portfolio

(Million euros) Portugal Poland Mozambique Angola Other Total Trading book 179 905 0 0 73 1,157 ≤ 1 year 4 429 0 0 0 434 > 1 year and ≤ 2 years 0 241 0 0 11 252 > 2 year and ≤ 5 years 171 205 0 0.454 63 439 > 5 year and ≤ 10 years 3 30 0 0 0.0037 33 > 10 years 0 0 0 0 0.0000 0 Banking book* 4,327 1,517 592 535 926 7,897 ≤ 1 year 160 416 440 166 5 1,188 > 1 year and ≤ 2 years 2 311 146 160 0 618 > 2 year and ≤ 5 years 1,168 786 6 196 52 2,208 > 5 year and ≤ 10 years 2,641 4 0 13 867 3,525 > 10 years 357 0 0 0 1 358 Total 4,505 2,422 592 536 999 9,054 ≤ 1 year 164 846 440 166 5 1,622 > 1 year and ≤ 2 years 2 551 146 160 11 869 > 2 year and ≤ 5 years 1,339 991 6 197 114 2,647 > 5 year and ≤ 10 years 2,644 34 0 13 867 3,558 > 10 years 357 0 0 0 1 358

Financial Statements

Consolidated Balance Sheet

(Million euros)

	30 June 2014	30 June 2015		30 June 2014	30 June 2015
Assets			Liabilities
Cash and deposits at central banks	1,927.9	2,426.8	Amounts owed to credit institutions	13,080.3	12,412.9
Loans and advances to credit institutions			Amounts owed to customers	48,806.8	50,601.1
Repayable on demand	720.6	1,140.8	Debt securities	8,314.9	5,262.9
Other loans and advances	1,012.6	831.0	Financial liabilities held for trading	921.3	824.2
Loans and advances to customers	55,547.3	53,408.6	Hedging derivatives	243.8	779.3
at fair value through profit or loss			Provisions for liabilities and charges	415.9	302.8
Financial assets available for sale	10,490.1	11,703.6	Subordinated debt	3,928.8	1,660.5
Assets with repurchase agreement	76.7	31.3	Current income tax liabilities	7.9	6.5
Hedging derivatives	80.3	80.9	Deferred income tax liabilities	7.3	13.1
Financial assets held to maturity	2,744.0	436.7	Other liabilities	1,342.8	1,216.1
Investments in associated companies	443.2	305.4	Total Liabilities	77,069.8	73,079.5
Non current assets held for sale	1,570.8	1,674.7
Investment property	179.6	166.4	Equity
Property and equipment	728.8	706.1	Share capital	1,465.0	4,094.2
Current tax assets	39.1	40.5	Treasury stock	-32.8	-120.1
Deferred tax assets	2,194.3	2,544.6	Share premium	0.0	16.5
Other assets	989.1	808.8	Preference shares	171.2	171.2
	80,440.4	78,730.4	Other capital instruments	9.9	9.9
			Fair value reserves	187.5	-100.9
			Reserves and retained earnings	921.5	313.7
			Net income for the period attrib. to Shareholders	-62.2	240.7

80,440.4 78,730.4

Equity attrib to Shareholders of the Bank 2,660.1 4,625.2 Non-controlling interests 710.5 1,025.7 Total Equity 3,370.6 5,650.9

Consolidated Income Statement Per quarter

(Million euros)	Quarterly
	2Q 14	3Q 14	4Q 14	1Q 15	2Q 15
Net interest income	259.6	295.0	325.2	328.4	299.6
Dividends from equity instruments	2.5	0.1	0.1	2.0	3.8
Net fees and commission income	176.5	165.0	174.7	169.9	180.7
Other operating income	62.4	-13.8	-22.2	-18.0	-23.9
Net trading income	63.3	182.0	85.0	200.1	308.1
Equity accounted earnings	9.9	5.2	7.7	6.1	14.6
Banking income	574.2	633.6	570.5	688.4	782.9
Staff costs	163.2	154.6	157.6	153.3	155.7
Other administrative costs	113.9	109.7	117.3	106.7	106.4
Depreciation	15.9	16.5	17.2	16.7	16.6
Operating costs	293.1	280.9	292.0	276.6	278.6
Operating net income bef. imp.	281.1	352.7	278.4	411.8	504.3
Loans impairment (net of recoveries)	179.9	502.9	232.5	205.6	269.4
Other impairm. and provisions	54.6	29.0	66.3	70.1	21.7
Net income before income tax	46.6	-179.2	-20.3	136.1	213.2
Income tax	7.6	-173.0	73.1	36.3	18.1
Non-controlling interests	27.2	29.3	28.2	30.1	38.7
Net income (before disc. oper.)	11.7	-35.5	-121.6	69.6	156.3
Net income arising from discont. operations	-33.3	-0.5	-6.8	0.8	14.0
Net income	-21.5	-36.0	-128.4	70.4	170.3

Consolidated Income Statement (Portugal and International Operations)

For the 6 months period ended 30th June, 2014 and 2015

(Million euros)

(Million euros)
													Internatio	nal o	peratio ns
		Gro up			P o rtugal			T o tal		B ank M	illennium (P		M illennium bim (M		o z.)	M	illennium A ngo la		Other int. o		peratio ns
	jun 14	jun 15	Δ %	jun 14	jun 15	Δ %	jun 14	jun 15	Δ %	jun 14	jun 15	Δ %	jun 14	jun 15	Δ %	jun 14	jun 15	Δ %	jun 14	jun 15	Δ %
Interest income	1,350	1,170	-13.3%	885	692	-21.7%	465	478	2.8%	308	278	-9.6%	97	117	21.0%	57	80	39.5%	3	3	-8.5%
Interest expense	854	542	-36.5%	677	363	-46.4%	177	179	1.5%	133	117	-12.3%	30	42	39.8%	17	23	39.7%	-4	-3	6.7%
N et interest inco me	496	628	26.6%	208	329	58.5%	288	299	3.6%	175	161	-7.6%	6 6	7 5	12.5%	4 1	5 7	39.4%	7	6	-7.5%
Dividends from equity instruments	6	6	-0.1%	2	3	28.4%	3	3	-18.4%	0	0	-24.1%	0	0	-100.0%	3	3	-17.0%	0	0	-12.3%
Intermediatio n margin	502	634	26.3%	210	332	58.2%	292	302	3.4%	175	162	-7.6%	6 6	7 5	12.4%	4 4	5 9	35.5%	7	6	-7.5%
Net fees and commission income	341	351	2.8%	217	225	3.7%	124	126	1.2%	76	74	-3.2%	21	25	16.8%	14	15	0.7%	13	13	2.3%
Other operating income B asic inco me	47 890	-42 942	<-100% 5.9%	51 478	-44 513	<-100% 7.4%	-4 412	2 429	>100% 4.0%	-9 242	-5 230	42.1% -4.9%	6 9 4	7 106	12.7% 13.4%	0 5 8	0 7 4	>100% 28.1%	0 19	0 19	-29.8% -1.6%
Net trading income	175	508	>100%	132	426	>100%	43	82	89.2%	23	29	25.8%	9	22	>100%	11	29	>100%	1	2	>100%
Equity accounted earnings	23	21	-10.3%	23	21	-8.9%	0	0	--	0	0	--	0	0	--	0	0	--	0	0	--
B anking inco me	1,088	1,471	35.2%	633	960	51.8%	456	511	12.1%	264	258	-2.4%	103	128	24.5%	6 8	103	51.2%	2 0	2 1	6.1%
Staff costs	323	309	-4.5%	214	187	-12.5%	109	122	11.2%	64	67	3.3%	22	26	16.2%	15	20	35.6%	8	9	15.5%
Other administrative costs	221	213	-3.8%	121	116	-4.0%	101	97	-3.6%	61	51	-16.2%	19	24	22.6%	18	19	8.4%	3	3	10.8%
Depreciation	32	33	4.6%	16	15	-6.1%	15	18	16.0%	6	6	-7.4%	5	6	24.6%	4	6	44.5%	0	0	-16.4%
Operating co sts	577	555	-3.7%	351	319	-9.3%	226	237	4.9%	132	123	-6.2%	46	56	19.8%	37	45	23.4%	11	12	13.9%
Operating net inco me bef. imp.	512	916	79.0%	281	642	>100%	230	274	19.1%	133	135	1.5%	5 7	7 3	28.4%	3 2	5 8	83.3%	9	9	-3.2%
Loans impairment (net of recoveries)	372	475	27.8%	331	420	26.9%	41	55	34.7%	34	32	-5.8%	5	12	>100%	3	11	>100%	-1	0	98.9%
Other impairm. and provisions	114	92	-19.4%	114	88	-22.9%	-1	4	>100%	-1	2	>100%	0	1	>100%	0	0	-25.1%	0	0	>100%
N et inco me befo re inco me tax	2 6	349	>100%	-164	134	>100%	190	216	13.6%	100	100	0.8%	5 2	6 0	16.0%	2 8	4 7	64.3%	10	9	-14.3%
Income tax	2	54	>100%	-37	13	>100%	39	42	7.0%	23	21	-9.1%	9	11	20.2%	5	8	59.6%	1	1	-12.0%
Non-controlling interests	53	69	30.9%	0	0	<-100%	52	69	32.4%	0	0	--	0	1	26.2%	0	0	--	52	69	32.5%
N et inco me (befo re disc. o per.)	-29	226	>100%	-127	121	>100%	9 9	105	6.2%	7 6	7 9	3.8%	4 2	4 8	14.9%	2 3	3 8	65.4%	-43	-61	-42.5%
Net income arising from discont. operations -34		15	>100%
N et inco me	-62	241	>100%

Investor Relations Division Rui Coimbra, Head of Investor Relations

Luís Pedro Monteiro Luís Morais Paula Dantas Henriques Lina Fernandes

Investor Relations Reporting and Ratings

Tl: +351 21 1131 084 Tl: + 351 21 1131 337

Email: Investors@millenniumbcp.pt

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 4,094,235,361.88.