Banco Comercial Portugues

Investor Presentation • Jul 29, 2019

l 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, as amended.

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

l Figures for the first half of 2019 not audited.

l The information in this presentation is for information purposes only, and should be read in conjunction with all other information made public by the BCP Group.

(Million euros)

Improved profitability, with net earnings of €169.8 million in the 1st half of 2019, on the back of stronger core income (+5.3%) and lower impairment and provision charges (-13.1%)

220.6 200.3 59.2 42.8 279.8 243.1 1H18 1H19 -13.1% Cost of risk 88bp 74bp 687.7 740.1 340.2 342.2 1,027.9 1,082.3 1H18 1H19 +5.3% Other Loans Fees and commissions Net interest income +7.6% +0.6% -27.7% -9.2% Core income (net interest income + commissions) (Million euros) Impairment and provisions (Million euros)

5

Significant decrease of NPE (-€1.7 billion from June 30, 2018) and of cost of risk (74bp in the 1st half of 2019)

106% 109% 108% 50% 52% 54% Jun 18 Dec 18 Jun 19 103 105 76 ^{88 92 74} Jun 18 Dec 18 Jun 19 Total coverage* Coverage by loan-loss reserves Lower cost of risk Cost of risk PT, bp Cost of risk Group, bp

Capital ratio of 14.7%*, comfortably above SREP requirements. Organic capital generation and AT1 issue (Jan.19) more than compensate for impacts of Eurobank's acquisition and of the reduction of the pension fund discount rate

Increasing business volumes, with performing loans up by €5.9 billion and total Customers funds up €6.8 billion from June 30, 2018

7

Growing active Customer base*

('000 Customers)

Bringing technology to processes and business model, benefitting Customer relationship and the Bank's efficiency

Customer journeys

• Transforming most relevant journeys
• Digital labs
• Advanced analytics
• More advanced and efficient propensity models

User experience

• New apps (individuals and trading)
• New in-app credit processes
• Easier transfers and payments

Operating transformation

• Robotics
• Artificial intelligence
• Text analytics

Talent development

• Human-centered design
• Machine learning
• Automation and robotics

IT/Digital platform adaptability

• Modular architecture and cloud
• Integration and connection with third party platforms
• Cybersecurity

Recent rating upgrades recognise the improvement of BCP's profitability, asset quality and business model

• DBRS has upgraded senior debt to investment grade on June 3, whereas Moody's upgraded deposits to investment grade on July 24
• The senior debt rating was upgraded by 3 notches by both S&P and Moody's
• Excluding the effect of Government support removal due to changes in methodology, the intrinsic rate of BCP was upgraded by 4 notches by S&P, 6 notches by Moody's and 2 notches by Fitch

Net earnings of €169.8 million in 1st half of 2019

(million euros)		1H18	1H19	YoY	Impact on earnings
Net interest income		687.7	740.1	+7.6%	+52.4
Commissions		340.2	342.2	+0.6%	+2.0
Core income		1,027.9	1,082.3	+5.3%	+54.4
	Operating costs excluding non-usual items	-492.8	-525.8	+6.7%	-33.0
Core earnings		535.1	556.5	+4.0%	+21.4
Non-usual staff costs		-8.0	-22.4	+180.3%	-14.4
Other income*	Gains on PT sovereign debt: €13.4m in 1H18, €55.4m in 1H19 Impact of low interest rates on insurer: -€8.6m no 1H19	28.9	42.0	+45.2%	+13.1	Compensation for temporary salary cuts: -€12.4m Restructuring costs: -€10.0m
Operating net income		556.0	576.0	+3.6%	+20.1
Impairment and provisions		-279.8	-243.1	-13.1%	+36.7
Net income before income tax		276.2	332.9	+20.5%	+56.7	IFRS 9 First day impairment Eurobank: -€18.8m in 1H19
	Income taxes, non-controlling interests and discontinued operations	-125.5	-163.1	+30.0%	-37.6
Net income		150.6	169.8	+12.7%	+19.1

*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.

Net earnings of €169.8 million, a significant improvement when non-usual items are excluded

(Million euros)

Net interest income increases in spite of an adverse environment

Stronger comissions, in spite of lower market-related fees

Growing other income*, in spite of higher mandatory contributions and of a low interest rate environment

*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.

Recurring operating costs reflect growth strategy

Millennium bcp: one of the most efficient banks in the Eurozone

*Core income = net interest income + net fees and commission income. Cost to core income excludes compensation for temporary salary cuts

Cost of risk continues trending to normalisation

Lower NPE and strengthened coverage

	Jun 18	Jun 19
NPL>90 days ratio	8.0%	5.2%
NPE ratio inc. securities and off-BS (EBA)	9.3%	6.4%
NPE ratio (loans only)	13.2%	9.1%

*By loan-loss reserves, expected loss gap and collaterals. NPE include loans only, except if otherwise indicated.

Customer funds keep growing

*Deposits, debt securities, assets under management, assets placed with Customers and insurance products (savings and investments).

Increasing loan portfolio

Comfortable liquidity position

25

Capital levels adjusted to business model

Capital at adequate levels

Leverage ratio

(Fully implemented, latest available data)

Leverage ratio at 7.0% as of June 30, 2019, a comfortable and comparatively strong figure in European banking

RWA density

(RWAs as % of assets, latest available data)

High RWA density (55% as of June 30, 2019), comparing favourably to most European banking markets

Pension fund

Key figures

(Million euros)

	Dec 18	Jun 19
Pension liabilities	3,066	3,319
Pension fund	3,078	3,174
Liabilities' coverage	100%	96%
Fund's profitability	+0.2%	+4.7%
Actuarial differences*	(98)	(158)

Assumptions

	Dec 18	Jun 19
Discount rate	2.10%	1.60%
	0.25% until 2019	0.25% until 2019
Salary growth rate	0.75% after 2019	0.75% after 2019
	0.00% until 2019	0.00% until 2019
Pensions growth rate	0.50% after 2019	0.50% after 2019
Projected rate of return of fund assets	2.10%	1.60%
Mortality Tables
Men	Tv 88/90	Tv 88/90
Women	Tv 88/90-3 years	Tv 88/90-3 years

Pension fund

• Discount rate and projected rate of return revised downwards to 1.60%, reflecting lower market rates
• Liability coverage of 96%
• Negative actuarial differences (-€158 million in the 1st half of 2019) as a result of changes to the fund's assumptions, partially compensated by the funds' profitability

*Negative actuarial differences resulted from the performance of the fund below assumptions in 2018, and from changes to the fund's assumptions, partially compensated by the funds' profitability, in 2019.

Portugal

Increased net income

Net income*

(Million euros)

Net operating revenue

(Million euros)

• Net earnings of €72.7 million in the 1st half of 2019, +23.2% compared to €59.0 million in the same period of the previous year
• Net earnings were driven by a significant reduction in credit-loss charges (-26.6%, with cost of risk decreasing to 76bp from 103bp), as well as by higher net operating revenue

Net interest income

• Net interest income stood at €399.4 million in the 1st half of 2019, comparing to €384.8 million in the same period of 2018. The negative effects of lower credit yields, reflecting the normalisation of the macro-economic environment was more than compensated by the favourable impacts of a lower wholesale funding cost, of the continued decline in the remuneration of time deposits and of a growing credit portfolio (as the expansion of the performing portfolio exceeded the decrease in NPE)
• Net interest income stood at €197.9 million in the 2nd quarter of 2019, comparing to €201.5 million in the 1st quarter. The positive impacts from a lower wholesale funding, from the declining remuneration of time deposits and from a growing credit portfolio were more than compensated by lower credit yields and by the unfavourable effect of a lower securities portfolio

Continued effort to reduce the cost of deposits

Spread on the performing loan book

• Continued improvement in the spread of the portfolio of term deposits: from -0.6% in 1st half of 2018 to -0.5% in the same period of 2019; front book priced at an average spread of -40bp in the 1st half of 2019, still below the current back book's
• Spread on the performing loan portfolio stood at 2.7% in the 1st half of 2019 (same spread as in the 1st half of 2018)
• NIM stood at 1.7%

Commissions and other income*

(Million euros) (Million euros)

	1H18	1H19	YoY
Banking fees and commissions	201.0	209.6	+4.3%
Cards and transfers	53.1	52.8	-0.6%
Loans and guarantees	53.5	54.9	+2.6%
Bancassurance	40.7	43.4	+6.6%
Customer account related	46.9	50.9	+8.6%
Other fees and commissions	6.9	7.7	+12.2%
Market related fees and commissions	32.9	25.9	-21.4%
Securities operations	29.6	23.1	-21.8%
Asset management	3.3	2.8	-17.1%
Total fees and commissions	234.0	235.5	+0.7%

(Million euros) Fees and commissions Other income*

• Stable commissions in Portugal, despite the challenging context. Emphasis on income related to loans and guarantees, to bancassurance and to accounts standing out, more than compensating for lower market-related fees
• Increased other income due to sales of sovereign and corporate debt, lower losses on credit sales, as well as gains on foreclosed assets sales

*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.

Controlled recurring operating costs

*Includes impact of IFRS16.

Lower NPE, with reinforced coverage

140.6

NPE build-up

	Jun 19	Jun 19
(EUR million)	vs.Jun 18	vs.Dec 18
Opening balance	5,913	4,797
Net exits	-627	-255
Write-offs	-601	-324
Sales	-598	-131
Ending balance	4,088	4,088

• NPE in Portugal down by €1.8 billion, from €5.9 billion as at June 30, 2018 to €4.1 billion as at the same date of 2019
• This decrease results from net outflows of €0.6 billion, sales of €0.6 billion and write-offs of €0.6 billion
• The decrease of NPE from June 30, 2018 is attributable to a €1.2 billion reduction of NPL>90d and to a €0.6 billion decrease of other NPE
• Significant NPE reduction in the 1st half of 2019, from €4.8 billion as at December 31, 2018 to €4.1 billion as at June 30, 2019
• Reduction of the cost of risk to 76bp in the 1st half of 2019 from 103bp in the same period of 2018, with a reinforcement of NPE coverage by loan-loss reserves to 53% from 48%, respectively

191.5

NPE coverage

• Total coverage* ≥100%, for both individuals and companies, and for both NPE categories (NPL>90d and other NPE)
• Coverage by loan-loss reserves is stronger in loans to companies, where real-estate collateral, usually more liquid and with a more predictable market value, accounts for a lower coverage than in loans to individuals: coverage by loan-losses was 61% for companies NPE as at June 30, 2019, reaching 70% for companies NPL>90d (79% and 94%, respectively, if cash, financial collateral and expected loss gap are included)

*By loan-loss reserves, expected loss gap and collaterals. NPE include loans to Customers only.

Foreclosed assets and corporate restructuring funds

Corporate restructuring funds

(Million euros)

• Net foreclosed assets were down by 22.6% between June 30, 2018 and June 30, 2019. Valuation of foreclosed assets by independent providers exceeded book value by 26%
• 2,111 properties were sold during the 1st half of 2019 (2,198 properties in the same period of 2018), with capital gains increasing from €31 million to €46 million
• Corporate restructuring funds decreased 2.9% to €990 million at June 30, 2019. The original credit exposure on these funds totals €2,006 million, with total reserves (original credit, plus restructuring funds) corresponding to a 51% coverage

Growing customer funds and loans to customers

18.3 21.4 19.2 17.5 1.1 1.5 14.4 15.3 53.0 55.6 +4,9% (Billion euros) Term deposits Other BS funds Off-BS funds Individuals: +5.8% 18.3 17.9 2.0 2.0 17.1 17.2 37.4 37.2 -0.4% (Billion euros) Companies Personal and other Mortgage NPE: -30.9% (-€1.8 billion) Performing: +5.3% (+€1.7 billion) Total Customers funds* Loans to Customers (gross) Demand deposits

Jun 18 Jun 19

Jun 18 Jun 19

Strong credit activity to companies in Portugal

• Performing credit portfolio in Portugal up by €1.7 billion (+5.3%) from June 30, 2018
• Millennium bcp reinforced its role as the Bank of Portuguese Companies:
• Strong performance of loans to companies, up by €0.9 billion, with new leasing and factoring business, up by 24.1% and by 19.8% from June 30, 2018, respectively, being particularly outstanding
• Millennium bcp was the leader for the "PME Excelência'18" and "PME Líder'18" programmes, with the largest number of submissions and awards among participating banks
• Main bank for Portuguese companies (18.1% market share), closest to Customers, most appropriate products (BFin Data-E 2019)
• Most innovating and most used bank in NetBanking, with a 26.9% market share (BFin Data-E 2019), with a strong focus on digital channels and on solutions that simplify managing companies

International operations

Contribution from international operations to group earnings

				(Million euros)
	1H18	1H19	Δ % local currency	Δ % euros
Poland	81.2	77.9	-4.1%	-5.4%
Mozambique	52.9	48.0	-9.3%	-6.1%
Angola*
Before IAS 29 impact	6.5	7.0
IAS 29 impact**	-2.0	-0.7
Total Angola including IAS 29 impact	4.5	6.3
Other	8.6	6.3
Net income	147.2	138.5
Non-controlling interests (Poland and Mozambique)	-58.2	-54.9
Exchange rate effect	0.8	--
Contribution from international operations	89.9	83.7		-6.9%
	-6.9%
89.9			83.7
Contribution 1H18			Contribution 1H19

*Contribution of the Angolan operation. | **Goodwill impairment (-€4.8 million) and contribution revaluation (+€2.8 million) in the 1 st half of 2018, Amortization of the effect of the application of IAS 29 calculated as at 31 December 2018 (-€0.7 million) in the 1 st half of 2019. | Subsidiaries' net income presented for 2018 at the same exchange rate as of 2019 for comparison purposes.

Net earnings affected by Eurobank's acquisition

309.5 217|217|217 365.1 1H18 1H19 +18.0% Net operating revenue (Million euros)

• Net earnings of €77.9 million, with ROE of 9.7%
• Net operating revenue up by 18.0%, driven by net interest income; operating costs impacted by a higher contribution to the resolution fund, by Eurobank's staff and integration costs, and by increased IT costs
• Business volumes impacted by Eurobank's acquisition: Customer funds up by 23.6%, while loans to Customers increased by 49.4%, excluding FX-denominated mortgage loans
• CET1 ratio of 16.9% as of June 30, 2019, with total capital of 20.1%
• Experience redesign and new app and site features strengthen Customer service (Autopay – automatic toll payment, and online access to Family 500+, the State family support programme )
• Best bank in Poland by Global Finance

Successful completion of Eurobank's acquisition

Increased net interest income

Commissions and other income

(Million euros; does not include tax on assets and contributions to the resol. fund and to the DGF)

*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 (€6.6 million in the 1st half of 2019 and €5.6 million in the 1st half of 2018) is presented in net trading income. FX effect excluded. €/Zloty constant at June 2019 levels: Income Statement 4.28250833; Balance Sheet 4.2465.

Credit quality

• NPL>90d accounted for 2.4% of total credit as of June 20, 2019 (2.7% as of June 30, 2018)
• Coverage of NPL>90d by loan-loss reserves at 110% (133% as of June 30, 2018)
• Cost of risk of 80bp (47bp in the 1st half of 2018), 48bp if first day impairment of Eurobank is excluded

Growing volumes

Loans to Customers (gross)

(Million euros)

FX effect excluded. €/Zloty constant at June 2019 levels: Income Statement 4.28250833; Balance Sheet 4.2465.

Normalisation of interest rate environment leads to lower earnings…

• Net earnings of €48.0 million, with ROE of 20.6%, reflecting lower net interest income as a consequence of the normalisation of interest rates
• Customer funds grew 3.8%, with loan portfolio down by 17.2% reflecting a conservative approach under a challenging environment
• Capital ratio of 41.3%
• New "WhatsIZI" solution for banking services through Whatsapp, also featuring reinforced security on the onboarding process
• Utilisation of robotics on the bank's institutional facebook's chat bot, allowing for easier interaction with Customers, providing also information on the bank's range of products and services
• Best bank in Mozambique by Global Finance, for the 10th year in a row

… reflecting lower net interest income

FX effect excluded. €/Metical constant at June 2019 levels: Income Statement 70.92500000; Balance Sheet 70.7100.

Credit quality performance influenced by challenging environment

Business volumes reflect a conservative approach under a challenging environment

FX effect excluded. €/Metical constant at June 2019 levels: Income Statement 70.92500000; Balance Sheet 70.7100.

Key figures

Strategic Plan 2021

Franchise growth		1H18	1H19	2021
	Active Customers	4.7 million	4.9 million	>6 million
	Digital Customers	53%	57%	>60%
Value creation	Mobile Customers	31%	37%	>45%
	Cost to income	47% (47% excl. non-usual costs)	49% (47% excl. non-usual costs)	≈40%
	RoE	5.3%	5.7%	≈10%
	CET1	11.7%	12.2%	≈12%
	Loans-to-deposits	88%	88%	<100%
Asset quality	Dividend payout	--	--	≈40%
	NPE stock	€6.7 billion	€5.0 billion	≈€3 billion Down ≈60% from 2017
	Cost of risk	88bp	74bp	<50bp

Awards in 2019

Millennium bcp: Leadership in the "PME Excelência '18" and "PME Líder '18" programmes , with the largest number of submissions and awards among participating banks

Millennium bcp: Marketeer award, "Banking" category (3rd year in a row)

Millennium bcp: Closest to Customers, clearest information, most satisfied digital channels' Customers, most recommended, best service (Basef Banca, June 2019)

Millennium bcp: Market leader in factoring, confirming and leasing, according to the Portuguese association of leasing and factoring companies

Bank Millennium: Best bank in Poland

Millennium bim: Best bank in Mozambique

Millennium bim: Best trade finance provider in Mozambique

Millennium bim: Global Finance Innovators 2019 award, "Payments" category for the "Millennium IZI" service

Millennium bcp Consumer choice 2019, "Large Banks" category

Barómetro Financeiro 2019

Millennium bcp Main bank for companies; most appropriate products; most innovating; closest to Customers

Millennium bcp Best investment bank in Portugal

Appendix

Sovereign debt portfolio

(Consolidated, million euros)

Portugal	5,938	7,375	7,229	+22%	-2%
T-bills and other	673	1,932	1,665	+147%	-14%
Bonds	5,265	5,443	5,564	+6%	+2%
Poland	3,936	5,385	4,328	+10%	-20%
Mozambique	626	263	290	-54%	+10%
Other	1,090	1,091	1,010	-7%	-7%	≤1y >1y, ≤2y 22%
Total	11,590	14,115	12,857	+11%	-9%	18%
						The sovereign debt portfolio totalled €12.9 billion, €10.2 billion of which maturing until 5 years


Sovereign debt portfolio Sovereign debt maturity

• The sovereign debt portfolio totalled €12.9 billion, €10.2 billion of which maturing until 5 years
• The Portuguese sovereign debt portfolio totalled €7.2 billion, whereas the Polish and Mozambican portfolios amounted

Sovereign debt portfolio

	Portugal	Poland	Mozambique	Other	Total
Trading book*	35	165	0	1	200
≤ 1 year	32	9	0	0	40
> 1 year and ≤ 2 years	3	53	0	0	57
> 2 years and ≤ 5 years	0	66	0	0	66
> 5 years and ≤ 8 years	0	30	0	0	30
> 8 years and ≤ 10 years	0	1	0	0	1
> 10 years	0	5	0	1	6
Banking book**	7,194	4,163	290	1,009	12,657
≤ 1 year	1,696	694	44	377	2,811
> 1 year and ≤ 2 years	46	1,959	18	232	2,255
> 2 years and ≤ 5 years	3,276	1,270	121	349	5,016
> 5 years and ≤ 8 years	1,904	177	0	0	2,081
> 8 years and ≤ 10 years	178	60	37	51	327
> 10 years	94	3	70	0	167
Total	7,229	4,328	290	1,010	12,857
≤ 1 year	1,727	703	44	377	2,851
> 1 year and ≤ 2 years	50	2,012	18	232	2,312
> 2 years and ≤ 5 years	3,276	1,336	121	349	5,082
> 5 years and ≤ 8 years	1,904	207	0	0	2,111
> 8 years and ≤ 10 years	178	61	37	51	328
> 10 years	94	9	70	1	173

*Includes financial assets held for trading at fair value through net income (€32 million).

**Includes financial assets at fair value through other comprehensive income (€12,187 million) and financial assets at amortised cost (€470 million).

Diversified and collateralised portfolio

Loan portfolio Mortgage 47% Personal/ other 11% Companies 43% Loans per collateral LTV of the mortgage portfolio in Portugal 0-40 40-50 16% 11% 50-60 14% 60-75 29% 75-80 10% 80-90 11% >90 10% Real guarantees 59% Other guarantees 26% Unsecured 15% (Consolidated)

Loans

• Loans to companies accounted for 43% of the loan portfolio as at June 30, 2019, including 7% to construction and real-estate sectors
• Mortgage accounted for 47% of the loan portfolio, with low delinquency levels and an average LTV of 66%
• 88% of the loan portfolio is collateralised

Collaterals

• Real estate accounts for 93% of total collateral value
• 80% of the real estate collateral is residential

Consolidated earnings

(million euros)	1H18	1H19	YoY	Impact on earnings
Net interest income	687.7	740.1	+7.6%	+52.4
Net fees and commissions	340.2	342.2	+0.6%	+2.0
Other income*	28.9	42.0	+45.2%	+13.1
Net operating revenue	1,056.8	1,124.2	+6.4%	+67.4
Staff costs	-289.8	-324.2	+11.9%	-34.5
Other administrative costs and depreciation	-211.0	-223.9	+6.1%	-12.9
Operating costs	-500.8	-548.2	+9.5%	-47.4
Profit before impairment and provisions	556.0	576.0	+3.6%	+20.1
Loans impairment (net of recoveries)	-220.6	-200.3	-9.2%	+20.3
Other impairment and provisions	-59.2	-42.8	-27.7%	+16.4
Impairment and provisions	-279.8	-243.1	-13.1%	+36.7
Net income before income tax	276.2	332.9	+20.5%	+56.7
Income taxes	-71.9	-121.1	+68.4%	-49.2
Non-controlling interests	-55.4	-55.5	+0.1%	-0.1
Net income from discontinued or to be discontinued operations	1.8	13.4		+11.7
Net income	150.6	169.8	+12.7%	+19.1

*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.

Consolidated balance sheet

(Million euros)

	30 June 2019	30 June 2018
ASSETS
Cash and deposits at Central Banks	3,586.1	2,165.8
Loans and advances to credit institutions repayable on demand	313.4	240.6
Financial assets at amortised cost
Loans and advances to credit institutions	971.2	878.4
Loans and advances to customers	49,564.4	44,834.9
Debt instruments	3,378.1	3,103.2
Financial assets at fair value through profit or loss
Financial assets held for trading	855.7	1,037.2
Financial assets not held for trading mandatorily at fair value through profit or loss	1,417.9	1,386.4
Financial assets designated at fair value through profit or loss	31.5	32.9
Financial assets at fair value through other comprehensive income	13,386.0	12,049.8
Assets with repurchase agreement	-	24.9
Hedging derivatives	207.3	95.7
Investments in associated companies	422.0	488.6
Non-current assets held for sale	1,582.7	2,101.5
Investment property	9.7	12.1
Other tangible assets	712.4	487.8
Goodwill and intangible assets	214.7	171.6
Current tax assets	52.5	27.0
Deferred tax assets	2,798.7	2,938.1
Other assets	1,369.1	1,023.8
TOTAL ASSETS	80,873.2	73,100.2

	30 June 2019	30 June 2018
LIABILITIES
Financial liabilities at amortised cost
Resources from credit institutions	7,231.5	6,985.8
Resources from customers	56,877.4	50,633.7
Non subordinated debt securities issued	1,771.8	1,706.3
Subordinated debt	1,302.0	1,151.7
Financial liabilities at fair value through profit or loss
Financial liabilities held for trading	332.0	340.0
Financial liabilities at fair value through profit or loss	3,514.5	3,716.7
Hedging derivatives	278.9	192.2
Provisions	314.4	325.9
Current tax liabilities	9.2	7.3
Deferred tax liabilities	10.6	4.4
Other liabilities	1,665.8	1,149.2
TOTAL LIABILITIES	73,308.1	66,213.2
EQUITY
Share capital	4,725.0	5,600.7
Share premium	16.5	16.5
Preference shares	-	59.9
Other equity instruments	402.9	2.9
Legal and statutory reserves	240.5	264.6
Treasury shares	(0.1)	(0.3)
Reserves and retained earnings	793.7	(292.6)
Net income for the period attributable to Bank's Shareholders	169.8	150.6
TOTAL EQUITY ATTRIBUTABLE TO BANK'S SHAREHOLDERS	6,348.3	5,802.4
Non-controlling interests	1,216.8	1,084.5
TOTAL EQUITY	7,565.1	6,886.9
TOTAL LIABILITIES AND EQUITY	80,873.2	73,100.2

Consolidated income statement per quarter

(Million euros)

	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19
Net interest income	342.8	365.2	370.8	362.7	377.4
Dividends from equity instruments	0.6	0.0	0.0	0.0	0.6
Net fees and commission income	172.4	169.9	174.0	166.6	175.6
Other operating income	-61.0	1.7	-1.0	-10.6	-64.8
Net trading income	42.6	12.6	-11.0	60.3	35.2
Equity accounted earnings	21.6	30.5	17.3	18.6	2.6
Banking income	519.0	579.7	550.1	597.7	526.6
Staff costs	147.5	145.8	157.2	152.2	172.0
Other administrative costs	93.1	93.1	100.9	80.5	86.5
Depreciation	14.2	14.5	14.8	26.8	30.1
Operating costs	254.8	253.4	273.0	259.5	288.6
Profit bef. impairment and provisions	264.2	326.3	277.1	338.1	237.9
Loans impairment (net of recoveries)	114.6	116.2	127.9	86.5	113.8
Other impairm. and provisions	35.3	33.0	44.2	17.4	25.4
Net income before income tax	114.3	177.1	105.0	234.2	98.7
Income tax	22.6	37.6	28.5	65.4	55.6
Non-controlling interests	28.5	30.5	31.9	28.4	27.1
Net income (before disc. oper.)	63.3	109.0	44.5	140.4	16.0
Net income arising from discont. operations	1.8	-2.2	-0.9	13.5	0.0
Net income	65.1	106.8	43.6	153.8	15.9

Income statement

(Million euros)

For the 6-month periods ended June 30th, 2018 and 2019

(Million euros)
For the 6-month periods ended June 30th, 2018 and 2019
								Internatio nal o peratio ns
	Gro up			P o rtugal			T o tal		B ank M illennium (P o land)		M illennium bim (M o z.)		Other int. o peratio ns
	Jun 18	Jun 19	Δ %	Jun 18	Jun 19	Δ %	Jun 18	Jun 19	Δ %	Jun 18	Jun 19	Δ %	Jun 18	Jun 19	Δ %	Jun 18	Jun 19	Δ %
Interest income	936	953	1.8%	496	478	-3.5%	440	475	7.8%	292	347	18.9%	145	122	-15.7%	3	5	59.2%
Interest expense	248	213	-14.3%	111	79	-29.0%	137	134	-2.4%	86	101	16.4%	53	33	-37.1%	-2	0	>100%
N et interest inco me	688	740	7.6%	385	399	3.8%	303	341	12.5%	206	247	20.0%	9 2	8 9	-3.4%	5	5	-4.3%
Dividends from equity instruments	1	1	9.0%	0	0	-100.0%	1	1	22.0%	1	1	18.9%	0	0	91.4%	0	0	-100.0%
Intermediatio n margin	688	741	7.6%	385	399	3.8%	303	341	12.5%	206	247	20.0%	9 2	8 9	-3.3%	5	5	-4.3%
Net fees and commission income	340	342	0.6%	234	236	0.7%	106	107	0.4%	80	79	-0.9%	14	15	5.3%	12	13	2.8%
Other operating income	-90	-75	16.3%	-59	-40	32.5%	-31	-36	-14.0%	-42	-46	-11.3%	11	11	2.5%	0	0	12.3%
B asic inco me	938	1,007	7.4%	560	595	6.3%	378	412	9.0%	244	280	14.7%	117	115	-1.8%	17	17	1.0%
Net trading income	77	96	24.0%	46	53	16.8%	31	42	34.6%	26	33	27.3%	4	7	89.3%	2	2	22.7%
Equity accounted earnings	41	21	-48.8%	29	15	-48.0%	13	6	-50.5%	0	0	--	0	0	--	13	6	-50.5%
B anking inco me	1,057	1,124	6.4%	634	664	4.6%	422	461	9.1%	270	313	15.9%	121	122	1.1%	3 2	2 6	-18.5%
Staff costs	290	324	11.9%	187	207	10.7%	102	117	14.2%	75	87	16.1%	19	21	10.6%	9	9	4.9%
Other administrative costs	183	167	-8.6%	108	94	-12.9%	75	73	-2.3%	51	49	-4.0%	21	21	2.2%	3	3	-4.9%
Depreciation	28	57	>100%	18	34	89.2%	10	23	>100%	6	17	>100%	4	5	32.1%	0	1	>100%
Operating co sts	501	548	9.5%	313	335	7.0%	188	213	13.5%	132	153	15.7%	43	47	8.6%	12	13	6.8%
P ro fit bef. impairment and pro visio ns	556	576	3.6%	321	328	2.2%	235	248	5.5%	138	160	16.0%	7 8	7 5	-3.1%	19	13	-34.8%
Loans impairment (net of recoveries)	221	200	-9.2%	192	141	-26.6%	29	60	>100%	21	51	>100%	14	12	-18.1%	-6	-3	54.2%
Other impairm. and provisions	59	43	-27.7%	50	41	-17.6%	9	2	-80.6%	4	0	<-100%	-1	2	>100%	7	0	-100.0%
N et inco me befo re inco me tax	276	333	20.5%	8 0	147	83.6%	196	186	-5.1%	113	109	-3.8%	6 4	6 2	-3.9%	18	15	-17.6%
Income tax	72	121	68.4%	25	74	>100%	47	47	-0.1%	31	31	0.5%	13	14	4.1%	3	2	-27.0%
Non-controlling interests	55	55	0.1%	-4	0	91.7%	60	56	-6.4%	0	0	--	0	0	7.9%	59	55	-6.5%
N et inco me (befo re disc. o per.)	149	156	5.0%	5 9	7 3	23.2%	9 0	8 4	-6.9%	8 2	7 8	-5.4%	5 1	4 8	-6.1%	-44	-42	3.1%
Net income arising from discont. operations	2	13	>100%
N et inco me	151	170	12.7%

Glossary (1/2)

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 loans impairment (P&L) accounted in the period to loans to customers at amortised cost and debt instruments at amortised cost related to credit operations before impairment at the end of the period.

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.

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 (net of reversals and net of recoveries - principal and accrual) of financial assets at amortised cost for loans to customers 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.

Glossary (2/2)

• 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 and results from derecognition of financial assets measured at fair value through other comprehensive.
• 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 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 (net of reversals) of financial assets at amortised cost for loans and advances of credit institutions, impairment of financial assets (at fair value through other comprehensive income and at amortised cost not associated with credit operations), 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 and trading derivatives), financial assets at fair value through other comprehensive income and assets with repurchase agreement.
• 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.