Management Reports • May 31, 2013
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In accordance with Article 10 of the CMVM Regulation nr.5/2008 we are pleased to transcribe the
1st QUARTER 2013 ACTIVITY REPORT
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 3,500,000,000.00.
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| Euro million | 31 Mar. 13 | 31 Mar. 12 | Change 13 / 12 |
|---|---|---|---|
| Balance sheet | |||
| Total assets | 89,474 | 92,029 | -2.8% |
| Loans to customers (gross) (1) | 66,507 | 71,243 | -6.6% |
| Total customer funds (1) | 70,622 | 67,328 | 4.9% |
| Balance sheet customer funds (1) | 57,434 | 54,525 | 5.3% |
| Customer deposits (1) | 51,873 | 48,830 | 6.2% |
| Loans to customers, net / Customer deposits (2) Loans to customers, net / Customer deposits (3) |
121% | 140% | |
| Results | 121% | 138% | |
| Net income | (152.0) | 40.8 | |
| Net interest income | 183.0 | 309.4 | -40.9% |
| Net operating revenues | 426.6 | 648.7 | -34.2% |
| Operating costs | 305.0 | 346.2 | -11.9% |
| Loan impairment charges (net of recoveries) | 188.4 | 152.3 | 23.7% |
| Other impairment and provisions | 50.8 | 45.8 | 10.9% |
| Income taxes | |||
| Current | 15.2 | 21.0 | -27.7% |
| Deferred | (43.2) | 13.0 | - |
| Profitability | |||
| Net operating revenues / Average net assets (2) | 2.0% | 2.8% | |
| Return on average assets (ROA) (4) | -0.6% | 0.3% | |
| Income before taxes and non-controlling interests / Average net assets (2) | -0.7% | 0.4% | |
| Return on average equity (ROE) | -19.7% | 4.5% | |
| Income before taxes and non-controlling interests / Average equity (2) | -17.3% | 8.9% | |
| Credit quality | |||
| Overdue and doubtful loans / Total loans (2) | 8.8% | 6.8% | |
| Overdue and doubtful loans, net / Total loans, net (2) | 2.4% | 1.9% | |
| Credit at risk / Total loans (2) | 13.8% | 10.9% | |
| Credit at risk, net / Total loans, net (2) | 7.8% | 6.2% | |
| Impairment for loan losses / Overdue loans by more than 90 days | 96.3% | 100.3% | |
| Efficiency ratios (2) | |||
| Operating costs / Net operating revenues | 71.5% | 53.4% | |
| Operating costs / Net operating revenues (Portugal) | 86.8% | 50.9% | |
| Staff costs / Net operating revenues | 39.8% | 30.0% | |
| Capital | |||
| Own funds | 6,750 | 5,353 | |
| Risk weighted assets | 53,625 | 57,188 | |
| Core tier I (2) | 12.1% | 9.2% | |
| Tier I (2) | 11.5% | 8.6% | |
| Total (2) | 12.6% | 9.4% | |
| Branches | |||
| Portugal activity | 802 | 872 | -8.0% |
| Foreign activity | 860 | 840 | 2.4% |
| Employees | |||
| Portugal activity | 8,954 | 9,944 | -10.0% |
| Foreign activity | 11,251 | 11,629 | -3.3% |
(1) Adjusted for a Repo operation of Euro 697 million on 31 March 2012.
(2) According to Instruction nr. 16/2004 from the Bank of Portugal, as the currently existing version. (3) Calculated in accordance with the definition from the Bank of Portugal.
(4) Considering net income before non-controlling interests.
Following the signature on 22 April 2013 of a definitive agreement with Piraeus Bank regarding the sale of the entire share capital of Millennium bank in Greece, it is expected that the transactions related to this agreement shall be completed in the second quarter of 2013, subject to the final regulatory approvals.
In this context, and according to IFRS 5, Millennium bank in Greece is now classified as a discontinued operation, which continues to be consolidated by the full consolidation method in the financial statements as at 31 March 2013, with the impact on results presented on a separate line item in the profit and loss account, defined as income arising from discontinued operations. At the consolidated balance sheet level, the presentation of assets and liabilities of Millennium bank in Greece has not been changed compared to the criteria considered in the consolidated financial as at 31 December 2012.
Millennium bcp's consolidated net income was negative by Euro 152.0 million in the first quarter of 2013, compared with a gain of Euro 40.8 million posted in the first quarter of 2012.
Net income in the first quarter of 2013 includes the impact of results associated with the Greek operation, together with other unfavourable impacts, in particular:
Comparing with the first quarter of 2012, consolidated net income was penalised by the activity in Portugal, reflecting the evolution of net operating revenues and the reinforcement of impairment charges for loan losses, despite the reduction in operating costs, determined by the performance in staff costs and other administrative costs.
Net income associated with the international activity, excluding the net income from discontinued operations, showed a favourable performance and rose by 12.0%, from the first quarter of 2012, benefiting from the increase in net operating revenues and from the reduction in operating costs.
Net interest income stood at Euro 183.0 million in the first quarter of 2013, which compares with Euro 309.4 million in the first quarter of 2012, penalised by the impact of the issuance of hybrid financial instruments subscribed by the Portuguese State, for which interest expenses posted in the first quarter of 2013 totalled Euro 66.6 million.
Additionally, net interest income was influenced by the unfavourable business volume effect, in particular in the activity in Portugal, reflecting the persistence of an adverse macroeconomic context, leading to a decline in demand by individuals and companies. Nevertheless, Millennium bcp continued to actively support customers with sustainable business plans in the long term, highlighting the support in the access to lines of credit focused on investment and on production in different sectors of the Portuguese economy.
The performance of net interest income was, also, restrained by the unfavourable interest rate effect, determined by the evolution of market interest rates, despite the continued efforts to reprice loans operations with customers, designed to adjust the financing cost to customer risk profiles, and the favourable effect from the reduction in the cost of term deposits.
In the international activity, the evolution of net interest income was hindered by the performance of the subsidiary companies in Poland and Mozambique.
The net interest margin stood at 0.96% in the first quarter of 2013, which compares with 1.51% in the same period in 2012.
1st Quarter 2013
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| AVERAGE BALANCES | Euro million | |||
|---|---|---|---|---|
| 31 Mar.13 | 31 Mar.12 | |||
| Balance | Yield % | Balance | Yield % | |
| Deposits in banks | 4,762 | 1.47 | 6,381 | 1.71 |
| Financial assets | 12,890 | 3.66 | 10,494 | 4.88 |
| Loans and advances to customers | 58,336 | 4.01 | 63,918 | 4.85 |
| Interest earning assets | 75,988 | 3.79 | 80,793 | 4.61 |
| Discontinued operations and non-current assets held for sale (1) |
3,147 | 3,585 | ||
| Non-interest earning assets | 9,068 | 8,685 | ||
| 88,203 | 93,063 | |||
| Amounts owed to credit institutions | 14,694 | 1.19 | 18,543 | 1.42 |
| Amounts owed to customers | 45,482 | 2.53 | 46,058 | 3.40 |
| Debt issued and financial liabilities | 13,655 | 3.60 | 16,665 | 3.66 |
| Subordinated debt | 4,323 | 7.58 | 1,147 | 5.27 |
| Interest bearing liabilities Discontinued operations and non-current |
78,154 | 2.75 | 82,413 | 3.03 |
| liabilities associated with assets held for sale (1) | 3,395 | 3,144 | ||
| Non-interest bearing liabilities Shareholders' equity and non-controlling |
2,730 | 3,101 | ||
| interests | 3,924 | 4,405 | ||
| 88,203 | 93,063 |
Net interest margin 0.96 1.51 Note: Interests related to hedge derivatives were allocated, in March 2013 and 2012, to the respective balance sheet item.
(1) Includes the activity of the Greek subsidiary and the consolidation adjustments.
Net commissions stood at Euro 163.1 million in the first quarter of 2013, which compares with Euro 165.1 million in the same period in 2012. Net commissions include the cost related to the guarantee granted by the Portuguese State to debt securities issued by the Bank. Excluding this impact, net commissions were stable between the first quarter of 2012 and the first quarter of 2013.
The performance of net commissions in the first quarter of 2013 shows essentially:
The net trading income totalled Euro 74.7 million in the first quarter of 2013, which compares with Euro 174.0 million in the same period in 2012.
The evolution of net trading income was mostly influenced by the activity in Portugal, in particular by results from trading and hedging activities, reflecting the gain posted in the first quarter of 2012 related to the repurchase of debt securities issued by the Bank, in the amount of Euro 95.5 million.
In the international activity, the increase of net trading income was boosted by the performance of results associated with derivative financial instruments, benefiting from the increase in the subsidiary company in Poland.
Other net operating income was negative by Euro 8.3 million in the first quarter of 2013, which compares with net losses of Euro 13.0 million in the same period of 2012.
ACTIVITY REPORT & ACCOUNTS 1st Quarter 2013
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The evolution of other net operating income was mostly influenced by the international activity, which posted a positive net amount of Euro 7.7 million in the first quarter of 2013 (Euro 1.0 million in the same period of 2012), benefiting from gains obtained on the sale of real estate during the quarter.
Equity accounted earnings, which essentially comprise the appropriation of results associated with the 49% shareholding in Millenniumbcp Ageas, stood at Euro 14.1 million in the first quarter of 2013 (Euro 12.9 million in the same period of 2012).
| OTHER NET INCOME | Euro million | ||
|---|---|---|---|
| 31 Mar. 13 | 31 Mar. 12 | Change 13/12 |
|
| Net commissions | 163.1 | 165.1 | -1.2% |
| Banking commissions | 151.0 | 152.4 | -0.9% |
| Cards | 44.6 | 42.9 | 3.8% |
| Credit and guarantees | 36.1 | 43.7 | -17.4% |
| Bancassurance | 19.1 | 17.9 | 6.4% |
| Other commissions | 51.2 | 47.9 | 7.1% |
| Market related commissions | 29.3 | 28.1 | 4.3% |
| Securities | 19.4 | 18.2 | 6.5% |
| Asset management | 10.0 | 9.9 | 0.2% |
| Commissions related with the State guarantee | (17.3) | (15.4) | - |
| Net trading income | 74.7 | 174.0 | -57.1% |
| Other net operating income | (8.3) | (13.0) | - |
| Dividends from equity instruments | 0.0 | 0.3 | - |
| Equity accounted earnings | 14.1 | 12.9 | 9.7% |
| Total other net income | 243.6 | 339.3 | -28.2% |
| Other net income / Net operating revenues | 57.1% | 52.3% |
Operating costs declined 11.9% to Euro 305.0 million in the first quarter of 2013, from Euro 346.2 million accounted in the first quarter of 2012.
In the activity in Portugal, operating costs decreased 17.3% from the first quarter of 2012, as a result of the lower expenses associated with staff costs, other administrative costs and depreciation.
In the international activity, operating costs reduced 1.8% from the first quarter of 2012, benefiting from the reduction of costs shown by the subsidiary company in Poland, which more than offset the increases in Millennium bim in Mozambique and in Banco Millennium Angola, reflecting the support to the business plans and to the organic growth strategy underway in those two markets.
Staff costs were down by 12.5% to Euro 170.0 million in the first quarter of 2012, from Euro 194.3 million in the same period in 2012.
This performance of staff costs was influenced by the 18.1% decrease in the activity in Portugal, despite the slight increase (+0.3%) in the international activity.
In the international activity, staff costs showed the increases posted by the subsidiary companies in Mozambique and Angola, following the reinforcement of their operational capabilities.
Other administrative costs reduced 11.1% to Euro 117.6 million in the first quarter of 2013, from Euro 132.4 million in the first quarter of 2012, reflecting the impact of the rationalisation and cost containment initiatives carried out by the Group, in particular the resizing of the branch network in Portugal (-70 branches, from the end of March 2012). From the same period in 2012, it is worth noting the savings achieved in most line items, highlighting the reduction in costs associated with special services, communication, advertising, rent and insurance.
In the activity in Portugal, other administrative costs decreased 16.1%, benefiting from the reductions in special services, communication, advertising and insurance, while in the international activity decreased 3.8%, influenced by the reduction in expenses posted by the subsidiary in Poland, despite the increases in Banco Millennium Angola and Millennium bim in Mozambique, influenced by the expansion of the local distribution networks.
Depreciation costs fell 10.8% to Euro 17.4 million in the first quarter of 2013, from Euro 19.5 million in the same period in 2012.
This evolution reflects the 16.1% reduction in depreciation costs in the activity in Portugal, from the first quarter of 2012, supported by the lower level of depreciation associated with buildings and equipment.
In the international activity, depreciation costs fell by 4.1%, from the first quarter of 2012, influenced by the reduction in depreciation costs in most of the international subsidiaries, in particular by the slowing down in the depreciation level posted by Banco Millennium Angola, despite the increases showed by Millennium bim in Mozambique and Bank Millennium in Poland.
| OPERATING COSTS | Euro million | ||
|---|---|---|---|
| 31 Mar. 13 | 31 Mar. 12 | Change 13/12 |
|
| Staff costs | 170.0 | 194.3 | -12.5% |
| Other administrative costs | 117.6 | 132.4 | -11.1% |
| Depreciation | 17.4 | 19.5 | -10.8% |
| 305.0 | 346.2 | -11.9% | |
| Of which: | |||
| Portugal activity | 185.9 | 224.8 | -17.3% |
| Foreign activity | 119.1 | 121.3 | -1.8% |
| Operating costs / Net operating revenues (1) | 86.8% | 50.9% |
(1) Activity in Portugal. According to Instruction nr. 16/2004 from the Bank of Portugal, as the currently existing version.
Impairment for loan losses (net of recoveries) totalled Euro 188.4 million in the first quarter of 2013, which compares with Euro 152.3 million in the same period in 2012. This evolution was determined by the reinforcement of impairment charges for loan losses in the activity in Portugal, reflecting the effect of a persistent recessive economic cycle, with impact on the deterioration of the financial situation of households and of companies in Portugal. In the international activity, the decrease of impairment for loan losses (net of recoveries) was mostly driven by the reduction in impairment charges posted in the operations developed in Poland and in Mozambique, despite the increases in the subsidiary companies in Angola and Romania.
The cost of risk stood at 122 basis points in the first quarter of 2013, compared with 91 basis points in the first quarter of 2012.
Other impairment and provisions stood at Euro 50.8 million in the first quarter of 2013, which compares with Euro 45.8 million in the same period in 2012.
This evolution of other impairment and provisions reflects the increase in impairment charges in the international activity. In fact, the activity in Portugal showed a stabilisation of charges for other impairment and provisions, from the same period in 2012, as the reinforcement of impairment charges for financial assets was offset by the lower impairment charges for repossessed assets and for guarantees.
Income tax (current and deferred) totalled Euro -28.0 million in the first quarter of 2013, which compares with Euro 34.0 million in the first quarter of 2012.
The income tax item includes the expenses of current tax in the amount of Euro 15.2 million (Euro 21.0 million in the first quarter of 2012), net of a deferred tax asset in the amount of Euro 43.2 million (Euro -13.0 million in the first quarter of 2012).
Total assets stood at Euro 89,474 million as at 31 March 2013, which compares with Euro 92,029 million as at 31 March 2012.
Loans to customers (gross), on a comparable basis (adjusted for a Repo operation, in the amount of Euro 697 million as at 31 March 2012), was down by 6.6% to Euro 66,507 million as at 31 March 2013, from Euro 71,243 million as at 31 March 2012.
This evolution of the loans portfolio was determined by the decrease in the activity in Portugal (-8.7%) and by the stabilisation in the international activity, from 31 March 2012, reflecting, on the one hand, the decrease in the loans portfolio in the subsidiaries in Greece, Switzerland and Cayman and, on the other, the increases in Millennium bim in Mozambique, Bank Millennium in Poland and Banco Millennium Angola.
The performance of the loans portfolio, excluding the operation in Greece, reflects the decrease in loans to companies (-9.7%) and in loans to individuals (-3.9%), in a persistently adverse macroeconomic context and a consequent decline in demand for credit by households and economic agents, as a reflection of the uncertainty about the beginning of the economic recovery and of the postponement of investment decisions. In this context, Millennium bcp continued to support customers, individuals and companies, including companies with sustainable business plans in the long term, especially for tradable goods, highlighting the support in the access to lines of credit focused on investment and on production in different sectors of the Portuguese economy.
The structure of the loans to customers' portfolio showed identical levels of diversification, between the end of March 2012 and the end of March 2013, with loans to companies representing slightly more than 50% of total loans to customers, excluding the operation in Greece, as at 31 March 2013.
| LOANS TO CUSTOMERS (GROSS) | Euro million | ||
|---|---|---|---|
| 31 Mar. 13 | 31 Mar. 12 | Change 13/12 |
|
| Individuals | 30,879 | 32,146 | -3.9% |
| Mortgage loans | 27,200 | 28,258 | -3.7% |
| Consumer loans | 3,679 | 3,888 | -5.4% |
| Companies (1) | 30,961 | 34,270 | -9.7% |
| Services (1) | 12,642 | 14,485 | -12.7% |
| Commerce | 3,273 | 3,686 | -11.2% |
| Construction and Other | 15,046 | 16,099 | -6.5% |
| Total excluding Greece (1) | 61,840 | 66,416 | -6.9% |
| Millennium bank in Greece | 4,666 | 4,827 | -3.3% |
| Total (1) | 66,507 | 71,243 | -6.6% |
| Of which: | |||
| Portugal activity (1) | 49,295 | 53,998 | -8.7% |
| Foreign activity | 17,212 | 17,245 | -0.2% |
| Of which: Millennium bank in Greece | 4,666 | 4,827 | -3.3% |
(1) Adjusted for a Repo operation of Euro 697 million on 31 March 2012.
Credit quality, measured by the loans overdue by more than 90 days as a percentage of total loans, stood at 6.8% as at 31 March 2013 (5.0% as at 31 March 2012), mostly influenced by the evolution of the portfolio of loans to companies.
The coverage ratio for loans overdue by more than 90 days stood at 96.3% as at 31 March 2013, which compares with 100.3% at the end of March 2012. The coverage ratio of the total loans overdue portfolio to impairments stood at 89.9% as at 31 March 2013 (92.2% on the same date in 2012).
Overdue and doubtful loans stood at 8.8% of total loans as at 31 March 2013, compared with 6.8% posted at the end of March 2012 and credit at risk stood at 13.8% of total loans as at 31 March 2013 (10.9% on the same date in 2012).
| Euro million | ||||
|---|---|---|---|---|
| Overdue loans by more than 90 days |
Impairment for loan losses |
Overdue loans by more than 90 days /Total loans |
Coverage ratio (Impairment/ Overdue >90 days) |
|
| Individuals | 1,110 | 971 | 3.3% | 87.4% |
| Mortgage loans | 297 | 318 | 1.0% | 107.1% |
| Consumer loans | 814 | 653 | 19.3% | 80.3% |
| Companies | 3,409 | 3,380 | 10.3% | 99.2% |
| Services | 973 | 1,279 | 7.2% | 131.5% |
| Commerce | 517 | 403 | 14.3% | 78.0% |
| Construction and Other | 1,919 | 1,698 | 12.0% | 88.5% |
| Total | 4,519 | 4,351 | 6.8% | 96.3% |
OVERDUE LOANS BY MORE THAN 90 DAYS AND IMPAIRMENTS AS AT 31 MARCH 2013
Total customer funds, on a comparable basis (adjusted for a Repo operation, in the amount of Euro 697 million as at 31 March 2012), grew by 4.9% to Euro 70,622 million as at 31 March 2013, from Euro 67,328 million posted at the end of March 2012.
The increase of total customer funds, excluding the operation in Greece, benefited mostly from the 5.8% growth in balance sheet customer funds, boosted by the performance of customer deposits (+6.9%), reflecting the efforts carried out to further increase stable funding resources and to reduce commercial gap. Simultaneously, off-balance sheet customer funds also increased (+3.0%), from 31 March 2012, as a result of the growth posted in both assets under management (+4.3%) and capitalisation products (+2.4%).
In the activity in Portugal, total customer funds were up by 3.0%, to Euro 51,976 million as at 31 March 2013 (Euro 50,439 million as at 31 March 2012). In the international activity, total customer funds grew 10.4% to Euro 18,646 million, sustained by the increase in both balance sheet customer funds and off-balance sheet customer funds, driven by the favourable performance of the subsidiary companies in Poland, Mozambique and Romania.
Euro million
| 31 Mar. 13 | 31 Mar. 12 | Change 13/11 |
|
|---|---|---|---|
| Balance sheet customer funds (1) | 54,514 | 51,505 | 5.8% |
| Deposits (1) | 48,953 | 45,809 | 6.9% |
| Debt securities | 5,560 | 5,695 | -2.4% |
| Off-balance sheet customer funds | 13,143 | 12,760 | 3.0% |
| Assets under management | 4,066 | 3,899 | 4.3% |
| Capitalisation products | 9,076 | 8,861 | 2.4% |
| Total excluding Greece (1) | 67,656 | 64,265 | 5.3% |
| Millennium bank in Greece | 2,966 | 3,063 | -3.2% |
| Total (1) | 70,622 | 67,328 | 4.9% |
| Of which: | |||
| Portugal activity (1) | 51,976 | 50,439 | 3.0% |
| Foreign activity | 18,646 | 16,889 | 10.4% |
| Of which: Millennium bank in Greece | 2,966 | 3,063 | -3.2% |
(1) Adjusted for a Repo operation of Euro 697 million on 31 March 2012.
As at 31 March 2013, balance sheet customer funds was the major component in the structure of total customer funds and represented 81% of total customer funds, excluding the operation in Greece, with special emphasis on the component of customer deposits, which represented 72% of total customer funds.
The securities portfolio totalled Euro 15,587 million as at 31 March 2013, which compares with Euro 12,250 million on the same date in 2012 (Euro 14,488 million 31 December 2012), representing 17.4% of total assets (13.3% as at 31 March 2012).
This evolution was influenced, on the one hand, by the increase in financial assets available for sale, evidencing mostly the increase in sovereign debt financial instruments, in particular, Portuguese and Polish sovereign debt securities, despite the simultaneously reduction in the exposure to Greek sovereign debt securities, and, on the other, by the reduction in financial assets held to maturity.
The beginning of 2013 continued the narrowing of the divide between markets of the European countries in the "centre" and the markets of the "peripheral" countries, started during the last quarter of 2012. This allowed the return to the medium-long term debt markets of Portuguese issuers for the first time since the start of the sovereign debt crisis in the first quarter of 2010. However, this trend toward normalisation was mitigated by new signs of uncertainty, mainly the assistance program to Cyprus, which imposed significant losses on the depositors of the two major local credit institutions. Additionally, short-term markets continued to show low volumes, limited almost exclusively to maturities up to one week.
The assumption of the postponement of the return to the international medium-long term markets to 2014, considered by the Bank of Portugal in the scope of the 6th update of the Funding and Capital Plan, is one of the constraints considered in the Millennium bcp's Liquidity Plan for 2013, which sets as main targets the execution of the goals defined in the Funding and Capital Plan agreed with the "troika" and the maintenance of a comfortable liquidity buffer. In this context, this goal is expected to be achieved by deleveraging, based mainly on the growth of on-balance sheet resources and in the optimisation of the portfolio of eligible collateral. This deleveraging effort may allow the Bank to consider the partial early redemption of the Bank's own issues guaranteed by the State, with a consequent reduction in costs. In this regard, the European Central Bank announced at the end of the first quarter of 2013 that the term limit for the usage of own stateguaranteed issuances as eligible collateral would be 1 March 2015.
During the first quarter, the Bank reimbursed medium-long term debt amounting to Euro 1.0 billion, nearly the total to be amortised in 2013, as the commercial gap showed a favourable behaviour by decreasing Euro 8.5
billion from March 2012. Therefore, and in spite of some growth of the portfolio of the Portuguese sovereign debt, the net funding from the Eurosystem decreased by a further Euro 300 million from December 2012 (to Euro 10.3 billion) and the liquidity buffer (against total eligible collateral) strengthened by Euro 600 million, to Euro 12.3 billion.
The decrease of total funding needs enabled the early redemption of a tranche of Euro 1.0 billion from a total of Euro 12 billion originally borrowed from the Eurosystem through the long-term refinancing operations provided by the ECB, gaining flexibility in short-term liquidity management.
Following the request submitted by Millennium bcp, the Bank of Portugal authorised the adoption of methodologies based on Internal Rating models ("IRB") for the calculation of capital requirements for credit and counterparty risk, covering a substantial part of the risk from the activity in Portugal as from 31 December 2010. In the scope of the gradual adoption of the IRB methodologies for the calculation of capital requirements for credit and counterparty risk, the Bank of Portugal authorised the extension of this methodology to the subclasses of risk "Renewable Retail Positions" and "Other Retail Positions" in Portugal with effect as from 31 December 2011. Afterwards, with effect as from 31 December 2012, the Bank of Portugal authorised the use of own estimates of Credit Conversion Factors ("CCF") for exposures of the class of risk "Companies" in Portugal and the adoption of IRB methodologies for "Loans secured by residential real estate" and "Renewable positions" of the Retail portfolio in Poland.
The core tier I ratio stood at 12.1% in accordance with the Bank of Portugal rules and at 9.6% in accordance with EBA rules (12.4% and 9.8%, respectively, at the end of 2012), reflecting the reduction o core tier I (by Euro 90 million in accordance with the Bank of Portugal rules and by Euro 56 million in accordance with EBA rules) and the increase in risk weighted assets (by Euro 355 million) in the first quarter of 2013.
The decrease of core tier I calculated by the rules of the Bank of Portugal was mainly influenced by negative net income posted in the period (Euro 152 million), despite the positive effects mostly associated with the lower deductions related to deposits with higher interest rates (Euro 26 million) and with the increases in non-controlling interests (Euro 24 million) and in fair value reserves of Millenniumbcp Ageas (Euro 15 million). Compared with the figures obtained in accordance with the Bank of Portugal rule, the figures determined by the EBA rules benefited from the decrease in the deductions related to significant investments and from the shortfall of impairment to expected loss (Euro 34 million).
The increase of risk weighted assets was mostly influenced by the unfavourable impacts associated with the deterioration of the credit risk of some customers and the increase of market risk, which more than offset the positive effect determined by the reduction in credit exposures observed over the period.
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| SOLVENCY | Euro million | |
|---|---|---|
| 31 Mar. 13 | 31 Dec. 12 | |
| Own funds | ||
| Core tier I | 6,489 | 6,579 |
| Preference shares and perpetual subordinated debt securities with conditional coupons |
172 | 173 |
| Other deduction (1) | (496) | (530) |
| Tier I capital | 6,165 | 6,223 |
| Tier II capital | 730 | 697 |
| Deductions to total regulatory capital | (146) | (146) |
| Total regulatory capital | 6,750 | 6,773 |
| Risk weighted assets | 53,625 | 53,271 |
| Solvency ratios | ||
| Core tier I | 12.1% | 12.4% |
| Tier I | 11.5% | 11.7% |
| Tier II | 1.1% | 1.0% |
| Total | 12.6% | 12.7% |
| Core tier I ratio EBA (2) | 9.6% | 9.8% |
(1) Includes deductions related to the shortfall of the stock of impairment to estimated losses and to significant shareholdings in unconsolidated financial institutions, in particular to the shareholdings held in Millenniumbcp Ageas and Banque BCP (France and Luxembourg).
(2) Core tier I ratio in accordance with the criteria of EBA. In this scope, core tier I in accordance with the rules of the Bank of Portugal was deducted of the "Other deductions (1)" and of the buffer to sovereign risks (Euro 848 million); the risk weighted assets do not have adjustments.
Note: The Bank received authorisation from the Bank of Portugal (BoP) to adopt IRB approaches for the calculation of capital requirements for credit risks, as from 31 December 2010. In the scope of the gradual adoption of the IRB methodologies for the calculation of capital requirements for credit and counterparty risk, the Bank of Portugal authorised the extension of this methodology to the subclasses of risk "Renewable Retail Positions" and "Other Retail Positions" in Portugal with effect as from 31 December 2011. Afterwards, with effect as from 31 December 2012, the Bank of Portugal authorised the use of own estimates of Credit Conversion Factors ("CCF") for exposures of the class of risk "Companies" in Portugal and the adoption of IRB methodologies for "Loans secured by residential real estate" and "Renewable positions" of the Retail portfolio in Poland. In the 1st half of 2009, the Bank received authorisation from BoP to adopt the advanced approaches (internal models) to the generic market risk and the standard method for the operational risk.
Despite continuing the process of deleveraging, Banco Comercial Português maintained its commitment to support the Portuguese economy, expressed in the number of transactions under the mutual guarantee system, in the funding granted under the "PME Crescimento 2013" and other credit lines and the "Millennium Businesses" Meetings. The Bank also continued the talks with the Directorate-General for Competition, in order to complete the Restructuring Plan, and concluded the negotiations with Piraeus Bank in order to sell its Greek subsidiary. For the 1st quarter of 2013, it is worth mentioning the following:
As part of the Social Responsibility program "More Mozambique for Me", the project "Millennium bim Responsável" benefited again from the participation of the Bank's employees and their families in the rehabilitation of the Infant Jesus Centre in Manhiça.
As part of the commitment to the development of Mozambican culture, Millennium bim has an agreement with the Center for Art and the Fund for Artistic and Cultural Development, in order to rehabilitate the Center for Art's exhibition room.
The information available for the first quarter of 2013 suggests a slowdown of some of the economies that have been sustaining global growth, namely China and the USA. In the Euro Area, the wedge between the "periphery" countries and those of the "core" has diminished somewhat, mainly due to the pronounced cooling of the latter as the former continue to denote worrying levels of weakness. Generically, the climate in financial markets has remained constructive despite the uncertainty induced by the Cyprus request for an international financial rescue, the political stalemate in Italy, and the absence of a clear direction of the fiscal consolidation process in the USA.
The International Monetary Fund (IMF) revised downward its projection for the 2013 growth rate of the world economy, from 3.5% to 3.3%, invoking a lesser dynamism of both the advanced economies and the emerging markets. Among the main economic blocks, the Euro Area is the only one with a forecast for a contraction of economic activity, estimated at 0.3%.
Monetary conditions have remained universally accommodative. In this domain it is worth highlighting the broadly anticipated decision by the Bank of Japan to intensify monetary stimulus in order to achieve the new inflation target of 2%. The expansionist stance of the global monetary policy favoured most financial asset classes, in particular fixed income securities and equity indices, mainly in the USA, where they have climbed to new historic highs. In spite of the deterioration of the European economic environment, the public debt market of the Euro Area countries continued to show signs of recovery, reflecting the possibility of the activation of the ECB's program of conditional purchases of public debt (OMT), as well as the inclination of the European authorities to relax the fiscal targets of the member-states with excessive deficits. Thus, the yields on the "peripheral" sovereign debt tracked the downward trend observed in the "core", especially in Germany, confirming a change in perception regarding the risk of the countries under programs of financial assistance.
During the first quarter there were modest improvements in the functioning of the euro's interbank money market, associated, in large measure, with the partial liquidation of the three-year refinancing operations (LTRO) carried out by the ECB at the end of 2011 and the start of 2012. However, since the reimbursements have not exceeded 23% of the LTRO-operations total outstanding, the liquidity levels have remained ample, leading to a stabilisation of Euribor interest rates for all maturities, in a context in which the ECB maintained its main refinancing rate at 0.75%. Regarding the Portuguese banks it should be mentioned the reduction of the liquidity taken from the ECB, especially in the shorter maturities, which resulted in a lengthening of the funding acquired through the central bank.
According to the National Statistics Institute (Instituto Nacional de Estatística - INE), Portuguese GDP recorded an annual contraction of 3.8% in the last quarter of 2012. Given the measures aiming at lowering public expenditure and raising the tax burden, with impact on consumption and investment, the recessive climate should extend to the first quarter of the current year, albeit with a lower intensity, according to the most recent activity indicators. In face of the worsening of the macroeconomic scenario, the "troika" decided during the seventh revision to the implementation of the Economic and Financial Adjustment Programme to award greater flexibility in the fulfilment of the fiscal objective, revising the targets for the deficit, from 4.5% to 5.5% in 2013, from 2.5% to 4.0% in 2014, and from 2.0% to 2.5% in 2015.
The Polish economy recorded significant loss of dynamism at the end of 2012, a development that might have extended to the first quarter of 2013. However, the considerable cuts in the reference rates made by the National Bank of Poland should mitigate the downward pressures of aggregate demand. The GDP of Greece contracted again in 2012, for the fifth consecutive year. The indications pertaining to the beginning of 2013 suggest a moderation in the recessive environment. Angola and Mozambique both showed robust growth in 2012, of 8.4% and 7.5% respectively, above the Sub-Saharan countries average (4.8%). According to the IMF's projections, in 2013 this dynamism is expected to continue, though in a more moderate way for Angola, due to a slowdown of the exporting activity.
Capitalisation products – includes unit link and retirement saving plans.
Cost of risk - ratio of impairment charges (net of recoveries) to the loan portfolio.
Credit at risk – definition that, according to the Bank of Portugal, is broader than the overdue loans by more than 90 days + doubtful loans, including, in particular, the possibility that debtors with overdue payments still do not fulfil their credit responsibilities. For detailed definition see instruction nr. 16/2004 from the Bank of Portugal, as the currently existing version.
Debt securities - debt securities issued by the Bank and placed with customers.
Dividends from equity instruments - dividends received from investments in 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.
Net interest margin - net interest income as a percentage of average interest earning assets.
Net operating revenues - net interest income, dividends from equity instruments, net commissions, net trading income, equity accounted earnings and other net operating income.
Net trading income - net gains/losses arising from trading and hedging activities, net gains/losses arising from available for sale financial assets, net gains/losses arising from financial assets held to maturity.
Operating costs - staff costs, other administrative costs and depreciation.
Other impairment and provisions - other financial assets impairment, other assets impairment, in particular provision charges related to assets received as payment in kind not fully covered by collateral, goodwill impairment and other provisions.
Other net income – net commissions, net trading income, other net operating income, dividends from equity instruments and equity accounted earnings.
Other net operating income - other operating income, other net income from non-banking activities and gains from the sale of subsidiaries and other assets.
Overdue and doubtful loans - loans overdue by more than 90 days and the doubtful loans reclassified as overdue loans for provisioning purposes.
Securities portfolio - financial assets held for trading, financial assets available for sale, assets with repurchase agreement and financial assets held to maturity.
Total customer funds - amounts due to customers (including securities), assets under management and capitalisation products.
1st Quarter 2013
Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM0007
| Consolidated | Activity in Portugal | International activity | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 31 Mar. 13 31 Mar. 12 | Change 13/12 |
31 Mar. 13 31 Mar. 12 | Change 13/12 |
31 Mar. 13 31 Mar. 12 | Change 13/12 |
||||
| Income statement | |||||||||
| Net interest income | 183.0 | 309.4 | -40.9% | 63.5 | 177.0 | -64.1% | 119.5 | 132.4 | -9.8% |
| Dividends from equity instruments | – | 0.3 | - | – | 0.3 | - | – | – | - |
| Net fees and commission income | 163.1 | 165.1 | -1.2% | 106.9 | 114.6 | -6.7% | 56.2 | 50.5 | 11.2% |
| Other operating income | (8.3) | (13.0) | - | (16.1) | (14.0) | - | 7.7 | 1.0 | - |
| Net trading income | 74.7 | 174.0 | -57.1% | 45.6 | 151.4 | -69.9% | 29.2 | 22.6 | 29.0% |
| Equity accounted earnings | 14.1 | 12.9 | 9.7% | 14.1 | 12.1 | 16.4% | – | 0.7 | - |
| Net operating revenues | 426.6 | 648.7 | -34.2% | 214.0 | 441.4 | -51.5% | 212.6 | 207.3 | 2.5% |
| Staff costs | 170.0 | 194.3 | -12.5% | 110.5 | 135.0 | -18.1% | 59.5 | 59.3 | 0.3% |
| Other administrative costs | 117.6 | 132.4 | -11.1% | 66.2 | 78.9 | -16.1% | 51.5 | 53.5 | -3.8% |
| Depreciation | 17.4 | 19.5 | -10.8% | 9.2 | 11.0 | -16.1% | 8.2 | 8.5 | -4.1% |
| Operating costs | 305.0 | 346.2 | -11.9% | 185.9 | 224.8 | -17.3% | 119.1 | 121.3 | -1.8% |
| Operating profit before impairment | 121.6 | 302.5 | -59.8% | 28.2 | 216.6 | -87.0% | 93.5 | 86.0 | 8.7% |
| Loans impairment (net of recoveries) | 188.4 | 152.3 | 23.7% | 169.6 | 133.2 | 27.4% | 18.8 | 19.1 | -1.9% |
| Other impairment and provisions | 50.8 | 45.8 | 10.9% | 47.8 | 47.8 | 0.0% | 3.0 | (2.0) | - |
| Profit before income tax | (117.5) | 104.4 | - | (189.2) | 35.7 | - | 71.7 | 68.8 | 4.2% |
| Income tax | (28.0) | 34.0 | - | (41.4) | 20.6 | - | 13.4 | 13.3 | 0.3% |
| Income after income tax from continuing operations | (89.5) | 70.5 | - | (147.8) | 15.0 | - | 58.3 | 55.4 | 5.1% |
| Income arising from discontinued operations | (42.3) | (11.2) | - | – | – | - | – | – | |
| Non-controlling interests | 20.1 | 18.5 | 8.6% | 0.2 | (2.6) | - | 19.9 | 21.2 | -6.0% |
| Net income | (152.0) | 40.8 | - | (148.0) | 17.7 | - | 38.4 | 34.3 | 12.0% |
| Balance sheet and activity indicators | |||||||||
| Total assets | 89,474 | 92,029 | -2.8% | 66,997 | 69,647 | -3.8% | 22,478 | 22,381 | 0.4% |
| Total customer funds (1) | 70,622 | 67,328 | 4.9% | 51,976 | 50,439 | 3.0% | 18,646 | 16,889 | 10.4% |
| Balance sheet customer funds (1) | 54,514 | 51,505 | 5.8% | 40,048 | 38,687 | 3.5% | 14,466 | 12,817 | 12.9% |
| Deposits (1) | 48,953 | 45,809 | 6.9% | 34,602 | 33,118 | 4.5% | 14,351 | 12,691 | 13.1% |
| Debt securities | 5,560 | 5,695 | -2.4% | 5,446 | 5,569 | -2.2% | 114 | 126 | -9.7% |
| Off-balance sheet customer funds | 13,143 | 12,760 | 3.0% | 11,928 | 11,752 | 1.5% | 1,215 | 1,008 | 20.5% |
| Assets under management | 4,066 | 3,899 | 4.3% | 3,260 | 3,200 | 1.9% | 807 | 699 | 15.4% |
| Capitalisation products | 9,076 | 8,861 | 2.4% | 8,668 | 8,552 | 1.4% | 408 | 309 | 32.0% |
| Millennium bank in Greece | 2,966 | 3,063 | -3.2% | – | – | 2,966 | 3,063 | -3.2% | |
| Loans to customers (gross) (1) | 66,507 | 71,243 | -6.6% | 49,295 | 53,998 | -8.7% | 17,212 | 17,245 | -0.2% |
| Individuals | 30,879 | 32,146 | -3.9% | 22,860 | 24,141 | -5.3% | 8,019 | 8,005 | 0.2% |
| Mortgage loans | 27,200 | 28,258 | -3.7% | 20,438 | 21,510 | -5.0% | 6,762 | 6,748 | 0.2% |
| Consumer loans | 3,679 | 3,888 | -5.4% | 2,422 | 2,631 | -7.9% | 1,257 | 1,258 | -0.1% |
| Companies (1) | 30,961 | 34,270 | -9.7% | 26,435 | 29,857 | -11.5% | 4,526 | 4,413 | 2.6% |
| Services (1) | 12,642 | 14,485 | -12.7% | 11,663 | 13,335 | -12.5% | 979 | 1,150 | -14.8% |
| Commerce | 3,273 | 3,686 | -11.2% | 2,361 | 2,781 | -15.1% | 911 | 906 | 0.6% |
| Construction and Other | 15,046 | 16,099 | -6.5% | 12,411 | 13,741 | -9.7% | 2,636 | 2,357 | 11.8% |
| Millennium bank in Greece | 4,666 | 4,827 | -3.3% | – | – | 4,666 | 4,827 | -3.3% | |
| Credit quality | |||||||||
| Total overdue loans | 4,838 | 3,915 | 23.6% | 3,744 | 3,058 | 22.4% | 1,093 | 857 | 27.6% |
| Overdue loans by more than 90 days | 4,519 | 3,598 | 25.6% | 3,463 | 2,802 | 23.6% | 1,056 | 796 | 32.7% |
| Overdue loans by more than 90 days /Total loans | 6.8% | 5.0% | 7.0% | 5.1% | 6.1% | 4.6% | |||
| Total impairment (balance sheet) | 4,351 | 3,609 | 20.5% | 2,942 | 2,903 | 1.4% | 981 | 706 | 38.9% |
| Total impairment (balance sheet) /Total loans | 6.5% | 5.0% | 6.0% | 5.3% | 5.7% | 4.1% | |||
| Total impairment (balance sheet) /Overdue loans by more than 90 days |
96.3% | 100.3% | 85.0% | 103.6% | 92.9% | 88.8% | |||
| 122 | 91 | 138 | 97 | 60 | 62 | ||||
| Cost of risk (net of recoveries, in b.p.) |
(1) Adjusted for a Repo operation of Euro 697 million on 31 March 2012.
1st Quarter 2013
Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM0007 INDIVIDUAL/CONSOLIDATED QUARTERLY INFORMATION (Not Audited) (Model applicable to companies subject to the Accounting Plan for Banks/Leasing/Factoring companies) Company: Banco Comercial Português, S.A._______________________________________________________________ Main Offices: Praça D. João I, 28 - 4000-295 Porto_____________________________________________________NIPC: 501 525 882___ Period of Reference: Reference values in 000Esc in Euros Quarter 1 Quarter 3 Quarter 5 (1) Start: 01/01/2013 End: 31/03/2013 ance Sheet Items Individual Consolidated n (NCA) n-1 (NCA) Var. (% ) n (IAS) n-1 (IAS) Var. (% ) ASSETS (NET) Loans to other credit institutions (2) 13,208,745,416 15,174,150,123 -12.95% 2,507,585,850 3,496,378,437 -28.28% Loans to clients 42,506,767,481 48,045,043,967 -11.53% 62,155,955,187 68,330,387,058 -9.04% Fixed income securities 14,556,556,667 20,501,358,984 -29.00% 13,258,931,108 10,765,559,734 23.16% Variable yield securities 2,685,681,221 2,543,754,825 5.58% 2,327,941,204 1,484,408,404 56.83% Investments 3,491,287,703 4,019,310,968 -13.14% 524,975,774 386,442,234 35.85% SHAREHOLDER'S AND EQUIVALENT EQUITY Equity Capital 3,500,000,000 6,064,999,986 -42.29% 3,500,000,000 6,064,999,986 -42.29% Nº of ordinary shares 19,707,167,060 7,207,167,060 - 19,707,167,060 7,207,167,060 - Nº of other shares 0 0- - Value of own shares 0 886,186 -100.00% 7,566,758 3,759,686 101.26% Nº of voting shares 0 3,938,072 - 79,650,089 24,610,734 - Nº of preferred, non voting shares 0 0- - Subordinate loans 5,999,092,816 2,815,610,685 113.07% 4,364,858,559 1,160,119,027 276.24% Minority interests 0 0 - 641,386,347 568,609,790 12.80% LIABILITIES Amounts owed to credit institutions 16,872,463,179 22,309,884,160 -24.37% 13,944,952,790 18,754,270,539 -25.64% Amounts owed to clients 34,697,176,790 33,962,735,681 2.16% 51,873,398,020 49,526,287,547 4.74% Debt securities 17,155,029,800 19,609,645,057 -12.52% 11,884,884,771 14,560,815,267 -18.38% TOTAL ASSETS (NET) 84,475,689,641 97,581,022,898 -13.43% 89,474,369,960 92,028,647,710 -2.78% TOTAL SHAREHOLDER'S EQUITY 3,449,495,252 4,576,328,466 -24.62% 3,227,079,296 3,991,247,984 -19.15% TOTAL LIABILITIES 81,026,194,389 93,004,694,432 -12.88% 85,605,904,317 87,468,789,936 -2.13% X X
| P & L Items | Individual | Consolidated | ||||
|---|---|---|---|---|---|---|
| n | n-1 | Var. (% ) | n | n-1 | Var. (% ) | |
| Financial margin (3) | 41,995,309 | 151,523,355 | -72.28% | 182,998,412 | 309,384,400 | -40.85% |
| Commissions and other oper. revenue (net) | 118,111,397 | 130,854,319 | -9.74% | 112,494,126 | 140,994,298 | -20.21% |
| Securities yield and profits from financial transaction | 26,926,978 | 156,358,384 | -82.78% | 68,927,428 | 173,516,045 | -60.28% |
| Banking Income | 187,033,684 | 438,736,058 | -57.37% | 364,419,966 | 623,894,743 | -41.59% |
| Personnel, administ. and other costs | -182,384,029 | -215,888,133 | -15.52% | -287,618,448 | -326,677,851 | -11.96% |
| Amortizations | -7,427,153 | -9,055,447 | -17.98% | -17,387,172 | -19,503,146 | -10.85% |
| Provisions (net of adjustments) | -426,221,138 | -269,636,944 | 58.07% | -233,331,029 | -197,279,083 | 18.27% |
| Extraordinary profit | 0 | 0 | n.a. | 0 | 0 | n.a. |
| Profit before taxes | -428,998,636 | -55,844,466 | 668.20% | -173,916,683 | 80,434,663 | -316.22% |
| Income tax (4) | 104,350,368 | 10,961,188 | 852.00% | 27,996,353 | -33,985,665 | -182.38% |
| Minority interests and income excluded from consoli | 0 | 0 | - | -6,041,967 | -5,689,800 | 6.19% |
| Net profit / loss for the quarter | -324,648,268 | -44,883,278 | 623.32% | -151,962,297 | 40,759,198 | -472.83% |
| Net profit / loss per share for the quarter | -0.0928 | -0.0074 | 1153.40% | -0.0077 | 0.0057 | -236.35% |
| Self financing (5) | 109,000,023 | 233,809,113 | -53.38% | 98,755,904 | 257,541,427 | -61.65% |
(1) Aplicable to the first economic period of companies adopting a fiscal year different from the calendar year
(Art.65.º - A of the Portuguese Commercial Company Code)
(2) Includes repayable on demand to credit institutions
(3) Financial margin = Interest income - Interest expense
(4) Estimated income tax
(5) Self financing = Net profits + amortization + provision
Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM0007
1st Quarter 2013
for the three months period ended 31 March, 2013 and 2012
| 31 March 2013 |
31 March 2012 |
|
|---|---|---|
| (Thousands of Euros) | ||
| Interest and similar income Interest expense and similar charges |
730,463 (547,464) |
965,327 (655,943) |
| Net interest income | 182,999 | 309,384 |
| Dividends from equity instruments Net fees and commission income Net gains / losses arising from trading and |
38 163,099 |
295 165,123 |
| hedging activities Net gains / losses arising from available for |
33,890 | 167,771 |
| sale financial assets Net gains / (losses) arising from financial |
41,105 | 6,289 |
| assets held to maturity Other operating income |
(278) (11,681) |
(22) (9,631) |
| 409,172 | 639,209 | |
| Other net income from non banking activity | 4,809 | 4,719 |
| Total operating income | 413,981 | 643,928 |
| Staff costs Other administrative costs Depreciation |
169,980 117,639 17,387 |
194,325 132,353 19,503 |
| Operating costs | 305,006 | 346,181 |
| Operating net income before provisions and impairments | 108,975 | 297,747 |
| Loans impairment Other financial assets impairment Other assets impairment Other provisions |
(188,382) (5,828) (34,711) (10,238) |
(152,297) (816) (36,955) (8,026) |
| Operating net income | (130,184) | 99,653 |
| Share of profit of associates under the equity method Gains / (losses) from the sale of subsidiaries and other assets |
14,094 (1,448) |
12,851 (8,058) |
| Net income before income tax Income tax |
(117,538) | 104,446 |
| Current | (15,190) | (20,997) |
| Deferred | 43,186 | (12,989) |
| Income after income tax from continuing operations | (89,542) | 70,460 |
| Income arising from discontinued operations | (42,285) | (11,160) |
| Net income after income tax | (131,827) | 59,300 |
| Attributable to: Shareholders of the Bank Non-controlling interests |
(151,962) 20,135 |
40,759 18,541 |
| Net income for the period | (131,827) | 59,300 |
| Earnings per share (in euros) | ||
| Basic Diluted |
(0.03) (0.03) |
0.02 0.02 |
1st Quarter 2013
Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM0007
Consolidated Balance Sheet as at 31 March, 2013 and 2012 and 31 December, 2012
| 31 March | 31 December | 31 March | |
|---|---|---|---|
| 2013 | 2012 | 2012 | |
| (Thousands of Euros) | |||
| Assets | |||
| Cash and deposits at central banks | 2,720,085 | 3,580,546 | 1,883,922 |
| Loans and advances to credit institutions | |||
| Repayable on demand | 776,815 | 829,684 | 1,130,660 |
| Other loans and advances | 1,730,770 | 1,887,389 | 2,365,719 |
| Loans and advances to customers | 62,155,955 | 62,618,235 | 68,330,387 |
| Financial assets held for trading | 1,939,793 | 1,690,926 | 2,066,045 |
| Financial assets available for sale | 10,145,753 | 9,223,411 | 6,266,559 |
| Assets with repurchase agreement | 85,622 | 4,288 | 9,251 |
| Hedging derivatives | 173,535 | 186,032 | 471,523 |
| Financial assets held to maturity | 3,415,703 | 3,568,966 | 3,908,114 |
| Investments in associated companies | 524,976 | 516,980 | 386,442 |
| Non current assets held for sale | 1,308,406 | 1,284,126 | 1,096,777 |
| Investment property | 550,879 | 554,233 | 562,869 |
| Property and equipment | 620,922 | 626,398 | 608,427 |
| Goodwill and intangible assets Current tax assets |
255,545 29,900 |
259,054 34,037 |
249,317 34,536 |
| Deferred tax assets | 1,809,746 | 1,755,411 | 1,540,229 |
| Other assets | 1,229,963 | 1,124,323 | 1,117,871 |
| 89,474,368 | 89,744,039 | 92,028,648 | |
| Liabilities | |||
| Amounts owed to credit institutions | 13,944,952 | 15,265,760 | 18,754,271 |
| Amounts owed to customers | 51,873,398 | 49,389,866 | 49,526,288 |
| Debt securities | 11,884,885 | 13,548,263 | 14,560,815 |
| Financial liabilities held for trading | 1,256,315 | 1,393,194 | 1,265,779 |
| Other financial liabilities at fair value | |||
| through profit and loss | 479,856 | 329,267 | 315,768 |
| Hedging derivatives | 267,047 | 301,315 | 376,021 |
| Provisions for liabilities and charges | 273,485 | 253,328 | 252,832 |
| Subordinated debt | 4,364,859 | 4,298,773 | 1,160,119 |
| Current income tax liabilities | 9,633 | 15,588 | 13,015 |
| Deferred income tax liabilities | 3,019 | 2,868 | 1,249 |
| Other liabilities | 1,248,453 | 945,629 | 1,242,633 |
| Total Liabilities | 85,605,902 | 85,743,851 | 87,468,790 |
| Equity | |||
| Share capital | 3,500,000 | 3,500,000 | 6,065,000 |
| Treasury stock | (16,448) | (14,212) | (11,448) |
| Share premium | 71,722 | 71,722 | 71,722 |
| Preference shares | 171,175 | 171,175 | 171,175 |
| Other capital instruments | 9,853 | 9,853 | 9,853 |
| Fair value reserves | 18,670 | 2,668 | (292,284) |
| Reserves and retained earnings | (375,930) | 850,021 | (2,063,529) |
| Net income for the period attributable to Shareholders | (151,962) | (1,219,053) | 40,759 |
| Total Equity attributable to Shareholders of the Bank | 3,227,080 | 3,372,174 | 3,991,248 |
| Non-controlling interests | 641,386 | 628,014 | 568,610 |
| Total Equity | 3,868,466 | 4,000,188 | 4,559,858 |
| 89,474,368 | 89,744,039 | 92,028,648 |
19
March 31, 2013
| Notes | 31 March 2013 |
31 March 2012 |
|
|---|---|---|---|
| (Thousands of Euros) | |||
| Interest and similar income | 3 | 730,463 | 965,327 |
| Interest expense and similar charges | 3 | (547,464) | (655,943) |
| Net interest income | 182,999 | 309,384 | |
| Dividends from equity instruments | 4 | 38 | 295 |
| Net fees and commissions income | 5 | 163,099 | 165,123 |
| Net gains / (losses) arising from trading and | |||
| hedging activities | 6 | 33,890 | 167,771 |
| Net gains / (losses) arising from financial | |||
| assets available for sale | 7 | 41,105 | 6,289 |
| Net gains / (losses) arising from financial | |||
| assets held to maturity | 8 | (278) | (22) |
| Other operating income / (costs) | 9 | (11,681) | (9,631) |
| 409,172 | 639,209 | ||
| Other net income from non banking activities | 4,809 | 4,719 | |
| Total operating income | 413,981 | 643,928 | |
| Staff costs | 10 | 169,980 | 194,325 |
| Other administrative costs | 11 | 117,639 | 132,353 |
| Depreciation | 12 | 17,387 | 19,503 |
| Operating expenses | 305,006 | 346,181 | |
| Operating net income before provisions and impairment | 108,975 | 297,747 | |
| Loans impairment | 13 | (188,382) | (152,297) |
| Other financial assets impairment | 14 | (5,828) | (816) |
| Other assets impairment | 27, 29 and 32 | (34,711) | (36,955) |
| Other provisions | 15 | (10,238) | (8,026) |
| Operating net income | (130,184) | 99,653 | |
| Share of profit of associates under the equity method Gains / (losses) from the sale of subsidiaries and |
16 | 14,094 | 12,851 |
| other assets | 17 | (1,448) | (8,058) |
| Net (loss) / income before income tax Income tax |
(117,538) | 104,446 | |
| Current | 31 | (15,190) | (20,997) |
| Deferred | 31 | 43,186 | (12,989) |
| Income after income tax from continuing operations | (89,542) | 70,460 | |
| Income arising from discontinued operations | (42,285) | (11,160) | |
| Net (loss) / income after income tax | (131,827) | 59,300 | |
| Attributable to: | |||
| Shareholders of the Bank | (151,962) | 40,759 | |
| Non-controlling interests | 45 | 20,135 | 18,541 |
| Net (loss) / income for the period | (131,827) | 59,300 | |
| Earnings per share (in Euros) | 18 | ||
| Basic | (0.03) | 0.02 | |
| Diluted | (0.03) | 0.02 |
| Notes | 31 March 2013 |
31 December 2012 |
|
|---|---|---|---|
| (Thousands of Euros) | |||
| Assets | |||
| Cash and deposits at Central Banks | 19 | 2,720,085 | 3,580,546 |
| Loans and advances to credit institutions | |||
| Repayable on demand | 20 | 776,815 | 829,684 |
| Other loans and advances | 21 | 1,730,770 | 1,887,389 |
| Loans and advances to customers | 22 | 62,155,955 | 62,618,235 |
| Financial assets held for trading | 23 | 1,939,793 | 1,690,926 |
| Financial assets available for sale | 23 | 10,145,753 | 9,223,411 |
| Assets with repurchase agreement | 85,622 | 4,288 | |
| Hedging derivatives | 24 | 173,535 | 186,032 |
| Financial assets held to maturity | 25 | 3,415,703 | 3,568,966 |
| Investments in associated companies | 26 | 524,976 | 516,980 |
| Non current assets held for sale | 27 | 1,308,406 | 1,284,126 |
| Investment property | 28 | 550,879 | 554,233 |
| Property and equipment | 29 | 620,922 | 626,398 |
| Goodwill and intangible assets | 30 | 255,545 | 259,054 |
| Current income tax assets | 29,900 | 34,037 | |
| Deferred income tax assets | 31 | 1,809,746 | 1,755,411 |
| Other assets | 32 | 1,229,963 | 1,124,323 |
| 89,474,368 | 89,744,039 | ||
| Liabilities Demonstrações Financeiras Consolidadas apresentadas de acordo com o Plano de Contas para o Sistema Bancário |
|||
| Deposits from credit institutions | 33 | 13,944,952 | 15,265,760 |
| Deposits from customers | 34 | 51,873,398 | 49,389,866 |
| Debt securities issued | 35 | 11,884,885 | 13,548,263 |
| Financial liabilities held for trading | 36 | 1,256,315 | 1,393,194 |
| Other financial liabilities at fair value | |||
| through profit or loss | 37 | 479,856 | 329,267 |
| Hedging derivatives | 24 | 267,047 | 301,315 |
| Provisions for liabilities and charges | 38 | 273,485 | 253,328 |
| Subordinated debt | 39 | 4,364,859 | 4,298,773 |
| Current income tax liabilities | 9,633 | 15,588 | |
| Deferred income tax liabilities | 31 | 3,019 | 2,868 |
| Other liabilities | 40 | 1,248,453 | 945,629 |
| Total Liabilities | 85,605,902 | 85,743,851 | |
| Equity | |||
| Share capital | 41 | 3,500,000 | 3,500,000 |
| Treasury stock | 44 | (16,448) | (14,212) |
| Share premium | 71,722 | 71,722 | |
| Preference shares | 41 | 171,175 | 171,175 |
| Other capital instruments | 41 | 9,853 | 9,853 |
| Fair value reserves | 43 | 18,670 | 2,668 |
| Reserves and retained earnings | 43 | (375,930) | 850,021 |
| Net (loss) / income for the period attributable to Shareholders | (151,962) | (1,219,053) | |
| Total Equity attributable to Shareholders of the Bank | 3,227,080 | 3,372,174 | |
| Non-controlling interests | 45 | 641,386 | 628,014 |
| Total Equity | 3,868,466 | 4,000,188 | |
| 89,474,368 | 89,744,039 |
CHIEF ACCOUNTANT THE EXECUTIVE COMMITTEE
| 31 March 2013 |
31 March 2012 |
|
|---|---|---|
| (Thousands of Euros) | ||
| Cash flows arising from operating activities | ||
| Interest income received | 665,110 | 873,369 |
| Commissions income received | 215,063 | 222,465 |
| Fees received from services rendered | 38,226 | 43,754 |
| Interest expense paid | (375,563) | (636,820) |
| Commissions expense paid | (67,292) | (73,623) |
| Recoveries on loans previously written off | 3,378 | 4,606 |
| Net earned premiums | 6,484 | 4,344 |
| Claims incurred | (3,607) | (2,944) |
| Payments to suppliers and employees | (420,837) | (450,918) |
| 60,962 | (15,767) | |
| Decrease / (increase) in operating assets: | ||
| Loans and advances to credit institutions | 129,430 | (54,000) |
| Deposits with Central Banks under monetary regulations | 788,792 | 718,638 |
| Loans and advances to customers | 480,615 | (305,155) |
| Short term trading account securities | (387,586) | (105,824) |
| Increase / (decrease) in operating liabilities: | ||
| Deposits from credit institutions repayable on demand | (151,254) | 3,523 |
| Deposits from credit institutions with agreed maturity date | (1,178,588) | 1,023,699 |
| Deposits from clients repayable on demand | 424,010 | 70,408 |
| Deposits from clients with agreed maturity date | 2,183,995 | 1,875,319 |
| 2,350,376 | 3,210,841 | |
| Income taxes (paid) / received | (16,565) | (13,031) |
| 2,333,811 | 3,197,810 | |
| Cash flows arising from investing activities Dividends received |
38 | 295 |
| Interest income from available for sale financial assets and | ||
| held to maturity financial assets | 103,360 | 116,297 |
| Proceeds from sale of financial assets available for sale | 3,988,863 | 3,470,752 |
| Purchase of financial assets available for sale | (23,388,748) | (10,875,143) |
| Proceeds from financial assets available for sale on maturity | 18,539,948 | 6,058,107 |
| Acquisition of fixed assets | (15,648) | (17,374) |
| Proceeds from sale of fixed assets | 6,906 | 6,721 |
| Decrease / (increase) in other sundry assets | (275,797) | 1,608,422 |
| (1,041,078) | 368,077 | |
| Cash flows arising from financing activities | ||
| Issuance of subordinated debt | 681 | 16,326 |
| Reimbursement of subordinated debt | (660) | (5,138) |
| Issuance of debt securities | 1,477,791 | 2,677,353 |
| Reimbursement of debt securities | (3,277,140) | (5,165,398) |
| Issuance of commercial paper and other securities | 71,996 | 6,498 |
| Reimbursement of commercial paper and other securities | (8,662) | (1,438,942) |
| Dividends paid to non-controlling interests | (608) | - |
| Increase / (decrease) in other sundry liabilities and non-controlling interests | 296,888 | (244,776) |
| (1,439,714) | (4,154,077) | |
| Exchange differences effect on cash and equivalents | (4,318) | 28,047 |
| Net changes in cash and equivalents | (151,299) | (560,143) |
| Cash and equivalents at the beginning of the period | 1,562,300 | 2,268,554 |
| Cash (note 19) | 634,186 | 577,751 |
| Other short term investments (note 20) | 776,815 | 1,130,660 |
| Cash and equivalents at the end of the period | 1,411,001 | 1,708,411 |
(Amounts expressed in thousands of Euros)
| Other comprehensive income |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Total equity |
Share capital |
Preference shares |
Other capital instruments |
Share premium |
statutory | Legal and Fair value and cash flow reserves hedged reserves |
Other | Other reserves and retained earnings |
stock | Non Treasury -controlling interests |
|
| Balance on 31 December, 2011 | 4,374,370 | 6,065,000 | 171,175 | 9,853 | 71,722 | 506,107 | (389,460) | (1,828,257) (767,963) | (11,422) 547,615 | ||
| Net income for the period attributable to | |||||||||||
| Shareholders of the Bank | 40,759 | - | - | - | - | - | - | - | 40,759 | - | - |
| Net income for the period attributable to | |||||||||||
| Non-controlling interests (note 45) | 18,541 | - | - | - | - | - | - | - | - | - | 18,541 |
| Tax and issuance costs related with capital instruments |
(9) | - | - | - | - | - | - | - | (9) | - | - |
| Treasury stock | (26) | - | - | - | - | - | - | - | - | (26) | - |
| Exchange differences arising on consolidation | 28,047 | - | - | - | - | - | - | 28,047 | - | - | - |
| Fair value reserves (note 43) | 97,176 | - | - | - | - | - | 97,176 | - | - | - | - |
| Non-controlling interests (note 45) | 2,454 | - | - | - | - | - | - | - | - | - | 2,454 |
| Other reserves arising on consolidation (note 43) | (1,454) | - | - | - | - | - | - | - | (1,454) | - | - |
| Balance on 31 March, 2012 | 4,559,858 | 6,065,000 | 171,175 | 9,853 | 71,722 | 506,107 | (292,284) | (1,800,210) (728,667) | (11,448) 568,610 | ||
| Share capital increase through the issue of | |||||||||||
| 12,500,000 new shares (note 41) | 500,000 | 500,000 | - | - | - | - | - | - | - | - | - |
| Costs related to the capital increase | (16,784) | - | - | - | - | - | - | - | (16,784) | - | - |
| Tax related to the registration costs regarding the | |||||||||||
| capital increase | 4,198 | - | - | - | - | - | - | - | 4,198 | - | - |
| Reduction of the share capital (note 41) | - | (3,065,000) | - | - | - | 123,893 | - | - | 2,941,107 | - | - |
| Actuarial losses for the period | (133,733) | - | - | - | - | - | - | (133,733) | - | - | - |
| Net (loss) / income for the period attributable | |||||||||||
| to Shareholders of the Bank | (1,259,812) | - | - | - | - | - | - | - | (1,259,812) | - | - |
| Net income for the period attributable to | |||||||||||
| non-controlling interests (note 45) Impact of selling 2.637% of Banco |
63,303 | - | - | - | - | - | - | - | - | - | 63,303 |
| Millennium Angola | (782) | - | - | - | - | - | - | - | (782) | - | - |
| Treasury stock | (2,764) | - | - | - | - | - | - | - | - | (2,764) | - |
| Gains and losses on sale of treasury stock | (489) | - | - | - | - | - | - | - | (489) | - | - |
| Tax related to gains and losses on sale of | 122 | - | - | - | - | - | - | - | 122 | - | - |
| treasury stock | |||||||||||
| Exchange differences arising on consolidation | (2,964) | - | - | - | - | - | - | (2,964) | - | - | - |
| Fair value reserves (note 43) | 294,952 | - | - | - | - | - | 294,952 | - | - | - | - |
| Non-controlling interests (note 45) | (3,899) | - | - | - | - | - | - | - | - | - | (3,899) |
| Other reserves arising on consolidation (note 43) | (1,018) | - | - | - | - | - | - | - | (1,018) | - | - |
| Balance on 31 December, 2012 | 4,000,188 | 3,500,000 | 171,175 | 9,853 | 71,722 | 630,000 | 2,668 | (1,936,907) | 937,875 | (14,212) 628,014 | |
| Costs related to the capital increase | 1,180 | - | - | - | - | - | - | - | 1,180 | - | - |
| Actuarial losses for the period (note 50) | (3,744) | - | - | - | - | - | - | (3,744) | - | - | - |
| Net (loss) / income for the period attributable | |||||||||||
| to Shareholders of the Bank | (151,962) | - | - | - | - | - | - | - | (151,962) | - | - |
| Net income for the period attributable to | |||||||||||
| non-controlling interests (note 45) | 20,135 | - | - | - | - | - | - | - | - | - | 20,135 |
| Treasury stock | (2,236) | - | - | - | - | - | - | - | - | (2,236) | - |
| Exchange differences arising on consolidation | (4,319) | - | - | - | - | - | - | (4,319) | - | - | - |
| Fair value reserves (note 43) | 16,002 | - | - | - | - | - | 16,002 | - | - | - | - |
| Non-controlling interests (note 45) | (6,763) | - | - | - | - | - | - | - | - | - | (6,763) |
| Other reserves arising on consolidation (note 43) | (15) | - | - | - | - | - | - | - | (15) | - | - |
| Balance on 31 March, 2013 | 3,868,466 | 3,500,000 | 171,175 | 9,853 | 71,722 | 630,000 | 18,670 | (1,944,970) | 787,078 | (16,448) 641,386 | |
| Notes | 31 March 2013 |
31 March 2012 |
|
|---|---|---|---|
| (Thousands of Euros) | |||
| Fair value reserves | 43 | 15,549 | 114,346 |
| Taxes | 43 | 453 | (17,170) |
| 16,002 | 97,176 | ||
| Actuarial losses for the period | |||
| Gross value | (1,796) | - | |
| Taxes | (1,948) | - | |
| (3,744) | - | ||
| Exchange differences arising on consolidation | 43 | (4,319) | 28,047 |
| Comprehensive income recognised directly in Equity after taxes | 7,939 | 125,223 | |
| Net (loss) / income for the period | (131,827) | 59,300 | |
| Total Comprehensive income for the period | (123,888) | 184,523 | |
| Attributable to: | |||
| Shareholders of the Bank | (144,023) | 165,982 | |
| Non-controlling interests | 20,135 | 18,541 | |
| Total Comprehensive income for the period | (123,888) | 184,523 |
Notes to the Interim Consolidated Financial Statements
31 March, 2013
Banco Comercial Português, S.A. Sociedade Aberta (the ‗Bank') is a public bank, established in Portugal in 1985. It started operations on 5 May, 1986, and these consolidated financial statements reflect the results of the operations of the Bank and all its subsidiaries (together referred to as the ‗Group') and the Group's interest in associates, for the three months ended 31 March, 2013 and 2012.
In accordance with Regulation (EC) no. 1606/2002 from the European Parliament and the Council, of 19 July 2002, the Decree-Law no. 35/2005, of 17 February and Regulation no. 1/2005 from the Bank of Portugal, the Group's consolidated financial statements are required to be prepared in accordance with International Financial Reporting Standards (‗IFRS') as endorsed by the European Union ('EU') since the year 2005. IFRS comprise accounting standards issued by the International Accounting Standards Board (‗IASB') as well as interpretations issued by the International Financial Reporting Interpretations Committee (‗IFRIC') and their predecessor bodies. The consolidated financial statements presented were approved on 6 May 2013 by the Bank's Executive Committee. The financial statements are presented in thousands of euros, rounded to the nearest thousand.
All the references in this document related with any normative always report to current version.
The consolidated financial statements for the three months ended 31 March, 2013 were prepared in terms of recognition and measurement in accordance with the IFRS adopted by the EU and effective on that date. The financial statements for the three months period ended 31 March 2013 do not include all the information to be published in the annual financial statements.
The Group has adopted IFRS and interpretations mandatory for accounting periods beginning on or after 1 January, 2013.
The accounting policies set out below have been applied consistently throughout the Group's entities and for all periods presented in these consolidated financial statements.
The Group's financial statements are prepared under the historical cost convention, as modified by the application of fair value for derivative financial instruments, financial assets and liabilities at fair value through profit or loss and available for sale assets, except those for which a reliable measure of fair value is not available. Financial assets and liabilities that are hedged under hedge accounting are stated at fair value in respect of the risk that is being hedged, if applicable. Other financial assets and liabilities and non-financial assets and liabilities are stated at amortised cost or historical cost. Non-current assets and disposal groups held for sale are stated at the lower of carrying amount or fair value less costs to sell. The liability for defined benefit obligations is recognised as the present value of the defined benefit obligation net of the value of the fund.
The preparation of the financial statements in accordance with IFRS requires the Executive Committee to make judgments, estimates and assumptions that affect the application of the accounting policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances and form the basis for making the judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The issues involving a higher degree of judgment or complexity or for which assumptions and estimates are considered to be significant, are presented in note 1 ad).
As from 1 January, 2010, the Group applied IFRS 3 (revised) for the accounting of business combinations. The changes in the accounting policies resulting from the application of IFRS 3 (revised) are applied prospectively.
The investments in subsidiaries, where the Group holds control, are fully consolidated from the date the Group assumes control over its financial and operational activities, until the control ceases to exist. Control is presumed to exist when the Group owns more than half of the voting rights. Additionally, control exists when the Group has the power, directly or indirectly, to manage the financial and operating policies of an entity to obtain benefits from its activities, even if the percentage of capital held is less than 50%.
As from 1 January, 2010, accumulated losses are attributed to non-controlling interests in the respective proportion, implying that the Group can recognise negative non-controlling interests. Previously, when the accumulated losses of a subsidiary attributable to the non-controlling interest exceed the equity of the subsidiary attributable to the non-controlling interest, the excess was attributed to the Group and charged to the income statement as it occurs. Profits subsequently reported by the subsidiary are recognised as profits of the Group until the prior losses attributable to non-controlling interest previously recognised by the Group have been recovered.
As from 1 January, 2010, on a step acquisition process resulting in the acquisition of control, the revaluation of any participation previously acquired, is booked against the profit and loss account when goodwill is calculated. On a partial disposal resulting in loss of control over a subsidiary, any participation retained is revalued at market value on the sale date and the gain or loss resulting from this revaluation is booked against the income statement.
Investments in associated companies are consolidated by the equity method from the date that the Group acquires significant influence and the date it ceases to exist. Associates are those entities in which the Group has significant influence but not control over the financial and operating policy decisions of the investee. It is assumed that the Group has significant influence when it holds, directly or indirectly, 20% or more of the voting rights of the investee. If the Group holds, directly or indirectly less than 20% of the voting rights of the investee, it is presumed that the Group does not have significant influence, unless such influence can be clearly demonstrated.
The existence of significant influence by the Group is usually evidenced in one or more of the following ways:
material transactions between the Group and the investee;
interchange of the management team; or
provision of essential technical information.
The consolidated financial statements include the part that is attributable to the Group of the total reserves and results of associated companies accounted on an equity basis. When the Group's share of losses exceeds its interest in the associate, the carrying amount is reduced to zero and recognition of further losses is discontinued except to the extent that the Group has incurred in a legal obligation to assume those losses on behalf of an associate.
Goodwill arising from business combinations occurred before 1 January 2004 was charged against reserves.
Business combinations that occurred after 1 January 2004 are accounted under the purchase method. The acquisition cost corresponds to the fair value, determined at the acquisition date, of the assets given and liabilities incurred or assumed including the costs directly attributable to the acquisition, for acquisitions up to 31 December, 2009.
As from 1 January, 2010 onwards, costs directly attributable to the acquisition of a subsidiary are booked directly in the income statement.
As from the transition date to IFRS (1 January 2004), positive goodwill arising from acquisitions is recognised as an asset carried at acquisition cost and is not subject to amortisation.
Goodwill arising on the acquisition of subsidiaries and associates is defined as the difference between the cost of acquisition and the total or corresponding share of the fair value of the net assets and contingent liabilities acquired, depending on the option taken.
Negative goodwill arising on an acquisition is recognised directly in the income statement in the year the business combination occurs.
The recoverable amount of the goodwill in subsidiaries is assessed annually, regardless the existence of any impairment triggers. Impairment losses are recognised in the income statement. The recoverable amount is determined based on the higher between the assets value in use and the market value deducted of selling costs, calculated using valuation methodologies supported by discounted cash flow techniques, considering market conditions, the time value of money and the business risks.
Until 31 December 2009, the contingent acquisition prices were determined based on the best estimate of probable future payments, being the future changes booked against goodwill. As from 1 January 2010, goodwill is no longer adjusted due to changes in the initial estimate of the contingent purchase price and the difference is booked in the income statement, or in equity, when applicable.
Until 31 December, 2009, when an investment in a subsidiary was disposed of, without a loss in control, the difference between the sale price and the book value of the equity allocated to the proportion of capital to be sold by the Group, plus the carrying value of goodwill in that subsidiary, was recognised in the income statement of the period as a gain or loss resulting from the disposal. The dilution effect occurred when the percentage of investment in a subsidiary decreased without any sale of interest in that subsidiary, for example, when the Group did not participate proportionally in a share capital increase of that subsidiary. Until 31 December, 2009, the Group recognised the gains or losses resulting from a dilution of a subsidiary following a sale or capital increase in the income statement.
Also in an acquisition of non-controlling interests, until 31 December 2009, the difference between the acquisition value and the fair value of the noncontrolling interests acquired was accounted against goodwill. The acquisitions of non-controlling interests through written put options related to investments in subsidiaries held by non-controlling interests were recorded as a financial liability for the present value of the best estimate of the amount payable, against non-controlling interests. Any difference between the non-controlling interests acquired and the fair value of the liability was recorded as goodwill. The fair value of the liability was determined based on the contractual price which may be fixed or variable. In case of a variable price, the changes in the liability are recognised against goodwill and the effect of the financial discount of the liability (unwinding) was recognised in the income statement. This accounting treatment is maintained for all options contracted until 31 December 2009.
Since 1 January 2010, the acquisition of the non-controlling interests that does not impact the control position of a subsidiary is accounted as a transaction with shareholders and, therefore, is not recognised additional goodwill resulting from this transaction. The difference between the acquisition cost and the fair value of non-controlling interests acquired is recognised directly in reserves. On this basis, the gains and losses resulting from the sale of non-controlling interests, that does not impact the control position of a subsidiary, are always recognised against reserves.
The gains and losses resulting from the dilution or sale of a financial position in a subsidiary, with loss of control, are recognised by the Group in the income statement.
Similarly, as from 1 January 2010, the acquisitions of non-controlling interests through written put options related with investments in subsidiaries held by non-controlling interests, are recorded as a financial liability for the present value of the best estimate of the amount payable, against non-controlling interests. The fair value of the liability is determined based on the contractual price which may be fixed or variable. In case of a variable price, the changes in the liability are recognised against the income statement as well as the effect of the financial discount of the liability (unwinding). As from 1 January 2010 onwards, in an acquisition (dilution) of non-controlling interests not resulting in a loss of control, the difference between the fair value of the non-controlling interests acquired and the acquisition value, is accounted against reserves.
The Group fully consolidates SPEs resulting from securitization operations of assets from Group entities (as referred in note 22) and from operations regarding the sale of loans, when the substance of the relation with those entities indicates that the Group exercises control over its activities, independently of the percentage of the equity held. Besides these SPEs resulting from securitization and sale of loans operations, no additional SPEs have been consolidated considering that they do not meet the criteria established on SIC 12 as described below.
The evaluation of the existence of control is determined based on the criteria established by SIC 12, which can be analysed as follows:
The activities of the SPE, in substance, are being conducted on behalf of the Group, in accordance with the specific needs of the Group's business, in order to obtain benefits from these activities;
The Group has the decision-making powers to obtain the majority of the benefits of the activities of the SPE or, by setting up an autopilot mechanism, the Group has delegated these decision-making powers;
The Group has the rights to obtain the majority of the benefits of the SPE and therefore may be exposed to risks inherent to the activities of the SPE;
The Group retains the majority of the residual or ownership risks related to the SPE or its assets in order to obtain benefits from its activities.
The Group manages assets held by investment funds for which the participation units are held by third parties. The financial statements of these entities are not consolidated by the Group, except when it has the control over these investment funds, namely when it holds more than 50% of the participation units.
When the Group consolidates real estate investment funds, the real estate property resulting from these funds are classified as investment property, as described in note 1 r).
The financial statements of the foreign subsidiaries and associates of the Group are prepared in their functional currency, defined as the currency of the primary economic environment in which they operate or the currency in which the subsidiaries obtain their income or finance their activity. In the consolidation process, assets and liabilities, including goodwill, of foreign subsidiaries are converted into euros at the official exchange rate at the balance sheet date. The goodwill existing on these investments is valued against reserves.
Regarding the investments in foreign operations that are consolidated under the full consolidation, proportional or equity methods, for exchange differences between the conversion to Euros of the opening net assets at the beginning of the year and their value in Euros at the exchange rate ruling at the balance sheet date for consolidated accounts are charged against consolidated reserves - exchange differences. The exchange differences from hedging instruments related to foreign operations are eliminated from profit and loss in the consolidation process against the exchange differences booked in reserves resulting from those investments. Whenever the hedge is not fully effective, the ineffective portion is accounted against profit and loss of the year.
The income and expenses of these subsidiaries are converted to Euros at an approximate rate of the rates ruling at the dates of the transactions. Exchange differences from the conversion to Euros of the profits and losses for the reporting period, arising from the difference between the exchange rate used in the income statement and the exchange rate prevailing at the balance sheet date, are recognised in reserves - exchange differences.
On disposal of investments in foreign subsidiaries for which there is loss of control, exchange differences related to the investment in the foreign operation and to the associated hedge transaction previously recognised in reserves, are transferred to profit and loss as part of the gains or loss arising from the disposal.
The balances and transactions between Group's companies, or any unrealised gains and losses arising from these transactions, are eliminated in the preparation of the consolidated financial statements. Unrealised gains and losses arising from transactions with associates and jointly controlled entities are eliminated in the proportion of the Group's investment in the entity.
Loans and advances to customers includes loans and advances originated by the Group which are not intended to be sold in the short term and are recognised when cash is advanced to costumers.
The derecognition of these assets occurs in the following situations: (i) the contractual rights of the Group have expired; or (ii) the Group transferred substantially all the associated risks and rewards.
Loans and advances to customers are initially recognised at fair value plus any directly attributable transaction costs and fees and are subsequently measured at amortised cost using the effective interest method, being presented in the balance sheet net of impairment losses.
The Group's policy consists in a regular assessment of the existence of objective evidence of impairment in the loan portfolios. Impairment losses identified are charged against results and subsequently, if there is a reduction of the estimated impairment loss, the charge is reversed, in a subsequent period.
After the initial recognition, a loan or a loan portfolio, defined as a group of loans with similar credit risk characteristics, can be classified as impaired when there is an objective evidence of impairment as a result of one or more events and when these have an impact on the estimated future cash flows of the loan or of the loan portfolio that can be reliably estimated.
According to IAS 39, there are two basic methods of calculating impairment losses: (i) individually assessed loans; and (ii) collective assessment.
Impairment losses on individually assessed loans are determined by an evaluation of the exposures on a case-by-case basis. For each loan considered individually significant, the Group assesses, at each balance sheet date, the existence of any objective evidence of impairment. In determining such impairment losses on individually assessed loans, the following factors are considered:
Group's aggregate exposure to the customer and the existence of overdue loans;
The viability of the customer's business and capability to generate sufficient cash flow to service their debt obligations in the future;
Impairment losses are calculated by comparing the present value of the expected future cash flows, discounted at the original effective interest rate of the loan, with its current carrying value, being the amount of any loss charged in the income statement. The carrying amount of impaired loans is reduced through the use of an allowance account. For loans with a variable interest rate, the discount rate used corresponds to the effective annual interest rate, which was applicable in the period that the impairment was determined.
Loans that are not identified as having an objective evidence of impairment are grouped on the basis of similar credit risk characteristics, and assessed collectively.
(ii) Collective assessment
Impairment losses are calculated on a collective basis under two different scenarios:
for homogeneous groups of loans that are not considered individually significant; or
losses which have been incurred but have not yet been reported (IBNR) on loans for which no objective evidence of impairment is identified (see last paragraph (i)).
The collective impairment loss is determined considering the following factors:
The methodology and assumptions used to estimate the future cash flows are reviewed regularly by the Group in order to monitor the differences between estimated and real losses.
Loans for which no evidence of impairment has been identified, are grouped together based on similar credit risk characteristics for calculating a collective impairment loss. This analysis allows the Group's recognition of losses whose identification in terms individual only occur in future periods.
In accordance with "Carta-Circular" no. 15/2009 of the Bank of Portugal, loans and advances to customers are charged-off when there is no realistic expectation, from an economic perspective, of recovering the loan amount. For collateralised loans, the charge-off occurs for the unrecoverable amount when the funds arising from the execution of the respective collaterals, for the part of the loans which is collateralised, is effectively received. This chargeoff is carried out only for loans that are considered not to be recoverable and fully provided.
(i) Classification, initial recognition and subsequent measurement
1) Financial assets and liabilities at fair value through profit and loss
The financial assets and liabilities acquired or issued with the purpose of sale or re-acquisition on the short term, namely bonds, treasury bills or shares, or that are part of a financial instruments portfolio and for which there is evidence of a recent pattern of short-term profit taking or that can be included in the definition of derivative (except in the case of a derivative classified as hedging) are classified as trading. The dividends associated to these portfolios are accounted in gains arising on trading and hedging activities.
The interest from debt instruments is recognised as net interest income.
Trading derivatives with a positive fair value are included in Financial assets held for trading and the trading derivatives with negative fair value are included in Financial liabilities held for trading.
The Group has adopted the Fair Value Option for certain own bond issues, loans and time deposits that contain embedded derivatives or with related hedging derivatives. The variations of the Group's credit risk related to financial liabilities accounted under the Fair Value Option are disclosed in Net gains / (losses) arising from trading and hedging activities.
The designation of other financial assets and liabilities at fair value through profit and loss is performed whenever at least one of the requirements is fulfilled:
The financial assets and liabilities at Fair Value Option are initially accounted at their fair value, with the expenses or income related to the transactions being recognised in profit and loss and subsequently measured at fair value through profit and loss. The accrual of interest and premium/discount (when applicable) is recognised in Net interest income according to the effective interest rate of each transaction, as well as for accrual of interest of derivatives associated to financial instruments classified as Fair Value Option.
Financial assets available for sale held with the purpose of being maintained by the Group, namely bonds, treasury bills or shares, are classified as available for sale, except if they are classified in another category of financial assets. The financial assets available for sale are initially accounted at fair value, including all expenses or income associated with the transactions. The financial assets available for sale are subsequently measured at fair value. The changes in fair value are accounted for against fair value reserves until they are sold or an impairment loss exists. On disposal of the financial assets available for sale, the accumulated gains or losses recognised as fair value reserves are recognised under Net gains / (losses) arising from available for sale financial assets. Interest income from debt instruments is recognised in Net interest income based on the effective interest rate, including a premium or discount when applicable. Dividends are recognised in the income statement when the right to receive the dividends is attributed.
The financial assets held-to-maturity include non-derivative financial assets with fixed or determinable payments and fixed maturity, for which the Group has the intention and capacity to maintain until the maturity of the assets and that were not included in the category of financial assets at fair value through profit and loss or financial assets available for sale. These financial assets are initially recognised at fair value and subsequently measured at amortised cost. The interest is calculated using the effective interest rate method and recognised in Net interest income. The impairment losses are recognised in profit and loss when identified.
Any reclassification or disposal of financial assets included in this category that does not occur close to the maturity of the assets, will require the Group to reclassify the entire portfolio as Financial assets available for sale and the Group will not be allowed to classify any assets under this category for the following two years.
Non-derivative financial assets with fixed or determined payments, that are not quoted in a market and which the Group does not intend to sell immediately or in a near future, may be classified in this category.
In addition to loans granted, the Group recognises in this category unquoted bonds and commercial paper. The financial assets recognised in this category are initially accounted at fair value and subsequently at amortised cost net of impairment. The incremental direct transaction costs are included in the effective interest rate for these financial instruments. The interest accounted based on the effective interest rate method are recognised in Net interest income.
The impairment losses are recognised in profit and loss when identified.
The other financial liabilities are all financial liabilities that are not recognised as financial liabilities at fair value through profit and loss. This category includes money market transactions, deposits from customers and from other financial institutions, issued debt, and other transactions.
These financial liabilities are initially recognised at fair value and subsequently at amortised cost. The related transaction costs are included in the effective interest rate. The interest calculated at the effective interest rate is recognised in Net interest income.
The financial gains or losses calculated at the time of repurchase of other financial liabilities are recognised as Net gains / (losses) from trading and hedging activities, when occurred.
At each balance sheet date, an assessment of the existence of objective evidence of impairment, is made. A financial asset or group of financial assets are impaired when there is objective evidence of impairment resulting from one or more events that occurred after its initial recognition, such as: (i) for listed securities, a prolonged devaluation or a significant decrease in its quotation price, and (ii) for unlisted securities, when that event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be estimated reasonably. According to the Group's policies, a 30% depreciation in the fair value of an equity instrument is considered a significant devaluation and the 1year period is assumed to be a prolonged decrease in the fair value below the acquisition cost.
If an available for sale asset is determined to be impaired, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the profit or loss) is removed from fair value reserves and recognised in profit or loss. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurred after the impairment loss was recognised in the profit or loss, the impairment loss is reversed through the income statement. Recovery of impairment losses on equity instruments classified as financial assets available for sale, is recognised as a gain in fair value reserves when it occurs (if there are no reversal in the income statement).
Embedded derivatives should be accounted for separately as derivatives, if the economic risks and benefits of the embedded derivative are not closely related to the host contract, unless the hybrid (combined) instrument is not initially measured at fair value with changes through profit and loss. Embedded derivatives are classified as trading and recognised at fair value with changes through profit and loss.
The Group designates derivatives and other financial instruments to hedge its exposure to interest rate and foreign exchange risk, resulting from financing and investment activities. Derivatives that do not qualify for hedge accounting are accounted for as trading instruments.
Derivative hedging instruments are stated at fair value and gains and losses on revaluation are recognised in accordance with the hedge accounting model adopted by the Group. A hedge relationship exists when:
at the inception of the hedge there is formal documentation of the hedge;
the hedge is expected to be highly effective;
the hedge is valuable in a continuous basis and highly effective throughout the reporting period; and
for hedges of a forecasted transaction, the transaction is highly probable and presents an exposure to variations in cash flows that could ultimately affect profit or loss.
When a derivative financial instrument is used to hedge foreign exchange arising from monetary assets or liabilities, no hedge accounting model is applied. Any gain or loss associated to the derivative and to changes in foreign exchange risk related with the monetary items are recognised through profit and loss.
Changes in the fair value of derivatives that are designated and qualify as fair value hedge instruments are recognised in profit and loss, together with changes in the fair value attributable to the hedged risk of the asset or liability or group of assets and liabilities. If the hedge relationship no longer meets the criteria for hedge accounting, the cumulative gains and losses recognised until the discontinuance of the hedge accounting are amortised through profit and loss over the residual period of the hedged item.
In a hedge relationship, the effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity - cash flow hedge reserves. Any gain or loss relating to the ineffective portion of the hedge is immediately recognised in profit and loss when occurred.
Amounts accumulated in equity are reclassified to profit and loss in the periods in which the hedged item will affect profit or loss.
In case of hedging variability of cash-flows, when the hedge instrument expires or is disposed or when the hedging relationship no longer meets the criteria for hedge accounting, or when the hedge relation is revoked, the hedge relationship is discontinued on a prospective basis. Therefore, the fair value changes of the derivative accumulated in equity until the date of the discontinued hedge accounting can be:
Deferred over the residual period of the hedged instrument; or
Recognised immediately in results, if the hedged instrument is extinguished.
In the case of a discontinued hedge of a forecast transaction, the change in fair value of the derivative recognised in equity at that time remains in equity until the forecasted transaction is ultimately recognised in the income statement. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to profit and loss.
For a hedge relationship to be classified as such according to IAS 39, effectiveness has to be demonstrated. As such, the Group performs prospective tests at the beginning date of the initial hedge, if applicable and retrospective tests in order to demonstrate at each reporting period the effectiveness of the hedging relationships, showing that the changes in the fair value of the hedging instrument are hedged by the changes in the hedged item for the risk being covered. Any ineffectiveness is recognised immediately in profit and loss when incurred.
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity. The gain or loss relating to the ineffective portion is immediately recognised in the income statement. Gains and losses accumulated in equity related to the investment in a foreign operation and to the associated hedge operation are included in the income statement on the disposal of the foreign operation as part of the gain or loss from the disposal.
In October 2008, the IASB issued a change to IAS 39 – Reclassification of Financial Assets (Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7: Financial Instruments Disclosures). This change allowed an entity to transfer financial assets from Financial assets at fair value through profit and loss – trading to Financial assets available for sale, to Loans and Receivables - Loans represented by securities or to Financial assets heldto-maturity, as long as the requirements described in the standard are met, namely:
The Group adopted this possibility for a group of financial assets, as disclosed in note 23.
Transfers of financial assets recognised in the category of Financial assets available-for-sale to Loans and receivables - Loans represented by securities and to Financial assets held-to-maturity are allowed, in determined and specific circumstances.
Transfers from and to Financial assets and financial liabilities at fair value through profit and loss by decision of the entity (Fair value option) are prohibited.
The Group derecognises financial assets when all rights to future cash flows have expired. In a transfer of assets, derecognition can only occur either when risks and rewards have been substantially transferred or the Group does not maintain control over the assets.
The Group derecognises financial liabilities when these are discharged, cancelled or extinguished.
An instrument is classified as an equity instrument when there is no contractual obligation at settlement to deliver cash or another financial asset to another entity, independently from its legal form, showing a residual interest in the assets of an entity after deducting all of its liabilities.
Transaction costs directly attributable to an equity instruments' issuance are recognised in equity as a deduction to the amount issued. Amounts paid or received related to sales or acquisitions of equity instruments are recognised in equity, net of transaction costs.
Preference shares issued by the Group are considered as an equity instrument when redemption of the shares is solely at the discretion of the issuer and dividends are paid at the discretion of the Group.
Income from equity instruments (dividends) are recognised when the right to receive this income is established and are deducted to equity.
Financial instruments that contain both a liability and an equity component (example: convertible bonds) are classified as compound financial instruments. For those instruments to be considered as compound financial instruments, the terms of its conversion to ordinary shares (number of shares) can not change with changes in its fair value. The financial liability component corresponds to the present value of the future interest and principal payments, discounted at the market interest rate applicable to similar financial liabilities that do not have a conversion option. The equity component corresponds to the difference between the proceeds of the issue and the amount attributed to the financial liability. Financial liabilities are measured at amortised cost through the effective interest rate method. The interests are recognised in Net interest income.
j) Securities borrowing and repurchase agreement transactions
Securities lent under securities lending arrangements continue to be recognised in the balance sheet and are measured in accordance with the applicable accounting policy. Cash collateral received in respect of securities lent is recognised as a financial liability. Securities borrowed under securities borrowing agreements are not recognised. Cash collateral placements in respect of securities borrowed are recognised under loans and advances to either banks or customers. Income and expenses arising from the securities borrowing and lending business are recognised on an accrual basis over the period of the transactions and are included in interest income or expense (net interest income).
The Group performs acquisition/sale of securities under reselling/repurchase agreements of securities substantially equivalent in a future date at a predetermined price ('repos'/'reverse repos'). The securities related to reselling agreements in a future date are not recognised on the balance sheet. The amounts paid are recognised in loans and advances to customers or loans and advances to credit institutions. The receivables are collateralised by the related securities. Securities sold through repurchase agreements continue to be recognised in the balance sheet and are revaluated in accordance with the applicable accounting policy. The amounts received from the proceeds of these securities are considered as deposits from customers and deposits from credit institutions.
The difference between the acquisition/sale and reselling/repurchase conditions is recognised on an accrual basis over the period of the transaction and is included in interest income or expenses.
Non current assets, groups of non-current assets held for sale (groups of assets together and related liabilities that include at least a non current asset) and discontinued operations are classified as held for sale when it is intention to sell the referred assets and liabilities and when the referred assets are available for immediate sale and its sale is highly probable.
The Group also classifies as non-current assets held for sale those non-current assets or groups of assets acquired exclusively with a view to its subsequent disposal, which are available for immediate sale and its sale is highly probable.
Immediately before classification as held for sale, the measurement of the non-current assets or all assets and liabilities in a disposal group, is performed in accordance with the applicable IFRS. After their reclassification, these assets or disposal groups are measured at the lower of their cost and fair value less costs to sell.
Discontinued operations and the subsidiaries acquired exclusively with the purpose to sell in the short term, are consolidated until the disposal.
The Group also classifies as non-current assets held for sale, the investments arising from recovered loans that are measured initially by the lower of its fair value net of selling costs and the loan's carrying amount on the date that the recovery occurs or the judicial decision is formalised.
The fair value is determined based on the expected selling price estimated through periodic valuations performed by the Group.
The subsequent accounting of these assets is determined based on the lower of the carrying amount and the corresponding fair value net of expenses. In case of unrealised losses, these should be recognised as impairment losses against results.
At the lessee's perspective, finance lease transactions are recorded as an asset and liability at fair value of the leased asset, which is equivalent to the present value of the future lease payments. Lease rentals are a combination of the financial charge and the amortisation of the capital outstanding. The financial charge is allocated to the periods during the lease term to produce a constant periodic rate of interest on the remaining liability balance for each period.
At the lessor's perspective, assets held under finance leases are recorded in the balance sheet as a receivable at an amount equal to the net investment in the lease. Lease rentals are a combination of the financial income and amortization of the capital outstanding. Recognition of the financial result reflects a constant periodical return rate over the remaining net investment of the lessor.
Interest income and expense for financial instruments measured at amortised cost are recognised in the interest income or expenses (net interest income) through the effective interest rate method. The interest related to financial assets available for sale calculated at the effective interest rate method are also recognised in net interest income as well as those from assets and liabilities at fair value through profit and loss.
The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of the financial instrument (or, when appropriate, for a shorter period), to the net carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Group estimates future cash flows considering all contractual terms of the financial instrument (for example: early payment options) but without considering future impairment losses. The calculation includes all fees paid or received considered as included in the effective interest rate, transaction costs and all other premiums or discounts directly related with the transaction, except for assets and liabilities at fair value through profit and loss.
If a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised based on the interest rate used to discount the future cash flows for the purpose of measuring the impairment loss.
Specifically regarding the accounting policy for interest on overdue loans' portfolio are considered the following aspects:
Interest income for overdue loans with collaterals are accounted for as income, up to the limit of the valuation of the collateral valued on a prudent basis, in accordance with IAS 18, assuming that there is a reasonable probability of recoverability; and
The interests accrued and not paid for overdue loans for more than 90 days that are not covered by collaterals are written-off and are recognised only when they are received, in accordance with IAS 18, on the basis that its recoverability is considered to be remote.
For derivative financial instruments, except those classified as hedging instruments of interest rate risk, the interest component is not separated from the changes in the fair value and is classified under Net gains / (losses) from trading and hedging activities. For hedging derivatives of interest rate risk and those related to financial assets or financial liabilities recognised in the Fair Value Option category, the interest component of the changes in their fair value is recognised under interest income or expense (Net interest income).
Fees and commissions are recognised according to the following criteria:
Fees and commissions that are an integral part of the effective interest rate of a financial instrument, are recognised in net interest income.
o) Financial net gains / losses (Net gains / losses arising from trading and hedging activities, from financial assets available for sale and from financial assets held to maturity)
Financial net gains / losses includes gains and losses arising from financial assets and financial liabilities at fair value through profit and loss, that is, fair value changes and interest on trading derivatives and embedded derivatives), as well as the corresponding dividends received. This caption also includes the impairment losses and gains and losses arising from the sale of available for sale financial assets and financial assets held to maturity. The changes in fair value of hedging derivatives and hedged items, when fair value hedge is applicable, are also recognised in this caption.
Assets held in the scope of fiduciary activities are not recognised in the Group's consolidated financial statements. Fees and commissions arising from this activity are recognised in the income statement in the period in which they occur.
Property and equipment are stated at acquisition cost less accumulated depreciation and impairment losses. Subsequent costs are recognised as a separate asset only when it is probable that future economic benefits will result for the Group. All other repairs and maintenance expenses are charged to the income statement during the financial period in which they are incurred.
The Group performs impairment tests whenever events or circumstances indicate that the book value exceeds the highest between the value in use and the fair value less costs to sell, being the difference charged to the profit and loss.
Depreciation is calculated on a straight-line basis, over the following periods which correspond to their estimated useful life:
| Number of years | |
|---|---|
| Premises | 50 |
| Expenditure on freehold and leasehold buildings | 10 |
| Equipment | 4 to 12 |
| Other fixed assets | 3 |
Whenever there is an indication that a fixed tangible asset might be impaired, its recoverable amount is estimated and an impairment loss shall be recognised if the net value of the asset exceeds its recoverable amount.
The recoverable amount is determined as the highest between the fair value less costs to sell and its value in use calculated based on the present value of future cash-flows estimated to be obtained from the continued use of the asset and its sale at the end of the useful life.
The impairment losses of the fixed tangible assets are recognised in profit and loss.
Real estate properties owned by the investment funds consolidated in the Group, are recognised as Investment properties considering, that the main objective of these buildings is the capital appreciation on a long term basis and not its sale in a short term period, or its maintenance for own use.
These investments are initially recognised at its acquisition cost, including the transaction costs and subsequently revaluated at its fair value. The fair value of the investment property should reflect the market conditions at the balance sheet date. Changes in fair value are recognised in results as Other operating income.
The expertises responsible for the valuation of the assets are properly certified for that purpose, being registered in CMVM.
Research and development expenditure
The Group does not capitalise any research and development costs. All expenses are recognised as costs in the year in which they occur.
The Group accounts as intangible assets the costs associated to software acquired from external entities and depreciates them on a straight line basis by an estimated lifetime of three years. The Group does not capitalise internal costs arising from software development.
For the purposes of the cash flow statement, cash and cash equivalents comprise balances with less than three months' maturity from the balance sheet date, including cash and loans and advances to credit institutions.
Cash and cash equivalents exclude restricted balances with central banks.
Financial assets and liabilities are offset and the net amount is recorded in the balance sheet when the Group has a legally enforceable right to offset the recognised amounts and the transactions are intended to be settled on a net basis.
Transactions in foreign currencies are translated into the respective functional currency of the operation at the foreign exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies, are translated into the respective functional currency of the operation at the foreign exchange rate at the reporting date. Foreign exchange differences arising on translation are recognised in the profit and loss. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated into the respective functional currency of the operation at the foreign exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into the respective functional currency of the operation at the foreign exchange rate at the date that the fair value was determined against profit and loss, except for financial assets available-for-sale, for which the difference is recognised against equity.
The Group has the responsibility to pay to their employees retirement pensions and widow and orphan benefits and permanent disability pensions, in accordance with the agreement entered with the collective labour arrangements. These benefits are estimated in the pensions plans ‗Plano ACT' and ‗Plano ACTQ' of the Pension Plan of BCP Group, which corresponds to the referred collective labour arrangements (the conditions are estimated in the private social security of the banking sector for the constitution of the right to receive a pension).
Until 2011, along with the benefits provided in two planes above, the Group had assumed the responsibility, under certain conditions in each year, of assigning a complementary plan to the Group's employees hired before 21 September, 2006 (Complementary Plan). The Group at the end of 2012 decided to extinguish ("cut") the benefit of old age Complementary Plan. As at 14 December 2012, the ISP ( Portuguese Insurance Institute) formally approved this change benefit plan of the Group with effect from 1 January 2012. The cut of the plan was made, having been assigned to the employees, individual rights acquired. On that date, the Group also proceed to the settlement of the related liability.
From 1 January 2011, banks' employees were integrated in the General Social Security Scheme which now covers their maternity, paternity, adoption and pension benefits. However, the Banks remain liable for those benefits as concern illness, disability and life insurance (Decree-Law no. 1-A/2011, of 3 January).
The contributory rate is 26.6% divided between 23.6% supported by the employer and 3% supported by the employees, replacing the Banking Social Healthcare System (‗Caixa de Abono de Família dos Empregados Bancários') which was extinguished by the decree law referred above. As a consequence of this amendment the capability to receive pensions by the actual employees are covered by the General Social Security Scheme regime, considering the service period between 1 January 2011 and the retirement age. The Bank supports the remaining difference for the total pension assured in ‗Acordo Colectivo de Trabalho'.
Following the approval by the Government of the Decree-Law no. 127/2011, which was published on 31 December, was established an agreement between the Government, the Portuguese Banking Association and the Banking Labour Unions in order to transfer, to the Social Security, the liabilities related with pensions currently being paid to pensioners and retirees, as at 31 December 2011.
This agreement established that the responsibilities to be transferred related to the pensions in payment as at 31 December 2011 at fixed amounts (discount rate 0%) in the component established in the ‗Instrumento de Regulação Colectiva de Trabalho (IRCT)' of the retirees and pensioners. The responsibilities related with the increase in pensions as well as any other complements namely, contributions to the Health System (SAMS), death benefit and death before retirement benefit continued to be under the responsibility of the Financial Institutions and being financed through the corresponding Pensions funds. The Decree-Law also established the terms and conditions under which the transfer was made by setting a discount rate of 4% to determine the liabilities to be transferred.
The Group's net obligation in respect of pension plans (defined benefit pensions plan) is calculated on a half year basis at 31 December and 30 June of each year.
The current services cost plus the interest cost on the unwinding of the Pension liabilities less the expected return on the Plan assets are recorded in operational costs.
The Group's net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods. The benefit is discounted in order to determine its present value, using a discount rate determined by reference to interest rates of high-quality corporate bonds that have maturity dates approximating the terms of the Group's obligations. The net obligations are determined after the deduction of the fair value of the assets of the Pension Plan.
Employee benefits, other than pension plans, namely post retirement health care benefits and benefits for the spouse and sons for death before retirement are also included in the benefit plan calculation.
Costs arising from early retirements are recognised in the income statement on the year in which the early retirement is approved and announced.
Gains and losses for the year are recognised against reserves in the year they occur.
The contributions to the funds are made annually by each Group company according to a certain plan contributions to ensure the solvency of the fund. The minimum level required for the funding is 100% regarding the pension payments and 95% regarding the past services of active employees.
For Defined Contribution Plan, the responsibilities related to the benefits attributed to the Group's employees are recognised as expenses when incurred.
As at 31 December 2012, the Group has two defined contribution plans. One plan that covers employees who were hired before July 1, 2009. For this plan, called non-contributory, Group's contributions will be made annually and equal to 1% of the annual remuneration paid to employees in the previous year. Contributions shall only be made if the following requirements are met: (i) the Bank's ROE equals or exceeds the rate of government bonds of 10 years plus 5 percentage points and (ii) exist distributable profits or reserves in the accounts of Banco Comercial Português.
The other plan covers employees who have been hired after July 1, 2009. For this plan, designated contributory, monthly contributions will be made equal to 1.5% of the monthly remuneration received by employees in the current month, either by themselves or by the Group and employees.
As at 31 March 2013 there are no share based compensation plans in force.
The Executive Committee decides on the most appropriate criteria of allocation among employees.
This variable remuneration is charged to income statement in the year to which it relates.
The Group is subject to the regime established by the Income Tax Code ("CIRC"). Additionally, deferred taxes resulting from the temporary differences between the accounting net income and the net income accepted by the Tax Authorities for Income Taxes calculation, are accounted for, whenever there is a reasonable probability that those taxes will be paid or recovered in the future.
Income tax registered in net income for the year comprises current and deferred tax effects. Income tax is recognised in the income statement, except when related to items recognised directly in equity, which implies its recognition in equity. Deferred taxes arising from the revaluation of financial assets available for sale and cash flow hedging derivatives are recognised in shareholders' equity and are recognised after in the income statement at the moment the profit and loss that originated the deferred taxes are recognised.
Current tax is the value that determines the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred taxes are calculated in accordance with the liability method based on the balance sheet, considering temporary differences, between the carrying amounts of assets and liabilities and the amounts used for taxation purposes using the tax rates approved or substantially approved at balance sheet date and that is expected to be applied when the temporary difference is reversed.
Deferred tax liabilities are recognised for all taxable temporary differences except for goodwill not deductible for tax purposes, differences arising on initial recognition of assets and liabilities that affect neither accounting nor taxable profit and differences relating to investments in subsidiaries to the extent that probably they will not reverse in the foreseeable future.
Deferred taxes assets are recognised to the extent when it is probable that future taxable profits, will be available to absorb deductible temporary differences for taxation purposes (including reportable taxable losses).
The Group, as established in IAS 12, paragraph 74, compensates the deferred tax assets and liabilities if, and only if: (i) has a legally enforceable right to set off current tax assets against current tax liabilities; and (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
The Group adopted the IFRS 8 - Operating Segments for the purpose of disclosure financial information by operating segments. A business segment is a group of assets and operations that are subject to risks and returns different from other business segments. The results of the operating segments are periodically reviewed by the management with the aim of taking decisions. The Group prepares regular financial information concerning these segments, which is reported to Management. A geographical segment is a group of assets and operations located within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments. The Group controls its activity through the following major operating segments:
Foreign activity
Poland;
Greece;
Others
The aggregate Others includes the activity not allocated to the segments mentioned above, namely the developed by subsidiaries in Romania, Switzerland and Cayman Islands.
Provisions are recognised when (i) the Group has a present obligation (legal or resulting from past practices or published policies that imply the recognition of certain responsibilities), (ii) it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation as a result of past events and (iii) a reliable estimate can be made of the amount of the obligation.
On the cases where the discount effect is material, the provision corresponds to the actual value of the expected future payments, discounted by a rate that considers the associated risk of the obligation.
Provisions are reviewed at each balance sheet date and adjusted to reflect the best estimate, being reverted through profit and loss in the proportion of the payments that are probable.
The provisions are derecognised through their use for the obligations for which they were initially accounted or for the cases that the situations were not already observed.
Basic earnings per share are calculated by dividing net income available to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the year, excluding the average number of ordinary shares purchased by the Group and held as treasury stock.
For the diluted earnings per share, the weighted average number of ordinary shares outstanding is adjusted to consider conversion of all dilutive potential ordinary shares, such as convertible debt and stock options granted to employees. Potential or contingent share issues are treated as dilutive when their conversion to shares would decrease net earnings per share.
If the earnings per share are changed as a result of an issue with premium or discount or other event that changed the potential number of ordinary shares or as a result of changes in the accounting policies, the earnings per share for all presented periods should be adjusted retrospectively.
The Group issues contracts that contain insurance risk, financial risk or a combination of both insurance and financial risk. A contract, under which the Group accepts significant insurance risk from another party, by agreeing to compensate that party on the occurrence of a specified uncertain future event, is classified as an insurance contract.
A contract issued by the Group without significant insurance risk, but on which financial risk is transferred with discretionary participating features is classified as an investment contract recognised and measured in accordance with the accounting policies applicable to insurance contracts. A contract issued by the Group that transfers only financial risk, without discretionary participating features, is classified as an investment contract and accounted for as a financial instrument.
Premiums of life insurance and investment contracts with discretionary participating features, which are considered as long-term contracts are recognised when due from the policyholders. The benefits and other costs are recognised concurrently with the recognition of income over the life of the contracts. This specialization is achieved through the establishment of provisions / liabilities of insurance contracts and investment contracts with discretionary participating features.
The responsibilities correspond to the present value of future benefits payable, net of administrative expenses directly associated with the contracts, less the theoretical premiums that would be required to comply with the established benefits and related expenses. The liabilities are determined based on assumptions of mortality, costs of management or investment at the valuation date.
For contracts where the payment period is significantly shorter than the period of benefit, premiums are deferred and recognised as income in proportion to the duration of risk coverage.
Regarding short-term contracts, including contracts of non-life insurance, premiums are recorded at the time of issue. The award is recognised as income acquired in a pro-rata basis during the term of the contract. The provision for unearned premiums represents the amount of premiums on risks not occurred.
Gross premiums written are recognised for as income in the period to which they respect independently from the moment of payment or receivable, in accordance with the accrual accounting principle.
Reinsurance premiums ceded are accounted for as expense in the year to which they respect in the same way as gross premiums written.
Provision for unearned premiums from direct insurance and reinsurance premiums ceded
The provision for unearned gross premiums is based on the evaluation of the premiums written before the end of the year but for which the risk period continues after the year end. This provision is calculated using the pro-rata temporis method applied to each contract in force.
At each reporting date, the Group evaluates the adequacy of liabilities arising from insurance contracts and investment contracts with discretionary participating features. The evaluation of the adequacy of responsibilities is made based on the projection of future cash flows associated with each contract, discounted at market interest rate without risk. This evaluation is done product by product or aggregate of products when the risks are similar or managed jointly. Any deficiency, if exists, is recorded in the Group's results as determined.
The Banco Comercial Português and Banco ActivoBank are entities authorized by the Insurance Institute of Portugal to practice the activity of insurance mediation in the category of Online Insurance Broker, in accordance with Article 8., Paragraph a), point i) of Decree-Law n. º 144/2006, of July 31, developing the activity of insurance intermediation in life and non-life.
Within the insurance mediation services, the banks perform the sale of insurance contracts. As compensation for services rendered for insurance mediation, the Banks receive commissions for arranging contracts of insurance and investment contracts, which are defined in the agreements / protocols established between the Banks and the Insurance Companies.
Commissions received by insurance mediation are recognised in accordance with the principle of accrual, so the commissions which payment occurs at different time period to which it relates, are subject to registration as an amount receivable under Other Assets.
IFRS set forth a range of accounting treatments that require the Executive Committee and management to apply judgment and make estimates in deciding which treatment is most appropriate. The most significant of these accounting policies are discussed in this section in order to improve understanding of how their application affects the Group's reported results and related disclosure.
Considering that in some cases there are several alternatives to the accounting treatment chosen by the Executive Committee, the Group's reported results would differ if a different treatment was chosen. Executive Committee believes that the choices made are appropriate and that the financial statements present the Group's financial position and results fairly in all material aspects.
The alternative outcomes discussed below are presented solely to assist the reader in understanding the financial statements and are not intended to suggest that other alternatives or estimates would be more appropriate.
The Group determines that financial assets available for-sale are impaired when there has been a significant or prolonged decrease in the fair value below its acquisition cost. This determination of what is significant or prolonged requires judgment. In making this judgment, the Group evaluates among other factors, the volatility in the prices of the financial assets. According to the Group's policies, a 30% depreciation in the fair value of an equity instrument is considered a significant devaluation and the 1year period is assumed to be a prolonged decrease in the fair value below the acquisition cost.
In addition, valuations are generally obtained through market quotation or valuation models that may require assumptions or judgment in making estimates of fair value.
Alternative methodologies and the use of different assumptions and estimates could result in a higher level of impairment losses recognised with a consequent impact in the consolidated income statement of the Group.
The Group reviews its loan portfolios to assess impairment losses on a regularly basis, as described in note 1 c).
The evaluation process in determining whether an impairment loss should be recorded in the income statement is subject to numerous estimates and judgments. The probability of default, risk ratings, value of associated collaterals recovery rates and the estimation of both the amount and timing of future cash flows, among other things, are considered in making this evaluation.
Alternative methodologies and the use of different assumptions and estimates could result in a different level of impairment losses with a consequent impact in the consolidated income statement of the Group.
Fair values are based on listed market prices if available, otherwise fair value is determined either by dealer price quotations (both for that transaction and for similar instruments traded) or by pricing models, based on net present value of estimated future cash flows which take into account market conditions for the underlying instruments, time value, yield curve and volatility factors. These pricing models may require assumptions or judgments in estimating their values.
Consequently, the use of a different model or of different assumptions or judgments in applying a particular model could result in different financial results for a particular period.
The Group follows the guidance of IAS 39 on classifying non-derivative financial assets with fixed or determinable payments and fixed maturity as held-tomaturity. This classification requires significant judgment. In making this judgment, the Group evaluates its intention and ability to hold such investments to maturity.
If the Group fails to keep these investments to maturity other than for the specific circumstances — for example, selling an insignificant amount close to maturity — it will be required to reclassify the entire class as available-for-sale. The investments would therefore be measured at fair value instead of amortised cost.
Held-to-maturity investments are subject to impairment tests made by the Group. The use of different assumptions and estimates could have an impact on the income statement of the Group.
The Group sponsors the formation of SPEs primarily for asset securitization transactions for liquidity purposes and/or capital management.
The Group does not consolidate SPEs that it does not control. As it can sometimes be difficult to determine whether the Group does control an SPE, it makes judgments about its exposure to the risks and rewards, as well as about its ability to make operational decisions for the SPE in question.
The determination of the SPEs that needs to be consolidated by the Group requires the use of estimates and assumptions in determining the respective expected residual gains and losses and which party retains the majority of such residual gains and losses. Different estimates and assumptions could lead the Group to a different scope of consolidation with a direct impact in net income.
In the scope of the application of this accounting policy and in accordance with note 22, the following SPEs resulting from securitization transactions were included in the consolidation perimeter: NovaFinance n.4, Magellan n.2 and 3, Kion n.1 and n.3, Kion CLO Finance n.1, Orchis Sp zo.o, Caravela SME n.2 and Tagus Leasing n.1. The Group did not consolidate the following SPEs also resulting from securitization transactions: Magellan n.1 and n.4. For these SPEs, which are not recognised in the balance sheet, the Group concluded that the main risks and the benefits were transferred, as the Group does not hold any security issued by the SPE that are exposed to the majority of the residual risks, neither is exposed to the performance of the credit portfolios.
The Group is subject to income taxes in numerous jurisdictions. Significant interpretations and estimates are required in determining the worldwide amount for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
Different interpretations and estimates would result in a different level of income taxes, current and deferred, recognised in the year.
The Portuguese Tax Authorities are entitled to review the Bank and its subsidiaries' determination of its annual taxable earnings, for a period of four years or six years in case there are tax losses brought forward. Hence, it is possible that some additional taxes may be assessed, mainly as a result of differences in interpretation of the tax law which for its probability, the Executive Committee considers that there is no relevant material effect at the level of the Financial Statements.
Determining pension liabilities requires the use of assumptions and estimates, including the use of actuarial projections, estimated returns on investment, and other factors that could impact the cost and liability of the pension plan.
Changes in these assumptions could materially affect these values.
The goodwill recoverable amount recognised as a Group's asset, is revised annually regardless the existence of impairment losses.
For this purpose, the carrying amount of the business units of the Group for which goodwill has been recognised is compared with the respective recoverable amount. A goodwill impairment loss is recognised when the carrying amount of the business unit exceeds the respective recoverable amount.
In the absence of an available market value, the recoverable amount is determined using cash flows predictions, applying a discount rate that includes a risk premium appropriated to the business unit being tested. Determining the cash flows to discount and the discount rate, involves judgment.
IFRS requires separate disclosure of net interest income and net gains arising from trading and hedging activities, from financial assets available for sale and from financial assets held to maturity, as presented in notes 3, 6, 7 and 8. A particular business activity can generate impact in net interest income and net gains arising from trading and hedging, from financial assets available for sale and from financial assets held to maturity. This disclosure requirement demonstrates the contribution of the different business activities for the net interest margin and net gains from trading and hedging, from financial assets available for sale and from financial assets held to maturity
The amount of this account is comprised of:
| Mar 2013 Euros '000 |
Mar 2012 Euros '000 |
|
|---|---|---|
| Net interest income | 182,999 | 309,384 |
| Net gains/(losses) from trading and hedging assets | 33,890 | 167,771 |
| Net gains/(losses) from financial assets available for sale | 41,105 | 6,289 |
| Net gains/(losses) from financial assets held to maturity | (278) | (22) |
| 257,716 | 483,422 |
The amount of this account is comprised of:
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Interest and similar income | ||
| Interest on loans and advances | 553,200 | 738,040 |
| Interest on trading securities | 4,716 | 11,944 |
| Interest on available for sale financial assets | 81,597 | 80,087 |
| Interest on held to maturity financial assets | 31,527 | 37,380 |
| Interest on hedging derivatives | 39,739 | 66,823 |
| Interest on derivatives associated to financial | ||
| instruments through profit and loss account | 915 | 2,892 |
| Interest on deposits and other investments | 18,769 | 28,161 |
| 730,463 | 965,327 | |
| Interest expense and similar charges | ||
| Interest on deposits and inter-bank funding | 329,031 | 458,440 |
| Interest on securities sold under repurchase agreement | 2,884 | 4,397 |
| Interest on securities issued | 205,280 | 179,826 |
| Interest on hedging derivatives | 6,223 | 4,542 |
| Interest on derivatives associated to financial | ||
| instruments through profit and loss account | 748 | 450 |
| Interest on other financial liabilities valued at fair | ||
| value through profit and loss account | 3,298 | 8,288 |
| 547,464 | 655,943 | |
| 182,999 | 309,384 |
The balance of Interest on loans and advances includes the amount of Euros 17,746,000 (31 March 2012: Euros 15,392,000) related to commissions and other gains which are accounted for under the effective interest method, as referred in the accounting policy described in note 1 m).
The balance Interest on securities issued includes the amount of Euros 66,640,000 related to costs with hybrid instruments qualify as core tier 1 (CoCos) underwritten by the Portuguese State.
| Mar 2013 Euros '000 |
Mar 2012 Euros '000 |
|
|---|---|---|
| Dividends from financial assets available for sale | 38 | 294 |
| Other | - | 1 |
| 38 | 295 |
The balance of Dividends from financial assets available for sale includes dividends and income from investment fund units received during the period.
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Fees and commissions received | ||
| From guarantees | 22,712 | 25,833 |
| From credit and commitments | 256 | 42 |
| From banking services | 119,297 | 127,242 |
| From insurance activity | 484 | 451 |
| From other services | 66,847 | 55,662 |
| 209,596 | 209,230 | |
| Fees and commissions paid | ||
| From guarantees | 18,913 | 16,822 |
| From banking services | 21,512 | 20,060 |
| From insurance activity | 355 | 351 |
| From other services | 5,717 | 6,874 |
| 46,497 | 44,107 | |
| 163,099 | 165,123 |
The amount of this account is comprised of:
| Mar 2013 Euros '000 |
Mar 2012 Euros '000 |
|
|---|---|---|
| Gains arising on trading and hedging activities | ||
| Foreign exchange activity | 362,836 | 490,524 |
| Transactions with financial instruments recognized | ||
| at fair value through profit and loss | ||
| Held for trading | ||
| Securities portfolio | ||
| Fixed income | 8,952 | 18,608 |
| Variable income | 123 | 3,749 |
| Certificates and structured securities issued | 13,627 | 4,936 |
| Derivatives associated to financial | ||
| instruments through profit and loss | 5,911 | 50,948 |
| Other financial instruments derivatives | 521,711 | 491,905 |
| Other financial instruments through profit and loss | 684 | 6,875 |
| Repurchase of own issues | 3,520 | 196,730 |
| Hedging accounting | ||
| Hedging derivatives | 36,360 | 40,385 |
| Hedged item | 17,834 | 814 |
| Other activity | 20,390 | 10,422 |
| Losses arising on trading and hedging activities | 991,948 | 1,315,896 |
| Foreign exchange activity | 341,021 | 484,951 |
| Transactions with financial instruments recognized | ||
| at fair value through profit and loss | ||
| Held for trading | ||
| Securities portfolio | ||
| Fixed income | 4,342 | 1,295 |
| Variable income | 2,467 | 4,390 |
| Certificates and structured securities issued | 16,127 | 14,555 |
| Derivatives associated to financial | ||
| instruments through profit and loss | 2,604 | 26,903 |
| Other financial instruments derivatives | 504,510 | 465,993 |
| Other financial instruments through profit and loss | 6,731 | 59,279 |
| Repurchase of own issues | 500 | 495 |
| Hedging accounting | ||
| Hedging derivatives | 49,263 | 24,652 |
| Hedged item | 2,869 | 51,580 |
| Other activity | 27,624 | 14,032 |
| 958,058 | 1,148,125 | |
| Net gains / (losses) arising from trading | ||
| and hedging activities | 33,890 | 167,771 |
| The amount of this account is comprised of: | ||
|---|---|---|
| Mar 2013 | Mar 2012 | |
| Euros '000 | Euros '000 | |
| Gains arising from financial assets available for sale | ||
| Fixed income | 47,818 | 8,013 |
| Variable income | 242 | 4 |
| Losses arising from financial assets available for sale | ||
| Fixed income | (6,498) | (1,728) |
| Variable income | (457) | - |
| 41,105 | 6,289 |
The amount of this account is comprised of:
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Losses arising from financial assets held to maturity | (278) | (22) |
| (278) | (22) |
The amount of this account is comprised of:
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Operating income | ||
| Income from services | 7,836 | 8,751 |
| Cheques and others | 3,595 | 3,895 |
| Other operating income | 1,449 | 1,436 |
| 12,880 | 14,082 | |
| Operating costs | ||
| Indirect taxes | 6,899 | 7,130 |
| Donations and quotizations | 940 | 1,078 |
| Specific contribution for the banking sector | 8,473 | 8,461 |
| Specific contribution for the resolution fund | 873 | - |
| Other operating expenses | 7,376 | 7,044 |
| 24,561 | 23,713 | |
| (11,681) | (9,631) |
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Salaries and remunerations | 130,164 | 146,488 |
| Mandatory social security charges | 27,468 | 34,287 |
| Voluntary social security charges | 9,269 | 12,215 |
| Other staff costs | 3,079 | 1,335 |
| 169,980 | 194,325 |
The amount of this account is comprised of:
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Water, electricity and fuel | 5,529 | 5,649 |
| Consumables | 1,396 | 1,796 |
| Rents | 33,074 | 34,280 |
| Communications | 7,914 | 11,446 |
| Travel, hotel and representation costs | 2,379 | 3,030 |
| Advertising | 6,235 | 7,624 |
| Maintenance and related services | 7,902 | 8,910 |
| Credit cards and mortgage | 1,003 | 4,550 |
| Advisory services | 3,862 | 3,205 |
| Information technology services | 5,236 | 5,125 |
| Outsourcing | 19,669 | 21,048 |
| Other specialised services | 7,543 | 7,779 |
| Training costs | 240 | 499 |
| Insurance | 1,519 | 2,631 |
| Legal expenses | 2,028 | 2,064 |
| Transportation | 2,707 | 2,671 |
| Other supplies and services | 9,403 | 10,046 |
| 117,639 | 132,353 |
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Intangible assets: | ||
| Software | 3,694 | 3,340 |
| Other intangible assets | 220 | 107 |
| 3,914 | 3,447 | |
| Property, plant and equipment: | ||
| Land and buildings | 6,221 | 8,175 |
| Equipment | ||
| Furniture | 694 | 832 |
| Office equipment | 639 | 647 |
| Computer equipment | 3,051 | 3,478 |
| Interior installations | 836 | 975 |
| Motor vehicles | 798 | 722 |
| Security equipment | 574 | 627 |
| Other equipment | 660 | 600 |
| Other tangible assets | - | - |
| 13,473 | 16,056 | |
| 17,387 | 19,503 |
The amount of this account is comprised of:
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Loans and advances to credit institutions: | ||
| Loans granted | ||
| Impairment for the period | 55 | - |
| Write-back for the period | - | (57) |
| 55 | (57) | |
| Loans and advances to customers: | ||
| Loans granted | ||
| Charge for the period | 464,001 | 373,117 |
| Write-back for the period | (272,305) | (216,161) |
| Recovery of loans and interest charged-off | (3,369) | (4,602) |
| 188,327 | 152,354 | |
| 188,382 | 152,297 |
The caption Loans impairment is related to an estimate of the incurred losses determined according with the methodology for a regular evaluation of objective evidence of impairment, as described in note 1 c).
The amount of this account is comprised of:
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Impairment for financial assets available for sale | ||
| Charge for the period | 5,828 | 764 |
| Write-back for the period | - | (66) |
| 5,828 | 698 | |
| Impairment for financial assets held to maturity | ||
| Charge for the period | - | 118 |
| - | 118 | |
5,828 816
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Provision for guarantees and other commitments | ||
| Charge for the period | 12,964 | 11,707 |
| Write-back for the period | (4,695) | (5,449) |
| 8,269 | 6,258 | |
| Other provisions for liabilities and charges | ||
| Charge for the period | 1,969 | 1,772 |
| Write-back for the period | - | (4) |
| 1,969 | 1,768 | |
| 10,238 | 8,026 |
The main contribution of the investments accounted for under the equity method to the Group's profit are analysed as follows:
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Millenniumbcp Ageas Group | 12,165 | 15,814 |
| Other companies | 1,929 | (2,963) |
| 14,094 | 12,851 |
The caption Gains / (losses) from the sale of subsidiaries and other assets corresponds to the gains and losses arising from the sale and revaluation of assets of the Group classified as non current assets held for sale.
The earnings per share are calculated as follows:
| Mar 2013 Euros '000 |
Mar 2012 Euros '000 |
|
|---|---|---|
| Net income for the period attributable to shareholders of the Bank from continuing operations Dividends from other capital instruments |
(109,677) - |
51,919 (2,149) |
| Adjusted net income from continuing operations | (109,677) | 49,770 |
| Income arising from discontinued operations | (42,285) | (11,160) |
| Adjusted net income | (151,962) | 38,610 |
| Average number of shares | 19,707,167,060 | 9,892,891,662 |
| Basic earnings per share (Euros): | ||
| from continuing operations | (0.02) | 0.02 |
| from discontinued operations | (0.01) | 0,00 |
| (0.03) | 0.02 | |
| Diluted earnings per share (Euros) | ||
| from continuing operations | (0.02) | 0.02 |
| from discontinued operations | (0.01) | 0,00 |
| (0.03) | 0.02 |
Under the Bank's Capitalisation Plan, the share capital increase was successfully completed, through the issue of ordinary shares in the amount of Euros 500,000,000, with the subscription reserved for shareholders in the exercise of their legal preference right, of 12,500,000,000 new shares. The share capital of the Bank, as at 31 December 2012, amounts to Euros 3,500,000,000 and is represented by 19,707,167,060 nominate and ordinary shares without nominal value, which is fully paid.
In June 2012, the Bank registered a decrease of the share capital from Euros 6,064,999,986 to Euros 3,000,000,000 without altering the number of existing shares without nominal value, being this decrease composed of two separate amounts: a) Euros 1,547,873,439.69, to cover losses recorded in the Bank's individual financial statements for 2011 and b) Euros 1,517,126,546.31, to reinforce future conditions for having funds that may be qualified, under the regulatory provisions, as distributable.
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Cash | 634,186 | 732,616 |
| Central Banks | 2,085,899 | 2,847,930 |
| 2,720,085 | 3,580,546 |
The balance Central banks includes deposits with central banks of the countries where the group operates in order to satisfy the legal requirements to maintain a cash reserve calculated based on the value of deposits and other liabilities. The cash reserve requirements, according with the European Central Bank System for Euro Zone, establishes the maintenance of a deposit with the Central Bank equivalent to 1% of the average value of deposits and other liabilities, during each reserve requirement period. The rate is different for countries outside the Euro Zone.
This balance is analysed as follows:
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Credit institutions in Portugal | 3,203 | 3,298 |
| Credit institutions abroad | 610,548 | 581,165 |
| Amounts due for collection | 163,064 | 245,221 |
| 776,815 | 829,684 |
The balance Amounts due for collection represents essentially cheques due for collection on other financial institutions.
This balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Central Banks | 215,477 | 242,238 |
| Inter-bank Money Market | - | 150,004 |
| Credit institutions in Portugal | 44,656 | 52,029 |
| Credit institutions abroad | 1,471,077 | 1,443,681 |
| 1,731,210 | 1,887,952 | |
| Overdue loans - Over 90 days | 1,849 | 1,795 |
| 1,733,059 | 1,889,747 | |
| Impairment for other loans and advances to | ||
| credit institutions | (2,289) | (2,358) |
| 1,730,770 | 1,887,389 |
The movements of impairment for other loans and advances to credit institutions is analysed as follows:
| Mar 2013 Euros '000 |
Mar 2012 Euros '000 |
|
|---|---|---|
| Balance on 1 January | 2,358 | 2,416 |
| Transfers | (110) | (37) |
| Impairment for the period | 55 | - |
| Write-back for the period | - | (57) |
| Exchange rate differences | (14) | - |
| Balance on 31 March | 2,289 | 2,322 |
This balance is analysed as follows:
| Mar 2013 | Dec 2012 Euros '000 |
|
|---|---|---|
| Euros '000 | ||
| Public sector Asset-backed loans |
940,989 39,803,782 |
775,391 40,770,529 |
| Personal guaranteed loans | 9,873,357 | 9,472,942 |
| Unsecured loans | 3,332,622 | 3,321,467 |
| Foreign loans | 3,219,502 | 3,402,736 |
| Factoring | 932,209 | 1,053,784 |
| Finance leases | 3,566,407 | 3,702,467 |
| 61,668,868 | 62,499,316 | |
| Overdue loans - less than 90 days | 318,743 | 187,056 |
| Overdue loans - Over 90 days | 4,519,018 | 4,174,588 |
| 66,506,629 | 66,860,960 | |
| Impairment for credit risk | (4,350,674) | (4,242,725) |
| 62,155,955 | 62,618,235 |
As at 31 March 2013, the balance Loans and advances to customers includes the amount of Euros 13,617,162,000 (31 December 2012: Euros 12,920,510,000) regarding mortgage loans which are collaterals for seven asset-back securities, issued by the Group.
During 2012, Banco Comercial Português issued one covered bond in the amount of Euros 2,000,000,000, with a maturity of 3 years. This transaction occurred on 23 August 2012 with an interest rate of Euribor 1M + 0.5%.
The Group, as part of the liquidity risk management, holds a pool of eligible assets that can serve as collateral in funding operations with the European Central Bank and other Central Banks in countries where the Group operates, which include loans and advances to customers.
The analysis of loans and advances to customers, by type of credit, is as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Loans not represented by securities | ||
| Discounted bills | 338,939 | 350,573 |
| Current account credits | 3,159,463 | 3,228,798 |
| Overdrafts | 1,698,890 | 1,619,125 |
| Loans | 18,516,355 | 18,531,143 |
| Mortgage loans | 30,145,601 | 30,730,140 |
| Factoring | 932,209 | 1,053,784 |
| Finance leases | 3,566,407 | 3,702,467 |
| 58,357,864 | 59,216,030 | |
| Loans represented by securities | ||
| Commercial paper | 1,854,108 | 1,813,334 |
| Bonds | 1,456,896 | 1,469,952 |
| 3,311,004 | 3,283,286 | |
| 61,668,868 | 62,499,316 | |
| Overdue loans - less than 90 days | 318,743 | 187,056 |
| Overdue loans - Over 90 days | 4,519,018 | 4,174,588 |
| 66,506,629 | 66,860,960 | |
| Impairment for credit risk | (4,350,674) | (4,242,725) |
| 62,155,955 | 62,618,235 |
The analysis of loans and advances to customers, by sector of activity, is as follows:
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Agriculture | 514,570 | 502,924 |
| Mining | 160,635 | 153,658 |
| Food, beverage and tobacco | 583,513 | 579,558 |
| Textiles | 454,358 | 448,794 |
| Wood and cork | 233,212 | 229,348 |
| Printing and publishing | 355,177 | 362,126 |
| Chemicals | 611,566 | 633,198 |
| Engineering | 981,360 | 1,005,529 |
| Electricity, water and gas | 1,091,518 | 1,086,650 |
| Construction | 4,110,112 | 4,104,356 |
| Retail business | 1,327,043 | 1,318,129 |
| Wholesale business | 2,280,916 | 2,172,270 |
| Restaurants and hotels | 1,389,957 | 1,379,669 |
| Transports and communications | 2,241,164 | 2,260,289 |
| Services | 13,544,990 | 13,523,937 |
| Consumer credit | 4,205,084 | 4,246,970 |
| Mortgage credit | 29,122,449 | 29,508,763 |
| Other domestic activities | 1,312,332 | 1,308,942 |
| Other international activities | 1,986,673 | 2,035,850 |
| 66,506,629 | 66,860,960 | |
| Impairment for credit risk | (4,350,674) | (4,242,725) |
| 62,155,955 | 62,618,235 |
The balance Loans and advances to customers includes the following amounts related to securitization transactions, presented by type of transaction:
| Traditional | |||
|---|---|---|---|
| Mar 2013 | Dec 2012 | ||
| Euros '000 | Euros '000 | ||
| Mortgage loans | 2,178,216 | 2,226,012 | |
| Consumer loans | 195,816 | 231,944 | |
| Leases | 654,818 | 709,032 | |
| Corporate loans | 3,105,284 | 3,128,165 | |
| 6,134,134 | 6,295,153 |
The balance Loans and advances to customers includes the following amounts related to finance leases contracts:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Gross amount | 4,171,924 | 4,346,984 |
| Interest not yet due | (605,517) | (644,517) |
| Net book value | 3,566,407 | 3,702,467 |
The loan portfolio includes customer contracts that resulted in a formal restructuring with customers and the consequent establishment of new funding to replace the previous. The restructuring may result in the reinforce collaterals, and / or liquidation of the credit and involve an extension of maturities or changes in the interest rate. The analysis of restructured loans by sector of activity is as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Agriculture | 26,722 | 24,341 |
| Mining | 715 | 205 |
| Food, beverage and tobacco | 2,890 | 3,165 |
| Textiles | 1,600 | 3,422 |
| Wood and cork | 20,343 | 20,718 |
| Printing and publishing | 4,663 | 2,245 |
| Chemicals | 8,247 | 6,105 |
| Engineering | 13,444 | 15,994 |
| Electricity, water and gas | 2,157 | 3,330 |
| Construction | 51,825 | 47,135 |
| Retail business | 29,226 | 20,713 |
| Wholesale business | 53,112 | 62,959 |
| Restaurants and hotels | 6,219 | 6,026 |
| Transports and communications | 10,158 | 11,445 |
| Services | 305,350 | 303,242 |
| Consumer credit | 215,337 | 208,357 |
| Mortgage credit | 379,673 | 382,617 |
| Other domestic activities | 82 | 198 |
| Other international activities | 3,678 | 2,543 |
| 1,135,441 | 1,124,760 |
The analysis of overdue loans by sector of activity is as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Agriculture | 40,705 | 29,951 |
| Mining | 14,852 | 10,744 |
| Food, beverage and tobacco | 51,776 | 48,165 |
| Textiles | 50,695 | 48,427 |
| Wood and cork | 44,902 | 43,676 |
| Printing and publishing | 26,671 | 19,051 |
| Chemicals | 16,719 | 20,257 |
| Engineering | 104,693 | 100,112 |
| Electricity, water and gas | 3,820 | 2,634 |
| Construction | 1,330,097 | 1,258,792 |
| Retail business | 163,710 | 150,756 |
| Wholesale business | 372,626 | 332,611 |
| Restaurants and hotels | 176,299 | 168,971 |
| Transports and communications | 98,848 | 90,961 |
| Services | 1,142,546 | 871,583 |
| Consumer credit | 839,924 | 824,155 |
| Mortgage credit | 309,012 | 290,763 |
| Other domestic activities | 35,572 | 35,473 |
| Other international activities | 14,294 | 14,562 |
| 4,837,761 | 4,361,644 |
The movements of impairment for credit risk are analysed as follows:
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Impairment for overdue loans and | Euros '000 | Euros '000 |
| for other credit risks: | ||
| Balance on 1 January | 4,242,725 | 3,487,542 |
| Transfers resulting from changes in the | ||
| Group's structure | 35,050 | 17,970 |
| Transfers | (1,782) | (3,140) |
| Impairment for the period | 464,001 | 373,117 |
| Write-back for the period | (272,305) | (216,161) |
| Loans charged-off | (112,280) | (60,393) |
| Exchange rate differences | (4,735) | 10,141 |
| Balance on 31 March | 4,350,674 | 3,609,076 |
If the impairment loss decreases in a subsequent period to its initial accounting and this decrease can be objectively associated to an event that occurred after the recognition of the loss, the impairment in excess is reversed through profit and loss.
The analysis of impairment, by sector of activity, is as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Agriculture | 56,943 | 57,199 |
| Mining | 13,321 | 10,958 |
| Food, beverage and tobacco | 37,581 | 40,164 |
| Textiles | 27,098 | 25,423 |
| Wood and cork | 38,329 | 35,658 |
| Printing and publishing | 43,446 | 39,784 |
| Chemicals | 35,509 | 34,883 |
| Engineering | 59,759 | 86,963 |
| Electricity, water and gas | 34,152 | 34,542 |
| Construction | 791,406 | 751,142 |
| Retail business | 122,896 | 118,597 |
| Wholesale business | 280,195 | 262,646 |
| Restaurants and hotels | 127,651 | 125,659 |
| Transports and communications | 271,452 | 271,998 |
| Services | 1,279,186 | 1,225,651 |
| Consumer credit | 652,923 | 639,968 |
| Mortgage credit | 317,835 | 295,724 |
| Other domestic activities | 20,805 | 16,753 |
| Other international activities | 140,187 | 169,013 |
| 4,350,674 | 4,242,725 |
The analysis of loans charged-off, by sector of activity, is as follows:
| Mar 2013 Euros '000 |
Mar 2012 Euros '000 |
|
|---|---|---|
| Agriculture | 106 | 1,248 |
| Mining | 181 | 2,079 |
| Food, beverage and tobacco | 1,162 | 827 |
| Textiles | 1,329 | 1,258 |
| Wood and cork | 1,544 | 805 |
| Printing and publishing | 240 | 391 |
| Chemicals | 98 | 29 |
| Engineering | 33,323 | 899 |
| Electricity, water and gas | 2 | - |
| Construction | 3,830 | 8,754 |
| Retail business | 2,055 | 573 |
| Wholesale business | 4,117 | 7,009 |
| Restaurants and hotels | 1,000 | 825 |
| Transports and communications | 3,814 | 812 |
| Services | 15,736 | 3,192 |
| Consumer credit | 17,687 | 23,171 |
| Mortgage credit | 738 | 697 |
| Other domestic activities | 104 | 196 |
| Other international activities | 25,214 | 7,628 |
| 112,280 | 60,393 |
In compliance with the accounting policy described in note 1 c), loans and advances to customers are charged-off when there are no feasible expectations, from an economic perspective, of recovering the loan amount. For collateralised loans, the charge-off occurs for the unrecoverable amount when the funds arising from the execution of the respective collaterals are effectively received. This charge-off is carried out only for loans that are considered not to be recoverable and fully provided.
The analysis of recovered loans and interest, during the first quarter of 2013 and 2012, by sector of activity, is as follows:
| Mar 2013 Euros '000 |
Mar 2012 Euros '000 |
|
|---|---|---|
| Agriculture | 3 | 153 |
| Mining | - | 23 |
| Food, beverage and tobacco | 15 | 11 |
| Textiles | 76 | 421 |
| Wood and cork | 6 | 209 |
| Printing and publishing | 3 | 78 |
| Chemicals | 15 | 39 |
| Engineering | 8 | 72 |
| Electricity, water and gas | - | 7 |
| Construction | 820 | 135 |
| Retail business | 41 | 110 |
| Wholesale business | 241 | 1,615 |
| Restaurants and hotels | 85 | 7 |
| Transports and communications | 29 | 37 |
| Services | 51 | 514 |
| Consumer credit | 1,341 | 1,119 |
| Mortgage credit | 5 | - |
| Other domestic activities | 137 | 51 |
| Other international activities | 493 | 1 |
| 3,369 | 4,602 |
The balance Financial assets held for trading and available for sale is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Bonds and other fixed income securities | ||
| Issued by public entities | 7,142,621 | 6,013,872 |
| Issued by other entities | 2,614,982 | 2,590,110 |
| 9,757,603 | 8,603,982 | |
| Overdue securities | 4,927 | 4,929 |
| Impairment for overdue securities | (4,925) | (4,925) |
| 9,757,605 | 8,603,986 | |
| Shares and other variable income securities | 1,050,606 | 962,186 |
| 10,808,211 | 9,566,172 | |
| Trading derivatives | 1,277,335 | 1,348,165 |
| 12,085,546 | 10,914,337 |
The portfolio of financial instruments held for trading and available for sale securities, net of impairment, as at 31 March 2013, is analysed as follows:
| Securities | |||
|---|---|---|---|
| Trading Euros '000 |
Available for sale Euros '000 |
Total Euros '000 |
|
| Fixed income: | |||
| Bonds issued by public entities | |||
| Portuguese issuers | 172,699 | 1,685,761 | 1,858,460 |
| Foreign issuers | 372,366 | 1,273,586 | 1,645,952 |
| Bonds issued by other entities | |||
| Portuguese issuers | 11,337 | 373,353 | 384,690 |
| Foreign issuers | 84,706 | 698,132 | 782,838 |
| Treasury bills and other | |||
| Government bonds | 13,263 | 3,624,946 | 3,638,209 |
| Commercial paper | - | 1,452,381 | 1,452,381 |
| 654,371 | 9,108,159 | 9,762,530 | |
| Impairment for overdue securities | - | (4,925) | (4,925) |
| 654,371 | 9,103,234 | 9,757,605 | |
| Variable income: | |||
| Shares in Portuguese companies | 310 | 66,702 | 67,012 |
| Shares in foreign companies | 5,268 | 24,522 | 29,790 |
| Investment fund units | 1,369 | 951,295 | 952,664 |
| Other securities | 1,140 | - | 1,140 |
| 8,087 | 1,042,519 | 1,050,606 | |
| Trading derivatives | 1,277,335 | - | 1,277,335 |
| 1,939,793 | 10,145,753 | 12,085,546 |
As referred in the accounting policy presented in note 1 d), the available for sale securities are presented at market value with the respective fair value accounted against fair value reserves, as referred in note 43. The negative amount of fair value reserves of Euros 79,497,000 is presented net of impairment losses in the amount of Euros 136,480,000.
The portfolio of financial instruments held for trading and available for sale securities, net of impairment, as at 31 December 2012, is analysed as follows:
| Securities | |||
|---|---|---|---|
| Available | |||
| Trading | for sale | Total | |
| Euros '000 | Euros '000 | Euros '000 | |
| Fixed income: | |||
| Bonds issued by public entities | |||
| Portuguese issuers | 162,878 | 1,468,522 | 1,631,400 |
| Foreign issuers | 48,188 | 966,782 | 1,014,970 |
| Bonds issued by other entities | |||
| Portuguese issuers | 12,621 | 465,585 | 478,206 |
| Foreign issuers | 84,541 | 580,030 | 664,571 |
| Treasury bills and other | |||
| Government bonds | 24,259 | 3,343,243 | 3,367,502 |
| Commercial paper | - | 1,452,262 | 1,452,262 |
| 332,487 | 8,276,424 | 8,608,911 | |
| Impairment for overdue securities | - | (4,925) | (4,925) |
| 332,487 | 8,271,499 | 8,603,986 | |
| Variable income: | |||
| Companies' shares | |||
| Portuguese companies | 335 | 69,138 | 69,473 |
| Foreign companies | 7,302 | 23,905 | 31,207 |
| Investment fund units | 1,613 | 858,869 | 860,482 |
| Other securities | 1,024 | - | 1,024 |
| 10,274 | 951,912 | 962,186 | |
| Trading derivatives | 1,348,165 | - | 1,348,165 |
| 1,690,926 | 9,223,411 | 10,914,337 |
As referred in the accounting policy presented in note 1 d), the available for sale securities are presented at market value with the respective fair value accounted against fair value reserves, as referred in note 43. As at 31 December 2012, the amount of fair value reserves of Euros 68,877,000 is presented net of impairment losses in the amount of Euros 130,945,000.
The analysis of financial assets held for trading and available for sale by maturity as at 31 March 2013 is as follows:
| Bonds Euros '000 |
Shares Euros '000 |
Other Financial Assets Euros '000 |
Overdue Securities Euros '000 |
Total Euros '000 |
|
|---|---|---|---|---|---|
| Food, beverage and tobacco | - | - | - | 2 | 2 |
| Wood and cork | - | 501 | - | 361 | 862 |
| Printing and publishing | - | 16 | - | 998 | 1,014 |
| Chemicals | - | 2 | - | - | 2 |
| Engineering | - | 7 | - | - | 7 |
| Electricity, water and gas | - | 6 | - | - | 6 |
| Construction | - | 1,655 | - | 2,560 | 4,215 |
| Wholesale business | - | 963 | - | 475 | 1,438 |
| Restaurants and hotels | - | 74 | - | - | 74 |
| Transport and communications | 81,938 | 7,020 | - | 529 | 89,487 |
| Services | 2,532,875 | 86,480 | 952,664 | 2 | 3,572,021 |
| Other domestic activities | 169 | 16 | - | - | 185 |
| Other international activities | - | 62 | 1,140 | - | 1,202 |
| 2,614,982 | 96,802 | 953,804 | 4,927 | 3,670,515 | |
| Government and Public securities | 3,504,412 | - | 3,638,209 | - | 7,142,621 |
| Impairment for overdue securities | - | - | - | (4,925) | (4,925) |
| 6,119,394 | 96,802 | 4,592,013 | 2 | 10,808,211 |
| Other | |||||
|---|---|---|---|---|---|
| Financial | Overdue | ||||
| Bonds | Shares | Assets | Securities | Total | |
| Euros '000 | Euros '000 | Euros '000 | Euros '000 | Euros '000 | |
| Food, beverage and tobacco | - | - | - | 4 | 4 |
| Wood and cork | - | 501 | - | 361 | 862 |
| Printing and publishing | - | 33 | - | 998 | 1,031 |
| Chemicals | - | 2 | - | - | 2 |
| Engineering | - | 6 | - | - | 6 |
| Electricity, water and gas | 150,567 | - | - | - | 150,567 |
| Construction | - | 1,804 | - | 2,560 | 4,364 |
| Wholesale business | - | 898 | - | 475 | 1,373 |
| Restaurants and hotels | - | 74 | - | - | 74 |
| Transport and communications | 42,746 | 7,020 | - | 529 | 50,295 |
| Services | 2,396,011 | 90,262 | 856,354 | 2 | 3,342,629 |
| Other domestic activities | 786 | 16 | 5,152 | - | 5,954 |
| Other international activities | - | 64 | - | - | 64 |
| 2,590,110 | 100,680 | 861,506 | 4,929 | 3,557,225 | |
| Government and Public securities | 2,646,370 | - | 3,367,502 | - | 6,013,872 |
| Impairment for overdue securities | - | - | - | (4,925) | (4,925) |
| 5,236,480 | 100,680 | 4,229,008 | 4 | 9,566,172 |
This balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Hedging instruments | ||
| Assets: | ||
| Swaps | 173,535 | 186,032 |
| 173,535 | 186,032 | |
| Liabilities: | ||
| Swaps | 267,047 | 301,315 |
| 267,047 | 301,315 |
The balance Financial assets held to maturity is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Bonds and other fixed income securities | ||
| Issued by public entities | 2,108,041 | 2,093,921 |
| Issued by other entities | 1,307,662 | 1,475,045 |
| 3,415,703 | 3,568,966 |
The analysis of Bonds and other fixed income securities portfolio, net of impairment, included in Financial assets held to maturity, by sector of activity, is analysed as follows:
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Transport and communications | 171,854 | 170,845 |
| Services | 1,135,808 | 1,304,200 |
| 1,307,662 | 1,475,045 | |
| Government and Public securities | 2,108,041 | 2,093,921 |
| 3,415,703 | 3,568,966 |
The Group, as part of the management process of the liquidity risk, holds a pool of eligible assets that can serve as collateral in funding operations with the European Central Bank and other Central Banks in countries were the Group operates, which include fixed income securities.
This balance is analysed as follows:
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Portuguese credit institutions | 26,770 | 25,408 |
| Foreign credit institutions | 27,348 | 26,364 |
| Other Portuguese companies | 461,531 | 455,444 |
| Other foreign companies | 9,327 | 9,764 |
| 524,976 | 516,980 |
The balance Investments in associated companies is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Banque BCP, S.A.S. | 22,743 | 21,734 |
| Banque BCP (Luxembourg), S.A. | 4,605 | 4,630 |
| Millenniumbcp Ageas Grupo Segurador, S.G.P.S., S.A. | 445,274 | 439,595 |
| SIBS, S.G.P.S, S.A. | 15,020 | 14,612 |
| Unicre - Instituição Financeira de Crédito, S.A. | 26,770 | 25,408 |
| Other | 10,564 | 11,001 |
| 524,976 | 516,980 |
These investments correspond to unquoted companies, consolidated by the equity method. The investment held in the associated company Millenniumbcp Ageas Grupo Segurador, S.G.P.S. corresponds to 49% of the share capital of the company. The Group companies included in the consolidation perimeter are presented in note 49.
This balance is analysed as follows:
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Subsidiaries acquired exclusively with the purpose of | ||
| short-term sale Investments, properties and other assets arising |
49,101 | 49,119 |
| from recovered loans | 1,584,331 | 1,554,470 |
| 1,633,432 | 1,603,589 | |
| Impairment | (325,026) | (319,463) |
| 1,308,406 | 1,284,126 |
The assets included in this balance are accounted for in accordance with the accounting policy note 1 k).
The balance Investments properties and other assets arising from the settlement of credit agreements to customers and includes transactions resulting from (i) delivery of the assets, with an option to repurchase or leasing, accounted with the celebration of the contract or the promise of asset and the respective irrevocable power of attorney issued by the client on behalf of the Bank, or (ii) procurement of goods as a result of the judicial process of guarantees execution, accounted with the title of adjudication or following the adjudication request after the record of the first.
These assets are available for sale in a period less than one year and the Group has a strategy for its sale. However, taking into account the actual market conditions, it is not possible in all instances to conclude the sales in the expected time.
The strategy of alienation is consolidated in active search of buyers, with the Group having a website that advertises these properties, contracts with intermediaries for sales promotion and sales initiatives in real estate auction. Prices are periodically reviewed and adjusted for the continuous adaptation to the market.
The referred balance includes buildings and other assets for which the Group has already established contracts for the sale in the amount of Euros 103,340,000 (31 December 2012: Euros 103,063,000).
The balance Subsidiaries acquired exclusively with the view of short-term sale corresponds to two real estate companies acquired by the Group within the restructuring of a loan exposure and that the Group intends to sell in less than one year. However, taking into account the actual market conditions, it was not possible to conclude the sales in the expected time. Until the date of the sale, the Group continues to consolidate in reserves and income, any changes occurred in the financial situation of the subsidiaries.
The balance Investment property includes the amount of Euros 540,489,000 (31 December 2012: Euros 544,142,000) related to buildings accounted in the "Fundo de Investimento Imobiliário Imosotto Acumulação", "Fundo de Investimento Imobiliário Gestão Imobiliária", "Fundo de Investimento Imobiliário Imorenda", "Fundo Especial de Investimento Imobiliário Oceânico II", "Fundo Especial de Investimento Imobiliário Fechado Stone Capital", "Fundo Especial de Investimento Imobiliário Fechado Sand Capital", "Fundo de Investimento Imobiliário Fechado Gestimo"and "Fundo Especial de Investimento Imobiliário Fechado Intercapital", which are consolidated under the full consolidation method, as referred in the accounting policy presented in note 1 b).
The buildings are valued in accordance with the accounting policy presented in note 1 r), based on independent assessments and compliance with legal requirements.
This balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Land and buildings | 968,252 | 971,143 |
| Equipment | ||
| Furniture | 98,564 | 98,415 |
| Machines | 56,089 | 56,540 |
| Computer equipment | 313,838 | 316,939 |
| Interior installations | 148,454 | 148,097 |
| Motor vehicles | 22,457 | 20,584 |
| Security equipment | 84,571 | 84,180 |
| Other equipment | 44,302 | 44,886 |
| Work in progress | 118,536 | 115,786 |
| Other tangible assets | 462 | 455 |
| 1,855,525 | 1,857,025 | |
| Accumulated depreciation | ||
| Charge for the period | (13,473) | (56,627) |
| Accumulated charge for the previous periods | (1,221,130) | (1,174,000) |
| (1,234,603) | (1,230,627) | |
| 620,922 | 626,398 |
This balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Intangible assets | ||
| Software | 143,632 | 151,956 |
| Other intangible assets | 55,308 | 58,129 |
| 198,940 | 210,085 | |
| Accumulated depreciation | ||
| Charge for the period | (3,914) | (14,181) |
| Accumulated charge for the previous periods | (153,869) | (151,236) |
| (157,783) | (165,417) | |
| 41,157 | 44,668 | |
| Goodwill | ||
| Millennium Bank, Societé Anonyme (Greece) | 294,260 | 294,260 |
| Bank Millennium, S.A. (Poland) | 164,040 | 164,040 |
| Real estate and mortgage credit | 40,859 | 40,859 |
| Unicre - Instituição Financeira de Crédito, S.A. | 7,436 | 7,436 |
| Others | 15,572 | 15,570 |
| 522,167 | 522,165 | |
| Impairment | ||
| Millennium Bank, Societé Anonyme (Greece) | (294,260) | (294,260) |
| Others | (13,519) | (13,519) |
| (307,779) | (307,779) | |
| 214,388 | 214,386 | |
| 255,545 | 259,054 |
The deferred income tax assets and liabilities, as at 31 March 2013, generated by temporary differences are analysed as follows:
| Mar 2013 | |||
|---|---|---|---|
| Assets | Liabilities | Net | |
| Euros '000 | Euros '000 | Euros '000 | |
| Intangible assets | 58 | - | 58 |
| Other tangible assets | 5,964 | 3,873 | 2,091 |
| Impairment losses | 752,888 | 5,341 | 747,547 |
| Benefits to employees | 543,988 | - | 543,988 |
| Financial assets available for sale | 8,740 | 36,089 | (27,349) |
| Derivatives | - | 2,798 | (2,798) |
| Allocation of profits | 69,504 | - | 69,504 |
| Tax losses carried forward | 549,324 | - | 549,324 |
| Others | 31,023 | 106,661 | (75,638) |
| Total deferred taxes | 1,961,489 | 154,762 | 1,806,727 |
| Offset between deferred tax assets | |||
| and deferred tax liabilities | (151,743) | (151,743) | - |
| Net deferred taxes | 1,809,746 | 3,019 | 1,806,727 |
| Dec 2012 | |||
|---|---|---|---|
| Assets | Liabilities | Net | |
| Euros '000 | Euros '000 | Euros '000 | |
| Intangible assets | 58 | - | 58 |
| Other tangible assets | 5,633 | 3,851 | 1,782 |
| Impairment losses | 775,176 | 4,750 | 770,426 |
| Benefits to employees | 565,917 | - | 565,917 |
| Financial assets available for sale | 9,433 | 37,559 | (28,126) |
| Derivatives | - | 2,784 | (2,784) |
| Allocation of profits | 68,634 | - | 68,634 |
| Tax losses carried forward | 448,681 | - | 448,681 |
| Others | 31,687 | 103,732 | (72,045) |
| Total deferred taxes | 1,905,219 | 152,676 | 1,752,543 |
| Offset between deferred tax assets | |||
| and deferred tax liabilities | (149,808) | (149,808) | - |
| Net deferred taxes | 1,755,411 | 2,868 | 1,752,543 |
The impact of income taxes in Net (loss) / income and other captions of equity of the Group as at 31 March 2013, is analysed as follows:
| Mar 2013 | ||||
|---|---|---|---|---|
| Net (loss) / income Euros '000 |
Reserves and retained earnings Euros '000 |
Exchange differences Euros '000 |
Discontinued operations Euros '000 |
|
| Deferred taxes | ||||
| Other tangible assets | 364 | - | (56) | - |
| Impairment losses | (33,809) | 11,495 | (1,295) | (297) |
| Benefits to employees | (6,203) | (15,359) | (66) | 45 |
| Financial assets available for sale | - | 149 | (192) | 820 |
| Derivatives | 870 | - | - | - |
| Allocation of profits | (85) | - | 71 | - |
| Tax losses carried forward | 85,046 | 10,946 | (42) | 4,693 |
| Others | (2,997) | (406) | 282 | 210 |
| 43,186 | 6,825 | (1,298) | 5,471 | |
| Current taxes | ||||
| Actual period | (15,244) | - | - | - |
| Correction of previous periods estimate | 54 | - | - | - |
| (15,190) | - | - | - | |
| 27,996 | 6,825 | (1,298) | 5,471 |
The impact of income taxes in Net (loss) / income and other captions of equity of the Group as at 31 December 2012, is analysed as follows:
| Dec 2012 | ||||
|---|---|---|---|---|
| Net (loss) / income Euros '000 |
Reserves and retained earnings Euros '000 |
Exchange differences Euros '000 |
Discontinued operations Euros '000 |
|
| Deferred taxes | ||||
| Intangible assets | (1) | - | - | - |
| Other tangible assets | 1,385 | - | 196 | - |
| Impairment losses | 156,291 | (20,746) | 3,136 | 9,654 |
| Benefits to employees | (42,559) | 1,515 | 533 | 56 |
| Financial assets available for sale | - | (97,339) | 484 | (375) |
| Derivatives | (10,126) | - | - | - |
| Allocation of profits | 821 | - | (292) | - |
| Tax losses carried forward | 139,945 | 21,513 | 4,629 | 29,427 |
| Others | (33,268) | - | (5,481) | 30,993 |
| 212,488 | (95,057) | 3,205 | 69,755 | |
| Current taxes | ||||
| Actual period | (71,539) | 2 | - | - |
| Correction of previous periods estimate | (10,157) | - | - | - |
| (81,696) | 2 | - | - | |
| 130,792 | (95,055) | 3,205 | 69,755 |
The reconciliation of the effective tax rate is analysed as follows:
| Mar 2013 | Dec 2012 | |||
|---|---|---|---|---|
| % | Euros '000 | % | Euros '000 | |
| Net (loss) / income before income taxes | (117,538) | 104,446 | ||
| Current tax rate | 29.0% | 34,086 | 29.0% | (30,289) |
| Foreign tax rate effect | ||||
| and in ―Zona Franca da Madeira‖ | 4.9% | 5,777 | -4.5% | 4,717 |
| Accruals for the calculation of taxable income (i) | -11.7% | (13,783) | 16.8% | (17,518) |
| Deductions for the calculation of taxable income (ii) | 10.6% | 12,467 | -9.8% | 10,215 |
| Fiscal incentives (iii) | 1.6% | 1,869 | -2.7% | 2,857 |
| Effect of the tax losses used / recognised | 0.0% | (15) | 0.3% | (310) |
| Effect of deferred tax losses not recognised previously | -0.1% | (127) | -0.4% | 388 |
| Tax rate effect (iv) | -10.0% | (11,755) | 3.2% | (3,340) |
| Previous periods corrections | -0.1% | (68) | 0.2% | (217) |
| (Autonomous tax) / tax credits | -0.4% | (455) | 1.9% | (489) |
| 23.8% | 27,996 | 34.0% | (33,986) |
This balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Debtors | 222,281 | 301,878 |
| Supplementary capital contributions | 144,712 | 137,230 |
| Amounts due for collection | 16,229 | 20,671 |
| Recoverable tax | 124,042 | 122,851 |
| Recoverable government subsidies on interest | ||
| on mortgage loans | 15,993 | 17,272 |
| Associated companies | 860 | 1,896 |
| Interest and other amounts receivable | 45,856 | 28,374 |
| Prepayments and deferred costs | 28,879 | 26,178 |
| Amounts receivable on trading activity | 437,784 | 209,924 |
| Amounts due from customers | 95,332 | 136,815 |
| Reinsurance technical provision | 4,533 | 3,165 |
| Sundry assets | 261,040 | 278,115 |
| 1,397,541 | 1,284,369 | |
| Impairment for other assets | (167,578) | (160,046) |
| 1,229,963 | 1,124,323 |
This balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Deposits from Central Banks | 11,408,615 | 12,400,010 |
| Deposits from credit institutions in Portugal | 171,436 | 156,831 |
| Deposits from credit institutions abroad | 2,364,901 | 2,708,919 |
| 13,944,952 | 15,265,760 |
This balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Deposits from customers: | ||
| Repayable on demand | 14,836,054 | 14,411,462 |
| Term deposits | 34,816,244 | 32,906,076 |
| Saving accounts | 1,791,463 | 1,750,451 |
| Treasury bills and other assets sold | ||
| under repurchase agreement | 110,122 | 43,707 |
| Others | 319,515 | 278,170 |
| 51,873,398 | 49,389,866 |
In the terms of the Law, the Deposit Guarantee Fund was established to guarantee the reimbursement of funds deposited in Credit Institutions. The criteria to calculate the annual contributions to the referred fund are defined in the Regulation no. 11/94 of the Bank of Portugal.
This balance is analysed as follows:
| Mar 2013 | Dec 2012 |
|---|---|
| Euros '000 | Euros '000 |
| 11,715,061 | 13,441,773 |
| 169,824 | 106,490 |
| 11,884,885 | 13,548,263 |
The balance is analysed as follows:
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Derivatives | ||
| FRA | 1,234 | 1,432 |
| Swaps | 1,111,034 | 1,169,446 |
| Options | 138,335 | 155,449 |
| Embedded derivatives | 946 | 693 |
| Forwards | 4,766 | 4,821 |
| Others | - | 61,353 |
| 1,256,315 | 1,393,194 |
The balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Deposits from customers | 163,968 | 14,532 |
| Bonds | 315,888 | 314,735 |
| 479,856 | 329,267 |
This balance is analysed as follows:
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Provision for guarantees and other commitments | 118,028 | 107,470 |
| Technical provision for the insurance activity: | ||
| For direct insurance and reinsurance accepted: | ||
| Unearned premium / reserve | 14,321 | 11,403 |
| Life insurance | 52,703 | 50,814 |
| Bonuses and rebates | 2,653 | 2,286 |
| Other technical provisions | 10,797 | 9,962 |
| Provision for pension costs | 4,612 | 4,440 |
| Other provisions for liabilities and charges | 70,371 | 66,953 |
| 273,485 | 253,328 |
Changes in Provision for guarantees and other commitments are analysed as follows:
| Mar 2013 Euros '000 |
Mar 2012 Euros '000 |
|
|---|---|---|
| Balance on 1 January | 107,470 | 100,708 |
| Transfers | 2,413 | 2,836 |
| Charge for the period | 12,964 | 11,707 |
| Write-back for the period | (4,695) | (5,449) |
| Exchange rate differences | (124) | 38 |
| Balance on 31 March | 118,028 | 109,840 |
This balance is analysed as follows:
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Bonds | 4,364,859 | 4,298,773 |
| 4,364,859 | 4,298,773 | |
The caption Subordinated debt - Bonds included, as at 31 December 2012, the amount of Euros 3,000,000,000 related to the issue of hybrids subordinated debt instruments eligible as Core Tier I Capital (CoCos), in 29 June 2012 by Banco Comercial Português, S.A. and fully subscribed by the Portuguese State. The instruments are fully reimbursable by the Bank through a five years period and only in special conditions, such as not carry out or lack of payment, are susceptible to convert in Bank's shares.
The referred instruments were issued under the Bank's recapitalization program, using the Euros 12,000,000,000 line available by the Portuguese State, under the scope of the IMF intervention program, in accordance with the law n. 150-A/2012. These instruments are eligible to solvency effects as Core Tier I, allowing the Bank to fulfil the 10% limit of the Core Tier I ratio as at 31 December 2012. However, under the "IAS 32 - Financial Instruments: Presentation for accounting purposes", these instruments are classified as liability, according with its characteristics, namely: (i) obligation condition to pay capital and interests; and (ii) in case of settlement through the delivery of equity securities, the number of securities to delivery is depending on the market value at that date, in order to have the value of the bond settled.
Then, the classification as liability results from the fact that the investor, as holder of the instrument issue, is not exposed to the company equity instruments risk, as always will receive the equivalent amount of the invested value, in cash and in own institution securities in the same amount.
The operation has an interest rate beginning in 8.5% and ending at the maturity at 10% in 2017.
As at 31 March 2013, the characteristics of subordinated debt issued are analysed as follows:
| Issue | Issue date |
Maturity date |
Interest rate | Nominal value Euros '000 |
Book value Euros '000 |
|---|---|---|---|---|---|
| Non Perpetual Bonds | |||||
| Banco Comercial Português: | |||||
| Mbcp Ob Cx Sub 1 Serie 2008-2018 | September, 2008 | September, 2018 | See reference (i) | 251,440 | 251,440 |
| Mbcp Ob Cx Sub 2 Serie 2008-2018 | October, 2008 | October, 2018 | See reference (i) | 70,802 | 70,802 |
| Bcp Ob Sub Jun 2020 - Emtn 727 | June, 2010 | June, 2020 | See reference (ii) | 87,178 | 90,413 |
| Bcp Ob Sub Aug 2020 - Emtn 739 | August, 2010 | August, 2020 | See reference (iii) | 53,298 | 56,060 |
| Bcp Ob Sub Mar 2021 - Emtn 804 | March, 2011 | August, 2020 | See reference (iv) | 114,000 | 114,000 |
| Bcp Ob Sub Apr 2021 - Emtn 809 | April, 2011 | April, 2021 | See reference (iv) | 64,100 | 64,100 |
| Bcp Ob Sub 3S Apr 2021 - Emtn 812 | April, 2011 | April, 2021 | See reference (iv) | 35,000 | 35,000 |
| Bcp Sub 11/25.08.2019 - Emtn 823 | August, 2011 | August, 2019 | Fixed rate of 6.383% | 7,500 | 8,099 |
| Bcp Subord Sep 2019 - Emtn 826 | October, 2011 | September, 2019 | Fixed rate of 9.310% | 50,000 | 47,133 |
| Bcp Subord Nov 2019 - Emtn 830 | November, 2011 | November, 2019 | Fixed rate of 8.519% | 40,000 | 35,759 |
| Bcp Subord Nov 2019 - Emtn 833 | December, 2011 | December, 2019 | Fixed rate of 7.150% | 26,600 | 22,011 |
| Mill Bcp Subord Jan 2020 - Emtn 834 | January, 2012 | January, 2020 | Fixed rate of 7.010% | 14,000 | 10,930 |
| Mbcp Subord Feb 2020 - Vm Sr. 173 | April, 2012 | February, 2020 | Fixed rate of 9.000% | 23,000 | 19,695 |
| Bcp Subord Apr 2020 - Vm Sr 187 | April, 2012 | April, 2020 | Fixed rate of 9.150% | 51,000 | 44,178 |
| Bcp Subord 2 Serie Apr 2020 - Vm 194 | April, 2012 | April, 2020 | Fixed rate of 9.000% | 25,000 | 21,476 |
| Bcp Subordinadas Jul 20-Emtn 844 | July, 2012 | July, 2020 | Fixed rate of 9.000% | 26,250 | 21,603 |
| Bank Millennium: | |||||
| Bank Millennium 2007 | December, 2007 | December, 2017 | Rate of 2.318% | 149,892 | 149,892 |
| Banco de Investimento Imobiliário: | |||||
| BII 2004 | December, 2004 | December, 2014 | See reference (v) | 15,000 | 14,990 |
| BCP Finance Bank: | |||||
| BCP Fin Bank Ltd EMTN - 295 | December, 2006 | December, 2016 | See reference (vi) | 71,209 | 71,188 |
| BCP Fin Bank Ltd EMTN - 828 | October, 2011 | October, 2021 | Fixed rate of 13.000% | 98,150 | 69,896 |
| Magellan No. 3: | |||||
| Magellan No. 3 Series 3 Class F | June, 2005 | May, 2058 | - | 44 | 44 |
| 1,218,709 |
(continuation)
| Issue | Maturity | Nominal value | Book value | ||
|---|---|---|---|---|---|
| Issue | date | date | Interest rate | Euros '000 | Euros '000 |
| Perpetual Bonds | |||||
| BCP - Euro 200 millions | June, 2002 | - | See reference (vii) | 86 | 46 |
| TOPS BPSM 1997 | December, 1997 | - | Euribor 6M + 0.900% | 22,201 | 22,752 |
| BCP Leasing 2001 | December, 2001 | - | See reference (viii) | 5,085 | 5,085 |
| 27,883 | |||||
| CoCos | |||||
| Bcp Coco Bonds 12/29.06.2017 | June, 2012 | June, 2017 | See reference (ix) | 3,000,000 | 3,015,143 |
| 3,015,143 | |||||
| Accruals | 103,124 | ||||
| 4,364,859 |
References :
(i) - 1st year 6.000%; 2nd to 5th year Euribor 6M + 1.000%; 6th year and following Euribor 6M + 1.400%
(ii) - Until the 5th year fixed rate of 3.250%; 6th year and following years Euribor 6M + 1.000%
(iii) - 1st year: 3.000%; 2nd year 3.250%; 3rd year 3.500%; 4th year 4.000%; 5th year 5.000%; 6th year and following Euribor 6M + 1.250%
(iv) - Euribor 3M + 3.750% per year
(v) - Until 10th coupon Euribor 6M + 0.400%; After 10th coupon Euribor 6M + 0.900%
(vi) - Euribor 3M + 0.300% (0.800% after December 2011)
(vii) - Until 40th coupon 6.131%; After 40th coupon Euribor 3M + 2.400%
(viii) - Until 40th coupon Euribor 3M + 1.750%; After 40th coupon Euribor 3M + 2.250%
(ix) - 1st year: 8.500%; 2nd year 8.750%; 3rd year 9.000%; 4th year 9.500%; 5th year 10.000%
This balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Creditors: | ||
| Suppliers | 29,773 | 50,388 |
| From factoring operations | 8,465 | 6,444 |
| Associated companies | 2 | 160 |
| Other creditors | 207,428 | 239,974 |
| Public sector | 72,715 | 86,934 |
| Interests and other amounts payable | 114,381 | 98,381 |
| Deferred income | 5,935 | 7,097 |
| Holiday pay and subsidies | 55,476 | 69,370 |
| Other administrative costs payable | 1,260 | 1,313 |
| Amounts payable on trading activity | 428,267 | 35,999 |
| Other liabilities | 324,751 | 349,569 |
| 1,248,453 | 945,629 |
The share capital of the Bank, amounts to Euros 3,500,000,000 and is represented by 19,707,167,060 nominate and ordinary shares without nominal value, which is fully paid.
Under the Bank's Capitalisation Plan, the share capital increase was successfully completed, through the issue of ordinary shares in the amount of Euros 500,000,000, with the subscription reserved for shareholders in the exercise of their legal preference right, of 12,500,000,000 new shares.
In accordance with the Shareholders General Meeting in 31 May of 2012, the Bank reduced the share capital from Euros 6,064,999,986 to Euros 3,000,000,000, without changing the number of shares without nominal value at this date. The reduction included two components: a) Euros 1,547,873,439.69 to cover losses on the individual accounts of the Bank occurred in the year 2011; b) Euros 1,517,126,546.31, to reinforce the future conditions in order to have funds that can be distribute.
Under Portuguese legislation, the Bank is required to set-up annually a legal reserve equal to a minimum of 10 percent of annual profits until the reserve equals the share capital. Such reserve is not normally distributable. In accordance with the proposal of share capital reduction approved in the General Shareholders Meeting held on 31 May 2012, the Bank increase the legal reserves in the amount of Euros 123,892,877.
In accordance with current legislation, the Group companies must set-up annually a reserve with a minimum percentage between 5 and 20 percent of their net annual profits depending on the nature of their economic activity.
This balance is analysed as follows:
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Actuarial losses (net of taxes) | (1,847,492) | (1,843,748) |
| Exchange differences arising on consolidation | (97,478) | (93,159) |
| Fair value reserves | ||
| Financial assets available for sale | ||
| Potential gains and losses recognised | ||
| in fair value reserves | 127,445 | 135,787 |
| Fair value hedge adjustments | 444 | (2,222) |
| Loans represented by securities (*) | (29) | (30) |
| Financial assets held to maturity (*) | 5,774 | 5,863 |
| In associated companies and others | (54,137) | (70,521) |
| Cash-flow hedge | (28,195) 51,302 |
(33,124) 35,753 |
| Tax Financial assets available for sale |
||
| Potential gains and losses recognised | ||
| in fair value reserves | (36,194) | (38,331) |
| Fair value hedge adjustments | (129) | 644 |
| Loans represented by securities | 8 | 9 |
| Financial assets held to maturity | (1,674) | (1,700) |
| Cash-flow hedge | 5,357 | 6,293 |
| (32,632) | (33,085) | |
| (1,926,300) | (1,934,239) | |
| Other reserves and retained earnings: | ||
| Legal reserve | 600,000 | 600,000 |
| Statutory reserve | 30,000 | 30,000 |
| Other reserves and retained earnings | 1,107,377 | 2,325,250 |
| Other reserves arising on consolidation | (168,337) | (168,322) |
| 1,569,040 | 2,786,928 |
(*) Refers to the amount not accrued the fair value reserve at the date of reclassification for securities subject to reclassification (see note 23).
The legal reserve changes are analysed in note 42. The Fair value reserves correspond to the accumulated fair value changes of the financial assets available for sale and Cash flow hedge, in accordance with the accounting policy presented in note 1 d).
The balance Statutory reserves corresponds to a reserve to steady dividends that, according with the bank's by-laws can be distributed.
The balance Other comprehensive income includes gains and losses that in accordance with IAS/IFRS are recognised in equity.
This balance is analysed as follows:
| Banco Comercial | Other | ||
|---|---|---|---|
| Português, S.A. | treasury | ||
| shares | stock | Total | |
| Mar 2013 | |||
| Net book value (Euros '000) | 7,566 | 8,882 | 16,448 |
| Number of securities | 79,650,089 | (*) | |
| Average book value (Euros) | 0.09 | ||
| Dec 2012 | |||
| Net book value (Euros '000) | 6,377 | 7,835 | 14,212 |
| Number of securities | 85,018,572 | (*) | |
| Average book value (Euros) | 0.08 |
Treasury stock refers to own securities held by the companies included in the consolidation perimeter. These securities are held within the limits established by the bank's by-laws and by "Código das Sociedades Comerciais".
(*) As at 31 March 2013, this balance includes 79,650,089 shares (31 December 2012: 85,018,572 shares) owned by clients which were financed by the Bank. Considering the fact that for these clients there is evidence of impairment, under the IAS 39 the shares of the Bank owned by these clients were, only for accounting purposes and in accordance with this standard, considered as treasury stock.
This balance is analysed as follows:
| Balance Sheet | Income Statement | |||
|---|---|---|---|---|
| Mar 2013 | Dec 2012 | Mar 2013 | Mar 2012 | |
| Euros '000 | Euros '000 | Euros '000 | Euros '000 | |
| Bank Millennium, S.A. | 408,652 | 408,371 | 9,656 | 6,723 |
| BIM - Banco Internacional de Moçambique, SA | 121,280 | 114,583 | 6,773 | 7,880 |
| Banco Millennium Angola, S.A. | 115,420 | 109,198 | 3,234 | 4,212 |
| Other subsidiaries | (3,966) | (4,138) | 472 | (274) |
| 641,386 | 628,014 | 20,135 | 18,541 |
This balance is analysed as follows:
| Mar 2013 | Dec 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Guarantees granted | 6,166,680 | 6,421,332 |
| Guarantees received | 28,445,923 | 29,223,557 |
| Commitments to third parties | 8,320,450 | 8,548,959 |
| Commitments from third parties | 16,261,902 | 16,079,980 |
| Securities and other items held for safekeeping | ||
| on behalf of customers | 112,353,623 | 109,900,993 |
| Securities and other items held under custody | ||
| by the Securities Depository Authority | 137,873,565 | 135,503,962 |
| Other off balance sheet accounts | 164,243,948 | 163,375,235 |
| Mar 2013 Euros '000 |
Dec 2012 Euros '000 |
|
|---|---|---|
| Guarantees granted: | ||
| Guarantees | 4,854,419 | 5,065,783 |
| Stand-by letter of credit | 176,764 | 196,457 |
| Open documentary credits | 236,021 | 220,991 |
| Bails and indemnities | 899,476 | 938,101 |
| 6,166,680 | 6,421,332 | |
| Commitments to third parties | ||
| Irrevocable commitments | ||
| Term deposits contracts | 59,499 | 4,328 |
| Irrevocable credit lines | 1,913,738 | 2,078,741 |
| Other irrevocable commitments | 320,092 | 308,493 |
| Revocable commitments | ||
| Revocable credit lines | 4,738,147 | 4,889,877 |
| Bank overdraft facilities | 1,117,474 | 1,137,876 |
| Other revocable commitments | 171,500 | 129,644 |
| 8,320,450 | 8,548,959 |
The guarantees granted by the Group may be related with loan transactions, where the Group grants a guarantee in connection with a loan granted to a client by a third entity. According to its specific characteristics, it is expected that some of these guarantees expire without being executed and therefore these transactions do not necessarily represent a cash-outflow.
Stand-by letters and open documentary credits aim to ensure the payment to third parties from commercial deals with foreign entities and therefore financing the shipment of the goods. Therefore the credit risk of these transactions is limited once they are collateralised by the shipped goods and are generally short term operations.
Irrevocable commitments are non-used parts of credit facilities granted to corporate or retail customers. Many of these transactions have a fixed term and a variable interest rate and therefore the credit and interest rate risk is limited.
The financial instruments accounted as Guarantees and other commitments are subject to the same approval and control procedures applied to the credit portfolio, namely regarding the analysis of objective evidence of impairment, as described in note 1 c). The maximum credit exposure is represented by the nominal value that could be lost related to guarantees and commitments undertaken by the Group in the event of default by the respective counterparties, without considering potential recoveries or collaterals.
Considering their nature, as described above, no material losses are anticipated as a result of these transactions.
Successful conclusion of the negotiations between BCP and Piraeus Bank resulting in the signing on 22 April definitive agreements with Piraeus Bank regarding: (i) the sale of the entire share capital of Millennium Bank (Greece) (―MBG‖) and, (ii) the investment by BCP in the forthcoming capital increase of Piraeus Bank. This agreement falls within the framework that has been defined by the Bank of Greece and the Hellenic Financial Stability Fund (―HFSF‖) aiming at the restructuring of the Greek banking system and strengthening its financial stability. The terms and conditions of the transactions have been approved by the HFSF. The transactions are expected to be consummated in the second quarter of 2013, subject in particular to the obtaining of final regulatory approvals.
The segments presented, concerning business and geographic segments, are in accordance with IFRS 8. In accordance with the Group's management model, the primary segment corresponds to segments used for Executive Committee's management purposes. The Group offers a wide range of banking activities and financial services in Portugal and abroad, with a special focus on Commercial Banking, Corporate and Investment Banking and Asset Management and Private Banking.
The Retail Banking activity includes the Retail activity of Banco Comercial Português in Portugal, operating as a distribution channel for products and services from other companies of the Group, and the Foreign business segment, operating through several banking operations in markets with affinity to Portugal and in countries with higher growth potential.
The Retail segment in Portugal includes: (i) the Retail network in Portugal, where the strategic approach is to target ―Mass Market‖ customers, who appreciate a value proposition based on innovation and speed, as well as Prestige and Small Business customers, whose specific characteristics, financial assets or income imply a value proposition based on innovation and personalisation, requiring a dedicated Account Manager; and (ii) ActivoBank, a bank focused on clients who are young in spirit, intensive users of new communication technologies and who prefer a banking relationship based on simplicity, offering modern products and services.
The Companies Banking business includes the includes the Companies segment in Portugal, which operates as a distribution channel of products and services from other companies of the Group, and the Corporate & Investment Banking segment.
The Companies in Portugal segment includes: (i) the Companies network, that covers the financial needs of companies with an annual turnover between Euros 2,500,000 and Euros 50,000,000, and focuses on innovation, offering a wide range of traditional banking products complemented by specialised financing; (ii) the activity of the Real Estate Business Division.
The Corporate & Investment Banking segment includes: (i) the Corporate network in Portugal, targeting corporate and institutional customers with an annual turnover in excess of Euro 50 million, providing a complete range of value-added products and services; (ii) the Investment Banking unit, which specialises in capital markets, providing strategic and financial advisory, specialised financial services – Project finance, Corporate finance, Securities brokerage and Equity research - as well as structuring risk-hedging derivatives products; and (iii) the activity of the Bank's International Division.
The Asset Management and Private Banking segment, for purposes of the geographical segments, comprises the Private Banking network in Portugal and subsidiary companies specialised in the asset management business in Portugal. In terms of business segments, it also includes the activities of Banque Privée BCP and Millennium bcp Bank & Trust.
The Foreign Business segment, for the purpose of geographical segments, comprises the operations outside Portugal, in particular Bank Millennium in Poland, Banque Privée BCP in Switzerland, Banca Millennium in Romania, Millennium bim in Mozambique, Banco Millennium Angola and Millennium bcp Bank & Trust in the Cayman Islands. The Foreign Business segment, in terms of the business segments, comprises the Group operations outside Portugal referred to above, excluding Banque Privée BCP in Switzerland and Millennium bcp Bank & Trust in the Cayman Islands, which are included in the Asset Management and Private Banking segment.
In Poland, the Group is represented by a universal bank offering a wide range of financial products and services to individuals and companies nationwide; in Switzerland by Banque Privée BCP, a Private Banking platform under Swiss law; and in Romania with an operation focused on individuals and small and medium-sized companies. Additionally, the Group is represented in Mozambique by a universal bank targeting companies and individual customers; in Angola by a bank focused on private customers and companies as well as public and private institutions; and in the Cayman Islands by Millennium bcp Bank & Trust, a bank designed for international services in the area of Private Banking to customers with high net worth ("Affluent" segment).
Other segment includes the centralised management of shareholdings and the remaining corporate activities and operations that are not included in the business segments, namely the bancassurance activity, a joint-venture with the Belgian-Dutch Group Ageas, and the remaining amounts not allocated to the segments.
The figures reported for each business segment result from aggregating the subsidiaries and business units integrated in each segment, including the impact from capital allocation and the balancing process of each entity, both at balance sheet and income statement levels, based on average figures. Balance sheet headings for each subsidiary and business unit are re-calculated, given the replacement of their original own funds by the outcome of the capital allocation process, according to regulatory solvency criteria.
Considering that the capital allocation process complies with regulatory solvency criteria currently in place, the weighted risk, as well as the capital allocated to segments, are based on Basel II methodology. Following the request submitted by the Bank, the Bank of Portugal authorised the adoption of methodologies based on Internal Rating models (IRB) for the calculation of capital requirements for credit and counterparty risk, covering a substantial part of the risk from the activity in Portugal as from 31 December 2010. In the scope of the Roll-Out Plan for the calculation of capital requirements for credit and counterparty risk, the Bank of Portugal authorised the extension of that methodology to the subclasses of risk ―Renewable Retail Positions‖ and ―Other Retail Positions‖ in Portugal with effect as from 31 December 2011. Afterwards, with effect as from 31 December 2012, the Bank of Portugal authorised the use of own estimates of Credit Conversion Factors (CCF) for exposures of the class of risk ―Corporate‖ in Portugal and the adoption of IRB methodologies for ―Loans secured by residential real estate‖ and ―Renewable positions‖ of the Retail portfolio in Poland.
Additionally, it was adopted the standard approach for operational risk and the internal models approach for general market risk and foreign exchange risk, for the perimeter managed centrally from Portugal. The capital allocation for each segment, resulted from the application of 10% to the risks managed by each segment. Each operation is balanced through internal transfers of funds, with no impact on consolidated accounts.
Operating costs determined for each business area rely on one hand the amounts accounted directly in the respective cost centres, and on the other hand, the amounts resulting from internal cost allocation processes. For example, in the first set of costs are included costs related to phone communication, travelling accommodation and representation expenses and to advisory services and in the second set are included costs related to correspondence, water and electricity and to rents related to spaces occupied by organic units, among others. The allocation of this last set of costs is based on the application of previously defined criteria, related to the level of activity of each business area, like the number of current accounts, the number of customers or employees, the business volume and the space occupied.
Financial flows generated by the business areas, in particular the placement of funds from new deposits and funding of loans granted, are processed at market prices, having the Bank's Treasury as counterparty. These market prices are determined according to the currency, the maturity of the transactions and their repricing periods. Additionally, all financial flows resulting from capital allocation are based on the average 6-month Euribor interest rate for each given period.
Information related to 2012 first quarter is presented on a comparable basis with the information reported in 2013 first quarter, reflecting the current organisational structure of the Group's business areas referred to in the Segment description described above.
The net contributions of each segment include, where applicable, the non-controlling interests. Thus, the net contribution reflects the individual results achieved by its business units, independent of the percentage held by the Group, including the impact of movements of funds described above. The following information is based on financial statements prepared according to IFRS and on the organisational model in place for the Group, as at 31 March 2013.
The Group operates with special emphasis in the Portuguese market, and also in a few affinity markets and in markets of recognised growth potential. Considering this, the geographical segments include Portugal, Poland, Mozambique, Angola and Other. The segment Portugal reflects, essentially, the activities carried out by Banco Comercial Português in Portugal, ActivoBank and Banco de Investimento Imobiliário. The segment Poland includes the business carried out by Bank Millennium (Poland); while the segment Mozambique contains the activity of BIM - Banco Internacional de Moçambique and the segment Angola contains the activity of Banco Millennium Angola. The segment Other, indicated within the geographical segment reporting, comprises the Group's operations not included in the remaining segments, namely the activities developed in other countries, such as Banque Privée BCP in Switzerland, Banca Millennium in Romania and Millennium bcp Bank & Trust in the Cayman Islands.
Following the signature on 22 April 2013 of a definitive agreement with Piraeus Bank regarding the sale of the entire share capital of Millennium bank in Greece, it is expected that the transactions related to this agreement shall be completed in the second quarter of 2013, subject to the final regulatory approvals. In this context, and according to IFRS 5, Millennium bank in Greece is now classified as a discontinued operation. In segmental reporting, the impact on results is presented on a separate line item in the profit and loss account, defined as income arising from discontinued operations. At balance sheet level, the presentation of assets and liabilities of Millennium bank in Greece has not been changed compared to the criteria considered in previous periods.
As at 31 March, 2013, the net contribution of the major business segments is analysed as follows:
| Commercial Banking | Companies Banking | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Foreign | Corporate and Investment |
Asset Management |
|||||||
| Retail in Portugal |
Business (***) |
Total | Companies in Portugal |
Banking in Portugal |
Total | and Private Banking |
Other | Consolidated | |
| Income statement | |||||||||
| Interest income Interest expense |
137,603 (110,725) |
243,387 (131,504) |
380,990 (242,229) |
95,027 (46,952) |
175,539 (111,684) |
270,566 (158,636) |
30,599 (20,022) |
48,308 (126,577) |
730,463 (547,464) |
| Net interest income | 26,878 | 111,883 | 138,761 | 48,075 | 63,855 | 111,930 | 10,577 | (78,269) | 182,999 |
| Commissions and other income Commissions and other costs |
94,741 (3,217) |
78,684 (19,364) |
173,425 (22,581) |
22,250 (718) |
38,140 (3,890) |
60,390 (4,608) |
13,884 (3,942) |
(4,782) (55,521) |
242,917 (86,652) |
| Net commissions and other income |
91,524 | 59,320 | 150,844 | 21,532 | 34,250 | 55,782 | 9,942 | (60,303) | 156,265 |
| Net gains arising from trading activity |
8 | 29,072 | 29,080 | - | 277 | 277 | 90 | 45,270 | 74,717 |
| Staff costs and administrative costs Depreciations |
132,090 493 |
105,921 8,094 |
238,011 8,587 |
16,250 66 |
16,016 31 |
32,266 97 |
10,108 79 |
7,234 8,624 |
287,619 17,387 |
| Operating costs | 132,583 | 114,015 | 246,598 | 16,316 | 16,047 | 32,363 | 10,187 | 15,858 | 305,006 |
| Impairment and provisions | (74,503) | (21,853) | (96,356) | (45,314) | (62,298) | (107,612) | 360 | (35,551) | (239,159) |
| Share of profit of associates under the equity method Net gain from the sale of |
- | - | - | - | - | - | - | 14,094 | 14,094 |
| other assets | - | 5,974 | 5,974 | - | - | - | - | (7,422) | (1,448) |
| Net income before income tax | (88,676) | 70,381 | (18,295) | 7,977 | 20,037 | 28,014 | 10,782 | (138,039) | (117,538) |
| Income tax | 25,608 | (12,467) | 13,141 | (2,304) | (5,811) | (8,115) | (2,157) | 25,127 | 27,996 |
| Income after income tax | |||||||||
| from continuing operations | (63,068) | 57,914 | (5,154) | 5,673 | 14,226 | 19,899 | 8,625 | (112,912) | (89,542) |
| Income arising from | |||||||||
| discontinued operations | - | (42,285) | (42,285) | - | - | - | - | - | (42,285) |
| Net (loss)/income after income tax | (63,068) | 15,629 | (47,439) | 5,673 | 14,226 | 19,899 | 8,625 | (112,912) | (131,827) |
| Non-controlling interests | - | (19,235) | (19,235) | - | - | - | - | (900) | (20,135) |
| Net (loss)/income after income tax | (63,068) | (3,606) | (66,674) | 5,673 | 14,226 | 19,899 | 8,625 | (113,812) | (151,962) |
| Income between segments | 33,649 | - | 33,649 | (5,353) | (23,904) | (29,257) | (4,392) | - | - |
| Balance sheet | |||||||||
| Cash and Loans and advances to credit institutions Loans and advances to customers Financial assets |
2,402,881 24,818,628 1,948 |
2,187,103 15,827,547 3,349,857 |
4,589,984 40,646,175 3,351,805 |
1,157,422 10,216,489 - |
12,403,951 12,335,770 6,774,618 |
13,561,373 22,552,259 6,774,618 |
2,489,145 1,430,542 32,308 |
(15,412,832) (2,473,021) 5,516,053 |
5,227,670 62,155,955 15,674,784 |
| Other assets (*) | 117,961 | 905,480 | 1,023,441 | 13,021 | 227,338 | 240,359 | 19,392 | 5,132,767 | 6,415,959 |
| Total Assets | 27,341,418 | 22,269,987 | 49,611,405 | 11,386,932 | 31,741,677 | 43,128,609 | 3,971,387 | (7,237,033) | 89,474,368 |
| Deposits from other credit institutions Deposits from customers Debt securities issued Other financial liabilities held for |
5,444,349 19,653,718 1,255,896 |
3,401,667 16,226,922 326,356 |
8,846,016 35,880,640 1,582,252 |
6,730,654 1,543,056 1,972,653 |
11,181,620 9,256,850 8,347,316 |
17,912,274 10,799,906 10,319,969 |
992,790 2,763,307 12,038 |
(13,806,128) 2,429,545 (29,374) |
13,944,952 51,873,398 11,884,885 |
| trading at fair value through profit or loss Other financial liabilities (**) Other liabilities |
157,159 21,052 18,709 |
231,920 297,357 444,370 |
389,079 318,409 463,079 |
246,851 22,836 13,367 |
1,044,556 53,155 65,372 |
1,291,407 75,991 78,739 |
32,170 4,258 6,967 |
23,515 4,233,248 985,805 |
1,736,171 4,631,906 1,534,590 |
| Total Liabilities | 26,550,883 | 20,928,592 | 47,479,475 | 10,529,417 | 29,948,869 | 40,478,286 | 3,811,530 | (6,163,389) | 85,605,902 |
| Equity and non-controlling interests |
790,535 | 1,341,395 | 2,131,930 | 857,515 | 1,792,808 | 2,650,323 | 159,857 | (1,073,644) | 3,868,466 |
| Total Liabilities, Equity and non-controlling interests |
27,341,418 | 22,269,987 | 49,611,405 | 11,386,932 | 31,741,677 | 43,128,609 | 3,971,387 | (7,237,033) | 89,474,368 |
(*) Includes financial assets held for trading, financial assets held to maturity, financial assets available for sale and hedging derivatives;
(**) Includes subordinated liabilities and hedging derivatives;
| Commercial Banking | Companies Banking | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Corporate and | Asset | ||||||||
| Retail | Foreign Business |
Companies | Investment Banking |
Management and Private |
|||||
| in Portugal | (***) | Total | in Portugal | in Portugal | Total | Banking | Other | Consolidated | |
| Income statement | |||||||||
| Interest income Interest expense |
239,940 (180,095) |
272,937 (148,307) |
512,877 (328,402) |
135,883 (69,234) |
207,996 (129,911) |
343,879 (199,145) |
54,416 (42,964) |
54,155 (85,432) |
965,327 (655,943) |
| Net interest income | 59,845 | 124,630 | 184,475 | 66,649 | 78,085 | 144,734 | 11,452 | (31,277) | 309,384 |
| Commissions and other income Commissions and other costs |
102,919 (3,732) |
66,440 (18,544) |
169,359 (22,276) |
24,827 (797) |
68,811 (2,846) |
93,638 (3,643) |
14,994 (4,087) |
(41,347) (46,132) |
236,644 (76,138) |
| Net commissions and other income |
99,187 | 47,896 | 147,083 | 24,030 | 65,965 | 89,995 | 10,907 | (87,479) | 160,506 |
| Net gains arising from trading activity |
(4) | 22,348 | 22,344 | - | (8,825) | (8,825) | 253 | 160,266 | 174,038 |
| Staff costs and administrative costs Depreciations |
153,781 446 |
107,405 8,420 |
261,186 8,866 |
21,461 55 |
19,375 28 |
40,836 83 |
12,682 104 |
11,974 10,450 |
326,678 19,503 |
| Operating costs | 154,227 | 115,825 | 270,052 | 21,516 | 19,403 | 40,919 | 12,786 | 22,424 | 346,181 |
| Impairment and provisions | (25,239) | (16,786) | (42,025) | (121,116) | (40,338) | (161,454) | (1,661) | 7,046 | (198,094) |
| Share of profit of associates under the equity method Net gain from the sale of |
- | 747 | 747 | - | (24) | (24) | - | 12,128 | 12,851 |
| other assets | - | - | - | - | - | - | - | (8,058) | (8,058) |
| Net income before income tax | (20,438) | 63,010 | 42,572 | (51,953) | 75,460 | 23,507 | 8,165 | 30,202 | 104,446 |
| Income tax | 5,853 | (12,013) | (6,160) | 15,078 | (21,883) | (6,805) | (2,282) | (18,739) | (33,986) |
| Income after income tax from continuing operations |
(14,585) | 50,997 | 36,412 | (36,875) | 53,577 | 16,702 | 5,883 | 11,463 | 70,460 |
| Income arising from | |||||||||
| discontinued operations | - | (11,160) | (11,160) | - | - | - | - | - | (11,160) |
| Net (loss)/income after income tax Non-controlling interests |
(14,585) - |
39,837 (19,666) |
25,252 (19,666) |
(36,875) - |
53,577 - |
67,206 - |
5,883 - |
11,463 1,125 |
59,300 (18,541) |
| Net (loss)/income after income tax | (14,585) | 20,171 | 5,586 | (36,875) | 53,577 | 67,206 | 5,883 | 12,588 | 40,759 |
| Income between segments | 17,283 | - | 17,283 | (3,020) | (12,027) | (15,047) | (2,236) | - | - |
| Balance sheet Cash and Loans and advances |
|||||||||
| to credit institutions | 2,062,002 | 2,532,291 | 4,594,293 | 1,245,528 | 7,991,815 | 9,237,343 | 4,106,604 | (12,557,939) | 5,380,301 |
| Loans and advances to customers Financial assets |
27,814,731 1,527 |
15,983,018 2,432,146 |
43,797,749 2,433,673 |
10,531,813 - |
13,725,303 5,698,488 |
24,257,116 5,698,488 |
1,355,263 31,655 |
(1,079,741) 4,548,425 |
68,330,387 12,712,241 |
| Other assets (*) | 110,071 | 674,850 | 784,921 | 12,167 | 289,015 | 301,182 | 25,210 | 4,494,406 | 5,605,719 |
| Total Assets | 29,988,331 | 21,622,305 | 51,610,636 | 11,789,508 | 27,704,621 | 39,494,129 | 5,518,732 | (4,594,849) | 92,028,648 |
| Deposits from other credit | |||||||||
| institutions | 5,596,759 | 4,573,508 | 10,170,267 | 5,056,318 | 10,435,169 | 15,491,487 | 2,183,193 | (9,090,676) | 18,754,271 |
| Deposits from customers | 19,600,663 | 14,580,696 | 34,181,359 | 1,847,051 | 7,579,548 | 9,426,599 | 3,103,305 | 2,815,025 | 49,526,288 |
| Debt securities issued Other financial liabilities held for trading at fair value through |
3,556,518 | 340,614 | 3,897,132 | 3,632,386 | 7,162,090 | 10,794,476 | - | (130,793) | 14,560,815 |
| profit or loss | 373,398 | 188,689 | 562,087 | 381,363 | 751,946 | 1,133,309 | 30,230 | (144,079) | 1,581,547 |
| Other financial liabilities (**) | 6,205 | 375,762 | 381,967 | 6,019 | 19,582 | 25,601 | 1,373 | 1,127,199 | 1,536,140 |
| Other liabilities | (161,613) | 232,120 | 70,507 | (119,415) | (77,818) | (197,233) | (24,328) | 1,660,783 | 1,509,729 |
| Total Liabilities | 28,971,930 | 20,291,389 | 49,263,319 | 10,803,722 | 25,870,517 | 36,674,239 | 5,293,773 | (3,762,541) | 87,468,790 |
| Equity and non-controlling interests |
1,016,401 | 1,330,916 | 2,347,317 | 985,786 | 1,834,104 | 2,819,890 | 224,959 | (832,308) | 4,559,858 |
| Total Liabilities, Equity and non-controlling interests |
29,988,331 | 21,622,305 | 51,610,636 | 11,789,508 | 27,704,621 | 39,494,129 | 5,518,732 | (4,594,849) | 92,028,648 |
(*) Includes financial assets held for trading, financial assets held to maturity, financial assets available for sale and hedging derivatives;
(**) Includes subordinated liabilities and hedging derivatives;
As at 31 March, 2013, the net contribution of the major geographic segments is analysed as follows:
| Portugal | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Retail | Asset Ma- nagement and Private Investment |
Corporate and |
Mozam- | Consoli | ||||||||
| Banking | Companies | Banking | Banking | Other | Total | Poland | Greece (***) | Angola | bique | Other | dated | |
| Income statement | ||||||||||||
| Interest income Interest expense |
137,603 (110,725) |
95,027 (46,952) |
19,212 (14,054) |
175,539 (111,684) |
48,308 | 475,689 (126,577) (409,992) (107,758) |
170,457 | - - |
22,113 | 42,144 | 20,060 (5,435) (13,862) (10,417) |
730,463 (547,464) |
| Net interest income | 26,878 | 48,075 | 5,158 | 63,855 | (78,269) | 65,697 | 62,699 | - | 16,678 | 28,282 | 9,643 | 182,999 |
| Commissions and | ||||||||||||
| other income Commissions and |
94,741 | 22,249 | 7,636 | 38,140 | (4,782) | 157,984 | 43,712 | - | 7,298 | 25,563 | 8,359 | 242,916 |
| other costs | (3,217) | (718) | (2,306) | (3,890) | (55,521) | (65,652) | (10,572) | - | (798) | (7,511) | (2,118) | (86,651) |
| Net commissions and other income |
91,524 | 21,531 | 5,330 | 34,250 | (60,303) | 92,332 | 33,140 | - | 6,500 | 18,052 | 6,241 | 156,265 |
| Net gains arising from trading activity |
8 | - | - | 277 | 45,270 | 45,555 | 16,286 | - | 6,810 | 4,702 | 1,364 | 74,717 |
| Staff costs and | ||||||||||||
| administrative costs Depreciations |
132,090 493 |
16,250 66 |
5,067 1 |
16,016 31 |
7,234 8,624 |
176,657 9,215 |
61,138 3,446 |
- - |
15,767 1,791 |
21,351 2,282 |
12,706 653 |
287,619 17,387 |
| Operating costs | 132,583 | 16,316 | 5,068 | 16,047 | 15,858 | 185,872 | 64,584 | - | 17,558 | 23,633 | 13,359 | 305,006 |
| Impairment and provisions |
(74,503) | (45,314) | 305 | (62,298) | (35,551) (217,361) | (12,630) | - | (4,573) | (3,191) | (1,404) | (239,159) | |
| Share of profit of associates under the equity method |
- | - | - | - | 14,094 | 14,094 | - | - | - | - | - | 14,094 |
| Net gain from the sale of other assets |
- | - | - | - | (7,422) | (7,422) | 610 | - | 10 | 5,354 | - | (1,448) |
| Net income before income tax |
(88,676) | 7,976 | 5,725 | 20,037 | (138,039) (192,977) | 35,521 | - | 7,867 | 29,566 | 2,485 | (117,538) | |
| Income tax | 25,608 | (2,304) | (1,632) | (5,811) | 25,127 | 40,988 | (7,126) | - | (1,525) | (4,213) | (128) | 27,996 |
| Income after income tax from continuing operations |
(63,068) | 5,672 | 4,093 | 14,226 | (112,912) (151,989) | 28,395 | - | 6,342 | 25,353 | 2,357 | (89,542) | |
| Income arising from discontinued operations |
- | - | - | - | - | - | - | (42,285) | - | - | - | (42,285) |
| Net (loss)/income after income tax (63,068) Non-controlling interests |
- | 5,672 - |
4,093 - |
14,226 - |
(900) | (112,912) (151,989) (900) |
28,395 (9,583) |
(42,285) - |
6,342 (2,992) |
25,353 (6,660) |
2,357 - |
(131,827) (20,135) |
| Net income after income tax |
(63,068) | 5,672 | 4,093 | 14,226 | (113,812) (152,889) | 18,812 | (42,285) | 3,350 | 18,693 | 2,357 | (151,962) | |
| Income between segments | 33,649 | (5,353) | (4,392) | (23,904) | - | - | - | - | - | - | - | - |
| Balance sheet | ||||||||||||
| Cash and Loans and | ||||||||||||
| advances to credit institutions |
2,402,881 | 1,157,424 | 882,031 | 12,403,951 | (15,412,832) 1,433,455 | 933,648 | 308,166 | 302,157 | 581,509 | 1,668,735 | 5,227,670 | |
| Loans and advances to customers |
24,818,628 | 10,216,489 | 1,027,220 | 12,335,770 | (2,473,021) | 45,925,086 | 9,715,043 | 4,163,537 | 504,893 | 1,040,469 | 806,927 | 62,155,955 |
| Financial assets (*) | 1,948 | - | 1,614 | 6,774,618 | 5,516,053 | 12,294,233 | 2,569,012 | 136,523 | 338,839 | 211,054 | 125,123 | 15,674,784 |
| Other assets | 117,961 | 13,021 | 6,042 | 227,338 | 5,132,767 | 5,497,129 | 295,438 | 251,028 | 185,224 | 148,004 | 39,136 | 6,415,959 |
| Total Assets | 27,341,418 | 11,386,934 | 1,916,907 | 31,741,677 | (7,237,033) | 65,149,903 | 13,513,141 | 4,859,254 | 1,331,113 | 1,981,036 | 2,639,921 | 89,474,368 |
| Deposits from other | ||||||||||||
| credit institutions | 5,444,349 | 6,730,654 | 135,053 | 11,181,620 | (13,806,128) 9,685,548 | 1,387,601 | 1,281,083 | 330,916 | 180,383 | 1,079,421 | 13,944,952 | |
| Deposits from customers | 19,653,718 | 1,543,057 | 1,718,817 | 9,256,850 | 2,429,545 | 34,601,987 | 10,693,941 | 2,919,970 | 838,877 | 1,453,304 | 1,365,319 | 51,873,398 |
| Debt securities issued Other financial liabilities |
1,255,896 | 1,972,653 | 12,038 | 8,347,316 | (29,374) | 11,558,529 | 196,270 | 103,805 | - | 26,281 | - | 11,884,885 |
| held for trading at fair value through profit or loss |
157,159 | 246,852 | 1,506 | 1,044,556 | 23,515 | 1,473,588 | 155,121 | 76,109 | - | - | 31,353 | 1,736,171 |
| Other financial liabilities (**) | 21,052 | 22,836 | 1,168 | 53,155 | 4,233,248 | 4,331,459 | 274,323 | 12,459 | 2,895 | 4,068 | 6,702 | 4,631,906 |
| Other liabilities | 18,709 | 13,367 | 4,466 | 65,372 | 985,805 | 1,087,719 | 162,182 | 64,546 | 49,713 | 164,274 | 6,156 | 1,534,590 |
| Total Liabilities | 26,550,883 | 10,529,419 | 1,873,048 | 29,948,869 | (6,163,389) | 62,738,830 | 12,869,438 | 4,457,972 | 1,222,401 | 1,828,310 | 2,488,951 | 85,605,902 |
| Equity and non-controlling | ||||||||||||
| interests | 790,535 | 857,515 | 43,859 | 1,792,808 | (1,073,644) 2,411,073 | 643,703 | 401,282 | 108,712 | 152,726 | 150,970 | 3,868,466 | |
| Total Liabilities, Equity | ||||||||||||
| and non-controlling | ||||||||||||
| interests | 27,341,418 | 11,386,934 | 1,916,907 | 31,741,677 | (7,237,033) | 65,149,903 | 13,513,141 | 4,859,254 | 1,331,113 | 1,981,036 | 2,639,921 | 89,474,368 |
(*) Includes financial assets held for trading, financial assets held to maturity, financial assets available for sale and hedging derivatives;
(**) Includes subordinated liabilities and hedging derivatives;
| Portugal | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Retail Banking |
Companies | Asset Ma- nagement and Private Investment Banking |
Corporate and Banking |
Other | Total | Poland | Greece (***) | Angola | Mozam- bique |
Other | Consoli dated |
|
| Income statement | ||||||||||||
| Interest income Interest expense |
239,940 (180,095) |
135,883 (69,234) |
39,058 (29,123) |
207,996 (129,911) |
54,155 | 677,032 (85,432) (493,795) (115,044) |
182,532 | - - |
24,878 | 57,361 | 23,524 (8,070) (19,689) (19,345) |
965,327 (655,943) |
| Net interest income | 59,845 | 66,649 | 9,935 | 78,085 | (31,277) | 183,237 | 67,488 | - | 16,808 | 37,672 | 4,179 | 309,384 |
| Commissions and | ||||||||||||
| other income Commissions and |
102,919 | 24,827 | 9,694 | 68,811 | (41,347) | 164,904 | 40,509 | - | 6,004 | 18,394 | 6,834 | 236,645 |
| other costs | (3,732) | (797) | (2,447) | (2,846) | (46,132) | (55,954) | (10,036) | - | (675) | (7,415) | (2,059) | (76,139) |
| Net commissions and other income Net gains arising from |
99,187 | 24,030 | 7,247 | 65,965 | (87,479) | 108,950 | 30,473 | - | 5,329 | 10,979 | 4,775 | 160,506 |
| trading activity | (4) | - | - | (8,825) | 160,266 | 151,437 | 7,359 | - | 6,990 | 6,911 | 1,341 | 174,038 |
| Staff costs and administrative costs Depreciations |
153,781 446 |
21,461 55 |
7,267 1 |
19,375 28 |
11,974 10,450 |
213,858 10,980 |
63,410 3,366 |
- - |
14,877 2,197 |
20,917 2,106 |
13,616 854 |
326,678 19,503 |
| Operating costs | 154,227 | 21,516 | 7,268 | 19,403 | 22,424 | 224,838 | 66,776 | - | 17,074 | 23,023 | 14,470 | 346,181 |
| Impairment and provisions |
(25,239) (121,116) | (1,254) | (40,338) | 7,046 | (180,901) | (9,038) | - | (2,347) | (5,202) | (606) | (198,094) | |
| Share of profit of associates under the equity method Net gain from the sale |
- | - | - | (24) | 12,128 | 12,104 | 747 | - | - | - | - | 12,851 |
| of other assets | - | - | - | - | (8,058) | (8,058) | - | - | - | - | - | (8,058) |
| Net income before income tax |
(20,438) | (51,953) | 8,660 | 75,460 | 30,202 | 41,931 | 30,253 | - | 9,706 | 27,337 | (4,781) | 104,446 |
| Income tax | 5,853 | 15,078 | (2,059) | (21,883) | (18,739) | (21,750) | (6,594) | - | (1,164) | (4,911) | 433 | (33,986) |
| Income after income tax from continuing operations |
(14,585) | (36,875) | 6,601 | 53,577 | 11,463 | 20,181 | 23,659 | - | 8,542 | 22,426 | (4,348) | 70,460 |
| Income arising from | ||||||||||||
| discontinued operations Net (loss)/income after income tax (14,585) |
- | - (36,875) |
- 6,601 |
- 53,577 |
- 11,463 |
- 20,181 |
- 23,659 |
(11,160) (11,160) |
- 8,542 |
- 22,426 |
- (4,348) |
(11,160) 59,300 |
| Non-controlling interests Net income after |
- | - | - | - | 1,125 | 1,125 | (8,160) | - | (4,038) | (7,468) | - | (18,541) |
| income tax | (14,585) | (36,875) | 6,601 | 53,577 | 12,588 | 21,306 | 15,499 | (11,160) | 4,504 | 14,958 | (4,348) | 40,759 |
| Income between segments | 17,283 | (3,020) | (2,236) | (12,027) | - | - | - | - | - | - | - | - |
| Balance sheet | ||||||||||||
| Cash and Loans and | ||||||||||||
| advances to credit institutions Loans and advances |
2,062,002 | 1,245,528 | 1,327,173 | 7,991,815 | (12,557,939) | 68,579 | 916,605 | 823,280 | 368,626 | 336,091 | 2,867,120 | 5,380,301 |
| to customers | 27,814,731 | 10,531,813 | 800,022 | 13,725,303 | (1,079,741) | 51,792,128 | 9,669,408 | 4,601,853 | 454,856 | 899,562 | 912,580 | 68,330,387 |
| Financial assets Other assets (*) |
1,527 110,071 |
- 12,167 |
1,649 5,690 |
5,698,488 289,015 |
4,548,425 4,494,406 |
10,250,089 4,911,349 |
1,438,157 166,628 |
204,231 185,206 |
370,415 157,380 |
331,409 137,237 |
117,940 47,919 |
12,712,241 5,605,719 |
| Total Assets | 29,988,331 | 11,789,508 | 2,134,534 | 27,704,621 | (4,594,849) | 67,022,145 | 12,190,798 | 5,814,570 | 1,351,277 | 1,704,299 | 3,945,559 | 92,028,648 |
| Deposits from other credit institutions Deposits from customers Debt securities issued |
5,596,759 19,600,663 3,556,518 |
5,056,318 1,847,051 3,632,386 |
97,032 1,972,860 - |
10,435,169 7,579,548 7,162,090 |
(9,090,676) 2,815,025 (130,793) |
12,094,602 33,815,147 14,220,201 |
1,644,135 9,230,487 172,567 |
2,111,589 3,020,178 140,357 |
409,824 817,693 - |
175,536 1,217,279 27,690 |
2,318,585 1,425,504 - |
18,754,271 49,526,288 14,560,815 |
| Other financial liabilities held for trading at fair value through profit or loss Other financial liabilities (**) Other liabilities |
373,398 6,205 |
381,363 6,019 (161,613) (119,415) |
- 428 (5,940) |
751,946 19,582 |
1,127,199 (77,818) 1,660,783 |
(144,079) 1,362,628 1,159,433 1,295,997 |
76,486 363,827 70,827 |
111,410 8,400 (16,225) |
- 592 26,205 |
- 803 151,475 |
31,023 3,085 |
1,581,547 1,536,140 (18,550) 1,509,729 |
| Total Liabilities | 28,971,930 | 10,803,722 | 2,064,380 | 25,870,517 | (3,762,541) | 63,948,008 | 11,558,329 | 5,375,709 | 1,254,314 | 1,572,783 | 3,759,647 | 87,468,790 |
| Equity and non-controlling interests |
1,016,401 | 985,786 | 70,154 | 1,834,104 | (832,308) 3,074,137 | 632,469 | 438,861 | 96,963 | 131,516 | 185,912 | 4,559,858 | |
| Total Liabilities, Equity and non-controlling interests |
29,988,331 | 11,789,508 | 2,134,534 | 27,704,621 | (4,594,849) | 67,022,145 | 12,190,798 | 5,814,570 | 1,351,277 | 1,704,299 | 3,945,559 | 92,028,648 |
(*) Includes financial assets held for trading, financial assets held to maturity, financial assets available for sale and hedging derivatives;
(**) Includes subordinated liabilities and hedging derivatives;
Description of the relevant items of reconciliation:
| Mar 2013 | Mar 2012 | |
|---|---|---|
| Euros '000 | Euros '000 | |
| Net contribution (excluding minority interest effect) | ||
| Retail Banking in Portugal | (63,068) | (14,585) |
| Companies | 5,673 | (36,875) |
| Corporate and Investment Banking | 14,226 | 53,577 |
| Asset Management and Private Banking | 4,093 | 6,601 |
| Foreign Business | 20,162 | 39,119 |
| of which: discontinued operations | (42,285) | (11,160) |
| (18,914) | 47,837 | |
| Impact on the Net interest income of the allocation of capital (1) | 1,634 | (1,369) |
| (20,548) | 49,206 | |
| Amounts included in the aggregate Others (not allocated to segments): | ||
| Non-controlling interests (2) | (20,135) | (18,541) |
| Operating expenses (3) | (15,858) | (22,424) |
| Loan impairment and other provisions (4) | (35,551) | 7,046 |
| Equity accounted earnings | 14,094 | 12,851 |
| Own Credit Risk | (2,429) | (19,369) |
| Gains on repurchase of own issues (liability management) | - | 95,575 |
| Impact on net interest income of the liability management operations | (52,192) | (51,180) |
| Cost of debt issue with Stat Guarantee | (17,254) | (15,445) |
| Others (5) | (2,089) | 3,040 |
| Total not allocated to segments | (131,414) | (8,447) |
| Consolidated net income | (151,962) | 40,759 |
(1) Represents the impact on net interest income due to allocation of capital. The balance sheet items of each subsidiary and each business unit are recalculated considering the replacement of accounting equity by the amounts assigned through the allocation within the strict fulfilment of solvency regulatory criteria. (2) Corresponds mainly to the income attributable to third parties related to the subsidiaries in Poland, in Mozambique and in Angola.
(3) Includes difference in costs allocated to the segments, namely those connected with corporate areas and strategic projects.
(4) Includes provisions for property in kind, administrative infractions, various contingencies and other unallocated to commercial networks.
(5) Includes funding for non interest bearing assets and the financial strategies as well as tax effect associated with the items previously discriminated.
As at 31 March 2013 the Banco Comercial Português Group's subsidiary companies included in the consolidated accounts using the full consolidation method were as follows:
| Group | Bank | |||||||
|---|---|---|---|---|---|---|---|---|
| Subsidiary companies | Head office |
Share capital |
Currency | Activity | % control |
% held |
% held |
|
| Banco de Investimento Imobiliário, S.A. | Lisbon | 217,000,000 | EUR | Banking | 100.0 | 100.0 | 100.0 | |
| Banco ActivoBank, S.A. | Lisbon | 41,000,000 | EUR | Banking | 100.0 | 100.0 | – | |
| Banca Millennium S.A. | Bucharest | 303,195,000 | RON | Banking | 100.0 | 100.0 | – | |
| Banco Millennium Angola, S.A. | Luanda | 4,009,893,495 | AOA | Banking | 50.1 | 50.1 | 50.1 | |
| Bank Millennium, S.A. | Warsaw | 1,213,116,777 | PLN | Banking | 65.5 | 65.5 | 65.5 | |
| Banque Privée BCP (Suisse) S.A. | Geneve | 70,000,000 | CHF | Banking | 100.0 | 100.0 | – | |
| BIM - Banco Internacional de Moçambique, S.A. |
Maputo | 4,500,000,000 | MZN | Banking | 66.7 | 66.7 | – | |
| Millennium Bank, Societe Anonyme | Athens | 219,479,300 | EUR | Banking | 100.0 | 100.0 | – | |
| Millennium bcp Bank & Trust | George Town | 340,000,000 | USD | Banking | 100.0 | 100.0 | – | |
| BCP Finance Bank, Ltd. | George Town | 246,000,000 | USD | Banking | 100.0 | 100.0 | – | |
| BCP Finance Company | George Town | 202,176,181 | EUR | Investment | 100.0 | 15.3 | – | |
| Caracas Financial Services, Limited | George Town | 25,000 | USD | Financial Services | 100.0 | 100.0 | 100.0 | |
| Millennium Fin Commerce of Vehicles, Vessels, Devices and Equipment, Societe Anonyme |
Athens | 960,000 | EUR | Investment | 100.0 | 100.0 | – | |
| MB Finance AB | Stockholm | 500,000 | SEK | Investment | 100.0 | 65.5 | – | |
| Millennium BCP - Escritório de Representações e Serviços, Ltda. |
Sao Paulo | 40,596,536 | BRL | Financial Services | 100.0 | 100.0 | 100.0 | |
| ALO Investments B.V. | Amsterdam | 18,000 | EUR | Holding company | 100.0 | 100.0 | – | |
| BCP Investment B.V. | Amsterdam | 620,774,050 | EUR | Holding company | 100.0 | 100.0 | 100.0 | |
| bcp holdings (usa), Inc. | Newark | 250 | USD | Holding company | 100.0 | 100.0 | – | |
| BII Internacional, S.G.P.S., Lda. | Funchal | 25,000 | EUR | Holding company | 100.0 | 100.0 | – | |
| Bitalpart, B.V. | Rotterdam | 19,370 | EUR | Holding company | 100.0 | 100.0 | 100.0 | |
| Millennium bcp Participações, S.G.P.S., Sociedade Unipessoal, Lda. |
Funchal | 25,000 | EUR | Holding company | 100.0 | 100.0 | 100.0 | |
| BCP Capital - Sociedade de Capital de Risco, S.A. |
Lisbon | 2,000,000 | EUR | Venture capital | 100.0 | 100.0 | 100.0 | |
| BG Leasing, S.A. | Gdansk | 1,000,000 | PLN | Leasing | 74.0 | 48.5 | – | |
| BII Investimentos International, S.A. | Luxembourg | 150,000 | EUR | Investment fund management | 100.0 | 100.0 | – | |
| Imábida - Imobiliária da Arrábida, S.A. (*) | Oeiras | 1,750,000 | EUR | Real-estate management | 100.0 | 100.0 | 100.0 | |
| Interfundos - Gestão de Fundos de Investimento Imobiliários, S.A. |
Lisbon | 1,500,000 | EUR | Investment fund management | 100.0 | 100.0 | 100.0 | |
| Millennium bcp - Prestação de Serviços, A. C. E. |
Lisbon | 331,000 | EUR | Services | 93.8 | 94.3 | 75.8 | |
| Millennium Dom Maklerski, S.A. | Warsaw | 16,500,000 | PLN | Brokerage services | 100.0 | 65.5 | – |
| Group | Bank | ||||||
|---|---|---|---|---|---|---|---|
| Head | Share | % | % | % | |||
| Subsidiary companies | office | capital | Currency | Activity | control | held | held |
| Millennium Leasing, Sp.z o.o. | Warsaw | 48,195,000 | PLN | Leasing | 100.0 | 65.5 | – |
| Millennium Service, Sp.z o.o. | Warsaw | 1,000,000 | PLN | Services | 100.0 | 65.5 | – |
| Millennium Telecomunication, Sp.z o.o. | Warsaw | 100,000 | PLN | Brokerage services | 100.0 | 65.5 | – |
| Millennium TFI - Towarzystwo Funduszy Inwestycyjnych, S.A. |
Warsaw | 10,300,000 | PLN | Investment fund management | 100.0 | 65.5 | – |
| Millennium bcp Gestão de Activos - Sociedade Gestora de Fundos de Investimento, S.A. |
Oeiras | 6,720,691 | EUR | Investment fund management | 100.0 | 100.0 | 100.0 |
| Millennium bcp Teleserviços - Serviços de Comércio Electrónico, S.A. |
Lisbon | 50,004 | EUR | Videotext services | 100.0 | 100.0 | 100.0 |
| Millennium Mutual Funds Management Company, Societe Anonyme |
Athens | 1,176,000 | EUR | Investment fund management | 100.0 | 100.0 | – |
| MBCP REO I, LLC | Delaware | 370,174 | USD | Real-estate management | 100.0 | 100.0 | – |
| MBCP REO II, LLC | Delaware | 5,971,574 | USD | Real-estate management | 100.0 | 100.0 | – |
| Millennium bcp Imobiliária, S.A. | Lisbon | 50,000 | EUR | Real-estate management | 99.9 | 99.9 | 99.9 |
| Propaço- Sociedade Imobiliária De Paço D'Arcos, Lda |
Oeiras | 5,000 | EUR | Real-estate company | 52.7 | 52.7 | 52.7 |
| QPR Investmentos, S.A. (*) | Lisbon | 50,000 | EUR | Advisory and services | 100.0 | 100.0 | 100.0 |
| Servitrust - Trust Management Services S.A. |
Funchal | 100,000 | EUR | Trust services | 100.0 | 100.0 | 100.0 |
| TBM Sp.z o.o. | Warsaw | 500,000 | PLN | Advisory and services | 100.0 | 65.5 | – |
(*) - Companies classified as non-current assets held for sale
The Group also consolidates under the full consolidation method the following Investment Funds: "Fundo de Investimento Imobiliário Imosotto Acumulação", "Fundo de Investimento Imobiliário Gestão Imobiliária", "Fundo de Investimento Imobiliário Imorenda", "Fundo Especial de Investimento Imobiliário Oceânico II", "Fundo Especial de Investimento Imobiliário Fechado Stone Capital", "Fundo Especial de Investimento Imobiliário Fechado Sand Capital", "Fundo de Investimento Imobiliário Fechado Gestimo", "M Inovação - Fundo de Capital de Risco BCP Capital" and "Fundo Especial de Investimento Imobiliário Fechado Intercapital", as referred in the accounting policy presented in note 1 b).
As at 31 March 2013 the associated companies, were as follows:
| Group | Bank | ||||||
|---|---|---|---|---|---|---|---|
| Associated companies | Head office |
Share capital |
Currency | Activity | % control |
% held |
% held |
| Banque BCP, S.A.S. | Paris | 84,164,803 | EUR | Banking | 19.9 | 19.9 | 19.9 |
| Banque BCP (Luxembourg), S.A. | Luxembourg | 16,000,000 | EUR | Banking | 19.9 | 19.9 | – |
| Academia Millennium Atlântico | Luanda | 47,500,000 | AOA | Education | 33.0 | 16.5 | – |
| ACT-C-Indústria de Cortiças, S.A. | Sta.Maria Feira | 17,923,625 | EUR | Extractive industry | 20.0 | 20.0 | 20.0 |
| Baía de Luanda - Promoção, Montagem e Gestão de Negócios, S.A. |
Luanda | 19,200,000 | USD | Services | 10.0 | 10.0 | – |
| Beira Nave | Maputo | 2,849,640 | MZN | Naval shipyards | 22.8 | 13.7 | – |
| Constellation, S.A. | Maputo | 1,053,500,000 | MZN | Property management | 20.0 | 12.0 | – |
| Luanda Waterfront Corporation | George Town | 10,810,000 | USD | Services | 10.0 | 10.0 | – |
| Group | Bank | ||||||
|---|---|---|---|---|---|---|---|
| Head | Share | % | % | % | |||
| Associated companies | office | capital | Currency | Activity | control | held | held |
| Lubuskie Fabryki Mebli, S.A. | Swiebodzin | 13,400,050 | PLN | Furniture manufacturer | 50.0 | 32.8 | – |
| Nanium, S.A. | Vila do Conde | 15,000,000 | EUR | Electronic equipments | 41.1 | 41.1 | 41.1 |
| Pomorskie Hurtowe Centrum Rolno - Spożywcze S.A. |
Gdansk | 21,357,000 | PLN | Wholesale business | 38.4 | 25.2 | – |
| Quinta do Furão - Sociedade de Animação Turística e Agrícola de Santana, Lda |
Funchal | 1,870,492 | EUR | Turism | 31.3 | 31.3 | 31.3 |
| SIBS, S.G.P.S, S.A. | Lisbon | 24,642,300 | EUR | Banking services | 21.9 | 21.9 | 21.5 |
| Sicit - Sociedade de Investimentos e Consultoria em Infra-Estruturas de Transportes, S.A |
Oeiras | 50,000 | EUR | Advisory and services | 25.0 | 25.0 | 25.0 |
| UNICRE - Instituição Financeira de Crédito, S.A. | Lisbon | 10,000,000 | EUR | Credit cards | 32.0 | 32.0 | 31.7 |
| VSC - Aluguer de Veículos Sem Condutor, Lda. |
Lisbon | 12,500,000 | EUR | Long term rental | 50.0 | 50.0 | – |
As at 31 March 2013 the Banco Comercial Português Group's subsidiary and associated insurance companies included in the consolidated accounts under the full consolidation method and equity method were as follows:
| Group | Bank | ||||||
|---|---|---|---|---|---|---|---|
| Subsidiary companies | Head office |
Share capital |
Currency | Activity | % control |
% held |
% held |
| S&P Reinsurance Limited | Dublin | 1,500,000 | EUR | Life reinsurance | 100.0 | 100.0 | 100.0 |
| SIM - Seguradora Internacional de Moçambique, S.A.R.L. |
Maputo | 147,500,000 | MZN | Insurance | 89.9 | 60.0 | – |
| Group | Bank | ||||||
|---|---|---|---|---|---|---|---|
| Head | Share | % | % | % | |||
| Associated companies | office | capital | Currency | Activity | control | held | held |
| Millenniumbcp Ageas Grupo Segurador, S.G.P.S., S.A. |
Oeiras | 1,000,002,375 | EUR | Holding company | 49.0 | 49.0 | – |
| Médis - Companhia Portuguesa Seguros de Saúde, S.A. |
Oeiras | 12,000,000 | EUR | Health insurance | 49.0 | 49.0 | – |
| Ocidental - Companhia Portuguesa de Seguros de Vida, S.A. |
Oeiras | 22,375,000 | EUR | Life insurance | 49.0 | 49.0 | – |
| Ocidental - Companhia Portuguesa de Seguros, S.A. |
Oeiras | 12,500,000 | EUR | Non-life insurance | 49.0 | 49.0 | – |
| Pensõesgere, Sociedade Gestora Fundos de Pensões, S.A. |
Oeiras | 1,200,000 | EUR | Pension fund management | 49.0 | 49.0 | – |
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