Banco Comercial Portugues

Quarterly Report • Nov 7, 2019

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

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

l Figures for the first nine months of 2019 and of 2018 not audited.

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

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4

Improved profitability, with net earnings of €270.3 million in the 1 st nine months of 2019, on the back of stronger core income (+7.0%) and lower impairment and provision charges (-12.1%)

336.7 299.0 92.2 78.1 429.0 377.1 9M18 9M19 -12.1% Cost of risk 88bp 73bp 1,052.8 1,153.0 510.1 519.1 1,562.9 1,672.0 9M18 9M19 +7.0% +9.5% +1.8% -15.4% -11.2% (Million euros) (Million euros) Improved profitability Core income (net interest income + commissions) Impairment and provisions Other Loans Fees and commissions Net interest income

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Core income (net interest income + commissions)

Impairment and provisions

Fees and commissions

Net interest income

Other

Loan impairment

Significant decrease of NPEs (-€1.7 billion from September 30, 2018) and of cost of risk (73bp in the 1st nine months of 2019)

107% 109% 107% 51% 52% 55% Sep 18 Dec 18 Sep 19 102 105 74 ^{88 92 73} Sep 18 Dec 18 Sep 19 Cost of risk PT, bp Cost of risk Group, bp 68bp excl. additional impairment Euro Bank Total coverage* Coverage by loan-loss reserves Lower cost of risk

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Capital ratio of 15.7%*, comfortably above SREP requirements. Organic capital generation and AT1+T2 issues (Jan.19 and Sep.19, respectively) more than compensate for the negative impacts of Euro Bank's acquisition and related to the pension fund

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Increasing business volumes, with performing loans up by €5.2 billion and total Customers funds up by €7.4 billion from September 30, 2018

7 *Including unaudited earnings for the 1 st nine months of 2019. Includes impact of IFRS16. | **Deposits, debt securities, assets under management, assets placed with Customers and insurance products (savings and investments).

Growing Customer base, mobile Customers standing out

('000 Customers)

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Bringing technology to processes and business model

(Consolidated, '000 Customers)

>1 million digital Customers in Portugal, with a significant increase since the launch of the new app

413

834

('000 Customers)

511

Digital Customers

46%

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Recent rating upgrades recognise Millennium bcp's improvement over the last years

• Fitch Ratings and S&P have upgraded the issuer's rating outlook to positive (October 30 and October 10, respectively)
• Moody's has upgraded deposits to investment grade on July 24, whereas DBRS upgraded senior debt to investment grade on June 3
• The senior debt rating was upgraded by 3 notches by both S&P and Moody's since 2013
• Excluding the effect of Government support removal due to changes in methodology, the intrinsic rate of BCP was upgraded by 4 notches by S&P, 6 notches by Moody's and 2 notches by Fitch

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• Fitch Ratings and S&P have

• The senior debt rating was

and Moody's since 2013

notches by Fitch

10, respectively)

upgraded the issuer's rating outlook to positive (October 30 and October

• Moody's has upgraded deposits to investment grade on July 24, whereas DBRS upgraded senior debt to investment grade on June 3

upgraded by 3 notches by both S&P

• Excluding the effect of Government support removal due to changes in methodology, the intrinsic rate of BCP was upgraded by 4 notches by S&P, 6 notches by Moody's and 2

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12

Net earnings of €270.3 million in the 1 st nine months of 2019

(Million euros)	9M18	9M19	YoY	Impact on earnings
Net interest income	1,052.8	1,153.0	+9.5%	+100.2
Commissions	510.1	519.1	+1.8%	+9.0
Core income	1,562.9	1,672.0	+7.0%	+109.2
Operating costs excluding non-usual items	-742.2	-808.0	+8.9%	-65.8
Core earnings	820.6	864.1	+5.3%	+43.4
Non-usual operating costs Compensation for temporary salary cuts, restructuring costs, Euro Bank integration	-12.0	-39.3	+228.1%	-27.3
Other income*	73.6	70.9	-3.6%	-2.6
Operating net income	882.2	895.7	+1.5%	+13.4
Impairment and provisions	-429.0	-377.1	-12.1%	+51.9
Net income before income tax	453.3	518.6	+14.4%	+65.3
Income taxes, non-controlling interests and discontinued operations	-195.8	-248.3	+26.8%	-52.5
Net income	257.5	270.3	+5.0%	+12.8

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

Mais valias em dívida pública PT: €16,0M nos 9M18, €58,5M nos 9M19 Efeito baixas taxas de juro nos seguros: -€8,6M no 9M19

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IFRS 9 1

€18,8M

st day impairment Euro Bank: -

Compensação ajuste temporário: -€12,4M Custos reestruturação: -€12,0M Custos de integração Euro Bank: -€14,9M

Net earnings of €270.3 million, a significant improvement when non-usual items are excluded

(Million euros)

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Net interest income increases in spite of an adverse environment

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Stronger commissions, in spite of lower market-related fees

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Performance of other income reflects higher mandatory contributions and low interest rate environment

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40.9 40.4

9M18 9M19

32.7 30.5

9M18 9M19

Recurring operating costs reflect growth strategy

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

*Core income = net interest income + net fees and commission income.

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Cost of risk continues trending to normalisation

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Lower NPEs and strengthened coverage

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Customer funds keep growing

Sep 18 Sep 19

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

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Increasing loan portfolio

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Comfortable liquidity position

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26

Capital levels adjusted to business model

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Capital at adequate levels

Leverage ratio

(Fully implemented, latest available data)

Leverage ratio at 7.1% as of September 30, 2019, a comfortable and comparatively strong figure in European banking

RWA density

(RWAs as % of assets, latest available data)

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29

Portugal

Increased net income

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Net income*

(Million euros)

Net earnings of €125.5 million in the 1

previous year

102bp)

+7.1% compared to €117.1 million in the same period of the

Net earnings were driven by a significant reduction in credit-loss charges (-28.5%, with cost of risk decreasing to 74bp from

st nine months of 2019,

Net operating revenue

(Million euros)

• Net earnings of €125.5 million in the 1 st nine months of 2019, +7.1% compared to €117.1 million in the same period of the previous year
• Net earnings were driven by a significant reduction in credit-loss charges (-28.4%, with cost of risk decreasing to 74bp from 102bp)

Net interest income

Net interest income stood at €600.1 million in the 1st nine months of 2019, comparing to €595.8 million in the same period of 2018. The negative effects of lower credit yields, reflecting the normalisation of the macro-economic environment, and of the securities portfolio, resulting from lower yields, was more than compensated by the favourable impacts of a lower wholesale funding cost, of the continued decline in the remuneration of time deposits and of a growing credit portfolio (as the expansion of the performing portfolio exceeded the decrease in NPEs)

Continued effort to reduce the cost of deposits

	2.72%	2.72%
(average)

• Continued improvement in the spread of the portfolio of term deposits: from -0.57% in 1 st nine months of 2018 to -0.55% in the same period of 2019; front book priced at an average spread of -40bp in the 1 st nine months of 2019, still below the current back book's
• Spread on the performing loan portfolio stood at 2.72% in the 1 st nine months of 2019 (same spread as in the 1 st nine months of 2018)
• NIM stood at 1.70%

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Commissions and other income

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(Million euros) (Million euros)

	9M18	9M19	YoY
Banking fees and commissions	303.1	319.3	+5.3%
Cards and transfers	81.9	81.6	-0.4%
Loans and guarantees	79.1	82.8	+4.7%
Bancassurance	60.7	64.9	+7.0%
Customer account related	70.8	77.8	+10.0%
Other fees and commissions	10.6	12.0	+13.4%
Market related fees and commissions	49.4	37.6	-23.8%
Securities operations	44.4	33.3	-24.9%
Asset management	5.0	4.3	-14.1%
Total fees and commissions	352.5	356.9	+1.2%

(Million euros) Fees and commissions Other income*

• Stable commissions in Portugal, despite the challenging context. Income related to loans and guarantees, to bancassurance and to accounts stood out, more than compensating for lower market-related fees

Controlled recurring operating costs

Lower NPEs, with reinforced coverage

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(Million euros)

NPE build-up

	Sep 19	Sep 19
(Million euros)	vs.Set 18	vs.Dec 18
Opening balance	5,546	4,797
Net exits	-617	-336
Write-offs	-534	-388
Sales	-705	-382
Ending balance	3,691	3,691

• NPEs in Portugal down by €1.9 billion, from €5.5 billion as at September 30, 2018 to €3.7 billion as at the same date of 2019

• This decrease results from net outflows of €0.6 billion, sales of €0.7 billion and write-offs of €0.5 billion
• The decrease of NPEs from September 30, 2018 is attributable to a €1.3 billion reduction of NPL>90d and to a €0.6 billion decrease of other NPEs
• Significant NPE reduction in the 1st nine months of 2019, from €4.8 billion as at December 31, 2018 to €3.7 billion as at September 30, 2019
• Reduction of the cost of risk to 74bp in the 1st nine months of 2019 from 102bp in the same period of 2018, with a reinforcement of NPE coverage by loan-loss reserves to 54% from 48%, respectively

NPE include loans to Customers only.

NPE coverage

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•	Total coverage* ≥100%, for both individuals and companies,
	and for both NPE categories (NPL>90d and other NPE)

• Coverage by loan-loss reserves is stronger in loans to companies, where real-estate collateral, usually more liquid and with a more predictable market value, accounts for a lower coverage than in loans to individuals: coverage by loan-losses was 62% for companies NPE as at September 30, 2019, reaching 74% for companies NPL>90d (83% and 102%, respectively, if cash, financial collateral and expected loss gap are included)

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

Foreclosed assets and corporate restructuring funds

Corporate restructuring funds

(Million euros)

• Net foreclosed assets were down by 27.4% between September 30, 2018 and September 30, 2019. Valuation of foreclosed assets by independent providers exceeded book value by 26%
• 4,480 properties were sold during the 1st nine months of 2019 (3,553 properties in the same period of 2018), with sale values exceeding book values by €60 million
• Corporate restructuring funds decreased 5.3% to €969 million at September 30, 2019. The original credit exposure on these funds totals €2,006 million, with total reserves (original credit, plus restructuring funds) corresponding to a 52% coverage

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RE/tourism

Industry

Growing customer funds and loans to customers

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Companies

Mortgage

Personal and other

(Billion euros)

Total Customers Funds* Loans to Customers (gross)

(Billion euros)

Strong credit activity to companies in Portugal

• Performing credit portfolio in Portugal up by €1.4 billion (+4.5%) from September 30, 2018
• Millennium bcp reinforced its role as the Bank of Portuguese Companies:
  • Strong performance of loans to companies, which accounted for 47% of the total performing loan growth from September 30, 2018. Leading bank in specialised credit, with factoring invoicing up by 19% and new leasing business of €430 million
  • Main bank for Portuguese companies (18.1% market share), closest to Customers, most appropriate products (BFin Data-E 2019)
  • Most innovating and most used bank in NetBanking, with a 26.9% market share (BFin Data-E 2019), with a strong focus on digital channels and on solutions that simplify companies' management

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40

International operations

Contribution from international operations to group earnings

			(Million euros)
	9M18	9M19	Δ % local currency	Δ % euros
Poland	127.6	124.2	-2.6%	-3.7%
Mozambique	74.5	74.7	+0.3%	+3.4%
Angola*
Before IAS 29 impact	11.7	12.6
IAS 29 impact**	1.2	-1.5
Total Angola including IAS 29 impact	12.9	11.1
Other	11.1	8.3
Net income	226.0	218.3
Non-controlling interests (Poland and Mozambique)	-88.5	-86.9
Exchange rate effect	3.2	--
Contribution from international operations	140.8	131.4		-6.6%
	-6.6%
140.8			131.4
Contribution 9M18			Contribution 9M19

*Contribution of the Angolan operation. | **Goodwill impairment (-€8.7 million) and contribution revaluation (+€9.9 million) in the 1 st nine months of 2018; amortisation of the effect of the IAS 29 application calculated for December 31, 2018 (-€1.5 million) in the 1 st nine months of 2019. Subsidiaries' net income presented for 2018 at the same exchange rate as of 2019 for comparison purposes.

Net earnings affected by Euro Bank's acquisition

• Net earnings of €124.2 million, with ROE of 9.2%
• Net operating revenue up by 24.9%, driven by net interest income; operating costs impacted by a higher contribution to the resolution fund, by increased staff and integrations costs (Euro Bank) and by higher IT costs
• Business volumes impacted by Euro Bank's acquisition: Customer funds up by 28.6%, while loans to Customers increased by 49.2%, excluding FXdenominated mortgage loans
• CET1 ratio of 17.1% as of September 30, 2019, with total capital of 20.2%
• Bank Millennium exceeded 2 million active Customers for the first time, and was considered Best bank in Poland by Global Finance. This magazine also voted its website as the best website design in Central and Eastern Europe

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Integration of Euro Bank

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Legal merger completed on October, 1st Agreement 5 November 2018 Operational merger November 2019 Legal merger 1 October 2019 Closing 31 May 2019 • One owner • Two legal entities • Two brands • Two systems • One owner • One legal entity • Two brands • Two systems • One owner • One legal entity • One brand

• One system

Non-usual costs Euro Bank

(Million euros)	Q1'19	Q2'19	Q3'19	Total
Euro Bank integration costs	-0.5	-4.2	-10.3	-14.9
Additional impairment Euro Bank		-18.8	-1.9	-20.6
Total impact, pre-tax	-0.5	-22.9	-12.1	-35.5
Total impact, net of taxes	-0.4	-18.6	-9.8	-28.8

• Euro Bank's integration proceeds according to the plan: legal merger completed on October, 1 st; full merger (single brand and IT systems) to be completed in November
• Non-usual costs related to the integration of Euro Bank totalled €35.5 million in the first nine months of 2019 (€28.8 million net of taxes):
  • €14.9 million of integration costs
  • €20.6 million of additional impairment: €18.8 million of first day impairment, plus €1.9 million due to the application of the risk models of Bank Millennium to the loan portfolio of Euro Bank

FX effect excluded. €/Zloty constant at September 2019 levels: Income Statement 4.30; Balance Sheet 4.37.

Increased net interest income

*Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in accounting terms, part of this margin (€10.6 million in the 1 st nine months of 2019 and €9.8 million in the 1 st nine months of 2018) is presented in net trading income. FX effect excluded. €/Zloty constant at September 2019 levels: Income Statement 4.30; Balance Sheet 4.37.

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Credit quality

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• impairment Euro Bank NPL>90d accounted for 2.6% of total credit as of September 30, 2019 (2.7% as of September 30, 2018)
  • Coverage of NPL>90d by loan-loss reserves at 107% (134% as of September 30, 2018)
  • Cost of risk of 80bp (47bp in the 1st nine months of 2018), 61bp if additional impairment related to the acquisition of Euro Bank is excluded

FX effect excluded. €/Zloty constant at September 2019 levels: Income Statement 4.30; Balance Sheet 4.37.

Growing volumes

FX effect excluded. €/Zloty constant at September 2019 levels: Income Statement 4.30; Balance Sheet 4.37.

3,647

3,293

16,343

Euro Bank: €2.9 billion

Stable earnings, reflecting the normalisation of the interest rate environment

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Net operating revenue

(Million euros)

• Net earnings of €74.7 million, with ROE of 20.7%, reflecting stable net interest income following the normalisation of interest rates
• Customer funds grew 4.3%, with loan portfolio down by 19.0% reflecting a conservative approach under a challenging environment
• Capital ratio of 47.9%
• Best bank in Mozambique by Global Finance, for the 10th year in a row

Stable net interest income, reflecting the normalisation of the interest rate environment

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*Excludes employees from SIM (insurance company)

FX effect excluded. €/Metical constant at September 2019 levels: Income Statement 70.07; Balance Sheet 67.34.

Sep 18 Sep 19

Credit quality performance influenced by challenging environment

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FX effect excluded. €/Metical constant at September 2019 levels: Income Statement 70.07; Balance Sheet 67.34.

Business volumes reflect a conservative approach under a challenging environment

FX effect excluded. €/Metical constant at September 2019 levels: Income Statement 70.07; Balance Sheet 67.34.

Key figures

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51

Strategic Plan 2021

Franchise growth		9M18	9M19	2021
	Active Customers	4.8 million	5.1 million	>6 million
	Digital Customers	54%	58%	>60%
Value creation	Mobile Customers	32%	39%	>45%
	Cost to income	46% (45% excluding non-usual costs)	49% (46% excluding non-usual costs)	≈40%
	RoE	6.0%	6.0%	≈10%
	CET1	11.8%	12.3%	≈12%
	Loans-to-deposits	89%	88%	<100%
Asset quality	Dividend payout	--	--	≈40%
	NPE stock	€6.3 billion	€4.6 billion	≈€3 billion Down ≈60% from 2017
	Cost of risk	88bp	73bp	<50bp

Awards in 2019

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

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

Banks" category Millennium bcp: Customers most satisfied with digital channels (Basef Banca, June 2019)

Millennium bcp: Best investment bank in Portugal

Millennium bcp: Best investment bank in Portugal

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

Bank Millennium: Best bank in Poland

Bank Millennium: Best website design in Central and Eastern Europe

Millennium bim: Best bank in Mozambique (10th year in a row)

Millennium bim: Best trade finance provider in Mozambique

Millennium bim: Best Information Security and Fraud Management in Mozambique

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

Millennium bcp

Best consumer digital bank in Portugal; Best Information Security and Fraud Management in Portugal

Millennium bcp Consumer choice 2019, "Large

Barómetro Financeiro 2019

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

Millennium bcp Best private bank in Portugal

Appendix

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54

Sovereign debt portfolio

(Consolidated, million euros)

	Sep 18	Jun 19	Sep 19	YoY	QoQ
Portugal	6,335	7,229	7,413	+17%	+3%
T-bills and other	971	1,665	1,536	+58%	-8%
Bonds	5,364	5,564	5,876	+10%	+6%
Poland	4,047	4,328	4,645	+15%	+7%
Mozambique	656	290	320	-51%	+10%
Other	522	1,010	940	+80%	-7%
Total	11,560	12,857	13,317	+15%	+4%

Sovereign debt portfolio Sovereign debt maturity

• The sovereign debt portfolio totalled €13.3 billion, €10.1 billion of which maturing until 5 years
• The Portuguese sovereign debt portfolio totalled €7.4 billion, whereas the Polish and Mozambican portfolios amounted to €4.6 billion and to €0.3 billion, respectively; "other" includes Spanish and Italian sovereign debt (€0.5 billion and €0.4 billion, respectively)

Sovereign debt portfolio

	Portugal	Poland	Mozambique	Other	Total
Trading book*	35	172	0	1	207
≤ 1 year	35	7	0	0	42
> 1 year and ≤ 2 years	0	59	0	0	59
> 2 years and ≤ 5 years	0	70	0	0	70
> 5 years and ≤ 8 years	0	26	0	0	26
> 8 years and ≤ 10 years	0	9	0	0	9
> 10 years	0	0	0	1	1
Banking book**	7,378	4,473	320	940	13,110
≤ 1 year	1,594	314	48	217	2,173
> 1 year and ≤ 2 years	20	2,476	33	228	2,755
> 2 years and ≤ 5 years	3,231	1,296	122	367	5,016
> 5 years and ≤ 8 years	2,137	304	0	128	2,569
> 8 years and ≤ 10 years	389	60	40	0	489
> 10 years	7	24	76	0	107
Total	7,413	4,645	320	940	13,317
≤ 1 year	1,629	321	48	217	2,215
> 1 year and ≤ 2 years	20	2,535	33	228	2,815
> 2 years and ≤ 5 years	3,231	1,365	122	367	5,086
> 5 years and ≤ 8 years	2,137	331	0	128	2,596
> 8 years and ≤ 10 years	389	69	40	0	499
> 10 years	7	24	76	1	108

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

**Includes financial assets at fair value through other comprehensive income (€12,606 million) and financial assets at amortised cost (€504 million).

Diversified and collateralised portfolio

Loan portfolio Mortgage 47% Personal/ other 11% Companies 42% Loans per collateral LTV of the mortgage portfolio in Portugal 0-40 40-50 16% 11% 50-60 14% 60-75 29% 75-80 10% 80-90 11% >90 9% Real guarantees 59% Other guarantees 26% Unsecured 16% (Consolidated)

Loans

• Loans to companies accounted for 42% of the loan portfolio as at September 30, 2019, including 6% to construction and real-estate sectors
• Mortgage accounted for 47% of the loan portfolio, with low delinquency levels and an average LTV of 65%
• 85% of the loan portfolio is collateralised

Collaterals

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

Consolidated earnings

(Million euros)	9M18	9M19	YoY	Impact on earnings
Net interest income	1,052.8	1,153.0	+9.5%	+100.2
Net fees and commissions	510.1	519.1	+1.8%	+9.0
Other income*	73.6	70.9	-3.6%	-2.6
Net operating revenue	1,636.5	1,743.0	+6.5%	+106.5
Staff costs	-435.6	-488.0	+12.0%	-52.5
Other administrative costs and depreciation	-318.7	-359.3	+12.7%	-40.6
Operating costs	-754.2	-847.3	+12.3%	-93.1
Profit before impairment and provisions	882.2	895.7	+1.5%	+13.4
Loans impairment (net of recoveries)	-336.7	-299.0	-11.2%	+37.7
Other impairment and provisions	-92.2	-78.1	-15.4%	+14.2
Impairment and provisions	-429.0	-377.1	-12.1%	+51.9
Net income before income tax	453.3	518.6	+14.4%	+65.3
Income taxes	-109.5	-174.0	+58.9%	-64.5
Non-controlling interests	-85.9	-87.6	+2.1%	-1.8
Net income from discontinued or to be discontinued operations	-0.4	13.4		+13.8
Net income	257.5	270.3	+5.0%	+12.8

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

Consolidated balance sheet

(Million euros)

	30 September 2019	30 September 2018
ASSETS
Cash and deposits at Central Banks	3,766.3	2,192.5
Loans and advances to credit institutions repayable on demand	286.3	330.3
Financial assets at amortised cost
Loans and advances to credit institutions	978.1	868.2
Loans and advances to customers	49,418.8	45,355.4
Debt instruments	3,676.6	3,347.7
Financial assets at fair value through profit or loss
Financial assets held for trading	930.8	1,024.8
Financial assets not held for trading mandatorily at fair value through profit or loss	1,420.4	1,405.5
Financial assets designated at fair value through profit or loss	31.5	32.9
Financial assets at fair value through other comprehensive income	13,972.3	12,063.8
Assets with repurchase agreement	-	15.5
Hedging derivatives	267.7	76.6
Investments in associated companies	429.2	488.2
Non-current assets held for sale	1,422.9	1,940.0
Investment property	10.0	12.0
Other tangible assets	723.1	484.2
Goodwill and intangible assets	219.9	168.7
Current tax assets	25.2	12.9
Deferred tax assets	2,720.4	2,945.3
Other assets	1,059.6	980.0
TOTAL ASSETS	81,359.1	73,744.6

	30 September 2019	30 September 2018
LIABILITIES
Financial liabilities at amortised cost
Resources from credit institutions	6,502.8	7,563.5
Resources from customers	57,621.8	50,760.5
Non subordinated debt securities issued	1,751.8	1,707.7
Subordinated debt	1,685.7	1,097.7
Financial liabilities at fair value through profit or loss
Financial liabilities held for trading	333.1	310.6
Financial liabilities at fair value through profit or loss	3,379.1	3,831.9
Hedging derivatives	324.1	170.5
Provisions	332.4	331.9
Current tax liabilities	8.7	4.7
Deferred tax liabilities	11.4	5.0
Other liabilities	1,772.8	1,015.9
TOTAL LIABILITIES	73,723.6	66,800.0
EQUITY
Share capital	4,725.0	5,600.7
Share premium	16.5	16.5
Preference shares	-	59.9
Other equity instruments	402.9	2.9
Legal and statutory reserves	240.5	264.6
Treasury shares	(0.1)	(0.3)
Reserves and retained earnings	750.6	(393.2)
Net income for the period attributable to Bank's Shareholders	270.3	257.5
TOTAL EQUITY ATTRIBUTABLE TO BANK'S SHAREHOLDERS	6,405.8	5,808.6
Non-controlling interests	1,229.7	1,136.0
TOTAL EQUITY	7,635.5	6,944.7
TOTAL LIABILITIES AND EQUITY	81,359.1	73,744.6

Consolidated income statement per quarter

(Million euros)

	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19
Net interest income	365.2	370.8	362.7	377.4	412.9
Dividends from equity instruments	0.0	0.0	0.0	0.6	0.1
Net fees and commission income	169.9	174.0	166.6	175.6	176.9
Other operating income	1.7	-1.0	-10.6	-64.8	-12.5
Net trading income	12.6	-11.0	60.3	35.2	23.6
Equity accounted earnings	30.5	17.3	18.6	2.6	17.8
Banking income	579.7	550.1	597.7	526.6	618.8
Staff costs	145.8	157.2	152.2	172.0	163.8
Other administrative costs	93.1	100.9	80.5	86.5	102.5
Depreciation	14.5	14.8	26.8	30.1	32.9
Operating costs	253.4	273.0	259.5	288.6	299.1
Profit bef. impairment and provisions	326.3	277.1	338.1	237.9	319.6
Loans impairment (net of recoveries)	116.2	127.9	86.5	113.8	98.7
Other impairm. and provisions	33.0	44.2	17.4	25.4	35.2
Net income before income tax	177.1	105.0	234.2	98.7	185.7
Income tax	37.6	28.5	65.4	55.6	52.9
Non-controlling interests	30.5	31.9	28.4	27.1	32.2
Net income (before disc. oper.)	109.0	44.5	140.4	16.0	100.5
Net income arising from discont. operations	-2.2	-0.9	13.5	0.0	0.0
Net income	106.8	43.6	153.8	15.9	100.5

Income statement

(Million euros)

For the 9-month periods ended September 30th, 2018 and 2019

(Million euros)
For the 9-month periods ended September 30th, 2018 and 2019
							Internatio nal o						peratio	ns
	Gro up			P o rtugal			T o tal		B ank M illennium (P o land)			M illennium bim (M o z.)			Other int. o peratio ns
	Sep 18	Sep 19	Δ %	Sep 18	Sep 19	Δ %	Sep 18	Sep 19	Δ %	Sep 18	Sep 19	Δ %	Sep 18	Sep 19	Δ %	Sep 18	Sep 19	Δ %
Interest income	1,408	1,478	5.0%	741	717	-3.2%	667	761	14.0%	443	565	27.6%	215	188	-12.4%	10	8	-22.9%
Interest expense	355	325	-8.5%	145	117	-19.3%	210	208	-1.1%	129	159	23.0%	79	49	-38.3%	2	0	-93.8%
N et interest inco me	1,053	1,153	9.5%	596	600	0.7%	457	553	21.0%	313	406	29.5%	136	139	2.7%	8	7	-4.2%
Dividends from equity instruments	1	1	24.0%	0	0	>100%	1	1	23.7%	1	1	20.9%	0	0	90.6%	0	0	-100.0%
Intermediatio n margin	1,053	1,154	9.5%	596	600	0.7%	458	554	21.0%	314	407	29.5%	136	139	2.7%	8	7	-4.3%
Net fees and commission income	510	519	1.8%	352	357	1.2%	158	162	3.0%	118	120	2.3%	22	23	6.1%	18	19	3.6%
Other operating income	-88	-88	0.6%	-44	-35	19.0%	-45	-52	-17.3%	-58	-66	-12.8%	14	14	-2.3%	0	0	1.4%
B asic inco me	1,475	1,585	7.4%	905	922	1.9%	570	663	16.3%	373	461	23.5%	172	176	2.7%	2 5	2 6	1.3%
Net trading income	90	119	33.0%	42	48	15.5%	48	71	48.1%	39	57	45.2%	6	11	86.4%	3	3	8.1%
Equity accounted earnings	72	39	-45.7%	43	28	-35.3%	29	11	-61.3%	0	0	--	0	0	--	29	11	-61.3%
B anking inco me	1,636	1,743	6.5%	989	997	0.8%	647	746	15.2%	413	518	25.6%	177	187	5.5%	5 7	4 0	-29.9%
Staff costs	436	488	12.0%	281	302	7.3%	154	186	20.6%	112	141	25.1%	29	31	8.8%	13	15	8.2%
Other administrative costs	276	269	-2.3%	161	142	-11.7%	115	128	10.8%	79	90	13.7%	31	33	6.2%	5	5	-4.6%
Depreciation	43	90	>100%	27	51	88.8%	16	39	>100%	9	29	>100%	6	8	30.9%	0	1	>100%
Operating co sts	754	847	12.3%	469	495	5.5%	285	353	23.6%	201	260	29.5%	6 6	7 3	9.7%	19	2 0	9.1%
P ro fit bef. impairment and pro visio ns	882	896	1.5%	520	503	-3.4%	362	393	8.6%	212	259	22.0%	111	115	3.0%	3 9	2 0	-48.7%
Loans impairment (net of recoveries)	337	299	-11.2%	288	206	-28.4%	49	93	90.8%	32	79	>100%	22	16	-24.4%	-5	-3	48.8%
Other impairm. and provisions	92	78	-15.4%	77	68	-10.8%	16	10	-37.5%	5	8	76.3%	-1	1	>100%	12	0	-100.0%
N et inco me befo re inco me tax	453	519	14.4%	156	228	46.5%	298	291	-2.4%	175	171	-2.2%	9 0	9 7	7.2%	3 2	2 2	-30.3%
Income tax	110	174	58.9%	43	103	>100%	67	71	6.5%	46	47	2.1%	17	21	22.7%	3	3	-19.4%
Non-controlling interests	86	88	2.1%	-4	0	89.9%	90	88	-2.3%	0	0	--	1	1	5.8%	90	87	-2.3%
N et inco me (befo re disc. o per.)	258	257	-0.4%	117	125	7.1%	141	131	-6.6%	129	124	-3.7%	7 2	7 5	3.4%	-60	-68	-11.7%
Net income arising from discont. operations	0	13	>100%
N et inco me	257	270	5.0%

61

Glossary (1/2)

Assets placed with customers – amounts held by customers in the context of the placement of third-party products that contribute to the recognition of commissions.

Balance sheet customer funds – deposits and other resources from customers and debt securities placed with customers.

Commercial gap – loans to customers (gross) minus on-balance sheet customer funds.

Core income - net interest income plus net fees and commissions income.

Core net income - net interest income plus net fees and commissions income deducted from operating costs.

Cost of risk, net (expressed in basis points) - ratio of loans impairment (P&L) accounted in the period to loans to customers at amortised cost and debt instruments at amortised cost related to credit operations before impairment at the end of the period.

Cost to core income - operating costs divided by core income.

Cost to income – operating costs divided by net operating revenues.

Coverage of non-performing exposures by impairments – loans impairments (balance sheet) divided by the stock of NPE.

Coverage of non-performing loans by impairments – loans impairments (balance sheet) divided by the stock of NPL.

Coverage of overdue loans by impairments - loans impairments (balance sheet) divided by overdue loans.

Coverage of overdue loans by more than 90 days by impairments - loans impairments (balance sheet) divided by overdue loans by more than 90 days.

Debt instruments – non-subordinated debt instruments at amortised cost and financial liabilities measured at fair value through profit or loss (debt securities and certificates).

Debt securities placed with customers - debt securities issued by the Bank and placed with customers.

Deposits and other resources from customers – resources from customers at amortised cost and customer deposits at fair value through profit or loss.

Dividends from equity instruments - dividends received from investments classified as financial assets at fair value through other comprehensive income and from financial assets held for trading.

Equity accounted earnings - results appropriated by the Group related to the consolidation of entities where, despite having a significant influence, the Group does not control the financial and operational policies.

Insurance products – includes unit linked saving products and retirement saving plans ("PPR", "PPE" and "PPR/E").

Loans impairment (balance sheet) – balance sheet impairment related to loans to customers at amortised cost, balance sheet impairment associated with debt instruments at amortised cost related to credit operations and fair value adjustments related to loans to customers at fair value through profit or loss.

Loans impairment (P&L) – impairment (net of reversals and net of recoveries - principal and accrual) of financial assets at amortised cost for loans to customers and for debt instruments related to credit operations.

Loans to customers (gross) – loans to customers at amortised cost before impairment, debt instruments at amortised cost associated to credit operations before impairment and loans to customers at fair value through profit or loss before fair value adjustments.

Loans to customers (net) - loans to customers at amortised cost net of impairment, debt instruments at amortised cost associated to credit operations net of impairment and balance sheet amount of loans to customers at fair value through profit or loss.

Loan to Deposits ratio (LTD) – loans to customers (net) divided by deposits and other resources from customers.

Loan to value ratio (LTV) – mortgage amount divided by the appraised value of property.

Net commissions - net fees and commissions income.

Net interest margin (NIM) - net interest income for the period as a percentage of average interest earning assets.

Net operating revenues - net interest income, dividends from equity instruments, net commissions, net trading income, other net operating income and equity accounted earnings.

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Glossary (2/2)

• Net trading income results from financial operations at fair value through profit or loss, results from foreign exchange, results from hedge accounting operations, results from derecognition of financial assets and financial liabilities measured at amortised cost and results from derecognition of financial assets measured at fair value through other comprehensive.
• Non-performing exposures (NPE) non-performing loans and advances to customers (loans to customers at amortised cost and loans to customers at fair value through profit or loss) more than 90 days past-due or unlikely to be paid without collateral realisation, if they recognised as defaulted or impaired.
• Non-performing loans (NPL) overdue loans (loans to customers at amortised cost, debt instruments at amortised cost associated to credit operations and loans to customers at fair value through profit or loss) more than 90 days past due including the non-overdue remaining principal of loans, i.e. portion in arrears, plus non-overdue remaining principal.

Off-balance sheet customer funds – assets under management, assets placed with customers and insurance products (savings and investment) subscribed by customers.

• Operating costs staff costs, other administrative costs and depreciation.
• Other impairment and provisions impairment (net of reversals) of financial assets at amortised cost for loans and advances of credit institutions, impairment of financial assets (at fair value through other comprehensive income and at amortised cost not associated with credit operations), other assets impairment, in particular provision charges related to assets received as payment in kind not fully covered by collateral, investments in associated companies and goodwill of subsidiaries and other provisions.
• Other net income dividends from equity instruments, net commissions, net trading income, other net operating income and equity accounted earnings.
• Other net operating income net gains from insurance activity, other operating income/(loss) and gains/(losses) arising from sales of subsidiaries and other assets.
• Overdue loans total outstanding amount of past due loans to customers (loans to customers at amortised cost, debt instruments at amortised cost associated to credit operations and loans to customers at fair value through profit or loss), including principal and interests.
• Overdue loans by more than 90 days total outstanding amount of past due loans to customers by more than 90 days (loans to customers at amortised cost, debt instruments at amortised cost associated to credit operations and loans to customers at fair value through profit or loss), including principal and interests.
• Resources from credit institutions resources and other financing from Central Banks and resources from other credit institutions.
• Return on average assets (Instruction from the Bank of Portugal no. 16/2004) net income (before tax) divided by the average total assets (weighted average of the average of monthly net assets in the period).
• Return on average assets (ROA) net income (before minority interests) divided by the average total assets (weighted average of the average of monthly net assets in the period).
• Return on equity (Instruction from the Bank of Portugal no. 16/2004) net income (before tax) divided by the average attributable equity + non-controlling interests (weighted average of the average of monthly equity in the period).
• Return on equity (ROE) net income (after minority interests) divided by the average attributable equity, deducted from preference shares and other capital instruments (weighted average of the average of monthly equity in the period).
• Securities portfolio debt instruments at amortised cost not associated with credit operations (net of impairment), financial assets at fair value through profit or loss (excluding the ones related to loans to customers and trading derivatives), financial assets at fair value through other comprehensive income and assets with repurchase agreement.
• Spread increase (in percentage points) to the index used by the Bank in loans granting or fund raising.
• Total customer funds balance sheet customer funds and off-balance sheet customer fund.

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