TABLE OF CONTENTS ARTICLE 75(1) OF FINANCIAL SYSTEM ACT OF MACAU (FSAM) MARKET RISK INTEREST RATE RISK IN THE BANKING BOOK OPERATIONAL RISK

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2 TABLE OF CONTENTS ARTICLE 75(1) OF FINANCIAL SYSTEM ACT OF MACAU (FSAM) 3 MARKET RISK 59 Balance sheet Profit and loss Account Summary of the Management Report Opinion of the Sole Supervisor Summary of the external auditors' report List of institutions with more than 5% interests List of the shareholders with qualifying holdings Names of the members of the Company's Board CORPORATE GOVERNANCE CASH FLOW STATEMENT OFF-BALANCE-SHEET EXPOSURES OTHER THAN DERIVATIVES TRANSACTIONS DERIVATIVES TRANSACTIONS ACCOUNTING POLICIES RELATED PARTY TRANSACTIONS Qualitative disclosure Quantitative disclosure INTEREST RATE RISK IN THE BANKING BOOK Qualitative disclosure Quantitative disclosure OPERATIONAL RISK Qualitative disclosure FOREIGN EXCHANGE RISK Qualitative disclosure Quantitative disclosure LIQUIDITY RISK Qualitative disclosure Quantitative disclosure Qualitative disclosure Quantitative disclosure CAPITAL 5 Qualitative disclosure Quantitative disclosure CREDIT RISK Qualitative disclosure Quantitative disclosure

3 ARTICLE º 75(1) OF FINANCIAL SYSTEM ACT OF MACAU (FSAM)

4 Article º 75(1)of FSAM BANCO NACIONAL ULTRAMARINO, S.A. BALANCE SHEET AS OF DECEMBER 31, 215 MOP PROVISIONS, ASSETS GROSS ASSETS AMORTIZATIONS NET ASSETS AND NET VALUE CASH 1,597,854, ,597,854, DEPOSITS WITH AMCM 428,399, ,399,767.4 CERTIFICATES OF INDEBTEDNESS ISSUED BY THE MACAU GOVERNMENT 6,698,913, ,698,913,345. ACCOUNTS RECEIVABLE 12,782, ,782, DEMAND DEPOSITS WITH OTHER CREDIT INSTITUTIONS IN MACAU 185,247, ,247,85.3 DEMAND DEPOSITS WITH OTHER CREDIT INSTITUTIONS ABROAD 227,248, ,248, GOLD AND SILVER... OTHER CURRENT ASSETS 2,38, ,38, CREDIT GRANTED 26,664,268, ,572, ,624,696,249.5 PLACEMENTS WITH CREDIT INSTITUTIONS IN MACAU 1,67,999, ,67,999, DEPOSITS AT CALL AND TIME DEPOSITS WITH CREDIT INSTITUTIONS ABROAD 16,328,265, ,328,265, SHARES, BONDS AND EQUITY 1,693,625, ,693,625, INVESTMENT OF ASSIGNED FUNDS... DEBTORS 169,433, ,433, OTHER PLACEMENTS... FINANCIAL INVESTMENTS 8,938, ,938, PROPERTY 1,864,498, ,119, ,787,378,667. EQUIPMENT 146,54, ,89, ,414,28.38 DEFERRED COST 75,188, ,329, ,859,448.7 START-UP EXPENDITURE... FIXED ASSETS IN PROGRESS... OTHER FIXED ASSETS 1,834, ,834, INTERNAL AND ADJUSTMENT ACCOUNTS 229,461, ,461, TOTAL 66,492,772, ,11, ,217,661,

5 Article º 75(1)of FSAM BANCO NACIONAL ULTRAMARINO, S.A. BALANCE SHEET AS OF DECEMBER 31, 215 MOP LIABILITIES SUB - TOTAL BANK NOTES IN CIRCULATION CURRENT DEPOSITS 16,299,898,87.89 DEPOSITS AT CALL. TIME DEPOSITS 9,648,43,9.92 GOVERNMENT DEPOSITS 24,636,87, AMOUNTS DUE TO CREDIT INSTITUTIONS IN MACAU 249,493,249.8 AMOUNTS DUE TO OTHER LOCAL ENTITIES. AMOUNTS DUE TO CREDIT INSTITUTIONS ABROAD 1,162,577,88.15 ASSIGNED FUNDS. CHEQUES AND ORDERS PAYABLE 2,67, TOTAL 6,866,8,12. 25,948,31,88.81 CREDITORS 111,155,941.2 OTHER LIABILITIES 133,268, ,295,972, INTERNAL AND ADJUSTMENT ACCOUNTS 542,552, PROVISIONS FOR RISK 298,758,979.9 CAPITAL 2,,,. OTHER RESERVES 3,755,665,19.3 5,755,665,19.3 NET PROFIT BROUGHT FORWARD. NET PROFIT FOR THE YEAR 51,33,28.72 TOTAL 66,217,661,

6 Article º 75(1)of FSAM BANCO NACIONAL ULTRAMARINO, S.A. PROFIT AND LOSS ACCOUNT AS OF DECEMBER 31, 215 MOP DEBIT AMOUNT CREDIT AMOUNT COST OF CREDIT OPERATIONS 422,571, PERSONNEL COSTS 22,325,37.45 OF WHICH: REMUNERATION OF BOARD OF DIRECTORS AND SUPERVISOR COMMITTEE 8,658,328.6 SALARIES AND WAGES 169,599, BENEFITS 21,95,249. OTHERS 2,162,236.7 THIRD PARTY SUPPLY 1,33, THIRD PARTY SERVICES 79,287,75.21 OTHER BANKING COSTS 165,875, TAXATION 1,122,45. COST OF NON-BAKING OPERATIONS 4,815, DEPRECIATION ALLOWANCES 54,96,22.85 PROVISION ALLOWANCES 65,257, OPERATING PROFIT 572,67, TOTAL 1,578,612, INCOME FROM CREDIT OPERATIONS 1,127,931,77.96 INCOME FROM BANKING SERVICES 356,676, INCOME FROM OTHER BANKING SERVICES 59,16,32.13 INCOME FROM SECURITIES AND EQUITY INVESTMENTS 989, OTHER BANKING INCOME 28,22,19.33 INCOME FROM NON-BANKING OPERATIONS 5,688, OPERATING LOSSES. TOTAL 1,578,612,

7 Article º 75(1)of FSAM BANCO NACIONAL ULTRAMARINO, S.A. PROFIT AND LOSS ACCOUNTS AS OF DECEMBER 31, 215 MOP DEBIT AMOUNT CREDIT AMOUNT OPERATING LOSS. LOSSES RELATED TO PREVIOUS YEARS 77,7, EXCEPTIONAL LOSSES. PROFIT TAX PROVISION 69,886,875. PROFIT FOR THE YEAR 51,33,28.72 TOTAL 657,224, OPERATING PROFIT 572,67, PROFIT RELATED TO PREVIOUS YEARS 8,149, EXCEPTIONAL PROFITS. PROVISIONS USED UP 77,7, LOSS FOR THE YEAR. TOTAL 657,224, HEAD OF ACCOUNTING PRESIDENT OF THE EXECUTIVE COMMITTEE MARIA CLARA FONG PEDRO MANUEL DE OLIVEIRA CARDOSO 7

8 Article º 75(1)of FSAM Summary of the Management Report Banco Nacional Ultramarino, S.A. represents the CGD Group in Macau, continuing to develop its activities in commercial banking and simultaneously is one of the banks with responsibility for note issuing in Macau, where the monetary circulation has been growing steadily. In 215 it was recorded a big contraction in the Macau GDP, driven mostly by the drop in gaming revenue, mainly due to the anticorruption policies adopted by the People s Republic of China and the slowdown of the economy of China, which indirectly has been affecting Macau, as the Territory is an important international center of tourism and leisure. It should be noted that some sectors have been gaining importance such as fairs, exhibitions (MICE) and retail shopping. However these are highly dependent on external factors, namely the number of tourists visiting the city which, in the majority, are from Mainland China The gaming and tourism sectors, as well as all connected activities, such as exhibitions and retail shopping, are the main drivers of the Macau economy. It was noted that there was a strong market adjustment with gross gaming revenue dropping 34.3 percent in 215, mostly due to decline from the VIP segment and, at the same time, there was a decrease of visitors arrivals to Macau in 215 by 2.6 percent. Reflecting a correction of tourism and gaming sectors, in 215, the Tourist Price Index (TPI) decreased.9 per cent when compared with 214. The recorded unemployment average rate in 215 was 1.8 percent, a slight increase compared to 1.7 percent recorded in the previous year, confirming a full employment situation in the local economy which implies an upward pressure in wages and greater difficulties for firms in getting and keeping the human resources. Simultaneously, the inflation rate reached 4.6 percent in 215, reflecting mainly the pressure on of rents and restaurant sector prices. In this local economic environment, the banking sector in Macau continued to have a stable performance. Meanwhile, in spite of the banking business continuing to be more competitive as several banks try to get more market share, it has been noticed a decrease in terms of operations profitability and rates practiced in the local market. Despite the unfavorable economic situation that Macau is going through, and also the referred increased banking competitiveness with impact on margins, on getting deposits from clients and loans to private clients, BNU continued to present a good performance on business volume growth. In 215, in terms of evolution of BNU business, credit and deposits growth stood at 21.6 per cent. As a result, the loan-to-deposit ratio in 215 maintained the same level as last year at 53.1 percent. 8

9 The average number of products per customer increased to 3.28 in 215 while in 214 was 3.2. It is the result of the continuing effort in cross-selling where the Bank registered an increase in revenues from sales of insurance products by 28.9 percent. BNU s net interest income had a good performance in 215, with a year-on-year growth of 22.5 percent, due to the increase of business volume. As a result from a better customer loyalty and increased cross-selling of products, in spite of a strong negative impact of the contraction from gaming and tourism sectors, the net profits from commission recorded a growth of 3.6 percent. The staff costs, registered a 7 percent increase over the previous year, while administrative costs were down by 3.6 percent, due to a strong control made in the area of procurement, in spite of the inflation in Macau. The cash flow registered an increase of 13 percent as a result of growth of net interest income and the net commissions. As for the depreciation expense, there was a rise of 1 percent, due to the increased valuations of the Bank s properties, purchase of equipment and branches remodeling. Regarding the net charge to provisions, there was a decrease of 1.5 percent in 215 as a result of a slower growth of credit granted compared with the growth registered in 214. In this context, the net profit of the Bank reached 51.3 million Patacas, 15.1 percent more than the previous year. In order to take full advantage of the opportunities arising from the economic development of Macao, BNU continued to develop new products and services and innovation which will have a very significant impact on the development of the Bank activity in the coming years. Banco Nacional Ultramarino, S.A. would like to express its most sincere gratitude to all of its customers for their trust and support and to its employees for the work accomplished and utmost dedication, as well as to our shareholder, Caixa Geral de Depósitos, for all the support and trust given. Banco Nacional Ultramarino, S.A. further extends its gratitude to Macau Authorities for all their support and cooperation, in particular the Monetary Authority of Macao, for all the support and collaboration given. Article º 75(1)of FSAM Macau, 25 February 216 Pedro Manuel de Oliveira Cardoso President of the Executive Committee 9

10 Opinion of the Sole Supervisor Article º 75(1)of FSAM Shareholders: In accordance with article 32 e) of the Articles of Association, the Board of Directors of Banco Nacional Ultramarino, S.A. submitted to the Sole Supervisor, the Balance Sheet, Accounts and Annual Report in relation to the Bank s operation in year 215. In addition, the external auditor s report as prepared by «Deloitte Touche Tohmatsu» for the Bank in relation to its activity in the same year was also provided. During the year, the Sole Supervisor had maintained regular contacts with the Board of Directors, consulted on the Bank s activity and always received the collaboration as well as necessary clarification in an efficient manner. After reviewing the documents as presented by the Board of Directors, it was found that the documents reflected clearly the financial and economical situation of the Bank. The Report of the Board of Directors also explained clearly the business development of the Bank s activity in the referred year of operation. The Sole Supervisor had also reviewed the external auditors report and found that the report reflected truly the financial situation and performance of the Bank as at close of business on 31 December 215 as well as the result of the activity for the year ended and which were prepared under the accounting principles applicable on banking activity. As such, the Sole Supervisor decided to recommend the approval of: 1. The balance sheet and profit and loss account; 2. The annual report of the Board of Directors. Chui Sai Cheong The Sole Supervisor Macau, 26 February 216 1

11 Article º 75(1)of FSAM Summary of the External Auditors Report To the shareholders of Banco Nacional Ultramarino, S.A. We have audited the financial statements of the Banco Nacional Ultramarino, S.A. for the year ended 31 December 215, in accordance with the Normas de Auditoria and Normas Técnicas de Auditoria of the Macao Special Administrative Region. In our report, dated 25 February 216, we expressed an opinion with no constraints on the financial statements of which the present is a summary. The financial statements referred to above comprise the balance sheet, as at 31 December 215, the income statement, the statement of changes in equity and the cash flow statement for the year ended, as well as a summary of the relevant accounting policies and other explanatory notes. The summarized financial statements prepared by Management results from the annual audited financial statements mentioned above. In our opinion, the summarized financial statements are consistent in all material respects with the audited financial statements. To better understand the financial position of Banco Nacional Ultramarino, S.A. and the results of its operations in the period and scope covered by our audit, the summarized financial statements should be read in conjunction with the financial statements of which they result, as well as with the corresponding audit report. Kwok Sze Man Registered Auditor Deloitte Touche Tohmatsu Sociedade de Auditores Macau, 25 February

12 Article º 75(1)of FSAM List of institutions with more than 5% interests BANCO NACIONAL ULTRAMARINO, S.A. List of the institutions in which they have holdings in excess of 5% in the share capital, or over 5% of their own funds, with an indication of the respective percentage. None List of the shareholders with qualifying holdings Caixa Geral de Depósitos, S.A % 12

13 Article º 75(1)of FSAM Governing and Auditing Bodies Board of the General Meeting Board of Directors Executive Committee Chairman: Joaquim Jorge Perestrelo Neto Valente Vice-Chairman: Liu Chak Wan Secretary: Maria de Lurdes Nunes Mendes da Costa Chairman: CAIXA GERAL DE DEPÓSITOS, S.A., represented by Nuno Maria Pinto de Magalhães Fernandes Thomaz Vice-Chairman: Pedro Manuel de Oliveira Cardoso Members: Kan Cheok Kuan Leandro Rodrigues da Graça Silva Alberto Manuel Sarmento Azevedo Soares Armando Mata dos Santos Tse See Fan Paul President: Pedro Manuel de Oliveira Cardoso Members: Kan Cheok Kuan Leandro Rodrigues da Graça Silva Sole Supervisor Chui Sai Cheong 13

14 CORPORATE GOVENANCE

15 Top Management CADMI (Board of Directors) Corporate Governance CIPNE Group Business Integration &Promotion Committee CCRED Credit Committee CAUCO Audit and Compliance Committee CEXEC Executive Committee CRISC Risk Committee ALCO Asset and Liability Committee EBSC Electronic Banking Security Committee Shanghai Representative Office DIRET Retail Banking Divison DIFCC Financial Control & Corporate Development Division DCOR1 Corporate Banking Division/Team1 DCOR2 Corporate Banking Division/Team2 DCOR3 Corporate Banking Division/Team3 DIPRS Division of Products and Services TREAS Treasurer PBANK Private Banking & Institutional Clients SINFO Information Technology DIRIS Risk Management Division DIOPE Operational Support Division (a) Organic Structure of Top Management Top Management of BNU - Macau includes: Board of Directors; Executive Committee; Audit and Compliance Committee; Risk Committee; Asset and Liability Committee; Electronic Banking Security Committee; Group Business Integration & Promotion Committee Also includes the following subordinate structure: Credit Committee; (b) General Organic Structure of BNU - Macau The general organic structure includes following divisions: Retail Banking Division; Corporate Banking Division/Team 1; Corporate Banking Division/Team 2 Corporate Banking Division/Team 3; Division of Products and Services Operational Support Division. Risk Management Division; Financial Control & Corporate Development Division;- Private Banking and Institutional Clients; Treasury; Information Technology. 15

16 Corporate Governance CADMI BOARD OF DIRECTORS (Conselho de Administração) The Board of Directors is the ultimate administrative, management and decision-making body, being its responsibility to represent, manage, direct and supervise the Bank, as well as the performance of all the acts necessary to achieve its mission objectives. The following are non-alienable duties of the Board of Directors: a) To approve the strategies, plans and general policies of the Bank, specially the annual and pluri-annual budget and Strategic Planning; b) Approve the investment policy; c) Change or modify the Bank s structure; d) To approve banking transactions, either assets, liabilities or of any other nature for amounts in excess of 12 million Patacas; e) Acquisitions of equity participations in a percentage over 2% of the acquired company s shareholders equity or when the acquisition price is in excess of 1 million Patacas; f) Acquisition of assets, tangibles or intangbles, or substantial third party services contracts, or others, in the name of the Bank. It is considered a substantial contract when it implies a payment in excess of 4 million Patacas or other specifically referred in the BNU Board of Directors Regulations. The Board of Directors is formed by a number of members as specified by the General Assembly, within the limits set by the Bank s statutes. Any person or company, not necessarily shareholders, can be members of the board. Currently, the Board of Directors is formed by the following members: * President CGD nominated person; * Vice-President President of BNU Executive Committee; * Vice-President; * Member a member of the BNU Executive Committee; * Member a member of the BNU Executive Committee. 16

17 CEXEC EXECUTIVE COMMITTEE (Comissão Executiva) Corporate Governance The Executive Committee is a Board of Directors specialized committee with executive functions for taking binding decisions for the Bank, according to the delegated powers. Such power delegation may include all the powers of the Board of Directors except those that legally, statutorily or according to the BNU Board of Directors Regulations cannot be delegated. The Executive Committee is formed by a number of members designated by the Board of Directors, not less than three, chaired by one of the vice-presidents of the Board of Directors. Currently, the Executive Committee is formed by the following members: * President Vice-President of the BNU Board of Directors; * Member a member of the BNU Board of Directors primarily responsible for internal administration and operational function; * Member a member of the BNU Board of Directors primarily responsible for commercial activity. I.2.1. PRESIDENT OF EXECUTIVE COMMITTEE (Presidente da Comissão Executiva) Without detriment of the duties specifically assigned to the Executive Committee, as a collegial body, the President of Executive Committee (Presidente da Comissão Executiva) shall: i. Summon and chair the meetings of the Executive Committee, setting up the respective agenda and ensure the execution of the decisions taken; ii. To coordinate the relationship between the Executive Committee and the Board of Directors and submit to this one the proposals of the Executive Committee; iii. Submit to the Board of Directors the Executive Committee proposal about the Bank s annual budget as well as the big investments; iv. Coordinate the relationship between the Executive Committee and the Board of Directors s delegated committees, attending the respective meetings whenever deemed convenient; v. Oversee the promotional activities of institutional nature; vi. Promote, organize, manage and chair representative and institutional events and assure the external representation on such events. The President of Executive Committee, therefore assuming the role of Chief Executive Officer (CEO), has the primary responsibility over: AUDIT Internal Audit COMOF Compliance Office DIFCC Financial Control and Corporate Development Division DIRIS Risk Management Division DIPRS Division of Products and Services REHUM Human Resources Representative Office MARKT Marketing & Public Relations I.2.2. MEMBER OF EXECUTIVE COMMITTEE (Vogal da Comissão Executiva) The Member of Executive Committee (Vogal da Comissão Executiva), as Executive Director (ED), who assumes the principal function of internal administration and operational task, has the primary responsibility over: DIOPE Operational Support Division TREAS Treasury SINFO Information Systems ORGAP Organization & Procedures GESTI Premises Management PECON Supplies & Facilities. The role of this ED is to design, develop and implement operational strategic plans for the Bank in a cost-effective and time-efficient manner as well as responsible for the day-to-day operation of the Bank. I.2.3. MEMBER OF THE EXECUTIVE COMMITTEE (Vogal da Comissão Executiva) The Member of Executive Committee (Vogal da Comissão Executiva), as Executive Director (ED), who assumes the principal function of commercial activity, has the primary responsibility over: DIRET Retail Banking Division DCOR1 Corporate Banking Division/Team 1 DCOR2 Corporate Banking Division/Team 2 DCOR3 Corporate Banking Division/Team 3 PBANK Private Banking & Institutional Clients The role of this ED is to design, develop and implement business strategic plans for the Bank in a cost-effective and profit driven manner as well as responsible for the day-to-day business development of the Bank. 17

18 CAUCO AUDIT AND COMPLIANCE COMMITTEE (Comissão de Auditoria e Compliance) Corporate Governance 1. - Appointment and Composition 1. The Audit and Compliance Committee is composed of a minimum of five members appointed by the Board of Directors, which will also appoint the respective President. 2. The majority of the Audit and Compliance Committee must not exercise executive functions in the Bank. 3. Under the scope of the coordination of the internal control system as sociated with the activity of CGD Group, which integrates the BNU as a subsidiary subject to consolidated supervision, participates on the Audit and Compliance Committee the Director of the Internal Audit Department of CGD and the Director responsible for Office for the Compliance Function of CGD or, in his absence, the Directors designated by them Competences 1. It is the responsibility to the Audit and Compliance Committee: a) - Ensure the observance of laws and regulations, the Bank's statutes and regulations issued by supervisory authorities, as well as general policies, standards and practices instituted internally; b) - Monitor the adequacy and compliance with policies, criteria and accounting principles and practices for the regularity of the documents that support it, and propose to the Board of Directors, or to CEXEC all measures deemed appropriate; c) - Assess the external audit and the statutory revision of the accounts; d) - Assess and promote the effectiveness of internal control system, in what concerns to the Internal Audit and Compliance; e) - Promote the correction of the deficiencies or weaknesses detected, monitoring their implementation. 18

19 2. In performing the competences referred in the preceding paragraph, it is the responsibility of the Audit and Compliance Committee, namely: a)- To approve the business plans of Internal Audit and assess the respective activity reports; b)- Obtain information, updated regularly, about the areas or subjects covered by the audits conducted by Internal Audit; c)- Monitor the evolution of the main processes in charge of Internal Audit; d)- To approve the business plans of the Compliance function and assess their activity reports, after the opinion issued by the Compliance Office of CGD Group and having received the decision of the CEXEC of BNU; e)- Evaluate the effectiveness of the Compliance risk management, assessing the procedures in force and the shortcomings noted; f)- Examine the most relevant situations identified involving legal and contractual risks; g)- To propose the appointment or dismissal of the Head of Audit and the Compliance Officer of BNU; h)- To assess the reports of external auditors; i) - Propose to the Board the hiring of external audit services, as well as statutory auditors and respective conditions; j) - Acknowledge the progress of the inspections carried out by the regulator and other authorities Meetings 1.- The Audit and Compliance Committee shall meet at least once in a quarter, or whenever summoned by its President The notice of each meeting, to be sent to the Audit and Compliance Committee members by its President, with a minimum of 7 days prior notice, shall contain the respective agenda and supporting documents The Audit and Compliance Committee is con sidered to be validly constituted with the presence of at least three of its members, subject to what is mentioned in the number 2. The attendance may also be assured by phone or video conferencing Any member of the Audit and Compliance Committee can be represented by another member, subject to written notice to the Pres ident of the Commission, taking into account what is mentioned in paragraph Decisions are taken by simple majority of votes cast by the members present in the meeting, having the President of CAUCO or, in his absence, a non-executive member of the Board of Directors of the Bank with a seat in CAUCO, a casting vote, provided that the Commission find validly constituted It may be asked to attend the Audit and Compliance Committee meetings, whenever it is deemed advantageous for the discussion, among other employees, the responsible for the Internal Audit (Head of Audit) of BNU and the BNU Compliance Officer Minutes It will be prepared summary minutes of the Audit and Compliance Committee meetings, containing the main issues discussed and the decisions taken, which will be made aware, by the President of the Commission, to the Board of Directors at its meeting immediately following the CAUCO meeting Support structure Corporate Governance The President of the Audit and Compliance Committee may request the assistance of another element to assist in the preparation and holding of the meetings and the preparation of the respective minutes. 19

20 Corporate Governance CRISC RISK COMMITTEE (Comissão de Risco) 1. - Appointment and Composition 1.- The Risk Committee is composed of a minimum of three members appointed by the Board of Directors, which will also appoint the respective President. 2.- The majority of the Risk Committee must not exercise executive functions in the Bank. 3.- Under the coordination of the internal control system associated with the activity of CGD Group, which integrates the BNU as a subsidiary subject to consolidated supervision, participates on the Risk Committee the Director of Risk Management Department of CGD or, in his absence, the Director of such department appointed by him Competence 1. It is the Risk Commission responsibility: a)- Oversee the BNU compliance with the prudential rules, the use of good banking practices, in terms of analysis, assessment, approval and monitoring of all the risks, as well as the effectiveness of the principles established in the Bank and in CGD Group; b)- c)- d)- e)- f)- g)- h)- Ensure the compliance with the rules issued by the regulator, in terms of assumption, management and monitoring of the risks, as well as with the general policies, standards and practices in force in the Bank; Monitor the proper approval, management and monitoring of the risks, in particular the credit risk, liquidity risk, interest rate risk, exchange risk and risk of exposure to currency mismatches; Evaluate the loan portfolios of the Bank for levels of risk exposure, the level and adequacy of provisions made by the Bank; Analyze and monitor levels of credit default, the measures taken to promote their reduction and the adequacy of provisions made by the Bank; Assess and promote an effective monitoring of areas with greater relevance to the Bank given its location and exposure, particularly in those sectors of the hospitality and gaming, real estate, as well as public works and construction; Assess the evolution of all financial and market risks incurred by the bank as part of its activities; Review and monitor the progress of the assets placed with AMCM; i)- Monitor all the risks associated with the is suance and management of banknotes and coins in circulation. 2. In performing the competences referred to in the preceding paragraph, it is the responsibility of the Risk Committee, namely: a) - Approve the risk management plans of BNU and assess their implementation reports; b) - Obtain information, regularly updated, about the areas or subjects covered by the risk man agement; c) - Monitor the evolution of the risks and assess the effectiveness of its management; d) - Examine situations identified that may constitute the assumption of risks relevant to the Bank; e) - Review the reports of external auditors in what concern to the risks management; f) - Acknowledge the progress of the inspections carried out by the regulator and by other authorities. 2

21 Corporate Governance 3. Meetings 1. - The Risk Committee shall meet at least once in a quarter, or whenever summoned by its President 2. - The notice of each meeting, to be sent to the Risk Committee members by its President, with a minimum of 5 days prior notice, shall contain the respective agenda and supporting documents The Risk Committee is considered to be validly constituted with the presence of at least two of its members, subject to what is mentioned in the number 4. The attendancy may also be assured by phone or video conferencing Any member of the Risk Committee can be represented by another member, subject to written notice to the President of the Commission, to the Director of the Risk Management De partment of CGD, after his absence has been accepted by the BNU Director, responsible for the Risk Management Department of BNU It may be asked to attend meetings of the Risk Committee, where this suits the smooth progress of the works, among other employees, the responsible for the Commercial Areas of BNU (DCOR1, DCOR2, DCOR3, DIRET, and PBANK) and from other relevant areas (CONTO and AOPER). 4. Minutes It will be prepared summary minutes of the Audit and Compliance Committee meetings, containing the main issues discussed and the decisions taken, which will be made aware, by the President of the Commission, to the Board of Directors at its meeting immediately following the CRISC meeting. 5. Support structure The Chairman of Risk Committee may request the assistance of an element to assist in the preparation and holding of the meetings and in the preparation of the minutes thereof Decisions are taken by simple majority of votes cast by the members present in the meeting, having the President of the Risk Committee or, in his absence, a non-executive member of the Board of Directors of the Bank with a seat in CRISC, a casting vote, provided that the Commission find validly constituted. 21

22 ALCO ASSET AND LIABILITY COMMITTEE Corporate Governance The Asset/Liability policy falls under the authority of the Executive Committee, who in turn assigns to the ALCO authority for its formulation, revision, Implementation and administration and other duties as deemed necessary. Ultimate responsibility for effective asset/liability management rests with the Executive Committee. The Executive Committee will review the minutes of the Asset/Liability Committee at least on a quarterly basis. 1.Purpose and Main Goals of the Asset / Liability Committee The purpose of the asset and liabilities committee is to control the various risks assumed by the Bank in order to ensure a sound financial situation while allowing for the expansion of the Bank s activity on a sustainable way. More specifically the ALCO processes and policy proposes aim to achieve the following main goals: a) To develop the asset/liability process and related procedures; b) To measure and manage the various risks facing the Bank on a consistent basis; c) To establish guidelines to meet various applicable regulatory rules and comply with requirements from supervisory bodies, namely in matters such as capital, solvability and liquidity; d) To form a consistent, centralized and integrated policy for the management of Bank s financial position and planning, taking into consideration the policies defined by all areas (investments, lending, operations, etc.); e) To oversee the maintenance of a management information system that supplies, on a timely basis, the information and data necessary for the Committee to fulfil its role as well as promoting training for BNU staff in matters related to the ALM process; The ALCO process is primarily focused on the following main risks: a) balance sheet interest rate risk, i.e. the risk that changes in assets or liabilities interest rates will negatively affect the earnings stream of the Bank; b) Price risk (also called valuation or market risk), i.e. the risks that changes in market prices (e.g. interest rates, exchange rates, assets valuation) will negatively affect the value of portfolio assets and liabilities, as well as that of capital; c) Liquidity risk, i.e., the risk that the financial flows generated by assets and liabilities are insufficient to satisfy commitments with depositors and other creditors, including an out look on the mismatches between liabilities and assets, foreseeing the exercise of options in both cases (e.g. withdrawals or early reimbursements); d) Credit Risk - risk that some loans and investments may not be repaid (default risk); implications of asset mix on risk-based capital and asset quality on ability to leverage the bank s capital; e) Regulatory risk, i.e., the risk of not fulfilling directives from the supervisory bodies and the resulting potential negative consequences. Other Risks: Other risks may be measured from time to time. However, there importance is also key to the Bank s continued operations, namely: f) Strategic Risk The risk from making adverse business decisions; g) Reputation Risk the risk from adverse public opinion, and its affect on the Bank; h) Event Risk - risk that changes in laws, regulations, or other external factors may result in losses to the Bank; i) Operational Risk - risk that errors made in the course of conducting business will result in losses; j) Compliance Risk the risk from violations or non-conformance with laws, rules, policies (regulatory or internal), and ethical standards; k) Yield Curve or Mismatch Risk - risk of adverse consequences from a change in interest rates that arise due to differences in the timing of when those interest rate changes affect the Credit Union s assets and liabilities; l) Basis Risk - risk that the spread between instruments of similar maturities will change; 22

23 Corporate Governance 2.Duties of the Asset Liability Committee The items cited below do not necessarily represent an all-inclusive list of Committee s duties, given the dynamic nature of its responsibilities. On a regular basis, Committee should: a) Hold a formal meeting at least once in two months. Informal meetings will be held on an as needed basis. b) Monitor and discuss the status and results of implemented asset/liability management strategies and tactics. c) Review the current and prospective liquidity positions and monitor alternative funding sources. d) Review measurement reports on various risks that can be measured with a reasonable degree of effort. Compare simulated exposures of these risks to policy limits. Discuss and report on the impact of major funding shifts and changes in overall investment and lending strategies. e) Review the current and prospective capital levels (risk-based as well as leverage capital) to determine sufficiency in relation to: expected growth, interest rate risk, price risk, and asset mix/quality. f) Maintaining and reviewing contingency plans to handle unexpected situation regarding liquidity; g) Preparing, for approval by CEXEC, proposals on strategic guidelines regarding BNU s man agement policy for balance sheet interest rate risk and market risk, establishing indicators, limits and guidelines; h) Developing scenarios on the evolution of the main variables determining balance sheet interest rate risk and market risk (e.g. interest rates, exchange rates) and establishing adequate action plans; i) Preparing, for approval by CEXEC, proposals on strategic guidelines regarding the Bank s capital ratios, funding and capital management policy, in a regulatory and economic viewpoint; j) Review outlook for interest rates and economy at both local and national levels. k) Develop alternate strategies and deemed appropriate, which take into account changes in: Interest rate and exchange rate levels and trends, Deposit and loan products and related markets, Economic outlook and monetary and fiscal policy. l) Develop parameters for the pricing and maturity distributions of deposits, loans and investments. m) Report the minutes each quarter to the Executive Committee. Also, Committee will ensure that it is aware of the overall financial performance of the Bank, therefore, will keep abreast of significant changes/trends in its financial results. In this regard it may: Review actual financial results net interest income and non-interest income) and asset/liability distribution versus budget. Measure performance against established standards and, if appropriate against peer group data. Review the annual budget. 23

24 Corporate Governance 3. Committee Membership The Committee will consist of the following members: a) The Chief Executive Officer that chairs the Committee. In his absence the Committee is chaired by the member of the Executive Director responsible for the Financial Division of BNU (Treasury). b) The member of the Executive Committee in charge of the Finance Division of BNU (Treasury); c) Treasury (TREAS) d) Retail Banking Division (DIRET) e) Private Banking & Institutional Clients (PBANK) f) Corporate Banking Division/Team 1 (DCOR1) g) Corporate Banking Division/Team 1 (DCOR2) h) Corporate Banking Division/Team 1 (DCOR3) i) Risk Management Division (DIRIS) j) Operational Support Division (DIOPE) k) Financial Control and Corporate Development Division (DIFCC) l) ALCO Support Structure; m) Other technical and directive elements, in accordance with the themes being analysed. 24

25 Corporate Governance 4. ALCO Support Structure Banking Security Committee ALCO has a Support Structure that ensures adequate preparation of ALCO meetings, namely in what concerns the selection and treatment of information and indicators to be analyzed, and that also brings consistency and continuity to actions and initiatives that are to be developed within the scope of ALM process. The ALCO Support Structure is responsible for collecting and analysing relevant information for ALCO, preparing report drafts to be submitted to the Executive Committee and monitoring the follow-up of ALCO deliberations, making regular status assessments. Each member represented in ALCO is a privileged contact point on matters related to ALM, which coordinates its action with ALCO Support Structure. 5. Indicators to be Analyzed by ALCO on a Regular Basis Indicators to be discussed at each ALCO meeting are collected by the Support Structure and distributed to participants at least three working days before the meeting date. Framework of BNU Activity a) Economic and financial situation and outlook b) Monetary and credit aggregates evolution c) Projections for interest rates developments Balance Sheet and Income Statement a) Deposits, credit and ratios evolution (e.g. credit-to-deposits ration, overdue credit ratios) b) Market share c) Income Statement evolution, operating income evolution (not aggregate), revenues by product and by units, ratios (e.g. ROA, ROE). Liquidity a) Liquidity situation and wholesale funding b) Funding costs evolution with reference to benchmark c) Liquidity ratio, maturity gaps and other liquidity risk indicators Market Risk and Portfolio Management a) Investment portfolio management and negotiation indicators (strategy, performance) b) Shares portfolio indicators (e.g. valuations) c) Market risk indicators (e.g. VaR, BpV) and portfolio guidelines achievement d) Foreign exchange exposure indicators Balance Sheet Interest Rate Risk Interest rate gaps and other balance sheet interest rate indicators. Capital and Compliance Indicators a) Capital ratios b) Other regulatory ratios and indicators, aggregate and separate. 25

26 Corporate Governance CCRED CREDIT COMMITTEE (Comissão de Crédito) The Credit Committee and all the other decision-making organs has a scope and terms defined in the Credit Regulations of BNU, S.A. (Regulamento de Crédito do BNU, S.A.) approved by the Board of Directors. This specific regulation defines the guidelines and limits of competence for the approval of credit facilities, banking guarantees and all the other transactions that BNU, S.A. is authorized to perform with its customers, either retail, corporate or group of corporate customers, under the local Banking Regulations. To ensure a swift, efficient and safe decision-making process, the following levels of decision are set up by the credit regulation: Chairman together with one Executive Director of the shareholder CGD; Chairman together with another Executive Director; President of the Executive Committee together with another Executive Director; Credit Committee; Credit Sub-Committee of Commercial Banking Division; Credit Sub-Committee of Retail Banking Division; Credit Sub-Committee of Private Banking and Institutional Clients (PBANK); General Manager of Operational Support Division (DIOPE) and the Head of Documentary Operations (DOCOP); General Manager of Operational Support Division (DIOPE) and the Head of Loans Administration (ALOAN); Branches Management; The said Credit Regulations establishes also the rules governing the decision-making organs and respective Limits of Authority. 26

27 Corporate Governance EBSC ELECTRONIC BANKING SECURITY COMMITTEE 1. Purpose and Main Goals of the Electronic Banking Security Committee In consideration on development of the electronic banking services widely adopted by customers nowadays and in addition to the keep on increasing of external threats of fraudulent crimes, the Electronic Banking Security Committee (EBSC) is established under these crucial needs. It oversees the relevant assessments and improvement of security control so to ensure minimizing the risks to the lowest levels and to protect the bank s interest from preventable losses. 2. Functions and Tasks The EBSC will take up the responsibilities of vulnerabilities and threats assessment, issues analysis and solution, policies defining and procedures implementation, together with documents and reports writing. The span of functions and tasks of the EBSC should cover of all aspects on the Electronic Plastic Card business (debit card and credit card) and the Internet Banking business. 3. Committee Membership The committee includes the following members: All CEXEC Directors Head of AUDIT (and System Audit) Head of COMOF Head of DIPRS Head of DIRET Head of MARKT Head of ORGAP Head of PECON Head of SINFO 4. Meetings The Electronic Banking Security Committee shall meet quarterly or as convened by CEXEC 5. Minutes It will be prepared minutes of the Electronic Banking Security Committee meetings, containing the main issues discussed and the decisions taken. 27

28 Corporate Governance CIPNE GROUP BUSINESS INTEGRATION AND PROMOTION COMMITTEE (Comissão de Integracão e Potenciacão de Negócios do Grupo) 1. Appointment and Composition The Group Business Integration and Promotion Committee is composed of a minimum of four members appointed by the Board of Directors, which will also appoint the respective President: - President Non-Executive Board Member; - Member President of Executive Committee; - Member BNU Board member responsible for the Commercial Divisions; - Other invited by the President. 2. Functions and Tasks The CIPNE will analyze the evolution of the import and export, and the investment activities between the Portuguese Speaking Countries (PALOP s) and China, and the respective major players, aiming to identify business opportunities for BNU and for the CGD Group. 28

29 Corporate Governance 3. Indicators to be Analyzed by CIPNE on a Regular Basis a) BNU Business with CGD Group Entities The transactions arising from the referrals from other CGD units should be booked in BNU, treated as BNU customers, although dully flagged as CGD Group Customers, at CIF level. submit to CIPNE for analysis. On a monthly basis, SINFO will generate the management report BNU Business with CGD Group Entities, which IDESK will b) Trade Finance & Investment between China and the PALOP s Overview IDESK will summarize the information obtained from specialized sources (e.g. IPIM, AICEP Macau, Forum Macau and local Chambers of Commerce), as well as from the commercial areas, related to the Trade Finance and Investment in China and will present it to the Committee. c) BNU Referrals to CGD Group Based on the analysis mentioned in b), IDESK will present to the Committee the list of foreign companies doing bilateral business with China, which may be contacted by the CGD Group entity of the respective Country. All these referrals should be channeled to CGD DIN. d) Referrals Received from CGD Group The referrals received from CGD should be routed to the respective commercial division, who should approach the customer, aiming to initiate a business relationship. 4. Meetings The Group Business Integration and Promotion Committee (CIPNE) shall meet quarterly or as convened by its President. 5. Meeting Minutes It will be prepared summary minutes of the Group Business Integration and Promotion Committee (CIPNE) meetings, containing the main issues discussed and the decisions taken. 29

30 CASH FLOW STATEMENT

31 Cash Flow Statement BANCO NACIONAL ULTRAMARINO, S.A. CASH FLOW STATEMENT OF DECEMBER 31, 215 MOP OPERATING ACTIVITIES AMOUNT PROFIT BEFORE TAXATION 58,217,84 ADJUSTMENTS FOR: DEPRECIATION OF PROPERTIES AND EQUIPMENT 54,96,23 PROVISION FOR DOUBTFUL LOANS AND ADVANCES TO CUSTOMERS 57,18,268 INTEREST INCOME FROM INVESTMENTS IN DEBT SECURITIES (27,228,755) OTHER INTEREST INCOME (1,1,72,323) INTEREST EXPENSE 422,571,268 DIVIDEND INCOME FROM UNLISTED EQUITY INVESTMENTS (989,744) NET GAIN ON DISPOSAL OF PROPERTIES AND EQUIPMENT (76,579) AMORTIZATION OF DISCOUNTS / PREMIUMS ON DEBT SECURITIES, NET 1,652,253 EXCHANGE ADJUSTMENTS 68,436,814 OPERATING CASH FLOWS BEFORE MOVEMENTS IN WORKING CAPITAL 55,948,39 INCREASE IN PLACEMENTS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS WITH ORIGINAL MATURITY MORE THAN THREE MONTHS (1,259,264,45) INCREASE IN DEBT CERTIFICATES ISSUED BY THE MACAU GOVERNMENT (584,218,255) INCREASE IN LOANS AND ADVANCES TO CUSTOMERS (4,77,963,897) DECREASE IN OTHER ASSETS 185,39,828 DECREASE IN DEPOSITS AND BALANCES WITH BANKS AND OTHER FINANCIAL INSTITUTIONS (79,173,781) INCREASE IN DEPOSITS FROM CUSTOMERS 8,996,627,435 INCREASE IN BANK NOTES IN CIRCULATION 595,291,47 INCREASE IN OTHER LIABILITIES 78,475,341 CASH GENERATED FROM OPERATIONS 3,218,32,45 MACAU COMPLEMENTARY TAX PAID (62,113,314) INTEREST RECEIVED 1,7,929,572 INTEREST PAID (48,39,288) NET CASH FROM OPERATING ACTIVITIES 3,818,89,15 31

32 Cash Flow Statement BANCO NACIONAL ULTRAMARINO, S.A. CASH FLOW STATEMENT OF DECEMBER 31, 215 INVESTING ACTIVITIES AMOUNT INTEREST RECEIVED FROM INVESTMENTS IN DEBT SECURITIES 22,66,442 DIVIDENDS RECEIVED FROM UNLISTED EQUITY INVESTMENTS 989,744 PURCHASES OF INVESTMENTS IN SECURITIES (1,374,46,93) PROCEEDS FROM DISPOSAL AND REDEMPTION OF INVESTMENTS IN SECURITIES 368,319,73 PURCHASES OF PROPERTIES AND EQUIPMENT (32,13,294) PROCEEDS FROM DISPOSAL OF PROPERTIES AND EQUIPMENT 87,55 NET CASH USED IN INVESTING ACTIVITIES (1,14,56,731) MOP 32

33 Cash Flow Statement BANCO NACIONAL ULTRAMARINO, S.A. CASH FLOW STATEMENT OF DECEMBER 31, 215 MOP CASH USED IN FINANCING ACTIVITY AMOUNT DIVIDEND PAID (221,641,526) NET INCREASE IN CASH AND CASH EQUIVALENTS 2,582,66,758 CASH AND CASH EQUIVALENTS AT 1 JANUARY 11,465,381,79 CASH AND CASH EQUIVALENTS AT 31 DECEMBER 14,48,41,837 REPRESENTED BY CASH AND SHORT-TERM FUNDS 2,438,75,715 PLACEMENTS WITH BANKS AND OTHER FINANCIAL INSTITUTIONS WITH ORIGINAL MATURITY AT OR WITHIN THREE MONTHS 11,69,291,122 14,48,41,837 33

34 OFF-BALANCE SHEET EXPOSURES OTHER THAN DERIVATIVES TRANSACTIONS

35 Off-balance sheet exposures other than derivatives transactions BANCO NACIONAL ULTRAMARINO, S.A. CONTRACTUAL OR NOTIONAL AMOUNT OF EACH MATERIAL CLASS OF OFF-BALANCE-SHEET EXPOSURES OF DECEMBER 31, 215 MOP THOUSAND CASH USED IN FINANCING ACTIVITY AMOUNT (a) CREDIT SUBSTITUTES 462,831 (b) TRANSACTION-RELATED CONTINGENCIES 2,543,817 (c) ACCEPTANCES AND OTHER TRADE-RELATED CONTINGENCIES 4,677 (d) NOTE ISSUANCE FACILITIES, REVOLVING UNDERWRITING FACILITIES AND OTHER SIMILAR FACILITIES (e) FORWARD ASSET PURCHASES (f) UNPAID PORTION OF PARTLY PAID SHARES AND OTHER SECURITIES (g) FORWARD FORWARD DEPOSITS (h) ASSET SALES WITH REPURCHASE OPTION (i) UNDRAWN CREDIT FACILITIES AND OTHER COMMITMENTS TO EXTEND CREDIT 7,528,11 (j) OTHER OFF-BALANCE-SHEET ITEMS 581,882,736 35

36 DERIVATIVES TRANSACTIONS

37 Derivaties Transactions BANCO NACIONAL ULTRAMARINO, S.A. CONTRACTUAL AMOUNT OR NOTIONAL AMOUNT MOP THOUSAND ELEMENTS NOMINAL VALUE INTEREST RATE CONTRACTS 1,226,63 EXCHANGE RATE CONTRACTS 6,434,522 EQUITIES CONTRACTS COMMODITIES CONTRACTS OTHERS BANCO NACIONAL ULTRAMARINO, S.A. CREDIT RISK WEIGHTED AMOUNTS OF INTEREST RATE CONTRACTS AND EXCHANGE RATE CONTRACTS AS CALCULATED IN ACCORDANCE WITH NOTICE NO. 11/215-AMCM OF 1/9/215 MOP THOUSAND ELEMENTS WEIGHTED EXPOSURE INTEREST RATE CONTRACTS 4,197 FOREIGN EXCHANGE RATE CONTRACTS 24,761 37

38 ACCOUNTING POLICIES

39 Accounting Policies Significant accounting policies Loans and advances to customers Investments in securities The financial statements have been prepared on the historical cost basis except for certain properties that are measured at revalued amounts, as explained in the accounting policies set out below. The financial statements have been prepared in accordance with Normas de Relato Financeiro ("Financial Reporting Standards of Macau SAR"). Revenue recognition Interest income is recognised in the income statement as it is accrued on a time basis, except in the case of non-accrual loans and advances to customers where interest is recorded in an off-balance sheet account, and is not recognised in the income statement. Non-accrual loans and advances to customers represent the credit exposures which are overdue for more than 3 months. Interest income from non-accrual loans and advances to customers is directly credited to profit when the interest is subsequently recovered. Fees and commission income are recognised when services are provided. Dividend income from investments in equity securities is recognised when the shareholder's right to receive payment has been established. Loans and advances to customers are stated in the balance sheet after deducting specific and general provisions for possible losses. Provisions are made against specific advances when management has doubts on the ultimate recoverability of principal or interest. Specific provision is made to reduce the carrying amount of loans and advances to customers, net of any collateral, to the expected net realisable value based on management's assessment of the potential losses on those identified advances, and with reference to the requirements of AMCM. The provisions are reviewed periodically and adjustments are made when considered necessary by management. In addition, amounts have been set aside as provision for loans and advances to customers based on past experience of collecting payments, as well as cross-border exposures, and are maintained with reference to the requirements of AMCM. When there is no realistic prospect of recovery, the outstanding loans and advances to customers are written off. Investments in unlisted equity securities are carried at cost less any identified impairment losses. Investments in debt securities are carried at amortised cost less any identified impairment losses. An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset's carrying amount and the recoverable amount estimated by management. Impairment losses are reversed in subsequent periods when an increase in the investment's recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of that asset at the date the impairment is reversed does not exceed what the cost would have been had the impairment not been recognised. Amounts have been set aside as provision for cross border exposures and are maintained with reference to the requirements of AMCM. 39

40 Accounting Policies Off balance sheet derivative financial instruments Derivative financial instruments including interest rate swaps, forward foreign exchange contracts and foreign exchange swap contracts are used primarily to hedge the Bank's exposures to interest rate and foreign exchange risks, arising from operational, financing and investment activities. The interest arising from the interest rate derivative instruments is recognised in the income statement as interest income or interest expense. The gain or loss arising from the settlement of foreign exchange derivative instruments is recognised in profit or loss in the period in which they arise. The derivative financial instruments are recorded off balance sheet. Properties and equipment Properties and equipment held for use in the supply of services or for administrative purposes are stated at cost, deemed cost or fair value, as appropriate, less subsequent accumulated depreciation and accumulated impairment losses, if any. The Bank has adopted the revaluation model for land and buildings since 211. Land and buildings held for use in the supply of services or for administrative purposes are stated in the balance sheet at their revalued amounts, being the fair value at the date of revaluation less any subsequent accumulated depreciation and any subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amounts do not differ materially from those that would be determined using fair value at the end of the year. Any revaluation increase arising on revaluation of land and buildings is recognised and accumulated in the revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in net carrying amount arising on revaluation of an asset is recognised in profit or loss to the extent that it exceeds the balance, if any, on the revaluation reserve relating to a previous revaluation of that asset. Depreciation on revalued buildings is recognised in profit or loss. On the subsequent sale or retirement of a revalued asset, the attributable revaluation surplus remaining in the revaluation reserve is transferred to retained profits. Depreciation is provided to write off the cost or valuation of items of properties and equipment (other than freehold land) over their estimated useful lives and after taking into account their estimated residual value, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis. An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the year in which the item is derecognised. 4

41 Accounting Policies Leasing Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Bank as lessee Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are recognised as a reduction of rental expense over the lease term on a straight-line basis. Impairment At each balance sheet date, the Bank reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of such an impairment loss is recognised as income immediately. Leasehold land and buildings The land and building elements of a lease of land and building are considered separately for the purpose of lease classification, unless the lease payments cannot be allocated reliably between the land and building elements, in which case, the entire lease is generally treated as a finance lease and accounted for as properties and equipment. 41

42 Accounting Policies Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from 'profit before tax' as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Bank's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the year. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Bank expects, at the end of the year, to recover or settle the carrying amount of its assets and liabilities. Current and deferred tax is recognised in profit or loss, except when it relates to items that are recognised directly in equity, in which case, the current and deferred tax are also recognised directly in equity respectively. 42

43 Accounting Policies Foreign currencies Transactions in currencies other than the functional currency of the Bank (foreign currencies) are recorded in its functional currency (i.e. the currency of the primary economic environment in which the Bank operates) at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in profit or loss in the period in which they arise. Retirement benefit costs Payments to defined contribution retirement benefit plans are charged as an expense when employees have rendered service entitling them to the contributions. Provisions Provisions are recognised when the Bank has a present obligation as a result of a past event, and it is probable that the Bank will be required to settle that obligation. Provisions are measured at management's best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise cash and short-term funds, including cash, deposits with AMCM and current accounts with banks and other financial institutions, placements with banks and other financial institutions with original maturity at or within three months. 43

44 RELATED PARTY TRANSACTIONS

45 RELATED PARTY TRANSACTIONS Related Party Transactions Quantitative disclosure Policy for lending to related parties 1. Overview In order to monitor exposure to related parties and to address possible conflicts of interest, such lending is subject to appropriate management oversight. Related parties include entities, which are directly or indirectly controlled by CGD and BNU, member of the Board of Directors and Supervisory Board as well as employee of the bank, and person or a close member of that person s family. Related party transactions include any form of credit, loan or exposure and hereinafter referred as credit for purpose of this document. 2. Definition of Related Parties 2.1 Related parties include any person or any close family member (including spouse, children, parents, step-children, step parents, sons/daughters/parents-in-law) of that person who: a) has control or joint control over BNU; b) has significant influence over BNU; c) holds a qualifying holding in BNU; d) is a member of the board of directors or supervisory board of BNU or of CGD; e) is an employee of BNU and/or a member of the key management personnel, who have authority and responsibility for planning, directing, and controlling the activities of BNU or of CGD. 45

46 Related Party Transactions 2.2 Related parties also include any entity if any of the following conditions applies: a) That entity and BNU are members of the same group (e.g. parent, subsidiary and fellow subsidiary); b) Holds a qualifying holding in BNU; c) Is an associate or joint venture of BNU; d) BNU is an associate or joint venture of that entity; e) That entity and BNU are both joint ventures of the same third party; f) That entity is a joint venture of a third entity and BNU is an associate of that third entity; g) BNU is a joint venture of a third entity and that entity is an associate of that third entity; h) That entity is controlled or jointly controlled by a person identified in 2.1; i) A person identified in 2.1.a has significant influence over that entity or is a member of the key manage ment personnel of that entity(or of a parent of that entity); j) A person identified in 2.1.d is a member of the key management personnel of that entity (or of a parent of that entity) 46

47 Related Party Transactions 3. Scope of Credits Covered by this Code his Code applies to credits to related parties as further described below: a) a credit on more favorable terms (including without limitation terms as to credit assessment, duration, interest rates, amortization schedules, collateral requirements) than non-related parties. An exemption is permitted for beneficial terms that are part of a remuneration package available to staff of the BNU generally (e.g. staff credits at relatively favorable terms) provided that such terms have been approved by CEXEC; b) a credit, or any variation of the terms of a credit to a related party, shall be subject to individual prior approval by CEXEC. Member of CEXEC with conflicts of interest shall be excluded from the approval process; c) action in respect of management of a credit including but not limited to permitting interest roll-up, granting a grace period for payment, credit write-off in whole or in part, provisioning against a credit, decision to take or not to take enforcement action; BNU shall not lend to a related party where to do so would result in the exposures of the Bank exceeding one or more of the following limits: CATEGORY OF CREDIT MAXIMUM LIMIT To any member of the board of directors and supervisory board, and persons connected to them, including companies under his control or to which board of director or supervisory board they belong; 1% of own funds The aggregate exposures of above; 1% of own funds His or her total net annual income To each employee*; To any person, individual or corporate which holds directly or indirectly 1% or more of the share capital or voting rights, or in any other form which confers the possibility to exercise a significant influence over the management of the bank, or to companies in which this person has direct or indirect control, and in the aggregate; 2% of own funds With the exception that the credit is intended for home purchase by the respective beneficiary, collateralized by a real guarantee which has been evaluated by an independent value and registered in the name of the institution. 47

48 Related Party Transactions The above limit and definition are with the following exception or not considered for calculation of exposure limits: a) Credit to the Territory of Macau; b) Credit with collateral of central governments or central banks of countries or territories previously accepted by AMCM; c) Credit to financial subsidiaries subject to supervision on a consolidated basis with the credit institution in question; d) Credit covered by express and irrevocable guarantee of the entities referred to above (a) and (b), or guaranteed with securities issued by the same entities; e) Credit covered by cash deposits, certificates of deposit issued by the lending institution and deposited onshore; f) Credit with a maturity of 12 months or less to other credit institutions subject to supervision deemed ade quate by AMCM; g) Credit secured by or granted through discounting of bills or of other properly documented instruments which represent exports from Macau; h) Undrawn credit facilities with an original maturity of up to one year or which may be unconditionally can celled at any time. 4. Monitoring and Control DIRIS should prepare a report on exposure to all related parties, individually and on aggregate, to CEXEC on quarterly basis. 48

49 Related Party Transactions QUANTITATIVE DISCLOSURE BANCO NACIONAL ULTRAMARINO, S.A. QUANTITATIVE DISCLOSURE OF DECEMBER 31, 215 MOP THOUSAND DEBIT BALANCES 15,798,621 INTERBANK ASSETS 15,395,73 CERTIFICATES OF DEPOSIT SUNDRY INVESTMENTS LOANS GRANTED OTHER ASSETS OPERATING COST CREDIT BALANCES 261,882 16,476 34,56 1,425,252 DEPOSITS OF NON-BANK CUSTOMERS - CERTIFICATES OF DEPOSIT - INTERBANK LIABILITIES OTHER LIABILITIES OPERATING INCOME 1,115,543 11, ,39 49

50 CAPITAL

51 Qualitative disclosure The Bank has authorised share capital of MOP 2,,,, comprising of 2,, paid up ordinary shares of MOP 1, each. The Bank's Tier I capital comprises of ordinary share capital and Statutory Reserves. Tier II capital consists of Revaluation Reserves at a discount of 45%, general provisions and subordinated capital instruments. Capital In compliance to Notice no. 11/215-AMCM, the Bank has taken into account the international directives on adequacy of own funds in relation to assets and off-balance-sheet items and maintains a solvency ratio of not less than 8% by the relation between own funds and the total weighted assets and off-balance-sheet items (capital adequacy ratio). Risk weighted assets The Bank has applied standard approach for computation of capital charge for market risk, interest rate risk and foreign exchange risk; and basic indicator approach for operational risk. Strategy to achieve the required Capital Adequacy Rigorous monitoring of overdue loans. Finance clients having good rating as per company s policy. Raise fresh capital by injection of funds. 51

52 Capital BANCO NACIONAL ULTRAMARINO, S.A. QUANTITATIVE DISCLOSURE OF DECEMBER 31, 215 MOP THOUSAND BANCO NACIONAL ULTRAMARINO, S.A. QUANTITATIVE DISCLOSURE OF DECEMBER 31, 215 OWN FUNDS & SOLVENCY RATIO CORE CAPITAL - PAID UP SHARE CAPITAL 2,, LEGAL, STATUTORY AND OTHER RESERVES WHICH ARE 2,148,765 CREATED FROM APPROPRIATION OF RETAINED PROFITS THE TOTAL AMOUNT OF SUPPLEMENTARY CAPITAL 1,443,837 OTHER DEDUCTION FROM CAPITAL - THE TOTAL AMOUNT OF OWN FUNDS AFTER DEDUCTION 5,592,62 CAPITAL ADEQUACY RATIO 14.% * * The approach of the CAR's calculation was in compliance with Notice No. 11/215-AMCM dated 1 September Solvency ratio (i.e. Capital adequacy ratio) is the ratio of the Bank's own funds to its risk-weighted exposures (including credit risk, market risk and operational risk). SOLVENCY RATIO FOR THE TOP CONSOLIDATED GROUP THE HOLDING COMPANY CAIXA GERAL DE DEPÓSITOS GROUP 12.3% ITS SIGNIFICANT BANK SUBSIDIARIES CAIXA - BANCO DE INVESTIMENTO, S.A. PORTUGAL 13.8% MERCANTILE LISBON BANK HOLDINGS, LTD. SOUTH AFRICA 21.1% BANCO CAIXA GERAL BRASIL, S.A. BRAZIL 16.5% BANCO CAIXA GERAL, S.A. SPAIN 16.7% BANCO COMERCIAL DO ATLÂNTICO, S.A. CAPE VERDE 15.7% BANCO COMERCIAL E DE INVESTIMENTOS, S.A. MOZAMBIQUE 12.7% BANCO INTERATLÂNTICO, S.A. CAPE VERDE 12.5% 52

53 CREDIT RISK

54 Credit Risk Credit Risk QUALITATIVE DISCLOSURE OF CREDIT RISK The approval process of credit transactions and limits are defined in BNU Credit Regulations Under the internal regulations, limits by business line are set up and procedures to follow up and recover the overdue credit are in place. The methodology of credit risk assessment is defined in Credit Risk Manual (MA 59/14). The credit risk mitigation techniques such as the credit assessment which includes the financial analysis based on the financial statements and business forecast, SWAT analysis, stress test of cash flows, impairment analysis, credit scoring model for housing loan, personal loan and credit card as well as car loans. Furthermore, on a monthly basis, the calculation of impairment provision will be carried out. The concept and procedure for the calculation is detailed in the Impairment Provision Manual (MA 73/16). At each balance sheet date, the Bank reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognized as an expense immediately. When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the estimate of its recoverable amount, but the increased carrying amount must not exceed the carrying amount if no impairment loss has been recognized for the asset in prior years. A reversal of an impairment loss is recognized as income immediately. To control the portfolio risk, BNU has reports to monitor the exposure for risk prevention and mitigation, including the analysis on the exposure by segment and type, overdue by products in outstanding and installments, as well as the bank exposure of the bank by sector of economic activity. Loans and advances to customers are registered in the balance sheet after deducting specific and general provisions for possible losses. Specific Provisions are created in accordance with the rules of AMCM or when the senior management has doubts on the ultimate recoverability of principal or interest. These provisions are reviewed periodically and adjustments are made when considered necessary by the management. General provisions for loans and advances to customers are also created in accordance also with the requirements of AMCM.When there is no realistic prospect of recovery, the outstanding loans and advances to customers are written off. Besides the establishment of provisions, according to the AMCM regulations, the Bank has been calculating impairment provisions, under the IFRS 9, through the Tactical Model (Modelo Tactico), which do not differ much from the regulatory provisions created by the Bank. The Asset and Liability Management Committee (ALCO) analyzes and monitors regularly the credit portfolio of the Bank. 54

55 QUANTITATIVE DISCLOSURE GEOGRAPHIC DISTRIBUTION OF EXPOSURES OF DECEMBER 31, 215 COUNTRY CODE NAME LOANS AND ADVANCES LOANS AND ADVANCES PAST DUE SPECIFIC PROVISION DEBT SECURITIES INTERBANK ASSETS GOVERNMENT AND/OR PUBLIC SECTOR FINANCIAL DERIVATIVES Credit Risk MOP THOUSAND EQUITY INVESTMENT AE UNITED ARAB EMIRATES 387, AO ANGOLA , AU AUSTRALIA , BE BELGIUM BD BANGLADESH BR BRAZIL 75, , CA CANADA CH SWITZERLAND , CN CHINA ,44 632, KY CAYMAN ISLANDS , DE GERMANY 4, , DK DENMARK ES SPAIN (ESPANA) FR FRANCE ,421 1,81-798,34 - GB UNITED KINGDOM 62, ,323 3,842,492-5,677,76 - HK HONG KONG 66, ,189 48, ,326 7,674 ID INDONESIA IN INDIA IT ITALY JP JAPAN ,461 32, LU LUXEMBOURG MO MACAU 22,986,218 45,339 (39,572) - 1,53,246 9,2, - 1,265 MZ MOZAMBIQUE , MU MAURITIUS MY MALAYSIA 223, NL NETHERLANDS NO NORWAY NZ NEW ZEALAND PL POLAND PT PORTUGAL 261, ,882 1,89, ,724 - RU RUSSIAN FEDERATION SA SAUDI ARABIA SG SINGAPORE 262, , ZA SOUTH AFRICA , KR SOUTH KOREA SK SLOVAKIA (SLOVAK REPUBLIC) , SE SWEDEN TR TURKEY , US UNITED STATES 1,213, ,981 6, VE VENEZUELA VG VIRGIN ISLANDS (BRITISH) 482, ,618,93 45,339 (39,572) 1,693,626 17,68,76 9,2, 7,661,96 8,939 55

56 QUANTITATIVE DISCLOSURE BANCO NACIONAL ULTRAMARINO, S.A. INDUSTRY DISTRIBUTION OF EXPOSURES OF DECEMBER 31, 215 Credit Risk MOP THOUSAND SECTORS LOANS AND ADVANCES LOANS AND ADVANCES PAST DUE SPECIFIC PROVISION CHARGE-OFFS ASSETS AGRICULTURE AND FISHERIES MANUFACTURING 81,4 1,854 (744) 6,477 ELECTRICITY, GAS AND WATER 598, CONSTRUCTION AND PUBLIC WORKS 688,872 2 (2) - TRADE (WHOLESALE AND RETAIL) 39, RESTAURANTS, HOTELS AND RELATED ACTIVITIES 68,718 - (65) - TRANSPORT, WAREHOUSE AND COMMUNICATIONS 181,113 - (11) 9 INDIVIDUALS FOR HOUSE PURCHASES 11,293,714 - (25) 7,864 INDIVIDUALS FOR OTHER PURPOSES 994,62 39,591 (1,533) - OTHERS 11,52,51 3,892 (27,967) ,618,93 45,339 (39,572) 14,894 According to AMCM's requirement, a general provision of 1 % for MOP 299 million was made by the end of the period in order to reach a balance of 1% of the aggregated value of the credits which were not overdue for more than 3 months and of guarantees. 56

57 QUANTITATIVE DISCLOSURE Credit Risk Residual contractual maturity breakdown by types and repayable periods BANCO NACIONAL ULTRAMARINO, S.A. MATURITY ANALYSIS ON ASSETS AND LIABILITIES OF DECEMBER 31, 215 MOP THOUSAND TYPE OF ACCOUNTS TOTAL REPAYABLE ON DEMAND WITHIN 1 MONTHS (except those repayable on demand) MORE THAN 1 MONTH BUT NOT MORE THAN 3 MONTHS MORE THAN 3 MONTHS BUT NOT MORE THAN 1 YEAR MORE THAN 1 YEAR BUT NOT MORE THAN 3 YEARS MORE THAN 3 YEARS WITHIN AN INDEFINITE PERIOD ASSETS LOANS AND ADVANCES TO CUSTOMERS CASH AND BALANCES WITH AND LOANS AND ADVANCES TO BANKS CERTIFICATES OF DEPOSIT HELD SECURITIES ISSUED BY MACAO SAR GOVERNMENT AND /OR AMCM OTHER SECURITIES TOTAL ASSETS LIABILITIES DEPOSITS AND BALANCES OF BANKS AND FINANCIAL INSTITUTIONS DEPOSITS FROM PUBLIC SECTOR ENTITIES DEPOSITS FROM HOLDING AND ASSOCIATED COMPANIES DEPOSITS FROM NON-BANK CUSTOMERS CERTIFICATES OF DEPOSITS ISSUED OTHER SECURITIES ISSUED TOTAL LIABILITIES 26,618,93 26,88,761 6,698,913 1,693, ,553 24,636,87 1,96,519 25,948,32 194,65 412, ,553 7,774,95 3,262 16,299,899 1,8,26 8,136,39 6,698,913 85,57 1,75, ,652 1,981,25 747,33 5,74,129 9,1 6,72,574 93,65 1,281,576 1,523,193 12,519,746 68,9 8,391,682 4,216,419 1,937,988 96,494 2,169,23 21,27,68 624,975 61,82,23 67,11 15,928,566 6,496,469 14,111,29 2,844,482 21,832,583 51,997,244 24,392,89 3,921,376 8,95,755 12,68,11 2,169,23 57

58 Credit Risk QUANTITATIVE DISCLOSURE Gross amount of past due assets to non-bank customers BANCO NACIONAL ULTRAMARINO, S.A. ANALYSIS ON PAST DUE ASSETS OF DECEMBER 31, 215 PAST DUE FOR MORE THAN 3 MONTHS BUT NOT MORE THAN 6 MONTHS MORE THAN 6 MONTHS BUT NOT MORE THAN 1 YEAR PAST DUE LOANS & ADVANCES (INCLUDING TRADE BILLS) MOP THOUSAND COLLATERAL SPECIFIC PROVISIONS 13, % 15,936 27,411 14, % 9,621 3,427 MORE THAN 1 YEAR 17,55 37.% 1,6 8,734 TOTAL 45,339 1.% 36,157 39,572 58

59 MARKET RISK

60 Market Risk QUALITATIVE DISCLOSURE OF MARKET RISK Exposure to market risk mainly arising from the evolution of interest rates and exchange rates is limited, given the fact that the Bank focuses its activity in the retail segment. This risk can arise from market-making, dealing, and position-taking in bonds, securities, securities indexes, commercial paper and other emissions, currencies, commodities, forex instruments, or derivatives. BNU runs a proprietary investment book in high quality debt instruments for purposes of liquidity management. Placements are done in view of the large amount of customer deposits. There are established limits for foreign exchange in different currencies. THE MARKET RISK CAPITAL REQUIREMENTS OF DECEMBER 31, 215 MOP THOUSAND ITEMS AMOUNT INTEREST RATE RISK EQUITY POSITION RISK FOREIGN EXCHANGE RISK 1,1 COMMODITIES RISK MARKET RISK CAPITAL CHARGES FOR ALL CATEGORIES 1,1 Operations involving the assumption of interest rate risk above six months must be approved by members of the Executive Committee The risk for potential loss in our foreign exchange position and our portfolio of investment, trading and negotiation is evaluated on a daily basis by calculating the VaR (Value at Risk) and Backtesting. The Asset and Liability Management Committee (ALCO) monitors regularly our exposure to market risk. 6

61 INTEREST RATE RISK IN THE BANKING BOOK

62 Interest Rate Risk in the Banking Book QUALITATIVE DISCLOSURE OF INTEREST RATE RISK This risk refers to the current or prospective risk to earnings and capital arising from adverse movements in interest rates. The impact of changes in interest rates in the own funds of the bank and in the Profit and Loss account are tested monthly as per guidelines of AMCM. Interest Sensitive Assets, Interest Sensitive Liabilities and Long and Short Positions are registered by time bands and it is quantitatively evaluated the impact of a shock of an interest rate increase of 2b.p. in the Profit and Loss and own Funds of the Bank. It is also analyzed on a monthly basis that the Basis Risk is also calculated monthly in order to be able to assess the impact of the reduction in the gap between the Prime Rate and HIBOR/MIBOR. The Asset and Liability Management Committee (ALCO) monitors regularly our exposure to interest rate risk. QUANTITATIVE DISCLOSURE OF DECEMBER 31, 215 Interest rate exposures at a shock of 2 basis points ITEM TIME BAND LONG (a) (SHORT) (b) LONG (c) (Short) (d) TOTAL NET LONG (SHORT) (e) MOP THOUSAND WEIGHT- ING (%) WEIGHTED POSITION LONG (SHORT) (f) 1 WITHIN 1 DAY 9,817,526 (18,126,33) - - (8,38,84) - 2 >1 TO <= 7 DAYS 6,68,75 (1,742,984) - - 4,937, >7 DAYS TO <= 1 MONTH 627,579 (559,749) , >1 TO <= 3 MONTHS 1,534,78 (4,363,635) - - (2,828,927).32 (9,52.57) 5 >3 TO <= 6 MONTHS 56,167 (823,955) - - (317,788).72 (2,288.7) 6 >6 MONTHS TO <=1 YEAR 1,531,966 (3,957,41) - - (2,425,444) 1.43 (34,683.85) 7 >1 TO <=2 YEARS 98,281 (34,326) - - (26,45) 2.77 (5,77.45) 8 >2 TO <=3 YEARS 164,565 (534,31) - - (369,745) 4.49 (16,61.55) 9 >3 TO <=4 YEARS 5, , , >4 TO <=5 YEARS 61, , , >5 TO <=7 YEARS >7 TO <=1 YEARS >1 TO <=15 YEARS >15 TO <=2 YEARS OVER 2 YEARS WEIGHTED POSITION FOR THIS CURRENCY (59,394.54) 17 WEIGHTED POSITION OF ALL OTHER CURRENCIES 373, WEIGHTED POSITION OF ALL CURRENCIES (16(F)+17(F)) 314, OWN FUNDS 5,592,62. 2 IMPACT ON ECONOMIC VALUE AS % OF OWN FUNDS* (18(F) AS % OF 19(F)) 5.62% 62

63 OPERATIONAL RISK

64 Qualitative disclosure Operational Risk The objectives of the Operational Risk and Internal Control are to optimize capital charge and reinforce the control culture. The operational risk and internal control management processes cover four stages: Identification; Evaluation; Monitoring and Mitigation. The identification phase includes the collection of information on potential operational risks and their documentation. The evaluation phase is supported by the recording of operational risk events and by self-evaluation questionnaires. In the mitigation stage, action plans are identified, designed and implemented in order to reduce the operational risk. The governance model adopted for the operational risk and internal control management includes the Board of Directors (CADMI), the Executive Committee (CEXEC), the Operational Risk and Internal Control Committee, the Organization and Procedures Department (ORGAP), the Internal Audit Department (AUDIT), the Accounting Department (CONTO) and the remaining Areas of BNU Macau, within their respective activities. Monitoring includes the use of risk indicators and the production and reporting of management information which will enable the evaluation of the risk profile of the BNU Macau. 64