Banco BPI Consolidated results in 1st quarter 2017

Transcription

1 Banco BPI Consolidated results in 1st quarter April 2017

2 A. Financial results I. Domestic activity II. International activity III. Consolidated results B. Income statements and balance sheets

3 Domestic activity results in the 1st quarter 2017 Net profit increases 35.2 M. to 43.1 M. in the 1st quarter 2017; ROE of 8.8%; Efficiency ratio improves from 77.9% in the 1st quarter 2016 to 71.3% in the 1st quarter 2017; BPI issued 300 M. of Tier II subordinated debt, with an Euribor +5.74% remuneration rate, totally subscribed for by Caixabank; CET1 ratio of 11.7% and total ratio of 13.5%; Financial margin increases 7.1%; Net operating revenue increases by 9.7%; Overhead costs 1) decrease by 7.7%; Reversal of loan impairments (net of recoveries) of 0.11% 2) of the loan portfolio; Compares with a cost of credit risk net of recoveries of 0.29% 2) in the first quarter 2016; Credit at risk ratio decreases from 4.6% in Mar to 3.8% in Mar. 2017; Credit at risk coverage by impairments of 81% (not considering collaterals); Loans to deposits ratio of 104%; 1) Overhead costs excluding early retirement costs and indemnities related to the branch of France. 2) On annualized terms. 3

4 Net profit of 43.1 M. in the domestic activity NET PROFIT Domestic activity M. +447% Q16 1T 16 1Q17 1T 17 ROE 1.7% 8.8% 4

5 Net profit of 43.1 M. in the domestic activity Domestic activity NET PROFIT Q15 1T15 2Q15 2T15 3Q15 3T15 4Q15 4T15 1Q16 1T16 2Q16 2T16 3Q16 3T16 4Q16 4T16 1T17 1Q17 5

6 ROE (2002-1st quarter 2017) Domestic activity AVERAGE RETURN ON SHAREHOLDERS EQUITY (ROE) 30% 20% 10% 0% -10% 18.8% 22.1%23.4% 13.3% 13.1%13.6% 4.9% 4.7% 0.7% 10.2% -1.5% 5.2% 7.7%8.8% 1) -20% -15.6% -20.4% -30% Q 1T 17 1) ROE of 8.9% in the 1st quarter 2017, excluding the impact of the sale of 2% of BFA and deconsolidation. 6

7 ROE comparison with Iberian banks AVERAGE RETURN ON SHAREHOLDERS EQUITY (ROE) Spanish banks Portuguese banks Banco BPI -47.3% -32.0% 2) -14.2% BPI csl Bankinter Totta SGPS BPI domestic Santander Bankia BBVA Sabadell CaixaBank BCP csl Novo Banco CGD CGD csl csl POP 8.9% 7.0% 6.7% 6.7% 5.8% 4.5% 0.6% 14.7% 13.5% 11.1% 1) 1) BPI ratios in the 1st quarter 2017; other banks ratios as of December ) 1st quarter 17, excluding the impact of the sale of 2% of BFA and deconsolidation. 2) BPI calculation. 7

8 Total Customer resources Corrected by duplication of balances and BPI managed pension funds applications 1 Domestic activity M. Dec. 07 Dec. 08 Dec. 09 Dec. 10 Dec. 11 Dec. 12 Dec. 13 Dec 14 Dec 15 Dec 16 Mar 17 On-balance sheet resources Sight deposits and other deposits Term and savings deposits Customers' deposits Bonds placed with Customers and other 2) Deposits and Bonds Insurance capitalisation and other Unit links insurance capitalisation "Aforro" insurance capitalisation products and other 3) Participating units in consolidated trust funds On-balance sheet resources Off-balance sheet resources Unit trust funds, PPR and PPA BPI Suisse Off-balance sheet resources Total Customer resources Other customer resources Public offerings Third-party funds placed with customers Other customer securities (4) Other customer resources Total Pension Funds BPI Group Other Note: Corrections for double counting 1) Deduction of placements of pension funds under management (1) ) Total resources and their components are corrected by duplication of balances (elimination of investment funds managed by BPI Group placed in deposits and structured products) and are deducted from the pension fund assets under management in On Balance Sheet resources and off balance sheet resources. 2) Fixed rate bonds, structured products, subordinated bonds and preference shares placed with Customers. 3) Capitalization insurance that guarantees the capital invested and whose remuneration consists in the participation in the results and capitalization insurance guaranteed rate and guaranteed retirement. 4) Excludes BPI securities. 8

9 Loans to Customers Domestic activity M. Dec.07 Dec.08 Dec.09 Dec.10 Dec.11 Dec.12 Dec.13 Dec.14 Dec.15 Dec.16 Mar.17 Corporate banking Large companies Medium-sized companies Project Finance - Portugal Madrid branch Project Finance Corporates Public Sector Central Administration Regional and local administrations State Corporate Sector - in the budget perimeter State Corporate Sector - outside the budget perimeter Other Institutional Individuals and Small Businesses Banking Mortgage loans to individuals Loans contracted before Loans contracted in 2011 and thereafter Consumer credit / other purposes Credit Cards Car financing Small businesses BPI Vida Loans in arrears net of impairments Other Total

10 Financial assets available for sale Domestic activity 31 Dec Mar.2017 M. in securities in derivatives Total in securities in derivatives Public debt Portugal Of which Acquisition value Book value Gains / (losses) 1) Acquisition value TBonds TBills Italy T-Bills Spain T-Bills Italy Corporate Bonds Equities Other Total Book value Gains / (losses) 1) Total 1) Fair value reserve before deferred taxes. Includes the impact of hedging interest rate risk. 10

11 Net operating revenue Domestic activity M. Mar. 16 Mar. 17 M. % Financial margin % Technical result of insurance contracts % Net commission income % Commercial banking income % Net income on financial operations % Net operating income % Operating income from banking activity % 11

12 Net interest income Domestic activity M % 2.0% 1.9% NET INTEREST INCOME EURIBOR 3M TERM DEPOSITS SPREAD % 4% 1.5% 3% 1.0% % 1% 1.6% 0.5% 0.0% New deposits contracted: 0.2% Q 17 0% -1% -0.3% Q 17 Euribor 3M quarterly average -0.5% -1.0% Mar.16 Mar.17 Average rate 0.05% 0.0% Average spread 0.1% 0.2% Q 17 Quarterly average spread: Term deposits remuneration - Euribor 12

13 Commissions Domestic activity Amounts in M. Mar.16 Mar.17 Commercial Banking Asset Management Investment Banking Net commission income % 13

14 Commercial Banking commissions Domestic activity Amounts in M. Mar.16 Mar.17 M. Loans and guarantees Cards Deposits and related services Insurance intermediation Banking services Securities-related services Other Commercial Banking commisions

15 Operating costs Domestic activity M. Mar. 16 Mar. 17 M. % Personnel costs % General administrative costs % Depreciation and amortisation % Overhead costs % Costs with early-retirements Indemnities related with the branch in France Overhead costs (excluding costs with early-retirements and indemnities related with the branch in France) % Of which: Personnel costs (excluding costs with early-retirements and indemnities related with the branch in France) % 15

16 Operating costs (2007- Mar.17) Domestic activity M x Mar.17 % 4 x Mar.17 vs Mar.17 Personnel costs 1) % General administrative costs % Depreciation and amortisation % Overhead costs 1) % Mar / Mar.17 Employees % Variable remunerations (M. ) [4 x 1Q.17] ACTV increases (%) 2.75% 2.6% 0.75% Distribution network in Portugal 2) % Accumulated inflation (2007 Mar.17) Operating costs Costs reduction +11.3% -23.4% M. 1) Excluding early retirement costs, gain from the revision of the ACT (Collective Labour Agreement) and indemnities related to the branch in France in the 1st quarter ) Retail branches, investment centres, corporate centres, institutional centres and Project finance centre. 16

17 Distribution network in Portugal Domestic activity -34% No Mar. 17 Branches Investment Centres Housing Shops Corporate Banking Total

18 Efficiency ratio Domestic activity EFFICIENCY RATIOS 120% 118.0% Overhead costs adjusted in % of commercial operating income from banking 1 Overhead costs in % of operating income from banking Calculated based on costs and income as reported Overhead costs adjusted in % of commercial operating income from banking 100% 80% 66.7% 69.1% 70.3% 78.4% 79.4% 76.6% 60% 67.9% 69.6% 63.1% 60.5% 58.2% 40% 88.6% 77.6% 80.1% 73.5% 50.1% 88.1% 89.0% 72.4% 76.3% 69.3% 74.7% 69.2% T 17 1) Overhead costs adjusted in % of commercial operating income from banking: 71.3% 67.7% Overhead costs Costs with early retirements - gains due to the amendment to the terms of the pension plan (death subsidy) - gains with ACT revision indemnities related with the branch in France = Domestic operating income from banking * * Financial margin + technical results of insurance contracts + Commissions. 18

19 Earnings of associated companies (equity method) Domestic activity M. Mar. 16 Mar. 17 M. Insurance Allianz Portugal Cosec Unicre Other Total

20 Credit at risk Domestic activity Credit at risk M CREDIT AT RISK Impairments 712 M Mar.17 Credit at risk ratio (%) 1.5% 1.8% 2.3% 2.4% 3.0% 4.0% 4.7% 5.0% 4.5% 3.7% 3.8% Coverage by impairments 81% Mar.17 1) Calculation method applies the Instruction 23/2011 of Bank of Portugal to the consolidation perimeter of BPI according to the IAS. 20

21 Credit at risk and coverage by impairments Domestic activity 31 Mar.17 Credit at risk (M. ) Credit at risk ratio Coverage by impairments 1) Corporate banking % 90% Individuals Banking % 72% Mortgage loans % 62% Loan-to-Value % Other loans to individuals % 111% Small businesses % 91% Other 4 0.2% Domestic activity % 81% 1) Without considering the coverage by associated guarantees. 2) Before impairments. Note: Credit at risk calculation method applies the Instruction 23/2011 of Bank of Portugal to the consolidation perimeter of BPI according to the IAS. 21

22 Cost of credit risk net of recoveries In M. IMPAIRMENTS NET OF RECOVERIES Domestic activity As % of loan portfolio T % 0.98% 0.31% 0.15% 0.66% 0.42% 0.38% 0.09% 1) 2) 1) T 1Q 17 2) -0.11% 22 1) In 2009, an extraordinary loan impairment charge of 33.2 M. (0.12% of the average loan portfolio) was excluded. 2) In 2010, that extraordinary charge was utilised and therefore, added to impairment charges for the year.

23 Cost of credit risk Loan impairments by segment Domestic activity M. 1) In annualised terms 2) Recoveries of loans, interest and expenses. M. % loan portfolio 1 M. % loan portfolio 1 Corporate Banking % % Individuals Banking % % Mortgage loans % % Other loans to individuals % % Small businesses % % Other % % Impairment losses and provisions for loans and guarantees, net 31 Mar Mar % % Recoveries of loans, interest and expenses % % Impairment losses and provisions for loans and guarantees (net), deducted of recoveries 2) % % 23

24 BPI foreclosure properties Domestic activity MORTGAGE OTHER TOTAL Gross value Impairment Impairment as % of gross value Mar % 38% 28% 33% 38% 43% 4% 5% 4% 3% 3% 16% 19% 36% 36% 39% 37% 31% 28% 26% 36% 35% 22% 25% 33% 35% 38% 40% 20% 17% 18% 24% 22% Mar Mar 17 Units in Recovery Fund FCR = 63.1 M. (net exposure) Units in Corporate Reestructuring Fund, FCR = 3.5 M. (net exposure) 24

25 Credit at risk ratio comparison with Iberian banks Spanish banks Portuguese banks Banco BPI Novo Banco Montepio Popular Liberbank Portugal sector BCP CGD Bankia Spain sector CaixaBank Sabadell Totta BBVA Bankinter Santander BPI BPI domestic CREDIT AT RISK RATIO % 14.6% 13.9% 11.8% 10.9% 10.5% 9.8% 9.1% 6.9% 6.1% 5.6% 4.9% 4.0% 3.9% 3.8% * * March % * 25.6% BPI ratios in the 1st quarter 2017; other banks ratios as of December ) Portuguese banks credit at risk ratio (according to Instruction 23/2011 of the Bank of Portugal); Spanish banks - loans in arrears > 90 days and associated loans falling due. 25

26 Employees pension liabilities Domestic activity ANNUAL AVERAGE RETURN 3 M. 31 Mar Dec Mar. 17 Total past service liability Net assets of the pension funds 1) Last 25 years 9.1% Last 10 years 5.7% Degree of coverage of pension liabilities 105.3% 97.8% 100.1% Last 5 years 10.5% Total actuarial deviations 2) (86.4) (244.0) (211.7) Pension funds return -2.7% -1.2% 3.0% Last 3 years 5.7% 1) In Dec.16 includes 75.5 M. of contributions transferred in early ) Recognized directly in shareholders' equity, in accordance with IAS19. 3) Of Banco BPI pension fund, until 31 Mar

27 Employees pension liabilities Domestic activity BPI ACTUARIAL ASSUMPTIONS 31 Dec Jun Dec Mar. 17 Discount rate - current employees 2.83% 2.50% 2.00% 2.00% Discount rate - retirees 2.00% 2.50% 2.00% 2.00% Expected pension fund rate of return 2.50% 2.50% 2.00% 2.00% Salary growth rate 1.00% 1.00% 1.00% 1.00% Pensions growth rate 0.50% 0.50% 0.50% 0.50% Mortality table (M): TV 73/77 2 years (1) (W): TV 88/ 90 3 years (1) 1) For the target population, the age below the actual age of beneficiaries is two years for men (H) and three years for women (M) respectively, which is equivalent to considering a higher life expectancy. 27

28 A. Financial results I. Domestic activity II. International activity III. Consolidated results B. Income statements and balance sheets

29 BFA results in the 1st quarter 2017 Banco Fomento Angola (BFA) International activity BFA net profit of M. in the 1st quarter 2017, increases 34%; ROE of 42%; BFA net profit attributable to BPI of 44.1 M. corresponding to the 48.1% shareholding; Loans to deposits ratio of 21%; Solvency ratio (BNA rules) of 33%; Number of BFA customers increases by 12% year-on-year to 1.6 million. 29

30 Net profit and ROE of BFA NET PROFIT OF BFA International activity + 26 M. +34% BFA contribution, excluding the impact of the sale of 2% of BFA and deconsolidation. 1Q16 1T 16 1T 1Q1717 ROE 39% 42% Average rate (year-to-date) Rate at the end of period Mar. 16 Mar. 17 % AKZ / 1 EUR % USD / 1 EUR * % AKZ / 1 EUR % USD / 1 EUR * % 30 * Exchange rate implied in the AKZ / USD and AKZ / EUR exchange rates disclosed by the BNA.

31 BFA individual net income and ROE BFA individual accounts International activity M. Mar. 16 Mar. 17 M. % Financial margin % Net commission income % Net income on financial operations % Net operating income % Operating income from banking activity % Personnel costs % General administrative costs % Depreciation and amortisation % Overhead costs % Operating profit before impairments and provisions % Impairment losses and provisions, net of recoveries % Net income before income tax % Income tax % BFA non-consolidated net income % BFA contribution to consolidated net income % 31

32 BFA selected indicators BFA individual accounts International activity M. Mar. 16 Mar. 17 % Individual net profit % ROE 39% 42% Efficiency ratio 29% 30% Total assets % Deposits % Loans % Loans / Deposits 21% 21% Securities % Shareholders' Equity % Solvency ratio (BNA rules) 26% 33% Staff % Distribution network (units) % Customers (thousand) 1,415 1, % 32

33 BCI selected indicators International activity 30% equity-accounted shareholding M. Mar. 16 Mar. 17 % Contribution to consolidated net profit % Total assets % Loans % Deposits % Loans / Deposits 78% 73% Market shares In loans 30.4% 30.7% 1) In deposits 29.8% 29.6% 1) Staff % Branches Market share in branches 31.4% 29.9% 2) Metical / 1 EUR Exchange Rates Mar. 16 Mar. 17 % Rate at the end of period % Average rate % 33 1) February ) December 2016.

34 Impact of the sale of 2% of BFA In January 2017, the sale of 2% of BFA's capital to Unitel was concluded, and the BPI Group's stake in BFA fell from 50.1% to 48.1%. The consolidated financial statements for the first quarter of 2017 reflect: the capital gain realized with the sale of the 2% stake in BFA in the amount of 6.6 M., after taxes 1). the deconsolidation of the shareholding in BFA, which is now recognized by the equity method. In addition, in accordance with international accounting standards, the change in the consolidation method (deconsolidation) had the following consequences: the transfer, between shareholders equity captions, from accumulated negative foreign exchange reserves amounting to M. to net income for the year, therefore impacting negatively the consolidated net income by M., but having no impact on shareholders' equity, as that impact was already offset to shareholders equity. The aforementioned reserves reflected adverse exchange rate variations in the translation of BFA's financial statements from kwanzas to euros. the increase in the provision for deferred tax liabilities by 36.8 M. associated with the potential gain in the 48.1% stake kept by BFA. 1) Realised gain (before taxes) of 9.3 M., deducted of taxes (2.7 M. ) on the gain recorded in individual accounts that has as reference the respective cost of acquisition of the participation. 34

35 Impact of the sale of 2% of BFA In summary, the impact of the sale of 2% of BFA on consolidated shareholders equity was negative by 30.2 M.. Due to the transfer of M. from negative foreign exchange reserves to the result for the year, the impact on consolidated net income was negative by M.. Amounts in M. Consolidated Domestic Of which International Proceeds from the sale of the 2% stake % of BFA shareholders' equity Realised capital gain Taxes on the capital gain Realised capital gains net of taxes Annulment of the foreign exchange reserve related to the 50.1% stake in BFA Deferred taxes on the gain on the 48.1% stake kept by BFA Total impact of the sale in net income Transfer of 2% of BFA shareholders equity Total impact on shareholders' equity

36 International activity contribution M. CONTRIBUTION IN THE 1ST QUARTER 2017 International activity % x individual net profit Lucro BFA individual net do profit BFA BPI Apropriação appropriation do resultado of result pelo * BPI * Impacto of da sale venda of de 2% BFA do and BFA e desconsolidação deconsolidation Contributo BFA contribution do BFA Contributo BCI and do other BCI e contributions outros International Contributo da actividade activity contribution internacional * Deducted of deferred taxes on dividends to be distributed. 36

37 A. Financial results I. Domestic activity II. International activity III. Consolidated results B. Income statements and balance sheets

38 BPI consolidated results in 1st quarter 2017 Consolidated Net profit of 90 M., excluding impact of the sale of 2% of BFA and deconsolidation; ROE of 14.7%, excluding impact of the sale of 2% of BFA and deconsolidation; Net profit as reported of M., reflects the impact of accounting the sale of 2% of BFA and change of the consolidation method (deconsolidation); Common Equity Tier 1 ratio CRD IV / CRR: Phasing-in: 11.9%; Fully Implemented: 10.8%. T1 ratio of 11.9% and total capital ratio of 13.3% (both phasing in) BPI complies minimum SREP 2017 of CET1, T1 and total ratio. 38

39 Consolidated net profit NET PROFIT Consolidated M st quarter 1º Trim 2016 Resultado Consolidated consolidado, result, excluding excluindo impacto of de sale venda of 2% 2% BFA and e desconsolidação deconsolidation Impacto da of sale venda of 2% BFA BFA and e desconsolidação deconsolidation Consolidated Resultado consolidado net income Contributions to net profit M. 1st quarter 16 1 st quarter 17, excl. impact sale 2% BFA and deconsolidation 1st quarter 2017 Impact sale 2% BFA and deconsolidation 1st quarter 2017 Domestic activity International activity

40 ROE by business area RETURN ON SHAREHOLDERS EQUITY (ROE) excluding the impact of BFA 2% sale and deconsolidation Consolidated 1st Q (as reported) 1st Q. 2017, excluding the impact of the sale of 2% BFA and deconsolidation Domestic activity International activity Consolidated Domestic activity International activity Consolidated Adjusted allocated capital As % of total 81.2% 18.8% 100.0% 80.5% 19.5% 100.0% Net income ROE 1.7% 34.4% 7.8% 8.9% 38.8% 14.7% Net income "as reported" 43.1 ( 165.4) ( 122.3) ROE "as reported" 8.8% % -20.0% 1) The average capital considered in the calculation of ROE excludes the fair value reserve (net of deferred taxes) relating to the portfolio of available-for-sale financial assets. 40

41 Common Equity Tier 1 ratios Phasing in Consolidated 31 Mar.17 CET 1 Consolidated 2.0Bi. Domestic activity 1.9 Bi. Minimum requirements SREP 2017 RWA 16.6 Bi Bi. CET1 ratio 11.9% 11.7% 9.25% T1 ratio 11.9% Total ratio 13.3% 11.7% 13.5% 9.75% 11.75% 41

42 Rácio Common Equity Tier 1 fully implemented Consolidated Domestic activity Consolidated 31 Mar. 17 CET 1 fully implemented 1.8 Bi. 1.8 Bi. RWA 16.4 Bi Bi. CET 1 ratio fully implemented 10.8% 11.3% T1 ratio fully implemented 10.8% Total ratio fully implemented 12.6% 11.3% 13.2% 42

43 Leverage & Liquidity (CRD IV / CRR) Mar. 17 Considering rules for CET 1 phasing in Mar. 17 Considerando regras para CET 1 fully implemented Minimum ratios CRD IV / CRR Consolidated Leverage Consolidated Domestic act. 6.5% 6.4% 5.9% 6.1% 3% (at 1 Jan. 2018) Liquidity Liquidity coverage ratio (LCR) Net stable funding ratio (NSFR) Consolidated Domestic act. Consolidated Domestic act. 162% 162% 111% 112% 162% 162% 111% 112% 80% (2017) 100% (2018) 100% (under revision; level expected for 2018) 43

44 A. Financial results B. Income statements and balance sheets

45 Income statement Amounts in M. Consolidated Mar. 16 Mar. 16 Mar. 17 as reported proforma as reported Financial margin (narrow sense) Gross margin on unit links Income from equity instruments Net commissions relating to amortised cost Financial margin Technical result of insurance contracts Net commission income Net income on financial operations 51.9 (3.6) 7.7 Net operating income (5.0) (1.2) (176.0) Operating income from banking activity (0.5) Personnel costs General administrative costs Depreciation and amortisation Overhead costs Operating profit before impairments and provisions (125.2) Recovery of loans, interest and expenses Impairment losses and provisions for loans and guarantees, net (0.1) Impairment losses and other provisions, net (3.5) Net income before income tax (115.4) Income tax Earnings of associated companies (equity method) Net income from continuing operations (122.3) Net income from discontinued operations 76.6 Income attributable to non-controlling interests from continuing operations Income attributable to non-controlling interests from discontinued operations 38.4 Net Income (122.3) Note: The designation "Mar. 16 proforma reflects the BFA's contribution to the consolidated result expressed in accordance with IFRS 5. 45

46 Balance sheet Consolidated Amounts in M. Mar. 16 as reported Dec. 16 as reported Mar. 17 as reported Cash and deposits at central banks Deposits at other credit institutions Loans and advances to credit institutions Loans and advances to Customers Financial assets held for trading and at fair value through profit or loss Financial assets available for sale Held to maturity investments Hedging derivatives Investments in associated companies and jointly controlled entities Investment properties Non-current assets held for sale and discontinued operations Other tangible assets Intangible assets Tax assets Other assets Total assets Resources of central banks Financial liabilities held for trading Resources of other credit institutions Resources of Customers and other debts Debts securities Technical provisions Financial liabilities relating to transferred assets Hedging derivatives Non-current liabilities held for sale and discontinued operations Provisions Tax liabilities Contingent convertible subordinated bonds Other subordinated debt and participating bonds Other liabilities Shareholders' equity attributable to the shareholders of BPI Non-controlling interests Total liabilities and shareholders' equity

47 Income statement Amounts in M. Domestic activity Mar. 16 Mar. 17 Chg.% as reported as reported Mar16 / Mar17 Financial margin (narrow sense) % Gross margin on unit links (14.2%) Income from equity instruments % Net commissions relating to amortised cost % Financial margin % Technical result of insurance contracts (54.2%) Net commission income % Net income on financial operations (3.6) % Net operating income (1.2) (1.1) 5.5% Operating income from banking activity % Personnel costs % General administrative costs (7.5%) Depreciation and amortisation % Overhead costs % Operating profit before impairments and provisions % Recovery of loans, interest and expenses % Impairment losses and provisions for loans and guarantees, net 20.1 (0.1) (100.6%) Impairment losses and other provisions, net 3.3 (3.5) (207.8%) Net income before incom e tax % Income tax % Earnings of associated companies (equity method) % Income attributable to non-controlling interests % Net Income % 47

48 Balance sheet Domestic activity Amounts in M. Mar. 16 as reported Dec. 16 as reported Mar. 17 as reported Mar16/ Mar17 Cash and deposits at central banks % Deposits at other credit institutions % Loans and advances to credit institutions % Loans and advances to Customers % Financial assets held for trading and at fair value through profit or loss % Financial assets available for sale % Held to maturity investments % Hedging derivatives % Investments in associated companies and jointly controlled entities % Investment properties Non-current assets held for sale and discontinued operations Other tangible assets % Intangible assets % Tax assets % Other assets % Total assets % Resources of central banks % Financial liabilities held for trading % Resources of other credit institutions % Resources of Customers and other debts % Debts securities % Technical provisions % Financial liabilities relating to transferred assets % Hedging derivatives % Non-current liabilities held for sale and discontinued operations Provisions % Tax liabilities % Contingent convertible subordinated bonds Other subordinated debt and participating bonds % Other liabilities % Shareholders' equity attributable to the shareholders of BPI % Non-controlling interests % Total liabilities and shareholders' equity % 48 1)The balance sheet of the domestic activity presented is not corrected by the balance of operations with the geographical segment International activity.

49 Income statement Amounts in M. International activity Mar. 16 Mar. 16 Mar. 17 as reported proforma as reported Financial margin (narrow sense) ( 0.1) Gross margin on unit links Income from equity instruments Net commissions relating to amortised cost Financial margin ( 0.1) Technical result of insurance contracts Net commission income 13.1 ( 0.1) 0.3 Net income on financial operations 55.5 ( 0.0) Net operating income ( 3.8) ( 0.0) ( 174.9) Operating income from banking activity ( 174.6) Personnel costs General administrative costs Depreciation and amortisation Overhead costs Operating profit before impairments and provisions 97.2 ( 0.1) ( 175.2) Recovery of loans, interest and expenses 0.8 Impairment losses and provisions for loans and guarantees, net 10.5 Impairment losses and other provisions, net 0.9 Net income before income tax 86.6 ( 0.1) ( 175.2) Income tax Earnings of associated companies (equity method) Net income from continuing operations 76.3 ( 0.3) ( 165.4) Net income from discontinued operations 76.6 Income attributable to non-controlling interests from continuing operations 38.4 Income attributable to non-controlling interests from discontinued operations 38.4 Net Income ( 165.4) 49 Note: The designation "Mar. 16 proforma reflects the BFA's contribution to the consolidated result expressed in accordance with IFRS 5.

50 Balance sheet International activity Amounts in M. Mar. 16 as reported Cash and deposits at central banks Deposits at other credit institutions Loans and advances to credit institutions Loans and advances to Customers Financial assets held for trading and at fair value through profit or loss Dec. 16 as reported Mar. 17 as reported Financial assets available for sale Held to maturity investments Hedging derivatives Investments in associated companies and jointly controlled entities Investment properties Non-current assets held for sale and discontinued operations Other tangible assets Intangible assets Tax assets Other assets Total assets Resources of central banks Financial liabilities held for trading 29.3 Resources of other credit institutions Resources of Customers and other debts Debts securities Technical provisions Financial liabilities relating to transferred assets Hedging derivatives Non-current liabilities held for sale and discontinued operations Provisions 21.8 Tax liabilities Contingent convertible subordinated bonds Other subordinated debt and participating bonds Other liabilities Shareholders' equity attributable to the shareholders of BPI Non-controlling interests Total liabilities and shareholders' equity The balance sheet of international activity presented is not corrected by the balance of operations with the geographical segment "Domestic activity.

51 BFA (individual) income statement Amounts in M. International activity Mar.16 Mar.17 Mar.16 / Mar.17 as reported as reported Chg. M. Chg.% Financial margin % Technical result of insurance contracts % Net commission income % Net income on financial operations ( 34.2) -61.6% Net operating income ( 3.8) ( 9.2) ( 5.4) % Operating income from banking activity % Personnel costs % General administrative costs % Depreciation and amortisation % Overhead costs % Operating profit before impairments and provisions % Recovery of loans, interest and expenses ( 0.7) -80.9% Impairment losses and provisions, net ( 10.1) -88.0% Net income before income tax % Income tax ( 9.4) -93.3% BFA non-consolidated net income % Result attributable to BPI % Taxes on dividends and other % BFA contribution to consolidated net income % 51

52 BFA (individual) balance sheet Amounts in M. International activity 31 Mar.16 as reported 31 Dec. 16 as reported 31 Mar. 17 as reported Chg.% Mar.16/ Mar.17 Assets Cash and deposits at central banks (37.6%) Deposits at other credit institutions % Loans and advances to credit institutions (29.4%) Loans and advances to Customers (6.9%) Financial assets held for trading and at fair value through profit or loss % Financial assets available for sale (22.7%) Non-current assets held for sale 0.4 Other tangible assets (2.9%) Intangible assets % Tax assets (16.4%) Other assets % Total assets (1.0%) Liabilities and shareholders' equity Resources of central banks Financial liabilities held for trading (76.4%) Resources of other credit institutions % Resources of Customers and other debts (7.3%) Debts securities Provisions % Tax liabilities (21.5%) Other subordinated debt and participating bonds Other liabilities % Shareholders' equity % Total liabilities and shareholders' equity (1.0% ) 52

53 Profitability, efficiency, credit quality and solvency As in the Bank of Portugal s Instruction no. 23/2011 Consolidated 31 Mar. 16 as reported 31 Mar. 16 proforma 31 Mar. 17 as reported 31 Mar. 17 excl. the impact of the sale of 2% BFA and deconsolidation Operating income from banking activity and results of equity accounted subsidiaries / ATA 3.0% 1.7% 0.7% 2.8% Profit before taxation and income attributable to non-controlling interests / ATA 1.1% 1.0% -0.7% 1.4% Profit before taxation and income attributable to non-controlling interests / average shareholders equity (including non-controlling interests) 15.7% 14.2% -9.3% 18.3% Personnel costs / Operating income from banking activity and results of equity accounted subsidiaries % 44.5% 120.7% 29.1% Overhead costs / Operating income from banking activity and results of equity accounted subsidiaries % 75.0% 204.9% 49.3% Loans in arrears for more than 90 days + doubtful loans / loan portfolio (gross) 4.0% 3.2% Loans in arrears for more than 90 days + doubtful loans, net of accumulated loan impairments / loan portfolio (net) -0.2% 0.1% Credit at risk as % of total loans (gross) 2 5.0% 4.0% Credit at risk 2, net of accumulated loan impairments as % of total loans (net) 0.8% 0.9% Restructured loans as % of total loans (gross) 3 6.8% 6.3% Restructured loans not included in credit at risk as % of total loans (gross) 3 4.8% 4.6% Total capital ratio 10.8% 4) 13.3% 5) Tier I ratio 10.8% 4) 11.9% 5) Core Tier I ratio 10.8% 4) 11.9% 5) Loans (net) to deposits ratio 88% 104% ATA = Average total assets. 1) Excluding costs with early retirements. 2) The credit at risk is the sum of: (1) the total amount outstanding on a loan in respect of which there are instalments of principal or interest in arrears for 90 days or more; (2) the total amount outstanding on loans which have been restructured, after having been in arrears for a period of 90 days or more, without adequate reinforcement of guarantees (these should be sufficient to cover the full amount of the outstanding principal and interest) or full payment of interest and other charges in arrears; (3) the total value of loans with instalments of principal and accrued interest in arrears for less than 90 days but in respect of which there is evidence to justify their classification as credit-at-risk, namely the debtor s bankruptcy or winding up. 3) According to Instruction 32/2013 of Bank of Portugal. 4) According to CRD IV/CRR phasing in rules for ) According to CRD IV/CRR phasing in rules for

54 Investor Relations Tel Website: Ricardo Araújo (IR Officer) Tel: Banco BPI, S.A. Publicly held company Head Office: Rua Tenente Valadim, no.284, Porto, Portugal Share capital: Registered in Oporto C.R.C. and corporate body no