3 rd QUARTER 2010 ACTIVITY REPORT

Transcription

1 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 In accordance with Article 10 of the CMVM Regulation nr.5/2008 we are pleased to transcribe the 3 rd QUARTER 2010 ACTIVITY REPORT BANCO COMERCIAL PORTUGUÊS, S.A. a public company (Sociedade Aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600, Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600, /86

2 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 Financial Highlights Euro million 30 Sep Sep. 09 Change 10 / 09 Balance sheet Total assets 99,434 93, % Loans to customers (1) 76,638 76, % Loans to customers (net) (1) 74,254 74, % Total customer funds (1) (2) 66,971 65, % Balance sheet customer funds (1) 50,082 50, % Customer deposits (1) 45,319 44, % Results Net interest income 1, % Net operating revenues (3) 2, , % Operating costs (4) 1, , % Loan impairment charges (net of recoveries) % Other impairment and provisions % Income taxes % Minority interests Net income % Profitability Net operating revenues / Average net assets (5) 2.9% 2.7% Return on average assets (ROA) (6) 0.4% 0.3% Income before taxes and minority interests / Average net assets (5) 0.4% 0.3% Return on average equity (ROE) 5.9% 4.9% Income before taxes and minority interests / Average equity (5) 7.0% 6.2% Credit quality Overdue loans according to Bank of Portugal / Total loans (5) 4.5% 2.9% Overdue loans according to Bank of Portugal, net/ Total loans, net (5) 1.4% 0.3% Impairment for loan losses / Overdue loans by more than 90 days 100.2% 119.6% Impairment for loan losses / Overdue loans 92.5% 98.9% Efficiency ratios Operating costs / Net operating revenues (5) (7) 55.1% 64.4% Operating costs / Net operating revenues (Portugal) (5) (7) 48.7% 60.7% Staff costs / Net operating revenues (5) (7) 30.4% 36.6% Capital (pro forma IRB) Own funds 5,792 Risk weighted assets 58,186 Tier I 9.0% Total 10.0% Capital (standardised) Tier I solvency ratio (5) 8.5% 8.9% Total solvency ratio (5) 10.2% 11.2% Branches Portugal activity % Foreign activity (1) % Employees Portugal activity 10,198 10, % Foreign activity (1) 11,195 10, % (1) Adjusted from the impact of the operations in Turkey and in USA, in accordance with the sale agreements established. (2) Amounts due to customers (including securities), assets under management and capitalisation insurance. (3) Net interest income, dividends from equity instruments, net commissions, net trading income, equity accounted earnings, other net operating income (rule 16/2004 from the Bank of Portugal). (4) Staff costs, other administrative costs and depreciation. (5) According to rule 16/2004 from the Bank of Portugal. (6) Considering net income before minority interest. (7) Excludes the impact of specific items. 2/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

3 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 In accordance with the agreement established for the sale of 95% of Millennium Bank AS in Turkey and the sale of all the branches and the respective deposits portfolio of Millennium bcpbank in the United States of America (USA), and in accordance with IFRS 5, as at 30 September 2010 the total assets and liabilities of these subsidiary companies will be presented, respectively, in the item of Non current assets held for sale and Non current liabilities held for sale in the Consolidated balance sheet, while the total expenses and income for the year will be represented line by line in the consolidated income statement. Until the date of sale, which in the case of Millennium bcpbank in the United States of America was concluded on 15 October 2010, the Group continues to consolidate, in reserves and income, any changes occurred in the net assets of Millennium bank Turkey and Millennium bcpbank USA. RESULTS Millennium bcp s consolidated net income totalled Euro million in the first nine months of 2010, compared to Euro million in the same period of Net income in the first nine months of 2010 includes the recognition of an impairment associated with the goodwill of Millennium bank in Greece, booked in the second quarter, in the amount of Euro 73.6 million, while net income in the first nine months of 2009 includes the gain accounted from the entry of new shareholders in Banco Millennium Angola s share capital, amounting to Euro 21.2 million, and the gain of Euro 57.2 million obtained with the sale of assets. Net income in the first nine months of 2010 benefited from the performance in net trading income, net interest income, net commissions and dividends received, together with operating cost control, influenced by the decrease in staff costs, in particular in pension fund costs, despite the reinforce of impairment charges for loan losses (net of recoveries). Net income from the activity in Portugal stood at Euro million in the first nine months of 2010, up from Euro million in the same period in Net income from the activity in Portugal includes the impacts previously mentioned, which was boosted by the growth in net operating revenues, as well as by the reduction in operating costs, partially offset by the reinforce of impairment charges for loan losses. In the international activity, net income totalled Euro 26.6 million in the first nine months of 2010, which compares with Euro 3.0 million in the same period in The increase in net income from the international activity shows the positive performance in net interest income and net commissions, partially restrained by the higher level in operating costs, in particular at Banco Millennium Angola, in the scope of the strategy of organic growth implemented, at Millennium bcpbank in the United States of America, as a result of the depreciation of the residual value of assets excluded from the process of sale, and at Bank Millennium in Poland, mostly due to the exchange rate appreciation of the Zloty against the Euro. The rise in net income from the international activity was mostly influenced by the contribution from associated companies in Poland, Mozambique and Angola. Net interest income was up by 9.4%, achieving Euro 1,091.8 million in the first nine months of 2010, compared to Euro million in the same period in The growth in net interest income was sustained by the positive volume effect, in both the activity in Portugal and the international activity, as well as by the favourable interest rate effect, benefiting, in particular, from the repricing policy for credit operations. On a quarterly basis, net interest income in Portugal showed, in this last quarter, the best performance since the second quarter of 2009, reflecting the impact from the progressive revision of spreads for operations settled. In the international activity, the increase in net interest income was influenced by the positive volume effect and simultaneously by the favourable interest rate effect, mainly supported by the performance in Bank Millennium in Poland, as well as in the subsidiary companies in Angola and Romania, and also in Millennium bim in Mozambique, were net interest income, excluding the exchange rate devaluation of the Metical against the Euro, showed a positive evolution in the period. The net interest margin stood at 1.63% in the first nine months of 2010, a favourable evolution from 1.57% in the same period of This performance reflects the impact from initiatives carried out, in particular the revision of spreads in credit operations with customers, aiming to adjust the increased implicit cost of risk of loans granted. On a quarterly basis, net interest margin has performed favourably since the second quarter of /86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

4 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 AVERAGE BALANCES Sep. 10 Sep. 09 Euro million Balance Yield % Balance Yield % Deposits in banks 3, , Financial assets 8, , Loans and advances to customers 74, , ,394 83,935 Non current assets held for sale Interest earning assets 88, , Non interest earning assets 9,889 10,226 98,226 94,161 Amounts owed to credit institutions 13, , Amounts owed to customers 45, , Debt issued and financial liabilities 26, , Subordinated debt 2, , ,687 85,569 Non current liabilities held for sale Interest bearing liabilities 88, , Non interest bearing liabilities 2,458 2,220 Shareholders equity and minority interests 7,227 6,372 98,226 94,161 Net interest margin (1) (1) Net interest income as a percentage of average interest earning assets. Note: Interest related to hedge derivatives were allocated, in the first nine months of 2010 and in the first nine months of 2009, to the respective balance item. Net commissions grew by 12.7%, to Euro million in the first nine months of 2010, up from Euro million in the same period in This increase benefited, on the one hand, from net commissions more directly associated with the banking business, in particular commissions related to the distribution of insurance products and to banking services provided, namely the sale of means of payment, account maintenance and the Frequent Customer solution, and on the other, from commissions related to financial markets, in particular structured operations, custodian services for securities and asset management. The positive evolution in net commissions was sustained by both the activity in Portugal (+10.7%) and the international activity (+17.9%), reflecting the increase in commissions in most foreign operations, in particular in Poland, Angola, Switzerland and Romania. Net trading income, which includes net gains arising from trading and hedging activities and net gains arising from available for sale financial assets, amounted to Euro million in the first nine months of 2010, compared to Euro million in the same period of 2009, essentially reflecting the performance of the activity in Portugal. Net trading income from the activity in Portugal, in the first nine months of 2010, includes the debt valuation adjustment, and also the results from foreign exchange, trading and hedging activities. In the international activity, the evolution in net trading income was hindered by the impact of the revaluation of derivative financial instruments booked by Bank Millennium in Poland, partially offset by the positive effect from foreign exchange activity posted by Millennium bim in Mozambique and by Banco Millennium Angola. Other net operating income, which includes other operating income, other net income from non-banking activities and gains from the sale of subsidiaries and other assets, totalled Euro 19.6 million in the first nine months of 2010 (Euro million in the same period in 2009). In the first nine months of 2009, other net 4/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

5 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 operating income in the activity in Portugal included the gain related to the dispersal of 49.9% of Banco Millennium Angola s share capital, in the amount of Euro 21.2 million, and the gain of Euro 57.2 million obtained with the disposal of assets. Excluding these impacts, other net operating income was essentially determined by the reduction in results from the sale/revaluation of real estate and from services provided. Dividends from equity instruments, which include dividends received on investments in available for sale financial assets, increased to Euro 35.5 million in the first nine months of 2010 (from Euro 4.3 million, in the same period of 2009), reflecting mostly the higher dividends received associated with the shareholding in Eureko. Equity accounted earnings totalled Euro 53.2 million in the first nine months of 2010, showing an increase of 11.3%, from Euro 47.8 million in the same period of This performance benefited, fundamentally, from the appropriation of the earnings associated with the 49% shareholding in Millenniumbcp Ageas. OTHER NET INCOME Euro million Sep. 10 Sep. 09 Change 10/09 Net commissions Banking commissions Cards % Credit and guarantees % Bancassurance % Other commissions % Subtotal banking commissions % Market related commissions Securities % Asset management % Subtotal market related commissions % Total net commissions % Net trading income % Other net operating income (1) % Dividends from equity instruments Equity accounted earnings % Total other net income 1, % Other income / Net operating revenues (2) 49.2% 47.4% (1) In the first nine months of 2009, includes the gain booked related to the dispersal of 49.9% of Bank Millennium Angola s share capital, amounting to Euro 21.2 million, and the gain associated with the sale of assets, in the amount of Euro 57.2 million. (2) Calculated according to rule 16/2004 from the Bank of Portugal. Operating costs, which include staff costs, other administrative costs and depreciation, stood at Euro 1,183.4 in the first nine months of 2010, compared to Euro 1,172.4 million in the same period in 2009 (+0.9%). The operating costs evolution was mostly influenced by the international activity, in particular by Banco Millennium Angola, following the strategy implemented of organic growth, by Millennium bcpbank in the United States of America, as a result of the depreciation of assets not included in the sale, and by Bank Millennium in Poland, mainly influenced by the exchange rate appreciation of the Zloty against the Euro, notwithstanding the drop in operating costs posted by Millennium bank in Greece and by Banca Millennium in Romania. Nevertheless, consolidated operating costs benefited from the reduction of 4.2% reached by the activity in Portugal, sustained by the lower level of staff costs and depreciation. The consolidated cost-to-income ratio, on a comparable basis, stood at 55.1% in the first nine months of 2010, an improvement of 9.3 p.p. from 64.4% in the same period of In the first nine months of 2010, the cost-to-income ratio showed an improvement in the activity in Portugal, to 48.7%, from 60.7% in the first 5/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

6 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 nine months of 2009, as a result of the initiatives carried out focused on restraining operating costs and increasing income. Simultaneously, the cost-to-income ratio improved in the international activity by 2.9 p.p., from the first nine months of 2009, benefiting from the favourable performances achieved in most foreign operations. Staff costs decreased by 2.1%, to Euro million in the first nine months of 2010, from Euro million in the same period of This reduction in staff costs was mostly driven by lower costs related to the pension fund, despite the growth in salaries, in the sequence of the annual process of salary reviews and the increase in the number of employees in the international activity, in particular in Angola and in Mozambique, as a result of the branch network expansion plans underway in these operations. In the activity in Portugal, staff costs dropped by 7.4% from the same period in 2009, which more than offset the increase in the international activity, in particular at Bank Millennium in Poland, partially boosted by the exchange rate appreciation of the Zloty against the Euro, and in Banco Millennium Angola, due to the increase in the number of employees, notwithstanding the reduction in staff costs at Banca Millennium in Romania and at Millennium bank in Greece. Other administrative costs totalled Euro million in the first nine months of 2010, compared to Euro million in the same period of 2009 (+4.6%), driven by both the activity in Portugal and the international activity. In the activity in Portugal, the performance of other administrative costs was influenced by higher costs related to legal fees, energy and specialised services. However, it is worth noting the savings achieved in costs related with communication and travel. In the international activity, the evolution in other administrative costs reflects the increase in costs for advertising, rents and specialised services, related to the strategy of organic growth carried out, in particular in Angola and Mozambique. Nevertheless, it is worth noting the reduction in other administrative costs at Bank Millennium in Poland, excluding the exchange rate appreciation of the Zloty against the Euro, as a result of the initiatives focused on improving operating efficiency. On a quarterly basis, other administrative costs were down by 5,3% between the second and the third quarters of 2010, benefiting from the activity in Portugal (-11.4%), in particular costs related to specialised services, sponsorships, energy, stationery and maintenance & repairs. Depreciation costs stood at Euro 83.7 million in the first nine months of 2010, from Euro 78.6 million in the same period in This evolution reflects, mostly, the performance in the international activity, particularly influenced by the impact from the depreciation of the residual value of assets excluded from the process of sale of Millennium bcpbank in the United States of America. Notwithstanding, depreciation reduced in the activity in Portugal, in particular depreciation related with equipment and buildings. 6/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

7 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 OPERATING COSTS Euro million Sep. 10 Sep. 09 Change 10/09 Staff costs % Other administrative costs % Depreciation % 1, , % Of which: Portugal activity % Foreign activity % Operating costs / Net operating revenues (1) (2) 48.7% 60.7% (1) Activity in Portugal. Calculated according to rule 16/2004 from the Bank of Portugal. (2) Excludes the impact of specific items. Impairment for loan losses (net of recoveries) amounted to Euro million in the first nine months of 2010, compared to Euro million in the same period of 2009, reflecting essentially the evolution in the activity in Portugal, despite the lower credit impairment (net of recoveries) posted by the international activity. In the activity in Portugal, the reinforcement of the impairment charges reflects the impact of an adverse economic and financial environment, especially at the level of loan defaults. In the international activity, the higher impairment charges posted by Millennium bank in Greece and, to a lesser extent, by the operations developed in Switzerland, Angola and Mozambique, following, in these last operations, the expansion of the business portfolio, were more than offset by the reduction in impairment charges (net of recoveries) booked by Bank Millennium in Poland. The cost of risk, measured by the ratio of impairment charges (net of recoveries) to the loan portfolio, stood at 96 b.p. in the first nine months of 2010 (70 b.p. in the first nine months of 2009). Other impairment and provisions include other asset impairment, in particular provision charges related to assets received as payment in kind not fully covered by collateral, goodwill impairment and other provisions, which comprise provisions charged for several risks and contingencies. Other impairment and provisions amounted to Euro million in the first nine months of 2010, compared to Euro 75.4 million in the same period of This performance was mainly influenced by the recognition of an impairment, in the amount of Euro 73.6 million, in the second quarter of 2010, associated with the goodwill of Millennium bank in Greece, in accordance with the Group s accounting policy and with IAS 36. Nevertheless, other impairment and provisions were favourably influenced by the lower impairment charges related to real estate, resulting from the termination of loan contracts with customers, and by the lower impairment charges posted in the international activity, benefiting from the performance in most of the foreign operations. 7/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

8 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 BALANCE SHEET Total assets rose to Euro 99,434 million as at 30 September 2010, compared to Euro 93,912 million posted on the same date in Loans to customers (gross) achieved Euro 76,638 million as at 30 September 2010, showing a slight decrease from Euro 76,854 million (on a comparable basis) posted on 30 September The evolution in loans to customers was mostly hindered by loans to companies, which amounted to Euro 41,797 million as at 30 September 2010, while loans to individuals increased by 3.1%, sustained by the growth of 4.3% in mortgage loans. The structure of the loan portfolio remained stable and diversified as at 30 September 2010, with loans to companies representing 54.5% of total loans portfolio and therefore the main component of loans to customers portfolio, while loans to individuals represented 45.5% of total loans to customers, which is composed above all by mortgage loans. The evolution in loans to customers reflects mainly the performance of the activity in Portugal, which decreased 2.5% from 30 September 2009, influenced by the drop in loans to companies, despite de rise in loans to individuals, supported by the growth of 1.9% in mortgage loans. Loans to customers in the international activity increased 8.4%, from 30 September 2009, benefiting from the performances achieved in both loans to companies and loans to individuals, highlighting mortgage loans (+11.5%), boosted by most of the foreign associated companies, in particular by Millennium Bank in Poland, which benefited additionally from the exchange rate effect, as well as by the subsidiary companies in Mozambique and in Angola. LOANS TO CUSTOMERS (GROSS) Euro million 30 Sep Sep. 09 Change 10 / 09 Individuals Mortgage loans 30,014 28, % Consumer loans 4,827 5, % Companies 34,841 33, % Services 16,301 16, % Commerce 4,860 5, % Other 20,636 21, % 41,797 43, % Subtotal 76,638 76, % Of which: Portugal activity 59,573 61, % Foreign activity 17,065 15, % Loans associated with assets in the process of sale (1) Total 76,638 77,612 (1) Millennium bank Turkey and Millennium bcpbank USA. Credit quality, measured by the non-performing loan indicators, in particular overdue loans by more than 90 days as a percentage of total loans, stood at 3.1%, in line with the evolution seen in previous quarters, reflecting the deterioration of the economic and financial conditions of families and companies. The coverage ratio for loans overdue by more than 90 days stood at 100.2% as at 30 September /86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

9 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 OVERDUE LOANS BY MORE THAN 90 DAYS AND IMPAIRMENTS AT 30 SEPTEMBER 2010 Euro million Overdue loans by more than 90 days Impairment for loan losses Overdue loans by more than 90 days / Total loans Coverage ratio Individuals Mortgage loans % 102.3% Consumer loans % 84.5% % 89.6% Companies Services % 100.0% Commerce % 93.0% Other % 110.1% 1,757 1, % 103.9% Total 2,379 2, % 100.2% Total customer funds were up by 1.9%, on a comparable basis, to Euro 66,971 million as at 30 September 2010 (Euro 65,734 million on the same date in 2009). The increase in total customer funds benefited from the commercial dynamism to further increase customer funds, leading to a growth of 8.4% in off-balance sheet customer funds and to the rise of 1.7% in customer deposits, despite the less favourable evolution in debt securities. The increase in off-balance sheet customer funds benefited from the performances in assets under management (+1.6%) and, most of all, in capitalisation insurance (+11.4%), which achieved the historic maximum amount of Euro 12 billion, during this third quarter of TOTAL CUSTOMER FUNDS Euro million 30 Sep Sep. 09 Change 10 / 09 Balance sheet customer funds Deposits 45,319 44, % Debt securities 4,763 5, % 50,082 50, % Off-balance sheet customer funds Assets under management 4,855 4, % Capitalisation insurance 12,034 10, % 16,889 15, % Subtotal 66,971 65, % Of which: Portugal activity 50,676 50, % Foreign activity 16,295 15, % Customer funds related to assets in the process of sale (1) Total 66,971 66,640 (1) Millennium bank Turkey and Millennium bcpbank USA. The increase in total customer funds was boosted by the international activity (+6.8%), sustained by the contribution from the activity in Bank Millennium in Poland in both balance sheet customer funds and offbalance sheet customer funds, benefiting additionally from the exchange rate appreciation of the Zloty 9/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

10 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 against the Euro, as well as from the growths reached by Millennium bim in Mozambique and Banco Millennium Angola, driven by the focus to further increase customer deposits. In the activity in Portugal, total customer funds increased slightly, despite the evolution in debt securities, and were positively influenced by the rise of 7.5% in off-balance sheet customer funds. On a quarterly basis, deposits from customers in Portugal increased by 2.5%, between the second and the third quarters of LIQUIDITY MANAGEMENT Balance sheet customer funds practically stabilised from 30 September 2009, yet showed a recovery during the third quarter of At the same time, there was a break in the funding markets support and an increase in risk premiums, affecting in particular the peripheral countries of the European Union with difficulties in terms of the correction of macroeconomic imbalances and the sustainability of public finance. In this context, Millennium bcp continued to identify and to guarantee the access to alternative sources of funding, particularly through the use of direct funding from the European Central Bank (ECB). The execution of the Group s financing plan defined for the first quarter of 2010, concerning wholesale funding, was in line with expectations, in particular, through a new securitisation operation, called Tagus Leasing, in the amount of Euro 1.2 billion, and the successful placement of a 2-year fixed rate debt issue in the amount of Euro 750 million and a 3-year floating rate debt issue in the amount of Euro 300 million, both under the Euro Medium Term Notes (EMTN) programme. In the second and third quarters of 2010, the greater restrictions on access to international debt markets and the increased cost of risk, strongly related with the increase in sovereign risk affecting some member states of the European Union including Portugal, implied greater difficulties for financing for financial institutions in general, and restrained the implementation of the Group s liquidity plan defined for the period. Despite the adverse environment, in the third quarter of 2010, Millennium bcp showed an improvement in the commercial gap and maintained adequate levels of liquidity, including through the use of Money Market and funding operations with the European Central Bank, and simultaneously was able to further strengthen the pool of assets eligible as collateral in potential refinancing operations with Central Banks to Euro 17.8 billion, as at 30 September 2010, compared with Euro 16.5 billion as at 30 June CAPITAL The capital ratios as at 30 September 2010 were determined in accordance with the Basel II guidelines, with the calculation of capital requirements following the standardised approach with respect to credit risk. During 2009, subsequent to the authorization from the Bank of Portugal, the Group applied the standard approach for operational risk and the internal models approach for generic market and foreign exchange risk, in the perimeter centrally managed from Portugal. The consolidated solvency ratio, as at 30 September 2010, stood at 10.2%, with Tier I standing at 8.5%, above the minimum limit of 8% recommended by the Bank of Portugal. In the scope of the application of Basel II methodologies for the calculation of capital requirements, adopted by the European Union through the EU directives, and transposed to Portuguese national law in 2007, Millennium bcp requested formal authorisation from the Bank of Portugal to implement the IRB approach for credit and counterparty risk. Regarding the stage of the process under review by the Bank of Portugal concerning the use of the IRB approach, Millennium bcp calculated pro forma capital ratios according to the aforementioned IRB approach. According to this approach the estimated Tier I and total capital ratios reached 9.0% and 10.0%, respectively, as at 30 September Core Tier I was mainly influenced by the negative effect related to the amortisation of the deferred adjustments related to the transition to IFRS, the mortality table of 2005 and the actuarial losses of 2008, despite the retention of the Group s net income in the period. The capital ratios presented do not include the effects related to the sale of the operations in Turkey and USA. Additionally, risk weighted assets contributed favourably to the performance of capital ratios, given that they fell between 30 June 2010 and 30 September 2010, influenced, on the one hand, by the evolution of 10/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

11 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 the activity in this period, in particular by the reduction in loans to customers, and on the other, by the measures implemented to optimize and reinforce collaterals. SOLVENCY Standardised Pro forma IRB (1) Euro million 30 Sep. 10 (2) 30 Jun.10 (2) 30 Sep. 10 (2) 30 Jun. 10 (2) Own Funds Tier I Capital 5,282 5,333 5,265 5,288 of which: Preference shares and Perpetual subordinated debt securities with conditional coupons 1,859 1,882 1,934 1,930 Other deduction (3) (30) (44) (564) (561) Tier II Capital 1,284 1, Deductions to Total Regulatory Capital (213) (295) (149) (158) Total Regulatory Capital 6,353 6,254 5,792 5,781 Risk Weighted Assets 62,107 62,359 58,186 59,527 Solvency Ratios Core Tier I 5.6% 5.6% 6.7% 6.6% Tier I 8.5% 8.6% 9.0% 8.9% Tier II 1.7% 1.5% 0.9% 0.8% Total 10.2% 10.0% 10.0% 9.7% (1) The presented pro forma ratios were calculated in accordance with the IRB methods, taking into consideration the revision process, by the Bank of Portugal (BoP), of the submission of the proposal to adopt these methods. Had been considered estimates of the probability of default and the lost given default (IRB Advanced) for the retail portfolio collateralized by commercial and residential real state, and estimates of the probability of default (IRB Foundation) for corporate portfolio, in Portugal. In the 1st semester of 2009, the Bank received authorization from BoP to adopt the advanced approaches (internal models) to the generic market risk and the adoption of the standard approach for the operational risk. (2) The amounts and the ratios presented do not include the impacts from the sale of 95% of Millennium bank AS in Turkey, which will have an estimated impact on Tier I of around +6 b.p., and from the sale of the operation in the USA. (3) Includes, in particular, deductions related to the shareholdings in Millenniumbcp Ageas and Banque BCP (France and Luxembourg). 11/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

12 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 SEGMENTAL REPORTING Millennium bcp offers a wide range of banking activities and financial services in Portugal and abroad, focusing on Retail Banking, Companies, Corporate & Investment Banking and Private Banking & Asset Management. Segment description The Retail Banking segment includes: (i) the Retail Bank in Portugal, where the strategic approach is to target Mass Market customers, those who appreciate a value proposition based on innovation and speed, as well as Prestige and Small Business customers, whose specific characteristics, financial assets or income imply a value proposition based on innovation and personalisation, requiring a dedicated Account Manager; and (ii) ActivoBank, a bank focused on clients with a young spirit, intensive users of new communication technologies who prefer a banking relationship based on transparency, featuring simple, modern products and services. The Companies segment, in Portugal, covers the financial needs of companies with an annual turnover between Euro 7.5 million and Euro 100 million, focuses on innovation, offering a wide range of traditional banking products complemented by specialised financing. Within the scope of the cross-selling strategy, the Companies segment also acts as a distribution channel for financial products and services of the Millennium bcp business areas as a whole. The Corporate and Investment Banking segment includes: (i) the Corporate network in Portugal, targeting corporate and institutional customers with an annual turnover in excess of Euro 100 million, providing a complete range of value-added products and services; (ii) the Investment Banking unit, which specialises in capital markets, providing strategic and financial advisory, specialised financial services Project finance, Corporate finance, Securities brokerage and Equity research - as well as structuring risk-hedging derivatives products; and (iii) the activity of the Bank's International Division. The Private Banking and Asset Management segment, for purposes of the geographical segments, comprises the Private Banking network in Portugal and subsidiary companies specialised in the asset management business in Portugal. In terms of business segments, it also includes the activities of the Banque Privée BCP and Millennium bcp Bank & Trust. The Foreign Business segment, for the purpose of geographical segments, comprises the operations outside Portugal, in particular Bank Millennium in Poland, Millennium bank in Greece, Banque Privée BCP in Switzerland, Banca Millennium in Romania, Millennium bim in Mozambique, Banco Millennium Angola in Angola and Millennium bcp Bank & Trust in the Cayman Islands, Millennium bank in Turkey (in the process of being sold) and Millennium bcpbank in the United States of America, whose sale was completed on 15 October The Foreign Business segment, in terms of the business segments, comprises the Group operations outside of Portugal referred to above, excluding BCP Banque Privée in Switzerland and Millennium bcp Bank & Trust in the Cayman Islands, which are included in the Private Banking & Asset Management segment. In Poland the Group is represented by a universal bank offering a wide range of financial products and services to individuals and companies nationwide; in Greece by an operation based on innovative products and services; in Switzerland by Banque Privée BCP, a Private Banking platform under Swiss law; and in Romania with an operation focused on individuals and small and medium-sized companies. Additionally, the Group is represented in Mozambique by a universal bank targeting companies and individual customers; in Angola by a bank focused on private customers and companies and public and private institutions; and in the Cayman Islands by Millennium bcp Bank & Trust, a bank designed for international services in the area of Private Banking to customers with high net worth (Affluent segment). 12/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

13 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 Business segment activity The figures reported for each business segment result from aggregating the subsidiaries and business units integrated in each segment, including the impact from capital allocation and balancing process of each entity, both at balance sheet and income statement levels, based on average figures. Balance sheet headings for each subsidiary and business unit are re-calculated, given the replacement of their original own funds by the outcome of the capital allocation process, according to regulatory solvency criteria. As the process of capital allocation follows the regulatory criteria of solvency in place, the risk weighted assets and, consequently, the business segments capital allocation, were determined in accordance with the Basel II framework, applying the standard approach for calculating capital requirements for credit risks. In 2009, subsequent to the authorisation from the Bank of Portugal, the Bank adopted the standard approach for operational risk and the internal models approach for general market risk and foreign exchange risk, for the perimeter managed centrally from Portugal. Each operation is balanced through internal transfers of funds, with no impact on consolidated accounts. To ensure comparability for this information the structural changes that occurred in the second half of 2009 and in the first half of 2010 in the organisation of the segments were reflected in the 2009 figures: Retail Banking and Business Banking were individualised, while Corporate was included in the Corporate & Investment Banking segment. The business fully accounted in the Millennium BCP Bank & Trust in the Cayman Islands has been considered, in the Foreign Business segment, where previously it was only partially reflected in the Private Banking & Asset Management segment. A capital allocation of each business segment in the first nine months of 2010 was 6.5% and was considered, for comparative purposes, the same percentage of capital allocation as in the same period of Each segment s net contribution reflects the individual results achieved by its business units, independent of the percentage held by the Group, including the impact of movements of funds described above. The following information is based on financial statements prepared according to IFRS and on the organisational model in place for the Group, as at 30 September /86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

14 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 Retail Banking The net contribution from Retail Banking in Portugal stood at Euro 81.7 million in the first nine months of 2010, showing a reduction of 26.1% compared to Euro million in the first nine months of 2009, reflecting the evolution in net interest income. The decrease in net interest income includes the effect from the reduction in deposits and credit, determined by the decrease in volumes, particularly in loans to customers, as well as by lower net interest income rates. Other net operating income showed a positive performance, from the same period in 2009, determined by the evolution in commissions related to customer loyalty programs, in particular commissions associated with deposits, with mortgage lending and with risk insurance. Operating costs dropped from the first nine months of 2009, driven by the measures implemented to simplify the organization and to optimize processes, as well as by the reduction in the number of employees. The impairment charges remained at the same level as the amount posted in the first nine months of 2009 as a result of the joint effort between the areas of loan granting and loan recovery. Total customer funds, reflecting the commercial effort to retain and further increase customer funds, stood at Euro 35,508 million as at 30 September 2010, compared to Euro 35,511 million as at 30 September Customer loans decreased 3.0% to Euro 33,905 million as at 30 September 2010, compared to Euro 34,946 million posted on the same date in 2009, supported by the reduction in mortgage loans, loans for property development, consumer credit and loans to companies. Euro million 30 Sep Sep. 09 Change 10 / 09 Profit and loss account Net interest income % Other net income % % Operating costs % Impairment % Contribution before income taxes % Income taxes % Net contribution % Summary of indicators Allocated capital 1,287 1, % Return on allocated capital 8.5% 10.8% Risk weighted assets 19,801 21, % Cost to income ratio 68.6% 67.4% Loans to customers 33,905 34, % Total customer funds 35,508 35, % Note: Loans to customers and customer funds on monthly average balances. 14/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

15 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 Companies The Companies segment in Portugal posted a net loss of Euro 8.4 million in the first nine months of 2010, compared with a positive net contribution of Euro 27.9 million in the first nine months of The performance of this segment was determined by the higher impairment charges, despite the increase in operating income. Other net operating income increased 72.0% over the first nine months of 2009, influenced by the favourable performance in commissions, in particular commissions related to financial services of investment, currency financing, credit for signing and demand deposits. This increase more than offset the reduction in net interest income from deposits, which was determined by the decrease in spreads from operations with customers. Quarterly, net interest income showed an upward trend in the third quarter of 2010, from the three previous quarters, as a result of the re-pricing policy implemented in loan operations, in order to adequately reflect the increased implicit cost of risk from refinancing operations on new loans granted. The increase in impairment charges posted in the first nine months of 2010, when compared with the same period in 2009, resulted from the higher levels of non-performing loans. Customer deposits decreased, dented by the current economic and financial cycle, leading to a decrease in total customer funds of 15.2%, from Euro 1,975 million at 30 September 2009 to Euro 1,675 million at 30 September Loans to customers fell 9.6% to Euro 10,096 million as at 30 September 2010, compared to Euro 11,163 million posted on the same date in 2009, reflecting the impact of the financial crisis on the investment decisions of economic agents and determining the reduction in the national currency loans, commercial paper and factoring. Change Euro million 30 Sep Sep / 09 Profit and loss account Net interest income % Other net income % % Operating costs % Impairment % Contribution before income taxes (11.4) Income taxes (3.0) Net contribution (8.4) Summary of indicators Allocated capital % Return on allocated capital -1.8% 5.2% Risk weighted assets 9,875 11, % Cost to income ratio 22.1% 22.6% Loans to customers 10,096 11, % Total customer funds 1,675 1, % Note: Loans to customers and customer funds on monthly average balances. 15/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

16 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 Corporate & Investment Banking The Corporate & Investment Banking segment showed a net contribution of Euro 58.6 million in the first nine months of 2010 compared to Euro million posted in the same period in The performance of this segment was determined by the higher impairment charges in the Corporate network. The decrease in other net operating income was due to lower results from financial operations in investment banking, despite the increase in fees in the Corporate network, with emphasis on the increase in commissions associated with credit for signature, national currency loans and commercial paper. Net interest income was hindered by the unfavourable interest rate effect, resulting from the decrease in spreads of customer operations, despite the positive volume effect in loans to customers. Operating costs also showed a favourable evolution, decreasing from the first half of 2009, and showing sustained savings, as well as synergies associated with the process of merging Banco Millennium bcp Investimento into Banco Comercial Português. The total customer funds decreased 5.7% to Euro 10,577 million as at 30 September 2010, compared with Euro 11,216 million as at 30 September 2009, as a result of the decrease in customer deposits. Loans to customers amounted to Euro 13,578 million at end of September 2010, increasing 8.9% from Euro 12,463 million recorded at the end of September 2009, benefiting from the performance in credit to real estate, national currency loans and commercial paper. Euro million 30 Sep Sep. 09 Change 10 / 09 Profit and loss account Net interest income % Other net income % % Operating costs % Impairment % Contribution before income taxes % Income taxes % Net contribution % Summary of indicators Allocated capital % Return on allocated capital 7.9% 16.1% Risk weighted assets 15,267 14, % Cost to income ratio 19.1% 19.2% Loans to customers 13,578 12, % Total customer funds 10,577 11, % Note: Loans to customers and customer funds on monthly average balances. 16/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

17 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 Private Banking & Asset Management The Private Banking & Asset Management segment, considering the geographical segmentation criteria, posted a net loss of Euro 6.9 million in the first nine months of 2010, compared with a positive net contribution of Euro 0.8 million in the first nine months of This evolution includes the decrease in net interest income, reflecting the reduction in both the business volumes and the interest rates margin for customer funds and loans to customers. The decrease in other net operating income was driven by the performance of International Private Banking, which is associated with the decrease in commissions on foreign currency loans and credit for signature. Operating costs showed a favourable performance, from the first nine months of 2009, benefiting from the decrease in other administrative costs, mainly influenced by IT projects. Total customer funds decreased by 0.7%, from 30 September 2009, supported by the good performance in capitalization insurance, which partially offset the performance in customer deposits. Loans to customers amounted to Euro 1,389 million as at 30 September 2010, compared to Euro 2,178 million as at 30 September 2009, as a result of the reduction in loans to customers from Private Banking in Portugal associated, partially, with the local currency loans. Euro million 30 Sep Sep. 09 Change 10 / 09 Profit and loss account Net interest income % Other net income % % Operating costs % Impairment % Contribution before income taxes (9.6) Income taxes (2.7) Net contribution (6.9) Summary of indicators Allocated capital % Return on allocated capital -15.7% 1.3% Risk weighted assets 899 1, % Cost to income ratio 70.5% 53.8% Loans to customers 1,389 2, % Total customer funds 6,837 6, % Note: Loans to customers and customer funds on monthly average balances. 17/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

18 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 Foreign Business The net contribution of the Foreign Business segment, considering the geographical segmentation criteria, totalled Euro 58.5 million, compared with a net loss of Euro 9.3 million in the first nine months of 2009, benefiting from the rise in net operating revenues. The increase in net interest income by 34.4%, from the first nine months in 2009, benefited from all international operations (with the exception of Greece), boosted primarily by the performance of the activity in Poland, due to the volume and interest rate effect, and by the subsidiary companies in Romania and Angola, as a result of the growth in business volumes. In other net operating income it is worth noting the positive contributions of the subsidiary companies in Poland (related to the increase in commissions associated with cards, customer deposits and investment funds), Angola (relating to commissions, associated with the growth of bank transfers and loans to customers) and Mozambique (materialised in the results obtained in foreign exchange transactions with customers). The decrease in impairment charges and provisions of 23.8%, from the first nine months of 2009, is associated with the lower provisioning level posted by the operation developed in Poland, which offset the increase in impairment charges booked in Greece, Angola and Mozambique. Operating costs increased by 10.3% due to the growth in staff costs and administrative costs in the operations in Poland, Angola and United States of America, driven, respectively, by the effect from the exchange rate appreciation of the Zloty against the Euro, by the strategy of organic growth implemented in the Angolan market and by the depreciation of assets not included in the sale. Loans to customers rose 7.7% to Euro 16,514 million as at 30 September 2010, boosted by the performance in loans to individuals, reflecting the increases achieved in most foreign operations, particularly in developed operations in Angola and Mozambique. Total customer funds increased 9.2% to Euro 16,329 million as at 30 September 2010, influenced by the performance in customer deposits, which grew 7.8%, and capitalization insurance. Euro million 30 Sep Sep. 09 Change 10 / 09 Profit and loss account Net interest income % Other net income % % Operating costs % Impairment and provisions % Contribution before income taxes 75.2 (4.6) -- Income taxes Net contribution 58.5 (9.3) -- Summary of indicators Allocated capital 1,441 1, % Return on allocated capital 5.4% -1.0% Risk weighted assets 14,791 14, % Cost to income ratio 70.7% 73.9% Loans to customers 16,514 15, % Total customer funds (1) 16,329 14, % (1) Excludes Millennium bank Turkey and Millennium bcpbank USA in 2010 and in /86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

19 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 SIGNIFICANT EVENTS The main events of the third quarter of 2010 included implementing the strategy of focusing on the international portfolio, including the acceleration of expansion of Angola s operations, the completion of the sale of the United States unit and the inauguration of the Macau onshore branch; strengthening the policy of proximity to customers; promoting of innovation as a key competitive advantage; launching of several campaigns to increase customer funds, with the aim of contributing to reducing the commercial gap; and the re-pricing initiatives of adjust for the increase in the cost of funding. Of special note: Continued expansion in Angola, with Banco Millennium Angola increasing, already at the beginning of October, its network to 33 branches, offering the business community and individuals innovative financial products and services, and contributing to the economic development of the country; On 15 October 2010, Millennium bcp completed the transaction with Investors Savings Bank to sell all the branches of Millennium bcpbank in the United States of America, all of the deposits of approximately Euro 445 million and part of the loan portfolio of approximately Euro 145 million. As a result of this transaction, Millennium bcp no longer engages in the business of banking in the USA; Opening of Millennium bcp s full-service onshore branch in Macau,with the aim of creating an international platform for business for China, Europe and Portuguese-speaking Africa; Millennium bcp has reopened on Saturdays at selected branches, adding one more business day of banking services to each week, an effort aimed at strengthening the Bank's close relationship and trust with customers; Celebration of the 10 th anniversary of Millennium bank s Greek unit and of Millennium bim s 15 th anniversary; Launching of a commercial campaign entitled 25 years of sharing the future with you, to commemorate the 25 th anniversary of Millennium bcp, with a strong visual - the image of a package ready to be opened - inviting customers to discover the many initiatives designed to commemorate the date. Of special note within these initiatives is the 25 Years Time Deposit, which earns interest in proportion to the year the customer's current account was opened; Renewal of Millennium bcp s contract for issuing and managing American Express cards with exclusive rights in Portugal for a period of seven years, a strong sign of the confidence that the fifth largest brand in the financial world has in Portugal, with Millennium bcp as its partner; Millennium Meetings took place in Guarda and in Vila Real, helping strengthen commercial and institutional enthusiasm. The Meetings aim to create opportunities for dialogue that bring the Bank closer to its customers; Following the change of the trading name of Fortis Group, Millennium bcp's partner in Portugal for insurance, to Ageas Group, the trade name of the partnership with Millennium bcp is now called Millenniumbcp Ageas. Despite the new name, the business model remains unchanged; Inclusion in the ASPI Eurozone sustainability index, one of 120 companies in the Euro zone with the best performance in terms of sustainability as determined by Vigeo, the European leader in CSR evaluation, in accordance with the index's requirements. Millennium bcp is the only Portuguese bank included in this index; Millennium bim has undertaken a variety activity in the social responsibility segment. Millennium bim's Social Responsibility Programme, entitled More Mozambique for Me aims to reach the various niches of society in need of support in various ways; Presentation of Millennium Atlantico Academy in Luanda, a pioneering project in Angola which aims to deliver high quality training to meet the needs and expectations of the Angolan business sector, particularly in finance, banking and insurance; On July 23, the results of the stress tests in Europe, coordinated by the CEBS (Committee of European Banking Supervisors), in cooperation with the European Central Bank and the Bank of Portugal, were released. The design of scenarios and execution of the test were the sole responsibility of the supervisors involved. The threshold imposed for the Tier I ratio in the stress scenario, was demanding, at 6% -- 2% above the 4% minimum required by the Bank of Portugal. According to the results, under the most adverse scenario Millennium bcp s Tier I ratio would 19/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

20 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 evolve from 9.3% in December 2009 to 8.4% in December The results obtained by Millennium bcp are positive, showing that the bank is solid, adequately capitalized and resilient, even in extreme scenarios; Fitch Rating Agency announced that it has concluded the revision process of ratings for five Portuguese Banks, resulting, as for Banco Comercial Português, in the revision the long-term rating from A+ to A, in the reaffirmation of the short-term rating at F1 and maintenance of a negative outlook; The Moody's Rating Agency, stated that, following the review of the Republic of Portugal s rating by two notches, from Aa2 to A1, it decided to downgrade the deposits rating of Millennium bcp also by two notches, from A1 to A3. Moody's affirmed Millennium bcp s Bank Financial Strength Rating, at D+ and the Baseline Credit Assessment ( Baa3 ), which depend exclusively on factors intrinsic to the Bank; Millennium bcp was named Best Bank in Portugal for Real Estate lending by Euromoney magazine; Millennium bcp received the Best Annual Report Financial sector award at the 24 th edition of Investor Relations & Governance Awards, an initiative of consultants Deloitte and the Diário Económico newspaper; Millennium bcp was distinguished with two awards for Excellence in Communication in the APCE 2010 Grand Prix, the annual initiative of the Portuguese Association of Business Communication (APCE); For the sixth year in a row, Millennium's online banking system for individual customers has been judged the best in Poland in the World's Best Internet Banks competition, held by the international business magazine Global Finance; EMEA Finance magazine distinguished Millennium Angola as the Best Foreign Bank in Angola and Millennium bim, for the second consecutive year, as Best Bank in Mozambique, in the scope of the African Banking Achievement Awards 2010; Millennium bim was named one of the top five domestic banks in Africa by IC Publications - Publisher of African Banker Magazine; Millennium bank was presented, for the third year in a row, with the 2009 EUR Straight - Through Processing Excellence Award by Deutsche Bank. In October 2010, BCP reached an agreement with the former Board Members now retired, with one exception, in order to, according to Banco Comercial Português s perspective, bring the Retirement Pensions of former Board Members into line with limits of Article 402, Number 2, of the Companies Code. Regarding the former board member with whom no agreement was reached, a legal action was distributed aimed to achieved the same objective; In October 2010, the Bank, in the process 1557/08 point 3TFLSB related to the shareholders campaigns associated with BCP s capital increases in 2000 and 2001, was acquitted of all the following charges: (i) 1 very serious offence by excessive intermediation; (ii) 41 very serious offences by disrespect of the duty to give preference to the shareholders interests; (iii) 57 very serious offences by the failure of the obligation to preserve documents; (iv) 1 very serious offence by insufficient information quality provided to regulatory entities. This deliberation may be appealed. 20/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

21 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 ECONOMIC EMVIRONMENT World economic activity seems to have fared better than expected during the first half of 2010, with stronger and more sustainable growth stemming from the emerging countries whereas in the advanced economies the correction of severe macroeconomic imbalances keeps running its course. Financial constraints on public finances preclude the continuation of expansionary policies and, in many countries, demand drastic changes in economic policy. Consequently, it is likely that the pace of global economic growth will continue moderate into Despite being closer to normalcy, some peculiar behavior is still discernible in financial markets relative performances. While emerging markets stock indices have now fully recovered to pre-crisis levels, the U.S. and Germany's sovereign yields remain at very low levels historically. Such marked differences in the assessment of the underlying economic situation are also a feature among the major central banks. The Japanese Central Bank along with the Federal Reserve and the Bank of England are willing to go further in supporting economic activity, in order to offset the negative impact expected as a result of fiscal austerity. On the other hand, the European Central Bank is pursuing the rapid normalization of its liquidity operations. Hence, the Euribor interest rates increased during the third quarter of this year, on average to levels above the main refinancing rate (1%), and the euro currency appreciated in effective terms. The return to a path of sustainability of public finances has been the main distinguishing factor across markets in the euro area. The countries with sound public finances or revealing a budgetary execution ahead of or in line with initial plans have recorded slight decreases of their risk premiums. By contrast, Ireland and Portugal, due to the effort to support the financial sector in the former and the poor budget execution in the later, faced significant increases in their sovereign yields. For 2011, a much tighter fiscal policy seems unavoidable, designed to balance public finances over time, and this very likely exert a negative impact on these countries growth dynamics. Rebuilding a climate of confidence among the non-resident investor community is of the utmost importance for the correction of excessive indebtedness to occur in a consistent but controlled manner, so as not to cause irremediable disruptions in economic activity and the social environment. Apart from these particular situations, Poland continues to distinguish itself through its path towards European convergence, while the African countries feature solid development, both recording economic growth rates well above the European Union. Credit growth has been stabilizing in most European countries, after the intense deceleration of the previous two years. However, growth rates remain modest. The financial crisis has marked a setback in the level of integration of European interbank markets by demanding a greater share of stable and domestic resources in financial institutions liabilities. This change seems to be of a more persistent nature. The proposed changes to banking regulations include, in addition to the significant increases in minimum capital requirements, monitoring instruments that pertain to the type of bank financing. Also planned is the introduction of special taxes to be levied according to banks liabilities. These proposals, on the liquidity, capital and tax burden, despite the prolonged period of adjustment that has been allowed, configure objective constraints to banking activity in terms of both business volumes and profitability over the medium term. 21/86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,

22 Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM /86 Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number and the share capital of EUR 4,694,600,