Portuguese Banks Panel Banco BPI. Morgan Stanley European Financials Conference London, 31 March - 2 April 2009

Transcription

1 Portuguese Banks Panel Banco BPI Morgan Stanley European Financials Conference London, 31 March - 2 April 2009

2 I. Managing BPI since the financial crisis emerged II. The impact of the crisis in BPI III. Where we stand 2

3 Four clear priorities Capital Liquidity Risk Control Clients 3

4 Strong capital Capital Tier I Y average 7.0 Core capital

5 Strong capital Capital CORE CAPITAL (31 Dec.08) Totta BPI Banesto Santander Popular CGD Sabadell Pastor Bankinter BBVA BCP BES 1) 7.2% 7.2% 7.1% 6.8% 6.7% 6.5% 6.3% 6.2% 5.8% 8.1% 8.0% 2) 5.7% 7.9% Note: Bank of Portugal established a deferment regime until 30 Dec for the recognition of regulatory capital impacts of the negative actuarial deviations in pension funds registered in This had a positive impact in core Tier I ratios of 1p.p. in BPI, 0.8 p.p. in BCP and 0.9 p.p. in BES, at 31 December ) Under BIS II Standard method, in use at 31 Dec.08. 2) After the impact of the capital increase. Under IRB Foundation, according to figures discosed by BES, the core Tier I would be 6.1% at 31 Dec.08 and the core Tier I after the capital increase would be 8.3%. 5

6 Fully funding new loans with new deposits Liquidity Consolidated (Bi. ) Domestic activity Bi Jan.07 - Dec.07 Jan.08 - Dec.08 On-balance sheet resources (change) Net loan portfolio (change) 1) 1) Excluding insurance capitalisation 6

7 Net creditor in the interbank money market Liquidity SHORT-TERM LIQUIDITY SURPLUS Bi. Consolidated Domestic Dec 06 Jun 07 Dec 07 Jun 08 Sep 08 Dec 08 Note: in the calculation of the short-term gap surplus it is not included Cash reserve requirements and deposits with the Bank of Portugal. 7

8 Comfortable situation in resources and liquidity Liquidity RESOURCES STRUCTURE Domestic activity Total resources (Bi. ) Net short term resources MLT resources MLT customer resources 5% 27% 6% 24% 8% Customer deposits 62% 69% 1) Excluding capitalisation insurance. Loans / deposits Loans / On-balance sheet customer resources 1) -5% Dez. 07 Dez % 138% 141% 124% Liquidity surplus 8

9 BFA: strong capitalisation and high liquidity Liquidity BALANCE SHEET AS OF 31 DECEMBER 2008 Banco de Fomento Angola M. Loans to Customers Securities Customer resources Liquidity Credit / Resources 32% Loans to CI Other Other Shareholders Equity 9

10 Comfortable funding outlook Liquidity MLT DEBT MATURING 2013 FUNDING CAPACITY Bi Potential issuance with guarantee by the Portuguese State Eligible Assets for ECB refinancing Short term net credit position Σ 09/13 10

11 Cost of credit risk Risk mgt Domestic activity International activity IIMPARMENTS & CREDIT LOSSES as % of loan portfolio 0.41% 0.33% 0.39% 0.28% Average 02 / % 0.40% BANCO DE FOMENTO ANGOLA P&L Annual provisions Dec. 07 Dec % 3.51% 1.52% 0.31% 0.21% 0.30% 0.19% 0.21% 0.21% 0.12% 0.11% 0.30% Balance sheet Loans in arrears Provisioning cover 1.0% 0.7% 602% 629% Loan impairments Net credit loss 1 1) Loans impairments less recoveries of loans in arrears previously written off 11

12 Low exposure to equities Equity portfolio decreased to 58 M. Risk mgt Exposure to equities of the pensions fund decreased to 18% of assets M. 796 EQUITY PORTFOLIO (available for sale) % 100% Equities 61% 18% M. Debt emerging countries 319 M. 4% % 25% Cash & bonds 65% Jun. 07 Dec. 07 Mar. 07 Jun. 07 Sep. 08 Dec. 08 8% Real estate 13% 30 Jun Dec

13 Portugal - Strengthening Clients relationships Domestic activity LOANS TO CUSTOMERS ON-BALANCE SHEET CUSTOMER RESOURCES NEW CLIENTS CAPTURED Bi. Bi. th. +5.4% +14.0% +8.6%

14 BFA - Strong business growth and market leading positions M. US$ LOANS TO CUSTOMERS M. CUSTOMER RESOURCES CLIENTS +24% US$ +89% x mil +37% 405 Excellent position to take advantage of strong growth opportunity in Angola Leading market positions Loans Deposits # 1 # 2 Dec.08 Market share 21% 20%

15 I. Managing BPI since the financial crisis emerged II. The impact of the crisis in BPI III. Where we stand 15

16 Consolidated net profit down 58% NET PROFIT M. -58% Excluding BCP, BFA and early retirements impacts % Capital losses and impairments in BCP Early retirements Capital gains Sale of 49.9% of BFA 08 16

17 Net profit in the international activity increased 94% NET PROFIT M. 94% BCI Mozambique BFA Angola Attributed profit to the BPI Group Minority interests (49.9% of income Dec.)

18 Impacts of the international financial crisis Domestic activity Profits from financial operations Commissions Loan impairments Decrease of the trading profits Financial result derived from pension funds close to zero after June 08 (reduction of pension fund financing surplus and assumption of expected pension fund rate of return equal to discount rate) Decrease of asset management commissions: strong decrease of the volumes under management as a result of depreciation of assets and redemptions Decrease of investment banking commissions due to the strong reduction of capital markets activity (M&A, Public Offers, Brokerage) Increase of loan impairments: relatively good credit loss as a % of portfolio, but significant increase in amount due to the slowing down of the economic activity 18

19 Impacts of the international financial crisis Domestic activity Net interest income Increase of the average cost of funding Strong deceleration in the credit growth Gradual adjustment of the credit spreads in order to reflect the increase of the banks s financing costs Commercial banking commissions Moderate growth in line with general trends in commercial banking business (loans, cards, insurance, etc.) Decrease of cross-subsidies among products and segments Cost control In response to the prevailing market conditions the bank reinforced cost control measures 19

20 I. Managing BPI since the financial crisis emerged II. The impact of the crisis in BPI III. Where we stand 20

21 BPI Management priorities for 2009 Five priorities: Capital Since the international financial crisis emerged Liquidity Risk Control Clients Profitability 21

22 Investment case Strong capital Comfortable liquidity and funding position Sound risk indicators Improved commercial capacity will leverage play on the recovery of the Portuguese economy Room to develop highly profitable investment banking unit Excellent position to take advantage of growth opportunities in Angola and Mozambique 22

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