CORPORATE PRESENTATION November 2017

Transcription

1 CORPORATE PRESENTATION November 2017

2 Disclaimer This document is not an offer of securities for sale in the United States, Canada, Australia, Japan or any other jurisdiction. Securities may not be offered or sold in the United States unless they are registered pursuant to the US Securities Act of 1933 or are exempt from such registration. Any public offering of securities in the United States, Canada, Australia or Japan would be made by means of a prospectus that will contain detailed information about the company and management, including financial statements The matters discussed in this document may include forward-looking statements that are subject to risks and uncertainties. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of BCP to be materially different from future results, performance or achievements expressed or implied by such forward looking statements. Many of these risks and uncertainties relate to factors that are beyond BCP's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of regulators and other factors such as BCP's ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which BCP operates or in economic or technological trends or conditions, including inflation and consumer confidence. Attendees at this presentation are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Even if BCP s financial condition, business strategy, plans and objectives of management for future operations are consistent with the forward-looking statements contained in this presentation, those results or developments, as well as BCP past performance, may not be indicative of results or developments in future periods. BCP expressly disclaims any obligation or undertaking to release any updates or revisions to these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law The information in this presentation has been prepared under the scope of the International Financial Reporting Standards ( IFRS ) of BCP Group for the purposes of the preparation of the consolidated financial statements under Regulation (CE) 1606/2002 First 9 months figures for 2016 and 2017 not audited 2

3 Agenda Strategic Plan Appendix 9M 2017 earnings Other information 3

4 Millennium bcp is a brand with unique international presence focused on key strategic markets Single brand Millennium Portugal Market share: 17.6% on loans, 17.4% on deposits Loans to Customers (gross): 37,947 million Customer funds: 51,493 million Employees: 7,281 Branches: 589 Macao On-shore branch Loans to Customers (gross): 350 million Customer funds: 758 million Employees: 12 Branches: 1 Poland Market share: 4.4% on loans, 5.1% on deposits Loans to Customers (gross): 11,406 million Customers funds: 15,247 million Customers: 1.6 million Employees: 5,852 Branches: 359 BCP shareholding: 50.1% China (Guangzhou) Representation office 2 employees Loans market share: >11% Deposits market share: >12% Customers: >1,000,000 Employees: >1,800 Branches: 140 BCP shareholding: 22.5% De-consolidated from June 2016 Angola Mozambique Market share: 29.7% on loans, 28.0% on deposits Loans to Customers (gross): 1,086 million Customer funds: 1,461 million Customers: 1.8 million Employees: 2,609 Branches: 182 BCP shareholding: 66.7% Data as at September 30,2017, except market shares (August 2017) 4

5 Key highlights 1 2 Profitable operation with a recurring capacity to generate operating results in excess of 1 billion per annum Net interest benefits from continuing reduction in cost of deposits and repayment of CoCos: NIM of 2.2% in 9M17 (Portugal:1.8%, up from 0.6% in 2013) Consistent track record of delivering reduction in operating costs: cost to coreincome of 46%*, vs Eurozone s 78%. Largest operating restructuring in Portugal, with operating costs down by >40% from 2011 (pre-programme) Focused NPE management through a dedicated recovery strategy in Portugal: NPE reduction of 5.6bn from 12.8bn at year-end 2013 to 7.2bn at September 30, Total coverage** of 105% at September 30, Resilient international earnings contribution of 131mn in 9M Sustainable funding strategy: loans to deposits ratio at 93% as of September 30, ECB funding at 3.4 billion as of the same date, down from a maximum of 12.4 billion at year-end 2011 Enhanced capital position: fully implemented CET1 ratio of 11.7%, phased-in of 13.2%, compared to minimum required phased-in CET1 (SREP) of 8.15%; total phasedin capital ratio of 14.2% (SREP requirement: 11.65%) *Core income = net interest income + net fees and commission income. **By loan-loss reserves, expected loss gap and collaterals. 5

6 1 Net interest income to benefit from continuing reduction in cost of deposits and total funding costs Net Interest Income NIM ( mn) 9M M17 1.8% 1.5% 1.6% 1.0% 0.6% M17 NII to improve, as cost of time deposits keeps decreasing... (Portugal, spread on TDs book vs 3m Euribor, bps)... leading to a decrease in total funding costs (Interest expenses divided by Interest-bearing liabilities) M Front book -52 bp 2.41% 1.92% 1.21% 0.78% 0.50% M17 6

7 1 Consistent track record of delivering reduction in operating costs Operating costs down by > 40% vs 2011 (preprogramme)... Operating costs ( mn)...with a >30% reduction in branches... Branches (#) 1, * 448 * M M Sep and >25% reduction in employees Employees (#) Largest operating restructuring in Portugal Operating costs cumulative performance ** 9,959 8,584 7,795 7,459 7,333 7,281-22% Sep 17-40% BCP Top5 ex-bcp * Excluding non-usual items in 2016 and 2017: impact from revision of collective labour agreement net of restructuring costs. **Source: Companies financials. 7

8 1 Millennium bcp is one of the most efficient banks in the Eurozone Cost to core income* Cost to core income* Latest available data vs. peers in Portugal vs. Euro-zone banks 80% +2pp 78% 86% -41pp 46% 46% 46% 47% w/o non-usual items Bank 1 66% 59% Cost to income 73% 44% M17 Bank 2 63% 85% PPP (Pre-provision profit)** Bank 3 72% 100% Bank 4 53% 101% % 78% 9M13 9M17 *Core income = net interest income + net fees and commission income. ** Excluding non-usual items : impact from revision of collective labour agreement net of restructuring costs and gains on Visa transaction. 8

9 2 Asset quality metrics to benefit further from continued focus on NPE reduction Cost of risk and loan-loss charges NPEs (EBA definition) (Basis points) ( bn) Impairment charges ( mn) Cost of risk (basis points) 743 1, , Other p.a Already below the year-end target <7.5 NPLs>90d M17 Dec13 Dec14 Dec15 Dec16 Sep 17 Dec17 NPE total coverage* 86% 90% 93% 100% 105% Continued decrease of NPEs over the last 3.75 years at a pace of 1.5bn per year as a result of a stabilisation of the macro environment and the measures implemented Reduction of 5.6bn from Dec 13 to Sep 17 comprised of decrease in net new exits ( 1.5bn), write-offs ( 3.0bn) and sales ( 1.1bn) Implemented plan to reduce NPEs to < 7.5bn by yearend 2017, with the target already achieved in Sep 17 Dec13 Dec14 Dec15 Dec16 Sep 17 Cost of risk at 137bps in 9M17 reinforcing NPE total coverage* to 105% at end-sep 17 * Coverage by LLRs, collateral and expected loss gap. 9

10 2 Strong coverage levels NPE breakdown (September 2017) Total NPEs: 7.2bn NPE total coverage* 107% 105% 105% Companies 73% Individuals 27% Other NPEs 42% NPLs >90d 58% 71% 13% 23% 37% 46% 20% 18% 48% 41% Real estate collateral Cash, other fin. collat., EL gap LLRs Individuals Companies Total NPL>90d total coverage* Other NPE total coverage* 101% 108% 106% 118% 102% 105% 29% 41% 67% 23% 18% 6% 28% 55% 47% Individuals Companies Total Real estate collateral Cash, other fin. collat., EL gap LLRs 78% 47% 54% 16% 18% 27% 12% 39% 33% Individuals Companies Total Real estate collateral Cash, other fin. collat., EL gap LLRs *By loan-loss reserves, expected loss gap and collaterals. 10

11 3 Diversified and coherent international exposure delivering resilient contribution Net income ( mn, before non-controlling interests) Contribution to consolidated results* ( mn) Other Full year M17 9M M17 * Comparable, assuming shareholding in Bank Millennium (Poland) constant at 50.1% and excluding discontinued operations. 11

12 4 Stronger funding and liquidity Net loans ( bn) Deposits ( bn) -30% +7% Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Sep17 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Sep17 Commercial gap (net loans deposits) ( bn) Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Sep 17 Important deleveraging process: -30% loans +7% deposits which account for 83% of funding compared to 62% in 2011 Loans to deposit ratio at 93% versus 143% in 2011 Foreign operations self funded 143% Loans to deposits ratio 93% 12

13 4 Credit now stabilising (Billion euros) Performing portfolio Performing portfolio stable from end Structural change to the portfolio of loans to companies over recent years, with a lower weight of construction and real estate activities and of non-financial holding companies Dec 13 Dec 14 Dec 15 Dec 16 Sep 17 Companies portfolio Strong credit activity, both for individuals (new business up by 27.4% vs first nine months of 2016) and for companies (new leasing business: +19.6%; factoring invoicing: +21.3%) Dec 13 Construction, real estate, holding cos. Other activities Dec 16 Construction, real estate, holding cos. Other activities Sep 17 13

14 4 Stable deposits Customer deposits per type (Billion euros) Customer deposits per holder (Billion euros) Other (inc public sector) Individuals and companies Term deposits Dec 13 Dec 14 Dec 15 Dec 16 Sep 17 Stable deposits as the decrease of term deposits (due to historically low yields) has been compensated by expanding demand deposits On-demand deposits Customer deposits are now higher than at the end of 2013, in spite of the decrease of the deposits from public sector Dec 13 Dec 14 Dec 15 Dec 16 Sep 17 14

15 4 Continued reduction of ECB funding Outstanding debt repayments (medium-long term) ( bn) ECB funding ( bn) Already repaid Average To be repaid M >2018 Total collateral Buffer ECB funding Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Sep 17 Liquidity ratios (CRD IV/CRR) 124% 158% Net usage of ECB funding at 3.4 billion, compared to 12.4 billion at December 31, billion (net of haircut) of eligible assets available for refinancing operations with ECB, of which 3.2 billion are related to Portuguese sovereign debt, with a 9.1 billion buffer Future debt repayments (medium-long term) significantly lower than in the past NSFR (Net stable funding ratio) LCR (Liquidity coverage ratio) Compliance with relevant liquidity ratios 15

16 5 Enhanced capital position From equity to CET1 capital* Capital ratio* (Million euros) 6,052-1, Deductions % 4,423 CET1 ratio fully imp. 6.4% 9.3% 9.7% 11.7% 12.4% 13.2% Fully imp. Equity DTAs EL gap Stakes >10% Other CET1 fully imp. Dec09 Dec11 Dec16 Sep17 CT1 ratio, BoP definition CET1 ratio phased-in, CRDIV/CRR Minimum phased-in capital requirements (SREP) Pillar 1 Conservation buffer Countercyclical buffer Other syst. important institutions buffer Pillar 2 requirement s (P2R) Total require -ments Sep 17 Phased-in* CET1 4.50% 1.25% 0.00% 0.00% 2.40% 8.15% 13.2% Total capital 8.00% 1.25% 0.00% 0.00% 2.40% 11.65% 14.2% * Estimates including 9M earnings. 16

17 5 Capital in line with European peers, with high RWA density and leverage ratios Common Equity Tier 1 ratio Phased-in, latest available data vs. Euro-zone banks 13.2% * RWA density RWAs as % of assets, latest available information 44% 42% 25% 23% 52% 13.0% FR DE ES IT 12.1% Leverage ratio Phased-in, latest available data 13.4% 4.1% 4.9% 5.8% 6.1% 6.7% 12.0% FR DE ES IT *Estimates including 9M earnings. 17

18 Strategic plan for 2018 reaffirmed on a stronger equity base Consolidated 9M16 9M CT1 / CET1* Phased-in: 12.2% Fully implemented: 9.5% Phased-in: 13.2% Fully implemented: 11.7% 11% Loans to Deposits 100% 93% <100% Cost Income 46.0% Stated: 43.6% Excluding non-usual items: 45.1% <43% Cost-Core Income** 52.0% Stated: 45.8% Excluding non-usual items: 47.3% <50% Cost of risk 221 bp 120 bp <75 bp RoE*** -8.5% 4.2% 10% *Estimates including 9M earnings. **Core income = net interest income + net fees and commission income. ***Based on fully implemented CET1. 18

19 Investment case Return to normalization allows Millennium bcp to focus on its core strengths Distinct position Reference private sector bank in Portugal, and well-positioned in a rapidly changing landscape, following the completion of the restructuring plan successfully implemented over the last years: one of the most efficient banks in the Eurozone, with cost to core income ratio of 46% (Eurozone: 78%) and cost to income ratio of 43% Profitable commercial banking business model with highly recurrent operating results, supported by a continued track record of improvement in operating performance: PPP in excess of 1 billion per annum Profitable and self-funded international operations Strong balance sheet (phased-in CET1 ratio at 13.2%, loans to deposits of 93%) 19

20 Agenda Strategic Plan Appendix 9M 2017 earnings Other information 20

21 9M 2017 earnings Highlights Group Profitability Liquidity Capital Portugal International operations Conclusions 21

22 Summary 1 Net profit of million ( million in the first nine months of 2016), benefitting from the continued expansion of core net income to million in the first nine months if 2017*, compared to million in the same period of NPEs in Portugal, down by 1.4 billion in the first nine months of 2017 to 7.2 billion, are now lower than the 7.5 billion target for year-end 2017, with total coverage including guarantees increasing to 105% 3 The performing portfolio stabilised in the first nine months of 2017 in Portugal 4 Strong business performance, with Customer acquisition standing out. Active Customers for the Group total 5.4 million, 5.7% up from September 30, 2016 * million excluding a positive non-usual impact of 23.7 million on staff costs. 22

23 1 Highlights: improved profitability (Million euros) Core net income* Net income M13 9M14 9M15 9M16 9M Positive non-usual impact of 23.7 million (staff costs) Not including extraordinary gains on Portuguese sov. debt of 272 million M13 9M14 9M15 9M16 9M17 Core net income increases to million in the first nine months of 2017 ( million excluding a positive non-usual impact of 23.7 million on staff costs), with a noteworthy expansion in net interest income Significant expansion in core net income: +23.7% from million in the first nine months of 2016 One of the most efficient banks in the Eurozone, with cost to core income of 46% (44% cost to income) Net earnings of million in the first nine months of 2017 Substantial improvement from previous years losses *Core net income = net interest income + net fees and commission income - operating costs. 23

24 2 Highlights: improved asset quality (Million euros) Non-performing exposures (NPEs) 12,783 10,921 9,777 6,213 6,134 5,572 5,029 4,255 NPE total coverage* 8,538 7,168 Dec 13 Dec 14 Dec 15 Dec 16 Sep 17 86% 90% 93% 23% 28% 31% 39% 101% 105% 41% Other NPEs NPL>90d Coverage by impairment NPEs in Portugal down to 7.2 billion as at September 30, 2017, showing a strong pace of reduction from billion NPE reduction in the first nine months of 2017, now exceeding the annual reduction target to < 7.5 billion at year-end 2017 Significant increase in net new exits from NPE: 395 million in the first nine months of 2017 ( 103 million in the same period of 2016) NPE total coverage* increases to 105%, with coverage by impairment reinforced to 41% Dec 13 Dec 14 Dec 15 Dec 16 Sep 17 *By loan-loss reserves, expected loss gap and collaterals. 24

25 3 Highlights: credit stabilising in Portugal (Billion euros) Performing portfolio Performing portfolio stable from end Structural change to the portfolio of loans to companies over recent years, with a lower weight of construction and real estate activities and of non-financial holding companies Dec 13 Dec 14 Dec 15 Dec 16 Sep 17 Companies portfolio Strong credit activity, both for individuals (new business up by 27.4% vs firts nine months of 2016) and for companies (new leasing business: +19.6%; factoring invoicing: +21.3%) Dec 13 Construction, real estate, holding cos. Other activities Dec 16 Construction, real estate, holding cos. Other activities Sep 17 25

26 4 Highlights: strong business performance, especially as long as Customers and service are concerned Group Awards 3Q17 Customer base 5.4 million active Customers (+6% vs Sep. 2016) Best branch experience Best Customer Experience Awards Portugal Digital Customers 2.4 million active digital Customers (+13% vs Sep.2016) Best site/ financial services app ACEPI Navegantes Portugal #1 in both traditional and mobile banking Newsweek Friendly Bank Poland Portugal Best digital strategy ACEPI Navegantes Activobank Portugal Customer acquisition Individuals: >150,000 Customers Companies: >12,000 Customers 2017 Best commercial bank World Finance Activobank Portugal Digital Customers Individuals: >750,000 active Companies: >90,000 active Best Consumer Digital Bank Global Finance Portugal and Poland Closest to Customers, most innovating, most adequate products Data E Portugal Banking Category Marketeer Portugal Best Bank Euromoney Mozambique Credit activity Individuals: 1.4 billion in new credit Companies: > 480 million under the Portugal 2020 programme Consumer choice Superbrands Portugal and Mozambique Branch transformation Celent Model Bank Award Portugal Best private bank in Portugal The Banker Portugal Best Bank in Trade Finance Global Finance Mozambique Best bank in social responsibility Euromoney Poland 26

27 9M 2017 earnings Highlights Group Profitability Liquidity Capital Portugal International operations Conclusions 27

28 Profit of million in the first nine months of 2017, with a significant improvement of core net income (million euros) 9M16 9M17 YoY Impact on earnings Core net income (net int income+commissions oper. costs) % Non-usual items (staff costs) Core net income excluding non-usual items % Other income* Includes 91.0 million gains on Visa transaction % Operating net income (bef. impairment and provisions) % Impairment and provisions -1, % Net income before income tax Income taxes, non-controlling interests and disc. operations Net income *Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings. 28

29 Core net income increases in all geographies (Million euros) Core net income* Consolidated Portugal +23.7% Non-usual positive effect (staff costs) % M16 9M17 International operations % M16 9M17 9M16 9M17 *Core net income = net interest income + net fees and commission income - operating costs. 29

30 Net interest income boosted by the continued reduction in the cost of deposits and by CoCo repayment (Million euros) Net interest income Consolidated Portugal Net interest margin 1.9% 2.2% +12.8% 1, Net interest margin 1.6% 1.8% +9.0% M16 International operations 9M17 Net interest margin 2.7% +18.5% 3.1% M16 9M17 9M16 9M17 30

31 Increase of commissions in international operations stands out, stable in Portugal (Million euros) Fees and commissions Consolidated Portugal 9M16 9M17 YoY Banking fees and commissions % -1.6% Cards and transfers % Loans and guarantees % Bancassurance % Customer account related % 9M16 International operations 9M17 Other fees and commissions % Market related fees and commissions % Securities operations % % Asset management % Total fees and commissions % 9M16 9M17 31

32 Increased other income*, influenced by higher mandatory contributions and by gains on Visa transaction in 2016 (Million euros) Other income* Consolidated Portugal % % 9M M17 Visa transaction Mandatory contributions International operations Bank. sector extra cont. PT: 31.0 European ResolFund: 18.2 ResolFund/DGF PT: ,9% M16 9M17 Visa transaction Mandatory contributions M16 9M17 Visa transaction Mandatory contributions *Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings. 32

33 Cost reduction continues (Million euros) Operating costs Consolidated Portugal Cost to income 46.0% 43.6% Cost to core income* Depreciation Other administrative costs 52.0% 45.8% % +7.3% -0.1% Cost to income 47.2% 43.3% Cost to core income* 52.4% 45.6% M16 International operations M17 Cost to income 43.9% 44.0% Non-usual positive effect of 23.7 million Staff costs % Includes non-usual positive effect of 23.7 million Cost to core income* 51.3% 46.0% +5.1% M16 9M17 9M16 9M17 *Core income = net interest income + net fees and commission income. 33

34 making Millennium bcp one of the most efficient banks in the Eurozone Cost to core income* Latest available data vs. peers in Portugal vs. Euro-zone banks Cost to core income* 80% -2pp 78% 46% 46% 86% -41pp Banco 1 64% 59% Banco 2 76% 85% 46% 47% w/o nonusual items Banco 3 69% 100% Banco 4 53% 101% 57% 78% M17 *Core income = net interest income + net fees and commission income. 34

35 Strengthening the balance sheet: cost of risk now trending towards normalisation (Million euros) Impairment and provision charges Consolidated Portugal Cost of risk 270bp 137bp Cost of risk Other 221bp 1, % 120bp Other Loans 1, M % M International operations Loans Cost of risk Other 58bp % 71bp Loans M16 9M17 9M16 9M17 35

36 Lower delinquency and increased coverage (Million euros) Credit quality Consolidated Portugal NPE total coverage* NPE as a % of total credit NPEs 98% 19.0% 15.9% 9, % NPE total 103% 99% 105% coverage* 12.6% including debt securities (EBA definition) NPEs 9, % 7,168 Outros 4,176 8,079 3,350 Loan-loss reserves International operations Sep 16 Sep 17 3,408 2,932 NPL>90d NPL>90d as a % of total credit 5,808 4, % 9.3% NPE total coverage* NPEs 79% 82% % 911 Down from 944 million at June 30 Loan-loss reserves Sep 16 Sep 17 3,804 3,387 Loan-loss reserves Sep 16 Sep *By loan-loss reserves, expected loss gap and collaterals. 36

37 9M 2017 earnings Highlights Group Profitability Liquidity Capital Portugal International operations Conclusions 37

38 Growing Customer funds in Portugal and in international operations (Million euros) Total Customer funds* Off-BS funds Other BS funds 66,781 16,206 1, % Consolidated 70,231 17,966 1,575 Total Customer funds* in Portugal Other Term deposits Demand deposits +5.8% from Sep16 including OTRVs +4.5% 49,294 51,493 14,961 16,212 20,716 19,299 13,618 15,982 Sep 16 Sep 17 Term deposits Ondemand deposits 27,906 21,031 26,135 24,555 Tot. Customer funds* international operations Other Term deposits Demand deposits 17, % 18,738 2,883 3,329 7,190 6,837 7,413 8,573 Sep 16 Sep 17 Sep 16 Sep 17 *Deposits, debt securities, assets under management, capitalisation products and investment funds placed with Customers. 38

39 Credit portfolio reflects NPE reduction, in spite of support to economy (Million euros) Loans to Customers (gross) Consolidated Portugal 52, % NPE: -19.1% Performing: +0.1% 50, % 40,291 37,947 Mortgage 24,273 23,406 Sep 16 Sep 17 Consumer and other 4,074 3,768 International operations Companies 24,263 23, % 12,319 12,807 Sep 16 Sep 17 Sep 16 Sep 17 39

40 Comfortable liquidity position Net loans to deposits ratio ECB funding (Billion euros) Net loans as a % of BS Customer funds 97% 91% Elegible assets % -6pp 93% Sep 16 Sep 17 Liquidity ratios (CRD IV/CRR) 124% 158% Sep 16 Sep 17 NSFR (Net stable funding ratio) LCR (Liquidity coverage ratio) 40

41 9M 2017 earnings Highlights Group Profitability Liquidity Capital Portugal International operations Conclusions 41

42 Strengthened capital, in line with European peers Common Equity Tier 1 ratio Phased-in, latest available data vs. Euro-zone banks Common Equity Tier 1 ratio* 12.2% 13.2% 9.5% 11.7% 13.2% * 13.0% Total ratio RWAs ( Bn) Sep 16 Sep 17 Sep 16 Sep 17 Phased-in Fully implemented 13.2% 14.2% 10.4% 12.7% % Capital Ratios CET1 of 13.2% (phased-in) and 11.7% (fully implemented) Increased fully implemented capital ratio from 9.5% as at September 30, 2016 due to: share capital increase, net of CoCos reimbursement (net impact of +2.3pp); 13.4% net earnings for the last 4 quarters (+1.2pp); partially offset by increased deductions from expected losses and from defferred tax assets (-1.3pp) Increased fully implemented capital ratio from 11.3% as at June 30, 2017 due to: 12.0% net earnings for the quarter (+0.1pp impact); improved fair value reserves (+0.2pp, reflecting, to a large extent, lower yields on the Portuguese sovereign debt portfolio) *Estimates including 9M earnings. 42

43 Capital at comfortable levels, high leverage ratios Leverage ratio Leverage ratio Phased-in, latest available data 6.2% 6.7% 4.8% 6.0% 4.1% 4.9% 5.8% 6.1% 6.7% Sep 16 Sep 17 Sep 16 Sep 17 Phased-in Fully implemented RWA density RWAs as % of assets, latest available information FR DE ES IT Texas ratio* 44% 42% 52% 129.8% 87.1% 25% 23% FR DE ES IT Sep 16 Sep 17 *Texas ratio = NPE / (Tangible equity + loan-loss reserves). 43

44 9M 2017 earnings Highlights Group Profitability Liquidity Capital Portugal International operations Conclusions 44

45 Increased net income (Million euros) Net income Core net income* % M16 9M17 9M16 9M17 Banking income Operating costs -0.6% % Includes non usual positive effect of 23.7 million 9M16 9M17 9M16 9M17 *Core net income = net interest income + net fees and commission income - operating costs. 45

46 Lower cost of time deposits more than compensates for the decreases of credit volumes and Euribor Net interest income (Million euros) +9.0% NIM 1.6% % 9M16 Effect of lower Euribor on credit Performing loans volume effect Securities NPL effect CoCo repayment effect Effect of cost of time deposits Other 9M17 Increase in net interest income compared to 9M 2016, reflecting the impact of the consistent reduction of the cost of time deposits, the repayment of CoCos and the reduction of NPLs, more than compensating for the negative effects of the reduction of Euribor rates and of lower credit volumes The increase of the net interest income from million in 2Q17 to million in 3Q17 is mainly attributable to the reduction of the cost of funding (retail and wholesale), that more than offset the impact of lower credit volumes, reflecting, to a large extent, the focus on NPE reduction 46

47 Continued effort to reduce the cost of deposits Spread on the book of term deposits (vs 3m Euribor) Spread on the performing loan book (vs 3m Euribor) 9M16 9M17 2.9% 2.8% -0.9% -0.7% 9M16 9M17 NIM 1.6% 1.8% Continued improvement of the spread of the portfolio of term deposits: from -0.9% in 9M16 to -0.7% in the same period of 2017; September s front book, priced at an average spread of -52bp, is still below current back book s spread Spread on the performing loan book at 2.8% in 9M17 (2.9% in 9M16) 9M16 9M17 NIM stood at 1.8% (1.6% in 9M16) 47

48 Commissions and other income* (Million euros) Fees and commissions Other income* 9M16 9M17 YoY % 49.1 Banking fees and commissions % Cards and transfers % 9M16 9M17 Loans and guarantees % Bancassurance % Customer account related % Other fees and commissions % Market related fees and commissions % Securities operations % Asset management % Total fees and commissions % Visa transaction Mandatory contributions Commissions reflect the booking of investment banking operations in 2016 (under "other commissions") Other income* was influenced by higher mandatory contributions and gains on the Visa transaction in 2016 *Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings. 48

49 Continuous reduction of costs, in line with the new commercial approach (Million euros) Operating costs Employees Cost to income Cost to core income* Depreciation 47.2% 43.3% 52.4% 45.6% ,429 7,281 Other administrative costs Branches Sep 16 Sep 17 Staff costs Includes non-usual positive effect of 23.7 million M16 9M17 Sep 16 Sep 17 * Core income = net interest income + net fees and commission income. 49

50 Lower NPL>90d, with reinforced coverage (Million euros) NPL>90d Loan-loss reserves 5, % As a % of NPL>90d 62.5% 68.9% 3,408 2,932 4,255 Sep 16 Sep 17 Loan impairment (net of recoveries) Cost of risk 270bp bp Sep 16 Sep 17 9M16 9M17 50

51 Lower NPEs (Million euros) Non-performing exposures (NPEs) NPE build-up 9, % Sep 17 Sep 17 vs.sep 16 vs.jun 17 Opening balance 9,257 7,816 +/- Net entries Other NPE 3,803 7,168 - Write-offs Sales Ending balance 7,168 7,168 NPL>90d 2,913 5,454 4,255 Sep 16 Sep 17 NPEs in Portugal down by 2.1 billion, from 9.3 billion as at September 30, 2016 to 7.2 billion as at the same date of 2017 This decrease results from a net exits of 785 million, sales of 777 million and write-offs of 527 million The 2.1 billion decrease in NPE from September 30, 2016 is attributable to a 1.2 billion reduction of NPL>90d and to a 0.9 decrease of other NPE Significant NPE decrease during the 3 rd quarter, to 7.2 billion at end-september from 7.8 billion at end-june (- 0.6 billion) 51

52 Lower NPEs, with reinforced coverage NPE total coverage* NPE total coverage* 99% 105% 107% 105% 105% 46% 46% 16% 18% 36% 41% Real estate collateral Cash, other fin. collat., EL gap LLRs 71% 13% 23% 37% 46% 20% 18% 48% 41% Real estate collateral Cash, other fin. collat., EL gap LLRs Sep 16 Sep 17 Individuals Companies Total NPL>90d total coverage* Other NPE total coverage* 101% 108% 106% 118% 102% 105% 29% 41% 67% 23% 18% 6% 28% 55% 47% Individuals Companies Total Real estate collateral Cash, other fin. collat., EL gap LLRs 78% 47% 54% 16% 18% 27% 12% 39% 33% Individuals Companies Total Real estate collateral Cash, other fin. collat., EL gap LLRs *By loan-loss reserves, expected loss gap and collaterals. 52

53 Foreclosed assets and corporate restructuring funds Foreclosed assets (Million euros) Corporate restructuring funds (Million euros) Impairment 210 (Million euros) Net value 1,685 Number of properties sold 1, ,475 1,634 Sep 16 Sep 17 Sale value % Original credit exposure: 2,006 million Book value (30 Sep 2017): 1,065 million Total impairment (credit+restr. funds): 940 million (47% coverage) EBITDA yoy growth (ex-construction): +31% in 2016, +30% in , , Industry RE/tourism Book value # properties sold 9M16 9M17 1,568 2, Sep 16 Sep 17 Construction 53

54 Improved liquidity position (Million euros) Total Customer funds* Loans to Customers (gross) 49, % 51,493 Off-BS funds Other BS funds Term deposits 13,422 14,743 1,539 1,469 20,716 19,299 Mortgage Consumer and other 40,291 17,902 2, % 37,947 17,203 2,013 Ondemand deposits 13,618 15,982 Companies 19,916 18,730 Sep 16 Sep 17 Sep 16 Sep 17 *Deposits, debt securities, assets under management, capitalisation products and investment funds placed with Customers. 54

55 Growing new loans to individuals, new leasing business and factoring invoicing (Million euros) Loans to individuals, new business Leasing, new business +27.4% , % ,097 9M16 9M17 Factoring invoicing 3,466 1, % +25.1% 4,203 2,362 Confirming 1, % 1,841 Factoring 9M16 9M17 9M16 9M17 55

56 9M 2017 earnings Highlights Group Profitability Liquidity Capital Portugal International operations Conclusions 56

57 Contribution from international operations (Million euros) International operations *Contribution of the Angolan operation. 9M16 9M17 Δ % local currency Δ % euros Poland % -9.6% 9.3% Mozambique % +16.9% 23.7% Angola* % -14.4% Other % +15.9% Net income % -3.1% Non-controlling interests Poland and Mozambique Exchange rate effect Total contribution international operations % Same as above without FX effect % ROE -1.0% Contribution 9M16 FX effect 9M16 comparable Contribution 9M17 Subsidiaries net income presented for 2016 at the same exchange rate as of 2017 for comparison purposes. 57

58 Strong performance of net earnings adjusted by Visa transaction in 2016 (Million euros) Net income Banking income ROE Net income Impact from Visa transac., net of tax 11.4% 9.3% % Impact from Visa transac., before tax % 9M16 9M17 9M16 9M17 Operating costs +2.5% M16 9M17 Net earnings at million, with ROE of 9.3%. The decrease from 9M16 reflects the impact of the Visa transaction (net gain of 53.8 million in 2016) Net interest income up by 12.1%*, commissions by 16.5% and operating costs by 2.5% Customer funds up by 6.6%, with loans to customers increasing by 2.8% 1.6 million active Customers, 10% up from September 30, 2016, with 1.1 million digital Customers (+17%) The Bank announced its Strategy 2020, including the following targets for that year: net earnings of 1 billion zlotys**, core income up by 30% from 2017 and a 40% cost to income, keeping cost of risk in line with the historical average. FX effect excluded. /Zloty constant at September 2017 levels: Income Statement ; Balance Sheet *Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in accounting terms, part of this margin ( 8.3 million in 9M17 and 7.6 million in 9M16) is presented in net trading income. **Excluding extraordinary legal, regulatory and tax events. 58

59 Increased net interest income and commissions (Million euros) Net interest income* Operating costs NIM 2.4% 2.5% Cost to income 43.9% 45.6% +12.1% +2.5% Other % 95.7 Staff costs % M16 9M17 9M16 9M17 Commissions and other income Employees Branches Other -21.6% ,839 5, Comissions % M16 9M17 Sep 16 Sep 17 Sep 16 Sep 17 * Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in accounting terms, part of this margin ( 8.3 million in 9M17 and 7.6 million in 9M16) is presented in net trading income. FX effect excluded. /Zloty constant at September 2017 levels: Income Statement ; Balance Sheet

60 Stable credit quality, comfortable coverage (Million euros) NPL>90d Credit ratio Sep 16 Sep 17 NPL>90d 2.7% 2.8% Loan-loss reserves Coverage ratio Sep 16 Sep 17 NPL>90d 108% 110% Sep 16 Sep 17 Sep 16 Sep 17 Loan impairment (net of recoveries) Cost of risk 45bp 54bp +22.0% NPL>90d ratio at 2.8% of total credit as at September 30, 2017, compared to 2.7% as at the same date of the previous year Provision coverage of NPL>90d at 110% (108% as at September 30, 2016) Cost of risk increased to 54bp (45bp in 9M2016) 9M16 9M17 FX effect excluded. /Zloty constant at September 2017 levels: Income Statement ; Balance Sheet

61 Growing volumes (Million euros) Customer funds Loans to Customers (gross) Off-BS funds Other BS funds 14,297 1, % +24.3% +12.1% 15,247 1, , % 11,406 Term deposits 6, % 5,815 Mortgage 6, % 6,191 Ondemand deposits 6, % 7,352 Consumer and other Companies 1, % 1,571 3, % 3,645 Sep 16 Sep 17 Sep 16 Sep 17 FX effect excluded. /Zloty constant at September 2017 levels: Income Statement ; Balance Sheet

62 Net income growth in a demanding environment (Million euros) Net income Banking income ROE 21.6% 23.7% +28.2% % M16 9M17 9M16 9M17 Operating costs Net income up by 28.2%, with ROE at 23.7% % % increase in banking income, on the back of higher net interest income (+39.1%) and commissions (+7.5%), in spite of the increase in operating costs (+12.7%) Customer funds up by 2.3%, loans to customers down by 7.5% 9M16 9M17 406,000 active mobile Customers, +9% from end- September, 2016 FX effect excluded. /Metical constant at September 2017 levels : Income Statement ; Balance Sheet

63 Growing income partially offset by the increase in operating costs (Million euros) Net interest income Operating costs NIM 7.8% 10.1% +39.1% Cost to income Other Staff costs 40.7% +12.7% 38.7% % % M16 9M17 9M16 9M17 Commissions and other income Employees* Branches Other % -47.3% ,385 2, Commissions % M16 9M17 Sep 16 Sep 17 *Excludes employees from SIM (insurance company) Sep 16 Sep 17 FX effect excluded. /Metical constant at September 2017 levels : Income Statement ; Balance Sheet

64 Credit quality (Million euros) NPL>90d Credit ratio Sep 16 Sep 17 NPL>90d 5.3% 14.0% Down from 162 million as reported in june Loan-loss reserves Coverage ratio Sep 16 Sep 17 NPL>90d 129% 66% Sep 16 Sep 17 Sep 16 Sep 17 Loan impairment (net of recoveries) Cost of risk 179bp 283bp % 23.1 NPL>90d ratio of 14.0% as at September 30, 2017, with a 66% coverage by loan-loss reserves as at the same date Increased provisioning effort, as reflected by a 283bp cost of risk in 9M17, up from 179bp in 9M16 9M16 9M17 FX effect excluded. /Metical constant at September 2017 levels : Income Statement ; Balance Sheet

65 Growing deposits and lower credit, in a challenging environment (Million euros) Customer funds Loans to Customers (gross) +2.3% Term deposits 1,428 1, % 672 Mortgage Consumer and other 1, % -16.9% -14.9% 1, Ondemand deposits % 789 Companies % 890 Sep 16 Sep 17 Sep 16 Sep 17 FX effect excluded. /Metical constant at September 2017 levels : Income Statement ; Balance Sheet

66 9M 2017 earnings Highlights Group Profitability Liquidity Capital Portugal International operations Conclusions 66

67 Road to 2018: targets Consolidated 9M16 9M CT1 / CET1* Phased-in: 12.2% Fully implemented: 9.5% Phased-in: 13.2% Fully implemented: 11.7% 11% Loans to Deposits 100% 93% <100% Cost Income 46.0% Stated: 43.6% Excluding non-usual items: 45.1% <43% Cost-Core Income** 52.0% Stated: 45.8% Excluding non-usual items: 47.3% <50% Cost of risk 221 bp 120 bp <75 bp RoE*** -8.5% 4.2% 10% *Estimates including 9M earnings. **Core income = net interest income + net fees and commission income. ***Based on fully implemented CET1. 67

68 Millennium bcp: a bank ready for the future 1 Largest private sector bank based in Portugal with a balanced shareholder structure and a sound balance sheet (phased-in CET1 ratio of 13.2%, loans to deposits of 93%) Profitability and balance-sheet indicators in line with targets for 2017/ Successful implementation of the NPE reduction plan in Portugal: 1.4 billion down in the first nine months of 2017 to 7.2 billion as at September 30, already exceeding the annual reduction target to < 7.5 billion 3 Profitable operation with a recurring capacity to generate operating results in excess of 1 billion per annum ( 900 million in the first nine months of 2017); one of the most efficient banks in the Eurozone, with a cost to core income ratio of 46% (Eurozone: 78%) and a cost to income ratio of 44% (Eurozone: 63%) 4 Well-positioned in a rapidly changing landscape, following the completion of the restructuring plan successfully implemented over the ast years: 258,000 new Customers in 2017, 69,000 of which in Portugal 68

69 Appendix 69

70 Sovereign debt portfolio Sovereign debt portfolio (Million euros) Sovereign debt maturity Sep 16 Jun 17 Sep 17 YoY QoQ >8y, 10y 4% >10y 0% 1y 27% Portugal 4,355 5,089 4, % -3% >5y, 8y 31% T-bills % -16% Bonds 3,528 4,244 4, % -0% Poland 3,406 3,847 3, % -3% Mozambique % -2% Other >100% -9% Total 8,097 9,928 9, % -3% >2y, 5y 18% >1y, 2y 20% The sovereign debt portfolio totalled 9.6 billion, 2.5 billion of which maturing within one year The Portuguese sovereign debt portfolio totalled 4.9 billion, whereas the Polish and Mozambican portfolios amounted to 3.7 billion and to 0.4 billion, respectively; other includes US sovereign debt of 0.5 billion 70

71 Sovereign debt portfolio (Million euros) Portugal Poland Mozambique Other Total Trading book* year > 1 year and 2 years > 2 years and 5 years > 5 years and 8 years > 8 years and 10 years > 10 years Banking book** 4,787 3, ,354 1 year ,399 > 1 year and 2 years 330 1, ,930 > 2 years and 5 years 563 1, ,656 > 5 years and 8 years 2, ,990 > 8 years and 10 years > 10 years Total 4,945 3, ,607 1 year ,530 > 1 year and 2 years 330 1, ,952 > 2 years and 5 years 600 1, ,745 > 5 years and 8 years 2, ,994 > 8 years and 10 years > 10 years *Includes financial assets held for trading at fair value through net income ( 142 million). **Includes AFS portfolio ( 9,216 million) and HTM portfolio ( 138 million). 71

72 Diversified and collaterised portfolio Loan portfolio Consolidated Companies 47% Loans per collateral Mortgage 46% 59% 25% 16% Real guarantees Other guarantees Unsecured LTV of the mortgage portfolio in Portugal 15% 11% 13% 27% 11% 12% 11% Consumer/ other 7% >90 Loans Loans to companies accounted for 47% of the loan portfolio at September 30, 2017, including 8% to construction and real-estate sectors Mortgage accounted for 46% of the loan portfolio, with low delinquency levels and an average LTV of 65% 84% of the loan portfolio is collateralised Collaterals Real estate accounts for 93% of total collateral value 80% of the real estate collateral is residential 72

73 Consolidated earnings (million euros) 9M16 9M17 YoY Impact on earnings Net interest income , % Net fees and commissions % Other income* % Banking income 1, , % Staff costs % Other administrative costs and depreciation % -2.5 Operating costs % Operating net income (before impairment and provisions) % Of which: core net income % Loans impairment (net of recoveries) % Other impairment and provisions % Impairment and provisions -1, % Net income before income tax Income taxes Non-controlling interests Net income from discontinued or to be discontinued operations Net income *Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings. 73

74 Consolidated balance sheet (Million euros) 30 September September 2016 Assets Cash and deposits at central banks 2, ,618.3 Loans and advances to credit institutions Repayable on demand 1, Other loans and advances ,628.2 Loans and advances to customers 47, ,805.8 Financial assets held for trading ,090.8 Other financial assets held for trading at fair value through profit or loss Financial assets available for sale 11, ,680.0 Assets with repurchase agreement Hedging derivatives Financial assets held to maturity Investments in associated companies Non current assets held for sale 2, ,112.8 Investment property Other tangible assets Goodwill and intangible assets Current tax assets Deferred tax assets 3, ,790.7 Other assets 1, , , September September 2016 Liabilities Resources from credit institutions 9, ,302.7 Resources from customers 50, ,937.1 Debt securities issued 3, ,919.2 Financial liabilities held for trading Hedging derivatives Provisions Subordinated debt ,682.9 Current tax liabilities Deferred tax liabilities Other liabilities 1, Total Liabilities 65, ,093.2 Equity Share capital 5, ,094.2 Treasury shares (0.3) (3.1) Share premium Preference shares Other capital instruments Legal and statutory reserves Fair value reserves 44.0 (66.1) Reserves and retained earnings (58.0) (22.8) Net income for the period attrib. to Shareholders (251.1) Total equity attrib. to Shareholders of the Bank 6, ,076.3 Non-controlling interests 1, Total Equity 7, , , ,

75 Consolidated income statement Per quarter (Million euros) 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 Net interest income Dividends from equity instruments Net fees and commission income Other operating income Net trading income Equity accounted earnings Banking income Staff costs Other administrative costs Depreciation Operating costs Operating net income bef. imp Loans impairment (net of recoveries) Other impairm. and provisions Net income before income tax Income tax Non-controlling interests Net income (before disc. oper.) Net income arising from discont. operations Net income

76 Income statement (Portugal and International operations) For the 9-month periods ended September 30 th, 2016 and 2017 (Million euros) International operations Group P ortugal Total Bank M illennium (P oland) M illennium bim (M o z.) Other int. operations Sep 16 Sep 17 Δ % Sep 16 Sep 17 Δ % Sep 16 Sep 17 Δ % Sep 16 Sep 17 Δ % Sep 16 Sep 17 Δ % Sep 16 Sep 17 Δ % Interest income 1,430 1, % % % % % % Interest expense % % % % % % Net interest income 907 1, % % % % % % Dividends from equity instruments % % % % % Intermediation margin 914 1, % % % % % % Net fees and commission income % % % % % % Other operating income % % % % % % Basic income 1,299 1, % % % % % % Net trading income % % % % % % Equity accounted earnings % % >100% >100% Banking income 1,572 1, % % % % % % Staff costs % % % % % % Other administrative costs % % % % % % Depreciation % % % % % % Operating costs % % % % % % Operating net income bef. imp % % % % % % Loans impairment (net of recoveries) % % % % % % Other impairm. and provisions % % % % 0-3 <-100% % Net income before income tax >100% % % % % % Income tax >100% % % % % % Non-controlling interests % 0-3 <-100% % % % Net income (before disc. oper.) >100% >100% % % % % Net income arising from discont. operations % % % Net income >100% % % 76

77 Glossary (1/2) Balance sheet total customer funds - debt securities and customer deposits. Capitalisation products includes unit linked saving products and retirement saving plans ( PPR, PPE and PPR/E ). Commercial gap total loans to customers net of BS impairments accumulated for risk of credit minus on-balance sheet total customer funds. Core income - net interest income plus net fees and commission income. Core net income - corresponding to net interest income plus net fees and commission income deducted from operating costs. Cost of risk, gross (expressed in bp) - ratio of impairment charges accounted in the period to loans to customers (gross). Cost of risk, net (expressed in bp) - ratio of impairment charges (net of recoveries) accounted in the period to loans to customers (gross). Cost to core income - operating costs divided by core income (net interest income and net fees and commission income). Cost to income operating costs divided by net operating revenues. Coverage of credit at risk by balance sheet impairments total BS impairments accumulated for risks of credit divided by credit at risk (gross). Coverage of credit at risk by balance sheet impairments and real and financial guarantees total BS impairments accumulated for risks of credit plus real and financial guarantees divided by credit at risk (gross). Coverage of non-performing loans by balance sheet impairments total BS impairments accumulated for risks of credit divided by NPL. Credit at risk definition broader than the non performing loans which includes also restructured loans whose changes from initial terms have resulted in the bank being in a higher risk position than previously; restructured loans which have resulted in the bank becoming in a lower risk position (e.g. reinforced collateral) are not included in credit at risk. Credit at risk (net) credit at risk deducted from BS impairments accumulated for risks of credit. Credit at risk (net) ratio credit at risk (net) divided by loans to customers deducted from total BS impairments accumulated for risks of credit. Credit at risk ratio credit at risk divided by loans to customers (gross). Debt securities - debt securities issued by the Bank and placed with customers. Dividends from equity instruments - dividends received from investments in financial assets held for trading and available for sale. Equity accounted earnings - results appropriated by the Group related to the consolidation of entities where, despite having a significant influence, the Group does not control the financial and operational policies. Loan to Deposits ratio (LTD) Total loans to customers net of accumulated BS impairments for risks of credit divided by total customer deposits. Loan to value ratio (LTV) Mortgage amount divided by the appraised value of property. Net interest margin (NIM) - net interest income for the period as a percentage of average interest earning assets. Net operating revenues - net interest income, dividends from equity instruments, net commissions, net trading income, equity accounted earnings and other net operating income. Net trading income - net gains/losses arising from trading and hedging activities, net gains/losses arising from available for sale financial assets, net gains/losses arising from financial assets held to maturity. Non-performing exposures (NPE, according to EBA definition) Non-performing loans and advances to customers more than 90 days past-due or unlikely to be paid without collateral realisation, even if they recognised as defaulted or impaired. Considers also all the exposures if the on-bs 90 days past due reaches 20% of the outstanding amount of total on-bs exposure of the debtor, even if no pull effect is used for default or impairment classification. Includes also the loans in quarantine period over which the debtor has to prove its ability to meet the restructured conditions, even if forbearance has led to the exit form default or impairments classes. Non-performing loans (NPL) Overdue loans more than 90 days including the non-overdue remaining principal of loans, i.e. portion in arrears, plus non-overdue remaining principal. Non-performing loans ratio Loans more than 90 days overdue and doubtful loans reclassified as overdue for provisioning purposes divided by total loans (gross). 77

78 Glossary (2/2) Operating costs - staff costs, other administrative costs and depreciation. Other impairment and provisions - other financial assets impairment, other assets impairment, in particular provision charges related to assets received as payment in kind not fully covered by collateral, goodwill impairment and other provisions. Other net income net commissions, net trading income, other net operating income, dividends from equity instruments and equity accounted earnings. Other net operating income - other operating income, other net income from non-banking activities and gains from the sale of subsidiaries and other assets. Overdue and doubtful loans - loans overdue by more than 90 days and the doubtful loans reclassified as overdue loans for provisioning purposes. Overdue and doubtful loans (net) - overdue and doubtful loans deducted from BS impairments accumulated for risks of credit. Overdue and doubtful loans (net) ratio - overdue loans and doubtful loans (net) divided by loans to customers deducted from total BS impairments accumulated for risks of credit. Overdue and doubtful loans coverage by BS impairments - BS impairments accumulated for risks of credit divided by overdue loans and doubtful loans (gross). Overdue and doubtful loans ratio - overdue and doubtful loans divided by loans to customers (gross). Overdue loans - loans in arrears, not including the non-overdue remaining principal. Overdue loans by more than 90 days coverage ratio - total BS impairments accumulated for risk of credit divided by total amount of loans overdue with installments of capital and interest overdue more than 90 days. Overdue loans coverage ratio total BS impairments accumulated for risks of credit divided by total amount of overdue loans. Return on average assets (Instruction from the Bank of Portugal no. 16/2004) Net income (before tax) divided by the average total assets. Return on average assets (ROA) Net income (before minority interests) divided by the average total assets. Return on equity (Instruction from the Bank of Portugal no. 16/2004) Net income (before tax) divided by the average attributable equity + non-controlling interests. Return on equity (ROE) Net income (after minority interests) divided by the average attributable equity, deducted from preference shares and other capital instruments. Securities portfolio - financial assets held for trading, financial assets available for sale, assets with repurchase agreement, financial assets held to maturity and other financial assets held for trading at fair value through net income. Spread - increase (in percentage points) to the index used by the Bank in loans granting or fund raising. Total customer funds - balance sheet customer funds, assets under management and capitalisation products. 78

79 Summary Strategic Plan Appendix 9M 2017 earnings Other information 79

80 Building the largest bank in Portugal and a relevant bank in Europe and in affinity markets From foundation Incorporation and organic growth to become relevant player Consolidation to reach critical mass Leadership in Portugal, setting the foundations for expansion in Poland and Greece Partnership with Ageas for insurance business Consolidation of international expansion with a single brand Focus on Portugal and on affinity markets Optimization of the capital structure, profitability recovery in Portugal and strong presence in Africa Portugal - Poland Mozambique Angola (since 2016 with a partnership with BPA) Leading bank in Portugal and strong position in Poland and Mozambique Business model transformation to adapt to new customer needs to leadership in Portugal and to international presence through growth in selected affinity retail markets 80

81 Diversified shareholder base, geographically scattered Shareholder structure (Last information available) Non-PT institutionals 24% Fosun 25% Non-PT retail 2% PT institutionals 6% Sonangol 15% PT retail 26% EDP 2% Number of Shareholders (x1000) Per geography (Post-share capital increase) Portugal 33.3% Other 39.3% Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Sep 17 Africa 15.5% UK/US 11.9% 81

82 One-tier management and supervisory model, composed by a Board of Directors General Meeting of Shareholders Remuneration and Welfare Board Board for International Strategy Board of Directors Client Ombudsman Statutory Auditor (ROC) Audit Committee Committee for Nominations and Remunerations Committee for Corporate Governance, Ethics and Professional Conduct Committee for Risk Assessment Executive Committee Company Secretary Legal Affairs Costs and Investments Costs and Investments Sub-Committee Companies Human Resources Retail Customer Experience Sub-Committee Investment Products Sub-Committee Commissions and Sub-Commissions Non-Core Business Compliance AML Sub-Committee Pension Fund Monitoring Credit Non-Core Credit Capital, Assets and Liabilities Management Risk Credit at Risk Pension Funds Risk Monitoring Security Moving Forward Speedway Internal Control and Operational Risk Monitoring CrossNetworking 82

83 Fiscal consolidation creates the conditions for the sustainability of the public debt, leading to normalisation of yields on sovereign debt Budget deficit decreases (% of GDP) (total expenditure, % of GDP) with significant effort on expenditure Source: Statistics Portugal; Ministry of Finance Source: Bank of Portugal; Ministry of Finance. Debt level is expected to decrease (Public debt, % of GDP) Yields have decreased 10y Portuguese bonds (yield, %) Source: Statistics Portugal; Ministry of Finance Average >10% Average 4% Source: Thomson Reuters. 2% 83

84 Portugal has been undergoing profound structural reforms, which are already showing positive results Real GDP growth rate (yoy) Current account balance (% of GDP) Q17 2Q17 3Q17 Source: Statistics Portugal; Ministry of Finance Source: Statistics Portugal; Ministry of Finance. Unemployment rate (%) Budget deficit at 2.0% in 2016, lower than EU s 2.5% target. This is a 2.4pp improvement from 2015, mainly on the back of a decrease of expenditure as a percentage of GDP Portugal s stability programme forecasts a 1.5% deficit as a percentage of GDP in 2017, a 0.5pp improvement from 2016, reflecting both increased revenues and lower expenditure Q17 2Q17 3Q17 According to BdP forecasts, GDP growth should improve to 2.5% in 2017 and unemployment rate should decrease to 9.4% at the same date Source: Statistics Portugal; Ministry of Finance. 84

85 Portuguese financial system Sector overview (Consolidated) ( bn for gross loans and deposits, 2Q17) Gross loans * Deposits Branches Employees CGD ,108 15,334 Millennium bcp ,136 15,809 SantanderTotta ,096 NB ,706 CaixaBank ,406 Montepio ,151 Caixa Agrícola ,054 * Gross Loans includes securitizations. 85

86 Portuguese financial system market shares Gross loans Deposits (June 2017) (June 2017) 23.4% 17.8% 15.0% 13.0% 10.7% 27.1% 17.3% 13.7% 10.0% 9.9% Bank 1 Millennium bcp Bank 3 Bank 4 Bank 5 Bank 1 Millennium bcp Bank 3 Bank 4 Bank 5 Branches Employees (June 2017) (June 2017) 13.8% 13.5% 13.4% 11.9% 10.1% 20.1% 15.9% 13.2% 11.7% 11.6% Bank 1 Bank 2 Millennium bcp Bank 4 Bank 5 Bank 1 Millennium bcp Bank 3 Bank 4 Bank 5 86

87 Portuguese financial system Loans and deposits as a % of PIB ( bn, Portugal ) Deposits LTD (Loans-to-deposits ratio) Loans Deposits 132% 130% 125% 124% 120% 112% 102% 96% 95% 93% Loans 178% 172% 161% 152% 151% Q Q 17 Commercial gap ( bn ) ( bn ) ECB funding Q Q17 87

88 Portuguese financial system NPEs (Non-performing exposures) NPEs coverage 28.6% 29.4% 27.5% 17.3% 17.2% 15.5% 12.5% 10.7% 9.6% 7.2% 7.0% 6.5% 68.1% 69.7% 71.1% 44.0% 48.8% 49.2% 45.0% 46.0% 40.0% 23.5% 21.0% 21.9% Q17 Mortgage Consumer Companies Total Q17 Mortgage Consumer Companies Total Leverage ratio CET1 ratio 12.3% 11.3% 12.4% 11.4% 13.2% 7.1% 6.9% 7.6% 6.9% 7.5% Q Q 17 88

89 1Q00 4Q00 3Q01 2Q02 1Q03 4Q03 3Q04 2Q05 1Q06 4Q06 3Q07 2Q08 1Q09 4Q09 3Q10 2Q11 1Q12 4Q12 3Q13 2Q14 1Q15 4Q15 3Q16 2Q17 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Housing prices and bank appraisals are recovering House price index (HPI) Housing bank appraisals (HPI base 100=2015) ( /m2) Total Existing New Portugal Lisbon Area Source: Statistics Portugal. Source: Statistics Portugal. Property prices (Q1 2000=100) Spain 179 Portugal 109 The House Price Index increased 8.0% in 2Q17 when compared to 2Q16, with existing dwellings recording an average increase in excess of new dwellings (+8.9% vs. +5.4%, respectively) The average value of housing bank appraisals in Portugal stood at 1,135 per square meter in September, up 5.5% y-o-y (+5.7% to 1,381 in the Lisbon area) The housing costs accounted for 18.9% of disposable household income in Portugal, compared to 21.8% for the Eurozone as a whole (latest available data: 2015) Source: BIS. 89

90 The NPE reduction plan is being implemented Reconciliation of NPLs>90d with NPEs (EBA definition) NPEs down 5.6 billion from end-2013 (Billion euros) NPLs>90d vs NPEs (EBA definition) (Billion euros, September 2017) Dec13 Net new entries Write offs Sales Dec17 NPLs >90d Crossdefault Quaran -tine* LLR/gross loans>20% or LLR> 5mn Other triggers NPEs * 9 months following payment is resumed for loans to companies, 3 months for retail loans. 90

91 Balanced Balance Sheet Balance sheet breakdown ( bn) Securities portfolio ( bn) Other (net) Securities Equity Debt issued MM (net) Other Loans Deposits Sovereign debt Dec 11 Sep 17 Dec 11 Sep 17 Sovereign debt portfolio (Billion euros) Debt issued (Billion euros) Dec 11 Sep 17 Portugal T-bills Bonds Poland Angola Mozambique Other Total Dec 11 Sep 17 Debt securities Loan Agreements Senior - MTN Senior - Retail Bonds Covered bonds Securitisation Subordinated debt Total

92 Limited resource to wholesale funding Wholesale funding + Retail bonds ( bn) 31.4 Breakdown by maturity Sep 17 ( bn) 0.9 < 1yr 9.1 Dec 11 Sep > 1yr Breakdown by instrument Sep 17 ( bn) Money Market (net) Debt ECB IMM/Repos Loan Agreements MTN Retail Bonds CB Subordinated Securitizations 92

93 Latest Rating Actions recognized the progress made by BCP in implementing its strategic plan S&P Stand-alone credit profile (SACP) Moody s Baseline Credit Assessment (BCA) +3 notches +3 notches b2 b3 Caa1 Caa Fitch Viability Rating (VR) BB- B+ B B- bbb+ b +2 notches Rating Agencies have recognized the progress achieved by Millennium bcp since 2013 Excluding the effect of Government support removal due to change in Rating Agencies methodology in order to adjust for the BRRD, the intrinsic rate of BCP was upgraded by 3 notches by S&P and Moody s and by 2 notches by Fitch An eventual upgrade of the Portuguese Republic rating should provide room for an upgrade of BCP ratings 93

94 Ratings Moody's Standard & Poor's Intrinsic Baseline Credit Assessment Adjusted Baseline Credit Assessment b2 B2 Stand-alone credit profile (SACP) bb- LT/ST Other Counterparty LT/ST Deposits LT/ST Senior unsecured LT/ST Outlook deposits / senior Subordinated Debt - MTN Preference Shares Other short term debt Covered Bonds Ba2 / NP B1 / NP B1 / NP Stable/ Negative (P) B3 Caa2 (hyb) P (NP) A3 Counterparty Credit Rating LT/ST Senior Unsecured LT/ST Outlook Subordinated debt Preference shares BB-/ B BB-/ B Stable B- D Intrinsic Viability Rating Support Support floor Fitch Ratings bb- 5 Intrinsic Critical obligations No floor DBRS BB (high) BBB/R-2(high) LT/ST Deposits LT/ST Senior unsecured debt issues LT/ST Outlook BB- / B BB- / B Stable Short-Term Debt LT / ST Deposit LT / ST Trend BB (high) / R-3 BB (high) / R-3 Stable Other Subordinated Debt Lower Tier 2 Preference Shares Covered Bonds B+ B- BBB+ Dated Subordinated Notes Covered Bonds BB (low) A 94

95 Progress recognised by the market CDS 5 yr Portuguese Republic b.p Dec-13 Dec-14 Dec-15 Dec-16 CDS 5 yr BCP b.p Dec/13 Dec/14 Dec/15 Dec/16 CDS BCP yield curve (senior) b.p year ago As at November (Years) BCP CDS spreads have narrowed since the end of 2016 and after the completion of the share capital increase in February 2017 but reflect also the progress made by the Bank in reducing NPEs as well as the increase in NPEs coverage Besides this BCP s intrinsic factors the BCP CDS spreads benefitted also from the decrease in Portuguese Republic CDS spreads Spreads on senior preferred debt have also narrowed in recent months because there was the introduction of a new debt class in the Iberian markets: the senior non preferred debt 95

96 New Senior Bond and CB issues signal Millennium bcp s return to capital debt markets 3 Yr Senior Unsecured Notes 5 Yr Covered Bond Issue Issuer: Banco Comercial Português, S.A. Issue Rating (S/M/F/D): B (Neg.) / B1 (Neg.) / BB- (Neg.) / BBBL (Neg.) Issue type: Senior Unsecured Unsubordinated Amount: 500m Issue date: 19 February 2014 Settlement date: 27 February 2014 Maturity: 27 February 2017 Coupon: % Spread: MS+285bps Re-offer yield: % Listing / ISIN: London Stock Exchange / PTBITIOM0057 Issuer: Banco Comercial Português, S.A. Issue Rating (M/F/D): A3/BBB+/A Issue type: Mortgage Bonds Amount: 1,000m Issue date: 23 May 2017 Settlement date: 31 May 2017 Maturity: 31 May 2022 Coupon: % Spread: MS+65bps Re-offer yield: % Listing / ISIN: Irish Stock Exchange / PTBCPIOM0057 Breakdown by Investor Type and Geography Breakdown by Investor Type and Geography Hedge Funds 12% Banks 16% Insurance and Pension Funds 10% Other 2% Investment Funds 60% Deutschland 6% France 11% Spain Austria 5% 6% Italy 15% Switzerland 4% Portugal 20% UK 33% Insurance & Pension Funds 5% Banks 21% Central Banks & Official Institutions 29% Asset Managers 45% UK & Ireland 4% Benelux 7% France 10% Spain 10% Switzerl. 3% Italy 3% Other 2% Germany & Austria 25% Portugal 36% 96

97 97