RC BCI 2016 UK_rc bci /07/16 14:33 Page 1 ANNUAL REPORT 2015

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2 ANNUAL REPORT 2015

3 2_ ANNUAL REPORT 2015 INDEX

4 INDEX 1 Message of the Chairman of the Board of Directors 4 2 Key Indicators 7 3 BCI 7 4 Governing Bodies 8 5 Organisational Structure 9 6 Main Events of the Year Distribution Network 10 8 Economic And Financial Framework International Context 11 9 Business Areas Private and Micro-Finance Corporate and Institutional E-Banking Business Support Area Human Resources Marketing and Communication Transactions Global Risk Internal Control Compliance Credit Recovery Information Technologies International Relations Juridical Relations Social Responsability Financial Analysis Proposal for the Appropriation of Profits Financial Statements Notes to the Financial Statements Opinion of the Executive Board External Audit Report 92 3_ BANCO DE COMÉRCIO E INDÚSTRIA

5 4_ ANNUAL REPORT 2015

6 1. MESSAGE OF THE CHAIRMAN OF THE BOARD OF DIRECTORS The financial year of 2015 was affected by difficult moments in the economical context, of which the core circumstance was the significant drop in oil prices in the international market, which had immediate consequences on the reduction of the net external assets and on the increase of the financial deficit by the abrupt fall of the text revenues. In fact, the Angolan economy registered the so called twin deficits, which affected the external and fiscal accounts, due to the fact that the country strongly depends on the exportation of oil that feeds not only the current account Balance of payments but also the fiscal account of the General State budget. In fact, the oil barrel price on the international market, has been going downhill since the middle of 2014, when it reached, in June, its peak of 114,92 USD per barrel. In the beginning of 2015, the price of a barrel was 46, 59 USD. Banco de Comércio e Indústria, just as the entire banking sector, was affected by this situation, mainly in the response to the clients' requests of currency, which gave origin, consequently, to decrease of the net interest margin for transactions of this nature. The suspension of liquidity-absorbing operations, in February 2015, by the Banco Nacional de Angola, conditioned, until a certain point, the available cash profit opportunities. As a result of this, in our opinion, the banks were lead to channel the resources towards credits, which sets out a tendency preferred by the banking institutions. However, these circumstances have not kept the Bank from diversify its operation with a matrix of options that allowed a considerable decrease of the net accumulated loans of the previous financial years and, most of all, an improvement of the account quality, reflected in the decrease of reservations, down to two, concerning the accounts in the current financial year. ATTENTIVE TO THIS INEVITABLE TECHNOLOGICAL EVOLUTION TENDENCY, BANCO DE COMÉRCIO E INDÚSTRIA HAS CHANNELLED ITS EFFORT TO MODERNISE ITS SYSTEMS AND INFRASTRUCTURE, CONSIDERING IT MORE AN INVESTMENT THAN A COST, WITH PREDICTABLE COMPENSATIONS IN THE IMPROVEMENT OF OPERATIONAL EFFICIENCY. The banking activity is part of a framework of fast change, as a result of the technological evolution, that continues at a fast and unpredictable pace. Therefore, the spreading of the distribution channels of financial products and services has stimulated and revolutionised banking transactions, increasingly user-friendly and fast, in accordance with Clients' expectations, which makes the banking companies more competitive. Attentive to this inevitable technological evolution tendency, Banco de Comércio e Indústria has channelled its effort to modernise its systems and infrastructure, considering it more an investment than a cost, with predictable compensations in the improvement of operational efficiency. The benchmark that testifies this movement is visible in the migration to the new application "Banca 3 G", that simplified the procedure though without neglecting the internal control and validation security procedures proper to any work process. Once again, as always, we express our gratitude to everyone at BCI, because indeed the employees are the ones who keep on enhancing the Bank's growth, as technology by itself is just innocuous if there is not a human being behind it, with knowledge, initiative and proactivity. Finally, on what concerns challenges set out, the year 2016 started with a significant devaluation of Kwanza in relation to USD, which, along with the decrease of currency made available by the Banco Central, with the continued instability of the price of oil per barrel and with the increase of inflation to two digits, cause significant constraints to the Angolan economy and particularly to the financial sector. We believe that this new reality shall promote the financial institutions' demand for new solutions, regarding not only the search for other income resources, but also the reduction of costs, by increasing operational efficiency, in order to minimise the impacts of this unfavourable situation and maximise the results of the banks. The Chairman, Filomeno da Costa Alegre Alves de Ceita 5_ BANCO DE COMÉRCIO E INDÚSTRIA

7 6_ ANNUAL REPORT 2015 BCI

8 2. KEY INDICATORS Key Indicators Million Kz Var.(%)14/15 1. STRUCTURE Total assets 98, , , % Customer credit (Net of provisions) 49, , , % Client deposits 67, , , % EQUITY 8, , , % Commercial network number % Number of Employees 1,005 1,073 1,114 4% ATMs % APTs ,642 1,356-17% Number of accounts 331, , ,059 14% 2. PROFITABILITY Net interest margin 4, , , % Complementary margin 3, , , % Net operating income 7, , , % Structural costs 4 7, , , % Net Income -2, , , % Return on equity (ROE) -36.7% -76.9% -32.4% 45 p.p. Return on assets (ROA) -3.0% -4.9% -1.8% 3 p.p. 3. SOLIDITY Loans overdue/ Total loans 36.4% 24.3% 25.6% 1 p.p. Provisions/ Loans Overdue 24.4% 27.0% 38.4% 11 p.p. Provisions/ Total credit 8.9% 6.6% 9.8% 3 p.p. 4. SOLVENCY Balance sheet solvency ratio 12.2% 8.8% 7.4% 1 p.p. Balance sheet regular solvency ratio 7.3% 5.1% 5.5% 0 p.p. 5. LIQUIDITY Loans/ Total deposits 74.0% 60.9% 47.3% 14 p.p. Term Deposits/ Total Deposits 36.1% 36.9% 30.0% 7 p.p. 6. PRODUCTIVITY AND EFFICIENCY Structural costs/ Net operating income 101.9% 110.3% 110.7% 0 p.p. Net interest margin/ Net operating income 54.5% 52.2% 54.1% 2 p.p. Net operating income/ Number of employees % 1 Includes agencies, branches and service points 2 Automatic Teller Machines 3 Automatic payment terminals 4 Includes costs of staffing, supply of external services, other costs, depreciation and amortisation 3. BCI Banco de Comércio e Indústria (BCI), S.A.R.L, was created by Decree no. 8 - A/91, of the 16th of March, of the Council of Ministers and formed by a public deed on the 1st of August of The State is BCI's main shareholder with 93,60% of the capital stock, of which the remaining 6,40% are divided by the following public companies: Sonangol (1,13%), Ensa (1,13%), Porto de Luanda (1,13%), Taag (1,13%), Endiama (0,45%), Tcul (0,45%), Cerval (0,45%), Angola Telecom (0,45%), and Bolama (0,08%). The Bank is dedicated to obtaining resources from third parties in the form of deposits or similar funds, which it combines with its own funds in order to grant loans, make deposits at the Banco Nacional de Angola, invest in credit institutions and purchase securities or other assets for which it is duly authorised. The Bank also provides other banking and services and carries out various types of operations in foreign currencies. The BCI's governance model consists of governing bodies, particularly, the General Meeting of Shareholders, the Board of Directors and the Audit Board. The Banco de Comércio e Indústria has Crowe Horwarth as External Auditor since _ BANCO DE COMÉRCIO E INDÚSTRIA

9 The BCI's vision is to be an agile, flexible and innovating bank, with the capacity to anticipate the financial needs of its clients and to provide products and integrated highquality services by aiming to achieve a prominent position in the national and international markets. The BCI's mission is to render financial services of recognised value to its clients and to provide an attractive profitability to its savers, shareholders and other interest groups. 4. GOVERNING BODIES GENERAL MEETING OF SHAREHOLDERS Chairman: Maria Mambo Café in memory of Vice-Chairman: Luvumbo Sebastião Secretary: Alfredo Vale da Costa BOARD OF DIRECTORS Chairman: Filomeno da Costa Alegre Alves de Ceita Member: Maria do Carmo Bastos Corte Real Bernardo Member: Jorge Leão Peres Member: João de Jesus Batalha Freire dos Santos Member: Carlos Alberto Teixeira De Alva Sequeira Bragança AUDIT BOARD Chairman: Luís Filipe Teixeira Member: Júlio João Moniz Member: José Rela dos Santos Bento From left to right: Carlos Alberto Teixeira de Alva Sequeira Bragança, João de Jesus Batalha Freire dos Santos, Jorge Leão Peres, Maria do Carmo Bastos Corte Real Bernardo, Filomeno da Costa Alegre Alves de Ceita. 8_ ANNUAL REPORT 2015

10 5. ORGANISATIONAL STRUCTURE In December 2015, the organisational structure of the BCI bank, consisted of 14 Divisions and 7 Offices, distributed between and supervised by members of the Board, as follows: 9_ BANCO DE COMÉRCIO E INDÚSTRIA

11 6. MAIN EVENTS OF THE YEAR 2015 JANUARY Extended opening hours for customer service, by opening several branches on Saturdays; New Branch in Viação and Trânsito II (Capolo II), in Luanda Province FEBRUARY New Service Point for Tax Collection - Catete, in Luanda Province; Opening of the new Shoprite Branch in Huíla Province. MARCH New Branch in Talatona, in Luanda Province; Opening of the first BCI Branch in Bié Province, by the name of Cunje Branch. APRIL General Meeting of Shareholders, in scope of the analysis and approval of the annual report relating to the financial year MAY Opening of the Uíge Agency, in Uíge Province. JUNE Opening of the new Tax Office in Dondo, in Cuanza Norte Province Norte; Opening of the new Branch in Tchioco, in Huíla Province; Opening of the new Service Point in Porto de Cabinda, in Cabinda Province; Closing of the Branch at the airport, in Luanda Province AUGUST Opening of the new 11 de Novembro II Branch, in Zaire Province. SEPTEMBER Migration of the Bank's management system, version 2.03, to the new Banca 3G version. OCTOBER Opening of the service point in Taag, in Luanda Province. Opening of the new Branch in Sequele, in Luanda Province; NOVEMBER Opening of the service point in Chicala, in Luanda Province. 7. DISTRIBUTION NETWORK By the end of 2015, the distribution network of the Banco de Comércio e Indústria consisted of 131 branches, of which 42 are service points. During the year 2015, the Bank achieved its representation in every province of the country, by opening the Branch in Cunje, in Bié Province, the only province, where the Bank was not represented yet. For the purpose of increasing the proximity to the customers as well as the turnover, the bank has made investments in order to enlarge its commercial network, by opening the following 8 branches: 3 branches in Luanda Province, 2 in Huíla and 1 in each of the Bié, Uíge and Zaire Provinces. In the Provinces of Luanda, Cuanza Norte and Cabinda, 3 service posts were opened. With regard to the number of branches for each province, Luanda tops the list, due to its population density, with a total number of 66 branches, followed by Benguela with 11 10_ ANNUAL REPORT 2015

12 and Cabinda with 8, Huambo with 6, Zaire and Huíla with 5, Lunda Sul, Cuanza Norte and Moxico with 4 branches each; the Cuanza Sul, Uíge and Cunene Provinces have 3 branches each, and the Lunda Norte, Bengo, Namibe and Provinces have 2 branches each, and, finally, the Kuando Kubango, Malange and Bié Province each have 1 branch. In view of the personalised service for institutions and large companies, BCI, in 2015, had a Business Center, located in the installations of the 4 de Fevereiro Branch. Geographic Distribution of the Commercial Network, December/ 2015 PROVINCE AGENCIES/ BRANCHES SERVICE POINTS TOTAL Luanda Benguela Cabinda Huambo Lunda Sul Zaire Moxico Cuanza Norte Cuanza Sul Cunene Huíla Bengo Malange Namibe Uíge Lunda Norte Cuando Cubango Bié Total ECONOMIC AND FINANCIAL FRAMEWORK 8.1 INTERNATIONAL CONTEXT WORLD PRODUCT In 2015 the world economy reached a growth of a 3,1%, which is lower than the 3,4% registered in The Economic Development of the World Regions in percentage PIB PROJECTIONS World Economy USA Japan China Euro Zone Brasil India Sub-Saharan Africa South-Africa Source: IMF 11_ BANCO DE COMÉRCIO E INDÚSTRIA

13 In 2015, the evolution of the world economy was marked, for the fifth year in a row, by a slowdown of the emerging and developing economies, while the advanced economies continue to register a slight improvement. In negative terms, the emphasis is placed on the influential Russian and Brazilian economies, that, in 2015, reached a negative growth of 3% and 3,8%, respectively. The Russian economy kept on suffering from the effects of the financial and economic sanctions imposed by the West and the United States of America, due to the military conflict in Crimeia, as well as to the decrease of the oil price on the international markets, which is the main source of the fiscal revenues of the Russian Federation. The Brazilian economy has encountered several difficulties in the exportation and production sector, due to a significant downfall of the raw material prices and financial scandals registered at the country's main oil company Petrobras. The emerging economies, particularly the Chinese and the Indian economy, as well as the region of sub-saharan Africa, in spite of a slight slowdown, have contributed positively to the growth of the world economy in Notwithstanding a few macro-economic constraints, registered throughout the year, the Chinese economy has grown 6,9% (7,9% in 2014), the Indian economy 7,3% (as in 2014), while the region of sub-saharan Africa registered a growth of 3,5% (less than the 5,0% registered in 2014). According to FMI previsions, the Japanese economy has grown 0,6% in 2015, (more than the 0,0% of 2014). The economies of the Euro Zone and the United States of America continue to register a remarkable recovery, due to the positive, fiscal, monetary and economic measures taken by the respective countries. In the Euro Zone, the activity has grown 1,5% (higher than the 0,9% in 2014) The German economy, the largest in the Euro Zone, has grown 1,5%, the French 1,1%, and the Italian has registered a growth of 0,8% (higher than the -0,2% of the previous year) In spite of the uncertainties of the monetary and financial markets in some regions of the globe, the projections made by the IMF regarding the year 2016 point out a growth of the world economy of 3,4%. The global outlook is conditioned by three main factors, namely, the slowdown and gradual recovery of China's activity, the falling raw material and oil prices, as well as the tightening monetary policy of the authorities of the USA. INFLATION The global inflation rate in 2015 increased for the emerging and developing economies, due to Venezuela and Ukraine, while, in the economies that export commodities, the nominal exchange rate depreciation raise inflationary pressures. As for the advanced economies, in 2015, a falling inflation is expected to levels close to zero, as a consequence of the falling oil price. The forecasts for 2016 project a further increase of the inflation rate, in general, for the advanced economies 12_ ANNUAL REPORT 2015

14 Evolution of the Inflation Rate of some Markets ,3 6,9 6,2 5,7 5,6 5,6 3,1 2,1 2,7 1,5 1,6 2,5 1,1 0,2 1,3 0,4 0,1 1, Euro Zone U.S.A. BRIC Source: IMF In the United States, the inflation rate recorded a slight decrease down to 0,1% in In the Euro Zone, the inflation has decreased continuously, and for 2015 a rate of 0,2% is registered. The BRICs should maintain relatively high inflation rates, in spite of the prospects of reduction. In 2015, the inflation rate attained 7,3%, which is higher than the 5,6% registered in INTEREST RATES According to the IMF, the reference interest rate (London InterBank Offered Rate - LIBOR), in the form of six-month deposits, in American dollars, should be on average 0,4% in 2015, and the three-month deposits in euros should remain at 0,0% in the period from 2015 to Evolution of the reference interest rates 0,45 0,4 0,35 0,3 0,25 0,2 0,15 0,10 0,05 0 0,4 0,4 0,3 0,2 0, Libor USD (6 Months) Libor EUR (3 Months) Source: IMF 13_ BANCO DE COMÉRCIO E INDÚSTRIA

15 8.2 NATIONAL CONTEXT GROSS DOMESTIC PRODUCT According to the official figures presented in the general budget for 2016, Angola's economy, after healthy economic activity in 2014, has recorded a slight reduction of the Gross Domestic Product in 2015, with an expected 4,0% increase compared to the 4,8% recorded in Changes in Gross Domestic Product (%) Estimate GDP 5,2 6,8 4,8 4,0 Oil Sector 4,3-0,3-0,8 2,3 Non-oil sector 5,6 7,2 5,6 1,7 Agriculture -22,5 42,3 11,9 2,5 Fishing and derivative 9,7 2,4 19,1 2,0 Diamonds and other 0,3 3,3 1,0 3,2 Manufacturing industry 14,0 8,6 8,1 2,6 Energy 10,4 34,4 17,3 12,0 Construction 11,7 8,1 8,0 3,5 Market services 13,4 7,0 8,0 2,2 Other 8,3 0,7 6,0 1,1 Source: MPDT; INE; BNA This slow-down of the Gross Domestic Product was essentially caused by the less favourable performance, which was recorded in the oil sector, that should present a growth of 1,7% (compared to the 5,6% registered in 2014). The Others sector with 1,0%, the fishing and derivative industry with 2,0%, the Market Services with 2,2%, the Agriculture sector with 2,5%, the manufacturing industry with 2,6%, the Energy with 12,0% and the Construction sector with 3,5% contributed significantly to this growth reduction. It should be stressed that there has been a positive evolution in the Diamonds and others sector, that grew from 1,0%, recorded in 2014, to 3,2% in After all, the oil production, that represents a considerable weight in the composition of the national GDP, has registered an increase up to 2,3% (higher than -0,8% registered in 2014). In general, the performance of the Angolan economy was affected by the significantly falling oil price on the international markets, registered since June Consequently, the State observed a significant decrease of the exchange revenues, and the economy as well slowed in general, due to the reduced currency supply, required for the activity in the different sectors. MACRO-ECONOMIC INDICATORS In macroeconomic terms, Angola's economy recorded a downfall of several indicators, in particular concerning its inflation rate evolution, that by the end of the year had attained 14,27%, which is lower than the 7,48% recorded in _ ANNUAL REPORT 2015

16 Evolution of economic indicators Inflation rate 7,6 7,4 14,2 Exchange rate (USD/ AOA) 97,6 102,8 135,3 Net External Reserves (USD million) 31,1 27,7 24,7 Monetary Base M3 (thousand million AOA) Rates of Nominal Asset Interest MN - Particular (Until 180 days) 14,9 14,9 16,4 Rates of Nominal Loan Interest MN (From 181 days up to 1 year) 5,1 5,5 3,8 Source: National Bank of Angola The State's net official international reserves, as a result of the reduction in the average oil price on the international markets, decreased from USD 27,7 billion attained in December 2014, to USD 24,7 billion in December On the foreign exchange market, with the regular intervention of the National Bank of Angola, on the primary market, there was pressure on the kwanza by the end of the year, due to the average exchange rate of the Kwanza compared to the North American Dollar at Kz 102,8, opposed to the Kz 97,6 recorded in December 2014, which represents a 31,6% variation. In 2015, the banks developed their activities in a difficult macroeconomic environment, holding the total bank assets, increasing from Kz million, recorded in 2014, up to Kz million, attained in 2015, i.e. an increase of 18,8%. Five of the 24 banks, that were active in 2015, account for 72% of the total assets. The system deposit portfolio recorded a growth of 13,9%, and the credit portfolio grew 2,0%. In accordance with the preliminary BNA data, at the end of the year, the total of the deposits amounted to Kz ,9 million, and that of the credits amounted to Kz ,2 million. In terms of currencies, by the end of December 2015, the deposits in national currency represented 68,7% and the remaining 31,3% in foreign currency. As far as credits are concerned, by the end of the year, these were represented by 64,9% in national currency and by 35,1% in foreign currency. Throughout the year 2015, as a result of the monetary and fiscal policy conducted by the Angolan authorities and of the macro-economic framework, the lending and deposit rates increased. Consequently, the average credit rate in national currency for the particular sector, for the maturity of 180 days at 16,4%; while the term deposits, for the maturity between 181 days and 1 year, were established at 3,8%. It should be mentioned that in 2015, the Banco Nacional de Angola continued to offer, on the primary market, Treasury Bills and Treasury Bonds, as well as Central Bank Bonds on the open market. In December 2015, the average interest rate for Treasury Bills, for the maturity of 91 days was established at 13,90% and for 182 days at 14.95% By the end of the year, the average rate for Treasury Bonds indexed to the exchange rate, averaged around 7,00%, for the maturity of 2 years and 7,77%, for the maturity of 5 years. 15_ BANCO DE COMÉRCIO E INDÚSTRIA

17 RELEVANT REGULATORY CHANGES IN 2015 MONTH INSTRUMENT January Notice no. 01/2015 of 29 January Notice no. 02/2015 of 29 January Instruction no. 01/2015 of 14 January Instruction no. 02/2015 of 14 January February Instruction no. 03/2015 of 23 February TOPIC Import and export of foreign currency and traveller's cheques Limits to exposure to exchange risk Classification of countries, multilateral development banks and international organisations Methodologies for creating provisions Required reserves March Instruction no. 04/2015 of 02 March Purchase and Sale of foreign currency. Additional Operating Rules April Notice no. 05/2015 of 20 April Notice no 06/2015 of 20 April Notice no. 07/2015 de 20 de April Notice no. 08/2015 of 20 of April Notice no. 09/2015 de 20 of April Instruction no. 05/2015 of 22 April Standard check Angolan Bank Account Number (NBA) and International Bank Account Number (IBAN) Securities Clearing System (SCV) and Cheque Clearance Subsystem (SCC) Real-time gross settlement Deadlines for the execution and the availability of funds for deposit demand accounts, transfers and remittances Technical specifications of the standard cheque May Instruction no. 06/2015 of 26 May Instruction no. 07/2015 of 26 of May Automated Clearing House of Angola and guarantees for the settlement of balances Operating Rules June Instruction no. 09/2015 of 04 June Instruction no. 10/2015 of 04 June Notice no. 10/2015 of 08 June Instruction no. 11/2015 of 18 June Instruction no. 12/2015 of 24 June Methodologies for establishing provisions Foreign currency purchase and sale sessions and extraordinary participation procedures Entry and exit of currency in the border area of Santa Clara (Angola) and Oshikango (Namibia) Agreement on currency conversion between BNA and Banco da Namíbia Operating Rules to be observed by the Financial Institutions Exchange transactions and respective procedures July Instruction no. 13/2015 of 01 July Instruction no. 14/2015 of 07 July Instruction no. 15/2015 of 13 July Instruction no. 16/2015 of 22 July Liquidity provision transactions of the Developing Banks Exchange market. Maximum margin for currency sale transactions Maximum margin for currency sale transactions Reserve requirement August Instruction no. 17/2015 of 20 August Instruction no. 18/2015 of 21 August Transaction procedures to be observed during auctions for selling foreign currencies to exchange offices Payment cards - statistical information December Instruction no. 20/2015 of 09 December Notice no. 11/2015 of 24 December Notice no. 12/2015 of 29 December Directive no. 02/DRO/DSI/2015 of 10 December Report and monitoring of exchange transactions Subsystem classification Agreement on currency conversion between BNA and Banco da Namíbia Money laundering and financing of terrorism. Guide for the prevention of money laundering and recommendations against terrorism financing in the relationships with correspondent and client banks 16_ ANNUAL REPORT 2015

18 9.BUSINESS AREAS 9.1 INDIVIDUAL AND MICROFINANCE Within the framework of its responsibilities, the Department of Individual and Microfinance has undertaken several actions in order to attend the needs of individual customers, and has maintained relations with institutional entities, within the scope of the support programme for micro, small and medium-sized enterprises. The main activities developed by the Department of Individual and Microfinance were the following: - Analysis and monitoring of the relevant indicators with regard to the management of the credit portfolio of the Bank's personal customers, particularly per branch; - Monitoring of the campaign for the financial education project of the population, promoted by the BNA (Bankita product); - Monitoring of Microcredit, namely in government programmes, in particular PROAPEN - Former Militaries. In December 2015, the Bank had a total of individual customers, i.e. more than the registered in the previous year. In December 2015, the total of individual deposits reached 33,6 billion KZ, compared to the 30.5 billion KZ, registered in the previous year. 24,2 billion KZ of this amount represent sight deposits and 9,4 billion KZ represent term deposits. Composition of the Individual Deposits Portfolio in % 72% Sight Deposits Term Deposits By the end of 2015, the credit granted to this segment of clients reached the amount of 24.0 billion KZ, compared to the 23.7 billion KZ, registered in In terms of products, those that, in 2015, represented the highest number of granted credit are: Cria Condições, Rent, Wage Advance and Car Credit. Within the framework of the financial education project of the population, promoted by the BNA, that targets citizens with low income, the BCI opened a total of sight accounts (Bankita product), for which ATM cards were issued, and for term deposits (Poupança a Crescer product) 20 accounts were opened. Since the beginning of the project, the total of accounts opened for both products, in December 2015, reached the number of and in total credit cards were issued. 17_ BANCO DE COMÉRCIO E INDÚSTRIA

19 9.2 CORPORATE AND INSTITUTIONAL In 2015, the Corporate and Institutional Department has taken a series of actions with regard to corporate and institutional customers, with the main purpose of providing a more customised service, in order to obtain and increase the number of customers in this segment. In this manner, this Department focused its activities on the management and monitoring of credit processes of companies and institutions, particularly for the Angola Invest credit, and carried out, at national level, a series of visits to several project promoters, in order to obtain information about the state of the activity development, as well as to strengthen relations. By the end of December 2015, the bank had a total of business class customers, i.e. a higher number than the registered in the previous year. The deposit portfolio of this segment, which consists of the Local and the Central Governments, Funds and Autonomous Public Services, Social Security and Enterprises, totalled KZ 62,2 billion in 2015, a higher amount than the 47.2 billion of the previous year. 42,8 billion KZ of this amount represent sight deposits and 19,3 billion KZ represent term deposits. Composition of the Corporate and Institutional Deposits Portfolio in % 69% Sight Deposits Term Deposits In 2015, the bank continued to take into account the credit needs of corporate clients and institutions in various sectors, totalling a granted credit amount KZ 24,4 billion, in In scope of the Angola Invests programme, in 2013, the BCI granted, as a State partner,a credit amount of KZ 1.5 billion to 25 beneficiaries. Since the start-up of the programme, the BCI granted a total of KZ 3,2 billion to 46 beneficiaries. 9.3 E-BANKING In 2015, through the E-banking Department, the bank gave particular attention to this market segment, by investing in new ATMs and APTs. In 2014, the bank supplied its customers with MULTICAIXA network bank cards, MULTICAIXA, totalling, by the end of the year, valid cards, of which active cards, representing a share of 37,3% of active cards regarding the valid cards. 18_ ANNUAL REPORT 2015

20 In terms of issue of MULTICAIXA cards, throughout the year 2015, in total, cards were issued, i.e less than the registered in By the end of the year, the cards issued in national currency totalled a number of 23,517, i.e. more than in The non-personalised cards attained the number of , which represents a difference of more than cards in comparison to the cards registered in the same period. It must be highlighted that in 2016 the BCI, in its business plan, has planned to place international MasterCard cards on the market. In terms of the automatic teller machines (ATMs) the BCI had, by the end of 2015, 160 machines in a total of 17 provinces, which represents an increase of 2 automatic teller machines, compared to the 158 existing in the previous year. ATMs Of the 160 ATMs, 159 were registered in the MULTICAIXA network, of which 141 were active, among active machines within the group of banks, which represents 5.3% of the total. Luanda province showed the highest number of registered automatic teller machines, totalling 74, i.e. 1 more than the previous year, followed by Benguela province with 23 and Huambo province with 11. Throughout the year, several operations were carried out in the bank's ATM network, especially in terms of withdrawal transactions, which totalled KZ 49,9 billions, of which KZ 26,2 billion in Luanda and KZ 19,6 billion in the remaining provinces. In relation to the Automatic Payment Terminals (APTs), in December 2015, the BCI network had terminals, compared to registered in December 2014, which represented a decrease of 17%. This decrease is due to the update process of the Terminal park during the second semester of the year. Automatic Payment Terminals _ BANCO DE COMÉRCIO E INDÚSTRIA

21 In 2015 the BCI Call Center service registered, in total, 182 complaints concerning electronic services of the MULTICAIXA network, of which 35 were explained, 131 solved, and 5 in progress. Throughout the year, the accession to the electronic Internet Banking and SMS service was relevant, because there were more 377 clients using Internet Banking. By the end of the year, in total, clients, of which individual and 344 corporate clients were using Internet Banking, as well as 105 employees. Market Share of Automatic Teller Machines and APTs, Dec./ 15 Description BCI BANKS % BCI Registered Automatic Teller Machines 159 2, % Automatic Payment Terminals 1,356 61, % 10. BUSINESS SUPPORT AREA 10.1 HUMAN RESOURCES As of 31 December 2015, BCI had a total staff of employees, of which: 623 were males, i.e. 56.2%; 464 were females, i.e. 43.8% of the total staff. The following table illustrates the staff's evolution over the past four years. BCI Staff/ YEAR MEN WOMEN TOTAL DIFFERENCE , , , STAFF DISTRIBUTION The Staff of the governing bodies structure is distributed as follows: Board of Directors,14 Central Departments e 6 Offices. The staff of the Central Departments has 368 employees, i.e. 33.2% of the bank's global population, of which: 224 are men; 144 are women. With regard to the staff distribution in de country's 18 provinces, 741 employees were registered, i.e. 66,8% of the bank's global population, of which: 399 are men; 342 are women. 20_ ANNUAL REPORT 2015

22 The Staff is distributed over the provinces, in accordance with the following table: BCI Staff per Province on 31 December 2015 STAFF IN EACH PROVINCE MEN WOMEN TOTAL Luanda Bengo Benguela Bié Cabinda Cunene Huambo Huíla Cuanza - Norte Cuanza - Sul Cuando Cubango Lunda - Norte Lunda - Sul Malange Moxico Namibe Uíge Zaire Total ,109 STAFF AGE The distribution of employees by age group and seniority as of December 2015 is shown in the following table: Age of Employees in 2015 AGE Employees % Until % % % % % % % % % >60 8 1% 1, % The table shows that the age group from 25 to 29 has the highest number of employees, i.e. 262 in total. The average age of the employees is 36 years, which demonstrates that the BCI's staff keeps getting younger. 21_ BANCO DE COMÉRCIO E INDÚSTRIA

23 EDUCATIONAL ATTAINMENT LEVELS In terms of educational qualification, in December 2015, 46,4% of the bank's employees had a high school degree and 23,4% had a university degree, as in shown in the following table: Educational Attainment Levels in 2015 Educational Attainment Levels MEN Women TOTAL Post-graduation/ Masters Graduates Undergraduates High School Other (Primary and Secondary) Total ,109 Graphic Distribution of Schooling Levels in December % 2% 24% High School Others (Primary and Secondary) Masters Degree 9% Licence Degree 46% Bachelor Degree TRAINING In order to empower the employees with solid scientific knowledge, the bank has increased the investment in training throughout 2015, by organising internal and external training in several areas, with priority to the excellence in service for the customers. In total, 615 employees participated in the various training courses, that provided hours of training. 22_ ANNUAL REPORT 2015

24 Training Courses in 2015 Theme No. Participants No. Hours Excellence in service Integration training Market management 2 80 Credit and billing management 4 35 Tender acquisition and management 2 21 Bank management 1 48 Credit analysis and management 2 40 Documentary transactions 4 21 Leadership Occupational safety and hygiene Transport safety 1 45 Banking capital adequacy 1 28 Management 1 16 Labour legislation Staff management empowerment Financial instruments 2 16 Internal audit 6 55 Labour law 4 36 Lean banking 4 16 Leadership for the public business sector 2 4 Ethics and attending 2 16 New regulations Archive management 3 20 Post-Graduation in applied management Total MARKETING AND COMMUNICATION The Marketing and Communication Department has the mission of promoting its business, BCI culture and social responsibility, through an integrated and global marketing strategy, by using all of its tools in an ethic, competent, creative, innovating and professional manner. It is also committed to improve the Bank's image as well as the product quality and BCI services, to maintain the Bank's presence in the media, to advertise the products and services as well as to promote the Bank. In fact, during the year 2015, several initiatives were developed, such as advertising campaigns, improvement of the image of the branches, research and studies, creative projects, communication, products and services, as well as client support. At advertising level, in March 2015, the promotion of a generic campaign (institutional) started, with the motto "Para Mim" ("For Me"), in order to increase the brand awareness, that focused on a growing BCI, and that offers loan solutions and innovating services. Worth mentioning is the innovating nature of this radio campaign (Luanda and Radio Mais), with daily quizzes interacting with the audience, by means of questions about BCI and handing out prize kits to the winners, at an average of 15 per day. Given the success of the radio quizzes, in May, the brand awareness was reinforced by using taxis as advertising vehicles for the first time in the history of the institution. There were other advertising campaigns, not less important, such as the sale of apartments of the Huíla building and plots of land in Camama, by BCI Imobiliária, the opening of the BCI branches 23_ BANCO DE COMÉRCIO E INDÚSTRIA

25 on Saturdays, the update of Clients' information and the Cria Condições campaign, with a maximum value of KZ ,00. During the year of 2015, more than presentation brochures were printed and handed over, and more than advertising leaflets and flyers were distributed in scope of the support to the commercial activity. There was also a merchandising campaign of our products for the Banks' employees. In order to improve their image, several visits to branches were organised with the aim of identifying the needs and the respective improvements were carried out TRANSACTIONS Throughout 2015, the Transactions Department has taken a range of actions supporting the bank's transactions, especially in view of compensation, general transactions and State General Budget, processing of credit accounts, as well as transactions abroad. In terms of compensation activity, transactions were carried out, of which the balance was positive on 31 December 2015 and reached KZ 45,8 billion. With regard to Real Time Payment System (RTPS) transactions, a total amount of KZ 135,3 billion was sent and KZ 141,9 billion were received. With regard to the receipts, it must be noted that the amounts received on Single Treasury Account (STA), to cover budget units, with accounts in BCI, that totalled KZ 21,7 billions, i.e. less than the KZ 27,0 billion received in the previous year. For the STA, and in the scope of the revenue collection agreement with the Ministry of Finance, in 2015 the amount of KZ 83,5 billion was transferred. Throughout the year, and through the Credit Transfer System (CTS), in total, KZ 10,9 billion were transferred and KZ 19,8 billion were received, which equal a positive balance of KZ 8,8 billion. In 2015, the transactions abroad, in particular the issued payment orders, totalled 16,143, compared to the 10,644 registered in GLOBAL RISK Within the framework of the several risks faced by the bank, the Global Risk Department is the structure unit responsible for the appropriate credit and other risk management in the future. It ensures compliance with rules and internal regulatory procedures, that guarantee the most adequate practice, quality in granting and monitoring the portfolio, as well as the safeguarding of the integrity of the support documents. Its mission is to protect the institution's capital, regarding the conception of models of analysis and integrated management of credit policies risk, market risk and operational risk. Within the framework of the several risks faced by the bank, in 2015, The Global Risk Department paid special attention to credit risk. Therefore, cases related to the different credit products marketed by the bank were analysed. The total amount of granted credit was KZ 30,9 billion. Most of the analysed credit processes are related to the Cria Condições product, with a total of 4.186, followed by the Credit to Staff Members with 423 and Individuals with 261 processes. During the financial year, the Global Risk Department classified the credit operations in accordance with Notice no. 04/09 of BNA, which consists of the individual and collective analysis of the established risk levels and the calculation of provisions in accordance with Notice 04/2011 of 8 June of BNA. 24_ ANNUAL REPORT 2015

26 10.5 INTERNAL CONTROL In order to carry out its activity and plan and targets set out for the year of 2015, the Internal Audit Department developed a series of initiatives, which basically focused on the adjustment of procedures and regulations for the best activity performance in the institution. The Department's activities were centred in three areas, namely, auditing to branches and service points, as well as process audit and training. In scope of the auditing of branches and service points, on various occasions, the quality of the respective commercial networks treasury departments was assessed, which lead to the conclusion that, in general, the treasury of the Bank is being correctly controlled. The branch treasury service process, the granting and control of loans, the costs analysis per branch, the fixed assets confirmation, as well as the issuing and control of cheques were also subject to audits. As for the process audit, the Internal Audit Department has audited the process of granting maternity allowance. Other tasks carried out by the Department in scope of its functions, such as handling correspondence with clients and legal authorities (106 circular letters from Clients, 217 letters from court answers to circulation process of courts and 158 letters from the Justice Department) and in 12 occasional situations, some of them required by the Bank's Board COMPLIANCE In accordance with its activity plan, in 2015, the Compliance Office has taken several steps in view of the compliance with the legislation on combating money laundering and terrorist financing. Throughout the year, the main objective of the Department focused on implementing an automatic and on-line monitoring of Clients and transactions, supervising the operations, structuring the area of conformity (control of legality and compliance with regulations), monitoring the implementation project of BNA Notices no. 1 and 2/2013, supervising the enhancement process of Clients' data, reviewing and formalising the BCFT prevention process, and promoting training on compliance. The automatic and on-line monitoring of Clients was not carried out in 2015, due to the postponement to February 2016 of the start-up of the implementation project of the new Argus-KYT application. Nevertheless, hundreds of alerts, without any match being confirmed, were analysed through ARGUS. The structuring of the area of conformity was partially carried out. The legal compliance assessment process was formalized and approved. In 2015, the Department coordinated conclusively the implementation project of the BNS Notices 1 and 2/2013, that consists of making the risk management function operational, in formulating the loans portfolio impairment model and in developing the compliance function. As for the enhancement for Client data, the objective was achieved. Since June 2015, the Department coordinates the up-date and enhancement process of these data. Update procedures were set out, and an obligatory introduction code renewal was conceived for all updated and recently opened accounts. On this basis, by the end of 2015, it was possible to control approximately 50 thousand accounts, that were considered as updated.. 25_ BANCO DE COMÉRCIO E INDÚSTRIA

27 10.7 CREDIT RECOVERY In coordination with the commercial areas and the Legal Department, the Credit Recovery Department, persisted, throughout the year, in contacting customers with past due loans, which made the recovery of a considerable amount of past due credit of KZ 916,3 million possible, which means an increase of 277,2%, compared to In 2016, the Department will follow up the improvement of the credit recuperation techniques, in accordance with the rigorous and careful policy regarding credit in irregular situations, defending the interests of the Institution and the costumers INFORMATION TECHNOLOGIES The Information Technologies Department has four departments in its structure: Basic Systems Department; Application Development Department; Infrastructure and User Support Department; Quality Planning and Management and Security of Information Systems Department In 2015, the Information Technologies Department developed a series of activities, that had a positive impact on the banking transaction performance and on the business of the institution. The following are worth mentioning: Creating the technical and technological conditions for the new branches and agencies; Anti-virus licence renewal; and internet banking certificate renewal; BCI web page renewal; Implementation of the customisation platform for cheques; Development of the statement module for enterprises; Implementation of the 'Pagou Activou' service in several enterprises; Data centre virtualisation. Disaster Recovery Implementation; Implementation of new internet banking channels; Optimisation of the network infrastructure between the branches and the head office; Implementation of new reports required by BNA. 26_ ANNUAL REPORT 2015

28 10.9 INTERNATIONAL RELATIONS Throughout the year, the permanent contact with the actual and potential correspondent banks, continued to be the priority for the International Relations Department, of which the main function consists in maintaining relations with operators of foreign banking markets. On one hand, the Department strengthened the existing relations with several correspondent banks, and, on the other hand, created new financial connections with the most active banks on international level, always focused on the following objectives: Increasing the variety of options in terms of international operations Finding better service solutions in terms of quality/ price; Diversify the financing alternatives for its activity; Increasing the profitability of the asset in foreign currency; Negotiating new credit lines and facilities. During the year 2015, the International Relations Department had several meetings with the following international institutions: Millennium BCP, Novo Banco, Bank of China, Commerzbank, Industrial and Commercial Bank of China, Banco Privado Atlântico Europa and Money Corp. With regard to these meetings, the agreements signed with Novo Banco on the increase of the credit line for BCI, as well as the agreement on opening nostro accounts at ICBC and BPA Europa JURIDICAL RELATIONS The Legal Department, among other tasks, gives legal advice to the Board and to other functional areas of the Bank, supervises any juridical activity in which the institution is involved, in order to, in any occasion, maintain compliance with the current laws in Angola In this scope, several activities were carried out in 2015, in particular the formulation of legal opinions relating to various issues regarding the Board, the issuing of various types of contract relating to loans granted by the bank, of which 473, of General Credit, 367 Particular, 309 Car Credit and 106 Corporate. The Department also granted legal assistance to various organs of the structure of the Bank, having followed and participated in 32 disciplinary proceedings, received and formulated legal opinions regarding proceedings for the opening of accounts, new signatures and company name proceedings. Moreover, in order to handle the Banks' proceedings, it took relevant actions concerning various organs, namely National Police, The Court of Luanda, the National Press, General Tax Administration, the Registry Office and the Notary. 27_ BANCO DE COMÉRCIO E INDÚSTRIA

29 11 SOCIAL RESPONSABILITY Considering that the social responsibility is an ethic commitment, which creates value towards organisations and society in general, BCI took several initiatives, not only at internal level but also for the community, of which we highlight the following: Civil Protection and Fireman; Medical Speciality Committee; Diocese of Benguela ; Students Council of Colégio Elizangela Filomena; Multiperfil Clinic; Leonildo Beatriz Foundation; Irmãs de São José de Cluny-Malange School; Angolan Skating Federation; Luanda Rails; Catholic University of Luanda; Coprat Futsal Club; Municipal Administration of Lobito. 12 FINANCIAL ANALYSIS ASSETS On 31 December 2015, BCI's total net assets amounted to KZ ,5 million, compared to KZ ,6 million achieved in 2014, which indicates a positive variation of 19%. Million KZ ASSETS Variation KZ KZ % 1. Disposable Assets , ,1 83% 2. Liquidity Investments: , ,4-23% 3. Securities 4.864, ,2 161% 4. Loans in the Payment System 167,5 314,4 88% 5. Foreign Exchange Transactions 0,0 0,0 0% 6. Loans , ,3-3% 7. Current Tax Assets 244,1 244,2 0% 8. Other Values , ,1 12% 9. Fixed Assets 7.127, ,7 4% Total Assets , ,5 19% Within the asset structure, the credit applications had the highest impact with 36%, followed by the disposable assets with 26%, the other assets with 13%, the liquidity investments with 10%, the fixed assets with 9%, the securities with 6% and finally, the loans in the payment system with 0%. 28_ ANNUAL REPORT 2015

30 Composition of assets in % 6% Credit Applications Other Assets 26% Securities Disposable Assets Fixed Assets 35% 10% 9% Liquidity Investments Foreign Exchange Transactions Loans in the Payment System The increase in the assets was influenced essentially by the increase of the disposable assets, that went from KZ billion in December 2014 to KZ 33,5371 billion in 2015, i.e. an increase of KZ 15,2565 billion, which reveals a high short term liquidity level observed by the bank at the end of the year. Consequently, the Bank was able to comply with the required reserves defined by the National Bank of Angola, as well as to fulfil the Clients' requests for transaction instructions and withdrawal at the branches. On the other hand, the increase of Securities has also contributed to the increasing total of Total Net Assets, as far as the Securities attained, in December 2015, the value of KZ 12,6872 billion, compared to KZ 4,8643 billion of 2014, which represented an increase of KZ 7,8829 billion. By the end of the year, the liquidity applications attained a value of KZ 11,6564 billion, representing a 23% downfall, compared to the KZ 15,0429 billion in the same period of BCI continued to meet the credit needs of its customers, by having its net loan portfolio coming up to KZ 45,5922 billion by the end of the year, compared to KZ billion registered in 2014, which means a decrease of 3%. With regard to the credit portfolio, it is important to highlight the credits granted to private customers through the products 'Cria Condições' and Wage Advance, as well as through the credit granted to companies by means of General Credit or Advance. The other values, receivable from sundry debtors, tax credits, dividends, tax reimbursements, exchange forward transactions, accounting accruals and other, registered a positive variation of 12%, coming from KZ 14,1891 billion in 2014, op to KZ 15,88 billion registered in The fixed assets, as a result of the investments made, throughout the year, in rehabilitation, construction of branches, software and investments in financial participations, totalled KZ 7,4396 billion, i.e. an increase of KZ 312,4 million, compared to the KZ 7,1272 billion obtained in December In December 2015, the tangible fixed assets totalled KZ 6,3186 billion, the financial fixed assets totalled KZ 787,5 million and the intangible fixed assets KZ 333,4 million. 29_ BANCO DE COMÉRCIO E INDÚSTRIA

31 LIABILITIES In December 2015, total liabilities reached KZ 120,8919 billion, i.e. a decrease of 21% compared to the KZ 100,0296 billion obtained in Liabilities Million KZ Variation KZ KZ % 1. Deposits , ,0 25% 2. Liquidity Funding 0,0 0,0 0% 3. Liabilities in the Payment System 983,9 800,5-19% 4. Foreign Exchange Transactions 0,0 27,2 100% 5. Other Funding , ,8 8% 6. Other Liabilities 8.344, ,9 10% 7. Provisions for Probable Liabilities 1.569, ,5-8% Total Liabilities , ,9 21% By the end of the year, the deposit portfolio reached KZ 96,42 billion, compared to KZ 77,0106 billion of 2014, i.e. an increase of 25%. It is important to highlight that the increase was recorded not only in the sight deposits, which increased 39% and by the end of the year attained KZ 67,4631 billion, compared to the KZ 48,623 billion, achieved in the previous year, but also in the term deposits, that went from KZ 28,3874 billion, recorded in 2014, up to KZ 28,9568 billion, which equals an increase of 2%. Liability composition in % 18% Deposits 1% Equity 76% Other Liabilities Other resources The figure above reveals the liability composition, in which the deposits, that represent 76% of the total, are highlighted, followed by other liabilities, that consist of other funding and liabilities with 18%, the equity with 5% and the other resources with 1%. EQUITY By the end of 2015, BCI's equity registered a growth of 5% and amounted to KZ 7,1352 billion, compared to the KZ 6,782 billion attained in The share capital (reserves e funds) increase contributed significantly to the equity increase. 30_ ANNUAL REPORT 2015

32 Equity Million KZ Variation KZ KZ % 1. Share Capital 6.894, ,0 0% 2. Reserves and Funds 7.608, ,8 53% 3. Potential Earnings 3.167, ,8 0% 4. Retained Earnings , ,1 116% 5. Net Results , ,3-56% Total Equity 6.782, ,2 5% In December 2015, the Reserves and Funds amounted to KZ 11,6148 billion, compared to the KZ 7,6086 billion, which equals an increase of 53%. This increase resulted from the capital increase by the State Shareholder in the amount of KZ 4 billion. This value is registered in the reserves until its execution in the notary's office. As a consequence, the share capital remained at 6,894 billion. For the purpose of the evolution of the regulatory Equity, the Solvency Ratio, by the end of the year came up to 5,5%, compared to 5,2% registered in Evolution of Equity (in thousands of kwanzas) Share Reserves and Funds Potential Earnings Retained Earnings Net Income for the Year PROFIT AND LOSS ACCOUNT Million KZ PROFIT AND LOSS ACCOUNT Variation KZ KZ % Net Operating Income 8.178, ,8 21% Provisions for Bad Debt and Provision of Guarantees 4.566, ,1-53% Earnings from Financial Intermediation 3.611, ,7 114% Administrative and Marketing Costs 9.021, ,9 21% Provisions for Other Values and Probable Liabilities 67,0 283,7 323% Earnings from Financial Fixed Assets 90,1 34,6-62% Other Operating Income and Costs -120,6 351,5-391% Operating Earnings , ,5-55% Non-operating earnings 290,6 175,2-40% Net Income for the Year , ,3-56% 31_ BANCO DE COMÉRCIO E INDÚSTRIA

33 NET OPERATING INCOME The results of the Bank's net operating income on 31 December 2015 are presented in the following figure: Million KZ Variation KZ KZ % Net Interest Income 4.271, ,9 25% Complementary margin 3.906, ,9 16% Total Net Operating Income 8.178, ,8 21% The net interest income in 2015 increased 25%, up to KZ 5,3599 billion, while in 2014 totalled KZ 4,2713 billion. This has resulted from the increase of the Profit from Securities, that represented a value of KZ 1,9473 billion in 2015, compared to KZ 513,7 million in On the other hand, the Income from Liquidity Investments also increased from KZ 234,4 million of the year 2014 to KZ 467,5 million. The costs of Financial Instruments increased from 1,2357 billion, recorded in 2015, up to KZ 1,3895 billion by the end of 2015, mainly due to the Cost of Deposits increase, which during the period under review, increased 11% and amounted to KZ 1,3282 billion. On the other hand, the Liquidity Funding Costs contributed to the increase of the total Costs of Financial Instruments, that recorded a 46% increase, which means that they went from KZ 42,0 million, in the previous year, up to KZ 61,3 in NET INTEREST INCOME Million KZ Variation KZ KZ % Profit from Liquidity Investments 234,5 467,6 99% Income from Securities 513, ,4 279% Income from Derivative Financial Instruments 0,0 0,0 0% Income from Loans and Advances 4.758, ,5-9% Income from Derivative Financial Instruments 5.507, ,5 23% Costs of Deposits 1.193, ,2 11% Liquidity Funding Costs 42,0 61,4 46% Funding Costs Related to Securities 0,0 0,0 0% Costs of Derivative Financial Instruments 0,0 0,0 0% Other Funding Costs 0,0 0,0 0% (-) Costs of Financial Instruments (Liabilities) 1.235, ,6 12% Total Net Interest Income 4.271, ,9 25% Given the adverse circumstances on the exchange market throughout the year, the results of the Exchange Transactions decreased from KZ 1,6432 billion, down to KZ 1,9515 billion in 2014, which means a 16% fall down. The Net Income from Financial Services have grown 48% in 2015, and resulted in KZ 2,8976 billion, compared to KZ 1,9554 billion in _ ANNUAL REPORT 2015

34 Complementary Margin Million KZ Variation KZ KZ % Net Income from Trading and Fair Value Adjustments % Net Income from Foreign Exchange Transactions 1.951, ,3-16% Net Income from Financial Services 1.955, ,7 48% Total Complementary Margin 3.906, ,4 22% In view of the net interest and complementary income, the net operating income recorded an increase of 21%, by reaching KZ 9,9008 billion in 2015, after having reached KZ 8,1781 billion in the previous year. Composition of Net Operating Income (in million Kwanza) 6.000, , , , , ,0 0,0 Net Interest Complementary Income STRUCTURAL COSTS In 2015, the structural costs, as a result of the investments made in scope of the expansion of the commercial network and the training of the employees, recorded a 21% increase, under the influence of the 22% increase of the Staff-related Costs (KZ 976,5 million), External Supplies, representing more than 165,1 million, and the Depreciations and Amortisations, that increased 3% (more KZ 22,8 million). Structural Costs Million KZ Variation KZ KZ % Staff 4.514, ,1 22% External Supplies 3.576, ,4 5% Tax and Rates not Incident on Earnings 84,0 101,5 21% Penalties Applied by Regulatory Authorities 1,8 0,1-97% ACT Withholding Costs 0,0 0,0 0% Other Administrative and Marketing Costs 0,0 55,7 0% Depreciation and Amortisation 845,1 867,9 3% Cost Recovery 0,0 0,0 0% Total Structural Costs 9.021, ,9 21% 33_ BANCO DE COMÉRCIO E INDÚSTRIA

35 Structural Costs Composition % 10% 40% 36% 50% 54% Staff-related Costs External Supplies ans Services Other costs Staff-related Costs External Supplies ans Services Other costs Within the Administrative Costs, the Staff-related Costs, which in 2014 had absorbed 50% of the total, increased up to 54% in 2015, while External Supplies and Services, went from 40% down to 36%; Other Costs remained at 10% RATIO The Accounting Solvency Ratio reached 7,7%, while the Regulatory Solvency Ratio recorded a slight reduction by achieving 5,5%, compared to the 5,1% of the previous year. The credit quality has slightly declined, in so far as the Loans Overdue, in relation to the Total Loans, increased from 24,3% in 2014 up to 25,6% in The provisions on Loans Overdue increased 27,0% in 2013, reaching 38,4% in the following year. The Liquidity Ratios continue to be positive, since the Total Deposit Loans registered 47,3% (60,9% in 2014) and the Term Deposits had a weight of 30,0% of the Total Deposits (36,9% in the previous year). In terms of productivity, the relation Structural Costs / Net Operating Income has presented the value of 110,7% em 2015 compared to 110,3% in The Net Interest Income, compared to the Net Operating Income, increased from 52,2% in 2014 to 54,1% in the following year. 34_ ANNUAL REPORT 2015

36 13. PROPOSAL FOR THE APPROPRIATION OF PROFITS The result of the financial year 2015 was negative in ,10 kwanzas, and therefore we suggest its accounting in retained results. 35_ BANCO DE COMÉRCIO E INDÚSTRIA

37 36_ ANNUAL REPORT FINANCIAL STATEMENTS

38 BALANCE SHEET ON 31 DECEMBER OF 2015 AND 2014 In thousands Kz NOTES ASSETS KZ KZ 1. DISPOSABLE ASSETS LIQUIDITY INVESTMENTS Inter-financial Market Transactions Purchase of Securities from Third Parties with Reverse Repurchase Agreement Transactions in Gold and Other Precious Metals SECURITIES Held for Trading Held to Maturity LOANS IN THE PAYMENT SYSTEM EXCHANGE OPERATIONS 0,0 0,0 6. LOANS Credits Provision for Bad Debt (-) CURRENT TAX ASSETS , OTHER VALUES FIXED ASSETS Financial Fixed Assets Tangible Fixed Assets Intangible Fixed Assets TOTAL ASSETS NOTES LIABILITIES AND EQUITY KZ KZ 1. DEPÓSITOS Sight Turn Other Deposits LIQUIDITY FUNDING 0,0 0,0 3. LIABILITIES IN THE PAYMENT SYSTEM EXCHANGE OPERATIONS ,0 5. OTHER FUNDING Other funding set out OTHER LIABILITIES PROVISIONS FOR PROBABLE LIABILITIES TOTAL OF LIABILITY EQUITY 8. Share capital Reserves and Funds Potential Earnings Retained Earnings Net Results TOTAL EQUITY TOTAL LIABILITIES AND EQUITY _ BANCO DE COMÉRCIO E INDÚSTRIA

39 FINANCIAL STATEMENT ON 31 DECEMBER OF 2015 AND 2014 In thousands Kz NOTES INCOME STATEMENT KZ KZ Income from Derivative Financial Instruments Profit from Liquidity Investments Profit from Securities Profit from Derivative Financial Instruments 0,0 0,0 Profit from Credits Profit from Derivative Financial Instruments Deposit Costs Liquidity Funding Costs Security Funding Costs 0,0 0,0 Derivative Financial Instruments Costs Other Funding Costs (-) Costs of financial instruments (liabilities) Net Interest Income Net Income from Trading and Fair Value Adjustments 0,0 0,0 Net Income from Foreign Exchange Transactions Net Income from Financial Services (-) Provisions for Bad Debt and Provision of Guarantees 7 and Earnings from Financial Intermediation Staff External Supplies Tax and Rates not Incident on Earnings Penalties Applied by Regulatory Authorities Other Administrative and Marketing Costs ,0 Depreciation and Amortisation Cost Recovery 0 0 (-) Administrative and Marketing Costs (-) Provisions for Other Values and Probable Liabilities 8 and Earnings from Financial Fixed Assets , Other Operating Income and Costs (-) Operating Income and Costs Operating Earnings (-) Non-Operating Earnings Earning Before Tax and Other Charges (-) Charges on Current Earnings 26 0,0 0,0 Current Net Income (-) Minority Holdings Year Income _ ANNUAL REPORT 2015

40 STATEMENT OF CHANGES IN EQUITY ON 31 DECEMBER OF 2015 AND 2014 In thousands Kz SHARE CAPITAL ORDINARY PREMIUM TOTAL RESERVES INCOME YEAR RETAINED YEAR SHARES ISSUE AND FUNDS POTENTIAL EARNINGS INCOME TOTAL Balance on 1 January ( ) ( ) Transfer of the 2013 result ( ) Constitution of Reserves and funds Receipts from capital increase (2014) Other ( ) - ( ) Exchange Variation Net year Income ( ) ( ) Balance on 31 December ( ) ( ) Transfer of the 2014 result ( ) Constitution of Reserves and funds Receipts from capital increase (2015) Applications (11.400) (11.400) Other ( ) Exchange variation (3.894) - (2.484) Net year income ( ) ( ) Balance on 31 December ( ) ( ) _ BANCO DE COMÉRCIO E INDÚSTRIA

41 CASH FLOW STATEMENTS ON 31 DECEMBER OF 2015 AND 2014 In thousands Kz NOTES KZ KZ Income from liquidity investments Income from securities Income from loans Receipt of income from financial instruments (assets) Payment of deposit costs ( ) ( ) Payment of Liquidity funding costs 0 (42.033) Payment of other funding costs (61.379) - Payments of costs of financial instruments (liabilities) ( ) ( ) Cash flow of net interest income Cash flow of foreign exchange transactions Cash flow of net income from financial services OPERATIONAL CASH FLOW OF FINANCIAL BROKERAGE Payment of administrative and marketing costs ( ) ( ) Payment of other Charges on earnings 0 (7.000) Cash flow of the settlement of Transactions in the payment system ( ) ( ) Cash flow of other values and other Liabilities ( ) ( ) Cash flow of other operating costs and income (65.926) ( ) INCOME AND PAYMENT OF OTHER OPERATING INCOME AND COSTS ( ) ( ) CASH FLOW OF OPERATIONS ( ) ( ) Cash flow of liquidity Investments ( ) Cash flow of investments in securities (assets) ( ) Cash flow of investments in credits ( ) ( ) CASH FLOW OF FINANCIAL BROKERAGE INVESTMENTS ( ) ( ) Cash flow of investments in fixed assets ( ) ( ) Cash flow of other non-operational profit and losses CASH FLOW OF FIXED ASSETS ( ) ( ) CASH FLOW OF INVESTMENTS ( ) ( ) Cash flow of financing with deposits Cash flow of financing with liquidity funding 0 ( ) Cash flow of financing with Other funding Cash flow of financing with other funding ( ) ( ) CASH FLOW OF FINANCIAL BROKERAGE FINANCING Receipts from share capital increases (-) Payments due to capital reductions 0 0 CASH FLOW OF FINANCING WITH EQUITY CASH FLOW OF FINANCING BALANCE IN CASH AND DEPOSITS AT THE START OF THE YEAR BALANCE IN CASH AND DEPOSITS AT THE END OF THE YEAR VARIATION IN CASH AND DEPOSITS _ ANNUAL REPORT 2015

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43 42_ ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS

44 1. ACTIVITY Banco de Comércio e Indústria, S.A. (hereinafter referred to as Bank or BCI ) was constituted by Public Decree on 11 March 1991, by Decree-Law 8 - A/91.11 March. BCI operates and has its head office at Rua Rainha Ginga, Largo do Atlético Luanda in Angola. The Bank is dedicated to obtaining resources from third parties in the form of deposits or similar funds, which it combines with its own funds in order to grant loans, make deposits at the Banco Nacional de Angola, invest in credit institutions and purchase securities or other assets to which it is duly authorised. The Bank also renders other banking services and conducts various types of operations in foreign currencies. For this purpose, it has a network of 89 branches. With regard to its shareholding structure, as detailed in note 14, the Bank belongs to the Angolan State, as well as to entities of the Angolan Public Sector. 2. MAIN ACCOUNTING POLICIES 2.1 BASIS OF PRESENTATION The financial statements presented in this report were prepared under the assumption of business continuity, based on the ledgers and records kept by the Bank, and pursuant to the accounting principles established in the Accounting Plan of the Financial Institutions (CONTIF), as defined in Instruction no. 9/2007 of 19 September, issued by Banco Nacional de Angola (hereinafter also referred to as BNA ), which was enforced as of 1 January 2010, and its subsequent updates in Directive no. 04/DSI/2011, which establishes the compulsory adoption of the international accounting standards (IFRS International Financial Reporting Standards) for all matters related to accounting procedures and criteria which are not established in CONTIF. These principles may differ from those generally accepted in other countries. The objective of CONTIF is to standardise accounting records and financial statement disclosure in line with international practice, through the convergence between the accounting principles and International Financial Reporting Standards (IFRS). These financial statements reflect the Bank's operations regarding the financial years ended on 31 December 2015 and 2014 and were prepared under the assumption of business continuity and accrual-based accounting, meaning that items are recognised as assets, liabilities, equity, income and costs, when they satisfy the recognition definitions and criteria for those elements in the framework, in accordance with the qualitative characteristics of understandability, relevance, reliability, materiality, objective representation, substance over form, completeness, prudence, neutrality and comparability. The financial statements of BCI, relating to the year ended on 31 December 2015, were approved by the Board on 31 March The accounting policies presented in this note were applied consistently in all the periods of these financial statements. The Bank's financial statements for the years ended on 31 December 2015 and 2014 are expressed in thousand Angolan Kwanza, pursuant to BNA Notice no.15/2007, art. 5, whereby all the assets and liabilities denominated in foreign currency were converted at the reference average exchange rate published by the BNA on the reporting date. 43_ BANCO DE COMÉRCIO E INDÚSTRIA

45 On 31 December 2015 and 2014, the exchange rate the Kwanza (AKZ), published by the BNA, compared to the United States Dollar (USD) and the Euro (EUR) was the following: USD = EUR = ACCOUNTING POLICIES The main accounting policies adopted in the preparation of the financial statements are the following: a) Accruals Basis The income and costs are recognised based on the period during which they incurred or were obtained, in accordance with the accounting principle of accruals basis, and are registered when they become due, regardless of the moment on which they are received or paid. Income is considered realised: i. In transactions with third parties, when the payment is made or a firm commitment is undertaken to carry it out; ii. In the partial or total extinction of a liability, whatever its motive, without the simultaneous disappearance of an asset of equal or higher value; iii. In the natural generation of new assets, independently of the intervention of third parties; iv. in the effective receipt of donations and subsidies. In turn, costs are considered incurred: i. When the corresponding assets value no longer exists, due to transfer of its ownership to a third party; ii. Through the reduction or extinction of the economic value of an asset; iii. Through the arising of a liability, without the corresponding asset. Dividends are recognised when they are received. b) Foreign exchange transactions Foreign exchange transactions are registered, pursuant to the principles of the multicurrency system, whereby each transaction is recorded in the currency in which it is denominated. Foreign exchange transactions are converted to Kwanzas, based on the reference exchange rate of the day of the transaction, published by the BNA. Asset and liability transactions stated in foreign currency are converted to Kwanzas based on the reference exchange rate published by the BNA on the day of the balance sheet. The realised or potential costs and income, arising from exchange rate variation, are recorded in the income statement of the financial year during which they occur. The non-monetary assets and liabilities, financial fixed assets, are registered at historical cost. The non-monetary assets and liabilities, stated in foreign currency and registered at historical cost, except financial fixed assets, are converted to Kwanzas based on the reference exchange rate of the day of the transaction, published by the BNA. Forward and spot purchases and sales in foreign currency are immediately stated in the foreign exchange position on the contract date. Whenever such operations lead to changes in the net balances of the different currencies, entries are made to the spot or forward foreign exchange position account, whose contents and revaluation criteria are described below: 44_ ANNUAL REPORT 2015

46 Spot currency position The spot currency position in a given currency corresponds to the net balance of assets and liabilities expressed in that currency, of the spot transactions pending settlement and of the forward operations coming due within two working days. The spot currency position is revalued daily based on the reference exchange rate of that day, published by the BNA, which leads to the movement of the exchange position (national currency), stated against the income. Forward currency position The forward currency position in a given currency corresponds to the net balance on forward operations pending settlement, except those maturing in the following two business days. All the contracts relating to these operations are revalued at market forward exchange rates (currency forwards) or, if not available, as calculated on the basis of the interest rate applicable to the residual maturity of each transaction. The difference between the counter values in Kwanzas at the forward revaluation rates applied and the counter values at the contracted rates, that represent income or costs or the forward currency position revaluation cost, is recorded in the headings Foreign exchange transactions of the assets or liabilities, with a corresponding income entry. c) Credit Credit classification Credit granted to customers is composed by financial assets initially registered by the contracted values, whenever created by the Bank, or by paid values, when acquired from other entities. The interest component is recognised separately in the respective balance sheet accounts, the respective income being accrued throughout the lifetime of the credit operations, irrespective of the moment when charged or paid. Credit is subsequently recorded at the initial value, net of depreciations and provisions for bad debt. The responsibilities for guarantees and sureties provided and documentary credit are recorded in off-balance sheet entries by the value at risk, the interest flows, commissions and other income recorded are registered in results items throughout the lifetime of the operations. Since the entry into force of Notice no. 4/2011 of 8 June of the BNA, subsequently repealed by Notice no. 3/2012 of 28 March, of the BNA, credit operations are granted in national currency, by disbursement, to all entities, except to the State and enterprises with confirmed receipts in foreign currency, for the following purposes: - Liquidity assistance, including the secured current accounts; - Car financing; - Consumer credit; - Microcredit; - Advances to depositors or overdrafts; - Other forms of short term financial credit (less than one year). The classification of the operations of credit granted to customers and guarantees and sureties provided and documentary credit is determined by its risk and subject to the constitution of provisions, pursuant to Notice no. 3/2012 of 28 March of the BNA, that repealed Notice no. 4/2011 of 8 June of the BNA on the methodology and classification of credit granted to customers and the constitution of the respective provisions. In accordance with Notice no. 3/2012 of 28 March of the BNA, the Bank classifies the operations of credit granted to customers and guarantees and sureties provided and documentary credit by increasing order of risk, to the following categories: 45_ BANCO DE COMÉRCIO E INDÚSTRIA

47 Level A B C D E F G Risk Zero Very low Low Moderate High Very high Loss The credit operations that enter in default are classified pursuant to the risk levels associated to due and overdue credit of each operation on the reference date of the financial statements, taking into account the classification given during the credit granting phase and elapsed default time, respectively. In addition to this, the credit operations short of default, that were not recorded as overdue credit, are rated at A level, if they involve State risk entities (credit granted within the framework of credit programmes of the Angolan government or to public entities) as well as at levels B or C for the remaining entities, pursuant to the risk perception resulting from the evaluation of the customer's capacity to meet the debt service and the financial component of the operation, underpinned in the analysis of cash flows and guarantees (typology and the coverage ratio of credit). In view of the constitution of provisions, the classification of the credit operations, granted to the same customer, is made at the level that shows the highest risk (assign). The revision and reclassification of the risk level of any operation results from the assessment periodically carried out by the Bank, taking into account the risk perception associated to the credit operations and the existence of possible guarantees that collateralise the debt with the Bank. Notwithstanding the foregoing, the credit operation classification is monthly revised, pursuant to the time elapsed since the default entry date of the operations, in accordance with the following table: Risk Levels A B C D E F G Time elapsed until to 30 1 to 2 2 to 3 3 to 5 5 to 6 more than since default date days days months months months months 6 months In accordance with the delay reduction, the credit reclassification with regard to a lower risk level is limited to the level established in the initial classification or in the classification that results from the periodical risk assessment. As for customer credit granted with maturities of over two years, the time elapsed since the default entry is considered doubled, compared to the period indicated above. Provisions for Bad Debt and Provision of Guarantees Bad debt provisions are intended to cover potential risk existing in the credit portfolio, including guarantees and sureties provided and documentary credit and are monthly constituted as a result of the application product of the provision percentages of the accounting value of each credit, i.e. the amount to receive from the borrower, plus any income and costs not received, including those resulting from currency rate variation, if applicable. 46_ ANNUAL REPORT 2015

48 The minimum provisioning levels to be applied to each credit operation, in accordance with its respective risk level, are as follows: Risk Levels A B C D E F G % minimum provision 0% 1% 3% 10% 20% 50% 100% The granted credit provisions are recorded in the assets in heading Provisions for doubtful debt, to deduct from heading Credit (see note 7) and the guarantees and sureties provided and documentary credit not guaranteed at the date of the balance sheet are presented in the liabilities, in heading "Provisions for probable liabilities in the guarantees provision" (see note 13). Credit transferred to losses Six months after a Class G operation's classification, the Bank writes off this credit from assets and uses the respective provision, if it is delayed by more than 180 days (credit transferred to losses). In addition to this, this credit remains registered in an off-balance sheet for a minimum period of ten years. Credit renegotiation Operations which are the object of renegotiation are maintained at least at the same risk level they were classified as in the month immediately prior to the renegotiation. The reclassification to a lower risk level only occurs if there is a significant and regular depreciation of the liabilities. The profit or income resulting from renegotiation only are recorded when they are effectively received. Credit Recovery In the situations in which written-off credit is recovered from assets by using provisions, the received amounts are recorded under the heading Non-operating earnings. Appropriation of income The bank writes off the interest due for more than 60 days and does not recognise interest from that day on, regarding default credit operations, until the customer solves the situation. d) Securities Classification of securities The securities acquired by the bank are recorded at the value of the effective amount paid, including brokerage and emoluments. The Board of Directors determines the classification of its investments at initial recognition, in one of the following categories, considering the securities' characteristics and its intention at the time of the acquisition: i. Securities held for trading; ii. Securities available for sale; iii. Securities kept until maturity. The income produced by the securities from interest earned over the period until their maturity or declared dividends is considered directly through profit or loss for the period, regardless of the category into which they have been classified, considering that the income relative to shares acquired less than six months previously must be recognised against the account recording the corresponding acquisition cost 47_ BANCO DE COMÉRCIO E INDÚSTRIA

49 The Bank classifies, in the same manner, the securities, in ascending risk order, at the following levels, meeting the same coverage criteria defined by CONTIF for the credit portfolio: Level A B C D E F G Risk Zero Very low Low Moderate High Very High Loss The Bank classifies debt securities of the Angolan State and of Banco Nacional de Angola at Level A. Securities held for trading Are considered securities acquired for the purpose of active and frequent trading. Securities held for trading are initially recorded at acquisition cost, including costs that are directly attributable to the acquisition of the financial asset. Subsequently, they are adjusted to the fair value, by which the respective income or cost is recorded in the net income. Securities kept until maturity Securities kept until maturity are those that are acquired for the purpose of being kept in the portfolio until they mature, for which the Bank has financial capacity. This financial capacity is confirmed based on cash flow, not considering the possibility of the sale of the securities before their maturity. The unredeemable shares can not be classified under the category securities kept until maturity. Securities kept until maturity are recorded at their acquisition value, plus the income received based on the time period (including the due date of the interest and the premium/discount against the income), in which the Bank recognises possible profits or losses determined on the maturity date based on the difference between the price and the book value. In case of the possible sale of securities classified in the category securities kept until maturity prior to redemption, the possible profits or losses must be recorded on the date of the sale at the difference between the price and the book value. The Bank can not classify any securities in the category securities kept until maturity if, during the current financial year or one of the two previous financial years, sold or reclassified a substantial part of them before the maturity, except the cases in which the acquisition value of the shares, plus the received profit, does not present a significant difference with the market value. Central Bank Securities and Treasury Bills are issued at discount value and recorded at their acquisition value. The difference between this value and the nominal value, that determines the Bank's remuneration, is recognised in the accounts as profit over the period between the purchase date and the maturity date of the securities, in its own accounts under the specification "Income receivable" 48_ ANNUAL REPORT 2015

50 Treasury Bonds issued in national currency, indexed to the United States Dollar exchange rate, are subject to exchange rate updating. The result of exchange rate updating of the nominal value of the security, discount and realised interest is reflected in the income statement for the year when it occurs, under the heading "Securities". Securities available for sale Securities available for sale are those considered to be negotiable and that do not fall under the remaining categories. Initially, they are recorded at acquisition cost. Subsequently, they are adjusted to the fair value. The fair value variations are recorded against the equity account. The profit is recorded in the net income at the date of the effective sale of the asset. Market value The market value (fair value) of the securities is determined in accordance with the following criteria: i. Average trading price on the calculation date or, when unavailable, average trading price on the previous working day; ii. Estimated net realisable value obtained through the adoption of a technique or internal model of appreciation; iii. Similar financial instrument price, taking into consideration, at least, the payment periods and due dates, the credit risk and the currency or index; and iv. Price defined by the BNA. As for securities that have a maturity of less than one year and that are not quoted in an active market with regular transactions, these are appreciated based on the acquisition value, because it is considered to reflect a better approximation of the market value. Transfer of securities between categories The transfers from one category to another can only occur for an isolated, not a usual or recurring, motive, which could not have been reasonably anticipated, having occurred after the classification date. In this case, the documentation, on which the reclassification is based, shall remain at the disposal of the BNA, duly accompanied by the statement of reasons of the Bank's Board. Any transfer to another category shall take into account the intention and the financial capacity of the Bank, as well as the market value of the security, considering the following procedures: 1) As for the transfer of the category Securities held for trading to the other categories, the reversal of values already recorded in the income statement, that result from unrealised gains or losses, will not be allowed; 2) As for the transfer of the category Securities available for sale, the unrealised gains or losses, recorded as a highlighted equity component, must be recognised in the profit or loss for the period: i. Immediately, if to the category "Securities held for trading"; ii. Pursuant to the remaining maturity period, if to the category; Securities kept until maturity ; 49_ BANCO DE COMÉRCIO E INDÚSTRIA

51 3) In case of transfer from the category Securities kept until maturity to the other categories, the unrealised profits or losses must be recognised: i. Immediately in the profit or loss for the period, if to the category "Securities held for trading"; ii. As a highlighted equity component, if to the category "Securities available for sale". Impairment The permanent losses related to securities must be immediately recognised in the net income for the year. The adjusted value resulting from the recognition of the above mentioned losses creates the new value basis for the appropriation of income. The reversal of these losses are not admitted. e) Financial fixed assets Holdings in related entities and equivalent Holdings in related entities and equivalent are holdings in companies in which the Bank, directly or indirectly, holds a stake equal to or above 10% of the respective voting share capital, without controlling it. The Bank applies the equity method for its holdings in related entities and equivalent, in the following situations: a) When the holdings are related; or b) When the holdings are relevant and the Bank has influence in their management, or when the Bank's percentage holding, directly or indirectly, represents 20% (twenty per cent) or more of the voting share capital of the related entity. A holding is considered related when it holds control over the company, reflected through operational control, common administration or management, or corporate control, when control is obtained by the total percentage held directly by the Bank, its directors, or controlling and related companies. A holding is considered relevant whenever: a) The book value is not lower than 10% of the equity of the Bank; or b) The book value of the subsidiaries, considered in conjunction, is not lower than 15% of the equity of the Bank. In accordance with the equity method, the financial fixed assets are initially recorded at their purchase value and subsequently adjusted pursuant to the changes verified after the acquisition, in the Bank's share in the net assets of the subsidiaries. The Bank's profit and loss include the corresponding part in the profit and loss of these subsidiaries. In addition to this, the Bank must constitute a provision for losses, whenever it discovers a liability, in the subsidiary, and the Bank has the manifest intention of maintaining its financial support. The holding in equivalent and affiliate entities with clear and affective evidence of loss of continuity of its operations, or in case these are operating under severe long term restrictions that significantly affect their capacity to transfer resources to the investing entity, shall no longer be evaluated by the equity method. When the equity method valuation does not apply, the financial fixed assets are recorded at the acquisition cost minus the provision for losses. 50_ ANNUAL REPORT 2015

52 The acquisition issued in foreign currency is subject to exchange rate updating. The result of this exchange rate updating is reflected under the specific equity heading. Holdings in other companies This heading considers holdings in companies in which the Bank, directly or indirectly, holds a stake below 10% of the respective voting share capital. The holdings in other companies are recorded at acquisition cost minus the provision for losses. The income produced by these investments relative to declared dividends, is considered directly through profit or loss for the period. The acquired holdings with proposed and unpaid dividends (ex-dividends) have these dividends recorded on the respective account as acquisition cost against the profit and loss. The acquisition issued in foreign currency is subject to exchange rate updating. The result of this exchange rate updating is reflected under the specific equity heading. Other investments This heading includes rights of any nature that are not classifiable by any other assets heading, nor in tangible or intangible fixed assets such as artistic objects. f) Tangible and intangible fixed assets Intangible fixed assets Intangible fixed assets include essentially goodwill paid on acquisition, organisation and expansion, improvements to property owned by third parties and software, whenever the bank is able to demonstrate that they generate future economic benefits. Intangible fixed assets are recorded at acquisition cost and are depreciated in monthly twelfths over a period of three years, with the exception of improvements to third party properties, which are depreciated pursuant to the rental expectation or the respective useful life period, if lower. Tangible fixed assets Tangible fixed assets are recorded at acquisition cost, although they may be revalued in accordance with applicable legal provisions. A percentage of 30% of increase of the depreciations, which results from the revaluations is not acceptable as costs for tax purposes. The depreciation is calculated on a straight-line basis at the maximum rates acceptable as costs for tax purposes, pursuant to the Industrial Tax Code, which correspond to the following estimated tears of useful life: Years Properties for own use: Buildings 50 Works 5 Equipment: Furniture and material 10 Machines and tools 6 Hardware and software 6 Indoor installations 10 Transport material 3 Security equipment 10 Other equipment 6 to 10 51_ BANCO DE COMÉRCIO E INDÚSTRIA

53 In accordance with the presidential decree no. 207/15, published on 5 November 2015, which established the new fixed assets depreciation and amortisation regime, the depreciation of assets, purchased as from 1 January 2015, is calculated at the maximum rates established in the table annexed to the above mentioned decree, to which the following years of expected useful life correspond: Years Properties for own use: Buildings 25 Works 5 Equipment: Furniture and material 6 to 8 Machines and tools 3 to 8 Hardware and software 3 Indoor installations 5 to 10 Transport material 4 Security equipment 8 Other equipment 3 to 5 Fixed assets in progress, that correspond essentially to buildings and branches/service posts under construction and the respective furniture, are recorded at acquisition cost and shall start their depreciation, as soon as the respective buildings and branches/service posts become operational. g) Assets not for own use The assets not for own use are classified as held for sale when it is intention to sell the referred assets and the referred assets are available for immediate sale and its sale is highly probable. The Bank classifies as assets not for own use the assets held as a result of credit recovery initially measured at the lowest value between its net fair value and the book value of the existing loan on the date of the in lieu. In addition to this, the properties, that are not part of the installations of BCI nor destined to its corporate object, are classified as assets not for own use. The fair value is based on the market value, which is determined based on the expected sale price obtained by the Bank's periodic assessments. Subsequently, these assets are measured at the lower book value and corresponding fair value net of expenses, which are not subject to depreciation. In case of the existence of unrealised losses, they are recorded as impairment losses against the profit and loss for the year. h) Reduction in the recoverable value of assets (impairment) The Bank assesses its assets periodically with a view to the identification of assets which show a recoverable value below their book value, in particular when elaborating the financial statements. The reduction of the book value (impairment) of an asset is always recognised when its book value exceeds its recoverable value. 52_ ANNUAL REPORT 2015

54 For the assessment of impairment, the institution takes into account at least the following indicators: 1) Significant decline in the value of an asset, higher than would be expected from its normal use; 2) Significant changes in the technological, economic or legal environment, with adverse effects on the Bank; 3) Increase in interest rates or other market rates, with effects on the discount rates and consequent reduction in the present value or recoverable value of the assets; 4) Book value of net assets higher than the market value; 5) Evidence of obsolescence or loss of physical capacity of an asset; 6) Significant changes in the form of use of the asset, such as discontinuity or restructuring, with adverse effects on the Bank; 7) Indication that the economic performance of the asset will be worse than expected. i) Monetary updating of equity reserve In accordance with Banco Nacional de Angola Notice no. 2/2009 of 8 May relating to monetary revaluation, and which revoked Notice no. 19/2007 of 26 September, financial institutions must, in cases where inflation prevails, monthly consider the effects of the change in the national currency's purchasing power, based on the application of the Consumer Price Index to the balances on capital, reserves and retained earnings. The financial statements of an entity of which the functional currency is the currency of a hyper inflationary economy, shall be stated in terms of the measuring unit current at the end of the reporting period. Hyperinflation is indicated by characteristics of the economic environment of a country which include, but are not limited to, the following: i. The general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. The detained amounts of local currency are immediately invested in order to maintain purchasing power; ii. The general population regards the monetary amounts in terms of a stable foreign currency. Prices may be quoted in that currency; iii. Sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short; iv. Interest rates, salaries and prices are linked to a price index; and v. The accumulated inflation rate over 3 years is close to or exceeds 100%. The value arising from the monetary updating of fixed assets must be monthly credited under the heading "Earnings from Monetary Updating", against the heading of gross value and depreciation of fixed assets. 53_ BANCO DE COMÉRCIO E INDÚSTRIA

55 The value arising from the monetary updating must be monthly debited under the account "Earnings from Monetary Updating" of the financial statements, against the increase of equity balance, with exception of the heading "Social Share", which may be classified in a specific heading ("Monetary Updating of Capital Reserve") which can only be used for further capital investment. In the financial years of 2015 and 2014, the Bank did not proceed with the monetary updating of its financial fixed assets and equity, because inflation and the development of the exchange rate, throughout the period, did not point Angola as a hyper inflationary economy, according to the law in force. j) Benefits to employees Retirement pensions liability The Law no. 07/04, of 15 October, that revoked the Law no. 18/90, of 27 October, which regulates the Social Security System of Angola, predicts the allowance of retirement pensions to Angolan workers registered with Social Security. The calculation of these pensions is based on a table proportional to the number of working years, considering the average of monthly net salaries received in the periods before the date when the employee ends his activity. According to Decree no. 38/08, of 19 June, the rate of contribution to this system are 8% for the entity and 3% for the workers. In addition to this, according to Law no. 2/2000 and with the articles 218 and 262 of General Labour Law, the compensation to be paid by the Bank, in case of working contract expiration by retirement of the worker, is determined by the multiplication of 25% of the basic monthly salary in force by the date when the worker achieves the legal age for retirement by the number of years of seniority.this compensation, though, was annulled in the new General Labour Law, adopted by Law no. 7/15 of 15 June, that has entered in force on 15 September Nevertheless, BCI's responsibilities concerning supplementary pensions, provided for in the previous General Labour Law, are registered in the heading Provisions for probable responsibilities (see note 13). On the other hand, on 15 March 2010, the Bank has signed a protocol with Banco Nacional de Angola, aiming at the assumption of costs of retirement pensions supplementary to the Social Security System of Angola for the Bank's employees coming from that institution. These charges are paid through a Monthly Life-long Income from the moment when employees retire, being assumed in a shared way and proportionally to the period of employment in each of the institutions. Provision for holidays and holidays allowance The General Labour Law, in force on 31 December 2015, determines that the amount of holidays allowance payable to workers in a certain year is a right acquired in the year preceding. Consequently, the Bank accounts in the financial year the values relative to holidays and holidays allowance payable in the following year (see note 12). k) Income tax In scope of the normal course of its activity, the Bank's income is subject to several taxes, depending on its nature. In this manner, the Bank is taxed for its entire profit, either in the country or outside of the country, and its taxable profit equals the difference between the total income and the total cost and losses of the financial year under review, where necessary adjusted in accordance with the terms and conditions of the Industrial Tax Code. 54_ ANNUAL REPORT 2015

56 The Bank is subject to Industrial Tax and considered, for tax purposes, a group A taxpayer. Its income is taxed in accordance with the new Industrial Tax Code, adopted by Law no. 19/14 of 22 October 2014, which entered in force on 1 January 2015 and establishes the new tax rate (see note 25). Tax losses determined in a particular financial year, pursuant article 48 of the Industrial Tax Code, can be deducted from taxable income of the three following years. The tax declarations are subject to revision and correction from tax authorities throughout a period of 5 years, and this may result, due to different interpretations of the tax law, on possible adjustments to the taxable income of the financial years from 2011 to It cannot be predicted, though, if any of these adjustments of these financial years will occur. If they do occur, a significant impact on the balance sheets is not to be expected. The income from public debt securities obtained in Treasury Bonds and Treasury Bills issued by the Angolan Government, whose terms of issue are regulated by the framework law of Direct Public Debt (Law no. 16/02, of 5 December) and falling within the scope of Regulatory Decrees 51/03 and 52/03, of 8 July, enjoys exemption from all taxes. Such fact is complemented by the provisions in point c) in no.1 in Article 23 of the Industrial Tax Code, where it is explicit that no earning from any public debt securities will be considered net income, for the effect of determination of the industrial contribution. Therefore, in determining the taxable profit for the years ended at 31 December 2015 and 2014, this income was deducted from the taxable profit. Current tax The current tax calculation is based on the taxable income of the financial year, which differs from the accounting results due to adjustments arising from costs or profits which are not relevant for tax purposes or which will be considered in other accounting periods. Deferred Tax Deferred tax corresponds to the impact on the future receivable/payable tax resulting from the temporary taxable or deductible difference between the value of an asset or a liability and its taxable base, used to determine the taxable income. Deferred tax asset and liability is calculated based on the tax rates in force for the period when the respective asset or liability is expected to be realised. The reportable tax losses also originate deferred tax assets. Deferred tax liability is normally recorded for all the taxable temporary difference, while deferred tax asset is only recognised up to the amount in which it is probable to have future taxable income which allows the use of the correspondent tax difference or of tax losses report. Additionally, deferred tax asset is not recorded in cases when its recoverability might be questionable due to other situations, including questions of interpretation of the tax law in force. However, deferred tax assets or liabilities are not recorded when referring to temporary difference originated in the initial asset and liability recognition in transactions that do not affect the tax result or the taxable income. The Bank has not recognised in the financial statements the deferred tax assets related to the reportable tax loss, as it is not possible for the Bank to demonstrate the probability of obtaining taxable income in the future, capable of allowing its use. Capital Gains Tax Following the outlines defined by the Tax Reform project, the Presidential Decree No. 2/14, of 20 October, published in the Diário da República (Official Gazette), that leads to the revision and the republication of the Tax Code on Capital Application ( IAC ), that entered into force on 19 November _ BANCO DE COMÉRCIO E INDÚSTRIA

57 The Presidential Decree No 2/14, of 20 October, that entered into force on 19 November, reviewed and introduced several legislative amendments to the IAC Code, following the Tax Reform project. O IAC relates generically to income from the Bank's financial applications. This rate ranges from 5% (in the case of an interest payment of government debt securities, that present a maturity of three or more years) to 15%. Nevertheless, what concerns income from government debt securities, as mentioned above, only those that result from securities issued on or after 1 January 2013, are subject to this tax, in accordance with the latest agreement between the Tax Authorities and the Banco Nacional de Angola sent to the ABANC (letter from the Banco Nacional de Angola, issued on 26 September 2013). The IAC regulates the payment on account of the Industrial Tax, by managing this compensation through the eventual tax allowance, in accordance with paragraph a) of No. 81 of the Industrial Code. Urban Property Tax In accordance with the amendments made to Law no. 18/11, of 21 April, of the Urban Property Tax Code ( IPU ), a 15%. IPU rate is applied to the income from rented real estate. On the other hand, in accordance with article 23 of the Industrial Tax Code, the rents, that are subject to IPU, are not considered profits or gains, for the purpose of the assessment of the due tax. l) Wealth tax Urban Property Tax In view of the amendment by Law no. 18/11, of 21 April, the exemption, previously established in the IPU Regulation, was repealed, and, therefore, a 0,5% IPU rate now applies to the value of the own real estate, whose function consists in the development of the Bank's regular activity (higher than AKZ ). Real Estate Transfer Tax ('SISA') Under the terms of the Legislative Measure no. 230, of 18 May 1931, as well as the amendments of Law no. 15/92, of 3 July and Law no. 16/11, of 21 April, the Real Estate Transfer Tax is levied on all acts that imply perpetual or temporary transfer property of any value, type or nature, regardless of its designation or type of security (for example, acts that imply the transfers of improvements rural or urban buildings, the transfers of real estate through donations with entries or pensions, or the transfer of real estate through donations), at a 2% rate. m) Other Taxes The Bank is equally subject to indirect taxes, namely, such as Custom Duties, Stamp Duties, Excise Duty, as well as other taxes. n) Tax Substitution Capital Gains Tax In accordance with the Presidential Decree no. 2/14, of 20 October, the Bank makes the IAC retention at source, at a 10% rate, on the term deposit interests paid to clients. 56_ ANNUAL REPORT 2015

58 Stamp Duty In accordance with the Presidential Decree no 3/14, of 21 October, the Bank is responsible for the payment and the delivery of the Stamp Duty of its clients in most of the banking activities (such as financing, financing interest recovery, commissions for financial services), in which the Bank pays the tax at the rates established in the Table of Stamp Duty. Industrial Tax In accordance with Article 67 of the Law no. 19/14 of 22 October, the effective taxation of the services supplied to the Bank, subject to a withholding tax on specific service supplies at a 6,5% rate. Urban Property Tax In accordance with the Law no. 18/11, of 21 April, the Bank withholds the UPT retention, at a 15% rate, on the payment or delivery of rents of rented real estate. o) Provisions and contingencies Provisions Provisions represent probable obligations with estimated time periods and values. Provisions are recognised when (i) the Bank presents an obligation, legal or constructive, (ii) it is probable that its payment will be demanded and (iii) a reliable estimate can be made of the value of this obligation. The provision amount corresponds to the best estimate of the value to pay in order to settle the liability, on the balance date. Contingent Liabilities In case the Bank has a liability of which the future out-flow of resources is not probable, it is a contingent liability. Contingent assets are only object of disclosure, unless the probability of its occurrence is remote. Contingent assets are recognised in off-balance sheet accounts when (i) the Bank has a possible present obligation, whose existence will be confirmed only by the occurrence or not of one or more future events, that are beyond the control of the institution; (ii) one present obligation which arises from past events, but which is not recognised because it is not probable that the institution will have to settle it or the value of the obligation can not be measured with sufficient reliability. Contingent liabilities are revalued periodically in order to determine if their initial assessment continues valid. If it is probable that an outflow of resources will be required for an item previously treated as a contingent liability, a provision is recognised in the financial statements, for the period when the change in the probability occurs. Contingent assets Contingent assets are a possible present asset, arising from past events, whose existence will be confirmed only by the occurrence or not of one or more future events, that are beyond the control of the institution. Contingent assets are only object of disclosure and recognised in off-balance sheet accounts, unless the probability of its occurrence is remote. Contingent assets are revalued periodically in order to determine if their initial assessment continues valid. If it is practically certain that any inflow of resources will take place on account of an asset, and this entry has been classified previously as probable, the asset and corresponding gain will be recognised in the financial statements, for the period when the change in the estimate probability occurs. 57_ BANCO DE COMÉRCIO E INDÚSTRIA

59 p) Recognition of profits from services and commissions The commissions from services rendered are normally recognised as profits over the period the service is rendered or on a one-off basis, if they arise from single acts. q) Profit per share The profit per share is calculated by dividing the net income of the Bank by weighted average number of ordinary shares outstanding during the financial year, excluding the average number of ordinary shares acquired by the Bank and held as own shares. If the profit per share is changed as a consequence of an issue with premium or discount or other event capable of changing the potential number of ordinary shares or changes in the accounting policies, the calculation of profit per share for all the time periods presented is retrospectively adjusted. r) Dividends distribution Dividends are recognised as liability and deducted from the fixed assets heading after the shareholders' approval. s) Main estimates and uncertainties related to the application of accounting The Bank's accounts integrate estimates produced under conditions of uncertainty, which require a judgement from the Board in order to determine the appropriate estimate. This way, in some situations, the estimates determined by Board of the Bank, could have been different if another judgement had been made. The Board considers that the adopted criteria are appropriate and that the financial statements present adequately the financial position of the Bank and of its transactions in all material relevant aspects. Estimates and assumptions were used, namely in the following areas: "Provisions for doubtful debts", "Securities", "Financial fixed assets", "Tangible and intangible fixed assets", "Benefits for employees", "Provisions for probable liabilities" and "Income tax". t) Cash flows For the purpose of preparing the cash flow statements, as disposable assets, the Bank considers the total of balances in cash headings, disposable assets in the Central Bank and disposable assets in financial institutions. u) Balance Clearing The assets and liabilities elements must be valued separately, not being allowed any clearing between debtors and creditors' balances, including the one of income accounts, excepting the clearing relative to interdepartmental or interdependencies transactions, or other defined by BNA. 58_ ANNUAL REPORT 2015

60 3. DISPOSABLE ASSETS On 31 December 2015 and 2014, this heading has the following composition: Cash National notes and coins Foreign notes and coins In United States Dollars In other currencies Disposable assets in the Central Bank In national currency In United States Dollars Disposable assets in the other credit institutions Commerzbank In United States Dollars In Euros Banco Comercial Português In Euros In United States Dollars In Pounds Novo Banco In United States Dollars In Euros Byblos Bank In United States Dollars In Euros Bank of China In United States Dollars In Euros 7 - Standard Bank In United States Dollars ,600 In South African Rands Other credit institutions In United States Dollars In South African Rands Outstanding cheques - in Angola The "Disposable assets in the Central Bank" on national and foreign currency aim to comply with the provisions in force on the maintenance of compulsory reserves and are not remunerated 59_ BANCO DE COMÉRCIO E INDÚSTRIA

61 The mandatory reserves are established in accordance with the BNA Instruction on Monetary Policy, and these are held in Angolan currency as well as in foreign currencies, in function of the respective denomination of the liabilities, that are its basis, and must be maintained throughout the period to which they relate. On 31 December 2015, the demands concerning the maintenance of compulsory reserves were calculated at the rate of 25,0% on the arithmetical average of daily balances of electable liabilities in national and in foreign currency, with exceptions of the Central Government's deposits, on which is applied a rate of 75%, and Local Governments and Council Administrations, whose rates are 50% for deposits in national currency and 100% for foreign currency. In the last week of the year 2015, the mandatory reserves, in total, amounted to makz. On 31 December 2015 and 2014, the "Disposable assets in other credit institutions" are not remunerated either. On 31 December 2014, the balance of the heading "Outstanding cheques - in Angola" corresponds to cheques deposited on the last working day of the year and presented in compensation on the first working day of On 31 December 2015, with the entry into production of the new electronic cheque clearing system (SCC - Check Clearing Subsystem), the value of the cheques to be cleared is registered in the compensation account (Note 6) 4. LIQUIDITY INVESTMENTS On 31 December 2015 and 2014, this heading has the following composition: Inter-financial money market transactions Investments in national credit institutions BNA Investments in foreign credit institutions International Trust Bank Novo Banco Standard Chartered Bank Byblos Bank Millennium BCP Standard Bank of South Africa Commerzbank ,070,072 Recoverable tax Purchase of Securities from Third Parties with Reverse Repurchase Agreement Invested value Payable interest Investments in gold and other precious metals Gold Silver (other precious metals) _ ANNUAL REPORT 2015

62 On 31 December 2015 and 2014, the heading "Investments in foreign credit institutions" includes the collateral for the letters of credit issuing line at Novo Banco, S.A., in the amounts of makz and makz , respectively (see note 11). On 31 December 2015 and 2014, the net investments, excluding the respective payable interest, present the following structures by currency and average interest rate: Average Interest rate Amount in currency Amount in makz Average Interest rate Amount in currency Amount in makz United States Dollars 0.20% 55,492,721 7,508, % 37,992,421 3,908,014 Kwanzas 1.75% 2,000,000,000 2,000, % 10,950,000,000 10,950,000 Euros 0.00% 477,636 70, % 1,060, ,766 In South African Rands 6.90% 3,300,000 46, % 3,300,000 29,292 9,626,487 15,020,072 On 31 December 2015 and 2014, the liquidity investments, excluding the payable interest, show the following structure, according to the residual maturities: Until three months From three to six months From six months to one year SECURITIES On 31 December 2015 and 2014 the composition of the securities portfolio is as follows: Risk Country Currency Average Book Average Book Level Interest rate value (1) Interest rate value (1) Securities held for trading Treasury Bills A Angola AKZ 8,45% Securities kept until maturity Treasury bonds in national currency Indexed to the United States Dollar A Angola AKZ 5,90% ,00% Treasury bonds in national currency A Angola AKZ 5,00% Treasury bonds in foreign currency A Angola USD 3,24% ,39% (1) Includes the acquisition cost added with the discount at the purchase moment already recognised in accounting terms (the discount at the purchase moment is recognised in accounting terms as income throughout the period of time between the purchase date and the maturity date, in the account itself). The Bank classifies debt securities of the Angolan State and of BNA at risk level.a. On 31 December 2015, comparing to 31 December 2014, there was not any migration of the issuers' risk levels. 61_ BANCO DE COMÉRCIO E INDÚSTRIA

63 On 31 December 2015 and 2014, the distributions of securities held in the portfolio, by indexer is as follows: Fixed Variable Total Fixed Variable Total rate rate rate rate Treasury bills Treasury bonds in national currency Indexed to the United States Dollar Treasury bonds in national currency Treasury bonds in foreign currency On 31 December 2015 and 2014, the securities held in the portfolio, show the following structure, according to the residual maturities: Until three months From three to six months From six months to one year From one to three years ,696 From three to five years More than five years LIABILITIES IN THE PAYMENT SYSTEM On 31 December 2015 and 2014, the liabilities in the payment system show the following structure: Credit in the payment system Funds in transit Other transactions pending settlement Relations between institutions Senior Executive 314, Other transactions pending settlement Liabilities in the Payment System Relations between institutions Clearing of cheques and other documents Bank cheques Certified cheques Payable orders Other transactions pending settlements STC value clearing ,248 Clearing of Multicaixa network values Western Union Clearing ,685 Other transactions pending settlements ( ) ( ) 62_ ANNUAL REPORT 2015

64 7. LOANS On 31 December 2015 and 2014, this heading has the following composition: Other credits Future credit In national currency Credit Current account credits Advances to depositors In foreign currency Credit Current account credit Advances to depositors Total of due credit Overdue credit ,056,660 Total of granted credit ,546,295 Interest from granted credit Total of credit ,072,091 Loan programmes of the Angolan Executive Due credit In national currency Credit Current account credits Total due credit Overdue credit Total granted credit Interest from granted credit Total Credit from credit programmes of the Angolan Executive Total interest granted credit Provision for doubtful debts ( ) ( ) On 31 December 2015, the ten major clients of the Bank represent, in total, approximately 18% (31 December 2014: 18%) of the total of the credit portfolio. On 31 December 2015 and 2014, all the loan operations present a fixed interest rate. 63_ BANCO DE COMÉRCIO E INDÚSTRIA

65 On 31 December 2015 and 2014, the credit portfolio, excluding receivable interest, presents the following structure, by type of borrower and operating mode: Due Overdue Total Due Overdue Total Other credits Public administration Loans Current account credits Advances to depositors , Companies Loans ,307,932 Current account credits Advances to depositors Individuals Loans Current account credits Advances to depositors , Credit programmes of the Angolan Executive Public administration Loans Companies Loans Individuals Loans Current account credit On 31 December 2015 and 2014, the residual credit maturity of due credit, excluding receivable interest, presented the following structure: Other credit Until one year From one to three years From three to five years More than five years Credit programmes of the Angolan Executive Until one year From one to three years From three to five years ,334,956 More than five years _ ANNUAL REPORT 2015

66 On 31 December 2015 and 2014, the credit portfolio, excluding receivable interest, per currency, has the following structure: Other credit Kwanzas United States Dollars Euro Loan programmes of the Angolan Executive Kwanzas On 31 December 2015 and 2014, the composition of credit portfolio, excluding receivable interest, by activity sector, is the following: Description Due Overdue Total % Due Overdue Total % Credit Credit Credit Credit Individuals ,54% ,67% Agriculture animal production and hunting ,79% ,41% Forestry and logging ,06% ,06% Fisheries, aquaculture and respective services , ,13% ,29% Metal mining and preparation ,04% ,05% Food and drink industries ,13% ,59% Clothing industry ,06% ,341 0,04% Manufacture of wood, cork and related production ,17% ,15% Manufacture of pulp, paper and paper products ,19% ,11% Edition, printing and copying of computer storage media ,88% ,89% Production of chemical goods ,01% ,38% Furniture factories and other transforming industry ,54% ,62% Electricity, gas, steam and hot water production and distribution ,02% ,33% Collection, purification and distribution of water ,23% ,12% Construction , ,01% ,48% Trading, maintenance, repair of auto vehicles ,59% ,12% Gross trading ,446, ,67% ,32% Retail trading ,67% ,78% Hotels and restaurants ,82% ,78% Land transportation, pipeline transportation ,60% ,69% Water transports ,00% ,53% Air transports ,06% ,18% Activities connected or supportive of transports ,03% ,35% Mailing and telecommunications ,01% ,07% Real Estate activities ,53% ,46% Computer and related activities ,03% ,18% Research and development ,09% ,00% Services to companies ,59% ,61% Education ,46% ,56% Social activities and health ,06% ,02% Hygiene and public health ,10% ,14% Other ,88% ,03% ,00% ,00% 65_ BANCO DE COMÉRCIO E INDÚSTRIA

67 The BCI loan portfolio contains renegotiated contracts, that may imply maturity extension, redefinition of payment plans and/ or interest rate change. The operations in provisions for doubtful debts by the end of the financial years 2014 and 2014, i.e. on 31 December, was the following: Provisions for doubful debts Balance on 1 January Appropriations Annulments ( ) ( ) Readjustment/ (Use) ( ) ( ) Currency rate variation (27.886) Balance on 31 December In accordance with the accounting policy described in note 2.2. c), six months after the qualification of a loan operation in class G, as long as it presents a delay longer than 180 days, the Bank writes off that loan from the asset pursuant the use of the provision of 100% of the loan value, constituted for this effect (transfer of the credit to losses). The amount of credit transferred to losses during the financial year of 2015 achieves makz (2014: makz ). 66_ ANNUAL REPORT 2015

68 8. OTHER VALUES On 31 December 2015 and 2014, this heading has the following composition: Current tax assets Recoverable Taxes Other values of a civil nature Sundry Debtors Public administrative sector Credit programmes of the Angolan Executive Commissions for revenue collection Receivable subsidised loans Inflation rate Other Supplementary payments Multitel - Serviço de Telecomunicações EMIS - Empresa Interbancária de Serviços Supplies Mutombe EMIS - Empresa Interbancária de Serviços Accruals and deferrals to the asset Asset transactions pending settlement - 2,306,191 Operations bound to credit letters BCI Imobiliária ,481,488 Advances on financial fixed assets Abanc Other ,832, Other values of an administrative and commercial nature Advances to employees Deferred costs Rents Stationary Other Provisions for other values ( ) ( ) On 31 December 2014 and 2013, the heading Current tax assets - Recoverable tax is related to provisional Industrial Tax payments made by the Bank and that can be deducted from future settlements by deduction to taxable income. The deduction of these provisional payments, unlike tax loss, do not have an expiring date. On 31 December 2015 and 2014, the heading "Other values of a civil nature - Sundry Debtors - Public administrative sector - Loan programmes of the Angolan Executive" shows amounts payable by the State referring to loan defaults, given under the Loan programmes promoted by the Angolan Executive. 67_ BANCO DE COMÉRCIO E INDÚSTRIA

69 On 31 December 2015 and 2014, the balance in the heading "Other values of a civil nature - Sundry debtors - Administrative Public Sector - Commissions for revenue collection" corresponds to the commission receivable from the Ministry of Finance for tax collection. The calculation of these commissions is made through the application of 1% over the total of tax collected. On 31 December 2015 and 2014, the balance in the heading "Other values of a civil nature - Sundry debtors - Administrative Public Sector - Receivable subsidised loans" shows the interest rate subsidies receivable from the Ministry of Finance, for the loans granted in scope of the loan programme Angola Investe of the Angolan Government, which aims at the promotion of granting loans to micro, small and medium-sized enterprises, in partnership with the commercial banks. On 31 December 2015 and 2014, the heading Other values of a civil nature - Sundry debtors - Assets accruals and deferrals Operations on assets pending settlement contains the amounts that were to be settled, due to the absence of appropriate and sufficient supporting documents. In 2015, the Bank was able to settle a total amount of makz , by assuming the remaining value of makz against retained earnings. (See note 14). On 31 December 2015 and 2014, the heading "Other values of a civil nature - Sundry debtors - Assets accruals and deferrals - Operations bound to letters of credit" shows the amounts to be charged to customers for the letters of credit payment under the financing line of Novo Banco, S.A. (see note 11). On 31 December 2015 and 2014, the balance in the heading "Other values of a civil nature - Sundry debtors - BCI Imobiliária", shows the amounts advanced by the Bank to its subsidiary, mainly on account of real estate development expenses. On 31 December 2015 and 2014, the heading Other values of a civil nature - Sundry debtors - Advances on financial fixed assets, reveals the expenses incurred by the Bank relating to the incorporation costs of its subsidiary ILHA Sociedade Gestora de Organismos de Investimento Colectivo, that will start operating in On 31 December 2014 and 2014, the heading "Other values of an administrative nature - Advances to employees" includes mainly the expenses with medical services handled by the Bank of which accruals and deferrals are made on a monthly basis, through debit from employees' salaries. The movement in the provisions for other values of financial years that ended on 31 December 2014 and 31, was the following: Provisions for other values Balance on 1 January Appropriations ,181 Annulments ( ) (77.883) Balance on 31 December _ ANNUAL REPORT 2015

70 9. FIXED ASSETS Financial fixed assets On 31 December 2015 and 2014, this heading has the following composition: Holdings in related entities and equivalent Holdings in other companies Artistic property On 31 December 2015 and 2014, the Bank had the following shares, of which the most recent information is the following: Own Net Gros Equity Book Book % held Funds Income Value Method of Provision Value Value Accounting Holdings in related entities and equivalent Multitel, Lda.(*) 20,00% BCI Imobiliária (**) 100,00% ( ) ( ) 100 (100) EBA - Empreendimentos e prestações de serviços 33,33% n.a. n.a Servauto, S.A.R.L. 20,00% n.a. n.a Mutombe, Lda. 30,00% n.a. n.a Bricomil, SARL 15,00% n.a. n.a Ilha - Soc. Gestora de Organismos de Invest. Colectivo 100,00% ( ) ( ) Holdings in other companies CLV - Viana Park 5,00% n.a. n.a EMIS - Empresa Interbancária de Serviços, S.A. (***) 2,66% Bolsa de Valores e Derivados de Angola (the Angolan securities and derivatives market) 0,84% n.a. n.a , Sociedade Angolana Promoção de Shoppings n.a. n.a. n.a (*) Information extracted from the financial statements audited from 31 December 2015 expressed in makz. (**) Information extracted from the financial statements audited from 31 December 2015 expressed in makz. (***) Information extracted from the financial statements audited from 31 December 2015 expressed in makz. n.a - information not available. The book value variation of the holding in Multitel, Lda is due to the calculation of its book value, through the equity method. On 31 December 2015, considering the negative equity presented by the BCI Imobiliária and the will of the Bank to keep its financial support to the subsidiary, the provision for additional losses achieves the amount of makz (31 December 2014: makz ) (see note 13). On 31 December 2015, in spite of the negative equity presented by ILHA, relating to the charges required for incorporation of the company, there is a business continuity plan for the company, that, in 2016, will be incorporated and of which the first investment fund on the market will be made available, with the prevision of a 50% increase of the amount managed in the year 2017, and doubled in 2018, in comparison to the amount of Therefore, the Bank decided not to establish any provision for the negative equity coverage. 69_ BANCO DE COMÉRCIO E INDÚSTRIA

71 Taking into account the Bank's evaluation of the situation of the entity CLV Viana Park and the risk associated to the recoverability of the invested amounts, during the financial year 2015, the Bank constituted a provision on the investment made, in the amount of makz (see note 25). The holdings in related entities or equivalent which are no longer active or act under severe restrictions, are provisioned by the total investment amount. The transaction movement the in provisions for financial fixed assets at the end of the financial years 2014 and 2014, i.e. on 31 December, respectively, was the following: Provisions for financial fixed assets Balance on 1 January Appropriations Foreign Exchange variation Balance on 31 December Tangible and intangible fixed assets On 31 December 2015 and 2014, this heading presents the following composition: Tangible fixed assets Real Estate Equipment Machines and tools Transport equipment Furniture Computer equipment Security equipment Indoor installations Security equipment Other equipment Current fixed assets Other tangible fixed assets Accumulated amortizations Relating to previous periods Relating to the current period Intangible fixed assets Construction works in rented properties Software Accumulated amortizations Relating to previous periods Relating to the current period _ ANNUAL REPORT 2015

72 The movement in tangible and intangible assets headings during the financial year of 2015, was the following: Acquisition cost Balance Increase Writte-offs Transactions Balance Tangible fixed assets Properties for own use Equipment Other tangible fixed assets ( ) Current fixed assets ( ) Intangible fixed assets Construction works in rented properties Software Other intangible fixed assets Total gross assets Accumulated amortizations Balance Increase Writte-offs Transactions Balance Tangible fixed assets Properties for own use Equipment Other tangible fixed assets Intangible fixed assets Construction works in rented properties Software Total accumulated amortizations Total net assets The movement in tangible and intangible assets headings, during the financial year of 2014, was the following: Acquisition cost Balance Acquisitions Write-offs Regularisations Balance Tangible fixed assets Properties for own use Equipment (990) ( ) Current fixed assets ( ) Other tangible fixed assets ( ) (990) ( ) Intangible fixed assets Obras em edifícios arrendados ( ) Software (26.994) Outras imobilizações incorpóreas (3.698) ( ) Total gross assets (990) ( ) Accumulated amortizations Balance Acquisitions Write-offs Regularisations Balance Tangible fixed assets Properties for own use Equipment and other Tangible fixed assets (990) ( ) (990) ( ) Intangible fixed assets ( ) Total accumulated amortizations (990) ( ) Total net assets (79.883) - ( ) _ BANCO DE COMÉRCIO E INDÚSTRIA

73 During the year 2014, the Bank concluded the inventory, the supporting documentation and the reconciliation with the Accounting of its tangible and intangible fixed assets, from which a number of regularisations resulted, as mentioned above, as opposed to the heading Retained Earnings (see note 14). 10. DEPOSITS On 31 December 2015 and 2014, this heading has the following composition: Residents' sight deposits In national currency Individuals Public Sector Companies Other sectors In foreign currency Companies Individuals Public Sector Non-Residents' sight deposits National currency Foreign currency Total of sight deposits Residents term deposits In national currency Public Sector Companies Individuals In foreign currency Companies Public Sector Individuals Non-Residents term deposits National currency Foreign currency Interest of term deposits Total of term deposits Other deposits Total of Deposits _ ANNUAL REPORT 2015

74 On 31 September 2015 and 2014, the customers' term deposits, excluding the respective payable interest, have the following structure per currency and average interest rate: Interest In foreign Amount Interest In foreign Amount rate currency in makz rate currency in makz In Kwanzas 4,48% ,28% In United State Dollars 1,90% ,63% In Euros 1,82% ,54% On 31 December 2015 and 2014, most customers' sight deposits are not remunerated. On 31 December 2015 and 2014, all the transactions of term deposits have a fixed interest rate. On 31 December 2015 and 2014, all the customers' deposits, excluding the respective payable interest, show the following structure per currency: Sight Term Other Total Sight Term Other Total Deposits Deposits Deposits Deposits Deposits Deposits Kwanzas United States Dollars Euros Other Currencies On 31 December 2015 and 2014, the customers' term deposits, including the current interest, show the following structure, according to the residual maturities: Until three months From three to six months From six months to one year More than one year _ BANCO DE COMÉRCIO E INDÚSTRIA

75 11. OTHER FUNDING RECEIVED On 31 December 2015 and 2014, this heading has the following composition: Other Funding Hired Credit programmes of the Angolan Executive Crédito Meu Negócio Minha Vida Crédito Agrícola de Investimento Crédito Agrícola de Campanha Assets bound to letters of credit On 31 December 2015 and 2014, the balance of the heading "Other Liquidity Funding Contracted - Loans programs from the Angola Executive" refers to financial conventions concluded with Banco de Desenvolvimento de Angola, Ministry of Finance and Ministry of Economy, that finance the Bank, so that it can grant loans to small entrepreneurs and specific activity sectors. On 31 December 2015 and 2014, the balance of the heading "Assets bound to letters of credit" refers to a funding line from Banco Novo, S.A., aimed at providing documentary credits to the customers (see note 4 and 8) 12. OTHER LIABILITIES On 31 December 2015 and 2014, this heading has the following composition: Liabilities of a Social or Statutory Nature Suppliers Liabilities of a fiscal nature Tax charges Dependent employment income tax Stamp Duty Urban Property Tax Bank transactions tax Industrial tax on service supply Excise Duty Social Security Liabilities of a Civil Nature National Treasury account and collected revenue Creditors due to resources to disburse Liability transactions pending settlement Suppliers Liabilities of Administration and Marketing Staff - Salaries and other remunerations Estimated holidays and holidays allowances Other administrative costs Other costs estimated _ ANNUAL REPORT 2015

76 On 31 December 2014 and 2014, the heading "Liabilities of a Social or Statutory nature - Supplies" refers to the supplies given by the Bank's shareholders. On 31 December 2014 and 2014, the heading Fiscal Liabilities - Fiscal expenses represents the taxes withheld by the Bank during the month of December, to be delivered to the Ministry of Finance during the month of January of On 31 December 2015 and 2014, the heading "Liabilities of a Social nature - Other accruals and deferrals - National Treasury accounts and revenue collections" refers mainly to amounts handed out by the Angolan Government under the Public Investment Programme ("PIP") and to the revenue collection to be handed to Finance Ministry. On 31 December 2015 and 2014, the heading "Administrative and Trading Liabilities - Other accruals and deferrals - Creditors due to resources to disburse" registers funds assigned to documentary credit transactions. 13. PROVISIONS FOR PROBABLE LIABILITIES On 31 December 2015 and 2014, this heading has the following composition Provision for retirement complements Provisions for guarant. and docum. credit Provisions for liabilities of a fiscal nature Other Provisions On 31 December 2015 and 2014, the balance of the heading "Provisions for retirement complements" is meant to cover liabilities related to "Retirement Compensations", in accordance with Law 2/2000 and Articles 218 and 262 of the General Labour Law. Although, as mentioned in note 2.2 j, this complement ceased to exist in the new General Labour Law, adopted by Law no. 7/15 of 15 June, that entered in force on 15 September 2015, the Bank maintained part of this prevision, based on the assumption of granting this complement all the same to the elder employees of the institution. During the financial year of 2013, the Tax Directorate (DNI) carried out an inspection to BCI, analysing the financial years of 2008 and As a result of this inspection, the Bank was notified about a number of Industrial Tax and Stamp Duty corrections, that were claimed from the General Tax Administration. On 31 December 2015, the Bank annulled the constituted provision, since, in January 2016, received approval from AGT, with regard to the hierarchy resources filed by the Bank. On 31 December 2015, the balance of the heading Other Provisions, includes the provision for additional losses, issued by the Bank in the amount of makz (31 December 2014: makz ), as a result of BCI Imobiliária's negative equity and the Bank's manifest intention to continue to support its subsidiary. 75_ BANCO DE COMÉRCIO E INDÚSTRIA

77 The movement in the probable liabilities throughout the financial years of 2015 and 2014 by 31 December, respectively, was the following: 2015 Balance Appropriations Annulments Transf. Usage Regularizations Exchange Balance 31-Dec-14 diff. 31-Dec-15 Provision for retirement complements ( ) - (17.774) Provisions for guarant. and docum. credit ( ) Provisions for liabilities of a fiscal nature (14.322) Other Provisions ( ) - (17.774) Balance Appropriations Annulments Transf. Usage Regularizations Exchange Balance 31-Dec-13 diff. 31-Dec-14 Provisions for retirement complements ( ) - (3.718) Provisions for guarant. and docum. credit (54.864) (2.634) Provisions for liabilities of a fiscal nature ( ) - (7.000) Other Provisions ( ) ( ) - (10.718) ( ) (2.634) EQUITY Share Capital The 15th Annual General Meeting of Shareholders of BCI, held in October 2007, approved an increase of the Bank's Share Capital in the overall amount of makz , including an issue premium of makz , totally subscribed and realised between 2007 and According to a letter from BNA of 30 April 2008, the Bank recorded the referred capital increase in the heading "Reserves and Funds", given the absence of notarial registry and formalisations at BNA. During the financial year of 2013, the Bank made the notarial registry of the capital increase and the respective formalisation at BNA, and consequently has accounted the correspondent balance of the heading "Share Capital". As a result of the operations described above, on 31 December 2015, the share capital of the Bank is makz and presents the following composition: Ordinary shares Issue Premium _ ANNUAL REPORT 2015

78 On 31 December 2015 and 2014, the shareholders structure of the Bank has the following composition: Amount % Share Amount % Share Ministry of Finance ,60% ,60% Sonangol ,13% ,13% Ensa ,13% ,13% Porto de Luanda ,13% ,13% TAAG ,13% ,13% Cerval ,45% ,45% TCUL ,45% ,45% Endiama ,45% ,45% Angola Telecom ,45% ,45% Bolama ,08% ,08% ,00% ,00% Reserves, potential earnings and retained earnings On 31 December 2015 and 2014, this heading has the following composition: Reserves e Funds Legal Reserves Monetary updating of capital reserve Social Fund Other reserves e funds Potential earnings Retained earnings ( ) ( ) Under the terms of the legislation in force, the Bank should constitute a legal reserve fund until its concurrence with its share capital. For this purpose, a minimum of 10% of the net income of the previous year is transferred annually to this reserve. This reserve may be used to cover accumulated losses only when all other constituted reserves have been depleted. The balance of the heading "Reserves and Funds - Social Fund" shows an amount relating to the Social Fund reserve which is aimed at assuring the funding of employees' exceptional expenses. This reserve is reinforced by the investment of earnings, by interests paid by the employees over financing receiving and, additionally, by the payment of a percentage calculated according to the employees' salary, which shall not exceed 0,5%. At any time the value of the Social Fund represents the maximum amount that the Bank is able to loan to its employees. Throughout the year 2014, the share capital was increased, in the amount of makz , and was fully subscribed and paid for in cash by the main shareholder, the Ministry of Finance. The Bank registered the above mentioned capital increase in the heading Other Reserves and Funds, given the absence of a notary's registry and formalisation at the BNA. 77_ BANCO DE COMÉRCIO E INDÚSTRIA

79 Throughout the year 2015, the share capital was increased, in the amount of makz and was fully subscribed with Treasury Bonds by the main shareholder, the Ministry of Finance. The Bank registered the above mentioned capital increase in the heading Other Reserves and Funds, given the absence of a notary's registry and formalisation at the BNA. The "Potential Earnings" correspond to the pending, but probable, earnings net of taxation, resulting from the transactions and from other events or circumstances which are not retained by the earning of the financial year when recognised by the Bank. Until 31 December 2004, under the terms of the legislation in force, the Bank has revaluated the tangible fixed assets through the application of coefficients, which reflected the monthly evolution of dollars official exchange, to the tangible fixed assets' gross balance and the respective accumulated amortisations, inserted in Kwanzas in the Bank's accounting records by the end of the previous month. From the financial year of 2005 on, the Bank ceased reassessing its fixed assets (see note 2.2.h). On 31 December 2015 and 2014, the heading "Potential Earnings" shows the mentioned reserve of fixed assets revaluation. Throughout the year 2014, the Bank has carried out several regularisations, in the amount of makz against retained earnings relating to the adjustment of the heading Asset transactions pending settlement. Throughout the year 2014, the Bank has made several regularisations, in the amount of makz ( ), through retained earnings, which are divided by the following effects: i) Tangible and intangible fixed assets, in the amount of makz ( ); and ii) Provision for additional losses, resulting from BCI Imobiliária's negative equity BCI in the amount of makz _ ANNUAL REPORT 2015

80 15. NET INTEREST INCOME By the end of financial years 2015 and 2014, i.e. on 31 December, respectively, these headings show the following composition: Income from financial instruments (assets) From granted credit Companies Individuals Public Sector Interest Securities Held to maturity Treasury bonds in national currency Treasury bonds in foreign currency Treasury bonds with repurchase agreement Held for trading; Treasury Bills From liquidity investments Inter-financial money market transactions Investments in national credit institutions Investments in foreign credit institutions Costs of financial instruments (liabilities) From deposits From term deposits From sight deposits From liquidity funding Inter-financial money market transactions Funding in national credit institutions Funding in foreign credit institutions From other funding Net interest margin The income from public debt securities obtained in Treasury Bonds and Treasury Bills issued by the Angolan Government, whose terms of issue are regulated by the framework law of Direct Public Debt (Law no. 16/02, of 5 December) and falling within the scope of Regulatory Decrees 51/03 and 52/03, of 8 July, is tax-exempt. Such fact is complemented by the provisions in point c) in no.1 in Article 23 of the Industrial Tax Code, where it is explicit that no earning from any public debt securities will be considered net income, for the effect of determination of the industrial contribution (see note 26) 79_ BANCO DE COMÉRCIO E INDÚSTRIA

81 16. NET INCOME FROM FOREIGN EXCHANGE TRANSACTIONS By the end of financial years 2014 and 2015, i.e. on 31 December, respectively, these headings show the following composition: Gains and Losses from foreign exchange transactions - Currency from foreign exchange transactions - Notes Gains and Losses from exchange rate updating ( ) NET INCOME FROM FINANCIAL SERVICES By the end of financial years 2015 and 2014, i.e. on 31 December, respectively, these headings show the following composition: Net income from financial services Received commissions Revenues collection Operations related to abroad ,601 Western Union Opening/ Updating of documentary credit Opening/ Updating/ Renewal/ Antecipation of documentary credit ,211 Opening/Renewal/Immobilisation of current accounts ,587 Transactions ,182 Purchase/ Sale/ Withdrawal foreign currency Bank cards Cheques Extracts Transactions ATM/ TPA/ Multicaixa Renting TPA Withdrawals ,160 Intermediation of securities Guarantees provided ,450 Other Costs from service supply Paid commissions Transactions TPA/ Multicaixa Operations related to abroad Importation of notes Other On 31 December 2014 and 2014, the balance in heading "Received commissions - revenues collection" registers the commissions attributed to the Bank from Ministry of Finance's revenues. 80_ ANNUAL REPORT 2015

82 18. STAFF By the end of the financial years 2015 and 2014, i.e. on 31 December, respectively, these headings show the following composition: Members of the management and supervisory bodies Monthly remuneration Additional remuneration Employees Monthly remuneration Additional remuneration Social charges Mandatory Optional Other On 31 December 2015 and 2014, the employees were divided into the following categories: Senior Executive 5 5 Director Coordinator Technical Administrative officer EXTERNAL SUPPLIES By the end of the financial years 2015 and 2014, i.e. on 31 December, respectively, these headings show the following composition: Security and surveillance Specialised services Maintenance and repair Communication Rents Transports Travel and expenses Sundry materials Water and electricity Insurance Publication, advertising and promotion Other external supplies On 31 December 2015, the heading "Specialised Services" includes mainly the Bank's incurred costs with audit and consulting services, in the amount of makz (on 31 December 2014: makz ). 81_ BANCO DE COMÉRCIO E INDÚSTRIA

83 20. TAX AND RATES NOT INCIDENT ON EARNINGS By the end of financial years 2015 and 2013, i.e. on 31 December, respectively, these headings show the following composition: Excise Duty Custom Duties Capital Gains Tax Urban Property Tax Stamp Duty Other Taxes and Rates PENALTIES APPLIED BY REGULATORY AUTHORITIES On 31 December 2015, this heading contains two minor fines imposed by a Court, implemented by the Banco Nacional de Angola, with regard to the deliver delay of the prudential reports related to the Supervision of the Financial Institutions. 22. OTHER ADMINISTRATIVE COSTS By the end of the financial years 2015 and 2014, i.e. on 31 December, respectively, these headings show the following composition Other Administrative Costs Contributions Donations/ Sponsorship Other EARNINGS FROM FINANCIAL FIXED ASSETS On 31 December 2013, this heading show the equity in earnings of Multitel, Lda, based on the amount of equities owned by this related entity, presented in the financial statements with reference to 31 December 2013 (see note 9). 82_ ANNUAL REPORT 2015

84 24. OTHER OPERATING INCOME AND COSTS By the end of financial years 2015 and 2014, i.e. on 31 December, respectively, these headings show the following composition: Other Operating Income Rest Income from Supplied Sundry Services Credit Recovery Other Other Operating Costs Flaws Other (62.833) On 31 December 2015, the heading Other operating Costs - Other registers mainly expenses of the Bank for the closing of accounts of clients in the amount of makz and expenses related to the forgiveness of interests, in the amount of makz NON-OPERATING EARNINGS By the end of financial years 2015 and 2013, i.e. on 31 December, respectively, these headings show the following composition: Non-operating Income or Gain Gains relating to previous years Other gains from fixed assets Other gains Non-operating Costs or Losses Losses relating to previous years Losses in fixed assets Other losses On 31 December 2015, the balance of the heading "Non-operating income and gains - Gains of previous years", including the amount of makz , relating to credit interest and interest on arrears which refer to previous years. On 31 December 2015, the heading "Non-operating Costs and Losses - Losses referent to previous years" includes the amount of (31 de December 2014: makz ) referring to the cancellation of credit interest of previous years. On 31 December 2014, the balance of the heading "Non-operating Income and Profits - Fixed assets losses includes the provisions established in order to cover possible holding capital losses (see note 9). 83_ BANCO DE COMÉRCIO E INDÚSTRIA

85 26. TAXES The Bank is subject to Industrial Tax and considered, for tax purposes, a group A taxpayer. Its income is taxed under the terms of no. 1 of Article 64 of Law no. 19/14 of 22 October, where the applicable tax rate is 30%. The Bank has not recognised, in the financial statements, the deferred taxes assets related to the reportable tax loss, as it is not possible for the Bank to demonstrate the probability of obtaining taxable income in the future, capable of allowing its use. The tax authorities can revise the Bank's tax situation during a period of five years, and this can result, due to different interpretations of the tax law, in any corrections to the taxable profit from 2011 to The Board of Directors believes that any additional charge, which might result from these revisions will not be significant for the attached financial statements. 27. OFF-BALANCE SHEET HEADINGS On 31 December 2015 and 2014, these headings show the following composition: Liabilities to Third Parties Guarantees Provided Commitments to third parties Open document credit Irrevocable credit lines Service supply liabilities Services supplied by the institution Custody of Securities Collection of Amounts The guarantees and sureties are bank operations which consist on call for funds by the Bank, being related with guarantees provided for support of import operations and for the execution of contracts by the Bank's customers. The guarantees provided represent values which can be required in the future. The opened documentary credits are Bank's irrevocable commitments, on the costumers behalf, to pay/send a certain amount to the supplier of a certain good or service, within the establish period of time, against the presentation of the documents referring to the good dispatch or the service supply. The quality of irrevocable consists on the fact of not being viable its cancelling or alteration without the agreement of all the involved parties. The commitments assumed to third parties represent contractual agreements with the Bank's customers for loans granting (for example, unused credit lines), which, generally, are hired with fixed deadlines or with other expiration requirements and, normally, require a commission payment. Those commitments represent values, which can be required in the future. 84_ ANNUAL REPORT 2015

86 28. SHAREHOLDERS, SUBSIDIARIES AND OTHER RELATED ENTITIES On 31 December 2015 and 2014, the main balances and transactions held with shareholders, subsidiaries and other related entities, are the following: Shareholders Subsidiaries Other Total Shareholders Subsidiaries Other Total Entities Entities Securities Held for Trading Held to maturity Granted credit Other values Deposits Sight Deposits Term Deposits Oher received funding Other Liabilities On 31 December 2015 the shareholder entities are the following: Ministry of Finance Sonangol, EP ENSA - Empresa Nacional de Seguros de Angola Angola Porto de Luanda TAAG - Linhas Aéreas de Angola Cerval TCUL Endiama Angola Telecom Bolama On 31 December 2015, the subsidiary entities are the following: Servauto, S.A.R.L. EBA - Empreendimentos e prestações de serviços Multitel, Lda. Mutombe, Lda. BCI Imobiliária, S.A.R.L. Bricomil, SARL Sociedade Angolana Promoção de Shoppings CLV - Viana Park EMIS - Empresa Interbancária de Serviços Bolsa de Valores e Derivados de Angola (' the Angolan securities and derivatives market') ILHA - Sociedade Gestora de Organismos de Investimento Colectivo, S.A. On 31 December 2015 the other related entities are: Filomeno da Costa Alegre Alves de Ceita Maria do Carmo Bastos Corte Real Bernardo Jorge Leão Peres João de Jesus Batalha Freire dos Santos Carlos Alberto Teixeira d Alva Sequeira Bragança 85_ BANCO DE COMÉRCIO E INDÚSTRIA

87 29. BALANCE PER CURRENCY On 31 December 2015 and 2014, the balances per currency show the following structure: National Foreign Total National Foreign Total Currency Currency Currency Currency Disposable assets Liquidity Investments: Securities Held for Trading Held to maturity Credit in the payment system Loans, net of provisions Other values Fixed assets Financial fixed assets Tangible fixed assets Intangible fixed assets Total Assets National Foreign Total National Foreign Total Currency Currency Currency Currency Deposits Sight Deposits Term Deposits Other deposits Liabilities in the Payment System Foreign exchange transactions Other received funding Other liabilities Provisions for Probable Liabilities Total liabilities Equity Total Liability and Equity _ ANNUAL REPORT 2015

88 30. SUBSEQUENT EVENTS We are not aware of any facts or subsequent events after 31 December 2015, until the approval of the Financial Statements, which justify any adjustments or disclosures in the Notes to the Annual Report referring to the financial year under analysis, which may affect the situations and/or informations therein in a significant manner and/or which may have changed or may be expected to change significantly, favourably or unfavourably, the Bank's financial situation, and its net income and/or activities, except for the following situations: Capital increase in kind In January 2016, the capital was increased by the Ministry of Finances through the emission of Treasury Bonds with a value of makz , in accordance with the Presidential Decree 15/16 of 15 January, the Executive Decree no. 49/16 of 28 January and the Decision of the Finance Minister no. 66/16 of 29 January. Transition to the International Financial Reporting Standards (IFRS) Impact of the conversion on the BCI accounts The Financial Statements of BCI were prepared in accordance with the accounting principles set out in Accounts Plan of the Financial Institutions ( CONTIF ) in accordance with the provisions in the BNA's Instruction no. 09/07, of 19 September, and its subsequent amendments, namely the Directive no. 04/DSI/2011, which introduces mandatory adoption of the International Financial Reporting Standards with regard to all matters concerning accounting procedures and criteria that are not mentioned in the CONTIF. In scope of the adoption process of the IFRS by the financial institutions in Angola, BCI is currently starting to implement the conversion process, by following the guidelines issued by the BNA, and taking into account the timings set out for the conversion process, even though the effects of possible differences resulting from the changes in the accounting standard have not yet been assessed in both qualitative and quantitative terms. The supervising entities and the International Accounting Standards Board (IASB) continue to develop standards, that can affect the differences between the CONTIF and the IFRS, as mentioned before, as well as the future Financial Statements. Conversion plan for the IFRS In 2015, the BCI initiated its conversion plan in view of the its financial statements in accordance with the IFRS as from 01 January 2017, i.e. with the first financial statements to be published, in accordance with the IFRS, on 30 June The plan set out by the BCI aims also at handling all interim statements required by the BNA in the scope of the conversion process. 87_ BANCO DE COMÉRCIO E INDÚSTRIA

89 88_ ANNUAL REPORT OPINION OF THE EXECUTIVE BOARD

90 ANNUAL REPORT 2015 OPINION ON FINANCIAL YEAR 2015 Dear Shareholders, 1. In accordance to the legal and statutory provisions, namely Law nr. 8-A/91, of 16 March, which creates Banco de Comércio e Indústria, S.A.R.L., (BCI) and approves its Articles of Association, and the Law no. 42/01, of 6 July (Regulations of Supervisory Boards of Public Companies), the Law no. 1/04 of 13 February (Company Acts) as well as the Banco Nacional de Angola (BNA) Notices, we present the Supervisory Board's opinion on the Annual Report regarding the financial year During the referred financial year, we had the opportunity to follow the Bank's activity, through the accounting information, that we received, and the contacts kept with the Assets, Credit Recovery, Legal and Accounting areas, as well as with the External Auditors. 3. When performing our task, we appreciated the BCI Annual Report, having noted that: 3.1. In order to fulfil the requirements of BNA Notices no. 1 and 2/2013, regarding corporate governance and the internal control system, documents and manuals were drawn up, that are up for the Executive Board's approval, in order to be used After reorganising the accounts, in order to reflect, as far as possible, the Bank's situation, the outcome was a negative result of Kz (two billion, three hundred and eight million, three hundred and twenty-six thousand Kwanzas), to which the provisions for doubtful debts contributed significantly. In order to change the present situation and cover the granted loans, the Supervisory Board has suggested repeatedly, that, whenever possible, material guarantees are required, new credits are provided An actuarial study for the payment to the workers of BCI, coming from BNA of the Retirement Pensions Supplementary to the Social Security System of Angola has been conducted in 2014, including the respective amount. In the overall value, the performance wages were not taken into account. Therefore, there has not been created any "Provision for Retirement Pensions". 89_ BANCO DE COMÉRCIO E INDÚSTRIA

91 ANNUAL REPORT ,00 Kz ( nine hundred and sixty-five million, four hundred and seventy-three thousand, two hundred Kwanzas) of the amount of ,00 Kz (two billion, three hundred and six million, one hundred and ninety-one thousand Kwanzas) registered in the caption "Asset transactions pending settlement" in 2014 without any support documentation, were in fact regularised.the remaining amount of ,00 Kz (one billion, three hundred and forty million, seven hundred and seventeen thousand, eight hundred Kwanzas) had to be made good and was registered in the heading Retained Earnings Overdue loans represent 26% of the total credit, which we consider a high percentage that has a negative impact on the Bank's soundness and liquidity, since this value is the basis for the Provisions for Credit Overdue, according to the BNA recommendations In accordance with the negative result, mentioned in paragraph 3.2 and the insufficient capitalisation of the shareholders, the solvency ratio is below the 10% minimum, required by BNA, and the return on assets and on equity is negative As far as it was possible for us to assess, there is no register of any violation of the Law or 2015 BCI's Statutes during the financial year. 90_ ANNUAL REPORT 2015

92 ANNUAL REPORT With this said and in the scope of our opinion, we recommend: a) that the Accounts Report of 2015 is approved; b) that, the provision for the payment of the Retirement Pensions Supplementary to the Social Security System of Angola is created, even though in stages, in view of the regularisation of this non-compliance; c) that the most appropriate measures are taken to control and lower doubtful loans, in order to improve the results of the next financial years in such a way as to motivate the shareholders to capitalise the bank, as expressed during the previous General Meeting. Luanda, 20 April 2016 Executive Board: Luís Filipe Teixeira - Chairman; Júlio João Moniz - Board Member; José Rela dos Santos Bento - Board Member. 91_ BANCO DE COMÉRCIO E INDÚSTRIA

93 92_ ANNUAL REPORT EXTERNAL AUDIT REPORT

94 ANNUAL REPORT 2015 Crowe Horwalh Angola - Auditores e Consultores S.A. is an Angolan Company, member of Horwath International, a Swiss association of several companies. Each of these companies is being held in a separate legal entity, that operates under the brand 'Crowe Horwath'. Member of Crowe Horwath International AUDIT REPORT (Values expressed in maoa) Introduction 1. We have audited the Financial Statements of Banco de Comércio e Indústria, S.A. ("Bank ), which comprise the balance sheet as at 31 December 2015, (which presents a total of maoa and a total equity of maoa, including a net loss of maoa), the income statement, the statement of change in equity and the cash flow statement referring to the financial year concluded on the date mentioned above, as well as the corresponding annex. Liabilities 2. The board of directors is responsible for the preparation of the financial statements, that correctly present the Bank's financial situation, the result of its operations, the change in equity and cash flow, as well as the application of appropriate accounting policies, adequate accounting criteria, by handling an appropriate internal control system. 3. Our responsibility consists of expressing a professional and independent opinion, based on our audit of the financial statements. Scope 4. Apart from the limitations mentioned in following paragraphs 6 and 7, our audit was conducted in accordance with the generally accepted auditing standards, which require that the audit be planned and performed in order to give reasonable assurance that the financial statements are free from any materially relevant distortions. To this end, the said examination included: - the test-check on the figures and disclosures contained therein, and an assessment of the estimates used in the preparation of financial statements based on opinions and criteria defined by the Board of Directors; - an evaluation of the accounting policies adopted and of the form of their publication, in view of current conditions; - an assessment as to whether the consistency concept can be applied or not; and - an assessment as to whether the presentation of the financial statements is appropriate or not. 5. We feel that the examination performed provides an acceptable basis for expressing our opinion. 93_ BANCO DE COMÉRCIO E INDÚSTRIA

95 ANNUAL REPORT 2015 Reserves 6. The Bank registers its Provision for doubtful loans, in accordance with BNA Notice no. 3/2012 of 28 March. Our audit reveals credit granted at a risk lever that is lower than recommended by the above mentioned Notice. Therefore, the provision for doubtful loans is likely to be insufficient to cover problems related to the loan portfolio, although the implementation of constant procedures in the mentioned notice, implies the implementation of highly complex rules, which does not allow us to determine, until the date of issue of this report, the additional required impairment amount, nor consequently quantify the effect this situation can have on the Bank's own funds. The content of this limitation is identical to paragraph 1 of the external auditor's report with reference to 31 December The Bank signed a protocol with Banco Nacional de Angola with the objective of establishing the responsibilities of each of the relevant actors concerning the assumption of the costs related to the Retirement Pensions Supplementary to the Social Security System of Angola for the workers of BCI, coming from BNA. The Bank registers the expenses with the payment of the above mentioned pensions on a cash basis, without registering the impact of the provided services, as a liability, relating to the employees covered by the protocol. Up to the date of this report, we have not had any access to any actuarial study determining the value of the Bank's liabilities relating to the services rendered by those employees. It is impossible to determine the exact value of the pension fund liabilities that should be registered in the Financial Statements of the Bank on 31 December The content of this limitation is identical to paragraph 2 of the Independent Audit Report with reference to 31 December Opinion 8. In our opinion, except for the possible effects of the situations described in paragraphs 6 and 7, the financial statements, referred to in paragraph 1, present a correct and appropriate statement of all the materially relevant aspects of the consolidated financial situation of Banco Comércio e Indústria, S.A. on 31 de December de 2015, the consolidated profit of its respective operations and consolidated cash flow during the tax year ending on that date in compliance with the accounting principles generally accepted in Angola for the banking sector. 94_ ANNUAL REPORT 2015

96 ANNUAL REPORT 2015 Emphasis 9. Although the Bank presents Positive Equity on 31 de December de 2015, and the shareholders have subscribed for and paid up a capital increase in the amount of maoa at the beginning of 2016, it has accumulated losses over the past years and, with regard to the possible effects of the situations mentioned in paragraphs 6 and 7, the continuity of the Bank's operations obviously still depends on the financial support of the Shareholders, the outcome of its operations and the capacity to obtain public resources. 10. The Independent Audit Report with reference to 31 December 2014, in paragraph 1, referred to the lacking support documentation, that would allow to validate the heading "Asset transactions pending settlement, in the amount of maoa. During this period, a significant part of this balance was identified and regularised, with a remaining value of maoa, booked against Retained Earnings, in accordance with Note 14 of the Attachments to the Financial Statements. Therefore, we consider this situation to be solved. 11. As mentioned in Note 26 of the Attachments, tax declarations relating to profit and other taxes remain open for review and adjustment by the tax authorities for a period of five years after the year they relate to (10 years as for Social Security). The Board of Directors believes that any possible corrections, which might result from these revisions, will not be significant for the attached financial statements. Luanda, 08 April 2016 CROWE - CROWE HORWATH ANGOLA Represented by João Martins de Castro Chartered Accountant registered at OCPCA under no _ BANCO DE COMÉRCIO E INDÚSTRIA

97 *FOR ME to design my future now * 96_ ANNUAL REPORT 2015