Consolidated Results 2017

Transcription

1 Consolidated Results 2017 Unaudited financial information Investor Relations Office Date 02/02/2018

2 Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital 2

3 Highlights 3

4 CGD 2020 Strategic Plan on the right track, supported by the business evolution, capital and liquidity Strategic Plan Implementation of the CGD 2020 Strategic Plan successfully concludes 2017, allowing (1) (2) CGD to reach positive net income (52M ) Business Asset Quality Liquidity Capital... supported by the evolution of CGD s recurrent business... with a strong focus on the reduction of non-performing assets...taking advantage of the wide base of funding available and reinforcing the capital position, despite the restructuring costs. Evolution 2017 vs. 2016: Net Interest Income: +19%; Commissions: +3% Recurrent Operating Costs: -7% Net Core Operating Inc. before Impairments: +87% NPE and NPL Evolution, 2017 vs. 2016: NPE: 9.3% (-2.8 pp); NPL: 12.1% (-3.7 pp) Coverage by impairments: NPE: 56.6%; NPL: 57.2% Cost of Credit Risk: 0.13% Deposits: 74% of Liabilities Pool of available Collateral: 13.7 B LCR: 209% Loans-To-Deposits: 87% Capital Ratios (Phased-in), 2017 vs. 2016: CET1: 14.0% (+1.9 pp) Tier 1: 15.1% (+2.1 pp) Total: 15.7% (+1.6 pp) (3) (3) (1) December 2016 values have been restated, considering Mercantile Bank, BCG Spain, BCG Brazil and CGD Investimentos CVC as non-current assets held for sale, for comparability purpose with December 2017; (2) 2016 and 2017 include non recurrent costs related to staff reduction programmes, national and international operations restructuring and sale provisions, and IAS 29 application to the activity in Angola, resulting in a total net amount of 32 M and 609 M in 2016 and 2017 respectively; (3) December 2017 Solvency and Asset Quality ratios are estimated, subject to change when definitive values are determined. 4

5 Results 5

6 Results Strong improvement in Net Income M Consolidated Net Income -1,

7 Results and in Net Core Operating Income before Impairments M Net Core Operating Income before Impairments (1) (2) 1Q 2Q 3Q 4Q 2017 Quarterly Net Core Operating Income before Impairments (Current Activity) (1) (2) (3) (1) Net Core Operating Income before Impairments = Net Interest Income + Net Fees and Commissions - Operating Costs; (2) Excluding non recurrent costs; (3) Consolidated figures on comparable basis, considering Mercantile Bank only as non current asset held for sale. 7

8 Results despite non recurrent costs already provisioned due to the Strategic Plan implementation M Provisions for restructuring costs and sale of international activities and IAS 29 (1) Provisions for operational structure reduction program ( ) International Activity (Contribution) Domestic Activity (Contribution) Total International Activity Domestic Activity Consolidated Net Income Net Income from Current Activity Non Recurrent Costs (1) Following the IAS 29 application to the Angolan activity, in the amount of -30M. 8

9 Results Net Interest Income advances M 14% vs. 4Q % 1, ,040 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Net Interest Income Quarterly Net Interest Income Note: Consolidated figures on comparable basis, considering Mercantile Bank only as non current asset held for sale. 9

10 Results Commissions benefit from the implementation of the Strategic Plan M % vs Other (PT) Automatic Channels (PT) Secutitization (PT) Services (PT) Cards and Acquiring (PT) Asset Management (PT) Credit & Guarantees (PT) Net Fees and Commissions (Consolidated) Net Fees and Commissions (CGD Portugal) 10

11 Results but CGD remains below peer group average % 1.50% 80% 1.30% 1.10% 0.90% 67% 55% 59% 60% 70% CGD vs. Competitors 60% = 50% CGD Commissions as % of BV Competitors Commissions as % of BV % 0.70% 0.50% 0.30% 0.55% 0.56% 0.59% 0.59% 0.37% 0.31% 0.35% 0.35% 40% 30% 20% 0.10% -0.10% Top 4 Competitors (Average) CGD CGD vs. Competitors 10% 0% Net Fees and Commissions (CGD vs. Competitors) Note: Quarterly Net Fees and Commissions, not accumulated; Business Volume (BV) = Gross Loans and Advances to Customers + Customer Deposits; Annualised quarterly values; 11

12 Results Total Operating Income was influenced by Net Interest Income and Trading Income M 38% 15% , ,965 1, , M +201M -5M +15M +139M , ,423 1, ,489 Total Operating Income Total Core Operating Income Net fees and commissions Net interest income Net trading income Other Operating Income Income from equity instruments 12

13 Results Lower recurrent Operating Costs at consolidated level M Non recurrent costs 5% (1) 12% (1) 6% (1) 7% (1) , , ,151 1,072 Employee costs Other administrative expenses Depreciation and amortisation Total Operating Costs Consolidated Activity (1) Excluding non-recurrent costs. 13

14 Results Employees and retail branches evolve according to the Strategic Plan M 8,868 8,896 8,819 8,570 8,321 Number of Employees (Domestic Activity) -547 vs. 4Q Retail Branch Network (CGD Portugal) vs. 4Q

15 Results Cost-to-Income continues its downwards path % 76.0% 66.1% 65.5% 63.9% 62.8% -5% -20% 78% 53% Cost-to-Core Income (1) (2) Operating Costs Reduction Cost-to-Income Total Operating Income Increase (2) (3) (1) Operating Costs / (Net Interest Income + Net Fees and Commissions); Calculated using consolidated figures on comparable basis, considering Mercantile Bank only as non current asset held for sale; (2) Excluding non-recurrent costs; (3) Ratio defined by the Bank of Portugal Instruction 23/2012 [Operating Costs / (Total Operating Income + Income From Associated Companies)]. 15

16 Results Contributions to consolidated Net Income from current activity M BNU Macao: % 273 France Branch: % International Activity BCG Angola: % Domestic Activity 388 BCI Mozambique: % Main contributions ROE (1) 661 Branches wind-down in 2017: London Branch, Cayman, Macao Offshore and Zhuhai. (1) ROE = Net Income from current activity / Average Total Equity 16

17 Balance Sheet 17

18 Balance Sheet Market Shares: CGD leader in Portugal % CGD 27% Deposits from: CGD 21% Credit to: Individuals (Mortgage) 25% Total Individuals 30% Total Individuals (Total) 22% Corporates 11% Corporates 17% Customer Deposits Portugal November 2017 Loans and Adv. to Customers Portugal November

19 Balance Sheet Total Customer Resources in Portugal increase 1.4 B M Total 68,648 Deposits 52, Treasury Bonds 2,888 Investment Funds Bancassurance 4,847 7,639 Bonds 956 Individual Customers 43, General Government and Institut. 2,401 Corporate 6,824 Total 67,278 Deposits 53, Treasury Bonds 1,415 Investment Funds Bancassurance 4,164 7,265 Bonds 1,251 Individual Customers 45, General Government and Institut. 1,374 Corporate 6,324 Total Customer Resources Domestic Activity Customer Deposits (Domestic Activity) 19

20 Balance Sheet Credit in Portugal follows market trend and reflects NPL reduction M Total 48,779 Corporates 15,747 General Government 5,026 Institutionals and Others 1,265 Individual customers - Mortgage loans 25,861 Individual customers - Other loans Total 52,960 Corporates 18,316 General Government 5,617 Institutionals and Others 1,028 Individual customers - Mortgage loans 27,064 Individual customers - Other loans Loans and Advances to Customers (Gross) - CGD Portugal 20

21 Balance Sheet Relevant Events Fora da Caixa Events 10 events with the presence of more than 3,300 CGD customers; Cities: Braga, Faro, Leiria, Lisboa, Oporto, Santarém, Funchal and Viseu; Relevant themes for the strategy of companies and the country. Digital Offer Caixadirecta: 1.4 million clients in Portugal; 720 million transactions in 2017; 50% of total internet banking users in Portugal; Caixadirecta App: > 500,000 unique users; CGD.pt: >1,000,000 unique visitors; Sole banking service in pageviews.pt Top 10; >300,000 followers in social networks. Caixa Account Easier, targeting customer s needs; Closer to customers and increased revenue; Launched in June 2017; Jan. 2018: > 1,000,000 accounts. Mutual Funds Market Leader 409 M growth in 2017; Total AuM of 3,928 M ; 32% market share in December Investment Banking and Credit Caixa BI: Best Investment Bank in Portugal 2017 by Euromoney, Global Finance and EMEA Finance; Leader in the Capitalizar credit line and in the National System of Mutual Guarantee. 21

22 Asset Quality 22

23 Asset Quality Reduced Cost of Credit Risk M % 2, % % 0.78% 0.13% Credit impairment net of reversals Cost of Credit Risk 23

24 Asset Quality NPE and NPL decreasing and reinforced coverage % % 9.3% 15.8% 12.1% 10.5% 8.9% Impairments and Collateral 87.7% 95.2% 91.8% 100.7% Impairments 52.9% 56.6% 52.8% 57.2% (1) (1) NPE NPL Credit at Risk Gross Ratios NPE (1) (1) NPL Coverage by Impairments and Collateral (1) NPE Non Performing Exposure EBA definition NPL Non Performing Loans EBA definition; 24

25 Asset Quality Strong action on NPL allows 2.7 B reduction % B % 15.3% % 13.1% 12.1% 5.0 (2) (2) NPL Cures Sales Write-offs Other NPL NPL evolution (1) (1) NPL Non Performing Loans EBA definition. (2) NPL net of impairments. 25

26 Asset Quality Foreclosed Assets (Real Estate) M % 1,112 1,025 45% 45% Foreclosed Assets (Real Estate) Coverage by Impairments 26

27 Liquidity 27

28 Liquidity ECB funding stabilized and ECB Eligible Assets Pool strengthened M 3,110 2,766 3,527 3,467 4,447 12,348 12,212 12,262 13,655 4,101 2,642 4,270 3,186 3, ,073 2, ECB Funding Eligible Assets in ECB Pool 28

29 Liquidity with Wholesale Debt maturities fully covered M 13,655 1, , , Annual maturities of Wholesale Debt Total Eligible Assets Pool 29

30 Liquidity Solid funding structure based on retail funding % M 89% 87% Central Banks and Credit Instit. 5% 59,413 66,529 55,255 63,499 Other 14% 84,974 M Debt Securities and Subordinated Liabilities 6% Funding Structure Customer Resources 75% Loans-to-Deposits Ratio Loans and Adv. to Customers (net) Customer Deposits 30

31 Liquidity with comfortable Liquidity Coverage Ratio (LCR) % % 230% 222% 204% 209% Regulatory requirement: 100% in January % 19.6% 27.9% CGD ratio ( ) PT ratio ( ) EU ratio ( ) Liquidity Ratio Asset Encumbrance LCR average PT and EU ( ): PT: 165% EU: 145% 31

32 Capital 32

33 Capital CGD complies with capital requirements % 8.875% O-SII 0.25% CCB P2R 1,875% 2,25% 14,0% 14,0% AT % 0.25% 1,875% 2,25% 1,50% 15.1% 15.0% 1,04% AT1 0,99% Tier % 0.25% 1,875% 2,25% 2,00% 1,50% 15.7% 15.2% 0.61% Tier 2 0,23% 1.04% AT1 0,99% Min. CET1 4,50% 4,50% 4,50% SREP Requirement Phased-in Fully Implemented SREP Requirement Phased-in Fully Implemented SREP Requirement Phased-in 2018 CET Tier Total Fully Implemented SREP 2018 Requirements and CGD Capital Ratios in 4 th Quarter 2017 IFRS 9 impact: CGD has chosen not to make use of the transitional regime (phasing-in), estimating a non-materially relevant impact of the adoption of the accounting standard IFRS 9. 33

34 Capital gradually improving its Capital position after the recapitalisation % 12.1% (1) 12.3% 12.8% 13.0% 14.0% 14.1% (1) 14.2% 14.6% 14.7% 15.7% CET 1 Total Capital Ratios Quarterly Evolution (Phased-in) (1) Proforma, including stages 1 and 2 of the Recapitalization Plan. 34

35 Capital High Risk Weighted Assets (RWA) density, Texas Ratio improving % 60% 58% 56% 100% 91% 80% 67% RWA Density Texas Ratio (1) RWA fully implemented (2017): 52 B (1) Texas Ratio = Non Performing Exposure EBA / (Impairments + Tangible Equity). 35

36 Capital Available Distributable Items (ADI) and Maximum Distributable Amount (MDA) B % 33 x Annual Cost AT1 (1) 33 x Annual Cost AT1 (1) % 8.875% MDA Buffer: 5.2% 2.7 B (2) 14.0% 10.7% MDA Buffer: 3.3% 1.7 B CET Requirement 2018 CET Requirement Gaps Tier 1 and Tier 2 ADI (Available Distributable Items) MDA (Maximum Distributable Amounts) (1) 10.75% coupon for current 500 M AT1 issuance; (2) Considering Buffers of 1.5% in T1 and 2% in T2 fulfilled. 36

37 Capital Market price evolution of CGD s AT % % /05/ /06/ /08/ /09/ /11/ /12/ /02/2018 AT % Perp. 37

38 CGD: Targets and 2017 Execution 2017 Plan 2017 Execution 2018 Management Targets Strategic Plan Targets Return on Equity (ROE) < 0% 0.6% > 5% > 5% > 9% Recurrent Cost-to-Income < 61% 53% < 55% < 58% (1) (1) < 43% Cost of Risk < 0.60% 0.13% < 0.50% < 0.70% (1) (1) < 0.60% NPL Ratio < 12.5% 12.1% < 10% n.a. < 12% CET1 Phased-In > 12.0% 14.0% > 13.5% > 12% > 14% (1) Target for the Domestic Business. 38

39 Disclaimer This document is intended to disclose general information, and does not constitute investment recommendation or professional guidance, nor can be interpreted as such. The values refer to 31 December 2017, except otherwise stated. CAIXA GERAL DE DEPÓSITOS Head Office : Av. Joao XXI, LISBOA PORTUGAL (+351) Share Capital 3,844,143,735 CRCL and Tax no INVESTOR RELATIONS OFFICE investor.relations@cgd.pt 39

40 Thank You