Presentation Consolidated Results 1 st Half 2017

Transcription

1 Presentation Consolidated Results 1 st Half th July 2017 Unaudited financial information Investor Relations Office

2 Consolidated Results 1 st Half 2017 Presentation (*) Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital (*) The June 2016 values have been restated, considering Mercantile Bank Holdings, Ltd. as a non-current asset held for sale. 2

3 Consolidated Results 1 st Half 2017 Presentation Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital 3

4 Highlights 1 st Half 2017 Highlights 1 Recapitalisation Plan Conclusion Consolidation of capital position with a 4,444 M reinforcement Capital Ratios (Phased-in): CET1: 12.7% Tier 1: 13.7% Total: 14.6% 2 Efficiency and Profitability provides a positive starting point to implement the Strategic Plan Evolution 1H 2017 vs. 1H 2016: Net Interest Income: +18% Recurrent Operating Costs: -5% Total Operating Income: +57% 3 Asset Quality consistent performance reduces non-productive assets NPE and NPL Evolution vs. Dec. 2016: NPE: 10.7% (-1.4 pp) NPL: 13.6% (-2.2 pp) NPE Coverage: 52.1% NPL Coverage: 52.1% Cost of Credit Risk: 0.16% 4 Liquidity with a wide base of available funding. Deposits: 79% of Liabilities Pool of available Collateral: 12 B LCR: 222% Loans-To-Deposits: 87% 4

5 Consolidated Results 1 st Half 2017 Presentation Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital 5

6 Results Improving profitability M Net Core Operating Income before Impairments (1) (2) Net Operating Income Consolidated Net Income (1) Net Core Operating Income before Impairments = Total Core Operating Income - Operating Costs Total Core Operating Inc. = Net Interest Income + Commissions (net); (2) Excluding the non-recurrent staff costs related to the early retirement program and the termination program by mutual agreement, in the amount of 20M and 61M in 1H2016 and 1H2017, respectively; 6

7 Results Net Interest Income benefiting from the reduction in funding costs M % 8% 656 1,351 1,241 27% -753 (1) Net Interest Income Interest and Similar Income Cost of Funding (1) Interest paid for the 2012 subordinated bonds issuance (CoCos). 7

8 Results and keeping quarterly positive evolution M Net Interest Income Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Note: Values refer to disclosure date accounts 8

9 Results Commissions stabilize and Income from Financial Operations show strong growth M Commissions (net) Income from Financial Operations 9

10 Results Total Operating Income was influenced by Net Interest Income and Income from Financial Operations M ,154-1M +95M +0.2M +325M Other Operating Income Net interest inc. incl. inc. from eq. investm. Income from financial operations Commissions (net) 10

11 Results Lower recurrent Operating Costs at consolidated level M % (1) 10% 6% 5% (1) Employee (1) costs Other administrative Depreciation expenses and amortisation Total (1) Operating Costs Consolidated Activity (1) Excluding the non-recurrent staff costs related to the early retirement program and the termination program by mutual agreement, in the amount of 20M and 61M in 1H2016 and 1H2017, respectively. 11

12 Results and also lower recurrent Operating Costs in Portugal M % (1) 12% 4% 9% (1) Employee (1) costs Other administrative Depreciation expenses and amortisation Total (1) Operating Costs CGD Portugal (1) Excluding the non-recurrent staff costs related to the early retirement program and the termination program by mutual agreement, in the amount of 20M and 61M in 1H2016 and 1H2017, respectively. 12

13 Results Cost-to-Income continues its downwards path % 78% 66% -4% 80% -27% 50% Cost-to-Core Income (1) (2) Operating Costs Reduction Cost-to-Income Total Operating Income Increase (2) (3) (1) Operating Costs / (Net Interest Income + Commissions (net)); (2) Excluding the non-recurrent staff costs related to the early retirement program and the termination program by mutual agreement, in the amount of 20M and 61M in 1H2016 and 1H2017, respectively; (3) Ratio defined by the Bank of Portugal Instruction 23/2012 [Operating Costs / (Total Operating Income + Income From Associated Companies)]; 13

14 Results Net Operating Income and Consolidated Net Income advance M Net Operating Income Tax Consolidated Net Income 14

15 Results Important contribution from international activity to consolidated Net Income M BNU Macao: France Branch: 21 Domestic Activity -169 BCG Espanha: 13 International Activity BCG Angola: BCI Mozambique: Main contributions from International activity 15

16 Consolidated Results 1 st Half 2017 Presentation Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital 16

17 Balance Sheet Balance Sheet reflects recapitalisation B Other assets Securities investments * 93,547 96,008 9,481 8,729 15,148 18,532 5,816 8,271 93,547 96,008 3,883 7,895 10,001 4,184 8,783 4,078 5,800 5,337 Shareholders Equity Other liabilities Debt securities Credit instit. and central banks investments * 63,102 60,476 69,680 69,915 Central banks' and credit instit. resources Loans and adv. to customers (net) Customer resources Assets Liabilities + Shareholders Equity * Includes assets with repurchase agreement. 17

18 Balance Sheet Market Shares: CGD leader in Portugal % CGD 27% Deposits from: CGD 21% Credit to: Individuals (Other Purpose) 6% Total Individuals 31% Total Individuals (Mortgage) 26% Corporate 12% Individuals (Total) 23% Corporate 18% Customer Deposits Portugal May 2017 Loans and Adv. to Customers Portugal May

19 Balance Sheet Customer deposits grow in Portugal M Total 69,532 Deposits - Corporate 6,531 Deposits - Individual Customers 45, Deposits - General Government and Institut. 2,804 Treasury Bonds 2,091 Investment Funds Bancassurance 4,275 7,308 Bonds 1,278 Total 67,278 Deposits - Corporate 6,324 Deposits - Individual Customers 45, Deposits - General Government and Institut. 1,374 Treasury Bonds 1,415 Investment Funds Bancassurance 4,164 7,265 Bonds 1,251 Total Customer Resources Domestic Activity 19

20 Balance Sheet Credit in Portugal follows market trend M Total 49,242 Corporate 16,185 General Government 4,534 Individual customers - Mortgage loans 26,471 Institutionals and Others 1,174 Individual customers - Other loans Loans and Advances to Customers - CGD Portugal 20

21 ,50 3,50 3,00 2,50 Balance Sheet Mortgage loans new operations keeps recovering M ,545 3,357 3,043 3,208 3,522 4,00 0 2,00 Mortgage Loans Amount of new operations (Quarterly) Portugal Branch Office Network Mortgage Loans Number of new operations (Quarterly) Portugal Branch Office Network 21

22 Balance Sheet Quarterly initiatives streamline business and strengthen relationships Fora da Caixa Events Porto, Santarém, Braga and Lisbon. Streamlining products Fixed rate mortgage loans; Leader in Capitalizar Credit Lines Market Share: 32%; Leader in Treasury Bonds; Innovative life insurance Plano Proteção Vida ; AgroCaixa Antecipar credit line. Caixa BI bookrunner Bookrunner in REN share capital increase; Best investment bank in Portugal. Operational efficiency Optimization of Processes; New commercial systematic; Caixa mobile branch service. Caixa Account Simplicity; Transparency; Multiproduct Solution. Caixadirecta New image; Convenience; New functionalities. 22

23 Consolidated Results 1 st Half 2017 Presentation Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital 23

24 Asset Quality Impairments reduce with contained Cost of Credit Risk M % % % Credit impairment net of reversals Cost of Credit Risk 24

25 Asset Quality NPE and NPL decreasing % % 10.7% 15.8% 13.6% 52.9% 52.1% 52.8% 52.1% 79.0% 76.7% NPE (1) (1) Gross Ratios NPL (1) (1) NPE NPL Credit at Risk Coverage by Impairments (2) (1) NPE Non Performing Exposure EBA definition NPL Non Performing Loans EBA definition; (2) Ratio as defined by Bank of Portugal Instruction 23/

26 Asset Quality Foreclosed Assets (Real Estate) M % 1,112 1,087 45% 46% Foreclosed Assets (Real Estate) Coverage by Impairments 26

27 Consolidated Results 1 st Half 2017 Presentation Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital 27

28 Liquidity ECB funding stabilized M % 3,110 2,766 3,527 3,497 Other Bonds 36% CGD Group Issuances 17% 12,262 M Other Sovereign Debt 23% Portuguese Sovereign Debt 24% ECB Funding Eligible Assets in ECB Pool 28

29 Liquidity with maturities fully covered by Eligible Assets Pool M 12, , , , Total Eligible Assets Pool Annual maturities of Wholesale Debt 29

30 Liquidity Solid funding structure based on retail banking % M 90% 87% Central Banks and Credit Instit. 6% 64,931 72,065 69,577 60,476 Other 8% 88,113 M Debt Securities and Subordinated Liabilities 6% Funding Structure Customer Resources 80% Loans-to-Deposits Ratio Loans and Adv. to Customers (net) Customer Deposits 30

31 Liquidity Comfortable LCR ratio % % 222% Minimum: 70% in % in 2017 Liquidity coverage ratio Liquidity Ratio 31

32 Consolidated Results 1 st Half 2017 Presentation Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital 32

33 Capital Recapitalisation allowed solvency reinforcement % 12.1% 13.0% 14.1% 14.6% 13.7% 12.7% 7.0% 7.0% 8.1% 8,25% 9,75% 11,75% SREP Capital Requirements for * Phased-in Capital Ratios * Proforma including stages 1 and 2 of the Recapitalisation Plan 33

34 Capital Adequate Capital Ratios % 11.75% 9.75% 1,25% 8.25% 1,25% 2,50% CCB P2R 1,25% 2,50% 12,7% 12,5% AT1 2,50% 13,7% 13,5% Tier 2 2,00% 1,50% 1,50% 14,6% 13,7% Min. CET1 4,5% 4,5% 4,5% SREP Phased-in Fully Requirement Implemented SREP Phased-in Fully Requirement Implemented SREP Phased-in Fully Requirement Implemented CET 1 Tier 1 Total SREP 2017 Requirements and CGD Capital Ratios in 1 st Half

35 Capital High RWA density, Texas Ratio improves % 100% 91% 78% 60% 58% 56% RWA Density Texas Ratio (1) (1) Texas Ratio = Non Performing Exposure EBA / (Impairments + Tangible Equity) 35

36 Capital ADI and MDA B 33 x Annual Cost AT1 (1) 33 x Annual Cost AT1 (1) % 12.7% 8.25% MDA Buffer: 4.5% 2.4 B (2) 12.7% 9.92% MDA Buffer: 2.8% 1.5 B ADI (Available Distributable Items) (1) 10.75% coupon for current 500 M AT1 issuance. CET Requirement 2017 CET MDA (Maximum Distributable Amounts) (2) Considering Buffers of 1.5% in T1 and 2% in T2 fullfilled. Requirement Gaps Tier 1 and Tier 2 36

37 Consolidated Results 1 st Half 2017 Presentation Executive Summary 1. Recapitalisation Plan Conclusion 1 st quarter 2017 witnessed CGD s completion of phases 1 and 2 of the Recapitalisation Plan agreed between the Portuguese state and European Commission (DG Comp). In June, the phased-in capital ratios were 12.7% (CET1), 13.7% (Tier 1) and 14.6% (Total). 2. Operational Activity - Core operating income evolved favourably over the same period of 2016, with cost-to-income (excluding non-recurrent costs) reducing to 50% in the 1 st half The consolidated net income was negative by 50 M. 3. Asset Quality - Positive evolution in 1 st half 2017 of NPE and NPL ratios and its coverage by impairments and collateral, in line with the Strategic Plan. 4. Liquidity - CGD maintained a highly comfortable liquidity position with total financing from the ECB remaining stable (fully under TLTRO II). ADI and MDA levels remained high. 37

38 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 30 June 2017, except otherwise stated. 38

39 THANK YOU CAIXA GERAL DE DEPÓSITOS Head Office : Av. Joao XXI, LISBOA PORTUGAL (+351) Share Capital 3,844,143,735 CRCL and Tax no GABINETE INVESTOR RELATIONS investor.relations@cgd.pt Caixa Geral de Depósitos Lisboa 1 de março de 2017 <#>