Consolidated Results 1 st Quarter 2017

Transcription

1 Presentation Consolidated Results 1 st Quarter th May 2017 Unaudited financial information GIR Gabinete de Investor Relations

2 Consolidated Results 1 st Quarter 2017 Presentation (*) Agenda Executive Summary Recapitalization Plan Results Balance Sheet Liquidity and Solvency (*) The March 2016 values have been restated, considering Mercantile Bank Holdings, Ltd. as a non-current asset held for sale. 2

3 Consolidated Results 1 st Quarter 2017 Presentation Agenda Executive Summary Recapitalization Plan Results Balance Sheet Liquidity and Solvency 3

4 Consolidated Results 1 st Quarter 2017 Presentation Executive Summary 1. Recapitalisation Plan - 1st 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), resulting in: Capital increase of 4.4 billion euros. Substantial reinforcement of its capital ratios at 31 March 2017 with 12.3% (CET1), 13.3% (Tier 1) and 14.2% (Total) phased-in ratios. 2. Operational Activity - Core operating income was 147 million euros in the 1 st quarter, up 63% over the same period of Total operating income was up 65%, to 490 million euros in the same period. Both were fuelled by: Net interest income growth (+18%) Reduction of recurring operating costs (-3.5%) Positive income from financial operations (81 million euros in the 1 st quarter). Consequently, cost-to-income (excluding non-recurrent costs) reduced to 58% in the 1 st quarter

5 Consolidated Results 1 st Quarter 2017 Presentation Executive Summary 3. Asset Quality - Positive evolution in 1 st quarter 2017, with gross NPE and NPL ratios reaching 11.8% and 15.4% (6.5% and 8.6% net of impairments). The coverage by impairments and collateral was 88.5% and 92.7%, respectively (94.4% and 100.9% in Portugal). The cost of credit risk for the quarter was 0.17%. 4. Results - Net losses of 39 million euros were made in the quarter, impacted by nonrecurrent costs of 58 million euros (42.1 million net of tax). Recurring net income amounted to 3.5 million euros. 5. Liquidity and Solvency - CGD maintained a highly comfortable liquidity position with an LCR (Liquidity Coverage Ratio) of 230% with total financing from the ECB remaining stable at 3,497 million euros or around 3.6% of total assets. CGD had ADI (Available Distributable Items) of 1.7 billion euros at this date with a 4.0% surplus on the level of its MDA (Maximum Distributable Amount) restrictions. 5

6 Consolidated Results 1 st Quarter 2017 Presentation Agenda Executive Summary Recapitalization Plan Results Balance Sheet Liquidity and Solvency 6

7 Recapitalization Plan Recapitalisation Plan is concluded 4,874 M Phase 1 Executed 4 January M 499 M 500 M Share Capital increase in kind by the State using the CoCos subscribed in 2012, with a nominal value of 900 M plus accrued, unpaid interest since the last coupon (45.1 M ) Share Capital increase in kind by the Portuguese State, using 49% of Parcaixa SGPS, S.A., valued at book value Issuance of AT1 Phase 2 Executed End of March M Share Capital increase in cash, subscribed by the Portuguese State By September M Issuance of AT1 7

8 Recapitalization Plan strengthening CGD's capital level % 14.1% 14.2% 13.0% 13.3% 12.1% 12.3% 7.0% 7.0% 8.1% 8.25% 9.75% 11.75% SREP capital requirements for * Phased-in Capital Ratios * Proforma including stage 1 and 2 measures of the Recapitalization Plan 8

9 Consolidated Results 1 st Quarter 2017 Presentation Agenda Executive Summary Recapitalization Plan Results Balance Sheet Liquidity and Solvency 9

10 Results Core Net Operating Income before Impairments increased M Core Total Operating Income % Core Net Operating Income before Impairments Operating Costs (1) (1) Core Net Operating Income before Impairments (2) (1) Excluding the non recurrent cost of 58 M concerning the provision for the 2017 early retirement program (2) Core Net Operating Inc. before Impairments = Core Total Operating Inc. Operating Costs Core Total Operating Inc. = Net Interest Income + Commissions (net) 10

11 Results Net Operating Income before Impairments with strong growth M Total Operating Income Net Operating Income before Impairments Operating Costs (1) Net Operating Income before Impairments (1) (1) Excluding the non recurrent cost of 58 M concerning the provision for the 2017 early retirement program 11

12 Results Consolidated Net Income improved M Net Income before Tax and Non- Controlling Interest Consolidated Net Income Attrib. to CGD Shareholder 12

13 Results Net Interest Income up 18.4% benefiting from the reduction in funding costs M % 9.4% % Net Interest Income Interest and Similar Income Cost of Funding 13

14 Results Quarterly Net Interest Income with positive evolution M 15.6% Portugal vs. 1Q 16 Consolidated Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Note: Values refer to disclosure date accounts 14

15 Results Commissions and Income from Financial Operations M 3.7% Commissions (net) Income from Financial Operations 15

16 Results M Total Operating Income was influenced by Net Interest Income and Income from Financial Operations M + 44 M -4 M M 65.2% M Other Operating Income Net interest inc. incl. inc. from eq. investm. Income from financial operations Commissions (net) 16

17 Results Lower Consolidated recurrent Operating Costs M % (2) 4.9% 2.7% 3.5% (2) (1) 58.0 (1) Employee costs Other administrative Depreciation expenses and amortisation Operating Costs Consolidated Activity Total (1) Non recurrent cost of 58 M concerning the provision for the 2017 early retirement program (2) Excluding the non recurrent cost 17

18 Results the same happening in Portugal M % (1) 2.7% 3.8% 3.9% (1) Employee costs Other administrative Depreciation expenses and amortisation Operating Costs CGD Portugal Total (1) Excluding the non recurrent cost of 58 M concerning the provision for the 2017 early retirement program 18

19 Results Cost-to-Income improvement % 76.7% 66.1% (3) -3.5% (3) -37.3% 99.0% 58.2% (3) Cost-to-Core Income (1) Operating Costs Reduction Total Operating Income (4) Increase Cost-to-Income (2) (1) Operating Costs / (Net Interest Income + Commissions (net)) (2) Ratio defined by the Bank of Portugal Instruction 23/2012 [Operating Costs / (Total Operating Income + Income From Associated Companies)] (3) Excluding the non recurrent cost of 58 M concerning the provision for the 2017 early retirement program (4) Includes the cross effect of cost reduction and income increase 19

20 Results Impairments reducing with contained Cost of Credit Risk M % % 3.42% % 0.17% Credit impairment net of reversals Cost of Credit Risk 20

21 Results NPE and NPL decreasing % % 15.4% 8.8% 8.6% 12.1% 11.8% 6.6% 6.5% NPE (1) (1) NPL NPE NPL Gross Ratios Ratios net of Impairments (1) NPE Non Performing Exposure EBA definition NPL Non Performing Loans EBA definition 21

22 Results Reinforced NPE, NPL and Credit at Risk Coverage % % 94.4% 100.1% 100.9% CGD Portugal 54.2% 54.7% 54.3% 55.2% 52.9% 52.9% 52.8% 52.7% 78.9% 76.9% Consolidated 87.8% 88.5% 91.8% 92.7% (1) (1) NPE NPL Credit at (2) Risk Coverage by Impairments (1) NPE Non Performing Exposure EBA definition NPL Non Performing Loans EBA definition (2) Ratio as defined by Bank of Portugal Instruction 23/2012 NPE NPL Coverage by Impairments + Collateral 22

23 Results Foreclosed Assets (Real Estate) M % 1,112 1, % 46.3% Foreclosed Assets (Real Estate) Coverage by Impairments Foreclosed Assets (Real Estate) Impairment 23

24 Results Important contribution from international activity M Domestic Activ. International Activ BNU Macau: 15.6 France Branch: 13.5 BCG Angola: 7.2 BCG Spain: 4.9 BCI Mozambique: 4.7 Other: 3.7 Net Income attrib. to CGD Shareholder (International activity contributions) 24

25 Consolidated Results 1 st Quarter 2017 Presentation Agenda Executive Summary Recapitalization Plan Results Balance Sheet Liquidity and Solvency 25

26 Balance Sheet Balance Sheet is stable B Total assets (net) Loans and adv. to customers (net) * * Including assets with repurchase agreement 26

27 Balance Sheet Market leader in Portugal % Total CGD 28% Deposits from: Individuals Corporates Public Sector 12% 31% 36% Total CGD 22% Individuals (Other Purpose) Individuals (Mortgage) Individuals (Total) Corporates Public Sector Credit to: 7% 26% 23% 19% 33% Customer Deposits Portugal February 2017 Loans and Adv. to Customers Portugal February 2017 Source: Bank of Portugal 27

28 Balance Sheet Quarterly initiatives streamline business and strengthen relationships Fora da Caixa Events Porto; Santarém. Caixa BI bookrunner REN share capital increase. Streamlining products Fixed rate mortgage loans; Leader in Capitalizar Credit Lines; Leader in Treasury Bonds; New life insurance; Agribusiness. Operational efficiency Optimization of Processes; New commercial systematic. 28

29 120,0 110,0 10,0 90, 0 80, 0 60, Balance Sheet Mortgage loans new operations M 1, , ,058 1,070 1, Amount Number Mortgage Loans New Operations (Quarterly) Portugal Branch Office Network Mortgage Loans New Operations (Monthly) Portugal Branch Office Network 29

30 Balance Sheet Resilient customer resources M 0.7% 2.1% 1.6% 69,357 67,293 69,838 68,397 Customer Deposits (Consolidated Activ.) 53,184 54,306 Customer Deposits (Domestic Activ.) Customer Resources (Domestic Activ.) (1) (1) Including deposits, investment funds, bancassurance, floating rate bonds and other bonds Customer Resources 30

31 Consolidated Results 1 st Quarter 2017 Presentation Agenda Executive Summary Recapitalization Plan Results Balance Sheet Liquidity and Solvency 31

32 Liquidity and Solvency ECB funding stabilized M % 3,110 2,766 3,527 3,497 Other Bonds 37% CGD Group Issuances 17% M Other Sovereign Debt 19% Portuguese Sovereign Debt 27% ECB Funding Eligible Asset Pool 32

33 Liquidity and Solvency wholesale maturities fully covered by Eligible Assets Pool M 12, , , , Total Eligible Assets Pool Annual maturities of Wholesale Debt 33

34 Liquidity and Solvency Solid funding structure based on retail banking % M Central Banks and Credit Instit. 7% Other 8% 88,777 M 88.5% 88.1% 73,458 69,838 64,982 61,558 Debt Securities and Subordinated Liabilities 6% Customer Resources 79% Funding Structure Loans-to-Deposits Ratio Loans and Adv. to Customers (net) Customer Deposits 34

35 Liquidity and Solvency Comfortable liquidity ratios % % 159.1% 134.3% 136.5% Minimum: 70% in % in 2017 Liquidity coverage ratio Net stable funding ratio Liquidity Ratios 35

36 Liquidity and Solvency Adequate Capital Ratios % 11.75% 8.25% 9.75% 1.25% 1.25% 2.50% Min. CET1 P2R CCB 1.25% 2.50% 4.5% 12.3% 12.0% AT1 2.50% 13.3% 13.0% Tier % 1.50% 1.50% 4.5% 4.5% 14.2% 13.2% SREP Phased-in Fully Requirement Implemented SREP Phased-in Fully Requirement Implemented SREP Phased-in Fully Requirement Implemented CET 1 Tier 1 Total Phased-in Leverage Ratio : 7.37% : 7.95% SREP 2017 Requirements and CGD Capital Ratios in 1 st Quarter

37 Liquidity and Solvency High RWA density, Texas Ratio improving % % 99.8% 90.8% 82.3% 59.8% 58.3% 56.9% (1) (1) RWA of 54,998 M RWA Density Texas Ratio (2) Texas Ratio = Non Performing Exposure EBA / (Impairments + Tangible Equity) (2) 37

38 Liquidity and Solvency ADI and MDA B 33 x Annual Cost AT1 (1) 33 x Annual Cost AT1 (1) % % 8.25% MDA Buffer: 4.04% ADI (Available Distributable Items) CET Requirement 2017 MDA (Maximum Distributable Amounts) (1) 10.75% coupon for current 500 M AT1 issuance 38

39 Consolidated Results 1 st Quarter 2017 Presentation Executive Summary 1. Recapitalisation Plan 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). 2. Operational Activity - Core operating income and total operating income were up 63% and 65% over the same period of 2016, with cost-to-income (excluding non-recurrent costs) reducing to 58% in the 1st quarter Asset Quality - Positive evolution in 1st quarter 2017 of NPE and NPL ratios and its coverage by impairments and collateral. 4. Results - Net losses were made in the quarter, but recurring net income amounted to 3.5 million euros. 5. Liquidity and Solvency - CGD maintained a highly comfortable liquidity position with total financing from the ECB remaining stable. ADI and MDA levels remained high. 39

40 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 March 2017, except otherwise stated. 40

41 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 <#>