DISCLAIMER This document is not an offer of securities for sale in the United States, Canada, Australia, Japan or any other jurisdiction, Securities may not be offered or sold in the United States unless they are registered pursuant to the US Securities Act of 1933 or are exempt from such registration. Any public offering of securities in the United States, Canada, Australia or Japan would be made by means of a prospectus that will contain detailed information about the company and management, including financial statements The information in this presentation has been prepared under the scope of the International Financial Reporting Standards ( IFRS ) of BCP Group for the purposes of the preparation of the consolidated financial statements under Regulation (CE) 1606/2002 The figures presented do not constitute any form of commitment by BCP in regard to future earnings Values for the first six months of 2011 and 2012 were subject to limited revision by External Auditors 2
Agenda Main Highlights Group Capital Liquidity Profitability Portugal International operations Conclusions 3
Highlights Capital Core tier I reaches the highest value ever at 12.1% according to Bank of Portugal s criteria (versus 8.5% in June 2011) and 9.7% according to EBA s criteria, in line with the capitalization plan, ensuring a capital position above regulatory requirements and favorably comparing with Euro Zone peers Commercial gap improvement: commercial gap (net loans less deposits) reduction by 7.8 billion euros and loan to deposit ratio (BoP) decreasing to 138% from 154% in June 2011, and net loan to balance sheet customer funds standing at 121% Liquidity Customer deposits * up 5.5% on an annual basis, with a 7.3% increase in Portugal and 2,0% in international operations Loans to customers growth in line with liquidity plan: -5.5% * on an annual basis Reinforcement of impairment charges, reaching a coverage of 5.9% of total loan portfolio Cost containment, excluding specific items: operating costs down by 1,4% on an annual basis, mainly benefiting from the performance in Portugal Profitability Stable banking income on an annual basis, penalized by liability management transactions costs, market interest rates and State guarantee costs, and benefiting from trading gains Poland, Mozambique and Angola net income up 3.8% Accumulated net income in the first half of 2012 reaching -544.3 million euros penalized by the - 534.4 million euros impairment charges in Portugal and by impairment charges for estimated losses and results associated to the Greek operation in the amount of -502.2 million euros A particularly difficult and demanding 2012, although in line with the capitalization plan focused in strengthening the capital base, improving balance sheet structure and reinforcing provisioning * Adjusted for a Repo transaction in the amount of 2,256 million euros as at 30 June 2011 Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 4
Highlights Ensure solvency ratios above regulatory requirements Managing deleveraging process to stabilize balance sheet funding CT1 9% BoP Dec. 2011 9% EBA Jun. 2012 10% BoP Dec. 2012 L/D 120% in 2014 Core tier I (%) +364bp 12.1% +119 bp 9.7% 8.5% EBA Jun 12 BoP Commercial gap * Loan to deposit ratio * (Billion euros) 26.0 19.7-7.8 Net loans less BS customer funds 18.2 11.7 (%) 154% 136% -16pp Net loans to BS customer fund ratio 138% 121% * Calculated with net loans and customer deposits * Calculated with net loans and customer deposits (according to BoP criteria) 5
Highlights Net income 114.3 Net income from operations in Poland, Mozambique and Angola 111.7 +3.8% 115.9-544.3-502.2 Greece Banking income + 0.04% 1,268.7 1,269.2 Operating costs * - 1.4% 746.9 736.7 * Exluding specific items, including, on 1H2011 provisions reversal related to pension funds (-35.5 M ) and early retirements (+1.8M ) and on the 1H2012, a change in the calculation formula of mortality allowance (-64.0 M ) and early retirements (+2.7 M ). Non-adjusted real change of -5.3% Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 6
Agenda Main Highlights Group Capital Liquidity Profitability Portugal International operations Conclusions 7
Capital plan with two components Requirements * Exogenous impacts (Eur mn) Ratings Downgrades (Pt, Gr) 151 Greek Public debt impairment 409 Sovereign buffer (excl. Gr) 848 Other EBA deductions 724 Pension Fund transfer 439 Impairment for estimated losses (Greece) 450 Safety buffer 479 3,500 1 Capital plan Hybrid instruments - 3.0 Mm Description: issuance of contingent convertibles, eligible as core tier I capital, according to the terms established by EBA and BoP Subscription: Portuguese State (temporary State Aid line) Remuneration: Fixed cost (8.5% in the 1 st year, 8.75% in the 2 nd year, 9.0% in the 3 rd year, 9.5% in the 4 th year and 10% in the 5 th year) Carried out: June 29 th, 2012 Reimbursement: 2014, 2015 and 2016 (before the 5 year legal deadline) 2 Rights issue - 0.5Mm Description: rights issue, issuance of ordinary shares, Underwriting: by the State at a price of 0.04 per share, in accordance with MOF s ordenance nr. 150- A/2012 of May 17 Carried out: Until September 28 th 2012 * In line with the capitalization plan 8
Core tier I ratio reaches 12.1%, allowing the bank to comply with all regulatory requirements Core tier I ratio (%) 8.5% +364bp 12.1% Compliance with regulatory requirements Consolidated 9% BoP Dec. 2011 9% EBA Jun. 2012 10% BoP Dec. 2012 June 2012 vs. 2011 (ch. in mn eur) Core tier I (M ) 4,949 +36.1% 6,738 Reinforcement of core tier I Issuance of hybrid instruments +3,000 Liability management transactions +670 despite... Greek debt impairment -409 RWA (M ) 58,432-4.8% 55,640 Inspection (SIP) and Pension fund -891 Impairment for estimated losses (Greece) -450 Reduction of RWA Deleveraging, optimization and other -2,042 IRB extension to other credit portfolios -750 IRB method: IRB Advanced for loan portfolio for small retail business or collateralized by residential real estate or commercial; IRB Foundation and for loans to companies in Portugal, except for property developers and entities from the simplified rating system. Note: in the first half of 2009, the Bank received the Bank of Portugal authorization to adopt the internal models approach to market generic risk and the standard method for operating risk 9
and to reach the highest value ever, comparing favourably with Euro Zone peers Core tier I (%) ratio evolution in BCP + 745 bp 12.1% ~8.0% ~6.0% 4.7% ~5.0% 2000 2002 2004 2006 2008 1Q10 3Q10 1Q11 3Q11 1Q12 The effort to strengthen the capital structure of the Bank, allowed BCP: To reach the highest core tier I ratio in its history To become one of the best capitalized banks among its Euro Zone peers Core tier I (%) of Euro Zone banks * 12.1% B1 B2 BCP B4 B5 B6 B7 B8 B9 B10 B11 B12 B13 B14 B15 B15 B17 B18 B19 B20 B21 B22 B23 B24 B25 B26 B27 B28 B29 B30 B31 B32 B33 B34 * Source: SNL Financials, last core tier I reported by Euro Zone banks with total assets above 40 billion euros 10
Agenda Main Highlights Group Capital Liquidity Profitability Portugal International operations Conclusions 11
Focus on increasing customer funds Customer funds * Customer deposits in Portugal * Consolidated Balance sheet customer funds 51,791 6,318 +5.2% 54,505 6,531 30,092 +7.3% 32,289 45,473 +5.5% 47,974 14,847 12,302 Other BS customer funds Deposits Off BS customer funds Market share ** % 1st Bank 1 28.6 2nd BCP 18.1 3rd Bank 3 14.9 4th Bank 4 10.5 5th Bank 5 10.0 * Adjusted for a Repo transaction in the amount of 2,256 million euros as at 30 June 2011 ** Market shares are based on information published by Bank of Portugal and on public information from Portuguese banks as of the 1 st quarter 2012 12
and on reducing loans to customers in line with deleveraging policy Loans to customers * (gross) -5.5% Consolidated Loans to customers * (gross) in Portugal 56,863-6.7% 53,062 74,390 30,930-2.9% 70,317 30,031 22,215 21,258 2,770 2,664 1,696 9,214 1,738 7,779 20,968 19,624 4,667-4.8% -7.6% 4,443 38,793 35,843 Mortgage Consumer loans Loans to companies Mortgage Consumer loans Loans to public sector Loans to construction and real estate prom. Loans to other companies Loans to companies in Portugal Market share ** % 1st BCP 22.8 2nd Bank 1 21.8 3rd Bank 3 20.2 4th Bank 4 10.8 5th Bank 5 9.3 * Adjusted for a Repo transaction in the amount of 2,256 million euros as at 30 June 2011 ** Market shares are based on information published by Bank of Portugal and on public information from Portuguese banks as of the 1 st quarter 2012 13
Reduction of commercial gap as refinancing driver (Eur billion) Commercial gap * 26.0 25.0-7.8 20.5 18.8 18.2 Loan to deposit ratio ** (BoP) 154% 152% 136% 143% 135% 138% 138% 128% 124% 121% Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Accumulated net repayment of MLT debt (Medium and long term debt repayments since the beginning of 2009) 17.0 17.9 12.5 12.8 13.0 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Net loans to BS customer funds ratio Commercial gap fell 7.8 billion euros during last year and loan to deposit ratio below 140% Reduction of net usage in BCE Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Net usage of ECB 15.0 15.3 14.7 12.7 11.3 Jun 11 Sep11 Dec 11 Mar 12 Jun 12 Use of ECB s Long term refinancing operation (LTRO) to replace short-term funding: 5.1 billion euros in December 2011 7.0 billion euros in March 2012 Buffer of 6.7 billion euros of eligible assets, net of haircuts, available for refinancing with central banks * Calculated based on net loans and customer deposits ** According to Bank of Portugal s criteria 14
Lower refinancing needs on the short, medium and long term (Eur billion) Refinancing needs of medium-long term debt Already repaid 5.2 4.9 4.9 ** 2.9 * 3.0 0.6 1.0 0.4 0.6 1.3 0.4 2009 2010 2011 2H12 2013 2014 2015 2016 2017 >2018 Significant improvement of the funding structure 53% 56% 59% 61% 23% 19% 25% 34% 24% 25% 15% 5% Dec 10 Jun 11 Dec 11 Jun 12 Customer deposits Funding > 1 year Funding < 1 year Reduction of funding needs benefitting from the deleveraging process which proceeds at a steady pace Deposits are the main source of funding Lower short-term refinancing needs than in the past * Includes repurchase of own debt amounting 0.5 billion ** Includes 1.6 billion related to liability management transaction 15
Agenda Main Highlights Group Capital Liquidity Profitability Portugal International operations Conclusions 16
Income statement Consolidated Δ Net interest income 750.9 583.0-167.9 Of which: liability management 0.0-96.0-96.0 Net fees and commissions 390.4 334.8-55.6 Of which: State guarantee costs 0.0-33.4-33.4 Other operating income 55.4 310.2 254.8 Of which: specific financial operations -141.3 184.3 325.6 Banking income 1,196.7 1,228.0 31.3 Excluding Greek operation Staff costs 352.1 325.0-27.1 Of which: reversal of prov., early retirements and mortality allow. -33.7-61.3-27.6 Other admin. costs and depreciation 302.7 301.1-1.5 Operating costs 654.8 626.1-28.6 Operating profit before impairment 541.9 601.9 60.0 Impairment and provisions 540.7 573.6 32.9 Net income before income tax 1.2 28.3 27.1 Income tax and non-controlling interests -121.8 70.5 192.2 Of which: recognition of DTA -132.5 0.0 132.5 Net income (excluding Greece) 123.0-42.1-165.1 Greece With Greece Net income and provision for Greece operation -8.7-502.2-493.5 Net income 114.3-544.3-658.6 Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 17
Income statement (1 st half of 2011 vs. 2012) Consolidated 114.3 1 27.1 2 3 31.3 28.6-32.9-42.1-493.5-192.2-544.3-502.2 Net income banking income increase operating costs decrease impairment and provisions increase income improvement without the greek operation and tax expenses Greece tax and minoritary interest Net income Greece (excluding Greece) 1 2 3 Repurchase of own debt offset costs associated with 2011 s liability management transactions and the cost of the issues guaranteed by the state Exposure to Greece with a negative impact due to the impairment for estimated losses (450M ) and the appropriation of the Greek operation s result (52M ) Recognition of deferred tax assets in the of 133M following the reorganization of the Group s shareholdings Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 18
Net interest income decrease due to a negative evolution of market interest rates and to liability management transactions Net interest income Consolidated Portugal 807.7-26.6% Market interest rates evolution vs. -104 592.9 Liability management -96 Past due loans effect -31 Commercial margin and other +32 Total -199 International operations -5.3% 289.3 274.0 NIM 1.77% 1.41% Excluding liability management 1.63% 19
Fees and commissions affected by markets and state guaranteed operations, but improving on the 2Q12 when compared to the 1Q12 Fees and commissions Consolidated YoY Banking fees and commissions 336.6 331.0-1.7% Cards and transferences 91.5 87.0-4.8% Loans and guarantees 89.9 90.7 0.9% Banking fees and commissions Portugal * 253.1-3.5% 244.1 Bancassurance 37.7 35.6-5.7% Other fees and commissions 117.5 117.6 0.1% Market related fees and commissions 64.5 49.1-24.0% Securities operations 38.8 28.0-27.8% Asset management 25.7 21.0-18.3% Total fees and comissions excluding state guarantee 401.1 380.0-5.3% State guarantee 0.0-33.4 na Total fees and commissions 401.1 346.6-13.6% 1Q12 2Q12 QoQ Total fees and commissions 169.9 176.7 4.0% International operations +4.0% 83.5 86.8 * Excluding state guarantee 20
Operating costs containment in Portugal and costs under control in international operations Operating costs * Consolidated -1.4% 746.9 736.7 47.9-12.0% 42.2 Portugal * -2.6% 456.8 444.9 0.0% 284.0 284.0 414.9-1.1% 410.5 International operations +0.6% 290.0 291.8 Depreciation Other administrative costs Staff costs *Excluding specific items, including, on 1H2011 the provisions related to the pension funds (-35.5 M ) and early retirements (+1.8M ) and on the 1H2012, a change in the calculation formula of mortality allowance (-64.0 M ) and early retirements (+2.7 M ). Non-adjusted real change of -5.3% Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 21
Credit quality and provisioning reflect the economic cycle Consolidated Credit quality Loans impairment Credit ratio: overdue and doubtful loans > 90 days overdue loans ratio > 90 days Total overdue and doubtful loans >90 days 7.8% 11.9% 3.8% 6.1% overdue > 90 101% 96% days 3,112 2,893 4,065 4,297 Credit coverage ratios: overdue and doubtful > 90 days 49% 49% Impairment 147 bp charges net of 281 bp recoveries as % of gross loans 2,936 4,115 Doubtful loans Overdue > 90 days Total overdue over 90 days and doubtful loans ratio increased to 11.9%, reflecting the deterioration of the macroeconomic scenario. The coverage ratio remained at 49% Credit at risk ratio (including insolvencies and restructured loans) at 13.2%, while coverage (by B/S impairments and both real estate and financial guarantees) is above 100% 22
Well diversified and collateralized credit portfolio and most of the Portuguese public debt portfolio with short term maturities Loan portfolio Loans by collateral 16% 3% 2% 3% 3% 7% 7% Other sectors Transp. and communications Other national activities Wholesale commerce Other int. activities Construction Companies 51% Real estate commercial and retail Mortgage 43% 64% 28% 7% With real estate guarantees With other guarantees Without guarantees LTV of mortgage portfolio in Portugal 10% Other services Consumer 6% 13% 8% 10% 23% 10% 21% 14% 0-40 40-50 50-60 60-75 75-80 80-90 >90 Portuguese public debt portfolio Total: 4,688 million (in June 30, 2012) >2 years 37% <1 year 31% Mortgage loans represent 43% of the total loan portfolio with a low delinquency level and an average LTV of 67% Loans to companies represent 51% of the total loan portfolio, with a diversified distribution by activity sectors Over 64% of the loan portfolio is collateralized >1 year e <2 years 32% About two thirds of Portuguese public debt with maturity of less than 2 years 23
Provisioning in line with the economic cycle Credit impairment charges Impairment charges net of recoveries as % of gross loans 147 bp 281 bp Impairment charges (gross) 1S12 Consumer 99.9 Mortgage 50.1 987.3 562.1 450.0 Impairment for estimated losses (Greece) Companies 846.3 Reinforcement of impairment charges with an increase of cost of risk from 147bp to 281bp 537.3 (including impairment for estimated losses Greece) Of the impairment charges for the first half of 2012, 85% were related to loans to companies, 10% to consumer credit and 5% to mortgage 24
Agenda Main Highlights Group Capital Liquidity Profitability Portugal International operations Conclusions 25
Clear deleveraging effort with an increase in deposits and a reduction of loans Customer funds * Loans to customers (gross) * Balance sheet funds +6.6% 36,292 38,688 6,200 6,399 30,092 +7.3% 32,289 13,818 11,232 56,863 22,215 2,770-6.7% -4.3% -3.8% 53,062 21,258 2,664 31,879-8.6% 29,141 Other B/S funds Deposits Off B/S customer funds Mortgage Consumer loans Loans to companies * Adjusted for a Repo transaction in the amount of 2,256 million euros as at 30 June 2011 26
Net income in Portugal was affected by the macroeconomic context Net income 49.9 Growth in banking product due to higher trading gains offset by net interest income and fees and commissions decrease Operating costs, excluding specific items, decrease 2.6% -116.6 Banking income Operating costs * +1.2% 793.0 802.7 456.8-2.6% 444.9 *Excluding specific items, including, on 1H2011 the provisions related to the pension funds (-35.5 M ) and early retirements (+1.8M ) and on the 1H2012, a change in the calculation formula of mortality allowance (-64.0 M ) and early retirements (+2.7 M ). Non-adjusted real change of -9.3% Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 27
Net interest income decrease due to liability management transactions, market rates evolution and cost of deposits (%, Eur million) Net interest income 518.4-38.5% Negative impact from liability management transactions concluded at the end of 2011 318.9 Net interest income penalized by lower interest rates Despite the deterioration on the deposit spreads, NIM 1.49% 1.01% Deposits and credit average spreads vs. Eur3M repricing efforts allowed an improvement in credit spreads 3 months Euribor 2.46 2.22 2.42 Deposit spread 2.82 3.14 3.15 Credit spread (%, quarterly average) 1.41 1.56 1.50 1.04 0.70-1.13-1.02-1.22-1.56-2.09-2.20 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12 28
despite the loans portfolio repricing effort Loans to companies (contractual spread, %) Mortgage (contractual spread, %) 3.95 4.07 4.10 2.06 2.20 Portfolio 2.64 2.49 2.40 2.30 2.77 2.93 3.27 3.66 1.61 1.94 New production 2.37 2.22 2.04 2.00 2.54 2.67 2.77 3.08 2.91 2.81 2.74 Portfolio 0.96 0.98 1.00 1.02 1.04 1.06 1.08 1.10 1.11 1.13 1.15 1.14 1.15 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Loans to companies (55% of total loans): Spreads increased 83bps YoY Mortgage (40% of total loans): Portfolio spreads at 115bps Average new production spreads of 274bps 29
Fees and commissions affected by macroeconomic conditions and by State guaranteed issues, but recovered on the 2 nd quarter YoY 1Q12 2Q12 2Q12/ 1Q12 Banking fees and commissions 253.1 244.1-3.5% 120.5 123.6 2.6% Cards and transferences 50.4 45.6-9.7% 23.1 22.4-3.2% Loans and guarantees 72.6 69.0-5.0% 33.8 35.2 4.3% Bancassurance 37.7 35.6-5.7% 17.9 17.6-1.7% Other fees and commissions 92.4 94.1 1.8% 45.6 48.4 6.1% Market related fees and commissions 29.4 20.0-31.9% 9.6 10.4 9.3% Securities operations 17.0 10.9-36.0% 4.7 6.2 30.4% Asset management 12.3 9.1-26.2% 4.8 4.3-11.3% Total fees and comissions excluding state guarantee 282.4 264.1-6.5% 130.0 134.1 3.1% State guarantee 0.0-33.4 na -15.4-17.9 na Total fees and commissions 282.4 230.7-18.3% 114.6 116.1 1.4% 30
Operating costs reduction in Portugal Operating costs * -2.6% 456.8 444.9 24.9-14.7% 21.2 155.3-0.0% 155.2 276.7-3.0% 268.4 Staff costs Other adimn. costs Depreciation *Excluding specific items, including, on 1H2011 the provisions related to the pension funds (-35.5 M ) and early retirements (+1.8M ) and on the 1H2012, a change in the calculation formula of mortality allowance (-64.0 M ) and early retirements (+2.7 M ). Non-adjusted real change of -9.3% Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 31
Credit quality suited to macroeconomic challenges (%, Eur million) Credit quality Balance sheet loans impairment Credit ratio: Overdue and doubtful loans >90 8.6% 13.4% Credit coverage ratios: Overdue and doubtful loans >90 days 46% 41% Overdue loans >90 days ratio Overdue loans >90 days 3.8% 6.5% 104% 85% Total overdue and doubtful loans >90 days 2,832 2,236 Doubtful loans 3,679 3,456 Overdue > 90 dias Impairment charges net of recoveries as % of gross loans 169 pb 160 pb 2,316 2,922 Total overdue over 90 days and doubtful loans ratio increased to 13,4%, reflecting the deterioration of the macroeconomic environment. The coverage ratio improved to 41% Credit at risk ratio (including insolvent and restructured loans) at 13,9%, while coverage (by B/S impairments and both real estate and financial guarantees) is above 100% 32
Agenda Main Highlights Group Capital Liquidity Profitability Portugal International operations Conclusions 33
Income improvement in Poland, Mozambique and Angola YoY International operations 64.4 22.2-65.5% Poland * 51.3 52.5 2.2% Mozambique 41.9 46.1 10.0% Angola 15.1 17.3 15.0% Greece -8.7-52.2 <-100% Romania -10.1-6.5 35.2% Other and non-controlling interests -28.5-35.0-22.9% +3.8% 111.7 115.9 17.3 74.1 46.1 38.1 52.5 Jun 09 Jun 10 * Excluding FX effect. /PLN rates used: Income Statement 4.21610833; Balance Sheet 4.2488 34
Poland: Growth in customer funds and loans to customers Customer funds * Loans to customers (net) +9.7% 9,644 10,581 9,083 677 +6.9% -1.9% 9,710 664 Consumer 6,102 +8.1% 6,599 Mortgage 2,304 +6.2% 2,447 Companies * Includes deposits, own bonds and investment products * Excluding FX effect. /PLN rates used: Income Statement 4.21610833; Balance Sheet 4.2488 35
Net income growth, despite the provisions increase Net income + 2.2% 51.3 52.5 ROE 10.8% 9.7% Despite the higher loan impairment charges, net income improved 2.2% when compared to the same period of 2011, driven by net interest income growth Growth of 3.8% in banking income with stable cost structure GDP growth forecasts remain high for Poland: 2.6% in 2012(E) and 3.2% in 2013(E)* Banking income + 3.8% 216.4 224.7 Operating costs + 0.8% 131.6 132.7 * Source: International Monetary Fund (World Economic Outlook Database, April 2012) * Excluding FX effect. /PLN rates used: Income Statement 4.21610833; Balance Sheet 4.2488 36
Net interest income growth Net interest income * Net fees and commissions 136.1 +6.1% 144.4-5.2% 69.7 66.1 NIM evolution * 2.6% 2.6% 2.5% 2.4% 2.5% Improvement of 6.1% in net interest income when compared to the first half of 2011 Loans 3.0% 2.9% 2.9% 2.9% 2.9% 0.4% Deposits 0.4% 0.2% 0.2% 0.3% 2Q11 3Q11 4Q11 1Q12 2Q12 Net fees and commissions decreased by 5.2% compared to the first half of 2011 due to lower market related fees. However, when compared to the first quarter of 2012, fees and commissions improved 10.2% in the second quarter * Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in accounting terms, part of this margin (7,1 M on the 1 st H 2011 and 4,7 M on the 2 nd H 2012) is presented in net trading income * Excluding FX effect. /PLN rates used: Income Statement 4.21610833; Balance Sheet 4.2488 37
Cost to income improvement Operating costs + 0.8% Number of employees +52 6,107 6,159 131.6 132.7 67.8-2.7% 66.0 Cost to income ratio 63.8 + 4.6% 66.7 60.8% 59.1% Other administrative costs * Staff costs Staff costs increased 4.6% when compared to the 1H2011 but decreased 2.6% on a quarterly basis Other administrative costs (including depreciation) decreased 2.7%, showing a strict cost reduction policy Cost to income ratio decreased to 59.1% on the first half of 2012, reaching the lowest value ever of 56.6% in the second quarter * Including depreciation Excluding FX effect. /PLN rates used: Income Statement 4.21610833; Balance Sheet 4.2488 38
Reinforcement of loans to companies provisioning, allowing an increase of overdue loans coverage Credit Quality Impairment charges 102% Overdue loans >90 days coverage ratio 114% Impairment 44bp * charges as % of average net 55bp * loans Overdue loans > 90 days 3.0% Overdue loans 2.6% >90 days ratio 286 265 19.1 +38.7% 26.5 Impairment charges increased 38.7% when compared to the first half of 2011, due to the deterioration of corporate loans potfolio, namely in the construction sector Overdue loans over 90 days ratio decreased to 2.6%, maintaining a good mortgage quality Overdue loans over 90 days coverage improved to 114% * Impairment charges / average net loans for the period (in bps, annualized) Excluding FX effect. /PLN rates used: Income Statement 4.21610833; Balance Sheet 4.2488 39
Mozambique: customer funds growth and loans with a low delinquency level Customer funds Loans to customers (gross) 464% Overdue loans >90 days coverage ratio 390% 1,094 +28.4% 1,404 1.3% Overdue loans 1.9% >90 days ratio 913 26 245 +13.6% -9.5% +17.2% 1,037 24 287 641 726 +13.6% Mortgage Consumer loans Loans to companies 40
Banking income improvement with operating costs in line with the expansion plan Net income 41.9 +10.0% 46.1 Net income improved 10.0% to 46.1M ROE reached 30.1% Net income evolution driven by the banking income s good performance (+21.2%), especially in trading results and in net interest income Ongoing expansion plan ROE 1S12 42.6% 30.1% GDP growth forecasts remain high for Mozambique: 6.7% in 2012(E) and 7.2% in 2013(E)* Banking income Operating costs 92.0 +21.2% 111.5 34.6 +38.2% 47.8 * Source: International Monetary Fund (World Economic Outlook Database, June 2012) 41
Strong fees and commissions growth with operating costs in line with the expansion plan Net interest income +10.1% 72.4 65.7 Fees and commissions +33.2% 17.6 13.2 Operating costs 34.6 3.3 15.0 16.3 +38.2% Depreciation Other administrative costs Staff costs 47.8 4.3 20.5 23.0 Employees Branches 2,179 +15.1% +16.7% 126 147 2,507 42
Angola: Strong growth in customer funds and in loans to customers Customer funds Loans to customers (gross) 232% Overdue loans >90 days coverage ratio 152% +24.7% 872 Overdue loans 2.2% >90 days ratio 3.3% 699 465 +14.7% 533 43
Net income growth, driven by improvement in income and in volumes, despite the expansion plan associated costs Net income Net income improved 15.0% to 17.3M 15.1 +15.0% 17.3 ROE of 18.3% Strong income growth Costs reflect the ongoing expansion plan GDP growth forecasts remain high for Angola: 6.8% in 2012(E) and 5% in 2013(E)* ROE 21.7% 18.3% Banking income Operating costs 52.3 +15.7% 60.4 27.7 +29.3% 35.8 * Source: International Monetary Fund (World Economic Outlook Database, July 2012) 44
Strong income and operating costs growth in line with the expansion plan Net interest income 31.1 +11.5% 34.6 Operating costs 27.7 3.1 13.8 +29.3% 35.8 4.6 17.2 10.8 14.1 Fees and commissions 8.4 +27.3% 10.7 Depreciation Other administrative costs Staff costs Employees Branches +20.4% 776 934 44 +47.7% 65 45
Agenda Main Highlights Group Capital Liquidity Profitability Portugal International operations Conclusions 46
Capitalization plan Demanding economic environment (2012-13) Stronger balance sheet Sound capital ratios Reinforcement of liquidity position Improvement of balance sheet quality Creating growth and profitability conditions (2014-15) Portugal turnaround Focus in international portfolio Preserve strategic position, recover profitability and increase efficiency on capital allocation in Portugal Implement a lean customer operational structure adjusted to the new business model Continuous business development in Poland, Mozambique and Angola Sustained growth (2016-17) Net income sustained growth Improved balance between domestic and international operations contributions 47
Conclusion Earnings in line with the capitalization plan Focus on strengthening capital base 1 st half of 2012 net income, allows the Bank to meet requirements, before the capital increase reserved to shareholders Core tier I capital ratio reaches 12.1%, the highest value ever Improvement of balance sheet structure 5.5% increase in customer deposits, which already represent 61% of the financing structure Net loans to balance sheet customer funds ratio reaches 121% Reinforcement of provisioning Reinforcement of impairment charges in Portugal Reinforcement of impairment for estimated losses (Greece) The Board of Directors continues to firmly believe in: 1. the successful completion of the capitalization plan 2. the ability to reimburse the hybrid instruments 3. the capital increase reserved to shareholders 48
Appendixes 49
Pension fund 2008 2009 2010 2011 Jun 12 Pension liabilities 5,723 5,410 5,322 2,452 2,393 Pension fund 5,322 5,530 5,149 2,362 2,221 Liabilities' coverage 100% 109% 104% 111% 105% Fund's profitability -14% 9% -5% -1% -4% Actuarial differences 2,140 1,514 1,921 0 0 Corridor 572 553 532 0 0 Outside the corridor 1,568 961 1,389 0 0 Actuarial gains (losses) (827) 557 (468) (201) (155) Pension liabilities coverage at 105% Actuarial losses: of 155 million euros Fund s profitability: -4% 50
Sovereign debt exposure Portugal Poland Mozambique Angola Greece Romania Ireland Others Total Trading book 167 69 0 0 12 0 0 35 283 < 1 year 40 39 0 0 12 0 0 0 91 > 1 year and <2 years 5 14 0 0 0 0 0 0 20 > 2 years 122 16 0 0 0 0 0 35 173 Banking book 4,521 1,128 360 347 37 67 206 68 6,734 < 1 year 1,402 733 344 218 29 20 0 0 2,746 > 1 year and <2 years 1,487 90 2 47 0 43 206 14 1,889 > 2 years 1,632 304 15 81 9 5 0 54 2,099 Total 4,688 1,196 360 347 49 67 206 103 7,017 < 1 year 1,442 772 344 218 41 20 0 0 2,837 > 1 year and <2 years 1,492 104 2 47 0 43 206 14 1,908 > 2 years 1,754 320 15 81 9 5 0 89 2,272 Total sovereign debt of 7.0 million euros, of which 4.7 million with maturity under 2 years 51
Greece: affected by the deepening of the country s economic recession Net income Banking income Operating costs -8.7 72.0-42.9% 41.2 58.4-15.7% 49.2-52.2 Net loss of 52,2 million euros due to the adverse macroeconomic environment Banking income penalized by the increase of financing costs Impairment charges reach 71.7 million euros (29.1 M on the 1H2011), reflecting the increase on overdue loans generated by the macroeconomic scenario Operating costs decreased 15.7% to 49.2 million euros, following the implementation of cost containment measures, which resulted in a reduction of 34 branches and 244 employees Loans to customers (gross) Mortgage Consumer Companies Branches 5,032-4.5% 4,803 2,060 616 1,979 555 2,356 2,269 154-34 120 Customer deposits -6.0% 2,789 2,622 Employees 1,439-244 1,195 52
Romania: strong costs saving policy and volumes growth Net income Banking income Operating costs -10.1-6.5 14.6-28.1% 20.7 10.5-19.0% 16.7 Net income improvement when compared to the 1H2011, driven by impairment charges reduction Loans to customers (gross) Customer deposits +13.7 +20.4% 357 406 299 248 Strong cost reduction policy Increase of both deposit and credit volumes, maintaining conservative risk criteria Branches -1 66 65 Employees 691-23 668 53
Financial statements 54
Consolidated Balance Sheet and Income Statement 30 June 2012 31 December 2011 30 June 2011 30 June 2012 30 June 2011 Assets Cash and deposits at central banks 1,717,472 2,115,945 1,254,872 Loans and advances to credit institutions Repayable on demand 989,022 1,577,410 1,308,829 Other loans and advances 5,443,880 2,913,015 2,786,291 Loans and advances to customers 66,202,466 68,045,535 73,708,984 Financial assets held for trading 2,007,971 2,145,330 3,929,229 Financial assets available for sale 7,221,221 4,774,114 3,546,695 Assets with repurchase agreement 45,299 495 18,353 Hedging derivatives 122,240 495,879 328,074 Financial assets held to maturity 3,742,148 5,160,180 6,371,734 Investments in associated companies 414,632 305,075 331,891 Non current assets held for sale 1,088,527 1,104,650 1,012,735 Investment property 560,731 560,567 515,686 Property and equipment 619,085 624,599 596,410 Goodwill and intangible assets 248,494 251,266 396,791 Current tax assets 34,843 52,828 28,874 Deferred tax assets 1,564,189 1,564,538 1,247,165 Other assets 976,969 1,790,650 900,957 Liabilities 92,999,189 93,482,076 98,283,570 Amounts owed to credit institutions 17,795,795 17,723,419 20,659,486 Amounts owed to customers 47,974,254 47,516,110 47,728,831 Debt securities 14,720,570 16,236,202 15,070,178 Financial liabilities held for trading 1,509,600 1,478,680 1,069,437 Other financial liabilities at fair value through profit and loss 237,022 2,578,990 3,754,905 Hedging derivatives 390,462 508,032 447,704 Provisions for liabilities and charges 269,627 246,100 208,583 Subordinated debt 4,207,360 1,146,543 1,449,340 Current income tax liabilities 5,262 24,037 11,823 Deferred income tax liabilities 3,654 2,385 645 Other liabilities 1,939,431 1,647,208 2,144,072 Equity (Thousands of Euros) Total Liabilities 89,053,037 89,107,706 92,545,004 Share capital 3,000,000 6,065,000 6,065,000 Treasury stock (10,796) (11,422) (79,508) Share premium 71,722 71,722 71,722 Preference shares 171,175 171,175 1,000,000 Other capital instruments 9,853 9,853 9,853 Fair value reserves (198,956) (389,460) (357,273) Reserves and retained earnings 855,582 (1,241,490) (1,597,034) Net income for the period attributable to Shareholders (544,279) (848,623) 114,262 Total Equity attributable to Shareholders of the Bank 3,354,301 3,826,755 5,227,022 Non-controlling interests 591,851 547,615 511,544 Total Equity 3,946,152 4,374,370 5,738,566 92,999,189 93,482,076 98,283,570 (Thousands of Euros) Interest and similar income 1,922,291 1,938,677 Interest expense and similar charges (1,329,372) (1,130,968) Net interest income 592,919 807,709 Dividends from equity instruments 3,622 1,108 Net fees and commission income 346,639 401,109 Net gains / losses arising from trading and hedging activities 320,457 (9,020) Net gains / losses arising from available for sale financial assets (10,586) 33,520 Net gains / (losses) arising from financial assets held to maturity 15,510 - Other operating income (29,483) 4,933 1,239,078 1,239,359 Other net income from non banking activity 10,571 9,725 Total operating income 1,249,649 1,249,084 Staff costs 349,195 381,243 Other administrative costs 283,988 283,989 Depreciation 42,198 47,945 Operating costs 675,381 713,177 Operating net income before provisions and impairments 574,268 535,907 Loans impairment (987,269) (562,127) Other financial assets impairment (11,256) (3,475) Other assets impairment (75,797) (42,120) Other provisions (20,926) 37,916 Operating net income (520,980) (33,899) Share of profit of associates under the equity method 30,243 24,061 Gains / (losses) from the sale of subsidiaries and other assets (10,711) (4,447) Net income before income tax (501,448) (14,285) Income tax Current (38,159) (42,184) Deferred 34,818 210,972 Net income after income tax (504,789) 154,503 Attributable to: Shareholders of the Bank (544,279) 114,262 Non-controlling interests 39,490 40,241 Net income for the period (504,789) 154,503 Earnings per share (in euros) Basic (0.15) 0.03 Diluted (0.15) 0.03 Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 55
Consoludade Income Statement (quarterly evolution) For the 6 month period ended 30 th of June, 2011 and 2012 Quarterly Year-to-date 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 Δ % 12 / 11 Net interest income 406.1 389.1 382.5 317.5 275.4 807.7 592.9-26.6% Dividends from equity instruments 1.1 0.2 0.0 0.3 3.3 1.1 3.6 >100% Net fees and commission income 205.7 193.4 194.8 169.9 176.7 401.1 346.6-13.6% Other operating income -10.0-2.6-30.3-14.5-15.2 10.2-29.6 <-100% Net trading income -2.0 156.7 26.4 191.3 134.0 24.5 325.4 >100% Equity accounted earnings 7.3-21.9 12.5 12.9 17.4 24.1 30.2 25.7% Banking income 608.3 714.9 586.0 677.4 591.8 1,268.7 1,269.2 0.0% Staff costs 206.6 188.0 384.4 206.6 142.6 381.2 349.2-8.4% Other administrative costs 144.6 142.3 158.2 141.3 142.6 284.0 284.0 0.0% Depreciation 23.1 22.5 25.7 21.5 20.7 47.9 42.2-12.0% Operating costs 374.3 352.8 568.3 369.4 306.0 713.2 675.4-5.3% Operating net income bef. imp. 234.0 362.1 17.7 308.0 285.8 555.5 593.8 6.9% Loans impairment (net of recoveries) 395.6 201.9 567.9 170.3 367.0 562.1 537.3-4.4% Goodwill impairment 0.0 0.0 160.6 0.0 0.0 0.0 0.0 -- Other impairm. and provisions -23.7 159.3 497.4 46.3 61.7 7.7 108.0 >100% Net income before income tax -137.9 1.0-1,208.3 91.5-142.9-14.3-51.4 <-100% Income tax -183.5-5.9-284.1 32.2-28.8-168.8 3.3 >100% Non-controlling interests 21.5 23.5 22.1 18.5 20.9 40.2 39.5-1.9% Net income (before prov. Gr.) 24.2-16.7-946.2 40.8-135.0 114.3-94.3 <-100% Impairmente for expected losses 450.0 450.0 -- Net income 24.2-16.7-946.2 40.8-585.0 114.3-544.3 <-100% Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 56
Consolidated Income Statement (Portugal and International operations) For the 6 month period ended 30 th of June, 2011 and 2012 International operations Group P ortugal Total Bank M illennium (P oland) M illennium bim (M o z.) M illennium Angola Other int. operations Δ % Δ % Δ % Δ % Δ % Δ % Δ % Interest income 1,939 1,922-0.8% 1,326 1,267-4.4% 613 655 6.9% 321 362 12.5% 88 110 24.4% 45 49 8.9% 158 134-14.8% Interest expense 1,131 1,329 17.5% 808 948 17.4% 323 381 17.9% 184 222 20.6% 22 37 66.0% 14 15 3.1% 103 107 4.4% Net interest income 808 593-26.6% 518 319-38.5% 289 274-5.3% 137 140 1.7% 66 72 10.1% 31 35 11.5% 55 27-50.6% Dividends from equity instruments 1 4 >100% 1 3 >100% 0 1 >100% 0 1 >100% 0 0 58.8% 0 0 -- 0 0 >100% Intermediation margin 809 597-26.2% 519 322-38.0% 290 275-5.1% 138 141 2.1% 66 72 10.2% 31 35 11.5% 55 27-50.6% Net fees and commission income 401 347-13.6% 282 231-18.3% 119 116-2.3% 74 66-11.0% 13 18 33.2% 8 11 27.3% 23 22-5.5% Other operating income 10-30 <-100% 11-29 <-100% -1-1 55.9% -4-2 46.2% 5 5-0.2% 0 0 >100% -2-4 -83.5% Basic income 1,220 914-25.1% 813 523-35.6% 407 390-4.1% 208 204-1.6% 84 95 13.1% 39 45 16.0% 76 45-40.6% Net trading income 25 325 >100% -44 251 >100% 69 75 8.8% 21 19-11.3% 8 16 >100% 13 15 14.5% 27 25-7.5% Equity accounted earnings 24 30 25.7% 24 29 18.7% 0 2 -- 0 1 -- 0 1 -- 0 0 -- 0 0 -- Banking income 1,269 1,269 0.0% 793 803 1.2% 476 466-1.9% 229 224-2.1% 92 112 22.1% 52 60 15.7% 103 70-32.0% Staff costs 381 349-8.4% 243 207-14.8% 138 142 2.8% 68 67-1.8% 16 23 41.0% 11 14 30.2% 43 38-11.3% Other administrative costs 284 284 0.0% 155 155 0.0% 129 129 0.0% 62 58-6.8% 15 20 36.7% 14 17 24.6% 38 33-12.2% Depreciation 48 42-12.0% 25 21-14.7% 23 21-9.1% 9 7-22.7% 3 4 30.9% 3 5 46.5% 8 5-32.7% Operating costs 713 675-5.3% 423 384-9.3% 290 292 0.6% 138 131-5.4% 35 48 38.2% 28 36 29.3% 89 77-13.6% Operating net income bef. imp. 556 594 6.9% 370 419 13.3% 186 175-5.9% 90 93 2.8% 57 65 12.4% 25 25 0.3% 13-7 <-100% Loans impairment (net of recoveries) 562 537-4.4% 498 425-14.7% 64 112 75.7% 22 29 35.5% 7 7-3.9% 8 4-54.1% 27 72 >100% Other impairm. and provisions 8 108 >100% 10 109 >100% -2-1 54.0% -1-3 <-100% -2 1 >100% 0 0 >100% 1 1-14.7% Net income before income tax -14-51 <-100% -138-115 16.8% 124 64-48.6% 70 66-5.2% 52 57 9.8% 17 21 22.1% -14-80 <-100% Income tax -169 3 >100% -188 4 >100% 19-1 <-100% 15 14-9.3% 9 10 6.3% 2 4 73.5% -7-28 <-100% Non-controlling interests 40 39-1.9% 0-3 <-100% 40 42 5.3% 0 0 -- 0 1 67.8% 0 0 -- 40 42 4.8% Net income (before prov. Gr.) 114-94 <-100% 50-117 <-100% 64 22-65.5% 55 52-4.0% 42 46 10.0% 15 17 15.0% -47-94 -98.3% Impairmente for expected losses 0 450 -- Net income 114-544 <-100% Note: Due to a change in the accounting policy related to the recognition of OCI (other comprehensive income) changes and the reclassification of impairment securities from income from financial operations to other impairments and provisions, 2011 financial information was restated to allow comparability 57
Investor Relations Division: Rui Coimbra, Head of Investor Relations Francisco Pulido Valente João Godinho Duarte Tl: +351 21 1131 084 Email: Investors@millenniumbcp.pt Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number 501 525 882 and the share capital of EUR 3,000,000,000 58