2008 Results Presentation · 2008 Results Presentation 29th January 2009 2 I. Foreword • 2008 was...

2008 Results Presentation(Un-audited Figures)

BESAngola

29th January 2009 12008 Results Presentation

Agenda

I. Highlights of the Year

II. 2008 Consolidated Results

III. Commercial Activity

IV. Customer Credit and Funds

V. Asset Quality & Provisioning

VI. AFS Portfolio & Post Retirement Benefits

VII. Funding, Liquidity & Solvency

VIII. Wrap Up


I. Foreword

• 2008 was a year of many challenges for the world in general and for the Banking sector in particular. It was the year of global economic slowdown, massive asset meltdowns, large recapitalisations by Banks, funding scarcity and intervention by Public Authorities to prevent the sector insolvency and failure.

• Throughout 2008 BES remained focused in its Banking activity, continuing to work with its clients while maintaining a healthy balance sheet, helping Portuguese companies pursue their international strategy while ensuring adequate solvency levels, contributing to the financing of the Portuguese economy while working with Portuguese Authorities to foster Banking sector stability in Portugal.

• It was due to a strict and prudent management of its balance sheet and capital, focus on its long term strategy, always aimed at creating shareholder value, that BES was able to post one of the best ever net profit figure of its history, amid one of the worst financial crisis ever. The FY08 results clearly show the resilience and virtue of BES business and strategy.

• For 2009 Banks face a more strict regulatory environment with new requirements for Tier I capital. BoP has set the minimum limit for Tier I at 8% to be reached until September. In order to comply with the new rules and continue on pursuing its long term strategy of servicing clients, shareholders and the Portuguese economy, while avoiding other short term value damaging measures, the Board of Directors will propose in the next AGM (March 30th) a rights issue of Eur 1.2 bn. After the capital increase, BES will emerge stronger and better prepared to face the challenges that a new world poses to all of the Banking sector.


I. 2008 Results highlights

• Net income totalled Eur 402.3mn (EPS of 0.74 eur1) representing a 34% decline vs. 2007.

• International business contributed with 35.6% to the consolidated net income, reaching Eur 143.2mn.

• Angola contribution of Eur 48.2mn (+44% YoY) is the result of the strong activity in the country. Commercial

banking income is growing 63%, surpassing operating costs increase of 28%.

• Investment banking business in Brazil is also developing well, with BES Group taking part in important

transactions in the country. Contribution of Brazil to consolidated results totalled Eur 29.8 mn.

• Resilient commercial banking income (+7.8% YoY) backed by a good performance of NII (+13.9% YoY) and

stable Fees and Commissions (-1.1% YoY).

• Operating costs increased 5.4% YoY and decreased 3.6% QoQ, representing a major effort on rationalisation,

particularly taking into consideration the amortisation of actuarial differences (with an impact of 15 mn in staff costs in

the 2H08), the increase in the domestic branch network and the international expansion.

• In a year of global asset meltdowns and downward, high volatile markets, BES posted Eur 228.8mn of Capital

Markets Results highlighting the capacity of BES Trading team.

• Thus, efficiency gains backed by positive operating jaw ex-markets of 2.4%. Commercial Cost to Income of

58.2%, down from the 59.5% in 2007, while total Cost to Income posted a healthy 53%.

(1) Adjusted for the dividend paid on pref shares


I. 2008 Results highlights

• Strict risk management, driving NPL’s over 90 days to remain under control at 1.1% (from 1.0% last year). Net

new entries in the fourth quarter decreased to 38 bp (vs 41 bp, 52 bp and 55 bp in the previous quarters), which

reflects a strong recovery effort and a prudent risk management policy.

• Credit provisions charge was 57 b.p., driving coverage of NPL over 90 days to 219%. Provision reserve increased

to 2.38% of total gross credit (2.29% in 2007), one of the highest in Iberia.

• The main stakes of the AFS portfolio totalled a loss of Eur 179.5 mn, reflecting tough market conditions. It should

be highlighted that equity AFS negative reserves were all booked for solvency purposes in Core Tier I, with an impact

of 31 bp.

• Core Tier I of 6.1% and Tier I of 7.1% with IRB Foundation methods under Basel II (in final stage of certification).

Management is proposing a dividend per share of eur 0.16, representing a one-off reduction of the payout ratio to

20% in 2008.

• At the end of 2008, BES had a total Eur 8.7 bn repoable securities, of which Eur 4.5 bn are eligible for ECB,

more than covering the full MLT refinancing need for the year (Eur 3.2bn).


I. Activity highlights

• Resilient client acquisition levels: 157k new individual clients (155k in 2007) and 680 new SME clients in 2008.

• Reinforced domestic competitive market positioning, reflected on the average market share of 20.7% (20.4%

in 2007) and 23.8% in the Corporate segment.

• Leading position in the corporate business focused on the support to the internationalisation efforts of

Portuguese SME, which resulted in a 27.3% market share in trade finance and a YoY increase of 128% in

trade finance and exports related fees.

• Increasing importance of BES presence in the strategic triangle (Iberia, Angola and Brazil) leverages both

domestic business of exporting companies but also international business (commercial flow between the

countries is growing substantially).

• Selective credit growth focusing on Corporate segment while boosting deposit base:

• Credit growth of 9.7% YoY with Corporate up by 13.4% YoY (or Eur 4.1 bn), Mortgage 2.9% YoY and

Other Loans to Individuals up 3.2%.

• Deposits up by 11.0%, or Eur 2.6bn compensating the decrease in CD’s (Eur -2.4bn) and Off BS funds (Eur -

0.9bn).

• International volumes posted a good performance on the credit side, growing 27.6% YoY with Corporate

segment accounting for 99% of the growth, and Customer Funds down by 15% due to CD’s contraction.


I. Main figures

(1) Net Assets + Asset Management + Off-balance sheet funds + Securitised credit

(2) Estimated figures for Ye08. Basel II ratios assume the Foundation approach for credit risk and Standard method for operational risk, in final phase of certification. Assumes a payout ratio of 20%.

11.211.5%Total

0.560.98%ROA

7.17.5%Tier I

6.16.6%Core Tier I

BIS II (IRB)

BIS ISolvency (2)

0.5

9.7

10.0

5.5

-33.7

YoY

59.5

47.5

55,445

47,389

68,355

93,819

16.6

607.1

2007

%

%

EUR mn

EUR mn

EUR mn

EUR mn

%

EUR mn

58.2Cost / Income (ex Markets & Others)

53.0Cost / Income

55,697Total Customer Funds

51,964Loans to Customers (incl. securitisation)

75,187Total Net Assets

98,953Total Assets under Management (1)

9.8ROE

402.3Net Income

2008


Agenda








VIII. Wrap Up


70.7

5.3

-13.0

63.0

89.9

152.9

255.5

408.4

-5.0

-14.4

427.8

158.8

269.0

3Q08

67.5

5.7

19.3

92.5

105.0

197.5

246.3

443.8

-49.9

16.0

477.7

171.6

306.1

4Q08

-33.7

-11.2

-45.3

-35.2

43.0

-15.6

5.4

-5.7

n.m.

-39.8

7.8

-1.1

13.9

YoY (%)

-4.4402.3607.1Net Income=

n.m.-63.140.6Other results+

-

-

=

-

=

-

=

+

=

+

+

8.224.928.0Minority Interests

n.m.83.5152.5Taxes

46.9510.7787.6Income Bef. Taxes and Minorities

16.8375.8262.9Net Provisions

29.2886.51,050.5Net Operating Income

-3.61,001.6950.7Operating Costs

8.71,888.12,001.2Banking Income

n.m.228.8363.5Capital Markets Results

11.71,722.41,597.1Commercial Banking Income

8.0636.2643.4Fees and Commissions

13.81,086.2953.7Net Interest Income

QoQ (%)20082007(EUR million)



II. 2008 Consolidated Results breakdown: Domestic vs. International

InternationalDomestic

1.2

0

-18.5

-2.8

-

17.3

11.6

14.9

-31.5

28.8

-3.6

57.4

YoY(%)

143.2

19.4

32.9

195.5

71.6

267.1

184.7

451.8

62.4

389.4

136.3

253.1

2008

141.5

19.4

40.2

201.1

26.7

227.8

165.5

393.3

91.1

302.2

141.4

160.8

2007

-44.4

-36.4

-54.9

-46.3

28.8

-24.7

4.0

-10.7

-67.0

2.9

-0.4

5.1

YoY(%)

259.1

5.5

50.6

315.2

304.2

619.4

816.9

1,436.3

103.3

1,333.0

499.9

833.1

2008

465.6

8.6

112.3

586.5

236.2

822.7

785.2

1,607.9

313.0

1,294.9

502.0

792.9

2007

=

-

-

=

-

=

-

=

+

=

+

+

35.6Net Income

78.0Minority Interests

39.4Taxes

38.3Income Bef. Taxes and Minorities

19.0Net Provisions

30.1Net Operating Income

18.4Operating Costs

23.9Banking Income37.7Capital Markets Results & Other

22.6Banking Income ex-Markets

21.4Fees and Commissions

23.3Net Interest Income

% of Total (Consolid.)

(euro million)


II. International Operations

Other; 13.2

France/Lux; 9.0

Spain; 1.3

Brazil; 29.8

Angola; 48.2

UK; 41.7

International operations continue to increase their contribution to BES consolidated results, with Angola being the main growth driver where results reached Eur 48.2mn up 43.8% YoY. Brazil and UK maintain a resilient contribution of Eur 29.8mn and Eur 41.7mn, respectively.

Breakdown of Net Income from International Activity

( ) 2007

(44.4)

(12.3)

(15.2)

(32.2)

(33.5)

(3.9)

(Eur mn)

19.7%13.3%% of consolidated

1.2%143.2141.5Total

55.4%57.2%% of International

-6.0%41.744.4UK

23.3%

16.2

80.92007

Net Profit Contribution(EUR million)

35.6%

22.2

79.32008

37.0%

-2.0%YoY

% Consolidated

Other

Strategic Triangle


II. Net Interest Income

(NIM in bp; Accumulated Figures)

Evolution of NII and NIMEuribor 3M Evolution (moving avrg)

Net Interest Income increased by 24.8% YoY in the 4Q08 pushing the FY08 NII growth to 13.9%.

International operations are key to this performance, as international NII increased by 57.4% YoY.

3.8%3.8%3.9%4.0%

4.1%4.2%4.2%

4.5%4.7%4.7%4.6%

4.9%

4.5%4.4%

4.6%4.8%

4.9%4.9%5.0%5.0%5.0%5.1%

4.2%

3.3%3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

'Jan

Feb

Mar

Apr

May Ju

n Jul

Aug Se

p

Oct

Nov

Dec

2007 2008

228 232 249 245 258 253 269 306

186181 181 178 176

170171 176

0

50

100

150

200

250

300

350

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08

75

95

115

135

155

175

195

NII (quarter) NIM (Accum)

2007 avg: 4.28%

2008 avg: 4.63%

+24.8%


Avg Interest Earning Assets

(eur mn)

NIM (%)

2008 61,788

200753,701

20071.78%2008

1.76%

€ -9.7 mn

€+143.6 mn

NII 2007= € 953.7 mn

NII2008 = € 1,086.2 mn

II. Net Interest Income

Net Interest Income 2008Volume and Margin Effects

On a YoY comparison, the volume effect was the positive contributor to the expansion of NII due to an increase of 16.0% YoY in average BS deposits and 16.7% YoY increase in average BS credit. Price effect had a marginal negative impact of Eur 9.7mn, as a result of 2 bp decrease of NIM.

Price Effect- 2 bp

Eur 8,1bn

€ -1.4 mn


II. Net Interest Income and Net Interest Margin

185164180

260

2.18

1.581.47

1.68

0.0

50.0

100.0

150.0

200.0

250.0

300.0

1Q08 2Q08 3Q08 4Q080.00

0.50

1.00

1.50

2.00

2.50

Credit NII (LHS, Eur mn) Credit Margin (RHS, %)

56

10910685 0.90

1.981.881.55

0.0

20.0

40.0

60.0

80.0

100.0

120.0

1Q08 2Q08 3Q08 4Q080.00

0.50

1.00

1.50

2.00

Deposits NII (LHS, Eur mn) Deposits Margin (RHS, %)

Credit Margin Evolution Deposit Margin Evolution

However, it is important to note the effort to reflect on credit margins the increased spreads paid on funding. The good performance on credit margins, which was also positively impacted by some mismatch effect, is helping to compensate the decline in deposit margins that have been hit by declines in interest rates and increased competition during the 4Q08.


6.710.610.0127.633.014.5Trade Finance & Exports related (1)

26.824.619.4-8.089.397.2Other

-26.69.012.3-3.247.148.6Bancassurance

7.31.91.72.36.86.6Factoring

158.8

8.6

25.3

14.3

13.7

9.4

19.8

24.3

3Q08

171.6

9.2

23.4

13.9

17.0

14.5

25.0

22.5

4Q08

8.1

7.3

-7.6

-2.7

23.7

54.9

26.4

-7.7

QoQ(%)

7.557.753.7Guarantees

-1.1636.2643.4Total Fees & Commissions

10.535.231.8Cards

-14.4100.9117.8Asset Management (3)

-21.251.265.0Securities related fees (2)

-21.844.256.5Corporate Finance & Project Finance

13.081.872.4Commissions on Loans

12.289.079.3Account Management Fees

YoY (%)

20082007(euro million)

II. Fees & Commissions

(1) Includes trade finance and letters of credit(2) Includes Brokerage(3) Includes discretionary management

Note: YoY % corresponds to change calculated based on figures in thousand euros


II. Capital Markets Results

Breakdown of Capital Markets Results VaR per Type of Risk

117.755.2262.218.4… Interest rate

-57.6-40.5-144.5-29.7… Credit

21.6-16.3-3.249.8… FX & Other

30.27.658.118.7Provisions for Securities

16.0-14.4228.8363.6Capital market results

18.42.991.850.0Income from securities

-22.0

-16.0

-12.9

-1.6

3Q08

-14.2

-84.0

-65.7

81.9

4Q08

170.7344.9Capital Markets net of Provisions for securities

22.5275.1Trading

114.3325.1Equity

114.538.5Interest Rate & FX

20082007(EUR million)

--22.33Diversif. Effect

45.15

9.08

26.40

32.01

VaR

1.14%

0.23%

0.67%

0.81%

% Tier I (BoP)

Global

Equity & commodity

FX

Interest rate

(EUR million)

Capital markets results reflect the impact of the turmoil felt in 2008 across all markets. The lack of confidence in the global financial system, poor economic indicators from both US and Euro zone, lack of liquidity, widening of credit spreads and increasing government intervention on economies, were the most important facts of the ending period.


II. Equity Accounted Earnings and Other Results

-19.9-6.8-42.88.7Other Results

-5.0

2.9

-1.0

1.8

3Q08

-49.9

5.0

-35.0

-30.0

4Q08

-63.1

17.5

-37.8

-20.3

2008

40.6

10.1

21.8

31.9

2007

… BES Vida

… Other

(euro mn)

Other Results

Equity accounted earnings, o.w.

Equity Account Earnings were Eur -20.3mn in FY08, reflecting mostly the markets poor performance impact

at BES Vida, eclipsing the good operational performance of the life insurance business.


BES continued to control costs as highlighted by the operating cost base evolution, particularly

significant on a quarter on quarter basis: total operating costs decreased 3.6% in the last quarter.

II. Operating costs

-3.6246.3255.55.41,001.6950.7Operating Costs

11.7

6.3

-5.4

5.4

3.8

% YoY

58.2%

77.9

402.6

72.8

448.3

521.1

2008

59.5%

69.8

378.8

78.3

423.8

502.1

2007

51.6%59.7%Cost to Income ex-markets

-4.1107.2111.7…Remunerations

1.222.321.9…Post Employment Benefits

4.721.120.3Depreciation

-5.8

-3.2

% QoQ

95.7

129.5

4Q08

101.6Admin Costs

133.6Staff Costs, ow

3Q08(EUR mn)

11.9 12.6

2.6

-1.1

1Q08 2Q08 3Q08 4Q08

Operating Costs Ex. Post Employment Benefits Evolution

YoY growth %

Operating Costs Ex Post Employment Benefits

have come under significant control:

(a) cost reduction initiatives announced continue

yielding results;

(b) the branch expansion impacts are already

normalised.


II. Operating costs: Domestic and International breakdown

13.7100.688.53.3347.7336.7…Remunerations

-10.52.83.1-5.270.073.8…Post Empl. Benefits

184.7

13.2

68.1

103.4

2008 YoY%2007YoY%20082007

785.2

58.2

316.5

410.5

Domestic

165.5

11.6

62.3

91.6

International

11.6

13.9

9.2

12.9

4.0

11.2

5.7

1.7

816.9

64.7

334.5

417.7

Admin Costs

Depreciation

(EUR mn)

Operating Costs

Staff Costs

0.623.923.8-5.383.287.9…Remunerations

71.41.20.7-0.421.221.2…Post Empl. Benefits

46.4

3.7

17.6

25.1

4Q08 QoQ%3Q08QoQ%4Q083Q08

211.5

16.6

85.8

109.1

Domestic

44.0

3.7

15.8

24.5

International

5.4

0.7

11.1

2.4

-5.5

4.8

-8.9

-4.4

199.9

17.4

78.1

104.4

Admin Costs

Depreciation

(EUR mn)

Operating Costs

Staff Costs

Domestic and International YoY evolution

Domestic and International QoQ evolution

56%60% 60%

67%59%

66% 66%

55%

1Q07 2Q07 3Q07 4Q07

Domestic Cost to Income Ex-markets

62%

49% 50%

61%58%

53%

41% 41%

1Q 2Q 3Q 4Q

International Cost to incomeEx-markets

20072008

20072008


II. Provisions breakdown

Breakdown of Provisions

105.0

1.0

30.2

61 bp

73.8

4Q08

89.9

3.5

7.6

67 bp

78.9

3Q08

262.9

31.0

18.7

49 bp

213.2

2007

112.7

29.0

18.0

57 bp

65.7

2Q08

68.2

9.8

2.3

51 bp

56.1

1Q08

375.959.161.776.166.0Total Provisions

43.3-20.30.823.626.9Provisions for other purposes

58.113.63.40.90.8Provisions for Securities

57 bp61 bp55 bp53 bp41 bpAs % of Gross Loan Portfolio (annualised)

274.465.857.451.738.3Provisions for Credit

20084Q073Q072Q071Q07(EUR million)


Agenda








VIII. Wrap Up


III. BES maintained its strong competitive positioning in 2008, with an average market share of 20.7%

3

1

4

3

2

2

127.3%

14.7%

25.6%

17.1%

32.0%

18.9%

16.9%

25.6%

17.5%

29.6%

19.2%

16.3%

Brokerage

POSs

Trade Finance

Factoring

Leasing

Corporate Lending

Other Loans Indiv.

Mortgage

Asset Mgmt

Other Life Insurance

Pension Plans

On BS Funds

Note: On BS funds includes deposits and debt securities placed with Clients.

Ranking

9.0

20.4 20.7

1992 2007 2008

2,3 x

Average Market Share

(%)

Market Share by product

1

2

3

Corporatesegment: 23.8

2

1


III. Domestic network increased by 43 branches YoY, topping 743 retail units in Portugal in December 2008

618

2005 Net newopenings

2006

600 +18

+82743

2006 Net newopenings

2007

2007

700+43

Net newopenings

2008

Domesticnetwork

2008

The branch expansion effort undergone since 2006 strongly focused on low-cost branch formats (initial investment and cost level is 43% below traditional branches)Currently the network includes:

- 41 Assurfinance on-site branches (1 employee-branches)- 93 Non teller branches (2 employee-branches)

Retail Branch network growthNumber of branches


III. New branches account already for a significant part of the retail unit growth

The strong results obtained with new branches are a key lever of the Retail growth, both in terms of client acquisition and in terms of volume growth

Retail client acquisition - share of the new branches

Retail volume growth - share of the new branches

11%

17%

2007 2008

25%

2007 2008

12%


III. BES Group maintains a strong level of client acquisition

Strong Client acquisition levels supported by branch expansion, innovative channels and underpinned by

a strong focus on service quality.

During 2008, the Client base

continued to grow at a

significant pace, backed by an

acquisition of ca. 157.3k new

clients, with a 24%

contribution from the

Assurfinance Programme (38k

clients), which also channelled

21% of the Bank’s production

of programmed saving plans

157.3 k155.0k

+1.5%

20082007


III. The Assurfinance Programme continues to be one of the main contributors to the increase of the Bank’s client base

• New Clients captured: 38k (amounts to

24% of new clients)

• T-Cards placed: 32,560

• Weight of new programmed saving plans

channelled by Assurfinance agents: 21%

(15% in 2007)

• Weight of mortgage production

channelled by Assurfinance agents: 13%

During 2006 Tranquilidade & BES launched a

cooperative distribution concept and in

December 2008 this network included 41

branches

23

30

38 38

2005 2006 2007 2008

(Number of Clients, thousand)

BES new clients channelled byTranquilidade agents


III. Pension Plans reached a new record production level in 2008

544

649

787

2006 2007

Pension Plans productionIncludes Funds and InsuranceEUR mn

2008

Production of pension plans

reached Euro 787 mn in

2008, a new production

record (+21.3% YoY),

maintaining BES leadership

in this strategic area

Programmed saving plans

accounted for 20% of the

production growth

Market share (production)

21% 29%


III. BES 360º and Small Businesses

During 2008, the reinforced approach to core affluent professions lead to a significant increase in terms of client acquisition: +22% YoYThe commercial approach to small businesses focused on increased levels of credit selectivity and on a thorough review of the pricing of the credit portfolio (+79 basis points YoY)

8.2% 9.1%7.0% 7.1%

Client Involvement

ClientFunds

Credit BankingIncome

Client involvement: credit and funds

360º (Affluent Clients) YoY Growth

2.9% 2.8% 3.0%

10.5%

Client Involvement

ClientFunds

Credit BankingIncome

Small Businesses YoY Growth

Credit spreads:

+79bp2007: +18.5%

2007: +7.5%


III. Mass Market: Increasing productivity levels

Client loyalty has been one of the priorities in the commercial efforts, which in mass market translates into the number of products bought, being sales the key driver. Currently almost 85% of new clients have a daily banking bundle (a single package with several products covering all main daily financial needs)

The number of clients with their salary transferred to BES increased 6.4% YoY.

Daily Banking bundle

Health insurance

Mass Market YoY Growth

27%

167 %

96%

Life Insurance(premium formulae)Production

Programmed Saving Plan

29%39%

Auto Insurance

Premium formulae: 24% of the production

growth

2007 2008

1.21.5

+25%(Million)

Thousands of products sold


III. Middle Market: core of the Portuguese economy

The performance on this segment has been based on the Bank’s strong franchise with Portuguese companies and has also been driven by a strong focus on increasing BES share-of-wallet in good risk clients, through several cross-selling initiatives.

Building on BES’ know-how, the Bank setup in late 2008 a new unit, dedicated to supporting the international activities of Portuguese companies, leveraging the global presence of the Bank. This unit is composed of specialized account managers who leverage a network of cross-border managers

9.0%

2.8%

10.0%

14.1%

Client Involvement

Funds Credit BkgIncome

Middle Market YoY Growth

Client involvement: credit and funds

2007 2008

25.3%

28.3%

Share of Funds & Cross –Sellingwithin Banking Income

Derivatives: +182%Trade Finance: +16%Life insurance: +48%

Non Life Insurance: +15%

2007: +16.8%


III. Increase of contracted credit spreads

BES has been intensifying its efforts in terms of pricing optimisation. The corporate credit portfolio has been reviewed thoroughly, leading to a significant spread increase, supported by BES historic franchise and track record in this segment.

This same initiative has been pursued in mortgages, with the spread of new mortgages increasing by 29bp, while reinforcing the risk profile: affluent clients account for 55% of new mortgages and the average annual LTV of new mortgages decreased 2.1pp to 74.1%

2.82%

0.79% 3.61%

Dec 07 ΔYoY Dec 08

Small Businesses Middle Market Wholesale Banking

Contracted Credit Spreads

1.46%

0.69% 2.15%

Dec 07 ΔYoY Dec 08 Dec 07 ΔYoY Dec 08

0.98%0.54% 1.52%


IV. BES Vida Activity

BES Vida posted an overall premium growth 19.0% to €1,860mn (in the domestic market), which compares to an

overall life insurance market increase of 17.3%. BES Vida occupies the third position in the market with a share

of 16.9%, and is the leader in pension plans with a market share of 29.7%.

Premium Breakdown

Traditional Products 4%

Pension Plans 39%

Capitalisation Products

57%

• Unit link products represent 63.9% of total

premiums (1,188mn) and 50.2% of

Mathematical provisions in December 2008

(3.665mn)

• Capital guaranteed products represent

36.1% of total premiums. Despite 49.8% weight

in Mathematical Provisions, the average

guaranteed rate was reduced (from 1.69% to

1.00% in capitalisation products and from 2.37%

to 2.04% in pension plans).


III. Investment Banking: Benefiting from Internationalisation

Banking Income

Banking Income 2008: EUR 187.9m (-7% YoY)

Net Profit 2008: EUR 47.5m (-35% YoY)

Net Profit

International61%

Portugal39%

Net Interest Income27%

Fees & Commissions52%

Capital Mkts Results21%

International78%

Portugal22%

Domestic market slowed down but interesting deals closedJoint Mandated Lead Arranger on the €1.1 bn financing for Iberwind’s

acquisition of part of Enersis wind power generation assets in Portugal.

Financial Advisor and Mandated Lead Arranger in the €900 million Douro

Interior Road Concession.

Leadership of the Portuguese Brokerage market in 2008, ending

December with a 11.7% accumulated market share.

International activity dynamic, especially in BrazilIn Spain, 5th position in the Brokerage market with a 5.6% market share.

In Brazil, Mandated Lead Arranger on the USD135 mn syndicated credit

loan facility for Latapack under an IFC A/B Loan and was Financial Advisor

to the winner consortium (CIBE, Ascendi and Grupo Leão) for the auction

of SP300 road concession in São Paulo; Financial Advisor to Furnas

Centrais Elétricas on the auction for the construction and operation of

Complexo do Rio Madeira’s transmission lines, in a total investment of R$

2,500 mn; Mandated Lead Arranger on the USD240 mn financing for the

construction of the underground line “Linha Quatro” in São Paulo, which

was considered “Americas Infrastructure Deal of the Year 2008” by

Project Finance International magazine.

In Angola, Financial Advisor to the Ministry of Transports on both the

restructuring of the national road public transportation service and the

restructuring of the railway sector.


Agenda








VIII. Wrap Up


16%7,607

39,782

47,389

6,748

23,558

30,306

328

2,386

2,714

531

13,838

14,369

17,083

2007

18%9,226

41,829

51,055

8,331

25,130

33,461

341

2,407

2,748

554

14,293

14,847

17,595

9M08

5.2%27.6%9,703… International

6.2%

9.7%

30.8%

8.5%

13.4%

-1.2%

3.9%

3.2%

4.1%

2.9%

2.9%

3.0%

YoY (%)

19%

42,261

51,964

8,826

25,549

34,375

324

2,478

2,802

553

14,234

14,787

17,589

2008

1.0%… Domestic

1.8%Loan portfolio

5.9%… International

% total

2.0%… ow Other

1.7%… Domestic

2.7%Corporate Lending

-5.0%… International

2.9%… Domestic

-0.2%… International

-0.4%… Domestic

-0.4%… ow Mortgages

0.0%Loans to Individuals

QoQ(%)(euro million)

IV. Loan Portfolio

During 2008 BES grew credit selectively focusing on Corporate segment (up 13.4% YoY) with

International business making once again a critical contribution.

Considering the outstanding amounts of securitised credit, totalling eur 3,766 mn Ye 08, eur 3,876 mn Sep 08, eur 4,228 mn Ye 07

28%

5%67%

Mortgage Other individ. Corporate

Breakdown of Loan Portfolio


IV. Customer funds

-52.5-40.33,5237,4135,900Deposits Certificates

29%

16,037

38,781

54,818

17,495

37,531

7,001

23,117

9M08

22%

12,504

43,193

55,697

17,508

38,189

8,279

26,387

2008

-15.0

6.1

0.5

-4.8

3.0

12.1

11.0

YoY (%)

27%

14,718

40,727

55,445

18,385

37,060

7,385

23,775

2007

% total

0.9Total Customer Funds

-19.9… International

6.9… Domestic

0.1Off-BS Funds(2)

1.4On-BS Customer Funds

1.5Debt Securities (1)

14.1Deposits

QoQ(%)(euro million)

(1) Includes solely debt securities placed with clients (ex-EMTN)(2) Detailed in the appendix

37.0 38.2

18.4 17.5

2007 2008On-BS Funds Off-BS Funds

Breakdown of Customer Funds

55.4 55.7

(euro billion)

Deposits grew by 11.0% YoY (Eur +2.6bn) helping to mitigate the impact of a reduction of Deposits

Certificates and Off BS funds which were down by 4.8% YoY (Eur -0.9bn).


Agenda








VIII. Wrap Up


Coverage Ratios

V. Asset quality ratios evolution

Overdue Loans Ratios

Note: Figures up to 2004 were not restated under IFRS criteria

2.3%

1.9% 1.8%2.1% 2.1%

1.9%

1.5%

1.3%1.2%

1.3%

2.0%

1.7%

1.5%

1.8% 1.8%

1.6%

1.3%

1.1%1.0%

1.1%

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Overdue Loans/Gross Loans Overdue Loans (over 90 days)/Gross Loans

123%

180%

195%

184%

137% 132%131% 132%

140%

170%

219%229%

218%

197%

167%

153%149%

155%138%

161%

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Coverage of Overdue Loans Coverage of Overdue Loans (> 90 days)

Credit Provisions Reserve

2.62%2.43% 2.29% 2.33% 2.35% 2.35% 2.38%

'05 '06 '07 1Q08 2Q08 3Q08 4Q08

Credit provisions (on the BS) / Total gross loans

BES faces the currently challenging macro economic environment with a strong coverage (219% of overdue above 90 days) and strong

balance sheet cushion of 2.4% of credit provisions over credit


200.7

1,111.1

51.7

727.1

497.4

623.5

47,179

9M08

61.2

157.7

15.7

157.8

91.3

129.3

5,037

EUR mn

YoY Chg

28.7

15.9

23.5

26.1

21.1

25.5

11.7

%

274.4

1,148.1

82.6

762.0

524.2

636.9

48,198

2008

QoQ Chg

-5.1

37.0

-4.7

34.9

26.8

13.4

1,019

EUR mn

-6.5

3.3

-13.2

4.8

5.4

2.2

2.16

%

66.9Write Offs (accum)

213.2Credit provisions (P&L)

990.4Credit provisions (Balance)

604.2Overdue and Doubtful Loans (BoP) (1)

432.9Overdue Loans (over 90 days)

507.6Overdue Loans (over 30 days)

43,161Gross Loans (On-BS)

2007(EUR million)

V. Asset quality indicators

(1) According to Bank of Portugal rules (Circular Letter N. 99/09/2003)

BES maintains its prudent management policy regarding asset quality increasing balance credit

provisions by the same amount as the increase of overdue and doubtful loans.


V. Asset quality indicators

(1) According to Bank of Portugal rules (Circular Letter N. 99/09/2003)

57 bp

2.35%

152.8%

223.4%

178.2%

1.54%

1.05%

1.38%

3.24%

0.68%

1.32%

9M08

8 bp

-0.09

-13.2

-9.8

-14.9

0.18

0.09

0.18

0.28

0.03

0.14

YoY Chg

57 bp

2.38%

150.7%

219.0%

180.2%

1.58%

1.09%

1.38%

3.13%

0.68%

1.32%

2008

0.041.00%Overdue Loans >90 days / Gross Loans

0.041.40%Overdue and Doubtful Loans Ratio (BoP) (1)

2 .0195.1%Coverage of Overdue Loans

-4.4228.8%Coverage of Overdue Loans > 90 days

-2.1163.9%Coverage of Overdue and Doubtful Loans (BoP)

-

0.03

-

-0.11

-

-

QoQChg

1.20%Corporates (>30d)

49 bpP&L Provisions for Credit / Total Gross Loans

2.29%Provisions for Credit / Total Gross Loans

2.85%Consumer (>30d)

0.65%Mortgage (>30d)

1.18%Overdue Loans >30 days / Gross Loans

2007(EUR million)


V. Quarterly credit provision charge & new entries

0.55

0.63

74.5

0.67

78.9

3Q08

AccumulatedQuarterly

0.38

0.53

64.2

0.61

73.7

4Q08

0.25

0.41

178.3

0.49

213.2

2007

0.45

0.52

252.5

0.57

274.4

2008

0.52

0.54

62.1

0.57

65.7

2Q08

0.10

0.50

54.4

0.61

65.8

4Q07

0.41

0.47

51.7

0.51

56.1

1Q08

0.31

0.50

51.7

0.55

57.4

3Q07

0.25

0.45

44.0

0.53

51.7

2Q07

0.38Net new entries as % Performing Loans

0.31% Loan Portfolio

28.2P&L Credit Provisions net of Recoveries

0.41% Loan Portfolio

38.3P&L Credit Provisions

1Q07(EUR million)


Agenda








VIII. Wrap Up


The poor market performance has taken its toll across the bulk of the financial stakes held in the AFS portfolio. Potential losses total eur 179.5 mn by Ye08, fully recognised in Core Tier I (31 bp).

VI. Available for Sale portfolio – main holdings

Potential Gains & Losses

-179.5102.6816.8Total

8.07.88.60.252.5BMCE

-29.5

-54.0

178.3

9M08

6.68

3.05

2.13

% Stake 2008

(AFS)

-20.5661.7412.8Bradesco

76.0

70.5

2007

-91.2

-75.8

2008

454.3Portugal Telecom

375.9EDP

Acquis. Value

(EUR million)

Potential Gains & Losses


Actuarial assumptions were updated in 2008 to better reflect current market conditions, in line with IAS 19 and the recommendations of Watson & Wyatt. Outside the corridor actuarial differences stood at Eur 765 mn reflecting markets performance. Actuarial differences outside the corridor are amortised during 15y in staff costs (Eur 45mn in 2009; Eur 16mn in 2008).

VI. Post Retirement Benefits

234 209 206

94284

765

2007 1H08 2008

Corridor Outside the Corridor

Actuarial Differences

328

493

(EUR mn)

-0.25%2.00%2.25%Increase in Pensions

+0.75%4.00%3.25%Increase in Salaries

+0.55%5.80%5.25%Expected Return of Plan Assets

+0.50%5.75%5.25%Discount rate

N.A.SameTV 88/90Mortality Table – Women

N.A.SameTV 73/77 (adapt.)

Mortality Table – Men

ChgDec, 08Dec, 07Actuarial Assumptions

971


VI. Pension Fund performance reflected the poor market conditions

2,065 2,070

Liabilities Assets

Other 8.5%

Other Var. Income 24.8% Fixed

Income 27.4%

Equities 29.4%Real Estate

9.9%

Pension Fund Assets & Liabilities Evolution

(EUR mn)

Pension Fund Assets Breakdown 2008

Total plan assets amount to Eur 2.1bn as at Dec08, including Eur 538mn BES Group contribution.Liabilities are 100% covered.


Agenda








VIII. Wrap Up


12% 14% 13% 12%

64% 64% 64% 63%

22% 23% 25%

6% 5% 3%

23%

-5%

2005 2006 2007 2008

Capital Instruments Customer Funds Medium/Long Term Funds Treasury Gap (net interbank deposits)

VII. Funding Structure

BES Funding Structure

The prudent liquidity management policy followed throughout the years, supported on the diversification of funding sources and the extension of the funding maturity profile, led to an increase of Medium an Long Term Funds on the Funding Structure. Customer Funds, the most important funding source, accounted for 63% of total funding in 2008.

43.3 bn 49.9 bn 58 bn 60.4 bn

+8.1 bn +2.4 bn+6.6 bn

Total Funding


The total amount of funds maturing in 2008 was Eur 3.9bn of which Eur 2.8bn of EMTN and medium and long term loans, Eur 0.4bn of bonds placed with customers and Eur 0.7bn of Extendible Notes. Throughout 2008 BES raised total funds of approximately Eur 5.8 bn on the international capital markets. The proceeds from these issues surpassed the total amount of medium and long term funds maturing by more than Eur 1.9bn.

VII. Funding/Redemption profile

1 2882 065

3 705

5 869

-737

-2 791-1 794-228 -74 0

-387

January March June December

New Issues Redemptions XL's Customers

12%

12%

28%5%

43%

EMTNExchangeablesCovered BondsPriv. PlacementsSub. Debt

Funding/Redemptions profile New Issues

Redemptions

19% 62%

10%9%

EMTN

XL's

Priv.PlacementsPlaced withCustomers

Eur mn


1.031

536155

1.461

4.714

3.854

1.347

543 691476

61300 400 500

791 7601.118

1Q09 2Q09 3Q09 4Q09 2010 2011 2012 2013 2014 2015 >=2016

Senior Sub.

VII. Medium and Long Term Funds – maturity profile as of December 08

The total amount of medium and long term wholesale funds maturing in 2009 is Eur 3.2bn, which is fully covered by the amount of repoable securities eligible for ECB (Eur 4.6bn). In the beginning of 2009, BES executed it’s first government guaranteed transaction amounting Eur 1.5bn with a 3 year maturity

Medium and Long Term wholesale funds – maturity profile as of December 08

Maturity profile for 2009 (per quarter)

EUR 3.2bn

Medium and long term funds maturing in 2009 is fully covered by the current amount of ECB repoable securities (EUR 4.6bn).

Eur mn


•BES monitors the liquidity levels, particularly in what concerns the Net Interbank Deposits (“GAP”: interbank deposits up to 1Y less short term interbank loans), under the following guidelines, if negative:

must not exceed 5% of total assets;Should not represent more than 100% of the equivalent cash amount of ECB eligible assets or 50% of the estimated equivalent cash amount of repoable securities;Should not represent more than 50% of money market facilities (estimated to be Eur 10 bn.)

•Refinancing needs for the year should be covered by the amount held of repoable assets.

Repoable Securities Portfolio

VII. Conservative liquidity guidelines

Eur mn

The Group maintains a portfolio of repoable securities at comfortable levels as an additional source of liquidity (including roughly Eur 4.5bn eligible for rediscount with ECB), considering a conservative level of haircuts.

4,569

1,987

8,710

6,029

2007 2008

ECB EligibleTotal


VII. Solvency ratios

Core Tier I stood at 6.1% at YE with Tier I at 7.1% under IRB Foundation (BES is in the final stages of the certification process by the BoP). Potential losses of the AFS portfolio are fully deducted to Core Tier I (Eur -179.5 mn, or 31 bp), so is the actuarial difference resulting from the expected return of plan assets (Eur 133 mn, or 24 bp).

Tier I Tier II Total

6.1%

Solvency Ratios Dec 08 (under IRB)

4.1% 11.2%

7.1%

Cor

e Ti

er I

Dec 08 **

10.56.65.7

15%

6003,9493,4126,277

3,042

2,911

53,797

59,750Standard

11.57.56.6

15%

6003,9533,4866,067

-

4,464

48,392

52,8562007 *

15%As % Tier I

50,132Banking Book

2,911Trading Book

2,840Operational Risk

3,412Core Tier I

7.1Tier I (%)

6,273Total Capital

3,946Tier I

11.2

6.1

600

55,883IRB

Core Tier I (%)

Total (%)

Pref. Shares

RWA (BoP)

(EUR million)

(*) Basel I(**) Estimated


VII. BoP regulatory framework for solvency ratios calculation

It is worth highlighting some of the relevant changes that took place at regulatory level during 2008 with material impact on the calculation of solvency ratios.

AFS Bond PortfolioLosses in the AFS Bond portfolio are no longer required to be recognised at Tier I level. (Notice 6/2008).

Pension Funds Transition period for actuarial losses that emerged during 2008 with the exception of the ones steaming from the expected return of pension fund. These actuarial losses will be gradually recognised at Core Tier I in the upcoming 4 years – 2009 to 2012. (Notice 11/2008).

Deferred TaxesElimination of limit of 10% for deferred tax assets weight in Tier I. (Notice 9/2008).

Preference SharesIncreased limit from 20% to 35% of preference shares weight in Tier I. (Notice 9/2008).


Agenda








VIII. Wrap Up


VIII. Wrap up

• FY08 results proved the resilience and strength of BES business model. In a year of dramatic returns for Banks in general, BES posted a net profit of Eur 402.3 mn.• Commercial banking income (+7.8%) surpassed operating costs growth (5.4%), leading to further efficiency gains:

Cost to Income ex-markets of 58.2%, down from the 59.5% in 2007, while total Cost to Income posted a healthy 53%.

• International business was key to this performance:• Angola continues to grow business in a healthy, profitable and efficient manner, while increasing its contribution

to BES consolidated figures

• In Brazil, BES Group participated in important investment banking transactions, positioning the Bank for the

development expected for the next years, namely in infrastructure projects

• UK maintains a resilient contribution to the results, based on trade finance and structured trade finance businesses

• BES maintained asset quality under control, proving once again the merits of its risk management and strict criteria

when conceding credit or investing in financial assets.

• Core capital ended the year at 6.1% and Tier I at 7.1% under IRB Foundation, placing the Bank in a good position to

reinforce capital ratios through the proposed rights issue, which will boost core capital and Tier I to healthy 8.3% and 9.2% levels respectively.• The proposed rights issue has to do solely with the purpose of meeting the new regulatory standards, finance business and better prepare the Bank to face the challenges of a slowing economy. BES has no hidden losses that

need to be covered by a capital increase.

• Amid a time of crisis, BES Board of Director reinforces its commitment to shareholder value creation based on prudent management of balance sheet and capital, always with the purpose of better serving clients, shareholders and our country.


Agenda








VIII. Wrap Up

Appendix


Quarterly consolidated results

67.5

5.7

19.3

92.5

105.0

197.5

246.3

443.8

-49.9

16.0

477.7

171.6

306.1

4Q08

70.7

5.3

-13.0

63.0

89.9

152.9

255.5

408.4

-5.0

-14.4

427.8

158.8

269.0

3Q08

145.9

6.2

20.3

172.4

68.2

240.6

241.5

482.1

1.3

71.8

409.0

150.7

258.3

1Q08

-43.4

-46.5

-28.1

-41.0

77.8

-8.5

-5.9

-7.1

n.m.

-23.3

15.4

1.8

24.8

YoY(%)

-4.4

8.2

n.m.

46.9

16.8

29.2

-3.6

8.7

n.m.

n.m.

11.7

8.0

13.8

QoQ(%)

118.2

7.7

56.9

182.8

112.7

295.5

258.4

553.9

-9.4

155.4

407.9

155.1

252.8

2Q08

119.3

10.7

26.8

156.7

59.1

215.8

261.8

477.6

8.3

55.4

413.9

168.6

245.3

4Q07

227.0

4.7

57.1

288.8

76.1

365.0

232.8

597.7

14.5

195.8

387.5

155.7

231.8

2Q07

121.0

9.2

25.6

155.8

61.7

217.5

239.2

456.6

4.3

39.2

413.1

164.0

249.1

3Q07

139.8

3.5

43.0

186.3

66.0

252.3

217.0

469.3

13.5

73.2

382.6

155.1

227.5

1Q07

- Minorities

- Taxes

= Income Bef. Taxes and Min.

= Net Income

+ Other Results

- Net Provisions

= Net Operating Income

- Operating Costs

= Banking Income

+ Capital Markets Results

= Commercial Banking Income

+ Fees and Commissions

+ Net Interest Income

(EUR million)


Quarterly domestic results

47.0

2.3

18.2

67.6

68.9

136.5

199.9

336.4

-29.1

365.6

138.5

227.1

4Q08

25.2

-0.1

-18.8

6.5

74.9

81.4

211.5

292.9

-28.6

321.5

116.5

205.0

3Q08

77.8

1.9

37.6

117.3

98.3

215.6

210.6

426.2

108.9

317.3

121.7

195.6

2Q08

-26.9

14.2

16.9

-17.5

55.4

8.1

-6.7

-1.2

-

14.7

14.1

15.1

YoY(%)

109.1

1.3

13.3

123.7

62.1

185.8

194.9

380.7

52.0

328.7

123.3

205.4

1Q08

82.9

4.9

13.1

101.0

57.5

158.5

200.4

358.9

24.2

334.6

131.8

202.8

3Q07

64.4

2.1

15.6

82.1

44.4

126.4

214.2

340.7

21.9

318.7

121.4

197.4

4Q07

86.5

-

-

-

-8.0

67.5

-5.5

14.9

1.7

13.7

18.9

10.8

QoQ(%)

200.6

0.2

46.0

246.8

71.5

318.2

191.3

509.5

189.7

319.8

123.0

196.9

2Q07

117.6

1.4

37.7

156.7

62.8

219.5

179.3

398.8

77.1

321.7

125.8

195.9

1Q07

- Minorities

- Taxes


= Net Income

- Net Provisions


- Operating Costs

= Banking Income

+ Capital Markets & Other Results




(EUR million)


Quarterly international results

20.5

3.4

1.0

24.9

36.1

61.0

46.4

107.3

-4.8

112.1

33.1

79.0

4Q08

45.5

5.3

5.7

56.5

15.1

71.5

44.0

115.5

9.1

106.4

42.4

64.0

3Q08

40.4

5.8

19.3

65.5

14.4

79.9

47.7

127.6

37.0

90.6

33.4

57.2

2Q08

19.7

23.8

-

3.0

-

21.2

13.4

18.1

-52.8

35.6

31.7

38.2

YoY (%)

36.8

4.9

7.0

48.7

6.1

54.8

46.6

101.4

21.1

80.3

27.4

52.9

1Q08

38.1

4.3

12.5

54.8

4.2

59.0

38.8

97.7

19.3

78.5

32.2

46.3

3Q07

54.9

8.5

11.2

74.7

14.7

89.4

47.6

136.9

41.8

95.1

47.2

48.0

4Q07

-54.9

-35.8

-82.5

-55.9

-

-14.7

5.5

-7.1

-

5.4

-21.9

23.4

QoQ (%)

26.4

4.5

11.3

42.1

4.7

46.7

41.5

88.2

20.5

67.7

32.8

34.9

2Q07

22.2

2.1

5.3

29.6

3.1

32.7

37.7

70.4

9.5

60.9

29.2

31.7

1Q07

- Minorities

- Taxes


= Net Income

- Net Provisions


- Operating Costs

= Banking Income

+ Capital Markets & Other Results




(EUR million)


Angola: Income Statement

-13.231.536.359.0114.071.7Banking Income ex-Markets=

-32.310.715.844.348.233.4Net Income=

37.3%

19.8

53.2

2.6

55.8

33.2

89.0

17.3

34.9

36.8

2007

32.8%

34.0

82.2

4.8

87.0

42.5

129.5

15.5

39.3

74.7

2008

71.7

54.5

84.6

55.9

28.3

45.5

-10.3

12.8

102.8

YoY %

40.3

-8.1

-47.4

-11.0

9.4

-5.0

-

-31.4

1.5

QoQ %

33.9%

10.8

21.6

1.0

22.6

11.6

34.2

2.8

11.6

19.8

4Q08

29.4%

7.7

23.5

1.9

25.4

10.6

36.0

-0.3

16.9

19.5

3Q08

-

=

-

=

-

=

+

+

+

Cost to Income

Taxes & Minority Interests

Income Bef. Taxes & Min.

Net Provisions

Net Operating Income

Operating Costs

Banking Income

Capital Markets Results & Other

Fees and Commissions

Net Interest Income

(EUR million)


Angola: main indicators and developments

2008 Main Developments

Best Bank in Angola and Best Bank in Sub-Saharan

Africa by Global Finance and World Finance

respectively;

Focused distribution network: 28 Branches, 2

Corporate Centers, 1 Private Center and 1

Investment Banking Office;

Launch of BESAACTIF – the first asset management

company in Angola;

Outstanding Efficiency levels with Cost to Income

32.6%;

571.6 586.1

802.2

1180.0

1,004.0

2007 1Q08 1H08 9M08 2008

Credit Portfolio

828.6939

1680.61,508.2

1,248.3

2007 1Q08 1H08 9M08 2008

Client Deposits

(Credit gross; EUR mn)

(EUR mn)103%

106%


Spain: Income Statement

10.231.428.59.6120.0109.5Banking Income ex-Markets=

-32.9%-8.70.3-1.315.2Net Income=

70.9%

3.8

19.0

15.2

34.2

83.2

117.4

7.9

59.2

50.3

2007

70.4%

-3.4

-2.1

39.2

37.0

87.8

124.8

4.8

47.8

72.2

2008

-

-

157.9

8.2

5.5

6.3

-39.2

-19.3

43.5

YoY %

-

-

176.8

14.1

11.7

12.4

-

-17.1

29.2

QoQ %

71.2%

-5.1

-13.8

22.7

8.9

22.0

30.9

-0.5

9.7

21.7

4Q08

71.6%

-0.7

-0.4

8.2

7.8

19.7

27.5

-1.1

11.7

16.8

3Q08

-

=

-

=

-

=

+

+

+

Cost to Income



Net Provisions


Operating Costs

Banking Income



Net Interest Income

(EUR million)


Brazil: Income Statement

9.84.092.924.712.9Banking Income=

1.510.5-7.529.832.4Net Income=

23.5%

27.3

59.7

0.1

59.8

18.4

78.2

65.3

12.4

0.5

2007

29.7%

14.8

44.6

4.1

48.7

20.6

69.3

44.6

10.9

13.8

2008

-45.8

-25.1

-

-18.4

12.0

-11.2

-31.7

-11.7

-

YoY %

-4.9

-3.4

2.9

-0.5

3.7

3.2

-6.6

0.0

9.8

4Q08

24.8%

2.7

13.2

0.7

13.9

4.6

18.5

14.5

4.0

0.0

3Q08

-

=

-

=

-

=

+

+

+

Cost to Income



Net Provisions


Operating Costs

Banking Income



Net Interest Income

(EUR million)


UK: Income Statement

12.626.423.417.181.269.3Banking Income=

12.214.713.1-6.041.744.4Net Income=

17.3%

2.8

47.2

8.7

55.9

11.7

67.6

-1.7

17.2

52.1

2007

18.5%

2.7

44.4

16.2

60.7

13.8

74.5

-6.7

19.4

61.8

2008

-3.6

-5.9

86.1

8.5

18.1

10.1

-

12.7

18.5

YoY %

-

26.6

-

60.4

7.6

50.3

-

42.8

5.6

QoQ %

13.7%

2.2

16.9

6.5

23.4

3.7

27.1

0.7

6.4

20.0

4Q08

19.1%

0.2

13.3

1.3

14.6

3.4

18.0

-5.4

4.4

19.0

3Q08

-

=

-

=

-

=

+

+

+

Cost to Income



Net Provisions


Operating Costs

Banking Income



Net Interest Income

(EUR million)


171.6

24.5

1.9

9.0

9.2

23.4

13.9

17.0

14.5

10.6

25.0

22.5

4Q08

158.8

19.4

1.7

12.3

8.6

25.3

14.3

13.7

9.4

10.0

19.8

24.3

3Q08

155.1

24.2

1.7

12.3

9.3

25.0

9.1

14.6

7.8

8.4

21.0

21.6

2Q08

1.8

0.0

7.3

-22.5

7.2

-27.1

-31.8

14.1

41.8

164.6

32.4

5.0

YoY (%)

150.7

21.2

1.5

13.6

8.0

27.2

13.9

12.3

12.5

4.0

16.0

20.6

1Q08

168.6

24.6

1.9

11.6

8.6

32.0

20.4

14.9

10.3

4.0

18.9

21.4

4Q07

6.73.24.03.2Trade Finance & Exports related (1)

54.915.616.813.8Corporate & Project Finance

155.1

28.2

1.5

11.0

7.4

29.5

12.3

13.9

15.4

19.0

1Q07

8.0

26.8

7.3

-26.6

7.3

-7.7

-2.7

23.7

26.4

-7.7

QoQ(%)

26.918.9Other

11.714.4Bancassurance

1.51.8Factoring

155.7

7.3

28.0

13.0

13.4

18.7

19.5

2Q07

164.0

8.6

28.3

19.3

11.5

17.8

19.5

3Q07

Guarantees

Total Fees & Commissions

Cards

Asset Management (3)

Securities related fees (2)

Commissions on Loans

Account Management Fees

(EUR million)

Quarterly fees & commissions breakdown

(1) Includes trade finance and letters of credit(2) Includes Brokerage(3) Includes discretionary management

Note: change calculated based on figures in thousand euros


Other Results breakdownReconciliation between IFRS P&L and Presentation

-21.9

-4.4

27.1

0.9

Sep 08

-15.3

-0.5

19.7

3.9

Jun 08

-10.8

0.8

8.0

-2.0

Mar 08

4.2

-11.6

31.5

24.1

Dec 07

7.2

-13.6

66.5

60.1

Sep 07

-40.37.15.6… Other

-9.5

41.4

39.0

Jun 07

-1.8

21.2

25.0

Mar 07

-4.6… Capital Markets

37.0… Fees

-7.9Other Results, ow

Dec 08(EUR million)

Accumulated Figures

-6.6

-3.8

7.4

-2.9

3Q08

-4.4

-1.3

11.7

6.0

2Q08

-10.8

0.8

8.0

-2.0

1Q08

-3.0

2.0

-35.0

-36.0

4Q07

0.1

-4.1

25.1

21.1

3Q07

-18.41.55.6… Other

-7.7

20.2

14.0

2Q07

-1.8

21.2

25.0

1Q07

-0.2… Capital Markets

9.9… Fees

-8.8Other Results, ow

4Q08(EUR million)

Quarterly Figures


Quarterly loan portfolio breakdown (including securitised)

19%

9,703

42,261

51,964

8,826

25,549

34,375

324

2,478

2,802

553

14,234

14,787

17,589

4Q08

18%

9,226

41,829

51,055

8,331

25,130

33,461

341

2,407

2,748

554

14,293

14,847

17,594

3Q08

17%

8,487

41,460

49,946

7,601

24,756

32,357

348

2,407

2,755

538

14,297

14,834

17,589

2Q08

5.2%

1.0%

1.8%

5.9%

1.7%

2.7%

-5.0%

2.9%

2.0%

-0.2%

-0.4%

-0.4%

0.0%

QoQ(%)

27.6%

6.2%

9.7%

30.8%

8.5%

13.4%

-1.2%

3.9%

3.2%

4.1%

2.9%

2.9%

3.0%

YoY(%)

16%

7,862

40,660

48,523

7,001

24,056

31,056

332

2,421

2,753

530

14,184

14,714

17,466

1Q08

16%

7,607

39,782

47,389

6,748

23,558

30,306

328

2,386

2,714

531

13,838

14,369

17,083

4Q07

7,5816,7976,110… International

17%

38,200

45,781

6,772

22,371

29,142

279

2,278

2,557

530

13,551

14,082

16,639

3Q07

16%

36,899

43,696

6,011

21,422

27,433

266

2,183

2,449

520

13,294

13,814

16,263

2Q07

15%

35,646

41,756

5,355

20,544

25,899

220

2,054

2,274

536

13,047

13,583

15,857

1Q07

… Domestic

Loan portfolio

… International

% total

… ow Other

… Domestic

Corporate Lending

… International

… Domestic

… International

… Domestic

… ow Mortgages

Loans to Individuals

(EUR million)

(1) Considering the outstanding amounts of securitised credit. Securitised credit only includes domestic loans.


Quarterly customer funds breakdown

14.1%11.0%26,38723,11723,91722,06923,77520,61220,18418,716… Deposits

-52.5%-40.3%3,5237,4136,9916,4475,9005,8835,9955,049… Certificates of Deposits

22%

12,504

43,193

55,697

17,508

38,189

8,279

29,910

4Q08

29%

16,037

38,989

55,026

17,495

37,531

7,001

30,530

3Q08

29%

16,329

39,788

56,127

18,238

37,889

6,981

30,908

2Q08

-15.0%

6.1%

0.5%

-4.8%

6.3%

32.6%

0.8%

YoY (%)

27%

14,801

39,514

54,315

18,231

36,084

7,568

28,516

1Q08

27%

14,718

40,727

55,445

18,385

37,060

7,385

29,675

4Q07

26%

13,856

38,528

52,384

18,766

33,618

7,123

26,495

3Q07

-22.0%

10.8%

1.2%

0.1%

1.8%

18.3%

-2.0%

QoQ (%)

26%

13,561

37,659

51,220

19,064

32,156

5,977

26,179

2Q07

26%

12,245

35,243

47,488

18,383

29,105

5,340

23,765

1Q07

% total

Total Customer Funds

… International

… Domestic

Off-BS Funds

On-BS Funds

Debt Securities

Deposits (1)

(EUR million)

(1) Includes Client deposits and certificates of deposits


Quarterly off-BS customer funds breakdown

-6.9%-16.9%1,0711,1501,2371,2651,2891,3031,4031,445… Domestic

--71-------… International

2,638

14,870

17,508

877

2,943

3,820

5,190

132

2,476

2,608

1,142

1,897

2,851

4,748

4Q08

3,180

14,315

17,495

1,021

3,052

4,073

4,982

125

2,130

2,255

1,150

2,034

3,001

5,035

3Q08

3,087

15,151

18,238

984

3,116

4,100

5,128

120

2,372

2,492

1,237

1,983

3,298

5,281

2Q08

-17.7%

-2.0%

-4.8%

-18.3%

-11.4%

-13.1%

5.2%

9.1%

-7.6%

-6.9%

-11.4%

-5.6%

-3.6%

-4.4%

YoY (%)

3,200

15,031

18,231

994

3,462

4,456

5,060

122

2,413

2,535

1,265

2,084

2,831

4,915

1Q08

3,205

15,180

18,385

1,074

3,323

4,397

4,933

121

2,679

2,800

1,289

2,010

2,956

4,966

4Q07

3.9%15,44715,62415,068… Domestic

3,319

18,766

1,117

3,278

4,395

4,951

111

2,704

2,815

1,303

2,091

3,211

5,302

3Q07

-17.0%

0.1%

-14.1%

-3.6%

-6.2%

4.2%

5.6%

16.2%

15.7%

-0.7%

-6.7%

-5.0%

-5.7%

QoQ(%)

3,440

19,064

1,114

3,024

4,138

4,921

110

2,723

2,833

1,403

2,216

3,554

5,770

2Q07

3,315

18,383

1,097

2,856

3,953

4,751

107

2,630

2,737

1,445

2,111

3,386

5,497

1Q07

Total Off-BS Funds

… International

… Domestic

… International

Pension Funds

Other (*)

Bancassurance (Domestic)

… International

… Domestic

Real Estate Funds

… International

… Domestic

Mutual Funds

(EUR million)

(*) Other includes off-BS structured products, discretionary management and venture capital


Solvency Ratios

11.2

7.1

6.1

15%

600

(9)

2,336

3,946

3,412

6,273

2,840

2,911

50,132

55,883

Basel II(IRB)

9.9

6.3

5.5

15%

600

(8)

2,202

3,883

3,345

6,077

3,042

3,707

54,401

n.m.

61,150

Basel II(Std)

10.5

6.7

5.8

15%

600

(8)

2,202

3,883

3,345

6,077

-

3,862

54,289

13.9%

58,151

Basel I

Sep 08

9.7

6.6

5.7

15%

600

(6)

1,833

3,889

3,357

5,716

3,042

4,408

51,733

n.m.

59,183

Basel II(Std)

10.0

6.8

5.9

15%

600

(6)

1,833

3,889

3,357

5,716

-

4,425

52,633

15.3%

57,058

Basel I

Jun 08

10.1

6.8

6.0

15%

600

(6)

1,888

3,943

3,434

5,825

3,042

5,825

48,676

n.m.

57,543

Basel II(Std)

10.7

7.3

6.3

15%

600

(6)

1,888

3,943

3,434

5,825

-

4,678

49,596

17.8%

54,274

Basel I

Mar 08

15%15%15%As % Tier I

53,79757,12848,392Banking Book

2,9113,3494,464Trading Book

3,042--Oper. Risk

Dec 08 *

10.4

6.5

5.6

600

(9)

2,337

3,949

3,412

6,277

15.3%

60,477

Basel I

11.5

7.5

6.6

600

(5)

2,114

3,953

3,486

6,067

18.3%

52,856

Dec 07

3,412Core Tier I

YoY

6.6Tier I (%)

6,277Total Capital

3,949Tier I

2,337Tier II

(9)Deductions

10.5

5.7

600

59,750

Basel II(Std)

Core Tier I (%)

Total (%)

Pref. Shares

RWA (BoP)

(EUR million)

* Estimate. BIS II IRB corresponds to calculations based on IRB Foundation for credit risk and standardised for operational risk


Disclaimer

This news release may include certain statements relating to the Banco Espírito Santo Group that are neither

reported financial results nor other historical information. These statements, which may include targets, forecasts,

projections, descriptions of anticipated cost savings, statements regarding the possible development or possible

assumed future results of operations and any statement preceded by, followed by or that includes the words

“believes”, “expects”, “aims”, “intends”, “may” or similar expressions or negatives thereof are or may constitute

forward-looking statements.

By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty.

There are a number of factors that could cause actual results and developments to differ materially from those

expressed or implied by forward-looking statements. These factors include, but are not limited to, changes in

economic conditions in individual countries in which the BES Group conducts its business and internationally, fiscal

or other policies adopted by various governments and regulatory authorities of Portugal and other jurisdictions, levels

of competition from other banks and financial services companies as well as future exchange and interest rates.

Banco Espírito Santo does not undertake to release publicly any revision to the forward-looking information included

in this news release to reflect events, circumstances or unanticipated events occurring after the date hereof.


Investor Relations

Investor Relations Contacts

Website: www.bes.pt/irPhone: + 351 21 359 7390E-mail: [email protected]: + 351 21 359 7001

NUMBER OF SHARES: 500 millionNOMINAL VALUE: 5 Euros per shareSHARE CAPITAL: EUR 2.5 bnSECTOR: Financial Services: BankingINDEX MEMBERSHIP: PSI20

Euronext 100Dow Jones EurostoxxDow Jones Stoxx BanksFTSE4GOODFTSE All World Developed

LISTING: NYSE EuronextBLOOMBERG: BES PLREUTERS: BES.LSISIN CODE: PTBES0AM0007RATINGS: S&P: A / Stable / A1

Moody’s: Aa3 / Stable / P1Fitch: A+ / Stable / F1

2008 Results Presentation · 2008 Results Presentation 29th January 2009 2 I. Foreword • 2008 was...

Documents

Transcript of 2008 Results Presentation · 2008 Results Presentation 29th January 2009 2 I. Foreword • 2008 was...