Cheuvreux EMEA Conference - Millenniumbcp · dimension Leadership in Portugal, setting up the basis...

Cheuvreux EMEA Conference24 March 2009

22

Cheuvreux EMEA Conference

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’) project 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 earnings

33


1985 - 1995

1995 - 2000

2000 - 2004

2005 – 2010

1985-2008

From incorporation …

… to leadership

Organic growth to become

relevant player

Consolidation to reach critical

dimension

Leadership in Portugal,

setting up the basis for

expansion in Poland and

Greece

On the path to the future…

Consolidation of international expansion with a single brand, focused on organic growth and value creation.

44


49% of our branches are located outside Portugal 53% of our staff works abroad

Portugal

(December 2008)

Eur Millions

A leading Group focused in the Retail business in Portugal, Poland, Greece and Mozambique

Source: BCP. Market shares in Portugal are based on Portuguese Banking Association and Portuguese banks’ public data. Market shares in Poland are from the Polish Banks Association and Polish Asset Managers Association. Market shares in Greece are based on Bank of Greece and Greek banks’ public data. Market shares in Mozambique are based on Bank of Mozambique public data.

24.5%

Dec. ‘08

Market Shares

OtherMozambiqueGreecePoland

8.125 4.794 1.3478.241

3.558 1.339

57.622

484

52.322

804

11.5% 5.6% 2.0% 1.1%

Mortgage Loans

December 2008

DepositsDecember

Total Loans

December 2008

DepositsNovember

2008

41.2% 36.8%

Total Loans

October 2008

DepositsOctober

2008

Loans to Customers (2)

Customers’ Funds

Loans to Customers

(net)

Customers’ Funds

Loans to Customers

(net)

Customers’ Funds

Loans to Customers

(net)

Customers’ Funds

Employees Branches Employees Branches Employees Branches Employees

Loans to Customers

(net)

Customers’ Funds

Employees BranchesBranches

7.0491.5571.554

10.667

1762 117178490

918

100

25.8%

(1) Excluding securitization(2) Net, excludes credit represented by securities)

Dec ’08 (1)

55


Millennium bcp has become a leading Portuguese financial institution in several retail banking activities, providing an integrated and complete offer to its customer base.

Market shares: December 2008Customers’ fundsMortgage loans

(Portugal, gross, including securitization)

BranchesNet operating revenues**

** Million euros, on a comparable basis.

Loans to customers(gross, excluding securitization)

Millennium bcp positioning and market share vs. main competitors

#1 #3 #2 #3

18,3%

28,4%24,5%

16,7%

25,8%26,1%

13,6%

27,7%

20,0%

#3#1 #3 #1 #3#1

3.4372.870

1.890

818918

831

66


Portuguese Banking SystemMarket Shares

Loans to customers

26.1%

25.8%

14.4%15.2% 15.2% 15.4%

16.4% 16.5% 16.5%

9.8% 10.2% 10.2%10.7% 10.5% 10.4% 10.3% 10.0%

24.9%

25.7%

25.1%

25.3%26.5%

25.5%25.6%

25.5%25.4%25.4%24.9%

26.0%26.8%26.7%

16.2%

13.2%

11.2%11.6%11.6%

12.4%11.7%

13.3%

9.8%

Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Jun 08 Set 08 Dec 08

CGD

BCP

BES

S.Totta

BPI

BCP on comparable basis (excluding Interbanco, BCM, Banque BCP, bcpbank Canada) Loans to customers: gross, excluding securitizations. BCP and CGD includes commercial paper. Source of sector data: APB (Associação Portuguesa de Bancos)

77


Portuguese Banking SystemMarket Shares

Loans to customers: Portugal

24.1% 23.7%23.2%

24.1%

25.4%

27.0%25.7%

25.0%24.1%

24.1%

14.7% 14.4% 14.7%15.5% 15.8% 15.8%

11.0% 10.9% 11.2%11.8% 12.1% 11.7% 11.5% 11.1%

24.1%

25.4%

24.2%

24.1% 24.4%24.1%

14.7%

15.3%

13.2%13.8%13.7%

13.4%14.0%14.0%

14.8%

14.4%

Dec 04 Dec 05 Sep 06 Dec 06 Dec 07 Jun 08 Set 08 Dec 08

CGD

BCP

BES

S.Totta

BPI

BCP on comparable basis (excluding Interbanco, BCM, Banque BCP, bcpbank Canada) Loans to customers: gross, excluding securitizations. BCP and CGD includes commercial paper. Source of sector data: APB (Associação Portuguesa de Bancos)

88


Portuguese Banking SystemMarket shares: loans to customers –Portugal

Retail

(Gross, including securitization)

18.2% 18.6% 18.9% 18.8% 18.8% 18.9% 18.7% 18.6% 18.3% 18.3% 18.3%

23.4% 23.3% 23.1%24.1%

22.8% 22.9% 22.9%

24.7%

11.6% 11.5% 11.6% 11.6% 11.6% 11.6% 11.6% 11.7% 11.6% 11.5% 11.4%

8.8% 8.5% 8.4% 8.4% 8.5% 8.5% 8.5% 8.6% 8.7% 8.8% 8.8%

25.1% 25.1% 25.2%24.6%

25.7% 26.0% 26.0%

24.4%

23.9% 23.4%23.9%

12.3% 12.5% 12.6% 12.6% 12.7% 12.6% 12.5% 12.6% 12.6% 12.5% 12.4%

25.1% 25.0%25.2%

Dec

04

Dec

05

Dec

06

Mar

07

Jun

07

Set

07

Dec

07

Mar

08

Jun

08

Set

08

Dec

08

CGD

BCP

Outros

S.Totta

BES

BPI

Estimated market shares using as souce Bank of Portugal (crédito de outras instituições financeiras a instituições não monetárias, administração pública exceptogovernocentral, sociedades não financeiras e particulares ).BCP and CGD includes commercial paper.

99


Portuguese Banking SystemMarket shares: loans to customers –Portugal

SME and Corporate(Gross, including securitization)

17.8%

18.7%19.2% 19.4%

10.5%

16.6% 16.6%

19.1%

18.4%16.4% 18.5%

20.3%

18.7%

20.8%

18.9%19.5%

18.9%

19.3%

16.1%

17.7%

18.7%18.8% 19.1%

12.6%

12.3%13.0% 12.9%

12.7%13.2%

12.5%

12.2%

12.0%

9.7%

11.5%12.0%

11.4%

10.5% 10.6% 10.7%10.8%

10.5% 10.7%10.9%

10.7%

15.4%

14.3%

11.9%

16.8%

13.0% 11.5%

9.9%

12.1%12.5%

12.8%

9.9%

27.8% 27.4% 27.3% 26.8% 26.9% 26.6% 26.6% 26.2% 26.0%

27.8%

29.5%

Dec

04

Dec

05

Dec

06

Mar

07

Jun

07

Set

07

Dec

07

Mar

08

Jun

08

Set

08

Dec

08

CGD

BCP

Outros

S.Totta

BES

BPI

Estimated market shares using as souce Bank of Portugal (crédito de outras instituições financeiras a instituições não monetárias, administração pública exceptogovernocentral, sociedades não financeiras e particulares ).BCP and CGD includes commercial paper.

1010


Portuguese Banking System Market share: customers’ funds –Portugal

Capitalization insurance considred for CGD as “outside balance sheet” for comparison purposesExcludes EMTNs and CDs.

On balance sheet

32.5%

34.5% 34.8%33.6%

32.4%31.7%

32.9% 33.1% 32.5%

20.1%

22.3%

20.4%21.1% 21.5% 21.9%

15.0% 14.7%

16.2%

8.4%

21.9% 22.7% 22.1%

14.1% 14.6% 14.8%

15.9%15.2%

14.7%

12.1%

12.9%

11.0%

8.3%9.3%

10.4% 12.4%11.0%

9.5%9.4%8.5%8.8%

8.8%

9.5%10.5%

10.4%

9.5%

Dec 04 Dec 05 Dec 06 Jun 07 Set 07 Dec 07 Jun 08 Set 08 Dec 08

CGD

BCP

BES

S.Totta

BPI

1111


Portuguese Banking System Market share: customers’ funds –Portugal

Capitalization insurance considred for CGD as “outside balance sheet” for comparison purposesExcludes EMTNs and CDs.

Total customers’ funds

21.5% 21.9%

29.7% 31.2%

17.0%

21.0%22.5%

21.4%21.2%20.9% 22.4%22.0%

31.2%31.0%29.9% 30.3% 29.8% 30.8% 31.2%

15.1%14.9% 15.2%15.2%14.8%15.9% 16.1% 15.7%

11.0% 11.4%

9.8%9.2%

10.8%

11.1%

10.2%

11.5% 11.9%

10.7%10.9%

11.2% 11.6% 11.0%11.3%

10.5%11.0% 11.0%

Dec 04 Dec 05 Dec 06 Jun 07 Set 07 Dec 07 Jun 08 Set 08 Dec 08

CGD

BCP

BES

S.Totta

BPI

1212


A particularly challenging year

Macroeconomic slowdown

Financial sector subject to uncertainties and pressures

from multiple variables

Interest rates expected to continue low; increasing cost of funding not entirely reflected in higher loan spreads; asset prices expected to continue depressed

Recent evolution of capital markets together with increasing refinancing needs of the financial sector represent a major challenge to access funding under attractive conditions (cost and term)

New “surprises” at international level are not to be excluded Uncertainty regarding the perspectives of short term economic recovery

Disfunctional markets translate into general shortness of capital and liquidity

Overall uncertainty

Economic recession and increasing unemployment affecting growth, earnings and impairments across the financial sector

Pressure over interest rates and asset prices

1313


Focus on stabilizing the Bank and managing in a turbulent environment

1st Semester

“Bank Stabilization”

Priorities and Key Initiatives

2nd Semester

“Management under market crisis”

Bank’s management focus:§ Reestablishing institutional stability

(General Meeting, May 27, 2008)§ Strengthening of financial position

€1,300 million capital increase in April 2008Two issues of long-term corporate debt totaling €2,250 million in May 2008

Unparalleled deterioration of the international financial markets -“management under crisis” aiming at immediate results§ Divestment of equity stakes (sale of BPI), portfolio evaluation§ Increase of liquidity contingency levels§ Cost reduction§ Adjustments to credit/liquidity risk pricing

1414


Highlights 2008

Portugal with recovery on core revenues growth and cost control

1

International operations with impact from current crisis2

Sustained volumes growth, mainly on deposits3

Prudence on risk evaluation. Impairment increased to support current cycle

4

5Adequate capital position and in line with announced target. Capital measures are been considered to meet future regulatory recommendations

1515


201.2

23.5

225.0563.3

426.2

586.8

FY07 FY08

Net income impacted by BPI stake and adverse market environment(Eur million)

-27.4%

Specific items* in 2008:- BPI stake (-€232.6m)- Reduction of variable

remuneration accrued in 2007 and restructuring costs (+€7.6m)

Net income

* Net of taxes

-64.3%

1,170.01,020.9

FY07 FY08

Operating profit before provisions

+14.6%

(Excluding specific items)

1616


Resilient core revenues growth

(Eur million)

Core operating income: Net interest income + Dividends + Banking related commissions and other operating income

Excluding specific items

Core operating income(excluding financial market)

* Dividends: € 27.6 million

590.9605.7568.3 578.2560.7

4Q07 1Q08 2Q08 3Q08 4Q08

2,343.12,186.1

2007 2008

+7.2%+5.4%

*

1717


Strong cost control in an expansion year; qoqdemonstrates focus on efficiency

Excluding specific items

Staff

Depreciation

Administrative

Operating costs

+175

+1,467

Cost-to-income ratio

(Eur million)

925.6

642.6

112.8

884.4

627.4

114.9

2007 2008

+3.3%

1,681.0

34.9 26.327.8 28.4 30.3

216.9239.3230.3 239.1217.2

161.6146.9 169.2164.9181.7

4Q07 1Q08 2Q08 3Q08 4Q08

429.1 416.4433.8 403.5-1.8%

+2.4%

+4.6%

432.0

-4.0%1,626.7

58.6%60.3%-1.7pp

Number of branches*

1,8031,628

Number of employees 22,58921,122

* Net of closures

1818


45,355 51,682Mortgage

Consumer loans

Loans to companies

Double digit growth in volumes in both loans and on balance-sheet funds

Loans to customers *(gross)

* Excluding securitized loans not presented in the balance sheet and securities reclassified as credit** Includes: deposits, certificates of deposits and debt securities placed with customers

(Eur million)

Off BS customers’funds

Customers’ funds

On BS customers’funds **

14.58218.598

Dec07 Dec08

36,725 40,434

4,877

25,50328,538

4,645

Dec07 Dec08

+10.4%

66,873

63,953

+3.6%66,264

73,849

+13.9%

2,6253,126Securitized loans

+10.1%

+5.0%

+11.9%

1919


1,11

0,52

0,77

0,40

0,74

0,850,91

0,48

0,94

1,27

4Q07 1Q08 2Q08 3Q08 4Q08

Critical to ensure proactive credit risk management (in credit granting and recovery)

Gross impairment

charges as % of total loans

Impairment net of recoveries as % of total loans

(Million Euros)

Impairment charges as % of total loans(annualized)*

Prudent revaluation of potential risks due to depressed market environment

* Excluding loans placed with customers

2020


0,22

0,04

0,30

0,55 0,46 0,34

0,39

0,740,480,59

0,850,84

0,48

0,69

0,95

0,47

2001 2002 2003 2004 2005 2006 2007 2008

Critical to ensure proactive credit risk management (in credit granting and recovery)

Gross impairment

charges as % of total loans

Impairment net of recoveries as % of total loans

(Million Euros)

Impairment charges as % of total loans *

Prudent revaluation of potential risks due to depressed market environment

* Excluding loans placed with customers

2121


Evolution of Past Due ratio in Portugal.

2,52,6 2,6

2,5

2,3 2,3

2,1 2,1

1,92,0

2,1 2,1

1,92,0

1,92,0

1,92,0 2,0 2,0

1,7

2,02,1

2,3 2,3

1,4 1,4 1,4 1,4

1,2 1,21,1

1,0

0,80,7 0,7 0,7 0,7 0,7 0,7 0,7

0,6 0,7 0,7 0,80,7

0,7 0,8

1,0 1,0

2002

Dez

2003

Mar

2003

Jun

2003

Set

2003

Dez

2004

Mar

2004

Jun

2004

Set

2004

Dez

2005

Mar

2005

Jun

2005

Set

2005

Dez

2006

Mar

2006

Jun

2006

Set

2006

Dez

2007

Mar

2007

Jun

2007

Set

2007

Dez

2008

Mar

2008

Jun

2008

Set

2008

Dez

MarketMillennium bcp

Total Past Due ratioSource: Bank of Portugal and Millennium bcp

2222


An average family with a €100,000 mortgage and a spread of 1% will pay today €104 less than it paid at the peak in 2008, and taking into consideration the evolution of interest rates, is likely to be paying €199 less in July 2009.

€ 601

€ 497

€ 594

€ 402€ 419

0

100

200

300

400

500

600

700

Jan-

08

Apr-

08

Jul-

08

Oct

-08

Jan-

09

Apr-

09

Jul-

09

Simulation: 30 years loan of 100 thousand Euros with 1.00% spread – evolution of instalment

3 m Euribor =1.629%

-33%

There has been an instalment decrease

2323


0.0

1.0

2.0

3.0

4.0

5.0

6.0

Jan-

08

Feb-

08

Mar

-08

Apr-

08

May

-08

Jun-

08

Jul-

08

Aug-

08

Sep-

08

Oct

-08

Nov

-08

Dec-

08

Jan-

09

Feb-

09

Mar

-09

3 Months Euribor

BCE Ref. Rate

Rates came down380 bp in 6 months

Interest rates are at historic low levels

2424


Source: Moody s Global Soverigne – Impact of Global Crisis on EMU – March 2009

Portugal as negligible refinancing risk according to Moodys

2525


Liquidity positionWholesale funding

(Eur billion)

1.6

0.5

2.6

4.74.00.0

1Q09 2Q09 3Q09 4Q09 FY09 FY10

Maturity

Refinancing needs of long term debt§ Current highly liquid asset

portfolio allows to obtain additional €5bn from ECB

§ Total portfolio of ECB collateralexpected at year end 2009 of around €9bn

§ Already issued €1.5bn with State guarantee

§ State guaranty available of €2.5bn

2626


Pension Fund – prudence on changing actuarial assumptions

588

7651,568

572

+293

+797 +27 -402+112 -40

Dec07 Expected

return

Asset

devaluation

Non financial

losses

Chg in

discount rate

Chg mortality

table women

Amortization Dec08

Actuarial losses

Corridor

Outside corridor

Fully fundedEffective return of the fund: -14%

(Eur million)

Capital impact: 2008

Change in actuarial losses 827.4

Expected return of the fund (293.2)

Deferred for capital purposes 534.2

Annual amortization estimate for the next 4 years 133.5

Actuarial Assumptions 2007 2008

Increase in future compensation levels 3.25% 3.25%

Pensions increase rate 2.25% 2.25%

Projected rate of return of fund assets 5.50% 5.50%

Discount rate 5.25% 5.75%

Mortality tables

Men TV 73/77 - 1

year

TV 73/77 - 1

year

Women TV 88/90 TV 88/90 - 2

years

2727


Pension Fund discount rate in line with European Actuaries assumptions and below corporate yields

2828


Pension Fund structure

National

shares24%

European shares9%

International shares

2%Fixed rate

33%

Real Estate

12%

Alternative

Investments

5%

FRNS and Liquidity

15%

National

shares14% European shares

8%International

shares

1%

Fixed rate

21%Real Estate

13%

Alternative

Investments

4%

FRNS and Liquidity

39%

December 2007 December 2008

(million euros)

2929


7.1%

Core Tier 1 - Perspective

Core Tier 1

RWA** 61,687 66,976

3,8853,8854,364

2,752

Dec07 Sep08 Dec08 Dec08

67,426

Core Tier 1

Tier 1

4.3%

Total

5.5%

9.6%

6.5%

7.8%

11.2%

5.8%

10.5%

* According to the criteria of the Bank of Portugal, Core Tier 1 excludes the deduction related to financial stakes. Figures presented on a comparable basis ** RWA = Risk Weighted Assets*** Assuming a cap of 20% that will be in place for 2009

Solvency ratio

(Eur million)

Proforma with IRB Advanced

7.3%

8.6%

12.4%Estimated impact of the implementation

of IRB Advanced (Basel II)***:

Core Tier I: +156bpTier I: +148bpTotal: +195bp

53,131

*

3030


Basel II Project: Impact on Capital Ratio

Percentage; Euro millionAll Entities as of December 31st 2008

December-2008

Standardized

Approaches

December-2008

IRB, Int.Model,

Stand.(op.risk)

10% floor

December-2008

IRB, Int.Model,

Stand.(op.risk)

20% floor (2009)

Credit and Counterparty Risk 61.845 47.618 47.618

Market Risk 436 1.089 1.089

Operational Risk 5.143 4.424 4.424

Total 67.425 53.131 53.131

Basel I Proxy 66.340 66.340 66.340RWA reduction floor 10% 20%

RWA floor adjusted 67.425 59.706 53.131

Core Tier 1 3.885 3.885 3.885

Tier 1 (adjusted) 4.780 4.546 4.546

Total Capital (adjusted) 7.057 6.589 6.589

Total Ratio 10,5% 11,0% 12,4%Core Tier 1 Ratio 5,8% 6,5% 7,3%Tier 1 Ratio 7,1% 7,6% 8,6%

3131


Basel II Project: Major impacts

Euro millionAll Entities as of December 31st 2008

Working Approach:IRB for Portugal and Retail segment in Poland, Standardised for all other entitiesStandardised for Banks, Sovereigns and Equity exposuresNon-Classified customers treated as Standardised

RWA STD RWA IRB/STD Difference

Portugal 45.275 32.630 -12.645 Corporate -1.586Retail (excluding SMEs) -4.290

SMEs -6.757Other -12

Poland 6.028 4.840 -1.188 Retail (excluding SMEs) -1.090SMEs -98

Greece 3.313 3.313 0Other Entities 2.363 2.363 0

Other Assets 4.866 4.472 -394

Credit and counterparty risk 61.845 47.618 -14.227Market risk 436 1.089 653

Operational risk 5.143 4.424 -719

Total Group 67.425 53.131 -14.294

Detail

3232


Conservative PD and LGD assumptions

PD LGD

PORTUGAL 2,8% 27,2%

Corporate 1,6% 36,0%

Other Retail 3,5% 32,6%

Credit cards 4,6% 40,0%

Residential Retail 3,4% 16,3%

SME Corporate 2,9% 32,0%

SME Retail 3,5% 31,3%

POLAND 2,3% 23,3%

Other Retail 2,4% 35,0%

Credit cards 3,4% 40,3%

Residential Retail 2,0% 14,8%

SME Retail 2,4% 33,5%

3333


Mortgage loans instalment sensitivity to FX and interest rate changes

* As of 31st January 2009

** As of 11 February 2009

The impact from the recent sharp decrease of the CHF interest rates more than compensated the PLN depreciation

ILLUSTRATIVE EXAMPLE

700

800

900

1,000

1,100

1,200

J-08 M-08 M-08 J-08 S-08 N-08 J-09

Evolution of Monthly Instalment in PLN

Initial Loan Amont (PLN) 200,000

Initial Loan Amont (CHF) 87,336

Date of Dirbursement (PLN) Jan-08

Tenor (months) 360Spread 1.30%

Initial 2.76%Current* 0.67%

Initial 2.3Current** 2.8

Market Rate (Libor 90d)

Exchange Rate

Initial 924.5

Current 919.3Monthly Installment (PLN)

Evolution of Exchange Rate and Reference Rate

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Jan08 Mar08 May08 Jul08 Sep08 Nov08 Jan09

1.0

1.5

2.0

2.5

3.0

Libor CHF 90dPLN/CHF

Highest instalment in Dec 08Illustrative

3434


Re-affirmed credit ratings by all rating agencies

Short term Long term Outlook

Moody's P-1 Aa3 Stable

Standard and Poor's A-1 A

Fitch Ratings F1 A+ Stable

Negative

3535


A strong position on critical performance vectors

§ Portugal: 2.6 million active clients; largest branch network (918)§ Poland: ~7% market share in deposits and branches (4th largest network);

38% spontaneous awareness in 2008 (ranking 4th in awareness)§ Mozambique: market leader with 40% market share; national

distribution network with >100 branches§ Greece: 4% market share in branches; 15% client growth in 2008

(reaching ~500 thousand); 78% of clients highly satisfied

§ Capture of 174 thousand new retail clients in Portugal in 2008 § Client satisfaction index recovered and reached the highest level in the

past 3 years

§ Reinforcement of Tier 1 from 5.5% in 2007 to 7.1% in 2008. With adoption of IRB advanced, Tier 1 of 8.6%

§ Increase of on balance-sheet customer funds by ~ €3 billion§ Deceleration of commercial gap and wholesale funding

Strong, resilient Retail

Reinforced brand and identity

Reinforced capital and liquidity

3636


Soundness and Trust

Clients and Performance

Sustainability

The Bank has a management agenda with clear priorities for 2009

1. Rigorous risk management

2. Prudent liquidity and capital management

3. Deep commitment to clients

4. Cost reduction and organizational streamlining

5. Adjustment of business models and materialization of growth opportunities

6. Talent management and employee motivation

Reinforced Commitment

Sustainable value creation

3737


Five key principles for a new Program “Towards the Future”

Bank with long-lasting relationships – focus on relationships (more than on products and transactions), increase proximity and frequent contact with clients, long term commitment

“Commitment to clients”

Bank with strong risk management and capital optimization capabilities– effective use of capital and liquidity, proactive risk perspective, strengthening of credit decision processes, rigorous operational risk control

“Effective risk management”

Leaner, simpler and more cost-effective bank – in the organizational structure, internal processes, relationship with clients, business lines, and even product and services offer

“Simplicity and efficiency”

Bank with options – portfolio of operations where the Bank can “make a difference” and add value, which contribute to growth, risk diversification and value creation for the Group in the long term

“Diversified international

presence”

Bank focused on its capabilities – bank focused on its distinctive capabilities and competitive advantages: retail/commercial banking, branch network based distribution, employees experience and know-howacross geographies

“Focus on capabilities”

3838


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 4.694.600.000

Investor Relations Division:

Pedro Esperança Martins, Head of Investor Relations

Francisco Pulido Valente

Tl: +351 21 1131 085

Email: [email protected]

3939


Appendices

4040


Portuguese Banking System Market shares

Activity in Portugal market shares of the five biggest banks, except CGD and Santander that includes all activities. Analysis excluding specific items .

Net Interest Income (NII) Commissions

25.7% 26.0%

23.2% 22.7% 22.1% 21.9% 21.9% 22.3% 22.3% 22.3%

33.7% 33.0%

36.9% 37.7%38.7% 38.6% 39.1% 39.2% 39.2% 38.9%

15.3% 15.3% 15.7% 15.7% 15.7% 15.8% 15.5% 15.2% 15.2% 15.6%

10.9% 11.0% 10.2% 10.1% 9.9% 9.9% 9.2% 9.2% 9.2% 9.2%

14.1%14.1%14.1%14.3%13.8%13.7%13.7%14.0%14.8%14.5%

Dec 04 Dec 05 Dec 06 Jun 07 Set 07 Dec 07 Mar 08 Jun 08 Set 08 Dec 08

CGD

BCP

Totta

BES

BPI

28.9% 28.8%28.0% 27.6%

26.9% 26.7%26.0%

16.8% 17.1%18.2% 18.1% 18.2%

18.8%

26.6%25.5%

23.1%23.7%

24.3% 23.8%

13.8%13.2% 13.4% 13.6% 13.5%

14.2%13.7%

12.7% 12.5% 12.5%

26.1%25.8%

24.3%

18.2%

20.4%20.2%

19.7%

24.3%23.8%24.1%

25.2%

13.9%

15.4%

17.3% 17.0% 17.0% 16.5%

18.7%

17.7%17.5%

16.8%


CGD

BCP

S.Totta

BES

BPI

4141


Portuguese Banking System Operating profit and costs (Portugal) – market shares


24.7% 24.2%23.5% 23.4%

22.5% 23.3% 23.3% 23.4%

28.5% 28.0%

31.2% 31.9%32.7% 32.7%

33.4% 33.8% 34.0% 33.7%

18.8% 18.5% 17.9% 18.1% 18.2% 18.2% 18.1% 17.6% 17.6% 18.0%

11.8% 11.6% 11.2% 11.1% 11.0% 11.2%10.4% 10.2% 10.1% 10.1%

26.9%26.7%

14.3% 15.0% 15.0% 14.7% 14.7% 14.6%15.5% 15.1% 15.0% 14.8%


CGD

BCP

S.Totta

BES

BPI

NII + Commissions NII + Commissions + Other Income

25.4% 24.8%24.1% 24.1%

23.3% 23.8% 23.5% 23.3%

28.6% 28.0%

31.9% 32.4%33.3% 33.2% 33.7% 34.2%

34.9% 35.0%

17.9% 18.0%17.3% 17.7% 17.7% 17.7% 17.5% 17.1% 17.0% 17.4%

11.2% 11.3% 10.9% 10.7% 10.6% 10.9% 10.4% 10.3% 10.0% 10.0%

28.5% 27.9%

14.4%14.6%14.7%15.0%14.2%14.2%14.3%14.5%14.8%13.8%


CGD

BCP

S.Totta

BES

BPI

4242


Portuguese Banking System Operating profit and costs (Portugal) – market shares


Operating Profit Operating Costs

23.2%21.2% 21.5% 21.6% 21.0% 21.5% 21.2%

22.2%

31.0%33.1%

36.2% 36.5% 36.3% 35.5% 35.4% 35.6%

38.6%

17.8% 17.6% 17.0% 16.5% 16.2%

11.0% 10.5% 10.7% 10.9% 10.8%11.7% 12.0%

11.2% 10.3%9.5%

25.6%27.1%

38.2%

18.0%17.4%18.1%18.5%18.9%

13.1% 13.3% 13.0%12.4% 12.9% 13.1%

14.1% 13.7% 13.7% 13.6%


CGD

BCP

S.Totta

BES

BPI

24.4%23.4% 23.6% 23.4% 22.8% 22.7% 22.4% 21.9%

32.6%

36.0% 36.8% 36.9% 36.6% 36.9% 36.0% 36.3% 36.7% 38.1%

16.0% 15.8% 16.2% 16.1% 16.3% 16.1% 16.8% 17.0% 17.2% 16.9%

10.7% 10.8% 11.5% 12.2% 12.3% 12.4%13.2% 12.9% 12.6% 12.1%

29.4%

26.6%

11.0%11.1%11.1%11.3%11.2%11.2%11.3%11.0%10.9%11.3%


CGD*

BCP

S.Totta

BES

BPI

4343


RWA Calculation – Standardized Approach

Percentage; Euro millionAll Entities as of December 31st 2008 Other Entities BCP Group

RWA Portugal Poland Greece Others BCP

Total corporate (not including receivables); of which: 10.515 1.853 487 875 13.731

Corporate (not including SMEs, specialised lending and receivables) 8.543 1.611 479 875 11.510

Specialised lending (SL) 1.972 242 8 0 2.221

Sovereign 30 29 0 532 591

Bank 681 346 19 60 1.107

Retail (not including SMEs); of which: 13.105 2.948 1.331 790 18.175

Residential mortgages 9.081 1.518 637 504 11.740

Other retail 3.623 1.281 587 281 5.772

Qualifying revolving retail exposures 402 149 107 5 663

SMEs; of which: 19.104 781 1.393 105 21.382

Treated as corporate 15.681 209 1.139 68 17.097

Treated as retail 3.423 571 253 37 4.285

Purchased receivables (PR) 1.310 71 83 1.464

with recourse 676 71 62 809

without recourse 634 0 21 655

Securitization 530 530

Other assets 4.866

Total RWA 45.275 6.028 3.313 2.363 61.845

436

5.143

67.425RWA DEC-2008

EU entities

Market Risk

Operational risk

4444


RWA Calculation – IRB approach

Percentage; Euro millionAll Entities as of December 31st 2008

Other Entities BCP Group

RWA Greece OthersIRB STD IRB STD STD STD IRB STD

Total corporate (not including receivables); of which: 8.432 836 0 1.853 487 875 8.432 4.052 12.484

Corporate (not including SMEs, specialised lending and receivables) 6.263 836 0 1.611 479 875 6.263 3.803 10.066Specialised lending (SL) 2.168 0 0 242 8 0 2.168 249 2.417

Sovereign 0 30 0 29 0 532 0 591 591Bank 0 681 0 346 19 60 0 1.107 1.107Retail (not including SMEs); of which: 8.315 500 1.602 256 1.331 790 9.917 2.877 12.795

Residential mortgages 6.472 376 877 71 637 504 7.348 1.588 8.936Other retail 1.663 105 651 178 587 281 2.314 1.151 3.465

Qualifying revolving retail exposures 181 20 74 7 107 5 255 138 393SMEs; of which: 11.871 476 115 570 1.393 105 11.986 2.543 14.529

Treated as corporate 10.259 354 0 209 1.139 68 10.259 1.771 12.029Treated as retail 1.612 122 115 360 253 37 1.727 773 2.500

Purchased receivables (PR) 968 3 2 67 83 970 153 1.122

with recourse 334 3 2 67 62 0 336 132 468without recourse 634 0 0 0 21 0 634 21 655

Securitization 518 0 0 0 0 0 518 0 518Other assets 956 3.516 4.472

Total RWA 30.104 2.526 1.719 3.121 3.313 2.363 32.778 14.839 47.618

TOTAL 3.313 2.363 47.618

1.089

4.424

53.131RWA DEC-2008

EU entities

Market Risk

Operational risk

32.630 4.840

Portugal

53.131

Poland BCP

47.618

1.089

4.424

4545


Alternatives for increasing Banco Comercial Português’sown funds

1. The levels of own funds reported as of December 31, 2008 (Core Tier 1 of 5,8%, Tier 1 of 7,1% and a Total Solvency ratio of 10,5%) are in line with the previously-announced goal of operating with a Core Tier 1 of around 6%. It should be noted, in this context, that the favourable impact on Core Tier 1, and the other indicators, resulting from the capital increase of Banco Millennium Angola, which has been approved and which will boost Core Tier 1 by 0,12%, is not reflected in the values provided for December 2008, nor are the favourable impacts that are expected to occur in 2009, resulting from the application of the IRB Advanced methodology, under Basel II, with a favourable impact on Core Tier 1 of around 1.5%.

2. Given the context outlined in point 1, the Bank is considering, in addition to the steps that will result from the execution of the previously-announced strategy (which includes the refocusing of the portfolio of international operations, which will also yield favourable impacts on solvency ratios), on a supplementary basis, and to the extent recommended from a perspective of prudent capital management, to issue non-dilutive financial instruments (that is, excluding common stock and instruments that are convertible into common stock) with characteristics that allow them to be included in the capital base.

By way of example, these instruments include subordinated perpetual bonds, such as those issued recently by various European banks.

During the press conference held on February 17, 2009, and for illustrative purposes, it was mentioned that, as of December 31, 2008, and considering the limit set by the Bank of Portugal for hybrid instruments eligible for own funds, the Bank could issue up to a maximum of 1,200 million euros, though it is to be expected that the amount that will actually be issued will be below the maximum mentioned. The amount value will depend on the expected impact and the timing of the other measures mentioned.

4646


Qualified Shareholdings according to shareholders information

Share capital : 4,694,600,000 shares

Sonangol 469,000,000 9.99% Eureko Group (1) 331,956,248 7.07% Grupo Teixeira Duarte (2) 329,755,255 7.02% Berardo Group (3) 292,141,478 6.22% Banco Sabadell 208,177,676 4.43% Caixa Geral Depósitos Group 177,607,866 3.78% Grupo EDP (4) 152,075,727 3.24% Sogema 125,766,734 2.68% Privado Financeiras 109,461,901 2.33% Stanley Ho Group 106,254,934 2.26% SFGP - Investimentos e Participações 102,062,855 2.17%

Total 2,404,260,674 51.21%

Number of Shares % Capital

(1) Although Eureko has entered into a series of derivative transactions with JP Morgan regarding 135,238,429 BCP shares, the Portuguese Securities Market Commission (CMVM) considers that the voting rights inherent to those shares should be attributed to Eureko, thus increasing its participation to 9.95% of total voting rights. (2) Teixeira Duarte- Sociedade Gestora de Participações Sociais , S.A. informed, through an announcement dated December 12, that its subsidiary Teixeira Duarte – Gestão de Participações e Investimentos Imobiliários , S.A. has agreed to acquire 102,483,872 BCP shares from C+P.A. - Cimentos e Produtos Associados , S.A., and therefore the voting rights related to those shares should be attributable to the former (3) The shares and voting rights held by Fundação José Berardo and Metalgest are subject to reciprocal imputation. Therefore, Metalgest stake, 64,106,512 shares, was included (4) EDP Pension Fund held 52,805,044 BCP shares, corresponding to 1.125% of the bank share capital

4747


Consolidated Balance SheetAt 31 December, 2008 and 2007

2008 2007

Assets

Cash and deposits at central banks 2.064.407 1.958.239 Loans and advances to credit institutions Repayable on demand 1.048.348 820.699 Other loans and advances 2.892.345 6.482.038 Loans and advances to customers 75.165.014 65.650.449 Financial assets held for trading 3.903.267 3.084.892 Financial assets available for sale 1.714.178 4.418.534 Assets with repurchase agreement 14.754 8.016 Hedging derivatives 117.305 131.069 Financial assets held to maturity 1.101.844 - Investments in associated companies 343.934 316.399 Non current assets held for sale 19.558 24.180 Property and equipment 745.818 699.094 Goodwill and intangible assets 540.228 536.533 Current tax assets 18.127 29.913 Deferred tax assets 586.952 650.636 Other assets 4.147.645 3.355.470

94.423.724 88.166.161

Liabilities

Amounts owed to central banks 3.342.301 784.347 Amounts owed to others credit institutions 5.997.066 8.648.135 Amounts owed to customers 44.907.168 39.246.611 Debt securities 20.515.566 26.798.490 Financial liabilities held for trading 2.138.815 1.304.265 Other financial liabilities held for trading at fair value through results 6.714.323 1.755.047 Hedging derivatives 350.960 116.768 Provisions for liabilities and charges 221.836 246.949 Subordinated debt 2.598.660 2.925.128 Current income tax liabilities 4.826 41.363 Deferred income tax liabilities 336 46 Other liabilities 1.383.633 1.399.757

Total Liabilities 88.175.490 83.266.906

Equity

Share capital 4.694.600 3.611.330 Treasury stock (58.631) (58.436) Share premium 183.368 881.707 Preference shares 1.000.000 1.000.000 Fair value reserves 214.593 218.498 Reserves and retained earnings (274.622) (1.598.704) Profit for the period attributable to Shareholders 201.182 563.287

Total Equity attributable to Shareholders of the Bank 5.960.490 4.617.682

(Thousands of Euros)

4848


Consolidated Statement of IncomeAt 31 December, 2008 and 2007

2008 2007

Interest income 5.269.597 4.332.187 Interest expense (3.548.549) (2.794.884)

Net interest income 1.721.048 1.537.303

Dividends from equity instruments 36.816 27.921 Net fees and commission income 740.417 664.583 Net gains / losses arising from trading and hedging activities 277.631 199.138 Net gains / losses arising from available for sale financial assets (259.532) 193.211 Other operating income 57.580 97.861

2.573.960 2.720.017

Other net income from non banking activity 17.390 12.925

Total operating income 2.591.350 2.732.942

Staff costs 915.307 1.006.227 Other administrative costs 642.641 627.452 Depreciation 112.843 114.896

Operating costs 1.670.791 1.748.575

920.559 984.367

Loans impairment (544.699) (260.249) Other assets impairment (60.024) (45.754) Other provisions 15.500 (49.095)

Operating profit 331.336 629.269

Share of profit of associates under the equity method 19.080 51.215 Gains from the sale of subsidiaries and other assets (8.407) 7.732

Profit before income tax 342.009 688.216 Income tax Current (44.001) (73.045) Deferred (39.997) 3.475

Profit after income tax 258.011 618.646

Attributable to: Shareholders of the Bank 201.182 563.287 Minority interests 56.829 55.359

Profit for the period 258.011 618.646

(Thousands of Euros)

4949


Consolidated Statement of Income (Quarterly Evolution)

At 31 December, 2008 and 2007

∆

(*) In 2007, Q2 : general tender offer over BPI commissions (88.7 - 23.2);Q3 : restructuring costs (12.3 - 3.3);Q4 : merger project with BPI commissions (14.5 - 3.8), restructuring costs (109.5 - 29.0), gains from the sale of EDP and

Sabadell (290.2 - 17.6), BPI and other impairment (94.0 - 14.3), asset revaluations (13.4 - 3.5) and contingencies (47.5 - 6.6).In 2008, Q1 : BPI impairment (151.3 - 20.0) and 2007 variable annual remuneration reversal (18.0 - 4.8);

Q2 : BPI impairment (50.9 - 6.7); Q3 : BPI impairment (44.7 - 5.9);Q4 : BPI impairment (21.1 - 2.8) and restructuring costs (7.8 - 2.1).

(Millions of euros) ? %

08 / 07

Net interest income 388 412 430 435 444 1,721 1,537 12%

Dividends from equity instruments 5 2 28 - 0 8 37 28 32%Net fees and commission income 199 174 194 185 187 740 768 - 4%Other operating income 35 30 18 16 2 67 119 - 44%Net inc. from trading activity 27 36 52 50 148 286 196 46%

Operating income 654 654 721 685 790 2,851 2,648 8%

Staff costs 217 230 239 239 217 926 884 5%Other administrative costs 182 147 165 162 169 643 627 2%Depreciation 35 26 28 28 30 113 115 - 2%

Operating costs 434 404 432 429 416 1,681 1,627 3%

Operating profit before provisions 220 251 289 256 374 1,170 1,021 15%

Equity accounted earnings 9 14 14 7 - 17 19 51 - 63%Loans impairment (net of recoveries) 87 70 136 135 204 545 260 109%Other provisions 3 3 - 9 20 31 45 34 31%

Profit before income tax 139 192 176 109 122 600 778 - 23%

Income tax 16 43 29 12 33 117 136 - 14%Minority interests 14 17 16 18 6 57 55 3%

Net income before spec. items 108 133 131 80 83 426 587 - 27%

Specific items (*) 51 - 118 - 44 - 39 - 24 - 225 - 24 >500%Net income 160 15 87 41 59 201 563 - 64%

Year-to-dateQuarterly

Q4 07 Dec 07Dec 08Q4 08Q3 08Q2 08Q1 08

5050


Consolidated Statement of Income (National and International Operations)

At 31 December, 2008 and 2007

(EUR Thousands, except percentages)

Dec08 Dec07 ? % Dec08 Dec07 ? % Dec08 Dec07 ? % Dec08 Dec07 ? % Dec08 Dec07 ? % Dec08 Dec07 ? % Dec08 Dec07 ? %

Interest income 5,270 4,332 21.6% 3,952 3,431 15.2% 1,318 901 46.2% 711 425 67.1% 100 86 17.3% 377 271 39.3% 130 120 8.3%Interest expense 3,549 2,795 27.0% 2,757 2,327 18.5% 792 468 69.3% 431 222 94.4% 22 18 20.1% 251 154 62.9% 88 73 19.4%Net interest income 1,721 1,537 12.0% 1,195 1,104 8.3% 526 434 21.3% 280 204 37.4% 78 67 16.5% 126 116 8.1% 42 46 -9.4%

Dividends from equity instruments 37 28 31.9% 29 27 6.5% 8 0 >200% 7 0 >200% 0 0 >200% 0 0 111.1% 0 0 31.2%Intermediation margin 1,758 1,565 12.3% 1,224 1,131 8.2% 533 434 22.9% 287 204 40.7% 78 67 16.5% 126 117 8.2% 42 46 -9.4%

Net fees and commission income 740 768 -3.6% 535 563 -5.0% 206 205 0.3% 135 143 -6.1% 22 19 20.7% 32 28 13.9% 16 15 10.3%Other operating income 67 119 -43.8% 54 96 -44.0% 13 23 -43.3% 2 15 -86.0% 5 3 43.6% 2 5 -64.4% 4 0 >200%Basic revenue 2,565 2,452 4.6% 1,813 1,790 1.3% 752 662 13.6% 424 362 17.1% 106 89 18.4% 160 150 6.8% 63 61 2.4%

Net inc. from trading activity 286 196 45.9% 139 80 74.1% 148 117 26.6% 99 87 13.7% 14 11 28.4% 8 7 6.1% 26 11 146.2%Operating income 2,851 2,648 7.7% 1,951 1,869 4.4% 900 779 15.5% 523 449 16.4% 120 100 19.5% 168 157 6.8% 89 72 23.6%

Staff costs 926 884 4.6% 614 623 -1.5% 311 261 19.2% 174 142 22.2% 26 22 14.8% 62 54 15.5% 50 43 16.6%Other administrative costs 643 627 2.4% 377 407 -7.4% 265 220 20.6% 142 112 26.1% 22 19 13.4% 55 51 8.1% 47 38 24.5%Depreciation 113 115 -1.8% 67 69 -3.4% 46 45 0.7% 20 23 -12.6% 7 7 -7.2% 9 8 17.3% 10 7 32.3%Operating costs 1,681 1,627 3.3% 1,058 1,100 -3.8% 623 527 18.2% 335 277 20.9% 54 49 11.0% 126 112 12.3% 107 88 21.3%

Operating profit bef. imp. 1,170 1,021 14.6% 893 769 16.1% 277 252 10.0% 188 172 9.3% 66 51 27.7% 42 45 -7.0% -18 -16 11.3%

Equity accounted earnings 19 51 -62.7% 19 51 -62.7% 0 0 0 0 0 0 0 0 0 0

545 260 109.3% 470 220 113.5% 75 40 86.3% 37 17 125.1% 1 6 -75.7% 16 15 12.5% 19 3 >200%

Other provisions 45 34 31.0% 41 33 25.3% 3 1 199.1% 2 1 54.7% 1 0 >200% 0 0 -15.0% 0 0 >200%Profit before income tax 600 778 -22.9% 401 567 -29.3% 199 211 -5.5% 149 154 -3.5% 63 46 38.4% 25 30 -16.5% -38 -19 98.9%

Income tax 117 136 -14.0% 70 94 -25.4% 47 42 11.6% 31 32 -4.8% 11 4 189.9% 10 8 26.8% -5 -2 149.8%Minority interests 57 55 2.7% -2 -1 69.4% 58 56 3.7% 0 0 1 0 11.3% 0 0 16.3% 58 56 3.7%Net income before spec. items 426 587 -27.4% 332 474 -29.9% 94 112 -16.5% 118 122 -3.2% 52 41 24.6% 15 22 -31.4% -91 -73 24.5%

Specific items -225 -24 >200% -225 -24 >200% 0 0 0.0% 0 0 0.0% 0 0 0.0% 0 0 0.0% 0 0 0.0%Net income 201 563 -64.3% 107 451 -76.2% 94 112 -16.5% 118 122 -3.2% 52 41 24.6% 15 22 -31.4% -91 -73 24.5%

Loans impairment (net of recoveries)

Millennium bim (Moz.)

International operations

Group Portugal Total Bank Millennium (Poland) Millennium Bank (Greece) Other int. operations

5151


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 4.694.600.000

Investor Relations Division:

Pedro Esperança Martins, Head of Investor Relations

Francisco Pulido Valente

Tl: +351 21 1131 085

Email: [email protected]

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