1st Quarter 2019 Unaudited financial information Investor Relations - PowerPoint PPT Presentation

Consolidated Results 1st Quarter 2019 Unaudited financial information Investor Relations 02/05/2019

Agenda 1 Highlights 2 Results 3 Balance Sheet 4 Asset Quality 5 Liquidity 6 Capital 2

Highlights 3

Highlights CGD strengthens profitability capital and asset quality, returning to dividend payment Consolidated net income reaches 126 M € (68 M € in March 2018), resulting in a ROE of 6.6%, +2.8 p.p. (1) Core operating income increases 11.5% over 1Q 2018 Fully implemented CET 1 ratio reaches 15.0%, Tier 1 16.1% and Total ratio 17.4% ( before dividend). These ratios are evidence of CGD’s robust capital position Continued improvement in asset quality: reduction of NPL ratio to 7.8% and coverage of 62,8% CGD returns to paying dividends with a proposal of 200 M € to be submitted to the General Meeting already authorized by the supervisory authorities (1) Core operating income = Interest margin + Net Commissions - Operating costs. 4

Highlights Strategic Plan – 2019 execution consolidates the track to 2020 Strategic Plan Targets > 9% 6.6% 2019 Management Return on Equity Targets (1) (ROE) > 7% 2019-03 Execution 2019-03 Execution Target 2020 48% (2) < 43% 2019 Management Recurrent Targets Cost-to-Income < 50% 2019-03 Execution 2019-03 Execution Target 2020 7.8% 2019 Management 7.0% NPL Ratio Targets < 7% 2019-03 Execution 2019-03 Execution Target 2020 15.0% 2019 Management 14.0% CET1 Targets Fully loaded > 14% 2019-03 Execution Target 2020 2019-03 Execution (1) Current activity ROE = (net income + non-recurring costs + non-controlling interests) / Shareholders ' equity (average of 13 monthly observations, annualized; 5 (2) (2) Domestic activity.

Highlights Digital Banking: Building the Future CGD, leader with a 45% market share Caixadirecta Logins M Direct 36% App logins Active customers already reach CGD PT More than 2 million users globally 64% 2.08 2.03 1.99 1.94 1.92 1.86 App 1.84 1.80 1.78 64% 46% (jun18) 0.47 0.45 0.44 0.42 0.43 0.41 0.40 0.39 0.39 Market Share Other Leader with more 1.58 1.61 55% 1.55 1.52 1.49 than twice the 1.44 1.45 1.41 1.39 number of users of 2 nd placed bank* Portugal CGD 45% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 CGD Portugal Other (CGD Group) Total * According to Basef Internet Banking study (2018 average) by Marktest. 6

Highlights Leadership and Distinctions Leader in main client and product segments Prizes and distinctions The most valuable Portuguese bank Customer deposits 24.9% brand Individuals deposits 28.9% Emigrant deposits 49.7% Caixa Platina is the best Premium card in 2019 (by Compara.Já.pt) Loans and advances to customers 19.2% Individuals loans 21.0% Mortgage loans 24.2% General government loans 27.4% Caixa BI CGD Euronext Lisbon Nº 1 1 st in Portugal Unit trust Investment funds 34.3% IPO & Seasoned 45 th in Europe Financial insurance 32.0% Equity Offer House 154 th Worldwide Retirement savings plans 32.8% 2019 Wealth management 38.6% (1) (1) Minimum service accounts 44.2% Debit cards Caixagest 26.8% Best Global and Bond Market Shares Fund Manager in February 2019 Portugal 2019 (1) December 2018. 7

Highlights Corporate business Individuals and Corporates Outstanding position in the placement of SPGM, PME Investment, IFD and supranational lines (EIB and EIF) Individuals and households 2nd place in Capitalizar 2018, € 116M 1 , MS*= 19% • • 58% increase in new mortgage loans, € 165 1st place in Capitalizar Mais, € 81M 1 , MS*= 23% • million over Mar18 1st place in Protocolos SGM € 46M 2 , MS*= 21% • 449 Caixa EIB 2018, € 178M 3 – depleted 58 % • 283 Caixa Invest Inovação (FEI), € 75M 3 • 2018-03 2019-03 New commercial offer for corporates • Credit line to support Tourism development • 1.6 million Contas Caixa accounts , 64,000 • more than in dec 2018 SI Inovação Lines (IT inovation) • 301 thousand remote banking clientes • Launch of FLEXCASH ( digital confirming) ; • Customer segmentation model: Caixa Platinum, • Forfait extended to documentary credits (EUR and USD); Caixa Azul and Mass Market extended to remote • Fixed rate MLT loans and leasing offer (new terms: up to 20 years) customer management servisse • Roll out of export credit insurance products (CGD-COSEC) • Launch of a line of credit with a mutual guarantee • Launch of Caixa Business and Caixa Business+ accounts for students in higher education In 1Q 2019, 3 “Fora da Caixa ” conferences were held involving Social support: circa 1,152 CGD customers and 50 thousand streaming views. • Support for cyclone Idai victims. With these events a cycle of 26 conferences was closed over 2 years. 1 Cumulative production since the beginning of each line; 2 Production in 2019 (until Feb, SGM); Supranationals EIB and EIF 28-03-2019 (DSI); 8

Highlights Macro-economic and market context • Maintenance of interest rates at minimum levels with expectations of their maintenance at negative levels for an extended period; • Long-term rates fall, reducing the profitability of financial assets and pressing down credit spreads; • Prospects of global economic slowdown , particularly in the euro zone (IMF, World Bank); • Political and geostrategic risks (Brexit, trade war, international sanctions, oil price evolution); • Introduction of new regulatory requirements (MREL); • Continued deleveraging of economic agents in Portugal with impact on credit stocks; • Need for further reduction of NPL stock; 9

Highlights Non-recurring events in 1st quarter accounts • Accounting for all regulatory costs for 2019 (including special contribution to the banking sector with negative impact of EUR 60 million on net income ; • Positive impact of EUR 36 million in net income, resulting from a capital gain of EUR 50 million on the sale of property.; • Reversal of EUR 55 million in provisions for staff reduction programs, registered at the end of 2017, with an equivalent amount of staff costs. No impact on net income ; • Without these effects, the result (recurrent) for the period would be EUR 149 million , higher than reported; 10

Results 11

Results 1 st Quarter 2019 confirms progress in strengthening CGD’s profitability M € 496 2 . 8 p.p 126 52 6.6% -171 -348 3.8% -1.860 2014 2015 2016 2017 2018 2019-03 2018-03 2019-03 ROE Consolidated Net Income 12

Results Quarterly Net Income confirms progress of CGD’s profitability ... + 85% M € 85% 175 126 126 126 126 99 68 68 3 -11 (*) (*) 2018-03 2019-03 -39 Net Income (*) (*) (*) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q excluding capital gains 55% from real estate sales 2018 2019 2017 Quarterly Net Income (*) Includes regulatory costs for the entire year 13

Results …supported by the favourable evolution of Net Core Operating Income before Impairments M € 11.5% 200 190 167 126 126 113 113 1Q 2Q 3Q 4Q 1Q 2018-03 2019-03 2018 2019 Net Core Operating Income Quarterly Net Core Operating Income before Impairments (1) (2) before Impairments (1) (2) (1) Net Core Operating Income before Impairments = Net Interest Income + Net Fees and Commissions - Operating Costs; ( 2) 2018 accounts have been restated, considering Banco Comercial do Atlântico (BCA) as a non-current asset held for sale. 14

Results Net Interest Income affected by low interest rate environment M € CGD Portugal 2.8% Consolidated Change Year on Year 332 1Q2019 vs 1Q2018 313 306 303 300 291 292 287 283 191 183 184 185 178 179 175 172 172 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2019 2017 2018 Quarterly Net Interest Income (1) (1) 2018 accounts have been restated, considering Banco Comercial do Atlântico (BCA) as a non-current asset held for sale. 15

Results Net Interest Margin in retail rises despite deleveraging and interest rate environment … M € Consolidated Activity – Retail Net Interest Margin (%) Domestic Activity – Retail Net Interest Margin (%) 1.76% 1.95% 1.55% 1.64% 300 291 283 197 186 172 1Q 2017 1Q 2018 1Q 2019 1Q 2017 1Q 2018 1Q 2019 Total Net Interest Income Total Net Interest Income Domestic Activity Consolidated Activity 16

Results …and Net Fees and Commissions in line with the Strategic Plan M € 7% 5% Domestic Activity Consolidated Change Year on Year 1Q2019 vs 1Q2018 136 132 127 126 123 122 121 120 120 116 113 115 115 109 111 114 115 111 106 95 89 2018-03 2019-03 2019 2017 2015 2016 2018 Net Fees and Commissions (Domestic Activity and Consolidated) 17

Results Lower Operating Costs at consolidated level… M € 2018-03 2019-03 12% 7% 50% 5% 293 278 203 189 58.5* 55.9* 76 67 22 15 Employee Other administrative Depreciation Total costs expenses and amortisation Operating Costs – Consolidated Activity * Non recurrent costs 18

Results Cost-to- Income continues its downwards path… % 58% 66% 52% 58% 55% 48% 2017-03 2018-03 2019-03 2017-03 2018-03 2019-03 Cost-to-Income (1)(2) Cost-to-Core Income (2)(3) (Consolidated) (Consolidated) (1) Ratio defined by the Bank of Portugal Instruction 6/2018 [Operating Costs / (Total Operating Income + Income From Associated Companies)]; (2) Excluding non-recurrent costs; (3) Operating Costs / (Net Interest Income + Net Fees and Commissions); 2018 accounts have been restated, considering Banco Comercial do Atlântico (BCA) as a non-current asset held for sale. 19