Presentation Consolidated Results 1 st Half 2017 28 th July 2017 Unaudited financial information Investor Relations Office
Consolidated Results – 1 st Half 2017 Presentation (*) Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital (*) The June 2016 values have been restated, considering Mercantile Bank Holdings, Ltd. as a non-current asset held for sale. Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 2
Consolidated Results – 1 st Half 2017 Presentation Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 3
Highlights 1 st Half 2017 Highlights 1 Capital Ratios (Phased-in): Recapitalisation Consolidation of capital CET1: 12.7% position with a 4,444 M € Plan Conclusion Tier 1: 13.7% reinforcement… Total: 14.6% 2 Evolution 1H 2017 vs. 1H 2016: … provides a positive Efficiency and Net Interest Income: +18% starting point to implement Profitability Recurrent Operating Costs: -5% the Strategic Plan… Total Operating Income: +57% 3 NPE and NPL Evolution vs. Dec. 2016: … consistent performance NPE: 10.7% (-1.4 pp) NPL: 13.6% (-2.2 pp) Asset Quality reduces non-productive NPE Coverage: 52.1% assets… NPL Coverage: 52.1% Cost of Credit Risk: 0.16% 4 Deposits: 79% of Liabilities … with a wide base of Pool of available Collateral: 12 B € Liquidity LCR: 222% available funding. Loans-To-Deposits: 87% Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 4
Consolidated Results – 1 st Half 2017 Presentation Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 5
Results Improving profitability… M € 117 303 173 -50 -205 -219 2016-06 2017-06 2016-06 2017-06 2016-06 2017-06 Net Operating Income Consolidated Net Income Net Core Operating Income before Impairments (1) (2) (1) Net Core Operating Income before Impairments = Total Core Operating Income - Operating Costs Total Core Operating Inc. = Net Interest Income + Commissions (net); (2) Excluding the non-recurrent staff costs related to the early retirement program and the termination program by mutual agreement, in the amount of € 20M and € 61M in 1H2016 and 1H2017, respectively; Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 6
Results Net Interest Income benefiting from the reduction in funding costs… M € 8% 2016-06 18% 2017-06 1,351 1,241 656 555 27% -753 (1) -44 -585 -797 Interest and Cost of Net Interest Income Similar Income Funding (1) Interest paid for the 2012 subordinated bonds issuance (CoCos). Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 7
Results … and keeping quarterly positive evolution M € Net Interest Income 330 326 312 307 282 282 278 273 268 257 147 146 124 121 108 105 103 96 92 79 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2015 2016 2017 Note: Values refer to disclosure date accounts Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 8
Results Commissions stabilize and Income from Financial Operations s how strong growth… M € 276 224 225 -49 2016-06 2017-06 2016-06 2017-06 Commissions (net) Income from Financial Operations Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 9
Results Total Operating Income was influenced by Net Interest Income and Income from Financial Operations … M € 2017-06 1,154 -26 680 225 276 +325M € -1M € +95M € +0.2M € 735 2016-06 -49 584 224 -25 Other Operating Income Income from financial operations Net interest inc. incl. inc. from eq. investm. Commissions (net) Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 10
Results Lower recurrent Operating Costs at consolidated level … M € (1) 3% 10% 6% (1) 5% 2016-06 2017-06 638 627 20 61 397 367 20 61 607 577 213 192 336 347 49 46 Employee Other administrative Depreciation Total (1) costs expenses and amortisation (1) Operating Costs – Consolidated Activity (1) Excluding the non-recurrent staff costs related to the early retirement program and the termination program by mutual agreement, in the amount of € 20M and € 61M in 1H2016 and 1H2017, respectively. Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 11
Results … and also lower recurrent Operating Costs in Portugal M € (1) 8% 12% 4% (1) 9% 2016-06 2017-06 405 397 20 61 265 241 61 20 377 126 344 110 204 221 30 29 Employee Other administrative Depreciation Total (1) costs expenses and amortisation (1) Operating Costs – CGD Portugal (1) Excluding the non-recurrent staff costs related to the early retirement program and the termination program by mutual agreement, in the amount of € 20M and € 61M in 1H2016 and 1H2017, respectively. Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 12
Results Cost-to- Income continues its downwards path… % 78% -4% 66% -27% 80% 50% 2016-06 Operating Total Operating 2017-06 2016-06 2017-06 Costs Income Cost-to-Core Income (1) (2) Reduction Increase Cost-to-Income (2) (3) (1) Operating Costs / (Net Interest Income + Commissions (net)); (2) Excluding the non-recurrent staff costs related to the early retirement program and the termination program by mutual agreement, in the amount of € 20M and € 61M in 1H2016 and 1H2017, respectively; (3) Ratio defined by the Bank of Portugal Instruction 23/2012 [Operating Costs / (Total Operating Income + Income From Associated Companies)]; Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 13
Results Net Operating Income and Consolidated Net Income advance M € 117 2016-06 2017-06 166 -50 -205 -14 -219 2016-06 2017-06 2016-06 2017-06 2016-06 2017-06 Net Operating Income Tax Consolidated Net Income Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 14
Results Important contribution from international activity to consolidated Net Income M € BNU Macao: 29 117 120 France Branch: 21 Domestic -169 BCG Espanha: 13 Activity International -322 Activity BCG Angola: 12 -50 BCI Mozambique: 7 -205 2016-06 2017-06 Main contributions from International activity Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 15
Consolidated Results – 1 st Half 2017 Presentation Agenda Highlights Results Balance Sheet Asset Quality Liquidity Capital Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 16
Balance Sheet Balance Sheet reflects recapitalisation… B € 96,008 96,008 93,547 93,547 Shareholders Equity 7,895 8,729 3,883 Other 9,481 10,001 8,783 assets 18,532 4,078 4,184 15,148 Other liabilities 5,800 5,337 5,816 8,271 Securities * investments Debt securities 69,680 69,915 Credit instit. and central 63,102 60,476 Central banks' and * banks investments credit instit. resources Customer resources Loans and adv. to customers (net) 2016-12 2017-06 2016-12 2017-06 Liabilities + Assets Shareholders Equity * Includes assets with repurchase agreement. Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 17
Balance Sheet Market Shares: CGD leader in Portugal % Credit to: CGD 21% CGD Deposits from: 27% Individuals (Other 6% Purpose) Individuals Total Total 26% (Mortgage) Individuals 31% Individuals 23% (Total) Corporate 12% Corporate 18% Customer Deposits – Portugal Loans and Adv. to Customers – Portugal May 2017 May 2017 Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 18
Balance Sheet Customer deposits grow in Portugal… M € 2017-06 Deposits - General Treasury Bonds Government and Institut. 2,091 2,804 Total Bonds 69,532 1,278 Investment Funds Deposits - Corporate Deposits - Individual Bancassurance 4,275 6,531 Customers 7,308 45,246 Deposits - General 2016-12 Treasury Bonds Government and Institut. 1,415 1,374 Total Bonds 67,278 1,251 Investment Funds Deposits - Individual Deposits - Corporate Bancassurance 4,164 Customers 6,324 7,265 45,486 Total Customer Resources – Domestic Activity Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 19
Balance Sheet Credit in Portugal follows market trend… M € Total Individual customers - General Corporate Mortgage loans Government 49,242 16,185 26,471 4,534 Individual customers - Institutionals and Other loans Others 878 1,174 2017-06 Loans and Advances to Customers - CGD Portugal Consolidated Results 1 st Half 2017 Presentation | 28 th July 2017 Caixa Geral de Depósitos | Lisbon 20
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