corporate presentation - millenniumbcp · presentation are cautioned not to place undue reliance on...

CORPORATE

PRESENTATION

OCTOBER 2018

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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 matters discussed in this document may include forward-looking statements that are subject to risks and uncertainties. By their

nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on

circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of BCP to be

materially different from future results, performance or achievements expressed or implied by such forward looking statements. Many

of these risks and uncertainties relate to factors that are beyond BCP's ability to control or estimate precisely, such as future market

conditions, currency fluctuations, the behavior of other market participants, the actions of regulators and other factors such as BCP's

ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which

BCP operates or in economic or technological trends or conditions, including inflation and consumer confidence. Attendees at this

presentation are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this

presentation. Even if BCP’s financial condition, business strategy, plans and objectives of management for future operations are

consistent with the forward-looking statements contained in this presentation, those results or developments, as well as BCP past

performance, may not be indicative of results or developments in future periods. BCP expressly disclaims any obligation or

undertaking to release any updates or revisions to these forward-looking statements, whether as a result of new information, future

events or otherwise, except as required by applicable law

The information in this presentation has been prepared under the scope of the International Financial Reporting Standards (‘IFRS’) of

BCP Group for the purposes of the preparation of the consolidated financial statements under Regulation (CE) 1606/2002

First 6 months figures for 2018 and 2017 not audited

The information in this document is provided solely for information purposes. It must be understood as being in accordance with the

remaining information publicly disclosed by Group BCP.

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Agenda

Macro and Business Overview

Performance 2013-2018

Strategic Plan 2018-2021

1H 2018 earnings

Other information

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Key highlights

• Successful fiscal consolidation in the last years in Portugal: State budget deficit at

0.9%* in 2017, with a surplus forecasted for as early as 2021.

• Following the 2011-2013 recession, economic activity is now strong, with GDP up by

2.7% in 2017 (2.1% in 1Q18) from 1.6% in 2016

• Unemployment decreased significantly from its peak, and now stands at 7.4% (8.9%

full year 2017 figures)

• The current account has turned positive (0.6% surplus in 2017), following ≈10%

deficits for most of the decade up to 2010

• The real estate market has also recovered

• Concentrated banking system (top 5 banks account for ≈80% of total market), with

comfortable liquidity and capital position, together with a lower, although still

elevated, weight of non-performing loans

• Largest private sector bank in Portugal, with an unique international position,

diversified shareholder structure and a clear governance model

1

2

3

*3%, including the impact from recapitalisation of CGD

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96.2 111.4

126.2 129.0 130.6 128.8 129.9 125.7

2010 2011 2012 2013 2014 2015 2016 2017

51.8 50.0

48.5 49.9

51.8

48.2

44.9 45.9

2010 2011 2012 2013 2014 2015 2016 2017

0

2

4

6

8

10

12

14

16

18

2004 2006 2008 2010 2012 2014 2016 2018

Fiscal consolidation creates the conditions for the sustainability of the

public debt, leading to normalisation of yields on sovereign debt

Average >10%

Average≈4%

<2%

10y Portuguese bonds (yield, %)

Yields have decreased

…with significant effort on expenditure Budget deficit decreases…

(% of GDP) (total expenditure, % of GDP)

(Public debt, % of GDP)

Debt level is expected to decrease

Source: Bank of Portugal; Ministry of Finance.

Source: Statistics Portugal for 2010-17

Source: Thomson Reuters.

0.9

11.2

7.4

5.7 4.8

7.2

4.4

2.0 3.0

2010 2011 2012 2013 2014 2015 2016 2017E

Including

recapitalisation

of CGD

Source: Statistics Portugal

1

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+1.9

-1.8

-4.0

-1.1

+0.9 +1.8 +1.9

+2.8

2010 2011 2012 2013 2014 2015 2016 2017

10.8 12.7

15.6 16.2

13.9 12.4

11.1 8.9

2010 2011 2012 2013 2014 2015 2016 2017

-10.2

-6.0 -2.2

+1.5 +0.2 +0.3 +0.6 +0.6

2010 2011 2012 2013 2014 2015 2016 2017

Portugal has been undergoing profound structural reforms, which are

already showing positive results

Real GDP growth rate (yoy) Current account balance (% of GDP)

Unemployment rate (%)

Source: Statistics Portugal (INE); Ministry of Finance. Source: Statistics Portugal; Ministry of Finance.

Source: Statistics Portugal (INE); Ministry of Finance.

Budget deficit at 0.9% in 2017 (excluding recapitalisation of

CGD), down from 11.2% in 2010, mainly on the back of

lower levels of expenditure as a percentage of GDP

GDP up by 2.8% in 2017 from 1.9% in 2016, following the

2011-2013 recession

Unemployment has decreased significantly and continuously

from a 16.2% peak in 2013, standing at 8.9% in 2017

Following ≈10% deficits for most of the decade up to 2010,

the current account has turned positive from 2013 (0.6%

surplus in 2017)

1

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Housing prices and bank appraisals are recovering

Source: Eurostat.

Housing bank appraisals House price index (HPI) (€ /m2) (HPI base 100=2015)

Property prices (2010=100)

85

95

105

115

125

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

1Q

15

3Q

15

1Q

16

3Q

16

1Q

17

3Q

17

1Q

18

Total Existing New

800

900

1000

1100

1200

1300

1400

1500

Jun-0

9

Dec-0

9

Jun-1

0

Dec-1

0

Jun-1

1

Dec-1

1

Jun-1

2

Dec-1

2

Jun-1

3

Dec-1

3

Jun-1

4

Dec-1

4

Jun-1

5

Dec-1

5

Jun-1

6

Dec-1

6

Jun-1

7

Dec-1

7

Jun-1

8

Portugal Lisbon Area

Source: Statistics Portugal. Source: Statistics Portugal.

The House Price Index increased 11.2% in 2Q18 when compared

to 2Q17, with existing dwellings recording an average increase

in excess of new dwellings (+12.6% vs. +6.3%, respectively)

The average value of housing bank appraisals in Portugal stood

at €1,196 per square meter in Aug 18, up 6.6% y-o-y (+7.9% to

€1,468 in the Lisbon area)

Property prices were relatively stable in Portugal since 2000,

comparing to a volatile property market in neighboring Spain

The housing costs accounted for 17.7% of disposable household

income in Portugal, compared to 22.0% for the Eurozone as a

whole (latest available data: 2016)

0

50

100

150

200

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Spain 129

Portugal 92

1

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Portuguese financial system market shares

Branches

24% 18% 16%

11% 11%

Bank 1 Millenniumbcp

Bank 3 Bank 4 Bank 5

Gross loans + Customers funds

34%

19% 15%

5% 3%

Millenniumbcp

Bank 2 Bank 3 Bank 4 Bank 5

15% 15% 15% 13% 11%

Bank 1 Bank 2 Bank 3 Millenniumbcp

Bank 5

Core net income*

(December 2017) (December 2017)

(December 2017)

* Core net income = net interest income + net fees and commission income – operating costs

Concentrated Portuguese banking market: TOP 5

banks represent 80% of the market share in terms of

business volumes

BCP, the largest private sector bank in Portugal in

terms of business volumes, generates 34% of the

system core net income

BCP is the most efficient bank in Portugal with only

13% of the system branch network

2

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Portuguese financial system

17.5% 17.2% 13.3% 12.7%

2015 2016 2017 Mar 18

NPEs (Non-performing exposures) NPE coverage

LTD (Loans-to-deposits ratio) CET1 ratio

40.8% 45.3% 49.3% 52.2%

2015 2016 2017 Mar 18

12.2% 11.3% 12.4% 11.4% 13.9% 13.6%

Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18

111.8% 102.1% 96.1% 95.5% 92.5% 92.5%

Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18

2

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Building the leading private sector bank in Portugal and a

relevant player in selected markets

… to leadership in Portugal and to international

presence through growth in selected affinity retail markets

From foundation…

Incorporation

and organic

growth to

become

relevant player

Consolidation to

reach critical

mass

Leadership in

Portugal, setting

the foundations

for expansion in

Poland and

Greece

Partnership

with Ageas

for insurance

business

Consolidation

of international

expansion

with a single

brand

Focus on

Portugal and on

affinity markets

Reference bank

in Portugal

Portugal -

Poland –

Mozambique –

Angola (since

2016 with a

partnership with

BPA)

Leading bank in

Portugal and

strong position

in Poland and

Mozambique

Business model

transformation

to adapt to new

customer needs 1985-1995

1995-2000

2000-2005

2005–2012

2012–2017

2017- …

3

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Leading position in most products and financial services in Portugal.

Millennium bcp ranks second in terms of loans market share (17%) and customer deposits market

share (17%), after state-owned Caixa Geral de Depósitos.

A listed bank in Portugal

The largest private sector bank in Portugal

• Main business lines directed to retail

and commercial banking, investment

banking, corporate and private

banking/asset management

• Strong focus on innovation and on

Customer experience

3

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Unique international presence focused on key strategic

markets

Representation office

2 employees

Single brand

Millennium

Market share: 26.8% on loans, 27.2% on deposits

Loans to Customers (gross): €915 million

Customer funds: €1,517 million

Employees: 2,483

Branches: 190

BCP shareholding: 66.7%

Mozambique

Angola


Loans to Customers (gross): €11,924 million

Customers funds: €15,835 million

Employees: 5,846

Branches: 359


Poland

On-shore branch


Customer funds: €632million

Employees: 12

Branches: 1

Macao

China (Guangzhou)




Employees: 7,151

Branches: 573

Portugal

Loans market share: >11%

Deposits market share: >12%

Employees: >1,800

Branches: 140


De-consolidated from June 2016

Leading

Private Sector Bank

Retail focus

Stable position

Market know-how

Solid partnership

Since 1993

On-shore branch

Market leader

Key innovator

3

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Diversified shareholder base, geographically scattered

Number of Shareholders

Shareholder structure

Per geography

(Last information available)

Fosun 27%

Sonangol 20%

EDP 2%

PT retail 24%

PT institutionals 4%

Non-PT retail 1%

Non-PT institutionals 22%

170.9 164.1

Dec10 Jun 18

(x1000) (Last information available)

3

China 27.1%

Outros 11.0%

UK/US 11.5%

Africa 19.6%

Portugal 30.8%

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One-tier management and supervisory model, composed by a

Board of Directors 3

General Meeting of Shareholders

Board for International Strategy

Remuneration and Welfare Board

Statutory Auditor (ROC)

Audit Committee

Executive Committee Company Secretary

Board of Directors

Commissions and Sub-Commissions

Costs and Investments Commission

Costs and Investments Sub-Commission

CALCO

Human Resources Commission

Compliance Commission

Quality, Security and Data Protection Commission

Companies & Investment Banking Commission

Retail Commission

Project Mobilizar Commission

Work Relations Commission

• Committee for Nominations and Remunerations • Committee for Corporate Governance, Ethics and Professional Conduct • Committee for Risk Assessment

Client Ombudsman

Credit Commission

Risk Commission

Monitoring and Validation of Models Sub-Commission

NPA Monitoring Commission

Internal Control and Operational Risk Monitoring Commission

Pensions Funds Risk Monitoring Commission

16 Commissions and Sub-Commissions

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Agenda




1H 2018 earnings

Other information

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Key highlights

*Core income = net interest income + net fees and commission income.

**By loan-loss reserves, expected loss gap and collaterals.

• Profitable operation with a recurring capacity to generate operating results > €1.1 billion per

annum

Net interest benefits from continuing reduction in cost of funding: NIM of 2.2% in 1H18

(Portugal:1.8%, up from 0.6% in 2013)

Consistent track record of delivering reduction in operating costs: cost to core-income of

49%*, vs Eurozone’s 71%. Largest operating restructuring in Portugal, with operating costs

down by 40% from 2011 (pre-programme)

• Focused NPE management through a dedicated recovery strategy in Portugal: NPE reduction of

€6.9bn from €12.8bn at year-end 2013 to €5.9bn at June 30, 2018. Increased coverage by

provisions to 48% (50% for the Group) from 23% in 2013. Total coverage** of 106% at June 30, 2018

• Resilient international recurring earnings contribution of €89.9mn in 1H18

• Sustainable funding strategy: loans to deposits ratio at 88% as of June 30, 2018. ECB funding at

€3.1 billion as of the same date, down from a maximum of €12.4 billion at year-end 2011

• Enhanced capital position: fully implemented CET1 ratio of 11.7%, compared to minimum

required phased-in CET1 (SREP) of 8.81% for 2018; fully implemented total capital ratio of 13.3%

(SREP requirement: 12.31%)

1

2

3

4

5

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Net interest income to benefit from continuing reduction in

cost of funding 1

-239 -173

-123 -83 -69 -58

2013 2014 2015 2016 2017 1H18

Net Interest Income

... leading to a decrease in total funding

costs

NII to improve, as cost of time deposits keeps

decreasing ...

(€ mn)

(Interest expenses divided by Interest-bearing liabilities) (Portugal, spread on TDs book vs 3m Euribor, bps)

141 208 329 358 390 385

808

343

527

711 736

2013 2014 2015 2016 2017 1H18

2.41% 1.92%

1.21% 0.78% 0.44% 0.38%

2013 2014 2015 2016 2017 1H18

NIM

1.8%

0.6%

1.0%

1.5% 1.6% 1.8%

2013 2014 2015 2016 2017 1H18

1H

Front book:

-46bp

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Consistent track record of delivering reduction in

operating costs 1

9,959 8,584 7,795 7,459 7,333 7,189 7,151

2011 2013 2014 2015 2016 2017 Jun 18

* Excluding non-usual items in 2016: impact from revision of collective labour agreement net of restructuring costs.

885 774 695 671 618 578 573

2011 2013 2014 2015 2016 2017 Jun 18

423 353 351 320 310 271 313

588

1,039

853

690 644 624

2011 2013 2014 2015 2016 2017 1H18

...with a >30% reduction in branches...

Operating costs down by 40% vs 2011 (pre-

programme) ...

Branches (#)

Employees (#)

... and >25% reduction in employees

Operating costs (€ mn)

*

1H

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1

Pre-provision profit

Millennium bcp: one of the most efficient banks in the

Eurozone

47% sem itens

não habituais

Cost to core income* Latest available information

vs. peers in

Portugal

vs. Euro-zone

banks

Cost to core income*


178

599 556

474

1,243

2013 2017 1H18

Banco 1

Banco 2

Banco 3

Banco 4

54%

74%

65%

49%

58%

49%

71%

78%

98%

77%

60%

49%

86%

49%

2013 1H18

-37pp

80% 71% -9pp

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Asset quality metrics to benefit further from continued focus

on NPE reduction

2

743 1,021 730 1,045

Cost of risk and loan-loss charges

Impairment

charges (€mn)

Cost of risk

(basis points)

-1.5p.a.

NPEs (EBA definition) (€ bn)

Other

NPLs>90d

(Basis points)

Continued decrease of NPEs over the last 4.5 years at a

pace of €1.5bn per year as a result of a stabilisation of the

macro environment and the measures implemented

Reduction of almost €6.9bn from Dec 13 to Jun 18

Cost of risk at 103bps in 1H18 with NPE coverage by

provision at 48% and total coverage* at 106% by Jun 18

NPEs net from loan-loss reserves were down to €3.1 billion

as at June 30, 2018 from €9.8 billion at year-end 2013

Cost of risk at 88 bps and NPE coverage by provision at 50%,

at a Group level

533

* Coverage by LLRs, collateral and expected loss gap.

157

233 175

266

140 103

2013 2014 2015 2016 2017 1H18

192

NPE coverage

23% 28%

31%

39% 42%

48%

Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Jun 18

Total

coverage* 101.4% 105.6% 90.3% 92.6% 106.3%

Coverage by

LLRs

86.0%

6.2 6.1 5.6 5.0 4.1 3.6

12.8 10.9

9.8 8.5

6.8 5.9


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Strong coverage levels

Individuals 26%

Companies 74%

NPLs >90d 59%

Other NPEs 41%

2

(June 2018)

NPE breakdown Total NPEs: €5.9bn

*By loan-loss reserves, expected loss gap and collaterals.

NPE total coverage*

Other NPE total coverage* NPL >90d total coverage*

LLRs

Real estate

collateral

Cash, other

fin.collat., EL gap

LLRs

Real estate

collateral

Cash, other

fin.collat., EL gap LLRs

Real estate

collateral

Cash, other

fin.collat., EL gap

24%

56% 48% 3%

20% 15%

69%

34% 44%

97% 110% 106%

Individuals Companies Total

12%

47% 38% 4%

15% 12%

80%

46% 54%

96% 108% 105%


32%

62% 54% 2%

23% 17% 63%

26% 36%

97% 111% 107%


(June 2018)

(June 2018) (June 2018)

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Diversified and coherent international exposure delivering resilient

contribution 3

Key international operations Contribution to consolidated results*

* Comparable, assuming shareholding in Bank Millennium (Poland) constant at 50.1% and excluding discontinued operations

(€ mn)



Customers funds: €15,835 million

Employees: 5,846

Branches: 359


Poland

Angola

Loans market share: >11%

Deposits market share: >12%

Employees: >1,800

Branches: 140


De-consolidated from June 2016

Market share: 26.8% on loans, 27.2% on

deposits



Employees: 2,483

Branches: 190


Mozambique

159

178 170 173 175

90

2013 2014 2015 2016 2017 1H18

1H

Full year

** Excluding IAS 29 impact for the Angola operation in the amount of €28.4 million

**

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Balance Sheet

Sovereign debt portfolio

Securities portfolio (€ bn)

(Billion euros) Debt issued

Balance sheet breakdown (€ bn)

Equity

MM (net) Debt issued

Other (net)

Loans

Securities

Other

Sovereign

debt

(Billion euros)

7.3

11.6

4.8

2.6 12.1

14.2

Dec 11 Jun 18

Deposits

Dec 11 Jun 18

Portugal 4.7 5.9

T-bills 1.7 0.7

Bonds 3.0 5.2

Poland 0.8 3.9

Mozambique 0.3 0.6

Other 1.5 1.1

Total 7.3 11.6

Dec 11 Jun 18

Debt securities 16.2 2.6

MTN 7.6 0.2

Bonds + Certificates 4.1 1.1

Covered bonds 3.3 1.0

Securitisation 1.2 0.3

Subordinated debt 1.1 1.2

Loan Agreements 1.2 1.7

Total 18.5 5.4

4

68.0

47.5 46.9 53.5

12.1

12.9 14.2

3.2

18.5 6.7

5.4

4.4

6.9

1 2 3 4 5Dec 11 Jun 18

2.0

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Stronger funding and liquidity 4

Net loans Deposits

(€ bn)

Commercial gap (net loans – deposits)

Important deleveraging process: -31% loans

+12% deposits which account for 88% of funding

compared to 62% in 2011

Loans to deposit ratio at 88% versus 143% in 2011

Foreign operations self funded

(€ bn)

143% 88% Loans to deposits ratio

20.5 13.2 7.8 3.9 0.4

-0.8 -3.6 -6.6

Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec 17 Jun18

(€ bn)

68.0 62.6 56.8 53.7 52.0 48.0 47.6 46.9

Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Jun18

47.5 49.4 49.0 49.8 51.5 48.8 51.2 53.5

Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec 17 Jun18

-31% +12%

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Credit and deposits 4

Credit Performing portfolio

34.5

32.9

31.8

30.8 31.2 31.4


• The performing portfolio increased in Portugal by

approximately €200 million from year-end 2017

• Increasing trend in Customer deposits, with the

decrease of term deposits (due to historically low

yields) to be compensated by expanding demand

deposits

Customer deposits

9.0 10.1 12.9 14.1 16.4 18.3

24.9 24.3 21.9 19.9 18.9 19.2

33.9 34.4 34.8 34.0 35.3 37.5


On-demand

deposits

Term

deposits

(€ bn) (€ bn)

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Continued reduction of ECB funding 4

ECB funding

(€ bn)

Net usage of ECB funding at €3.1 billion, compared to

€12.4 billion at December 31, 2011

€15.6 billion (net of haircut) of eligible assets available

for refinancing operations with ECB, of which €4.6

billion are related to Portuguese sovereign debt, with a

€12.5 billion buffer

Future debt repayments (medium-long term)

significantly lower than in the past

Compliance with relevant liquidity ratios

Liquidity ratios (CRD IV/CRR)

129%

176%

NSFR (Net stablefunding ratio)

LCR (Liquiditycoverage ratio)

Buffer

ECB

funding

Total

collateral

(€ bn)

Outstanding debt repayments (medium-long term)

Already repaid To be repaid

0.1 0.4

2.3 2.3

0.2

4.9

Average2011-2016

2017 1H18 2018 2019 >2019

12.4 10.5 10.0 6.6 5.3 4.4 3.0 3.1

15.7

22.3 19.9

14.2 13.9 12.1 12.8 15.6

Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec 17 Jun 18

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Enhanced capital position 5

Minimum capital requirements (SREP)

Capital ratio* (Million euros)

-724 -107 -108

5,802

4,863

Equity DTAs EL gap Other CET1fully imp.

From equity to CET1 capital*

11.7% CET1 ratio

fully imp.

6.4%

9.3% 11.1% 11.9% 11.7%

Dec09 Dec11 Dec16** Dec17 Jun18

CT1 ratio, BoP definition CET1 ratio, fully implemented, CRDIV/CRR

Pillar 1Conservation

buffer

Counter-

cyclical

buffer

Other syst.

important

institutions

buffer

Pillar 2

requirements

(P2R)

Total

require

-ments

Jun 18

CET1 4.50% 1.875% 0.00% 0.1875% 2.25% 8.81% 11.7%

Total capital 8.00% 1.875% 0.00% 0.1875% 2.25% 12.31% 13.3%

*Estimates including earnings for the first half. **Estimates as at January 1, 2017, adjusted by the impact of the capital increase and of

CoCos repayment, both completed in February 2017.

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3.7% 4.5%

5.7% 6.3% 6.4%

FR DE ES IT

Capital at comfortable levels, strong leverage ratios

5.7% 6.4%

Jun 17 Jun 18

93.2%

74.4%

Jun 17 Jun 18

26% 25%

43% 42%

57%

FR DE ES IT

Fully implemented

*Texas ratio = NPE / (Tangible equity + loan-loss reserves).

Leverage ratio

Texas ratio*

Leverage ratio

Fully implemented, latest available data

RWA density RWAs as % of assets, latest available data

5

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Agenda




1H 2018 earnings

Other information

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Five strategic priorities to launch a new growth cycle

Talent

Mobilization

Business model

sustainability

Mobile-centric

digitization Growth in

international

footprint

Growth and

leadership in Portugal

1

2

3

4

5

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Talent Mobilization

Priorities going forward Strengths

Engagement and commitment

Engagement of the entire organization to proactively pursue new

vision and strategy

Rewards for success

Alignment of compensation with performance and strategic

objectives for all teams

Preparation for the future

Development of capabilities to assume new roles and use of

external hiring where necessary, with clear focus on productivity

and efficiency

Merit-based growth

Access to development opportunities and knowledge for all

employees

• Workforce talent as a

sustained advantage in

the market

• Overall increase in

satisfaction

• Employees proud to

work at Millennium

• Employees currently

satisfied with teams

and their direct

supervisors

New ways of working

Empowerment and simplification of decision making with wider

collaboration and teamwork across the bank

1

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Mobile-centric digitization

Mobile expanding day-to-day capabilities, with

interactions anytime, anywhere

Transform top customer journeys, with advanced

analytics modelling

Omni channel model including mobile and remote

services complemented by an efficient physical

network for comfort and convenience, addressing

complex needs and personal advice

Transform operations through NextGen levers to

scale up automation of low value added tasks

Weight of digital sales

3x

Time dedicated by

branches to complex

needs

+20%

share of affluent

customers with remote

advisory

3x

Increase in

branch efficiency

(sales per FTE)

+15% Expand (democratize) personalized solutions

Ambition for 2021 vs 2017 Main initiatives/levers

Cost reduction in

central services

>10%

2

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Growth and leadership in Portugal

Maximize potential of unique position as the largest private Portuguese bank

Main initiatives/levers Ambition for 2021 vs 2017

Simplicity and

convenience in

customer

financing

Strengthen market share in

high growth segments

(consumer lending, affluent and

small business)

Strength mortgage position

redesigning customer journey

and expanding distribution

reach

+470 M€ Consumer lending new business

+4pp Market share in non-auto consumer lending

+3pp Market share in mortgage new business

+1.2 Bn€ Mortgage new business

+51 k New affluent customers

+9pp Share off-balance assets

Innovate the way the

customers save and invest

~+100 M€

Banking income

3

Become the

preferred partner

for sound small

businesses

Reinforce

preeminence in

corporate

Optimize mid-corporate

portfolio exploiting value

chain financing

Capture the full potential of

the value proposition of

ActivoBank

+1.1 Bn€ Lending to small business

+1.2 Bn€ Lending to mid-corporate

2x ActivoBank Customers

Accelerate the credit

decision process, adopting

"pre-approved" facilities

and increasing automated

approvals in digital

channels

~+100 M€

Banking income

+

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Growth in international footprint

Capitalize on opportunities in high growth markets where we have competitive

advantages

Expand Customer base in

Poland, capturing full

potential of relationships

Strengthen local

relationships and risk

control in Angola

Support business sectors

across geographies in

commercial relationships

with China

Reinforce growth of

Banque Privée in

Switzerland

Pursue sustainable growth strategy in

Mozambique

>3.2 M Active customers

~200 M€ Net income

2021 aspiration for

the international

footprint

4

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Business model sustainability

Pursue low risk retail and commercial banking, innovating in credit management and

monitoring

Strong governance and management framework in place to

ensure plan is delivered

Strictly deliver on NPE plan levers

Streamline credit and risk processes to align with new lending

growth aspirations

Reinforce mechanisms to monitor new loan approvals and

ensure acceptance of sound risk profiles

NPE stock, Bn€

7.7

~3

2017 2021

~60%

NPE reduction

<50bp

Cost of risk

Ambition for 2021

Vis-à-vis 2017

Main levers

Strengthen compliance practices in Portugal and across

geographies

5

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Millennium Group’s ambitions for 2021

Consolidated

RoE

Loans to Deposits

Total active Customers

Digital customers

Cost-Income

Mobile customers

≈10%

<100%

>6 million

>60%

≈40%

>45%

≈12% CET1

Dividend payout ≈40%

NPEs stock ≈3 bn€

down by ≈60% from 2017 Asset quality

Franchise

growth

Value

creation

Cost of Risk <50 bps

5.3%

88%

4.8 million

45%

47%

26%

11.7%

--

6.7 bn€

88 bps

1H18 2021

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Investment case

1

2

4

5

Reference private sector bank in Portugal, and well-positioned in a rapidly changing landscape, following the

completion of the restructuring plan successfully implemented over the last years: one of the most efficient

banks in the Eurozone, with cost to core income ratio of 49% (Eurozone: 71%) and cost to income ratio of 47%

Profitable commercial banking business model with highly recurrent operating results, supported by a

continued track record of improvement in operating performance: PPP>€1.1 billion per annum

Profitable international operations

Strong balance sheet (fully implemented CET1 ratio at 11.7%, loans to deposits of 88%)

Strategic Plan 2021. New strategic Vision - “Partnering with our customers to create and share value” -

expected to:

• Reinforce position in core markets, enabling the expansion of active Customer base (>6mn active Clients in

2021) and a higher penetration of both digital (>60%) and mobile banking (>45%);

• Bring additional banking income in Portugal (+€200mn) and a solid contribution from international

operations (~€200mn);

• Deliver on a sustainable business model through a continuing NPE reduction (-60% to ~€3bn in 2021);

• 2021 targets of ~40% for the cost to income ratio and ~10% for return on equity

Distinct

position

Return to normalization allows Millennium bcp to focus on its core strengths

3

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Agenda




1H 2018 earnings

Other information

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1H 2018 earnings

Highlights

Group

• Profitability

• Business activity

• Capital

Portugal

International operations

Key figures

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Highlights

• Net profit of €150.6 million (€89.9 million in the 1st half of 2017),

on the back of strong earnings growth on the Portuguese activity

and increased international business activity

NPEs significantly down: -€2.1 billion from June 30, 2017 (-€1.9

billion in Portugal), -€993 million in the 1st half of 2018 (-€841

million in Portugal). Coverage by loan-loss reserves of 50%, 106%

including collaterals

• Business volumes €2.9 billion up from June 30, 2017, with total

Customers funds significantly up (+€4.1 billion)

• +103,000 active Customers in Portugal from June 30, 2017

1

2

3

4

• Improved profitability, with net earnings of €150.6

million in the 1st half of 2018

Improved credit quality, with NPEs decreasing by

€2.1 billion from June 30, 2017

• Increasing business volumes, up by €2.9 billion

from June 30, 2017

• +103,000 active Customers in Portugal from June

30, 2017

1

2

3

4

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Highlights

Improved profitability

Increasing business volumes

89.9

150.6

1H17 1H18

Improved asset quality

Growing Customer base

1 2

3 4

(Consolidated net earnings, million euros) (Non-performing exposures, billion euros)

(Consolidated, billion euros) (Active Customers Portugal, million)

+67.5%

4.6 3.6

3.3

2.4

7.8

5.9

Jun 17 Jun 18

-€1.9 billion

NPL>90d

Other NPEs

68.4 72.5

51.7 50.5

120.1 122.9

Jun 17 Jun 18

+€2.9 billion

Total Customers

funds*

Loans to Customers (gross)

0.8 0.9

2.1 2.2

Jun 17 Jun 18

+103,000 Customers

Digital Customers

NPEs Portugal

Total business

volume Active Customers

8.8 6.7 NPEs group -€2.1 billion

NPE: -2.1

Performing:

+0.9

+€4.9 billion exc. NPEs

Crescimento da base de Clientes 4

(Active Customers do Grupo, million)

2.3 2.7

5.2 5.6

Jun 17 Jun 18

+380 mil Clientes

Digital Customers

Active

Customers

*Deposits, debt securities, assets under management, assets placed with Customers and insurance products (savings and investments).

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1H 2018 earnings

Highlights

Group

• Profitability


• Capital

Portugal


Key figures

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Improved profitability across geographies

*Resultado core = margem financeira + comissões – custos operacionais.

Resultado core*

534.9 117.0

260.4

396.4 437.1

558.6 526.3

1S13 1S14 1S15 1S16 1S17 1S18

Efeito positivo não

habitual de €23,7 million

(custos com pessoal)

(Million euros)

Consolidated net earnings*

Net earnings from international operations

Não incluindo ganhos de

€272 million em dívida

pública portuguesa

Net earnings from domestic activity

89.9

150.6

1H17 1H18

+67.5%

1.6

59.0

1H17 1H18

87.1 89.9

1H17 1H18

+3.1%

• Net earnings of €150.6 million in 1H18, a

67.5% increase from €89.9 million in the same

period of the previous year

• Earnings from domestic activity improved

significantly: €59.0 million in the first six months

of 2018, compared to €1.6 million in the same

period of 2017

• Earnings from international activity increased

3.1%, to € 89.9 million in the first half of 2018

from €87.1 million in the same period of 2017

*Includes earnings from domestic activity, from international operations and from discontinued operations (€1.3 million in the 1st half of

2017 and €1.8 million in the 1st half of 2018).

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Profit of €150.6 million in the 1st half of 2018

*Includes dividends from equity instruments, other net operating income, net trading income and equity accounted earnings.

(million euros) 1H17 1H18 YoYImpact on

earnings

Net interest income 678.5 687.7 +1.3% +9.2

Commissions 330.3 340.2 +3.0% +9.9

Core income 1,008.8 1,027.9 +1.9% +19.0

Other income* 40.0 28.9 -27.7% -11.1

Operating costs -450.2 -500.8 +11.2% -50.6

Of which: recurring -473.9 -492.8 +4.0% -18.9

Of which: non-usual items (staff costs) 23.7 -8.0 -31.7

Operating net income 598.6 556.0 -7.1% -42.6

Impairment and provisions -415.3 -279.8 -32.6% +135.5

Net income before income tax 183.3 276.2 +50.7% +92.9

Income taxes, non-controlling interests and disc. operations -93.4 -125.5 +34.4% -32.2

Net income 89.9 150.6 +67.5% +60.7

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Net interest income driven by international operations

+19,2% sem

efeito cambial

(Million euros)

Net interest income Portugal

NIM 2.2% 2.2%

678.5 687.7

1H17 1H18

+1.3%

288.3 302.9

1H17 1H18

NIM 1.8% 1.8%

390.2 384.8

1H17 1H18

-1.4%


+5.1%

NIM 3.1% 3.1%

Consolidated

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Increased commissions

Em %

depósitos

+crédito*

0,61% 0,61%

+13,3% sem

efeito cambial

(Million euros)

225.2 234.0

1H17 1H18

Fees and commisions

105.1 106.3

1H17 1H18

+1.1%

Portugal


+3.9%

Consolidated

1H17 1H18 YoY

Banking fees and commissions 271.6 278.3 +2.5%

Cards and transfers 75.2 79.8 +6.1%

Loans and guarantees 78.5 81.4 +3.7%

Bancassurance 47.5 48.1 +1.3%

Customer account related 52.1 52.4 +0.6%

Other fees and commissions 18.2 16.6 -9.1%

Market related fees and commissions 58.8 61.9 +5.3%

Securities operations 38.2 39.5 +3.6%

Asset management 20.6 22.4 +8.4%

Total fees and commissions 330.3 340.2 +3.0%

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217|217|217 89.9 77.0

36.7 42.0

-86.6 -90.1

40.0 28.9

1H17 1H18

Other income* influenced by mandatory contributions and credit

sales

(Million euros)

Other income* Portugal


13.5 13.2

1H17 1H18

Mandatory

contributions 39.1 40.4

26.5 15.7

1H17 1H18

Consolidated

-27.7%

-40.7%

Includes -€22.4

million on credit sales

Inclui ganho na alienação de

imóvel e indemnização

seguradora (€3,1 million)

Mandatory


Mandatory


• Banking sector PT: 33.1

• European ResolFund: 21.2

• ResolFund/DGF PT: 12.2

-2.2%


Net trading

income

Equity earnings

+ dividends

Other operating

income

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Recurring operating costs under control, in spite of the impact from

the reversal of salary cuts

+5,3% sem

efeito cambial

(Million euros)

Operating costs

241.5 289.8

182.6

182.7

26.1

28.4 450.2

500.8

1H17 1H18

+11.2% 271.1 313.2

1H17 1H18

179.1 187.6

1H17 1H18

Portugal


+4.8%

Consolidated

+15.5%

Includes non-usual positive

impact of €23.7 million

Includes non-usual negative


Impact from reversal of

salary cuts: +€7.5 million

Recurring 473.9 492.8 294.8 305.2 Recurring +4.0% +3.5%




Staff costs

Other

administrative

costs

Depreciation

1H17 1H18

Cost to income 42.9% 47.4%

Cost to income excluding non-usual items 45.2% 46.6%

Cost to core income* 44.6% 48.7%

Cost to core income* excluding non-usual items 47.0% 47.9%

1H17 1H18


Cost to income excluding non-usual items 45.9% 48.1%


Cost to core income* excluding non-usual items 47.9% 49.3%

1H17 1H18



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Millennium bcp: one of the most efficient banks in the

Eurozone

47% sem itens

não habituais


Banco 1

Banco 2

Banco 3

Banco 4

Latest available information

vs. peers in

Portugal

vs. Euro-zone

banks

54%

74%

65%

49%

58%

49%

71%

78%

98%

77%

60%

49%

86%

49%

2013 1H18

-37pp


80% 71% -9pp

73%

47%

2013 1H18

-26pp

Cost to income

67% 68% +1pp


CGD

Totta

BPI

NB

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Cost of risk keeps normalisation trend

(Million euros)

305.0

220.8

110.3

59.0

415.3

279.8

1H17 1H18

Impairment and provision charges Portugal


257.7 191.8

112.3

49.6

370.0

241.3

1H17 1H18

-34.8%

-32.6%

118bp 88bp

Loans

Cost of risk

Other

47.3 29.1

-2.0

9.4

45.3 38.5

1H17 1H18

Loans

Cost of risk

Other

Loans

Cost of risk

Other

133bp 103bp

-15.0%

Consolidated

73bp 45bp

Loan-loss

reserves 3,618 3,327

Loan-loss

reserves 3,165 2,810

Loan-loss

reserves 453 517

Inclui €4,6 million de

efeito IAS29 Angola

Inclui €10,2 million

de imparidades para

imóveis

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Relevant NPE reduction and strengthened coverage

5,040 4,032

3,721

2,633

8,761

6,665

Jun 17 Jun 18

7,816

5,913

Jun 17 Jun 18

944 752

Jun 17 Jun 18

(Million euros)

Portugal Credit quality


NPEs

NPEs

Consolidated

NPEs

NPL>90d

Other

NPE coverage by

LLRs 41% 50%

*EBA definition.

**By loan-loss reserves, expected loss gap and collaterals.

Jun 17 Jun 18

NPL>90 days ratio 9.8% 8.0%

NPE ratio* 17.0% 13.2%

NPE ratio inc. securities and off-BS* 13.0% 9.4%

NPE total coverage** 105% 106%

-24.3%

-23.9%

-2.1 billion

-1.9 billion

-20.4%

-0.2 billion

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1H 2018 earnings

Highlights

Group

• Profitability


• Capital

Portugal


Key figures

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Strong Customer acquisition

2.1

2.2

Jun 17 Jun 18

+103,000

Active Customers

(Million)

0.8

0.9

Jun 17 Jun 18

+113,000

Digital Customers

(Million)

Awards and surveys

• Clientes particulares: Banco mais próximo dos seus Clientes; Banco mais inovador; Banco eleito; Banco com os Clientes mais

satisfeitos com os canais digitais, com a qualidade do atendimento, com o gestor e com a qualidade dos produtos/serviços

(BASEF, 5 maiores bancos)

• Companies: Banco com a maior quota de mercado nas Empresas, com os Clientes mais satisfeitos, e com maior quota de

utilização e satisfação com os canais digitais; melhor Banco para as Empresas, Banco mais próximo dos Clientes, mais

inovador, com produtos mais adequados e mais eficiente (BFin 2018 DataE – 5 maiores Bancos)

• Líder nas operações de bolsa online, com forte contributo da app Bolsa e da plataforma MTRADER (prémio Best Capital

Market Initiative nos Euronext Lisbon Awards 2018)

• O Millennium investment banking foi eleito Best Investment Bank em Portugal pela Euromoney, no âmbito dos Euromoney

Awards for Excellence 2018.

+79,000 since

December 17

+55,000 since

December 17

• Bank closest to its Customers; most innovative Bank; Bank of choice; Bank with the most satisfied

Customers with digital channels, with Customer service, with Customer manager and with the quality

of products/services (BASEF, 5 largest banks in Portugal)

• Leader in online brokerage, with a strong contribution from the Bolsa app and the MTRADER platform,

winner of the Best Capital Market Initiative award at Euronext Lisbon Awards 2018

Active Customers

5.2 5.6

Jun 17 Jun 18

+380 mil

2.4 2.5

Jun 17 Jun 18

+124 mil

Grupo

Portugal

(Milhões)

(Milhões)

Digital Customers

2.3 2.7

Jun 17 Jun 18

+352 mil

0.9 1.0

Jun 17 Jun 18

+123 mil

Grupo

Portugal

(Milhões)

(Milhões)

+195 mil desde

dezembro 17

+85 mil desde

dezembro 17

+195 mil desde

dezembro 17

+85 mil desde

dezembro 17

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Strong business dynamics results in growing Customer funds

14,603 15,410

Set 16 Set 17

+5,5%

32,535 33,684

1,799 1,597 34,334 35,281

Set 16 Set 17

+2,8%

Particulares e

empresas

Outros (inc

setor público)

+3,6% sem

efeito cambial

+3,5%

(Billion euros)

Total Customers funds* in Portugal

24.2 27.9

26.4 25.6

1.6 1.2

16.2 17.8

68.4 72.5

Jun 17 Jun 18

Total Customers funds*

Demand

deposits

+5.9%

Consolidated

15.4 18.3

19.4 19.2

14.5 15.6

49.4 53.0

Jun 17 Jun 18

+7.5%

Crescimento de 4,7%

incluindo OTRVs

8.8 9.5

7.0 6.4

3.2 3.4

19.0 19.4

Jun 17 Jun 18

+2.0%


Tot. Customer funds* international operations Term

deposits

Other BS

funds

Off-BS

funds Demand

deposits

Term

deposits

Other

Demand

deposits

Term

deposits

Other

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Strong business dynamics, with increasing performing portfolio

0 0

-1,784

39,361 39,361

37,996

Dez 16 NPE Não NPE Dez 16 NPE Não NPE Dez 17

+2,0% sem

efeito cambial

(Billion euros)

Loans to Customers (gross)

24.2 23.2

3.8 3.9

23.7 23.4

51.7 50.5

Jun 17 Jun 18

Companies

Consumer

and other

Mortgage


Portugal

-2.4%

13.0 13.1

Jun 17 Jun 18

Consolidated

NPE: -23.9% (-€2.1 billion)

Performing: +2.0% (+€0.9 billion)

38.7 37.4

Jun 17 Jun 18

-3.5%

NPE: -24.3% (-€1.9 billion)

Performing: +1.8% (+€0.5 billion)

+1.1%

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Comfortable liquidity position

Amortizações de dívida (médio e longo prazos)

3.3

0.9 1.6

0.2 1.3

Média2009-2015

2016 2017 2018 >2018

Já amortizado

(Billion euros, exclui CoCos)

A amortizar

95%

88%

Jun 17 Jun 18

-7pp

(Billion euros)

3.6 3.1

Jun 17 Jun 18

15.6 12.0

129%

176%

NSFR (Net stablefunding ratio)

LCR (Liquiditycoverage ratio)

Net loans to deposits ratio ECB funding

Eligible

assets

Liquidity ratios (CRD IV/CRR)

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1H 2018 earnings

Highlights

Group

• Profitability


• Capital

Portugal


Key figures

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Comfortable capital position

Rácio Common Equity Tier 1

vs. bancos

zona euro

*

12.0%

13.4%

12.3%

13.0%

11.9%

Fully implemented

11.3% 11.7%

Jun 17 Jun 18

37.7 41.7

12.4% 13.3%

CET1 capital ratio of 11.6% (fully implemented

and phased-in)

Increase from a 11.3% fully implemented ratio

as of June 30, 2017 due to earnings and

improved fair value reserves, partially offset by

the impact of the IFRS9 adoption, by the

deduction of irrevocable commitments (DGF/SRF)

and by increased risk-weighted assets

The decrease from a 11.8% fully implemented

ratio as of March 31 reflects the deterioration of

public debt yields and increased risk-weighted

assets

Total capital ratios of 13.2% (fully implemented)

and 13.3% (phased-in), boosted by the €300

million subordinated debt (tier 2) issued in

December 2017

RWAs (€Bn)

Total ratio

Common Equity Tier 1 ratio*

ECB requirement

(SREP) for CET1 in

2018: 8.8%

CET1 capital ratio of 11.7% (fully implemented)

Increase from a 11.3% fully implemented ratio

as of June 30, 2017 due to organic capital

generation (+66bps on capital due to earnings

from 1st half of 2017) and improved fair value

reserves, partially offset by the impact of the

IFRS9 adoption, by the deduction of irrevocable

commitments (DGF/SRF) and by increased risk-

weighted assets

Decrease from a 11.8% fully implemented ratio

as of March 31, as organic capital generation

(+16bps on capital due to earnings for the

quarter) was offset by the deterioration of public

debt yields and by increased risk-weighted assets

Total capital ratios of 13.3% (fully

implemented), boosted by the €300 million

subordinated debt (tier 2) issued in December

2017

59

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217|217|217

3.7% 4.5%

5.7% 6.3% 6.4%

FR DE ES IT

Capital at comfortable levels, strong leverage ratios

5.7% 6.4%

Jun 17 Jun 18

93.2%

74.4%

Jun 17 Jun 18

26% 25%

43% 42%

57%

FR DE ES IT

Fully implemented

*Texas ratio = NPE / (Tangible equity + loan-loss reserves).

Leverage ratio

Texas ratio*

Leverage ratio

Fully implemented, latest available data

RWA density RWAs as % of assets, latest available data

60

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Pension fund

Assumptions of the fund unchanged from

December 31, 2017

Coverage of liabilities of 105%

Positive actuarial deviations in the 1st

half of 2018 (+€27 million), reflecting the

performance of the fund above

assumptions

Shares 13%

Bonds 35%

Real estate 8%

Cash and other 44%

Pension fund Key figures

Assumptions

(Million euros)

Dec 17 Jun 18

Pension liabilities 3,050 3,056

Pension fund 3,166 3,202

Liabilities' coverage 104% 105%

Fund's profitability +4.2% +3.1%

Actuarial differences +29 +27

Discount rate

Projected rate of return of fund assets

Mortality Tables

Men

Women

Salary growth rate

Pensions growth rate

2.10%

Dec 17

2.10%

0.25% until 2019

0.75% after 2019

0.00% until 2019

0.50% after 2019

Jun 18

2.10%

0.25% until 2019

Tv 88/90

Tv 88/90-3 years

2.10%

Tv 88/90

Tv 88/90-3 years

0.75% after 2019

0.00% until 2019

0.50% after 2019

61

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217|217|217

1H 2018 earnings

Highlights

Group

• Profitability


• Capital

Portugal


Key figures

62

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191|191|191

217|217|217

271.1 313.2

1H17 1H18

1.6

59.0

1H17 1H18

641.9 634.4

1H17 1H18

Increased net income

(Million euros)

Net earnings of €59.0 million in 1H18, + €57.5

million compared to €1.6 million in the same

period of 2017

Net earnings were driven by a significant

reduction in credit-loss charges (-25.6%, with

cost of risk decreasing to 103bp from 133bp), as

well as by lower other impairment and provisions

(-55.9%)

+57.5







Net income

Operating costs

Banking income

63

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217|217|217

Net interest income

Net interest income decreased from €390.2 million in the first half of 2017 to €384.8 million in the same period

of 2018. The favourable impacts of the repayment of CoCos; of the continued decline in the remuneration of

time deposits; and of a lower wholesale funding cost were more than offset by the negative effects of the

lower volume of credit, largely reflecting the emphasis on the reduction of NPEs (unlikely to pay); of lower

interest recoveries (including IFRS9); and of the securities portfolio (increased balance yielding lower interest,

reflecting lower sovereign yields from the end of the first half of 2017)

Net interest income increased slightly from €192.0 million in the first quarter to €192.8 million in the second

quarter of 2018

-1.4%

+6.3 +8.5 +18.1

-16.1 -12.6

-9.8

+0.1 390.2 384.8

1H17 CoCorepayment

effect

Effect of costof timedeposits

Effect ofwholesale cost

Creditvolumeeffect

Effect of netrecovery of

interest

Effect ofsecuritiesportfolio

Other 1H18

1.8% 1.8% NIM

Net interest income (Million euros)

64

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191|191|191

217|217|217

Continued effort to reduce the cost of deposits

Continued improvement in the spread of the

portfolio of term deposits: from -0.7% in the first

half of 2017 to -0.6% in the same period of 2018;

front book for 1st half of 2018 priced at an

average spread of -46bp, still below the current

back book’s

Spread on the performing loan portfolio stood at

2.7% in the first half of 2018 (same spread as in

the first half of 2017)

NIM was 1.8%

-0.7%

-0.6%

1H17 1H182.7% 2.7%

1H17 1H18

NIM

1.8% 1.8%

1H17 1H18

Continued improvement in the spread of the

portfolio of term deposits: from -0.7% in the first

half of 2017 to -0.6% in the same period of 2018;

front book for 1st half of 2018 priced at an

average spread of -46bp, still below the current

back book’s

Spread on the performing loan portfolio stood at

2.7% in the first half of 2018 (same spread as in


NIM was 1.8%

Spread on the book of term deposits (vs 3m Euribor)

Spread on the performing loan book (vs 3m Euribor)

65

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Commissions and other income*

(Million euros)

26.5

15.7

1H17 1H18

-40.7%

Growing commissions in Portugal, in all

lines, with income related to markets

(brokerage, in particular) and to

investment banking activity standing

out

Decreased other income due to lower

trading income (-€22.4 million in sales

of credit) and to higher mandatory

contributions (+€8.6 million)

Growing commissions in Portugal, in all lines,

with income related to markets (brokerage, in

particular) and to investment banking activity

standing out

Decreased other income due to lower trading

income (-€22.4 million in sales of credit) and to

higher mandatory contributions (+€8.6 million)


Fees and commissions Other income*

1H17 1H18 YoY

Banking fees and commissions 194.0 201.0 +3.6%

Cards and transfers 51.4 53.1 +3.4%

Loans and guarantees 51.7 53.5 +3.4%

Bancassurance 39.3 40.7 +3.6%

Customer account related 46.4 46.9 +0.9%

Other fees and commissions 5.2 6.9 +32.8%

Market related fees and commissions 31.2 32.9 +5.6%

Securities operations 28.0 29.6 +5.6%

Asset management 3.2 3.3 +5.0%

Total fees and commissions 225.2 234.0 +3.9%

66

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191|191|191

217|217|217

Operating costs

(Million euros)

145.1 187.4

109.9

107.9 16.1

17.9 271.1

313.2

1H17 1H18

Operating costs

596 573

Jun 17 Jun 18

-23

7,303 7,151

Jun 17 Jun 18

-152 Cost to core

income* 50,4% 50,3%

Cost to income 44,8% 46,0%

+15.5%





294.8 305.2 Recurring +3.5%



Employees

Branches

Staff costs

Other

administrative

costs

Depreciation

67

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191|191|191

217|217|217

Very strong pace of NPE reduction since 2013

(Million euros)

6,213 6,134 5,572 5,029 4,058 3,561

12,783 10,921

9,777 8,538

6,754 5,913


NPL>90d

Other

NPEs

23% 28% 31%

39% 42%

48%


101.4% 105.6% 90.3% 92.6% 106.3% 86.0%

• NPEs in Portugal down to €5.9 billion as of

June 30, 2018, a €841 million reduction

from year-end 2017

• This decrease is attributable to a €497

million NPLs> 90d reduction and to a

€344 million reduction of other NPEs

• NPE total coverage* of 106%, broken down

as follows:

– coverage by loan-loss reserves of 48%

– coverage by real estate collateral of 44%

– coverage by financial collateral of 12%

– coverage by expected loss gap of 2%

• NPEs net from loan-loss reserves were

down to €3.1 billion on June 30, 2018

from € 9.8 billion at year-end 2013


Non-performing exposures (NPEs)

NPE coverage

Coverage by

LLRs

Total

coverage*

68

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217|217|217

Lower NPEs, with reinforced coverage

(Million euros)

4,558 3,561

3,258 2,352

7,816

5,913

Jun 17 Jun 18

-24.3%

NPL>90d

Other NPEs

257.7 191.8

1H17 1H18

133bp 103bp Cost of

risk

3,165 2,810

NPEs in Portugal down by €1.9 billion, from €7.8 billion as at June

30, 2017 to €5.9 billion as at the same date of 2018

This decrease results from net outflows of €813 million, sales of

€560 million and write-offs of €531 million

The decrease of NPEs from June 30, 2017 is attributable to a €1.0

billion reduction of NPLs>90d and to a €0.9 billion decrease of other

NPEs

Significant NPE reduction in the quarter, from €6.3 billion as at

March 31 to €5.9 billion as at June 30, 2018

Reduction of the cost of risk to 103bp in the first half of 2018 from

133bp in the same period of 2017, with a reinforcement of coverage

of the NPEs by loan-loss reserves to 48% from 40%, respectively

NPE build-up Non-performing exposures (NPEs)

Loan impairment (net of recoveries)

Loan-loss

reserves

Jun 18

vs.Jun 17

Jun 18

vs.Mar 18

Opening balance 7,816 6,282

+/- Net entries -813 -134

- Write-offs -531 -134

- Sales -560 -101

Ending balance 5,913 5,913

69

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217|217|217

NPE coverage

24%

56% 48% 3%

20% 15%

69%

34% 44%

97% 110% 106%


12%

47% 38% 4%

15% 12%

80%

46% 54%

96% 108% 105%


32%

62% 54% 2%

23% 17% 63%

26% 36%

97% 111% 107%


40% 48%

18% 15%

46% 44%

105% 106%

Jun 17 Jun 18


NPE total coverage* NPE total coverage*

Other NPE total coverage* NPL>90d total coverage*

LLRs

Real estate

collateral

Cash, other

fin.collat., EL gap

LLRs

Real estate

collateral

Cash, other

fin.collat., EL gap

LLRs

Real estate

collateral

Cash, other

fin.collat., EL gap

LLRs

Real estate

collateral

Cash, other

fin.collat., EL gap

70

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217|217|217

Foreclosed assets and corporate restructuring funds

(Million euros)

(Million euros)

148

224

1H17 1H18

1,629 1,448

196 216

1,825 1,664

Jun 17 Jun 18

(Million euros)

1,615 2,189

165 255

9 0

854 825

205 195

1,068 1,020

Jun 17 Jun 18

Original credit exposure: €2,006 million

Book value (30 Jun 2018): €1,020 million

Total impairment (credit+restr. funds): €986 million

(49% coverage)

-11.1% -6.6%

Valuation exceeds book value

by 26%

Foreclosed assets

Sales of foreclosed assets

Book value

Net value

Impairment

Corporate restructuring funds

# properties

sold

Sale value

Construction

RE/tourism

Industry

71

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191|191|191

217|217|217

15.4 18.3

19.4 19.2

1.5 1.1

13.0 14.4

49.4

53.0

Jun 17 Jun 18

19.4 18.2

2.0 2.0

17.3 17.1

38.7 37.4

Jun 17 Jun 18

Strong business dynamics leads to increased Customer funds and

performing credit portfolio

(Billion euros)

Loans to Customers (gross) Total Customers funds*

+7.5%

-3.5%

Demand

deposits

Term

deposits

Other BS

funds

Off-BS

funds

Companies

Consumer

and other

Mortgage

NPE: -24.3% (-€1.9 billion)

Performing: +1.8% (+€0.5 billion) Decrease from €38.0 billion in March due

to strong NPE reduction (-€369 million)

and wholesale maturities (-€350 million)


72

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191|191|191

217|217|217

Credit now growing in Portugal

(Billion euros)

Performing credit portfolio

30.9

31.4

Jun 17 Jun 18

Total Customers funds*

-5.5 -0.8 -0.1

+0.1

25.2

18.9 18.9

Dez 13 Construção,imobiliário,

SGPS não fin.

Outrossetores

Dez 17 Construção,imobiliário,

SGPS não fin.

Outrossetores

Jun 18

50.8 53.1

Jun 17 Jun 18

+1.8%

+4,5%

• Growth of the performing credit

portfolio in Portugal of 1.8% from June

30, 2017

• Strong performance of credit activity

in the first six months of 2018:

– New consumer credit increased 19.1%

compared to the first half of 2017.

Strong focus on digital, with new

remote underwriting channels (mobile

web and app) and actions targeting

Customers with pre-scoring conditions

for online credit

– Significant increase in new mortgage

lending (+72.7% compared to the first

half of 2017), with strong growth in

credit simulations on digital channels

and a new innovating service allowing

contract execution until 10:00pm and

during weekends

73

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217|217|217

Main bank of companies in Portugal

Results BFin 2018 DataE*, 5 largest Banks in Portugal

Used as primary

Bank

Satisfaction with

primary Bank**

Usage of net

banking

Satisfaction net

banking**

Usage and satisfaction indicators (%)

Overall best

Bank

Closest to

Customers

More

innovating

Most appropriate

products

Image indicators (%)

10

12

16

17

20

Bank 1

Bank 2

Bank 3

Bank 4 -3

11

11

16

24

15

21

25

27

27

20

35

37

46

52

Mobile:

25% (#1)

4

7

8

12

12

Bank 1

Bank 2

Bank 3

Bank 4 4

7

9

11

13

3

4

6

11

13

3

7

8

8

11

More efficient:

15% (#1)

• Millennium bcp is the main Bank of

Companies in Portugal, where it

leads with a market share of 20.2%

in all dimensions (Micro, SMEs,

MidCaps and Large Companies),

according to BFin 2018 DataE

• Millennium bcp leads in trade,

services and industry, as well as in

exporting companies, in Portugal

2020, factoring and leasing

• Most used bank for credit lines and

main choice of Companies that

intend to invest in the next 12

months

• Leadership also in digital, in the

usage of both Net Banking and

Mobile Banking, and in Customer

satisfaction regarding Net Banking

• Bank referred to as the “Overall

Best Bank for Companies”,

“Overall More Efficient”, with

“Products most appropriate to

Companies”, “More Innovating”

and “Closest to Customers”

*According to DataE, the "Business-Banking Financial Services Barometer (BFin Bancos)" is a study whose main objective is to characterize

the Portuguese banking sector from the point of view of companies, regarding banking products and services. The results of BFin 2018 are

based on a sample of more than 1,300 companies. The information was collected between April and June 2018.

**Satisfaction in Net Promoter Score (NPS) = % promoters - % detractors.

74

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191|191|191

217|217|217

1H 2018 earnings

Highlights

Group

• Profitability


• Capital

Portugal


Key figures

75

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253|217|226

191|191|191

217|217|217

Increased contribution from international operations

(Million euros)

87.1 89.9

Contribution 1H17 Contribution 1H18

+3.1%

*Contribution of the Angolan operation.

**Includes goodwill impairment (-€6.6 million) and contribution revaluation (+€3.9 million).

Subsidiaries’ net income presented for 2017 at the same exchange rate as of 2018 for comparison purposes.

1H17 1H18Δ %

local currency

Δ %

eurosROE

Poland 74.3 82.3 +10.8% +11.7% 9.5%

Mozambique 41.9 51.1 +22.0% +19.4% 26.1%

Angola*

Before IAS 29 impact 10.8 8.9

IAS 29 impact** -- -2.7

Total Angola including IAS 29 impact 10.8 6.2

Other 5.6 8.4 +48.8% +42.2%

Net income 132.6 147.9 +11.6% +7.1%

Non-controlling interests Poland and Mozambique -51.0 -58.1

Exchange rate effect 5.5 --

Contribution from international operations 87.1 89.9 +3.1%

Same as above without FX effect and IAS 29 (Angola) 81.6 92.6 +13.4%

76

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191|191|191

217|217|217

Increased net income

143.8 149.6

1H17 1H18

(Million euros)

ROE 9.5% 9.5%

+4.0%

74.3 82.3

1H17 1H18

+10.8%

Net earnings of € 82.3 million (+10.8%), with ROE of 9.5%

Increasing banking income, driven by net interest income

and commissions

Customer funds up by 5.8%, while loans to Customers

increased by 15.6%, excluding FX-denominated mortgage

loans

CET1 ratio of 21.3% as of June 30, 2018

1.6 million active Customers, a 11% increase over June 30,

2017

Bank Millennium was considered the digital leader in the

Deloitte EMEA Digital Banking maturity survey 2018

297.7 313.6

1H17 1H18

+5.4%

Net earnings of € 82.3 million (+10.8%), with ROE of 9.5%

Increasing banking income, driven by net interest income and

commissions

Customer funds up by 5.8%, while loans to Customers increased by

15.6%, excluding FX-denominated loans

CET1 ratio of 21.3% as of June 30, 2018

1.6 million active Customers, a 11% increase over June 30, 2017, with

1.2 million active Digital Customers (+12%).

Bank Millennium was considered the digital leader in the Deloitte EMEA

Digital Banking maturity survey 2018

FX effect excluded. €/Zloty constant at June 2018 levels: Income Statement 4.22565833; Balance Sheet 4.3723. | *Pro forma data. Margin

from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest income, whereas in

accounting terms, part of this margin (€5.7 million in 2018 and €6.3 million in 2017) is presented in net trading income.

Net income

Operating costs

Banking income

77

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191|191|191

217|217|217

77.8 79.7

20.8 22.7

98.6 102.3

1H17 1H18

Increased net interest income and commissions

69.8 74.8

74.0 74.8

143.8 149.6

1H17 1H18

+4.0%

360 359

Jun 17 Jun 18

199.0 211.3

1H17 1H18

+6.2%

(Million euros)

+3.8%

NIM 2.5% 2.5% Cost to income 46.5% 46.4%

+2.4%

+7.2%

+1.0%

5,865 5,846

Jun 17 Jun 18

-19 -1

*Pro forma data. Margin from derivative products, including those from hedging FX denominated loan portfolio, is included in net interest

income, whereas in accounting terms, part of this margin (€5.7 million in 2018 and €6.3 million in 2017) is presented in net trading income.

FX effect excluded. €/Zloty constant at June 2018 levels: Income Statement 4.22565833; Balance Sheet 4.3723.

Net interest income*

Commissions and other income

Operating costs

Branches Employees

Staff costs

Other

Commissions

Other

Does not include tax on

assets and contribution to

resolution fund

78

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191|191|191

217|217|217

28.9 26.8

1H17 1H18

Credit quality

(Million euros)

NPL>90d accounted for 2.7% of total credit as of

June 30, 2018 (same percentage as of June 30,

2017)

Provision coverage of NPL>90d of 133% (109% as

of June 30, 2017)

Decrease in the cost of risk to 47bp (52bp in the

first half of 2017)

Credit ratio Jun 17 Jun 18

NPL>90d 2.7% 2.7%

Coverage ratio Jun 17 Jun 18

NPL>90d 109% 133%

332.3 430.3

Jun 17 Jun 18

Cost of risk

52bp 47bp

-7.3%

305.8 323.1

Jun 17 Jun 18


NPL>90d


Loan-loss reserves

79

209|0|93

253|217|226

191|191|191

217|217|217

7,222 8,277

5,812 5,407

98 93 1,834

2,058

14,966 15,835

Jun 17 Jun 18

Growing volumes

3,515 3,920

1,501 1,715

3,770 3,392

2,367 2,898

11,154 11,924

Jun 17 Jun 18

+6.9%

-10.0%

+14.2%

+11.5%

(Million euros)

Loans to Customers (gross) Customers funds

Companies

Consumer

and other

Mortgage Foreign exchange

Demand

deposits

Term

deposits

Other BS

funds

Off-BS

funds

+5.8%

+14.6%

-7.0%

-5.0%

+12.2%

+15.6% excluding FX

mortgage loans

Mortgage Local currency

+22.4%


80

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191|191|191

217|217|217

Growing net earnings

41.9 51.1

1H17 1H18

+22.0%

(Million euros)

113.2 120.9

1H17 1H18

+6.8% ROE 25.8% 26.1%

41.8 43.1

1H17 1H18

+3.0%

Net earnings of €51.1 million (+22.0%), with ROE of 26.1%

Increasing banking income (+6.8%), driven by higher net

interest income and other income

Customer funds grew 0.5%, loan portfolio down by 20.4%

Capital ratio of 25.8%

1.0 million active Customers, a 4% increase over June 30,

2017

Millennium bim was distinguished as the best bank in

Mozambique by both Global Finance and Euromoney

FX effect excluded. €/Metical constant at June 2018 levels : Income Statement 73.42791667; Balance Sheet 69.1250.

Net income

Operating costs

Banking income

81

209|0|93

253|217|226

191|191|191

217|217|217 18.2 18.5

23.6 24.6

41.8 43.1

1H17 1H18

2,408 2,483

Jun 17 Jun 18

Growing income partially offset by the increase in

operating costs

+3.0%

(Million euros)

Staff costs

Other

89.4 92.2

1H17 1H18

+3.1%

179

190

Jun 17 Jun 18

+75 +11

Commissions

Other

+1.8%

+4.0%

NIM 10.7% 10.9% Cost to income 36.9% 35.7%

15.3 14.2

8.5 14.5

23.8 28.7

1H17 1H18

+20.6%

-7.0%

+70.1%


Net interest income

Commissions and other income

Operating costs

Branches Employees*

*Excludes employees from SIM (insurance company)

82

209|0|93

253|217|226

191|191|191

217|217|217

Credit performance influenced by challenging environment

(Million euros)

NPL>90d ratio of 15.9% as of June 30, 2018,

with coverage by loan-loss reserves of 55%

on the same date

Maintenance of a high provisioning effort,

reflected in a risk cost of 326bp (320bp in


Credit ratio Jun 17 Jun 18

NPL>90d 14.0% 15.9%

104.1 79.9

Jun 17 Jun 18

160.8 145.4

Jun 17 Jun 18

Cost of risk 320bp 326bp

17.3 14.1

1H17 1H18

-18.7%

Coverage ratio Jun 17 Jun 18

NPL>90d 65% 55%

NPL>90d ratio of 15.9% as of June 30, 2018,

with coverage by loan-loss reserves of 55%

on the same date

Maintenance of a high provisioning effort,

reflected in a risk cost of 326bp (320bp in



NPL>90d


Loan-loss reserves

83

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253|217|226

191|191|191

217|217|217

834 759

675 758

1,509 1,517

Jun 17 Jun 18

936 751

202

153

13

11

1,150

915

Jun 17 Jun 18

Growing deposits and lower credit

-20.4%

-23.9%

-19.8%

(Million euros)

Loans to Customers (gross) Customer funds

Companies

Consumer

and other

Mortgage

Demand

deposits

Term

deposits +12.3%

+0.5%

-13.3%

-9.0%


84

209|0|93

253|217|226

191|191|191

217|217|217

1H 2018 earnings

Highlights

Group

• Profitability


• Capital

Portugal


Key figures

85

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253|217|226

191|191|191

217|217|217

Key figures

Consolidated

2018

<75 bp

-€3,0 billion

≈11%

<100%

<50%

≈43%

≈10%

Cost of risk

Cumulative NPE reduction

from January 1, 2016 (Portugal)

CET1 fully implemented

Loans to Deposits

Cost-Core Income1, 2

Cost–Income1

1H17 1H18

118 bp

-€1.9 billion

11.3%

95%

47.0%

45.2%

88 bp

-€3.9 billion

11.7%

88%

47.9%

46.6%

4.3% 6.8% RoE3

1 Excludes non-usual items.

2 Core income = net interest income + net fees and commission income.

3 Based on a fully implemented CET1 of 11%.

86

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(Million euros)

≤1y 24%

>1y, ≤2y 12%

>2y, ≤5y 26%

>5y, ≤8y 34%

>8y, ≤10y 2%

>10y 2%

The sovereign debt portfolio totalled €11.6 billion, €2.8 billion of which maturing within one

year

The Portuguese sovereign debt portfolio totalled €5.9 billion, whereas the Polish and

Mozambican portfolios amounted to €3.9 billion and to €0.6 billion, respectively; “other”

includes US sovereign debt of €0.8 billion

Sovereign debt maturity Sovereign debt portfolio

Portugal 5,089 4,696 5,938 +17% +26%

T-bills and other 845 499 721 -15% +44%

Bonds 4,244 4,197 5,217 +23% +24%

Poland 3,847 3,981 3,936 +2% -1%

Mozambique 379 553 626 +65% +13%

Other 612 1,068 1,090 +78% +2%

Total 9,928 10,299 11,590 +17% +13%

QoQJun 17 Jun 18 YoYMar 18

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(Million euros)

*Includes financial assets held for trading at fair value through net income (€33 million).

**Includes financial assets at fair value through other comprehensive income (€10,507 million) and financial assets at amortised cost (€735

million).

Portugal Poland Mozambique Other Total

Trading book* 37 284 0 27 348

≤ 1 year 0 44 0 0 44

> 1 year and ≤ 2 years 33 3 0 26 62

> 2 years and ≤ 5 years 2 196 0 0 199

> 5 years and ≤ 8 years 2 31 0 0 33

> 8 years and ≤ 10 years 0 11 0 0 11

> 10 years 0 0 0 1 1

Banking book** 5,900 3,652 626 1,063 11,242

≤ 1 year 674 765 455 862 2,756

> 1 year and ≤ 2 years 166 1,102 44 0 1,313

> 2 years and ≤ 5 years 1,023 1,669 18 103 2,814

> 5 years and ≤ 8 years 3,842 104 0 2 3,948

> 8 years and ≤ 10 years 7 12 38 96 153

> 10 years 187 0 71 0 259

Total 5,938 3,936 626 1,090 11,590

≤ 1 year 674 809 455 862 2,799

> 1 year and ≤ 2 years 199 1,105 44 26 1,374

> 2 years and ≤ 5 years 1,026 1,865 18 103 3,012

> 5 years and ≤ 8 years 3,844 135 0 2 3,981

> 8 years and ≤ 10 years 8 22 38 96 164

> 10 years 187 0 71 1 260

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Diversified and collateralised portfolio

Mortgage 46%

Consumer / other 8%

Companies 46%

58% 26% 16%

Real guarantees Other guarantees Unsecured

15% 11% 13% 27% 11% 11% 11%

0-40 40-50 50-60 60-75 75-80 80-90 >90

Loans

Loans to companies accounted for 46% of the loan portfolio at June 30, 2018, including 8% to construction and

real-estate sectors

Mortgage accounted for 46% of the loan portfolio, with low delinquency levels and an average LTV of 66%

84% of the loan portfolio is collateralised

Collaterals

Real estate accounts for 93% of total collateral value

80% of the real estate collateral is residential

Loans per collateral

LTV of the mortgage portfolio in Portugal

Loan portfolio Consolidated

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Consolidated earnings


**Core net income = net interest income + net fees and commission income - operating costs.

(million euros) 1H17 1H18 YoYImpact on

earnings

Net interest income 678.5 687.7 +1.3% +9.2

Net fees and commissions 330.3 340.2 +3.0% +9.9

Other income* 40.0 28.9 -27.7% -11.1

Banking income 1,048.8 1,056.8 +0.8% +8.0

Staff costs -241.5 -289.8 +20.0% -48.3

Other administrative costs and depreciation -208.7 -211.0 +1.1% -2.3

Operating costs -450.2 -500.8 +11.2% -50.6

Operating net income (before impairment and provisions) 598.6 556.0 -7.1% -42.6

Of which: core net income** 558.6 527.1 -5.6% -31.5

Loans impairment (net of recoveries) -305.0 -220.8 -27.6% +84.2

Other impairment and provisions -110.3 -59.0 -46.5% +51.3

Impairment and provisions -415.3 -279.8 -32.6% +135.5

Net income before income tax 183.3 276.2 +50.7% +92.9

Income taxes -43.4 -71.9 +65.5% -28.5

Non-controlling interests -51.2 -55.4 +8.2% -4.2

Net income from discontinued or to be discontinued operations 1.3 1.8 +40.0% +0.5

Net income 89.9 150.6 +67.5% +60.7

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Consolidated balance sheet

(Million euros)

30 June

2018

30 June

2017

Assets

Cash and deposits at Central Banks 2,165.8 1,650.9

Loans and advances to credit institutions

Repayable on demand 240.6 491.5

Other loans and advances 878.4 895.9

Loans and advances to customers 46,876.6 48,066.0

Other financial assets at amortised cost 1,061.5 451.3

Financial assets held for trading 1,037.2 974.0

Other financial assets not held for trading

mandatorily at fair value through profit or loss 1,386.4 -

Other financial assets held for trading

at fair value through profit or loss 32.9 142.0

Financial assets at fair value through other comprehensive income 12,049.8 12,384.7

Assets with repurchase agreement 24.9 15.4

Hedging derivatives 95.7 113.9

Investments in associated companies 488.6 596.0

Non-current assets held for sale 2,101.5 2,224.0

Investment property 12.1 12.3

Other tangible assets 487.8 487.4

Goodwill and intangible assets 171.6 164.3

Current tax assets 27.0 7.6

Deferred tax assets 2,938.1 3,165.4

Other assets 1,023.8 1,181.3

Total Assets 73,100.2 73,023.7

30 June

2018

30 June

2017

Liabilities

Resources from credit institutions 6,985.8 9,373.2

Resources from customers 53,454.6 50,635.7

Debt securities issued 2,602.1 3,121.4

Financial liabilities held for trading 340.0 476.2

Hedging derivatives 192.2 289.3

Provisions 325.9 339.1

Subordinated debt 1,151.7 850.6

Current tax liabilities 7.3 8.9

Deferred tax liabilities 4.4 1.6

Other liabilities 1,149.2 981.9

Total Liabilities 66,213.2 66,078.0

Equity

Share capital 5,600.7 5,600.7

Share premium 16.5 16.5

Preference shares 59.9 59.9

Other equity instruments 2.9 2.9

Legal and statutory reserves 264.6 252.8

Treasury shares (0.3) (0.3)

Fair value reserves 35.2 (23.3)

Reserves and retained earnings (327.8) (51.3)

Net income for the period attributable to Bank's Shareholders 150.6 89.9

Total equity attrib. to Shareholders of the Bank 5,802.4 5,947.9

Non-controlling interests 1,084.5 997.8

Total Equity 6,886.9 6,945.7

73,100.2 73,023.7

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(Million euros)

Consolidated income statement Per quarter

Net interest income 346.2 344.7 368.1 344.8 342.8

Dividends from equity instruments 1.5 0.1 0.1 0.1 0.6

Net fees and commission income 169.5 164.3 172.1 167.8 172.4

Other operating income -71.4 -10.4 -5.2 -29.1 -61.0

Net trading income 53.5 25.1 33.4 34.4 42.6

Equity accounted earnings 15.5 21.7 34.8 19.8 21.6

Banking income 514.8 545.5 603.2 537.8 519.0

Staff costs 104.6 138.6 146.5 142.3 147.5

Other administrative costs 94.0 92.2 99.3 89.5 93.1

Depreciation 13.4 13.6 13.9 14.2 14.2

Operating costs 211.9 244.4 259.6 246.0 254.8

Operating net income bef. imp. 302.9 301.1 343.6 291.8 264.2

Loans impairment (net of recoveries) 156.1 153.6 165.1 106.1 114.8

Other impairm. and provisions 56.0 59.6 131.2 23.9 35.1

Net income before income tax 90.8 87.9 47.3 161.8 114.3

Income tax 24.3 19.7 -33.0 49.3 22.6

Non-controlling interests 27.9 24.8 27.1 26.9 28.5

Net income (before disc. oper.) 38.6 43.4 53.1 85.6 63.3

Net income arising from discont. operations 1.3 0.0 0.0 0.0 1.8

Net income 39.8 43.4 53.1 85.6 65.1

2Q 17 2Q 181Q 184Q 173Q 17

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(Million euros)

Jun 17 Jun 18 Δ % Jun 17 Jun 18 Δ % Jun 17 Jun 18 Δ % Jun 17 Jun 18 Δ % Jun 17 Jun 18 Δ % Jun 17 Jun 18 Δ %

Interest income 957 936 -2.2% 532 496 -6.7% 425 440 3.6% 275 292 6.4% 147 145 -1.6% 3 3 -0.2%

Interest expense 278 248 -10.7% 141 111 -21.4% 137 137 0.3% 83 86 3.6% 56 53 -5.7% -3 -2 26.3%

N et interest inco me 678 688 1.3% 390 385 -1.4% 288 303 5.1% 191 206 7.6% 91 92 0.9% 6 5 -12.3%

Dividends from equity instruments 2 1 -61.4% 1 0 -93.8% 1 1 1.1% 1 1 -3.5% 0 0 -- 0 0 -29.0%

Intermediat io n margin 680 688 1.2% 391 385 -1.6% 289 303 5.1% 192 206 7.5% 91 92 1.0% 6 5 -12.3%

Net fees and commission income 330 340 3.0% 225 234 3.9% 105 106 1.1% 77 80 3.3% 16 14 -9.0% 12 12 -0.0%

Other operating income -87 -90 -4.0% -53 -59 -11.1% -34 -31 7.0% -37 -42 -12.9% 3 11 >100% 0 0 -35.6%

B asic inco me 924 938 1.6% 564 560 -0.6% 360 378 5.0% 232 244 5.3% 110 117 6.1% 18 17 -4.4%

Net trading income 90 77 -14.3% 59 46 -22.4% 31 31 1.1% 25 26 4.7% 5 4 -27.8% 1 2 60.6%

Equity accounted earnings 35 41 17.9% 19 29 48.0% 16 13 -19.1% 0 0 -- 0 0 -- 16 13 -19.1%

B anking inco me 1,049 1,057 0.8% 642 634 -1.2% 407 422 3.8% 256 270 5.2% 116 121 4.5% 35 32 -9.0%

Staff costs 241 290 20.0% 145 187 29.1% 96 102 6.3% 69 75 8.1% 19 19 -0.3% 9 9 6.1%

Other administrative costs 183 183 0.0% 110 108 -1.8% 73 75 2.9% 49 51 4.0% 20 21 0.3% 3 3 2.3%

Depreciation 26 28 8.5% 16 18 11.5% 10 10 3.8% 6 6 -0.1% 4 4 10.6% 0 0 5.0%

Operat ing co sts 450 501 11.2% 271 313 15.5% 179 188 4.8% 125 132 6.1% 43 43 0.9% 12 12 5.0%

Operat ing net inco me bef . imp. 599 556 -7.1% 371 321 -13.4% 228 235 3.0% 132 138 4.4% 73 78 6.7% 23 19 -16.2%

Loans impairment (net of recoveries) 305 221 -27.6% 258 192 -25.6% 47 29 -38.5% 29 21 -29.2% 18 14 -20.4% 0 -6 <-100%

Other impairm. and provisions 110 59 -46.5% 112 50 -55.9% -2 9 >100% 1 4 >100% -3 -1 74.4% 0 7 >100%

N et inco me befo re inco me tax 183 276 50.7% 1 80 >100% 183 196 7.5% 102 113 11.4% 58 64 11.1% 23 18 -18.8%

Income tax 43 72 65.5% -1 25 >100% 44 47 6.3% 28 31 10.5% 15 13 -12.6% 1 3 >100%

Non-contro lling interests 51 55 8.2% 0 -4 <-100% 51 60 16.0% 0 0 -- 0 0 1.4% 51 59 16.1%

N et inco me (befo re disc. o per.) 89 149 67.9% 2 59 >100% 87 90 3.1% 74 82 11.7% 43 51 19.4% -29 -44 -48.2%

Net income arising from discont. operations 1 2 40.0%

N et inco me 90 151 67.5%

M illennium bim (M o z.)

Internat io nal o perat io ns

Gro up P o rtugal T o tal B ank M illennium (P o land) Other int . o perat io ns

Income statement (Portugal and International operations)

For the 6-month periods ended June 30th, 2017 and de 2018

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Glossary (1/2)

Balance sheet impairment – Balance sheet impairment related to amortised cost and fair value adjustments related to loans to customers at fair value

through profit or loss.

Balance sheet customer funds - debt securities and customer deposits.

Commercial gap –loans to customers (gross) minus on-balance sheet customer funds.

Core income - net interest income plus net fees and commissions income.

Core net income - corresponding to net interest income plus net fees and commissions income deducted from operating costs.

Cost of risk, net (expressed in bp) - ratio of impairment charges (net of recoveries) accounted in the period to loans to customers at amortised cost before

impairment.

Cost to core income - operating costs divided by core income (net interest income and net fees and commissions income).

Cost to income – operating costs divided by net operating revenues.

Coverage of non-performing loans by balance sheet impairments – BS impairments divided by the stock of NPL.

Coverage of non-performing exposures by balance sheet impairments – BS impairments divided by the stock of NPE.

Debt securities - debt securities issued by the Bank and placed with customers.

Dividends from equity instruments - dividends received from investments classified as financial assets at fair value through other comprehensive income and

from financial assets held for trading.

Equity accounted earnings - results appropriated by the Group related to the consolidation of entities where, despite having a significant influence, the

Group does not control the financial and operational policies.

Insurance products – includes unit linked saving products and retirement saving plans (“PPR”, “PPE” and “PPR/E”).

Loans to customers (gross) – Loans to customers at amortised cost before impairment and loans to customers at fair value through profit or loss before fair

value adjustments.

Loans to customers (net) - Loans to customers at amortised cost net of impairment and balance sheet amount of loans to customers at fair value through

profit or loss.

Loan to Deposits ratio (LTD) – Loans to customers (net) divided by total customer deposits.

Loan to value ratio (LTV) – Mortgage amount divided by the appraised value of property.

Net commissions - net fees and commissions income.

Net interest margin (NIM) - net interest income for the period as a percentage of average interest earning assets.

Net operating revenues - net interest income, dividends from equity instruments, net commissions, net trading income, equity accounted earnings and other

net operating income.

Net trading income - net gains/losses arising from trading and hedging activities, net gains/losses arising from financial assets at fair value through other

comprehensive income and financial assets at amortised cost.

Non-performing exposures (NPE, according to EBA definition) – Non-performing loans and advances to customers more than 90 days past-due or unlikely to

be paid without collateral realisation, even if they recognised as defaulted or impaired.

Non-performing loans (NPL) – Overdue loans more than 90 days including the non-overdue remaining principal of loans, i.e. portion in arrears, plus non-

overdue remaining principal.

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Glossary (2/2)

Operating costs - staff costs, other administrative costs and depreciation.

Other impairment and provisions - other financial assets impairment, other assets impairment, in particular provision charges related to assets received as

payment in kind not fully covered by collateral, goodwill impairment and other provisions.

Other net income – net commissions, net trading income, other net operating income, dividends from equity instruments and equity accounted earnings.

Other net operating income – net gains from insurance activity, other operating income/(loss) and gains/(losses) arising from sales of subsidiaries and other

assets.

Overdue loans - loans in arrears, including principal and interests.

Overdue loans by more than 90 days coverage ratio - BS impairments divided by total amount of overdue loans including installments of capital and interest

overdue more than 90 days.

Overdue loans coverage ratio – BS impairments divided by total amount of overdue loans including installments of capital and interest overdue.

Return on average assets (Instruction from the Bank of Portugal no. 16/2004) – Net income (before tax) divided by the average total assets.

Return on average assets (ROA) – Net income (before minority interests) divided by the average total assets.

Return on equity (Instruction from the Bank of Portugal no. 16/2004) – Net income (before tax) divided by the average attributable equity + non-

controlling interests.

Return on equity (ROE) – Net income (after minority interests) divided by the average attributable equity, deducted from preference shares and other

capital instruments.

Securities portfolio - financial assets held for trading, financial assets not held for trading mandatorily at fair value through profit or loss, financial assets at

fair value through other comprehensive income, assets with repurchase agreement, other financial assets at amortised cost and other financial assets

held for trading at fair value through profit or loss.

Spread - increase (in percentage points) to the index used by the Bank in loans granting or fund raising.

Total customer funds - balance sheet customer funds, assets under management, assets placed with customers and investment funds.

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Agenda




1H 2018 earnings

Other information

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3.6

+0.2 +0.2

+1.2

+0.7 5.9

NPLs>90d

Cross-default

Quaran-tine*

LLR/gross loans>20% or LLR>€5mn

Othertriggers

NPEs

The NPE reduction plan is being implemented Reconciliation of NPLs>90d with NPEs (EBA definition)

NPEs down €6.9 billion from end-2013

5.0 +0.4 +0.6 +1.6 +0.3

+0.7 8.5

NPL>90d

Cross-default

Quaren-tine*

LLR>20% or LLR> €5mn

Restruct.>45d

Othertriggers

NPE

Reconciliation of NPL>90d with NPEs

(EBA definition)

NPLs>90d vs NPEs (EBA definition)

(Billion euros, June 2018)

* 9 months following payment is resumed for loans to companies, 3 months for retail loans.

(Billion euros)

-2.3

-3.0

-1.5

12.8

5.9

Dec13 Net newentries

Writeoffs

Sales Jun18

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Latest Rating Actions recognized the progress made by

BCP in implementing its strategic plan

+3 notches +3 notches

+2 notches

S&P Stand-alone credit profile (SACP)

Fitch Viability Rating (VR)

Moody’s Baseline Credit Assessment (BCA)

BB-

B+

B

B-

2013 2014 2015 2016 2017

b2

b3

Caa1

Caa2

2013 2014 2015 2016 2017

bb-

b+

b

2013 2014 2015 2016 2017

Rating Agencies have recognized the progress achieved

by Millennium bcp since 2013

Excluding the effect of Government support removal

due to change in Rating Agencies methodology in order

to adjust for the BRRD, the intrinsic rate of BCP was

upgraded by 3 notches by S&P and Moody’s and by 2

notches by Fitch

Future upgrades of the Portuguese Republic rating

should provide room for an upgrade of BCP ratings

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Ratings

Moody's Standard & Poor's

Intrinsic Baseline Credit Assessment

Adjusted Baseline Credit Assessment

b2

B2

Stand-alone credit profile (SACP) bb-

LT/ST

Counterparty LT/ST

Deposits LT/ST

Senior unsecured LT/ST

Outlook deposits / senior

Ba1 / NP

B1 / NP

B1 / NP

Positive

Counterparty Credit Rating LT/ST

Senior Unsecured LT/ST

Outlook

BB-/ B

BB-/ B

Positive

Other

Subordinated Debt - MTN

Preference Shares

Other short term debt

Covered Bonds

(P) B3

Caa2 (hyb)

P (NP)

A2

Subordinated debt

Preference shares

B-

CCC

Fitch Ratings DBRS

Intrinsic

Viability Rating

Support

Support floor

bb- Intrinsic

Critical obligations

BB (high)

BBB/R-2(high) 5

No floor

LT/ST

Deposits LT/ST

Senior unsecured debt issues LT/ST

Outlook

BB- / B

BB- / B

Positive

Deposits LT / ST

Short-Term Debt LT / ST

Trend

BB (high) / R-3

BB (high) / R-3

Positive

Other

Subordinated Debt Lower Tier 2

Preference Shares

Covered Bonds

B+

B-

BBB+

Dated Subordinated Notes

Covered Bonds

BB (low)

A

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Progress recognised by the market

CDS 5 yr Portuguese Republic

CDS BCP yield curve (senior)

CDS 5 yr BCP

BCP CDS spreads have narrowed since the end of 2016

and after the completion of the share capital increase in

February 2017 but reflect also the progress made by the

Bank in reducing NPEs as well as the increase in NPEs

coverage

Besides this BCP’s intrinsic factors the BCP CDS spreads

benefitted also from the decrease in Portuguese

Republic CDS spreads

Spreads on senior preferred debt have also narrowed in

recent months because there was the introduction of a

new debt class in the Iberian markets: the senior non

preferred debt

1 year ago

As at June, 30

b.p.

b.p. b.p.

(Years)

0

200

400

600

800

1000

Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18

0

100

200

300

400

500

Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18

0

100

200

300

400

500

600

1 2 3 4 5 7 10

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New Senior Bond, CB and Subordinated issues signal

Millennium bcp’s return to capital debt markets

Issuer: Banco Comercial Português, S.A.

Issue Rating (M/F/D): A3/BBB+/A

Issue type: Mortgage Bonds

Amount: € 1,000m

Issue date: 23 May 2017

Settlement date: 31 May 2017

Maturity: 31 May 2022

Coupon: 0.750 %

Spread: MS+65bps

Re-offer yield: 0.876 %

Listing / ISIN: Irish Stock Exchange / PTBCPIOM0057

Asset Managers

45%

Central Banks & Official

Institutions 29%

Banks 21%

Insurance & Pension Funds

5%

Portugal 36%

Germany & Austria

25%

Spain 10%

France 10%

Benelux 7%

UK & Ireland

4%

Switzerl. 3%

Italy 3%

Other 2%

3 Yr Senior Unsecured Notes Breakdown by Investor Type and Geography

Breakdown by Investor Type and Geography 5 Yr Covered Bond Issue

Investment Funds 60%

Banks 16%

Hedge Funds 12%

Insurance and Pension Funds 10%

Other 2%

UK 33%

Portugal 20%

Italy 15%

France 11%

Deutschland 6%

Austria 6%

Spain 5%

Switzerland 4%


Issue Rating (S/M/F/D): B (Neg.) / B1 (Neg.) / BB- (Neg.) / BBBL (Neg.)

Issue type: Senior Unsecured Unsubordinated

Amount: € 500m

Issue date: 19 February 2014

Settlement date: 27 February 2014

Maturity: 27 February 2017

Coupon: 3.375 %

Spread: MS+285bps

Re-offer yield: 3.422 %

Listing / ISIN: London Stock Exchange / PTBITIOM0057

Breakdown by Investor Type and Geography 5 Yr subordinated Debt Issue


Issue Rating (M/S/F/D): B3/B-/B+/BB(L)

Amount: € 300mm

Issue date: 7 December 2017

Maturity: 7 December 2027

Issuer’s Call: 7 December 2022, subject to the prior approval of the

Relevant Authority

Coupon: 4.50 % (Fixed, Annual) until 7th December 2022. One time

reset year 5 to prevailing 5Y MS + 4.267% (initial margin)

Re-offer price: 100%

Listing / ISIN: Irish Stock Exchange / PTBCPWOM0034

Asset Manager

48% Hedge

Fund 37%

Bank & Private

Bank 11%

Insurance & Pension

5%

UK & Ireland 43%

Iberia 17%

Germany, Austria &

Switzerland 15%

FraBeLux 13%

Asia 5%

Other 4% Italy 3%

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