9m09 results presentationweb3.cmvm.pt/english/sdi/emitentes/docs/fr25715.pdf · 2020-05-20 · 9m09...
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9M09 Results Presentation(Un-audited Figures)
28th October 2009 19M09 Results Presentation
Agenda
I. 9M09 Highlights
II. Recent Market & Macro Developments
III. 9M09 Consolidated Results
IV. Segment Reporting & Commercial Activity
V. Customer Credit and Funds
VI. Funding & Liquidity, AFS & Solvency
VII. Wrap Up
28th October 2009 29M09 Results Presentation
I. Results highlights
• Net income reached Eur 360.8mn in 9M09 up 7.8% YoY, implying a ROE of 9.4% and a ROA of 0.62%.
• International business critical to performance with net operating income growth of 46.4% YoY and a net income contribution
to results standing at 35.2%.
• NII continues to deliver good performance (+21.9% YoY), albeit decelerating on a quarterly basis given the fading of the
mismatch effect and the fact that credit re-pricing was largely concluded in 1H09.
• Fees & Commissions proved once again their resilience moving up 11.3% YoY in the 9M09. Trade finance (+77.6% YoY),
commissions on loans (+35.5% YoY) and corporate finance & project finance fees (+21.0% YoY) were among the standouts year
to date.
• Commercial Banking Income was up by 17.9% YoY, demonstrating once again BES ability to generate recurrent revenues in a
difficult market environment, both domestically (+13.3% YoY) and internationally (+34.2% YoY).
• Trading income delivered once again a positive contribution of Eur 108.3mn in 3Q09, boosting the year to date contribution to
Eur 280.4mn, or 16.4% of total banking income.
• Costs continue under a tight control, having increased by just 2.5% YoY in 9M09 mainly because of the increase in amortisation of actuarial differences (+ Eur 26.8 mn YoY). Excluding post employment benefits, operating costs would have
declined by 2.1% YoY. Reported Cost to Income was 45.4% at the end of 9M09 versus 52.3% a year ago.
• Provisions in the 9M09 showed a deceleration versus 2Q09. Cost of risk for the 3Q09 stood at 85 bp versus 147 bp in 2Q09
(114 bp ex Eur 40mn), with net new entries reducing to more than half in 3Q09 versus previous quarter (0.49% vs 1.08% in 2Q09)
and credit provision reserve still increasing to 2.91% (versus 2.81% in 2Q09).
• Potential capital gains on strategic stakes of AFS portfolio currently stand at Eur 291mn a significant increase of Eur 431mn
since the end of 2008.
• Capital ratios remain very solid, and BES is, as well, among the most capitalised Banks in Iberia, with core tier I at 8.2% and
Tier I at 8.8%.
28th October 2009 39M09 Results Presentation
I. Activity highlights
• Client acquisition levels accelerating: 97,000 new individuals, with affluent clients growing 46% YoY in the first
nine months of 2009. The 3Q09 monthly client acquisition rate stood 9% above than the one registered in the 1H09.
488 new SME clients were acquired in the 9M09.
• Total Credit increased by 2.9% YoY, and continues to be driven by the International business and Corporate
lending;
• Corporate lending remains the main driver of volume growth, increasing 5.1% YoY or Eur 1.7bn. On a QoQ
basis, corporate lending increased by Eur 222mn;
• Mortgage book declined by 1.6% YoY (despite increasing production levels) and Other Loans to Individuals
slightly increased by 0.8% YoY.
• International credit volumes remain strong, up 8.1% YoY to Eur 10.0bn, driven by corporate lending which
represents 92% of international portfolio; Total customer funds increased 13.4% YoY, driving the transformation
ratio of the international business to 65%.
• On a consolidated basis, deposits were up by 5.6% YoY and CDs grew a strong 25.9% YoY. In aggregate,
both have increased by Eur 3.2 bn YoY, clearly outpacing gross loans absolute growth of Eur 1.9bn in Eur
1.4bn, or 74% more. Total Transformation ratio stands at 119%.
• Off Balance sheet funds posted another quarter of good performance, increasing by 5.1% QoQ or Eur 934mn in
absolute terms, which reflects both the capital markets recovery and the commercial dynamism of BES in this area.
28th October 2009 49M09 Results Presentation
I. Main figures
(1) Net Assets + Asset Management + Off-balance sheet funds + Securitised credit
(2) Basel II ratios as of 9M09 (estimate) assume the Foundation approach for credit risk (Advanced for retail portfolios) and Standard method for operational risk, both certified by the Bank of Portugal. 9M08 ratios calculated based on standardised approach.
+2.5 pp8.8%6.3%%Tier I
Solvency: Basel II (2)
-0.01 pp0.620.63%ROA
+2.3 pp12.2%9.9%%Total
+2.7 pp8.2%5.5%%Core Tier I
-7.9 pp
-6.9 pp
7.9%
2.9%
8.5%
6.8%
-1.5 pp
7.8%
YoY
60.7
52.3
55,031
51,055
74,421
98,417
10.9
334.8
9M08
%
%
Eur mn
Eur mn
Eur mn
Eur mn
%
Eur mn
52.8Cost / Income (ex Markets & Others)
45.4Cost / Income
59,364Total Customer Funds
52,537Loans to Customers (incl. securitisation)
80,718Total Net Assets
105,149Total Assets under Management (1)
9.4ROE
360.8Net Income
9M09
28th October 2009 59M09 Results Presentation
Agenda
I. 9M09 Highlights
II. Recent Market & Macro Developments
III. 9M09 Consolidated Results
IV. Segment Reporting & Commercial Activity
V. Customer Credit and Funds
VI. Funding & Liquidity, AFS & Solvency
VII. Wrap Up
28th October 2009 69M09 Results Presentation
II. Markets Environment
Credit Spreads (Cash vs. CDS).Selected Stock Indices.
0
50
100
150
200
250
300
350
400
Jan. 2007 Jul. 2007 Jan. 2008 Jul. 2008 Jan. 2009 Jul. 2009
(bps)
iBoxx EUR Financials
iTRAXX Financials Senior 5yr30
50
70
90
110
130
150
170
Jun. 2007 Out. 2007 Fev. 2008 Jun. 2008 Out. 2008 Fev. 2009 Jun. 2009 Out. 2009
Eurostoxx 50
01 Ju
n. 2
007
= 10
0
S&P 500
Bovespa
Shanghai Composite
Sensex (India)
Source: Bloomberg & Reuters
Financial stabilisation and improved growth prospects with low inflationary pressures have resulted in stronger confidence in financial markets with
emerging markets outperforming and credit spreads narrowing across the board.
28th October 2009 79M09 Results Presentation
II. Macro Portugal: Highlights
y-o-y growth (p.p.)
Exports growth (y-o-y, July 2009) :Angola: 16.8%Maghreb: 15.5%
3
4
5
6
7
8
9
10
11
1995 1997 1999 2001 2003 2005 2007 2009
%
9.1
9.6Euro Area
Portugal
Source: INE, European Commission & Bloomberg
Unemployment rateContribution Net External Demand to GDP
Return to positive growth already in 2Q2009 (0.3% q-o-q). A gradual export-led recovery is on the way, leading to improvements in confidence levels. Portugal’s
unemployment rate remains below the Euro Area average.
-1.9
-1.3 -1.3 -1.2
0.1
1.4
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
(% of labour force)
28th October 2009 89M09 Results Presentation
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
2025303540455055606570
Index (Points)
GDP (LHS)
PMI Services (RHS)
PMI Manufacturing (RHS)
PMI Services, PMI Manufacturing and GDP(%, y-o-y).
6
8
10
12
14
16
18
20
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
% o
f labo
ur fo
rce
17.9
Quarterly unemployment rate(% of labour force)
II. Macro Spain: Highlights
Source: INE & Bloomberg
Domestic demand adjustments are still penalising growth and should delay a full recovery. But a stabilising trend is already visible in some activity indicators.
28th October 2009 99M09 Results Presentation
Oil production (mb/day)
External reserves (USD million)
0
5
10
15
20
25
Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep.
12.8
20.1
USD
billio
ns
2008 2009
1.4
1.5
1.6
1.7
1.8
1.9
Jan.2007
Apr. Jul. Oct. Jan.2008
Apr. Jul. Oct. Jan.2009
Apr. Jul.
mb/
d
1.9
II. Macro Angola: Highlights
Source: BNA, OPEC & Bloomberg
Recovery in oil output and resilient activity in non-energy sectors are contributing to a reacceleration in growth. Scarcer USD liquidity in 1H2009 has forced a Kwanza
depreciation and higher interest rates. External reserves have now stabilised. GDP growth expected for 2009 at 5.0% clearly outpacing developed economies growth
28th October 2009 109M09 Results Presentation
II. Macro Brazil: Highlights
USD/BRL and Sovereign CDS spreadExternal Accounts
0
500
1000
1500
2000
2500
3000
3500
4000
2001 2002 2003 2004 2005 2006 2007 2008 2009
CDS
Spre
ad
1.5
2.0
2.5
3.0
3.5
4.0
USD/BRL
USD/BRL (RHS)Brazil CDS
5Y(LHS)
Source: IBGE, BACEN & Bloomberg
Rapid return to growth, based on strong exports and private consumption. Higher propensity to risk and the search for higher returns at the global level have
translated into a stronger Real. Selic rate with a final cut in 3Q2009, to 8.75%.
Trade balance (% of GDP)
Current Account Total (% of GDP)
28th October 2009 119M09 Results Presentation
II. The strong performance of Brazil is part of a trend of superior growth coming from emerging markets versus the developed countries
Contribution of main zones to global GDP growth
0.7
0.70.9
1.4
1.4
0.8 1.01.4
2.12.1
2.4 2.7
1.9
1.1
2.0
-4
-3
-2
-1
0
1
2
3
4
519
80
1985
1990
1995
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
USA Euro Area Japan Advanced - Ex US, EA, JP Emerging
%
Source: IMF, ES Research
28th October 2009 129M09 Results Presentation
II. This superior growth is a function as well of the low levels of leverage in emerging markets, with the burden of debt being clearly heavier in developed countries
Public Debt as a percentage of GDP
0
2 0
4 0
6 0
8 0
1 0 0
1 2 0
1 9 9 0 1 9 9 3 1 9 9 6 1 9 9 9 2 0 0 2 2 0 0 5 2 0 0 8 2 0 1 1 2 0 1 4
% o
f GD
P
Ad v a n c e d e c o n o m ie s
E m e rg in g a n d d e v e lo p in g
Source: IMF
28th October 2009 139M09 Results Presentation
Agenda
I. 9M09 Highlights
II. Recent Market & Macro Developments
III. 9M09 Consolidated Results
IV. Segment Reporting & Commercial Activity
V. Customer Credit and Funds
VI. Funding & Liquidity, AFS & Solvency
VII. Wrap Up
28th October 2009 149M09 Results Presentation
114.6
10.0
24.8
149.4
137.6
287.0
262.0
549.0
-30.7
108.4
471.3
171.0
300.3
3Q09
144.9
12.3
8.3
165.5
209.7
375.2
257.5
632.8
-1.7
123.7
510.8
175.9
334.9
2Q09
7.8%
64.8%
21.5%
12.5%
70.8%
35.4%
2.5%
18.2%
n.m.
31.8%
17.9%
11.3%
21.9%
YoY
-20.9%360.8334.8Net Income=
n.m.-40.6-13.1Other results+
-
-
=
-
=
-
=
+
=
+
+
-19.5%31.619.2Minority Interests
n.m.78.164.2Taxes
-9.8%470.5418.2Income Bef. Taxes and Minorities
-34.4%462.7270.9Net Provisions
-23.5%933.2689.1Net Operating Income
1.7%774.4755.3Operating Costs
-13.3%1,707.61,444.4Banking Income
-12.5%280.4212.8Capital Markets Results
-7.7%1,467.81,244.7Commercial Banking Income
-2.8%517.3464.7Fees and Commissions
-10.3%950.5780.0Net Interest Income
QoQ9M099M08(EUR million)
III. 9M09 Consolidated Results
28th October 2009 159M09 Results Presentation
III. 9M09 Consolidated Results breakdown: Domestic vs. International
InternationalDomestic
3.4%
83.8%
-24.5%
5.8%
241.7%
46.4%
6.6%
30.4%
15.1%
34.2%
3.4%
52.4%
YoY
126.9
29.5
24.2
180.6
121.3
301.9
147.5
449.4
77.4
372.0
106.7
265.3
9M09
122.7
16.0
32.0
170.7
35.5
206.2
138.3
344.5
67.2
277.3
103.2
174.1
9M08
10.3%
-32.4%
67.5%
17.1%
45.1%
30.7%
1.6%
14.4%
22.6%
13.3%
13.6%
13.1%
YoY
233.9
2.1
53.9
289.9
341.4
631.3
626.9
1,258.2
162.4
1,095.8
410.6
685.2
9M09
212.1
3.2
32.2
247.5
235.4
482.9
617.0
1,099.9
132.5
967.4
361.5
605.9
9M08
=
-
-
=
-
=
-
=
+
=
+
+
35.2%Net Income
93.2%Minority Interests
31.0%Taxes
38.4%Income Bef. Taxes and Minorities
26.2%Net Provisions
32.3%Net Operating Income
19.0%Operating Costs
26.3%Banking Income32.3%Capital Markets Results & Other
25.3%Commercial Banking Income
20.6%Fees and Commissions
27.9%Net Interest Income
% of Total (Consolid.)
(euro million)
28th October 2009 169M09 Results Presentation
III. Albeit being impacted by an increase in provisions, international operations maintained a strong commercial dynamism
-19.9%22.6%% of consolidated
3.4%126.9122.7Total
-56.4%61.7%% of international
60.3%43.327.0UK
36.7%
20.0
75.79M08Net Income Contribution(EUR million)
35.2%
12.1
71.69M09
-
-39.6%
-5.5%YoY
% consolidated
Other
Strategic Triangle
Other 8.0
UK 43.3
France/Lux 4.0
Angola55.6
Spain -6.3Brazil
22.3( ) 9M08
(Eur mn)
(37.5)
(27.0)
(28.3) (9.9)
(12.4)
(7.6)
• Strategic triangle results impacted by the increase
in provisions of the Spanish operation although
operating income still growing at an healthy 48.1%;
• UK continued strong performance already
evidenced in 1H09 results with results growing
60.3% YoY in the 9M09 as operating income
boosted 96.2% YoY;
• Total International results accounted for 35.2% of
consolidated results.
110.3%59.128.1Spain
-9.8%44.449.2Brazil
48.1%209.9141.7Strategic Triangle
46.4%301.9206.2Total International
96.2%73.137.3UK
27.2
64.4
9M08Operating Income(EUR million)
18.9
106.4
9M09
-30.9%
65.2%
YoY
Other
Angola
Net Income Breakdown
28th October 2009 179M09 Results Presentation
NII 9M08 PriceEffect
VolumeEffect
MixedEffect
NII 9M09
III. NII Ytd continued to be strong (+21.9% YoY) in spite of the well flagged QoQreduction, as the mismatch effect faded and the re-pricing efforts concluded
(NIM
in b
p; A
ccum
ulat
ed F
igur
es)
258 253269
306315
335
300
176 171 170 176193 189196
0
50
100
150
200
250
300
350
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q0975
95
115
135
155
175
195
NII (quarter) NIM (Accum)
395406423
260180 164 185
3.253.38
1.681.47 1.58
2.18
3.58
0.0
100.0
200.0
300.0
400.0
500.0
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q090.000.501.001.502.002.503.003.504.00
Credit NII (LHS, Eur mn) Credit Margin (RHS, %)
-39-36-47
56
10910685
-0.61-0.59-0.74
0.90
1.981.881.55
-70.0
-20.0
30.0
80.0
130.0
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09-0.90
-0.40
0.10
0.60
1.10
1.60
2.10
Deposits NII (LHS, Eur mn) Deposits Margin (RHS, %)
Credit Margin Deposit Margin
Net Interest Income & Margin Breakdown Volume & Price Effect
780.084.4
77.5 8.6 950.5
(EUR mn)
+11.6%
+21.9%
28th October 2009 189M09 Results Presentation
III. Fees & Commissions have shown resilience once again in the quarter, benefiting from a recovery of capital markets related fees
Capital Markets Related Fees**Trade Finance & Export Related Fees
Total Fees & Commissions * Traditional & Cross Selling Fees
171.0175.9170.3
464.7517.3
9M08 9M09 1Q09 2Q09 3Q09
118.3130.7124.3
320.2373.5
9M08 9M09 1Q09 2Q09 2Q09
9.912.817.1
22.4
39.7
9M08 9M09 1Q09 2Q09 3Q09
* Breakdown in appendix** Corporate Finance & Project Finance + Securities + Asset Management
52.745.245.9
144.4 143.8
9M08 9M09 1Q09 2Q09 3Q09
(EUR mn)(EUR mn)
(EUR mn)(EUR mn)
11.3%
-2.8%
16.6%
-9.5%
-0.4%
16.6%
77.6%
-23.1%
Bancassurance: +15.8% YoYCommissions on Loans: +35.5% YoYGuarantees: +28.5% YoY
28th October 2009 199M09 Results Presentation
108.2123.8
48.3
280.4
212.8
9M08 9M09 1Q09 2Q09 3Q09
Capital Markets Results Breakdown
Capital Markets Results*
* Breakdown in appendix
(EUR mn)
197.2 35.2 14.8
-26.6
79.1 5.7 280.4
(EUR mn)
14.7%
16.4%
19.6% 19.7%
% Bkg Income
1H09Interest Rate
Credit FX & Other
Equity Divid. 9M09 Prov. 9M09 net of Prov.
-37.5242.8
Interest Rate
Credit FX & Other
Equity Divid.
-81.3-21.2
15.4
62.0 172.1
Stronger outlook for both US and Euro Zone economies;
Continuous aggressive monetary policies followed by Central Banks on a historical low interest rate environment;
Continued depreciation of US Dollar against other currencies;
Credit spreads narrowing along with the reduction of liquidity premium;
Liquidity excess decreased risk aversion sentiment, causing an increased demand on credit markets;
The strong performance of global equity markets explain most of the positive results achieved in this area.
III. Capital Markets Results maintained a strong contribution to banking income fuelled by interest rate and equity trading
9.2%
1H09
3Q09
28th October 2009 209M09 Results Presentation
III. Other Results in 9M09 confirmed the recovery pattern of BES Vida as reduction of market impairments leaves room for higher reflection in bottom line of good commercial performance
-1.8
-15.4
2.3
11.3
13.6
2Q09
n.m.
n.m.
-49.6%
n.m.
112.9%
YoY
-30.7
-38.1
0.3
7.1
7.4
3Q09
n.m.
n.m.
n.m.
-37.2%
-45.6%
QoQ
-61.2-22.8Other
-40.6
6.3
14.3
20.6
9M09
-13.1
12.5
-2.8
9.7
9M08
… BES Vida
… Other
(euro mn)
Other Results
Equity accounted earnings, o.w.
Other Results Breakdown
28th October 2009 219M09 Results Presentation
III. Operating Costs performance in 9M09 continued to reflect BES’ tight cost control policies, namely in staff expenses (-2.1% ex-post employment benefits YoY) and administrative costs (-5.1% YoY)
Administrative Costs Depreciation & Amortisation
Total Operating Costs & Cost to Income Staff Costs
257.5 262.0
755.3 774.4
9M08 9M09 2Q09 3Q09
140.8138.8
391.5 417.6
9M08 9M09 2Q09 3Q09
22.021.9
56.865.5
9M08 9M09 2Q09 3Q09
99.396.9
307.0 291.2
9M08 9M09 2Q09 3Q09
(EUR mn)(EUR mn)
(EUR mn) (EUR mn)
6.7%
-5.1%
2.4%
1.4%
Total Staff Costs down 2.1% YoY ex Post Employment
Benefits
15.4%
0.6%
1.7%
52.3% 45.4%
40.7% 47.7%
Cost to Income
2.5%
28th October 2009 229M09 Results Presentation
III. Provisions for credit yearly increase reflects the still challenging economic environment. However, in 3Q09, were down to an annualised 85bp of gross loans – 62bp below 2Q09 peak level
Securities Provisions Other Provisions
Total Provisions Credit Provisions & Cost of Risk
177.5137.5 104.2
200.7
378.3
9M08 9M09 2Q09 2Q09 3Q09
137.6209.7
270.9
462.7
9M08 9M09 2Q09 3Q09
18.517.5
42.3 46.9
9M08 9M09 2Q09 3Q09
14.914.7
27.9
37.5
9M08 9M09 2Q09 3Q09
(EUR mn)(EUR mn)
(EUR mn) (EUR mn)
57 103
147114
Cost of Risk
Ex-Reinf.
85
28th October 2009 239M09 Results Presentation
III. The lower cost of risk has not impaired the effort of maintaining credit provision reserve at high levels, having in fact increased to 2.91% in 3Q09, and is also a reflection of a reduction to half of net new entries in the quarter
1.82%
2.3%
1.9% 1.8%2.1%2.1%
1.9%
1.5%
1.3%1.2%
1.3%
1.5%1.77%
1.56%2.0%
1.7%
1.5%
1.8% 1.8%
1.6%
1.3%
1.1%1.0%
1.1%1.2%
1.42%
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 1Q092Q093Q09
Overdue Loans/Gross Loans Overdue Loans (over 90 days)/Gross Loans
159%
123%
159%163%
180%
195%
184%
137%132%131% 132%
140%
170%
186%
198%
210%219%
229%218%
197%
167%
153%149%
155%138%
161%
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 1Q09 2Q09 3Q09
Coverage of Overdue Loans Coverage of Overdue Loans (> 90 days)
Credit Provisions Reserve Net New Entries as % of Performing Loans
NPL’s Evolution Coverage Evolution
2.33% 2.35% 2.35% 2.38% 2.52%2.81% 2.91%
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
0.41%0.52% 0.55%
0.37%
1.07% 1.08%
0.49%
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
(quarterly annualised)
28th October 2009 249M09 Results Presentation
Agenda
I. 9M09 Highlights
II. Recent Market & Macro Developments
III. 9M09 Consolidated Results
IV. Segment Reporting & Commercial Activity
V. Customer Credit and Funds
VI. Funding & Liquidity, AFS & Solvency
VII. Wrap Up
28th October 2009 259M09 Results Presentation
IV. The BES Group is composed of eight operational segments (including the corporate centre)
118.8
13.4
168.7
122.6
48.1
21.3
136.1
-158.7
470.5
Income before Taxes and Minorities9M09. Euro million
Total Group
Retail
Private Banking
Corporate and Institutional Clients
International Commercial Banking
InvestmentBanking
Asset Management
Markets & Strategic Participations
CorporateCentre
Dom
estic
Com
mer
cial
B
anki
ng
Δ YoY
+13.8%
-14.3%
-25.4%
+23.4%
-30.2%
-15.3%
…
-5.3%
+12.5%
EUR mn
455.3
29.5
379.0
337.8
160.9
38.2
306.8
1,707.5
Δ YoY
-8.6%
-17.5%
+16.0%
+44.0%
+7.6%
-7.0%
+93.7%
+18.2%
Banking Income9M09
Operating Costs9M09
Net Provisions9M09
EUR mn
311.3
17.0
44.9
115.2
75.1
17.0
35.2
158.7
774.4
Δ YoY
-3.7%
-9.1%
-1.1%
+12.8%
+8.9%
+6.0%
+16.6%
+5.3%
+2.5%
EUR mn
25.1
-1.0
165.3
100.1
37.6
-0.1
135.6
462.7
Δ YoY
-64.4%
-170.3
+199.8%
…
…
+13.3%
+36.8%
+70.8%
28th October 2009 269M09 Results Presentation
IV. Retail contribution increased by 13.8% YoY, backed by low impairment and a strong commercial activity, focused on client acquisition and client loyalty
Client Acquisition 9M09 Retail Banking 9M09 YoYRetail Banking Sales 9M09
Client Involvement
ClientFunds
Client involvement: credit and funds
Credit
TotalGroup
Inter-national
Domestic
97 9
88
+1.5%
-3.4%
+7,2%
Affluent: +46.0%
• Affluent: +8.6%• Mass Market: +5.4%• Small Businesses: +5.0%
Value-added products soldThousands
9M08 9M09
530639
+20%
• Pension Plans: +37% YoY (production market share: 34.1%, rank: #1)
• Mortgages production: +63% in 3Q09 vis-à-vis 1H09
• Auto Insurance: +66% YoY• Direct Debits: +182% YoY (stock)
(Thousand clients)
Acquisition in the 3Q09 grew by 9% vis-à-vis 1H09
28th October 2009 279M09 Results Presentation
IV. Corporate Banking is the strongest contributor to the Group’s results, due to the strong franchise with Portuguese companies (particularly with companies with international activities)
Middle Market 9M09 YoY Wholesale Banking 9M09 YoY
ClientInvol-
vement
ClientFunds
Credit
+13.2%
+6.7%
+28.1%
ClientInvol-
vement
ClientFunds
Credit
+5.2%
+5.4%
+3.8%
On-Balance Sheet Funds• Middle Market: +3.7%• Wholesale : +26.9%
Impact of the ongoing cross selling initiatives in these segments in terms of commissions
• Domestic Trade Finance: +187%
• Investment Banking Services: +258%
• Renting: +39%
• Life insurance: +34%
Cross Selling 9M09
28th October 2009 289M09 Results Presentation
IV. Investment Banking: growth with increased internationalisation
Net IncomeBanking Income
Banking Income 9M09: Eur 161 (9% YoY)
International59%
Portugal41% Net
Interest Income
28%
Fees & Commissions
49%
Capital MktsResults
23%
Net Income 9M09: Eur 34mn (-19% YoY)
International79%Portugal
21%
Domestic market:
Fixed Income and Project Finance continued to lead the
way
Financial Advisor to Altavia Tejo consortium on the
proposal for the High Speed Link Concession Lisboa –
Poceirão which includes the third bridge over Tagus River.
Leadership of the Portuguese Brokerage market, ending
September with a 16.9% accumulated market share (11.7%
at the end of 2008).
International Market:
SPAIN: Brokerage ranking 4th place and market share increase (7.1% from 5.6% at the end of 2008).
SPAIN: (i) Financial Advisor to EDP in the acquisition of low pressure gas distribution networks from Gas Natural (ii)Mandated Lead Arranger on the ACS Cobra €342 million financing for a thermo solar plant.
BRAZIL: (i) Bookrunner of the Tender and Exchange Offer of Banco Mercantil do Brasil (ii) Joint-Lead and Bookrunner of the Bradespar BRL 800 million local bond issue; (iii) Co-Manager of the USD 750 million BancoBradesco Subordinated Debt issue.
MOROCCO: Financial Advisor to PT in the sale of 32.18% equity stake and outstanding shareholders loans in Méditel.
28th October 2009 299M09 Results Presentation
Agenda
I. 9M09 Highlights
II. Recent Market & Macro Developments
III. 9M09 Consolidated Results
IV. Segment Reporting & Commercial Activity
V. Customer Credit and Funds
VI. Funding & Liquidity, AFS & Solvency
VII. Wrap Up
28th October 2009 309M09 Results Presentation
V. Total loan book increased 2.9% YoY focusing mostly on supporting the corporate segment (+5.1%) and the international business (+8.1% YoY)
Other Loans to Individuals Book
Corporate Loan BookLoan Portfolio
Mortgage Book
41,829 42,232 42,562
9,226 9,9759,996
9M08 1H09 9M09Domestic Portfolio International Portfolio
14,293 14,032 14,081
554 523539
9M08 1H09 9M09Domestic Portfolio International Portfolio
25,130 25,803 26,023
8,330 9,1409,139
9M08 1H09 9M09Domestic Portfolio International Portfolio
2,407 2,397 2,458
341 312318
9M08 1H09 9M09Domestic Portfolio International Portfolio
YoY %
(EUR mn)
(EUR mn)
(EUR mn)
(EUR mn)
+9.7%+8.1%
-8.5% -5.7%
+1.8% +3.6%
-1.5%2.1%
51,055 52,228 52,537 33,460 34,942 35,163
2,748 2,715 2,770 14,847 14,571 14,604
28th October 2009 319M09 Results Presentation
V. Customer funds grew on total 7.9% YoY driven a sharp increase in deposits & CD’s (+10.5% YoY). In absolute terms deposits & CD’s have outpaced gross loans growth by Eur 1.4bn YoY (74%)
Deposits & CD’s Transformation Ratio*
Total Customer Funds On BS Funds & Off BS Funds
38,780 41,486 40,939
16,251 18,42516,892
9M08 1H09 9M09Domestic Portfolio International Portfolio
40,10440,05237,536
18,326 19,26017,495
9M08 1H09 9M09On BS Off BS
23,117 25,156 24,416
7,413 9,3347,806
9M08 1H09 9M09Deposits CD's
YoY %
1.88 1.951.97
1.881.99 1.78 1.86
1.191.181.231.231.231.181.24
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Core Total
* Core = On BS Credit / DepositsTotal = On BS Credit / On BS Customer Funds
(EUR mn)(EUR mn)
(EUR mn)
+5.6%
+13.4% +10.1%
+6.8%
+25.9%
+5.6%
55,031 58,378 59,364
28th October 2009 329M09 Results Presentation
Agenda
I. 9M09 Highlights
II. Recent Market & Macro Developments
III. 9M09 Consolidated Results
IV. Segment Reporting & Commercial Activity
V. Customer Credit and Funds
VI. Funding & Liquidity, AFS & Solvency
VII. Wrap Up
28th October 2009 339M09 Results Presentation
VI. BES refinancing needs for the full 2009 have been surpassed in Eur 1.2bn in 9M09
12 12 13 14
62 63 60 59
26 25 27 271
-59M08 2008 1H09 9M09
Capital Customer Funds MLT Funds Treasury Gap
5.2 4.73.8
2009 2010 2011 2012
Repoable Securities Funding Activity during the quarter
Funding Structure Medium Long Term Maturity Profile
4.6 4.4 4.2 4.0
8.7 8.6 9.1 9.0
2008 1Q09 2Q09 3Q09
ECB eligibleTotal
(EUR bn)
(EUR bn)
(%)
BES maintains a well balanced funding structure, resulting in a liquidity surplus up to 1Y at the end of 3Q09. Customer Funds showed a strong performance (+Eur 2.6 bn YoY) but its weight on total funding declined 3 p.p. due to the raise of medium and long term funds (Eur 2.4 bn YoY) and the rights issue concluded in April (capital instruments increased Eur 1.9 bn YoY).
In the context of a global revision for Portuguese Banks, Moody’s downgraded BES senior unsecured debt rating to A1 (from Aa3) and BFSR to C- (from C+), with outlook stable
2009 refinancing needs
YtD funds raised
3.24.4
28th October 2009 349M09 Results Presentation
VI. BES has recently created a holding company, Avistar, that aggregates the holdings in Bradesco, PT and EDP. No changes from a consolidated balance sheet perspective
Main Highlights
. Holding incorporated in Portugal;
. More than Eur 1bn in assets;
. Eur 100mn in capital;
. Purpose of reducing capital volatility and increase efficiency in capital management;
. Intention of opening the holding to minorities and eventual listing in 2010, subject to market conditions;
. Possibility of further diversifying the investment portfolio;
28th October 2009 359M09 Results Presentation
VI. Total potential gross gains stood at Eur 291mn benefiting from the recovery of the strategic positions in Bradesco, PT and EDP, that have recovered Eur 431mn since the end of 2008
Portugal TelecomStake: 5.83%
EDPStake: 2.35%
Potential Capital Gains & Losses * BradescoStake: 2.52%
291.0
58.3102.6
-179.5 -189.2
9M08 4Q08 1Q09 2Q09 3Q09
297.5
147.4178.3
-20.5 -5.2
9M08 4Q08 1Q09 2Q09 3Q09
-15.7-31.8-29.5-91.2 -105.4
9M08 4Q08 1Q09 2Q09 3Q09
2.8
-64.8-54.0 -75.8 -84.9
9M08 4Q08 1Q09 2Q09 3Q09
(EUR mn)(EUR mn)
(EUR mn) (EUR mn)
* Includes Bradesco, PT, EDP and BMCE
28th October 2009 369M09 Results Presentation
VI. The strategic position held in Bradesco is backed by sound fundamentals supporting the Brazilian economy that have been recognised by investors worldwide
-60
-40
-20
0
20
40
60
80
2003 2004 2005 2006 2007 2008 20090.99
1.3
1.34
2.44
India
China
Russia
Brazil
EM equity fund flows (USD bn) EM equity fund flows (USD bn)
Brazil top of the BRIC’s for recent fund flows
Source: EPFR Global, FT.
Record fund inflows in 2009 for EM
“Brazil has been the standout performer in October as equity investors have pumped in USD 2.44bn which is almost twice the inflows seen to China in the month. Brazil is one of the world’s largest commodity producers and has benefited from strong growth in China, as well as broader
optimism about global economic recovery.” Financial Times
Source: EPFR Global, FT. Data for October 2009
28th October 2009 379M09 Results Presentation
VI. BES solvency ratios remain as one of the highest of Iberia
RWA Components Evolution* Tier I Capital
Solvency Ratios Evolution* RWA
8.28.37.86.0 5.7 5.5 6.1 5.8
8.88.88.66.67.16.36.66.8
12.212.211.99.9
11.39.99.710.1
1Q08 2Q08 3Q08 4Q08 1Q09 1Q09PF
2Q09 3Q09
Core Tier I Tier I Total Capital
62,02659,48859,09555,70557,543 59,183 61,150
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
* From 4Q08 onwards use of IRB Foundation
(EUR mn)
(EUR mn)
Standard IRB
3,146
3,742
52,600
2Q09 (IRB)
3,146
3,159
52,790
1Q09 (IRB)
2,840
2,878
49,987
4Q08 (IRB)
3,146Op. Risk
3,712Trading Book
55,168Banking Book
3Q09 (IRB)
600 600 600
600 600 600
5,0744,9224,6153,4153,4123,345
3Q08 4Q08 1Q09 1Q09PF
2Q09 3Q09
(%)
Core Tier IPreferred Shares
28th October 2009 389M09 Results Presentation
Agenda
I. 9M09 Highlights
II. Recent Market & Macro Developments
III. 9M09 Consolidated Results
IV. Segment Reporting & Commercial Activity
V. Customer Credit and Funds
VI. Funding & Liquidity, AFS & Solvency
VII. Wrap Up
28th October 2009 399M09 Results Presentation
VII. Wrap up
• BES 9M09 results marked the first YoY increase of the year with net profit achieving Eur 360.8mn corresponding to
an increase of 7.8% YoY.
• International business evermore important as net operating income grew 46.4% YoY, confirming the operating
dynamism and strategic rationale of BES international operations focused on the Southern Atlantic axis. Total
net income contribution stood at 35.2% of the consolidated net income.
• It is also important to stress the increasingly important role that BES has been assuming in the support of
companies (Portuguese but not only) that seek potential growth to emerging markets where BES is present,
namely Angola and Brazil.
• The good strategic positioning of BES has allowed for resilient top line in these difficult times with commercial
banking income growing 17.9%.
• Additionally BES continued to control costs in an effective manner achieving further efficiency gains, even
starting from a more efficient base than peers. Cost to income stood at a healthy 45.4% in 9M09.
• The 9M09 results also showed a reduction of cost of risk and quarterly net new entries of NPL’s, while credit
provisions reserve continued to increase, once again highlighting BES conservativeness in managing risks.
• The strategic positions held by BES in the AFS portfolio have also recovered, moving up by Eur 431mn since the
end of 2008, thus confirming, namely with regards to Brazil and Bradesco, the merits of these long term holdings.
• In terms of solvency, BES maintains a core tier I ratio among the best in Iberia with 8.2% at the end of the 9M09
(8.3% if including the 3Q09 net profit).
• All in all BES posted what we believe are a solid set of results across the board and will continue to pursue a
shareholder value creation course, while navigating in a still uncertain, albeit recovering environment.
28th October 2009 409M09 Results Presentation
Appendix I: Quarterly Data
28th October 2009 419M09 Results Presentation
Quarterly consolidated income statement
-20.9%
-19.5%
199.6%
-9.8%
-34.4%
-23.5%
1.7%
-13.3%
n.m.
-12.5%
-7.7%
-2.8%
-10.3%
QoQ
114.6
10.0
24.8
149.4
137.6
287.0
262.0
549.0
-30.7
108.4
471.3
171.0
300.3
3Q09
144.9
12.3
8.3
165.5
209.7
375.2
257.5
632.8
-1.7
123.8
510.8
175.9
334.9
2Q09
101.3
9.3
45.0
155.6
115.4
271.0
254.7
525.7
-8.2
48.3
485.6
170.3
315.3
1Q09
67.5
5.7
19.3
92.5
105.0
197.5
246.3
443.8
-49.9
16.0
477.7
171.6
306.1
4Q08
70.7
5.3
-13.0
63.0
89.9
152.9
255.5
408.4
-5.0
-14.4
427.8
158.8
269.0
3Q08
145.9
6.2
20.3
172.4
68.2
240.6
241.5
482.1
1.3
71.8
409.0
150.7
258.3
1Q08
62.3%
89.0%
n.m.
137.1%
53.0%
87.6%
2.6%
34.4%
n.m.
n.m.
10.2%
7.7%
11.6%
YoY
7.8%
64.8%
21.5%
12.5%
70.8%
35.4%
2.5%
18.2%
n.m.
31.8%
17.9%
11.3%
21.9%
9M09/9M08
118.2
7.7
56.9
182.8
112.7
295.5
258.4
553.9
-9.4
155.4
407.9
155.1
252.8
2Q08
- Minorities
- Taxes
= Income Bef. Taxes and Min.
= Net Income
+ Other Results
- Net Provisions
= Net Operating Income
- Operating Costs
= Banking Income
+ Capital Markets Results
= Commercial Banking Income
+ Fees and Commissions
+ Net Interest Income
(EUR million)
28th October 2009 429M09 Results Presentation
Quarterly domestic income statement
-37.1%
n.m.
263.8%
-26.0%
-40.7%
-34.2%
0.5%
-19.2%
-43.9%
-13.1%
-14.7%
-12.2%
QoQ
72.5
-0.4
17.4
89.6
91.2
180.8
211.0
391.8
52.9
338.9
126.1
212.8
3Q09
115.2
1.2
4.8
121.1
153.6
274.8
210.0
484.8
94.5
390.2
147.9
242.4
2Q09
46.1
1.3
31.6
79.0
96.7
175.7
205.8
381.5
14.8
366.7
136.7
230.0
1Q09
47.0
2.3
18.2
67.6
68.9
136.5
199.9
336.4
-29.1
365.6
138.5
227.1
4Q08
25.2
-0.1
-18.8
6.5
74.9
81.4
211.5
292.9
-28.6
321.5
116.5
205.0
3Q08
77.8
1.9
37.6
117.3
98.3
215.6
210.6
426.2
108.9
317.3
121.7
195.6
2Q08
187.8%
n.m.
n.m.
n.m.
21.8%
122.1%
-0.2%
33.8%
n.m.
5.4%
8.3%
3.8%
YoY
109.1
1.3
13.3
123.7
62.1
185.8
194.9
380.7
52.0
328.7
123.3
205.4
1Q08
10.3%
-32.4%
67.5%
17.1%
45.1%
30.7%
1.6%
14.4%
22.6%
13.3%
13.6%
13.1%
9M09/9M08
- Minorities
- Taxes
= Income Bef. Taxes and Min.
= Net Income
- Net Provisions
= Net Operating Income
- Operating Costs
= Banking Income
+ Capital Markets & Other Results
= Commercial Banking Income
+ Fees and Commissions
+ Net Interest Income
(EUR million)
28th October 2009 439M09 Results Presentation
Quarterly international income statement
41.9%
-7.7%
110.9%
34.8%
-17.4%
5.6%
7.4%
6.2%
-9.8%
9.8%
60.1%
-5.4%
QoQ
42.1
10.3
7.3
59.7
46.4
106.1
51.0
157.1
24.7
132.4
45.0
87.5
3Q09
29.7
11.1
3.5
44.3
56.2
100.5
47.5
148.0
27.4
120.6
28.1
92.5
2Q09
55.2
8.0
13.4
76.6
18.7
95.3
48.9
144.2
25.3
118.9
33.6
85.3
1Q09
20.5
3.4
1.0
24.9
36.1
61.0
46.4
107.3
-4.8
112.1
33.1
79.0
4Q08
45.5
5.3
5.7
56.5
15.1
71.5
44.0
115.5
9.1
106.4
42.4
64.0
3Q08
40.4
5.8
19.3
65.5
14.4
79.9
47.7
127.6
37.0
90.6
33.4
57.2
2Q08
-7.4%
93.8%
29.2%
5.8%
208.1%
48.4%
15.9%
36.0%
171.2%
24.4%
6.0%
36.7%
YoY
36.8
4.9
7.0
48.7
6.1
54.8
46.6
101.4
21.1
80.3
27.4
52.9
1Q08
3.4%
83.8%
-24.5%
5.8%
241.7%
46.4%
6.6%
30.4%
15.1%
34.2%
3.4%
52.4%
9M09/9M08
- Minorities
- Taxes
= Income Bef. Taxes and Min.
= Net Income
- Net Provisions
= Net Operating Income
- Operating Costs
= Banking Income
+ Capital Markets & Other Results
= Commercial Banking Income
+ Fees and Commissions
+ Net Interest Income
(EUR million)
28th October 2009 449M09 Results Presentation
Angola: Quarterly income statement
2.2%
6.9%
1.3%
-0.7%
-0.3%
-0.5%
6.9%
13.0%
13.0%
3.0%
4.5%
2.4%
71.0%
-11.2%
QoQ
-8.4%1,634.71,599.51,697.11,680.61,508.21,248.3938.9On BS Customer Funds
-21.1%3,942.13,891.43,659.93,530.23,256.11,839.01,405.7Total Assets
-61.7%1,623.71,518.21,428.41,180.31,004.0802.2586.1Total Credit
26.0%23.6%31.6%33.9%29.4%30.2%39.2%Cost to Income
99.3%
19.7
16.0
35.6
2.0
37.7
13.2
50.9
14.3
36.6
10.1
26.5
3Q09
66.6%
15.8
7.7
23.5
1.9
25.4
10.6
36.0
-0.3
36.3
16.9
19.5
3Q08
70.2%
10.7
10.8
21.6
1.0
22.6
11.6
34.2
2.8
31.5
11.6
19.8
4Q08
64.3%
12.5
9.1
21.6
1.1
22.7
9.8
32.5
40
28.4
7.2
21.2
2Q08
84.2%
16.0
13.1
29.1
1.9
31.0
14.3
45.3
11.5
33.8
11.8
22.0
1Q09
62.4%
9.2
6.4
15.6
0.7
16.3
10.5
26.8
9.0
17.8
3.6
14.2
1Q08
28.6%0.6%35.8Commercial Banking Income
=
48.2%24.7%19.9Net Income=
94.9%
16.0
35.9
1.8
37.7
11.7
49.5
13.7
5.9
29.8
2Q09
94.4%
65.9%
54.3%
65.2%
27.1%
52.9%
211.2%
0.6%
42.7%
9M09/9M08
106.4%
51.6%
5.5%
24.9%
24.9%
41.3%
n.m.
-40.2%
36.1%
YoY
-
=
-
=
-
=
+
+
+
Total Credit / On BS C.Funds
Taxes & Minority Interests
Income Bef. Taxes & Min.
Net Provisions
Net Operating Income
Operating Costs
Banking Income
Capital Markets Results & Other
Fees and Commissions
Net Interest Income
(EUR million)
28th October 2009 459M09 Results Presentation
Spain: Quarterly income statement
-1.5%
-
n.m.
n.m.
n.m.
-12.1%
-1.9%
-3.8%
-2.9%
-87.5%
7.2%
38.6%
-3.3%
QoQ
--51.9%52.5%58.2%71.2%71.6%75.2%64.5%Cost to Income
4,104.8
-4.5
-3.8
-8.3
28.0
19.7
21.3
41.0
0.6
40.5
13.1
27.3
3Q09
4,168.0
-8.7
-3.2
-11.8
31.9
20.1
22.2
42.3
4.5
37.8
9.5
28.3
2Q09
3,793.1
2.6
0.6
3.2
4.4
7.6
23.0
30.6
2.8
27.8
11.4
16.4
2Q08
3,920.2
0.3
-0.7
-0.4
8.2
7.8
19.7
27.5
-1.1
28.5
11.7
16.8
3Q08
4,182.5
-8.7
-5.1
-13.8
22.7
8.9
22.0
30.9
-0.5
31.4
9.7
21.7
4Q08
4,128.2
6.7
2.2
9.0
10.3
19.3
21.6
40.9
2.9
38.0
8.9
29.1
1Q09
3,629.1
7.0
1.8
8.8
3.9
12.7
23.1
35.8
3.5
32.3
15.0
17.3
1Q08
31.1%41.8%Commercial Banking Income
=
-164.1%
n.m.Net Income=
4.7%
n.m.
n.m.
242.3%
152.8%
8.3%
49.4%
n.m.
12.0%
62.7%
YoY
-
n.m.
-195.4%
325.4%
110.3%
-1.0%
32.3%
52.0%
-17.4%
67.8%
9M09/9M08
-
=
-
=
-
=
+
+
+
Credit
Taxes & Minority Interests
Income Bef. Taxes & Min.
Net Provisions
Net Operating Income
Operating Costs
Banking Income
Capital Markets Results & Other
Fees and Commissions
Net Interest Income
(EUR million)
28th October 2009 469M09 Results Presentation
Brazil: Quarterly income statement
-26.5%
-55.0%
-36.9%
77.4%
-21.8%
9.0%
-14.3%
-34.6%
20.4%
-7.1%
37.2%
QoQ
30.7%
7.4
2.6
10.0
4.3
14.3
6.4
20.7
10.0
10.7
3.1
7.6
3Q09
29.5%
4.7
3.9
8.6
3.1
11.7
4.9
16.6
7.6
9.0
3.4
5.6
1Q09
20.3%
11.6
15.1
26.7
0.4
27.1
6.9
34.0
29.0
5.0
3.9
1.2
2Q08
24.9%
10.5
2.7
13.2
0.7
13.9
4.6
18.5
14.5
4.0
4.0
0.0
3Q08
115.6%
1.5
-4.9
-3.4
2.9
-0.5
3.7
3.2
-6.6
9.8
0.0
9.8
4Q08
24.0%
10.2
5.7
15.9
2.4
18.3
5.8
24.2
15.3
8.9
3.4
5.5
2Q09
39.7%
6.2
1.9
8.1
0.1
8.2
5.4
13.6
7.7
5.9
3.1
2.8
1Q08
91.9%169.3%Commercial Banking Income
=
-21.1%-29.3%Net Income=
-2.8%
-23.9%
511.2%
3.2%
38.7%
12.0%
-31.2%
-21.0%
n.m.
YoY
-37.6%
-27.9%
692.9%
-9.8%
1.2%
-7.0%
-35.9%
-9.1%
367.0%
9M09/9M08
-
=
-
=
-
=
+
+
+
Cost to Income
Taxes & Minority Interests
Income Bef. Taxes & Min.
Net Provisions
Net Operating Income
Operating Costs
Banking Income
Capital Markets Results & Other
Fees and Commissions
Net Interest Income
(EUR million)
28th October 2009 479M09 Results Presentation
UK: Quarterly income statement
113.2%
n.m.
n.m.
-50.5%
20.5%
8.1%
18.9%
n.m.
23.6%
176.7%
-14.9%
QoQ
12%
14.7
2.3
17.0
9.7
26.7
3.6
30.3
-1.2
31.5
14.2
17.3
3Q09
10%
21.7
1.4
23.1
1.2
24.3
2.8
27.1
1.9
25.2
5.2
20.0
1Q09
21%
5.5
-0.6
5.0
7.4
12.4
3.3
15.7
-1.8
17.5
6.5
11.0
2Q08
19%
13.1
0.2
13.3
1.3
14.6
3.4
18.0
-5.4
23.4
4.4
19.0
3Q08
14%
14.7
2.2
16.9
6.5
23.4
3.7
27.1
0.7
26.4
6.4
20.0
4Q08
13%
6.9
-4.3
2.6
19.5
22.1
3.3
25.5
0.0
25.4
5.1
20.4
2Q09
25%
8.4
0.9
9.3
1.0
10.3
3.4
13.7
-0.1
13.8
2.1
11.7
1Q08
49.9%34.3%Commercial Banking Income
=
60.3%12.1%Net Income=
n.m.
27.9%
n.m.
83.0%
5.2%
68.1%
n.m.
218.2%
-8.8%
YoY
n.m.
55.1%
212.6%
96.2%
-3.7%
74.8%
-110.4%
87.2%
38.3%
9M09/9M08
-
=
-
=
-
=
+
+
+
Cost to Income
Taxes & Minority Interests
Income Bef. Taxes & Min.
Net Provisions
Net Operating Income
Operating Costs
Banking Income
Capital Markets Results & Other
Fees and Commissions
Net Interest Income
(EUR million)
28th October 2009 489M09 Results Presentation
-2.8%
20.3%
-0.1%
-38.8%
6.0%
14.5%
41.0%
-9.8%
2.4%
-23.1%
-11.0%
-2.8%
QoQ
171.0
20.6
1.9
12.2
9.0
27.0
13.0
18.3
12.7
9.9
25.1
21.5
3Q09
170.3
27.2
1.6
12.1
8.0
22.7
12.5
13.8
10.7
17.0
23.7
21.0
1Q09
175.9
17.1
1.9
19.8
8.5
23.6
9.2
20.2
12.4
12.8
28.1
22.1
2Q09
171.6
24.6
1.9
9.0
9.2
23.4
13.9
17.0
14.5
10.6
25.0
22.5
4Q08
158.8
19.4
1.7
12.3
8.6
25.3
14.3
13.7
9.4
10.0
19.8
24.3
3Q08
155.1
24.2
1.7
12.3
9.3
25.0
9.1
14.6
7.8
8.4
21.0
21.6
2Q08
7.7%
6.2%
11.3%
-0.8%
4.4%
6.5%
-8.9%
32.9%
35.2%
-1.1%
26.6%
-11.6%
YoY
150.7
21.1
1.5
13.6
8.0
27.2
13.9
12.3
12.5
4.0
16.0
20.6
1Q08
77.6%Trade Finance & Exp. related (1)
21.0%Corporate & Project Finance
11.3%
1.3%
12.3%
15.8%
-1.7%
-5.5%
-6.8%
28.5%
35.5%
-2.8%
9M09/9M08
Other
Bancassurance
Factoring
Guarantees
Total Fees & Commissions
Cards
Asset Management (3)
Securities related fees (2)
Commissions on Loans
Account Management Fees
(EUR million)
Quarterly fees & commissions
(1) Includes trade finance and letters of credit(2) Includes Brokerage(3) Includes discretionary management
Note: change calculated based on figures in thousand euros
28th October 2009 499M09 Results Presentation
Quarterly capital markets results and VAR
1.04%54.65
-30.87
29.2833.6722.57
109.0
14.7
123.7
60.4
59.4
119.8
-8.0
-3.2
15.1
3.9
2Q09
0.75%40.70
-21.09
22.3226.4413.04
93.4
14.9
108.3
5.7
79.1
84.8
-26.5
14.8
35.2
23.5
3Q09
0.80%31.33
-22.25
10.6021.8021.18
40.4
- 7.9
48.3
1.6
-44.0
-42.4
-13.3
-78.1
182.1
90.7
1Q09
VAR – value at risk32.5812.037.5621.97Interest Rate25.0127.9035.3212.31FX9.237.2314.885.85Equity & Commodities
-19.57-17.58-18.44-16.01Diversification Effect47.2629.5839.3124.12Global VAR
-14.2-22.0137.369.5Capital Markets net of Provisions for securities
1.01%
-18.0
155.4
52.7
96.0
148.7
-31.1
-38.5
76.3
6.7
2Q08
0.76%
-7.6
-14.5
3.1
-16.0
-12.9
-16.3
-40.5
55.2
-1.6
3Q08
1.20%
-30.2
16.0
18.4
-84.1
-65.7
21.6
-57.6
117.7
81.7
4Q08
13.0… Interest rate
-7.9… Credit
22.5… FX & Other
-2.3Provisions for Securities
71.8Capital market results
17.7… Income from securities
0.61%
26.5
44.2
27.6
1Q08
Global VAR as % of Tier I
… Trading
Equity
Interest Rate & FX
(EUR million)
28th October 2009 509M09 Results Presentation
Quarterly other resultsReconciliation between IFRS P&L and Presentation
-18.9
106.7
14.5
102.3
1H09
-7.2
96.5
9.2
98.5
1Q09Accumulated
-40.3
-4.6
37.0
-7.9
FY08
-21.9
-4.4
27.1
0.9
9M08
-15.3
-0.5
19.7
3.9
1H08
-10.8
0.8
8.0
-2.0
1Q08
-43.0… Other
120.0… Capital Markets
23.6… Fees
100.6Other Results, ow
9M09(EUR million)
-11.7
10.2
5.3
3.8
2Q09
-7.2
96.5
9.2
98.5
1Q09Quarterly
-18.4
-0.2
9.9
-8.8
4Q08
-6.6
-3.8
7.4
-2.9
3Q08
-4.4
-1.3
11.7
6.0
2Q08
-10.8
0.8
8.0
-2.0
1Q08
-24.1… Other
13.3… Capital Markets
9.1… Fees
-1.7Other Results, ow
3Q09(EUR million)
28th October 2009 519M09 Results Presentation
Quarterly: Equity Accounted Earnings
0.3
7.1
7.4
3Q09
-89.7%
n.m.
311.1%
YoY %
-87.0%
-37.2%
-45.2%
QoQ %
2.3
11.3
13.6
2Q09
3.7
-4.1
-0.4
1Q09
Equity Accounted Earnings
5.0
-35.0
-30.0
4Q08
2.8
-1.0
1.8
3Q08
2.6
-7.6
-5.0
2Q08
7.1
5.8
12.9
1Q08
… Others
… BES Vida
Equity Accounted Earnings
(EUR million)
6.3
14.3
20.6
9M09
-49.6%
n.m.
112.4%
YoY %
6.0
7.2
13.2
1H09
3.7
-4.1
-0.4
1Q09
Equity Accounted Earnings
17.5
-37.8
-20.3
FY08
12.5
-2.8
9.7
9M08
9.7
-1.8
7.9
1H08
7.1
5.8
12.9
1Q08
… Others
… BES Vida
Equity Accounted Earnings
(EUR million)
28th October 2009 529M09 Results Presentation
Quarterly operating costs
1.7%
0.4%
2.4%
64.7%
20.4%
-4.7%
-1.6%
-0.8%
1.5%
QoQ
262.0
22.0
99.2
1.0
16.9
12.1
22.0
101.1
140.8
3Q09
250.5%98.4%12.712.76.26.12.32.3… Amortisation actuarial differences
254.8
21.6
95.0
1.0
15.1
21.3
100.7
138.1
1Q09
-38.9%9.8%0.61.30.92.50.8…Long term service benefits
-8.9%4.0%14.016.616.316.615.5…Other
107.1%35.5%22.216.116.27.57.9…Post Employment Benefits, ow
241.4
17.7
98.9
100.7
124.9
1Q08
258.3
18.8
106.5
106.5
133.0
2Q08
257.5
21.9
96.9
101.9
138.8
2Q09
246.4
21.1
95.7
95.6
129.5
4Q08
255.5
20.3
101.6
100.2
133.7
3Q08
2.6%
8.3%
-2.4%
0.7%
5.4%
YoY
-0.6%…Remunerations
2.5%
15.4%
-5.1%
6.7%
9M09/
9M08
Admin costs
Total Operating Costs
Depreciation
Staff costs
(EUR million)
28th October 2009 539M09 Results Presentation
Quarterly operating costs: domestic and international
7.6%
2.4%
18.5%
-10.8%
1.7%
2.7%
1.8%
0.4%
0.0%
-0.8%
64.7%
25.0%
-4.7%
-1.7%
-2.0%
1.4%
QoQ
51.0
4.0
19.4
-
1.6
0.8
25.2
27.6
211.0
18.0
79.7
1.0
15.2
12.1
21.1
75.9
113.2
3Q09
250.5%98.4%12.712.76.26.12.32.3… Amort. of Actuarial Differences
8.8%14.7%1.81.61.61.41.61.6…Other
49.0
4.0
16.7
-
1.0
25.7
28.3
205.8
17.6
78.3
1.0
13.5
20.3
75.0
109.8
1Q09
------… Long term service benefits
-38.4%9.8%0.61.30.92.50.8…Long term service benefits
-6.3%3.0%12.215.014.815.013.9…Other
110.5%36.4%21.514.915.57.07.4…Post Employment Benefits, ow
46.6
2.8
18.0
0.5
23.8
25.8
194.8
14.9
80.9
76.9
99.0
1Q08
47.7
3.0
16.7
0.5
25.9
28.0
210.7
15.8
89.8
80.5
105.1
2Q08
4.5%12.3%24.522.422.4…Remunerations
5.8%12.6%27.125.124.5Staff Costs
International
47.5
3.9
16.4
0.8
210.1
18.0
80.4
77.4
111.6
2Q09
46.4
3.7
17.6
1.2
200.0
17.4
78.1
73.2
104.5
4Q08
44.0
3.7
15.8
0.7
211.5
16.6
85.8
77.9
109.1
3Q08
15.9%
7.9%
23.0%
16.3%
-0.2%
8.4%
-7.1%
-2.6%
3.8%
YoY
-3.0%…Remunerations
6.6%
25.2%
4.0%
53.8%
1.6%
13.3%
-7.0%
6.9%
9M09/9M08
International Operating Costs
Admin costs
Depreciation
Admin costs
…Post Employment Benefits
Domestic Operating CostsDepreciation
Staff costs
Domestic (EUR million)
28th October 2009 549M09 Results Presentation
Quarterly Provisions
462.7
46.9
37.5
156 bp
116.5
89 bp
261.8
103 bp
378.3
9M09
-34.4%
5.7%
1.4%
-
-17.85
-
-51.5%
-
-41.3%
QoQ
--177 bp215 bp75 bp147 bp86 bp67 bp28 bpcost of risk (bp)
62.5%1.7%60.0123.877.938.259.051.650.6Domestic
--61 bp128 bp81 bp40 bp62 bp55 bp55 bpcost of risk (bp)
194.8%122.2%44.253.718.735.619.914.15.5International
137.6
18.5
14.9
85 bp
104.2
3Q09
34.4%95.0%14.77.930.27.618.02.2…Securities
115.4
10.9
80 bp
96.6
1Q09
10.9%442.0%17.51.03.428.99.9…Other
--147 bp61 bp67 bp57 bp51 bp…cost of risk (bp)
68.2
56.1
1Q08
112.7
65.7
2Q08
209.7
177.5
2Q09
105.0
73.8
4Q08
89.9
78.9
3Q08
53.0%
32.1%
YoY
88.5%…Credit
70.8%
9M09/
9M08
Total Provisions
(EUR million)
28th October 2009 559M09 Results Presentation
Quarterly balance sheet: assets
80,718
4,724
88
57
775
122
670
-
326
385
-
2,568
(1,426)
47,606
7,701
7,779
2,122
3,856
668
1,271
3Q09
81,428
3,094
142
57
672
123
645
-
252
487
-
2,670
(1,365)
47,275
11,185
7,387
1,605
4,025
574
1,233
2Q09
8.5%
72.9%
40.4%
210.2%
42.6%
21.8%
22.7%
-
168.6%
28.1%
-
393.2%
28.8%
3.3%
-15.5%
13.7%
-0.6%
6.8%
-1.4%
23.1%
YoY
-0.9%76,64175,18774,42172,56467,892Total Assets
52.7%3,4183,1212,7322,9892,141Other assets
-38.2%159142632725Deferred income tax assets
-0.5%5753181919Current income tax assets
15.3%636645543559583Investments in associated companies
-1.5%1231241009590Intangible assets
3.8%654638546574550Other tangible assets
------Investment property
29.4%172148121380302Non current assets held for sale
-21.0%632936301228448Hedging derivatives
------Financial Assets with repurchase agreements
-3.8%2,4852,160521539495Held to maturity investments
4.8%(1,215)( 1,148)( 1,111)(1,080) (1,033)(Provisions)
0.7%47,06347,04946,06844,87943,385Loans and advances to customers
-31.2%6,6484,5329,1118,8846,466Loans and advances to banks
5.3%7,1487,0946,8415,8215,741Financial assets available for sale
32.2%2,0722,1622,1342,5231,921Financial assets at fair value through P&L
-4.2%3,9063,6903,6113,5594,028Financial assets held for trading
16.3%531664677525507Deposits with banks
3.1%9372,0271,0339631,192Cash and deposits at central banks
QoQ 1Q094Q083Q082Q081Q08(Eur mn)
28th October 2009 569M09 Results Presentation
Quarterly balance sheet: liabilities
74,103
2,147
2,702
-
88
75
149
63
286
-
31,571
24,416
7,658
-
1,628
1,071
3,319
3Q09
71,979
1,488
2,550
-
70
85
132
13
333
-
26,246
25,328
11,083
-
1,976
24
2,673
1Q09
6.5%
61.4%
6.2%
-
205.3%
58.5%
-9.2%
394.7%
-13.8%
-
12.2%
5.6%
-6.8%
-
-11.4%
n.m.
-13.4%
YoY
-1.5%75,19870,53469,58967,65862,770Total Liabilities
58.6%1,3541,3161,3301,7801,575Other liabilities
1.4%2,6642,8292,5452,0882,090Other subordinated loans
------Instruments representing capital
11.6%79372952123Deferred income tax liabilities
62.2%4690476775Current income tax liabilities
2.7%145131164165142Provisions
51.3%421313250233Non current liabilities held for sale
-7.9%310727332396386Hedging derivatives
------Financial liabilities associated to transferred assets
4.4%30,23024,59728,12627,33025,858Debt securities
-2.9%25,15626,38723,11723,91722,069Due to customers
-26.0%10,3507,6828,2157,3137,187Deposits from banks
------Financial assets at fair value through P&L
2.7%1,5841,9141,8371,4191,526Financial liabilities held for trading
3.5%1,0351,4411621560(ow, European Central Banks System)
2.5%3,2394,8103,8342,8801,507Amounts owed to central banks
QoQ2Q094Q083Q082Q081Q08(Eur mn)
28th October 2009 579M09 Results Presentation
Quarterly balance sheet: equity
6,615
191
-
361
675
227
600
(26)
-
1,086
3,500
6,063
3Q09
4,662
171
-
101
941
( 291)
600
( 29)
-
669
2,500
4,389
1Q09
36.9%
24.0%
-
7.8%
8.7%
n.m.
0.0%
-13.8%
-
62.4%
40.0%
39.6%
YoY
6.2%6,2294,6534,8324,9065,122Total Equity
2.4%187154154147137Minority interests
------Anticipated dividends (prefshares)
46.5%246402335264146Net Profit for the period / year
1.4%666624621615884Other reserves and retained earnings
n.m.(31)( 266)( 17)141222Fair value reserve
0.0%600600600600600Preference shares
0.0%(26)( 30)( 30)( 30)( 35)Treasury stock
------Other capital instruments
0.0%1,086669669669669Share premium
0.0%3,5002,5002,5002,5002,500Share capital
4.6%5,7964,0974,3434,4954,839Shareholders' Equity
QoQ2Q094Q083Q082Q081Q08(Eur mn)
28th October 2009 589M09 Results Presentation
Quarterly loan portfolio (including securitised)
19%
9,975
42,562
52,537
9,141
26,023
35,164
312
2,458
2,770
523
14,081
14,604
17,374
3Q09
19%
9,903
42,053
51,956
9,032
25,508
34,540
321
2,427
2,748
550
14,118
14,668
17,416
1Q09
19%
9,996
42,232
52,228
9,139
25,803
34,942
318
2,397
2,715
539
14,032
14,571
17,286
2Q09
19%
9,703
42,261
51,964
8,826
25,549
34,375
324
2,478
2,802
553
14,234
14,787
17,589
4Q08
18%
9,226
41,829
51,055
8,331
25,130
33,461
341
2,407
2,748
554
14,293
14,847
17,594
3Q08
17%
8,487
41,460
49,946
7,601
24,756
32,357
348
2,407
2,755
538
14,297
14,834
17,589
2Q08
-0.2%
0.8%
0.6%
0.0%
0.9%
0.6%
-1.9%
2.5%
2.0%
-3.1%
0.4%
0.2%
0.5%
QoQ
8.1%
1.8%
2.9%
9.7%
3.6%
5.1%
-8.5%
2.1%
0.8%
-5.7%
-1.5%
-1.6%
-1.3%
YoY
16%
7,862
40,661
48,523
7,001
24,056
31,056
332
2,421
2,753
530
14,184
14,714
17,467
1Q08
… International
… Domestic
Loan portfolio
… International
% total
… ow Other
… Domestic
Corporate Lending
… International
… Domestic
… International
… Domestic
… ow Mortgages
Loans to Individuals
(EUR million)
(1) Considering the outstanding amounts of securitised credit. Securitised credit only includes domestic loans.
28th October 2009 599M09 Results Presentation
Quarterly asset quality indicators
(1) According to Bank of Portugal rules (Circular Letter N. 99/09/2003)
1.56%1.42%1.20%1.09%1.05%1.08%1.02%Overdue Loans >90 days / Gross Loans
186.4%197.9%209.5%219.0%223.4%217.3%228.9%Coverage of Overdue Loans > 90 days
2.04%1.95%1.64%1.38%1.38%1.34%1.27%Corporates (>30d)
3.58%3.60%3.60%3.13%3.24%3.18%3.02%Consumer (>30d)
0.71%0.74%0.72%0.68%0.68%0.67%0.65%Mortgage (>30d)
293 bp302 bp99 bp212 bp133 bp44 bp37 bpSpain
61 bp128 bp81 bp40 bp62 bp55 bp55 bp… Domestic
177 bp215 bp75 bp147 bp86 bp67 bp28 bp… International
85 bp147 bp80 bp61 bp67 bp57 bp51 bpQoQ Provision Charge
159.4%158.7%163.0%180.2%178.2%181.4%189.0%Coverage of Overdue Loans >30 days
2.81%
134.3%
2.09%
1.77%
Jun 09
2.35%
152.8%
1.54%
1.32%
Sep 08
2.38%
150.7%
1.58%
1.32%
Dec 08
2.33%
162.3%
1.43%
1.23%
Mar 08
2.52%
144.8%
1.74%
1.54%
Mar 09
2.35%
152.6%
1.54%
1.30%
Jun 08
2.23%Overdue and Doubtful Loans Ratio (BoP) (1)
130.6%Coverage of Overdue and Doubtful Loans (BoP)
2.91%Provisions for Credit / Total Gross Loans
1.82%Overdue Loans >30 days / Gross Loans
Sep 09(EUR million)
(1) According to Bank of Portugal rules (Circular Letter N. 99/09/2003)
28th October 2009 609M09 Results Presentation
274.1
1,364.6
33.9
1,015.8
689.6
860.0
48,640
1H09
177.6
314.6
6.8
364.9
267.4
270.9
1,853
EUR mn
YoY Chg
88.5%
28.3%
13.2%
50.2%
53.8%
43.5%
3.9%
%
378.3
1,425.7
58.5
1,091.9
764.8
894.4
49,032
9M09
QoQ Chg
n.m.
61.1
24.6
76.1
75.3
34.4
392.0
EUR mn
n.m.
4.5%
72.6%
7.5%
10.9%
4.0%
0.8%
%
51.7Write Offs
200.7Credit provisions (P&L)
1,111.1Credit provisions (Balance)
727.1Overdue and Doubtful Loans (BoP) (1)
497.4Overdue Loans (over 90 days)
623.5Overdue Loans (over 30 days)
47,179Gross Loans (On-BS)
9M08(EUR million)
Asset Quality Indicators
(1) According to Bank of Portugal rules (Circular Letter N. 99/09/2003)
28th October 2009 619M09 Results Presentation
Quarterly & accumulated credit provision charge & net new entries
0.441.081.070.370.550.520.41Net new entries as % Performing Loans (quarter)
261.8201.877.9199.3161.1102.150.6… Domestic
116.572.418.775.139.519.65.5… International
71.841.710.242.720.57.53.3ow Spain
89 bp104 bp81 bp52 bp57 bp55 bp55 bp… Domestic
156 bp145 bp75 bp77 bp57 bp46 bp28 bp… International
233 bp200 bp99 bp102 bp70 bp40 bp37 bpow Spain
61 bp128 bp81 bp40 bp62 bp55 bp55 bp… Domestic
177 bp215 bp75 bp147 bp86 bp67 bp28 bp… International
293 bp302 bp99 bp212 bp133 bp44 bp37 bpow Spain
30.131.510.222.213.04.23.3ow Spain
60.0123.877.938.259.051.650.6… Domestic
44.353.718.735.619.914.15.5… International
1.08
113 bp
274.1
147 bp
177.5
2Q09
1.07
80 bp
96.6
80 bp
96.6
1Q09
0.48
57 bp
200.7
67 bp
78.9
3Q08
0.45
57 bp
274.4
61 bp
73.7
4Q08
0.86
103 bp
378.3
85 bp
104.2
3Q09
0.46
53 bp
121.8
57 bp
65.7
2Q08
0.41
51 bp
56.1
51 bp
56.1
1Q08
Net new entries as % Performing Loans (accum.)
As % Loan Portfolio (bp)
P&L Credit Provisions Accumulated
As % Loan Portfolio (bp)
P&L Credit Provisions
(EUR million; % annualised)
28th October 2009 629M09 Results Presentation
Quarterly customer funds
31%29%26%22%29%29%28%% total
0.5%-8.6%8,0057,9637,1248,8748,7609,6638,398Sight
-4.5%14.3%16,41117,19318,20417,51314,35714,25413,671Term
18,425
40,939
59,364
19,260
40,104
6,354
9,334
24,416
33,750
3Q09
14,643
40,696
55,339
16,923
38,416
7,144
5,944
25,328
31,272
1Q09
16,892
41,486
58,378
18,326
40,052
7,090
7,806
25,156
32,962
2Q09
-2.9%5.6%26,38723,11723,91722,069… Deposits
19.6%25.9%3,5237,4136,9916,447… Certificates of Deposits
12,504
43,193
55,697
17,508
38,189
8,279
29,910
4Q08
16,037
38,989
55,031
17,495
37,536
7,006
30,530
3Q08
16,329
39,799
56,128
18,238
37,890
6,981
30,908
2Q08
13.4%
5.6%
7.9%
10.1%
6.9%
-9,3%
10.6%
YoY
14,801
38,292
53,093
18,231
34,862
6,346
28,516
1Q08
43.5%
-4.5%
6.6%
10.0%
5.0%
-23.3%
12.8%
QoQ
Total Customer Funds
… International
… Domestic
Off-BS Funds
On-BS Customer Funds
Debt Securities
Deposits (1)
(EUR million)
(1) Includes Client deposits and certificates of deposits
28th October 2009 639M09 Results Presentation
Quarterly off-BS customer funds
3,350
15,910
19,260
981
3,249
4,230
5,454
138
2,506
2,644
69
1,194
1,263
2,162
3,507
5,669
3Q09
3,010
13,913
16,923
884
2,565
3,449
5,077
129
2,363
2,492
75
1,023
1,098
1,922
2,885
4,807
1Q09
3,102
15,224
18,326
929
3,351
4,280
5,202
136
2,384
2,520
71
1,135
1,206
1,966
3,152
5,118
2Q09
5.2%3.8%1,0711,1501,2371,265… Domestic
-2.8%-71---… International
2,977
14,531
17,508
877
2,943
3,820
5,190
132
2,476
2,608
1,142
1,897
2,851
4,748
4Q08
3,180
14,315
17,495
1,021
3,052
4,073
4,982
125
2,130
2,255
1,150
2,034
3,001
5,035
3Q08
3,087
15,151
18,238
984
3,116
4,100
5,128
120
2,372
2,492
1,237
1,983
3,298
5,281
2Q08
5.3%
11.1%
10.1%
-3.9%
6.5%
3.9%
9.5%
10.4%
17.7%
17.3%
9.8%
6.3%
16.9%
12.6%
YoY
3,200
15,031
18,231
994
3,462
4,456
5,060
122
2,413
2,535
1,265
2,084
2,831
4,915
1Q08
4.5%… Domestic
8.0%
5.1%
5.6%
-3.0%
-1.2%
4.8%
1.5%
5.1%
4.9%
4.7%
10.0%
11.3%
10.8%
QoQ
Total Off-BS Funds
… International
… Domestic
… International
Pension Funds
Other (*)
Bancassurance (Domestic)
… International
… Domestic
Real Estate Funds
… International
… Domestic
Mutual Funds
(EUR million)
(*) Other includes off-BS structured products, discretionary management and venture capital
28th October 2009 649M09 Results Presentation
Available for Sale Portfolio – main equity holdings potential gains & losses
Potential Capital Gains (Losses) EvolutionAt the end 9M09
58.2
7.4
-31.8
-64.8
147.4
2Q09
291.0
6.4
-15.7
2.8
297.5
3Q09
-189.2-179.5838.81,320.8Total
-5.2-20.5661.72.52%560.9Bradesco
0.25%
5.83%
2.35%
% AFS
8.0
-91.2
-75.8
2008
8.6
76.0
70.5
2007
6.3
-105.4
-84.9
1Q09
2.5BMCE491.1Portugal Telecom266.3EDP
Acquis. Value(EUR million)
28th October 2009 659M09 Results Presentation
Quarterly solvency ratios
12.2%
8.8%
8.3%
11%
600
1,979
5,261
4,922
7,230
3,146
3,742
52,600
59,488
Jun 09(IRB)
11.9%
8.6%
7.8%
12%
600
1,946
5,101
4,615
7,038
3,146
3,159
52,790
59,095
Mar 09(IRB PF)
9.9%
6.6%
5.8%
15%
600
1,946
3,901
3,415
5,838
3,146
3,159
52,790
59,095
Mar 09(IRB)(IRB)(Std)
11.3%
7.1%
6.1%
15%
600
2,336
3,946
3,412
6,273
2,840
2,878
49,987
55,705
10.5%
6.6%
5.7%
15%
600
2,337
3,948
3,412
6,277
3,042
2,878
53,791
59,711
Dec 08
12.2%
8.8%
8.2%
11%
600
2,086
5,450
5,074
7,536
3,146
3,712
55,168
62,026
Sep 09(IRB)
9.9%
6.3%
5.5%
15%
600
2,202
3,883
3,345
6,077
3,042
3,707
54,401
61,150
Sep 08(Std)
9.7%
6.6%
5.7%
15%
600
1,833
3,889
3,357
5,716
3,042
4,408
51,733
59,183
Jun 08(Std)
10.1%
6.8%
6.0%
15%
600
1,888
3,943
3,434
5,825
3,042
5,825
48,676
57,543
Mar 08(Std)
As % Tier I
Banking Book
Trading Book
Oper. Risk
Core Tier I
Tier I (%)
Total Capital
Tier I
Other
Core Tier I (%)
Total (%)
Pref. Shares
RWA (BoP)
(EUR million)
Note: BIS II IRB corresponds to calculations based on IRB Foundation for credit risk and standardised approach for operational risk
28th October 2009 669M09 Results Presentation
Appendix II: Macro Data
28th October 2009 679M09 Results Presentation
Markets Environment: Aggressive fiscal and monetary stimuli are inducing stronger global demand, which in turn is translating into a recovery in international trade flows.
Indicator of Manufacturing Activity.
-14-12-10-8-6-4-20246
1992 1994 1996 1998 2000 2002 2004 2006 2008
%
Volume of international trade flows(% q-o-q growth, 3-month moving average).
30
35
40
45
50
55
60
65
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Inde
x (Po
ints)
USA
Euro Zone
Indicator of Manufacturing Activity.
30
35
40
45
50
55
60
65
Jun.2007
Out.2007
Fev.2008
Jun.2008
Out.2008
Fev.2009
Jun.2009
Inde
x (P
oints
)
ChinaBrazil
Russia
India
Oil Price (Brent), USD vs. EUR/barrel.
0
20
40
60
80
100
120
140
160
2001 2002 2003 2004 2005 2006 2007 2008 2009
USD;
EUR USD
EUR
78
52
Source: Bloomberg
28th October 2009 689M09 Results Presentation
Markets Environment: Financial stabilisation and improved growth prospects with low inflationary pressures have resulted in stronger confidence in financial markets.
10- year Government Bond Yield.
3-month Euribor and USD Libor (%) Credit Spreads (Cash vs. CDS).
Selected Stock Indices.
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
Jan. Abr. Jul. Out. Jan. Abr. Jul. Out. Jan. Abr. Jul. Out.
%
USA
Euro Zone
2007 2008 2009
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2005 2006 2007 2008 2009
%
3-month Euribor
3-month Libor
0
50
100
150
200
250
300
350
400
Jan. 2007 Jul. 2007 Jan. 2008 Jul. 2008 Jan. 2009 Jul. 2009
(bps)
iBoxx EUR Financials
iTRAXX Financials Senior 5yr
30
50
70
90
110
130
150
170
Jun. 2007 Out. 2007 Fev. 2008 Jun. 2008 Out. 2008 Fev. 2009 Jun. 2009 Out. 2009
Eurostoxx 50
01 Ju
n. 2
007
= 10
0
S&P 500
Bovespa
Shanghai Composite
Sensex (India)
Source: Bloomberg & Reuters
28th October 2009 699M09 Results Presentation
Portugal: Return to positive growth already in 2Q2009 (0.3% q-o-q). A gradual export-led recovery is on the way, leading to improvements in confidence levels. Portugal’s unemployment rate remains below the Euro Area average.
PSI-20 Stock Index
-40
-30
-20
-10
0
10
20
30
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Inde
x (Po
ints)
Manufacturing
Services
Confidence indicators in manufacturing and services
-2.0-1.5-1.0-0.50.00.51.01.52.0
2Q 08 3Q 08 4Q 08 1Q 09 2Q 09
Perc
enta
ge P
oints
Contribution of net external demand to GDP y-o-y growth (p.p.)
Exports growth (y-o-y, July 2009) :Angola: 16.8%Maghreb: 15.5%
40
50
60
70
80
90
100
Jan.2008
Abr.2008
Jul.2008
Out.2008
Jan.2009
Abr.2009
Jul.2009
1 Ja
n. 2
008
= 10
0
Eurostoxx 50
PSI 20
3
4
5
6
7
8
9
10
11
1995 1997 1999 2001 2003 2005 2007 2009
%
9.1
9.6Euro Area
Portugal
Source: INE, European Commission & Bloomberg
Unemployment rate (% labour force)
28th October 2009 709M09 Results Presentation
Sources: INE, Bank of Portugal, ES Research.
Portugal Forecasts 2009-2010
Annual real growth rates (%), except where indicated.
10.09.17.68.07.77.6Unemployment (% of Labour Force)
-9.6-8.3-10.5-8.1-9.3-8.3Current & Capital Account Balance (% GDP)
81.574.566.363.564.763.6Public Debt (% GDP)
-6.7-5.9-2.6-2.6-3.9-6.1Budget Balance (% GDP)
1.5-0.52.62.53.12.3Inflation (%)
0.7-9.92.66.15.13.5Imports
2.3-11.7-0.47.88.72.0Exports
-1.0-12.90.23.4-0.3-1.5Investment
0.30.80.60.0-1.43.2Public Consumption
0.3-0.81.71.61.92.0Private Consumption
0.5-3.00.01.91.40.9GDP
2010F2009F2008200720062005
28th October 2009 719M09 Results Presentation
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
2025303540455055606570
Index (Points)
GDP (LHS)
PMI Services (RHS)
PMI Manufacturing (RHS)
-20
-15
-10
-5
0
5
10
15
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
Private consumption
Investment
Exports
-5
-3
-1
1
3
5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
y-o-y
q-o-q
Private consumption, exports and investment (%, y-o-y).
PMI Services, PMI Manufacturing and GDP (%, y-o-y).
GDP growth (%).
6
8
10
12
14
16
18
20
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
% o
f labo
ur fo
rce
17.9
Quarterly unemployment rate (% of labour force)
Spain: Domestic demand adjustments are still penalising growth and should delay a full recovery. But a stabilising trend is already visible in some activity indicators.
Source: INE & Bloomberg
28th October 2009 729M09 Results Presentation
Sources: INE, Bank of Spain, ES Research.
Spain Forecasts 2009-2010
Annual real growth rates (%), except where indicated.
20.018.311.38.38.59.2Unemployment (% of Labour Force)
-8.0-7.5-8.7-8.1-8.4-6.5Current & Capital Account Balance (% GDP)
63.051.039.536.239.643.0Public Debt (% GDP)
-5.4-9.5-3.42.22.01.0Budget Deficit (% GDP)
1.5-0.14.12.83.43.4Inflation (%)
-3.0-19.8-2.56.210.37.7Imports
2.0-16.70.74.96.72.6Exports
-9.0-14.2-3.05.37.17.0Investment
2.83.45.34.94.65.5Public Consumption
-0.5-3.80.13.43.94.2Private Consumption
-0.8-3.71.23.73.93.6GDP
2010F2009F2008200720062005
28th October 2009 739M09 Results Presentation
58.0
120.0
150.0 150.0 150.0 150.0
95.0 95.0
14.0 19.6 19.630.0
020406080
100120140160
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Oct.
%
0
20
40
60
80
100
120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
EUR/
AOA
and
USD/
AOA
128.1
85.1EUR/AOA
USD/AOA
Oil production (mb/day) External reserves (USD million)
Kwanza exchange rate Central Bank rediscount interest rate (%)
0
5
10
15
20
25
Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep.
12.8
20.1
USD
billio
ns
2008 2009
1.4
1.5
1.6
1.7
1.8
1.9
Jan.2007
Apr. Jul. Oct. Jan.2008
Apr. Jul. Oct. Jan.2009
Apr. Jul.
mb/
d
1.9
Angola: Recovery in oil output and resilient activity in non-energy sectors are contributing to a reacceleration in growth. Scarcer USD liquidity in 1H2009 has forced a Kwanza depreciation and higher interest rates. External reserves have now stabilised.
Source: BNA, OPEC & Bloomberg
28th October 2009 749M09 Results Presentation
Sources: IMF, Angolan Central Bank, Finance Ministry, ES Research.
Angola Forecasts 2009-2010
25.030.019.619.614.095.0BNA Rediscount Rate (%), end of period
85.079.475.177.180.487.2Exchange Rate (USD/KZ), annual average
-7.2-10.812.411.514.87.1Budget Balance (% GDP)
0.1-8.121.215.925.216.8Current Account Balance (% GDP)
13.012.512.512.213.323.0Inflation (%)
5,3675,0574,9613,6292,8471,988GDP per capita (USD, current prices)
10.05.014.820.318.620.6GDP (real growth rate, %)
2010F2009F2008200720062005
28th October 2009 759M09 Results Presentation
Brazil: Rapid return to growth, based on strong exports and private consumption. Higher propensity to risk and the search for higher returns at the global level have translated into a stronger Real. Selic rate with a final cut in 3Q2009, to 8.75%.
GDP growth (%)
SELIC interest rate (%)
USD/BRL and Sovereign CDS spread
External Accounts
-4
-2
0
2
4
6
8
2002 2003 2004 2005 2006 2007 2008 2009
%
Y-o-Y
Q-o-Q
8
10
12
14
16
18
20
22
24
26
28
2002 2003 2004 2005 2006 2007 2008 2009
%
8.75%
0
500
1000
1500
2000
2500
3000
3500
4000
2001 2002 2003 2004 2005 2006 2007 2008 2009
CDS
Spre
ad
1.5
2.0
2.5
3.0
3.5
4.0USD/BRL
USD/BRL (RHS)Brazil CDS
5Y(LHS)
Source: IBGE, BACEN & Bloomberg
28th October 2009 769M09 Results Presentation
Sources: IBGE, Central Bank of Brazil, ES Research.
Brazil Forecasts 2009-2010
8.758.7513.7511.2513.2518.00SELIC Interest Rate (%, End of Period)
1.922.021.841.952.182.43Exchange Rate (USD/BRL), annual average
-1.6-1.0-1.80.11.31.8Current Account Balance (% GDP)
8.38.57.99.310.09.8Unemployment (% of Labour Force)
41.543.938.843.944.046.5Public Debt (% GDP)
3.32.04.13.93.84.8Primary Budget Balance (% GDP)
4.44.45.94.53.15.7Inflation (%)
4.00.55.15.74.03.2GDP (real growth rate, %)
2010F2009F2008200720062005
28th October 2009 779M09 Results Presentation
Disclaimer
This news release may include certain statements relating to the Banco Espírito Santo Group that are neither
reported financial results nor other historical information. These statements, which may include targets, forecasts,
projections, descriptions of anticipated cost savings, statements regarding the possible development or possible
assumed future results of operations and any statement preceded by, followed by or that includes the words
“believes”, “expects”, “aims”, “intends”, “may” or similar expressions or negatives thereof are or may constitute
forward-looking statements.
By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty.
There are a number of factors that could cause actual results and developments to differ materially from those
expressed or implied by forward-looking statements. These factors include, but are not limited to, changes in
economic conditions in individual countries in which the BES Group conducts its business and internationally, fiscal
or other policies adopted by various governments and regulatory authorities of Portugal and other jurisdictions, levels
of competition from other banks and financial services companies as well as future exchange and interest rates.
Banco Espírito Santo does not undertake to release publicly any revision to the forward-looking information included
in this news release to reflect events, circumstances or unanticipated events occurring after the date hereof.
28th October 2009 789M09 Results Presentation
Investor Relations
Investor Relations Contacts
Website: www.bes.pt/irPhone: + 351 21 359 7390E-mail: [email protected]: + 351 21 359 7001
NUMBER OF SHARES: 1,167 millionNOMINAL VALUE: 3 Euros per shareSHARE CAPITAL: EUR 3.5 bnSECTOR: Financial Services: BankingINDEX MEMBERSHIP: PSI20
Euronext 100Dow Jones EurostoxxDow Jones Stoxx BanksFTSE4GOODFTSE All World Developed
LISTING: NYSE EuronextBLOOMBERG: BES PLREUTERS: BES.LSISIN CODE: PTBES0AM0007RATINGS: Moody’s: A1 / Stable / P-1
Fitch: A+ / Stable / F1 S&P: A / Negative / A-1