cgd investor’s journal · cgd investor’s journal 3 in a context of low interest rates and...

CGD INVESTOR’S JOURNALApril

#02 2015

#02_April 20152

Head OfficeAvenida João XXI, 631000-300 LisboaTel: (+351) 217 953 000Fax: (+351) 217 905 050

[email protected]

EXECUTIVE BOARDJosé Agostinho Martins de MatosCEO

Nuno Maria Pinto de Magalhães Fernandes ThomazExecutive Vice-President

João Nuno de Oliveira Jorge PalmaExecutive Board Member, CFO

José Pedro Cabral dos SantosExecutive Board Member

Ana Cristina de Sousa LealExecutive Board Member, CRO

Maria João Borges Carioca RodriguesExecutive Board Member

Customer-centered business.

Support of Portuguese economic activity.

Promotion of human talent and teamwork.

Highest ethical standards.

Innovation.

Social responsibility, global sustainability and investment in the future.

CGD INVESTOR’S JOURNAL 3

In a context of low interest rates and strong competition, Caixa continues to benefit from its geographical diversification, creating value for its stakeholders.

In the 1st quarter of 2015 Gross Operating Income, at €175.7 million, was boosted by the international activity contribution, which represented 61.4% of the total.

The 1st quarter 2015 witnessed a growth of trade finance operations alongside a significant increase in the number of customers whose internationalization projects rely upon Caixa backing. Various actions were undertaken to reinvigorate and leverage business opportunities for the Group’s customers.

International area continues to make an important contribution to consolidated net income, reaching €22.3 million in the 1st quarter.The highest contributions were turned in by the business units located in Asia and Africa, with BNU Macau posting a net income of €14.4 million in the 1st quarter

INTERNATIONAL OPERATIONS CONTRIBUTED SIGNIFICANTLY TO CAIXA’S CONSOLIDATED GROSS OPERATING INCOME.

and Banco Caixa Totta de Angola and Banco Comercial e de Investimentos (BCI) in Mozambique €5.1 million and €4.5 million, respectively. In Europe, reference should be made to the recovery of the results of Banco Caixa Geral (BCG) Spain (€10.5 million) and the French branch (€9.6 million).

These achievements reflect Caixa’s commitment to its international strategy, together with optimizing the Group’s balance sheet, improving operational efficiency and redirecting the activity to focus on banking, alongside an increasing emphasis on corporate business.

International area’s contribution to Gross Operating Income advanced 40% to €108 million in the 1st quarter 2015.

#02_April 20154

BUSINESS PERFORMANCE (1ST QUARTER 2015)

Income before tax and non-controlling interest

Consolidated net income CGD’s consolidated net income attributed to shareholder for 1st quarter 2015improved €1.9 million over the comparable amount registered last year to a negative €8.9 million.

Income before tax and non-controlling interests was €65.4 million, a growth of €47.6 million, when compared to 1st quarter 2014.

M€

M€

Source: 1Q2015 Consolidated Accounts


(*) The amount of net income and income before tax and non-controlling interests for 1st quarter 2014, were adjusted to reflect the current percentage equity stake in the insurance companies (15% in Fidelidade and 20% in Multicare and Cares).

(*) The amount of net income and income before tax and non-controlling interests for 1st quarter 2014, were adjusted to reflect the current percentage equity stake in the insurance companies (15% in Fidelidade and 20% in Multicare and Cares).


Net interest income

FUNDING (AS OF MARCH 2015)

Balance sheet Funding structure

Income from Equity InstrumentsNet Interest Income

15.5%

Net Interest Income was up 15.5% over the same quarter 2014, benefiting from adecline of its funding cost, stronger than the reduction in income from lendingoperations.

Robust funding structure reflecting a dominant retail contribution (deposits and other retail instruments), due to a large and stable Customer base.

M€

M€



#02_April 20156

Credit Impairment (net)Provisions and impairment of other assets (net)

UsedUsed-TLTRO

Provisions and impairment

ECB FundsSource: 1Q2015 Consolidated Accounts


COLUMN TOTAL

Provisions and impairment for the quarter were down 34.3% by €59 million to €112.9 in comparison to €171.9 million year-on-year, reflecting the gradual improvement of credit risk conditions in the markets in which CGD operates.

Reflecting its comfortable liquidity situation, CGD decreased its funding from the ECB last year by €3,278 million (47.8%) to €2,987 million at the end of March 2015.

M€

M€





INTERNATIONAL ACTIVITY (AS OF MARCH 2015)

International Customer deposits

Assets

(*) Portuguese speaking African Countries

International Loans and Advances to Customers

The Cross Border Units of the Group represent 22% of total assets.

(*) Portuguese speaking African Countries

In terms of credit, Spain and France are the main contributors.International operations contributed significantly to resource taking, with specialreference to the operations in Asia, Africa and Spain together with France.

#02_April 20158

1Q 2015 TIMELINE CGD ISSUES / SECONDARY MARKET

CGD issues (% yields)

CGD Participation in International Venues

€1bn 7 Year Covered Bonds 2022€750M 5 Year Covered Bonds 2018€750M 5 Year Covered Bonds 2019

Source: Thompson Reuters

Source: www.cgd.pt

1Q Main EventsSource: www.cgd.pt


CGD DEBT €1bn / 7 YEAR COVERED BONDSPRIMARY MARKET

ISSUER Caixa Geral de Depósitos SA

RATINGS Moody´s: Baa2; Fitch: BBB; DBRS: A

FORMAT 7 Year Covered Bonds 2022

PRICING DATE 20-Jan-2015

SETTLEMENT 27-Jan-2015

MATURITY 27-Jan-2022

ISSUE SIZE €1bn

COUPON 1%

REOFFER YIELD 1.099%

REOFFER PRICE 99.336%

BOOKRUNNERS Caixa BI, LBBW, Natixis, Nomura, Santander.

Breakdown by type of investorsSource: www.cgd.pt

Geographic BreakdownSource: www.cgd.pt

#02_April 201510

COMPREHENSIVE ASSESSMENT

Financial health check of 130 banks in the euro area, covering approximately 82% of total banks assets.

2009 2011 2012 2013 2014

CGD THROUGH THE TURMOIL

MAY DEC JULJUN JUL MAY OCT

LAUNCH OF THE FINANCIAL ASSISTANCE PROGRAMME

EBA NEW CAPITAL REQUIREMENTS

CGD RESTRUCTURING PLAN

ASSET QUALITY REVIEW STRESS TESTS

SOVEREIGN CRISIS CGD RECAPITALIZATION € 1.65 bn

RECAPITALIZATION IS CONSIDERED STATE AID

END OF THE FINANCIAL ASSISTANCE PROGRAMME

8.0% 5.5%9.4% 6.1%

BASELINE SCENARIO

ADVERSE SCENARIO

CGD CGDTHRESHOLD THRESHOLD

CET1 Ratio

AQR - ASSET QUALITY REVIEWDetailed and backward-looking review of bank assets.

ST - STRESS TEST Performed in close cooperation with the European Banking Authority (EBA).It examined the resilience of banks Balance Sheets to stress scenarios.

Caixa Geral de Depósitos has accordingly reaffirmed its strength and financial robustness as the Portuguese banking system’s leading institution, able to contribute towards domestic economic development on behalf of its customers, in line with its mandate.

Source: Bank of Portugal


These prizes are the sole responsibility of the awarding entities.CGD PRIZES AND DISTINCTIONS

CDLI - Carbon Disclosure Leadership Index. [100]CPLI - Carbon Performance Leadership Index,LEVEL B [Iberia 125 Climate Change Report 2014]

Green Leadership Award 2014.Sustainability Strategy.

1st Portuguese bank with environmental certification, 2014. [APCER] [ISO 14001]

Rock in Rio Award for a Sustainable Stand.[2014 - Rock in Rio]

Prime Company 2014. [Oekom Ranking]

Brand Excellence Award 2014.

Best Ethical Practices Awards 2014.Social Responsibility.

Marketeer Awards 2014.Banking.

Best Bank 2014.

Communication Efficiency Awards. Bronze Medal - Financial Services / Insurance Category 2014.

Marktest Reputation Index - 2014.1st - Banking Category.

#02_April 201512

VYING FOR FAST GROWING MARKETSGlobal Reach

Caixa operates across borders through an extensive network of Banks, Branches and Representative Offices.

The international network links the developed markets in Europe and North America with regions of the globe witnessing the most rapid development, as shown by GDP expected growth trends for 2013-2020, according to the IMF – developing Asia (6.6%), sub-Saharan Africa (5.1%) and Latin America and Caribbean (2.2%).

GDP GROWTH2013-2020 Annual % Average Rate

6.6%2.3%2.2%1.7% 5.1%

LATIN AMERICAAND CARIBBEAN

NORTH AMERICA

EURO AREA + UK

SUB-SAHARAN AFRICA

DEVELOPING ASIA

LATIN AMERICAAND

CARIBBEAN

NORTH AMERICA

CAYMAN ISLANDS

USA

BRAZIL

VENEZUELA

CANADA

Source: imf statistics, April 2015


Large network connecting mature and fast growing markets. Extensive network of Banks, Branches and Representative Offices.

0.8%

721

PORTUGAL

6.6% 6.8%

20 13

CHINA EASTTIMOR

2.3%

1

UNITED KINGDOM

1.9% 1.2% 1.5%

2 48 112

LUXEMBOURG FRANCE SPAIN

8.4% 5.2%

168 35

MOZAMBIQUE ANGOLA

2.9% 2.3%

43 15

CAPE VERDE

SOUTHAFRICA

1.4%

3

BRAZIL

2.5%

2

USA

Number of Branches

INTERNATIONAL NETWORK

ALGERIA

SUB-SAHARAN AFRICA

DEVELOPING ASIA

EURO AREA + UK

SOUTH AFRICA

ANGOLA

CAPE VERDE

UK

SPAIN

FRANCE

PORTUGAL

GERMANY

BELGIUM

LUXEMBOURG

SWITZERLAND

MOZAMBIQUE INDIA

EAST TIMOR

CHINA

Source: www.cgd.pt

#02_April 201514

CGD PRESENCE

Banco Caixa Geral (BCG) Spain has been improving profitability and efficiency. BCG operates 110 branches in Spain and 3 representative offices abroad, encompassing the communities of Madrid, Galicia, Estremadura, Catalonia, The Basque Country, Asturias, Valencia, Castile-Léon and Aragón, ensuring the presence along the Portuguese-Spanish border.

Banco Caixa Geral Spain

AREA

506,030 Km2POPULATION (ESTIMATE)

46,704,314OFFICIAL LANGUAGE

Spanish

SPAINQUICK REPORT

ANDORRA

A Coruña

León

Valladolid

Madrid

Badajoz

Cáceres

Sevilla Málaga

Alicante

Valencia

Zaragoza

Barcelona

Vizcaya

Salamanca

Ourense Palencia

PORTUGAL

Zamora

Vitoria

AsturiasLugo

Palma de Mallorca Islands

Canary Islands

1

1

44

621

1 1

17

25

13

1

3

2

1

1

13

1

1

2

Pontevedra

BCG deploys an “Iberian Value Offer”, a turnkey service for both Portuguese companies doing business in Spain and Spanish companies with commercial relationships in Portugal. The “Iberian Passport” features a pioneering product, allowing customers from both countries to use Caixa’s international network even more effectively.

BCG Spain: Using Iberian Passport as a tool to help business growth.

The 1st quarter 2015 witnessed the recovery of Banco Caixa Geral Spain’s profit to €10.5 million.


Banco Caixa Geral SpainBCG Spain is concentrated on retail operations.

Total assets (net)€4,582 M Loans and advances to Customers€2,909 MCustomer deposits€2,426 MBranches110Employees 552

C/ Juan Ignacio Luca de Tena, 1, 28027 MADRIDSPAIN

(34 91) 309 90 00

[email protected]

� Spain is the largest export market for Portugal.

� Spain and Portugal share the oldest border in Europe.

� Portugal is Spain third largest market.

� 2014 was a year of transformation for BCG, streamlining the operation.

� BCG made a profit of €10.5 million in the 1Q2015.

# of Branches

With Private Banking Office

With Corporate Office

ANDORRA

A Coruña

León

Valladolid

Madrid

Badajoz

Cáceres

Sevilla Málaga

Alicante

Valencia

Zaragoza

Barcelona

Vizcaya

Salamanca

Ourense Palencia

PORTUGAL

Zamora

Vitoria

AsturiasLugo

Palma de Mallorca Islands

Canary Islands

1

1

44

621

1 1

17

25

13

1

3

2

1

1

13

1

1

2

Pontevedra

Source: Spain Today, Foreign Policy 2013 and Spanish Government

#02_April 201516

CAPITAL

AMOUNT INVESTED

# INVESTMENTS

INCEPTION YEAR

€ 370 M

€ 284 M31

1995

FCR Grupo CGD

€ 150 M

€ 12 M3

2013

CaixaCrescimento FCR

€ 25 M

€ 14 M32

2009

FCR Empreender+

€ 200 M

€ 15 M9

2013

€ 6 M

€ 125 K3

2015

Tech TransferAccelerator

PRIVATE EQUITY VENTURE CAPITAL FUND OF FUNDS

FCR Caixa Fundos

Caixa Capital is the Venture Capital and Private Equity arm of Caixa Geral de Depósitos’ Group and is fully owned by Caixa Banco de Investimento. Caixa Capital is currently one of the main operators in the Portuguese market and has the capacity to act in all the stages of a company´s life cycle.

Caixa Capital’s mission is to invest in funds and companies with significant growth potential, in order to generate adequate returns relative to the risk of its investments, contributing to the sustainable development of the Portuguese business environment.

Through its funds, Caixa Capital participates as an active partner, or as a capital investor through third-party funds, in the creation and development of technology and service-based businesses, as well as industrial and large exporting companies, preferably in tradable goods’ sectors.

Currently with more than 750 million euros under management and a portfolio of 78 investments, Caixa Capital is a reference in this area with special links to Private Equity and Venture Capital European associations.

Port

folio

CAIXA CAPITAL OVERVIEW


CAIXA CAPITALSociedade de Capital de Risco, SA

(+351) 21 389 67 06 / 08 Fax(+351) 21 389 67 [email protected]

Rua Barata Salgueiro, 33 - 1º1269-057 Lisboa PORTUGAL

http://caixacapital.pt/

nPRIVATE EQUITYGrowth equity for existing high potential traditional companies – focus on tradable goods, exports and internationalization;

Tackle global markets and promote consolidation processes.

nVENTURE CAPITALCoverage of early-stage / start-ups through co-investment in business angel venturing, corporate venturing and university venture funds;

Direct co-investment in Venture Capital / Growth equity companies with leading international players.

nFUND OF FUNDSPromote new local investment teams and attract investment from foreign teams into Portugal; From early-stage to buy-outs.

CAIXA CAPITAL ACTIVITY:

2014 Distribution per sector

2014 Cumulative Distribution per sector

Deal flow and Investments

DealflowDivestmentsInvestments

#

#02_April 201518

11% paper stationaries reduction since 2013.

All paper sources are certified and from sustainable origins.

CGD INVESTMENT IN THE FUTURE ENVIRONMENTAL MANAGEMENT SYSTEM

PAPER CONSUMPTION REDUCTION

Carbon Disclosure Project (CDP) Only company in the financial sector with maximum score (100 points) in the Carbon Disclosure Leadership Index (CDLI) in the “Iberia 125 Climate Report 2014”, and B in the band performance.

Environmental Management System (EMS)CGD is the first Portuguese bank to obtain environmental certification, according to ISO 14001.

14% electricity power usage per employee reduction since 2006.

28% electric power consumption reduction since 2006, equivalent to 7,000 homes.

ELECTRICITY CONSUMPTION REDUCTION


27% CO2 per employee reduction since 2006 95% of produced waste is recycled

WATER CONSUMPTION REDUCTION11% water consumption reduction since 2013, equivalent to 72,500 ten minute showers.

CARBON FOOTPRINT REDUCTION

ENVIRONMENTAL PERFORMANCE

2012 2013 2014 Fuel consumption of buildings (GJ) 1,653 1,559 1,726

Electricity (GJ) 299,624 291,643 267,555

Total GHG emissions (tCO2e) 32,598 34,334 34,128

Water consumption (m3) 175,877 164,287 146,880

Photocopy paper consumption (t) 452 451 431

Waste production (t) 1007 771 657Cost of energy and water per employee (EUR thousand/FTE) 1.77 1.68 1.72

Source: CGD - Sustainability Report

RECYCLING

#02_April 201520

CONTACT US

Investor Relations OfficeAv. João XXI, 63, 8º piso1000-300 LisboaPORTUGAL

[email protected]

www.cgd.pt/Investor-Relations/

(+351) 217 953 000Fax (+351) 217 953 479


www.cgd.pt/Investor-Relations/ FURTHER READING

BACK ISSUES

01_2013 02_2013 01_2014 02_2014 03_2014

04_2014 INT. NETWORK SPECIAL EDITION

CGD INVESTOR´S FACTSHEET

2014 ANNUALREPORT

1Q 2015CONSOLIDATEDACCOUNTS

#02_April 201522

This document is only provided for infor-mation purposes and does not constitute, nor must it be interpreted as, an offer to sell or exchange or acquire, or an invita-tion for offers to buy securities issued by any of the aforementioned companies in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer or sale. Any decision to buy or invest in securities in relation to a specific issue must be made solely and exclusively on the basis of the information set out in the pertinent prospectus filed by the company in relation to such specific issue. Nobody who becomes aware of the information contained in this report must regard it as definitive, because it is subject to changes and modifications. The Company makes no representation or warranty, express or implied, as to the accuracy or complete-ness of the information containeherein.

This document contains or may contain forward looking statements regarding intentions, expectations or projections of Caixa Geral de Depósitos or of its mana-gement on the date thereof that refer to miscellaneous aspects, including pro-jections about the future earnings of the business and involve significant elements of subjective judgment and analysis that may or may not be correct. The state-ments contained herein are based on our current projections, although the said earnings may be substantially modified in the future by certain risks, uncertainty and others factors relevant that may cause the results or final decisions to differ from such intentions, projections or estimates. These factors include, without limitation, (1) the market situation, macroeconomic factors, regulatory, political or government guide-lines, (2) domestic and international stock

DISCLAIMER

market movements, exchange rates and interest rates, (3) competitive pressures, (4) technological changes, (5) alterations in the financial situation, creditworthiness or solvency of our customers, debtors or counterparts. These factors could condi-tion and result in actual events differing from the information and intentions stated, projected or forecast in this document and other past or future documents. Caixa Geral de Depósitos does not undertake to publicly revise the contents of this or any other document, either if the events are not exactly as described herein, or if such events lead to changes in the stated stra-tegies and intentions. The contents of this statement must be taken into account by any persons or entities that may have to make decisions or prepare or disseminate opinions about securities issued by Caixa Geral de Depósitos and, in particular, by the analysts who handle this document and any recipient thereof should conduct its own independent analysis of the Com-pany and the data contained or referred to herein. This document may contain sum-marised information or information that has not been audited, and its recipients are invited to consult the documentation and public information filed by Caixa Geral de Depósitos with stock market supervisory bodies, in particular, the prospectuses and periodical information filed with the Portu-guese Securities Exchange Commission (CMVM).

Unless otherwise indicated all figures were disclosed in latest quarter consolidated accounts.

Distribution of this document in other juris-dictions may be prohibited, and recipients into whose possession this document comes shall be solely responsible for in-forming themselves about, and observing any such restrictions. By accepting this document you agree to be bound by the foregoing restrictions.

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