earnings presentation –1st half 2010...earnings presentation –1st half 2010 consolidated...

1

Earnings Presentation – 1st Half 2010

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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 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.

• The figures presented do not constitute any form of commitment by BCP in regard

to future earnings.

• First six months figures for 2009 and 2010 were subject to a limited revision by

External Auditors.

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Summary 1st half of 2010

Operating costs under control: down by 4.5% in Portugal

Tier I ratio reaches 8.9%, calculated according to IRB methodologies (pro forma); according to standard method, Tier I ratio of 8.6%

Significant improvement in efficiency, with a cost to income of 46.2% in Portugal and 52.2% on a consolidated basis

Customer funds grew 1.2% and loans to customers rose by 1.5%, with a strong boost from international operations (+5.1% in customer funds and 10.0% in loans)

Net income reaches 163.2 million euros, up 10.7% from the the first half of 2009. Excluding 74 million euros of goodwill impairment, net income reaches 236.8 million euros, +87.5%

Liquidity: significant increase of assets discountable in central banks to 16.5 billion euros; needs for 2010 totally refinanced

Continued upward trend in core banking income: net interest income and commissions continue to grow on a quarterly and annual basis

4


Net income up 10.7% and 87.5% excluding specific items

(Eur million)

Net income

Consolidated

163.2147.5

1H09 1H10

+10.7 %

236.8

126.3

1H09 1H10

+87.5 %

Net income ex-specific items

Consolidated

Specific items in 1H 09: accounting gain from the entry of new shareholders in Banco Millennium Angola's share capital, amounting to 21.2 million euros

Specific items in 1H 10: impairment in the Greek operation goodwill, amounting to 73.6 million euros

5


Net income reaches 163.2 million euros

Net income

(Eur million)

Portugal

International operations

Consolidated

163.2147.5

1H09 1H10

+10.7 %

Excluding specific items 126.3 236.8+87.5 %

137.9138.7

1H09 1H10

25.3

8.8

1H09 1H10

-0.6%

+188.4%

Specific items in 1H 09: accounting gain from the entry of new shareholders in Banco Millennium Angola's share capital, amounting to 21.2 million euros

Specific items in 1H 10: impairment in the Greek operation goodwill, amounting to 73.6 million euros

6


Stable loans and customer funds

Loans to customers (gross)*Customer funds*

Other customer funds from balance sheet

Deposits

Off balance sheet customer funds Mortgage

Consumer loans

Loans to companies

Consolidated(Eur million)

* Excluding Turkey and USA, in accordance with the sale agreements established

14,705 16,677

44,07244,066

4,8836,083

64,854 65,632

Jun 09 Jun 10

28,581 29,945

43,30143,352

4,9305,055

76,988 78,176

Jun 09 Jun 10

+1.5%

-0,1%

-2,5%

+4,8%

+1.2%

+€6 M

+€1,972 M

7


Tier I ratio reaches 8.9%

Solvency ratio IRB (pro forma) *

11.1% 9.7%11.0%

Actuarial losses and

change in the pension

fund corridor (–62 bp)

2Q10

* Reported values in the 1st half of 2009

** The presented pro forma ratios were calculated in accordance with the IRB methods, taking into consideration the revision process, by the Bank of Portugal (BdP), of the submission of the proposal to

adopt these methods. Estimates of the probability of default and the lost given default (IRB Advanced) for the retail portfolio collateralized by commercial and residential real state, and estimates of the

probability of default (IRB Foundation) for the corporate portfolio were considered in Portugal. At the 1st semester of 2009, the Bank received authorization from BdP to adopt the advanced methods

(internal model) to the generic market risk and the adoption of standard method for the operational risk

Consolidated

RWA (M€)

Total ratio

Core Tier I

Tier I9.7% 8.9%8.4%

7.3% 6.6%7.2%

Jun 09*

Standard 6.2%

Jun 10**

Standard 5.6%

Mar 10**

Standard 6.4%

Jun 09*

Standard 8.0%

Jun 10**

Standard 8.6%

Mar 10**

Standard 9.3%

56,591 59,52760,723

* ** **

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Good results in the CEBS stress test

Adverse scenario Iberian Banks results – Tier I

Shock scenario Iberian Banks results – Tier I

BCP shows strong resilience in adverse scenarios

Source: CEBS, Bank of Portugal and Bank of Spain

BCP

8.4% 8.4%Iberian average 8.2%

Iberian average 7.6%

BCP

9


(Eur million)

� Actuarial losses in 1st Half of 2010 of 365 million euros

� Return of pension funds of –3.9% in 1H10

� Pension liabilities coverage of 102%; no need for additional contributions

� Equity exposure of 19% in 2009

� No changes in actuarial assumptions

2006 2007 2008 2009 1H10

Pension liabilities 5,715 5,879 5,723 5,410 5,404

Pension fund 5,578 5,616 5,322 5,530 5,154

Liabilities' coverage* 105% 102% 100% 109% 102%

Fund's profitability 11% 4% -14% 9% -4%

Actuarial differences 1,240 1,353 2,140 1,514 1,855

Corridor 572 588 572 553 540

Outside the corridor 668 765 1,568 961 1,315

Actuarial gains (losses) 157 (160) (827) 557 (365)

% Equities in the Pension Fund 49% 35% 20% 22% 19%

* Includes the amount registered in the balance sheet

Pension liabilities coverage of 102%

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5.2

4.2

4.2

6.6

2.70.4

4.8

18.8

16.5

2009* 1H10 2H10 2011 2012 Total

Low refinancing needs for the 2nd half, comfortable portfolio of eligible assets(Eur billion)

Issued

during

2009**

Eligible

assets with

Central

Banks

Refinancing needs of long term debtConsolidated

* Includes 0.5 billion euros of bonds that were early redeemed** Includes the issue of 1 billion euros of Subordinated Perpetual Securities (June, August and December 2009)

Issued in

2010

25.8

Already

repaid

MTN

Jan10: €0.8bn

Mar10: €0.3bn

Private

Placements

€1.6bn

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Liquidity Plan

� Reduce commercial gap

� Reinforce relationships

with correspondent banks

� Increase eligible assets

with central banks to

>€20bn

� Coverage of all refinancing

needs until 2011

19.5

~1

>20

16.5

11.3

7.3

10.6

2007 2008 2009 1Q10 2Q10 Jul 10 2010 (E)

(Eur billion)

>2025

11.6

5.4

5.2

Eligible assets Other initiatives Total Total funding up

to 2011

Liquidity plan

Eligible assets with central banks

22.2

ECB

usage

MLT 2010-11

ST funding

12


Consolidated

Income statement

(Eur million)

(1) Includes in 1H09 gain accounted from the entry of new shareholders in BancoMillennium Angola's share capital, amounting to 21.2 million euros

(2) Includes in 1H10 impairment from the revaluation of Greek operation, amounting to 73.6 million euros

1H09 1H10 YoY

Net interest income 675.6 705.0 4.4%

Commissions 346.6 405.0 16.8%

Net trading income 214.1 314.6 46.9%

Dividends, equity acc. earnings and other income 63.9 63.1 -1.3%

Banking income 1,300.2 1,487.6 14.4%

Staff costs 444.2 424.2 -4.5%

Other administrative costs 278.7 301.1 8.0%

Depreciation 52.3 51.6 -1.5%

Operating costs 775.2 776.9 0.2%

Operational profit before impairment 525.0 710.7 35.4%

Loans impairment (net of recoveries) 279.1 384.2 37.7%

Other impairment and provisions 60.9 40.6 -33.3%

Income tax and minorities 58.8 49.1 -16.5%

Net income excluding specific items 126.3 236.8 87.6%

Specific items (1) 21.2 (2) -73.6 -447.2%

Net income 147.5 163.2 10.7%

13


Banking income growth and costs under control

Banking income* Operating costs

Consolidated(Eur million)

* Includes net interest income, commissions, net trading income, dividends, other income and equity accounted earnings

775.2 776.9

1H09 1H10

1,321.4

1,487.6

1H09 1H10

+12.6%

+0.2%

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52.2%54.5%

64.4%

55.8%

63.6%

59.6%58.6%

Cost-to-income ratio*


Portugal

Consolidated

* On a comparable basis, excluding specific items

Efficiency improvement; strong recovery in the last

quarters

46.2%

50.6%

60.2%60.7%

50.7%

54.0% 54.6%

72.3% 70.5%

62.7%66.2%

67.8% 69.9%71.9%

2008 3M09 6M09 9M09 2009 3M10 6M10

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(Eur million)

Net interest income

Portugal


Consolidated

Increase of net interest income, with strong recovery ininternational operations

705.0675.6

1H09 1H10

NIM

+4.4%

1,61%1,61%

138.3132.2 142.3138.6131.7

2T09 3T09 4T09 1T10 2T10

+8.0%

129.9116.3 129.2120.189.2

2T09 3T09 4T09 1T10 2T10

+44.8%

16


Sustained net interest income recovery

Quarterly net interest income

(%, Eur million)

Consolidated

412.2 429.7434.8 444.4

373.8

301.8322.6

364.4340.6336.0

2.05% 2.07% 2.00%2.11%

1.80%

1.43% 1.49%1.56% 1.58%

1.64%

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

NIM

+7.0%

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Net interest margin recovery in Portugal

Net interest margin (%)


Portugal

Consolidated

1.80

1.43

2.05 2.072.00

2.11

1.49 1.561.58 1.64

2.88 2.92 2.79 2.682.28 2.41

1.421.301.321.26

1.82 1.82 1.751.91 1.79

1.32

2.301.81 1.75

2.18

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

18


Sustained commissions growth in Portugal and in international operations

(Eur million)

Portugal


Consolidated

Banking commissions

Market-related commissions

Commissions

289.5324.1

57.1

80.9346.6

405.0

1H09 1H10

+16.8% 280.5251.0

1H09 1H10

124.595.6

1H09 1H10

+11.8%

+30.1%

+41.7%

+11.9%

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Consolidated

Significant growth in commissions YoY and QoQ

(Eur million)

1H09 1H10 YoY 2Q09 1Q10 2Q10

Banking commissions 289.5 324.1 11.9% 151.0 159.7 164.3 8.8% 2.9%

Cards 90.4 89.8 -0.6% 45.6 43.6 46.3 1.5% 6.1%

Loans and guarantees 87.7 85.4 -2.6% 43.8 41.8 43.6 -0.4% 4.5%

Bancassurance 25.1 37.2 48.5% 13.1 18.7 18.5 41.9% -1.1%

Other commissions 86.4 111.6 29.2% 48.5 55.7 55.9 15.1% 0.4%

Market related commissions 57.1 80.9 41.7% 26.9 42.4 38.5 43.0% -9.1%

Securities operations 35.4 54.3 53.6% 15.8 29.5 24.9 57.0% -15.5%

Asset management 21.7 26.6 22.4% 11.1 13.0 13.6 23.0% 5.3%

Total commissions 346.6 405.0 16.8% 177.9 202.2 202.8 14.0% 0.3%

2Q10/

2Q09

2Q10/

1Q10

20


Core income consistent recovery

Core income = Net interest income and Commissions

Consolidated

Net interest income

Commissions

(Eur million)

373.8301.8 322.6 336.0 340.6

364.4

168.7

177.9187.1 198.0 202.2

202.8

542.5479.7 509.7

567.2542.8534.0

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

+18.2%

21


Costs reduction in Portugal

Operating costs

Portugal


Depreciation

Other administrative costs

Staff costs

(Eur million)

Consolidated

52.3 51.6

444.2 424.2

278.7 301.1

1H09 1H10

-1.5%

+8.0%

-4.5%

+0.2% 479.9502.5

1H09 1H10

296.9272.7

1H09 1H10

-4.5%

+8.9%

775.2 776.9

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Impairment reinforced; credit quality at expected levels and in line with current economic cycle

Impairment

coverage > 90

days

Overdue loans

ratio > 90 days

Gross impairment charges as % of total loans

Impairment charges net of recoveries as % of

total loans

(Eur million)

Credit quality Impairment charges as % of total loans

< 90 days

> 90 days

Consolidated

Accumulated annualized figures

Total

overdue

loans*

0.76 0.740.85

0.720.71 0.72

0.82

0.70

0.98

1.02

0.860.83

0.770.86

2008 3M09 6M09 9M09 2009 3M10 6M10

105.1%132.6%

1.9% 2.7%

2,146.0

1,444.4

273.5

283.4

Jun 09 Jun 10

1,727.8

2,419.5

* Excluding Turkey and USA, in accordance with the sale agreements established

23


Cost of risk aligned with current economic cycle

Impairment charges as % of total loans (accumulated annualized figures)

Average = 0.47

Grossimpairment

charges as % oftotal loans

Impairment charges net of recoveries as % of total loans

0.850.98

0.570.75

0.640.49

0.61

0.83 0.86 0.76 0.74 0.770.86

0.21

0.70 0.720.72

0.26

0.82

0.40 0.460.30

0.55

0.22

0.71

0.39

0.95 1.02

0.690.48

2000 2001 2002 2003 2004 2005 2006 2007 2008 3M09 6M09 9M09 2009 3M10 6M10

24


Millennium bcp presents one of the better provisioning levels among the Iberian banks

On balance sheet total loans impairment as loans %

Source: Banks’ reports, 2Q10 when already disclosed, otherwise 1Q10

3.13% 3.15%3.10%

1.38%

1.98%

2.59%

1.79%

2.24%

3.00%

2.76%2.89%

Bank 10 Bank 9 Bank 8 Bank 7 Bank 6 Bank 5 BCP Bank 4 Bank 3 Bank 2 Bank 1

25


� Portugal

� International operations

26


Income statement

(Eur million)

(1) Includes in 1H09 gain accounted from the entry of new shareholders in BancoMillennium Angola's share capital, amounting to 21.2 million euros

(2) Includes in 1H10 impairment from the revaluation of Greek operation, amounting to 73.6 million euros

1H09 1H10 YoY

Net interest income 495.5 445.9 -10.0%

Commissions 251.0 280.5 11.8%

Net trading income 118.3 254.1 114.7%

Dividends, equity acc. earnings and other income 56.1 58.2 3.7%

Banking income 920.9 1,038.8 12.8%

Staff costs 314.1 281.9 -10.3%

Other administrative costs 157.9 170.5 7.9%

Depreciation 30.4 27.6 -9.5%

Operating costs 502.5 479.9 -4.5%

Operational profit before provisions 418.4 558.8 33.5%

Loans impairment (net of recoveries) 204.0 294.9 44.6%

Other impairments and provisions 60.0 41.7 -30.6%

Income tax and minorities 36.9 10.8 -70.8%

Net income excluding specific items 117.5 211.5 80.0%

Specific items (1) 21.2 (2) -73.6 -447.2%

Net income 138.7 137.9 -0.6%

27


13,824 15,465

29,65830,032

4,7986,046

49,902 49,922

Jun 09 Jun 10

Stable volumes in Portugal

(Eur million)

Loans to customers (gross)Customer funds

Other customer funds from balance sheet

Deposits

Off balance sheet customer funds Mortgage

Consumer loans

Loans to companies

+€20 M

-1.2%

+11.9%

36,609 36,067

21,395 21,876

3,411 3,097

61,04061,415

Jun 09 Jun 10

-0.6%

-9.2%

+2.2%

-1.5%

28


Growth in banking income and cost containment

(Eur million)

Banking income* Operating costs

* Includes net interest income, commissions, net trading income, dividends, other income and equity accounted earnings

502.5 479.9

1H09 1H10

942.11,038.8

1H09 1H10

+10.3%

-4.5%

29


Best cost to income ratio in the last 4 years

Cost to income*

* On a comparable basis, excluding specific items

67.7%

53.8%

60.9%

46.2%

58.5%

63.9%

56.4%

51.8%

54.6%

1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10

30


Net interest income and net interest margin recovery

Net interest income

(%, Eur million)

� On an annual basis margin penalised by

steep decrease of market interest rates

� Vs. 4Q 10:

– Maintenance of interest rates decrease– Margin penalized by base rate effect – Unfavourable sazonality, -2 interest

days

– Improvement of customer spreads

Euribor 3 months (%, quarterly average)

NIM

Clients

spread

206.3215.9 210.7

235.2212.5

1.26%1.32%

1.30%

1.42%

1.32%

1.65%

1.38%1.36%

1.49%1.56%

2Q09 3Q09 4Q09 1Q10 2Q10

0.66

0.87

1.31

0.690.72

2Q09 3Q09 4Q09 1Q10 2Q10

� Margin still being pressed by last year’s

steep fall of interest rates

� Vs. 1Q10:

– reversal of interest rates downwardtrend

– improvement of customer spread: credit repricing and recovery of deposits

margin

31


0.830.93 0.89 0.88

1.11

1.61

2.22 2.04 2.00

0.99 0.98 0.96 0.94 0.95 0.96 0.98 1.00 1.021.04

1.94

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

1.641.71 1.74

1.79

1.962.06

2.202.30

2.402.49

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Portfolio

New production

Portfolio

� Period of repricing of corporates portfolio (59% of total loans) up to 3 years

� Mortgage portfolio (36% of loans) cannot be re-priced. New production booked with adequate

spreads

Repricing in loans is offsetting the reduction of deposit margin

Corporates

(contractual spread, %)

Mortgage

(contractual spread, %)

32


Sustained commissions growth in Portugal

Banking commissions

Market-related commissions

(Eur million)

Commissions

117.9 115.3122.6

114.1122.5

13.7 16.916.1

24.219.7

131.7 132.2138.6 138.3 142.3

2Q09 3Q09 4Q09 1Q10 2Q10

+8.0%

33


Operating costs in Portugal drop by 4.5%

(Eur million)

Operating costs

Depreciation

Staff costs


30.427.6

281.8314.1

170.5157.9

502.5479.9

1H09 1H10

-9.5%

-4.5%

-10.3%

+7.9%

34


Impairment reinforced; credit quality at expected levels and in line with current economic cycle

(%, Eur million)

Impairment

coverage > 90

days

Overdue loans

ratio > 90

days

Grossimpairment

charges as % oftotal loans

Impairmentcharges net ofrecoveries as %of total loans

Credit qualityImpairment charges as % of total loans (accumulated figures, annualized)

< 90 days

> 90 days

Total

overdue

loans

0.82

0.640.71

0.660.64 0.61

0.97

0.650.69 0.71

0.85

1.00

0.690.83

2008 3M09 6M09 9M09 2009 3M10 6M10

1,651.71,125.4

209.0

256.7

1,382.1

1,860.7

Jun 09 Jun 10

105,5%138,5%

1,8% 2,7%

35


Client satisfaction at record level since the launch of the single brand

Client satisfaction index

Basis 100

79.078.7

79.8

78.1 78.2

79.0

77.7

78.9

80.3

79.1

2004 2005 2006 2007 2008 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Client satisfaction

Source: Clients satisfaction survey (SGC)

81.0

36


� Portugal

� International operations

37


Strong recovery of international operations

(Eur million)

Net income

1H09 1H10 YoY

YoY in

local

currency

International operations 8.8 25.3 188.4% 230.0%

Poland 4.6 34.4 >100% >100%

Mozambique 27.2 29.9 9.7% 35.8%

Angola 6.3 9.8 55.9% 88.2%

Greece 3.3 -10.2 < -100% < -100%

Romania -15.6 -13.1 15.9% 17.9%

Turkey -3.4 -1.9 44.8% 48.1%

USA -5.5 -2.1 62.0% 61.9%

Other 4.9 5.0 0.7% 2.8%

Minorities -13.1 -26.4 na na

38


Poland: sustained profitability improvement

(Eur million)

Net income

Banking income Operating costs

Excluding FX effect. Rates €PLN used: Profit and Loss account: 3,99590833; Balance Sheet: 4,1470

*Net interest income + Net commission income

131.0130.1

1H09 1H10

180.3 206.9

1H09 1H10

5.3

34.4

1H09 1H10

+14.7% +0.7%

+554%

� Net income in 1H10 (34.4 M€) 6 times higher

than in the same period of 2009. ROE grew from

1.5% to 7.7%

� Operating income up 14.7% Y/Y, driven by core

income* growth(+43.2% Y/Y), whereas trading

and other income decreased when compared to

the exceptionally high levels of 1H09

� Operating costs under control allowing for the

improvement of cost to income ratio from

72.1% to 63.3%

39


Net interest income recovery clearly visible on an annual and quarterly basis

NIM

(%, Eur million)

Net interest income* NIM evolution*

Loans’ margin Deposits’ margin

* Pro-forma data. Margin from all derivatives, including those hedging FX denominated loan portfolio, is presented in Net Interest Income, whereas in accounting terms part of this margin (9.6 M€ no

1H10 and 20.9 M€ in 1H09) is presented in Net trading income. Since 2009, new methodology applied, which transferred FX impact on accrued interests from Net Interest Income to FX gains

58.4 60.1

118.5

74.2

1H09 1Q10 2Q10 1H10

2.93%2.63% 2.97%2.79% 2.96%

-0.74%

-0.29%

-0.12% -0.11%-0.20%

2Q 09 3Q09 4Q09 1Q10 2Q10

2.2% 2.1%1.1%

+59.7%

1.8% 1.9%

+2,9%

� Net interest margin showed a significant improvement in 1H10 compared to 1H09 and

maintained the quarterly growth trend (+2.9% Q/Q) in spite of a strong deposits promotional

campaign

� Net interest margin stabilized at 2.1% as both loans and deposits spreads changed only

slightly during 2Q10. Higher competition on loans, lower WIBOR rates and promotion

campaigns were the main factors that influenced NIM in 2Q


40


58.2 71.1

1H09 1H10

7

3.1

9.2

17.2

11.1

4.7

0.95.2

12.7

Commissions growth on an annual basis

Accounts related

Loans and guarantees

Cards & ATMBrokerage and Custody

Mutual Funds

Transfers

Bancassurance

3rd party savingsOther

(Eur million)

Net commission income Net commission breakdown

� Net commissions posted a significant Y/Y growth of 22.2% in 1H10. This increase was driven by

cards, mutual funds, other capital market related savings products, as well as by current accounts.

The significant growth in these items more than compensated the decrease in bancassurance

commissions.

� The decrease of commissions on a quarterly basis was mainly caused by seasonally higher

commissions from bancassurance in 1Q10

+22,2%


41


10.0 9.5

63.960.7

57.659.4

1S09 1S10

Operating costs under control

Operating costs

Number of employees

Number of branches

Depreciation


Staff costs

(Eur million)


-5.6%

-3.0%

+5.4%

+0.7%

130,1 131,0

465484

Jun 09 Jun 10

6.1806.414

Jun 09 Jun 10

-3.6%

-3.9%

42


Credit and customer funds growth

Loans to companies

Loans to individuals

(Eur million)

* Includes deposits, bank’s bonds sold to individuals and investment products

Excluding FX effect. Rates €PLN used: Profit and Loss account 3. 99590833; Balance Sheet 4.1470

Customer funds*

8,5759,032

Jun 09 Jun 10

+5.3%

2,204 2,188

6,213 6,605

8,7938,418

Jun 09 Jun 10

+4.5%

+6.3%

-0.7%

Loans to customers (net)

43


Cost of risk reduction

* Impairment charges/ average net loans in the period (in bps, annualized). These ratios based on gross loans in 1H09 and 1H10 were 103 bp and 73 bp, respectively.

Impairment

coverage

Impairment

ratio

Total

Impaired

loans

Credit quality Impairment charges

Impairment

charges as %

of total loans

(%, Eur million)

Excluding FX effect. Rates €PLN used: Profit and Loss account 3. 99590833; Balance Sheet 4.1470

53%54%

4.8% 5.9%

106 bp* 76 bp *

46.3

20.811.7

32.5

1H09 1Q10 2Q10 1H10

-29.8%

-43.8%

� Net Provisions decreased in 1H10 by 30% versus 1H09. Cost of risk decreased from 106 bps in

1H09 to 76 bps in 1H10

� New provisions in 1H10 were almost evenly divided between companies and retail exposures

(in the latter most of them connected with unsecured consumer loans)

415.0 496.5 535.8

Jun 09 Mar 10 Jun 10

55%

6.0%

44


� GDP growth in Mozambique remains

at high levels: ~5% in 2010(P)

� Net income rises 35.8% in local

currency (+9.7% in euros)

� ROE reaches 38.4%

� Net income evolution sustained by

banking income good performance

� Conservative provisioning policy

� Ongoing expansion program

� Strong volumes increase

Banking income

Employees

Operating costs

Net impairment charges %

total gross loans

(accumulated)

Branches

Net income(Eur million)

(Eur million)

Mozambique: sustained evolution of net income supportedby banking income, in spite of expansion plan

29.927.2

1H09 1H10

67.6 74.1

1H09 1H10

31.2 30.4

1H09 1H10

103

119

Jun 09 Jun 10

1,8032,013

Jun 09 Jun 10

+9.7% +9.6%-2.4%

0.94

1.521.81

6M09 12M09 6M10

45


Sustained volume growth, mainly on loans to customers, with low level of delinquency

(Eur million)

Customer funds

+34% in local currency

+20.4%965

801

Jun 09 Jun 10

Loans to customers (gross)

Impairment

coverage > 90

days

Overdue

ratio > 90 days

+74% in local currency

24

27

598

365

197

136

526

821

Jun 09 Jun 10

+56.2%

541%460%

0.9% 0.9%

Mortgage

Consumer loans

Loans to companies

46


Angola: strong increase in net income, despite ongoing expansion


Branches

Banking income

Employees

Operating costs

Customer funds


(Eur million)

� Network expansion to 28 branches

� Strong loans, deposits and revenues

growth

� Despite the ongoing expansion,

profitability remains high

(ROE of 16.3%)

6.39.8

1H09 1H10

20.4

41.1

1H09 1H10

13.8

24.1

1H09 1H10

259411

Jun 09 Jun 10

368 514

Jun 09 Jun 10

1828

Jun 09 Jun 10

401619

Jun 09 Jun 10

+55.9% +101.7% +74.0%

+58.4% +39.9%

47


Greece: increase in provisions, lower trading income and deterioration of funding conditions

177 176

Jun 09 Jun 10

-10.2

3.3

1H09 1H10

Operating income

-8.3%

Operating costs

Impairment charges % total gross loans

Net Income

-3.3%

0.81

0.410.50

0.37

1.16

2Q09 3Q09 4Q09 1Q10 2Q10

81.2 74.5

1H09 1H10

59.962.0

1H09 1H10

� Net losses of €10.2mn euros in 1H10

� Impairment charges up 96% to €25.4mn in 1H10, as

unprecedented economic conditions led

delinquency to increase dramatically

� Particularly challenging market conditions led to

net trading losses of €0.7mln in 1H10, compared

to €7.1mn gains in H109

� Net interest income at €56.3mn, 4% down from

H109, reflecting intense competition for deposits

(deposit pricing) and the impact of the end of the

fixed-rate teaser for mortgages granted for a two

years period

� Commissions 16% up from 1H09, in spite of slowing

down loans new production

Employees

Branches

1,522 1,506

Jun 09 Jun 10

(Eur million)

(Eur million)

48


3.88 4.08 3.98 3.87 3.77

-0.95 -0.89 -1.18-1.57

-0.87

2Q09 3Q09 4Q09 1Q10 2Q10

Income impacted by significant deterioration of funding conditions

NIM

Cost-to-Income

Net Interest Income (quarterly) Loans and deposits spread

Loans spread

Deposits spread

(%, Eur million)

31.6 32.933.2

30.4

25.9

2.02% 2.08% 2.12% 1.90%1.61%

2Q09 3Q09 4Q09 1Q10 2Q10

74.2% 71.2% 72.9% 71.7%

91.1%

2Q09 3Q09 4Q09 1Q10 2Q10

49


3,508 3,062

377356

3,4193,885

Jun 09 Jun 10

Lower deposits reflect decrease from institutional customers andvery intense competition in customer funding

Off balance sheet funds

Deposits

(%, Eur million)

-12.0%


Impairment

coverage > 90 days

Overdue

ratio > 90 days

1,943 2,079

2,365 2,426

732 681

5,1865,039

Jun 09 Jun 10

+2.9%

59.5%43.3%

3.0% 3.2%

Customer funds

Loans to companies

Consumer loans

Mortgage

-12.7%

-5.5%

50


Focus and Transformation: strong growth potential of international operations contribution

Weight of international operations (1H10)

Branches100% = 1,807

* Excluding Turkey and USA

International operationsPortugal

Banking income100% = 1,481 million €

Net income100% = 163.2 million €

30.2

Customer fundsgrowth*

97.5%

15.5%

Customer funds *100%* = 66 billion €

23.9%

49.6%

Customers100% = 5.1 million

50.1%

1H09 figures

49.3%

48.0%

28.7%

6.0%

23.1%

30.2%

97.5%

23.9%

49.7%

50.1%

15.5%

51


Focus and Transformation: focus on core international operations

+ 7x

+55.9%

+9.7%

Net income of core international operations

+94.3%

Poland *

Angola Mozambique

* Excluding FX effect. Rates €PLN used: Profit and Loss account 3. 99590833; Balance Sheet 4.1470

74.1

38.1

1H09 1H10

6.39.8

1H09 1H10

29.927.2

1H09 1H10

34.4

4.6

1H09 1H10

(Eur million)

52


-4.4%

0.2%

-7.8%

2008 2009 1S10

Focus and Transformation: focus on profitability

Core income evolution * Operating costs evolution

... and cutting costsReversing banking income trend...

(Eur million)

567543534

510480

2Q09 3Q09 4Q09 1Q10 2Q10

* Net interest income and commissions

Consolidated

53


Highlights of 1st half of 2010

� Improvement of net income to 163.2 million euros, increasing 10.7%;

excluding specific items net income increases 87.5% to 236.8 million

euros

� Recovery of international operations

� Consistent recovery of margin and commissions since the 3rd quarter

of 2009

� Cost under control: +0.2% in consolidated operating costs and -4.5% in

Portugal

� Reinforcement of impairment and provisions

� Overdue loans aligned with expected levels at this point in the cycle

� Adequate liquidity

� Stress test results show resilience and adequate capital

54


Annexes

55


Staff costs containment in Portugal

(Eur million)

Staff costs

1H09 1H10 YoY

YoY in

local

currency

Portugal 314.1 281.9 -10.3% -10.3%

Remunerations 228.2 234.5 2.8% 2.8%

Pension costs 85.9 47.4 -44.9% -44.9%

International operations 130.0 142.3 9.5% 7.0%

Poland 53.5 63.9 19.5% 5.4%

Mozambique 14.8 14.0 -5.6% 16.9%

Angola 5.2 8.7 66.6% 101.1%

Greece 30.3 28.6 -5.8% -5.8%

Other 26.1 27.1 3.7% 0.6%

Staff costs 444.2 424.2 -4.5% -5.2%

56


(Eur million)

Recovery in commissions YoY and QoQ

1H09 1H10 YoY 2Q09 1Q10 2Q10

Banking commissions 218.9 236.6 8.1% 117.9 114.1 122.5 3.9% 7.4%

Cards 56.0 50.8 -9.3% 28.2 24.5 26.3 -6.9% 7.3%

Loans and guarantees 70.5 67.3 -4.6% 37.6 32.3 35.0 -6.9% 8.3%

Bancassurance 25.1 37.2 48.5% 13.1 18.7 18.5 41.9% -1.1%

Other commissions 67.4 81.3 20.7% 39.1 38.6 42.8 9.4% 10.8%

Market related commissions 32.1 43.9 36.9% 13.7 24.2 19.7 43.5% -18.5%

Securities operations 20.5 31.3 52.8% 8.0 18.1 13.1 63.6% -27.4%

Asset management 11.6 12.7 8.9% 5.7 6.1 6.6 15.2% 8.0%

Total commissions 251.0 280.5 11.8% 131.7 138.3 142.3 8.0% 2.9%

2Q10/

2Q09

2Q10/

1Q10

57


(Eur million)

Consolidated

Credit portfolio quality and coverage

Credit PortfolioOverdue > 90

days

Overdue > 90

days / total

loans

Overdue > 90

days / total

loans

Coverage

Jun 10 Jun 10 Mar 10 Jun 10

Individuals 568 1.6% 1.5% 96.0%

Mortgage 169 0.6% 0.5% 109.5%

Consumer 399 8.1% 7.0% 90.2%

Corporate 1,578 3.6% 3.3% 108.4%

Services 489 2.8% 2.8% 107.6%

Commerce 296 5.9% 5.4% 90.1%

Construction 374 7.2% 5.7% 59.9%

Others 419 2.7% 2.5% 165.8%

Total 2,146 2.7% 2.5% 105.1%

58


(Eur million)

Credit portfolio quality and coverage

Credit PortfolioOverdue > 90

days

Overdue > 90

days / total

loans

Overdue > 90

days / total

loans

Coverage

Jun 10 Jun 10 Mar 10 Jun 10

Individuals 348 1.4% 1.3% 94.7%

Mortgage 137 0.6% 0.6% 117.3%

Consumer 210 6.8% 6.1% 80.0%

Corporate 1,304 3.6% 3.3% 108.4%

Services 371 2.4% 2.5% 122.5%

Commerce 260 6.6% 6.1% 86.8%

Construction 332 7.5% 6.0% 61.0%

Others 340 2.8% 2.5% 156.0%

Total 1,652 2.7% 2.5% 105.5%

59


Romania: improvement of core income and control of operating costs

Branches

Banking income

Employees

Operating costs

Customer funds


(Eur million)

Loans to customers (gross)� Focus on customer funds translated

into strong deposit growth,

improving loans to deposits ratio

� Recovery of core income: net

interest income and commissions

grew by more than 4x vs. 2Q09

� Controlled costs

252 312

Jun 09 Jun 10

699 705

Jun 09 Jun 10

158221

Jun 09 Jun 10

+24.0% +40.3%

-13.1-15.6

1H09 1H10

12.8 12.0

1H09 1H10

-6.2% 20.520.9

1H09 1H10

-1.7%

7374

Jun 09 Jun 10

60


Turkey

Agreement to sell the Turkish operation concluded in 1Q10. Transaction is expected to be concluded in 3Q10

Loans to Customers (gross)

Branches

Banking income

Employees

Operating costs

Customer funds


(Eur million)

376 423

Jun 09 Jun 10

347 359

Jun 09 Jun 10

-3.4-1.9

1H09 1H10

10.9 10.7

1H09 1H10

7.7 7.8

1H09 1H10

+3.7% +12.5%

+0.5%-1.7%

18 18

Jun 09 Jun 10

316 298

Jun 09 Jun 10

61


USA

Agreement to sell the USA operation concluded in 1Q10.Transaction is expected to be concluded in 3Q 10. Branches

Banking income

Employees

Operating costs

Customer funds



(Eur million)

12.611.8

1H09 1H10

-6.4%11.9 11.7

1H09 1H10

451 455

Jun 09 Jun 10

491 510

Jun 09 Jun 10

222 191

Jun 09 Jun 10

17 17

Jun 09 Jun 10

-1.8%

+3.8%

-2.1

-5.5

1H09 1H10

+1.0%

62


Financial Statements

63


Consolidated Balance Sheet

At 30 June, 2010 and 2009 and 31 December 200930 June

2010

31 December 2009

30 June 2009

Assets

Cash and deposits at central banks 1,149,109 2,244,724 2,041,485 Loans and advances to credit institutions Repayable on demand 1,016,118 839,552 537,870 Other loans and advances 1,239,636 2,025,834 2,255,496 Loans and advances to customers 75,920,346 75,191,116 75,854,735 Financial assets held for trading 3,671,978 3,356,929 3,337,301 Financial assets available for sale 2,570,369 2,698,636 2,086,423 Assets with repurchase agreement 74,609 50,866 43,514 Hedging derivatives 581,780 465,848 383,388 Financial assets held to maturity 5,834,514 2,027,354 1,333,660 Investments in associated companies 428,233 438,918 374,688 Non current assets held for sale 1,922,777 1,343,163 824,433 Investment property 418,616 429,856 427,417 Property and equipment 625,690 645,818 708,151 Goodwill and intangible assets 463,403 534,995 539,831 Current tax assets 31,312 24,774 24,161 Deferred tax assets 605,886 584,250 586,795 Other assets 2,438,912 2,647,777 2,427,123

98,993,288 95,550,410 93,786,471

Liabilities

Amounts owed to central banks 11,584,409 3,409,031 1,270,014 Amounts owed to others credit institutions 5,194,916 6,896,641 6,256,064 Amounts owed to customers 44,072,444 46,307,233 44,852,968 Debt securities 19,573,724 19,953,227 21,683,547 Financial liabilities held for trading 1,495,234 1,072,324 1,297,701 Other financial liabilities held for trading at fair value through results 4,687,815 6,345,583 7,910,876 Hedging derivatives 395,806 75,483 93,550 Non current liabilities held for sale 969,040 435,832 - Provisions for liabilities and charges 254,605 233,120 228,965 Subordinated debt 1,988,449 2,231,714 2,519,439 Current income tax liabilities 2,028 10,795 1,422 Deferred income tax liabilities 4,107 416 370 Other liabilities 1,471,084 1,358,210 1,279,560

Total Liabilities 91,693,661 88,329,609 87,394,476

Equity

Share capital 4,694,600 4,694,600 4,694,600 Treasury stock (88,721) (85,548) (73,141) Share premium 192,122 192,122 183,276 Preference shares 1,000,000 1,000,000 1,000,000 Other capital instruments 1,000,000 1,000,000 300,000 Fair value reserves 46,965 93,760 29,377 Reserves and retained earnings (165,128) (243,655) (221,336) Profit for the period attributable to Shareholders 163,240 225,217 147,480

Total Equity attributable to Shareholders of the Bank 6,843,078 6,876,496 6,060,256

Minority interests 456,549 344,305 331,739

Total Equity 7,299,627 7,220,801 6,391,995

98,993,288 95,550,410 93,786,471

(Thousands of Euros)

64


Consolidated Income Statement

For the six month periods ended 30 June, 2010 and 200930 June

201030 June

2009

Interest income 1,636,856 1,991,263 Interest expense (931,897) (1,315,700)

Net interest income 704,959 675,563

Dividends from equity instruments 19,087 3,108 Net fees and commission income 404,991 346,635 Net gains / losses arising from trading and hedging activities 319,980 221,912 Net gains / losses arising from available for sale financial assets (5,423) (7,787) Other operating income 9,091 20,774

1,452,685 1,260,205

Other net income from non banking activity 8,564 8,818

Total operating income 1,461,249 1,269,023

Staff costs 424,214 444,162 Other administrative costs 301,094 278,699 Depreciation 51,552 52,329

Operating costs 776,860 775,190

684,389 493,833

Loans impairment (384,177) (279,056) Other assets impairment (20,393) (41,824) Goodwill impairment (73,565) - Other provisions (20,266) (19,118)

Operating profit 185,988 153,835

Share of profit of associates under the equity method 28,887 30,944 Gains / (losses) from the sale of subsidiaries and other assets (2,554) 21,466

Profit before income tax 212,321 206,245 Income tax Current (28,508) (56,842) Deferred 6,761 10,904

Profit after income tax 190,574 160,307

Attributable to: Shareholders of the Bank 163,240 147,480 Minority interests 27,334 12,827

Profit for the period 190,574 160,307

Earnings per share (in euros) Basic 0.05 0.05 Diluted 0.05 0.05

(Thousands of Euros)

65


Consolidated Income Statement (Quarterly Evolution)

For the six month periods ended 30 June, 2010 and 2009(Eur million)

∆ %

10 / 09

Net interest income 301.8 322.6 336.0 340.6 364.4 675.6 705.0 4.4%

Dividends from equity instruments 2.5 1.2 -1.0 0.9 18.2 3.1 19.1 >100%

Net fees and commission income 177.9 187.1 198.0 202.2 202.8 346.6 405.0 16.8%

Other operating income 15.9 75.6 5.7 5.0 10.1 51.1 15.1 -70.4%

Net trading income 64.4 -26.0 37.2 135.4 179.2 214.1 314.6 46.9%

Equity accounted earnings 19.4 16.9 18.4 16.7 12.1 30.9 28.9 -6.6%

Banking income 581.9 577.4 594.3 700.7 786.8 1,321.4 1,487.6 12.6%

Staff costs 212.2 222.9 198.2 208.8 215.4 444.2 424.2 -4.5%

Other administrative costs 136.1 148.0 143.5 147.7 153.4 278.7 301.1 8.0%

Depreciation 26.1 26.3 26.1 25.8 25.8 52.3 51.6 -1.5%

Operating costs 374.5 397.2 367.9 382.2 394.6 775.2 776.9 0.2%

Operating profit bef. imp. 207.4 180.3 226.4 318.5 392.2 546.2 710.7 30.1%

Loans impairment (net of recoveries) 119.0 130.4 150.6 164.8 219.4 279.1 384.2 37.7%

Other impairm. and provisions 24.1 14.5 21.9 21.8 92.4 60.9 114.2 87.4%

Profit before income tax 64.4 35.4 53.9 131.9 80.4 206.2 212.3 2.9%

Income tax 17.1 5.4 -5.1 22.0 -0.3 45.9 21.7 -52.7%

Minority interests 6.5 -0.7 11.9 13.5 13.8 12.8 27.3 >100%

Net income 40.8 30.7 47.1 96.4 66.8 147.5 163.2 10.7%

Year-to-dateQuarterly

2Q 09 Jun09 Jun102Q 101Q 104Q 093Q 09

66


Consolidated Income Statement (Portugal and International operations)

For the six month periods ended 30 June, 2010 and 2009(Eur million)

Jun09 Jun10 ∆ % Jun09 Jun10 ∆ % Jun09 Jun10 ∆ % Jun09 Jun10 ∆ % Jun09 Jun10 ∆ % Jun09 Jun10 ∆ % Jun09 Jun10 ∆ %

Interest income 1,991 1,637 -17.8% 1,419 1,068 -24.7% 572 569 -0.6% 265 292 10.2% 56 59 4.2% 156 123 -20.9% 95 95 0.0%

Interest expense 1,316 932 -29.2% 923 622 -32.6% 392 310 -21.0% 218 183 -16.0% 12 16 31.3% 98 67 -31.2% 65 44 -32.0%

Net interest income 676 705 4.4% 495 446 -10.0% 180 259 43.9% 47 109 >100% 44 43 -3.3% 59 56 -3.8% 30 51 68.3%

Dividends from equity instruments 3 19 >100% 3 19 >100% 0 0 3.8% 0 0 3.6% 0 0 12.9% 0 0 -9.7% 0 0 100% 44 43 -3.3% 59 56 -3.8% 30 51 68.3%

Net fees and commission income 347 405 16.8% 251 281 11.8% 96 124 30.1% 51 71 38.5% 12 11 -3.1% 14 17 16.4% 18 25 38.2%

Other operating income 51 15 -70.4% 45 11 -76.2% 6 4 -24.5% 1 -1 100%

Basic income 1,076 1,144 6.3% 794 756 -4.9% 282 388 37.7% 100 179 79.2% 59 57 -2.8% 74 75 1.3% 49 77 57.1%

Net trading income 214 315 46.9% 118 254 >100% 96 60 -36.9% 57 26 -54.7% 9 17 94.1% 7 -1 100%

Loans impairment (net of recoveries) 279 384 37.7% 204 295 44.6% 75 89 19.0% 41 33 -20.3% 2 7 >100% 13 25 96.3% 19 24 27.8%

Other impairm. and provisions 61 114 87.4% 60 115 92.0% 1 -1 100% 5 34 >100% 27 30 9.7% 3 -10

67


Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered at the Commercial Registry of Oporto, with the single commercial and tax identification number 501 525 882 and the share capital of EUR 4.694.600.000

Investor Relations Division:

Sofia Raposo, Head of Investor Relations

Francisco Pulido Valente

João Godinho Duarte

Tl: +351 21 1131 085

Email: [email protected]

earnings presentation –1st half 2010...earnings presentation –1st half 2010 consolidated...

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