CGD Group Consolidated Operations – 30 June 2016

10 Aug 2016

1st Semester (unaudited accounts)

Results

At the end of the first half 2016, core operating income (sum of net interest income and commissions, net of operating costs), saw an increase of 19.1% in the period to €159.6 million, influenced by the good performance of net interest income and operating costs.
CGD Group’s net interest income, in first half 2016, was up 5.5% by €29.8 million over the same half 2015 to €568.7 million.
In the quarter, the contributions by net commissions (€ 115.6 million) and income from financial operations (down € 97.3 million) reflected, in the former case, the strong competitive and statutory pressure on commissions charges and, in the latter case, the climate of instability in international financial markets. As in first half 2015, the half yearly growth of net interest income greatly benefited from the 17.5% reduction of €171.7 million in funding costs, surpassing the reduction also felt in interest on lending (down 9.3% by €141.8 million).
Commissions earnings (net) of €230.1 million reflected the strong competitive and regulatory pressure on commissions charges.
Income from financial operations were negative at €47.4 million, influenced by high volatility experienced in international financial markets, including public debt, associated with the United Kingdom's referendum about remaining in the European Union.
CGD’s total operating income for the half year, strongly influenced by the negative change of €349.4 million in income from financial operations, was therefore down €399.5 million over the same half 2015 to €754.7 million.
CGD’s operating costs, which benefited from the containment felt across all of its components, namely administrative expenditure (down 3.1%) and depreciation (down 7.6%) were down 2.0% in the half year. Employee costs were down 0.7%, although the reduction would have been 6% with the exclusion of the one-off Horizonte Plan cost of €20.0 million. Total operating costs, excluding this one-off factor, were down 5.1%.
Gross operating income for first half 2016 amounted to €115.4 million.
There was a 2.1% increase of €6.7 million in provisions and impairment for the period to €328.4 million.
Income before tax and non-controlling interests and net income for the half year were €-193.1 million and €-205.2 million, respectively.

Balance Sheet

CGD Group’s total assets, at the end of June 2016, were down 0.9% over the same date in 2015, to €99,355 million.
Customer resources of €72,442 million at the end of the first half represented a positive 3.1% evolution of €2,199 million over June 2015.
Gross loans and advances to customers (including credit with repurchase agreements) amounted to €70,674 million in June last. The growth of new loan agreements across the half year was insufficient to offset portfolio maturities.
Credit at risk, in June 2016, was 12.2% of the credit portfolio, with a level of provisions and impairment coverage of 63.2%. The level of coverage of credit at risk was 46.5% for credit to individuals and 73.7% for corporate customers.
The loans-to-deposits ratio of 90.1% reflected CGD’s strong resource-taking capacity, in addition to the, as yet, limited recovery of demand for credit, in Portugal.

Liquidity and solvency

CGD’s funding from the Eurosystem at the end of June 2016 totalled €3,597 million, a change of €832 million over December 2015 and €691 million over June 2015 and currently representing 3.6% of total assets.
CGD’s liquidity remained at a highly comfortable level with an LCR (liquidity coverage ratio) of 193.5%, far in excess of regulatory requirements.
The phased-in and fully implemented Common Equity Tier 1 (CET 1) ratios, calculated according to CRD IV/CRR rules were 10.0% and 9.2%, respectively in June 2016, complying with the regulatory requirements.

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Caixadirecta

Caixadirecta

CGD Group Consolidated Operations – 30 June 2016

1st Semester (unaudited accounts)