CGD Consolidated Operations at 30th June 2015

31 Jul 2015

CGD Results

Summary of evolution in 1st half (1)

For comparability purposes, the amounts of net income and income before tax and non-controlling interests for 1st half 2014, have been adjusted to reflect the appropriation of 15% of the net income of Fidelidade and 20% of Cares and Multicare, which correspond to the equity percentages presently held by CGD Group, and the exclusion of the capital gains recognised on the disposal of the referred to insurance companies occurred in that period.

Results

The amount of CGD’s consolidated net income attributable to its shareholder in 1st half 2015 was up by €216.4 million, year-on-year, to €47.1 million.
Income before tax and non-controlling interests grew by €324.2 million over 1st half 2014 to €213.5 million.
CGD’s net interest income was up 14.3% over the same semester 2014, benefiting from a decline of its funding cost, also higher than the reduction in income from lending operations.
Net operating income for the period was up by a positive 25.8% to €1,154.2 million in comparison to 1st half 2014, driven both by the referred to performance of net interest income and the large contribution made by income from financial operations.
Gross operating income was up 72.1% to €501.6 million owing to contributions both from CGD’s domestic and the Group’s international operations which accounted for 40.5% of the 1st half 2015 total.
Provisions and impairment for the half year were down 23.6% by €99.2 million to €321.7 million in comparison to the €420.9 million for the same period last year, as a reflection of the gradual improvement of credit risk conditions in CGD’s operating markets.

Balance Sheet

Net assets in CGD’s consolidated balance sheet this half remained practically at the same level as in 1st half 2014, achieved €100,238 million (up €33 million).
The loans and advances to customers portfolio, including credit with repurchase agreements, totalled a gross amount of €71,855 million, down by €1,205 million (down 1.7%) in comparison to June 2014 of which amount €1.196 million referred to the net impact of mortgage loans in Portugal, whose increase in new operations (58.5% over the same period last year) was not sufficient to offset the natural maturity of the existing portfolio.
The loans and advances to companies portfolio, in Portugal, was down 6% and 3.3% over June 2014 and December 2014, respectively, with a stabilising of its market share at 18.0%, in May 2015, notwithstanding the aggressiveness of the competitive conditions experienced in the domestic credit market.
Reference should be made to the growth of fresh loans to SMEs in 1st half 2015, up 37.1% over the same period of the preceding year.
The positive change of €3,116 million in customer resources, in 1st half 2015 (up 4.6% over 1st half 2014) to €70,242 million, showed the leading role played by CGD in the domestic financial sector.
The loans-to-deposits ratio of 94.8%, reflected a negative commercial gap of €3,613 million and provided yet another example of the robustness of CGD’s retail resources-taking capacity.

Liquidity

As a reflection of its comfortable liquidity situation, CGD Group reduced its financing from the ECB by €2,379 million over the last year (down 45.0%) to € 2,906 million at the end of June 2015.
In parallel and in the same period, CGD Group also reduced the amount of its eligible assets allocated to the ECB pool by €1,183 million (down 9.0%) to €11,962 million in June 2015. The value of the assets available to the referred to pool was therefore €9,055 million at the end of 1st half 2015 and compares favourably with the €7,806 million available the year before.
The liquidity coverage ratio (LCR), was 135.9% at the end of June (99.9% the year before). This was significantly higher than the 60% minimum required from October 2015 and the 100% requirement for 2018.
In January 2015 CGD returned to the primary market with a €1 billion covered bonds issuance with a maturity of 7 years and coupon rate of 1%.

Solvency

The common equity tier 1 (CET 1) phased-in and fully implemented ratios, calculated in accordance with CRD IV / CRR rules and considering the application of the special regime on deferred tax assets, totalled 10.8% and 9.6% at 30 June 2015, respectively, against 11.5% and 10.6% the year before.

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⁽¹⁾The amounts for June 2014 have been restated to reflect the adoption of the interpretation of the IFRIC 21 of the International Financial Reporting Interpretations Committee. So, the accounts for the 1st half already reflect the full amount of costs for 2014, in respect of the banking sector extraordinary contribution and contributions to the Deposit Guarantee Fund and Resolution Fund.

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CGD Consolidated Operations at 30th June 2015

CGD Results

Summary of evolution in 1st half (1)