CGD Consolidated Operations at 30th September 2015

12 Nov 2015

CGD Results

Summary of evolution at 30 September 2015 (1)

For comparability purposes, the amounts of net income and income before tax and non-controlling interests at 30 September 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

CGD’s results for the first nine months of 2015, before tax and non-controlling interests, were up €328.1 million over the same period 2014 to €176.7 million.
This improvement in the referred to results essentially derives from:
– The solid contribution of net interest income, including income from equity instruments (up 12.1% by €94.7 million, owing to the marked 22.0% reduction of €399.3 million in funding costs which more than offset the decline also noted in income from lending operations.
– The resilience of net commissions charges which were down 1.6% by no more than €6.1 million to €375.1 million in comparison to the same period 2014.
– The marked progression of income from financial operations with a 54.4% increase of €115.9 million to €329.0 million over the first nine months of 2014, although 91.8% of such income was essentially generated in the 1st half year, given market conditions in 3rd quarter 2015.
– A clear containment of operating costs whose 1.6% growth reflects the different circumstances in the various geographies in which CGD Group is present.
– A cost of credit risk ratio which confirms the deceleration already felt in the preceding quarters, to 0.66% of the average loans and advances to customers balance across this nine month period, as a reflection of the country’s economic evolution, as well as CGD’s performance in the credit and credit recovery areas.
The referred to factors, as well as the tax burden on the said results led to an improvement of €236.0 million in consolidated net income to €3.4 million in comparison to the same period of the preceding year (considering the mentioned adjustments).
The net income of €3.4 million in September 2015, represents a decrease (€42.9 million) when compared to the unadjusted value of €46.3 million obtained in the same period 2014.
However, excluding the non-recurring impact of positive €278.9 million related to the disposal of the referred to insurance companies in 2014, the adjusted net income for September 2014 would have been a loss of €232.6 million, which when compared to €3.4 million recorded in September 2015 shows an improvement of €236.0 million.

Balance Sheet

CGD Group’s consolidated balance sheet at the end of September 2015 was down 0.7% over the same period of the preceding year to €99,550 million, as a sign of its stability.
Customer resources at the end of September were up €983 million over the same date of the preceding year to €71,067 million, reflecting CGD’s strong capacity to attract customer investments, even in an environment of reduced (and falling) returns on deposits.
Customer resources at the end of 3rd quarter 2015, represented 76.2% of total liabilities taken by Caixa, providing a clear illustration of the characteristics of a bank centred on the Portuguese retail market and acting on behalf of households and corporates.
Loans and advances to customers (including loans with repurchase agreements) totalled €71,408 million in September last, reflecting the strong progression of new sales in 2015 in comparison to 2014, but insufficient to offset portfolio maturities.
New mortgage loans for the period January to September were up 93.4% year-on-year to €710.4 million. Lending to SMEs was up 23.0% to €3,980 million.
The loans-to-deposits ratio of 93.1% reflected CGD’s strong resource-taking capacity in addition to the aggressive competition existing in the domestic credit market.

Liquidity and Solvency

CGD Group continued to reduce its level of borrowings from the Eurosystem (down €295 million over December 2014 to €2,815 million in September 2015).
The value of the assets available in the ECB pool remained practically unchanged at €8,995 million last September.
The LCR (“Liquidity Coverage Ratio”) indicator, with a comfortable 148.1%, was significantly higher than the minimum requirements and indicative of CGD’s excellent liquidity position.
The Common Equity Tier 1 (CET 1) phased-in and fully implemented ratios, calculated under CRD IV/CRR rules, at 10.7% and 9.7% in September 2015 respectively, confirmed the balance of CGD’s current capital position.

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⁽¹⁾The amounts for September 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 at 30 September 2014 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.

Caixadirecta

Caixadirecta

CGD Consolidated Operations at 30th September 2015

CGD Results

Summary of evolution at 30 September 2015 (1)