CGD Consolidated Operations at 31st December 2015

5 Feb 2016

CGD Results

Consolidated Operations at 31st December 2015.

For comparability purposes, the amounts of net income and net income before tax and non-controlling interests at 31 December 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 achieved net interest income of €1,187.9 million in 2015, up 14.4% over 2014.
This growth was essentially the result of a sharp 21.5% reduction of €506.1 million in funding costs which more than offset the 11.4% reduction of €381.2 million in interest on lending activities.
Accompanying the growth of net interest income was a significant 22.0% increase of €154.0 million in non-interest income, which benefited from the marked 73.6% increase of €148.4 million in income from financial operations to €350.0 million.
Total operating income was up 17.5% over the preceding year to €2,042.0 million.
Operating costs in the administrative expenditure (down 4.3% by €21.0 million) and depreciation and amortisation (down 4.3% by €4.8 million) components were contained. Employee costs, were up 12.4% by €90.5 million, essentially owing to the effects of the provisioning of the Plano Horizonte in addition to the reduction of the discount rate on pension fund liabilities, in 2015.

Excluding those two impacts, operating costs would have decreased 1.7% in consolidated activity and 4.2% in CGD Portugal.
CGD’s net operating income before impairments, in 2015, was up 58.2% by €238.9 million to €649.7 million.
Provisions and impairments were down 24.6% by €233.1 million to €716.5 million.
Combining all of the above effects, CGD’s net income before tax and non-controlling interests amounted to a slightly negative €-21.3 million although this was an improvement of €490.3 million over 2014, considering the adjustments for the disposal of the insurance companies.
The negative level of net income for the year of €-171.5 million was an improvement of €454.7 million over 2014, taking the said adjustments into account.
However, with the elimination of the amount of €65.0 million for the provisioning of the Plano Horizonte from the costs for 2015, net income before tax and non-controlling interests would have been €43.7 million with negative net income of €-106.5 million.

Balance Sheet

CGD Group’s consolidated balance sheet at the end of December was up 0.7% over the preceding year to €100,901 million.
Customer resources of €73,426 million at the end of December, up €2,292 million over the same date of the preceding year, reflected CGD’s strong capacity to attract customers’ investments, even in an environment of reduced (and falling) interest on deposits.
The fact that customer resources at the end of 2015 made up 77.5% of Caixa’s total liabilities, is clearly indicative of the characteristics of a bank geared to the Portuguese retail market, operating on behalf of households and companies.
The loans and advances to customers portfolio (including assets with repo agreements), of €66,178 million in December last, reflected the sharp increase of new loans in 2015 in comparison to 2014, but was insufficient to counteract portfolio maturities.
Whereas new mortgage loans in 2015 were up 94% year-on-year to €1,045.3 million, lending to micro companies and SMEs totalled €3,218 million in 2015, €247 million in excess of annual repayments.
Credit at risk ratio was down from 12.2% in 2014 to 11.5% in 2015, with impairment coverage of 63.9% in consolidated activity. In Portugal, the level of coverage of credit at risk on individuals loans was 46.4% and 71.8% in the case of corporate loans.
The loans-to-deposit ratio of 90.1% reflected CGD’s strong resource-taking capacity, in addition to the competition scenario in the domestic credit market as well as still limited recovery of credit demand.

Liquidity and Solvency

CGD Group continued to reduce its borrowings from the Eurosystem to an end of year total of €2,766 million (down €344 million over 2014). This comprised 2.7% of its total assets at the said date.
The value of assets available for the ECB pool remained practically unchanged at €8,857 million last December.
The liquidity coverage ratio (LCR) achieved a comfortable 146.4% (103.6% at the end of December 2014), significantly higher than the minimum requirements and confirming 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 10.8% and 10.0% respectively, in December 2015, confirmed the equilibrium of CGD’s current capital position.

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CGD Consolidated Operations at 31st December 2015

CGD Results

Consolidated Operations at 31st December 2015.