CGD Consolidated Operations

31 Jan 2020

2019 Consolidated Results

Continued implementation of the Strategic Plan confirms, in 2019, progress in profitability, efficiency, asset quality and solvency.

Highlights

Consolidated net income for 2019 was €776 million, up €280 million over 2018. Recurrent consolidated net income was 27% up, €136 million, over 2018 to €632 million, equivalent to a ROE(1) of 8.1%;
The non-recurring result of €144 million is related to the sale process of international subsidiaries and is mainly due to the reversal of impairments set up in 2017;
The sales of BCG (Spain) and Mercantile (South Africa) were concluded in 2019;
The current net income of the domestic activity reached €449 million, an increase of €108 million (+48%) compared to 2018, and €183 million comes from international activity (+19%);
Operating costs were down 2%, €19 million, as a result of staff reduction and optimizing operational efficiency;
Net trading income was up €52 million, to €82.5 million, supported by the financial assets portfolio and respective hedges;
CGD’s efficiency level below 50% for the first time since the implementation of the Strategic Plan; Current cost-to-income ratio was 47%(2),
Credit risk impairment decreased €169 million, compared to 2018, reflecting the low level of credit risk. CGD has a negative credit risk cost (-9 bp), in line with its peers in Portugal;
Customer deposits were up 4.9%, showing confidence in and loyalty to CGD, allowing for the maintenance of its market shares and leadership position in Portugal;
Corporate loans in Portugal (excluding the construction and real estate sectors) grew 6.7%, reflecting CGD's support to the most dynamic sectors in the national economy;
New mortgage loans were up 33%, reinforcing CGD's status as the bank of choice for individual customers;
Asset quality improved as the Non-Performing Loans (NPL) ratio reached 4.7%, converging to the European average. The NPL ratio net of impairments reached 1.1%;
CGD reinforced its solvency, with capital ratios reaching 16.8% in core capital (CET1) and 19.3% in total capital;
CGD started filling its Minimum Requirement for own funds and Eligible Liabilities (MREL) requirements by issuing €500 million of senior non-preferred debt, the first such issue by a Portuguese bank;
In 2019, the improvement of asset quality and solvency was again recognized by rating agencies, with Fitch and DBRS upgrading CGD's rating by one notch, and Moody’s revising upwards the outlook to Stable.

Press Release - Read or Download here the full version
Presentation - Read or Download CGD Consolidated Results presentation

___________________________
⁽¹⁾ Current activity ROE = (net income + non-recurring costs + non-controlling interests) / Shareholders' equity (average of 13 monthly observations and annualized).
⁽²⁾ Excluding non-recurring costs for employee redundancy programmes and general administrative costs of €46.0 million in 2018 and €50.7 million in 2019.

Caixadirecta

Caixadirecta

CGD Consolidated Operations

2019 Consolidated Results