CGD Consolidated results

18 Mar 2017

1st Quarter 2017 (*)
(Unaudited financial information)

Caixa Geral de Depósitos, SA (CGD): Recapitalisation completed, CGD’s Strategic Plan 2020 in progress, targeting efficiency, profitability and sustainability.

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Highlights

1st quarter 2017 witnessed CGD’s completion of phases 1 and 2 of the Recapitalisation Plan agreed between the Portuguese State and European Commission (DG Comp).
The fulfilment of this plan, resulting in a capital increase of €4.4 billion, allowed CGD to substantially increase its capital ratios with a phased-in CET 1 ratio of 12.3% and a total ratio of 14.2% at 31 March 2017.
Core operating income¹ for the quarter, fuelled by the growth of net interest income and reduction of recurring operating costs, was up 63.1% over the same quarter 2016 to €147.4 million.
Net losses of €38.6 million were made in the quarter, impacted by non-recurrent costs of €58 million (€42.1 million net of tax). Recurring net income amounted to €3.5 million.
Net interest income, benefiting from the large 28.3% reduction of €114.4 million in funding costs, was up 18.4% by €50.8 million over 1st quarter 2016 to €326.1 million.
Total operating income, with positive contributions of €50.8 million from net interest income and €178.9 million in income from financial operations, was up 65.2% by €193.2 million over the same quarter last year to €489.6 million.

Cost-to-income (excluding non-recurrent costs) was down to 58.2% in the quarter as a consequence of the referred to good performance of the recurring operating costs and income components.

(EUR Million)

CGD Consolidated Results
	2016-03	2017-03	Y-o-Y Change
Net interest income	275	326	18,4%
Commissions (net)	113	109	-3,7%
Income from fin. operations	-98	81	-
Total operating income	296	490	65,2%
Operating costs	298	345	16,0%
Operating costs recurr. (⁽¹⁾	298	287	-3,5%
Core net op. inc. before imp.	90	89	-1,1%
Core net op. inc. before imp. recurr.⁽¹⁾	90	147	63,1%
Provisions and impairments	84	113	34,6%
Net income	-74	-39	-
Net income recurr⁽¹⁾	-74	3,5	-

⁽¹⁾ Excluding the non-recurring cos t referring to the provi s ion for the 2017 terminations and early reti rement program

Positive evolution of CGD’s asset quality in 1st quarter 2017, with NPE² and NPL³ values of €11,242 and €10,009 million (-4.9% and –5.2% over December last).
NPE and NPL ratios were 11.8% and 15.4% before impairments, respectively, and 6.5% and 8.6% net of impairments at 31 March 2017.
Impairment and collateral coverage of 88.5% (NPE) and 92.7% (NPL) in March 2017. The coverage level in Portugal was 94.4% (NPE) and 100.9% (NPL).
Credit at risk down to 10.4% at 31 March 2017 against 11.9% in March 2016, with impairment coverage of 77%.
The cost of credit risk for the quarter of 0.17%, confirms the expected downwards trajectory across the year, following the assets valuation performed at the end of 2016.
CGD’s balance sheet across the period was impacted by the referred to recapitalisation operations, as the main reason behind the €3,056 million increase of net assets over December 2016.
The loans-to-deposits ratio of 88.1% in March 2017 reflected CGD’s major customer retention capacity even in an environment of very low interest rates on deposits.
Total customer resources from domestic operations were up 1.6% by €1,105 million over December 2016 to €68,397 million, strongly influenced by the €1,122 million increase of customer deposits.
CGD therefore maintained its leading position in the domestic market with 28% of total deposits in February 2017 and 31% of individual customers’ deposits.
CGD maintained a highly comfortable liquidity position with an LCR (liquidity coverage ratio) of 230% with total financing from the ECB remaining stable at €3,497 million or around 3.6% of total assets.
The phased-in and fully implemented CET Ratios in March were 12.3% and 12.0% respectively with a phased-in Tier 1 and Total ratios of 13.3% and 14.2%.
CGD had ADI (available distributable items) of €1.7 billion at this date (around 31 times the annual cost of its current AT1 issuance) with a 4.0% surplus on the level of its MDA (Maximum Distributable Amount) restrictions.

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¹ Net interest income + Comissions – Recurring Operating Costs
² NPE - Non performing exposure (as defined by EBA)
³ NPL - Non performing loans (as defined by EBA)

(*) The March 2016 values have been restated, considering Mercantile Bank Holdings, Ltd. as a non-current asset held for sale.

Caixadirecta

Caixadirecta

CGD Consolidated results

1st Quarter 2017 (*)
(Unaudited financial information)

Caixa Geral de Depósitos, SA (CGD): Recapitalisation completed, CGD’s Strategic Plan 2020 in progress, targeting efficiency, profitability and sustainability.

CGD Consolidated results

1st Quarter 2017 (*)(Unaudited financial information)

Caixa Geral de Depósitos, SA (CGD): Recapitalisation completed, CGD’s Strategic Plan 2020 in progress, targeting efficiency, profitability and sustainability.

1st Quarter 2017 (*)
(Unaudited financial information)