FY2023 Results

15 Mar 2024

Caixa Geral de Depósitos releases its FY2023 consolidated results

(unaudited accounts)

CGD maintains its leadership in Portuguese banking. Generated capital exceeds public investment of the Recapitalization Plan. Net income allows for stronger capital and historic payment to the State.

Profitability allows reimbursement of public recapitalization

CGD achieves Net Income of €1,291M allowing a payment to the State of the same amount: 1,258 M€ (€525 M in dividends, €529M in taxes and €204M in supervision costs)
Dividends paid in 2023 and to be distributed in 2024 exceed €1.2B¹
Net Income of international entities held reaches a new maximum in 2023 of €206M, the highest value of this century
In March 2024, the buyer of CGD's shareholding in Banco Comercial do Atlântico, S.A. (BCA) was selected, subject to the appropriate authorizations.

Commercial dynamics preserve CGD's leadership in key segments

Largest business volume in the Portuguese banking system and leadership in customer resources and credit
Remuneration and publicity of the commercial offer allows recovery of deposits exceeding €70B in Portugal
Mortgage Loans showed an increase in demand focused on fixed rates; production exceeds €1B in the last quarter
CGD continues to be the leader in deposits and credit with market shares of 23.1% and 17.6%, respectively
Credit portfolio for corporates and public sector grows and market share of credit to SME’s increases to 15.8%
Digital customers exceed 3M. In Portugal, Caixa is leader with 2.3M (+41k), including 1.7M mobile customers (+218 k).

Customer support reinforced in a year of rising interest rates

Proactive support for families: ~38,400 renegotiated mortgage loans and ~3,500 with subsidized interest on Caixa's initiative, along with 7,750 operations with legislative measures applied
In 2023, CGD did not increase the pricing in commissions and exempted its application in several operations in Portugal, dropping by €23M. Results achieved allows commissions not to be increased in 2024.

Solid capital position after historic dividend and repayment of subordinated debt

Full recovery of the Recapitalization Plan of 2017, both at the private investment level with the early repayment of €500M of the Tier 2 issue in June, and at the level of public investment through capital generated organically since 2017 in the amount of €4.8B, exceeding the €3.9B of that recapitalization
Capital ratios above 20% after dividend payments. Capital exceeds regulatory requirement by 50%
Supervisor reduces O-SII requirement for 2024 by 25 b.p., the fourth reduction in requirements since 2017.

Significant improvement in asset quality

CGD was ranked 1st among banks supervised by the ECB in the EBA 2023 EU-Wide Stress Test
Non-core assets decrease €740M with a sharp reduction of €620M in NPL’s and an additional decrease of €120M in foreclosed assets, investment properties and restructuring funds
Consolidated NPL ratio of 1.6% and 1.5% in Portugal, the lowest value in the domestic market
Cost of credit risk at 29 b.p. reflects prudent and preventive approach in the face of potential but non-materialized risks.

Rating with 4 upgrades in 2023

CGD had four upgrades of its rating by the three rating agencies in 2023
Moody’s upgraded senior debt to Baa1 in November - after upgrading the BCA to baa2 in May - and Fitch to BBB in September
After an upgrade to BBB (high) in May, DBRS changed the Trend to “Positive” in December, anticipating a new upgrade.

ESG rating upgrades demonstrates progress achieved in its commitments

Best ESG Risk Rating at national level and 88th out of 1,032 banks by Sustainalytics with “Low Risk”. Best classification in the CDP Climate Change Questionnaire at national banking level with “A-“, confirming the evolution on its commitments
CGD is the only Portuguese financial institution to be included in The Banker's sustainable banking revenue ranking.

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¹ - Considering the dividend of €713 M paid in 2023 and the predicted amount for 2024 of €525M, in accordance with the Dividend Policy.

DISCLAIMER

The financial statements have been prepared based on the International Financial Reporting Standards (IFRS) as adopted in the European Union in accordance with Regulation (EC) No. 1606/2002 of the European Council and of the Parliament of July 19 and provisions of Decree-Law No. 35/2005 of February 17. The financial information reported is unaudited.
The shareholding in Flitptrel IV SA and Flitptrel Porto Santo SA were classified under "Non-current assets held for sale" in June 2023. Therefore, and for comparative purposes only, the amounts related to the consolidated balance sheet as of December 31, 2022 disclosed in this document were restated, as IFRS 5 “Non-Current Assets Held for Sale and Discontinued Operations” only requires the restatement of the income statement.
The financial metrics in this presentation refer to December 31,2023, unless otherwise stated. Solvency ratios include the net income authorized by the Supervisory authority, unless where otherwise noted.
Annual growth of global economy is expected to remain close to 3% in 2023-26, driven by emerging market economies. In the euro area, activity has stagnated since the end of 2022, but quarterly growth is projected to pick up in early 2024.

Inflationary pressures resulting from international prices will be moderate. Non-energy commodity prices are expected to decline in 2024, with contained increases afterwards. The Eurosystem projections for the euro area inflation shows gradual decrease from 5.4% in 2023 to 2.7% in 2024, 2.1% in 2025 and 1.9% in 2026. Inflation excluding energy and food products shows a similar profile, decreasing from 5.0% in 2023 to 2.7% in 2024, 2.3% in 2025 and 2.1% in 2026.
Expectations point to short-term interest rates starting to decline in the next quarter. The ECB's interest rate hike continued to be passed on to the rates on new loans and new deposits of households and corporates in Portugal. The implicit interest rate of Portuguese debt is expected to increase from 2.1% in 2023 to 2.4% in 2026.
This document is only intended to provide general information and does not constitute investment advice or professional advice, nor can it be interpreted as such.
This document is an English translation of the Portuguese language document “Resultados Consolidados 2023”. In the event of any inconsistency, the original version prevails.

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

Caixadirecta

Caixadirecta

FY2023 Results

Caixa Geral de Depósitos releases its FY2023 consolidated results

(unaudited accounts)