Banco Comercial Portugues, S.A. - BCP - Net Income Up 32% to Pte 12.0 Billion - Eur 60.0 Million - in the First Quarter of 1999.LISBON, Portugal--(BUSINESS WIRE)--April 27, 1999-- Banco Comercial Portugues (NYSE NYSE See: New York Stock Exchange : BPC BPC British Potato Council BPC Brewton-Parker College (Mt Vernon, GA) BPC Bible Presbyterian Church BPC Bangladesh Petroleum Corporation (Chittagong, Bangladesh) BPC British Pharmaceutical Codex , BCPPRA), Portugal's leading private bank, today reported consolidated net income of PTE PTE The ISO 4217 currency code for the Portugese Escudo. 12.0 billion (EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 60.0 million) for the first quarter of 1999. This amount reflects an increase of 31.8% over net income of PTE 9.1 billion in the same period of 1998. Earnings per share increased from PTE 58.3 to PTE 60.6 (EUR 0.30), more than compensating for the impact of the share capital increase from PTE 157.766 billion at March 31, 1998, to PTE 200.0 billion at the end of the first quarter of 1999. Return on equity decreased from 23.1% to 15.7% over the same period, reflecting the effect of the share capital increase, while return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). stood at 0.7% (up from 0.6% for the first quarter of 1998). ---------------------------------------------------------------------- 1st Quarter '99 1st Quarter '98 Change % PROFITABILITY INDICATORS EUR PTE PTE 99/98 ---------------------------------------------------------------------- Net Income (EUR million and PTE billion) 60.000 12.029 9.125 31.8% Earnings per Share 0.30 60.6 58.3 4.0% ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. (%) - 15.7% 23.1% - ROA ROA See: Return on assets ROA See: Right of accumulation ROA See return on assets (ROA). (before Minority Interests) - 1.1% 1.1% - ROA (after Minority Interests) - 0.7% 0.6% - -------------------------------------------------------------------- Mr Jardim Gonalves, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Banco Comercial Portugues, commented: "The very positive bottom-line performance of the BCP/Atlantico Group clearly demonstrates that, in the first quarter of 1999, and in the context of monetary union, the Group has done its homework in preparation for the euro. In fact, this process of change was transparent to our clients, many of whom are converting their financial reporting and their relationship with our Group companies to the new currency and trust the Group's institutions to guide and support them in this very important process. In certain areas, such as the foreign exchange markets, we had anticipated lower activity levels and we now see the confirmation of such expectations. In other areas, on the contrary, as a result of both consumer confidence and the economic and interest rate environment, we continued to face strong demand for our products and services, especially in the mortgage and consumer lending Consumer lending or consumer loans refers to any type of loan product that is not a mortgage; such as a car, boat, manufactured home, home equity loan, home equity line of credit, signature loan, signature line of credit, recreational vehicle, or Certificate of Deposit loans. businesses, as in insurance". The growth in net income is attributable to higher business volumes - notably the growth of loans granted - as a result of the growing acceptance of the Group's value offer. This performance confirms the merit of the decision to maintain autonomous brands which, by approaching the market in different ways, have contributed to strengthen the Group's share in several businesses. The fair pricing of the superior service levels that are a central point of the Group's offer and the containment of operating costs operating costs npl → gastos mpl operacionales have also played a role in offsetting the impact of continuing low margins, allowing consolidated profitability to improve. The growth of net interest income, which amounted to PTE 42.7 billion, is mainly the result of the increase of interest earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin , linked to the strong growth of loans granted. The net interest margin stood at 3.1%, similar to the level seen in the first quarter of 1998. --------------------------------------------------------------------- OPERATING INDICATORS 1st Quarter `99 1st Quarter `98 --------------------------------------------------------------------- Net Interest Margin 3.1% 3.1% Other Income/Total Income 64.2% 59.8% Operating Costs/Total Income 40.0% 47.3% --------------------------------------------------------------------- Other income amounted to PTE 33.9 billion, a 7.9% increase compared with the first quarter of 1998. The growing diversification of the sources of income - reflected in the evolution of the proportion of other income to total income, which increased to 64.2% - has contributed to offset the effect of narrowing margins. Net commissions, which amounted to PTE 15.0 billion, up 8.3% on the first quarter of 1998, are also worth mentioning. The growth of the asset management and payment cards businesses offset the slower growth of commissions related to capital markets business, which were affected by the unfavourable performance of the Portuguese stock market. Trading income was influenced by the performance of the capital and foreign exchange markets, the latter having been directly affected by the introduction of the euro The introduction of the euro took place principally between 31 December 1998, when the exchange rates between the euro and legacy currencies in the Eurozone became fixed, and early 2002, when euro notes and coins were introduced and the legacy currencies withdrawn. . The growth of income from securities was determined by the improved profitability of the subsidiaries consolidated by the equity method. Operating costs stood at PTE 47.7 billion, a 10.2% increase over the first three months of 1998, clearly lower than the increases shown by the major business revenue indicators. As a result, the weight of operating costs in total income decreased to 40.0% (47.3% in the first quarter of 1998). Operating costs continued to fall as a percentage of total income in spite of the growth of staff costs (related to the expansion of branch networks) and the growth of other expenses associated with such expansion and with the development of innovative and effective distribution channels, with the preparation of IT systems for the year 2000, with the launch of new projects, with the constant renewal of the product and service range and with the development of the Group's international presence. Loans to customers grew 37.7% to PTE 3,873 billion at the end of March, 1999, although lending continued to be based on the very prudent criteria that guides credit analysis and credit decisions. The growth of mortgage loans, which amounted to PTE 1,002 billion, exceeding by 41.2% the figure for March 31, 1998, and of consumer credit, which totalled PTE 390 billion, up 42.5% on the figure for the end of the first quarter of the previous year, is worth mentioning, as well as loans granted to the commerce and services sectors and to the construction industry. Total customers' funds - an indicator that includes customers' deposits, certificates of deposit, assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. and capitalisation n. 1. same as capitalization. Noun 1. capitalisation - writing in capital letters capitalization writing - letters or symbols that are written or imprinted on a surface to represent the sounds or words of a language; "he turned the paper insurance - registered a 5.8% growth, standing at PTE 6,211 billion, in spite of the sluggish evolution of the domestic equity market, which has resulted in limited price appreciation of the assets under management, and in spite of the various privatisations which took place after the first quarter of 1998 and which have siphoned individuals' savings into the capital markets. ---------------------------------------------------------------------- 1st Quarter '99 1st Quarter '98 Change % ACTIVITY INDICATORS EUR PTE PTE `99/'98 ---------------------------------------------------------------------- Total Assets under Management (1) 46,776 9,378 8,359 12.2% Total Assets 33,100 6,636 5,915 12.2% Total Customers' Funds (2) 30,982 6,211 5,870 5.8% Loans to Customers 19,317 3,873 2,813 37.7% Own Funds (3) 2,727 547 430 27.1% ---------------------------------------------------------------------- (1) Total assets, investment funds Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company and assets under personalised Adj. 1. personalised - made for or directed or adjusted to a particular individual; "personalized luggage"; "personalized advice" individualised, individualized, personalized management (2) Customers' deposits, certificates of deposit, assets under management and capitalisation insurance (3) Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. , preference shares and subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". (EUR million and PTE billion) Credit quality improved, with loans more than 90 days overdue OVERDUE. A bill, note, bond or other contract, for the payment of money at a particular day, when not paid upon the day, is overdue. 2. The indorsement of a note or bill overdue, is equivalent to drawing a new bill payable at sight. 2 Conn. 419; 18 Pick. amounting to PTE 53.2 billion (PTE 59.6 billion at the end of March 1998), representing 1.4% of total loans (2.1% at the end of March 1998). Coverage by provisions increased to 149.9%, compared to 132.2% at the end of the first quarter of 1998. -------------------------------------------------------------------- March 31 March 31 LOAN QUALITY INDICATORS '99 `98 ------------------------------------------------------------------ Loans more than 90 days overdue/Total loans 1.4% 2.1% Total overdue loans/Total loans 1.5% 2.3% Provisions/Loans more than 90 days overdue 149.9% 132.2% Provisions/Total overdue loans 133.0% 120.5% ------------------------------------------------------------------ Solvency indicators were positively influenced by BCP's share capital increase, with own funds - an indicator that includes shareholders' equity, preference shares and subordinated debt - totalling PTE 547 billion, 27.1% up on the amount for the end of March 1998. The solvency ratio Solvency Ratio One of many ratios used to gauge a company's ability to meet long-term obligations. Notes: Derived by taking a company's net worth and dividing by total assets. See also: Asset, Asset Valuation, Balance Sheet, Fundamental Analysis, Income Statement , computed in accordance with the rules of the Bank of Portugal, stood at 9.0% (8.7% at March 31, 1998), while according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. BIS principles, it is 9.8%. BANCO COMERCIAL PORTUGUES Consolidated Statement of Income for the three months ended 31 March, 1999 and 1998 (i) 1999 1999 1998 (`000s of Euros) (`000s of Escudos) Interest income 428,596 85,925,870 92,729,275 Interest expense 215,404 43,184,581 55,895,175 -------- ----------- ----------- Net interest income 213,192 42,741,289 36,834,100 Provision for loan losses 33,622 6,740,677 6,111,367 -------- ----------- ----------- Net interest income after provision for loan losses 179,570 36,000,612 30,722,733 -------- ----------- ----------- Other operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. : Income from securities 19,952 4,000,050 2,998,293 Commissions 90,405 18,124,488 16,482,382 Profit arising from trading activity 111,628 22,379,313 22,697,598 Insurance premiums 318,941 63,941,965 39,320,671 Other income 34,475 6,911,517 6,847,590 -------- ----------- ----------- 575,401 115,357,333 88,346,534 -------- ----------- ----------- Other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. : Commissions 15,726 3,152,797 2,657,731 Losses arising from trading activity 76,297 15,296,200 12,510,500 Staff costs 115,470 23,149,695 21,242,394 Other administrative costs 83,182 16,676,402 14,923,964 Depreciation 39,329 7,884,813 7,146,125 Other provisions 213,077 42,718,014 23,306,237 Claims incurred in the insurance activity 90,430 18,129,541 16,017,115 Other expenses 10,672 2,139,410 2,408,115 -------- ----------- ----------- 644,183 129,146,872 100,212,181 -------- ----------- ----------- Income before income taxes 110,788 22,211,073 18,857,086 Income taxes 18,353 3,679,506 3,461,471 -------- ----------- ----------- Net income 92,435 18,531,567 15,395,615 Minority interests 32,435 6,502,638 6,270,819 -------- ----------- ----------- Net income for the year attributable to the Bank 60,000 12,028,929 9,124,796 ======== =========== =========== (i): Financial Statements incorporating the insurance subsidiary companies by the full consolidation method. BANCO COMERCIAL PORTUGUES Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. as at 31 March, 1999 and 1998 (i) 1999 1999 1998 (`000s of Euros) (`000s of Escudos) Assets Cash and deposits at the Bank of Portugal 431,907 86,589,497 51,966,149 Loans and advances to credit institutions Repayable on demand 535,289 107,315,786 70,262,797 Other loans and advances 3,143,653 630,245,877 1,064,023,364 Loans and advances to customers 19,317,023 3,872,715,414 2,812,789,275 Securities 5,526,636 1,107,991,033 1,156,540,880 Investments 594,680 119,222,736 98,459,403 Intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. 859,330 172,280,159 123,089,462 Tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. 965,539 193,573,226 187,257,318 Other debtors 751,138 150,589,737 129,843,071 Prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. and accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. income 975,174 195,504,756 220,956,878 ----------- -------------- -------------- 33,100,369 6,636,028,261 5,915,188,597 =========== ============== ============== Liabilities Amounts owed to credit institutions Repayable on demand 352,546 70,679,027 98,494,920 With agreed maturity date 8,178,916 1,639,725,400 1,204,571,061 Amounts owed to customers Repayable on demand 6,258,767 1,254,770,215 1,099,479,994 With agreed maturity date 8,639,810 1,732,126,347 1,979,304,996 Debt securities 1,641,619 329,115,077 231,841,044 Other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. 786,097 157,598,289 135,956,639 Accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. and deferred income 1,036,117 207,722,950 225,673,840 Provision for liabilities and charges 2,864,200 574,220,611 420,926,624 Subordinated debt 736,212 147,597,333 153,000,737 ----------- -------------- -------------- Total Liabilities 30,494,284 6,113,555,249 5,549,249,855 ----------- -------------- -------------- Shareholders' Equity Share capital 997,596 200,000,000 157,766,351 Share premium 590,264 118,337,336 41,824,217 Reserves and retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. (67,201) (13,472,633) (43,890,802) Treasury stock (13,999) (2,806,500) -- ----------- -------------- -------------- Total Shareholders' Equity 1,506,660 302,058,203 155,699,766 ----------- -------------- -------------- Minority interests 615,409 123,378,400 88,788,171 Minority interests in preference shares 484,016 97,036,409 121,450,805 ----------- -------------- -------------- Total Minority Interests 1,099,425 220,414,809 210,238,976 ----------- -------------- -------------- 33,100,369 6,636,028,261 5,915,188,597 =========== ============== ============== (i): Financial Statements incorporating the insurance subsidiary companies by the full consolidation method. |
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