Banco Comercial Portugues -`BCP'- Earnings Release for the Second Quarter of 2003.Business Editors LISBON Lisbon (lĭz`bən), Port. Lisboa, ancient Olisipo, city (1991 pop. 677,790), W Portugal, capital of Portugal and of Lisboa dist., on the Tagus River where it broadens to enter the Atlantic Ocean. , Portugal--(BUSINESS WIRE)--July 22, 2003 Banco Comercial Comercial can refer to:
-- Net income for the second quarter of 2003 at Euro 114.7 million, 20.0% up from the previous quarter; -- Successful cost controls led to improvement in domestic cost-income ratio to 56.5% from 60.7% in the first quarter of 2003; -- Seguros e Pensoes (consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: by the equity method) makes a positive contribution to consolidated net income; -- Increased commission income boosted by fees from cards, operations on securities and investment banking; -- Outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of part of the Group's IT infrastructure expected to strongly reduce future IT costs and investments; -- Focused growth of loans to customers. Special emphasis on mortgages: loans up 4.9% from the end of March 2003, and market leadership in terms of new business during the quarter; -- Reinforced provisions for loan losses and maintenance of high credit quality: loans 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. by more than 90 days at 1.6% of total loans and coverage by provisions at 145.2%; -- BCP BCP Best Current Practice(s) BCP Business Continuity Planning BCP Business Continuity Plan BCP Book of Common Prayer BCP Banco Comercial Português BCP Bureau of Consumer Protection (US Federal Trade Commission) Investimento considered by Euromoney Features Euromoney magazine (ISSN 0014-2433) is a monthly publication focusing on international banking and capital markets. Euromoney covers banks, institutional investors and financial institutions; economy, national, regional, supra-regional banking and finance; fixed one of the best investment banks The following is a list of investment banks Financial conglomerates Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. operating in Portugal Portugal (pôr`chəgəl), officially Portuguese Republic, republic (2005 est. pop. 10,566,000), 35,553 sq mi (92,082 sq km), SW Europe, on the western side of the Iberian Peninsula and including the Madeira Islands and the Azores in the four years in a row, this time taking the award for "Best Domestic Securities Firm in Portugal"; -- Leadership in internet banking: -- cidadebcp leads domestic online financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , 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. market surveys by Marktest, and is considered the best financial site in Portugal by the PC Guia magazine, for the second consecutive year; -- 2003 edition of the "World's Best Internet Banks" awards, granted by Global Finance: managerland considered the Best Corporate/Institutional Internet Bank in Portugal and the Best Corporate/Institutional Integrated Site in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). .ActivoBank7 winner of the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. awards for Best Consumer Online Securities Trading securities trading, financial activity involving transactions of property such as stocks, bonds, commodities, and currency (see securities). Although the trading of stocks and bonds dates back several centuries in many Western nations, the development of the and Best Consumer Web Site Design. The consolidated net income of Banco Comercial Portugues amounted to Euro 114.7 million in the second quarter of 2003, up 20.0% from Euro 95.6 million in the previous quarter. Consolidated net income for the first half of 2003 totalled Euro 210.2 million, compared to Euro 320.9 million in the same period of 2002. Return on equity stood at 18.2%, with 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). standing at 0.7%.
PROFITABILITY 2nd 1st
INDICATORS Quarter Quarter Change
2003 2003 1Q03-2Q03
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Net income
(Millions of euros) 114.7 95.6 20.0%
ROE 18.2% 17.9% -
ROA 0.7% 0.6% -
ROA before minority interests 0.8% 0.7% -
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"The 20% increase in our quarterly earnings reflects the rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in Seguros e Pensoes' results and our efforts to improve the Bank's profitability, aimed at the preservation of interest margins - compensating the continuing decrease in interest rates through a focused loan growth, with the emphasis on mortgages reflected in the Group's leadership of the Portuguese market, in terms of new mortgage loans - and at boosting commissions, as well as concentrating on the continued implementation of cost rationalisation Noun 1. rationalisation - (psychiatry) a defense mechanism by which your true motivation is concealed by explaining your actions and feelings in a way that is not threatening rationalization initiatives, both domestically and abroad", commented Mr. Jardim There are many things that have the name Jardim (Portuguese for garden): Places In Brazil, South America
"The acquisition of Seguros e Pensoes at the end of March 2003 has made a positive contribution to consolidated earnings, reflecting the substantial progress of the programmes aimed at reducing Seguros e Pensoes' exposure to market risks and at decreasing its costs and improving its operating performance. We were also able to take advantage of the significant capital and extraordinary gains resulting from the more positive performance of capital markets over the last months to reinforce re·in·force v. 1. To give more force or effectiveness to something; strengthen. 2. To reward an individual, especially an experimental subject, with a reinforcer subsequent to a desired response or performance. 3. the Bank's provisions for loan losses, thus increasing provision coverage of past due loans." Net interest income increased to Euro 367.3 million in the second quarter of 2003 from Euro 364.0 million in the previous quarter. This performance was mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a higher volume of interest-earning assets stemming from increased business. This offset the impact of credit securitisation. It was also helped by the fact that BCP was able to restrict In the C programming language, the data pointed to by a pointer declared with the restrict qualifier may not be pointed to by any other pointer. This allows for more effective optimization. the decrease in net interest margin, down from 2.8% in the first quarter of 2003 to 2.7% in the second quarter, to less than that of the key market interest rates. Net interest income also benefited from the impact of BCP's share capital increase at the end of March 2003. The Bank's prudent provisioning policy, aimed at keeping high coverage of past due loans, and the strengthening of provisions to take advantage of significant market gains during the quarter, resulted in an increase in charges to provisions for loan losses to Euro 113.1 million in the second quarter of 2003 from Euro 78.5 million in the first quarter. The steep increase in income from securities, to Euro 65.5 million in the second quarter of 2003 from Euro 11.7 million in the previous quarter, resulted from the appropriation The designation by the government or an individual of the use to which a fund of money is to be applied. The selection and setting apart of privately owned land by the government for public use, such as a military reservation or public building. of Seguros e Pensoes' net income from March 31 and from the booking of dividends from the Group's investments in EDP (Electronic Data Processing) The first name used for the computer field. EDP - Electronic Data Processing , Intesa and Friends Provident Friends Provident plc (LSE: FP.) manages a life assurance business mainly based in the United Kingdom and with offices throughout the world. Friends Provident is a financial services group and a member of the FTSE100 Index. . Net commissions totalled Euro 143.1 million, compared to Euro 135.7 million in the first quarter of 2003, and were boosted by continuing efforts to optimise optimise - To perform optimisation. pricing. The performance of income from cards and from operations on securities stood out, the latter being influenced by the impact of BCP's share capital increase. Commissions from investment banking are also worth mentioning. The expertise of the BCP Group in this business is demonstrated by the fact that BCP Investimento is, for the fourth consecutive year, considered by Euromoney to be one of the best investment banks operating in Portugal, taking the award for the Best Domestic Securities Firm. Whilst still maintaining a prudent approach to market risks, the Bank was able to take advantage of increased volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in euro and US dollar interest rates in the second quarter, mainly in long maturities. This resulted in an increase in net trading income to Euro 37.1 million from Euro 28.6 million in the first quarter of 2003. Other net 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. totalled Euro 81.3 million in the second quarter of 2003 (Euro 74.6 million in the first quarter of 2003), benefiting from increased cross-selling Cross-selling is the term used to describe the sale of additional products or services to a customer. Less frequently it is used to describe the sale of services to additional business units at an account or to different geographic units of a customer. related income.
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OTHER INCOME 2nd 1st
(Millions of euros) Quarter Quarter Change
2003 2003 1Q03-2Q03
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Net Commissions 143.1 135.7 5.5%
Trading Gains 37.1 28.6 29.8%
Other Net Operating Income 81.3 74.6 9.0%
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Operating costs operating costs npl → gastos mpl operacionales (staff costs, other administrative expenses and depreciation) amounted to Euro 419.1 million, roughly unchanged from Euro 419.3 million in the first quarter of 2003. Domestic cost-income ratio improved to 56.5% from 60.7% in the first three months of 2003. Operating costs benefited from the implementation of the operating efficiency programme started in 2002 and from staff downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing measures. Part of the Group's IT infrastructure was outsourced for a 10-year period, and this is expected to have a significant positive impact on efficiency and on IT-related investments and costs. Operating costs continued to be affected by increased expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the expansion of the Group's activity abroad. Banque Privee BCP started its operations in Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. , and NovaBank's business expanded both in Greece Greece, Gr. Hellas or Ellas, republic (2005 est. pop. 10,668,000), 50,944 sq mi (131,945 sq km), SE Europe. It occupies the southernmost part of the Balkan Peninsula and borders on the Ionian Sea in the west, on the Mediterranean Sea in the south, on and in Turkey. Staff costs totalled Euro 216.8 million in the second quarter of 2003, compared to Euro 218.5 million in the previous quarter. The increase in domestic staff costs resulted from the integration of staff from Seguros e Pensoes into ServiBanca and from the increase in salaries established by the new Labour Agreement agreed with trade unions. Other administrative expenses stood at Euro 151.0 million (149.9 million in the first quarter of 2003) and were affected by increased advertising and outsourcing expenses.
OPERATING COSTS 2nd 1st
(Millions of euros) Quarter Quarter Change
2003 2003 1Q03-2Q03
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Staff Costs 216.8 218.5 -0.8%
Of which: domestic activity 170.0 166.2 2.3%
Other Administrative Expenses 151.0 149.9 0.7%
Of which: domestic activity 104.7 103.1 1.5%
Depreciation 51.3 50.9 0.7%
Of which: domestic activity 33.4 32.7 2.0%
Operating Costs 419.1 419.3 0.0%
Of which: domestic activity 308.1 302.0 2.0%
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Loans to customers totalled Euro 48,526 million at June June: see month. 30, 2003 and Euro 48,285 million at the end of the first quarter of 2003. The Bank maintained its efforts to limit exposure to large risks and focused on mortgage loans, up to Euro 12,573 million from Euro 11,981 million at March 31, 2003. The BCP Group led the Portuguese mortgage market in terms of new loans granted during the quarter. Total customers' funds amounted to Euro 50,399 million at June 30, 2003, compared to Euro 50,670 million at March 31. Securities showed a strong performance, up 14.5% from the end of the first quarter, reflecting the transfer of customers' savings from other instruments. 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 have also increased.
Change
ACTIVITY 30 Jun. 31 Mar. Mar.03-
INDICATORS 2003 2003 Jun.03
(Millions of euros)
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Total Assets 65,496 66,239 -1.1%
Loans to Customers 48,526 48,285 0.5%
Total Customers' Funds
- Deposits 29,048 30,214 -3.9%
- Assets under Management 9,159 9,038 1.3%
- Capitalisation Insurance 6,604 6,539 1.0%
- Securities 5,588 4,879 14.5%
- Total 50,399 50,670 -0.5%
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Credit quality improved from the end of the first quarter of 2003, a particularly outstanding performance given current economic conditions. Loans overdue by more than 90 days accounted for 1.6% of total loans, while provision coverage reached 145.2% (1.7% and 141.8%, respectively, at March 31, 2003).
30 31
LOAN QUALITY INDICATORS Jun. Mar.
2003 2003
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Loans overdue by more than 90 days/Total loans 1.6% 1.7%
Provisions/ Loans overdue by more than 90 days 145.2%141.8%
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Solvency The ability of an individual to pay his or her debts as they mature in the normal and ordinary course of business, or the financial condition of owning property of sufficient value to discharge all of one's debts. solvency n. was maintained at roughly the levels seen at the end of the first quarter, after capital strengthened significantly as a result of the capital-raising operations that took place in 2002 and in the first quarter of 2003. The consolidated 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 stood at 10.7% at June 30, 2003 according to the rules of the Bank of Portugal, and at 11.6% according to BIS principles (Tier One of 7.2%).
Change
REGULATORY CAPITAL (BIS) 30 Jun. 31 Mar. Mar.03-
(Millions of euros) 2003 2003 Jun.03
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Tier One Capital
- "Core" 2,669 2,665 0.1%
- Preference Shares 1,169 1,193 -2.0%
- Total 3,838 3,858 -0.5%
Tier Two Capital
- Debt 2,960 3,043 -2.7%
- Deductions (599) (569) 5.2%
- Total 2,361 2,474 -4.6%
Total Regulatory Capital 6,199 6,332 -2.1%
Risk Weighted Assets 53,632 53,038 1.1%
Ratios
- Tier One 7.2% 7.3% -
- Tier Two 4.4% 4.6% -
- Total 11.6% 11.9% -
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In the first half of 2003, the BCP Group, through cidadebcp, became the undisputed domestic leader in online financial services. This leadership was confirmed by external entities such as Marktest and the PC Guia magazine, which considered cidadebcp the best financial site in Portugal the second year in a row. Three years after it started operating, cidadebcp reached 714,000 registered customers, 300,000 of which are registered to use SMS banking SMS Banking is a technology-enabled service offering from banks to its customers, permitting them to operate selected banking services over their mobile phones using SMS messaging. Push and Pull messages SMS Banking services are operated using both Push and Pull messages. services. At the end of June 2003 cidadebcp launched a specific service for PDAs, making it a European reference in terms of mobile financial services. In July July: see month. , the Group's internet banking businesses received four Global Finance awards, three of which were on a European level. In the 2003 edition of the "World's Best Internet Banks" awards, managerland was considered the Best Corporate/Institutional Internet Bank in Portugal and the Best Corporate/Institutional Integrated Site in Europe. ActivoBank7 won the European awards for Best Consumer Online Securities Trading and Best Consumer Web Site Design. Commenting on BCP's operations abroad, Mr. Jardim Goncalves stated: "NovaBank's activity in Greece continues its dynamic progress with its business expanding into the Private Banking and Corporate segments. This follows its focus on high net-worth individuals, the success of which is demonstrated by the increase of business indicators, and also reflected in the improvement to its profit and loss account". He ended with a reference to the BCP Group's activity in Poland Poland, Pol. Polska, officially Republic of Poland, republic (2005 est. pop. 38,635,000), 120,725 sq mi (312,677 sq km), central Europe. It borders on Germany in the west, on the Baltic Sea and the Kaliningrad region of Russia in the north, on Lithuania, : "In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the significant impact on earnings arising from the fact that Bank Millennium millennium [Lat.,=1,000 years], the period of 1,000 years in which, according to some schools of Christian eschatology, Christ will reign again gloriously on earth. Belief in the millennium, based on Rev. 20, has recurred in Christianity since the earliest times. ceased to consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. PZU PZU Port Sudan Airport PZU Pañstwowy Zak³ad Ubezpieczeñ (Polish National Insurance Company) , an insurance company, using the equity method, the benefits stemming from the cost reduction programme currently under way are already visible. Bank Millennium continues to follow an organic growth strategy, focused on selective loan growth and on capturing customers' funds."
BANCO COMERCIAL PORTUGUES
Consolidated Balance Sheet as at 30 June, 2003 and 2002
2003 2002
----------------------
(Thousands of Euros)
Assets
Cash and deposits at central banks 986,329 1,264,840
Loans and advances to credit institutions
Repayable on demand 656,135 759,449
Other loans and advances 2,535,875 3,470,180
Loans and advances to customers 48,526,209 44,216,241
Securities 4,421,944 4,172,345
Treasury stock - 23,984
Investments 2,537,500 2,642,094
Intangible assets 179,493 138,995
Tangible assets 1,242,206 1,175,280
Other debtors 1,176,729 809,978
Prepayments and accrued income 3,233,351 2,122,358
----------------------
65,495,771 60,795,744
======================
Liabilities
Amounts owed to credit institutions
Repayable on demand 211,504 429,226
With agreed maturity date 12,137,616 10,965,966
Amounts owed to customers
Repayable on demand 11,918,307 11,871,335
With agreed maturity date 17,122,304 16,373,392
Debt securities 12,896,379 12,113,536
Other liabilities 554,901 438,190
Accruals and deferred income 2,675,163 1,632,697
Provision for liabilities and charges 1,013,928 859,384
Subordinated debt 2,910,913 2,882,675
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Total Liabilities 61,441,015 57,566,401
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Shareholders' Equity
Share capital 3,257,401 2,326,715
Mandatorly convertible notes 528,207 -
Share premium 674,229 715,117
Reserves and retained earnings (1,920,223)(1,178,122)
----------------------
Total Shareholders' Equity 2,539,614 1,863,710
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Minority interests 345,752 160,341
Minority interests in preference shares 1,169,390 1,205,292
----------------------
Total Minority Interests 1,515,142 1,365,633
----------------------
65,495,771 60,795,744
======================
BANCO COMERCIAL PORTUGUES
Consolidated Statement of Income
for the three months ended 30 June, 2003 and 2002
2003 2002
---------------------
(Thousands of Euros)
Interest income 1,571,438 1,492,564
Interest expense 840,106 828,530
--------------------
Net interest income 731,332 664,034
Provision for loan losses 211,679 174,739
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Net interest income after
provision for loan losses 519,653 489,295
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Other operating income
Income from securities 77,233 113,779
Net commissions 278,846 245,255
Net income arising from trading activity 65,714 74,190
Other income 226,368 280,030
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648,161 713,254
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Other operating expenses
Staff costs 435,387 379,136
Other administrative costs 300,922 262,879
Depreciation 102,169 81,403
Other provisions (4,673) 42,966
Other expenses 70,425 35,656
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904,230 802,040
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Income before income taxes 263,584 400,509
Income taxes 20,402 41,928
--------------------
Income after income tax 243,182 358,581
Minority interests 32,964 37,708
--------------------
Net income for the period 210,218 320,873
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