Banco Comercial Português, S.A. informs about Bank Millennium (Poland) results in 2019

    Banco Comercial Português, S.A. informs about Bank Millennium (Poland) results in 2019 

Banco Comercial Português, S.A. hereby informs that Bank Millennium in Poland, in which it has a 50.1% holding and whose accounts are fully consolidated at BCP group level, released today its results for 2019. Main highlights are as follows:

Solid operational profitability affected by Euro Bank acquisition and legal risk provisions

• Net profit reached 561 million PLN (130.6 million EUR) in 2019, a 26% decrease y/y and a 17% increase y/y, when adjusted to one-offs
• 205 million PLN (47.7 million EUR) of integration and provisions costs related to Euro Bank
• 223 million PLN (51.9 million EUR) of provisions related to foreign exchange (FX) mortgages legal risks
• Net profit reached 27 million PLN (6.3 million EUR) in the 4Q19, or 274 million PLN (63.8 million EUR) when adjusted to extraordinary itens
• Adjusted* ROE of 10.2% and Cost/income ratio of 47.4%

Operating income and costs influenced by the acquisition and merger of Euro Bank

• Operating income grew 27% y/y
• Net interest income grew 33% y/y
• Operating costs grew 36% y/y, (28%, excluding integration costs)
• Reserve for cash loans fees returns after European Court of Justice (ECJ) ruling: 66 million PLN (15.4 million EUR)

High asset quality and liquidity kept

• Impaired loans (stage 3) ratio at 4.56%
• Adjusted cost of Risk* at 57 b.p.
• Loans to deposits ratio at 86% 

Solid capital position and lower regulatory buffers

• Group’s Total Capital Ratio (TCR) at 20.1%, and CET1 ratio at 16.9% after incorporating full 1H 2019 year profits
• Reduction by the KNF of the FX mortgage related Pillar 2 buffer to 4.9% and dividend related Stress Test buffer to 3%
• The Management Board will recommend to the AGM the full retention of 2019 net profits

Retail business

• 2.6 million active clients, a 40% y/y growth, +494 thousand clients due to the Euro Bank acquisition and +240 thousand due to organic growth
• Deposits grew 28% y/y (10%, excluding Euro Bank)
• Loans grew 44% y/y (9%, excluding Euro Bank)
• Over 4 billion PLN (941 million EUR) in cash loans and mortgages sales, with high y/y growth rates: 28% and 26%, respectively
• Cash loans sales in the the 4Q19 affected by the Euro Bank migration and adjustment of the risk appetite and price
• Doubling of the new microbusiness accounts acquisition pace (26% opened online), in 2019
• 89 thousand microbusiness clients, at the end of 2019

Companies business

• Current accounts volumes grew 19% y/y
• Growth of loans to companies: 7% y/y, which means a 1.2 billion PLN (282 million EUR) y/y increase
• Growth in factoring sales of 6.5% y/y
• Growing number and volume of transactions in corporate business  

Quality and Innovations

• Highest NPS ratio** (52) among Polish banks
• Best Web Site Design in Central and Eastern Europe, according to Global Finance
• 1.5 million downloads of the Millennium Goodie app – smartshopping platform

 (*) total net provisions (including the Fair Value adjustment and modification effect) to average net loans, without extra IFRS9 provisions on Euro Bank acquired portfolio and on CHF mortgages legal risks.

(**) based on ARC Opinia i Rynek survey

End of announcement

Banco Comercial Português, S.A.

Attachment

• Resultados Polónia 2019 EN