Institutional Presentation - Unaudited financial information May 2017 - NET
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Institutional Presentation Unaudited financial information May 2017
Agenda
1. General Overview and Business Model
2. 1Q2017 Results
3. Summary
Appendix : Consolidated Balance Sheet and Income Statement
2
NOVO BANCO was created in Aug-14 after the resolution measure
applied to BES. Share capital fully underwritten by the Resolution Fund
Net Assets 1 (Portuguese Banks, € billion) Capital and shareholder structure
2016 1Q2017
Resolution 100%
93.5 96.6 Fund 2 (€4.9 billion)
71.3 72.1
52.3 51.1
44.8 44.9 Share capital of NOVO BANCO amounts to €4.9
38.3
33.0 billion and is fully underwritten by the Resolution Fund.
The sale process of NOVO BANCO was re-launched in
Jan-16, and on 31 March 2017, Banco de Portugal
Bank 1 Bank 2 - Bank 3 Bank 4 informed about the selection of LONE STAR for the
conclusion of the sale process and that the Resolution
Fund had signed the contractual documents of the sale.
The closing of the sale operation is depending on
NOVO BANCO is a reference institution obtaining the required regulatory authorizations (including
in the Portuguese financial system, with by the European Central Bank and the European
over 1.3 million clients Commission) and on the completion of a liability
management exercise.
3rd largest bank in Portugal by net assets
(€51.1 billion)
1 Source: 1Q2017 Results Press Releases (CGD, Millennium bcp, Santander Totta and BPI).
2 The Resolution Fund was created in 2012 and its primary goal is to provide financial support for the implementation of
resolution measures determined by Banco de Portugal. The Resolution Fund is a public-law legal person with
3
administrative and financial autonomy. It is operated within Banco de Portugal.
NOVO BANCO timeline
3Aug14 15Sep15 15-Dec-15 15Jan16 31Mar17
NOVO BANCO created 1st sale process Restructuring Plan agreed Banco de Portugal Banco de Portugal announces
following Resolution for NOVO BANCO with DG COMP. Internal announces the re- selection of LONE STAR for
measure applied to BES suspended by separation between launch of the sale the conclusion of the sale
by Banco de Portugal Banco de Portugal Commercial Franchise (core) process of NOVO process. Closing dependent
(‘BdP’) decision and Side Bank (non-core) BANCO on 3 pre-conditions
3Aug14 17Sep14 15Sep15 14Nov15 15-Dec-15 29Dec15 15Jan16 31Mar16 19Aug16 31Mar-17
17Sep14 14Nov15 29Dec15 31Mar16 19Aug16
Banco de Results of Comprehensive Banco de Portugal, acting as BdP announces that both António
Portugal Assessment undertaken by ECB Resolution Authority, announces strategic and market sale Ramalho
appoints a with no shortfall in Baseline several decisions, including re- processes would be pursued becomes CEO
new Board Scenario but €1.4 billion shortfall transfer of 5 series of non- and published eligibility of NOVO
of Directors in Adverse Scenario subordinated bonds to BES criteria for investors BANCO
4
NOVO BANCO broke with former BES legacy of a financial
conglomerate to focus on a domestic commercial franchise
…-2014 2014-2015 2015-2020 *
• A financial conglomerate, with a full • Transition management agenda to • Refocus on the Portuguese
range of banking services… prepare the sale of the bank market supported by a reduced
international footprint (only when
• Retail banking • Recovery of client confidence
synergetic with domestic
and retain deposits
• Private banking operations)
• Preserve the group integrity and
• Corporate banking • Identification of two realities with
maximise the option value for
distinct management agendas:
• Trade finance the buyer (with the exception of
the sale of BESI) • A Commercial Franchise to
• Asset management recover and grow in core
• Pursue incremental
• Investment banking segments (retail and corporate)
management improvements
leveraging a competitive
• etc • Start of the restructuring process value proposition
• …with a growing international • Leadership in corporate
footprint in Iberia, Portuguese segment
speaking countries and oil rich
emerging market countries… • High potential and efficient
retail model
• …and a diversified presence
across the Portuguese economy • A Side Bank to manage and
through several financial and non- deleverage a legacy portfolio
financial equity stakes of non-core and non-productive
assets
* the completion of the announced sale to Lone Star could impact the current strategy 5
Strategic priorities up to now: leveraging key commercial strengths
and orderly reduction of exposure to non-core assets
2014 2015 2016 2017
I Solving liquidity and funding constraints
II Managing the capital position
III Restoring profitability (Commercial Franchise)
IV Downsize Side Bank
I II III IV
• Deleverage • Manage regulatory capital • Focus on core business • Side Bank asset size of
position through with distinctive value €8.7 billion as of Dec-16,
• Improve liquidity and
deleveraging proposition down from €10.8 billion as of
funding position by
Dec-15
strengthening the customer • Sale of BESI • Normalise funding costs
deposit base • Wind-down or sell non-
• Selected sales of real • Reduce operating costs by
core international
• Reduce non-performing estate and equity stakes simplifying the group
operations
asset base structure and reducing
• Optimisation of RWAs
footprint • Accelerated sale of non-
• Estimated Phased-in core assets (real estate,
• Increase productivity
CET 1 Ratio of 10.8% at equity stakes)
leveraging on digitalisation
Mar-17
• Recovery or sale of out-of-
• Reduce cost of risk and
strategy credit portfolio
impairment charges by
reviewing risk appetite and
strengthening governance
6NOVO BANCO is a universal bank, with a wide offer and a well defined
approach to each of its business segments
Business Segments Market Share in selected Business Lines
Dec-16
Domestic 1
Commercial Trade Finance 22.6%
Banking * 2
Corporate credit 19.6%
3
POS 18.3%
2
Consumer lending 13.7%
2
Mortgages 10.2%
2
Deposits 11.9%
5
Life insurance 11.2%
NOVO BANCO operates a 4
Pension plans 11.9%
diversified range of financial
4
services. Asset management 10.0%
* Domestic Commercial Banking Includes Retail, Corporate and Institutional Clients and Private Banking
Dec-16 data. (1) SWIFT; (2) Data published by BdP and INE; (3) SIBS, Unicre; (4) APFIPP, CMVM, management estimates;
(5) APS, ASF, management estimates. 7NOVO BANCO is the reference bank in Portugal in Corporate Banking,
in particular for SMEs
Business Segments Corporate Banking
Domestic
NOVO BANCO has a market share of 19.6% in corporate credit. 83%2 of large
Commercial corporate and 79%2 of SMEs are NB Clients.
Banking *
21 corporate centres (including 1 centre in NB Açores), widespread throughout
Portugal. Commitment to be a reference partner for the corporate clients daily
activities.
To support the corporate segment across all industry sectors placing a
particular focus on the exporting SMEs and those that incorporate innovation
in their products, services or production systems.
Innovative offer with Express Bill (solution for payments and collections) and Fine
Trade (tool that identifies export opportunities for corporate clients).
Weight of Corporate Credit in
1
Overall portfolio (Portuguese Banks) Clients of NOVO BANCO
66%
50%
46% From c. 3,500
40% 40% From c. 25k SME’s
in Portugal, 79%2 Large Corporate in
are NB’s Clients. Portugal, 83%2 are
NB’s Clients.
- Bank 1 Bank 2 Bank 3 Bank 4
* Domestic Commercial Banking Includes Retail, Corporate and Institutional Clients and Private Banking.
1 Data as of Mar-17. Source: 1T2017 Press Releases (CGD, Millennium bcp, Santander Totta and BPI).
2 Estimated by management, based on Informa DB + applying an average of NB group companies to the number of non 8
clients in the marketNOVO BANCO has a leading domestic Retail and Private Banking
franchise, supported by a leading multi-channel platform
Business Segments Retail and Private Banking
NOVO BANCO has a market share of 10.2% and 13.7% in residential Mortgages
Domestic
Commercial and Personal Loans respectively.
Banking *
The Bank has a specialized, diversified and distinct product offer to meet its
private individuals, private banking and small business clients’ needs.
In addition to the strong branches network and the 13 private banking units,
NOVO BANCO has a multi-channel approach through internet banking, phone
banking, mobile banking (smartphone and tablet) .
Banco BEST, a 100% subsidiary online commercial bank targetting affluent and
private banking customers.
Large client base with
Sub-Segmentation (Retail) Retail Branches in Portugal
more than 1.3 million 2016
clients Small 1Q2017
651 650 657 627
Businesses 618 615
507 507
445 445
Affluent
Mass Market
Private Banking is also sub segmented in
“Executive Professionals”; “Entrepreneurs”;
“Traditional Family” and “Top Private”. Bank 1 Bank 2 Bank 3 ----* Bank 4
Sub-segmentation leads to a more 507 domestic branches (reduction of 89 in 2016)
focused commercial approach in line with the new business environment reality
* Domestic Commercial Banking Includes Retail, Corporate and Institutional Clients and Private Banking. 9Domestic Commercial Banking complemented by Asset Management,
Life Insurance and Markets, with international presence to support
NOVO BANCO clients
Business Segments Carried out by GNB Gestão de Ativos (100% owned by NOVO
Asset
BANCO).
Management
Domestic Wide product range covering mutual funds, real estate funds,
Commercial pension funds, discretionary and wealth management services.
Banking
Total AuM’s as of Mar-17 of €11.7 billion.
Carried out by GNB Seguros Vida (100% owned by NOVO
Life
BANCO), which provides life insurance products and retirement
Insurance plans both in Portugal and Spain.
NOVO BANCO also has a 25% stake in GNB Seguros, which
focus its activity in Portugal with non-life products such as home,
car and health insurance.
Asset Management
Markets Global financial management activity of the Group, whether of
a strategic nature or as part of current trading activity.
Issuance of debt and placement of funds in the financial markets;
Insurance Investment and risk management of credit, interest rate, FX and
equity instruments.
International International presence to support NOVO BANCO clients.
Markets Commercial Business development focused in Spain (Mar-17 net assets of €3.0
Banking billion) and additional platform to support Iberian clients.
International Commercial
Banking
10Agenda
1. General Overview and Business Model
2. 1Q2017 Results
Highlights
Funding and Liquidity
Capital
Results
3. Summary
Appendix : Consolidated Balance Sheet and Income Statement
11Highlights
Results Income Statement ( € million)
Change
Core Operating Income* of €59.6 million, growing 1Q2016 1Q2017
%
7.0% vs 1Q2016.
Net Interest Income 140.8 119.0 (15.5%)
Banking income totalled €180.8 million, reflecting a
+ Fees and Commissions 70.1 75.8 8.2%
22.8% YoY decrease, although underpinned by the
positive contribution of fees and commissions (+8.2%).
= Commercial Banking Income 210.9 194.8 (7.6%)
Operating costs reduced 12.9% YoY, to €135.2
+ Capital Markets and Other Results 23.2 (14.1) -
million, confirming the downward trend observed since
the creation of NOVO BANCO. = Banking Income 234.1 180.8 (22.8%)
Provision charge of €137.4 million, €210.8 million - Operating Costs 155.2 135.2 (12.9%)
lower than in the 1Q2016 (-60.5% YoY). Credit
impairments amounted to €119.3 million, which = Net Operating Income 78.9 45.6 (42.3%)
compares with €185.5 million a year earlier (-35.7%).
(= Core Operating Income*) 55.7 59.6 7.0%
Negative Net Income of €130.9 million, comparing
- Net Provisions 348.2 137.4 (60.5%)
favourably with the €249.4 million loss reported in
1Q2016. = Income Before Taxes (269.3) (91.8) 65.9%
- Taxes and Non-controlling interest (19.9) 39.1 -
= Net Income (249.4) (130.9) 47.5%
* Commercial Banking Income – Operating Costs
12Highlights
Activity and Capital Assets (€ billion)
Customer loans were down by €0.3 billion in the
- 5.2
1Q2017, in line with the deleveraging process still under - 1.2
way. 57.5 56.0
52.3 51.1
Production of Residential Mortgage Loans increased
57% YoY vs 1Q2016 and consumer loans production
grew 62% vs 2016 monthly average (+126% YoY).
Customer deposits of €25.2 billion, from €25.1 billion in
the 1Q2016.
Dec-15* Mar-16 Dec-16 Mar-17
Loan to deposit ratio of 110%, improved compared to
* Restated figures
the 1Q2016 (115%) and is in line with its value in
Dec-2016. CET1 Ratios
The last bond issuance guaranteed by the
Portuguese Republic matured on 17-Feb-2017 (€1,500 Phased in Fully Implemented
million). This meant that NOVO BANCO ceased to have
12.3% 12.0%
any kind of debt instrument guaranteed by the 10.8% 10.7%
9.8% 9.6%
Portuguese Republic (initial amount of the 3 debt issues:
€3,500 million).
Estimated CET1 phased-in ratio of 10.8% and CET1
under the full implementation regime at 9.6%.
Mar-16 Dec-16 Mar-17** Mar-16 Dec-16 Mar-17**
** Estimated figures for Mar-17
*** ESCB – European System of Central Banks
13Agenda
1. General Overview and Business Model
2. 1Q2017 Results
Highlights
Funding and Liquidity
Capital
Results
3. Summary
Appendix : Consolidated Balance Sheet and Income Statement
14Decrease of Customer Loans in line with the balance sheet
deleveraging process and a result of the selective lending policy
Loans per Segment (Gross, € billion) Loans per Geography (Gross, € billion)
35.2 35,2
33.8 33.5 33.8 33.5
1.7 (5%) International 4.9
1.6 (5%) 1.6 (5%) (14%) 4.7 4.5
Consumer (14%) (14%)
and Other 9.8
(28%) 9.7 9.7
(29%) (29%)
Mortgage
Domestic
Corporate 30.3 29.1 28.9
23.8 (86%) (86%) (86%)
22.5 22.2
(68%)
(67%) (66%)
Mar-16 Dec-16 Mar-17 Mar-16 Dec-16 Mar-17
Customer loans were down by €0.3 billion in the Stock of Residential Mortgage Loans and
1st quarter of 2017, which is in line with the Consumer and Other Loans to Individuals
deleveraging process still under way. stable comparing with Dec-16.
Market share of 22% on the 'Capitalizar' Credit Residential Mortgage Loans and Consumer
Line for Small Business. Loans with strong growth in production (+57%
and +126%, compared with the 1Q2016).
15Stability in Customer Deposits since the 1Q2016 (+€0.1 billion
YoY)
Net Loans (€ billion) Customer Deposits (€ billion)
- 3.7*
- 2.3 +0.1
31.6 29.3 28.2 27.9 27.4
25.1 25.6 25.2
Dec-15 Mar-16 Dec-16 Mar-17 Dec-15 Mar-16 Dec-16 Mar-17
Loan to Deposit Ratio (%) Liquidity Ratios (%)
- 5pp 107
99
87 88
99 98
113 115
110 110
77 84
LCR
NSFR
Dec-15 Mar-16 Dec-16 Mar-17 Dec-15 Mar-16 Dec-16 Mar-17
* In Gross Loans the decrease between Dec-15 and Mar-17 was of €3.9 billion of which €2.0 billion (-6%) in the domestic
activity and €2.0 billion (-31%) in the international activity which mainly reflects the transfer of BES Vénétie and NB Asia to 16
discontinued assetsCustomer Deposits increase weight in funding structure
(excluding Shareholders Equity)
Evolution of the funding structure (€ billion, as a % of Total Liabilities)
50.2
47.2 46.1
Customer deposits
25.1
(50%) 25.6 25.2
Debt issued (54%)
(55%)
Life Insurance Products 3.9 (8%)
3.9 (8%) 3.6 (8%)
5.2 (10%)
4.7 (10%) 4.5 (10%)
Other Liabilities *
16.0
13.0 12.8
(32%)
(28%) (28%)
Mar-16 Dec-16 Mar-17
Customer deposits continue to be the main funding source.
The last bond issuance guaranteed by the Portuguese Republic matured on 17-Feb-2017 (€1,500 million).
This meant that NOVO BANCO ceased to have any kind of debt instrument guaranteed by the Portuguese
Republic (at the time of its incorporation NOVO BANCO had three issues totalling: €3,500 million).
* Includes funding from ECB, Money Market funds and units being discontinued (as BESV,and NB Ásia)
17Increase of net ESCB* funding in €0.9 billion in the 1Q2017, but
below 1Q2016 levels
ESCB Funding (€ billion) Eligible Assets (€ billion)
Gross Central Banks Funding
+ 0.1
Net Central Banks Funding
- 2,0 13.7 13.1 13.2
+0.9
8.4
8.0
6.4 6.6
6.0
5.1
Mar-16 Dec-16 Mar-17 Mar-16 Dec-16 Mar-17
Net Funding with the ECB increased by €0.9 Stability in the portfolio of securities
billion in the 1Q2017 to €6.0 billion, but with available for rediscount (+€0.1 billion in
reduction compared to Mar-2016. the quarter).
* ESCB – European System of Central Banks
18Securities portfolio based in securities with lower risk and higher
liquidity
Evolution of Securities Portfolio (€ billion)
-+0.1
13.0
11.8 11.8
3.1
2.5 2.6
Other Securities
2.7
2.8 2.7
Bonds
4.0 3.0 2.9 Other Sovereign Debt
Portuguese Sovereign Debt
3.2 3.5 3.7
Mar-16 Dec-16 Mar-17
Sovereign Bonds from Euro Zone countries account for 55% of total securities portfolio.
Weight of Portuguese Sovereign Debt increased to 31% of total Securities Portfolio.
Positive fair value reserve of €195 million (Dec-15: €151 million).
19In 2017 planned wholesale MLT debt reimbursements amount to
€1.0 billion*
Wholesale MLT* Funding (€ billion)
1.69
Already reimbursed
∑ 2017 = 1.00 1.08
0.81
0.36
0.23
0.13 0.17
0.06 0.03
0.00
1Q17 2Q17 3Q17 4Q17 2018 2019 2020 2021 2022 >2022
In 2017 planned reimbursements amount to circa €1.0 billion.
All the debt guaranteed by the Portuguese Republic was cancelled (€1.7 billion in Nov. and Dec.
2016) or repaid (€1.8 billion in Jan. and Feb. 2017).
In the 1Q2017 NOVO BANCO redeemed €40 million in covered bonds, which were placed in the
market in 2010.
- MLT - Medium long term.
Estimated reimbursements based on 31 December 2016 status
20Agenda
1. General Overview and Business Model
2. 1Q2017 Results
Highlights
Funding and Liquidity
Capital
Results
3. Summary
Appendix : Consolidated Balance Sheet and Income Statement
21Estimated CET1 phased-in ratio of 10.8% in Mar-2017
Capital Ratios (phased-in)
CET1 phased-in ratio evolution BIS III (CRD IV / CRR)
€ million Mar-16 Dec-16 Mar-17*
12.3% 12.0% Risk Weighted Assets (A) 36,282 33,627 33,512
10.8%
Own Funds
CET1 (B) 4,471 4,051 3,620
Tier1 (C) 4,471 4,051 3,620
Total (D) 4,471 4,051 3,675
CET1 phased-in Ratio (B/A) 12.3% 12.0% 10.8%
Tier1 Ratio (C/A) 12.3% 12.0% 10.8%
Solvency Ratio (D/A) 12.3% 12.0% 11.0%
Mar-16 Dec-16 Mar-17*
CET1 fully implemented Ratio 10.7% 9.8% 9.6%
Estimated CET1 phased-in ratio of 10.8% in Mar-17.
Estimated CET1 fully implemented ratio of 9.6% in Mar-17.
* Estimated figures for Mar-17
22Agenda
1. General Overview and Business Model
2. 1Q2017 Results
Highlights
Funding and Liquidity
Capital
Results
3. Summary
Appendix : Consolidated Balance Sheet and Income Statement
23Sustainable recovery in Core Operating Income* in the last
quarters
Quarterly Evolution of Core Operating Income
(Commercial Banking Income – Operating Costs, € million)
+ 7.0%
59.6
55.7 53.2
48.2
43.6
12.9
Quarterly 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017
Avg 2015
Sustainable recovery in Core Operating Income* in the last quarters, based on the normalization
of commercial banking income and on the operating costs’ reduction.
* Commercial Banking Income – Operating Costs
24Net Interest Income with a 15.5% decrease vs 1Q2016, but slightly
below the 4Q2016. Fees and Commissions increase +8.2% YoY
Net Interest Income (€ million) Fees and Commissions (€ million)
Net Interest
Margin, YTD 1.19%* 1.10% 1.06%*
- 15.5% + 8.2%
140.8
123.4 119.0
70.7 75.8
70.1
1Q2016 4Q2016 1Q2017 1Q2016 4Q2016 1Q2017
NII dropped by 15.5% YoY, influenced by Fees and Commissions increased 8.2%
the positive impact of the reduction in the YoY, benefiting from the reduction in the
cost of liabilities (-24 bps, from 1.52% in fees paid related to the debt securities
Mar.16 to 1.28% in Mar.17), but still lower guaranteed by the Republic of Portugal
than the reduction in the interest rate on (€2.0 million in 1Q2017 vs €8.6 million in
assets (-37 bps). 1Q2016).
* Annualized figures
25Operating Costs decreased by 12.9% in the 1Q2017, reflecting the
implementation of the restructuring measures
Operating Costs (€ million) Branch Network
- 98
-1
- 12.9% 635
International 39 537 536
155.2 30 29
15.1 141.0
135.2
13.2 596
11.0 Domestic 507 507
58.7
54.6 52.4
Dec-15 Dec-16 Mar-17
Employees
- 1,215
- 59
81.4
73.3 71.8 7,311
International 740 6,096 6,037
409 391
1Q2016 4Q2016 1Q2017
Domestic 6,571
5,687 5,646
General
Staff Costs Administrative Depreciation
Costs
Dec-15 Dec-16 Mar-17
26Provisions of €137.4 million in 1Q2017 (-€ 210.8 million vs
1Q2016), with cost of risk reduction to 143 bps
Total Provisions (€ million) Credit Provisions (€ million)
- 60.5%
Cost of
2.11%* 1.99% 1.43%*
Risk, YTD
612.1
-35.7%
348.2
246.8
185.5
119.3
137.4
1Q2016 4Q2016 1Q2017 1Q2016 4Q2016 1Q2017
1Q2017 provisions of €137.4 million Credit provisions with a 35.7% YoY
(-€210.8 million vs 1Q2016) reduction.
Provision for the costs of the restructuring Cost of risk of 143 bps (vs 211 bps in the
process (€109.6 million) in the 1Q2016 1Q2016 and 199 bps in in 2016.
* Annualized figures
27Credit Risk Indicators
Overdue Loans (€ million) Non Performing Loans* (€ million)
Coverage 101% 94% 94% Coverage 47% 49% 50%
17.6% 17.8% 33.5% 33.4%
Credit 15.5% Credit 33.1%
Quality Quality
12,372
5,936 5,957 11,301 11,173
5,791
Dec-15 Dec-16 Mar-17 Dec-15 Dec-16 Mar-17
Overdue Loans Non Performing Loans
Decrease in Non Performing Loans stock of €128 million, with a 10 bps reduction in the
Credit Quality ratio and an increase in coverage to 50%
* Concept includes total exposure of loan contracts: (i) With overdue amount > 90 days; (ii) Flagged as default according
with internal definition compliant with the article 178 of the CRR; (iii) With specific impairment. For corporate loans this
classification is considered at client level
28Credit Risk Indicators
Credit Quality and Coverage
Coverage 108% 97% 99% 68% 64% 66% 47% 44% 44%
Dec-15
37.5% 37.8%
Dec-16
33.3%
Mar-17
25.6% 25.5%
22.8%
17.0% 17.0%
14.5%
Crédito Overdue
Vencido >loans
90 dias / CB Credit
Crédito em at Risk/ *CB
Risco Credit at Risk* +
> 90 days Restructured Credit not
included in Credit at Risk
Credit Risk ratio with a 10 bps decrease in the 1Q2017, with a €110 million reduction in the
stock and an increase in the coverage to 66%.
* According to Banco de Portugal instruction nr. 23/2011
29Agenda
1. General Overview and Business Model
2. 1Q2017 Results
3. Summary
Appendix : Consolidated Balance Sheet and Income Statement
30NOVO BANCO is a reference Bank in Portugal
NOVO BANCO’s Profile
NOVO BANCO is a reference institution in the Portuguese financial sector, with net
assets of €51.1 billion (3rd largest bank in Portugal).
Reference bank in Corporate segment, 83% of Large Corporate and 79% of SMEs are
Strong clients of NOVO BANCO.
Business
One of the leading banks in Retail and Private Banking in Portugal, backed by a
Model
segmented commercial approach and by a multi-channel strategy. 491 thousand frequent
digital clients (+7% YoY), with a strong adherence to the mobile channel (193 thousand
frequent clients, +66% YoY).
Net Loans of €27.9 billion in Mar-17.
Deposits of €25.2 billion in Mar-17.
Indicators Loan to Deposit ratio of 110% in Mar-17.
Estimated capital ratios in Mar-17: CET1 phased-in of 10.8% and CET1 fully implemented
of 9.6%.
31Awards in Several Areas
Best financial app Best Trade Best Securities
Apple Store Finance Bank Services Provider
e Google Play Award 2016 Award 2016
Apple Google
App Average
Store Play
NOVO
4.4 4.5 4.5
BANCO
Bank B 3.5 4.2 4.1
Bank C 2.9 4.1 4.1
Bank D 3.3 4.1 4.0
Bank E 3.5 3.5 3.5
Best Performance Distributor,
Best Trade Bank in Portugal 2016 Portugal
Trade & Forfating Review Structured Retail Products
(Euromoney Group)
32Agenda
1. General Overview and Business Model
2. 1Q2017 Results
3. Summary
Appendix : Consolidated Balance Sheet and Income Statement
33Consolidated Balance Sheet
(€ million) 31 Dec. 16 31 Mar. 17 (€ million) 31 dez. 16 31 Mar. 17
Cash and deposits with central banks 1,469 734 Deposits from central banks 6,410 6,610
Financial liabilities held for trading 633 613
Deposits with banks 371 338
Deposits from banks 3,578 2,999
Financial assets held for trading 657 642
Due to customers 25,990 25,577
Financial assets at fair value through profit and
1,204 1,141
loss Debt securities issued 3,818 3,632
Available for sale financial assets 10,558 10,707 Derivatives held for risk management purposes 108 113
Loans and advances to banks 724 756 Investment contracts 3,396 3,236
Non current liabilities held for sale 2 2
Loans and advances to customers 28,184 27,882
Non current liabilities held for sale:
749 731
Derivatives held for risk management purposes 223 223 - discontinued operations
Provisions 365 348
Non current assets held for sale 8 8
Technical reserves 1,334 1,281
Non current assets held for sale:
1,217 1,135
- discontinued operations Current tax liabilities 17 17
Investment properties 1,206 1,196 Deferred tax liabilities 19 17
Other tangible assets 206 200 Other subordinated debt 48 49
Intangible assets Other liabilities 719 852
45 42
Total Liabilities 47,185 46,085
Investments in associated companies 159 160
Share capital 4,900 4,900
Current tax assets 31 31 Revaluation reserves, other reserves and
955 199
retained earnings
Deferred tax assets 2,604 2,588
Net income for the period (788) (131)
Technical reserves of reinsurance ceded 6 6
Non-controlling interests 81 81
Other assets 3,460 3,333 Total Equity 5,148 5,049
Total Assets 52,333 51,124 Total Liabilities + Equity 52,333 51,124
34Consolidated Income Statement
(€ million) 1Q2016 1Q2017
Net Interest Income 140.8 119.0
Dividend income 17.7 1.5
Fee and Commission income 92.9 93.9
Fee and Commission expense (27.9) (21.8)
Net gains / (losses) from financial assets at fair value through profit or loss 11.2 (24.3)
Net gains / (losses) from available-for-sale financial assets 15.9 17.1
Net gains / (losses) from foreign exchange revaluation (9.7) 2.8
Net gains / (losses) from sale of other assets (0.8) (4.8)
Insurance earned premiums, net of reinsurance 11.1 11.5
Claims incurred, net of reinsurance (63.4) (75.4)
Change of the technical provision, net of reinsurance 48.8 60.7
Other operating income and expense (32.6) (33.8)
Operating Income 203.9 146.4
Staff costs (81.4) (71.8)
General and administrative costs (58.7) (52.4)
Depreciation and amortisation (15.1) (11.0)
Provisions and impairments (348.2) (137.4)
Sale of subsidiaries and associates 3.6 -
Results from associated companies consolidated by equity method (0.0) 1.7
Income before taxes (295.8) (124.5)
Income tax
Current 0.4 (2.1)
Deferred 49.5 (4.1)
Income from continuing activities (245.9) (130.7)
Income from discontinued activities (10.4) (0.5)
Net income for the period (256.3) (131.2)
Non-controlling interests (7.0) (0.3)
Net income attributable to the shareholders (249.4) (130.9)
35Disclaimer
This document may include certain statements relating to the NOVO BANCO Group that are neither reported
financial results nor other historical information. The statements, which may include targets, forecasts,
projections, descriptions of anticipated cost savings, statements regarding the possible development or possible
assumed future results of operations and any statement preceded by, followed by or that includes the words
“believes”, “expects”, “aims”, “intends”, “may” or similar expressions or negatives thereof are or may constitute
forward-looking statements.
By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty.
There are a number of factors that could cause actual results and developments to differ materially from those
expressed or implied by forward-looking statements. These factors include, but are not limited to, changes in
economic conditions in individual countries in which the NOVO BANCO Group conducts its business, fiscal or
other policies adopted by various governments and regulatory authorities of Portugal and other jurisdictions,
levels of competition from other banks and financial services companies as well as future exchange rates and
interest rates.
NOVO BANCO does not undertake any obligation to release publicly any revision to the forward-looking
information included in this document to reflect events, circumstances or unanticipated events occurring after the
date hereof and accepts no liability for any of such statements.
This document contains unaudited information for 2016.
36Investor Relations website: www.novobanco.pt phone: + 351 21 359 7390 email: investor.relations@novobanco.pt
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