2 1.highlights of 2006 2.consolidated operations 3.operations by business area 4.assets quality and...
TRANSCRIPT
2
1. Highlights of 2006
2. Consolidated Operations
3. Operations by Business Area
4. Assets Quality and Solvency
5. Other Indicators
General Index
3
Highlights of Activity in 2006
• Consolidated net income up 36.5% to EUR 733.7 million
• Highest level of income before tax and minority shareholders’ interests in financial sector, in 2006, at EUR 989.8 million
• Income tax of EUR 222.6 million, comprising an effective tax rate of 23.3%
• Net operating income up 21.9% to EUR 2,977.3 million
• Net-interest income (from banking and insurance) up 23%
• Net commissions up 14.1%
• Technical margin on insurance operations up 13.1%
4
Highlights of Activity in 2006 (cont.)
• Net assets up 11.3% to EUR 96.3 billion
• Loans and advances to customers (gross) up 12.8% to EUR 58.8 billion
• Total resources taken by Group up 10.6% to around EUR 87.6 billion
• Gross return on equity (ROE) of 21.3%
• Improvement in cost-to-income ratio from 61.4% to 54.7%
• Improvement in credit quality and provisioning indicators
• Solvency ratio of 10.6%, with Tier 1 and Core Tier 1 of 7.1% and 6.0% respectively
• CGD continues to be the Portuguese bank with the best ratings
5
Principal Indicators
2005 2006 Change %
Net Income EURm 537.7 733,7 36.5%
Net Operating Income (1) EURm 2,441.5 2,977.3 21.9%
Net interest income (banking and insurance)EURm 1,454.5 1,788.3 23.0%
Non-interest income (1) EURm 474.4 609.2 28.4%
Technical Margin - Insurance EURm 512.6 579.9 13.1%
Net Assets EURm 86,461 96,252 11.3%
Loans and Advances to Customers EURm 52,153 58,834 12.8%
Total Resources Taken EURm 79,202 87,563 10.6%
Shareholders’ Equity EURm 4,325 5,006 15.8%
Cost-to-Income % 61.4% 54.7% -6.7 p.p
ROE % 18.3% 21.3% 3.0 p.p
ROA % 0.81% 1.10% 0.3 p.p
Solvency Ratio % 12.4% 10.6% -1.8 p.p
Tier I % 7.4% 7.1% -0.3 p.p
Note: Considering the consolidation of Compal by the equity accounting method
(1) Excluding the capital gains realised on the disposal of the Unibanco investment in 2005.
6
1. Highlights of 2006
2. Consolidated Operations
3. Operations by Business Area
4. Assets Quality and Solvency
5. Other Indicators
General Index
7
Consolidated Net Income for 2006
EURm 2005 2006 Charge %
+ Net interest Income 1,454.5 1,788.3 23.0%
+ Non-interest Income 658.3 609.2 -7.5%
Non-interest Income (1) 474.4 609.2 28.4%
+ Technical Margin - Insurance 512.6 579.9 13.1%
= Net Operating Income 2,625.4 2,977.3 13.4%
Net Operating Income (1) 2,441.5 2,977.3 21.9%
- Operating Costs 1,627.8 1,689.3 3.8%
= Gross Income 997.6 1,288.1 29.1%
- Impairment and Provisions 348.9 408.0 16.9%
+Income from Subsidiary and Associated Companies 25.0 109.7 338.0%
= Income before Tax 673.8 989.8 46.9%
- Tax 119.0 222.6 87.0%
- Minority Shareholders’ Interests 17.1 33.5 95.9%
= Net Income 537.7 733.7 36.5%
Note: Considering the consolidation of Compal by the equity accounting method
(1) Excluding the capital gains realised on the disposal of the Unibanco investment in 2005.
8
Annual Growth of Net Income
36%36%
EURm
654.0 665.0 667.0
448.0
537.7
733.7
2001 2002 2003 2004 2005 2006
9
Evolution of Net Interest Income
26%
23%23%
Net interest income (banking+insurance)
EURm
-18%
89
73
1,454
1,788
1,365
1,715
2005 2006
1.715
Dividends
Net Interest Income
10
89.0
73.0
2005 2006
Equity Capital Instruments
Evolution of Income from Equity Capital
Instruments
-18%-18%
EURm
PT Multimedia
BCP
PT
EDP
1.11.0
4.85.8
24.618.1
17.532.7
20062005
Principal Equity Investments
GALP 10.9-
Unibanco -18.5
Cimpor 2.0-
11
474.4
609.2
2005 2006
319.4
364.4
2005 2006
Evolution of Non-Interest Income
Evolution of Non-interest Income *
Commissions (net)
28%28% 14%14%
(*) Excluding the capital gains realised on the disposal of the Unibanco investment, in 2005.
EURm
12
20,030 20,778
2005 2006
912
859 879
2005 2006
Base Costs Pension F. Indemnities
644 635
125 142
1,628 1,689
912 859
2005 2006
Depreciation Other administrative expenditureEmployee costs
Evolution of Operating Costs
Operating Costs
Employee Costs
4%4%
Evolution of Employees
EURm
1023
2%
6% 6%
6%
-1%
14%
-748-748
13
28,670 31,002
2005 2006
30,567 33,837
18,778
21,584
3,41352,153
58,834
2,808
2005 2006
Individual Customers Companies Public Sector
Loans and Advances to Customers
Loans and Advances to Customers
13%13%
EURm
11%
22%
15%
Mortgage Lending
8%8%
14
87,563
79,202
2005 2006
6,420 7,637
1,040
1,253
3,856
11,536
12,746
4,076
2005 2006
Unit Trust Funds Pension Funds
Wealth Management
47,957 51,587
19,709
23,230
67,666
74,817
2005 2006
Customer Deposits (*) Other Resources
Resources Taken and Under Management
+Balance Sheet
ResourcesOther Resources
TakenTotal Resources
Taken=
11%11%11%11% 10%10%
(*) Excluding Fixed-Rate Insurance Products recognised in Life Insurance branches.
EURm
8%
18%
19%
-5%
20%
15
0.8%
1.1%
2005 2006
18.3%21.3%
2005 2006
32.4%29.5%
2005 2006
Efficiency and Profitability Ratios
Note: Gross profitability ratios considering average shareholders’ equity and net assets values.
Employee Costs Cost-to-Income
Return on Average Equity
Return on Average Assets
57.7%51.6%
61.4%54.7%
2005 2006
Group Banking
16
1. Highlights of 2006
2. Consolidated Operations
3. Operations by Business Area
4. Assets Quality and Solvency
5. Other Indicators
General Index
17
734
456
60 28
38
153
CommercialBanking Portugal
Insurance International InvestmentBanking
Other Total
Contribution to Net Income by Business Area
EURm
% of Total
62%62% 21%21% 5%5% 4%4% 8%8%
19
1,4721,753
1,422
2,9903,175
1,519
2005 2006
Non-life Life
24%
33%
Operations in Portugal
Insurance Premiums
6%6%
Non-life
Total
Life
20%
EURm
Ranking
1st
1st
1st
20
95.4% 97.8%
2005 2006
165 158
216
409
224
35 38
427
2005 2006
Depreciation / AmortisationOther Administrative Costs Employee Costs
Principal Indicators
Net IncomeCombined Ratio
(Non-life)
28%28% 2.4 pp.2.4 pp.EURm
Structure Costs
EURm
-4%-4%
120.1
154.3
2005 2006
22
36.1% 34.0%
2005 2006
25.0 30.0
2005 2006
54.1 63.2
2005 2006
Investment Banking
Net Operating Income
Net IncomeCommissions
Net Operating Income by Area
Cost-to-Income
17%17% 22%22% 20%20%
-2.1 pp.-2.1 pp.
EURm
35.4 43.2
2005 2006
Financial Advisory Venture Capital
Project Finance Capital Market
45%
6%
26%
23%
Assessoria Financeira Capital de Risco
Project Finance Mercado de Capitais
23
Principal Rankings
Ranking (No. Operations)
Equity Capital Markets
2005 2006Source: CMVM, CaixaBI
2nd Place 1st Place
Ranking (Value of Operations)
Debt Capital Markets
2005 2006
Source: Bloomberg
1st Place 1st Place
Ranking (Value of Operations)
Mergers & Acquisitions
2005 2006Source: Bloomberg
3rd Place 1st Place
Ranking (Value of Operations)
Project Finance
2005 2006
Source: Dealogic
1st Portuguese5th Iberian
31st European
1st Portuguese3rd Iberian
6th European
25
0.83 0.79
Consumer Finance
2005 2006
11.4
15.0
Property Leasing
2005 2006
930 1,070
512
609 145
404 1,646
2,144
2005 2006
Property Leasing Equipment Leasing
Factoring Consumer Finance
Specialised Credit
Loans and Advances to Customers
30%30%
59
61
EURm
Market Shares (%)
9.2 10.1
2005 2006
14.2 13.9
Factoring
2005 2006
Equipment Leasing
27
4349
9
112
3
7
961
72
2005 2006
Wealth Management and Advisory
Pension Funds
Unit Trust Funds
Property Funds
5,465 6, 381
9551,2411,0401,243
14,551
15,182
24,047
22,010
2005 2006
Wealth Management and Advisory
Pension Funds
Unit Trust Funds
Property Funds
Assets under Management and Commissions
Assets under Management
Commissions
9%9% 18%18%
EURm
28
22% 13%
6%
25%
Market Shares
Unit Trust Funds Property Funds
Pension Funds Wealth Management
2005
2nd
1st
2006
2005
6th
5th
2006
2005
3rd
2nd
2006
2005
3rd
2nd
2006
30
7,9148,619
2005 2006
4,551
6,515
2005 2006
Credit and Resources
Loans and Advances to Customers*
Customer Resources
43%43%
9%9%
EURm
(*) Excluding international funding in France branch.
France Branch Banco Caixa Geral
BNU Macao Other
France Branch Banco Caixa Geral
BNU Macao Other
9%
27%
47%
17%
16%
22%41%
21%
31
1. Highlights of 2006
2. Consolidated Operations
3. Operations by Business Area
4. Assets Quality and Solvency
5. Other Indicators
General Index
32
2.3% 2.7%
-0.4% 0.0%
2005 2006
Non-performing credit ratio
Non-performing credit ratio (net)
2.1% 2.4%
1.9% 2.2%
2005 2006
Total Overdue Credit Ratio
Credit overdue for more than 90 days
101.4% 115.3%
2005 2006
125.2% 138.2%
2005 2006
Non-performing Loans and Provisioning
Overdue Credit Coverage > 90 days
Total Overdue Credit Non-Performing Credit
Non-performing Credit Coverage
33
Equity Capital
2005 1 2006 1 Change in 2006
EDP 69.1 272.4 203.3
PT (35.9) 30.8 66.7
BCP 38.4 66.6 28.2
PT Multimedia (6.9) 7.3 14.2
CIMPOR 0.4 19.1 18.7
GALP - 6.8 6.8
Euronext 10.4 30.1 19.7
TOTAL 75.5 433.1 357.6
(1) Recognised in balance sheet in reserves
Other Relevant CGD Investments
REN 19.9% 160.0
AdP 20.4% 88.5
Investment (%) Acquisition Cost (EURm)
Potential accumulated capital gains/losses in availablefor sale share portfolio in CGD’s balance sheet
34
9.4%10.6%
12.4%
2004 2005 2006
Solvency Ratios
Note: Ratios calculated under Bank of Portugal regulations.
Total Ratio
Core Tier I Tier I
5.7% 6.2% 6.0%
2004 2005 2006
6.3%7.1%7.4%
2004 2005 2006
35
Pension Liabilities
100%100%Funding of Liabilities
419.2399.6Provisions
419.2399.6Medical Plan Liabilities
68.060.3Corridor Used
5.25%5.25%Fund Yield
2.00%2.00%Pensions Growth Rate
3.00%3.00%Wages Growth Rate
4.75%4.75%Discount Rate Used
20062005
6.53%9.22%Return on Pension Fund
TV 73/77TV 73/77Men’s Mortality Table
Women’s Mortality Table
Funding of Liabilities
Pension Fund
Pension Liabilities
TV 88/90
100%
955.3
955.3
TV 88/90
100%
824.6
824.6
EURm
121.7110.0Total Corridor
36
1. Highlights of 2006
2. Consolidated Operations
3. Operations by Business Area
4. Assets Quality and Solvency
5. Other Indicators
General Index
37
31%
30% 22%
24%
Market Shares
(*) Excluding securitised credits
Customer Deposits Loans and Advances to Customers*
Mortgage Lending * Insurance
1st
Ranking2006
1st
Ranking2006
1st
Ranking2006
2nd
Ranking2006
38
Long Term
Short Term
Ratings
A+
A-1
Aa3
P-1
AA-
F1+
Stable Stable NegativeOutlook
Standard & Poor’s
Moody’sFitch
Ratings
Standard & Poor’s (July 2006)“Caixa Geral de Depósitos’ ratings are based on the fact that the bank is fully owned by the Portuguese state (…); enjoying a solid position in domestic retail banking which provides the bank with a broad, stable low cost funding base and, particularly an adequate financial profile.”Moody’s (September 2006)“The rating awarded to Caixa Geral de Depósitos, has a stable trend, reflects the bank’s leading position in terms of market share in Portugal, its strong funding base and a low credit risk profile, with a diversified offer of products and services/diversified market position in which half of its credit portfolio is made up of mortgage lending. (…) CGD remains a benchmark operator in the banking system and enjoys a position, in the domestic market that very few European institutions enjoy in their respective countries.”
Fitch Ratings (September 2006)“Caixa Geral de Depósitos’ ratings reflect its quality as a state-owned bank and its strong position in the market with a dominant share of individual customers’ deposits and mortgage lending.”
A Group of Recognised Merit
Best Equity House in Portugal Euromoney 2006
1st national, 3rd Iberian and 6th European in Project FinancePFI - Project Finance International
Unit Trust Funds Leader in Portugal Associação Portuguesa de Fundos de Investimento, Pensões e Patrimónios
CGD continues to enjoy 1st place in terms of banking reliability in the eyes of the Portuguese
Portuguese still consider Fidelidade Mundial to be the leading, most trustworthy insurance companySelecções do Reader’s Digest
Highest ratings awarded to a Portuguese bankMoody’s, S&P, Fitch
2nd Insurance Group and 5th Bank in the Iberian Peninsula
1st Insurance Group in Portugal, leader in life and non-life insurance branchesAssociação Portuguesa de Seguradores
Best, most solid bank, best customer inquiries facilities, clearest and most reliable information; highest trust ratio levels in eyes of bank customersBasef 2006
Bank with most widely used internet banking service and highest customer satisfaction indices Netsonda 2006