Accounts and Notes to the Accounts

In accordance with Regulation (EC) no. 1606/2002 from the European Parliament and the Council, of 19 July 2002, and Bank of Portugal Notice no. 1/2005 (revoked by Bank of Portugal Notice no. 5/2015), the Group’s consolidated financial statements are required to be prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) since 2005. The Bank’s individual financial statements are prepared in accordance with the same Standards since 2016.

The consolidated and individual financial statements presented in the Annual Report 2017 were approved on 23 April 2018 by the Bank’s Board of Directors.

Financial Statements

Group’s Consolidated Financial Statements

Bank’s Individual Financial Statements

CONSOLIDATED INCOME STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016

thousand euros

	Notes	2017	2016
Interest and similar income	3	1,914,210	1,909,997
Interest expense and similar charges	3	(522,935)	(679,871)
NET INTEREST INCOME		1,391,275	1,230,126
Dividends from equity instruments	4	1,754	7,714
Net fees and commissions income	5	666,697	643,834
Net gains / (losses) arising from trading and hedging activities	6	45,346	101,827
Net gains / (losses) arising from financial assets available for sale	7	103,030	138,540
Net gains from insurance activity		4,212	4,966
Other operating income / (loss)	8	(110,606)	(104,547)
TOTAL OPERATING INCOME		2,101,708	2,022,460
Staff costs	9	526,577	356,602
Other administrative costs	10	374,022	373,570
Amortizations and depreciations	11	53,582	49,824
TOTAL OPERATING EXPENSES		954,181	779,996
OPERATING NET INCOME BEFORE PROVISIONS AND IMPAIRMENTS		1,147,527	1,242,464
Loans impairment	12	(623,708)	(1,116,916)
Other financial assets impairment	13	(63,421)	(274,741)
Other assets impairment	27 32	(163,205)	(66,926)
Goodwill impairment of subsidiaries	30	(4)	(51,022)
Impairment for investments in associated companies	26	(57,764)	-
Other provisions	14	(16,710)	(88,387)
NET OPERATING INCOME / (LOSS)		222,715	(355,528)
Share of profit of associates under the equity method	15	91,637	80,525
Gains / (losses) arising from sales of subsidiaries and other assets	16	4,139	(6,277)
NET INCOME / (LOSS) BEFORE INCOME TAXES		318,491	(281,280)
Income taxes
Current	31	(102,113)	(113,425)
Deferred	31	71,954	495,292
INCOME AFTER INCOME TAXES FROM CONTINUING OPERATIONS		288,332	100,587
Income arising from discontinued or discontinuing operations	17	1,225	45,228
NET INCOME AFTER INCOME TAXES		289,557	145,815
Net income for the year attributable to:
Bank's Shareholders		186,391	23,938
Non-controlling interests	44	103,166	121,877
NET INCOME FOR THE YEAR		289,557	145,815
Earnings per share (in Euros)
Basic	18	0.014	0.019
Diluted	18	0.014	0.019

See accompanying notes to the consolidated financial statements.

Chief AccountantThe Executive Committee

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016

thousand euros

2017

	Continuing operations			Discontinued or discontinuing operations				Attributable to
	Gross value	Taxes	Net value	Gross value	Taxes	Net value	Total	Bank's Shareholders	Non-controlling interests
NET INCOME / (LOSS) FOR THE YEAR	318,491	(30,159)	288,332	1,225	-	1,225	289,557	186,391	103,166
ITEMS THAT MAY BE RECLASSIFIED TO THE INCOME STATEMENT
Fair value reserves	298,533	(67,182)	231,351	-	-	-	231,351	212,722	18,629
Exchange differences arising on consolidation	54,808	-	54,808	-	-	-	54,808	200	54,608
IAS 29 application
Effect on equity of Banco Millemmiun Atlântico, S.A. (note 43)	28,428	-	28,428	-	-	-	28,428	28,428	-
Others	(3,965)	-	(3,965)	-	-	-	(3,965)	(3,965)	-
	377,804	(67,182)	310,622	-	-	-	310,622	237,385	73,237
ITEMS THAT WILL NOT BE RECLASSIFIED TO THE INCOME STATEMENT
Actuarial losses for the year
BCP Group Pensions Fund	28,994	(44,726)	(15,732)	-	-	-	(15,732)	(15,732)	-
Pension Fund - Other associated companies	4,135	(2,239)	1,896	-	-	-	1,896	571	1,325
	33,129	(46,965)	(13,836)	-	-	-	(13,836)	(15,161)	1,325
Other comprehensive income / (loss) for the year	410,933	(114,147)	296,786	-	-	-	296,786	222,224	74,562
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR	729,424	(144,306)	585,118	1,225	-	1,225	586,343	408,615	177,728

thousand euros

2016

	Continuing operations			Discontinued or discontinuing operations				Attributable to
	Gross value	Taxes	Net value	Gross value	Taxes	Net value	Total	Bank's Shareholders	Non-controlling interests
NET INCOME / (LOSS) FOR THE YEAR	(281,280)	381,867	100,587	50,356	(5,128)	45,228	145,815	23,938	121,877
ITEMS THAT MAY BE RECLASSIFIED TO THE INCOME STATEMENT
Fair value reserves	(238,137)	59,653	(178,484)	586	(176)	410	(178,074)	(152,163)	(25,911)
Effect in fair value reserves of Banco Millennium Angola, S.A. (*)	-	-	-	(4,902)	1,471	(3,431)	(3,431)	(1,719)	(1,712)
Exchange differences arising on consolidation	(152,683)	-	(152,683)	(76,219)	-	(76,219)	(228,902)	(120,816)	(108,086)
Effect in reserves of the exchange differences arising on consolidation of Banco Millennium Angola, S.A. (*)	-	-	-	156,794	-	156,794	156,794	78,554	78,240
	(390,820)	59,653	(331,167)	76,259	1,295	77,554	(253,613)	(196,144)	(57,469)
ITEMS THAT WILL NOT BE RECLASSIFIED TO THE INCOME STATEMENT
Actuarial losses for the year
BCP Group Pensions Fund	(302,644)	69,290	(233,354)	-	-	-	(233,354)	(233,354)	-
Pension Fund - Other associated companies	(1,061)	(61)	(1,122)	-	-	-	(1,122)	(781)	(341)
	(303,705)	69,229	(234,476)	-	-	-	(234,476)	(234,135)	(341)
Other comprehensive income / (loss) for the year	(694,525)	128,882	(565,643)	76,259	1,295	77,554	(488,089)	(430,279)	(57,810)
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR	(975,805)	510,749	(465,056)	126,615	(3,833)	122,782	(342,274)	(406,341)	64,067

(*) Under the scope of the merger of Banco Millennium Angola, S.A. with Banco Privado Atlântico, S.A.

See accompanying notes to the consolidated financial statements.

Chief AccountantThe Executive Committee

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2017 AND 2016

thousand euros

	Notes	2017	2016
ASSETS
Cash and deposits at Central Banks	19	2,167,934	1,573,912
Loans and advances to credit institutions
Repayable on demand	20	295,532	448,225
Other loans and advances	21	1,065,568	1,056,701
Loans and advances to customers	22	47,633,492	48,017,602
Financial assets held for trading	23	897,734	1,048,797
Other financial assets held for trading at fair value through profit or loss	23	142,336	146,664
Financial assets available for sale	23	11,471,847	10,596,273
Assets with repurchase agreement		-	20,525
Hedging derivatives	24	234,345	57,038
Financial assets held to maturity	25	411,799	511,181
Investments in associated companies	26	571,362	598,866
Non-current assets held for sale	27	2,164,567	2,250,159
Investment property	28	12,400	12,692
Other tangible assets	29	490,423	473,866
Goodwill and intangible assets	30	164,406	162,106
Current tax assets		25,914	17,465
Deferred tax assets	31	3,137,767	3,184,925
Other assets	32	1,052,024	1,087,814
TOTAL ASSETS		71,939,450	71,264,811
LIABILITIES
Resources from credit institutions	33	7,487,357	9,938,395
Resources from customers	34	51,187,817	48,797,647
Debt securities issued	35	3,007,791	3,512,820
Financial liabilities held for trading	36	399,101	547,587
Hedging derivatives	24	177,337	383,992
Provisions	37	324,158	321,050
Subordinated debt	38	1,169,062	1,544,555
Current tax liabilities		12,568	35,367
Deferred tax liabilities	31	6,030	2,689
Other liabilities	39	988,493	915,528
TOTAL LIABILITIES		64,759,714	65,999,630
EQUITY
Share capital	40	5,600,738	4,268,818
Share premium	40	16,471	16,471
Preference shares	40	59,910	59,910
Other equity instruments	40	2,922	2,922
Legal and statutory reserves	41	252,806	245,875
Treasury shares	42	(293)	(2,880)
Fair value reserves	43	82,090	(130,632)
Reserves and retained earnings	43	(120,220)	(102,306)
Net income for the year attributable to Bank's Shareholders		186,391	23,938
TOTAL EQUITY ATTRIBUTABLE TO BANK'S SHAREHOLDERS		6,080,815	4,382,116
Non-controlling interests	44	1,098,921	883,065
TOTAL EQUITY		7,179,736	5,265,181
		71,939,450	71,264,811

See accompanying notes to the consolidated financial statements.

Chief AccountantThe Executive Committee

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016

thousand euros

	2017	2016
CASH FLOWS ARISING FROM OPERATING ACTIVITIES
Interests received	1,699,189	1,770,704
Commissions received	836,581	787,068
Fees received from services rendered	60,514	63,003
Interests paid	(522,214)	(667,682)
Commissions paid	(128,186)	(89,798)
Recoveries on loans previously written off	16,966	33,867
Net earned insurance premiums	19,847	13,744
Claims incurred of insurance activity	(10,891)	(9,214)
Payments to suppliers and employees	(1,086,602)	(929,400)
Income taxes (paid) / received	(118,676)	(57,941)
	766,528	914,351
Decrease / (increase) in operating assets:
Receivables from / (Loans and advances to) credit institutions	28,747	(106,683)
Deposits held with purpose of monetary control	(37,653)	59,473
Loans and advances to customers receivable	(244,376)	1,788,925
Short term trading account securities	36,195	52,033
Increase / (decrease) in operating liabilities:
Deposits from credit institutions repayable on demand	(51,702)	(28,040)
Deposits from credit institutions with agreed maturity date	(2,380,305)	1,423,509
Deposits from clients repayable on demand	3,430,158	2,357,657
Deposits from clients with agreed maturity date	(970,378)	(3,369,608)
	577,214	3,091,617
CASH FLOWS ARISING FROM INVESTING ACTIVITIES
Sale of shares in subsidiaries and associated companies which results loss control (*)	-	(496,194)
Acquisition of shares in subsidiaries and associated companies	(787)	-
Dividends received	102,759	47,085
Interest income from available for sale financial assets and held to maturity financial assets	253,783	212,042
Sale of available for sale financial assets and held to maturity financial assets	8,046,852	5,617,817
Acquisition of available for sale financial assets and held to maturity financial assets	(42,160,122)	(29,050,145)
Maturity of available for sale financial assets and held to maturity financial assets	33,937,652	22,239,293
Acquisition of tangible and intangible assets	(88,393)	(69,281)
Sale of tangible and intangible assets	8,014	15,581
Decrease / (increase) in other sundry assets	(304,789)	(518,526)
	(205,031)	(2,002,328)
CASH FLOWS ARISING FROM FINANCING ACTIVITIES
Issuance of subordinated debt	472,742	6,705
Reimbursement of subordinated debt	(852,386)	(121,210)
Issuance of debt securities	1,312,759	188,936
Reimbursement of debt securities	(1,994,444)	(1,513,220)
Issuance of commercial paper and other securities	188,076	57,588
Reimbursement of commercial paper and other securities	(9,674)	(19,202)
Share capital increase	1,295,148	174,582
Dividends paid to non-controlling interests	(7,787)	(20,907)
Increase / (decrease) in other sundry liabilities and non-controlling interests	(384,203)	(365,046)
	20,231	(1,611,774)
Exchange differences effect on cash and equivalents	48,915	(72,108)
Net changes in cash and equivalents	441,329	(594,593)
Cash (note 19)	540,290	625,311
Deposits at Central Banks (note 19)	1,033,622	1,215,006
Loans and advances to credit institutions repayable on demand (note 20)	448,225	776,413
CASH AND EQUIVALENTS AT THE BEGINNING OF THE YEAR	2,022,137	2,616,730
Cash (note 19)	540,608	540,290
Deposits at Central Banks (note 19)	1,627,326	1,033,622
Loans and advances to credit institutions repayable on demand (note 20)	295,532	448,225
CASH AND EQUIVALENTS AT THE END OF THE YEAR	2,463,466	2,022,137

(*) As in 2016 the Banco Millennium Angola, S.A. started to be considered as discontinuing operation, the related values net of intercompany operations, were incorporated in cash flows arising from investing activities.

See accompanying notes to the consolidated financial statements.

Chief AccountantThe Executive Committee

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016

thousand euros

	Share capital	Share premium	Preference shares	Other equity instruments	Legal and statutory reserves	Treasury shares	Fair value reserves	Reserves and retained earnings	Net income for the year attributable to Bank's Shareholders	Equity attributable to Bank's Shareholders	Non-controlling interests (note 44)	Total equity
BALANCE AS AT 31 DECEMBER 2015	4,094,235	16,471	59,910	2,922	223,270	(1,187)	23,250	(31,046)	235,344	4,623,169	1,057,402	5,680,571
Net income for the year	-	-	-	-	-	-	-	-	23,938	23,938	121,877	145,815
Fair value reserves (note 43)	-	-	-	-	-	-	(152,163)	-	-	(152,163)	(25,911)	(178,074)
Actuarial losses	-	-	-	-	-	-	-	(234,135)	-	(234,135)	(341)	(234,476)
Effect in fair value reserves related to the merger (a)	-	-	-	-	-	-	(1,719)	-	-	(1,719)	(1,712)	(3,431)
Effect in reserves of the exchange differences arising on consolidation related to the merger (a)	-	-	-	-	-	-	-	78,554	-	78,554	78,240	156,794
Exchange diferences arising on consolidation	-	-	-	-	-	-	-	(120,816)	-	(120,816)	(108,086)	(228,902)
TOTAL COMPREHENSIVE INCOME	-	-	-	-	-	-	(153,882)	(276,397)	23,938	(406,341)	64,067	(342,274)
Results apllications:
Legal reserve	-	-	-	-	22,605	-	-	-	(22,605)	-	-	-
Transfers for Reserves and retained earnings	-	-	-	-	-	-	-	212,739	(212,739)	-	-	-
Share capital increase (note 40)	174,583	-	-	-	-	-	-	-	-	174,583	-	174,583
Regrouping of shares	-	-	-	-	-	-	-	(1,047)	-	(1,047)	-	(1,047)
Costs related to the share capital increase	-	-	-	-	-	-	-	(6,437)	-	(6,437)	-	(6,437)
Tax related to costs arising from the share capital increase	-	-	-	-	-	-	-	1,352	-	1,352	-	1,352
Merger of Banco Millennium Angola, S.A. with Banco Privado Atlântico, S.A.	-	-	-	-	-	-	-	-	-	-	(210,395)	(210,395)
Dividends (b)	-	-	-	-	-	-	-	-	-	-	(20,907)	(20,907)
Treasury shares (note 42)	-	-	-	-	-	(1,693)	-	1	-	(1,692)	-	(1,692)
Other reserves (note 43)	-	-	-	-	-	-	-	(1,471)	-	(1,471)	(7,102)	(8,573)
BALANCE AS AT 31 DECEMBER 2016	4,268,818	16,471	59,910	2,922	245,875	(2,880)	(130,632)	(102,306)	23,938	4,382,116	883,065	5,265,181
Net income for the year	-	-	-	-	-	-	-	-	186,391	186,391	103,166	289,557
Fair value reserves (note 43)	-	-	-	-	-	-	212,722	-	-	212,722	18,629	231,351
Actuarial losses	-	-	-	-	-	-	-	(15,161)	-	(15,161)	1,325	(13,836)
Exchange diferences arising on consolidation	-	-	-	-	-	-	-	200	-	200	54,608	54,808
Application of IAS 29 - effect as at 1 january 2017 (notes 26 59):
Effect on equity of Banco Millenniun Atlântico, S.A. (c)	-	-	-	-	-	-	-	44,248	-	44,248	-	44,248
Impairment for investments in associated	-	-	-	-	-	-	-	(44,248)	-	(44,248)	-	(44,248)
Application of IAS 29 excluding the effect on net income for the year (notes 26 59):
Effect on equity of Banco Millenniun Atlântico, S.A. (c)	-	-	-	-	-	-	-	28,428	-	28,428	-	28,428
Others	-	-	-	-	-	-	-	(3,965)	-	(3,965)	-	(3,965)
TOTAL COMPREHENSIVE INCOME	-	-	-	-	-	-	212,722	9,502	186,391	408,615	177,728	586,343
Results applications:
Legal reserve (note 41)	-	-	-	-	6,931	-	-	-	(6,931)	-	-	-
Transfers for Reserves and retained earnings	-	-	-	-	-	-	-	17,007	(17,007)	-	-	-
Share capital increase (note 40)	1,331,920	-	-	-	-	-	-	-	-	1,331,920	-	1,331,920
Costs related to the share capital increase	-	-	-	-	-	-	-	(36,772)	-	(36,772)	-	(36,772)
Tax related to costs arising from the share capital increase (d)	-	-	-	-	-	-	-	(8,264)	-	(8,264)	-	(8,264)
Dividends (a)	-	-	-	-	-	-	-	-	-	-	(7,787)	(7,787)
Treasury shares (note 42)	-	-	-	-	-	2,587	-	1,083	-	3,670	-	3,670
Other reserves (note 43)	-	-	-	-	-	-	-	(470)	-	(470)	45,915	45,445
BALANCE AS AT 31 DECEMBER 2017	5,600,738	16,471	59,910	2,922	252,806	(293)	82,090	(120,220)	186,391	6,080,815	1,098,921	7,179,736

(a) Under the scope of the merger of Banco Millennium Angola, S.A. with Banco Privado Atlântico, S.A.
(b) Dividends of Banco Millennium Angola S.A., BIM - Banco Internacional de Moçambique, S.A. and SIM - Seguradora Internacional de Moçambique, S.A.R.L.
(c) Bank Millennium Atlântico, S.A.
(d) Includes the derecognition of deferred taxes related to tax losses from previous years associated to costs arising from the share capital increase.

See accompanying notes to the consolidated financial statements.

Chief AccountantThe Executive Committee

SEPARATE INCOME STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016

thousand euros

	Notes	2017	2016
Interest and similar income	3	1,013,310	1,131,067
Interest expense and similar charges	3	(219,101)	(410,754)
NET INTEREST INCOME		794,209	720,313
Dividends from equity instruments	4	73,197	215,176
Net fees and commissions income	5	433,256	434,333
Net gains / (losses) arising from trading and hedging activities	6	25,820	31,739
Net gains / (losses) arising from financial assets available for sale	7	116,565	95,794
Other operating income / (loss)	8	(25,699)	(11,771)
TOTAL OPERATING INCOME		1,417,348	1,485,584
Staff costs	9	325,409	171,869
Other administrative costs	10	235,803	244,325
Amortizations and depreciations	11	28,993	24,699
TOTAL OPERATING EXPENSES		590,205	440,893
OPERATING NET INCOME BEFORE PROVISIONS AND IMPAIRMENTS		827,143	1,044,691
Loans impairment	12	(533,296)	(1,030,606)
Other financial assets impairment	13	(70,310)	(295,304)
Other assets impairment	24 25 29	(132,597)	(211,970)
Other provisions	14	(50,491)	(87,572)
NET OPERATING INCOME / (LOSS)		40,449	(580,761)
Gains / (losses) arising from sales of subsidiaries and other assets	15	21,419	167,941
NET INCOME / (LOSS) BEFORE INCOME TAXES		61,868	(412,820)
Income taxes
Current	28	(2,489)	(4,854)
Deferred	28	58,642	486,982
NET INCOME FOR THE YEAR		118,021	69,308
Earnings per share (in Euros)
Basic	16	0.009	0.056
Diluted	16	0.009	0.056

See accompanying notes to the separate financial statements.

Chief AccountantThe Executive Committee

SEPARATE STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016

thousand euros

	Notes	2017	2016
NET INCOME / (LOSS) FOR THE YEAR		118,021	69,308
ITEMS THAT MAY BE RECLASSIFIED TO THE INCOME STATEMENT
Fair value reserves	39	125,012	(148,078)
Taxes		(37,436)	43,637
		87,576	(104,441)
ITEMS THAT WILL NOT BE RECLASSIFIED TO THE INCOME STATEMENT
Actuarial (gains) / losses for the year
Gross amount	44	28,899	(299,840)
Taxes		(44,741)	68,841
		(15,842)	(230,999)
Other comprehensive income / (loss) for the year		71,734	(335,440)
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR		189,755	(266,132)

See accompanying notes to the separate financial statements.

Chief AccountantThe Executive Committee

SEPARATE BALANCE SHEET

AS AT 31 DECEMBER 2017 AND 2016

thousand euros

	Notes	2017	2016
ASSETS
Cash and deposits at Central Banks	17	1,291,663	790,733
Loans and advances to credit institutions
Repayable on demand	18	156,460	312,595
Other loans and advances	19	1,254,472	1,497,180
Loans and advances to customers	20	33,356,945	34,028,229
Financial assets held for trading	21	770,639	953,557
Other financial assets held for trading at fair value through profit or loss	21	142,336	146,664
Financial assets available for sale	21	6,692,982	5,959,643
Hedging derivatives	22	18,804	33,347
Financial assets held to maturity	23	342,785	409,791
Investments in subsidiaries and associated companies	24	3,370,361	3,464,107
Non-current assets held for sale	25	1,480,112	1,621,304
Other tangible assets	26	217,101	218,309
Intangible assets	27	21,409	14,526
Current tax assets		7,208	11,136
Deferred tax assets	28	3,018,508	3,050,307
Other assets	29	1,434,731	1,270,437
TOTAL ASSETS		53,576,516	53,781,865
LIABILITIES
Resources from credit institutions	30	7,825,051	9,745,520
Resources from customers	31	35,037,427	33,957,969
Debt securities issued	32	2,381,881	2,755,844
Financial liabilities held for trading	33	381,380	534,483
Hedging derivatives	22	112,352	108,313
Provisions	34	269,057	223,633
Subordinated debt	35	1,021,541	1,416,033
Current tax liabilities		1,269	2,684
Other liabilities	36	617,291	585,841
TOTAL LIABILITIES		47,647,249	49,330,320
EQUITY
Share capital	37	5,600,738	4,268,818
Share premium	37	16,471	16,471
Other equity instruments	37	2,922	2,922
Legal and statutory reserves	38	252,806	245,875
Fair value reserves	39	44,501	(43,075)
Reserves and retained earnings	39	(106,192)	(108,774)
Net income for the year		118,021	69,308
TOTAL EQUITY		5,929,267	4,451,545
		53,576,516	53,781,865

See accompanying notes to the separate financial statements.

Chief AccountantThe Executive Committee

SEPARATE STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016

thousand euros

	2017	2016
CASH FLOWS ARISING FROM OPERATING ACTIVITIES
Interests received	980,099	1,053,333
Commissions received	557,616	555,621
Fees received from services rendered	53,230	253,678
Interests paid	(227,797)	(384,903)
Commissions paid	(96,479)	(69,893)
Recoveries on loans previously written off	14,067	29,748
Payments to suppliers and employees	(646,999)	(518,331)
Income taxes (paid) / received	2,073	(16,770)
	635,810	902,483
Decrease / (increase) in operating assets:
Receivables from / (Loans and advances to) credit institutions	241,224	(703,796)
Loans and advances to customers receivable	136,278	1,182,924
Short term trading account securities	28,689	21,706
Increase / (decrease) in operating liabilities:
Deposits from credit institutions repayable on demand	64,665	(240,196)
Deposits from credit institutions with agreed maturity date	(1,969,719)	1,707,963
Deposits from clients repayable on demand	2,240,921	896,042
Deposits from clients with agreed maturity date	(1,089,194)	(2,071,678)
	288,674	1,695,448
CASH FLOWS ARISING FROM INVESTING ACTIVITIES
Sale of shares in subsidiaries and associated companies	714,111	181,743
Acquisition of shares in subsidiaries and associated companies	(649,734)	(25,329)
Dividends received	73,197	215,176
Interest income from available for sale financial assets and held to maturity financial assets	88,673	107,435
Sale of available for sale financial assets	5,970,593	5,233,729
Acquisition of available for sale financial assets	(6,676,995)	(5,122,544)
Maturity of available for sale financial assets	363,497	347,882
Acquisition of tangible and intangible assets	(45,196)	(45,278)
Sale of tangible and intangible assets	883	1,253
Decrease / (increase) in other sundry assets	(160,425)	(824,093)
	(321,396)	69,974
CASH FLOWS ARISING FROM FINANCING ACTIVITIES
Issuance of subordinated debt	300,000	-
Reimbursement of subordinated debt	(701,920)	(121,259)
Issuance of debt securities	1,139,682	53,160
Reimbursement of debt securities	(1,680,978)	(1,350,800)
Issuance of commercial paper and other securities	188,076	57,588
Reimbursement of commercial paper and other securities	(9,674)	(19,202)
Share capital increase	1,295,148	174,582
Increase / (decrease) in other sundry liabilities	(152,817)	(134,218)
	377,517	(1,340,149)
Net changes in cash and equivalents	344,795	425,273
Cash and equivalents at the beginning of the year	648,507	488,310
Deposits at Central Banks (note 17)	454,821	189,745
CASH AND EQUIVALENTS AT THE BEGINNING OF THE YEAR	1,103,328	678,055
Cash (note 17)	337,534	335,912
Deposits at Central Banks (note 17)	954,129	454,821
Loans and advances to credit institutions repayable on demand (note 18)	156,460	312,595
CASH AND EQUIVALENTS AT THE END OF THE YEAR	1,448,123	1,103,328

See accompanying notes to the separate financial statements.

Chief AccountantThe Executive Committee

SEPARATE STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016

thousand euros

	Share capital	Share premium	Other equity instruments	Legal and statutory reserves	Fair value reserves	Reserves and retained earnings	Net income for the year	Total equity
BALANCE AS AT 31 DECEMBER 2015 (RESTATED)	4,094,235	16,471	2,922	223,270	61,366	65,921	85,044	4,549,229
Net income for the year	-	-	-	-	-	-	69,308	69,308
Fair value reserves (note 39)	-	-	-	-	(104,441)	-	-	(104,441)
Actuarial losses for the year (note 44):
Gross value	-	-	-	-	-	(299,840)	-	(299,840)
Taxes	-	-	-	-	-	68,841	-	68,841
TOTAL COMPREHENSIVE INCOME	-	-	-	-	(104,441)	(230,999)	69,308	(266,132)
Results applications:
Legal reserve (note 38)	-	-	-	22,605	-	-	(22,605)	-
Transfers for Reserves and retained earnings	-	-	-	-	-	62,439	(62,439)	-
Share capital increase (note 37)	174,583	-	-	-	-	-	-	174,583
Regrouping of shares (note 42)	-	-	-	-	-	(1,048)	-	(1,048)
Costs related to the share capital increase	-	-	-	-	-	(6,437)	-	(6,437)
Tax related to costs arising from the share capital increase	-	-	-	-	-	1,350	-	1,350
BALANCE AS AT 31 DECEMBER 2016	4,268,818	16,471	2,922	245,875	(43,075)	(108,774)	69,308	4,451,545
Net income for the year	-	-	-	-	-	-	118,021	118,021
Fair value reserves (note 39)	-	-	-	-	87,576	-	-	87,576
Actuarial losses for the year (note 44):
Gross value	-	-	-	-	-	28,899	-	28,899
Taxes	-	-	-	-	-	(44,741)	-	(44,741)
TOTAL COMPREHENSIVE INCOME	-	-	-	-	87,576	(15,842)	118,021	189,755
Results aplications:
Legal reserve (note 38)	-	-	-	6,931	-	-	(6,931)	-
Transfers for Reserves and retained earnings	-	-	-	-	-	62,377	(62,377)	-
Share capital increase (note 37)	1,331,920	-	-	-	-	-	-	1,331,920
Costs related to the share capital increase	-	-	-	-	-	(36,772)	-	(36,772)
Tax related to costs arising from the share capital increase (a)	-	-	-	-	-	(8,264)	-	(8,264)
Other reserves (note 39)	-	-	-	-	-	1,083	-	1,083
BALANCE AS AT 31 DECEMBER 2017	5,600,738	16,471	2,922	252,806	44,501	(106,192)	118,021	5,929,267

(a) Includes the derecognition of deferred taxes related to tax losses from previous years associated to costs arising from the share capital increase.

See accompanying notes to the separate financial statements.

Chief AccountantThe Executive Committee

Notes to the Financial Statements

1. Accounting Policies 2. Net Interest Income, Net Gains Arising from Trading and Hedging Activities and from Financial Assets Available for Sale 3. Net Interest Income 4. Dividends from Equity Instruments 5. Net Fees and Commissions Income 6. Net Gains / (Losses) Arising from Trading and Hedging Activities 7. Net Gains / (Losses) Arising from Financial Assets Available for Sale 8. Other Operating Income / (Costs)9. Staff Costs 10. Other Administrative Costs

11. Amortizations and Depreciations 12. Loans Impairment 13. Other Financial Assets Impairment 14. Other Provisions 15. Share of Profit of Associates under the Equity Method 16. Gains / (Losses) Arising from Sales of Subsidiaries and Other Assets 17. Income / (Loss) Arising from Discontinued or Discontinuing Operations 18. Earnings per Share 19. Cash and Deposits at Central Banks 20. Loans and Advances to Credit Institutions Repayable on Demand

21. Other Loans and Advances to Credit Institutions 22. Loans and Advances to Customers 23. Financial Assets Held for Trading, Other Financial Assets Held for Trading at Fair Value through Profit or Loss and Financial Assets Available for Sale 24. Hedging Derivatives 25. Financial Assets Held to Maturity 26. Investments in Associated Companies 27. Non-Current Assets Held for Sale 28. Investment Property 29. Other Tangible Assets 30. Goodwill and Intangible Assets

31. Income Tax 32. Other Assets 33. Resources from Credit Institutions 34. Resources from Customers and Other Loans 35. Debt Securities Issued 36. Financial Liabilities Held for Trading 37. Provisions 38. Subordinated Debt 39. Other Liabilities 40. Share Capital, Preference Shares and Other Equity Instruments

41. Legal and Statutory Reserves 42. Treasury Shares 43. Fair Value Reserves and Reserves and Retained Earnings 44. Non-Controlling Interests 45. Guarantees and Other Commitments 46. Assets under Management and Custody 47. Relevant Events Occurred During 2017 48. Fair Value 49. Post-Employment Benefits and Other Long Term Benefits 50. Related Parties

51. Consolidate Balance Sheet and Income Statement by Operational Segments 52. Risk Management 53. Solvency 54. Recently Issued Accounting Standards 55. Contingent Liabilities and Other Commitments 56. Mozambique's Sovereign Debt 57. Transfers of Assets 58. Discontinued or Discontinuing Operations 59. Application of IAS 29 in Angola 60. List of Subsidiary and Associated Companies of Banco Comercial Português Group

Notes to the Financial Statements

1. Accounting Policies