Management Report
Banco Comercial Português, with its decision centre in Portugal, operates and acts with respect for people and institutions, focusing on the Customer, pursuing a mission of excellence, trust, ethics and responsibility, and is a distinguished leader in various financial business areas in the Portuguese market and a reference institution on an international level.
The Group provides a wide variety of banking services and financial activities in Portugal and abroad, where it is present in the following markets: Poland, Switzerland, Mozambique, Angola (through its associate BMA) and China. All its banking operations develop their activity under the Millennium brand. The Group has also been present in Asia since 1993, but it was only in 2010 that the activity of the existing Macao branch was expanded, through the attribution of a full license (onshore) aimed at establishing an international platform for business operations between Europe, China and Portuguese-speaking African countries.
In Portugal, Millennium bcp is focused on the retail and companies markets, providing services to its Customers in a segmented manner. The subsidiary companies generally provide their products through the Bank’s distribution networks, offering a wide range of products and services.
Millennium bcp is Portugal’s largest private sector banking institution, with a leading position and particular strength in various financial products, services and market segments, based on a modern branch network with good domestic coverage.
The domestic activity focuses on Retail Banking, which is segmented in order to best serve Customer interests, both through a value proposition based on innovation and speed targeted at Mass-Market Customers, and through the innovation and personalised management of service for Prestige, Business Customers, Companies, Corporates and Large Corporates. Retail Banking also operates through Activobank, a bank aimed specifically at Customers who are young in spirit, intensive users of new communication technologies and prefer a banking relationship based on simplicity and offering innovative products and services.
The Bank also offers remote banking channels (banking service by telephone and online), which operate as distribution points for its financial products and services.
At the end of December 2017, the Bank had 578 branches in Portugal (including 1 branch in Macao), serving over 2.4 million Customers, and held market shares of 17.4% in loans to Customers and 17.2% in customer deposits.
The BCP share is part of over 50 domestic and international stock exchange indexes, among which we highlight the Euronext PSI Financial Services, PSI 20, Euronext 150, and NYSE Euronext Iberian.
CET1(1)
Loans to Deposits
PHASED-IN
13.2%
Fully implemented
11.9%
93%
CET1(1)
PHASED-IN
13.2%
Fully implemented
11.9%
Loans to Deposits
93%
Cost-Core Income(2)
46.4%
Cost of risk
122 b.p.
RoE(3)
4.4%
(1) Estimates including earnings for the year.
(2) Core income = net interest income + net fees and commission income.
(3) Based on a fully implemented CET1 of 11%.
Main Events in 2017
- January
Resolution adopted by the Board of Directors for co-opting Lingjiang Xu and João Nuno Palma to perform the functions of members of the Board of Directors, non-executive and executive, respectively, until the end of the ongoing term of office.
Resolution adopted by the Board of Directors to increase the share capital from 4,268,817,689.20 Euros to 5,600,738,053.72 Euros through a Rights Offering addressed to shareholders in the exercise of their preference rights and remaining investors who purchased subscription rights.
- February
Share capital increase from 4,268,817,689.20 euros to 5,600,738,053.72 euros.
Early repayment to the Portuguese State of the remaining Core Tier 1 hybrid capital instruments, amounting to 700 million euros.
Upwards review by S&P Global Ratings of the rating for LT unsecured senior debt from "B+" to "BB-", following the upwards review of the BCP rating (Stand Alone Credit Profile – SACP) from "b+" to "bb-".
- March
BCP is part of the new European Sustainability index, the "European Banks Index" from the analyst Standard Ethics.
- April
Millennium bcp renewed its subscription to Movement ECO – Empresas Contra os Fogos (Companies Against Fires), a project that aims to contribute to the prevention of forest fires and increasing public awareness towards risk behaviours.
- May
Issue of mortgage bonds, under the Covered Bonds Programme, amounting to 1.0 billion euros, 5-year maturity.
The General Meeting of Shareholders was held on 10 May 2017 with the presence of Shareholders owning more than 54.17% of the respective share capital. Among the resolutions adopted, were the approval of the management report, of the individual and consolidated accounts concerning the 2016 financial year, the proposal for the appropriation of profit for the 2016 financial year, the approval of the statement on the Remuneration Policy of the Members of the Management and Supervision Bodies, the appointment of two new directors (Lingiang Xu as non-executive member of the Board of Directors and João Nuno de Oliveira Jorge Palma as executive member of the Board of Directors) and the election of the composition of the Board of the General Meeting of Shareholders for the triennial 2017/2019.
Millennium bcp carried out an internal collection of paper in the wake of the campaign “Papel por Alimentos” (Paper for Food), a solidarity initiative by Entrajuda in favour of the Food Bank.
- June
Co-optation of three new non-executive directors: Gu Xiaoxu, Li Cheng and Zhihua Shen, thus increasing the number of Directors to 22, 14 of which are non-executive.
- August
Confirmation of its high performance in terms of sustainability by Ethibel EXCELLENCE Investment Register from Forum ETHIBEL.
Bank Millennium was part, for the first time, of the sustainability indexes FTSE4Good Emerging Index, of the analyst FTSE Russel, a reference in the ESG (Environmental, Social and Governance) performance evaluations.
- September
Creation of the “Plataforma de Gestão de Créditos Bancários, ACE”, together with two other Portuguese banks, with the purpose of increasing efficiency and speed in the NPEs and companies restructuring processes.
Celebration of the 30th anniversary of Banco Comercial Português in the Portuguese Stock Exchange and of the 25th anniversary of Bank Millennium in the Warsaw Stock Exchange.
BCP Group confirmed in the Sustainability Index "Ethibel Sustainability Index (ESI) Excellence Europe” from Forum Ethibel.
- October
Launching of one more in-house action “Millennium Solidário" for the collection of food, hygiene products, clothes and household objects for people and families who had their lives affected by forest fires.
Recognition of BCP Group regarding fight against climate changes by the non-governmental organization Carbon Disclosure Project. The Bank was classified in the category "Leadership", with an "A-".
- November
Issue of subordinated debt, amounting to 300 million euros, with a 10-year term and early redemption option at the end of the 5th year.
- December
Decision made by the ECB on prudential minimum requirements which must be observed as of 1 January 2018, a decision based on the results of the Supervisory Review and Evaluation Process (SREP).
Group BCP is part of the environmental sustainability index Engaged Tracking 2017 Carbon Rankings.
Inclusion of Bank Millennium in Poland, for the tenth consecutive time, in the RESPECT Index – the first Central and Eastern European index of socially responsible companies.
