1H13 Results Presentation · Macroeconomic highlights: economic activity shows signs of...

1H13 Results Presentation(Unaudited Figures)

26th July 2013

Macroeconomic highlights: economic activity shows signs of stabilisation

Gl b l i i i h d i f d i 2Q 2013 i l l i ibl i h i d l d Global economic activity showed signs of moderate recovery in 2Q 2013, particularly visible in the main developed economies. However, with liquidity flows in the Euro Area still subdued, the ECB cut the main refi rate in May by 25 bps, to 0.5%. Concerns related to the potential tapering of the Fed’s Quantitative Easing policy led to an increase in US Treasury and German Bund yields, from 1.9% to 2.5% and from 1.29% to 1.72%, respectively. This translated into an increase in the 10-year PGB yield to 6.4%, from a low of 5.2% in May. The PSI-20 stock index retreated 4.6% in the quarter.

In Portugal, GDP is expected to have increased in 2Q (close to 0.5% QoQ, for the first time since 3Q 2010, following consistent signs of stabilisation in the economy. Exports are recovering and showing an accelerating trend, with a 5.7% nominal YoY growth in the quarter ending in May (4.1% YoY in January-May). Sales to markets outside the EU rose 12.2% YoY in the same period, while the ongoing recovery in the Euro Area translated into stronger intra-EU exports growth (3.1% YoY). Particularly important is the fact that Portuguese exports to Spain, accounting for close to 24% of the total, already increased7.4% YoY. Favourable leading indicators pointing to a recovery in Spanish, German and French economic activity from 2H g p g y p y2013 onwards, suggest a further strengthening in exports.

The performance of exports has translated into a 4.5% YoY growth in industrial production in May, while leading business confidence indicators (e.g. rise in export order books) point to further improvements in 2H 2013 and in 2014. GDP could contract less than previously expected in 2013 (around 2%) and return to positive growth next year (around 0.4%). This should also be supported by the ongoing stabilisation in domestic demand and by policy measures focusing on incentives to growth and employment (including lower corporate income taxes and new credit lines to exporting firms).

Economic prospects should also be sustained by further improvements in financing conditions. The surplus in external accounts increased to 1.2% of GDP in 1Q 2013 and it estimated to rise to around 4.5% of GDP by year-end, reflecting a further increase in domestic savings. The household savings rate rose to 12.9% of disposable income in this period in 1Q, supporting a gradual rising trend in household deposits.

1H2013 Results Presentation 126 July 2013

pp g g g p

BES financials: continuous focus on strengthening the balance sheet placing the Bank in a favourable position to benefit from the expected improvement in business conditions

The current business environment continues very demanding for Portuguese Banks, though the signs of stabilisation of the economy in the second half of the year are now more robust. With GDP falling by the third consecutive year and unemployment reaching historical highs, Portuguese banks’ asset quality deterioration should be the driver of subdued profitability in 2013. p y

In fact, BES’ provision charges for this quarter more than doubled vis-à-vis the first quarter, surpassing Eur 500mn, which drove accumulated provisions to Eur 747mn (+75% YoY) and cost of risk to 2.16% in the semester. This strong provisioning effort demonstrates BES’ strict financial discipline and conservative approach to the current challenging macro environment. Despite the QoQ recovery of NII and the resilient performance of the core operating income the significant provisioning led toDespite the QoQ recovery of NII and the resilient performance of the core operating income, the significant provisioning led to losses in the quarter.

With solvency levels above minimum regulatory requirements, having avoided state funds for recapitalisation, BES Management continues focused on the balance sheet, with capital preservation as the key priority. Despite net losses in the semester, Core Tier I according to BoP methodology remained fairly stable in June at 10.4% (with RWA/TA of 78%, one of the highest in Europe). Considering the positive impact of the capital increase of BES Angola approved in General Meeting last June, pro-forma Core Tier I would be 10.7%. The recovery of the Portuguese economy should translate into a slowdown of asset quality deterioration, leading on the one side to lower provisioning needs, hence less pressure on profitability, and on the other to improved risk profile, ultimately translating into even stronger solvency levels.

The deleverage of the Balance Sheet maintains a downward trend, with the LTD ratio reaching 125%, mainly backed by a continued increase in the deposit base, which has been benefiting from the strong franchise of the Bank. In fact, since June 2010 when BES implemented a deleverage plan the deposit base increased by 45% or ca Eur 12bn In 2013 alone BES’2010, when BES implemented a deleverage plan, the deposit base increased by 45% or ca. Eur 12bn. In 2013 alone, BES’ deposit base increased Eur 3.4bn (+10%). As a result, the funding structure improved substantially, with deposits and bancassurance products now representing 66% of the total funding mix.

All in all, with a comfortable liquidity position, solid solvency levels and a domestic leading franchise complemented by a

1H2013 Results Presentation

sensible international footprint, BES is in a unique position to benefit from the recovery in macro conditions in Portugal.

226 July 2013

Table of contents

I. Funding & Liquidity: Comfortable liquidity position, with significant improvement in funding mix, deleverage plan driving LTD to 125% and high level of repoable assets covering MLT redemptions for over 3 yearsredemptions for over 3 years

II. Asset Quality: Conservative and prudent risk management, with reinforced provision reserve to cope with current macroeconomic conditions in Portugal

III. 1H13: BES continues to focus on B/S, with deleverage and strong provisioning pressuring bottom line

IV. Solvency: Solid capitalisation levels, with core capital comfortably above minimum regulatory thresholds of both BoP and EBA. Capital preservation is top priority

V. Wrap up

Appendix 1: Detailed financial data

Appendix 2: Portuguese Economy outlookAppendix 2: Portuguese Economy outlook

Appendix 3: Macro forecasts Portugal, Spain, Angola and Brazil


LTD ratio maintained a downward trend, reaching 125% in Jun.13, as a result of the strict deleverage plan the Bank implemented in the 2H10. Since then, LTD already decreased 73 p.p.

Transformation Ratio

198%-73 p.p. Domestic LtD :

125%

171%165% 163%

155%146% 147%

International LtD :126%

146%141%

135%

147%142%

137%129%

125%137%130% 131% 130%

*

120%

-5 p.p.

125% 122% 119% 117%124% 122% 120%

113% 112%

120%

1H10 9M10 FY10 1Q11 1H11 9M11 FY11 1Q12 1H12 9M12 FY12 1Q13 2Q13 Target YE14

Loans to Deposits Ratio Loans / On-BS Customer Funds


p

* Calculated according to BoP definition for Funding and Capital Plan. 426 July 2013

This reduction in LTD was achieved through a strong deposits growth (+45% or Eur 11.8bn since Jun.10) as well as a decrease in the loan portfolio (-4% or Eur 2.2bn since Jun.10). After the sharp increase during 1Q13 deposits continued to grow steadily in 2Q13 (Eur 0 5bn)

Gross Loan Portfolio Evolution

(EUR bn; excludes securitised credit)

Total Deposits Evolution

(EUR bn)

the sharp increase during 1Q13, deposits continued to grow steadily in 2Q13 (Eur 0.5bn)

- 2.3bn- 4%

-0.1bn0 1%

+ 11.8 bn+ 45%

+5.1 bn+16%

-0.1%

51.2

53.452.6

51.7 51.2 50.451.3 32.8

30.8 32.034.2 34.5

37.4

QoQ:51.1

37.9

26.1QoQ:-0.2bn (-0.3%)

Domestic-114mn

+0.5bn (1%)

Domestic+552mn

International-57mn

51.7 50.8 49.7 49.0 48.7 47.7 48.4 48.0

International-42mn

-57mn

Jun.

10

Dec

.10

Jun.

11

Dec

.11

Jun.

12

Dec

.12

Mar

.13

Jun.

13

Jun.

10

Dec

.10

Jun.

11

Dec

.11

Jun.

12

Dec

.12

Mar

.13

Jun.

13


Net Loans

526 July 2013

After the sale of international loans in 2010-2011, deleverage on the asset side is now being driven by mortgages. BES continues to support domestic companies and exporting SME’s

Loans per segment – YoY Growth Rate

(%)

Breakdown of Domestic Loans

(EUR bn; gross loans excluding securitised credit)

+0.2 bn+1%

38.2 38.42,1

1,2

10,6 10,41,9 1,8

25,7 26,2 Corporates: +500mn

Other Ind.: -140mnMortgage: -170mn-1,2

-0,6

-2,2

-0,7

-1 3 -1 0

0,6

-0,1

Dec.12 Jun.13

Breakdown of International Loans(EUR bn; gross loans excluding securitised credit)

-2,0-2,4

-4,1 -3,9 -3,8

,-1,3 1,0

-2,3-1,6-1.3

4,1

Mar

.12

Apr

.12

Mai

.12

Jun.

12

Jul.1

2

Aug

.12

Sep.

12

Oct

.12

Nov

.12

Dec

.12

Jan.

13

Feb.

13

Mar

.13

Apr

.13

Mai

.13

Jun.

13

Mortgage Corporates Total

+0.5 bn+4%

12.2 12.7

Mortgage Corporates Total

0,5 0,50,7 0,7

11,0 11,5 Corporates: +500mn

Other Ind.: +12mnMortgage: +14mnLoans to Portuguese exporting SME’s increased 7% since

Jun.10


Dec.12 Jun.13

626 July 2013

Backed by strong growth in deposits and life insurance products, Customer funds increased 12% YoY (Eur 6.2bn), clearly demonstrating BES strong franchise and Clients’ confidence Cost of deposits resumed its downward trend

Total Customer Funds

(EUR bn) (%)

Deposits – average rate evolution (stock)

confidence. Cost of deposits resumed its downward trend

+6.2 bn+12%

4Q11: 3.49%

1Q12

5,2 4,510,011,4

11,1 11,252.456.2 58.5 3Q11:

3.34%1Q12: 3.44%

3Q12: 2.98% 1Q13:

2.88%

58.6

1Q11:

3,7 5,04,8 5,06,0

5,35,2 4,5

2Q12: 3.07%

4Q12: 2.72%

On B/S Customer

Funds 2Q13: 2.79%

2Q11: 3.03%

4Q10: 2.47%

Q2.85%

32,8 34,5 37,4 37,9 Eur 47.4bn

+ 5.0bn YoY+12% YoY

1Q10:

2Q10: 1.57%

3Q10: 1.85%

Jun.12 Dec.12 Mar.13 Jun.13

Deposits Life InsuranceOth O /BS F d Off B/S F d

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13

1Q10: 1.49%

Jun-13


Other On /BS Funds Off B/S Funds

726 July 2013

A strong domestic franchise has been key to continue to increase Retail and Private Banking Customer funds in Portugal (Eur 1.2bn or 8.5% YtD). Additionally, BES ranked 1st

among top 5 Portuguese Banks in consumer satisfaction

Customer Funds (Retail and Private Banking) – YtD Growth

(EUR bn)

among top 5 Portuguese Banks in consumer satisfaction

European Consumer Satisfaction Index

(ECSI; %)

69,1 69,2 70,2 71,7 73,3

2012+8.5% in

the semester

Bank 3 Bank 2 Bank 1 Bank 4 BES

1st

1.10.1 1.2 (+17%

annualized)

Households Deposits: BES vs System

(Jan.11 = Base 100)

Retail Private banking

Total 142%BES System (source: BoP)

Retail and Private Banking customer funds are outperforming the market, clearly demonstrating Clients’

confidence in BES franchiseJan 11 Jul 11 Jan 12 Jul 12 Jan 13

110%


Jan-11 Jul-11 Jan-12 Jul-12 Jan-13

The strong deposits growth and the deleverage plan led to a significant improvement in BES’ funding structure. Deposits and bancassurance products represent 66% of the funding mix (+30 f YE09) hil MLT h l l f d l t f 23% ( 31 f YE09)(+30 p.p from YE09), while MLT wholesale funds only account for 23% (-31 p.p. from YE09)

Evolution of Funding mix

27% 23%

2%

(%)

8%8%54%

43%35%

27% 23%

Deposits

and

36%46% 55% 53% 58%

a d

Bancassurance:

66%

10% 11% 10% 12% 11%-8% -11% -8% -12%

2009 2010 2011 2012 Jun.13

Equity Deposits Bancassurance MLT Funds Treasury Gap (net interbank deposits)

Share of customer funds in funding mix increased significantly, currently representing 66% of the funding structure

1H2013 Results PresentationNote: ECB included in the Treasury Gap. 926 July 2013

MLT maturities for 2013 were already completely redeemed. BES annual MLT refinancing needs for the period 2013 – 2017 are on average Eur 1.5bn p.a., which compares with Eur 3.9bn on average in 2011-20123.9bn on average in 2011 2012

Medium and Long Term Debt maturing in 2013

(EUR bn; Total Eur 1.6bn)

Medium and Long Term Debt maturity profile

(Eur bn)

Includes the exchangeable notes linked to EDP and to

Bradesco

already repaidalready repaid

Bradesco

0,7

0,9

4,3 Average: Eur 1.5bn

Average: Eur 3.9bn

3,43,1

1.62.3

1Q13 2Q13 3Q13 4Q13

0,4

2011 2012 2013 2014 2015 2016 2017

0.0 0.0 0.2

During 2013, BES had Eur 1.6bn of MLT redemptions, fully repaid in the 1st Semester

2013-2017 MLT annual redemptions are much lower than in 2011-2012


With markets closed for Portuguese banks between 2Q10 and 4Q12, the deleverage plan implemented by BES allowed it to cover internally a liquidity gap of Eur 11.3bn. During the last 3 years BES redeemed Eur 19 6bn of wholesale debt (*) currently using only Eur 8 3bn

Evolution of net ECB use and BES redemptions net of issues (*)The liquidity gap was covered

last 3 years, BES redeemed Eur 19.6bn of wholesale debt ( ), currently using only Eur 8.3bn of ECB facilities

(Eur bn) Eur 11.3bn

The liquidity gap was covered internally through deleverage (increase of deposits, sale of international loans an

cash flow generation)+19.6bn

15.8

19.5 18.5

13 7

18.7Redemptions (net of issues): Eur 19.6bn

BES redeemed Eur 21.2bn of wholesale debt, o.w. Eur 14.6bn MLT and Eur 6.6bn ST.

19.6

+8.6bn

5 3

8.7

13.7

6.9 7.9

BES was able to place 3 MLT issues amounting to ca. Eur 1.6bn since November 2012. BES re-opened wholesale debt markets for Portuguese Banks8.3

0.0

5.3

-0.3

3.9Net use of ECB amounts to Eur 8.3bn, with Eur 9.2bn in LTRO’s, Eur 0.3bn ST and Eur 1.2bn in deposits.

During 1H13 BES redeemed Eur 1 0bn fromMar-10 Dec-10 Dec-11 Jun-12 Dec-12 Mar-13 Jun-13

Net use of ECB BES' Redemptions - Issues

A A- BB-BBS&P BB-S&P: 7 notches / Moody’s: 8 notches

BB-

During 1H13, BES redeemed Eur 1.0bn from the 1st LTRO

BB-

1H2013 Results Presentation(*) Includes ST and MLT redemptions, net of issues

A1 A2 Ba3Ba2Moody’s Ba3S&P: - 7 notches / Moody’s: - 8 notches

Ba3

1126 July 2013

Ba3

The use of ECB liquidity facilities decreased significantly from its peak in Jun.12. Repoable assets provide a significant liquidity buffer, covering MLT maturities for over 3 years

BES ECB exposure (net)

(EUR bn)

Total Repoable Assets1

(EUR bn)

BES use of ECB liquidity facilities (net)

(EUR bn)

13,7 22,4 21,822,3

25,4 24,6

+ 0.4bn Inflows: 5 1

Outflows: 6.5

- 5.4bn YoY

8,77 9 8,3

15,0

19,4

,

18,9

6.9

2.8 0.1 8.3

Inflows: 5.1

6,97,9

-3.4-0 5

2.50.4

0.7

Dec 11 Jun 12 Dec 12 Mar 13 Jun 13 Dec. 11 Dec.12 Mar.13 Jun.13Dec

.12

posi

ts

ance

s

ey M

kt

Loan

s

Equi

ty

d C

P's

ptio

ns

Oth

er

Jun.

13

-0.5-1.2

Dec. 11 Jun. 12 Dec.12 Mar.13 Jun. 13

ECB

Use

D

De

MLT

Issu

Mon

e

Bon

ds a

nd E

CD

's a

nd

MLT

Red

emp

ECB

Use

J

> 1 year: Eur 9.2bn< 1 year: Eur 0.3bnDeposits: Eur 1.2bn

Total

ECB Eligible


1) Pre-haircuts. Includes repo’ed assets

1226 July 2013

After the increase of the Portuguese sovereign book during 1H12, BES exposure to public debt decreased in the 2H12. Taking advantage of a significant liquidity position, BES bought T Bills in the 1H13 increasing its sovereign exposure again

European Sovereign Exposure

T-Bills in the 1H13, increasing its sovereign exposure again

Portuguese Yield Curve

(Eur mn)

T-Bills

Bonds6 840

(%)

14.5 15.0

12.89.7

Dec-116 604

1618

1177

467

3931 32314 787

5 550

4 2833 883

6.99.3

3.35.0

6.9 Dec-12Jun-12

6.7 Jun-133.55.6

3.1694.373

3.8152 983 2 909 3.374

1545

1618 4679002 949 3M 6M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y

Portuguese Government Bond yields

1.4043.169 2.983 2.909

Dec.11 Mar.12 Jun.12 Sep.12 Dec.12 Mar.13 Jun.1314.512.8

(%)10Y2Y

9.3

Maturity: > 1y

26% 53% 77% 93%

Jun.13 includes Eur 1.6bn from BES Vida

4.76.481%

6.9

3.3

6.7

3.5

64% 55%6.9


Dez-11 Jun-12 Dez-12 Jun-13

1326 July 2013

Data as of July 22nd, 2013

The European sovereign exposure in Jun. 13 is concentrated in Portuguese and Spanish debt, the majority accounted in the AFS portfolio

European Sovereign Exposure

5Y

Maturity profile of the European Sovereign Exposure

(Eur mn)(%)

Total o.w. Bonds o.w. T-Bills

> 5Y 37%

Includes Portugal 4 416 2 797 1 619

Spain 1 919 503 1 416

Italy 218 22 196

< 1Y 45%

1Y to 5Y 18%

Eur 0.4bn in 18

months T-bills

Greece 48 48 -

Germany 3 3 -

Ireland - - -

Breakdown of European Sovereign Exposure by portfolio

(%)Total 6 604 3 374 3 231

Total Mar.13 6 840 2 909 3 931

Total Dec.12 3 883 2 983 900

(%)HTM2%

Trading

Fair value20%

AFS75%

3%


Table of contents





V. Wrap up





Corporate lending represents the bulk of the loan portfolio with no significant concentration per sector. International loans account for 24.9% (Eur 12.7bn) of credit portfolio

% of Total Credit Portfolio

Credit Portfolio as of Jun 2013 (Eur 51.1bn Gross Loans)

Excludes securitised credit

wn

Consumer & Other4.9% (Eur 2.5bn)

Mortgage21.5%

15,4%

13,4%

11,4%

Services

Real estate

Other Sectors1

Sect

or

Bre

akdo

w

Corporate73.6%

(Eur 37.6bn)

(Eur 11.0 bn) 7,6%

7,2%

6,5%

6,4%

Const. & Public Works

Whol. & Retail

Other Manuf.

Fin. Inst.

,

5,9%T&C

% of Total Credit Portfolio

ogra

phic

ea

kdow

n

Domestic75.1%

(Eur 38.4bn)International

24.9%

11,2%

6,6%

3,8%

Spain

UK

Angola

Geo Bre (Eur 12.7bn)

1,2%

1,2%

0,9%

USA

Brazil

Other


1 Represents a composite of other sectors of the economy none representing more than 3% per se. 1626 July 2013

As widely expected, the recession in Portugal continues to impact asset quality. Despite the increase, and notwithstanding BES’ overweight in corporate lending, NPL levels continue to be lower than sector averagebe lower than sector average

BES Overdue Loans Ratio* Evolution vs Portuguese System

(%)

5 86.3 6.3

6.7 Corporate

Overdue loans continue to increase, reflecting the deterioration of macroeconomic conditions

(%)

11.3%

6.8%

7.2

4.8

3.63 2

3.4

4.65.3

5.8

System4.3 2.1%4 2

4.9

5.6

2.6

2.1 2.2 2.2 2.32.0 1.9 1.7 1.6

2.2

3.2Mortgage BES

3.22.4

2.31.9 1.8

2.1 2.11.9

1 5 1.82.1

3.03.5

3.7%

0.9%

4.2

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 Consumer & Other1Q

122Q

123Q

12

1.8 1.5 1.3 1.2 1.31.8

12.3%

8.1%4Q12

1Q13

2Q13

Source: BES and BoP (data for BoP as of May 2013)

Total Overdue Loans/Gross Loans SystemTotal Overdue Loans/Gross Loans BES


* Overdue loans + 30 days System data as of May 2013; Source: BoP

1726 July 2013

On B/S provision reserve continues to be reinforced, reaching 6.1% of gross loans or Eur 3.1bn. Overdue loans +90 days and credit at risk increased to 5.1% and 10.7% respectively, with a coverage of 120% and 57% p y, g % %

BES On-BS Provisions Reserve Evolution of Credit at Risk ratio

(Eur mn)(%)+29%

On BS provisions reserve increased

to 6.13%2 692

6 6%7,2%

7,9%

9,3% 9,4%10,1%

10,7%

2 823

3 134

1 777

2 167

2 4356,6%

Dec. 11 Mar. 12 Jun. 12 Sep. 12 Dec. 12 Mar. 13 Jun. 13

10,7%C ( l di ll t l

1 148

1 552Overdue and Credit at Risk ratios

(%)

5,1% 5,6%2.38% 3.07% 3.38% 4.23%

Coverage (excluding collaterals and guarantees)

4.76% 5.34% 5.51% 6.13%

2008 2009 2010 2011 Jun-12 2012 Mar-13 Jun-13

Provisions as % of Gross LoansOverdue

loans Overdue

loans Credit at

Risk*

120% 110% 57%


+ 90 days + 30 days

(*) According to Instruction 23/2011 of Bank of Portugal. Credit at risk includes: a) total value of credit with capital or interest past due by 90 days or more; b) other restructured credit, where the principal or interest payments were past due by more than 90 days and have been capitalized or refinanced without full coverage by collaterals or the interest fallen due have not been fully paid by the debtor and c) credits of an insolvent or bankrupt debtors.

1826 July 2013

Table of contents





V. Wrap up





Net interest income increased 12% QoQ, driven by the T-Bills portfolio, lower cost of deposits and positive contributions from Angola and Spain

Consolidated NII & NIM Domestic NII

(Eur mn; bps) (Eur mn) NII to gradually

ith

271 272

331307 295 313 299

274

125164 188 168

197 222 217187

128 134

recover with improved credit mix,

lower rates of deposits and contribution

1H12: Eur 608mn 1H13:

Eur 470mn -22.6% YoY

271 272 274222

2481Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Asset repricingoffset increasing cost of deposits

Sov. portfolio drove NII up, compensating

sharp E ribor decline

Despite the recover in 2Q13, NII still pressured by lower contribution from Sov Debt and by record low Euribor

of T-bills

+12%

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 International NII

(Eur mn)

cost of deposits sharp Euribor decline Sov. Debt and by record low Euribor

NII to improve156NIM 155 187 174 171 179 170 157 128 143

NII in 2Q13 recovered vis-à-vis 1Q13 (+12%, with NIM up 15bps), benefiting from the T-bills portfolio, lower cost of

147107

143 1399

115

NII to improve with gradual recovery in Angola and

growth in countries

h S i

156(bps) 155 187 174 171 179 170 157 128 143

p ) g pdeposits and positive contributions from Angola and Spain.

Despite the recovery, NII is still pressured by i) the deleverage of the B/S; ii) record low interest rates; iii) lower

contribution of the sovereign bond portfolio and iv) non-performing loans

107 97 91 83 87 945

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

such as Spain or

Mozambique

Lower contribution of Gradual recovery of


performing loans. Lower contribution of Angola to NII

Gradual recovery of Angola

2026 July 2013

Fees & Commissions flat QoQ. Capital markets & Other Results benefiting from the reinsurance agreement of BES Vida

Fees & Commissions

(Eur mn)

Capital Markets & Other

(Eur mn)

452

343 0 3%

-24%

169 +82%

+28%

343

172 171

-0.3%132

169

60

109

+82%

1H12 1H13 1Q13 2Q13

1H12 1H13 YoY

1H12 1H13 1Q13 2Q13

1H12 1H13 YoY

Fees & Commissions 452.0 343.1 -24.1%

Costs with GGB’s and other non-recurrent fees

-56.6 30.1 -

Total (like-for-like) 395 4 373 2 -5 6%

Interest rate, Credit and FX 320.4 47.5 -85.2%

Equity -91.8 39.5 -

Other Results -96.7 81.9 -

Total 131 9 168 9 +28 0%

Like-for-like fees & commissions (excluding the cost of GGB’s and other non-recurrent fees booked in 1H12) down 5.6% YoY

Total (like-for-like) 395.4 373.2 -5.6% Total 131.9 168.9 +28.0%

Other results in 1H13 include Eur 182mn (gross amount) related to the reinsurance agreement of BES Vida

1H2013 Results PresentationGGB’s = Government Guaranteed Bonds 2126 July 2013

Operating costs remain under control (excluding new consolidations, costs are down 0.5% YoY). BES is implementing a cost cutting programme during 2013-2015 that is expected to produce cost savings of c. Eur 100mn in the period

Domestic operating costs

(Eur mn)

p g p

Operating costs *

(Eur mn)Like-for-like costs

(excluding the impact of new consolidations) -3%of new consolidations)

down 0.5% YoY.

BES will implement a cost cutting

programme during

Cost cutting measures

already producing results in

388 375

190 185

-2%560 563

+0.7%

+0.6%

2013-2015 that should allow gradual

cost savings in domestic business

of ca. Eur 100mn (3%

results in Portugal. Like-for-like costs down 4.9%

YoY

190 185

1H12 1H13 1Q13 2Q13

281 283

International operating costs

(Eur mn)1H12 1H13 YoY 1Q13 2Q13 QoQ

in 2013; 5% in 2014 and 6% in 2015)

1H12 1H13 1Q13 2Q13

1H12 1H13 1Q13 2Q13

Staff 291.5 289.5 -0.7% 145.6 143.9 -1.2%

Admin. 214.2 220.9 3.2% 108.9 112.0 2.9%

Dep. 53.8 52.6 -2.2% 26.0 26.6 2.3%

Outside Portugal, costs

reflect the 172 188 +7%

+9%

Total 559.5 563.0 0.6% 280.5 282.5 0.7%

New consolidations 2.1 8.6 - 3.9 4.7 -

Total (l-f-l) 557.3 554.4 -0.5% 276.6 277.8 0.4%

expansion of international operations, namely in

Angola

91 97


1H12 1H13 1Q13 2Q13

Total provisions in 2Q13 surpassed Eur 500mn, more than doubling QoQ (cost of risk of 2.86% in 2Q13 vs. 1.46% in 1Q13). Strong provisioning effort represents a conservative approach to current macro environment

Credit Provisions & Cost of Risk Total Provisions

(Eur mn)(Eur mn; %)

1H13: Eur 553mn +57% YoY

267

366 Includes Eur

79.4mn for

foreclosed assets1H12:

Eur 352mn 747

+75%

225

148 147 149

203

267

196 187194 +111%

747

507

8095

84 94 81

553

74141426

240

Cost of

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

352

187

36653

Risk (bps)

7162 63 71 17463 114 115 159117 211 156 146

201067 bps

2011117 bps

2012162 bps

286

1H13216 bps

1H12 1H13 1Q13 2Q13

Credit Securities & Other


67 bps 117 bps 162 bps

2326 July 2013

216 bps

1H13 P&L reflects the current macro difficult environment. BES continued to strengthen its B/S, with deleverage and provisions reinforcement pressuring net income. Improvement of

(EUR million) 1H12 1H13 YoY 1Q13 2Q13 QoQ

macro conditions should allow results to recover in the coming quarters

(EUR million) 1H12 1H13 YoY 1Q13 2Q13 QoQ

+ Net Interest Income 607.6 470.4 -23% 221.9 248.5 12%

+ Fees and Commissions 452.0 343.1 -24% 171.8 171.3 -

= Commercial Banking Income 1 059.6 813.5 -23% 393.7 419.8 7%

+ Capital Markets & Other Results 131.9 168.9 28% 60.0 108.9 82%

= Banking Income 1 191.5 982.4 -18% 453.7 528.7 17%

- Operating Costs 559.5 563.0 1% 280.5 282.5 1%

= Net Operating Income 632.0 419.4 -34% 173.2 246.2 42%

- Net Provisions 426.3 747.3 75% 240.1 507.2 111%

f= Income Bef. Taxes and Minorities 205.7 -327.9 - -66.9 -261.0 -

- Taxes 115.4 -89.9 - 0.2 -90.2 -

o.w. Special tax on banks 14.0 13.0 - 6.5 6.5 -

Mi it I t t 64 8 0 5 5 1 4 7- Minority Interests 64.8 -0.5 - -5.1 4.7 -

= Net Income 25.5 -237.4 - -62.0 -175.4 -


During 1H13, BES continued to expand its international activity. BES Spain presented strong growth in deposits, BES Angola started to implement its new strategic plan and BES’ presence in Mozambique was reinforced

Spain – Main highlights Angola – Main highlights

During 1H13 BES Spain continued to

p q

Mozambique – Main highlights

During 1H13, BES Spain continued to grow organically:

Deposits: + Eur 1.3bn (+43% YtD)

# of Branches: +5 in 1H13

A new Board of Directors and a USD 500mn capital increase were approved

in the General Meeting held last June

In June, BES increased its stake in Moza Banco to 49%. Additionally, a strategic plan was agreed with Moçambique Capitais (51% stake in

(Barcelona, 2 in Madrid, Palma de Mallorca and Logroño). BES is currently studying new openings for 2H13 (10 potential branches already id tifi d)

In 1H13, BES Angola started to implement its new business plan:

Expand branch network: double current number of branches with the

Moza Banco) to:

i) Develop and expand the commercial activity of Moza,

ii) Ne Asset Management andidentified) current number of branches, with the opening of ca. 50 new branches / corporate centres in the next 2 years

New commercial strategy, with reinforced approached to specific

ii) New Asset Management and Investment Bank business lines

Moza Banco is currently the 5th

player in Mozambique with a 5 5%(+2)

(+1)

reinforced approached to specific market segments (oil companies; SME’s , affluent)

Multichannel approach: internet b ki bil b ki ll t

player in Mozambique, with a 5.5% market share as of Jun.13 (increased 1.7p.p. from 3.8% in Dec.12)

Network of 23 branches,

30 branches and 7 corporate centres

banking, mobile banking, call center, cards, POSs, ATMs

corresponding to 36 business units (22 retail, 10 corporate centres and 4 Private banking units) and should reach 27 branches by end of 2013


(1) >= Eur 50k

2526 July 2013

Investment Banking: Capital Markets business still very dynamic

Banking Income: Eur 121.2mn (-1.5% YoY)

123.1 121.2

Domestic Market: Leading the most important bond issues The Bank acted as Joint Lead Manager on Portugal Telecom’s (Eur 1bn) and ESFIL’s

(Eur 200mn) bond issues, as Joint Global Coordinator on Benfica SAD’s public bond offering(Eur 45mn) and as Sole Lead Manager on ESF Portugal (Eur 80mn) and Sonae

1H12 1H13

International contribution57%67%

(Eur 45mn) and as Sole Lead Manager on ESF Portugal (Eur 80mn) and SonaeInvestimentos (Eur 50 mn) bond issues.

The Bank ranked #3 in the Portuguese brokerage market, ending 1H2013 with a 6.3%accumulated market share and maintained the leadership of the M&A market (by numberand value of concluded transactions).

NII32%

Fees & Commissions

45%

International activity: Increased presence in Mexico In Mexico, the Bank increased its presence through the incorporation of Lusitânia Capital,

SOFOM a non-banking subsidiary focusing in local advising and financing activities. TheB k t d S l L d M th b d i f C di i (USD 30 ) 45%

Capital Markets23%

Net Profit: Eur 2 1mn (-86% YoY)

Bank acted as Sole Lead Manager on the bond issue of Crediamigo (USD 30mn).

In Brazil, the Bank advised the acquisition of 70% of Trefinox by Codimetal, and was JointBookrunner on the follow-on of BHG (R$ 378mn), on the bond issue of Andrade Gutierrez(USD 500mn) and on the Infrastructure Debenture issue of Rodovias do Tietê(R$ 1.1mm). It also concluded long-term funding for ViaBahia, through BNDES (BRL 46mn). Net Profit: Eur 2.1mn ( 86% YoY)

14.8

( $ ) g g , g ( )

In the UK, the Bank acted as Joint Bookrunner on the placing of 131.6 million new shares ofVertu Motors Plc (GBP 50mn) and as Sole Bookrunner on the placing of 1.2 million existingshares of Ted Baker (GBP 20mn).

In Poland, the Bank was Joint Global Coordinator and Joint Bookrunner on the sale of a

1H12 1H13

2.1

,25% stake in KRUK SA by PE Fund Enterprise Investors.

In Spain, the Bank ranked #7 in the Madrid Stock Exchange (5.0% market share) and #2 inthe Iberian M&A market (by value of concluded transactions).

O erall profitabilit constrained b increased credit impairment in Iberia


1H12 1H13Overall, profitability constrained by increased credit impairment in Iberia.

2626 July 2013

Table of contents





V. Wrap up





In the current environment, capital preservation is a top priority for BES. Despite net losses, Core Tier I remained fairly stable at 10.4% in Jun.13 (10.7% pro-forma, considering the approved capital increase of BES Angola). Risk weight of 78% is one of the highest inthe approved capital increase of BES Angola). Risk weight of 78% is one of the highest in Europe, reflecting BES’ conservative risk profile.

Solvency Ratios (%)

(BoP)

7.9

9.2

10.5 10.5 10.4 +0.3 10.7

Core Tier I

7.9

RWAs (Eur bn)RWA / TA (%)

68.882.2%

Core Tier I

65.481.5%

61.778.0%

61.876.3%

60.878.0%

Dec.10 Dec.11 Dec.12 Mar.13 Jun.13

RWA / TA (%) 82.2% 81.5% 78.0% 76.3% 78.0%

Capital increase in BES Angola,

approved in June’s GM

Jun.13Pro-forma

In the last 2 years, BES significantly reinforced its Core Tier I ratio, without the use of any public funds. According to BoPmethodology, Core Tier I is at 10.4% in Jun13 (or 10.7% on a pro-forma basis, considering the impact of the already approved

capital increase of USD 500mn in BES Angola) comfortably above minimum regulatory thresholds

June’s GM


capital increase of USD 500mn in BES Angola), comfortably above minimum regulatory thresholds .

Notes: BIS II IRB corresponds to calculations based on IRB Foundation for credit risk and standardised approach for operational risk. Preliminary data as of Jun-13RWA / TA excludes BES Vida, which for regulatory purposes is not fully consolidated

2826 July 2013

Core Tier I Ratio above both BoP and EBA minimum requirements without the use of any public funds allows BES to maintain its strategic independence

Solvency Ratios Risk weighted assets and Capital

(%)

Eur bn Dec. 12 Mar.13 Jun. 13(1)

RWA (BoP) 61,681 61,726 60,787

… Banking book 56,484 56,092 55,545EBA Jun/2012 minimum

BoP Dec/2012 minimum requirement: 10%

10.4%

9 5% … Trading book 1,503 1,940 1,548

… Oper. Risk 3,694 3,694 3,694

Net Assets (2) 79,117 80,929 77,961

minimum requirement: 9%

9.5%

RWA / TA 78.0% 76.3% 78.0%

Total Capital 6,963 6,910 6,488

… Core Tier I 6,471 6,510 6,293

d d ti AFS 52 37 115ow deductions AFS: 52 37 115

… Tier I 6,442 6,436 6,107

... Tier II and Other 521 474 381

BoP EBA

RWA’s(Jun 2013)

Eur 60.8bn(1) Preliminary data (2) Regulatory definition: excludes BES Vida(Jun 2013) (1) Preliminary data (2) Regulatory definition: excludes BES Vida

Core Tier I Ratio comfortably above both BoP and EBA minimum requirements

Core capital reinforced in the last 2 years with the debt / equity exchange offer concluded in Dec.11 and the rights issue concluded in May. 12. RWA’s decreased 12% during this period, despite the impact

of IRB pro cyclicality


Notes: BIS II IRB corresponds to calculations based on IRB Foundation for credit risk and standardised approach for operational risk. Preliminary data as of Mar-13RWA / TA excludes BES Vida, which for regulatory purposes is not fully consolidated

2926 July 2013

of IRB pro-cyclicality.

Table of contents





V. Wrap up


A di 2 P t E tl kAppendix 2: Portuguese Economy outlook



Backed by a strict financial discipline and a consistent strategy deployed over the years, BES has been proactively addressing the though macro, market and regulatory challenges by continuously strengthening the Balance Sheet. The Bank is in a favourable position toby continuously strengthening the Balance Sheet. The Bank is in a favourable position to benefit from the recovery in macro conditions in Portugal

Balance Sheet Management 1H13 Results

Deleverage plan: LtD decreased 73 p.p. since mid 2010 to 125% in Jun.13. Deposits increased 10% or Eur 3.4bn during 1H13

Significant improvement in BES’ funding structure, with deposits and

NII pressured by deleverage, low interest rates and lower contribution from sovereign portfolio. In 2Q NII recovered vis-

Funding & Liquidity

bancassurance products representing 66% of the funding mix

Contained use of ECB facilities, with repoable assets providing a significant liquidity buffer, covering over 3 years of MLT maturities

BES increased its sovereign exposure in 1H13 mainly through T

pà-vis 1Q (+12%, with NIM up 15bps), benefiting from the T-bills portfolio, lower cost of deposits and positive contributions from A l d S i BES increased its sovereign exposure in 1H13, mainly through T-

Bills, taking advantage of a significant liquidity position. Angola and Spain.

BES is implementing a cost cutting programme during 2013-2015 that should allow cost savings of c Eur 100mn in the

Solvency Capital preservation as one of BES top priorities. Core Tier I of 10.4% and 9.5% according to BoP and EBA. Pro-forma BoP CTI considering the approved capital increase of BES Angola at 10.7%.

savings of c. Eur 100mn in the domestic business.

Very strong provisioning effort, with total provisions reaching Eur 747mn and cost of

Asset Quality On-BS provision reserve of Eur 3.1bn or 6.13% of gross loans. BES continues to pursue a conservative risk management approach, with reinforced provision reserve as a cushion to overcome asset

grisk of 216bps (286 bps in the 2Q)

Lower banking income together with strong provisioning effort led to net

Recessionary environment


pquality deterioration in Portugal losses in the semester

3126 July 2013

Table of contents





V. Wrap up





Consolidated Income Statement: recent profitability hampered by macro environment leading to high provision charges

(EUR million) 2007 2008 2009 2010 2010 Restated*

2011 2012 YoY

+ Net Interest Income 953.7 1,086.2 1,200.8 1,164.0 1,164.0 1,181.6 1,180.5 -0.1%

+ Fees and Commissions 643.4 636.2 717.9 806.9 806.9 790.5 828.4 4.8%

= Commercial Banking Income 1,597.1 1,722.4 1,918.8 1,970.9 1,970.9 1,972.1 2,008.9 1.9%

+ Capital Markets Results 363.6 228.8 389.0 369.0 369.0 268.4 698.5 -

Oth lt 40 5 63 0 141 7 63 9 63 9 290 3 128 3+ Other results 40.5 -63.0 141.7 63.9 63.9 -290.3 -128.3 -

o.w. Insurance Premiums and Costs - - - - - - 0.7 -

= Banking Income 2,001.2 1,888.1 2,449.4 2,403.9 2,403.9 1,950.2 2,579.1 32.2%

O i C 9 0 1 001 6 1 0 1 169 1 123 1 1 129 2 1 149 1 1 8%- Operating Costs 950.7 1,001.6 1,055.7 1,169.5 1,123.1 1,129.2 1,149.1 1.8%

= Net Operating Income 1,050.5 886.5 1,393.7 1,234.4 1,280.7 821.0 1,430.0 74.2%

Net Op. Income ex-Mkts & Other 646.4 720.8 863.1 801.4 847.8 842.9 859.8 2.0%

Net Provisions 262 9 375 9 708 8 533 6 533 6 848 3 1 199 4 41 4%- Net Provisions 262.9 375.9 708.8 533.6 533.6 848.3 1,199.4 41.4%

= Income Bef. Taxes and Minorities 787.6 510.6 684.9 700.8 747.1 -27.3 230.6 -

- Taxes 152.5 83.5 109.8 43.8 43.8 -31.1 110.8 -

o.w. Special tax on banks - - - - - 30.5 27.9 -8.5%

- Minority Interests 28.0 24.9 53.0 146.5 146.5 112.5 23.7 -78.9%

= Net Income 607.0 402.3 522.1 510.5 556.9 -108.8 96.1 -

1H2013 Results Presentation 33(*) 2010 staff costs restated due to the change of the accounting policy related to emplyees long term benefits, which are now accounted in Other Comprehensive Income 26 July 2013

Income statement: domestic and international

Domestic International Consolidated

(EUR million) 1H12 1H13 YoY % Total Consol 1H12 1H13 YoY % Total.

Consol 1H12 1H13 YoYConsol. Consol.

+ Net Interest Income 419.4 261.3 -38% 56% 188.2 209.1 11% 44% 607.6 470.4 -23%

+ Fees & Commissions 276.0 237.1 -14% 69% 179.0 106.0 -40% 31% 452.0 343.1 -24%

= Commercial Bkg Inc. 695.4 498.4 -28% 61% 364.2 315.1 -13% 39% 1,059.6 813.5 -23%

+ Capital Mkts & Other 106.4 189.1 78% - 25.6 -20.2 - - 131.9 168.9 28%

ow Insurance Prem. & Costs 1.1 167.0 - - - - - - 1.1 167.0 -

= Banking Income 801.7 687.5 -14% 70% 389.8 294.9 -24% 30% 1,191.5 982.4 -18%

- Operating Costs 387.8 375.3 -3% 78% 171.7 187.7 9% % 559.5 563.0 1%

= Net Oper. Income 413.9 312.2 -25% 80% 218.1 107.2 -51% % 632.0 419.4 -34%

- Net Provisions 378.9 669.1 77% 92% 47.4 78.2 65% % 426.3 747.2 75%

… credit 307.9 492.2 60% 99% 44.1 60.9 38% % 352.0 553.1 57%… credit 307.9 492.2 60% 99% 44.1 60.9 38% % 352.0 553.1 57%

… securities 18.8 49.9 165% 78% 0.0 2.9 - % 18.8 52.8 -

… other 52.2 127.0 144% 81% 3.3 14.4 - % 55.5 141.4 -

= Inc. pre-Tax&Min. 35.0 -356.9 - - 170.7 29.0 -83% - 205.7 -327.8 -

- Taxes & Minorities 87.7 -100.6 - - 92.5 10.1 -89% - 180.2 -90.4 -

= Net Income -52.7 -256.3 - - 78.2 18.9 -76% 59% 25.5 -237.5 -

Cost to Income 48% 55% 7pp 44% 64% 20pp 47% 57% 10 pp

Cost to Income ex-Markets 56% 75% 19pp 47% 60% 13pp 53% 69% 16 pp


Quarterly consolidated income statement*

(EUR million) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 YoY QoQ

+ Net Interest Income 271.3 271.5 331.4 307.3 294.5 313.1 299.2 273.7 221.9 248.5 -21% 12%

+ Fees and Commissions 189.6 213.3 195.2 192.4 206.4 245.6 174.3 202.1 171.8 171.3 -30% -

C Bk I= Com. Bkg Income 460.9 484.8 526.6 499.7 500.9 558.7 473.5 475.8 393.7 419.8 -25% 7%

+ Capital Markets Results 100.4 244.7 33.7 -110.5 39.2 189.3 206.4 263.4 92.6 -5.7 -103% -106%

+ Other Results -35.9 15.7 -33.9 -236.1 -11.4 -85.3 3.4 -35.0 -32.7 114.6 - -

o.w. Insurance prem. & costs 0.0 0.0 0.0 0.0 0.0 1.1 -1.2 0.8 -1.7 168.7 - -p 0.0 0.0 0.0 0.0 0.0 1.1 1.2 0.8 1.7 168.7

= Banking Income 525.3 745.2 526.4 153.2 528.8 662.7 683.3 704.2 453.6 528.7 -20% 17%

- Operating Costs (restated) 281.0 276.4 272.8 298.9 271.9 287.6 285.8 303.8 280.5 282.5 -2% 1%

Note: Amort. actuarial diff. Eliminated 11.3 11.3 11.4 - - - - - - -

= Net Operating Income 244.3 468.8 253.6 -145.7 256.9 375.1 397.5 400.4 173.2 246.3 -34% 42%

- Net Provisions 103.1 366.5 191.0 187.6 190.7 235.6 326.0 447.1 240.1 507.1 105% 111%

= Income Bef.Tax & Min. 141.3 102.3 62.6 -333.4 66.2 139.5 71.5 -46.7 -66.9 -260.8 - -

- Taxes 29.9 -21.0 30.2 -70.1 25.3 90.1 9.7 -14.4 0.2 -90.2 - -

… Income Tax 13.3 50.7 0.4 7.7 41.0 3.8 41.6 48.8 43.7 65.2 - 49%

… Deferred Taxes 9.0 -79.4 22.2 -85.4 -23.5 80.1 -38.9 -70.2 -49.9 -161.8 - -

… Special Tax 7.6 7.6 7.6 7.6 7.8 6.2 7.0 7.0 6.5 6.5 5% -

- Minorities 39.1 16.9 39.2 17.4 29.3 35.4 -3.1 -38.0 -5.1 4.7 - -

= Net Income 72.3 106.4 -6.8 -280.6 11.6 13.9 64.9 5.7 -62.0 -175.3 -

Cost to Income 53.5% 37.1% 51.8% -. 51.4% 43.4% 41.8% 43.1% 61.8% 53.4%

C/I ex-Markets 61.0% 57.0% 51.8% 59.8% 54.3% 51.5% 60.4% 63.9% 71.3% 67.3%

1H2013 Results Presentation 35

(*) The change in the accounting policy related to emplyees long term benefits, now accounted in Other Comprehensive Income, led to a restatement of the staff costs line in 2010 and in the first three quarters of 2011

26 July 2013

Quarterly domestic income statement*


+ Net Interest Income 124.8 164.4 188.2 168.4 197.3 222.1 216.6 187.2 127.5 133.8 -40% 5%

+ Fees and Commissions 134.2 163.7 150.6 151.5 142.8 133.2 131.2 125.9 122.6 114.5 -14% -6%

= Commercial Bkg Income 259.0 328.1 338.8 320.0 340.1 355.3 347.8 313.2 250.0 248.4 -30% -1%

+ Capital Mkts & Other Results 61.8 252.1 -7.1 -340.7 21.3 85.0 182.4 210.5 75.5 113.6 34% 50%

ow Insurance Prem. & Costs 0.0 0.0 0.0 0.0 0.0 1.1 -1.2 0.8 -1.7 168.7 - -

= Banking Income 320.9 580.2 331.7 -20.8 361.4 440.3 530.2 523.7 325.6 362.0 -18% 11%

- Operating Costs (restated) 200.0 197.6 190.8 205.1 188.5 199.3 196.0 198.1 189.8 185.4 -7% -2%

= Net Operating Income 120 9 382 6 140 9 226 5 173 0 240 9 334 2 325 5 135 8 176 5 27% 30%= Net Operating Income 120.9 382.6 140.9 -226.5 173.0 240.9 334.2 325.5 135.8 176.5 -27% 30%

- Net Provisions 90.7 335.1 174.7 178.1 165.3 213.6 300.8 293.8 207.3 461.6 116% 123%

= Income Bef. Taxes and Min. 30.2 47.5 -33.8 -404.6 7.7 27.3 33.3 31.7 -71.5 -285.1 - -

Taxes 14 2 30 5 18 0 90 9 14 3 71 1 16 8 25 9 0 9 91 0- Taxes 14.2 -30.5 18.0 -90.9 14.3 71.1 -16.8 25.9 0.9 -91.0 - -

- Minorities -0.2 -1.1 2.4 -2.4 4.7 -2.4 -1.2 -4.0 -6.1 -4.3 - -

= Net Income 16.2 79.1 -54.2 -311.3 -11.3 -41.5 51.3 9.8 -66.4 -189.8 - -

Cost to Income 62.3% 34.1% 57.7% - 52.1% 45.3% 37.0% 37.8% 58.3% 51.2% 6pp -7pp

Cost to Income ex-Markets 77.2% 60.2% 56.5% 64.1% 55.4% 56.1% 56.4% 63.3% 75.9% 74.7% 19pp -1pp

(*) The change in the accounting policy related to employees long term benefits, now accounted in Other Comprehensive Income, ledto a restatement of the staff costs line in 2010 and in the first three quarters of 2011


Quarterly international income statement


+ Net Interest Income 146.6 107.1 143.2 138.9 97.2 90.9 82.5 86.5 94.4 114.7 26% 22%

+ Fees and Commissions 55.3 49.6 44.6 40.9 63.6 112.3 43.1 76.2 49.3 56.7 -50% 15%

= Commercial Bkg Income 201.9 156.7 187.9 179.8 160.9 203.3 125.7 162.7 143.7 171.5 -16% 19%

+ Capital Mkts & Other Res. 2.5 8.4 7.0 -5.9 6.5 19.1 27.5 18.0 -15.6 -4.6 - -

= Banking Income 204.4 165.1 194.8 173.9 167.4 222.4 153.1 180.7 128.1 166.8 -25% 30%

- Operating Costs 81.0 78.9 82.0 94.3 83.5 88.2 89.8 105.7 90.7 97.0 10% 7%

= Net Operating Income 123.4 86.2 112.8 79.9 83.8 134.2 63.3 75.0 37.4 69.8 -48% 86%

- Net Provisions 12.4 31.3 16.4 9.6 25.4 22.1 25.1 153.4 32.8 45.5 106% 39%

= Income Bef. Taxes & Min. 111.0 54.9 96.4 70.3 58.5 112.2 38.2 -78.4 4.6 24.3 -78% -

- Taxes 15.7 9.4 12.2 20.8 10.9 19.1 26.5 -40.3 -0.7 0.9 - -

- Minorities 39.3 18.0 36.9 19.8 24.5 37.9 -1.9 -34.0 0.9 9.0 -76% -

= Net Income 56.0 27.3 47.3 29.8 22.9 55.3 13.6 -4.1 4.4 14.5 -74% -

Cost to Income 39.6% 47.8% 42.1% 54.1% 49.9% 39.6% 58.6% 58.5% 70.8% 58.2%

Cost to Income ex-Markets 40.1% 50.3% 43.6% 52.4% 51.9% 43.4% 71.4% 65.0% 63.1% 56.6%


Strategic triangle income statement: Africa, Brazil and Spain

Africa* Brazil Spain Strategic Triangle

(EUR million) 1H12 1H13 YoY 1H12 1H13 YoY 1H12 1H13 YoY 1H12 1H13 YoY(EUR million) 3 o 3 o 3 o 3 o

+ Net Interest Income 80.9 102.3 26% 34.9 25.8 -26% 44.0 45.0 2% 159.8 173.1 8%

+ Fees and Com. 100.3 26.7 -73% 17.2 13.0 -24% 24.6 22.6 -8% 142.1 62.3 -56%

= Com Bkg Income 181 3 129 0 -29% 52 1 38 8 -25% 68 6 67 5 -2% 302 0 235 3 -22% Com. Bkg Income 181.3 129.0 -29% 52.1 38.8 -25% 68.6 67.5 -2% 302.0 235.3 -22%

+ Markets & Other 16.7 -6.5 - -11.1 -7.5 -33% 11.8 -0.6 - 17.4 -14.6 -

= Banking Income 197.9 122.5 -38% 41.0 31.4 -23% 80.5 66.9 -17% 319.4 220.8 -31%

Operating Costs 51 4 62 1 21% 20 4 21 5 5% 42 5 43 2 2% 114 3 126 8 11%- Operating Costs 51.4 62.1 21% 20.4 21.5 5% 42.5 43.2 2% 114.3 126.8 11%

= Net Op. Income 146.5 60.4 -59% 20.6 9.9 -52% 37.9 23.7 -37% 205.0 94.0 -54%

- Net Provisions 18.7 37.7 102% 0.4 3.6 - 26.0 44.4 70.5% 45.1 85.7 90%

I B f T & Mi 127 8 22 6 20 2 6 3 69% 11 9 20 7 159 9 8 2= Income Bef. Tax & Min. 127.8 22.6 - 20.2 6.3 -69% 11.9 -20.7 - 159.9 8.2 -

- Taxes & Min. 84.9 15.0 - 9.9 4.9 -51% 1.4 -6.4 - 96.2 13.5 -

= Net Income 43.0 7.7 - 10.2 1.4 -86% 10.5 -14.3 - 63.7 -5.2 -

Cost to Income 26% 51% 50% 68% 53% 65% 36% 57%

* Comprising Angola, Cape Verde, Mozambique and Libya


Brazil: Quarterly income statement


+ Net Interest Income 14.1 10.7 13.6 14.4 14.9 20.0 14.0 12.3 13.2 12.7 -37% -4%


= Commercial Bkg Income 24.2 22.6 20.5 17.7 24.9 27.2 17.5 18.7 20.1 18.8 -31% -6%

+ Capital Markets & Other -1.8 3.0 -1.8 2.7 -1.9 -9.2 -4.9 -3.2 -3.0 -4.5 -52% -

= Banking Income 22.4 25.5 18.7 20.4 23.0 17.9 12.6 15.5 17.1 14.3 -20% -16%

- Operating Costs 9.6 10.3 9.3 11.8 9.7 10.7 10.5 10.9 10.0 11.5 7% 16%

N t O ti I 12 8 15 2 9 4 8 5 13 3 7 2 2 1 4 6 7 1 2 8 61% 61%= Net Operating Income 12.8 15.2 9.4 8.5 13.3 7.2 2.1 4.6 7.1 2.8 -61% -61%

- Net Provisions 1.5 1.6 0.0 -1.5 0.6 -0.2 1.1 0.5 2.5 1.1 - -57%

= Income Bef. Taxes & Min. 11.3 13.6 9.4 10.1 12.7 7.5 1.0 4.1 4.6 1.7 -77% -63%

- Taxes & Minority Interests 5 6 5 6 4 4 8 2 5 7 4 2 1 4 2 9 3 2 1 7 -61% -48%- Taxes & Minority Interests 5.6 5.6 4.4 8.2 5.7 4.2 1.4 2.9 3.2 1.7 -61% -48%

= Net Income 5.7 8.0 5.0 1.8 7.0 3.2 -0.3 1.2 1.4 0.0 - -

Cost to Income 42.7% 40.4% 49.7% 58.0% 42.0% 59.7% 83.3% 70.4% 58.3% 80.5%

Assets 2,755.7 2,711.4 2,502.1 2,645.7 2,425.7 2,711.6 2,392.3 2,440.0 2,966.2 2676.5 -1% -10%, , , , , , , , ,


Angola: Quarterly income statement



+ Fees and Commissions 6.2 6.3 5.8 5.9 20.8 73.6 7.8 21.9 6.4 12.5 -83% 96%

= Commercial Bkg Income 93.0 63.6 98.0 93.0 65.6 107.3 38.5 54.0 47.6 70.7 -34% 48%

+ Capital Mkts & Other 5.3 -1.8 9.4 -1.1 8.8 3.4 20.8 2.7 -6.4 -1.9 - -

= Banking Income 98.3 61.8 107.5 91.9 74.4 110.7 59.2 56.7 41.2 68.8 -38% 67%

- Operating Costs 19.2 16.5 20.8 23.6 22.4 22.5 24.9 36.3 26.3 28.4 26% 8%

= Net Operating Income 79.2 45.3 86.7 68.3 52.0 88.2 34.4 20.3 14.9 40.4 -54% -

- Net Provisions 4 7 5 1 7 4 10 7 7 0 12 4 14 1 104 2 16 8 20 3 64% 21%- Net Provisions 4.7 5.1 7.4 10.7 7.0 12.4 14.1 104.2 16.8 20.3 64% 21%

= Income Bef. Taxes & Min. 74.4 40.2 79.3 57.6 45.1 75.8 20.3 -83.9 -1.9 20.1 -74% -

- Taxes & Minority Interests 47.3 25.6 50.3 36.6 32.6 48.1 20.9 -75.9 1.0 11.1 -77% -

= Net Income 27.1 14.6 29.0 21.0 12.5 27.7 -0.6 -8.0 -2.9 8.9 -68% -

Cost to Income 19.5% 26.7% 19.4% 25.7% 30.0% 20.3% 42.0% 64.1% 63.8% 41.3% 21pp -22pp

Total Assets 6,210.1 5,992.8 6,880.8 6,867.0 6,778.5 7,625.3 7,915.4 7,970.7 8,431.4 8,547.1 12% 1%

Total Credit (Gross) 3,029.4 3,221.2 3,579.5 3,946.3 4,061.9 4,558.3 4,898.2 5,382.1 5,745.4 5,699.2 25% -1%

Equity 526.9 556.1 653.6 721.3 734.2 844.6 820.9 762.7 774.0 801.7 -5% 4%


Spain: Quarterly income statement




= Commercial Bkg Income 37.9 34.9 32.8 35.7 34.6 34.1 32.5 35.0 32.3 35.2 3% 9%

+ Capital Markets & Other 5.1 2.5 -0.1 0.8 0.8 11.1 11.4 -0.7 1.6 -2.1 -

= Banking Income 43.0 37.5 32.7 36.5 35.3 45.1 44.0 34.3 33.9 33.0 -27% -2%

- Operating Costs 22.3 20.3 21.1 21.9 21.4 21.1 20.6 22.1 21.6 21.6 2% -

= Net Operating Income 20.7 17.2 11.6 14.6 13.9 24.0 23.4 12.2 12.3 11.4 -53% -7%

- Net Provisions 13.3 16.9 14.4 11.1 9.1 16.9 9.4 18.7 17.3 27.0 60% 56%

= Income Bef. Taxes & Min. 7.4 0.2 -2.7 3.5 4.8 7.1 14.0 -6.5 -5.0 -15.6 - -

- Taxes & Minority Interests 1 6 -0 6 -1 0 -1 4 0 1 1 2 3 7 -1 5 -1 2 -5 1 - -Taxes & Minority Interests 1.6 0.6 1.0 1.4 0.1 1.2 3.7 1.5 1.2 5.1

= Net Income 5.8 0.8 -1.7 5.0 4.7 5.9 10.3 -5.0 -3.8 -10.5 - -

Cost to Income 51.9% 54.1% 64.5% 60.1% 60.7% 46.8% 46.8% 64.6% 63.7% 65.5% 19pp 2pp

Credit (Gross) 3,736.4 3,690.5 3,564.8 3,495.1 3,371.5 3,347.2 3,194.4 3,258.7 3,343.7 3,376.6 1% 1%

Cost of Risk (bp) 142 bp 178 bp 161 bp 115 bp 94 bp 183 bp 107bp 138bp 130bp 235bp 52bp 105bp

Assets 5,502.6 4,792.0 4,874.2 5,302.5 5,139.2 5,013.0 4,654.5 4,652.6 5,601.3 5,597.9 12% 0%


UK: Quarterly income statement


+ Net Interest Income 12 8 9 7 9 6 7 8 7 8 7 0 8 7 6 8 8 8 6 6 6% 25%+ Net Interest Income 12.8 9.7 9.6 7.8 7.8 7.0. 8.7 6.8 8.8 6.6 -6% -25%

+ Fees and Commissions 18.4 8.5 13.0 5.7 12.2 8.6 11.4 23.7 12.4 14.7 72% 19%

= Commercial Bkg Income 31.1 18.2 22.6 13.6 20.0 15.6 20.1 30.5 21.1 21.3 36% 1%

+ Capital Markets & Other -7.2 0.6 -2.6 -8.7 -4.8 6.9 -0.7 11.2 -7.2 0.6 - - Capital Markets & Other 7.2 0.6 2.6 8.7 4.8 6.9 0.7 11.2 7.2 0.6

= Banking Income 24.0 18.9 20.0 4.8 15.2 22.5 19.3 41.6 13.9 21.9 -3% 57%

- Operating Costs 18.3 17.5 18.7 17.3 13.5 14.8 14.3 13.7 12.9 13.0 -12% 1%

= Net Operating Income 5.7 1.3 1.3 -12.5 1.7 7.6 5.0 28.0 1.1 8.9 16% -

- Net Provisions -4.3 7.6 -6.2 -14.7 8.9 -7.6 0.0 26.7 -3.9 -1.5 - -

= Income Bef. Taxes & Min. 10.0 -6.3 7.5 2.2 -7.2 15.3 4.9 1.2 4.9 10.4 - -

- Taxes & Minority Interests -0.2 -3.6 -4.0 2.6 -5.0 1.7 0.0 -1.6 -4.2 0.2 - -

= Net Income 10.2 -2.7 11.5 -0.4 -2.1 13.5 5.0 2.9 9.1 10.2 -24% 12%

Cost to Income 76.2% 92.9% 93.5% - 88.9% 66.0% 74.2% 32.9% 92.4% 59.4% -7pp -33pp

Credit (Gross) 2,349.2 2,122.5 2,079.1 1,930.5 2,122.5 2,051.3 2,100.7 2,028.1 1,994.5 1,950.4 -5% -2%


Quarterly Net Interest Income

gure

s)

190

Quarterly Net Interest Income & NIM Euribor 3M (quarterly average)(%)

2,01

bp; Q

uarte

rly F

i

193 199171141141

161

190

152156155187 174171179 170

157128

143

50

100

150

200

100

150

200

250

300

350

400

1,31

0,870,720,660,69

0,871,021,09

1,411,56 1,5

1,04

0,7

0,360 2 0 210 21

(NIM

in b

315

335

300

250

254

293

346

271

271

272

331

307

295

313

299

274

222

249

0

50

0

50

100

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

0,2 0,210,21

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

4,524 294 354,654 44

-47

-36

-39

-41

-52

-57

-66

-110

-136

-129

-146

-173

-206

-202

-218

-216

-236

-238

Credit Margin Deposit Margin

3,583,383,25

3,023,033,082,983,3 3,553,55

3,924,22

,5 4,294,35 4,444,41

-0,74-0,59-0,61-0,66-0,83-0,88-0,97

423

406

395

375

380

401

397

437

454

455

507

546

562

540

553

585

550

553

-1,45-1,78-1,64-1,78-2,0

-2,39-2,38-2,63-2,53-2,67-2,58


Credit NII (LHS, Eur mn) Credit Margin (RHS, %) Deposits NII (LHS, Eur mn) Deposits Margin (RHS, %)

26 July 2013

Net Interest income & Net Interest Margin (quarterly)

1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013A A A A A A

(EUR million)Avrg

Balance Interest Yield AvrgBalance Interest Yield Avrg

Balance Interest Yield AvrgBalance Interest Yield Avrg

Balance Interest Yield AvrgBalance Interest Yield

Interest Earning Assets 68,597 926.6 5.48 70,059 921.4 5.28 69,790 891.7 5.07 69,345 830.8 4.75 70,059 797.5 4.61 69,687 816.3 4.70

... Loan Portfolio 50,430 692.0 5.57 50,487 627.1 4.98 50,402 598.8 4.71 49,924 609.3 4.84 50,154 575.8 4.66 50,312 579.3 4.62

Securities and Other 18 167 234 6 5 24 19 571 294 3 6 03 19 388 293 0 6 00 19 421 221 4 4 57 19 905 221 7 4 52 11 374 237 0 4 91... Securities and Other 18,167 234.6 5.24 19,571 294.3 6.03 19,388 293.0 6.00 19,421 221.4 4.57 19,905 221.7 4.52 11,374 237.0 4.91

Other non interest earning assets 1,388 - - - - - - - - - - - - - -

Total 69,985 926.6 5.37 70,059 921.4 5.28 69,790 891.7 5.07 69,345 830.8 4,75 70,059 797.5 4.61 69,687 816.3 4.70

Interest Bearing Liabilities 69,985 632.1 3.66 69,510 608.3 3.51 67,089 592.6 3.50 65,767 557.1 3.36 66,909 575.6 3.49 66,676 567.8 3.41

... Deposits 34,981 296.3 3.44 34,050 260.9 3.07 33,016 248.4 2.98 33,809 232.1 2.72 35,855 254.3 2.88 36,944 257.0 2.79

... Other Liabilities 35,004 335.8 3.89 35,461 347.4 3.93 34,073 344.2 4.01 31.959 324.9 4.03 31,054 321.3 4.30 29,732 310.8 4.19

Other non interest bearing liabilities - - - 549 - - 2,700 - - 3,578 - - 3,150 - - 3,011 - -

Total 69,985 632.1 3.66 70,059 608.3 3.48 69,790 592.6 3.37 69,345 557.1 3.19 70,059 575.6 3.33 69,687 567,8 3.27

NII / NIM 294.5 1.71 313.1 1.79 299.2 1.70 273.7 1.57 221.9 1.28 248.5 1.43

Average Euribor 3M 1.04 0.70 0.36 0.20 0.21 0.21


Quarterly fees & commissions

(EUR million)1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 YoY QoQ 1H12 1H13 YoY

Account Management Fees 19.4 19.6 20.0 22.1 19.3 19.9 20.1 19.6 18.7 19.0 -5% 2% 39.2 37.7 -4%

Commissions on Loans 23.8 27.7 24.9 27.9 29.1 22.7 27.2 26.4 27.2 30.6 35% 12% 51.8 57.8 11%

Trade Finance & Exp. Rel. (1) 12.3 21.4 32.9 18.6 19.4 24.1 23.3 21.1 17.1 18.8 -22% 10% 43.5 36.0 -17%

Corporate & Project Finance 15 0 21 9 10 8 12 0 15 9 9 1 8 1 8 6 11 9 8 4 7% 29% 24 9 20 3 19%Corporate & Project Finance 15.0 21.9 10.8 12.0 15.9 9.1 8.1 8.6 11.9 8.4 -7% -29% 24.9 20.3 -19%

Guarantees 25.6 36.9 30.8 39.2 29.9 39.0 33.4 37.2 36.7 38.1 -2% 4% 68.9 74.8 9%

Securities related fees (2) 29.6 22.6 19.5 18.2 18.4 19.0 17.5 18.5 19.3 14.5 3% 1% 37.4 38.7 4%

Asset Management (3) 23.7 25.0 21.2 15.9 19.9 18.6 19.7 27.7 21.3 21.6 16% 1% 38.5 42.9 11%

Cards 9.7 10.0 10.2 11.1 10.0 10.4 10.6 25.7 8.4 9.4 -10% 12% 20.4 17.8 -13%

Bancassurance 11.7 10.2 10.3 2.7 19.1 8.4 8.8 11.4 5.7 5.6 -34% -2% 27.5 11.3 -59%

Factoring 1.9 2.0 2.2 2.2 1.8 1.6 2.0 2.2 1.8 2.3 43% 29% 3.4 4.1 21%

Other 16.8 16.1 12.7 22.1 23.6 72.8 3.7 3.7 3.8 -2.1 - - 96.4 1.7 -98%

... Cost of issuing GGB - - -3.4 -3.8 -12.6 -14.8 -15.0 -16.1 -15.0 -15.1 27.4 30.1 %

Note: Changes calculated based on figures in thousand euros.

Total Fees & Commissions 189.6 213.3 195.4 192.1 206.4 245.6 174.3 202.1 171.8 171.3 -30% - 452.0 343.1 -24%

Commissions related to the issuance of Government Guaranteed Bonds are included in “Other”


(1) Includes trade finance and letters of credit(2) Includes Brokerage(3) Includes discretionary management

26 July 2013

Quarterly capital markets results

(EUR million) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 1H12 1H13

Interest Rate, Credit & FX 50.5 7.6 164.2 -47.2 80.9 239.5 243.6 261.0 86.0 -38.5 320.4 47.5

… Interest rate 37.8 5.5 46.4 -36.5 58.1 221.9 236.0 265.3 87.4 33.5 280.0 120.9

Credit 8 4 14 3 99 6 19 0 23 3 -13 2 -14 8 37 2 -5 9 -62 7 10 1 -68 6… Credit 8.4 14.3 99.6 19.0 23.3 -13.2 -14.8 37.2 -5.9 -62.7 10.1 -68.6

… FX & Other 4.3 -12.2 18.2 -9.1 -0.5 30.8 22.4 -41.5 4.5 -9.3 30.3 -4.8

Equity 49.9 237.0 -130.3 -63.3 -41.7 -50.0 -37.2 2.4 6.7 29.8 -91.6 39.5

… Trading 45.6 100.3 -131.5 -88.8 -78.4 -113.8 -7.6 0.7 4.8 -18.1 -192.2 -13.3

… Income from securities 4.3 136.7 1.2 25.6 36.7 63.9 -29.6 1.7 1.9 50.9 100.6 52.8

Capital market results 100.4 244.6 33.9 -110.5 39.2 189.4 206.4 263.4 92.7 -5.7 228.8 87.0p

Provisions for Securities 0.6 55.8 5.3 11.6 1.9 16.9 13.7 74.1 18.5 34.3 18.8 52.8

Capital Markets net of Provisions for securities 99.8 188.8 28.6 -122.1 37.3 172.5 192.7 189.3 74.2 -40.0 210.0 34.2


2Quarterly capital markets results

Quarterly history of capital markets results since 1999

(EUR )

245

206

263

(EUR mn)

196

155

109128

189

206

49

84

109

64

88

51 50 54 53 55 51

84

46

80 82

66 6873

55

72

48

124

10897 98

46

128

10093

49

27

2

36

3

24

-1

1528

3525

51 50

19

3526

13

46 44 39

16

48 4634

-4

39

-6Excludes the one-off impact of-14

1Q99

2Q99

3Q99

4Q99

1Q00

2Q00

3Q00

4Q00

1Q01

2Q01

3Q01

4Q01

1Q02

2Q02

3Q02

4Q02

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

pEur 107mn related to the

partial transfer of the pensionfund to the Social Security


Quarterly equity accounted earnings and other results

Equity Accounted Earnings andEquity Accounted Earnings and Other Results (Quarterly)

(EUR million) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Equity Accounted Earnings 4.1 8.8 -9.5 -178.6 3.4 3.8 1.5 -0.5 1.8 -0.7

… BES Vida 2.9 -0.2 -12.6 -183.3 -0.2 3.0 - - - -… BES Vida 2.9 0.2 12.6 183.3 0.2 3.0

… Other 1.2 9.0 3.1 4.7 3.6 0.8 1.5 -0.5 1.8 -0.7

Other Results, ow -40.0 6.9 -24.5 -57.5 -14.8 -90.3 3.1 -35.3 -38.5 115.3

… Results from sale other assets -38.6 -7.2 -23.0 -21.0 -10.4 -14.6 -9.5 -23.3 -6.3 2.2

Insurance Premiums & Costs 1 1 1 2 0 8 1 7 168 7… Insurance Premiums & Costs - - - - - 1.1 -1.2 0.8 -1.7 168.7

Total Equity Accounted & Other -35.9 15.7 -33.9 -236.1 -11.4 -85.3 3.4 -35.0 -32.7 115.3

Equity Accounted Earnings and Other results (Accumulated)Other results (Accumulated)

(EUR million) 3M11 6M11 9M11 FY11 3M12 6M12 9M12 FY12 3M13 6M13

Equity Accounted Earnings, ow 4.1 12.9 3.4 -175.2 3.4 7.2 8.8 8.3 1.8 1.1

… BES Vida 2.9 2.7 -9.9 -193.2 -0.2 2.8 2.8 2.8 - -

O h R l 40 0 33 1 11 1 14 8 104 0 102 1 138 0 40 2 6 8Other Results, ow -40.0 -33.1 -57.5 -115.1 -14.8 -104.0 -102.1 -138.0 -40.2 76.8

… Results from sale of other assets -40.0 -33.1 -68.8 -89.9 -10.4 -25.0 -34.4 -57.7 -6.3 -4.1

… Insurance Premiums & Costs - - - - - 1.1 -0.1 0.7 -1.7 168.7


Quarterly other results: Reconciliation between IFRS P&L and Presentation

Quarterly

(EUR million) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Other Results (IFRS), ow 36.0 127.2 190.7 3.9 30.2 -46.0 4.7 40.0 -39.1 -83.5

… Fees 9.0 9.3 7.7 6.4 10.1 7.9 7.8 8.7 8.8 6.0

… Capital Markets 36.0 111.4 192.1 41.5 32.3 27.9 -8.7 -29.7 -14.9 -27.6

… Special Tax on Banks -7.6 -7.6 -7.6 -7.6 -7.8 -6.2 -6.9 -7.0 -6.5 -6.6

… Other -1.4 14.1 -1.4 -13.8 -4.4 -75.7 12.6 -12.0 -26.5 -55.5

Accumulated

(EUR million) 3M11 6M11 9M11 FY11 3M12 6M12 9M12 FY12 3M13 6M13

Other Results (IFRS), ow 36.0 163.2 353.9 357.8 30.2 -15.8 -11.1 -51.1 -39.1 -122.6

… Fees 9.0 18.3 26.0 32.4 10.1 18.0 25.8 34.5 8.8 14.8

… Capital Markets 36.0 147.4 339.5 381.0 32.3 60.2 51.5 21.8 -14.9 -42.5

… Special Tax Banks -7.6 -15.2 -22.9 -30.5 -7.8 -14.0 -20.9 -27.9 -6.5 -13.1

… Other -1.4 12.7 11.3 -25.1 -4.4 -80.1 -67.5 -79.5 -26.5 -82.0


Breakdown of operating costs*

Quarterly Operating Costs(EUR million)

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 YoY QoQ 1H12 1H13 YoY

Staff costs 147.4 142.4 148.2 149.5 143.1 148.4 148.3 159.1 145.6 143.9 -3% -1% 291.5 289.5 -1%

…Remunerations 116.0 111.9 117.5 126.2 114.7 119.0 118.9 131.2 116.2 115.1 -3% -1% 233.7 231.3 -1%

…Pension Benefits (restated) 6.8 6.2 6.8 2.9 4.8 4.7 5.7 3.3 5.0 4.7 - -6% 9.5 9.7 2%

…LT service benefits & Other 24.6 24.3 23.9 20.3 23.6 24.7 23.7 24.6 24.4 24.1 -2% -1% 48.3 48.5 -

Admin costs 107.5 107.9 98.1 120.3 102.2 112.0 110.8 117.2 108.9 112.0 - 3% 214.2 220.9 3%

Depreciation 26.1 26.2 26.5 29.1 26.6 27.1 26.8 27.5 26.0 26.6 -2% 2% 53.8 52.6 -2%

Total Operating Costs 280.9 276.5 272.8 298.9 271.9 287.5 285.8 303.8 280.5 282.5 -2% 1% 559.5 563.0 1%

(*) The change in the accounting policy related to employees long term benefits now accounted in Other(*) The change in the accounting policy related to employees long term benefits, now accounted in Other

Comprehensive Income, led to a restatement of the staff costs line in 2010 and the first three quarters of 2011


Breakdown of quarterly operating costs: domestic* and international

(EUR million) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 YoY QoQ 1H12 1H13 YoY

Domestic

Staff costs 101.1 99.1 100.2 94.8 94.7 97.9 97.6 99.5 94.7 90.9 -7% -15% 192.6 185.5 -4%

…Remunerations 72.8 71.6 71.6 74.4 68.8 71.0 70.7 75.0 68.7 65.1 -8% -5% 139.8 133.8 -4%

…Pension Benefits 5.8 5.3 6.0 1.9 4.0 3.8 4.9 1.7 4.0 4.1 -8% 2% 7.8 8.1 4%

…LT service benefits & Other 22.4 22.1 22.7 18.5 21.9 23.1 22.0 22.8 22.0 21.7 -6% -1% 45.0 43.7 -3%

Admin costs 78.6 78.6 70.4 89.1 73.9 82.1 79.3 79.3 76.7 76.0 -7% -1% 156.0 152.7 -2%

Depreciation 20.3 20.0 20.2 21.1 19.8 19.4 19.2 19.4 18.4 18.6 -4% 1% 39.2 37.1 -6%

Domestic Operating Costs 199.9 197.6 190.8 205.1 188.4 199.4 196.0 198.2 189.8 185.5 -7% -2% 387.8 375.3 -3%

International

Staff Costs 46.3 43.3 48.0 54.7 48.4 50.5 50.7 59.6 51.0 53.0 5% 4% 98.9 104.0 5%

…Remunerations 43.2 40.3 45.9 51.9 45.8 48.0 48.2 56.3 47.5 50.0 4% 5% 93.8 97.5 4%

…Pension Benefits 0.9 0.8 0.8 1.1 0.8 0.9 0.8 1.5 1.1 0.6 -33% -45% 1.7 1.7 -

… LT service benefits & Other 2.2 2.2 1.3 1.8 1.7 1.6 1.7 1.8 2.4 2.4 50% - 3.3 4.8 45%

Admin costs 28.9 29.3 27.8 31.1 28.3 29.9 31.5 37.9 32.2 36.0 20% 12% 58.2 68.2 17%

Depreciation 5 8 6 2 6 2 8 0 6 8 7 7 7 6 8 2 7 5 8 0 4% 7% 14 6 15 5 7%Depreciation 5.8 6.2 6.2 8.0 6.8 7.7 7.6 8.2 7.5 8.0 4% 7% 14.6 15.5 7%

International Operating Costs 81.0 78.9 82.0 93.8 83.5 88.1 89.8 105.7 90.7 97.0 10% 7% 171.7 187.7 9%

(*) The change in the accounting policy related to employees long term benefits, now accounted in Other Comprehensive Income, led to a restatement of the staff costs line in

2010 and the first three quarters of 2011


Quarterly provisions

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 YoY QoQ 1H12 1H13 YoY(EUR million)

…Credit 80.9 224.6 147.8 147.4 149.0 203.0 266.9 196.0 187.1 366.0 80% 96% 352.0 553.1 57%

cost of risk (bp) 63 174 114 115 117 159 210 156 146 286 127bp 140bp 138 216 78bp

D ti 70 1 197 4 132 4 138 3 126 4 181 4 247 4 168 5 166 0 326 2 80% 97% 307 9 492 2 60%… Domestic 70.1 197.4 132.4 138.3 126.4 181.4 247.4 168.5 166.0 326.2 80% 97% 307.9 492.2 60%

cost of risk (bp) 68 191 128 137 126 183 254 176 172 340 157bp 168bp 155 256 101bp

… International 10.7 27.2 15.4 9.0 22.5 21.6 19.4 27.5 21.2 39.8 84% 88% 44.1 60.9 38%

cost of risk (bp) 40 104 59 33 82 75 66 90 66 125 50bp 59bp 76 96 20 bp

…Securities 0.6 55.7 5.3 11.6 1.9 16.9 13.7 74.1 18.5 34.3 - - 18.8 52.8 -

…Other 21.6 86.1 37.9 28.6 39.8 15.8 45.4 177.1 34.5 106.9 - - 55.5 141.4 -

Total Provisions 103.0 366.5 191.0 187.6 190.7 235.7 326.0 447.2 240.1 507.1 115% 111% 426.3 747.2 75%

… Domestic 90.7 335.1 174.7 178.1 165.3 213.6 300.8 293.8 207.4 461.6 116% 123% 378.9 669.0 77%

… International 12.4 31.3 16.4 9.6 25.4 22.1 25.1 153.4 32.8 45.5 106% 39% 47.4 78.2 20%


Note: Detailed credit provisions and asset quality data in following slides

26 July 2013

Quarterly taxes: domestic and international

(EUR million) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 1H12 1H13

Domestic

Income Tax 5.7 43.6 8.0 5.9 38.3 -0.4 16.5 62.4 27.9 63.0 38.0 90.8

Deferred taxes 0.8 -81.7 2.4 -104.5 -31.8 65.3 -40.3 -43.5 -33.4 -160.5 33.4 -194.0

Banking sector special tax 7.6 7.6 7.6 7.6 7.8 6.2 7.0 7.0 6.5 6.5 14.0 13.0

Total domestic taxes 14.2 -30.5 18.0 -91.0 14.3 71.1 -16.8 25.9 0.9 -91.0 85.5 -90.1

International

Income Tax 7.5 7.2 -7.6 1.8 2.7 4.2 25.1 -13.6 15.8 2.2 6.9 18.0

Deferred taxes 8.2 2.3 19.8 19.1 8.3 14.8 1.4 -26.7 -16.5 -1.3 23.1 -17.8

Total international taxes 15.7 9.5 12.2 20.9 11.0 19.0 26.5 -40.3 -0.7 0.9 30.0 0.2

Consolidated

Income Tax 13.2 50.8 0.4 7.7 41.0 3.8 41.6 48.8 43.7 65.2 44.9 108.8

Deferred taxes 9 0 79 4 22 2 85 4 23 5 80 1 38 9 70 2 49 9 161 8 56 5 211 8Deferred taxes 9.0 -79.4 22.2 -85.4 -23.5 80.1 -38.9 -70.2 -49.9 -161.8 56.5 -211.8

Banking sector special tax 7.6 7.6 7.6 7.6 7.8 6.2 7.0 7.0 6.5 6.5 14.0 13.0

Total taxes 29.9 -21.0 30.2 -70.1 25.3 90.1 9.7 -14.4 0.2 -90.2 115.5 -89.9


Quarterly balance sheet: assets

(Eur mn) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep12 Dec 12 Mar 13 Jun 13 YoY QoQ(Eur mn) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep12 Dec 12 Mar 13 Jun 13 YoY QoQ

Cash & deposits at central banks 1,252 1,085 1,015 1,090 1,527 1,646 1,183 1,378 1,410 1,209 -26% -14%

Deposits with banks 671 538 610 581 562 723 617 681 511 565 -22% 11%

Financial assets held for trading 3,398 3,007 3,458 3,435 3,885 3,904 3,994 3,925 4128 3,219 -18% -22%

Fi i l t t FV 1 525 1 063 1 487 1 964 2 096 3 194 3 059 2 822 2 780 3 894 22% 40%Financial assets at FV 1,525 1,063 1,487 1,964 2,096 3,194 3,059 2,822 2,780 3,894 22% 40%

Financial assets AFS 10,777 10,925 12,137 11,483 12,438 14,298 12,025 10,755 13,559 12,129 -15% -11%

Loans and advances to banks 3,765 3,439 4,049 3,283 2,288 2,084 2,520 5,427 3,093 2,454 18% -21%

Loans and adv. to customers 49,862 49,718 49,933 49,043 48,713 48,741 48,234 47,706 48,443 47,977 -2% -1%

(Provisions) ( 1,790) (1,983) (2,101) (2,167) (2,271) (2,435) (2,577) (2,692) (2,823) (3,085) 27% 11%

Held to maturity investments 2,349 2,252 2,092 1,541 1,183 1,310 972 942 921 1,025 -22% 11%

Hedging derivatives 296 329 435 510 468 485 483 517 450 392 -19% -13%

Non current assets held for sale 605 637 674 1,647 1,827 2,164 2,176 3,278 3,489 3,365 56% -4%

Investment property - - - - - 385 394 442 395 393 2% -

Other tangible assets 780 798 823 852 834 865 947 932 971 954 10% -2%

Intangible assets 230 221 223 230 227 485 515 555 548 405 -17% -26%

Investments in assoc. Companies 961 961 948 807 858 577 587 581 583 608 5% 4%Investments in assoc. Companies 961 961 948 807 858 577 587 581 583 608 5% 4%

Current income tax assets 99 108 40 29 31 38 21 25 23 33 -13% 41%

Deferred income tax assets 292 377 375 712 714 665 672 729 779 936 41% 20%

Reinsurance Technical Prov. 3 3 4 2 12 - -

Other assets 3,886 4,704 4,467 3,031 3,614 3,724 3,464 2,994 2,859 3,046 -18% 6%

…Direct & Indirect Insur. Debtors 9 8 1 9 352 - -

... Other assets 3,886 4,704 4,467 3,031 3,614 3,715 3,456 2,994 2,850 2,694 -27% -5%

Total Assets 80,746 80,162 82,767 80,237 81,265 85,292 81,866 83,691 84,946 82,616 -3% -3%


Quarterly balance sheet: liabilities

(Eur mn) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 YoY QoQ

Amounts owed to central banks 8521 9,673 11,422 10,014 13,316 14,356 11,224 10,893 9,947 10,042 -30% 1%

Financial liabilities held for trading 1,875 1,895 2,113 2,125 1,943 2,167 2,187 2,122 1,949 1,568 -28% -20%

Deposits from banks 7,199 5,961 6,170 6,239 4,950 5,767 5,072 5,089 5,592 5,197 -10% -7%

Due to customers 30,545 31,972 33,854 34,206 35,959 32,765 33,240 34,540 37,417 37,912 16% 1%

Debt securities 20,742 19,907 18,649 18,453 15,116 15,615 15,108 15,433 14,582 12,732 -18% -13%

H d i d i ti 217 230 225 239 182 184 118 125 162 170 8% 5%Hedging derivatives 217 230 225 239 182 184 118 125 162 170 -8% 5%

Investment Contracts - - - - - 1,844 2,655 3,414 3,293 3,475 88% 6%

Non current liabilities held for sale 5 5 5 141 141 165 156 176 176 156 -6% -11%

Provisions 212 207 200 190 166 186 215 237 230 193 3% -16%% %

Technical provisions - - - - - 1,817 1,668 1,577 1,532 1,495 -18% -2%

Current income tax liabilities 27 25 24 45 46 44 78 221 207 123 - -41%

Deferred income tax liabilities 110 79 94 111 115 136 163 154 151 172 27% 14%

Other subordinated loans 2,327 1,578 1,158 961 946 834 839 840 835 831 - -

Other liabilities 1,603 1,642 1,950 1,321 1,996 1,887 1,384 1,146 1,187 1,320 -30% 11%

… Direct and Indirect Insurance Creditors - - - - - 11 25 2 21 22 - 4%

… Other liabilities 1,603 1,642 1,950 1,321 1,996 1,876 1,359 1,144 1,166 1,297 -31% 11%

Total Liabilities 73,386 73,175 75,863 74,045 74,875 77,768 74,107 75,958 77,261 75,384 -3% -2%


Quarterly balance sheet: equity

(Eur mn) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 YoY QoQ

Shareholders' Equity 6,738 6,274 6,132 5,713 5,769 6,837 7,022 6,967 7,066 6,819 - -3%

Share capital 3,500 3,500 3,500 4,030 4,030 5,040 5,040 5,040 5,040 5,040 - -

Share premium 1,085 1,085 1,085 1,082 1,082 1,067 1,069 1,070 1,069 1,069 - -

Other capital instruments 269 269 269 30 29 29 29 29 29 29 - -

Treasury stock (1) (1) (1) (1) (1) (11) (9) (7) (1) (1) - -

Preference shares 600 456 409 212 199 193 193 193 193 168 -13% -13%

Fair value reserve (33) (383) (467) (1,086) (900) (821) (632) (687) (710) (886) 8% 25%

Other reserves and retained earnings 1,317 1,322 1,337 1,447 1,330 1,340 1,330 1,329 1,445 1,399 4% -3%

Net Profit for the period / year 61 156 138 (109) 12 25 90 96 (62) (237) - -

Minority interests 562 583 634 588 609 663 647 669 682 650 -2% -5%

Total Equity 7 361 6 987 6 904 6 192 6 389 7 525 7 759 7 733 7 685 7 232 4% 6%Total Equity 7,361 6,987 6,904 6,192 6,389 7,525 7,759 7,733 7,685 7,232 -4% -6%


Quarterly gross loan portfolio (excluding securitised)

(EUR million) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 YoY QoQ

Loans to Individuals 14,333 14,292 14,157 14,326 14,095 13,979 13,768 13,762 13,617 13,477 -4% -1%

… ow Mortgages 11,650 11,646 11,595 11,610 11,496 11,411 11,317 11,134 11,044 10,974 -4% -1%

… Domestic 11,177 11,172 11,112 11,075 10,975 10,875 10,785 10,598 10,503 10,425 -4% -1%

… International 473 474 483 535 522 536 532 536 541 549 2% 2%

… ow Other 2,683 2,646 2,562 2,716 2,599 2,567 2,450 2,628 2,573 2,502 -3% -3%

… Domestic 2,348 2,305 2,228 2,130 2,034 1,952 1,849 1,937 1,844 1,799 -8% -2%

… International 335 341 334 586 565 615 601 691 729 703 14% -4%

Corporate Lending 37,319 37,409 37,876 36,885 36,889 37,197 37,043 36,637 37,650 37,634 1% -

… Domestic 27,441 27,764 28,159 27,160 27,003 26,777 26,344 25,656 26,144 26,153 -2% -

… International 9,878 9,645 9,717 9,725 9,885 10,420 10,700 10,981 11,505 11,481 10% -

Loan portfolio 51,652 51,701 52,033 51,211 50,984 51,176 50,811 50,399 51,267 51,111 - -

… Domestic 40,966 41,241 41,499 40,365 40,012 39,604 38,978 38,191 38,491 38,377 -3% -… Domestic 40,966 41,241 41,499 40,365 40,012 39,604 38,978 38,191 38,491 38,377 3%

… International 10,686 10,460 10,534 10,846 10,972 11,572 11,833 12,208 12,775 12,734 10% -

Int as % total 21% 20% 20% 21% 21% 23% 23% 24% 25% 25%


Quarterly asset quality indicators

Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13

O d L >90 d / G L 2 17% 2 35% 2 60% 2 74% 2 96% 3 30% 3 75% 3 90% 4 34% 5 09%Overdue Loans >90 days / Gross Loans 2.17% 2.35% 2.60% 2.74% 2.96% 3.30% 3.75% 3.90% 4.34% 5.09%

Coverage of Overdue Loans > 90 days 159.4% 163.0% 155.0% 154.5% 150.3% 144.0% 135.3% 136.9% 126.8% 120.4%

Overdue Loans >30 days / Gross Loans 2.38% 2.59% 2.85% 3.02% 3.48% 3.73% 4.18% 4.34% 4.92% 5.57%

Mortgage (>30d) 0.84% 0.82% 0.85% 0.84% 0.83% 0.86% 0.87% 0.92% 0.94% 0.95%

Consumer (>30d) 4.46% 4.55% 4.87% 4.98% 5.40% 6.01% 6.61% 7.44% 7.61% 8.08%

Corporates (>30d) 2.27% 3.00% 3.33% 3.56% 4.18% 4.45% 5.02% 5.15% 5.90% 6.76%

Coverage of Overdue Loans >30 days 145.4% 148.3% 141.6% 140.2% 127.8% 127.6% 121.5% 123.2% 112.0% 110.0%

Credit at Risk (BoP) (1) 5.22% 5.62% 6.22% 6.59% 7.15% 7.91% 9.30% 9.44% 10.10% 10.73%

Coverage of Credit at Risk 66.4% 68.3% 64.9% 64.2% 62.3% 60.1% 54.5% 56.6% 54.5% 57.1%Coverage of Credit at Risk 66.4% 68.3% 64.9% 64.2% 62.3% 60.1% 54.5% 56.6% 54.5% 57.1%

Provisions for Credit / Total Gross Loans 3.47% 3.83% 4.04% 4.23% 4.45% 4.76% 5.07% 5.34% 5.51% 6.13%

QoQ Provision Charge 63bp 174bp 114bp 115bp 117bp 159bp 210bp 156bp 146bp 286bp

… Domestic 68bp 191bp 128bp 137bp 126bp 184bp 254bp 176bp 172bp 340bp

… International 40bp 104bp 59bp 33bp 82bp 75bp 66bp 90bp 66bp 125bp


Overdue loans ratios and coverage

Total Overdue Loans Ratio (+30d) & Coverage (%)Overdue Loans +90 days Ratio & Coverage (%)

161% 166% 158% 161%145% 148% 142% 140%

188% 185%173%173% 2 6% 2 9% 3 0%

3,5% 3,7% 4,2% 4,3% 4,9%5,57%

145% 142% 140%128% 128% 122% 123%

112% 110%

5,09%

173%159% 163%

155%155% 150% 144%135% 137%

127% 120%

1,9% 1,9% 2,1% 2,1% 2,4% 2,6% 2,9% 3,0%

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

1,67%1,70%1,90%1,95%2,17%2,35%2,60%2,74%2,96%

3,30%3,75% 3,90%

4,34%

5,09%

2.98%2.94%

Net New Entries as % of Performing Loans(quarterly annualised)

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

1.03%0 74%

1.23%0.88%

1.29%0.91%

2.05%

1.26%

1.90%

0.83%

0.23%

0.74%0.37%

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Quarterly Write Offs


22.8 20.0 14.1 34.8 30.0 5.0 16.4 50.5 21.8 24.2 17.5 36.6 26.9 26.9

Quarterly asset quality indicators: Domestic and International

(EUR million) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13

Gross Loans 51,652.1 51,700.5 52,033.5 51,210.8 50,984.4 51,175.5 50,810.9 50,398.7 51,266.8 51,110.9

…Domestic 40,966.3 41,240.9 41,499.2 40,364.8 40,012.4 39,603.8 38,978.1 38,191.1 38,491.4 38,377.3

… International 10,685.8 10,459.7 10,534.3 10,846.1 10,972.9 11,571.8 11,833.8 12,207.7 12,775.4 12,733.7

Total Overdue Loans (> 30 d) 1 231 5 1 337 1 1 483 4 1 545 6 1 776 5 1 908 0 2 121 5 2 185 4 2 521 3 2 849 2Total Overdue Loans (> 30 d) 1,231.5 1,337.1 1,483.4 1,545.6 1,776.5 1,908.0 2,121.5 2,185.4 2,521.3 2,849.2

…Domestic 1018.7 1,101.1 1,213.5 1,236.7 1,488.6 1,582.0 1,764.0 1,810.5 2,119.1 2,386.5

… International 212.8 236.0 269.9 308.9 287.9 326.0 357.5 375.0 402.2 462.7

Overdue Loans > 90 days 1,122.7 1,216.2 1,355.2 1,403.3 1,510.8 1,690.8 1,904.9 1,966.0 2,226.9 2,602.8

…Domestic 931.7 996.0 1,101.3 1,123.2 1,242.3 1,407.5 1,566.1 1,652.0 1,853.1 2,172.1

… International 191.0 220.2 253.9 280.1 268.5 283.4 338.8 314.0 373.8 430.7

Credit at Risk 2,693.8 2,904.0 3,239.0 3,373.6 3,646.8 4,049.0 4,726.0 4,758.4 5,177.9 5,485.0

Total Credit Provisions (BS) 1,790.1 1,982.6 2,100.6 2,167.4 2,271.2 2,434.7 2,577.1 2,692.3 2,823.4 3,134.2

…Domestic 1,516.3 1,694.8 1,798.7 1,865.9 1,935.9 2,082.4 2,204.7 2,297.9 2.434.6 2,718.5

… International 273.8 287.8 301.8 301.6 335.2 352.3 372.4 394.4 388.8 415.7


Quarterly asset quality indicators: Domestic and International

Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13

O d L >90 d / G L 2 17% 2 35% 2 60% 2 74% 2 96% 3 30% 3 75% 3 90% 4 34% 5 09%Overdue Loans >90 days / Gross Loans 2.17% 2.35% 2.60% 2.74% 2.96% 3.30% 3.75% 3.90% 4.34% 5.09%

…Domestic 2.27% 2.41% 2.65% 2.78% 3.10% 3.55% 4.02% 4.33% 4.81% 5.66%

… International 1.79% 2.11% 2.41% 2.58% 2.45% 2.45% 2.86% 2.57% 2.93% 3.38%

C f O d L 90 dCoverage of Overdue Loans > 90 days 159.4% 163.0% 155.0% 154.5% 150.3% 144.0% 135.3% 136.9% 126.8% 120.4%

…Domestic 162.7% 170.2% 163.3% 166.1% 155.8% 148.0% 140.8% 139.1% 131.4% 125.2%

… International 143.3% 130.7% 118.9% 107.7% 124.8% 124.3% 109.9% 125.6% 104.0% 96.5%

Overdue Loans >30 days / Gross Loans 2.38% 2.59% 2.85% 3.02% 3.48% 3.73% 4.18% 4.34% 4.92% 5.57%

…Domestic 2.49% 2.67% 2.92% 3.06% 3.72% 3.99% 4.53% 4.74% 5.51% 6.22%

… International 1.99% 2.26% 2.56% 2.85% 2.62% 2.82% 3.02% 3.07% 3.15% 3.63%

Coverage of Overdue Loans >30 days 145.4% 148.3% 141.6% 140.2% 127.8% 127.6% 121.5% 123.2% 112.0% 110.0%

…Domestic 148.8% 153.9% 148.2% 150.9% 130.1% 131.6% 125.0% 126.9% 114.9% 113.9%

… International 128.6% 121.9% 111.8% 97.6% 116.5% 108.1% 104.2% 105.2% 96.7% 89.8%

Credit at Risk Ratio (BoP) 5.22% 5.62% 6.22% 6.59% 7.15% 7.91% 9.30% 9.44% 10.10% 10.73%


Quarterly and accumulated credit provision charge & net new entries

(EUR million; % annualised) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

P&L Credit Provisions Quarter 80.9 224.6 147.8 147.4 149.0 203.0 266.9 196.0 187.1 366.0

… Domestic 70.1 197.4 132.4 138.3 126.4 181.4 247.4 168.5 166.0 326.2

… International 10.7 27.2 15.4 9.0 22.6 21.5 19.4 27.5 21.2 39.8

As % Loan Portfolio (bp) 63bp 174bp 114bp 115bp 117bp 159bp 210bp 156bp 146bp 286bp

… Domestic 68bp 191bp 128bp 137bp 126bp 183bp 254bp 176bp 172bp 340bp


P&L Credit Provisions Accumulated 80.9 305.4 453.2 600.6 149.0 352.0 618.9 814.8 187.1 553.1

D ti 70 1 267 5 399 7 538 2 126 4 307 9 555 3 723 8 166 0 492 2… Domestic 70.1 267.5 399.7 538.2 126.4 307.9 555.3 723.8 166.0 492.2

… International 10.7 37.9 53.5 62.4 22.6 44.1 63.5 91.0 21.2 60.9

As % Loan Portfolio (bp) 63bp 118bp 116bp 117bp 117bp 138bp 162bp 162bp 146bp 216bp

… Domestic 68bp 130bp 128bp 133bp 126bp 155bp 190bp 190bp 172bp 256bp… Domestic 68bp 130bp 128bp 133bp 126bp 155bp 190bp 190bp 172bp 256bp


Net new entries as % Performing Loans

... Quarterly net new entries 123bp 88bp 129bp 91bp 205bp 126bp 190bp 83bp 298bp 294py p p p p p p p p p p

... Accumulated net new entries 123bp 105bp 113bp 109bp 205bp 166bp 175bp 153bp 298bp 297bp

Quarterly Write Offs (Eur mn) 30.0 5.0 16.4 50.5 21.8 24.2 17.5 36.6 26.9 26.9


Quarterly customer funds

(EUR million) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 YoY QoQ

Deposits 30,545 31,972 33,854 34,206 35,959 32,765 33,240 34,540 37,417 37,912 16% 1%

… Sight 8,145 8,466 8,730 8,573 9,119 8,521 8,927 10,458 10,718 10,506 23% -2%

Term 22 401 23 506 25 124 25 633 26 840 24 244 24 313 24 082 26 699 27 405 13% 3%… Term 22,401 23,506 25,124 25,633 26,840 24,244 24,313 24,082 26,699 27,405 13% 3%

Life Insurance Products - - - - - 3,661 4,323 4,991 4,825 4,969 36% 3%

Certificates of Deposits 2,006 1,650 1,573 644 652 773 619 612 493 379 -51% -23%

Debt Securities placed with

(1)

Debt Securities placed with Clients 5,747 5,988 5,273 5,820 4,804 5,226 5,111 4,642 4,692 4,150 -21% -11%

On-BS Customer Funds 38,298 39,610 40,699 40,670 41,415 42,425 43,293 44,785 47,427 47,410 12% -

Off-BS Funds 17,715 16,522 14,788 13,714 13,260 9,976 10,918 11,403 11,090 11,170 12% 1%Off BS Funds 17,715 16,522 14,788 13,714 13,260 9,976 10,918 11,403 11,090 11,170 12% 1%

Total 56,013 56,132 55,487 54,383 54,675 52,401 54,211 56,188 58,518 58,580 12% -

… Domestic 41,732 42,351 42,057 42,479 41,572 36,719 38,414 42,694 43,495 43,902 20% 1%

… International 14,281 13,781 13,430 11,905 13,103 15,682 15,797 13,494 15,023 14,679 7% -2%

% total 25% 25% 24% 22% 24% 26% 26% 24% 26% 25%

1H2013 Results Presentation 63(1) The increase of Life Insurance Products reflects the full consolidation of BES Vida from 2Q2012.

26 July 2013

Quarterly off-BS customer funds

(EUR million) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 De c 12 Mar 13 Jun 13 YoY QoQ(EUR million) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 De c 12 Mar 13 Jun 13 YoY QoQ

Mutual Funds 5,437 5,038 4,629 4,633 4,717 4,724 4,731 5,115 5,348 5,501 16% 3%

… Domestic 2,585 2,267 2,051 2,381 2,463 2,535 2,602 2,896 3,142 3,454 36% 10%

I t ti l… International 2,852 2,772 2,578 2,252 2,254 2,189 2,129 2,219 2,206 2,046 -6% -7%

Real Estate Funds 1,356 1,329 1,297 1,203 1,144 1,111 1,102 1,076 1,070 1,081 -3% 1%

… Domestic 1,275 1,249 1,209 1,110 1,052 1,013 1,005 982 973 970 -4% -

… International 81 80 88 93 92 98 97 93 96 111 13% 15%

Pension Funds 2,673 2,687 2,555 2,155 1,809 1,772 1,798 1,783 1,908 1,874 6% -2%

… Domestic 2,539 2,448 2,332 1,933 1,580 1,554 1,572 1,551 1,670 1,636 5% -2%

… International 134 239 223 222 229 218 226 233 238 239 10% -

Bancassurance(Domestic) 4,805 4,315 3,794 3,478 3,292 89 86 90 96 99 12% 3%

Other (2) 3,444 3,153 2,513 2,245 2,298 2,280 3,202 3,339 2,669 2,615 15% -2%

(1)(1)

… Domestic 2,638 2,349 1,874 1,684 1,746 1,755 2,759 2,886 2,188 2,123 21% -3%

… International 806 804 639 561 552 525 443 453 481 491 -6% 2%

T t l Off BS F d 17 715 16 522 14 788 13 714 13 260 9 976 10 918 11 403 11 090 11 170 12% 1%(1)Total Off-BS Funds 17,715 16,522 14,788 13,714 13,260 9,976 10,918 11,403 11,090 11,170 12% 1%

… Domestic 13,842 12,627 11,260 10,586 10,133 6,946 8,024 8,404 8,069 8,283 19% 3%

… International 3,873 3,895 3,528 3,128 3,127 3,030 2,895 2,998 3,022 2,887 -5% -4%

(1) The decrease of Bancassurance funds reflects the full consolidation of BES Vida Life Insurance Products are included in On Balance Sheet customer funds as from

( )


(1) The decrease of Bancassurance funds reflects the full consolidation of BES Vida. Life Insurance Products are included in On Balance Sheet customer funds as from 2Q2012.

(2) Other includes off-BS structured products, discretionary management and venture capital

26 July 2013

Quarterly solvency ratios

(EUR million) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13

RWA (BoP) 68,576 66,431 66,715 65,385 64,587 63,844 63,295 61,651 61,726 60,787

…Banking Book 60,214 59,482 60,524 59,705 58,451 58,081 57,419 56,454 56,092 55,545

…Trading Book 4,389 2,976 2,218 1,742 2,198 1,825 1,938 1,503 1,940 1,548

…Oper. Risk 3,973 3,973 3,973 3,938 3,938 3,938 3,938 3,694 3,694 3,694

Total Capital 7,838 7,577 7,038 6,970 6,967 7,118 7,021 6,963 6,910 6,488

Core Tier I 5,395 5,445 5,380 6,020 6,067 6,725 6,770 6,471 6,510 6,293

Tier I 6,033 6,127 6,020 6,171 6,185 6,683 6,651 6,442 6,436 6,107

Tier II and Other 1,805 1,517 1,018 799 782 435 370 521 474 381

Hybrid Capital 920 775 729 245 233 226 226 226 226 201

As % Tier I 15% 13% 12% 4% 4% 3% 3% 3% 3% 3%

Core Tier I (%) 7.9% 8.2% 8.1% 9.2% 9.4% 10.5% 10.7% 10.5% 10.5% 10.4%

Tier I (%) 8.8% 9.2% 9.0% 9.4% 9.6% 10.4% 10.5% 10.4% 10.4% 10.0%

Total (%) 11.4% 11. 5% 10.6% 10.7% 10.8% 11.1% 11.1% 11.3% 11.2% 10.7%

1H2013 Results Presentation 65Notes: BIS II IRB corresponds to calculations based on IRB Foundation for credit risk and standardised approach for operational risk. Preliminary data as of Jun 2013. 26 July 2013

Available for Sale Portfolio – main equity holdings potential gains & losses

Potential Gains and Losses

(EUR million) Acquis. Value Stake (%) 2010 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

EDP 173.8 2.38% -49.9 0.0 -20.1 -30.1 -24.1 -8.5 -10.1 11.0 24.5 34.7 41.0

PT 346.7 10.4% -7.3 -28.7 -146.8 -200.9 -151.0 -117.2 -99.8 -0.4 -10.7 1.1 -77.6

BMCE 82.4 2.69% 7.3 6.3 5.2 6.2 5.7 5.5 -1.3 -10.5 -3.6 -10.6 1.4

Total 602.9 120.3 112.6 -161.7 -224.8 -169.4 -120.2 -111.2 0.1 10.1 25.2 -35.2


Table of contents





V. Wrap up





Programme implementation is translating into a rapid rebalancing of the Portuguese economy. The combined current and capital account balance reached a surplus of 1.2% of GDP in 1Q 2013

External Balance (Net external financing needs (-) / capacity (+) of the economy, % GDP)

Net financing needs (-) / capacity (+) by sector (% GDP)*

100

-2

0

2 1Q 2013:1.2%

4.6

7.7

3.34.0

6.0

8.0

10.01Q 20121Q 2013

10

-8

-6

-4 0.0

-2.8-4.0

-2.0

0.0

2.0

-14

-12

-10

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

-4.6 -4.5

-7.1-8.0

-6.0

Households Non-Financial Corporations

Financial Sector General Government

Data for year ending in each quarter. Latest data for 1Q 2013

* Savings – investment.

Data for year ending in each quarter.

1H2013 Results Presentation 68Sources: INE, ES Research. 26 July 2013

This is the result of a strong improvement in the trade balance, resulting from a contraction in imports and from a favourable and resilient performance of exportsimports and from a favourable and resilient performance of exports

Trade Balance, Goods and Services (year ending in month EUR billion)

Contributions to the change in the trade balance over the last year (year ending in month EUR billion)

20

3.0

month, EUR billion) last year (year ending in month, EUR billion)

0.0

1.0

2.0

on

-2.0

-1.0EUR

Billio

-4.0

-3.0

Exports ImportsExports Imports

Latest data for MayLatest data for May

1H2013 Results Presentation 69Sources: INE, Bank of Portugal, ES Research. 26 July 2013

Portugal has been expanding its relevant market to fast growing emerging markets

Portuguese merchandise exports to selected countries

(%)Weight merchandise

exports %Growth merchandise

exports %

Top 5 merchandise exports

(2013 May , weight, %)

56,1

14,6

10 7

exports, % exports, %

Morocco

Brazil

Transportation Vehicles

Mineral Fuels

Machinery and electrical equipment

1,8

1,4

5 9

(1.2)

(1.3)8,3

10,7

11,2

10,7

9,5

7,4

Angola

Mozambique

Spain

Common Metals

Machinery and mechanical appliances

5,9

0,7

23,5

(5.6)

(0.6)

(22.8) 6,5

8,1

0 5 10 15

6,5

5,1

4,0

USA

United Kingdom

Poland

4,3

5,3

0,9

(4.2)

(5.2)

(0.9)

Top 5 services exports

(2013 May, weight, %)

-0,4

-2,3

-30,1

TotalY-o-Y

GrowthJan-May:

France

Germany

China

11,8

12,0

1,3

(12.3)

(12.8)

(2.0)

Travel and Tourism

Transportation

Other Business Services 16,0

30,9

39,3

,

-32,14.1%

Growth May 2013/12Weight May 2013( ) May 2012

Japan

,

0,3

( )

(0.5) Communications services

Construction services 3,0

3,1

16,0

1H2013 Results Presentation 70Sources: INE, ES Research.

0 20 40 60

26 July 2013

Extra-EU exports already represent close to 30% of total exports. Also, the profile of Portuguese exports has been changing, with an increase in the weight of higher added value goods and services

Portuguese Exports Profile (2000 - 2012)%∆ 2012/11

(EUR bn)

17,9 17,6 19,2 19,1

Total: 3.9%

5 8%

%∆ 2012/11

27,2 31,1 38,8 31,7 37,3 42,9 45,39,8 12,2

,16,3

17,6

2000 2005 2008 2009 2010 2011 2012

Services

Goods

5.8%Goods

-0.3%Services2000 2005 2008 2009 2010 2011 2012 Services

Portuguese Exports (Goods) Breakdown, Intra-EU and Extra-EU

(2000-2013 weight %)(2000-2013, weight, %) %∆ 2013/12

(Goods,Jan-May)29,0 29,219,1 20,0 25,6 24,6 24,6 25,6

INTRA-EU (Goods) EXTRA-EU (Goods)

4.1%80,9 80,0 74,4 75,4 75,4 74,4 71,0 70,8

2000 2005 2008 2009 2010 2011 2012 2013(Until

1H2013 Results Presentation 71Sources: INE, Bank of Portugal, ES Research.

May.)

26 July 2013

Main contributions to merchandise exports growth

Main contributions to merchandise exports growth, by Main contributions to merchandise exports growth, country (p.p.) by sector (p.p.)

1.68

2 662.66

0.66 0.65 0.60

0.32 0.27 0.270.18 0.15 0.14

0.700.46 0.35 0.31 0.27 0.21 0.20 0.16 0.15

Spain

Alge

ria

Moro

cco

Ango

la

Nethe

rland

s

USA

ted Ki

ngdo

m

Braz

il

South

Afric

a

Cana

da

Mine

ral F

uels

ood a

nd D

rinks

Plas

tics

Cellu

lose P

ulp,

Pape

r

Mach

inery

and

mech

anica

l ap

plian

ces

Chem

icals

Mach

inery

and

electr

ical

equip

ment

Footw

ear

ommo

n Meta

ls

Optic

al an

d Pr

ecisi

on

Instru

ments

May 2013 May 2013

N

Unit S

Fo C M M Co


External competitiveness is also being supported by favorable developments in unit labour costs, following structural adjustments in the economy and the ongoing “internal devaluation”g j y g g

Unit Labour Costs (% y-o-y)Real Effective Exchange Rate Index (2010 = 100)

2.03.04.05.0

-20-1.00.01.0

-5.0-4.0-3.02.0

Dec 2007 Dec 2008 Dec 2009 Dec 2010 Dec 2011 Dec 2012

-4.2

Dec. 2007 Dec. 2008 Dec. 2009 Dec. 2010 Dec. 2011 Dec. 2012

Year ending in each quarter. Latest data for 4Q 2012.

1H2013 Results Presentation 73Sources: BIS, Reuters Ecowin. 26 July 2013

From a different perspective, the improvement in the external balance is also a result of a deleveraging process among all sectors with a rising trend in domestic savingsdeleveraging process among all sectors, with a rising trend in domestic savings

Households’ Savings Rate (% of disposable income)Domestic Savings Rate (% of GDP) Households Savings Rate (% of disposable income)Domestic Savings Rate (% of GDP)

%20%

1011121314

12.9%

12141618

14.4%

6789

10

2468

10

56

2001 2003 2005 2007 2009 2011 201302

2001 2003 2005 2007 2009 2011 2013

Data for year ending in each quarter. Latest data for 1Q 2013. Data for year ending in each quarter. Latest data for 1Q 2013.

1H2013 Results Presentation 74Sources: INE, ES Research. 26 July 2013

Household deleveraging efforts are already translating into a declining trend in aggregate indebtednessindebtedness

Household IndebtednessLoans to Households

3540

Household Indebtedness (% of Disposable Income)

Loans to Households(%, y-o-y)

20253035

Mortgage

Consumption

100

120

140 130.7121.9

Consumption andOther

Housing

05

1015

Mortgage

40

60

80

-10-5

1999 2001 2003 2005 2007 2009 2011 2013

-3.8-7.8

0

20

40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Latest data for May 2013.

1H2013 Results Presentation 75Sources: Bank of Portugal, ES Research. 26 July 2013

A declining trend in non-financial corporations borrowing is also visible

Non-Financial Corporations IndebtednessLoans to Non-Financial Corporations

35%

160

Non-Financial Corporations Indebtedness (% GDP)

Loans to Non-Financial Corporations(%, y-o-y)

20

25

30

100

120

140

160 142.7

5

10

15

40

60

80

100

-5

0

1999 2001 2003 2005 2007 2009 2011 2013

-2.70

20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


1H2013 Results Presentation 76Sources: Bank of Portugal, ES Research. 26 July 2013

In 2012, cyclical components – particularly on the revenue side – and non-recurring effects were mostly responsible for the gap vs. the initial deficit target. This was partially compensated by a stronger than budgeted fall in operational spending

2012 General Government Budget Deficit, Headline vs. Deficit for EFAP* purposes (% GDP)

General Government Budget deficit (% GDP)

10.2 9.810

12

6.4

0.70.5

0.5

3.4 3.7 4.0

6.5

4.6

313.6

4.42

5.5

4.0

7.41

5.84

4

6

8

4.85

6.43

6.4

4.8

Budget deficit, ANA concession Recapitalisation of Recapitalisation of Deficit reported for 3.4 3.12.5

0

2

4

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

g ,Maastricht criteria

pCGD

pSAGESTAMO

pEFAP purposes

2012 General Government Budget Deficit, Headline vs. Deficit excluding one-off effects (% GDP)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

1. 2011 underlying deficit, without one-off measures (Banks’ pension funds); 2. 2011 deficit after one-off measures, and reported to Eurostat;3 2012 nominal deficit reported to Eurostat (includes non recurring 6 4

0.5

0.53. 2012 nominal deficit reported to Eurostat (includes non-recurringexpenditures related to the recapitalisation of CGD and Sagestamo).

4. 2012 underlving deficit, excluding non-recurrent effects. 5. Deficit reported to the Troika for the purpose of the Economic and Financial

Adjustment Programme.

6.4

5.8

0.3

Budget deficit, Recapitalisation of CGD Recapitalisation of Other adjustments Deficit excluding one-off ( 4G ti

Sources: Ministry of Finance, INE, ES Research, NCPAMoU. 77

gMaastricht criteria

p pSAGESTAMO

j geffects(e.g. 4G auction,

personal income taxsurcharge, etc).

* EFAP = Economic and Financial Adjustment Programme.

26 July 20131H2013 Results Presentation

In spite of the challenges in meeting the deficit targets, the commitment to fiscal consolidationhas been very clear Primary expenditure has been cut by close to EUR 11 billion in 2011-12 andhas been very clear. Primary expenditure has been cut by close to EUR 11 billion in 2011-12, andthe structural primary deficit has been reduced by 6.2 p.p. of GDP

Primary Balance and Structural Primary Balance(% GDP)

Public Expenditure (EUR billion)*

47 4% ofPrimary Balance49.4% of

GDP

51.5% ofGDP

-0.40.30.2

0.92.2

1

3

47.4% ofGDP

Primary BalanceStructural Primary Balance

89.084.5

78.4Capital

Interest 4.86.9

GDP

-2.0

-1.0

-2.5

5

-3

-178.4Capital

Expenditure

74 2 70 7 66 1

6.9

7.39.9

6.85.0

-7.3 -7.0

-6.0 -6.0

-9

-7

-5 CurrentPrimary

Expenditure

74.2 70.7 66.1

2009 2010 2011 2012 2013E 2014E 2010 2011 2012

* Vertical axis starts at EUR 30 billion.

Sources: Ministry of Finance, INE, ESResearch. 7826 July 20131H2013 Results Presentation

Portugal’s official creditors continue to see debt as sustainable

IMF’s Projections for Portugal’s public debt (% GDP)*

123,0122,4 123,7

122,5

119,4120,0

122,2 122,3

120,0 117 2

123,6

120

125

108,1

117,2

108,3110

115

108,0,

100

105 Initial MoU Scenario

6th Review

7th Review

93,593,3

94,0

90

95Observed values (Eurostat)

2010 2011 2012 2013 2014 2015 2016

1H2013 Results Presentation 79Sources: IMF, EC, ECB, ES Research-NACPMoU 26 July 2013

The ongoing deleveraging is also translating into a lower stock of net external liabilities in the financial sector

40

The increase in net external liabilities of the General Government (and of the economy) reflects a price effect, related to the rise in the value of Portuguese Government bonds held by non-residents, i.e. a rise in the value of Government liabilities, in spite of the declining trend in the Government’s net financing needs.

-10.3-17.9

-24.7-20

0

20

Stock of net 24.7-31.9-39.5

-46.3-55.4 -58.2 -63.1 -67.4

-78.888 9

-80

-60

-40%

of GD

Pexternal liabilities of the Portuguese economy (1)

-88.9-96.1

-110.6-107.2 -104.9

-116.5 -118.1

-140

-120

-100(% GDP)

Banking Sector Monetary authority General GovernmentOther Sectors Total net external liabilities

Banking Sector Monet. Authorities General Gov. Other Sectors2009 1Q 2013

-46 -112009 1Q 2013

+2 -152009 1Q 2013

-60 -762009 1Q 2013

-7 -15


(1) The stock of narrow net external debt stood at 99.1% of GDP at the end of 2012. Net external debt corresponds to net external liabilities excluding participation in capital and reinvested profits from FDI, shares and other participations from portfolio investment, derivatives and reserve assets. Source: Bank of Portugal.

26 July 2013

Ample external assets provide stability in the face of a tough financing environment. Portugal is one of the main world holders of gold reservesPortugal is one of the main world holders of gold reserves

200

Portugal’s gold reservesPortugal’s gross external assets (% GDP)

(% GDP)(% GDP)

~ EUR 15 billion

8

10

125

150

175

200 9.3172

4

6

50

75

100

125

% of

GDP

0

2

199920002001200220032004200520062007200820092010201120122013Q10

25

50

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1H2013 Results Presentation 81Sources: Bank of Portugal, INE, ES Research. 26 July 2013

The shift of resources away from domestic oriented, non-tradable, sectors is penalisingemployment and tax revenues Lending to exporting firms is increasing illustrating the shift inemployment and tax revenues. Lending to exporting firms is increasing, illustrating the shift in resources towards the tradable sector

Unemployment Rate (% Labour Force) Loans to Exporting Non-Financial Corporations(%, y-o-y)

4

5

6May5.1%

%

14

16

18 17.7

1

2

3

4

6

8

10

12

-1

0

1

2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 0

2

4

6

1983 1987 1991 1995 1999 2003 2007 2011 Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar1983 1987 1991 1995 1999 2003 2007 2011

Latest data for 1Q 2013 Latest data for May 2013.


The Government has presented a programme aimed at promoting economic growth based on investment in the tradable sectors, leading to stronger growth in exports

Main elements of the Government’s Programme to Promote Investment and Growth

Areas Key MeasuresAreas Key Measures

Skills, education and learning

•Strengthening the dual learning system (academic/professional), with the goal of involving 200 000 students

•New credit line to exports activities, in the amount of EUR 1 billion (immediate availability of EUR 500 million).

Corporate Income Tax Credit in 2013:

Tax deduction of 20% of i t t di

Financing

( y )

• Creation of a new development bank, specializing in SME financing.

•Lower spreadsand higher maturities in SME financing (negotiations

•Strengthen the role of CGD in the financing of economic activity (EUR 1 billion in 2013, EUR 2.5 billion in 2014).

investment spending, up to 70% of the tax collection.

In the limit, possibility of lowering the effective tax rate to

A more dynamic corporate sector

Promoting investment •Reform of the National Interest Projects innitiative.

•Streamlining mergers and acquisitions.

Lower spreads and higher maturities in SME financing (negotiations with Banks).

effective tax rate to 7.5%.

For investments up to EUR 5 million, between June 1st and December 31st 2013

Tax competitiveness

Innovation and entrepreneurship

Internationalisation

•Reform of the Corporate Income Tax.

•Reducing bureaucracy and simplifying licencing procedures.

•Allocation of 50% of European structural funds in the 2014-2020 December 31 2013.

Possibility of deduction for a period of 5 years.

Internationalisation

Logistic Infrastructure •Lower the costs of ports operations by 50%.

pProgramme to the suppoort of competitiveness of firms.

1H2013 Results Presentation 83Sources: MEE, ES Research, NCPAMoU. 26 July 2013

In response to new regulatory demands, Portuguese banks have been successfully lowering their transformation ratio…

Banking sector deposits Portugal vs Other periphery

120Portugal

Portuguese banking sector, Transformation Ratio (%) Banking sector deposits, Portugal vs. Other peripheryeconomies under adjustment programmes, 2009 = 100

The reference to the 120% target has been

100

110

Portugal

Spain

157

140128

120

gdropped by the Troika in the 7th assessment.

80

90

Ireland

120

60

70

Dec-2009 Sep-2010 Jun-2011 Mar-2012 Dec-2012

Greece

2010 2011 2012 (Est) Target 2014

Data for April 2013.

1H2013 Results Presentation 84Sources: Bank of Portugal, INE, National Central Banks, ES Research. 26 July 2013

... with a resilient behaviour of deposits reflecting the ongoing confidence in the sector. No signs of contagion from the Cyprus crisisg g yp

Stock of households’ bank deposits (EUR billion) Stock of non-financial corporations’ bank deposits(EUR billi )

40

130

140

(EUR billion)

May 2013 May 2013

-9.1% YoY+2 9% M M

+0.7% YoY+0 5% MoM

30

35

110

120

130 +2.9% MoM+0.5% MoM

20

25

90

100

10

15

70

80

Jan. 2008 Jan. 2009 Jan. 2010 Jan. 2011 Jan. 2012 Jan. 2013Jan. 2008 Jan. 2009 Jan. 2010 Jan. 2011 Jan. 2012 Jan. 2013

1H2013 Results Presentation 85Source: Bank of Portugal. 26 July 2013

Exposure to the ECB has been stable, with a slight downward trend

Central Bank liquidity provision (including ELA estimates for Greece and Ireland*), EUR Billion

% GDP (1) % Banks’ Assets (2)

17 1 6 4350

400

17.1

23.6

6.4

7.0250

300

350

RBil

lion Spain

(250.1;Jun. 2013)

Italy(261.4;May 2013)

42.4

32 6

19.3

4 5100

150

200

EUR

Greece(85.3;May 2013)

Ireland(4 1 M 2013) 32.6

29.3

4.5

8.90

50

2007 2008 2009 2010 2011 2012 2013

(47.1;May 2013)Portugal

(49.4; Jun 2013)

(1) 2012 GDP; (2) Banks’ assets in Dec. 2012(*) Ireland’s use of ELA came down from close to EUR 40 billion to zero in February 2013.

1H2013 Results Presentation 86Sources: Bank of Portugal, Bloomberg, National Central Banks, ES Research. 26 July 2013

Portuguese banks have strengthened their capital ratios, going beyond the Programme’s targets

Recapitalisation of Portuguese BanksEUR billion

Portuguese Banks Average Core Tier 1 Ratio (%) *

Public fundsPrivate funds

1 6 1 3

3.0

1.17.8 8.1 8.7

9.611.2 11.5

Target 2012: 10%

1.00.2 0.5 0.45

1.6 1.3

May-12 Jun-12 Jul-12 Set-12 Jan-13

Core Tier I. March 2013 (%)Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12

(Est)

BP

EBA

* Bank of Portugal criteria12.1%15.0%11.5%

9.6%

10.5% n.a.

n.a.9.6%9.4%9.9%

1H2013 Results Presentation 87Sources: Bank of Portugal, Bloomberg, National Central Banks, ES Research. 26 July 2013

No bubble in the housing sector. Real house prices increased very moderately in Portugal in the i t th E A d bt i i i l t t ith th iyears prior to the Euro Area debt crisis, in clear contrast with other economies

House PricesResidential Property,

% May2013

(% y-o-y)p y,

Accumulated Real Price Growth 1998-2011 (%)1

96

468

1012

May 2013

Confidencial Imobiliário76

(market prices)

-6-4-202

-3.5-5.07

44

-10-8-6

1996 1998 2000 2002 2004 2006 2008 2010 2012

5.0INE7

Portugal Euro Area Ireland Spain

(Bank appraisals)

(1) Accumulated nominal house price growth minus accumulated CPI growth


1H2013 Results Presentation 88Sources: ECB, Bloomberg, Confidencial Imobiliário, ES Research. 26 July 2013

The current fall in house prices in Portugal is reflecting the ongoing recession, and not the aftermath of a bubble burst in the housing sector. House prices have been relatively stable g p yover the last decade, comparing with other European economies

House Price Growth, Portugal vs. Spain (1987=100)

20

25600%Price index Portugal (lhs)

Price index Spain (lhs)

Nominal change Spain (rhs)

10

15

20

400

500

g p ( )

Nominal change Portugal (rhs)

0

5300

Index

15

-10

-5

100

200

-20

-15

0

1H2013 Results Presentation 89Sources: Confidencial Imobiliário (Portugal), Ministerio de Fomento (Spain), ES Research. 26 July 2013

Economic activity contracted 0.4% q-o-q and 4% y-o-y in 1Q 2013. But most indicators are signaling a stabilisation trend in 2013 and a small recovery in 2014

OECD Leading Indicator. (1)

102

103

104

100

101

102

Long term

97

98

99g

average

95

96

97

94Jan-2005 Jan-2006 Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012 Jan-2013

1H2013 Results Presentation 90Sources: INE, OECD, ES Research. (1) Leading indicator based on domestic and export order books, industrial production, share prices and unfilled job vacancies. 26 July 2013

Ongoing recovery in exports and industrial production, and a stabilisation trend in private consumption. GDP should have posted a slight q-o-q increase in Q2 2013

BoP activity coincident indicator (% y-o-y).

EC business confidence indicators (net balances).

Exports of goods and services (% y-o-y, 3m MA).

Jan-June 2013: -1.9% y-o-yJune

2012: -3.3% y-o-y

%

Industrial production and services turnover (% y-o-y, 3m MA).

External orders in manufacturing (% y-o-y 6m MA) vs. IFO.

BoP private consumption coincident indicator vs. consumer confidence.

Jan-June 2013: -3.9% y-o-y2012 5 7%120050

%

50

0.0

5.0

10.0

1.8%

Industrial production(May 2013)

2012: -5.7% y-o-y

(Y-o-Ysimples: +4.5%)

100.0

105.0

110.0

115.0

120.0

10

20

30

40

50IFO (Advced.6m, RHS)Jun. 2013

-200

-15.0

-10.0

-5.0-6.2%

Services Turnover (May 2013)

80.0

85.0

90.0

95.0

-40

-30

-20

-10

0-1.1%

New manufacturing orders,external market (LHS)May 2013


20.02006 2006 2007 2008 2008 2009 2010 2010 2011 2012 2012

91Sources: Bank of Portugal, European Commission, INE, DGEG, Bloomberg.

Oct. 2006

Jun. 2007

Feb. 2008

Oct. 2008

Jun. 2009

Feb. 2010

Oct. 2010

Jun. 2011

Feb. 2012

Oct. 2012

Jun. 2013

26 July 2013

Along with the supportive stance of the ECB (with the OMTs), the improvement in the external perception of Portugal’s adjustment translated into a significant decline in Government bond pe cept o o o tuga s adjust e t t a s ated to a s g ca t dec e Go e e t bo dyields. The initial negative impact of the recent political turmoil on yields has been reversed

Portuguese Government Bond yields in the secondary market (%)

Average yields in Treasury Bill issues (%)

OMTs official

182022

2Y404.55.05.5

6 Month12 Month

April 6th 2011: Request for

Official Financial

announcementby the ECB(06/09/2012)

Political turbulence

810121416

10Y2.02.53.03.54.0

3 Month

18 Month

1.72%1.60%

Financial Assistance

Fed announces tapering of

QE (May 22nd)

(resignation of the

Finance and Foreign Ministers,

July 1st and 2nd).

02468

4.386.41

0.00.51.01.5

21S 2N 4J 1 F b 2M 19S 16J 1 A 1 J l

1.04%0.74%

Jan. 2010Jul. 2010Jan. 2011Jul. 2011Jan. 2012Jul. 2012Jan. 2013Jul. 201321 Sep. 2011

2 Nov. 2011

4 Jan. 2012

15 Feb. 2012

2 May 2012

19 Sep. 2012

16 Jan. 2013

17 Apr. 2013

17 Jul. 2013

Latest data for July 23rd.

1H2013 Results Presentation 92Sources: IGCP, Reuters Ecowin, Bloomberg. 26 July 2013

The successful 5 and 10 year Government bond issues in January and May 2013 are important steps in the long way back to full market access and to the gradual stabilisation of financial conditions

January 23rd 2013: Syndicated tap of the OT 4.35% due 16 May 7th 2013: Sale of a new benchmark bond (OT 5.65%) due 15 y y pOctober 2017

y ( )February 2024

10%4% 2%

Distribution by Investor Type

6%7%

Distribution by Investor Type

60%24%

Asset Managers

Hedge Funds

Banks

Insurance/Pension Funds51%

12%

Asset Managers

Hedge Funds

Banks

Insurance/Pension Funds

CentralBanks

Distribution by GeographyDistribution by Geography

60%Others

7%

17%

Central Banks

Others

16%

10%

7%4% 1%

y g p y

USUKOther EuropeGer./Aus./Swi.Asia

33%

9%

9%

7% 2%

y g p y

USUKOther Europe

Issue Amount: EUR 2.5bn

Maturity: October 2017

Issue Amount: EUR 3bn

Maturity: February 2024

Yield: 5.669%

27%

2%7%2%14%

10%PortugalScandinaviaFranceItalySpainOthers

11%

9% pGer./Aus./Swi.AsiaPortugalOthers

Yield: 4.891%

Spread: Mid-Swap + 395

bps

Spread: Mid-Swap + 400

bps


2%7%2%29%

93Sources: IGCP, Reuters Ecowin. 26 July 2013

Portugal is fully funded in 2013 and already partially funded in 2014, with an estimated funding gap of around EUR 9 billionfunding gap of around EUR 9 billion

General Government’s estimated financing needs and sources 2012-2017 (EUR billion)

0.8

49.5 34.5 33.0 22.7 27.3 20.9 24.9 18.5 20.6 14.2 18.5 12.1

165

27.5

10.1

0.1

12.318.1 15.0 16.9

103

8.9

16.5

7.8 5.8

14.214.5

9.986

8.00.5

2.73.7

9.0

18.514.2 12.1

12.3 10.3 6.7 6.4 3.5 6.41.6

6.4-0.18.6

Fontes Necessidades Fontes Necessidades Fontes Necessidades Fontes Necessidades Fontes Necessidades Fontes Necessidades

2012 2013E 2014F 2015F 2016F 2017F

Sources Needs Sources Needs Sources Needs Sources Needs Sources Needs Sources Needs

FundinggapNet financingneedsPre-funding

EFAP financing(official loans)RedemptionsPGBs/ MTN’s

PGBsissuesandTBillsnet issues

1H2013 Results Presentation 94Sources: IGCP, Ministry of Finance, ES Research-NCPAMoU 26 July 2013

The 7 year extension of the maturities of the EFSF and EFSM loans will improve the debt repayment profilerepayment profile

General Government refinancing needs 2013-2023 (EUR million)

20

25 Other M/L term IMF EFSM EFSF The Eurogroup and Ecofin Ministers have agreed to lengthen the

maturities of the EFSM and EFSF loans to Portugal by increasing the

15

20

UR Bi

llion

loans to Portugal, by increasing the weighted average maturity limit by 7 years, to a maximum of 19.5 years for EFSM loans and 22 years for

EFSF loans.

5

10

EU

The extension implies an increase of the average residual maturity of total

debt from 6.7 years, to about 8.5

02013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

years.

The extension focused in lengthening the maturity of the

l i i ll i i 2016Total amount disbursed of official loans: EUR 64.5 billion.Average maturity of official loans (years): 11.2 (EFSM:12.4; EFSF:14.4; IMF:7.3).Estimated cost of loans (incl. interest and fees): EFSM:3%; EFSF:2.8%; IMF:3.8%; Average EU-IMF: 3.2%

loans originally maturing in 2016-2022, which amount to roughly EUR

22 billion.

1H2013 Results Presentation 95NOTE: Average maturity of total public debt: 6.7 years; average implicit cost of total public debt in 2012 (interest spending/stock of debt): 3.6%. Sources: IGCP, Reuters Ecowin, ES Research. 26 July 2013

Table of contents





V. Wrap up





Portugal: Main Forecasts 2013-2014

2007 2008 2009 2010 2011 2012E 2013F 2014F

GDP 2.4 0.0 -2.9 1.9 -1.6 -3.2 -2.3 0.4

Pri ate Cons mption 2 5 1 3 2 3 2 5 3 8 5 6 3 7 0 7

Annual growth rates (%), except where indicated

Private Consumption 2.5 1.3 -2.3 2.5 -3.8 -5.6 -3.7 -0.7

Public Consumption 0.5 0.3 4.7 0.1 -4.3 -4.4 -3.0 -1.7

Investment 2.1 -0.1 -13.3 1.4 -13.8 -13.7 -8.2 -3.2

Exports 7.5 -0.1 -10.9 10.2 7.2 3.3 2.5 4.6

Imports 5.5 2.3 -10.0 8.0 -5.9 -6.9 -3.1 0.4

Inflation (%) 2 5 2 6 0 8 1 4 3 7 2 8 0 9 1 2Inflation (%) 2.5 2.6 -0.8 1.4 3.7 2.8 0.9 1.2

Budget Balance (% GDP) -3.1 -3.6 -10.2 -9.8 -4.4 (7.4)* -6.4 (5.8)** -5.5*** -4.0***

Public Debt (% GDP) 68.4 71.7 83.7 94.0 108.3 123.6 122.9*** 124.2***

Unemployment (% Labour Force)*** 8.0 7.6 9.5 10.8 12.7 15.7 18.0 18.3

Current & Capital Account Balance (% GDP) -8.9 -11.1 -10.1 -9.0 -5.6 0.8 4.5 6.3

* The 4 4% reading includes the effects of the integration of the banks’ pension funds and other one off measures Without these effects the deficit would be 7 4% of GDP The 4.4% reading includes the effects of the integration of the banks pension funds and other one-off measures. Without these effects, the deficit would be 7.4% of GDP. ** Including one-off effects related to the recapitalisation of CGD and Sagestamo, worth close to 1% of GDP. Without these and other one-off effects, the deficit would be 5.8%

of GDP. The Government has reported a deficit of 4.7% of GDP to the Troika for the purpose of the Economic and Financial Adjustment Programme (which includes the revenue from the concession to ANA of the airport management services).

*** Economic and Financial Adjustment Program targets.E: Estimate; F: Forecast.


;Sources: Bank of Portugal, INE, ES Research, European Commission, IMF, OECD.

26 July 2013

Spain: Main Forecasts 2013-2014

2008 2009 2010 2011 2012F 2013F 2014F

GDP 0 9 3 7 0 3 0 4 1 4 1 5 0 6

Annual real growth rates (%), except where indicated.

GDP 0.9 -3.7 -0.3 0.4 -1.4 -1.5 0.6

Private Consumption -0.6 -3.8 0.7 -1.0 -2.0 -2.1 0.0

Public Consumption 5.9 3.7 1.5 -0.5 -4.8 -7.0 -1.3

Investment -4.7 -18.0 -6.2 -5.3 -9.0 -5.7 -0.2

Exports -1.0 -10.0 11.3 7.6 2.1 4.2 5.8

Imports -5.2 -17.2 9.2 -0.9 -6.2 -3.3 2.3

Inflation (%) 4.1 -0.2 2.0 3.1 2.4 1.7 1.0

Budget Deficit (% GDP) -4.5 -11.1 -9.7 -9.4 -10.6 -6.7 -7.2

Public Debt (% GDP) 40 1 53 8 61 5 69 3 88 4 95 8 101 0Public Debt (% GDP) 40.1 53.8 61.5 69.3 88.4 95.8 101.0

Current & Capital Account Balance (% GDP) -9.2 -4.5 -4.4 -3.7 -1.9 1.0 2.5

Unemployment (% of Labour Force) 11.3 18.0 20.1 21.7 25.0 26.6 26.1

1H2013 Results Presentation 98Sources: INE, Bank of Spain, ES Research, European Commission. 26 July 2013

Angola: Main Forecasts 2013-2014

2008 2009 2010 2011 2012F 2013F 2014F

GDP (real growth rate, %) 13.8 2.4 3.4 3.9 8.4 6.5 7.0

GDP per capita (USD, current prices) 4 671 4 082 4 329 5 305 5 873 6 033 6 292

Inflation (%) 12.5 13.7 14.5 13.5 10.3 9.4 8.4

Current Account Balance (% GDP) 10.3 -9.9 8.1 12.6 9.6 3.5 1.3

Budget Balance (% GDP) -4.5 -7.4 5.5 10.2 8.5 -1.2 -1.9

Exchange Rate (USD/KZ), annual average 75.0 79.2 91.9 93.7 95.3 95.4 95.0

1H2013 Results Presentation 99Sources: IMF, Angolan Central Bank, Finance Ministry, ES Research. 26 July 2013

Brazil: Main Forecasts 2013-2014

2008 2009 2010 2011 2012E 2013F 2014F

GDP (real growth rate %) 5 2 0 3 7 5 2 7 0 9 2 3 2 5GDP (real growth rate, %) 5.2 -0.3 7.5 2.7 0.9 2.3 2.5

Inflation (%) 5.7 4.9 5.0 6.5 5.8 5.8 6.0

Primary Budget Balance (% GDP) 4.0 2.0 2.7 3.1 2.4 2.0 2.5y g ( )

Public Debt (% GDP) 38.0 41.5 39.2 36.4 35.1 35.4 35.1

Unemployment (% of Labour Force) 7.9 8.1 6.7 6.0 5.5 5.3 5.5

Current Account Balance (% GDP) -1.7 -1.5 -2.2 -2.1 -2.4 -3.3 -2.9

Exchange Rate (USD/BRL), annual average 1.84 1.99 1.76 1.68 1.96 2.15 2.28

SELIC Interest Rate (%, End of Period) 13.75 8.75 10.75 11.00 7.25 9.25 9.25

1H2013 Results Presentation 100Sources: IBGE, Central Bank of Brazil, ES Research. 26 July 2013

Disclaimer

This news release may include certain statements relating to the Banco Espírito Santo Group that are neither reported

financial results nor other historical information. These 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 BES Group conducts its business and internationally, fiscal or other policies adopted by various

governments and regulatory authorities of Portugal and other jurisdictions, levels of competition from other banks and financial

i i ll f t h d i t t tservices companies as well as future exchange and interest rates.

Banco Espírito Santo does not undertake to release publicly any revision to the forward-looking information included in this

news release to reflect events circumstances or unanticipated events occurring after the date hereofnews release to reflect events, circumstances or unanticipated events occurring after the date hereof.


Investor Relations

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SHARE CAPITAL: EUR 5.04 bn

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