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Banco BPI | Annual Report Presentation

Banco BPI | Annual Report Presentation

Annual Report Presentation

Statement of the Chairman of the Board of Directors

Dear Shareholders,

For the first time since 1981, when the Portuguese Investment Company was founded, the initial message of this report is not signed by the founder of the project, Artur Santos Silva, currently serving as Banco BPI's Honorary Chairman. My initial words are for him. Of tribute for his vision, courage, leadership, capacity to execute and accomplish.

Of gratitude for his leadership, loyalty, rigour, transparency, and for the ability to mobilise shareholders, employees and customers at all times.

The year 2017 will be an exceptional period in BPI's journey. On 5 January, the sale of 2% of Banco de Fomento Angola (BFA) to Unitel was completed, with BPI now holding a 48.1% interest, and a new shareholders' agreement was signed that eliminated any participation of the Bank in the executive management of BFA. Accordingly, BPI complied with the ECB's determinations on exceeding the limit for limit for large exposures (Angolan public debt held by BFA, which until then BPI had consolidated in its accounts).

The takeover bid launched by CaixaBank was completed on 8 February 2017, enabling it to increase its stake in BPI's capital from 45% to 84.51%. Since then, BPI has been part of the CaixaBank Group, one of the main European financial institutions and a market leader in Spain in the most relevant commercial banking and insurance businesses: 30% of Spaniards have an account with CaixaBank and 27% consider it their main bank.

CaixaBank has been committed to BPI for more than 22 years, has supported the its endeavours and management at all times, some of which have not been easy, having gradually increased its shareholding from the initial 10% to the 44.5% it had when it launched the takeover bid. This is a natural evolution that will enable BPI to continue on its path, benefiting from all the strength and capabilities of the CaixaBank Group, an institution that has always guided its conduct by the same ethical and social responsibility values that have guided BPI's path since 1981.

On 26 April, the General Meeting of Shareholders elected a new Board of Directors for the three-year period 2017-2019, which would take office at the end of July after obtaining the authorisations of the Bank of Portugal and the European Central Bank.

Between February and July, the Bank experienced a period of transition with regard to changes in the Board of Directors and executive management. I have no doubt that this transition has been carried out in an exemplary manner, thanks to the farsightedness and commitment demonstrated by all those who have experienced it, whether they come from CaixaBank or BPI. The best proof of this is the excellent commercial results that the bank has achieved on all fronts despite the demands that such a process entails.

An important milestone in BPI's activity in 2017 was the programme to reduce employee headcount through early retirements and buyout agreements. As a result of this programme, 432 people left the Bank in 2017, plus 114 people whose departure was agreed in 2016 or 2017 before the programme. There will be an additional 83 departures in 2018, totalling 515 employees who have departed under such programme.

In total, since 2008 BPI has reduced the number of Employees in domestic activity from 7,767 to 4,930, a decrease of 37% (2,837 fewer people). This path, driven by new technologies and the evolution of customer behaviour, has been fundamental to ensure the Bank's profitability. As always, I would like to highlight the manner in which the process took place and the Bank's ability to provide excellent service despite the significant reduction in the number of employees.
The Bank's activity in 2017 continued to benefit from the recovery of the Portuguese economy that began in mid-2014. During the seven-year period between 2008 and 2014, Portuguese GDP fell 6.9% or about 1.0% per annum. In the three-year period between 2015 and 2017, GDP grew by 6.2% and was up 2.7% in 2017. The positive momentum of the Portuguese economy, in tandem with those of European Union countries, is expected to continue apace, which will be very positive for banking activity, whose profitability should continue to improve despite the low level of interest rates.

Finally, I would like to express my thanks for the efforts and dedication of all the great team that works at BPI and the trust that has been placed in us by customers and shareholders alike.

Fernando Ulrich

Statement of the Chaiman of the Executive Committee
Key performance indicators
Key Corporate Events