ANNUAL GENERAL MEETING OF SHAREHOLDERS BCP … · AGENDA 2014 • ANNUAL GENERAL MEETING OF...

ANNUAL GENERAL MEETINGOF SHAREHOLDERS BCP 2014

2

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCP

AGENDA

ITEM ONE To resolve upon the individual and consolidated annual report, balance sheet and fi nancial statements of 2013;

ITEM TWO To resolve upon the proposal for the appropriation of profi t;

ITEM THREE To carry out the general analysis of the management and auditing of the company with the latitude foreseen in the law;

ITEM FOURTo resolve, following the renunciation of the respective Chairman, on the composition of the remuneration and welfare board until the end of the current triennial 2012/2014;

ITEM FIVETo resolve, following the renunciation of two non-executive directors, on the composition of the Board of Directors until the end of the current triennial 2012/2014;

ITEM SIX To resolve upon the election of the Board of the General Meeting for the triennial 2014/2016;

ITEM SEVEN To resolve upon the election of the single Auditor and his/her alternate for the triennial 2014/2016;

ITEM EIGHT To resolve upon the appointment of the External Auditor for the triennial 2014/2016;

ITEM NINETo resolve upon the statement issued by the Remunerations and Welfare Board on the Remuneration policy for the Executive Board of Directors, including the Executive Committee as well as on the alteration of the Retirement Regulations of the Executive Directors;

ITEM TENTo reformulate the items of own capital by reducing the share capital without altering the number of existing shares without nominal value and without altering the net assets and consequent alteration of article 4 (1) of the articles of association, being the reduction of 2.035.000.000 to cover the losses in the bank’s individual accounts relating to the 2013 fi nancial year ;

ITEM ELEVEN To resolve upon the acquisition and sale of own shares and bonds.

Centro de Congressos do Lagoas Park Hotel, Porto Salvo, Oeiras30 of May of 2014.

3


SUMMARY

I. Main Highlights

II. Distinctive Factors

III. Competitive Positioning

IV. Strategy

V. BCP Shares

VI. Shareholders

VII. Capital

VIII. Funding and Liquidity

IX. BCP Ratings

X. Financial Review

XI. Pension Fund

XII. Corporate Governance

XIII. Key Indicators

ITEM ONETO RESOLVE UPON THE INDIVIDUAL AND CONSOLIDATED ANNUAL REPORT, BALANCE SHEET AND FINANCIAL

STATEMENTS OF 2013.

4

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPI. MAIN HIGHLIGHTS

CAPITAL

Reinforced and

above requirements

Core tier I ratio reaches 13.8% according to BoP, above 12.4% on 31 December 2012.

Core tier I ratio of 10.8% according to EBA (12.8% adjusted for 31 December 2013 buffer values).

PROFITABILITY

In line with

macroeconomic

environment

Consolidated net income at -740 million euros, comparing with -1,219 million euros in 2012, in line with macroeconomic

environment and with the restructuring plan.

Progressive improvement of core income.

Agreement with the unions for the implementation of the restructuring plan (to be implemented at the end of the

1st half of 2014) which includes a reduction of salaries (temporary) and the structure in Portugal in order to comply with DG Comp

agreement. Costs related to the early retirement programme and mutual agreement rescissions booked in 2013 in

the amount of 126 million euros.

Reduction in operating costs by 15.1%* in Portugal year-on-year.

New entries in NPL in Portugal decreases 53% compared to 2012, confi rming the target of a sustained reduction

in the cost of risk, but maintaining an high level of provisioning.

Contribution of international operations (excluding Greece and Romania) to consolidated net income of 178

million euros, an increase of 6.5% compared to 2012.

LIQUIDITY

Strengthening

Commercial gap improvement: reduction by 5.4 billion euros from December 2012, with net loans to deposits ratio

(BoP) at 117%, below the recommended level of 120%, and net loans to balance sheet customer funds at 108%.

Increase of 5.2%** in customer deposits year-on-year, with a growth in deposits of 4.0% in Portugal.

Focus on new funding to companies in Portugal, despite the lower demand for credit.

Reduction in ECB net usage to 10.0 billion euros.

* Excludes non-recurring specifi c items: restructuring costs (+69.3 M€ in 2012 and +126.5 M€ in 2013 and the impact of the legislative change related to mortality allowance (-64.0 M€

in 2012 and -7.5 M€ in 2013).

** On a comparable basis: excluding Greece (following the sale of that operation), Romania and Millennium bcp Gestão de Activos (following the discontinuation processes).

5


LARGEST PRIVATE OWNED

BANK IN PORTUGAL,

FOCUSED IN RETAIL

RESILIENCE AND

SUSTAINABILITY OF THE

BUSINESS MODEL

LEADING BANK IN

INNOVATION, WITH

PRESENCE IN SOCIAL

NETWORKS

INTERNATIONAL

COMPETITIVE POSITIONING,

FOCUSED ON POLAND,

ANGOLA AND

MOZAMBIQUE

TECNOLOGY: STRATEGY

OF CONTINUOUS

IMPROVEMENT IN

INFORMATION SYSTEMS

MILLENNIUM BRAND,

TRANSVERSAL TO ALL

OPERATIONS, WITH A FOCUS

ON COMMUNICATION

SEGMENT

II. DISTINCTIVE FACTORSLargest Portuguese

private-owned

banking institution,

with the second

largest branch

network in Portugal

and an expanding position

in the countries where

it operates, especially in

African affi nity markets

1,518 branches,

including 774 in

Portugal

5.2 million

customers,

including 2.3 million

in Portugal

18,660 employees,

including 46% in

Portugal

MILLENNIUM BCPWINS SEVERAL AWARDS

SUSTAINABILITY

WE KNOW WHAT COUNTS

6

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPIII. COMPETITIVE POSITIONINGPORTUGAL POLÓNIA

1st place in the Marktest Reputation Index 2013 ranking, in the Insurance category

“Best Commercial Bank” in Portugal, in the scope of the World Finance Banking Awards 2013World Finance Magazine

“Best Banking Offer” in Market Pearls Retailers’ Choice

“Brands of Excellence in Angola 2012/13” Superbrands

Best Corporate Governanceand Best Investor Relations Team / Capital Finance International Cfi .co

“Leading Top Rated” for Leading Clients, “Top Rated” for Cross Border/Non Affi liated Clients and “Commended” for Domestic Clients2013 Global Custodian Survey

“RESPECT Index” integration for the 5th timeWarsaw Stock Exchange/

Association of Listed Companies

“Best Bank” Global Finance

“Investment Fund/Open Pension Fund”, “Most Active in Certifi cates”, “Most Active in Shares B and C” and “Best Capital Market Promotion Event”Investment Challenge

“Ethibel EXCELLENCE Investment Register” Fórum ETHIBEL

“Golden Six”, in growing Millennium’s brand valueJornal Rzeczpospolita

“Best Bank in Mozambique”EMEA Finance

First place in fi nancial sector category, in the ranking of TOP CEO’s in Portugal Institutional Investor

Integration of Millennium bcp in Sustainability Indices: i) “Stoxx EuropeSustainability” and “Euro Stoxx Sustainability”Sustainalytics;ii) “Euronext Vigeo Europe 120” and “Ethibel Excellence Europe”Vigeo

“2013 Service Quality Star” Voting through Service Quality

Stars website

“Bank of the year in Mozambique”The Banker

ActivoBank was classifi ed as the 15th best company to work for in PortugalRevista Exame/Accenture

“Best Consumer Internet Bank”, in the scope of “World’s Best Internet Banks in Europe 2013”Global Finance

“Best Banking Group in Mozambique”World Finance

“Brands of Excellence”, in Health InsuranceSelec. Reader’s Digest

Millennium bcp and Médis were classiffi ed as “Consumer Choice”Consumerchoice

“Friendly Bank for Retail Customers”Newswee Magazine

“Bank of the year 2013 ”InterContinental Finance

Magazine

Benefactor Member attributed to Millennium bcp FoundationWorld Monuments Fund

Portugal

“Brands of Excellence in Portugal in 2013” for Millennium bcp, Médis and American ExpressSuperbrands

State-of-the-art Internet communication methods in Investor Relations Institute of Capital Market

– WSE Research

Brand of Excellence 2013 and 2014”Superbrands

“Best Consumer Internet Bank”, in the scope of the “World’s Best Internet Banks in Europe 2013”Global Finance

“Best website for online banking” for Millennium bcpPC Guia Reader Awards

MasterCard World Signia/Elite VIP card has been ranked 1st in the list of prestigious credit cards Forbes Magazine

PORTUGAL POLÓNIA ANGOLAPORTUGAL

MOÇAMBIQUE

7

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPIV. STRATEGY

Demanding economic environment

(2012-13)

Creating conditions for growth and profitability

(2014-15)

• Reduce wholesale funding

dependence• Stronger balance sheet

• Recovery of profitability

in Portugall

• Continued development of business

in Poland, Mozambique and Angola

Sustained growth

(2016-17)

• Net income sustained growth,

more balanced between domestic

and international component

STAGES PRIORITIES MAIN DRIVERS MAIN TARGETS

• Recovery in operating income

• Additional reduction

in operating costs

• Adopt strict limits in risk taking

• Wind down or divest the non-credit portfolio

2015 2017

CT1 (BoP) ~12% ~12%

LTD(*) <110% ~100%

C/I <55% <45%

Operating costs in Portugal

<700M€ <700M€

Cost of risk (bp)

~100 <100

ROE ~10% ~15%

(*) Loans to deposits ratio is defi ned as net loans divided by on-balance sheet customer funds.

8


2nd place in the

group of companies

included in the PSI20

that rose the most in 2013

and 2nd bank included

in the European

bank index (STOXX

Banks) that most

appreciated in 2013

V. BCP SHARE

In the context of the

“NYSE Euronext Lisbon

Awards” relative to 2013,

BCP was awarded

the prize for the

listed company

with the best

performance among

the companies with

stock exchange

capitalisation above

one billion euros

Market capitalization

of 3.3 billion

euros, at the end of

2013, representing an

increase of 122%

KEY INDICATORS UNITS 2013

Closing price (€) 0.1664

Number of ordinary shares (M) 19,707

Shareholder’s Equity attributable to the group (M€) 2,583

Book value per share (€) 0.12

Market capitalisation (closing price) (M€) 3,279

Annual volume (M) 34,249

Annual turnover (M€) 3,656

Share price

31 Jan. 28 Feb. 31 Mar. 30 Apr. 31 May 30 Jun. 31 Jul. 31 Aug. 30 Sep. 31 Oct. 30 Nov. 31 Dec.31 Dec.

0.00

0.05

0.10

0.20

0.15

PERFORMANCE ON BCP SHARES AS OF 2013

KEY INDICATORS UNITS 2013

9

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPVI. SHAREHOLDERS

The voting rights referred to above are the result of the direct and indirect stakes of Shareholders in the share capital of Banco Comercial Português. No other imputation of voting rights foreseen in article 20 of the Securities Code was communicated or calculated.

Number of

Shareholders stands at

174 thousands at the

end of 2013

Shareholders in Portugal

represent 51.6%

of the total

Qualifi ed Shareholders

represent 32%

of the Bank share capital

Relevant increase

of the weight of the

Institutional

Shareholders, which

currently represent

23% of bank capital

QUALIFIED SHAREOLDERS 31 December 2013

Shareholders Nr. of shares%

of share capital

% of voting

rights

Sonangol Group 3,830,587,403 19.44% 19.44%

Sabadell Group 841,830,560 4.27% 4.27%

EDP Group 591,001,026 3.00% 3.00%

Interoceânico Group 512,912,138 2.60% 2.60%

Berardo Group 498,462,641 2.53% 2.53%

QUALIFIED SHAREHOLDERS 6,274,793,768 31.84% 31.84%

Q

SShareholders Nr. of shares%

of share capital

% of voting

rights

Dec. 12 Dec.13

46%

SHAREHOLDER STRUCTURE

4

Qualified holdings

Institutional*

Retail

17%

37%

45%

23%

32%

2007 2008 2009 2010 2011 20132012

160,322 172,921 175,581 170,903 182,326 187,212187,21, 2 174,168

NUMBER OF SHAREHOLDERS

Source: Interbolsa

10

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPVII. CAPITALCORE TIER 1%

12.4%

Dec. 12

13.8%13.8%

Dec. 13

10.8%

Dec. 13 (static)

BoP EBA

12.8%12.8%

Dec. 13 (adjusted)

SOLVENCY Million euros

31 Dec. 13 31 Dec. 12

RISK WEIGHTED ASSETS

Credit risk 40,323 49,007

Risk of the trading portfolio 486 563

Operational risk 3,118 3,701

TOTAL 43,926 53,271

OWN FUNDS

Core Tier I 6,040 6,579

Preference shares and perpetual subordinated 40 173

Other deductions(1) (434) (530)

Tier I Capital 5,646 6,223

Tier II Capital 880 697

Deductions to total regulatory capital (106) (146)

TOTAL REGULATORY CAPITAL 6,421 6,773

(1) Includes deductions related to the shortfall of the stock of impairment to expected losses and signifi cant shareholdings in unconsolidated fi nancial institutions, in particular to the shareholdings held in Millenniumbcp Ageas and Banque BCP (France and Luxembourg).

Core Tier I ratio

stood at 13.8%

in accordance with BdP

criteria, above 12.4%

as at 31 December 2012

Core Tier I ratio stands at

10.8% according to EBA

(12.8% adjusted by the

buffer to 31 December

2013 values)

Ratios comfortable

above of regulatory

requirements of BoP

(10%) and EBA (9%)

Sale of the fi nancial holding

capital in Piraeus bank

had a very positive

effect on Bank’s

Core Tier I capital,

improving by 40 bps

compared to September

11

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPVIII. FUNDING AND LIQUIDITY

LOAN TO DEPOSIT RATIO(*)

Net loans to BS customer funds ratio

(*) Calculated with net loans and customer deposits (according to BoP criteria)

117%

128%

117%

128%

112%

Dec. 12 Dec. 13

108%

-11 p.p.

On a comparable basis: excluding Greece (following the sale of that operation), Romania and Millennium bcp Gestão de Activos (following the discontinuation processes)

CUSTOMER DEPOSITS

Billion euros

46.248.6

14.7

48.6

13.6

Portugal

International operations

Dec. 2012 Dec. 2013

32.633.9

+5.2%

+8.3%

+4.0%

Commercial gap

improvement:

reduction of 5.4

billion euros

compared to 31 December

2012

Loand to deposits

ratio (BdP) stands

at 117%, below the

recommendation of 120%

Reduction in net

usage of ECB to

10.0 billion, with a buffer

of 9.9 billion euros

Increase

of customer

deposits in 5.2%,

year-on-year, with

an increase of 4.0%

in Portugal

12

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPIX. BCP RATINGS

BCP Ratings remain

highly constrained by the

evolution of the rating of

the Portuguese Republic

Despite of the fact that

all the Rating Agencies

(CRA) assigned a negative

Outlook to the Portuguese

Republic and BCP, the

decline in yields on

government bonds and the

return from Portuguese

issuers to international

debt markets are perceived

as positive factors

BANCO COMERCIAL PORTUGUÊS

Last rating action Intrinsic(*) LT ST Outlook

Moody's 7/Oct./13 E B1 NP Negative

S&P 20/Sep./13 b- B B Watch Negative

Fitch Ratings 10/Jul./13 b BB+ B Negative

DBRS 28/Jun./13 BB (high) BBB (low) R-2 (mid) Negative

(*) Moody’s; Bank Financial Strenght Rating (BFSR); S&P; Stand-alone Credit Profi le (SACP); Fitch Ratings; Viability Ratings and DBRS: Intrinsic Assessment (IA).

REPUBLIC OF PORTUGAL

Last rating action LT ST Outlook

Moody's 8/Nov./13 Ba3 NP Stable

S&P 18/Sep./13 BB B Watch Negative

Fitch Ratings 23/Oct./13 BB+ B Negative

DBRS 13/Dec./13 BBB (low) R-2 (mid) Negative

Last rating action Intrinsic(*) LT ST Outlook

Last rating action LT ST Outlook

13

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPX. FINANCIAL REVIEWINCOME STATEMENT Million euros

2013 2012 Change % 13/12

Net interest income 848.1 998.0 -15.0%

Other net income 921.2 1,103.4 -16.5%

Net operating revenues 1,769.3 2,101.4 -15.8%

Operating costs 1,295.2 1,321.2 -2.0%

Impairment

For loans (net of recoveries) 820.8 969.6 -15.3%

Other impairment and provisions 465.8 349.6 33.2%

Income tax

Current 115.7 81.2 42.6%

Deferred (326.4) (213.3) 53.0%

Income from discontinued operations (45.0) (730.3) -93.8%

Non-controlling interests 93.7 81.8 14.5%

Net income attributable to Shareholders of the Bank (740.5) (1,219.1) -39.3%

CONTRIBUTION OF THE INTERNACIONAL OPERATIONS Million euros

2013 2012 Change % 13/12

Bank Millennium in Poland(1) 127.1 113.1 12.4%

Millennium bim in Mozambique(1) 85.5 85.5 0.0%

Banco Millennium Angola(1) 40.8 37.3 9.4%

Millennium Banque Privée in Switzerland 6.1 2.5 144.0%

Millennium bcp Bank & Trust in the Cayman Islands 11.4 14.7 -22.4%

Subtotal 270.9 253.1 7.0%

Non-controlling interests (92.7) (85.8) 8.0%

Subtotal 178.2 167.3 6.5%

Banca Millennium in Romania(2) (5.9) (23.8) -75.2%

Millennium bank in Greece(2) (63.1) (266.4) -76.3%

(1) The amounts showed are not deducted from non-controlling interests.(2) Net income of this operations are accounted at results from discontinued operations.

Consolidated net income

of -740 million euros,

comparing with -1,219

million euros in 2012, in

line with macroeconomic

context and with the

Restructuring Plan

Net income of BCP S.A.

will be transferred to

Reserves and Retained

Earnings

International operations

contribution (excluding

Greece and Romania)

for the consolidated net

income of 178 million

euros, an increase of 6.5%

compared to 2012

14

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPX. FINANCIAL REVIEW

Reduction of net interest

income reduced by the

increase of the cost of

the hybrids instruments

issued and by the liability

management in 2011

The evolution of the

net interest income

was constrained by the

decrease in demand for

credit by households and

fi rms

NET INTEREST INCOMEMillion euros

1,1171,133

Net interest income

269

848

135

998

1,117

2

8

1,133

9

2012 2013

1.42% 1.48%

Cost of hybrid financial instruments (CoCos)

Net interest margin (excl. cost of CoCos)

NET INTEREST INCOME (Activity in Portugal)

Million euros

612628

Net interest income

269

343

135

493

612

2

3

628

4

2012 2013

0.77% 0.58%

Cost of hybrid financial instruments (CoCos)


Net interest margin

NET INTEREST INCOME (International activity)

Million euros

505505 505505

2012 2013

3.22%

2.97%


Million euros

2013 vs. 2012

Cost of CoCo’s (134.1)

Customers funds margin 26.1

Volume effect loans (109.1)

Past due loans and recovery effect 37.7

Other 29.1

TOTAL (150.3)

Million euros

2013 vs. 2012

15


Operational costs

reduction by 15.1%*

in Portugal versus 2012

Agreement with the unions

for the implementation

of the restructuring plan

(to be implemented in the

2nd half of 2014) which

includes a temporary

wage reduction and the

reduction of the structure

in Portugal in order to

comply with agreed with

DG Comp

Booked in 2013 a provision

in the amount of 126

million euros related to the

early retirement program

and termination by mutual

agreement

OPERATING COSTSMillion euros

1,2951,2951,321

2012 2013

62.6%66.5%

Cost to income (excluding specific items)

OPERATING COSTS

Activity in Portugal

Million euros

870

2012 2013

68.9%

80.9%

Cost to income (excluding specific items)

OPERATING COSTS Million eurosOPERATING COSTS Million euros

2013 2012 2011 Change % 13/12

ACTIVITY IN PORTUGAL(1)

Staff costs 432.6 524.8 542.5 -17.6%Other administrative costs 263.0 299.6 320.0 -12.2%Depreciation 38.2 40.4 47.9 -5.4%

733.8 864.8 910.4 -15.1%INTERNATIONAL ACTIVITY

Staff costs 218.0 221.3 202.6 -1.5%Other administrative costs 194.5 202.2 193.0 -3.8%Depreciation 29.9 27.6 30.1 8.2%

442.4 451.1 425.7 -1.9%TOTAL(1)

Staff costs 650.6 746.1 745.1 -12.8%Other administrative costs 457.5 501.8 513.0 -8.8%Depreciation 68.1 68.0 78.0 0.1%

1,176.2 1,315.9 1,336.1 -10.6%Specifi c itemsLegislative change related to mortality allowance and reversal of provisions

(7.5) (64.0) (48.3)

Partial transfer of liabilities with pensions – – 164.8Restructuring programme and early retirements 126.5 69.3 12.3TOTAL 1,295.2 1,321.2 1,464.9 -2.0%

(1) Excludes the impacts of specifi c items presented the table.

* Excludes non-recurring specifi c items: restructuring costs (+69.3 M€ in 2012 and +126.5 M€ in 2013 and the impact of the legislative change related to mortality allowance (-64.0 M€ in 2012 and -7.5 M€ in 2013)

16


Loans impairment (net of

recoveries) stood at 820.8

million euros in 2013,

which compares to 969.6

million euros booked in

2012

Slowdown of the

impairment charges in

Portugal, versus 2012

New net entries in non

performing loans (NPL) in

Portugal in 2013 decreased

53% compared to 2012,

confi rming the objective

of sustained reduction

in the cost of risk, while

maintaining a high level of

provisioning

LOAN IMPAIRMENT CHARGES (NET OF RECOVERIES) Million euros( )

2013 2012 Change % 13/12

Loan impairment charges 837.3 993.1 -15.7%

Credit recoveries 16.5 23.5 -29.9%

TOTAL 820.8 969.6 -15.3%

Cost of risk:

Impairment charges as a % of total loans 140 b.p. 161 b.p. -21 b.p.

Impairment charges (net of recoveries) as a % of total loans

137 b.p. 157 b.p. -20 b.p.

Note: does not include impairment for estimated losses in Greece and Romania.

IMPAIRMENT CHARGES (NET)Million euros

821821

970

2012 2013

157 b.p.137 b.p.

As a % of total loans

IMPAIRMENT CHARGES (NET)

Activity in Portugal

Million euros

743743889

2012 2013

179 b.p.157 b.p.

As a % of total loans

17

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPXI. PENSION FUND

Liabilities for pensions

fully funded and degree of

coverage of 112%

Pension fund with

returns of 4.4% in

2013 versus 1.6% in 2012

Actuarial differences in

2013 of -212 million euros

penalized by the change

in the discount rate to 4%

(-200 million euros)

MAIN INDICATORS Million euros

2013 2012

Liabilities with pensions 2,533 2,293

Value of the Pension Fund 2,547 2,432

Coverage rate 112% 119%

Return on Pension Fund 4.4% 1.6%

Actuarial (gains) and losses 212 164

ASSUMPTIONS

2013 2012

Discount rate 4.00% 4.50%

Increase in future compensation levels1% until 2016

1.75% after 20171% until 2016

1.75% after 2017

Rate of pensions increase0% until 2016

0.75% after 20170% until 2016

0.75% after 2017

Projected rate of return of fund assets 4.00% 4.50%

Mortality tables

Men TV 73/77 – 1 year TV 73/77 – 1 year

Women TV 88/90 – 2 years TV 88/90 – 2 years

18

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPXII. CORPORATE GOVERNANCE

On 28 February 2012,

Banco Comercial

Português, S.A. held

a General Meeting of

Shareholders in which

approved the adoption

of a one-tier management

and supervisory model

During this same General

Meeting, the members

of the new boards and

governing bodies were

elected for the term of

offi ce of 2012-2014.

INTERNATIONAL

STRATEGIC BOARD

CLIENT OMBUDSMAN

Pension Fund Monitoring Commission

–

GENERAL MEETING

BOARD OF DIRECTORS

REMUNERATION AND WELFARE

BOARD

STATUTORY AUDITOR EXECUTIVE COMMITTEEAUDIT COMMITTEE

SPECIALISED

COMMISSIONS

COORDINATION

COMMITTEES

COMPANY

SECRETARY

GOVERNANCE MODEL

19


Securities Market Commission Recommendations on Corporate Governance

Nr. of Recommendations

Adoption Statement

RECOMMENDATION DESCRIPTION

I. VOTING AND CONTROL OF THE COMPANY

5 Adopts: 3

Adopts in part: 1

Does not adopt: 1

II. SUPERVISION, MANAGEMENT AND INSPECTION

II.1. Management and Supervision 10 Adopts: 9

Not applicable: 1

II.2. Inspection 5 Adopts: 5

II.3. Establishment of Remunerations 5 Adopts: 4

Not applicable: 1

III. REMUNERATIONS

8 Adopts: 3

Not applicable: 5

IV. AUDITS

3 Adopts: 3

V. CONFLICTS OF INTERESTS AND TRANSACTIONS WITH RELATED PARTIES

2 Adopts: 2

VI. INFORMATION

2 Adopts: 2

XII. CORPORATE GOVERNANCE

BCP adopts 94%

of the CMVM

recommendations on

Corporate Governance

Securities Market Commission Recommendationson Corporate Governance

Nr. of Recommendations

AdoptionStatement

20

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPXIII. KEY INDICATORS Million euros

2013 2012 2011 2010 2009Change %

13/12

BALANCE SHEET

Total assets 82,007 89,744 93,482 98,547 95.550 -8.6%

Loans and advances to customers (net) (1) 56,353 58,415 63,046 68,604 69.463 -3.5%

Total customer funds (1) 64,260 63,936 60,950 62,302 60.359 0.5%

INCOME STATEMENT

Net operating revenues 1,769.3 2,101.4 2,310.7 2,902.4 2,522.3 -15.8%

Operating costs 1,295.2 1,321,2 1,464.9 1,543.2 1,540.3 -2.0%

Net income attributable to Shareholders of the Bank (740.5) (1 219.1) (848.6) 344.5 225.2

PROFITABILITY

Return on average Shareholders’ equity (ROE) -26.5% -35.4% -22.0% 9.8% 4.6%

Net operating revenues/Average net assets (2) 2.1% 2.3% 2.4% 3.0% 2.7%

Return on average total assets (ROA) -0.8% -1.3% -0.8% 0.4% 0.3%

Net interest margin 1.1% 1.3% 1.7% 1.7% 1.6%

EFFICIENCY

Cost to income (2) (3) 66.5% 62.2% 57.8% 54.1% 62.9%

CREDIT QUALITY

Overdue loans (>90 days)/Total loans 7.1% 5.8% 4.2% 3.0% 2.3%

Credit at risk/Total loans(2) 11.9% 13.1% 10.1% 7.1% 6.0%

Total impairment/Overdue loans (>90 days) 80.1% 92.7% 115.0% 109.4% 119.0%

CAPITAL(4)

Own Funds 6,421 6,773 5,263 6,116 7,541

Risk weighted assets 43,926 53,271 55,455 59,564 65,769

Core Tier I (2) 13.8% 12.4% 9.3% 6.7% 6.4%

Tier I (2) 12.9% 11.7% 8.6% 9.2% 9.3%

Total (2) 14.6% 12.7% 9.5% 10.3% 11.5%

OTHER INDICATORS

Branches 1,518 1,699 1,722 1,744 1,774 -10.7%

Activity in Portugal 774 839 885 892 911 -7.7%

International activity 744 860 837 852 863 -13.5%

Employees 18,660 20,365 21,508 21,370 21,285 -8.4%

Activity in Portugal 8,584 8,982 9,959 10,146 10,298 -4.4%International activity 10,076 11,383 11,549 11,224 10,987 -11.5%

Note: The data and indicators disclosed result from the fi nancial statements in each year, except when referred. Following the classifi cation of activities as discontinued operations in 2012 and in 2013, for comparative purposes, the data for 2011 was updated.(1) Adjusted from discontinued operations: Millennium bank in Romania and Millennium bcp Gestão de Ativos (2013 to 2009); Millennium bank in Greece (2012 to 2009); Millennium bcpbank USA (2009). (2) According to Instruction no. 23/2011 from the Bank of Portugal, as the currently existing version. (3) Calculated in accordance with the defi nition from the Bank of Portugal. (4) Capital ratios based on the IRB approach in 2013 to 2010 and in accordance with the standard approach in 2009 (detailed information in the chapter “Capital”).

Millioon eeurou oss

2013 2012 2011 2010 2009Change %

13/13/13/121212

BALBALANCANCE SE SHEEHEETT

21

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM TWOTO RESOLVE UPON THE PROPOSAL FOR THE APPROPRIATION OF PROFIT

CONSIDERING:

• The diffi cult domestic and international macroeconomic environment that has affected the country in general and Banco Comercial Português, S.A., in particular

as a leading bank of the Portuguese fi nancial system;

• The several factors that infl uenced the 2013 net income, particularly the negative effects on the fi nancial margin related with the costs of the interests associated

with the issue of hybrid instruments subscribed by the State, the provisions for impairments and provisions accounted, the accounting of costs related with the early

retirements and mutually agreed work rescissions program and the estimation of losses in discontinued or under discontinuance operations;

• The combined effect of all these factors implied that Banco Comercial Português, S.A, registered in 2013, Group’s consolidated net losses amounting to

740,450,041.12 Euros and individual net losses amounting to 1,958,730,209.58 Euros.

IT IS PROPOSED

In accordance with article 66 (5) (f) and for purposes of article 376 (1) (b) of the Companies Code, and article 54 of the articles of association of Banco Comercial

Português, S.A., the appropriation of the individual net losses, amounting to 1,958,730,209.58 Euros for Retained Earnings.

22

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM THREETO CARRY OUT THE GENERAL ANALYSIS OF THE MANAGEMENT AND AUDITING OF THE COMPANY WITH THE LATITUDE

FORESEEN IN THE LAW

CONSIDERING:

• The diligence, dedication and professionalism shown during the 2013 fi nancial year by each and every one of the members of the Corporate Bodies in the exercise

of their functions, namely by the members of the Executive Committee and of the Audit Committee;

• The high level of professionalism and outstanding quality of the work carried out by the Chartered Accountant.

IT IS PROPOSED

That the General Meeting, within the scope of the general appraisal of the company’s management and supervision, resolve to approve a vote of trust and praise

addressed to the Board of Directors, Executive Committee and Audit Committee and each one of their members, as well as to the Chartered Accountant.

23

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM FOUR TO RESOLVE, FOLLOWING THE RENUNCIATION OF THE RESPECTIVE CHAIRMAN, ON THE COMPOSITION OF THE

REMUNERATION AND WELFARE BOARD UNTIL THE END OF THE CURRENT TRIENNIAL 2012/2014

CONSIDERING:

• That the Chairman of the Remuneration and Welfare Board, Baptista Muhongo Sumbe, presented his renunciation to the position on 6 September 2013;

• That, within the scope of the recapitalisation plan through state aid, the General Meeting held on 20 May 2013, elected Bernardo de Sá Braancamp Sobral

Sottomayor to be part of this body and the Remuneration and Welfare Board has one member more than the number foreseen in the initial election for the

current 2012/2014 term of offi ce;

• That, at a meeting held on 9 October 2013 the Remuneration and Welfare Board resolved to appoint José Manuel Archer Galvão Teles as interim Chairman, to

exercise functions until the General Meeting to be held in 2014.

IT IS PROPOSED

1. That the number of members of the Remuneration and Welfare Board be reduced to 4;

2. The appointment of Manuel Archer Galvão Teles as Chairman of the Remuneration and Welfare Board,

thus, that the Board, until the end of the current term of offi ce (2012/2014) be composed of the following individuals:

Chairman: José Manuel Archer Galvão Teles

Members: Manuel Soares Pinto Barbosa

José Luciano Vaz Marcos

Bernardo de Sá Braamcamp Sobral Sottomayor

24

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM FIVE TO RESOLVE, FOLLOWING THE RENUNCIATION OF TWO NON-EXECUTIVE DIRECTORS, ON THE COMPOSITION OF THE

BOARD OF DIRECTORS UNTIL THE END OF THE CURRENT TRIENNIAL 2012/2014

CONSIDERING:

• That the non executive Vice-chairman of the Board of Directors, Pedro Maria Calaínho Teixeira Duarte, presented his renunciation to the position on 31 August 2013;

• That the non executive member of the Board of Directors, António Manuel Costeira Faustino, presented his renunciation to the position on 31 October 2013;

• That, within the scope of the recapitalisation plan through state aid, the State appointed two non executive members to be part of the Board of Directors and

this body has two more members than the twenty ones elected at the General Meeting held on 28 February 2012;

• That, at its meetings held on 7 October and 4 November 2013, the Board of Directors considered that the existing vacant positions did not affect the regular

functioning of the Board or the Bank’s management.

IT IS PROPOSED

Without damaging the provisos of Law 63-A/2008 and the Decision 8840-B/2012 of 28 June and under the provisos of articles 11 (2) and 28 of the Articles of

Association, reduce the number of members of the Board of Directors from 22 to 20, with deferred and conditional effect, producing the reduction resolution

effects on 31 December 2014 if, until that date a cooptation or a replacement by other via has not taken place, being the reduction to 21 members if only one of

the cooptations mentioned above occurs during that period.

25

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM SIXTO RESOLVE UPON THE ELECTION OF THE BOARD OF THE GENERAL MEETING FOR THE TRIENNIAL 2014/2016

CONSIDERING:

• Considering that the term of offi ce of the Board of the General Meeting has reached its end;

IT IS PROPOSED

The election of the current members of the Board of the General Meeting of Shareholders of Banco Comercial Português, S.A. for the exercise of functions

during the term of offi ce 2014/2016. The Board will have the following composition:

Chairman: António Manuel da Rocha e Menezes Cordeiro

Vice-Chairman: Manuel António de Castro Portugal Carneiro da Frada

26

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM SEVENTO RESOLVE UPON THE ELECTION OF THE SINGLE AUDITOR AND HIS/HER ALTERNATE FOR THE TRIENNIAL 2014/2016

WHEREAS:

A. KPMG & Associados – SROC, S.A., represented by its partner Ana Cristina Soares Valente Dourado, ROC n.º 1011, ended the mandate 2011-2013 for which it

had been elected as Chartered Accountant at the Bank’s General Meeting of Shareholders;

B. The partner of KPMG & Associados – SROC, S.A., currently exercising the functions as the Bank’s chartered accountant represents that company as effective

Chartered Accountant since 2011 and, therefore the carrying out of an additional mandate will not question the provisos of the Chartered Accountants

Association concerning entities of public interest, stating that the maximum period for the partner in charge of coordinating or directly auditing the accounts to

undertake functions is of seven years counting from his/her appointment;

C. From the supervision made by the Audit Committee to the independence of the Chartered Accountant as well as from the respective evaluation of the

performance throughout the mandate, we are able to conclude that the functions of Chartered Accountant were exercised in an appropriate manner, showing

professionalism and quality in the work carried out;

D. Due to the signifi cant regulatory and supervision pressure that must be taken into account, plus the need to comply with the strict conditions deriving from the

Bank’s recapitalisation plan through state aid and the subsequent recapitalisation plan agreed with the Directorate-General for Competition of the European

Commission, the rotation of the Chartered Accountant would constitute an additional disturbance in the management of the Bank’s operations and would not

bring any signifi cant advantage;

E. Similar to what has been resolved for the previous triennial, the assessment of the internal control system, as an instrument to support the Bank’s management,

may be carried out by a different audit company and not by KPMG & Associados – SROC, S.A.;

F. The proposal of the Audit Committee to be submitted to the General Meeting maintains also the company KPMG & Associados – SROC, S.A., as External Auditor,

a fact that will enable to take advantage from the consequent synergies;

the Audit Committee proposes, in accordance with the provisos of articles 23 (d) and 39, (h), of the Articles of Association of Banco Comercial Português, S.A., as

well as the provisos of articles 446 (1) and 423-F (1) (m), of the Companies Code, the election as Effective and Alternate Chartered Accountant of the Bank to

exercise functions during the term of offi ce 2014-2016:

• Effective Chartered Accountant – KPMG & Associados, Sociedade de Revisores Ofi ciais de Contas, S.A. (SROC nº 189), represented by its partner Ana

Cristina Soares Valente Dourado, ROC nr. 1011;

• Alternate Chartered Accountant – Jean-éric Gaign (ROC nr. 1013).

27

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM EIGHTTO RESOLVE UPON THE APPOINTMENT OF THE EXTERNAL AUDITOR FOR THE TRIENNIAL 2014/2016

WHEREAS:

A. KPMG & Associados – SROC, S.A. ended on 31 December 2013 the mandate 2011-2013 for which it had been elected as External Auditor at the Bank’s General

Meeting of Shareholders;

B. The CMVM Corporate Governance Code recommends the rotation of the External Auditor, admitting, however, its maintenance beyond the established reference

rotation period, a situation that, if occurs, must be duly grounded by the supervision body by means of a specifi c opinion expressly stating the independence

conditions of the auditor and the advantages and costs involving its substitution;

C. The Audit Committee, taking into consideration the current context and the nearest future context wherein the Bank’s activities will be developed as well as the

assessment made to the independence and performance of KPMG, considers that the rotation of the External Auditor, at this moment, would be inopportune;

D. Due to the signifi cant regulatory and supervision pressure that must be taken into account, plus the need to comply with the strict conditions deriving from the

Bank’s recapitalisation plan through state aid and the subsequent recapitalisation plan agreed with the Directorate-General for Competition of the European

Commission, the rotation of the External Auditor would constitute an additional disturbance in the management of the Bank’s operations and would not bring

any signifi cant advantage;

E. The pure and simple substitution of the External Auditor would mean the loss of an important experience and in-depth knowledge of the Bank’s operations that,

under the current circumstances, may prove to be extremely useful and would certainly take very long to reacquire;

F. From the supervision made by the Audit Committee to the independence of the External Auditor as well as from the respective evaluation of the performance

throughout the mandate, we are able to conclude that the functions of External Auditor were exercised in an appropriate manner, showing professionalism and

quality in the work carried out;

G. The maintenance of the External Auditor is the solution that, within this context, provides an increased assurance of an effi cient external supervision of the Bank;

H. Similar to what has been resolved for the previous triennial and to mitigate the familiarity of the auditor with the audited company, the assessment of the internal

control system, as an instrument to support the Bank’s management, may be carried out by a different audit company and not by KPMG & Associados – SROC,

S.A., without damaging the legal responsibility of the External Auditor in this issue;

I. The proposal of the Audit Committee to be submitted to the General Meeting maintains also the company KPMG & Associados – SROC, S.A., as Effective

Chartered Accountant, a fact that will enable to take advantage from the consequent synergies;

the Audit Committee proposes, in accordance with the provisos of articles 23 (d) and 39, (h), of the Articles of Association of Banco Comercial Português, S.A., as well

as the provisos of article 9 (1) (m), of the Companies Code, the election as External Auditor of the Bank to exercise functions during the term of offi ce 2014-2016 of:

• KPMG & Associados – Sociedade de Revisores Ofi ciais de Contas, S.A. (SROC n.º 189).

28

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM NINE BD INCLUDING EC REMUNERATION POLICY AS WELL AS THE CHANGE TO RETIREMENT REGULATIONS OF THE EXECUTIVE

BOARD MEMBERS

STATEMENT ON THE REMUNERATION POLICY OF MEMBERS OF MANAGEMENT AND SUPERVISION BODIES

CONTEXT

In accordance with the provisos of articles 1 and 2 (1) of the Law 28/2009 of 19 June, the Remuneration and Welfare Board must present “every year, to the approval

of the general meeting a statement on the remuneration policy of the members of the respective management and supervision bodies.”

Article 5 (1) of the Notice of Banco de Portugal 10/2011, of 29 November state the same, as well as the Corporate Governance Code of Comissão do Mercado

de Valores Mobiliários, the one adopted by Banco Comercial Português, S.A. (hereinafter referred to as “BCP” or “Bank”).

In accordance with article 14 (c) of the Articles of Association of Banco Comercial Português, S.A., it pertains to the Remuneration and Welfare Board to approve

that remuneration statement and submit it to the General Meeting.

The Ordinance 150-A/2012 of 17 May defi nes the procedures necessary for the execution of the Law 63-A/2008, of 24 November, as successively altered, according

to which limitations were introduced to the remunerations of the members of the corporate bodies of credit institutions benefi ting from recapitalisation operations

through state aid. These limitations shall be in force as long as the state aid is in force.

Among other aspects and due to the provisos of Ordinance 150-A/2012, are specifi cally applicable to credit institutions benefi ting from recapitalisation operations

through state aid and for the duration of such aid, the provisos of item XI (l.24) of the annex to the Decree-Law 104/2007 of 3 April, introduced by article 4 of

Decree-law nr. 88/2011 of 20 July, situation BCP is experiencing since June 2012.

By means of the Article 14 (2) of Law 63-A/2008 and nr. 11 of Decision 8840-B/2012, the Portuguese State, through the Decision 15463-A/2012 published on

4 December 2012, appointed two non-executive members to the Board of Directors of BCP, being their remuneration defi ned therein.

The Remuneration and Welfare Board, together with the Nominations and Evaluations Commission appraised, approved and submitted to the 2013 General Meeting

the document that contains the policy for the remunerations of the members of the management and supervision bodies, hereinafter transcribed, that it proposes

to maintain.

29


The Remuneration and Welfare Board, with the assistance of the Human Resources Division and Mercer Portugal - Recursos Humanos, Lda., a leading company in

the advising services in the areas of talent and performance of human resources, analysed the remuneration policies of the corporate bodies of Banco Comercial

Português, as well as the Remuneration Plans and considers that the same observes the provisos of the recapitalisation plan through state aid of the Bank, namely

with the provisos of article 12 of the Ordinance 150-A/2012 and is being correctly implemented.

The Remuneration and Welfare Board does not issue an opinion on the adequacy of the remuneration earned by the members of management and supervision

bodies since this one is limited by ceilings imperatively established by the legal requirements mentioned above concerning credit institutions benefi ting from

recapitalisation operations through state aid.

Taking into account the framework described above and in accordance with Law 28/2009 of 19 June and with the Notice of Banco de Portugal nr. 10/2011 of 29

December, the Remuneration and Welfare Board submits to the appraisal of the Shareholders this statement on the remuneration policy of the members of the

management and supervision bodies of Banco Comercial Português, S.A.

I. Process for the defi nition and approval of the remuneration policy

In accordance with Article 14 of the articles of association it pertains to the Remuneration and Welfare Board to a) establish the remunerations of the members of

the corporate bodies, b) determine the terms of the complements due for retirement, old age and disability of the directors and c) submit to the annual General

Meeting of Shareholders a statement on the remuneration policy of the corporate bodies of BCP, in accordance with the rules and taking into account all applicable

recommendations.

On 28 February 2012 the General Meeting elected the Remuneration and Welfare Board for the 2012/2014 term-of-offi ce. Pursuant to the election made at the

General Meeting held on 20 May 2013 of a State representative, Bernardo de Sá Braamcamp Sobral Sottomayor and the renunciation to the position presented by

Baptista Muhongo Sumbe on 6 September 2013, this Board has now the following composition:

Chairman: José Manuel Archer Galvão Teles

Members: Manuel Soares Pinto Barbosa

José Luciano Vaz Marcos

Bernardo de Sá Braamcamp Sobral Sottomayor

The Remunerations and Welfare Board was assisted by Mercer (Portugal), Lda in the determination of the remuneration policy of the members of the management

and supervision bodies.

ITEM NINE BD INCLUDING EC REMUNERATION POLICY AS WELL AS THE CHANGE TO RETIREMENT REGULATIONS OF THE EXECUTIVE

BOARD MEMBERS

30


BOARD MEMBERS

II. Composition of the Remuneration

a) Board of Directors

In accordance with article 15 of the Articles of Association of BCP, the amount of the remuneration of the directors shall be set for each director individually, taking

into account, notably, the medium and long-term interests of the Bank and the aim of not encouraging excessive risk-taking.

Taking into account the provisos of article 9 of Notice 10/2011 of Banco de Portugal and article 15 (1) of the Articles of BCP’s Association, the non-executive

members of the Board of Directors of BCP earn a fi xed remuneration paid 12 times per year, the amount of which is currently determined taking into account the

provisos of article 12 (2) of the Ordinance 150-A/2012. The remuneration of the non-executive members appointed by the Portuguese State was defi ned by the

Decision 15463-A/2012, mentioned above.

The remuneration of the members of the Executive Committee may consist of a fi xed and of a variable component, in accordance with article nr. 8 of the Notice

10/2011 of Banco de Portugal and with article 15 (1) of BCP’s Articles of Association, considering the limitations set forth in item XI of the annex to the Decree-Law

104/2007, introduced by article 4 of the Decree-Law 88/2011:

i. Annual Fixed Remuneration

The fi xed component of the remuneration of the executive members of the Board of Directors is:

– Paid 14 times a year

– Determined in view of the criterion established in article 12 (2) of Ordinance 150-A/2012.

ii. Variable Remuneration

In accordance with article 15 (2) of the Company’s Articles of Association, the sum of the variable parts of the remuneration of all the directors shall not exceed an

amount corresponding to 2% of the distributable net income for the fi nancial year.

In view of the provisos of article 12 of the Ordinance 150-A/2012, the Bank has decided not to pay any variable remuneration during the period of time the Bank

is under a capitalisation program through state aid, that is due to end on 30 June 2017.

iii. Benefi ts

The existing benefi ts in terms of health insurance, credit card and mobile phone remain in effect, being the Executive Committee responsible for authorizing them.

31


BOARD MEMBERS

The limits to the value of company vehicles, an issue that does not fall under the competence of the Remuneration and Welfare Board, shall be determined by the

Executive Committee, taking into account the practice followed by other credit institutions of an equivalent size.

The members of the Executive Committee shall not receive cash benefi ts that are not foreseen in this statement.

III. Social Security and complements

In accordance with article 17 of the Articles of Association of BCP, approved at the General Meeting of Shareholders held on 28 February 2012:

“1. The directors shall benefi t from the social security regime applicable in each case.

2. The directors are also entitled to a supplement to the retirement or disability pensions and the Bank may enter into insurance contracts in favour of such directors.

3. At the beginning of each term of offi ce and by agreement with each director, the insurance policy may be replaced by contributions to a pension fund of defi ned contributions.

4. The amount of the contributions of the Bank, within the scope of the two previous paragraphs, shall be established on a yearly basis by the Remuneration and Welfare Board.

5. The Bank shall not bear any additional expenses with the retirement and disability pensions after the termination of each director’s functions.

6. The right to the supplement shall only become effective if the benefi ciary retires due to old age or disability, under the terms of the applicable social security regime.

7. At the time of the retirement, the benefi ciary may choose to redeem the capital.

8. In case of death before retirement, the right to receive the accrued capital shall remain effective pursuant to the applicable provisions established by the contract or by law.”

The right to the retirement complement is granted in accordance with the Retirement Regulations of the Executive Directors of Banco Comercial Português,

pursuant to the proposal hereto attached.

32


BOARD MEMBERS

IV. Other aspects

Apart from the ones herein described, the members of the Executive Committee do not receive any additional compensation.

Hence, given that the remuneration of the Members of the Executive Committee is aimed at the direct compensation of the activities they carry out at the Bank

directly or in companies related with it (namely companies in a control or group relation with BCP) or in corporate bodies to which they have been appointed by

indication or in representation of the Bank, the net value of the remunerations received annually for such duties by each Member of the Executive Committee will

be deducted from their respective Annual Fixed Remuneration. It is the obligation and responsibility of each Member of the Board of Directors to inform the Bank

of any additional compensation they may have received, for the purposes of the procedure established above.

The members of the Executive Committee will not enter into any hedging or risk-transfer agreements regarding any deferred remuneration components that may

minimise the effects of the risk underlying the established remuneration system.

Were not paid nor are due any compensations and indemnities to members of the administration body due to the end of their functions during the fi nancial year.

b) Supervision bodies

As mentioned above and taking into consideration the provisos of article 9 of the Notice nr. 10/2011 of Banco de Portugal, the members of the Audit Committee

receive a fi xed remuneration, paid 12 times per year, the amount of which is currently determined pursuant to article 12 (2) of Ordinance 150-A/2012.

V. Defi ning the Remuneration

The allocation of the amount resulting from the application of the provisos of article 12 (2) of the Ordinance 150-A/2012 amongst each one of the management

and supervision bodies as well as among each one of their members, was made by the Remuneration and Welfare Board taking into account, particularly, the nature

of the functions performed by each one of the members of those bodies.

33


BOARD MEMBERS

WHEREAS:

A. The recent alteration of the legislation ruling the welfare regime of the members of the corporate bodie implied the introduction of an adjustment in Article 6

of the Retirement Regulations for Executive Directors of Banco Comercial Português, S.A. to maintain the right to a complement due for retirement, old age and

disability, in compliance with article 17 of the Bank’s Articles of Association;

B. The article 17 of the articles of association of Banco Comercial Português sets forth that “the directors shall benefi t from the social security regime applicable

in each case” and that these “are also entitled to a complement due for retirement, old age and disability, and the Bank may enter into insurance contracts in

favour of such directors”, being that, “at the beginning of each term of offi ce and by agreement with each director, the insurance policy may be replaced by

contributions to a pension fund of defi ned contribution”;

C. Also in accordance with the above mentioned, “the right to the supplement shall only become effective if the benefi ciary retires due to old age or disability,

under the terms of the applicable social security regime”;

D. Also and exclusively due to the alteration introduced in Article 6 of the Retirement Regulations for Executive Directors of Banco Comercial Português, S.A. the

Remuneration and Welfare Board considers that the right to the future benefi t of a retirement complement that was given to the executive directors at his/her

election, should not be affected;

E. Notwithstanding the above-mentioned, the Remuneration and Welfare Board considers that company’s charges must remain in line with what has been foreseen

when of its approval by the Remuneration and Welfare Board in March 2011,

IT IS PROPOSED

The alteration of (2) of article 6 of the Retirement Regulations for Executive Directors of Banco Comercial Português, S.A. The same shall read as follows:

2 – The Bank’s annual contribution for the plan set forth in these Regulations is equal to the value, before applying any income tax deductions for individuals,

corresponding to 20% of the annual gross fi xed remuneration as per the articles of association as of April 2011.

The regulation, with the updated version, is attached to this proposal.

34


BOARD MEMBERS

RETIREMENT REGULATIONS FOR EXECUTIVE DIRECTORS OF BANCO COMERCIAL PORTUGUÊS, S.A.

Article 1

(Object)

This Regulation establishes, under Article 13 of the Articles of Association of Banco Comercial Português, S.A. (Bank) the supplementary regime for the retirement

due to old age or disability and survivor pension are granted based on the functions as Director in the Bank’s executive management body.

Article 2

(Scope)

Are within the scope of these Regulations the Benefi ciaries, included in the Social Security General Regime or in the Social Security Private Regime for the Banking

Sector in Portugal, who were members of the Bank’s Executive Board of Directors during the terms-of-offi ce as of 2008/2010 and following, for purposes of

protection in case of disability and old age.

These Regulations also comprise the benefi ciaries of the survivorship pensions referred in Article 5.

Article 3

(Supplemental retirement pension for disability and old age)

The right to the supplemental retirement pension for disability and old age pension is granted if the benefi ciary retires due to old age or disability, under the terms

of the applicable social security regime.

The value of the supplemental pension results from the transformation of the capital accrued in the Individual Account of the Pension Fund, after deducting the

applicable taxes, into a monthly pension for life.

The supplemental pension will be granted by purchasing a lifelong pension policy from an insurance company, being the Director responsible for choosing the annual

growth rate and the pension conversion in case of death.

Article 4

(Capital redemption)

As an alternative to the supplemental pension provided in Article 3, the Director may chose to redeem the capital under the terms and limits provided by law.

35


BOARD MEMBERS

Article 5

(Survivorship supplemental pension)

If the Director is deceased before retirement, his/her legitimate heirs, if any, shall be entitled to the capital accrued in the Director’s Individual Account, in accordance

with the laws of inheritance.

Article 6

(Financing)

The supplemental benefi ts plan regulated herein is fi nanced through individual applications to an open pension fund.

The Bank’s annual contribution for the plan set forth in these Regulations is equal to the value, before applying any income tax deductions for individuals, corresponding

to 20% of the annual gross fi xed remuneration as per the articles of association as of April 2011.

Article 7

(Accumulation of retirement benefi ts and remunerations)

The accumulation of retirement benefi ts due to old age and the remuneration earned as Director of the entity paying the pension is allowed, but while the Director

remains in functions it will be deducted from his/her gross remuneration the net amount of the pension or the amount that would have been paid as an alternative

to the capital redemption, without damaging the full payment of all amounts to be decided by the Remunerations and Welfare Board or Remunerations Committee

in accordance with art. 13 of the Bank’s Articles of Association, when applicable, as variable remuneration or premiums for the functions exercised.

Article 8

(Application and revision)

These Regulations, as adopted in 2008, shall apply to the benefi ts to grant after the date of their approval by the competent corporate body and approval by or

notifi cation to Instituto de Seguros de Portugal, as the case may be.

These Regulations shall be interpreted and applied by the Remunerations Board or Committee referred in the previous article.

The Remunerations Board or Committee must submit any amendments to these Regulations to the appraisal of the Annual General Meeting.

36


BOARD MEMBERS

OPINION ISSUED BY THE COMMISSION FOR NOMINATIONS AND EVALUATIONS

I. The Notice of Banco de Portugal 10/2011 of 29 December, Law 28/2009 of 19 June, the Corporate Governance Code of Comissão do Mercado de Valores

Mobiliários and also Law 63-A/2008, of 24 November and the Ordinance 150-A/2012 of 17 May that introduced limitations to the remunerations of the members

of management and supervision bodies.

II. The Remuneration Policy of Members of Management and Supervision Bodies of Banco Comercial Português;

III. The remuneration established for the members of the corporate bodies of Banco Comercial Português by the Remuneration and Welfare Board as well as the

impacts thereon due to the Recapitalisation Plan;

IV. The Statement and the Proposal to be presented by the Remuneration and Welfare Board to the General Meeting of Banco Comercial Português, S.A. called to

take place on 30 May 2014;

Therefore, it considers that the Remunerations Policy described in the Company’s Corporate Governance Report:

A. Was appropriately applied, in compliance with the defi ned rules and principles;

B. Is aligned with the interests of Directors, of the Bank, of the Shareholders and remaining and with an appropriate and sound management of risks.

37

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM TEN REDUCTION OF THE SHAREHOLDERS CAPITAL AND CONSEQUENT CHANGE TO THE ARTICLES OF ASSOCIATION

CONSIDERING:

A) That the consolidated fi nancial statements of Banco Comercial Português relating to 2013 were, among other factors, affected by the level of provisions for

impairments and provisions accounted and also by a number of relevant unfavourable factors, namely the impact in the fi nancial margin of the costs of the interests

related with the issue of hybrid instruments and the liability management operations made in 2011, the costs related with the restructuring program, the impacts

related with the extraordinary tax contributions paid by the banking sector, the deposit guarantee fund and the contributions, initial and regular, for the resolution

fund established in 2013 and the estimation of losses in discontinued or under discontinuance operations;

B) That these extraordinary events, in the Bank’s individual fi nancial statements, shareholders equity fell below the amount of the share capital, amounting the net

assets to 1,774,286,129.95 Euros and the share capital to 3,500,000,000.00 Euros, thus showing a negative difference amounting to 1,725,713,870.05 Euros;

C) That, besides the interest in the adequate cover of the losses recorded, it is also in the company’s best interest to, within the scope of the law, create conditions

for the future existence of funds that could qualify as distributable under regulatory provisos, taking, notably, into consideration the possibility of the Bank deciding

to fully resume its distribution of earnings policy,

We proposed to the General Meeting the following resolutions:

1) To reformulate the items of own capital, with the purpose to cover losses, by reducing the share capital in 2,035,000,000.00 Euros, without altering the number

of existing shares (without nominal value) and without altering the net assets, which will exceed the new share capital in more than twenty per cent, with the

consequent reduction of the ratio between share capital and number of shares issued,

2) That the terms and procedures of the share capital reduction, without damaging the legally mandatory allocation, and including those related with the accounting

handling and allocations be established by the Board of Directors.

38

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM TEN REDUCTION OF THE SHAREHOLDERS CAPITAL AND CONSEQUENT CHANGE TO THE ARTICLES OF ASSOCIATION

3) Consequently, alter number 1 of article 4 of the articles of association, which, with the integral execution of the resolutions stated in the previous paragraphs,

shall read as follows:

“Article 4

1. The share capital amounts to 1,465,000,000 Euros, corresponding to 19,707,167,060 registered and book-entry shares, without a nominal value, fully paid up”.

4) Clarify that this resolution does not, in any way whatsoever, affects the terms and scope of the authorisations foreseen in article 5 (1) and (5) of the articles

of association, whose maximum limits continue to be estimated having as reference the share capital existing at the moment of the respective approval, i.e.

3,000,000,000.00 Euros.

5) That this resolution is subject to the suspensive condition of the granting of the respective authorization from Banco de Portugal, in case the same has not been

granted in the meantime.

39

2014 • ANNUAL GENERAL MEETING OF SHAREHOLDERS BCPITEM ELEVEN TO RESOLVE UPON THE ACQUISITION AND SALE OF OWN SHARES AND BONDS

CONSIDERING:

• Considering the general regime applicable to commercial companies with respect to the acquisition and sale of own shares and bonds;

• Considering the convenience of the Bank in being able to continue to make use, under the general terms, of the possibilities that are inherent to such operations;

• Considering that the same convenience exists also in respect of subsidiaries, which, as happened before, may even be bound, under the terms of issue of their own

securities, to acquire or sell shares of the Bank, for which, without prejudice to article 319 (3) of the Companies Code, it is convenient to provide;

• Bearing in mind the characteristics of the bonds that might be issued by the Bank, in particular those connected with the issuance of convertible or exchangeable

securities by the Bank or a subsidiary,

• Considering the provisos in articles 319 (1) and 320 of the Companies Code and the regulations issued by Comissão do Mercado de Valores Mobiliários;

• Considering that the Commission Regulation no. (EC) 2273/2003, of 22 December 2003, establishing a special regime containing, in particular, exemption

requirements from the general regime of market abuse for certain share buyback programmes, requirements which is convenient to be taken into account even

in the case of acquisitions out of the scope of the programmes included therein,

• That, naturally, the resolution adopted by the General Meeting on this issue, does not dispense but implies, the additional compliance with all the requisites and

authorizations necessary in view of the binding instruments relating to the recapitalisation through state aid.

It is proposed

1) The approval of the acquisition by the company, or any of its current or future subsidiaries, of own shares or bonds (in the latter, in any of the situations when the

approval is legally required) already issued, or to be issued, of any kind, including rights to their acquisition or attribution, subject to a decision of the management

body of the acquiring company, under the following terms:

a) Maximum number of shares to acquire: up to the limit corresponding to ten per cent of the share capital, after deduction of any disposals made, without prejudice

of the amount of shares that may be needed to fulfi l any obligation of the acquirer, arising from law, contract or an issue of securities or contractual obligations in

connection with the plan of stock options of the Bank, and subject, if applicable, to subsequent disposal, as established by law, of shares that exceed the said limit;

Maximum number of bonds to acquire: the one corresponding to the total of each issue;

40


b) Term during which the acquisition may be made: eighteen months counting from the date of this resolution;

c) Forms of acquisition:

of shares: subject to the terms and limits imperatively established by law, onerous acquisition of shares, or rights of acquisition or attribution of shares, in stock

exchange, or over-the-counter, of any kind, namely by exchange, in compliance with the principle of equality of the shareholders in the terms established by law,

or acquisition at any title for, or by virtue of, fulfi lment of an obligation arising from law, contract, or conversion or exchange of convertible or exchangeable

securities issued by the Bank or any of its subsidiaries, in accordance with the respective terms and conditions, or of contracts entered into with relation to such

conversion or exchange;

of bonds: acquisition of any kind, namely original acquisition or onerous secondary acquisition in the stock exchange in which the bonds are listed, or the acquisition

outside the stock exchange, whether or not carried out through fi nancial dealers, besides the cases of conversion of convertible bonds;

d) Minimum and maximum consideration for the acquisitions:

of shares: the price of an onerous acquisition must be contained in an interval of fi fteen per cent less or more vis-à-vis respectively the lowest and the average

trading price of the shares on Euronext Lisbon, during the week immediately preceding the acquisition of the shares or the constitution of the right of acquisition

pursuant to the law or contract or attribution of shares, or correspond to the acquisition price resulting from the terms of the issue, carried out by the Bank or

any subsidiary, of securities convertible in, or exchangeable by, shares of the Bank, or of contracts entered into with relation to such conversions or exchanges;

of bonds: the price of an onerous secondary acquisition must be contained within a fi fteen per cent interval up or down vis-à-vis the average price of the bonds in

the stock exchange where the acquisition is made, during the week immediately preceding the acquisition or correspond to the acquisition price pursuant to the

law or contract, namely by acquisition by nominal value through accord and satisfaction agreement; In case of an issue not listed in Euronext Lisbon, the interval

shall refer to the value computed based on the bond prices of other fi nancial institutions in the same rating class, with similar term, and, for issues with interest

rate structures or derivatives included, bearing in mind the value of those structures or derivatives, estimated by the method usually used by market operators,

if it allows an objective computation, or by means of an independent valuation, if not. In the case of acquisition connected with, or in satisfaction of conditions of

issuance of other securities, or of contract related with such issue, the price will be the one resulting from the terms of such issuance or contract;

e) Time of acquisition: to be determined by the management body of the acquiring company, taking into consideration the situation of the securities market and the

interests or obligations of the acquirer, the Bank or any subsidiary of the Bank, and being carried out in one or more times in the proportions to be established

by the said body.

41


2) The approval of the sale of own bonds or shares, except in the cases of conversion or redemption and subject to the specifi c authority of the management body,

in particular those that may have been acquired, subject to a resolution of the management body of the seller company, and in the following conditions:

a) Minimum number of shares or bonds to sell: the correspondent to the quantity enough for the fulfi lment of obligations undertaken, arising from law, contract,

issuance of other securities or decision of the management body;

b) Term during which the acquisition may be made: eighteen months counting from the date of this resolution;

c) Forms of sale: subject to the terms and conditions imperatively established by law, onerous sale of any kind, including the sale or exchange in stock exchange

or over-the-counter to specifi c entities appointed by the board of directors of the seller company - in compliance with the principle of equality of the

shareholders in the case of shares or bonds able of being exchanged into shares - or gratuitous disposal, without prejudice, whenever the sale is made to fulfi l

an obligation or results from the issue of other securities by the Bank or a subsidiary, from contracts related, or not, with such issue, or contractual obligations

in connection with the Performance Share Plan of the Bank, of such sale being effected according with the respective terms and conditions;

d) Minimum sale price:

of shares: no more than fi fteen per cent below the average trading price on Euronext Lisbon of the shares sold during the week immediately preceding

the sale, or other price that is determined or results from the terms and conditions pursuant to the law or contract (and, namely, from the issue of other

securities, in particular convertible or exchangeable securities, or of contract entered into relating to such issue, conversion or exchange) or whenever the

sale results of that issue;

of bonds: no more than fi fteen per cent below the prices referred to in subparagraph d) of nr. 1 of this resolution, in accordance with the applicable

situation, or price determined in connection with the issue terms and conditions of other securities, namely convertible securities, or in accordance with

contract related with such programme, issuance or conversion, whenever the sale is made in connection with or in execution of the respective terms;

e) Time of the sale: to be determined by the management body of the selling company, taking into consideration the conditions of the securities market and

the convenience or obligations of the seller company, of the Bank or of other subsidiary of the Bank, and being carried out in one or more times in such

proportions to be established by that management body.

3) And also the approval of the acquisition and sale of own shares or fi nancial instrument able of being converted into shares, foreseen in the recapitalisation plan

under Law 63-A/2008 of 24 November, approved by the General Meeting of Shareholders, in accordance with the conditions, terms, forms, compensation and

amounts mentioned in that plan or with the conditions of the instruments issued thereunder.

Investor Relations Division

Rui Coimbra. Head of Investor Relations

Investor Relations

João Godinho Duarte, CFA

Paula Dantas Henriques

Reporting and Ratings

Luís Morais

Lina Fernandes

Ph.: +351 21 1131 084

Ph.: + 351 21 1131 337

Email: [email protected]

Banco Comercial Português. S.A. a public company (Sociedade Aberta) having its registered offi ce at Praça D. João I. 28. Oporto. registered at the Commercial Registry of Oporto. with the single commercial and tax identifi cation number 501 525 882 and the share capital of EUR 3.500.000.000

PORTUGALPORTUGAL

POLAND MOZAMBIQUE ANGOLA

ANNUAL GENERAL MEETING OF SHAREHOLDERS BCP … · AGENDA 2014 • ANNUAL GENERAL MEETING OF...

Documents

Transcript of ANNUAL GENERAL MEETING OF SHAREHOLDERS BCP … · AGENDA 2014 • ANNUAL GENERAL MEETING OF...