BES Group Presentation BES Group Presentation A successful history - - PowerPoint PPT Presentation

BES Group Presentation BES Group Presentation

A successful history of long term sustainable growth July 2014

Agenda

I.

History & Ownership Structure

II.

General Overview

III.

Current Challenges & Key Financials

IV

Wrap up

• IV. Wrap-up

1

BES foundations trace back to the 19th century. With 145 years of history, BES has always maintained a relevant role in Portugal

After the creation of the name Banco Espírito Santo in 1920 the Bank merged with Banco Comercial de Lisboa creating BESCL Espírito Santo Group returns to Portugal establishing BIC (Banco Internacional de Crédito) in partnership with Crédit Agricole and ESSI 2000 and 2001 mark the first steps of the “strategic triangle”: BES strengthens its position in Spain, enters a partnership with Banco Bradesco in Brazil and

The 1869 2014 30’s

Lisboa creating BESCL (1937)

… 80’s

Crédit Agricole and ESSI (1986)

… 00’s – the new millennium

Banco Bradesco in Brazil and creates BES Angola

145 years of history creating value for shareholders, clients and employees The Beginning Today 70’s

BESCL is nationalised within

… 90’s

Epírito Santo Group regains

… 2009 - 2011

L t P t nationalised within the Nationalisation program in Portugal after 1974 Revolution. E í it S t control of BESCL during re- privatisation process (1991- 1992). In the following years, the Bank consolidates its BES reinforces presence in Africa: acquisition of a 40% stake in Aman Bank (Libya) and 25.1% direct Largest Portuguese Bank by market cap and net assets, in portugal, with 19.7% market share Espírito Santo family rebuilds its financial interests abroad and creates the Espírito Santo presence in Portugal and scopes of activities, while expanding its geographical presence in Spain (BES Spain, 1992) and Macao (BESOR, stake in Moza Banco, in Mozambique (increased to 49% in 2013); establishes a partnership for a leasing co in Algeria; establishment of BES Cabo Verde domestically and pursuing a focused international expansion (present in 25 countries in 4 WW I WW II Lat Am Crisis Russia Crisis LTCM bailout 9/11 European sovereign debt crisis Group (GES) 1992) and Macao (BESOR, 1995) (BESCV) continents)

2

Great Depression Nationalisation Privatization Dot.com bubble Subprime

BES is a unique story of organic growth in the Portuguese market, where the banking sector has been in a consolidation process since the 80s

1985 1986 … 1988 1996 … 2000 …

2014

1989 1990 1991 … 1993 … 1995 BIC merger i t BES BES BIC 2005 … CGD BNU CGD Group into BES BPSM BPA BCP Champalimaud Group acquires BPSM BCP acquires BPSM BCP acquires BPA SFP UBP BCP acquires Mello BCP acquires BPA José de Mello Group acquires SFP Name changed to Banco Mello Banco Mello BTA CPP BCI Santander Acquires BCI Banesto Acquires BTA Champalimaud Group acquires BTA & CPP Santander Acquires BTA & CPP BPI BFN BFB Name changed to BFE BPI acquires BPI acquires BBI & BFE

3

BFB q BFB

The Bank successful story of organic growth had different stages: during the 90’s the Bank focused on its domestic business; in the following decade BES expanded its ti it b d d tl th f h b BS t

BES Strategy: Main events

activity abroad and more recently the focus has been on BS management

The 90’s:

Domestic focus

2000-2010

International expansion

2010-...

Focus on B/S & integrated International approach

 Market liberalization (e.g.: mortgages)  Favourable environment (declining interest rates, GDP growth, EU / EEC)  Mature market in Portugal  Opportunities abroad  Definition of the strategic focus (“strategic triangle”)  Challenging environment:  Macro  Regulatory  Markets , g , )  M&A activity  “Rebranching” of the Portuguese banking system supported by strong market growth ( strategic triangle )  Spain: expansion to corporate business  Macro recovery driven by exports  Deleverage g  Organic growth  Loan portfolio growth  Angola: creation of BESA  Brazil: Partnership with Bradesco and BESI  Diversification of income stream e e e age  Stronger capital base  Depressed profitability  New business plans for International business  Leverage Access to markets Diversification of income stream and strong profits International business

Ex Exports ta takes o

• ff

4

Note: pictures from “The Economist”

BES has been developing a strong and sustained franchise, which has been consistently expanding

# Branches # Employees

+ 548 2.845 Int. + 548 branches 145 Int.

629 788 9.018 10.216 1992 2000 2013 .... ....

7.371 Dom.

1992 2000 2013 .... ....

643 Dom

240 6.426

# Clients Market Share (domestic market)

800 000 (million) (%) Corporate banking: 25.5%

1 4 1.6 2.2

+ 800,000 clients

8 5% 16.1% 19.7%

+2.3x

1.4 1992 2000 2013 .... .... 8.5% 1992 2000 2013 .... ....

International Activity Data Domestic Activity Data

5

BES strong franchise, developed since the reprivatisation, has been key to build a relevant market position

Gross Credit Evolution

(EUR mn)

Net Assets Evolution

(EUR mn)

Deposits Evolution

(EUR mn) 80 608 CAGR 92/13: 22.1% CAGR 92/13: 20.0%

• Abs. : + Eur 78.9bn

80,608 49,722 CAGR 92/13: 18.6%

• Abs. : + Eur 49.0bn
• Abs. : + Eur 35.4bn

33,936 21,789 36,831 1992 2000 2013 1992 2000 2013 1,742 753 1,103 16,160 1992 2000 2013 1992 2000 2013 1992 2000 2013

Deposits growth demonstrates clients confidence in BES BES maintains a balanced support to the economy BES is the Portuguese second largest listed bank by net assets

.... .... .... .... .... ....

6

A supportive shareholder base has been key to implement a long term consistent strategy in the domestic business as well as in BES international expansion

BES main shareholders

17 June 2013

Espírito Santo Espírito Santo Financial Group Crédit Agricole 20.1%(3) 14.6% Bradesco PT 3.9% 2.1% 4.7% 4.2% 4.65%(1) 2.27% (2)

• BES free float currently stands at 59.3%

Silchester Capital Research BlackRock Baupost

Notes: Silchester - UK based investment management firm with more than €15bn AuM (primarily from US institutional clients)

(1) BlackRock’s stake announced on 8 July 2014 (2) Baupost stake announced on 10 July 2014 (3) ESFG stake announced on 14 July 2014

7

Capital Research and Management (CRMC) - U.S. based investment adviser that manages the American Funds family of mutual funds of Capital Group. BlackRock, Inc. - U.S. based multinational investment management corporation based in New York City. It is one of the world's largest asset managers with AuM totaling USD 3.67 trn Baupost – U.S. (Boston,) based investment advisory and hedge fund management

Agenda

I.

History & Ownership Structure

II.

General Overview

III.

Current Challenges & Key Financials

IV

Wrap up

• IV. Wrap-up

8

Conservative management and long term value creation focus have allowed BES to build a strong domestic franchise, complemented with a growing international

• presence. BES is currently the largest Portuguese Bank net assets

p y g g

BES relative size BES domestic position

• 1st largest private financial institution in Portugal
• Largest listed Portuguese Bank by Net Assets
• 1st largest private financial institution in Portugal

by net assets (EUR 82.8 billion at 31 March 14);

• Strong market position with an average market

share of 19.7% in the Portuguese banking market Bank1 Bank1 Bank2 Bank2 (25.5% in the corporate business)

• 2.2mn Clients worldwide

Net Net Assets: Assets: Eur 82.8bn Eur 82.8bn Eur 42.0bn Eur 42.0bn Eur 82.3b Eur 82.3bn Bank1 Bank1 Bank2 Bank2 BES solvency ratios – BIS III BES International footprint

(CRD IV / CRR)

11 4% 9.8% +1.6% 11.4% 8.0% +1.6% +0.9% 10.5%

8%

Mar.14 Rights issue Pro Forma Mar.14 Mar.14 Rights issue DTA's* Pro Forma Mar.14

(min. regulatory threshold)

9

* Estimated impact from ppotential DTA´s forbearance,

• 24 countries in 4 continents

Phased in Fully implemented

BES is a premier banking franchise in Portugal complemented by a highly successful international presence

Solid and Consistent Business Model Domestic business Commercial Activity Commercial Activity Geographic Exposure Geographic Exposure R t il Domestic business

Strong domestic business model with consistent increase in the market share

Retail Banking Private Banking International business Corporate Banking & Institutional Clients Asset Management

Focused on the Strategic Triangle, composed by Africa (especially Angola and Mozambique), Brazil and Spain

Investment Banking International Commercial B ki Service excellence and permanent focus on each client needs Service excellence and permanent focus on each client needs Banking Banking 10

BES has a very well defined approach to each of its business segments, making it a reference in the domestic market

Retail Banking

 643 Branches in Portugal  Specialised diversified and distinct offer to meet clients needs

Banking Private

 Specialised, diversified and distinct offer to meet clients needs  Maintenance of high client acquisition levels  Leader in the domestic Private Bank market

ctivity Private Banking Corporate

 22 Private Banking Centers in Portugal  Wide range of global solutions  Leadership in Corporate Banking with 25 5% market share

Domestic Ac Corporate Banking & Institutional Clients

 Leadership in Corporate Banking with 25.5% market share  78% of large corporates and 67% of SMEs are BES clients  23 corporate centers in Portugal and 7 in Spain  Focus on supporting companies with international activity

Asset Management

 Carried out by ESAF – Espírito Santo Activos Financeiros  Provides discretionary and portfolio management services  Wide product range covering mutual funds, real estate funds, pension funds

Investment Banking

 Carried out by Espírito Santo Investment Bank  Provides wide range of services to SMEs and Large Corporates, as well as Institutional Clients  M&A advisory, capital markets transactions (Equity & Debt), brokerage and

11

y p ( q y ) g portfolio management, project finance, acquisition finance …

BES average market share increased by 2.3x in the last 21 years. In the corporate segment, BES domestic franchise is even stronger, with a market share of 25.5%

Average market share (domestic market) Market share per selected product

g , g ,

Corporate banking: 25 5%

28.8% 32.1% POSs Trade Finance

(%)

e

2.3x

banking: 25.5%

19.7%

17.2% 21.5% 25.9% Leasing Factoring Corporate Lending

Corporat

16.1%

16.7% On BS Funds

8.5 %

18.6% 18.7% 19.1% Pension Plans Asset Mgmt Other Loans Indiv.

dividuals

1992 2000 2013

15.5% 18.1% 18.6% Mortgage Other Life Insurance Pension Plans

Ind

Source: APB; BdP; APFIPP; ISP; ASP; APLEASE; APEF; Euronext; SIBS; SWIFT; CMVM; BES

12

BES’s unique skills and superior know-how in key segments makes it uniquely positioned to address internationalisation opportunities

Specialised Off

 Leverage on BES’ core competences in the domestic market  Research team dedicated to target markets  Support the internationalisation of BES’ corporate client base

Offer

 Support the internationalisation of BES corporate client base  Geographically specialised bankers  Link between the domestic and the international business  Presence in markets with strong cultural or economic affinities with Portugal

nal Activity Oriented Geographic Exposure

 Presence in markets with strong cultural or economic affinities with Portugal  Exposure to high growth emerging economies  Strategic Triangle: backbone of international presence composed by Brazil, Africa (especially Angola and Mozambique) and Spain

Internation

 #1 International Bank in Portugal with presence in 24 countries (besides

Exposure

 Consolidation of International Business with the opening of branches in Venezuela and Luxembourg – countries with relevant Portuguese communities

Successful International footprint

 #1 International Bank in Portugal, with presence in 24 countries (besides Portugal)  #3 International Bank in Iberia and Iberian bank with the largest presence in Africa  “The Best Trade Finance Bank” in Portugal for the 7th consecutive year  BES awards the most internationalised and export oriented companies

BES successful internationalisation has been key to overcome domestic constraints 13 BES successful internationalisation has been key to overcome domestic constraints

BES’ international expansion is based on a solid strategic rationale, focused on markets with cultural and economic ties with Portugal and with high growth potential

BES International Footprint

Poland: Subsidiary ESIB France: Subsidiary BES Vénétie Italy: Associated Banco delle United Kingdom: Branch BES d ESIB Strategic Triangle: Africa-Brazil– Iberia Spain: Branch Luxembourg: Branch Tre Venezie New York: Branch BES and ESIB A BES and ESIB Iberia China: Representative Hong Kong: Subsidiary ESIB Miami: Subsidiary ES Bank of Florida USA

• ffice

Macao: Subsidiary BES Oriente Mumbai: Mexico: Representative Office BES and ESIB Venezuela: Branch Brazil: Subsidiary South Africa: Representative Mozambique: Moza Banco Mumbai: ESIB Morocco: Associated Libya: Subsidiary Cape Verde: BES Cape Algeria: Associate Angola: Subsidiary Subsidiary and ESIB Representative Office BES Moza Banco Associated Banque Marocaine du Commerce Extérieur Subsidiary Aman Bank BES Cape Verde Associate ILA-Ijar Leasing Subsidiary BES Angola

The backbone of BES international business is the Strategic Triangle, composed of Africa (especially Angola and Mozambique), Brazil and Spain

14

Financial growth is well balanced with sustainable growth: BES is recognised by independent entities as an example of sustainable management BES Group’s developed a six-tier strategy:

1

Governance and Ethics Guiding values and duties of company management

Corporate Identity 2 Innovation and Entrepreneurship3 Biodiversity and Climate Ch

5

Financial Inclusion 4 Responsible Citizenship 6

1

To promote the BES Group’s specific characteristics To identify and encourage innovative solutions To develop financial products and solutions for social and To help to protect biodiversity and react to climate change through To be an active partner in society by supporting cultural social and

2 3

Change 5

4 6

characteristics amongst its employees, partners, Customers, shareholders solutions. To promote the emergence of new business, new solutions and new entrepreneurs. social and professional segments with specific needs. change, through

• ur financial

activity and involvement with society. cultural, social and educational initiatives. and suppliers.

“Sustainability is part

• f the BES Group’s

DNA.” 15

Sustainability has essentially been achieved by the adoption of a set of measures and behaviours by the more relevant business areas and by the creation of innovative products which make a positive contribution towards the development of innovative products which make a positive contribution towards the development of the Bank and of the communities in which it operates and which it influences

Sustainability In the Core Business

• Financing Sustainable Development
• Towards a More Inclusive Market
• Environmental Impact

Sustainability In the Community p

• Financial Literacy
• Cultural Patronage
• Solidarity

“Sustainability is part Only Portuguese

• f the BES Group’s

DNA.” y g Bank included in the DJWSI 16

Agenda

I.

History & Ownership Structure

II.

General Overview

III.

Current Challenges & Key Financials

IV

Wrap up

• IV. Wrap-up

17

The financial and macroeconomic environment in Portugal together with the European sovereign debt crisis brought several challenges to the Portuguese Banking System in the last 3 years. For 2014 some encouraging signs are already visible y g g g y

Main Challenges

Recessionary

 Recessionary environment in Portugal (with GDP declining in 2011, 2012 and 2013. For 2014 our forecast points to a 1.1% GDP growth) led to an increased provisioning effort to

Recessionary Environment

cope with deteriorating asset quality, as expected.  Challenging external environment, with recession in Euro Zone in 2012 and 2013. A ca. 1% GDP growth is expected for Euro Zone in 2014.  The Economic and Financial Adjustment Programme signed by Portugal with IMF/EC/ECB included specific measures to strengthen the stability of the financial sector:

• Solvency: Core Tier I ratio of 9% in Dec.11 and 10% in Dec. 12;
• Deleverage: 120% LTD ratio recommended by 2014 ;
• Stable funding ratio of 100% by 2014.

 European Banking Authority (EBA) minimum mandatory 9% core tier I ratio for European banks as from Jun. 12, including a Sovereign buffer for public debt.

Regulatory Requirements

banks as from Jun. 12, including a Sovereign buffer for public debt.  For 2014 onwards Banks need to comply with Basel III capital requirements (8%). An Asset Quality Review (AQR) and Stress Tests will be conducted by ECB, with results being published late in the year.  Lack of liquidity in debt markets. Wholesale debt markets closed for Portuguese banks between Apr. 10 and Nov.12 (re-opened by BES with a senior unsecured issue). Portuguese Republic returned to international wholesale debt markets in Jan. 13.  S i d d B k ’ ti f ll i d d i i f th

Market Constraints

 Successive downgrades on Banks’ ratings, following downward revisions of the sovereign rating

18

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

Wrap-up

Solvency:  Solvency levels have always been a top priority for BES. The successful rights issue places the Bank among the best capitalized in Europe. Pro-forma Common Equity Tier 1, fully implemented,

Balance Sheet management

considering the rights issue and the potential impact from DTA’s, stands at 10.5%. Funding and Liquidity:  Comfortable liquidity position, with customer funds accounting to 66% of total funding mix and a liquidity buffer that covers more than 5 years of MLT maturities.  BES has ongoing market access: in 2014 the Bank already placed 2 senior unsecured issues, with strong demand from institutional investors along with declining yields. Operating trends are gradually improving:  NII recovered from its low in 1Q13 and is trending up (+21% YoY), driven by lower cost of funding.  Costs are under control, with the implementation of a domestic cost cutting programme  BES continues to pursue a conservative risk management approach, reinforcing coverage levels. On-

1Q14 Results and A t

BS provision reserve at Eur 3.7bn, or 7.2% of gross loans, covering 64% of credit at risk. BES has one of the highest levels of coverage in the Portuguese Banking system. NPL formation is slowing down in Portugal, with overdue loans increasing in 1Q14 at a lower pace than in 1Q13.  1Q14 results (Eur -89.1mn) still hampered by provisions

Asset Quality

1Q14 results (Eur 89.1mn) still hampered by provisions

19

Key Financials (I) – Funding & Liquidity, Risk Management and Solvency

(Eur mn)

2011 2012 2013 1Q14

Loans to Deposits (1) 141% 137% 121% 129%

Funding &

Customer Funds 54,383 56,188 56,837 57,204 Customer Loans (2) 51,211 50,399 49,722 51,001 Total Deposits 34,206 34,540 36,831 36,242

Funding & Liquidity

ECB Funds (net) 8,677 6,897 5,414 8,346 Credit at Risk (3) 6.59% 9.44% 10.56% 11.14% Credit at Risk 6.59% 9.44% 10.56% 11.14% Coverage of Credit at Risk 64.2% 56.6% 64.5% 64.2% NPL +90 days 2 74% 3 90% 5 68% 6 01%

Risk Management

NPL +90 days 2.74% 3.90% 5.68% 6.01% Coverage of NPL +90 days 154.5% 136.9% 119.9% 119.0% Core Tier I – BoP 9.2% 10.5% 10.6% 10.2% Core Tier I / Common Equity Tier I CRD IV / CRR (phase in)

• 10.2%

9.8% C Ti I / C E it Ti I

Solvency 20

Core Tier I / Common Equity Tier I CRD IV / CRR (fully implementation)

• 8.2%

8.0%

(1) Ratio calculated under BoP Funding & Capital Plan (2) Gross (3) According to BoP rules as defined by the MoU

Key Financials (II) – Return & Efficiency and Other

(Eur mn)

2011 2012 2013 1Q14

Banking Income 1,950.2 2,579.1 1,899.7 576.5

Domestic 1,211.8 1,855.6 1,280.8 370.7 International 738.4 723.5 619,0 205.8

Return & Effi i

Pre-Provision Income 821.0 1,430.1 762.8 290.1

Domestic 418.3 1,073.6 529.0 179.2 International 402.7 356.5 233.9 110.9

Efficiency

Net Income

• 108.8

96.1

• 517.6
• 89.0

Domestic

• 269.6

8.5

• 539.5
• 103.1

International 160.8 87.6 21.9 13.9

Cost to Income 57.9% 44.6% 59.8% 49.7% Cost to Income ex-markets & other 57.3% 57.2% 65.8% 67.9% ROE

• 0.1%

1.2%

• 6.9%
• 5.8% (3)

ROA 0 00% 0 12% 0 62% 0 3% (3) ROA 0.00% 0.12%

• 0.62%
• 0.3% (3)

Total Assets (1) 98,589 97,765 93,342 96,150 Net Assets 80,237 83,691 80,608 82,817

Other

Ratings S&P Moody’s DBRS BB/B Ba2/NP BBB/R2H BB-/B Ba3/NP BBBL/R2M BB-/B Ba3/NP BBBL/R2M BB/B BB-/B Ba3/NP BBBL/R2M BB/B

21

Dagong

• BB/B

(1) Net Assets + Asset Management + Other off-balance sheets + Securitised Credit (2) Annualised Net Income (3) Annualised data

Agenda

I.

History & Ownership Structure

II.

General Overview

III.

Current Challenges & Key Financials

IV

Wrap up

• IV. Wrap-up

22

With 145 years of history, BES has built a strong domestic franchise and a solid international presence. A prudent and conservative management has proved BES track d f ll dd i t h ll record on successfully addressing current challenges

• Consistent strategy and stable shareholder base and management team
• Strong domestic franchise in both retail and corporate segments: average market share of 19.7% in

Solid domestic

• Wide international presence in 24 countries and 4 continents
• Clear and consistent international expansion, privileging geographies with economic and cultural

affinities with Portugal Portugal, of which 25.5% in corporate business. Leadership in trade finance (market share of 32.1%)

Clear international presence

affinities with Portugal

• Leverage on domestic expertise, namely on the corporate and investment banking businesses

international strategy

• Capital reinforcement has been consistently one of BES top priorities. Successful rights issue,

concluded in Jun.14 places BES among the best capitalised banks in a Europe-wide context p g p p

• BES strong capital ratios represent a lever on the Bank’s competitive position to take advantage of

the recovery of the Portuguese economy, as well as to expand its international units, while simultaneously creating additional capital buffers to face new regulatory requirements and the upcoming AQR and stress tests conducted by the ECB

• To maintain strong efficiency levels BES is carrying a cost cutting programme of ca Eur 100mn

Prudent and conservative management

• To maintain strong efficiency levels BES is carrying a cost cutting programme of ca. Eur 100mn,

during 2013-2015

• Improvement of BES liquidity profile in the last 3 years, with customer funds (deposits and

bancassurance products) accounting for 66% of funding mix

• The deleverage plan implemented in Jun10 led LTD ratio to reach 129% as of Mar14, mainly driven

by an outstanding increase of 39% (or Eur 10.2bn) in BES’ deposit base, benefitting from the strong franchise of the Bank

• BES regained access to wholesale debt markets (both senior and subordinated). In 2014 the Bank

already placed 2 senior unsecured issues, with strong demand from institutional investors and declining yields

23

g y

Agenda

I.

History & Ownership Structure

II.

General Overview

III.

Current Challenges & Key Financials

IV

Wrap up

• IV. Wrap-up

Appendix: International Business Details

24

Established in 2001, today BES Angola is a top player that provides high quality services to its clients with innovative products and services

Shareholder structure BES Angola Strategic Focus

GENI 19.0% Others 1.3%

BES owns 55.7% of BES Angola. The other

• One of the fastest growing economies in the

world, with increasing economic links with Portugal and Europe

• Potential expansion projects to neighbouring

BES 55.7% Portmill 24.0%

The other 44.3% are held by local partners

• Potential expansion projects to neighbouring

countries

• BES Angola has a fully dedicated corporate team

for large and SME companies

Strategic Priorities

g p

• Expansion of the retail network
• Expansion to other businesses, enabling the

creation of a Multi-specialist Financial Group

• Focus on alternative distribution channels, namely
• Corporate Banking
• Private and Affluent Banking

Business Lines

• cus o

a te at e d st but o c a e s, a e y mobile

• Trade Finance (Portuguese and Brazilian corporates

in Angola)

• Portugal as the European gateway to Africa
• Investment Banking

Lines

9,408

# Portuguese companies exporting t A l

25

to Angola

In Mozambique, BES aims to leverage its tradition and know-how

• 2010: acquisition of a 25.1% stake
• In June 2013, BES increased its stake in Moza

Cabo Delgado Niassa

1

Banco to 49%. Additionally, a strategic plan was agreed with Moçambique Capitais (51% stake in Moza Banco) to: i) Develop and expand the commercial activity

Tete Nampula Delgado Zambézia Niassa

2 2 1

i) Develop and expand the commercial activity

• f Moza,

ii) New Asset Management and Investment Bank business lines

Sofala Manica

1 1 1

# Current Presence

• No. Branches
• Moza Banco is currently the 5th player in

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

Inhambane Gaza Maputo

13 1 1

• Network of 23 branches, corresponding to 36

business units (22 retail, 10 corporate centers d 4 P i t b ki it )

13

and 4 Private banking units)

3,031

# Portuguese companies exporting to Mozambique

26

to Mozambique

In Cape Verde, BES is committed to the development of Cape Verde aptitude of stability and attractiveness for companies which seek to develop the potential of Western Africa develop the potential of Western Africa

1 BES C V d h i i l Trade Finance Line

• 1. BES Cape Verde promotes the international

business with a specific trade finance line, when exporting to Cape Verde:

• BES Cape Verde opens LC´s
• BES confirms LC´s
• Knowledge of the local market and local players
• BES confirms LC s
• 2. BES Cape Verde allows corporate clients to

anticipate export related revenues: LC’s Discount. BES CV trying to accelerate local development g p y

• Strong positioning on corporate and institutional

segments

• BES CV has a talented and dedicated team for

BES CV Head Office in Praia City, Santiago Island and Branch in Salt Island international companies doing business in Cape Verde

• Growing number international companies

ti t C V d d ki exporting to Cape Verde and seeking presence there

• Strong links with Cape Verde communities living

abroad, namely Portugal, USA and Angola 27 abroad, namely Portugal, USA and Angola

BES is also present in North Africa, through partnerships…

Partnership with Banque Exterieure d’Algérie (BEA) Algeria

• BEA is the largest bank in Algeria and the 6th largest bank in Africa. It is a public bank, specialized in trade finance
• The two banks have a qualified commercial and institutional relationship

Establishment of a Leasing Company: ILA - Ijar Leasing

• In order to facilitate the access of Portuguese SMEs to the Algerian market, as well as create better conditions

for Algerian SME businesses, BES invested in the capital of ILA - Ijar Leasing, an Algerian leasing company

• BES holds a stake of 35% in ILA - Ijar Leasing. The remaining 65% is held by BEA

BES h it k h i th l i b i Morocco

• BES shares its know-how in the leasing business
• ILA – ljar Leasing began operations in the 1Q12

Partnership with Banque Marocaine du Commerce Exterieur (BMCE)

• BMCE is the 3rd largest Moroccan Bank (with an extensive national network of branches) and is specialized in

trade finance,

• BMCE is also proficient in factoring and leasing
• BMCE has an important African network, though the participations it possesses in the capital of some

subsidiaries of Bank of Africa

• The partnership between BES and BMCE aims to support both bank’s customers

28

• The partnership between BES and BMCE aims to support both bank s customers

… and in Libya BES is controlling shareholder of Aman Bank

Shareholder with management control of Aman Bank for Commerce and Investment Aman Bank is…

• … a modern commercial bank, founded in 2003 by private investors. It is part of

Banco Espirito Santo Group since April 2010 (with BES management control) BES Banco Espirito Santo Group since April 2010 (with BES management control). BES has the majority of the members of the Board of Directors (4 of 7) and appoints the Executive Team

• … the sixth biggest Libyan bank with 100 millions LYD on capital, fully owned by

… the sixth biggest Libyan bank with 100 millions LYD on capital, fully owned by private investors: BES (40%) and private Libyan entrepreneurs (60%).

• ... a bank with segmented commercial structure with 23 branches and 7 mobile

branches.

• … the leading financial institution in electronic payments, with 120 ATMs (60%

market share) and about 300 POSs (90% market share).

• … a bank with a strong corporate banking offer with specialized teams in Trade

g p g p Finance and Guarantees

• … the only Libyan Bank unaffected by UN, EU and US sanctions during the conflict

29

BES is present in Brazil since 1976. Brazil is currently one of the most important markets for BES

Brazil Rationale Consolidated emerging economy with strong growth prospects high liquidity and strong ties I t t B ki growth prospects, high liquidity and strong ties with Portugal Business Lines

• Investment Banking
• Asset management activity conducted by

BESAF

• Securities brokerage activity conducted

BES and Bradesco strengthened their partnership in 2000 through the creation of BESI Brasil - BESI (80%) and Bradesco (20%)

• Local player with international expertise with a

g y through BES Securities

• Wealth management conducted by BES DTMV
• Private Equity activity conducted by 2bcapital
• Local player with international expertise, with a

customer base composed by Institutional and Corporate clients

• Activity focus capital markets, risk management,
• Net income: EUR 1.8mn
• Credit: EUR 665mn

proprietary trading, project finance, distribution of fixed income products, private equity and corporate finance Key Indicators (1Q14)

• Total Assets: EUR 2.3bn

1,745

# Portuguese companies exporting t B il

In Dec11, BES activities in Brazil and in the USA were recognized by BACCF through the 2011 BACCF Excellence Award (Brazilian-American Chamber of Commerce of Florida) received by BES’ CEO 30

to Brazil

In Spain, BES is specialised in Private, Corporate and Investment banking, covering financial needs of Portuguese companies operating in Spain and vice versa vice-versa

BES presence in Spain Rationale

N t l i P t l 1 t

Investment Bank

Natural expansion. Portugal 1st trade partner. Focus on cross border business serving mainly SME’s Focusing on Advisory and Capital Markets

ORENSE

• # 11 in the Madrid Stock

Business Lines

• Corporate Banking
• Private Banking
• # 11 in the Madrid Stock

Exchange with a market share of 3.2% (1Q14) K i di t (1Q14)

Private Banking

• Investment Banking
• # 2 in the Iberian M&A market

in 2013 (by number and value

• f concluded transactions)

Key indicators (1Q14)

• Net Income: EUR 14.5mn
• Credit: EUR 3.3bn
• Total Assets: EUR 6.4bn

BES b h

• Focus in cross-border

mandates, leveraging international presence,

# Portuguese companies exporting to Spain

BES has 34 branches in Spain, 7 of which are

BES branches

7,062

namely in LatAm

• Strong sector expertise , with

emphasis on energy 31

p , Corporate centres

BES is present in Macao since 1996, supporting business between Chinese companies and Portuguese speaking countries

Macao Subsidiary and Shanghai Representative Office

• BES Group has over 16 years experience in Asia:
• In 1996, it opened its 100% owned subsidiary - Banco Espírito

Santo do Oriente - in Macao.

• In 1998 Shanghai’s Representative office was opened
• In 1998, Shanghai s Representative office was opened.
• These two units work in tandem to support Portuguese companies

and other BES Group clients’ business in Asia and in China in particular.

• Macao is located on the shores of Guangdong province - China’s

most important exporting region - and has a key liaison role between China and Portuguese speaking countries business.

• China´s growing role in international trade and investment, namely

China s growing role in international trade and investment, namely with countries where BES Group is present (e.g. Brazil, Angola, Libya, Mozambique, Venezuela, etc), create significant business

• pportunities.
• Macao and Shanghai units are prepared to support corporate
• Macao and Shanghai units are prepared to support corporate

customers in their endeavours in doing business in or with China.

• Key business lines:
• Trade Finance Solutions

32

• Corporate Banking

The opening of a branch in Venezuela…

• BES opened a branch in Venezuela in January

2012, located in the main avenue in Caracas

• Presence in a relevant market where the

Portuguese community amounts to more than half a million

• As an Universal Bank BES Venezuela focuses
• As an Universal Bank, BES Venezuela focuses

its activity on being a support base for the Portuguese community in the country, without forgetting a global approach Retail and Corporate banking

• Leverage of the strong relation between

Portugal and Venezuela to reinforce the link with the Venezuelan Public sector

33 7 de Setembro de 2012 33

… and in Luxembourg were important steps for the expansion of the international activity

• With a privileged location the Luxembourg
• With a privileged location, the Luxembourg

branch was opened in July 2012

• The Portuguese community is the largest

foreign community in Luxembourg, representing over 20% of the total population, and it is growing at an annual rate of 5% since g g 2005

• BES Luxembourg mission is to support the

natural market of the resident Portuguese natural market of the resident Portuguese community’s, as well as in the neighbour countries

• The branch also aims to be a platform for

international clients

• Main offer regards tor savings products

34 34

Investor Relations

NUMBER OF SHARES: 5,625 million SHARE CAPITAL: EUR 6.08 bn SECTOR Fi i l S i B ki LISTING: NYSE Euronext BLOOMBERG: BES PL REUTERS BES LS SECTOR: Financial Services: Banking INDEX MEMBERSHIP: 36 Indices, including: PSI20, Euronext 100, Eurostoxx, Stoxx Banks FTSE4GOOD REUTERS: BES.LS ISIN CODE: PTBES0AM0007 FTSE4GOOD

Investor Relations Contacts

Website: www.bes.pt/ir Phone: + 351 21 359 7390 E-mail: investor.relations@bes.pt Fax: + 351 21 359 7001

35

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 p j , p p g , g g p p p 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 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 services 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 hereof. 36