09-041334 Relatorio INGLES Vol 2 - BCP KOMORI 4 - Millennium bcp

2008 

Annual Report 

Volume 1I

2008 

Annual Report 

Volume I I

2 Annual Report Volume II Contents 

Contents 

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254 

259 

284 

294 

Volume II 

Report of the Supervisory Board 2008 

Opinion of the Supervisory Board 

Annual Report of the Audit and Risk 

Committee, which includes 

the Statement of Compliance 

2008 Financial Statements 

Consolidated Financial Statements 

– Banco Comercial Português 


– Banco Comercial Português, S.A. 

Declaration of Compliance 

External Auditors’ Report 

Legal Certification and Auditors’ Report 

of Consolidation Accounts 

Report on the Audit work carried out 

Corporate Governance Report 

Chapter 0 – Compliance Statement 

Chapter 1 – General Meeting 

Chapter II – Management 

and Supervisory Bodies 

Chapter III – Information 

Annexes to the Corporate 

Governance Report 

Banco Comercial Português, S.A.

Annual Report Volume II Contents 3

4 Annual Report Volume II Report of the Supervisory Board 2008 

Report of the Supervisory 

Board 2008

Annual Report Volume II Report of the Supervisory Board 2008 5

6 Annual Report Volume II Statement by the Chairman of the Supervisory Board

Annual Report Volume II Statement by the Chairman of the Supervisory Board 7 

Statement by the Chairman 

of the Supervisory Board 

Dear Shareholder, 

In the reporting year, the Supervisory Board devoted great effort to the changes that 

have occurred both in the Bank’s business and governance, in the banking system and in 

the international financial markets. The Board managed to best assist the company in 

the face of relevant corporate events as the designation of a new Executive Board, the 

execution of a rights issue and the set up of the consultation and selection process of the 

Statutory Auditor and External Auditors, among other corporate governance changes. 

Furthermore, the Board advised and assisted the Executive Board in assessing the Group’s 

strategic priorities in the face of the adverse market conditions seen in international 

markets. Although uncertainty remains around the volatility of international markets and 

the unfavourable economic development, the Bank has been showing strong resilience, 

namely in regard with the business franchise and capital and liquidity risk management. 

Also, in 2008 the Supervisory Board completed its first mandate since its inception in 

2006, when the segregation of executive and supervisory duties became effective. Such 

segregation between specialised corporate bodies allowed the company to overcome the 

challenges of the difficult years and to maintain the stability of the company, a critical 

condition to preserve the market’s and customers’ confidence. 

At the end of a challenging year, I would like to take this opportunity to thank the Executive 

Board and all the Group Employees, spread across the world, for their hard work and 

commitment towards the development of the business. 

Gijsbert J. Swalef 

The Chairman of the Supervisory 

Board 

February 2009

8 Annual Report Volume II Report of the Supervisory Board

Annual Report Volume II Report of the Supervisory Board 9 

Report of the Supervisory 

Board 

Supervision of the Company and Advisory, Follow-up and Assessment of 

the management of the Company performed by the Executive Board 

The corporate governance model approved by the General Meeting of Shareholders held in 

March 13 th 2006 crystallised the segregation of duties between the executive management and 

the supervision in Banco Comercial Português, in line with best international practices. The 

two-tier governance model granted the executive management to the Executive Board (EB) and 

the internal supervision to the Supervisory Board (SB). 

The Terms of Reference of the SB regulate its functioning. Article 3 of the Terms of Reference, 

in accordance with the Companies Code and the Bank’s Articles of Association, defines the 

duties of the SB. This corporate body has the duty to follow-up, monitor, supervise and 

advise the EB and to deliberate on, among other matters, the review of and opinion on the 

annual management report and financial statements, the risk management system, internal 

control, internal audit and the independence of the Statutory Auditor and External 

Auditors. 

The grant of powers to BCP’s SB complies with the most recent corporate governance 

recommendations issued by the CMVM (dated of September 2007), including the 

recommendation II.4, which states “The supervisory board, beyond the fulfilment of the 

monitoring duties to which it is entitled, should take a role of advisory, follow-up and continuous 

assessment of the company’s management that is performed by the EB. The SB should deliberate 

on the following matters, among others: i) the definition of the company’s strategy and general 

policies; ii) the group’s corporate structure; and iii) the decisions that should be considered 

strategic due to their amount, risk or special characteristics.” 

In the reporting year several relevant events took place at the Bank both on governance and 

strategic issues, and on which the SB, through the exercise of its duties, provided all its support. 

In 2008, with the designation of a new EB, on January 15 th 2008, the SB supported the company 

ensuring the maintenance of the proper relationship among the corporate bodies during the 

transition. The SB supported and advised the new EB in the important decisions that immediately 

followed, namely the closing of accounts of the previous fiscal year and the decision to increase 

the share capital, promoted the consultation and the selection process of the external auditor 

and proposed to the General Meeting, the election and the designation of the Statutory Auditor 

and External Auditor. The SB also supported and advised the EB in the implementation of internal 

measures and of organisational changes. 

With regard to the remuneration and welfare of the EB, the SB, through the specific duty that 

was granted to it in 2008, concluded the definition of the remuneration policy, thus ensuring for 

the new EB the incentives framework to perform its mandate. The defined policy, which was 

presented to the Annual General Meeting, resulted from a process that was developed in 

accordance with the best international practices. 

In a year marked by adverse conditions in the world’s financial markets and economies, as well 

as by internal difficulties in the life of the Bank, such adversities did not prevent the business from

10 Annual Report Volume II Report of the Supervisory Board 

developing and the executive and supervisory functions of the Bank corporate bodies from 

properly performing. The SB dedicated particular effort towards advice and support for the EB 

in driving the strategy of the Group, namely by following-up the definition of the strategic priorities 

in the face of the current environment, the evolution of the Bank’s profitability, the liquidity risk 

management and the functioning of the internal control systems. In addition, in a meeting 

specifically convened for that purpose, the SB analysed and discussed, together with the EB, the 

strategic guidelines and the Group’s budget for 2009. 

The work of the SB Specialised Committees contributed largely to the exercise of the SB duties; 

the Audit and Risk Committee focusing namely on the financial information, on the management 

report and financial statements, on the risk management and control and on monitoring the 

independence of and supervising the activity of the external auditors; the Nomination and 

Remunerations Committee analysing nominations proposals for internal structures and Group 

subsidiaries and coordinating the definition process of the EB remuneration policy; and the 

Corporate Governance Committee analysing governance issues and the Corporate Governance 

Report. 

In addition to the issues referred to, and because its first three-year mandate ended in 2008, the 

SB analysed international practices regarding the composition of supervisory bodies in the 

financial sector and assessed the requirements for the functioning of the corporate organs. 

Namely, the SB performed a self-assessment of its activity and functionality as a specialised 

supervisory body. These results were positive, indicating that very relevant experience was 

generated aiming at the effectiveness of the exercise of internal supervision, and also listening to 

its members concerning the performance of supervisory functions in the future. 

From the activity performed in 2008, as well as during its first mandate, the SB concludes that, 

faced with the adverse markets environment, the Bank has showed strong resilience, namely in 

respect to the business franchise and the capital and liquidity risk management. 

The SB also concluded that the current two-tier governance model, which defines the 

separation of powers between specialised corporate bodies, has proved to be an adequate 

form of corporate organisation of the company’s activity – an essential condition for preserving 

the market confidence, in the face of relevant developments in terms of corporate governance 

and of adverse conditions seen in the international financial markets and in the world economic 

development. 

The SB concluded that the SB’s commitment and liaison with the remaining corporate bodies 

have promoted superior levels of quality in governance practices, allowing the optimisation of the 

virtues of the governance model. In the course of its supervisory activity in 2008, the SB benefited 

from the necessary means to perform its activities and faced no constraints. 

The SB expresses the sound institutional and functional relationship verified among the various 

corporate bodies of the Bank and this relationship allowed for the effective way the SB 

performed its duties.


Major developments 

In 2008, special emphasis were given to the following events related to the works of the SB: 

• Election of members of corporate bodies: 

• New members for the SB; 

• New members for the Senior Board; 

• New mandate and composition of the EB; 

• New mandate and composition of the General Meeting Board; 

• New mandate and composition of the Remunerations and Welfare Board; 

• Election of the Statutory Auditor and designation of the External Auditor. 

• Share capital increase; 

• Consultation and Selection process of the Statutory Auditor and External Auditor; 

• Amendments to the Articles of Association, approved in the General Meeting in regard with 

voting rights limitation at the General Meeting of Shareholders and with the statutory limit of 

the EB variable remuneration; 

• Remuneration and welfare of the EB; 

• Follow-up of the administrative, judicial and mediation proceedings underway; 

• Monitoring the requirements for independence of the SB members; 

• Follow-up of the liquidity management; 

• Assessment of the Group’s Internal Control System. 

Election of members of corporate bodies 

In January 15 th 2008 a General Meeting of Shareholders was held, specifically convened for the 

election of corporate bodies. 

In order to fill vacancies opened in the period 2006/2008, the following people were elected as 

members of the SB: as effective members, Mr. António Luís Guerra Nunes Mexia and Mr. Manuel 

Domingos Vicente, and, as alternate member, Mr. Ângelo Ludgero da Silva Marques. 

The General Meeting of Shareholders also ratified the cooptation, to the Senior Board, of Mr. Luís 

Neiva dos Santos, Mr. Manuel Domingos Vicente and Mr. Maarten W. Dijkshoorn (who renounced 

his position on January 2009). 

The General Meeting also elected a new EB for the period 2008/2010, with the following 

composition: Chairman – Mr. Carlos Jorge Ramalho Santos Ferreira, Vice Chairmen – Mr. Armando 

António Martins Vara and Mr. Paulo José de Ribeiro Moita Macedo, Members – Mr. Luís Maria 

França de Castro Pereira Coutinho, Mr. Nelson Ricardo Bessa Machado, Mr. Vítor Manuel Lopes 

Fernandes and Mr. José João Guilherme. 

A new composition of the General Meeting Board for the period 2008/2010 was approved, 

including Mr. António Manuel da Rocha e Menezes Cordeiro, as Chairman, and Mr. Manuel 

António de Castro Portugal Carneiro da Frada, as Vice Chairman.


Share capital increase 

Among the issues that deserved a special attention from the SB, it is worth highlighting the share 

capital increase from 3,611,329,567 euros to 4,694,600,000 euros, realised in the first half of 2008. 

The share capital increase from 1,083,270,433 shares at an issuing price of 1.2 euros corresponding 

to a total 1,299,924,520 euros of proceeds and was held through a rights issue operation. 

Notwithstanding the strong volatility level that already had been seen at the time, the rights issue 

was successfully completed, with demand representing 2.2 times as much as the supply. The new 

shares began listing in May 6 th 2008. 

According to the number 1 of the article 6 of its Articles of Association the SB must issue a 

prior opinion on the capital increase deliberated by the EB, which the SB did and subsequently 

followed-up the rights issue process, having analysed the operation conditions in its meetings of 

February 18 th and April 21 st and the operation results in the SB meeting of May 12 th 2008. 

Consultation and Selection process of the Statutory Auditor and External 

Auditor 

Under the terms foreseen in the Companies Code and in the Articles of Association of Banco 

Comercial Português, S.A., it is a duty of the SB to propose to the General Meeting of 

Shareholders, based in the opinion of the Audit and Risk Committee, the appointment of a 

statutory auditor of the Bank. In addition, the Bank’s Articles of Association foresees that the 

SB has the duty to propose to the General Meeting of Shareholders the appointment of the 

External Auditor. 

Accordingly, and under the coordination of the Audit and Risk Committee, the SB specialised 

committee for financial matters, the consultation and selection process of the Statutory Auditor 

and External Auditor for the period 2008/2010 was performed, for the SB to formulate a 

proposal to be presented to the Annual General Meeting for the election and appointment of 

the Statutory Auditor and External Auditor respectively. 

In May 27 th 2008, the Annual General Meeting of Shareholders was held. The General Meeting 

deliberated to approve a shareholders proposal comprising the election of the Remunerations 

and Welfare Board for the period 2008/2010, with the following composition: Chairman – Mr. José 

Manuel Rodrigues Berardo, Members – Mr. Luís de Melo Champalimaud and Mr. Manuel Pinto 

Barbosa. 

The Annual General Meeting of Shareholders also approved the proposals presented by the 

corporate bodies, namely the proposal for designation of the External Auditor as well as the 

proposal for election of the Statutory Auditor and its alternate. Mr. Vítor Manuel da Cunha 

Ribeirinho (Statutory Auditor n.º 1081) and Ms. Ana Cristina Soares Valente Dourado 

(Statutory Auditor n.º 1011), both partners of KPMG & Associados – SROC, S.A. (n.º 189), 

were elected as Statutory Auditor and Alternate Statutory Auditor respectively. The audit firm 

KPMG & Associados, SROC, S.A. was designated as External Auditor.


Remuneration and welfare of the Executive Board 

The SB, after consulting the EB and the Senior Board, deliberated to formulate proposals to be submitted 

to the Annual General Meeting of the Bank, comprising the election of the effective and alternate 

Statutory Auditor and the designation of the External Auditor, for the period 2008/2010. The General 

Meeting of Shareholders, held on May 27 th 2008, subsequently approved those proposals in the terms 

mentioned above. 

In addition, and with the purpose of preserving the best practices, the SB deliberated to adopt the 

principle of realising a consultation process on a periodic basis, in similar terms of the 

abovementioned, for the appointment of both the Statutory Auditor and External Auditor. 

Amendments to the Articles of Association 

On April 21 st 2008, the SB, in accordance with article 429 of the Companies Code and article 

13 (1) of the Bank’s Articles of Association, deliberated to undertake the power to set forth the 

remuneration of the EB, appointing for that purpose the Nomination Committee, which was 

renamed as Nomination and Remunerations Committee. 

According to the SB Terms of Reference, to which changes were approved in May 12 th 2008, the 

Nomination and Remuneration Committee, on top of the duties of assisting and advising the SB 

in nomination issues – as those related with the definition of the profile of duties and composition 

of the internal structures and bodies, the issuing of opinions to the SB about lists of members to 

the corporate bodies of the Bank and subsidiary companies and the preparation and proposal 

of the annual vote of confidence given to members of executive and supervisory bodies – took 

on duties comprising the following matters, among others: 

• To define the remuneration policy, its components and limits, of the EB members; 

• To define the welfare policy, in its several components, namely illness, retirement and disability, 

of the EB members; 

The 2008 Annual General Meeting approved two proposals comprising the amendment of the 

Bank’s Articles of Association. 

The first proposal, submitted by the SB, comprised the elimination of the voting rights limit that 

referred to the percentage of share capital present at each General Meeting of Shareholders, thus 

proposing the elimination of the number 12 of article 16, transcribed below: 

“Article 16 

(...) 

12 – In the event that the whole of the share capital is not present at the meeting, the percentage of 

votes referred to in paragraph 10 of this article shall refer to the total number of votes present. 

(...)” 

The second proposal, submitted by shareholders, comprised the reduction of the limit imposed 

to the EB variable remuneration in terms of percentage of the company’s net profit, proposing 

the amendment of the number 2 of article 13 of the Bank’s Articles of Association so that the 

term “10% of profits” is replaced by “2% of profits”. This change had been included in the 

Compensation Model of the EB that was set up by the SB, through the Nomination and 

Remunerations Committee, and presented before the General Meeting.


• Under the defined policies, to individually agree with each EB member, the respective 

remuneration and welfare package, as well as the remuneration conditions that apply in case 

of future cease of the respective contracts 

• Based in the Group’s Vision, Mission and short and long-term goals, to agree with the EB in the 

relevant criteria for the performance evaluation in view of the EB members remuneration; 

• To follow-up the evolution of the established performance criteria; 

• To prepare and propose to the SB, in order to include in the declaration to submit to the 

Annual General Meeting, a presentation on the remuneration and welfare policy of the EB 

members, at least in the years in which such policy be established or changed. 

In the first half of 2008, the SB, supported by the activity of the Nomination and Remunerations 

Committee, defined the fixed remuneration of the EB members and the general principles 

concerning the remuneration policy of the EB, having submitted to the Annual General Meeting, 

on a consultation basis, the respective Remuneration Policy of the EB and the Retirement Plan 

of the EB members. Already in the second half of 2008, the SB approved proposals of the 

Nomination and Remunerations Committee in regard with the Compensation Model of the EB, 

comprising suggestions to improve the variable remuneration policy and the retirement plan of 

the EB members of Banco Comercial Português. The EB remuneration policy will again be 

submitted to shareholders at the 2009 Annual General Meeting. 

Following up the Administrative, judicial and mediation proceedings 

underway 

At the end of the fiscal year of 2007 and during the fiscal year of 2008 the group companies were 

subject to judicial actions and also the Supervisory Authorities (Bank of Portugal – the Portuguese 

Central Bank, CMVM – the Portuguese Securities Market Commission, and ISP – the Portuguese 

Insurance and Pension Fund Supervisory Authority) took legal actions against the Bank and other 

Group companies, for administrative offences related with the following matters: 

• Alleged provision of incomplete information, relatively to entities owned and/or attended by 

relatives of a member(s) of the Board (s) and management of the Group’s companies, in 

violation of the Article 85.º and 211.º paragraph r), of the Credit Institutions and Financial 

Companies Legal Framework; 

• Alleged violations of prudential and accounting rules, on the quality of information relating to 

the situation of several entities based in offshore jurisdictions; 

• Alleged breaches of the rules regarding deadlines for redemption of participation units in 

investment funds without records; 

• Alleged excessive financial intermediation, in violation of the rules on conflicts of interests, 

safekeeping of documents and rules on the quality of information; 

•Alleged violation of the rules of information availability to subscribers and participants of 

investment funds, of the duty to act independently and in the exclusive interest of the 

participants in investment funds, violation of the duty to trade funds with the “non opposition” 

of the regulator; 

•Alleged provision to the supervisory authority of information on securities and the issuer BCP 

that was not complete or true at the end of the year 2007;


• Alleged violation of mandatory provisions of the laws applicable to entities subject to the 

supervision of the ISP related to the subscription of commercial paper of the company 

Commercial Imobiliária, S.A.; 

• BCP’s alleged failure to provide the CMVM information received from a shareholder, relative to 

a qualified participation in the capital of the Bank; 

• Alleged violations of a fiscal nature in the framework of “Operation Hurricane”. 

The SB monitored the progress of these cases, in what concerns the provision by the Bank of all 

the information required by the authorities in their investigation, the public positions of the entities 

involved, the organisation of defence and appeals by the Bank, where there was accusation. 

The SB also knew about the information provided regularly by the EB on the nature and financial 

impact of the legal actions against the Bank in the scope of the shareholders campaign in 

2000/2001, by shareholders or former shareholders, targeting BCP shares, as well as on the 

voluntary mediation procedure that the Bank started on June 26, 2008, under the auspices of 

CMVM, aimed at putting an end to these disputes. 

In this chapter, it is also important to mention the attention the legal proceeding taken by a 

shareholder to annul the resolution adopted at the annual General Meeting held on May 27, 

2008, voted under item 7 on the Agenda, regarding the election of Mr. Vítor Manuel da Cunha 

Ribeirinho and Ms. Ana Cristina Soares Valente Dourado as Statutory Auditor and Alternate 

Statutory Auditor, respectively, since allegedly partners of the audit firms are not being allowed 

to act as statutory auditors as individuals, considering that they allegedly were elected as 

individuals, never mentioning their status as partners at the audit firm. The Bank took action 

against this proceeding. 

Monitoring the requirements for independence of the Supervisory 

Board members 

The SB engaged the Specialised Committee that was established to handle matters of 

corporate governance in accordance with article 15 (2) (a) of its Terms of Reference, to 

regularly revise and draw up periodic recommendations on the conditions for the efficient 

performance of the internal supervision function. To comply with the Companies Code and the 

Articles of Association of the Bank, for independence of the majority of the SB members is 

among the requirements for the exercise of the supervision function. 

Taking into account that new members of the SB were elected at the Annual General Meeting 

held on January 15 th 2008, under a proposal issued by the Corporate Governance Committee 

the SB has, through each of its members, measured the aforementioned requirements in 

order to be able to conclude that a majority of independent members (six independent 

members in a total of eleven) in this corporate body is maintained, in the light of the applicable 

criteria. 

Follow-up of the liquidity management 

In a year of particular turbulence in the financial markets, the SB has followed-up the Group’s 

liquidity management.


Although this matter was regularly included in the agenda of the SB meetings, because of the special 

conditions that were seen in 2008, the Audit and Risk Committee dedicated special importance to 

the liquidity management with the purpose to monitor the execution of the 2008 Liquidity Plan and 

the preparation of the Liquidity Plan for 2009. 

The Audit and Risk Committee was informed on the activity of the working group that is 

responsible for the follow-up and permanent control of the implications of the international 

financial crisis. The working group was created by the EB in 2008. 

Assessment of the Group’s Internal Control System 

As far as the Internal Control System is concerned, the SB, namely through the Audit and Risk 

Committee, followed the preparation works of the Internal Control System Report, which is a 

responsibility of the EB, and of the opinions to be issued by the SB, on the appropriateness and 

effectiveness of the Internal Control System, and by the Statutory Auditor, on the process of 

preparing and disclosing financial information (financial reporting) according to the Notice 5/2008 

of the Bank of Portugal. 

In the scope of supervising the Internal Audit, the SB, through the Audit and Risk Committee, 

analysed and issued a favourable opinion on the new organisational structure of the Audit 

Department. The opinion resulted from the work developed with the support of external 

consultants. 

The Supervisory Board 

Functions 

The SB main mission, according with the law and the Bank’s Articles of Association, is to ensure 

the supervision and follow-up of the EB activity, acting in cooperation with the EB and the 

other corporate bodies in pursuing the interests of the company, of its shareholders and of 

remaining stakeholders 

Composition 

The SB is composed by a number of members always higher than the number of EB members, 

elected by the General Meeting of Shareholders, in compliance with the legal requirements of 

independence that are stated in the Bank’s Articles of Association and in the law. 

Mr. Gijsbert Swalef is the Chairman of the SB since January 1 st 2008, when he took office following 

the ceasing of functions by the former SB Chairman Mr. Jorge Jardim Gonçalves. 

In 2008, aiming to fill vacancies for effective and alternate members, proposals were presented 

in order to designate new SB members. Those proposals were submitted to the General 

Meeting of Shareholders held on January 15 th 2008. As a result, the General Meeting approved 

the designation of Mr. António Mexia and Mr. Manuel Vicente, as SB effective members, and 

of Mr. Ângelo Ludgero Marques, as SB alternate member, effective January 15 th 2008 onwards. 

The SB composition as of December 31 st 2008 is included in the appendix of this report.


Functioning 

The internal functioning of the SB is set forth in the SB Terms of Reference that establishes the 

main working rules and procedures guiding the activity of the SB. 

The SB works through plenary meetings and Specialised Committees. 

In 2008, following the decision to undertake the power foreseen in the article 13 of the 

Bank’s Articles of Association, the SB revised its Terms of Reference, namely defining and 

regulating the responsibilities and functioning of the Nomination and Remunerations 

Committee. 

Specialised Committees 

For performing specific functions, the SB instituted three Specialised Committees: the Audit and 

Risk Committee specifically dedicated to financial matters, the Corporate Governance Committee 

and the Nomination and Remunerations Committee. 

The composition of the SB Specialised Committees as of December 31 st 2008 is included in the 

appendix to this report. 

Activity of the Supervisory Board 

Permanent activity 

Throughout 2008, the SB managed to be regularly informed on the matters that required its 

opinion or supervision according with the law, namely the matters comprising the share capital 

increase, the quarterly consolidated accounts and the report on the Internal Control System 

(under the terms of the notice 5/2008 of the Bank of Portugal). 

Thus, it was possible for the SB to follow, among other issues, the evolution of the process of 

the share capital increase to 4,694,600,000 euros, the works that led to the closing of the fiscal 

year, the preparation of two General Meetings of Shareholders held in 2008, the grant of the 

Portuguese Republic personal guarantee for the debt issuance of up to 1,500,000,000.00 euros, 

under the terms of the Law 60-A/2008 of October 20 th and the ordinance 1219-A/2008 of 

October 23 rd , and the report on the Internal Control System. 

In 2008, the activity of the SB received particular attention because the SB submitted to the General 

Meeting two relevant matters for the company’s life. The first comprised the presentation to the 

General Meeting, on a consultation basis, of the declaration on the EB remuneration policy, which 

resulted from the works of the Nomination and Remunerations Committee. The second, which 

resulted from the coordinated works of the Audit and Risk Committee, comprised the proposals 

of election and designation of the Statutory Auditor and External Auditor respectively, proposals that 

were approved by the General Meeting. 

In accordance with article 432 of the Companies Code, the Audit and Risk Committee attended the 

EB meetings in which the quarterly, half-year and annual accounts were approved.


Activity of the SB plenary meetings 

In 2008, the SB held eight meetings, in January 15 th , February 18 th , April 21 st , May 12 th and 27 th , 

July 21 st , October 27 th and December 4 th . 

The 2008 SB meetings registered an average attendance of 92%. 

The meeting of April 21 st 2008 was dedicated to the share capital increase, which totalled 

1,299,924,520 euros of proceeds, having been reiterated the decision of April 3 rd 2008 on that 

matter, to the Annual General Meeting. 

The SB approved the proposal of the Audit and Risk Committee, which analysed the conclusions 

of the working group that had been formed to analyse the proposals received in relation to the 

consultation and selection process for the Statutory Auditor and External Auditor for the period 

of 2008/2010. 

Also in this meeting, the SB decided, unanimously and according to the law and the article 13 (1) 

of the Bank’s Articles of Association, to assume the power to set forth the fixed remuneration 

of the EB, designating for that effect the Nomination and Remunerations Committee. 

In view of hearing the opinion of the Senior Board on the proposal related with the election of 

the Statutory Auditor and the designation of the External Auditor of the Bank, the SB decided to 

suspend the meeting and resume it on the following day, April 22 nd 2008, after the Senior Board 

meeting of the same day. On April 22 nd 2008, the SB meeting was resumed and focused on the 

proposal, to be submitted to the Bank’s Annual General Meeting of Shareholders, concerning the 

election of the Statutory Auditor and designation of the External Auditor of the Bank. 

In the meeting of May 12 th 2008, the SB analysed the business evolution, the first quarter 2008 

accounts and the matters to be submitted to the Annual General Meeting, including the profits 

appropriation proposal and the proposals to amend the Articles of Association. Among other 

issues analysed, it is worth highlighting the reflection on the EB remuneration policy, to be 

The Chairman of the EB attended all the 2008 SB meetings. Also, all the remaining EB members 

attended the SB meetings on a regular basis. 

The first meeting of 2008, on January 15 th , focused mainly on the issues related with the General 

Meeting of Shareholders that was held later on that day. It is worth highlighting the election of 

EB members for the period 2008/2010 and of two new effective members and an alternate 

member to the SB. 

In the second meeting, held on February 18 th , the SB approved a favourable opinion on the EB’s 

2007 Annual Report. The SB based its decision in an analysis performed, in the opinion of the 

Audit and Risk Committee and in the recommendation of the Corporate Governance Committee. 

In the same meeting, the SB analysed the activity in 2007 of the Audit and Risk Committee, the 

Nomination Committee and the Corporate Governance Committee. Other issues analysed 

comprised the reflection on the realisation of the Annual General Meeting of Shareholders and 

on the EB proposals in regard with changes to the Coordination Committees and other 

Committees established by the EB in the Bank’s executive structure.


In the meeting of October 27 th 2008, the SB analysed the activity and consolidated financial 

statements of the third quarter of 2008. It also analysed the report on credit granted to 

shareholders, whether Bank shares served as collateral or not, and the conclusions of the external 

auditors over credit operations held with members of corporate bodies. The SB particularly 

analysed the strategic agenda in the current environment, the assumptions for the 2009 budget 

and the Bank’s dividend policy. 

The EB presented relevant questions to the SB on the sustainability of the Pension Fund and the 

guiding principles of the regulation of the contributions in kind to the Pension Fund. 

The SB followed the activity of the Specialised Committees during the third quarter of 2008. 

As far as the activity of the Corporate Governance Committee and the Nomination and 

Remunerations Committee is concerned, the SB approved a set of working rules, previously 

discussed and approved, that apply to the relationship among the different corporate bodies 

of the Bank, namely the SB, EB and Senior Board, and began the process of self-assessment of 

the SB. The SB also analysed a question that was raised about the composition of its Specialised 

Committees. 

In the same meeting, the SB acknowledged the current status of the partnership agreement 

between Sonangol and BPA in regard to Banco Millennium Angola, of the process of the 

mediation process of impending claims related with the Bank’s share capital increases of 

2000/2001, and of the process of simplification of the Group’s corporate structure. The SB also 

acknowledged the EB credit policy, in regard to the financing of own shares and acceptance of 

own shares as financing guarantees. 

In its meeting of December 4 th 2008, the SB met with the main purpose of analysing the Bank’s 

annual budget for 2009. It also analysed the merger process of the investment bank subsidiary 

into BCP, ratified the request of personal guarantee to be granted by the Portuguese Republic, 

analysed the process and conclusions of the SB self-assessment and acknowledged the activity 

of the Specialised Committees during the fourth quarter of 2008. 

proposed to the General Meeting, and on the working rules among the Bank’s corporate bodies. 

The SB also decided on the proposal to revise the SB Terms of Reference, having approved the 

proposal that was presented. 

The meeting of May 27 th 2008, held in the morning of the same day of the General Meeting, 

focused in agenda of the General Meeting. 

In the meeting of July 21 st 2008, the SB analysed the activity and consolidated financial statements 

for the second quarter of 2008. It also analysed the Bank’s strategy in regard with the execution 

of the Millennium 2010 program as far as the financial, operating and portfolio strands are 

concerned, having advised and assisted the EB. 

The SB analysed the largest credit exposures to the Bank shareholders, acknowledging the EB 

policy on lending against BCP shares as collateral and on specific measures to adopt when facing 

credits/clients with this kind of loans that were already granted. 

In the same meeting, the SB approved its activity report on the first half of 2008 and 

acknowledged the activity of the Specialised Committees in that period.


During 2008, the SB was informed about the current status of the administrative, judicial and 

mediation proceedings pending against the Bank, and acknowledged the major legal and 

regulatory changes that occurred within the financial system. 

Activity of the Specialised Committees 

The Audit and Risk Committee (ARC) met thirteen times during 2008, namely on February 12 th 

(Quarterly Meeting), February 28 th , March 26 th , April 17 th (12:00 h), April 17 th (15:00 h), April 

22 nd , May 8 th , June 25 th , July 17 th (Quarterly Meeting), September 25 th , October 21 st (Quarterly 

Meeting), November 27 th and December 19 th . The 2008 ARC meetings registered an average 

attendance of 98% (including experts). Of the meetings held, the respective minutes were written. 

In accordance with the Companies Code, the ARC members attended the EB quarterly meetings 

that approved the quarterly accounts. 

Among the tasks performed it is worth highlighting: the review of the financial statements, both 

on an individual and consolidated basis; the monitoring of the evolution and control of the main 

risk and prudential indicators; the monitoring of the liquidity position of the Bank; the monitoring 

of the evolution of the cost-to-income ratio; the follow-up of the activity of the External Auditors, 

of the Internal Auditors, of the Risk Office, of the Compliance Officer and of the Client 

Ombudsman; the consulting process and proposal for the selection of the Statutory Auditor and 

External Auditor; the analysis of the Largest Credit Exposures and Impairments; follow-up 

progress on the implementation of the Basel II Project; the knowledge of the impact of the 

international financial crisis; the analysis of the liquidity management of the Group; the analysis of 

the new legal regime for the prevention and repression of money laundering and terrorism 

financing; the amendments in the accounting of financial instruments; the analysis of the internal 

regulation on contributions in kind to the Pensions Funds; the merger of Banco Millennium bcp 

investimento in BCP; the follow-up of the banking operations in Poland and Greece through the 

presentations of the respective CFO’s; the analysis of the budget for 2009; the approval of the 

Audit and Risk Committee Plan of Activities for 2009; and the legal proceeding to annul a 

corporate resolution which elected the Bank’s Statutory Auditor and its alternate for the 

three-year period of 2008/2010, submitted by a shareholder and disputed by the Bank. 

With respect to the supervision of the independence and of the activity of the External Auditors 

it is worth mentioning: the independence certification of the External Auditors, within the 

selection process of the Statutory Auditor and the External Auditors; the analysis of the Economic 

Provisions report prepared by KPMG; the analysis of the conclusions of the Desktop Review of 

the quarterly financial statements prepared by KPMG; the analysis of the conclusions of the 

Impairments Report; the analysis and approval of several proposals of non-audit services rendered 

by KPMG; and the KPMG opinion on the Internal Control System Report. 

The above-mentioned reports, services proposals and opinion were made available to the Audit and 

Risk Committee. The Audit and Risk Committee concluded that the quality and the independence 

requirements of the Statutory Auditor and the External Auditors were achieved. 

Regarding the Internal Auditors it is worth highlighting: the analysis of the new organisational 

structure for the Internal Audit Department; the analysis of the Internal Audit “Activities Plan for the 

Year of 2008”; the monitoring of the implementation of the recommendations made concerning


the Internal Audit of BCP; and the analysis of the Internal Control System Report submitted to the 

Bank of Portugal in December 2008. Also in the scope of the Internal Audit, the ARC analysed the 

information on the supervisory actions performed by the regulatory entities of the several markets 

where the Group operates, including namely the progress reports related to the agreement set up 

between the bcpbank (US) and the Office of the Comptroller of the Currency (OCC). 

Already in 2009, the ARC attended the EB meeting of February 11 th , 2009 that approved the 

annual accounts and the appraisal of the management report and financial statements of Banco 

Comercial Português, S.A., which include the financial statements on an individual and on a 

consolidated basis, prepared by the EB for the year ended December 31 st 2008 and approved 

the Annual Report of the Audit and Risk Committee in which the ARC recommends to the SB 

the adoption of a favourable opinion on the management report and financial statements of 

Banco Comercial Português, S.A. 

The SB was informed about the works of the Audit and Risk Committee on a regular basis, 

namely by the Chairman of this Committee and by the delivery of information about the 

Committee’s activity and of the minutes of its meetings. 

The Nomination Committee held two meetings in 2008, on February 18 th and April 18 th 

respectively. The meetings registered an attendance of 100%. Of the meetings held, the respective 

minutes were written. 

The Chairman of the EB attended both the 2008 meetings of the Nomination Committee. 

The meeting of February 18 th focused, among other issues, on the changes in the composition 

of the corporate bodies, that resulted from the General Meeting of Shareholders held on January 

15 th 2008, and on the areas of responsibility within the EB, the Committee having duly 

acknowledged the proposed changes in the structure and composition of the EB Committees 

and the distribution of areas of responsibility within the EB members. 

In the meeting of April 18 th 2008, given its powers in matters of nomination and bearing in mind 

the good governance practices, the Committee analysed the profile of both the Senior Board and 

the SB, bearing in mind that both the corporate bodies mentioned end their mandates at year-end. 

The Committee also discussed the process of the SB self-assessment, having issued a 

recommendation to the SB, which was analysed and adopted in the SB meeting of April 21 st 2008. 

In the same meeting, the Committee analysed, among other issues, the annual procedure of 

assessing the independence requisites of the SB members as well as the opinion to be issued in 

that respect by the Corporate Governance Committee. 

In both meetings, the Committee was called to issue its opinion on nominations for corporate bodies, 

agreeing with the several EB proposals of nominations for corporate bodies of subsidiary companies. 

The Committee followed-up the developments of the process of setting up the EB remuneration 

policy and analysed the matters related to the Annual General Meeting, namely the corporate bodies 

that were ending their mandates and were to be elected by the General Meeting. 

In the first half of 2008, the Nomination Committee ended its activity as a Specialised Committee 

exclusively dealing with nomination issues. On April 21 st 2008, the SB granted the power to set 

forth the remuneration of the EB, to a newly formed Nomination and Remunerations


Committee. The continuity of the works related with nomination issues that were in progress, and 

the assessment of the profile of the corporate bodies and the process of the SB self-assessment 

were fully assured by the new specialised committee of the SB. 

The SB was regularly informed on the activity of the Committee by its Chairman. 

In 2008, under the scope of the Committee’s activity, the following issues are worth highlighting. 

As far as the Nomination issues are concerned, the Committee discussed the best practices and 

principles in relation to the composition of a supervisory body, based on a benchmarking analysis, 

and the SB self-assessment process, the Committee having agreed to recommend its 

implementation before the end of the term of the current SB mandate. The Committee analysed 

the results of the 2007 employees satisfaction survey and assessed a question raised about the 

composition of the SB Specialised Committees. 

As far as the remunerations issues are concerned, the Committee analysed, in its first meeting, 

the remuneration and welfare policy of the EB and issued a recommendation to the SB about 

the corresponding proposals to be submitted to the General Meeting of Shareholders 

(comprising both remunerations and welfare of the EB members). The Committee had the 

support of a study that was performed by a specialised external consultant. In its meeting of 

July 16 th 2008, the Committee approved a proposal to be submitted to the SB meeting of July 

21 st 2008 related to the EB compensation model. The proposal comprised namely (i) the 

amounts of the fixed remunerations of each of the EB members, and (ii) the improvements 

to the EB compensation model. In the second half of 2008, the Nomination and 

Remunerations Committee decided to agree with the proposals concerning the application 

of the Compensation Model, and reviewed draft definitions of goals and metrics concerning 

SB variable remuneration for the upcoming years. 

The Committee agreed with a set of nominations proposed by the EB, comprising the corporate 

bodies of both subsidiary companies and the Bank internal structures. 

Already in 2009, in a meeting held on February 10 th 2009, the Committee, among other 

deliberations, proposed to the SB the amendment of Compensation Model of the Executive 

Board in accordance with the Bank’s practice in regard to the insurance plans of the EB members 

The Nomination and Remunerations Committee held four meetings during 2008, on May 8 th , 

July 16 th , October 15 th and November 19 th respectively. The meetings registered an average 

attendance of 77%. Of the meetings held, the respective minutes were written. 

The Chairman of the EB attended all the 2008 meetings of the Nomination and Remunerations 

Committee, except for the meeting held on October 15 th 2008. 

The members of the Nomination and Remunerations Committee are independent from the 

members of the EB. 

On April 21 st 2008, the Nomination and Remunerations Committee began its activity, dealing with 

remunerations issues on top of the nomination issues that previously were a duty of the 

Nomination Committee.


In the meeting of February 15 th 2008, the Corporate Governance Committee analysed the 

2007 Annual Report, focusing in particular on the chapter of the Corporate Governance 

Report and issued a recommendation to the SB. Among the other items discussed, it is 

worth highlighting the changes that occurred in the General Meeting of Shareholders held 

on January 15 th 2008 in the composition of the corporate bodies and the preparation of the 

Annual General Meeting, namely in regard to the corporate bodies whose term of mandate 

is approaching. The Committee also analysed the new distribution of areas of responsibility 

among the EB members, as well as the structure and composition of the EB Committees, and 

received and analysed information about the CMVM recommendations on corporate 

governance. 

In the meeting of April 18 th 2008, the Committee reflected on the governance model for the 

corporate bodies that have the duty to define the EB remunerations and welfare policies, and on 

working rules among the different corporate bodies of the Bank. Among other issues discussed 

in this meeting, it is worth highlighting the preparation of the 2008 Annual General Meeting and 

the process of annual verification of the independence requirements of the SB members and the 

profile of the Bank corporate bodies. 

The Committee devoted attention to the profile of both the Senior Board and the SB, having 

analysed a document whose preparation was based on data about international supervisory 

boards in terms of their composition. The Committee proposed that the Nomination and 

Remunerations Committee, which accepted the proposal, discuss the above-mentioned 

document. 

In the meeting of October 15 th 2008, the Committee decided to recommend to the SB, in the 

latter’s meeting of October 27 th 2008, the adoption of the document that establishes the 

working rules among the corporate bodies of Banco Comercial Português, and the realisation 

of the annual verification of the independence requirements of the SB members. In regard to 

the latter, the Committee had issued an opinion to the SB recommending that such 

independence assessment be renewed for the year of 2008. The SB approved and adopted 

both recommendations. 

The Committee also analysed the Bank’s Articles of Association with a view to identifying 

improvements. 

and the approval of the proposal in regard to the 2008 Variable Remuneration of the EB 

members. The Committee also recommended to the SB the adoption of a declaration, on the 

remuneration policy and retirement plan of the EB, to be submitted to 2009 Annual General 

Meeting. The SB, in its meeting of February 16 th 2009, approved the proposals and 

recommendation mentioned above. 

The SB was regularly informed on the activity of the Committee by its Chairman and by the 

delivery of information about the Committee’s activity and of the minutes of its meetings. 

The Corporate Governance Committee held three meetings in 2008, on February 15 th , April 

18 th and October 15 th respectively. The 2008 Corporate Governance Committee meetings 

registered an average attendance of 78% (including experts and the Chairman of the EB). Of the 

meetings held, the respective minutes were written.


In the same meeting, and following a previous discussion about the SB profile, the Committee 

analysed a benchmarking document of Supervisory Boards comprising financial institutions in 

Europe, having reached an understanding on the best practices and principles to observe about 

the composition of a supervisory body. Among the sample analysed, it was verified that the 

independence requirement is a crucial issue, that on average two former executives are members 

of the Board, that there are an average of four specialised committees in each supervisory board, 

and that the majority of the members, 79%, participates in the Board’s specialised committees. 

The Committee also discussed the realisation of the SB self-assessment, through a questionnaire 

prepared for that purpose, taking the opportunity of considering the experience acquired in the 

SB’s first mandate. Therefore, the Committee agreed to recommend its realisation before the 

term of the current SB mandate, a recommendation that was adopted by the SB. 

Already in 2009, in a meeting held in February 10th and 13th, the Committee discussed, among 

other matters, the preparation of the Annual General Meeting, analysed the 2008 Corporate 

Governance Report, on which it issued a favourable opinion to the SB, and the 2008 Sustainability 

Report, both reports prepared by the EB, and continued the analysis and discussion of the text 

of the Bank’s Articles of Association. 

The SB was regularly informed on the activity of the Committee by its Chairman and by the 

delivery of information about the Committee’s activity and of the minutes of its meetings. 

Issue of opinions 

In accordance with its supervision and advisory functions, the SB adopted the recommendations 

of the Audit and Risk Committee that resulted from its meetings of February 12 th 2008, April 17 th 

2008, December 19 th 2008 and February 11 th 2009, having issued its favourable opinion, 

respectively, on the 2007 Management Report and Year-End Financial Statements, the selection 

of the Statutory Auditor and External Auditor, on the Internal Control System Report and on the 

2008 Management Report and Financial Statements. 

Assessment of the Supervisory Board activity 

The self-assessment of supervisory corporate bodies, based on methodologies that have 

developed over time, is a good practice that is now widespread and allows, through the 

identification and prioritisation of themes and matters to address, the achievement of better 

performance and efficiency in the activities to be carried out. 

In 2008, the SB, created by decision of the General Meeting of Shareholders held on March 13 th 

2006, completed its first full mandate, so the opportunity to perform the self-assessment was 

judged to be important. 

The methodology used for the self-assessment included not only the evaluation of the work 

developed, but also the analysis of the answers of individual members of the SB to a specific 

questionnaire that focused, among other issues, on the commitment of the SB to its mission and


responsibility, on the participation and pro-activity of the members of the SB and on the working 

methods followed both at the level of SB Meetings and at the level of the several Specialised 

Committees. 

The assessment concluded that the overall balance of the SB activity is positive and allows the 

mission of supervision of Banco Comercial Português to be conducted with thoroughness and 

professionalism. 

The process of self-assessment of the SB has also allowed to identify some improvements to be 

made and to highlight a number of positive aspects: 

• The high level of attendance, availability and participation of SB members in plenary meetings 

as well as in the meetings of the Specialised Committees; 

• There is consistency and coherence between the procedures used in the process of analysis, 

resolution and monitoring of the implementation of decisions taken by the SB; 

• The work and effort invested in the relationship with the EB, materialised in the participation 

of the EB and its Chairman in multiple meetings of the SB and of its Committees, creating a 

very positive climate of institutional cooperation. 

In conclusion, the process of self-assessment of the SB, made in line with best international 

practices in terms of its methodology and scope, allowed the SB not only to make an assessment, 

which showed a positive evaluation of the work developed but also confirmed that the SB has 

all the adequate conditions to fulfil its mission of supervising of the Bank, and also to identify the 

issues to address in the near future to further enhance the effectiveness of the works of the SB. 

Recognitions 

For the cooperation provided and the adequate manner in which the SB received the information 

needed for the performance of its duties, the SB is grateful to the EB and to the EB members 

involved and to the Specialised Committees of the SB and its members. 

The SB wishes to thank all the Employees of the Bank for their attitude and commitment.

26 Annual Report Volume II Appendix

Annual Report Volume II Appendix 27 

Appendix 

Composition of the Supervisory Board and respective Specialised 

Committees as of December 31 st 2008 

Supervisory Board 

Chairman: 


Vice Chairman: 

António Manuel Ferreira da Costa Gonçalves 

Members: António Luís Guerra Nunes Mexia (since January 15 th 2008) 

Francisco de la Fuente Sánchez 

João Alberto Ferreira Pinto Basto 

José Eduardo Faria Neiva dos Santos 

Keith Satchell 

Luís de Melo Champalimaud 

Luís Francisco Valente de Oliveira 

Manuel Domingos Vicente (since January 15 th 2008) 

Mário Branco Trindade 

Alternate members: Ângelo Ludgero da Silva Marques (since January 15 th 2008) 

Audit and Risk Committee (1) 

Members: 

Participate 

in the Committee: 

Luís Francisco Valente de Oliveira (Chairman) 

João Alberto Ferreira Pinto Basto (Vice Chairman) 

José Eduardo Faria Neiva dos Santos 

Jeff Medlock (Expert) 

Corporate Governance Committee (1) 

Members: 

Participate 


Francisco de la Fuente Sánchez (Chairman) 

João Alberto Ferreira Pinto Basto (Vice Chairman) 


Carlos Jorge Ramalho dos Santos Ferreira (Chairman of the EB) 

António Augusto Serra Campos Dias da Cunha (Expert) 

José de Sousa Cunhal Melero Sendim (Expert) 

Morais Leitão, Galvão Teles, Soares da Silva & Associados 

– Sociedade de Advogados, represented by Miguel Galvão Teles 

(Expert) 

Nomination and Remunerations Committee (1) 

Members: 

Participate 


João Alberto Ferreira Pinto Basto (Chairman) 

Francisco de la Fuente Sánchez (Vice Chairman) 

António Luís Guerra Nunes Mexia 


Ângelo Ludgero da Silva Marques (Expert) 

Luís Manuel de Faria Neiva dos Santos (Expert) 

(1) 

The deliberations are taken with the favourable vote of the majority of the members that incorporate the Committee.

28 Annual Report Volume II Opinion of the Supervisory Board 

Opinion of the 

Supervisory Board

Annual Report Volume II Opinion of the Supervisory Board 29

30 Annual Report Volume II Opinion of the Supervisory Board 

Opinion of the 


1. The Supervisory Board issues its opinion on the financial information, which includes the financial 

statements on an individual and on a consolidated basis and the management report as prepared 

by the Executive Board of Banco Comercial Português, S.A. as of December 31 st , 2008. 

2. The Supervisory Board met periodically with the Chairman of the Executive Board and with 

the Director responsible for the financial matters, and has been informed on a timely basis about 

the management decisions of the Executive Board. 

3. The Audit and Risk Committee and the Corporate Governance Committee provided to the 

Supervisory Board all the relevant information and explanations for the accomplishment of its 

own duties, which included, namely, the procedures considered adequate and opportune 

concerning the compliance by the Bank with the by-laws and applicable legal framework. 

4. In accordance with its duties, the Supervisory Board received and agreed with the 

recommendation of adoption of a favourable opinion, regarding the 2008 management report 

and financial statements prepared by the Executive Board, issued by the Audit and Risk 

Committee, having also appreciated the Statutory Reports/Audit Reports prepared by KPMG & 

Associados – SROC, S.A., concerning the financial statements, both on an individual and on a 

consolidated basis, and agrees with its contents. 

5. The Supervisory Board issues a favourable opinion on the management report and financial 

statements on an individual and on a consolidated basis prepared by the Executive Board, for the 

year ended on December 31 st , 2008, recommending its approval by the Annual General Meeting 

of Shareholders.

Annual Report Volume II Opinion of the Supervisory Board 31 

6. The signatories, members of the Supervisory Board, declare that to the best of their knowledge, 

the financial information respecting the present opinion was drawn up in accordance with the 

applicable accounting standards, reflecting a true and fair view of the assets and liabilities, financial 

position and results of Banco Comercial Português, S.A. and of the companies included in its 

consolidation perimeter, and that the management report faithfully states the trend of the 

business, the performance and position of Banco Comercial Português, S.A. and of the companies 

included in its consolidation perimeter, contains a description of the principal risks and 

uncertainties faced. 

Lisbon, February 16 th , 2009 

The Supervisory Board 

Gijsbert J. Swalef – Chairman 

António Manuel Ferreira da Costa Gonçalves – Vice-Chairman 

António Luís Guerra Nunes Mexia – Member 

Francisco de La Fuente Sánchez – Member 

João Alberto Ferreira Pinto Basto – Member 

José Eduardo Faria Neiva dos Santos – Member 

Keith Satchell – Member 

Luís de Melo Champalimaud – Member 

Luís Francisco Valente de Oliveira – Member 

Manuel Domingos Vicente – Member 

Mário Branco Trindade – Member

32 Annual Report Volume II Annual Report of the Audit and Risk Committee 

Annual Report of the Audit 

and Risk Committee, which includes 

the Statement of Compliance

Annual Report Volume II Annual Report of the Audit and Risk Committee 33

34 Annual Report Volume II Annual Report of the Audit and Risk Committee 

Annual Report of the Audit 

and Risk Committee, which includes 

the Statement of Compliance 

1. This Audit and Risk Committee report to the Supervisory Board focuses on its supervision 

activity carried out in 2008. 

2. The Audit and Risk Committee informed regularly the Supervisory Board on the work carried 

out and the conclusions achieved on relevant matters. 

3. The Audit and Risk Committee met periodically with the Chairman of the Executive Board and 

with the Director responsible for the financial matters, and has been informed on a timely basis 

about the management decisions of the Executive Board. 

4. The Executive Board, the Director responsible for the financial matters, the officers of the Bank, 

the internal audit and the external auditors provided the Audit and Risk Committee all the 

relevant information and explanations for the accomplishment of its own duties, which included, 

namely, the procedures considered adequate and opportune concerning the compliance by the 

Bank with the by-laws and applicable legal framework. 

5. For carrying out the supervision activity during the year, the Audit and Risk Committee had 

available the necessary means for that purpose, without constrains to its performance. 

6. In accordance with its duties, the Audit and Risk Committee appraised the 2008 management 

report and the financial statements prepared by the Executive Board, having also appraised the 

Statutory Reports/Audit Reports prepared by KPMG & Associados – SROC, S.A., concerning the 

financial statements, both on an individual and on a consolidated basis, and agrees with its 

contents. 

7. The signatories declare that to the best of their knowledge, the financial information analysed 

was drawn up in accordance with the applicable accounting standards, including the options 

undertaken by the Executive Board concerning the accounting matters subject to discussions 

with the Supervisory Authorities, reflecting a true and fair view of the assets and liabilities, financial

Annual Report Volume II Annual Report of the Audit and Risk Committee 35 

position and results of Banco Comercial Português, S.A. and of the companies included in its 

consolidation perimeter, and that the management report faithfully states the trend of the 

business, the performance and position of Banco Comercial Português, S.A. and of the companies 

included in its consolidation perimeter, contains a description of the principal risks and 

uncertainties faced. 

8. The Audit and Risk Committee recommends to the Supervisory Board the adoption of a 

favourable opinion on the management report and financial statements of Banco Comercial 

Português, S.A., which include the financial statements on an individual and on a consolidated 

basis, prepared by the Executive Board for the year ended December 31 st , 2008. 

Lisbon, February 16 th , 2009 

The Audit and Risk Committee 

Luís Valente de Oliveira – Chairman 

João Alberto Pinto Basto – Vice-Chairman 

José Eduardo Neiva Santos – Member

36 Annual Report Volume II 2008 Financial Statements 

2008 Financial Statements 

38 

141 

228 

230 


– Banco Comercial Português 

Financial Statements 

– Banco Comercial Português, S.A. 


External Auditor’s Report

Annual Report Volume II 2008 Financial Statements 37

38 Annual Report Volume II Financial Statements 2008 Banco Comercial Português 

Consolidated Income Statement for the years ended 31 December, 2008 and 2007 

(Thousands of euros) 

Notes 

2008 

2007 

Interest and similar income 3 5,269,597 4,332,187 

Interest expense and similar charges 3 (3,548,549) (2,794,884) 

Net interest income 1,721,048 1,537,303 

Dividends from equity instruments 4 36,816 27,921 

Net fees and commissions income 5 740,417 664,583 

Net gains / (losses) arising from trading and hedging activities 6 277,631 199,138 

Net gains / (losses) arising from available for sale financial assets 7 (259,532) 193,211 

Other operating income 8 57,580 97,861 

2,573,960 2,720,017 

Other net income from non banking activities 17,390 12,925 

Total operating income 2,591,350 2,732,942 

Staff costs 9 915,307 1,006,227 

Other administrative costs 10 642,641 627,452 

Depreciation 11 112,843 114,896 

Operating expenses 1,670,791 1,748,575 

920,559 984,367 

Loans impairment 12 (544,699) (260,249) 

Other assets impairment 29 (60,024) (45,754) 

Other provisions 13 15,500 (49,095) 

Operating profit 331,336 629,269 

Share of profit of associates under the equity method 14 19,080 51,215 

Gains / (losses) from the sale of subsidiaries and other assets 15 (8,407) 7,732 

Profit before income tax 342,009 688,216 

Income tax 

Current 16 (44,001) (73,045) 

Deferred 16 (39,997) 3,475 

Profit after income tax 258,011 618,646 

Attributable to: 

Shareholders of the Bank 201,182 563,287 

Minority interests 42 56,829 55,359 

Profit for the year 258,011 618,646 

Earnings per share (in euros) 17 

Basic 0.03 0.13 

Diluted 0.03 0.13 

Chief Accountant 

The Board of Directors 

See accompanying notes to the consolidated financial statements

Annual Report Volume II Financial Statements 2008 Banco Comercial Português 39 

Consolidated Balance Sheet as at 31 December, 2008 and 2007 


Notes 

2008 

2007 

Assets 

Cash and deposits at central banks 18 2,064,407 1,958,239 

Loans and advances to credit institutions 

Repayable on demand 19 1,048,348 820,699 

Other loans and advances 20 2,892,345 6,482,038 

Loans and advances to customers 21 75,165,014 65,650,449 

Financial assets held for trading 22 3,903,267 3,084,892 

Financial assets available for sale 22 1,714,178 4,418,534 

Assets with repurchase agreement 14,754 8,016 

Hedging derivatives 23 117,305 131,069 

Financial assets held to maturity 24 1,101,844 - 

Investments in associated companies 25 343,934 316,399 

Non current assets held for sale 29 19,558 24,180 

Property and equipment 26 745,818 699,094 

Goodwill and intangible assets 27 540,228 536,533 

Current income tax assets 18,127 29,913 

Deferred income tax assets 28 586,952 650,636 

Other assets 29 4,147,645 3,355,470 

94,423,724 88,166,161 

Liabilities 

Deposits from central banks 3,342,301 784,347 

Deposits from other credit institutions 30 5,997,066 8,648,135 

Deposits from customers 31 44,907,168 39,246,611 

Debt securities issued 32 20,515,566 26,798,490 

Financial liabilities held for trading 33 2,138,815 1,304,265 

Other financial liabilities held for trading at fair value through profit or loss 34 6,714,323 1,755,047 


Provisions for liabilities and charges 35 221,836 246,949 

Subordinated debt 36 2,598,660 2,925,128 

Current income tax liabilities 4,826 41,363 

Deferred income tax liabilities 28 336 46 

Other liabilities 37 1,383,633 1,399,757 

Total Liabilities 88,175,490 83,266,906 

Equity 

Share capital 38 4,694,600 3,611,330 

Treasury stock 41 (58,631) (58,436) 

Share premium 183,368 881,707 

Preference shares 38 1,000,000 1,000,000 

Fair value reserves 40 214,593 218,498 

Reserves and retained earnings 40 (274,622) (1,598,704) 

Profit for the year attributable to Shareholders 201,182 563,287 

Total Equity attributable to Shareholders of the Bank 5,960,490 4,617,682 

Minority interests 42 287,744 281,573 

Total Equity 6,248,234 4,899,255 

94,423,724 88,166,161 





Consolidated Cash Flows Statement for the years ended 31 December, 2008 and 2007 


2008 

2007 

Cash flows arising from operating activities 

Interest income received 4,867,373 4,218,603 

Commissions income received 910,858 970,252 

Fees received from services rendered 309,533 290,025 

Interest expense paid (3,375,082) (2,668,285) 

Commissions expense paid (261,117) (375,054) 

Recoveries on loans previously written off 92,788 146,970 

Net earned premiums 17,967 16,795 

Claims incurred (10,707) (9,654) 

Payments to suppliers and employees (1,797,471) (1,706,778) 

754,142 882,874 

Decrease / (increase) in operating assets: 

Loans and advances to credit institutions 2,530,573 1,489,789 

Deposits with Central Banks under monetary regulations 973,967 (1,631,407) 

Loans and advances to customers (7,288,663) (9,253,601) 

Short term trading account securities 258,565 (154,005) 

Increase / (decrease) in operating liabilities: 

Deposits from credit institutions repayable on demand (154,200) 107,472 

Deposits from credit institutions with agreed maturity date 2,008,265 (3,289,235) 

Deposits from clients repayable on demand (630,704) (279,618) 

Deposits from clients with agreed maturity date 6,194,006 6,178,161 

4,645,951 (5,949,570) 

Income taxes (paid) / received 36,772 25,641 

4,682,723 (5,923,929) 

Cash flows arising from investing activities 

Acquisition of shares in subsidiaries and associated companies (1,994) (16,720) 

Dividends received 41,137 46,915 

Interest income from available for sale financial assets 201,810 165,990 

Proceeds from sale of available for sale financial assets 41,011,019 20,514,052 

Available for sale financial assets purchased (71,346,564) (32,935,142) 

Proceeds from available for sale financial assets on maturity 29,237,121 12,875,838 

Acquisition of fixed assets (225,083) (177,991) 

Proceeds from sale of fixed assets 75,228 122,071 

Increase / (decrease) in other sundry assets (915,398) (244,795) 

(1,922,724) 350,218 

Cash flows arising from financing activities 

Proceeds from issuance of subordinated debt 377,038 149,327 

Reimbursement of subordinated debt (463,578) (137,781) 

Proceeds from issuance of debt securities 4,745,710 8,451,039 

Repayment of debt securities (4,396,962) (3,483,947) 

Proceeds from issuance of commercial paper 16,664,374 17,705,311 

Repayment of commercial paper (20,744,783) (16,659,257) 

Share capital increase 1,083,270 - 

Share premium 183,368 - 

Dividends paid - (306,963) 

Dividends paid to minority interests (19,505) (15,785) 

Increase / (decrease) in other sundry liabilities and minority interests 154,283 (215,433) 

(2,416,785) 5,486,511 

Exchange differences effect on cash and equivalents (85,567) 38,387 

Net changes in cash and equivalents 257,647 (48,813) 

Cash and equivalents at the beginning of the year 1,474,592 1,523,405 

Cash (note 18) 683,891 653,893 

Other short term investments (note 19) 1,048,348 820,699 

Cash and equivalents at the end of the year 1,732,239 1,474,592 



Consolidated Statement of Changes in Equity for the years ended 31 December, 2008 and 2007 

Total 

equity 

Share 

capital 

Preference 

shares 

Share 

premium 

Legal and 

statutory 

reserves 

Fair value 

and Cash 

Flow hedged 

reserves 

Other 

reserves 

and retained 

earnings 

Balance on 31 December, 2006 4,854,661 3,611,330 1,000,000 881,707 481,300 442,889 1,117,117 (2,883,580) (22,150) 226,048 

Transfers to reserves: 

Legal reserve - - - - 60,902 - (60,902) - - - 

Statutory reserve - - - - 19,000 - (19,000) - - - 

Dividends paid in 2007 (306,963) - - - - - (306,963) - - - 

Profit for the year attributable to 

Shareholders of the Bank 563,287 - - - - - 563,287 - - - 


minority interests (note 42) 55,359 - - - - - - - - 55,359 

Dividends on preference shares (48,910) - - - - - (48,910) - - - 

Treasury stock (36,286) - - - - - - - (36,286) - 

Exchange differences arising on consolidation 38,387 - - - - - 38,387 - - - 

Fair value reserves (note 40) 

Financial instruments available for sale (224,015) - - - - (224,015) - - - - 

Cash-flow hedge (376) - - - - (376) - - - - 

Minority interests (note 42) 166 - - - - - - - - 166 

Other reserves arising on consolidation (note 40) 3,945 - - - - - 3,945 - - - 


Reverse of reserves (note 40): 

Share premium - - - (881,707) - - 881,707 - - - 

Legal reserve - - - - (96,911) - 96,911 - - - 

Statutory reserve - - - - (84,000) - 84,000 - - - 


Shareholders of the Bank 201,182 - - - - - 201,182 - - - 


minority interests (note 42) 56,829 - - - - - - - - 56,829 

Increase in share capital by the issue of 

1,083,270,433 shares (notes 38) 1,299,924 1,083,270 - 216,654 - - - - - - 

Registration costs related with the increase in share capital (33,286) - - (33,286) - - - - - - 

Dividends on preference shares (48,910) - - - - - (48,910) - - - 

Treasury stock (195) - - - - - - - (195) - 

Exchange differences arising on consolidation (85,567) - - - - - (85,567) - - - 

Fair value reserves (note 40) 

Financial instruments available for sale (8,831) - - - - (8,831) - - - - 

Cash-flow hedge 4,926 - - - - 4,926 - - - - 

Minority interests (note 42) (50,658) - - - - - - - - (50,658) 

Other reserves arising on consolidation (note 40) 13,565 - - - - - 13,565 - - - 


See accompanying notes to the consolidated financial statements 

Goodwill 


Treasury 

stock 

Minority 

interests


Notes to the Consolidated Financial Statements, 31 December, 2008 

1. Accounting policies 

a) Basis of presentation 

Banco Comercial Português, S.A. (the ‘Bank’) is a public bank, established in Portugal in 1985. It commenced operations on 5 May, 1986, and these consolidated 

financial statements reflect the results of the operations of the Bank and all its subsidiaries (together referred to as the ‘Group’) and the Group’s interest in associates, 

for the years ended 31 December, 2008 and 2007. 

In accordance with Regulation (EC) no. 1606/2002 from the European Parliament and the Counsel, of 19 July 2002, and its adoption into Portuguese Law through 

Decree-Law no. 35/2002, of 17 February and Regulation no. 1/2005 from the Bank of Portugal, the Group’s consolidated financial statements are required to be 

prepared in accordance with International Financial Reporting Standards (‘IFRS’) as endorsed by the European Union ('EU') since the year 2005. IFRS comprise 

accounting standards issued by the International Accounting Standards Board (‘IASB’) as well as interpretations issued by the International Financial Reporting 

Interpretations Committee (‘IFRIC’) and their predecessor bodies. The Executive Board of Directors approved these consolidated financial statements on 11 February 

2009. The financial statements are presented in thousands of euros, rounded to the nearest thousand. 

The Group adopted IFRS 7 - Financial Instruments: disclosures and IAS 1 - Presentation of Financial Statements (amendment) – Capital Disclosures. These standards 

since 1 January, 2007. It should be noted that the impact of the adoption of the standards mentioned above relates to additional disclosures requirements, without 

any impact on the equity of the Group. In accordance with the transitional rules, comparative information is also provided. 

Additionally, the Group adopted since 2008 IAS 39 and IFRS 7 - Reclassification of Financial Instruments, IFRIC 11 and IFRS 2 - Group and Tresuary Shares Transactions 

and IFRIC 14 and IAS 19 - The limit of a defined benefit asset, minimum pending requirements and their interaction. The adoption of these interpretations did not 

have any impact on the financial statements. 

The consolidated financial statements for the year ended 31 December, 2008 have been prepared in terms of recognition and measurement in accordance with the 

IFRS, effective and adopted for use in the EU. 

The financial statements are prepared under the historical cost convention, as modified by the application of fair value basis for derivative financial instruments, financial 

assets and liabilities at fair value through profit or loss (trading, and fair value option) and available-for-sale assets, except those for which a reliable measure of fair 

value is not available. Recognized assets and liabilities that are hedged under hedge accounting are stated at fair value in respect of the risk that is being hedged. Other 

financial assets and liabilities and non-financial assets and liabilities are stated at amortised cost or historical cost. Non-current assets and disposal groups held for sale 

are stated at the lower of carrying amount and fair value less costs to sell. 

The accounting policies set out below have been applied consistently throughout the Group entities and for all periods presented in these consolidated financial 

statements. 

Within the scope of the investigations in progress by the Supervisory Authorities that are described in notes 40, 54 and 55, the balance Reserves and Retained Earnings 

includes, with effect as at 1 January 2006, a restatement resulting from the decision taken by the Executive Board of Directors of booking a provision regarding an 

asset booked on the consolidated financial statements resulting from the transactions described in notes 40, 54 and 55. 

The preparation of the financial statements in accordance with IFRS requires the Executive Board of Directors to make judgements, estimates and assumptions that 

affect the application of the accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are 

based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making 

the judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The 

issues involving a higher degree of judgement or complexity, or where assumptions and estimates are considered to be significant are presented in note 1 ac). 

b) Basis of consolidation 

Investments in subsidiaries 

Investments in subsidiaries where the Group exercises control are fully consolidated from the date the Group assumes control over its financial and operational activities 

until the control ceases to exist. Control is presumed to exist when the Group owns more than half of the voting rights. Additionally, control exists when the Group 

has the power, directly or indirectly, to manage the financial and operating policies of an entity to obtain benefits from its activities, even if the percentage of shareholding 

is less than 50%. 

When the accumulated losses of a subsidiary attributable to the minority interest exceed the equity of the subsidiary attributable to the minority interest, the excess 

is attributed to the Group and charged to the income statement as it occurs. Profits subsequently reported by the subsidiary are recognized as profits of the Group 

until the prior losses attributable to minority interest previously recognised by the Group have been recovered. 

Investments in associates 

Investments in associated companies are consolidated by the equity method, since the date the Group acquires significant influence until the date it ceases. Associates 

are those entities, in which the Group has significant influence, but not control, over the financial and operating policy decisions of the investee. It is assumed that the 

Group has significant influence when it holds, directly or indirectly, 20% or more of the voting rights of the investee. Conversely, if the Group holds, directly or 

indirectly less than 20% of the voting rights of the investee, it is presumed that the Group does not have significant influence, unless such influence can be clearly 

demonstrated.


The existence of significant influence by the Group is usually evidenced in one or more of the following ways: 

– representation on the Board of Directors or equivalent governing body of the investee; 

– participation in policy-making processes, including participation in decisions about dividends or other distributions; 

– material transactions between the Group and the investee; 

– interchange of managerial personnel; or 

– provision of essential technical information. 

The consolidated financial statements include the attributable part of the total results and reserves of associated companies accounted on an equity basis. When the 

Group’s share of losses exceeds its interest in an associate, the Group’s carrying amount is reduced to nil and recognition of further losses is discontinued except to 

the extent that the Group has incurred in legal or constructive obligations or made payments on behalf of an associate. 

Goodwill 

Goodwill arising from business combinations occurred prior to 1 January 2004 was charged against reserves. 

Business combinations occurred after 1 January 2004 are accounted for using the purchase method of accounting. The acquisition cost corresponds to the fair value 

determined on the acquisition date of the assets given and liabilities incurred or assumed including the costs directly associated with the transaction. Goodwill arising 

on the acquisition of subsidiaries and associates is defined as the difference between the cost of the investment and the corresponding share of the fair value of the 

net assets acquired. 

Since the transition date to IFRS, which was on 1 January, 2004, positive goodwill arising from acquisitions is recognized as an asset and carried at cost and is not 

amortised. The value of recoverable goodwill is assessed annually to identify any impairment, regardless of the existence of any indication of any impairment. Impairment 

losses are recognized in the income statement. 

Negative goodwill arising on an acquisition is recognized directly to the income statement in the period when the business combination occurs. 

Special Purpose Entities (‘SPE’) 

The Group fully consolidates SPE’s resulting from securitization operation with Group companies (as refered in note 21), when the substance of the relation with 

those entities indicates that the Group exercises control over its activities, independently of the percentage of the equity held. Besides from the above mentioned 

SPE, there are no additional SPE subject to consolidation. 

The evaluation of the existence of control is determined based on the criteria established by SIC 12, which can be analysed as follows: 

– The activities of the SPE, in substance, are being conducted on behalf of the Group, in accordance with the specific needs of the Group’s business, so as to obtain 

benefits from these activities; 

– The Group has the decision-making powers to obtain the majority of the benefits of the activities of the SPE or, by setting up an "autopilot" mechanism, the Group 

has delegated these decision-making powers; 

– The Group has the rights to obtain the majority of the benefits of the SPE and therefore may be exposed to risks inherent to the activities of the SPE; or 

– The Group retains the majority of the residual or ownership risks related to the SPE or its assets in order to obtain benefits from its activities. 

Investment fund management 

The Group manages and assets held by investment funds regarding which the participation units are held by third parties. The financial statements of these entities 

are not consolidated by the Group, except when the Group has the control over these investment funds, namely when it holds more than 50% of the participation 

units. 

Investments in foreign operations 

The financial statements of the foreign subsidiaries and associates of the Group are prepared in their functional currency, defined as the currency of the primary 

economic environment in which they operate or the currency in which the subsidiaries obtain their income or finance them activity. On consolidation, assets and 

liabilities of the foreign subsidiaries are translated into euros at the official exchange rate at the balance sheet date. 

Regarding the investments in foreign operations that are consolidated in the Group accounts under the full consolidation, the proportional or the equity method of 

consolidation, the exchange differences between the translation to Euros of the opening net assets and their value in Euros at the exchange rate ruling at balance 

sheet date are changed against consolidated reserves. 

The exchange differences from hedging instruments related with foreign operations are eliminated from profit and loss in the consolidation process against the 

exchange differences booked in reserves from those instruments. 

Whenever the hedge is not fully effective, the ineffective portion is accounted against profit and loss of the period. 

The income and expenses of these subsidiaries are translated to Euros, at rates close to the rates ruling at the dates of the transactions. Exchange differences from 

the translation of the profits and losses for the reporting period, arising from the difference between the exchange rate used in the income statement and the 

exchange rate prevailing at the balance sheet date are recognised in reserves - exchange differences. 

On disposal of a foreign operation, exchange differences related to investment in the the foreign operation and to the associated hedge transaction previously 

recognised in reserves are accounted for in the income statement as part of the gains or loss arising from the disposal. 

Investments in jointly controlled entities 

Jointly controlled entities, consolidated under the proportional method, are entities where the Group has joint control, established by contractual agreement. The 

consolidated financial statements include the Group’s proportional share of the entities’ assets, liabilities, revenue and expenses, with items of a similar nature on a 

line by line basis, from the date that joint control started until the date that joint control ceases.


Transactions eliminated on consolidation 

Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated 

financial statements. Unrealised gains and losses arising from transactions with associates and jointly controlled entities are eliminated to the extent of the Group's 

interest in the entity. 

c) Loans and advances to customers 

Loans and advances to customers include loans and advances originated by the Group, which are not intended to be sold in the short term and are recognised when 

cash is advanced to borrowers. 

The derecognition of these assets occurs in the following situations: (i) the contractual rights of the Group have expired; or (ii) the Group transferred substantially 

all the associated risks and rewards. 

Loans and advances to customers are initially recognized at fair value plus any directly attributable transaction costs and fees and are subsequently measured at 

amortized cost using the effective interest method, less impairment losses. 

Impairment 

The Group’s policy consists in a regular assessment of the existence of objective evidence of impairment in the loan portfolios. Impairment losses identified are charged 

against income and subsequently the charge is reversed, if there is a reduction of the estimated impairment loss, in a subsequent period. 

After initial recognition, a loan or a loan portfolio, defined as a group of loans with similar credit risk characteristics, may be classified as impaired when there is 

objective evidence of impairment as a result of one or more events and when the loss event has an impact on the estimated future cash flows of the loan or of the 

loan portfolio that can be reliably estimated. 

According to IAS 39, there are two basic methods of calculating impairment losses: (i) individually assessed loans; and (ii) collective assessment. 

(i) Individually assessed loans 

Impairment losses on individually assessed loans are determined by an evaluation of the exposures on a case-by-case basis. For each loan considered individually 

significant, the Group assesses, at each balance sheet date, the existence of any objective evidence of impairment. In determining such impairment losses on individually 

assessed loans, the following factors are considered: 

– Group’s aggregate exposure to the customer and the existence of overdue loans; 

– The viability of the customer’s business and capability to generate sufficient cash flow to service their debt obligations in the future; 

– The existence, nature and estimated value of the collaterals; 

– A significant downgrading in the client rating; 

– The assets available on liquidation or insolvency; 

– The ranking of all creditor claims; 

– The amount and timing of expected receipts and recoveries. 

Impairment losses are calculated by comparing the present value of the expected future cash flows, discounted at the original effective interest rate of the loan, with 

its current carrying value and the amount of any loss is charged in the income statement. The carrying amount of impaired loans is reduced through the use of an 

allowance account. For loans with a variable interest rate, the discount rate used corresponds to the effective annual interest rate, which was applicable in the period 

that the impairment was determined. 

The present value of the estimated future cash flows of a collateralised loan reflects the cash flows that may result from the foreclosure less costs for obtaining and 

selling the collateral. 

Individual loans that are not identified as having an objective evidence of impairment are grouped on the basis of similar credit risk characteristics, and assessed 

collectively. 

(ii) Collective assessment 

Impairment losses are calculated on a collective basis under two different scenarios: 

– for homogeneous groups of loans that are not considered individually significant; or 

– in respect of losses which have been incurred but have not yet been identified (‘IBNR’) on loans subject to individual assessment for impairment (see section (i)). 

The collective impairment loss is determined considering the following factors: 

– historical loss experience in portfolios of similar risk characteristics; 

– knowledge of the current economic and credit conditions and its impact on the historical losses level; 

– the estimated period between a loss occurring and a loss being identified. 

The methodology and assumptions used to estimate the future cash flows are reviewed regularly by the Group in order to monitor the differences between estimated 

and real losses. 

Loans which have been individually assessed and for which no evidence of impairment has been identified, are grouped together based on similar credit risk 

characteristics for calculating a collective impairment loss. This loss covers loans that are impaired at the balance sheet date but which will not be individually identified 

as such until some time in the future. 

The write-off of loans is performed against the related loan impairments, when these correspond to 100% of the loan amount. Subsequent recoveries of amounts 

previously written off are accounted as a decrease of impairment losses in the year they occur.


d) Financial instruments 

(i) Classification, initial recognition and subsequent measurement 

1) Financial assets and liabilities at fair value through profit and loss 

1a) Financial assets held for trading 

The financial assets and liabilities acquired or issued with the purpose of sale or re-acquisition on the short term, namely bonds, Treasury Bills or shares or that make 

part of a financial instruments portfolio that are jointly managed and for which there is evidence of a recent pattern of short-term profit taking or that can be 

included in the definition of derivative (except in the case of a derivative that is an effective hedge instrument) are classified as trading. The dividends associated to 

these portfolios are accounted in Profits arising from trading activity. 

Trading derivatives with a positive fair value are included in the Financial assets held for trading and the trading derivatives with negative fair value are included in the 

Financial liabilities held for trading. 

1b) Financial assets and liabilities at fair value by decision of the own institution (“Fair Value Option”) 

The Group has adopted the Fair Value Option for certain bond issues, loans and deposits performed since 2007 that contain embedded derivatives or with related 

hedge derivatives. The variations of the credit risk of the Group related with financial liabilities accounted under the Fair Value Option are disclosed in Note 6 Net 

gains arising from trading and hedging activities. 

The designation of the financial assets and liabilities at fair value through profit and loss is performed whenever at least one of the requirements is fulfilled: 

– the assets and liabilities are managed, evaluated and reported internally at its fair value; 

– the designation eliminated or significantly reduced the accounting mismatch of the transactions; 

– the assets and liabilities include derivatives that significantly change the cash-flows of the original contracts (host contracts). 

The financial assets and liabilities at fair value through profit and loss are initially accounted at their fair value, with the expenses and income related to the transactions 

being recognized in profit and loss and subsequently measured at fair value. The subsequent expenses and income resulting from changes in the fair value and the 

related dividends are recognized in Net gains arising from trading and hedging activities of the statement of income. The accrual of interest and premium/discount 

(when applicable) is recognized in Net Interest Income according with the effective interest rate of each transaction, as well as that of the derivatives associated to 

financial instruments classified as Fair Value Option. 

2) Financial assets available for sale 

Financial assets available for sale held with the purpose of being maintained by the Group, namely bonds, Treasury Bills or shares, are classified as available for sale, 

except if they are classified as trading in another category of financial assets. The financial assets available for sale are initially accounted at fair value, including all 

expenses or income associated with the transactions. The financial assets available for sale are subsequently measured at fair value. The changes in fair value are 

accounted for against fair value reserves until they are sold or an impairment loss exists. In the sale of the financial assets available for sale, the accumulated gains or 

losses recognized as fair value reserves are recognized under Net gains and losses arising from available for sale financial assets. Interest income from debt instruments 

is recognized based on the effective interest rate, considering the useful life of the asset. In the situations where there is premium or discount associated to the assets, 

the premium or discount is included in the calculation of the effective interest rate. Dividends are recognized in income statement when the right to receive the 

dividends is attributed. 

3) Financial assets held-to-maturity 

The financial assets held-to-maturity include financial assets, except derivatives, with fixed or determined payments and fixed maturity, for which the Group has the 

intention and the capacity of maintaining until the maturity of the assets and that were not included in the category of financial assets at fair value through profit and 

loss or financial assets available for sale. These financial assets are initially recognised at fair value and subsequently measured at amortised cost. The impairment losses 

are recognised in profit and loss. 

Any reclassification or sale of the financial assets included in this category, which is not performed near the maturity of the assets, will require the Group to reclassify 

this portfolio of financial assets for sale and the Group will not be allowed to classify any assets under this category for the following two years. 

4) Loans and receivables 

The Group also has financial assets classified in loans and receivables when the management’s intention is not its immediate sale or in a near future. 

As an example, the Group may account unquoted bonds in this category. The financial assets recognised in this category are initially accounted at fair value and 

subsequently at amortised cost net of impairment. The transaction costs are initially recognised in the balance sheet and amortised through profit and loss, based on 

the effective interest rate method. 

5) Other financial liabilities 

The other financial liabilities are all financial liabilities that are not accounted as financial liabilities at fair value through profit and loss. This category includes money 

market transactions, deposits from customers and from other financial institutions, issued debt, and other transactions. 

ii) Impairment 

An assessment is made at each balance sheet date as to whether there is any objective evidence of impairment, namely circumstances where an adverse impact on 

estimated future cash flows of the financial asset or group of financial assets can be reliably estimated based on a significant or prolonged decrease in the fair value, 

below the acquisition cost. 

If an available-for-sale asset is determined to be impaired, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less 

any impairment loss on that financial asset previously recognised in the income statement) is removed from fair value reserves and recognised in the income statement. 

If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring


after the impairment loss was recognised in the income statement, the impairment loss is reversed through the income statement. The impairment losses recognised 

in equity instruments classified as available for sale, when reverted, are recognized against reserves. 

(iii) Embedded derivatives 

Embedded derivatives should be accounted for separately as derivatives if the economic risks and benefits of the embedded derivative are not closely related to the 

host contract, unless the hybrid (combined) instrument is not initially measured at fair value with changes through profit and loss. Embedded derivatives are classified 

as trading and accounted for at fair value with changes through profit and loss. 

e) Derivatives hedge accounting 

(i) Hedge accounting 

The Group uses derivative financial instruments to hedge its exposure to currency and interest rate risks, resulting from financing and investment activities. However, 

derivatives not qualified for hedging are accounted for as trading instruments. 

Derivative hedging instruments are stated at fair value and gains and losses on remeasurement are recognized in accordance with the hedging accounting model 

adopted by the Group. An hedge relationship exists when: 

– at the inception of the hedge there is formal documentation of the hedge; 

– the hedge is expected to be highly effective; 

– the effectiveness of the hedge can be reliably measured; 

– the hedge is valuable in a continuous basis and highly effective throughout the reporting period; and 

– for hedges of a forecasted transaction, the transaction is highly probable and presents an exposure to variations in cash flows that could ultimately affect net profit 

or loss. 

When a derivative financial instrument is used to hedge exchange rate fluctuations arising from monetary assets or liabilities, no hedge accounting model was applied. 

Any gain or loss associated to the derivative and exchange rate differences related with the related monetary items were recognized through income. 

(ii) Fair value hedge 

Changes in the fair value of derivatives that are designated and qualify as fair value hedge instruments are recorded in the income statement, together with changes 

in the fair value of the asset or liability or group thereof that are attributable to the hedged risk. If the hedge relationship no longer meets the criteria for hedge 

accounting, the cumulative adjustment to the carrying amount of an hedged item for which the effective interest method is used is amortised through the income 

statement over the residual period to maturity. 

(iii) Cash flow hedge 

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity. Any gain or loss relating 

to an ineffective portion is immediately recognised in the income statement. 

Amounts accumulated in equity are reclassified to the income statement in the periods in which the hedged item will affect profit or loss. However, when the 

forecasted transaction being is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity 

are transferred from equity and included in the initial measurement of the cost of the asset or liability. 

When a hedge instrument expires or is sold, or when the hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at 

that time remains in equity until the forecasted transaction is ultimately recognised in the income statement. When a forecasted transaction is no longer expected 

to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement. 

(iv) Hedge effectiveness 

For each hedge relation in order to be classified as such according to IAS 39, effectiveness has to be demonstrated. As such the Group performs prospective tests 

at the beginning date of the operations and retrospective tests in order to demonstrate in each reporting period the effectiveness, showing that the changes in the 

fair value of the hedging instrument are neutralized by the changes in the hedged item for the risk covered. Any ineffectiveness is recognised immediately in the income 

statement. 

(v) Hedge of a net investment in a foreign operation 

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective 

portion of the hedge is recognised in equity; the gain or loss relating to the ineffective portion is immediately recognised in the income statement. Gains and losses 

accumulated in equity related to the investment in a foreign operation and to the associated hedge operation are included in the income statement on the disposal 

of the foreign operation as part of the gain or loss from the disposal. 

f) Reclassifications between financial instruments categories 

In October 2008, the IASB issued a change to the IAS 39 – Reclassification of Financial Assets (Amendments to IAS 39 Financial Investments: Recognition and 

Measurement and IFRS 7: Financial Investments Disclosures). 

This change allowed an entity to transfer financial assets from financial assets at fair value through profit and loss – trading to financial assets available for sale, to Loans 

and Receivables or to financial assets held-to-maturity, as long as these financial assets comply with the characteristics of an each category. The Group adopted this 

possibility for a group of financial assets on 1 July 2008 and 31 October 2008 as disclosed in note 22. 

Transfer of Financial assets available for sale to "Loans and receivables" and "Held to maturity" are also authorised. Transfers from and to assets and liabilities decided 

by the Bank ("Fair value option") are prohibited.


g) Derecognition 

The Group derecognizes financial assets when all rights to future cash flows have expired or the assets are transferred. In the event of a transferral of assets, 

derecognition can only occur either when risks and rewards have substantially been transferred or the Group has not retained control of the assets. 

The Group derecognizes financial liabilities when these are discharged, cancelled or extinguished. 

h) Equity instruments 

An instrument is classified as an equity instrument when there is no contractual obligation at settlement to deliver cash or another financial asset to another entity, 

independently from its legal form, and shows a residual interest in the assets of an entity after deducting all of its liabilities. 

Transaction costs directly attributable to an equity transaction are recognised under shareholders’ equity and accounted for as a deduction from the amount issued. 

Amounts paid or received related to sales or acquisitions of equity instruments are recognised in shareholders’ equity, net of transaction costs as treasury stock. 

Distributions to holders of an equity instrument are deducted from shareholders’ equity as dividends when declared. 

Preference shares issued by the Group are considered as an equity instrument when redemption of the shares is solely at the discretion of the issuer and dividends 

are paid at the discretion of the Group. 

Income from equity instruments (dividends) are recognised when its payment is done. 

i) Compound financial instruments 

Non-derivative financial instruments that contain both a liability and an equity component (convertible bonds) are classified as compound financial instruments. For 

those instruments to be considered as compound financial instruments, the terms of its conversion to ordinary shares (number of shares) does not vary with changes 

in their fair value. The liability component corresponds to the present value of the future interest and principal payments, discounted at the market rate of interest 

applicable to similar liabilities that do not have a conversion option. The equity component corresponds to the difference between the proceeds of the issue and the 

amount attributed to the liability. The interest expense recognised in the income statement is calculated using the effective interest method. 

j) Securities borrowing and lending business and repurchase transactions 

(i) Securities borrowing and lending 

Securities lent under securities lending arrangements continue to be recognized in the balance sheet and are measured in accordance with the accounting policy for 

assets held for trading or available-for-sale as appropriate. Cash collateral received in respect of securities lent is recognized as a financial liability. Securities borrowed 

under securities borrowing agreements are not recognized. Cash collateral placements in respect of securities borrowed are recognized under loans and advances 

to either banks or customers. Income and expenses arising from the securities borrowing and lending business are recognized on an accrual basis over the period of 

the transactions and are included in interest income or expense. 

(ii) Repurchase agreements 

Investments sold under repurchase agreements at a predetermined price ('repos') continue to be recognized in the balance sheet and are measured in accordance 

with the accounting policy for either assets held for trading or available-for-sale as appropriate. The proceeds from the sale of the investments are reported as liabilities 

to either banks or customers. Investments purchased subject to commitments to resell them at future dates ('reverse repos') are not recognized on the balance sheet 

and the amounts paid are recognized in loans to either banks or customers. 

The difference between the sale and repurchase conditions is recognized on an accrual basis over the period of the transaction and is included in interest and income 

or expenses. 

k) Non-current assets held for sale 

Non-current assets or disposal groups (groups of assets to be disposed of together and related liabilities that include at least a non-current asset) are classified as 

held for sale when the assets or disposal groups are available for immediate sale and its sale is highly probable. 

The Group also classifies as non-current assets held for sale those non-current assets or disposal groups acquired exclusively with a view to its subsequent disposal, 

that are available for immediate sale and its sale is highly probable. 

Immediately before classification as held for sale, the measurement of the non-current assets or all assets and liabilities in a disposal group, is performed in accordance 

with the applicable IFRS. After their reclassification, these assets or disposal groups are measured at the lower between their carrying amount determined annually 

in accordance with the applicable IFRS and the fair value less costs to sell. 

l) Finance lease transactions 

Finance lease transactions for a lessee are recorded at the inception date of the lease as an asset and liability, at the fair value of the leased asset, which is equivalent 

to the present value of the future lease payments. 

Lease rentals are apportioned between the finance charge and amortisation of the capital outstanding. The finance charge is allocated to the periods during the lease 

term so as to produce a constant periodic rate of interest on the remaining liability balance for each period. 

Assets held under finance leases for a lessor are recorded in the balance sheet as a receivable at an amount equal to the net investment in the lease. 

Lease rentals are apportioned between the financial income and amortisation of the capital outstanding. 

Recognition of the financial result reflects a constant periodical return rate over the remaining net investment of the lessor.

48 Relatório e Contas Volume II Financial Statements 2008 Banco Comercial Português 

m) Interest income and expense 

Interest income and expense for all financial instruments measured at amortised cost are recognised in the income statement using the effective interest method. 

The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument (or, when 

appropriate, a shorter period), to the net carrying amount of the financial asset or financial liability. 

When calculating the effective interest rate, the Group estimates future cash flows considering all contractual terms of the financial instrument but without considering 

future impairment losses. The calculation includes all fees considered as included in the effective interest rate, transaction costs and all other premiums or discounts 

directly related with the transaction. 

If financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest 

used to discount the future cash flows for the purpose of measuring the impairment loss. 

For derivative financial instruments, except those classified as hedging instruments of interest rate risk, the interest component is not separated from the changes in 

the fair value and is classified under net losses/gains from financial assets. For hedging derivatives of interest rate risk, the interest component of the changes in their 

fair value is recognised under interest and similar income or interest expense and similar charges. 

n) Fee and commission income 

Fees and commissions are recognised according to the following criteria: 

– Fees and commissions which are earned as services are provided and recognised in income over the period in which the service is being provided; 

– Fees and commissions that are earned on the execution of a significant act, are recognised as income when the service is completed. 

Fees and commissions that are an integral part of the effective interest rate of a financial instrument are recognised in the net margin. 

o) Results arising from trading and hedging activities and available for sale financial assets 

The results arising from trading and hedging activities and available for sale financial assets correspond to gains and losses arising from financial assets and liabilities 

classified as trading (including fair value changes and interest on derivatives and embeded derivatives) and the corresponding dividends. Also included are the gains 

and losses arising from the available for sale financial assets portfolio, and the changes of the fair value of the hedging derivatives and the hedged items, when applicable. 

p) Fiduciary activities 

Assets held in the scope of fiduciary activities are not recognized in the consolidated financial statements of the Group. Fees and commissions arising from this activity 

are recognised in the income statement in the year to which they relate. 

q) Property and equipment 

Property and equipment are stated at deemed cost less accumulated depreciation and impairment losses. Subsequent costs are recognised as a separate asset only 

when it is probable that future economic benefits associated with the item will flow to the Group. All other repairs and maintenance are charged to the income 

statement during the financial period in which they are incurred. 

The Group performs impairment testing whenever events or circumstances show that the book value exceeds the recoverable amount. The difference between the 

book value and recoverable amount is charged to the profit and loss. 

Depreciation is calculated on a straight-line basis, over the following periods which correspond to their estimated useful life: 

Number of years 

Premises 50 

Expenditure on freehold and leasehold buildings 10 

Equipment 4 to 12 

Other fixed assets 3 

Whenever there is an indication that a fixed tangible asset might be impaired, its recoverable amount is estimated and a impairment loss is recognized if the net value 

of the asset exceeds that recoverable amount. 

The recoverable amount is determined as the higher between the sale price net of sale costs and its value in use calculated based on the present value of future 

cash-flows estimated to be obtained from the continued use of the asset and its sale at the end of the useful life. 

The impairment losses of the fixed tangible assets are recognized in profit and loss. 

r) Intangible Assets 

Research and development expenditure 

The Group does not capitalised any research and development costs. All expenses are recognized as costs in the year in which they occur.


Software 

The Group accounts as intangible assets the costs associated to software acquired from external entities and performs to a linear depreciation by an estimated period 

of three years. The Group does not capitalize internal costs arising from software development. 

s) Assets arising out of recovered loans 

The Group, following the requirements of IFRS 5, classifies as non-current assets held for sale the buildings arising out of recovered loans for which there is a sale 

agreement for the next 12 months. These assets accounted for in accordance with the accounting policy presented in note 1 k) are recognised by the amount agreed 

in the sale agreement. 

Assets arising out of recovered loans include buildings and other assets arising from the settlement of loan contracts for which there is not sale agreement. These 

assets are recognised in ‘Other assets’, considering that the holding period until the sale of these assets is in the majority of the cases more than one year. These assets 

are inicially measured by the lower of its fair value net of expenses and the carrying amount of the loan at the date of possession of the asset, either through 

agreement or judicial auction. 

Fair value is based on the market value, being determined based on the expected selling price estimated through periodic valuations performed by the Group. 

Subsequent measurement of these assets is at the lower between its carrying amount and fair value net of expenses and are not subject to depreciation. 

Any subsequent write-down of the acquired asset to fair value is recorded as an impairment loss and included in the income statement. 

t) Cash and cash equivalents 

For the purposes of the cash flow statement, cash and cash equivalents comprise balances with less than three months’ maturity from the balance sheet date, including 

cash and deposits with banks. 

Cash and cash equivalents exclude restricted balances with central banks. 

u) Offsetting 

Financial assets and liabilities are offset and the net amount is reported in the balance sheet when the Group has a legally enforceable right to offset the recognized 

amounts and the transactions are intended to be settled on a net basis. 

v) Foreign currency transactions 

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign 

currencies, which are stated at historical cost, are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are 

recognized in the income statement. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated at the 

foreign exchange rate ruling at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are 

translated to the reporting currency at the foreign exchange rates ruling at the dates when the fair values were determined. 

w) Employee benefits 

Defined benefit plans 

The Group has the responsability to pay to their employees retirement pensions and widow and orphan benefits and permanent disability pensions, in accordance 

with the agreement entered with the collective labour agreements. These benefits are estimated in the pensions plans ‘Plano ACT’ and ‘Plano ACTQ’ of the Pension 

Plan of BCP Group, which corresponds to the referred collective labour agreements (the conditions are estimated in the private social security of the banking sector 

for the constitution of the right to receive a pension). 

As for the benefits estimated in the two previous pensions plans, the Group also assumes the responsability, if some conditions are met in each year, of the attribution 

of a complementary plan to the employees of the Group, after due consideration of the requirements of the collective labour agreements applicable to each sector 

(complementary plan). The Group’s net obligation in respect of pension plans (defined benefit pensions plan) is calculated annually at each balance sheet date. 

The Group opted at the IFRS transition date, as at 1 January 2004, for the retrospective application of IAS 19, performing the recalculation of the pension obligations 

and the corresponding actuarial gains and losses which will be deferred under the corridor method as defined in IAS 19. The calculation is made using the projected 

unit credit method and following actuarial and financial assumptions in line with the parameters required by IAS 19. 

The current services cost plus the interest cost on the unwinding of the Pension liabilities less the expected return on the Plan assets are recorded in operational 

costs. 

The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees 

have earned in return for their service in the current and prior periods. The benefit is discounted in order to determine its present value, using a discount rate 

determined by reference to interest rates of high-quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations. The net 

obligations are determined after the deduction of the fair value of the assets of the Pensions Plan. 

Employee benefits, other than pension plans, namely post retirement health care benefits and benefits for widow and sons for death before retirement are also 

included in the benefit plan calculation. 

Costs arising from early retirements, as well as the corresponding actuarial gains and losses are recognized in the income statement on the year in which the early 

retirement is approved and announced. 

Under the ‘corridor’ method, actuarial gains and losses not recognized, exceeding 10% of the greater of the present value of the defined benefit obligation and the 

fair value of plan assets, are recognized in the income statement over a period of 20 years, corresponding to the expected remaining working life of the employees 

participating in the plan. 

The funding policy of the Plan is to make annual contributions by each Group company so as to cover the projected benefits obligations, including the non-contractual 

projected benefits. The minimum level required is 100% regarding the liability with pensioners and 95% regarding the employees in service.


Defined contributions plans 

For the defined Contributions Plan for the Complementary non-contractual retirement benefit attributable to the employees of the Group, obligations are recognised 

as an expense in profit and loss when they are due. 

Share based compensation plan (stock options) 

As at 31 of December 2008, there are no share based compensation plans in force. 

Variable remuneration paid to employees 

The Executive Board of Directors decides on the most appropriate criteria of allocation among employees. 

This variable remuneration is charged to income statement in the year to which it relates. 

x) Income tax 

Income tax on the income for the year comprises current and deferred tax effects. Income tax is recognized in the income statement, except to the extent that it 

relates to items recognized directly to reserves in which case it is recognized in reserves. Deferred taxes arising from the revaluation of financial assets available for 

sale and cash flow hedging derivatives are recognized in shareholders’ equity and are recognized in the profit and loss in the year the results that originated the deferred 

taxes are recognized. 

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any 

adjustment to tax payable in respect of previous years. 

Deferred taxes are calculated in accordance with the liability method based on the balance sheet, considering temporary differences, between the carrying amounts 

of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes using the tax rates approved or substantially approved at balance 

sheet date for each jurisdiction and that is expected to be applied when the temporary difference is reversed. 

Deferred taxes assets are recognized to the extent when it is probable that future taxable profits, will be available to absorb deductible temporary differences for 

taxation purposes (including reportable taxable losses). 

The Group compensates, as established in IAS 12, paragraph 74 the deferred tax assets and liabilities if, and only if: (i) the entity has a legally enforceable right to set 

off current tax assets against current tax liabilities; and (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation 

authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the 

assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or 

recovered. 

y) Segmental reporting 

A business segment is a distinguishable component of an entity that is engaged in providing an individual product or service or a group of related products or services 

and that is subject to risks and returns that are different from those of other business segments. 

A geographical segment is a distinguishable component of an entity that is engaged in providing products or services within a particular economic environment that 

are subject to risks and returns that are different from those segments operating in other economic environments. 

The Group controls its activity through the following major segments: 

Portugal 

– Retail Banking; 

– Private Banking and Asset Management; 

– Commercial and Corporate Banking; 

– Investment Banking. 

Foreign activity 

– Poland; 

– Greece. 

z) Provisions 

Provisions are recognised when (i) the Bank has a present obligation (legal or resulting from past practices or published policies that imply the recognition of certain 

responsibilities), (ii) it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation as a result of past events 

and (iii) a reliable estimate can be made of the amount of the obligation. 

Provisions are reviewed at each balance sheet date and adjusted to reflect the best estimate, being reverted through profit and loss in the proportion of the payments 

that are probable. 

The provisions are derecognised through their use, for the obligations for which they were initially accounted. 

aa) Earnings per share 

Basic earnings per share are calculated by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding 

during the year, excluding the average number of ordinary shares purchased by the Group and held as treasury stock. 

For the diluted earnings per share, the weighted average number of ordinary shares outstanding is adjusted to consider conversion of all dilutive potencial ordinary 

shares, such as convertible debt and stock options granted to employees. Potential or contingent share issues are treated as dilutive when their conversion to shares 

would decrease net earnings per share.


If the earnings per share are changed as a result of a issue with premium or discount or other event that changed the potential number of ordinary shares or as a 

result of changes in the accounting policies, the earnings per share for all presented periods should be adjusted retrospectively. 

ab) Insurance contracts 

The Group issues contracts that contain insurance risk, financial risk or a combination of both insurance and financial risk. A contract, under which the Group accepts 

significant insurance risk from another party, by agreeing to compensate that party on the occurrence of a specified uncertain future event, is classified as an insurance 

contract. 

A contract issued by the Group without significant insurance risk, but on which financial risk is transferred with discretionary participating features is classified as an 

investment contract recognized and measured in accordance with the accounting policies applicable to insurance contracts. A contract issued by the Group that 

transfers only financial risk, without discretionary participating features, is classified as an investment contract and accounted for as a financial instrument. 

The financial assets held by the Group to cover the liabilities arising under insurance and investment contracts are classified and accounted for in the same way as 

other financial assets. 

Insurance contracts and investment contracts with discretionary participating features are recognized and measured as follows: 

Premiums 

Gross premiums written are recognized for as income in the period to which they respect, in accordance with the accrual accounting principle. 

Reinsurance premiums ceded are accounted for as expense in the year to which they respect in the same way as gross premiums written. 

Provision for unearned premiums 

The provision for unearned gross premiums is based on the evaluation of the premiums written before the end of the year but for which the risk period continues 

after the year end. This provision is calculated using the pro-rata temporis method applied to each contract in force. 

ac) Critical accounting estimates and judgements in applying accounting policies 

IFRS set forth a range of accounting treatments and require the Executive Board of Directors and management to apply judgment and make estimates in deciding 

which treatment is most appropriate. The Executive Board of Directors was elected on 15 of January 2008 and the judments and estimates used, were based in the 

information, gathered from the internal analyses and the contacts with CMVM and Bank of Portugal during the course of the current supervisiory activities. The most 

significant of these accounting policies are discussed in this section in order to improve understanding of how their application affects the Group’s reported results 

and related disclosure. 

Considering that in some cases there are several alternatives to the accounting treatment chosen by management, the Group’s reported results would differ if a different 

treatment were chosen. Management believes that the choices made are appropriate and that the financial statements present the Group’s financial position and results 

fairly in all material aspects. 

The alternative outcomes discussed below are presented solely to assist the reader in understanding the financial statements and are not intended to suggest that 

other alternatives or estimates would be more appropriate. 

Impairment of available for-sale equity investments 

The Group determines that available-for-sale equity investments are impaired when there has been a significant or prolonged decrease in the fair value below its 

acquisition cost. This determination of what is significant or prolonged requires judgement. In making this judgement, the Group evaluates among other factors, the 

volatility in the prices of the financial assets. 

In addition, valuations are generally obtained through market quotation or valuation models that may require assumptions or judgment in making estimates of fair 

value. 

Alternative methodologies and the use of different assumptions and estimates could result in a higher level of impairment losses recognised with a consequent 

impact in the consolidated income statement of the Group. 

Impairment losses on loans and advances 

The Group reviews its loan portfolios to assess impairment losses on a regularly basis, as described in note 1 c). 

The evaluation process in determining whether an impairment loss should be recorded in the income statement is subject to numerous estimates and judgments. 

The probability of default, risk ratings, value of associated collaterals recovery rates and the estimation of both the amount and timing of future cash flows, among 

other things, are considered in making this evaluation. 

Alternative methodologies and the use of different assumptions and estimates could result in a different level of impairment losses with a consequent impact in the 

consolidated income statement of the Group. 

Fair value of derivatives 

Fair values are based on listed market prices if available; otherwise fair value is determined either by dealer price quotations (both for that transaction or for similar 

instruments traded) or by pricing models, based on net present value of estimated future cash flows which take into account market conditions for the underlying 

instruments, time value, yield curve and volatility factors. These pricing models may require assumptions or judgments in estimating their values. 

Consequently, the use of a different model or of different assumptions or judgments in applying a particular model could result in different financial results for a particular 

period.


Securitisations and special purpose entities 

The Group sponsors the formation of special purpose entities (SPEs) primarily for asset securitisation transactions and for liquidity purposes and/or capital management. 

The Group does not consolidate SPEs that it does not control. As it can sometimes be difficult to determine whether the Group does control a SPE, a judgement is 

made about the exposure to the risks and rewards, as well as about its ability to make operational decisions for the SPE in question (see note 1 b). 

The determination of the SPEs that needs to be consolidated by the Group requires the use of estimates and assumptions in determining the respective expected 

residual gains and losses and which party retains the majority of such residual gains and losses. Different estimates and assumptions, as for example for credit risks, 

anticipated liquidation and interest rate, could lead the Group to a different scope of consolidation with a direct impact in net income. 

In the scope of the application of this accounting policy and in accordance with note 21, the following SPEs resulting from securitization transactions were included 

in the consolidation perimeter: NovaFinance n. 3 and 4, Magellan n.5, Kion and Orchis Sp zo.o. The Group did not consolidate the following SPEs also resulting from 

securitization transactions: Magellan n. 1, 2, 3 and 4. For these SPEs, which are not recognized in the balance, the Group concluded that the main risks and the benefits 

were transferred, as the Group does not hold any security issued by the SPEs, neither is exposed to the performance of the credit portfolios. 

Income taxes 

The Group is subject to income taxes in numerous jurisdictions. Significant interpretations and estimates are required in determining the worldwide amount for income 

taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. 

Different interpretations and estimates would result in a different level of income taxes, current and deferred, recognised in the year. 

The Portuguese Tax Authorities are entitled to review the Bank and its subsidiaries’ determination of its annual taxable earnings, for a period of four years or six years 

in case there are tax losses brought forward. Hence, it is possible that some additional taxes may be assessed, mainly as a result of differences in interpretation of the 

tax law. However, the Executive Board of Directors of the Bank, and those of its subsidiaries domiciled in Portugal are confident that material tax assessments do not 

have impact in the financial statements. 

Pension and other employees’ benefits 

Determining pension liabilities requires the use of assumptions and estimates, including the use of actuarial projections, estimated returns on investment, and other 

factors that could impact the cost and liability of the pension plan. 

Changes in these assumptions could materially affect these values. 

Goodwill 

On an annual basis, the Group performs an evaluation of the recoverable amount of the consolidation differences, based on the value in use or the fair value. 

According with IAS 36, the value in use should be determined based on the evaluation of the future estimated cash-flows, using all available information, which 

requires the use of judgment. 

2. Net interest income and net gains arising from trading, hedging and available for sale activities 

IFRS requires separate disclosure of net interest income and net gains from trading, hedging and available for sale (AFS) activities, as presented in notes 3, 6 and 7. 

A particular business activity can generate impact in net interest income and net gains arising from trading, hedging and AFS activities. This required disclosure, however, 

does not demonstrate that net interest margin and net gains from trading, hedging and AFS activities are generated by a range of different business activities. 

The amount of this account is comprised of: 


Net gains from trading, hedging and AFS activities 18,099 392,349 

2008 

2007 

1,739,147 1,929,652 

Euros '000


3. Net interest income 


Euros '000 

Interest and similar income 

Interest on loans and advances 4,496,220 3,629,301 

Interest on trading securities 143,645 131,857 

Interest on other financial assets valued at fair value through profit and loss account 19,103 - 

Interest on available for sale securities 180,855 165,999 

Interest on held to maturity securities 12,670 - 

Interest on hedging derivatives 82,935 70,259 

Interest on derivatives associated to financial instruments through profit and loss account 13,500 5,907 

Interest on deposits and other investments 320,669 328,864 

5,269,597 4,332,187 

Interest expense and similar charges 

Interest on deposits and inter-bank funding 1,922,155 1,387,464 

Interest on securities sold under repurchase agreement 27,299 37,317 

Interest on securities issued 1,340,239 1,280,088 


Interest on derivatives associated to financial instruments through profit and loss account 41,268 11,990 

Interest on other financial liabilities valued at fair value through profit and loss account 163,500 23,077 

3,548,549 2,794,884 


The amount of Interest on loans and advances includes the amount of Euros 26,744,000 (31 December 2007: Euros 25,237,000) related to commissions which are 

accounted for under the effective interest method, as referred in the accounting policy, note 1 c). 

2008 

2007 

4. Dividends from equity instruments 


Euros '000 

2008 

2007 

Dividends from available for sale securities 36,759 27,472 

Other 57 449 

36,816 27,921 

The amount of Dividends from available for sale securities corresponds to dividends received during the year. 

5. Net fees and commissions income 


Euros '000 

2008 

2007 

Fees and commissions income: 

From guarantees 79,152 77,911 

From credit and commitments 254 361 

From banking services 551,683 522,030 

From insurance activity 483 2,082 

From other services 265,578 323,479 

897,150 925,863 

Fees and commissions expenses: 

From guarantees 841 742 


From insurance activity 513 652 


156,733 261,280 

Net fees and commission income 740,417 664,583 

The balance Commissions expenses from banking services included, as at 31 December 2007, the amount of Euros 88,694,000 related to the costs incurred with 

the Public Tender Offer for the acquisition of BPI, S.A. The referred amounts were recognized as cost for the period following the fact that the Public Tender Offer 

was unsuccessful, as established in IFRS 3. 

This referred caption also included in 2007 the amount of Euros 14,500,000 related to the costs incurred with the merger negociations with BPI, S.A., during the 

fourth quarter of 2007.


6. Net gains / (losses) arising from trading and hedging activities 


2008 

2007 

Gains arising on trading and hedging activities: 

Foreign exchange activity 8,310,077 2,308,637 

Financial instruments associated to financial instruments through profit and loss account 

Held for trading 

Securities 87,139 81,892 

Derivatives associated to financial instruments through profit and loss account 285,670 30,341 

Other financial instruments derivatives 2,232,445 1,313,472 

Other financial instruments through profit and loss account 152,938 21,748 

Headging accounting 

Hedging derivatives 2,057,561 977,074 

Hedged item 143,625 54,182 

Other activity 59,651 32,312 

13,329,106 4,819,658 

Losses arising on trading and hedging activities: 


Financial instruments associated to financial instruments through profit and loss account 



Derivatives associated to financial instruments through profit and loss account 321,814 29,594 


Other financial instruments through profit and loss account 48,776 5,841 


Hedging derivatives 1,895,290 985,109 

Hedged item 270,594 50,478 


13,051,475 4,620,520 

Net gains / (losses) arising from trading and hedging activities 277,631 199,138 

Euros '000 

The balance Net gains arising from trading and hedging activities, includes for the year ended at 31 December 2008, for the financial instruments through profit and 

loss account a gain of Euros 88,273,000 (2007: Gain of Euros 8,044,000) which reflects the fair value changes arising from changes in the credit risk (spread) of 

operations. 

The caption Net gains arising from trading and hedging activities - Financial instruments associated to financial intruments through profit and loss account - held for 

trading - other financial instruments derivatives also includes the amount of Euros 118,400,000 resulting from the discontinuance of an interest rate hedging relationship 

of a mortgage backed bond issue due to the break of its effectiveness. The discontinuance was decided in accordance with paragraph 91, c) of IAS 39. 

7. Net gains / (losses) arising from available for sale financial assets 


Euros '000 

Gains arising from available for sale financial assets 32,945 308,924 

Losses arising from available for sale financial assets (292,477) (115,713) 

Net gains / (losses) arising from available for sale financial assets (259,532) 193,211 

The value Losses arising from available for sale financial assets includes, for 2008, the amount of Euros 268,076,000 (2007: Euros 79,838,000) related with impairment 

losses for the investment held in Banco BPI S.A. recognized as a result of a significative decrease in the share price of this entity, during 2008, and whose recognition 

was made in accordance with the accounting policy described in note 1 d). 

As referred in note 22, Banco Comercial Português S.A. established in December 2008 a contract for the sale of 87,214,836 shares, or 9.69%, of Banco BPI. As a 

result of the execution of this contract Banco Comercial Português ceased to hold a qualified position in Banco BPI, S.A. 

The value Gains arising from available for sale financial assets includes, for 2007, the amounts of Euros 173,321,000 and Euros 116,887,000 related with the gains arising 

from the sale of shares of EDP - Energias de Portugal and Banco Sabadell, respectively, as referred in notes 22 and 40. The investment held in Banco Sabadell was 

sold to the BCP Group Pension Fund. 

2008 

2007


8. Other operating income 


Euros '000 

2008 

2007 

Operating income 

Income from services 59,887 62,372 

Cheques and others 26,834 31,039 

Other operating income 34,693 77,050 

121,414 170,461 

Operating costs 

Indirect taxes 38,770 35,319 

Donations and quotizations 5,116 6,745 

Other operating expenses 19,948 30,536 

63,834 72,600 

57,580 97,861 

9. Staff costs 


Euros '000 

Remunerations 623,595 632,792 

Mandatory social security charges 236,076 325,050 

Voluntary social security charges 41,824 16,439 

Other staff costs 13,812 31,946 

As referred in note 48, the balance Mandatory social security charges includes, for 2008, the amount of Euros 143,678,000 (2007: Euros 90,861,000) related to the 

pension cost for the year. The referred amount included, for 2008, the amount of Euros 7,789,000 (2007: Euros 41,695,000) related to early retirements during the 

period. 

For the exercise of its functions, members of the Executive Board of Directors did not received remunerations besides those that are communicated. Therefore, 

considering that the remuneration of members of the Executive Board of Directors intend to compensate the functions that are performed directly in the Bank and 

all other functions on subsidiaries or other companies for which they have been designated by indication or representing the Bank, in the later case, the net amount 

of the remunerations annualy received by each member are deducted to the fixed annual remuneration. 

The remunerations paid to the members of the Executive Board of Directors in 2008 amounted to Euros 3,413,000 (2007: Euros 4,710,000), with Euros 367,000 

paid by subsidiaries or companies whose governing bodies represent interests in the Group. During 2008 no variable remuneration was attributed to the members 

of the Executive Board of Directors. 

During 2008, the costs with Social Security and the contributions to the Pension Fund for members of the Executive Board of Directors amounted to Euros 1,031,000 

(2007: Euros 6,518,000). 

Considering that some members of the Executive Board of Directors were Directors of the Bank and companies Group during 2007 and until their election in 2008, 

fixed and variable remunerations were paid to them in the amount of Euros 1,001,000, the variable part being related to 2007. 

During the year of 2007, the Group accounted in staff costs the amount of Euros 78,864,000 related to liabilities with the retirement of the members of the Executive 

Board of Directors, occurred during the year. 

Additionally there was a termination of the contracts with three former Board members at 31 December 2007, for which the Group paid the amount of Euros 

18,700,000 as a compensation for the contract's conditions. Considering the amount provisioned and/or financed until that date regarding pension liabilities, the impact 

in the net income for the year was Euros 12,770,000, which was compensated by the reversal of the accrual of the attributable pluriannual variable remunerations. 

Regarding the retirement and termination of the employment contracts of the former members of the Executive Board of Directors, curtailment costs in the amount 

of Euros 16,633,000 were accounted for in 2007. 

The average number of employees by professional category, at service in the Group, is analysed as follows by category: 

Portugal 

2008 

2007 

915,307 1,006,227 

Management 1,293 1,247 

Managerial staff 1,932 1,967 

Staff 3,380 3,367 

Other categories 4,182 4,296 

10,787 10,877 

Abroad 11,303 9,447 

2008 

2007 

22,090 20,324


10. Other administrative costs 


Euros '000 

2008 

2007 

Water, electricity and fuel 21,353 18,185 

Consumables 9,940 10,619 

Rents 146,354 124,896 

Communications 50,762 50,649 

Travel, hotel and representation costs 21,869 26,342 

Advertising 53,609 50,992 

Maintenance and related services 46,237 41,341 

Credit cards and mortgage 21,664 17,808 

Advisory services 26,488 40,269 

Information technology services 26,193 23,272 

Outsourcing 93,706 97,946 

Other specialised services 27,965 24,535 

Training costs 3,313 3,514 

Insurance 15,632 16,372 

Legal expenses 9,073 12,136 

Transportation 11,896 12,118 

Other supplies and services 56,587 56,458 

642,641 627,452 

The balance Rents, includes, for 2008, the amount of Euros 121,844,000 (2007: Euros 103,470,000), related to rents paid regarding buildings used by the Group as 

leaser. 

11. Depreciation 


Euros '000 

2008 

2007 

Intangible assets: 

Software 14,114 12,449 

Other intangible assets 1,656 5,413 

15,770 17,862 

Property and equipment: 

Land and buildings 47,928 52,151 

Equipment 

Furniture 6,284 7,208 

Office equipment 5,294 5,828 

Computer equipment 22,580 15,385 

Interior installations 7,935 8,538 

Motor vehicles 1,877 1,868 

Security equipment 3,087 3,357 

Other tangible assets 2,088 2,699 

97,073 97,034 

112,843 114,896


12. Loans impairments 


Euros '000 

2008 

2007 

Loans and advances to credit institutions: 

For overdue loans and credit risks 

Impairment for the year 19,178 2,574 

Write-back for the year (13,025) - 

6,153 2,574 

Loans and advances to customers: 



Write-back for the year (328,341) (261,330) 

Recovery of loans and interest charged-off (92,788) (146,970) 

538,546 257,675 

544,699 260,249 

The balance Impairment for the year is related to an estimate of the incurred losses determined according with the methodology for a regular evaluation of objective 

evidence of impairment, as described in note 1 c). 

13. Other provisions 


Euros '000 

2008 

2007 

Provision for other pensions benefits 

Charge for the year 573 370 

Write-back for the year (23) - 

Provision for guarantees and other commitments 

Charge for the year 22,240 14,254 


Other provisions for liabilities and charges 



(15,500) 49,095 

14. Share of profit of associates under the equity method 

The contribution of the associated companies accounted for under the equity method to the Group's profit is as follows: 

Euros '000 

2008 

2007 

Millenniumbcp Fortis Group 30,647 60,532 

Amortization of value in force (VIF) for the Millennium bcp Fortis Group (18,088) (18,088) 

Other companies 6,521 8,771 

19,080 51,215


15. Gains / (losses) from the sale of subsidiaries and other assets 

The balance Gains / (losses) from the sale of other assets includes gains and losses arising from the sale of buildings. 

16. Income tax 

The charge for the years of 2008 and 2007 is comprised as follows: 

Euros '000 

2008 

2007 

Current tax 44,001 73,045 

Deferred tax 

Origination and reversal of temporary diferences 124,672 (31,569) 

Effect of changes in tax rate 28 2,728 

Tax losses utilized (84,703) 25,366 

39,997 (3,475) 

83,998 69,570 

The charge for income tax amounted to Euros 83,998,000 (2007: Euros 69,570,000), which represents an average tax rate of 24.6% of the consolidated net income 

before income tax (2007: 10.1%). 

The charge on temporary differences include the amount related to provisions that were disallowed for tax purposes and subject to tax in previous years whose 

recognition for tax purposes occured during the year and the deduction of dividends added in previous years. 

The main adjustments made to the accounting profit for the calculation of the net taxable profit arising from timing differences are as follows: 

– Changes arising from recognition in retained earnings of Pension Fund obligations and health care in the transition to IFRS, as well as the recognition of fair value 

reserves in AFS securities; 

– Loan impairment which, under the applicable legislation, were not considered for tax purposes in the current year, in the amount of Euros 84,081,000 (2007: Euros 

163,646,000), and will be deductible in future years when the losses are realised; 

– The difference between the charges of the year, which will be allowable for tax purposes in future periods, and the costs with early retirements accounted for prior 

years, which are deductible in the calculation of the net taxable income for the year, in accordance with apllicable tax regulations. The net amount to be deducted to 

taxable income is Euros 81,412,000 (2007: Euros 63,487,000); 

– Deduction of dividends distributed in the year, but made available on the previous year, in the amount of Euros 80,100,000; 

The main adjustments to net income to calculate the net taxable income, with a permanent nature, are as follows: 

– Net profit resulting from the “Zona Franca da Madeira” branches which is exempt for the calculation of the net taxable income within the legal limits, due to the 

applicable exemption until 31 December 2011, as well as the net profit of non-resident companies, in the amount of Euros 138,953,000 (2007: Euros 144,064,000); 

– Provisions not deductible under the applicable law, in the amount of Euros 50,724,000 (2007: Euros 89,753,000); 

– Dividends received which are not considered for calculating the net taxable profit, under the double taxation agreements, in the amount of Euros 27,267,000 (2007: 

Euros 25,756,000); 

– Charges on pensions in excess of the limit on staff costs in accordance with applicable law, in the amount of Euros 30,509,000 (2007: Euros 334,000); 

– Deduction in the calculation of the net taxable profit of the tax benefits related to the granting of employment to young people as well as deduction of income 

from bonds issued by state entities of Mozambique and Angola, in the amount of Euros 17,714,000 (2007: Euros 29,219,000); 

– Reinstatements not accepted in the amount of Euros 15,207,000. 

The difference between the applicable nominal income tax rate and the average effective rate results from the adjustments considered in the calculation of the taxable 

income, under the current legislation.


The reconciliation of the standard tax rate to the effective tax rate is analysed as follows: 

2008 

2007 

% Euros ‘000 % Euros ‘000 

Profit before income taxes 342,009 688,216 

Current tax rate 26.5% (90,632) 26.5% (182,377) 

Foreign tax rate effect (i) -3.7% 12,664 -2.3% 15,653 

Non deductible expenses (ii) 23.4% (80,073) 7.4% (51,160) 

Tax exempt income (iii) -28.3% 97,013 -20.5% 141,333 

Fiscal incentives (iv) -1.3% 4,510 -0.8% 5,272 

Utilization of losses brought forward 3.2% (10,780) 0.0% 334 

Tax rate effect 1.5% (5,121) 0.4% (2,729) 

Previous years corrections 3.0% (10,419) -0.9% 6,095 

Autonomous tax and tax suported in foreign subsidiaries (v) 0.3% (1,160) 0.3% (1,991) 

24.6% (83,998) 10.1% (69,570) 

References: 

(i) Difference between the tax rates applicable to non-resident companies and the standard tax rate in Portugal; 

(ii) Corresponds to tax associated to non deductible provisions and Pensions expenses in excess of the limit on staff costs in accordance with the applicable legislation; 

(iii) Tax associated with the following tax exempted or non-taxable income: 

a) Dividends received which are not considered under the double taxation agreement, in the amount of Euros 25,194,000 (Tax: Euros 6,676,000); 

b) Profit from the “Zona Franca da Madeira” branches, and net income of non-resident companies, in the amount of Euros 138,953,000 (Tax: Euros 36,823,000); 

c) Net income of associated companies consolidated under the equity method, in the net amount of Euros 19,170,000 (Tax: Euros 5,080,000); 

(iv) Includes tax benefits resulting from granting employment to people under the age of 30, as well as on interest income of bonds issued by state entities in 

Mozambique and Angola in the amount of Euros 17,714,000 (Tax: Euros 4,477,000); 

(v) Corresponds to autonomous taxation, according with the current legislation, of representation and non-deductible vehicle costs. 

For the years 2008 and 2007, the amount of deferred taxes in the Income Statement is attributable to temporary differences arising from the following balances: 

2008 2007 

Euros '000 

Intangible assets 446 1,942 

Other tangible assets 4,430 (692) 

Impairment losses 106,865 (13,007) 

Pensions (26,614) (56,992) 

Derivatives - 38,503 

Tax losses utilized (91,656) 25,388 

Allocation of profits 16,202 (34,879) 

Others 30,324 36,262 

Deferred taxes 39,997 (3,475)


17. Earnings per share 

The earnings per share are calculated as follows: 

2008 2007 

Euros ’000 


Dividends on preference shares (48,910) (48,910) 

Adjusted profit 152,272 514,377 

Weighted average number of ordinary shares 4,460,655,866 4,011,791,353 

Basic earnings per share (euros) 0.03 0.13 

Diluted earnings per share (euros) 0.03 0.13 

In May 2008, following the decision of the General Assembly of Shareholders, Banco Comercial Português, S.A. increased its share capital from Euros 3,611,329,567 

to Euros 4,694,600,000 through the issue of 1,083,270,433 shares pursuant to the exercise of shareholders proportional rights with a nominal value of 1 Euro per 

share and a subscription price of 1.2 Euro per share. This fact was also considered when doing the average number of shares for the calculation of the basic and diluted 

earnings per share. 

The average number of shares indicated above, results from the number of existing shares at the beginning of each year, adjusted by the number of shares repurchased 

or issued in the period weighted by a time factor. 

The amount of dividends on preference shares corresponds to two issues by BCP Finance Company which considering the rules established in IAS 32 and in 

accordance with the accounting policy presented in note 1 h), were considered as equity instruments. The issues are analized as follows: 

– 5,000,000 Perpetual Non-cumulative Guaranteed Non-voting Preference Shares with par value of Euros 100 each, issued by BCP Finance Company on 9 June, 2004, 

amounting to Euros 500,000,000, issued to redeem the 8,000,000 Non-cumulative Guaranteed Non-voting Preference Shares with par value of Euros 50 each, issued 

by BCP Finance Company on 14 June, 1999, amounting to Euros 400,000,000. 

– 10,000 preference shares with par value of Euros 50,000 perpectual each without voting rights issued in 13 October 2005, in the amount of Euros 500,000,000, 

to redeem the 6,000,000 preference shares of Euros 100 each without voting rights, in the amount of Euros 600,000,000, issued by BCP Finance Company at 

28 September 2000. 

18. Cash and deposits at central banks 

This balance is analysed as follows: 

2008 2007 

Euros ’000 

Cash 683,891 653,893 

Central banks 1,380,516 1,304,346 

2,064,407 1,958,239 

The balance Central banks includes deposits with Central Banks of the countries where the group operates to satisfy the legal requirements to maintain a cash reserve 

for which the value is based on the value of deposits and other liabilities. The cash reserve requirements, according with the European Central Bank System for Euro 

Zone, establishes the maintenance of a deposit with the Central Bank equivalent to 2% of the average value of deposits and other liabilities, during each reserve 

requirement period. The rate is different for countries outside the Euro Zone. 

19. Loans and advances to credit institutions repayable on demand 


2008 2007 

Euros ’000 

Credit institutions in Portugal 1,373 5,454 

Credit institutions abroad 496,793 188,192 

Amounts due for collection 550,182 627,053 

1,048,348 820,699 

The balance Amounts due for collection represents essentially cheques due for collection on other financial institutions.


20. Other loans and advances to credit institutions 


2008 2007 

Euros ’000 

Bank of Portugal 350,019 1,400,156 

Credit institutions in Portugal 898,614 935,618 

Credit institutions abroad 1,642,574 4,149,151 

2,891,207 6,484,925 

Overdue loans - less than 90 days 10,186 - 

Overdue loans - more than 90 days 1 222 

2,901,394 6,485,147 

Impairment for credit risk (9,049) (3,109) 

2,892,345 6,482,038 

This balance is analysed by the period to maturity, as follows: 

2008 2007 

Euros ’000 

Up to 3 months 2,515,723 6,082,943 

3 to 6 months 178,372 22,586 

6 to 12 months 48,874 45,526 

1 to 5 years 129,282 327,993 

More than 5 years 18,956 5,877 

Undetermined 10,187 222 

2,901,394 6,485,147 

Impairment for credit risks in credit institutions for the Group is analysed as follows: 

2008 2007 

Euros ’000 

Impairment for credit risks in credit institutions 

Balance on 1 January 3,109 287 

Transfers (183) 277 



Exchange rate differences (30) (29) 

Balance on 31 December 9,049 3,109


21. Loans and advances to customers 


Euros ’000 

2008 2007 

Public sector 569,981 713,355 

Asset-backed loans 42,135,232 37,250,063 

Personal guaranteed loans 15,263,492 12,390,387 

Unsecured loans 5,812,190 4,805,808 

Foreign loans 4,663,056 4,425,482 

Factoring 1,687,351 1,492,881 

Finance leases 5,663,027 5,240,222 

75,794,329 66,318,198 

Overdue loans - less than 90 days 151,580 69,070 

Overdue loans - more than 90 days 699,561 485,513 

76,645,470 66,872,781 

Impairment for credit risk (1,480,456) (1,222,332) 

75,165,014 65,650,449 

As at 31 December 2008, the balance Loans and advances to customers includes the amount of Euros 3,708,740,000 (31 December 2007: Euros 2,667,661,000) 

regarding mortgage loans which are a collateral for asset-back securities issued by the Bank, as refered in note 46. 

The analysis of loans and advances to customers, by type of credit, is as follows 

Euros ’000 

2008 2007 

Loans not represented by securities 

Discounted bills 1,306,516 1,413,358 

Current account credits 5,414,334 5,302,990 

Overdrafts 2,358,634 1,757,356 

Loans 25,384,802 23,529,488 

Mortgage loans 31,183,421 27,581,903 

Factoring 1,687,351 1,492,881 


72,998,085 66,318,198 

Loans represented by securities 

Commercial paper 2,487,178 - 

Bonds 309,066 - 

2,796,244 - 

75,794,329 66,318,198 

Overdue loans - less than 90 days 151,580 69,070 


76,645,470 66,872,781 


75,165,014 65,650,449 

The balance Loans represented by securities includes, as at 31 December 2008, the amount of Euros 1,550,365,000 related to non derivatives financial assets (bonds 

and commercial paper) reclassified during 2008 from Financial assets available for sale caption to the Loans and advances to customers caption, as referred in 

note 22.


The analysis of loans and advances to customers by sector of activity is as follows: 

Euros ’000 

2008 2007 

Agriculture 681,364 560,834 

Mining 307,761 173,903 

Food, beverage and tobacco 808,888 666,205 

Textiles 644,174 693,895 

Wood and cork 339,421 323,583 

Printing and publishing 428,908 333,341 

Chemicals 1,243,709 1,040,796 

Engineering 1,297,634 1,193,459 

Electricity, water and gas 933,782 596,709 

Construction 5,613,245 5,222,023 

Retail business 2,222,174 2,051,574 

Wholesale business 3,177,078 3,031,246 

Restaurants and hotels 1,318,438 1,095,196 

Transports and communications 2,199,364 1,887,527 

Services 15,174,564 11,841,191 

Consumer credit 4,877,090 4,645,345 

Mortgage credit 28,537,840 25,502,914 

Other domestic activities 933,139 935,159 

Other international activities 5,906,897 5,077,881 

76,645,470 66,872,781 


75,165,014 65,650,449 

The analysis of loans and advances to customers, by maturity date and by sector of activity as at 31 December, 2008, is as follows: 

Loans 

Euros ’000 

Due within 1 year to Over Undetermined 

1 year 5 years 5 years maturity Total 

Agriculture 284,640 141,395 250,143 5,186 681,364 

Mining 148,447 83,071 73,174 3,069 307,761 

Food, beverage and tobacco 455,443 169,572 179,405 4,468 808,888 

Textiles 355,691 90,821 167,137 30,525 644,174 

Wood and cork 221,203 60,638 48,848 8,732 339,421 

Printing and publishing 200,228 112,520 112,709 3,451 428,908 

Chemicals 688,689 294,848 254,964 5,208 1,243,709 

Engineering 677,882 272,787 317,075 29,890 1,297,634 

Electricity, water and gas 198,266 65,956 669,399 161 933,782 

Construction 2,894,865 1,402,963 1,141,079 174,338 5,613,245 

Retail business 1,102,752 501,613 586,263 31,546 2,222,174 

Wholesale business 1,857,828 545,984 694,111 79,155 3,177,078 

Restaurants and hotels 315,828 291,652 691,695 19,263 1,318,438 

Transports and communications 889,603 657,960 629,386 22,415 2,199,364 

Services 7,475,409 3,344,014 4,245,899 109,242 15,174,564 

Consumer credit 1,644,906 1,840,576 1,219,154 172,454 4,877,090 

Mortgage credit 58,723 320,445 28,037,693 120,979 28,537,840 

Other domestic activities 510,432 177,919 238,436 6,352 933,139 

Other international activities 1,918,319 1,295,093 2,668,778 24,707 5,906,897 

21,899,154 11,669,827 42,225,348 851,141 76,645,470


The analysis of loans and advances to customers, by type of credit and by maturity date as at 31 December, 2008, is as follows: 

Loans 

Euros ’000 

Due within 1 year to Over Undetermined 


Public sector 526,778 32,031 11,172 2,427 572,408 

Asset-backed loans 7,686,528 5,462,957 28,985,747 380,371 42,515,603 

Personal guaranteed loans 5,627,009 437,543 9,198,940 153,837 15,417,329 

Unsecured loans 4,571,270 687,072 553,848 207,639 6,019,829 

Foreign loans 1,498,628 2,704,555 459,873 16,224 4,679,280 

Factoring 1,687,351 - - 5,863 1,693,214 

Finance leases 301,590 2,345,669 3,015,768 84,780 5,747,807 

21,899,154 11,669,827 42,225,348 851,141 76,645,470 

Loans and advances to customers includes the effect of transactions of traditional securitization owned by SPE's consolidated under SIC 12, in accordance with the 

accounting policy 1 b) and synthetic securitization. 

BCP Group engages mainly in the securitization of mortgage loans, corporate loans and consumer loans. For this purpose, traditional securitizations and synthetic 

securitizations are used through specifically created Special Purpose Entities (SPEs). As referred in accounting policy 1 b), when the substance of the relationships with 

the SPE's indicates that the Group holds control of the activities, the SPE's are fully consolidated. 

The balance Loans and advances to customers includes the following amounts related to securitization transactions, presented by type of transaction: 

Traditional Synthetic Total 

Euros ’000 

2008 2007 2008 2007 2008 2007 

Consumer credit 699,024 747,219 - - 699,024 747,219 

Mortgage loans 2,480,593 413,096 - - 2,480,593 413,096 

Finance leases 193,544 209,021 - - 193,544 209,021 

Commercial paper 510,198 - - - 510,198 - 

Loans to companies 1,961,842 - 2,430,546 2,762,024 4,392,388 2,762,024 

5,845,201 1,369,336 2,430,546 2,762,024 8,275,747 4,131,360 

During 2008, the Group issued four securitization transaction namely Magellan n.º 5 (Mortgage loans), Caravela SME (loans to small and medium enterprises) and 

Nova Finance n.º4 (Consumer credit) issued by Banco Comercial Português, S.A. and Kion Mortgage Finance PLC II (Mortgage loans) issued by Millennium Bank, 

S.A. (Greece). Considering the characteristics of these securitizations and as referred in note 1 g), these transactions were not derecognized from the Group's 

financial statements. 

Considering the process of periodical evaluation of credit impairment as described in note 1 c), the Group's credit portfolio splitted between credit impairment 

and credit not impaired is analysed as follows: 

Euros ’000 

2008 2007 

Total of loans 85,259,222 74,909,770 

Loans and advances to customers with impairment 

Individually significant 

Gross amount 5,202,415 3,314,167 

Impairment (947,648) (649,141) 

Net book amount 4,254,767 2,665,026 

Parametric analysis 

Gross amount 3,868,240 3,552,381 

Impairment (325,464) (343,899) 

Net book amount 3,542,776 3,208,482 

Loans and advances to customers without impairment 76,188,567 68,043,222 

Impairment (IBNR) (285,073) (302,997) 

83,701,037 73,613,733 

The balance Total of loans includes the loans and advances to customers balance and the guarantees granted and commitments to third parties balance. 

The balances Impairment and Impairment (IBNR) were determined in accordance with accounting policy described in note 1 c), including the provision for guarantees 

and commitments to third parties.


The fair values of collaterals related to the loan portfolios, is analysed as follows: 

Euros ’000 

2008 2007 

Loans and advances to customers with impairment 

Individually significant 

Securities and other financial assets 735,853 188,958 

Home mortgages 421,820 275,195 

Other real-estate 1,133,833 735,793 

Other guarantees 197,759 512,962 

2,489,265 1,712,908 

Parametric analysis 

Securities and other financial assets 77,619 83,481 

Home mortgages 2,335,618 2,091,759 

Other real-estate 362,265 363,204 

Other guarantees 242,085 450,355 

3,017,587 2,988,799 

Loans and advances to customers without impairment 

Securities and other financial assets 3,692,000 3,433,344 

Home mortgages 25,070,764 22,991,083 

Other real-estate 6,455,773 4,899,635 

Other guarantees 5,900,779 8,640,585 

41,119,316 39,964,647 

46,626,168 44,666,354 

According to Group's risk management policy, the amounts above do not include the fair value of the personal guarantees received from clients with low risk ratings. 

The Group is applying physical collaterals and financial guarantees as instruments to mitigate the credit risk. The physical collaterals are mainly mortgages on residential 

buildings for the mortgage portfolio and other mortgages on other types of buildings related to other types of loans. In order to reflect the market value, these 

collaterals are regularly reviewed based on independent and certified valuation entities or through the application of evaluation coefficients that reflect the market 

trends for each specific type of building and geographical area. The financial guarantees are reviewed based on the market value of the respective assets, when 

available, with the subsequent application of haircuts that reflect the volatility of their prices. 

Taking into consideration the present real estate and financial markets, the Group negotiated, during the year of 2008, physical and financial collaterals with their 

customers. 

The balance Loans and advances to customers includes the following amounts related to finance leases contracts: 

2008 2007 

Gross amount 7,273,580 6,775,018 

Interest not yet due (1,610,553) (1,534,796) 

Net book value 5,663,027 5,240,222 

Euros ’000 

The analysis of the financial leasing contracts by type of client, is presented as follows: 

Euros ’000 

2008 2007 

Individuals 

Home 153,298 161,479 

Consumer 120,184 144,743 

Others 328,543 331,444 

602,025 637,666 

Companies 

Mobiliary 2,233,908 1,985,818 

Mortgage 2,827,094 2,616,738 

5,061,002 4,602,556 

5,663,027 5,240,222


Regarding the operational leasing, the Group does not present relevant contracts as leaser. 

In accordance with note 10, the balance Rents, includes as at 31 December 2008, the amount of Euros 121,844,000 (31 December 2007: Euros 103,470,000), 

corresponding to rents paid regarding buildings used by the Group as leaser. 

The loans portfolio includes restructured loans that have been formally negotiated with the clients, in order to reinforce collaterals, defer the maturity date or change 

the interest rate. The analysis of restructured loans by sector of activity is as follows: 

Euros ’000 

2008 2007 

Agriculture 5,339 4,976 

Mining 1,033 2,242 


Textiles 15,391 17,866 

Wood and cork 3,464 538 


Chemicals 5,726 344 

Engineering 20,036 18,387 

Electricity, water and gas 29 27 

Construction 11,742 10,171 

Retail business 5,679 6,943 

Wholesale business 11,496 16,903 

Restaurants and hotels 1,484 6,200 

Transports and communications 28,597 2,448 

Services 22,044 27,024 

Consumer credit 40,385 38,903 

Mortgage credit 13,323 7,509 

Other domestic activities 893 2,373 

Other international activities 3,588 2,004 

199,527 169,661 

The analysis of the overdue loans by sector of activity is as follows: 

Euros ’000 

2008 2007 


Mining 3,069 1,308 


Textiles 30,525 16,826 

Wood and cork 8,732 2,519 


Chemicals 5,208 5,203 








Services 109,242 43,775 


Mortgage credit 120,979 88,794 



851,141 554,583


The analysis of the overdue loans, by type of credit, is as follows: 

Euros ’000 

2008 2007 


Asset-backed loans 380,371 244,303 

Personal guaranteed loans 153,837 85,528 

Unsecured loans 207,639 158,162 

Foreign loans 16,224 7,086 

Factoring 5,863 5,890 

Finance leases 84,780 51,885 

851,141 554,583 

The movements of impairment for credit risk are analysed as follows: 

Euros ’000 

2008 2007 

Impairment for overdue loans and 

for other credit risks: 

Balance on 1 January 1,206,508 1,219,098 

Transfers (14,653) (28,039) 



Loans charged-off (368,891) (389,884) 

Exchange rate differences (11,893) 688 

Balance on 31 December 1,442,405 1,206,508 

Impairment for restructured loans: 

Balance on 1 January 15,824 23,313 

Transfers 22,227 (7,489) 

Balance on 31 December 38,051 15,824 

1,480,456 1,222,332 

If the impairment loss decreases on a subsequent period to its initial accounting and this decrease can be objectively associated to an event that occurred after the 

recognition of the loss, the impairment in excess is charged-off. 

The table below presents the analysis of the credit risk by classes of overdue, as at 31 December, 2008: 

Classes of overdue 

Euros ’000 

Up to 3 months to 6 months 12 months to Over 

3 months 6 months 12 months 3 years 3 years Total 

Secured overdue loans 108,429 98,519 130,478 291,488 14,588 643,502 

Impairment 1,292 9,946 32,793 110,116 14,588 168,735 

Unsecured overdue loans 43,151 40,081 72,582 43,810 8,015 207,639 

Impairment 654 8,527 25,420 43,810 8,015 86,426 

Overdue loans 151,580 138,600 203,060 335,298 22,603 851,141 

Impairment for overdue loans 1,946 18,473 58,213 153,926 22,603 255,161 

Impairment for outstanding capital related to overdue loans and other credits 1,187,244 

Impairment for restructured loans 38,051 

Impairment for credit risks 1,480,456


The analysis of the impairment, by sector of activity, is as follows: 

Euros ’000 

2008 2007 


Mining 16,872 14,081 


Textiles 38,883 50,850 

Wood and cork 13,097 5,070 


Chemicals 7,346 12,650 


Electricity, water and gas 4,133 749 






Services 322,698 249,445 





1,480,456 1,222,332 

The impairment for credit risk, by type of credit, is analysed as follows: 

Euros ’000 

2008 2007 




Unsecured loans 310,468 409,694 

Foreign loans 94,109 26,807 

Factoring 3,192 3,982 


1,480,456 1,222,332


The analysis of the loans charged-off, by sector of activity, is as follows: 

Euros ’000 

2008 2007 


Mining 3,255 1,245 


Textiles 17,961 19,920 











Services 42,318 69,800 





368,891 389,884 

Loans and advances to customers are charged-off when there are no expectations, from an economic point of view, of recovering the loan amount. For collate ralized 

loans, the charged-off occurs when the funds arising from the execution of the respective collaterals was already received. This charge-off is carried out only for loans 

that are fully provided. This criteria has been applied consistently by the Group in the previous periods. 

The analysis of the loans charged-off, by type of credit, is as follows: 

Euros ’000 

2008 2007 





Factoring 452 2,368 


368,891 389,884


The analysis of recovered loans and overdue interest, during 2008 and 2007, which were charged-off during the year or in previous years, by sector of activity is as follows: 

Euros ’000 

2008 2007 


Mining 2,882 1,514 


Textiles 9,079 6,224 

Wood and cork 369 658 

Printing and publishing 1,233 900 

Chemicals 482 553 








Services 6,660 20,022 




Other international activities 1,724 254 

92,788 146,970 

The analysis of recovered loans and overdue interest during 2008 and 2007 which were charged-off during the year or in previous years, by type of credit, is as 

follows: 

Euros ’000 

2008 2007 




Foreign loans 1,853 23 

Factoring 101 - 

Finance leases 999 477 

92,788 146,970 

22. Financial assets held for trading and available for sale 

The balance Financial assets held for trading and available for sale is analysed as follows: 

Euros ’000 

2008 2007 

Bonds and other fixed income securities 

Issued by public entities 2,303,898 2,349,003 

Issued by other entities 655,991 2,906,035 

2,959,889 5,255,038 

Overdue securities 5,427 5,427 

Impairment for overdue securities (5,427) (5,427) 

2,959,889 5,255,038 

Shares and other variable income securities 855,787 1,336,500 

3,815,676 6,591,538 

Trading derivatives 1,801,769 911,888 

5,617,445 7,503,426 

The balance Trading derivatives includes, the valuation of the embedded derivatives separated from the host contract in accordance with the accounting policy 1 d) 

in the amount of Euros 15,900,000 (31 December 2007: Euros 7,255,000).


The analysis of the financial assets held for trading and available for sale by the type of asset is as follows: 

2008 2007 

Euros ’000 

Securities 

Securities 

Available 

Available 

Trading for sale Total Trading for sale Total 

Fixed income: 

Bonds issued by public entities 

Portuguese issuers 305,346 2,001 307,347 344,910 1,913 346,823 

Foreign issuers 648,409 562,376 1,210,785 949,118 573,271 1,522,389 

Bonds issued by other entities 

Portuguese issuers 108,040 52,776 160,816 161,710 111,054 272,764 

Foreign issuers 456,240 43,611 499,851 217,758 58,470 276,228 

Treasury bills and other Government bonds 548,783 236,983 785,766 406,494 73,297 479,791 

Commercial paper - - - - 2,361,784 2,361,784 

Other securities 751 - 751 686 - 686 

2,067,569 897,747 2,965,316 2,080,676 3,179,789 5,260,465 

of which: 

Quoted 1,689,913 760,496 2,450,409 1,744,221 660,139 2,404,360 

Unquoted 377,656 137,251 514,907 336,455 2,519,650 2,856,105 

Variable income: 

Shares in Portuguese companies 2,457 77,300 79,757 39,655 472,917 512,572 

Shares in foreign companies 6,214 407,387 413,601 19,556 384,788 404,344 

Investment fund units 25,258 337,171 362,429 33,117 386,425 419,542 

Other securities - - - - 42 42 

33,929 821,858 855,787 92,328 1,244,172 1,336,500 

of which: 

Quoted 12,637 139,294 151,931 65,317 677,584 742,901 

Unquoted 21,292 682,564 703,856 27,011 566,588 593,599 

Impairment for overdue securities - (5,427) (5,427) - (5,427) (5,427) 

2,101,498 1,714,178 3,815,676 2,173,004 4,418,534 6,591,538 

Trading derivatives 1,801,769 - 1,801,769 911,888 - 911,888 

3,903,267 1,714,178 5,617,445 3,084,892 4,418,534 7,503,426 

The trading portfolio is recorded at fair value in accordance with accounting policy 1 d). 

As referred in the accounting policy presented in note 1 d), the available for sale securities are presented at market value with the respective fair value accounted 

against fair value reserves, as referred in note 40. The amount of fair value reserves of Euros 201,635,000 (31 December 2007: Euros 219,752,000) is presented net 

of impairment losses in the amount of Euros 42,085,000 (31 December 2007: Euros 126,726,000). 

The balance Financial assets available for sale - variable income securities - shares in foreign companies, includes the amount of EUR 380,114,000 related to the 

investment held in Eureko B.V. This investment is measured annually based on independent valuations obtain in the first quarter of each year. As referred in note 40, 

the fair value reserve associated with this participation amounts to Euro 256,715,000, as at 31 December 2008. 

As referred in note 7, Banco Comercial Português S.A. made an agreement in December 2008 under a contract for the sale of 87,214,836 shares, representing 9.69%, 

of Banco BPI share capital. As a result of the execution of this contract Banco Comercial Português ceased to hold a qualified position in Banco BPI, S.A. 

The Bank analised this sale within the scope of IAS 39 with the objective of assessing the conditions for derecognition and concluded that the transaction could be 

qualified as a true sale. This decision was based on the following aspects: (i) existence of an irrevocable contract for the sale of the shares; (ii) transfer of all risks and 

rewards associated with the shares, including dividends and voting rights; (iii) communication of the transaction to supervisory authorities; and (iv) existence of a deposit 

in the amount of Euros 30,000,000 as a collateral. 

Additionally, it is expected that the Bank grants a loan for financing the transaction in the amount corresponding to the difference between the value of the sale and 

Euros 50,000,000 corresponding to amount of the deposit established as collateral and the share capital of the acquirer. 

The balance Fixed income securities - Available for sale - bonds includes, as 31 December 2008, the amount of Euros 28,545,000, related to non-derivative financial 

assets reclassified from Financial assets held for trading , as referred in accounting policy note 1 f). 

During 2007, shares held in EDP - Energias de Portugal and Banco Sabadell were sold, as referred in note 7 and 40.


During the second semester of 2008, the Group reclassified the non derivatives financial assets from the available for sale portfolio to loans to customers portfolio 

(see note 21) and as referred in the accounting policy note 1 f), in accordance with the revision occurred on IAS 39 - Financial instruments: Classification and 

measurement (Reclassification of financial instruments) from financial assets held for trading portfolio to financial assets available for sale and financial assets held to 

maturity (see note 24). 

This reclassification is analised as follows: 

Euros ’000 

At the reclassification date December 2008 

Book value Fair value Book value Fair value Difference 

From Financial assets held for trading to: 

Financial assets available for sale (October 08) 28,682 28,682 28,545 28,545 - 

Financial assets held to maturity (July 08) 194,855 194,855 195,053 189,906 (5,147) 

Financial assets held to maturity (October 08) 549,001 549,001 549,661 549,190 (471) 

From Financial assets available for sale to: 

Loans represented by securities (October 08) 277,994 277,994 272,420 234,212 (38,208) 

Loans represented by securities (December 08) 2,435,530 2,435,530 1,277,945 1,277,945 - 

2,323,624 2,279,798 (43,826) 

The amounts accounted in Profits and losses and in fair value reserves, in 2008 related to reclassified financial assets are analysed as follows: 

Euros ’000 

P&L 

Changes 

Fair value 

Fair value 

Interest changes Total reserves Equity 

At the reclassification date 


Financial assets available for sale (October 08) 1,637 (290) 1,347 - 1,347 

Financial assets held to maturity (July 08) 3,371 (5,168) (1,797) - (1,797) 

Financial assets held to maturity (October 08) 15,838 (8,908) 6,930 - 6,930 


Loans represented by securities (October 08) 6,918 - 6,918 (1,688) 5,230 

Loans represented by securities (December 08) 21,850 - 21,850 - 21,850 

Euros ’000 

P&L 

Changes 

Fair value 

Fair value 


After the reclassification 


Financial assets available for sale (October 08) 573 - 573 (716) (143) 

Financial assets held to maturity (July 08) 5,218 - 5,218 - 5,218 

Financial assets held to maturity (October 08) 6,437 - 6,437 - 6,437 


Loans represented by securities (October 08) 3,937 - 3,937 53 3,990 

Loans represented by securities (December 08) 9,680 - 9,680 - 9,680


In 2007 the Group recognized in results, interest and fair value changes in the amount of Euros 19,347,000 and a negative amount of Euros 1,000 respectively, and 

also a variation of Euros 39,000 referred to fair value reserves, related to the reclassifications occurred during 2008. 

If the reclassifications described previously had not occurred, the additional amounts recognized in results and in fair value reserves would be as follows: 

Euros ’000 

P&L 

Changes 

Fair value 

Fair value 


Without considering the reclassifications 


Financial assets available for sale (October 08) - (716) (716) 716 - 

Financial assets held to maturity (July 08) - (5,147) (5,147) - (5,147) 

Financial assets held to maturity (October 08) - (471) (471) - (471) 


Loans represented by securities (October 08) 53 - 53 (38,261) (38,208) 

Loans represented by securities (December 08) - - - - - 

53 (6,334) (6,281) (37,545) (43,826) 

The movements of the impairment of the financial assets available for sale are analised as follows: 

Euros ’000 

2008 2007 


Transfers (3,060) - 




42,085 126,726 

The Group recognizes impairment on financial assets available for sale when there is a significant or prolonged decrease in its fair value or when there is an impact 

on expected future cash flows of the assets. This valuation involves judgement, in which the Group takes into consideration among other factors, the volatility of the 

prices of securities. 

Thus, as a consequence of the low liquidity and significant volatility in financial markets in 2008, the following factors were taken into consideration in determining the 

existence of impairment: 

– Equity instruments: (i) decreases more than 30% (20% in 2007) against the purchase price; or (ii) the market value below the purchase price for a period exceeding 

12 months (6 months in 2007) ; 

– Debt instruments: when there is objective evidence of events with impact on recoverable value of future cash flows of these assets. 

During 2008, and as referred in note 7 and in accordance with the criteria mentioned above, impairment losses were recognized in the amount of Euros 276,440,000 

(31 December 2007: Euros 96,074,000), of which Euros 268,076,000 (31 December 2007: Euros 79,838,000) related to the investment held in Banco BPI, S.A. 

As at the year-end and in accordance with the agreement established for the selling of the position held in Banco BPI, S.A., the impairment loss recognized was realized 

at the selling date.


The analysis of financial assets held for trading and available for sale by maturity date as at 31 December 2008, is as follows: 

Up to 3 months to More than Undetermined 

3 months 1 year 1 year maturity Total 

Fixed income: 


Portuguese issuers - 330 307,017 - 307,347 

Foreign issuers 134,745 160,532 915,508 - 1,210,785 


Portuguese issuers - 139 155,250 5,427 160,816 

Foreign issuers 26,654 227 472,970 - 499,851 

Treasury bills and other Government bonds 286,308 427,839 71,619 - 785,766 

Other securities - - 751 - 751 

447,707 589,067 1,923,115 5,427 2,965,316 

of which: 

Quoted 215,437 531,275 1,703,697 - 2,450,409 

Unquoted 232,270 57,792 219,418 5,427 514,907 


Shares in Portuguese companies 79,757 79,757 

Shares in foreign companies 413,601 413,601 

Investment fund units 362,429 362,429 

855,787 855,787 

of which: 

Quoted 151,931 151,931 

Unquoted 703,856 703,856 


Euros ’000 

447,707 589,067 1,923,115 855,787 3,815,676 


Up to 3 months to More than Undetermined 


Fixed income: 


Portuguese issuers - 160,402 186,421 - 346,823 

Foreign issuers 9,762 144,335 1,368,292 - 1,522,389 


Portuguese issuers - 46,542 220,795 5,427 272,764 

Foreign issuers 13,224 26,935 236,069 - 276,228 

Treasury bills and other Government bonds 228,815 180,352 70,624 - 479,791 

Commercial paper 1,655,024 706,760 - - 2,361,784 

Other securities - - 686 - 686 

1,906,825 1,265,326 2,082,887 5,427 5,260,465 

of which: 

Quoted 90,159 533,821 1,780,380 - 2,404,360 

Unquoted 1,816,666 731,505 302,507 5,427 2,856,105 





Other securities 42 42 

1,336,500 1,336,500 

of which: 

Quoted 742,901 742,901 

Unquoted 593,599 593,599 


Euros ’000 

1,906,825 1,265,326 2,082,887 1,336,500 6,591,538


The analysis of the securities portfolio included in the financial assets held for trading and available for sale, by sector of activity, as at 31 December 2008 is analysed 

as follows: 

Euros ’000 

Other Overdue Gross 

Bonds Shares financial assets Securities Total 

Mining - 73 - - 73 

Food, beverage and tobacco - 83 - - 83 

Textiles - 81 - 1,037 1,118 

Wood and cork 806 1,204 - 126 2,136 

Printing and publishing 146 3,751 - - 3,897 

Chemicals - 35 - - 35 

Engineering - 125 - 187 312 

Electricity, water and gas 4,650 3,525 - - 8,175 

Construction - 12,129 - 645 12,774 

Retail business 1,188 - - - 1,188 

Wholesale business - 101 - 63 164 

Restaurants and hotels - 51 - - 51 

Transport and communications - 1,333 - 18 1,351 

Services 646,860 470,663 363,130 3,351 1,484,004 

Other international activities 1,590 204 50 - 1,844 

655,240 493,358 363,180 5,427 1,517,205 

Government and Public securities 1,518,132 - 785,766 - 2,303,898 

Impairment for overdue securities - - - (5,427) (5,427) 

2,173,372 493,358 1,148,946 - 3,815,676 

The analysis of the securities portfolio included in the financial assets held for trading and available for sale, by sector of activity, as at 31 December 2007 is analysed 

as follows: 

Euros ’000 

Other Overdue Gross 

Bonds Shares financial assets Securities Total 

Agriculture - - 23,485 - 23,485 

Mining 835 89 2,650 - 3,574 

Food, beverage and tobacco - 255 53,614 - 53,869 

Textiles 868 86 34,741 1,037 36,732 

Wood and cork 2,793 - 13,540 126 16,459 

Printing and publishing 42 16,862 25,535 - 42,439 

Chemicals - 349 23,665 - 24,014 

Engineering - 5,985 47,261 187 53,433 

Electricity, water and gas 17,069 5,796 302,882 - 325,747 

Construction 20,138 2,932 76,118 645 99,833 

Retail business - - 30,321 - 30,321 

Wholesale business 907 394 191,462 63 192,826 

Restaurants and hotels - 342 17,452 - 17,794 

Transport and communications 100,431 6,388 49,790 18 156,627 

Services 398,955 877,439 1,889,487 3,351 3,169,232 

Other international activities 1,527 - 50 - 1,577 

543,565 916,917 2,782,053 5,427 4,247,962 

Government and Public securities 1,869,212 - 479,791 - 2,349,003 


2,412,777 916,917 3,261,844 - 6,591,538


The analysis of the trading derivatives by maturity as at 31 December 2008, is as follows: 

2008 

Euros ’000 

Notional (remaining term) 

Fair values 

Up to 3 months More than 

3 months to 1 year 1 year Total Assets Liabilities 

Interest rate Derivatives: 

OTC Market: 

Forward rate agreement - 227,000 - 227,000 565 424 

Interest rate Swaps 7,325,168 9,546,161 40,045,642 56,916,971 1,487,421 1,167,171 

Interest rate Options (purchase) 57,381 350,717 1,371,791 1,779,889 22,940 - 

Interest rate Options (sale) 57,381 350,682 1,370,838 1,778,901 - 22,924 

Other interest rate contracts 3,445 188,890 1,856,857 2,049,192 67,782 65,811 

7,443,375 10,663,450 44,645,128 62,751,953 1,578,708 1,256,330 

Stock Exchange transactions: 

Interest rate futures 148,004 43,225 - 191,229 - - 

Currency Derivatives: 

OTC Market: 

Forward exchange contract 393,918 58,129 3,617 455,664 6,731 23,184 

Currency Swaps 9,091,382 1,336,913 18,747 10,447,042 143,407 689,089 

Currency Options (purchase) 54,695 5,188 - 59,883 1,696 - 

Currency Options (sale) 54,695 5,304 - 59,999 - 1,750 

9,594,690 1,405,534 22,364 11,022,588 151,834 714,023 

Share Derivatives: 

OTC Market: 

Shares/indexes Swaps 112,271 256,680 582,421 951,372 18,147 136,496 

Shares/indexes Options (purchase) 157 - 40,000 40,157 500 - 

Shares/indexes Options (sale) 1,750 - - 1,750 - - 

114,178 256,680 622,421 993,279 18,647 136,496 


Shares futures 22,488 - - 22,488 - - 

Shares/indexes Options (purchase) 387,335 39,495 - 426,830 - - 

Shares/indexes Options (sale) 387,400 39,500 - 426,900 - 46 

797,223 78,995 - 876,218 - 46 


Commodities futures 37,384 - - 37,384 - - 

Credit derivatives: 

OTC Market: 

Credit Default Swaps 10,599 54,661 4,622,851 4,688,111 36,680 19,997 

Other credit derivatives (purchase) - - 14,286 14,286 - - 

Other credit derivatives (sale) 4,640 33,954 96,811 135,405 - - 

15,239 88,615 4,733,948 4,837,802 36,680 19,997 

Total financial instruments 

traded in: 

OTC Market 17,167,482 12,414,279 50,023,861 79,605,622 1,785,869 2,126,846 

Stock Exchange 982,611 122,220 - 1,104,831 - 46 

Embedded derivatives 15,900 11,923 

18,150,093 12,536,499 50,023,861 80,710,453 1,801,769 2,138,815



2007 

Euros ’000 


Fair values 




OTC Market: 

Interest rate Swaps 9,934,229 17,246,491 27,168,248 54,348,968 590,133 443,551 



10,455,337 18,078,321 29,623,757 58,157,415 593,273 446,432 


Interest rate Futures 205,760 29,413 27,512 262,685 - - 

Interest rate Options (purchase) 143,154 - - 143,154 - - 

Interest rate Options (sale) 279,514 - - 279,514 - - 

628,428 29,413 27,512 685,353 - - 


OTC Market: 

Forward exchange contract 392,729 66,412 2,482 461,623 6,409 8,768 

Currency Swaps 12,474,631 3,467,501 13,911 15,956,043 150,622 545,234 

Currency Options (purchase) 6,853 15,733 1,516 24,102 759 - 

Currency Options (sale) 6,863 15,746 1,633 24,242 - 782 

12,881,076 3,565,392 19,542 16,466,010 157,790 554,784 


OTC Market: 

Shares/indexes Swaps 67,127 499,647 793,128 1,359,902 21,730 37,497 

Shares/indexes Options (purchase) 276,613 399,710 - 676,323 3,246 - 

Shares/indexes Options (sale) 99,875 359,710 - 459,585 - 521 

443,615 1,259,067 793,128 2,495,810 24,976 38,018 


Shares futures 39,019 - - 39,019 - - 


OTC Market: 

Credit Default Swaps - 95,010 6,933,191 7,028,201 2,352 5,101 

Other swaps 16,268 317,864 1,828,730 2,162,862 126,242 127,951 

16,268 412,874 8,761,921 9,191,063 128,594 133,052 


traded in: 

OTC Market 23,796,296 23,315,654 39,198,348 86,310,298 904,633 1,172,286 

Stock Exchange 667,447 29,413 27,512 724,372 - - 


24,463,743 23,345,067 39,225,860 87,034,670 911,888 1,224,912


23. Hedging derivatives 


Euros ’000 

2008 2007 

Hedging instruments 

Assets: 

Swaps 117,305 131,069 

Liabilities: 

Swaps 350,960 116,768 

The Group uses derivatives to hedge interest and exchange rate exposure risks. The accounting method depends on the nature of the hedged risk, namely if the Group is 

exposed to fair value changes, variability in cash-flows or highly probable forecast transactions. 

Since 1 January 2005, for the hedging relationships which comply with the hedging requirements of IAS 39, the Group adopted the hedge accounting method, namely through 

the fair value hedge model, and holds in its derivatives portfolio mainly interest rate swaps, which are hedging fair value changes in interest rate risk of Debt securities issued 

and Deposit, Loans of inter-bank money market and Financial assets available for sale. 

The Group performs periodical effectiveness tests of the hedging relationships. For this year it was accounted against results a negative amount of Euros 830,000 (31 December 

2007: Euros 10,614,000), corresponding to the ineffective part of the fair value hedge relationships. The Group also adopted fair value hedge to cover interest rate risk for a 

specific portfolio with fixed interest rate loans with maturity of more than one year for which adopted an hedging policy for those portfolios, resulting from changes originated 

by interest rate variations. During 2008, for the referred hedging relationships, the ineffective part of the fair value hedge amounted to Euros 2,778,000 (31 December 2007: 

negative amount of Euros 3,081,000). In 2008 the Group designated a group of future transactions in foreign currency, for which adopted fair value hedge model for exchange 

rate risk. For the referred hedging relationships, the ineffective part of the fair value hedge amounted to Euros 134,000 (31 December 2007: negative amount of Euros 

122,000). 

As referred in note 6, during 2008 the Group discontinued an interest rate hedging relationship of a mortgage backed bond issue in the amount of Euros 1,500,000,000 in 

accordance with paragraph 91, c) of IAS 39, due to the break of its effectiveness. 

The adjustment on financial risks covered performed on the assets and liabilities which includes hedged items is analysed as follows: 

Euros ’000 

2008 2007 

Hedged item 

Loans 75,942 (19,056) 

Deposits / Loans (15,443) (467) 

Debt issued (138,331) 30,359 

Financial assets available for sale (344) (546) 

(78,176) 10,290 

The analysis of the hedging derivatives by maturity as at 31 December 2008, is as follows: 


2008 

Fair values 



Fair value hedge derivatives with 

interest rate risk: 

OTC Market: 

Interest rate Swaps 239,976 168,337 5,085,993 5,494,306 117,305 75,162 


Interest rate Futures 840,804 167,912 - 1,008,716 - - 

Cash flow hedge derivatives with 


OTC Market: 

Interest rate Swaps 189,556 964,251 1,790,404 2,944,211 - 275,798 


Traded by: 

OTC Market 429,532 1,132,588 6,876,397 8,438,517 117,305 350,960 

Stock Exchange 840,804 167,912 - 1,008,716 - - 

1,270,336 1,300,500 6,876,397 9,447,233 117,305 350,960 

Euros ’000




2007 

Fair values 





OTC Market: 

Interest rate Swaps 483,126 2,973,343 8,311,958 11,768,427 70,188 111,141 

Credit default swaps - - 67,931 67,931 127 - 

483,126 2,973,343 8,379,889 11,836,358 70,315 111,141 


Interest rate Futures 397,440 298,609 89,515 785,564 - - 

Interest rate Options (purchase) 26,239 - - 26,239 - - 

Interest rate Options (sale) 13,373 - - 13,373 - - 

437,052 298,609 89,515 825,176 - - 

Cash flow hedge derivatives with 


OTC Market: 

Interest rate Swaps - - 2,571,369 2,571,369 60,754 5,627 


Traded by: 

OTC Market 483,126 2,973,343 10,951,258 14,407,727 131,069 116,768 

Stock Exchange 437,052 298,609 89,515 825,176 - - 

920,178 3,271,952 11,040,773 15,232,903 131,069 116,768 

Euros ’000 

24. Financial assets held to maturity 

The balance Financial assets held to maturity is analysed as follows: 

Euros ’000 

2008 2007 


Issued by Government and public entities 519,379 - 

Issued by other entities 582,465 - 

1,101,844 - 

The balance Financial assets held to maturity includes, as at 31 December 2008, the amount of Euros 744,714,000 related to non derivatives financial assets (bonds) re - 

classified, during 2008, from financial assets held for trading caption to financial assets held to maturity caption, as referred in the accounting policy note 1 f) and note 22. 

The analysis of the securities portfolio included in the Financial assets held to maturity, by maturity date, as at 31 December 2008, is as follows: 

Up to 3 months More than Undetermined 

3 months to 1 year 1 year maturity Total 

Fixed income: 


Portuguese issuers - - 98,387 - 98,387 

Foreign issuers 1,719 - 419,273 - 420,992 



Foreign issuers - - 400,877 - 400,877 

1,719 - 1,100,125 - 1,101,844 

of which: 

Quoted - - 963,654 - 963,654 

Unquoted 1,719 - 136,471 - 138,190 

Euros ’000


The analysis of the securities portfolio included in the Financial assets held to maturity, by sector of activity, as at 31 December 2008 and 2007, is analysed as follows: 

Euros ’000 

2008 2007 

Transport and communications 97,118 - 

Services 485,347 - 

582,465 - 

Government and Public securities 519,379 - 

1,101,844 - 

25. Investiments in associated companies 


Euros ’000 

2008 2007 

Portuguese credit institutions 16,646 15,362 

Foreign credit institutions 20,606 20,469 

Other Portuguese companies 306,682 280,568 

343,934 316,399 

The balance Investments in associated companies is analysed as follows: 

2008 2007 

Banque BCP, S.A.S. 16,713 16,632 

Banque BCP (Luxembourg), S.A. 3,893 3,837 

Millenniumbcp Fortis Grupo Segurador, S.G.P.S., S.A. 288,319 260,094 

SIBS - Sociedade Interbancária de Serviços, S.A. 15,039 14,795 

Unicre - Cartão Internacional de Crédito, S.A. 16,646 15,362 

VSC - Aluguer de Veículos Sem Condutor, Lda. 3,324 5,679 

343,934 316,399 

Euros ’000 

These investments correspond to unquoted companies, being consolidated by the equity method. The investment held in the associated company Millenniumbcp 

Fortis Grupo Segurador, S.G.P.S. corresponds to 49% of the share capital of the company. The Group companies related amounts are presented in note 56. 

The main indicators of the associated companies are analysed as follows: 

Euros ’000 

Total Total Total Profit for 

Assets Liabilities Income the year 

2008 

Millenniumbcp Fortis Grupo Segurador, S.G.P.S., S.A. 11,617,559 10,493,968 1,121,719 28,432 

SIBS - Sociedade Interbancária de Serviços, S.A. (*) 109,324 34,971 160,787 8,269 

Unicre - Cartão Internacional de Crédito, S.A. (*) 343,326 265,853 240,781 14,817 

VSC - Aluguer de Veículos Sem Condutor, Lda. 212,305 205,658 60,458 (4,711) 

2007 

Millenniumbcp Fortis Grupo Segurador, S.G.P.S., S.A. 10,981,218 9,917,745 1,348,699 87,297 

SIBS - Sociedade Interbancária de Serviços, S.A. 119,408 54,599 141,539 8,614 

Unicre - Cartão Internacional de Crédito, S.A. 278,976 227,434 242,720 13,870 

VSC - Aluguer de Veículos Sem Condutor, Lda. 214,440 203,081 64,104 (1,120) 

(*) - estimated values.


The Group limits the exposure in foreign investments, through funding of the net investment in foreign operations with loans in the same currencies, to eliminate the 

risk of currency exchange rate. The information on net investments, held by the Group, in foreign institutions and the funding used to hedge these investments, as at 

31 December 2008 is as follows: 

Currency ’000 Euros ’000 

Net Funding Net Funding 

Companies Currency Investment debt Investment debt 

Banque Privée BCP (Suisse) S.A. CHF 62,861 62,861 42,331 42,331 

BCP Capital Finance Limited USD 90 90 65 65 

BCP Bank & Trust Company Ltd. USD 340,000 340,000 244,306 244,306 

BCP Finance Bank Ltd USD 561,000 561,000 403,104 403,104 

BCP Finance Company, Ltd USD 1 1 1 1 

Millennium BCPBank USD 74,714 74,714 53,685 53,685 

BII Finance Company Limited USD 25 25 18 18 

The information of the gains and losses in exchange rates on the loans to cover the investments in foreign institutions, accounted as exchange differences, are 

presented in the statement of changes in equity. 

The ineffectiveness generated in the hedging operations is recognized in the statement of income, as refered in accounting policy 1 e). 

26. Property and equipment 


2008 2007 

Euros ’000 


Equipment 

Furniture 104,615 99,160 






Work in progress 112,297 40,639 


1,799,149 1,785,664 

Accumulated depreciation 

Charge for the year (97,073) (97,034) 

Accumulated charge for the previous years (956,258) (989,536) 

(1,053,331) (1,086,570) 

745,818 699,094


The Property and equipment movements during 2008 are analysed as follows: 

Euros ’000 

Balance on Acquisitions Disposals Exchange Balance on 

1 January / Charge / Charged-off Transfers differences 31 December 

Cost: 

Land and buildings 993,077 71,231 (103,860) 95 (15,753) 944,790 

Equipment: 

Furniture 99,160 7,324 (2,093) 2,077 (1,853) 104,615 

Office equipment 57,728 12,092 (10,237) 283 (4,575) 55,291 

Computer equipment 306,465 26,586 (26,326) 223 (5,655) 301,293 

Interior installations 138,661 5,053 (4,347) 306 (3) 139,670 

Motor vehicles 22,826 3,611 (2,007) 22 (1,699) 22,753 

Security equipment 76,653 4,932 (6,956) 4 (237) 74,396 

Work in progress 40,639 57,249 (33,133) 46,372 1,170 112,297 

Other tangible assets 50,455 7,399 (9,113) 570 (5,267) 44,044 

1,785,664 195,477 (198,072) 49,952 (33,872) 1,799,149 

Accumulated depreciation: 

Land and buildings 470,599 47,928 (66,026) 55 (7,834) 444,722 

Equipment: 

Furniture 81,809 6,284 (1,115) 2,079 (1,157) 87,900 

Office equipment 45,125 5,294 (8,933) 297 (2,502) 39,281 

Computer equipment 264,530 22,580 (24,718) 207 (4,501) 258,098 

Interior installations 114,147 7,935 (2,786) 156 (2) 119,450 

Motor vehicles 11,802 1,877 (1,642) 23 (522) 11,538 

Security equipment 66,296 3,087 (6,937) 1 (31) 62,416 

Other tangible assets 32,262 2,088 (1,886) 546 (3,084) 29,926 

1,086,570 97,073 (114,043) 3,364 (19,633) 1,053,331 

27. Goodwill and intangible assets 


2008 2007 

Euros ’000 

Intangible assets 

Software 131,620 153,145 


193,418 238,424 

Accumulated amortisation 



(159,417) (202,768) 

34,001 35,656 

Goodwill 

Millennium Bank, Societé Anonyme (Greece) 294,260 294,260 

Bank Millennium, S.A. (Poland) 164,040 164,040 

Banco Investimento Imobiliário, S.A. 40,859 40,859 

Others 7,068 1,718 

506,227 500,877 

540,228 536,533


The Intangible assets movements during 2008 are analysed as follows: 

Euros ’000 



Cost: 

Software 153,145 17,153 (31,350) 838 (8,166) 131,620 

Other intangible assets 85,279 12,453 (26,219) 38 (9,753) 61,798 

238,424 29,606 (57,569) 876 (17,919) 193,418 

Goodwill 500,877 5,356 - - (6) 506,227 

739,301 34,962 (57,569) 876 (17,925) 699,645 

Accumulated amortisation: 

Software 120,006 14,114 (24,071) 910 (6,849) 104,110 

Other intangible assets 82,762 1,656 (19,552) 103 (9,662) 55,307 

202,768 15,770 (43,623) 1,013 (16,511) 159,417 

According to the accounting policy 1 b) the recoverable amount of the consolidation differences ('Goodwill') is annually evaluated during the second semester of 

each year, regardless the existence of impairment signs. 

In accordance with IAS 36 the recoverable amount of goodwill should be the greater between its use value and its fair value less costs to sell. Based on this criteria 

the Group made valuations to their investments for which there is goodwill recorded in the asset, which considered among other factors: 

(i) an estimate of future cash flows generated by each entity; 

(ii) an expectation of potential changes in the amounts and timing of cash flows; 

(iii) the time value of money; 

(iv) a risk premium associated with the uncertainty by holding the asset and 

(v) other factors associated with the current situation of financial markets. 

The valuations were based on reasonable assumptions and bear representing the best estimate of the Executive Board of Directors on the economic conditions that 

affect each entity, the budgets and the latest projections approved by the Executive Board of Directors for those entities and their extrapolation to future periods. 

The assumptions made for these assessments may change with the change in economic conditions and market. The Group estimates that are not expected significant 

changes in these assumptions which leads to the recoverable amount to be reduce to a level below the book value. 

Bank Millennium, S.A. (Poland) 

The estimated cash flows of the business were projected based on current operating results and assuming the business plan approved by the Board of Directors for 

a period of 3 years, after which a projection was made for another 2 years after which it was considered a perpetuity for the terminal value. 

For the entire period considered in the valuation, it was assumed a Tier I ratio of 8% and a full distribution of all funds distributable. The discount rate used was 12%, 

based on the average expected rate of return on the market for this activity. 

Millennium Bank, Societé Anonyme (Greece) 

The estimated cash flows of the business were projected based on current operating results and assuming the business plan approved by the Board of Directors for 

a period of 3 years, after which a projection was made for a period of 7 years which aims to realizing the potential of the network of branches of the Bank which is 

still very new, for the terminal value. 

For the entire period considered in the valuation, it was assumed a Tier I ratio of 8% and a full distribution of all funds distributable. The discount rate used was 9%, 

based on the average expected rate of return on the market for this activity. 

Banco Investimento Imobiliário, S.A. 

The valuation takes into consideration the specific characteristics of the business of the Bank and its relationship with the Group, including the fact that no new 

production is, for example, all new contracts attracted to the Banco Comercial Português, S.A. by payment of a fee-raising. It was estimated, however, the value of the 

business associated to the mortgage credit, originated in the real estate agents network. 

The estimated cash flows from activities were projected based on current operating results and assuming the business plan approved by the Executive Board of 

Directors for a period of 3 years and projections for related activities, assuming if a Tier I of 8% in line with new standards set by the Bank of Portugal. The discount 

rate used was 9%, based on the average expected rate of return on the market for this activity.


28. Deferred income tax assets and liabilities 

Deferred income tax assets and liabilities as at 31 December, 2008 and 2007 are analysed as follows: 

2008 2007 

Euros ’000 

Assets Liabilities Assets Liabilities 

Intangible assets 61 77 434 6 

Other tangible assets 2,015 5,168 3,032 1,775 

Impairment losses 214,173 60,514 267,363 - 

Pensions 339,010 - 313,076 - 

Financial assets available for sale 810 10,547 8,683 4,004 

Derivatives - 10,554 19,290 79,139 

Allocation of profits 36,847 - 53,049 - 

Others 66,329 123,756 116,300 82,320 

Tax losses carried forward 138,323 - 36,653 - 

797,568 210,616 817,880 167,244 

Deferred tax assets 586,952 650,636 

Others - 336 46 

Deferred tax liabilities 336 46 

Net deferred tax 586,616 650,590 

Deferred tax related to the losses carried forward are recognised only if it is probable the existence of future taxes profits. The uncertainty of the recoverability of the 

tax losses carried forward is considered in the deferred tax assets calculation. 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when deferred taxes are 

related to the same tax. 

As referred in the accounting policy note 1 x), the compensation is performed at each subsidiary, and therefore the consolidated financial statements reflect in its assets 

the sum of the deferred tax of subsidiaries that have deferred tax assets and in its liabilities the sum of the deferred tax of subsidiaries that have deferred tax liabilities. 

The net deferred tax asset movement is analysed as follows: 

2008 2007 

Euros ’000 



Charged to profit (39,997) 3,475 

Charged to equity 8,130 19,842 

Exchange rate differences (10,345) (1,002) 


The variation in the net deferred tax does not corresponds to the deferred tax expense for the year considering that there are a number of situations where changes 

in deferred tax are charged directly to shareholders' equity, namely: (i) potential gains and losses resulted form the re-valuation of financial assets held for sale (ii) 

deferred tax assets and liabilities of currency translations on foreign subsidiaries and (iii) acquisition and disposal of subsidiaries. 

The maturity date of tax losses carried foward is present as follows: 

Maturity date 2008 2007 

Euros ’000 

2008 - 11,318 

2009 9,361 11,071 

2010 2,315 2,590 

2011 15,509 1,782 

2012 3,015 3,360 

2013 and followings 108,123 6,532 

138,323 36,653 

As at 31 December 2008, the amount of unrecognized temporary differences refers mainly to tax losses carried forward in the amount of Euros 3,556,000 (31 

December 2007: Euros 7,104,000). The referred amounts were not recognised considering the degree of uncertainty and remaining period for recovery. Exception 

the tax losses carried forward, the remaining temporary differences do not have a maturity date.


29. Other assets 


2008 2007 

Euros ’000 

Debtors 373,638 335,696 

Investments arising from recovered loans 1,397,511 1,215,623 


Recoverable tax 61,513 65,259 

Recoverable government subsidies on mortgage loans 47,055 73,968 

Associated companies 8,515 4,405 

Other amounts receivable 49,958 37,116 

Prepayments and deferred costs 1,783,982 1,114,533 

Amounts receivable on trading activity 163,918 103,929 

Amounts due from customers 203,588 191,815 

Reinsurance technical provision 478 609 

Sundry assets 202,236 324,124 

4,318,778 3,497,430 

Impairment for other assets (171,133) (141,960) 

4,147,645 3,355,470 

In accordance with accounting policy 1 s), the balance Investments arising from recovered loans includes buildings and other assets resulting from the foreclosure of 

contracts of loans to customers, originated by (i) delivery of the assets, with option to repurchase or leasing, accounted with the celebration of the contract or the 

promise to delivery the asset and the respective irrevocable power of attorney issued by the customer in the name of the Bank; or (ii) the adjudication of the assets 

as a result of a judicial process of guarantees execution, accounted with the title of adjudication or following the adjudication request after the record of the first 

(payment pro-solvency). 

The balance Investments arising from recovered loans includes the amount of Euros 436,480,000 (31 December 2007: Euros 447,187,000) related to buildings 

accounted in the "Fundo de Investimento Imobiliário Imosotto Acumulação", "Fundo de Investimento Imobiliário Gestão Imobiliária" and "Fundo de Investimento 

Imobiliário Imorenda", which in accordance with SIC 12, are consolidated under the full consolidation method as referred in the accounting policy presented in note 

1 b). The referred balance also includes buildings for which there is a sale agreement in the amount of Euros 100,856,000 (2007: Euros 38,693,000) but considering 

their characteristics do not comply with the requirements of IFRS 5 - Non-current assets held for sale, as referred in the accounting policy presented in note 1 s). 

As at 31 December 2008, the balance Prepayments and deferred costs includes the amount of Euros 572,291,000 (31 December 2007: Euros 587,876,000) referring 

to the corridor value and deferred actuarial losses, in excess of the corridor in the amount of Euros 1,567,654,000 (31 December 2007: Euros 765,032,000), in 

accordance with the accounting policy presented in note 1 w). 

The deferred costs related to pensions, included in Prepayments and deferred costs are, analysed as follows: 

2008 2007 

Euros ’000 

Projected benefit obligations (5,722,909) (5,878,738) 

Value of the Pension Fund 5,322,224 5,616,436 

(400,685) (262,302) 

Actuarial losses 

Corridor 572,291 587,876 

Amount in excess of the corridor 1,567,654 765,032 

2,139,945 1,352,908 

1,739,260 1,090,606 

The difference between the Projected benefit obligation and the Value of the Pension Fund in the amount of Euros 400,685,000 (2007: Euros 262,302,000) correspond 

to other benefits not covered by the Pension Fund which are fully provided for.


The movement of impairment for other assets is analysed as follows: 

2008 2007 

Euros ’000 


Transfers (12,037) 1,013 


Write back for the year (1,620) (1,972) 

Amounts charged-off (18,388) (11,850) 



30. Deposits from other credit institutions 


Euros ’000 

2008 2007 

Non interest Interest Non interest Interest 

bearing bearing Total bearing bearing Total 

Credit institutions in Portugal 135,694 674,300 809,994 84,646 256,963 341,609 

Credit institutions abroad 48,718 5,138,354 5,187,072 253,853 8,052,673 8,306,526 

184,412 5,812,654 5,997,066 338,499 8,309,636 8,648,135 

This balance is analysed by the maturity date as follows: 

2008 2007 

Euros ’000 

Up to 3 months 2,903,404 4,465,402 

3 to 6 months 703,668 1,283,446 

6 to 12 months 980,332 859,675 

1 to 5 years 1,030,628 1,690,278 


5,997,066 8,648,135 

31. Deposits from customers 


Euros ’000 

2008 2007 



Deposits from customers: 

Repayable on demand 12,603,263 942,415 13,545,678 13,109,467 1,066,881 14,176,348 

Term deposits - 25,990,051 25,990,051 - 21,111,358 21,111,358 

Saving accounts - 4,781,069 4,781,069 - 3,523,888 3,523,888 

Treasury bills and other assets sold 

under repurchase agreement - 213,191 213,191 - - - 

Other - 377,179 377,179 - 435,017 435,017 

12,603,263 32,303,905 44,907,168 13,109,467 26,137,144 39,246,611 

In accordance with Regulation no. 180/94 of 15 December, the Deposit Guarantee Fund was established to guarantee the reimbursement of funds deposited in Credit 

Institutions. The calculations of the annual contributions for this Fund are based on the criteria defined in Regulation n. 11/94 of the Bank of Portugal.



2008 2007 

Euros ’000 

Deposits from customers repayable on demand: 13,545,678 14,176,348 

Term deposits and saving accounts from customers: 

Up to 3 months 23,583,096 19,223,482 

3 to 6 months 4,031,067 2,566,270 

6 to 12 months 2,812,098 2,536,123 

1 to 5 years 227,279 309,371 

More than 5 years 117,580 - 

30,771,120 24,635,246 

Treasury bills and other assets sold under 

repurchase agreement: 

Up to 3 months 190,100 - 

3 to 6 months 18,734 - 

6 to 12 months 4,357 - 

213,191 - 

Other: 

Up to 3 months 9,537 141,164 

3 to 12 months - 54,580 

More than 1 year 367,642 239,273 

377,179 435,017 

44,907,168 39,246,611 

32. Debt securities issued 


2008 2007 

Euros ’000 

Bonds 17,784,038 19,379,041 

Commercial paper 2,682,127 7,303,532 

Other 49,401 115,917 

20,515,566 26,798,490 

The balance Bonds includes issues for which the embedded derivative was separated from the host contract, in accordance with note 22 and accounting policy 1 d).


The characteristics of the bonds and commercial paper issued by the Group, as at 31 December, 2008, are analysed as follows: 

Issue Maturity Nominal value Book value 

Issue date date Interest rate Euros '000 Euros '000 

Bonds issued: 

Banco Comercial Português: 

EMTN BCP-SFE 21ª Em. May, 2000 May, 2010 Fixed rate of 5.2% 65,000 66,032 

BCP 4.9% Nov 01/11-2ª Em. November, 2001 November, 2011 Fixed rate of 4.9% 21,655 21,948 


BCP 5.34% March-02/Mar-12 March, 2002 March, 2012 Fixed rate of 5.34% 160,551 165,490 

BCP Ob Cx Sep 2003/2011 September, 2003 September, 2011 Fixed rate of 4.37% 114,678 115,892 

BCP SFI Glo.Eq.Inc.Bui.Strat. January, 2004 January, 2009 Indexed to portfolio of 20 shares 1,865 1,868 

BCP SFE Glob.Target Red. May, 2004 May, 2009 Indexed to portfolio of 20 shares 1,375 1,375 

BCP SFI Glob.Target Red. May, 2004 May, 2009 Indexed to portfolio of 20 shares 1,530 1,530 

BCP Super Inv.Mill.Nov 04/09 November, 2004 November, 2009 Indexed to portfolio of funds 38,147 38,147 

BCP Rend.Cr.Feb 05/09 February, 2005 February, 2009 Increasing rate of: 1st year 2%; 2nd 35,733 35,777 

year 2.25%; 3rd year 2.5%; 4th year 3.125% 

BCP Rend. 8 March 10 March, 2005 March, 2010 1st year 4%; 2nd year and following 22,458 22,458 

Max (9.3% - 2 * Euribor 12 months) 

BCP Mill. Ind. Mun. Mar 05/10 March, 2005 March, 2010 Indexed to portfolio of indexes 10,150 10,150 

BCP Super Inv.Mill. 05/10 April, 2005 December, 2010 Indexed to portfolio of funds 30,827 29,424 

BCP Rend. 8 May 10 May, 2005 May, 2010 1st year 4%; 2nd year and following 16,047 15,646 


BCP Rend. 8 May 10 2ª em. May, 2005 May, 2010 1st year 4%; 2nd year and following 8,649 8,459 


BCP Activo 4 June 05/09 June, 2005 June, 2009 Indexed to portfolio of shares 4,939 4,888 

BCP Ob Cx Aex Aug 05/10 August, 2005 August, 2010 Indexed to Aex index 10,000 9,764 

BCP Ob Cx Sp/Mib Aug 05/10 August, 2005 August, 2010 Indexed to Mib index 10,000 9,764 

BCP Ob Cx Dj euroxx50 August, 2005 August, 2010 Indexed to Dj euroxx50 index 10,000 9,764 

BCP Ob Cx Cac 40 August, 2005 August, 2010 Indexed to Cac 40 index 10,000 9,764 

BCP Ob Cx Ibex 35 August, 2005 August, 2010 Indexed to Ibex 35 index 10,000 9,764 

BCP Ob Cx Rend. 7 - Aug 2010 August, 2005 August, 2010 1st year 3.25%; 2nd year and following 24,772 24,072 

Max(8.1% - 2 * Euribor 12 months) 

BCP Ob Cx Triplo R. Sep 05/10 September, 2005 September, 2010 Indexed to Down Jones Global Titans 8,436 8,213 

50 index 

BCP Ob Cx Rend. 7 Oct 2010 October, 2005 October, 2010 1st year 3.5%; 2nd year and following 8,760 8,419 


BCP Ob Cx Rend. Real Nov 10 November, 2005 November, 2010 Indexed to IPC index 15,000 14,331 

BCP Ob Cx E. Gr. S. Dec 05/15 December, 2005 December, 2015 Indexed to Dj euroxx50 index 2,427 2,262 

BCP Ob Cx R. Cr. Jan 2009 January, 2006 January, 2009 1st Sem. 2.125%; 2nd Sem. 2.25%; 45,500 45,504 

3rd Sem. 2.5%; 4th Sem. 2.65%; 

5th Sem. 2.85%; 6th Sem. 3.10% 

BCP SFI Ob Cx R. Cr. Jan 2009 January, 2006 January, 2009 1st Sem. 2.125%; 2nd Sem. 2.25%; 7,631 7,632 

3rd Sem. 2.5%; 4th Sem. 2.65%; 

5th Sem. 2.85%; 6th Sem. 3.1% 

BCP SFE Ob Cx R. Cr. Jan 2009 January, 2006 January, 2009 1st Sem. 2.125%; 2nd Sem. 2.25%; 1,869 1,869 

3rd Sem. 2.5%; 4th Sem. 2.65%; 

5th Sem. 2.85%; 6th Sem. 3.1% 

BCP Ob Cx M.S. Act. Jan 05/11 January, 2006 January, 2011 Indexed to portfolio of indexes 9,569 9,448 

BCP Ob Cx I. Glob.12 Feb 06/11 February, 2006 February, 2011 Indexed to portfolio of indexes 14,496 13,287 

BCP Ob Cx E. I. S. Mar 06/16 March, 2006 March, 2016 Index to Down Jones EuroStoxx 1,100 1,026 

50 index 

BCP Ob Cx M. Oport Mar 06/10 March, 2006 March, 2010 Index to portfolio of indexes 9,333 9,154 

BCP Ob Cx. 3.84% Apr 2016 April, 2006 April, 2016 Fixed rate 3.84% 1,000 1,041 

BCP Ob Cx Cab. W. Eq. Jul 06/09 July, 2006 July, 2009 Indexed to portfolio of 3 indexes 1,660 1,633 

BCP Ob Cx Cab. Mund. Jul 06/09 July, 2006 July, 2009 Indexed to portfolio of 3 indexes 3,750 3,686 

BCP Ob Cx N. D. Var Aug 06/09 August, 2006 August, 2009 Indexed to portfolio of shares 18,325 18,249 

BCP Ob Cx R. Global 06/11 November, 2006 November, 2011 Index to Down Jones EuroStoxx 50 index 8,091 7,776 

BCP Ob Cx R. Global II 06/11 December, 2006 December, 2011 Index to Down Jones EuroStoxx 50 index 10,000 9,681 

BCP Ob Cx R. Global II 2E 06/11 December, 2006 December, 2011 Index to Down Jones EuroStoxx 50 index 1,820 1,763 

BCP FRN May 07/14 May, 2007 May, 2014 Euribor 3M + 0.15% 1,228,500 1,228,510 

BCP FRN May 07/11 May, 2007 May, 2011 Euribor 3M + 0.15% 400,000 400,000 

BCP Cov Bonds Jun 07/17 June, 2007 June, 2017 Fixed rate of 4.75% 1,500,000 1,519,025 

BCP FRN Sep 12 August, 2007 September, 2012 Euribor 3M + 0.10% 310,000 310,000 

BCP Cov Bonds Oct 07/14 October, 2007 October, 2014 Fixed rate of 4.75% 1,000,000 1,078,481 

(continue)


(continuation) 



BCP FRN Mar 17 December, 2007 March, 2017 Euribor 3M + 0.18% 100,000 100,000 

BCP Ob Cx I. Esp. Dec 07/09 1E December, 2007 December, 2009 5.25%, subject to Switch 40,473 40,473 





Bcp Ob Cx S Af 1E Mar 08/13 March, 2008 March, 2013 Euribor 3M + Remain Prize: 398,245 398,245 

1st year 0.0%; 2nd year 0.125%; 3rd year 

0.250%; 4th year 0.750%; 5th year 1.5% 



0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfi Ob Cx S Af 1E Mar 08/13 March, 2008 March, 2013 Euribor 3M + Remain Prize: 33,864 33,864 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfe Ob Cx S Af 1E Mar 08/13 March, 2008 March, 2013 Euribor 3M + Remain Prize: 5,899 5,899 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcp Ob Cx S Af 3E May 08/13 May, 2008 May, 2013 Euribor 3M + Remain Prize: 478,469 478,470 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfi Ob Cx S Af 3E May 08/13 May, 2008 May, 2013 Euribor 3M + Remain Prize: 21,871 21,871 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfe Ob Cx S Af 3E May 08/13 May, 2008 May, 2013 Euribor 3M + Remain Prize: 6,648 6,648 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcp Frn May 2010 / Emtn 468 May, 2008 May, 2010 Euribor 3M + 0.75% 1,249,900 1,249,725 

Bcp Ob Cx S Af 4E Jun 08/13 June, 2008 June, 2013 Euribor 3M + Remain Prize: 391,138 391,138 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfi Ob Cx S Af 4E Jun 08/13 June, 2008 June, 2013 Euribor 3M + Remain Prize: 15,819 15,819 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfe Ob Cx S Af 4E Jun 08/13 June, 2008 June, 2013 Euribor 3M + Remain Prize: 3,217 3,217 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcp Ob Cx S Af 5E Jul 08/13 July, 2008 July, 2013 Euribor 3M + Remain Prize: 116,058 116,060 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfi Ob Cx S Af 5E Jul 08/13 July, 2008 July, 2013 Euribor 3M + Remain Prize: 12,155 12,155 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfe Ob Cx S Af 5E Jul 08/13 July, 2008 July, 2013 Euribor 3M + Remain Prize: 3,387 3,387 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcp O Cx S A M B 1E Oct 08/13 October, 2008 October, 2013 Euribor 3M + Remain Prize: 341,199 341,199 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfi O Cx S A M B 1E 08/13 October, 2008 October, 2013 Euribor 3M + Remain Prize: 24,407 24,407 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfe O Cx S A M B1E Oct08/13 October, 2008 October, 2013 Euribor 3M + Remain Prize: 3,976 3,976 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp O Cx S A M B2E Nov 08/13 November, 2008 November, 2013 Euribor 3M + Remain Prize: 201,769 201,769 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfi O Cx S A M B2E 08/13 November, 2008 November, 2013 Euribor 3M + Remain Prize: 10,294 10,294 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfe O Cx S A M B2E Nov 08/13 November, 2008 November, 2013 Euribor 3M + Remain Prize: 1,952 1,952 


0.50%; 4th year 0.750%; 5th year 1.5% 

(continue)





Bcp O Cx S A M B3E Dec 08/13 December, 2008 December, 2013 Euribor 3M + Remain Prize: 233,714 233,714 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfi O Cx S A M B3E 08/13 December, 2008 December, 2013 Euribor 3M + Remain Prize: 12,112 12,112 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfe O Cx S A M B3E Dec 08/13 December, 2008 December, 2013 Euribor 3M + Remain Prize: 2,951 2,951 


0.50%; 4th year 0.750%; 5th year 1.5% 

BCP Investimento: 

5.32% - 2001/09 Mar 2009 March, 2001 March, 2009 Fixed rate of 5.32% 49,400 49,445 




6.522% - March 2001/2009 March, 2001 March, 2009 Fixed rate of 6.522% 7,500 7,517 

Rendimento Seguro 2001/2009 March, 2001 March, 2009 Fixed rate of 1.95% 7,500 7,500 

Bank Millennium: 

Orchis Sp. z o.o. - G. S. Inv. Bond December, 2007 December, 2016 WIBOR 1 month + 26.0 bp 83,753 83,753 

Orchis Sp. z o.o. - EIB S. Inv. Bond December, 2007 December, 2016 WIBOR 1 month + 26.0 bp 101,280 101,280 

Orchis Sp. z o.o. - M. Inv. Bond December, 2007 December, 2016 WIBOR 1 month + 15.0 bp 8,511 8,511 

Bank Millennium - BM_2009/10 October, 2008 October, 2009 Cl1 (Comdty) Or Cl2 (Comdty) 1,429 1,429 

Bank Millennium - BM_2009/10A October, 2008 October, 2009 Cl1 (Comdty) Or Cl2 (Comdty) 1,236 1,236 

Bank Millennium - BM_2010/07 July, 2008 July, 2010 Usdrub (Curncy) 55%; Eurrub (Curncy) 45% 2,411 2,411 

Bank Millennium - BM_2010/07A July, 2008 July, 2010 Usdrub (Curncy) 55%; Eurrub (Curncy) 45% 1,677 1,677 

Bank Millennium - BM_2010/09 September, 2008 September, 2010 Spdtp (Index) 391 391 

Bank Millennium - BM_2010/09A September, 2008 September, 2010 Spdtp (Index) 654 654 

Bank Millennium - BM_2010/12 December, 2008 December, 2010 Goldplnpm (Comdty) 1,826 1,826 

Bank Millennium - BM_2010/12A December, 2008 December, 2010 Goldplnpm (Comdty) 313 313 

Bank Millennium - BM_2011/02 February, 2008 February, 2011 Rdxusd (Index) 833 833 

Bank Millennium - BM_2011/03_1 March, 2008 March, 2011 Spbnm10E (Index) 1,366 1,366 

Bank Millennium - BM_2011/03_2 March, 2008 March, 2011 Spbnm10E (Index) 964 964 

Bank Millennium - BM_2011/04 April, 2008 April, 2011 Egidx (Index) 2,149 2,149 

Bank Millennium - BM_2011/05 May, 2008 May, 2011 Goldplnpm (Comdty) 25%; Pltmlnpm 2,295 2,295 

(Comdty) 25%; Api21Mon (Comdty) 25%; 

Hp1(Comdty) 25% 

Bank Millennium - BM_2011/05A May, 2008 May, 2011 Goldplnpm (Comdty) 25%; Pltmlnpm 1,806 1,806 

(Comdty) 25%; Api21Mon (Comdty) 25%; 

Hp1(Comdty) 25% 

Bank Millennium - BM_2011/11 November, 2008 November, 2011 Eurpln (Crncy) 1,812 1,812 

Bank Millennium - BM_2011/11A November, 2008 November, 2011 Eurpln (Crncy) 1,486 1,486 

Bank Millennium - BM_2012/01 December, 2008 January, 2012 Tpsa Pw (Equity) 25%; Pko Pw (Eqty) 1,533 1,533 

25%; Kgh Pw (Eqty) 25%; Pkn Pw (Eqty) 25% 

Bank Millennium - BM_2012/01A December, 2008 January, 2012 Tpsa Pw (Equity) 25%; Pko Pw (Eqty) 1,773 1,773 

25%; Kgh Pw (Eqty) 25%; Pkn Pw (Eqty) 25% 

Bank Millennium - BM_2012/04 March, 2008 April, 2012 Rdxusd (Index) 33,3333%; Meimduba 2,329 2,329 

(Index) 33,3333%; Ewz Us (Index) 33,3333% 

Bank Millennium - BM_2012/06 June, 2008 June, 2012 Sismeaa Lx (Equity) 50%; Jbafeub Lx 1,447 1,447 

(Aquity) 50% 

Banco de Investimento Imobiliário: 

FRN's BII Finance Company September, 1996 September, 2011 Euribor 3 m + 1.75% 83,962 83,279 

BCP Finance Bank: 

BCP Fin.Bank - Euros 11.429 m November, 2001 November, 2009 Indexed to portfolio of shares 378 631 

BCP Fin.Bank - Euros 15 m November, 2001 November, 2011 Zero coupon 15,000 12,680 

BCP Fin.Bank - USD 4.515 m November, 2001 November, 2009 Indexed to portfolio of shares 239 367 

BCP Fin.Bank - Euros 10 m July, 2002 July, 2009 Dsct. rate 5.22741% 6.0338566% 10,000 9,723 

BCP Fin.Bank - Euros 6.1 m May, 2003 May, 2010 Fixed rate 1.74% + max (CPI UE; 0%) 3,497 3,499 

(continue)





BCP Fin.Bank - Euros 90 m June, 2003 June, 2013 Euribor 360 3 months + 0.35% 90,000 90,000 

BCP Fin.Bank - Euros 20 m December, 2003 December, 2023 Fixed rate of 5.31% 20,000 21,029 

BCP Fin.Bank - EUR 500 m February, 2004 February, 2009 Euribor 3 months + 0.15%. 500,000 499,987 

BCP Fin.Bank - EUR 10 m March, 2004 March, 2024 Fixed rate of 5.01% 10,000 10,832 

BCP Fin.Bank - EUR 100 m May, 2004 May, 2009 Euribor 3 months + 0.2% 100,000 100,072 

BCP Fin.Bank - HKD 156 m August, 2004 August, 2009 HKD Hibor 3 months + 0.23% 14,463 14,478 

BCP Fin.Bank - EUR 50 m September, 2004 September, 2014 Euribor 3 months + 0.2% 50,000 49,871 

BCP Fin.Bank - EUR 50 m September, 2004 September, 2009 Euribor 3 months + 0.15% 50,000 49,993 

BCP Fin.Bank - EUR 500 m October, 2004 October, 2009 Euribor 3 months + 0.15% 500,000 499,925 

BCP Fin.Bank - EUR 20 m December, 2004 December, 2014 Euribor 6 months + 0.22% 20,000 19,980 

BCP Fin.Bank - EUR 9.7 m January, 2005 January, 2012 1st year 7.5%; 2nd year Max (former 5,725 5,735 

coupon + 1.75% - Euribor 3 months); 

3rd year Max (former coupon + 2.25% 

- Euribor 3 months); 4th year Max 

(former coupon + 2.75% - Euribor 3 

months); 5th year Max (former coupon 

+ 3.25% - Euribor 3 months); 6th year 

Max (former coupon + 3.75% - Euribor 

3 months); 7th year Max (former 

coupon + 4.25% - Euribor 3 months) 

BCP Fin.Bank - EUR 650 m January, 2005 January, 2010 Euribor 6 months + 0.15% 650,000 649,933 

BCP Fin.Bank - EUR 3 m February, 2005 February, 2015 1st year 6.6%; 2nd to 4th year former 1,800 1,800 

coupon *n/N; 5th year 6.6%; 6th to 

10th year former coupon *n/N; (n: n. 

of days Euribor 3 months





BCP Fin.Bank - EUR 500 m February, 2006 February, 2011 Euribor 3 months + 0.1% 489,000 488,502 

BCP Fin.Bank - GBP 50 m February, 2006 February, 2009 GBP Libor - BBA 3M + 0.04% 52,493 52,625 

BCP Fin.Bank - EUR 1000 m March, 2006 March, 2009 Euribor 3 months + 0.1% 1,000,000 1,000,000 

BCP Fin.Bank - EUR 200 m April, 2006 April, 2010 Euribor 3 months + 0.125% 200,000 200,000 

BCP Fin.Bank - EUR 5.335 m April, 2006 April, 2009 Indexed to GSCI Sugar Excess 1,884 1,868 

Return index 

BCP Fin.Bank - EUR 13.45 m May, 2006 May, 2014 Euribor 6 months + 37 bp per year 12,950 12,950 

BCP Fin.Bank - EUR 5.65 m May, 2006 May, 2014 Euribor 6 months + 32 bp per year 5,350 5,350 

BCP Fin.Bank - EUR 11 m June, 2006 June, 2014 Euribor 6 months + 35 bp per year 11,000 10,980 

BCP Fin.Bank - GBP 14.6 m July, 2006 July, 2011 Fixed rate of 5.3525% 15,328 16,276 

BCP Fin.Bank - USD 3 m July, 2006 July, 2016 USD Libor 6 months + 0.75% *n/N; 2,156 1,430 

(n: n. of days USD Libor 6 months< Barrier) 

BCP Fin.Bank - EUR 10.2 m July, 2006 July, 2009 Indexed to portfolio of indexes 8,920 8,793 

BCP Fin.Bank - EUR 1.225 m August, 2006 August, 2009 Indexed to portfolio of indexes 875 860 

BCP Fin.Bank - EUR 0.885 m August, 2006 August, 2009 Indexed to portfolio of 3 indexes 810 798 

BCP Fin.Bank - EUR 1.5 m August, 2006 August, 2009 Indexed to portfolio of 2 indexes 1,125 1,106 

of "NOKIA OYJ" 

BCP Fin.Bank - USD 25 m September, 2006 September, 2009 USD Libor 1 month + 0.055% per year 17,964 18,252 

BCP Fin.Bank - EUR 1500 m October, 2006 October, 2009 Euribor 3 months + 0.1% per year 1,500,000 1,499,974 

BCP Fin.Bank - EUR 2 m November, 2006 November, 2009 Indexed to portfolio of indexes 1,765 1,718 

BCP Fin.Bank - USD 2 m November, 2006 November, 2009 Indexed to portfolio of indexes 834 804 

BCP Fin.Bank - CZK 500 m December, 2006 December, 2011 Pribor 3 months+0.09% per year 18,605 18,595 

BCP Fin.Bank - EUR 1.3 m December, 2006 December, 2009 Indexed to portfolio of 3 shares 1,207 1,178 

BCP Fin.Bank - EUR 1.4 m December, 2006 December, 2009 Indexed to portfolio of 3 indexes 1,400 1,357 

BCP Fin.Bank - EUR 20 m December, 2006 June, 2015 Index to Nikkei 225 index 20,000 20,000 

BCP Fin.Bank - EUR 100 m January, 2007 January, 2017 Euribor 3 months + 0.175% 100,000 99,899 

BCP Fin.Bank - EUR 1000 m February, 2007 February, 2012 Euribor 3 months + 0.125% 955,000 954,793 

BCP Fin.Bank - EUR 32.1 m June, 2008 June, 2016 Euribor 6 months + 0.5% per year 32,100 32,100 

BCP Fin.Bank - EUR 31.35 m October, 2008 October, 2016 Euribor 6M + 0.60% per year 31,350 31,350 

Bank Millennium (Greece): 

Kion 2006-1 A December, 2006 July, 2051 Euribor 3 months + 0.15% 255,174 255,174 

Kion 2006-1 B December, 2006 July, 2051 Euribor 3 months + 0.27% 28,200 28,200 

Kion 2006-1 C December, 2006 July, 2051 Euribor 3 months + 0.55% 18,000 18,000 

NOVA Nº 3: 

NOVA Nº 3 - Class C Notes November, 2002 October, 2011 Euribor 3 months + 0.73% 5,841 5,841 

NOVA Nº 3 - Class D Notes November, 2002 October, 2011 Euribor 3 months + 1.375% 16,000 16,000 

17,644,425 

Accruals 139,613 

17,784,038 

Commercial paper: 


BCP Finance Bank - GBP 4.5 m January, 2008 January, 2009 Fixed rate of 5.42% 4,724 4,714 

BCP Finance Bank - USD 8 m January, 2008 January, 2009 Fixed rate of 3.61% 5,748 5,740 

BCP Finance Bank - EUR 130 m January, 2008 January, 2009 Fixed rate of 4.445% 130,000 129,760 

BCP Finance Bank - GBP 23 m January, 2008 January, 2009 Fixed rate of 5.48% 24,147 24,078 

BCP Finance Bank - EUR 10 m January, 2008 January, 2009 Fixed rate of 4.33% 10,000 9,968 

BCP Finance Bank - EUR 10 m March, 2008 February, 2009 Fixed rate of 4.75% 10,000 9,925 

BCP Finance Bank - EUR 2 m April, 2008 April, 2009 Fixed rate of 4.73% 2,000 1,975 

BCP Finance Bank - EUR 4 m April, 2008 January, 2009 Fixed rate of 4.81% 4,000 3,999 

BCP Finance Bank - EUR 7.5 m April, 2008 April, 2009 Fixed rate of 4.97% 7,500 7,380 

BCP Finance Bank - EUR 7 m May, 2008 May, 2009 Fixed rate of 4.97% 7,000 6,880 

BCP Finance Bank - EUR 16 m May, 2008 May, 2009 Fixed rate of 4.98% 16,000 15,698 

BCP Finance Bank - EUR 10 m June, 2008 June, 2009 Fixed rate of 5.1% 10,000 9,785 





BCP Finance Bank - EUR 41 m June, 2008 January, 2009 Fixed rate of 5.61% 41,000 40,841 

BCP Finance Bank - EUR 10 m June, 2008 April, 2009 Fixed rate of 5.33% 10,000 9,828 

(continue)





BCP Finance Bank - EUR 10 m July, 2008 April, 2009 Fixed rate of 5.25% 10,000 9,870 

BCP Finance Bank - JPY 10 m July, 2008 April, 2009 Fixed rate of 1.23% 15,855 15,807 

BCP Finance Bank - EUR 15 m July, 2008 January, 2009 Fixed rate of 5.17% 15,000 14,991 

BCP Finance Bank - EUR 67 m July, 2008 February, 2009 Fixed rate of 5.2% 67,000 66,625 




BCP Finance Bank - EUR 11.5 m July, 2008 July, 2009 Fixed rate of 5.38% 11,500 11,184 

BCP Finance Bank - EUR 50 m July, 2008 July, 2009 Fixed rate of 5.38% 50,000 48,577 





BCP Finance Bank - EUR 12.5 m July, 2008 July, 2009 Fixed rate of 5.39% 12,500 12,122 

BCP Finance Bank - EUR 5 m August, 2008 July, 2009 Fixed rate of 5.36% 5,000 4,848 

BCP Finance Bank - EUR 115 m August, 2008 February, 2009 Fixed rate of 5.18% 115,000 114,358 

BCP Finance Bank - EUR 4.5 m August, 2008 August, 2009 Fixed rate of 5.3% 4,500 4,356 

BCP Finance Bank - EUR 15 m August, 2008 August, 2009 Fixed rate of 5.33% 15,000 14,487 

BCP Finance Bank - EUR 10 m September, 2008 March, 2009 Fixed rate of 5.19% 10,000 9,914 

BCP Finance Bank - EUR 4 m September, 2008 February, 2009 Fixed rate of 5.18% 4,000 3,967 

BCP Finance Bank - EUR 300 m September, 2008 February, 2009 Fixed rate of 5.22% 300,000 297,626 

BCP Finance Bank - EUR 10.5 m September, 2008 September, 2009 Fixed rate of 5.35% 10,500 10,120 

BCP Finance Bank - EUR 30 m September, 2008 January, 2009 Fixed rate of 5.11% 30,000 29,941 



BCP Finance Bank - EUR 5 m September, 2008 September, 2009 Fixed rate of 5.44% 5,000 4,807 

BCP Finance Bank - EUR 15 m September, 2008 September, 2009 Fixed rate of 5.49% 15,000 14,405 

BCP Finance Bank - EUR 18.5 m October, 2008 January, 2009 Fixed rate of 5.37% 18,500 18,464 

BCP Finance Bank - EUR 5 m October, 2008 January, 2009 Fixed rate of 5% 5,000 4,999 

BCP Finance Bank - EUR 20 m October, 2008 January, 2009 Fixed rate of 5.015% 20,000 19,997 

BCP Finance Bank - EUR 75 m October, 2008 January, 2009 Fixed rate of 5.13% 75,000 74,713 

BCP Finance Bank - EUR 12 m October, 2008 October, 2009 Fixed rate of 5.03% 12,000 11,514 

BCP Finance Bank - EUR 5 m November, 2008 April, 2009 Fixed rate of 4.85% 5,000 4,921 

BCP Finance Bank - EUR 15 m November, 2008 April, 2009 Fixed rate of 4.83% 15,000 14,809 

BCP Finance Bank - EUR 15 m November, 2008 February, 2009 Fixed rate of 4.32% 15,000 14,914 


BCP Finance Bank - EUR 50 m November, 2008 January, 2009 Fixed rate of 4.225% 50,000 49,883 

BCP Finance Bank - EUR 11 m November, 2008 January, 2009 Fixed rate of 4.15% 11,000 10,968 


BCP Finance Bank - GBP 10.5 m December, 2008 February, 2009 Fixed rate of 3.35% 11,024 10,991 

BCP Finance Bank - EUR 8.5 m December, 2008 March, 2009 Fixed rate of 4.05% 8,500 8,443 

BCP Finance Bank - EUR 35 m December, 2008 February, 2009 Fixed rate of 3.98% 35,000 34,877 

BCP Finance Bank - EUR 14 m December, 2008 March, 2009 Fixed rate of 3.95% 14,000 13,904 

BCP Finance Bank - EUR 15 m December, 2008 January, 2009 Fixed rate of 3.4% 15,000 14,990 








BCP Finance Bank - EUR 400 m December, 2008 June, 2009 Fixed rate of 3.9% 400,000 392,641 

BCP Finance Bank - USD 5 m December, 2008 January, 2009 Fixed rate of 1.550001% 3,593 3,589 



BCP Finance Bank - EUR 50 m December, 2008 March, 2009 Fixed rate of 3.09% 50,000 49,625 





2,682,127



2008 2007 

Euros ’000 

Bonds: 

Up to 3 months 1,774,487 638,076 

3 to 6 months 109,733 1,284,155 

6 to 12 months 2,706,853 1,839,384 

1 to 5 years 8,284,560 10,407,612 

More than 5 years 4,768,792 5,069,915 

17,644,425 19,239,142 

Accruals 139,613 139,899 

17,784,038 19,379,041 


Up to 3 months 2,015,159 5,577,730 

3 to 6 months 518,903 1,489,207 

6 to 12 months 148,065 236,595 

2,682,127 7,303,532 

Other: 


3 to 12 months 1,553 13,406 

1 to 5 years 38,666 102,511 


49,401 115,917 

20,515,566 26,798,490 

33. Financial liabilities hold for trading 

The balance is analysed as follows: 

2008 2007 

Euros ’000 

Securities loans - 79,353 

FRA 424 - 

Swaps 2,078,564 1,159,334 

Options 24,720 4,184 


Forwards 23,184 8,768 

2,138,815 1,304,265 

The balance Financial liabilities held for trading includes, the embedded derivatives valuation separated from the host contract in accordance with the accounting policy 

presented in note 1 d), in the amount of Euros 11,923,000 (31 December 2007: Euros 52,626,000). This note should be analysed with note 22. 

34. Other financial liabilities held for trading at fair value through profit or loss 


Euros ’000 

2008 2007 

Deposits from credit institutions 1,935,354 31,710 

Deposits from customers 35,522 - 

Bonds 3,922,153 1,723,337 

Commercial paper 523,123 - 

Subordinated debt 298,171 - 

6,714,323 1,755,047 

The balance Other financial liabilities held for trading at fair value through profit or loss account includes the amount of Euros 88,273,000 (31 December 2007: Euros 

8,044,000) related to the fair value changes of the risk credit of the Group BCP, as referred in the accounting policy presented in note 1 d).


The characteristics of the bonds, commercial paper and subordinated debt issued by the Group at fair value through profit or loss as at 31 December, 2008, are analysed 

as follows: 



Bonds issued: 


BCP Ob Cx C.Call Feb 2007/09 February, 2007 February, 2009 Indexed to DJ EuroStoxx 50 index 1,250 1,246 

BCP Ob Cx 8%Feb 2007/09 February, 2007 February, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 88,948 89,459 

3rd Quart. 2.750%; 4th Quart. 2.750%; 

5th Quart. 3.0%; 6th Quart. 3.0%; 

7th Quart. 4.0%; 8th Quart. 8.0% 

BCP Ob Cx 8%Feb 2007/09 2Em February, 2007 February, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 21,636 21,760 




BCP SFI Ob Cx.8%Feb 2007/09 February, 2007 February, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 24,578 24,719 




BCP Ob Cx Eurostoxx50 Feb 2007/09 February, 2007 February, 2009 Indexed to DJ EuroStoxx 50 index 25,390 25,303 

BCP Ob Cx MR Dax Feb 2007/10 February, 2007 February, 2010 Indexed to DAX 30 index 13,802 14,507 

BCP Ob Cx R.G.III Feb 2007/12 February, 2007 February, 2012 Indexed to DJ EuroStoxx 50 index 20,652 18,345 

BCP SFE Ob Cx 8%Feb 2007/09 February, 2007 February, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 5,844 5,878 




BCP Ob Cx 9%Mar 2007/09 March, 2007 March, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 112,655 114,206 




BCP SFI Ob Cx 9%Mar 2007/09 March, 2007 March, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 22,185 22,490 




BCP Ob Cx Eurostoxx50 Mar 2007/09 March, 2007 March, 2009 Indexed to DJ EuroStoxx 50 index 15,567 15,458 

BCP Ob Cx Op 4%+ Mar 2007/10 March, 2007 March, 2010 Indexed to portfolio of shares 20,349 19,398 

BCP Ob Cx RGIv Mar 2007/12 March, 2007 March, 2012 Indexed to DJ EuroStoxx 50 index 12,672 11,317 

BCP Ob Cx RGIv 2Em Mar 2007/12 March, 2007 March, 2012 Indexed to DJ EuroStoxx 50 index 13,303 11,833 

BCP SFE Ob Cx 9%Mar 2007/09 March, 2007 March, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 2,917 2,957 




BCP Ob Cx 9%May 2007/09 May, 2007 May, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 74,043 75,247 




BCP SFI Ob Cx 9%May 2007/09 May, 2007 May, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 13,244 13,460 




BCP Ob Cx I. M. May 2010 May, 2007 May, 2010 Indexed to portfolio of indexes 6,327 6,388 

BCP Ob Cx RGV 2Em May 2007/12 May, 2007 May, 2012 Indexed to DJ EuroStoxx 50 index 5,000 4,484 

BCP Ob Cx RGV May 2007/12 May, 2007 May, 2012 Indexed to DJ EuroStoxx 50 index 11,924 10,647 

BCP SFE Ob Cx 9%May 2007/09 May, 2007 May, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 471 478 




BCP Ob Cx Obr 10 E-J Jun 2007/10 June, 2007 June, 2010 Indexed to portfolio of indexes 6,266 6,103 

BCP Ob Cx 10 %Jun 2007/09 June, 2007 June, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 77,323 79,028 




BCP SFI Ob Cx 10%Jun 2007/09 June, 2007 June, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 13,421 13,717 




(continue)





BCP Ob Cx RGVi Jun 2007/12 June, 2007 June, 2012 Indexed to portfolio of indexes 14,288 12,878 

BCP SFE Ob Cx 10%Jun 2007/09 June, 2007 June, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 939 959 




BCP Ob Cx Inv. 16 Aug 2007/09 August, 2007 August, 2009 1st Quart. 3%; 2nd Quart. 3.25%; 27,972 27,819 


6th Quart. 4%; 7th Quart. 4.25%; 

4th e 8th Quart. Indexed to portfolio 

of 4 shares 

BCP Ob Cx M.C. Aug 2007/09 August, 2007 August, 2009 1st Sem. 3.750%; 2nd Sem. 4.0%; 58,533 59,363 

3rd Sem. 4.250%; 4th Sem. 4.5% 

BCP SFI Ob Cx M.C. Aug 2007/09 August, 2007 August, 2009 1st Sem. 3.750%; 2nd Sem. 4.0%; 15,737 15,960 

3rd Sem. 4.250%; 4th Sem. 4.5% 

BCP Ob Cx RGVii Aug2007/12 August, 2007 August, 2012 Indexed to portfolio of indexes 12,271 11,454 

BCP SFE Ob Cx M.C. Aug 2007/09 August, 2007 August, 2009 1st Sem. 3.750%; 2nd Sem. 4.0%; 1,390 1,410 

3rd Sem. 4.250%; 4th Sem. 4.5% 

BCP Ob Cx I.Eur. Sep 2007/09 September, 2007 September, 2009 1st Quart. 3%; 2nd Quart. 3.25%; 23,662 23,756 




of 4 shares 

BCP Ob Cx M.C. Sep 2007/10 September, 2007 September, 2010 1st Sem. 4.00%; 2nd Sem. 4.05%; 37,832 38,031 

3rd Sem. 4.10%; 4th Sem. 4.15%; 

5th Sem. 4.20%; 6th Sem. 4.25% 

BCP SFI Ob Cx M.C. Sep 2007/10 September, 2007 September, 2010 1st Sem. 4.%; 2nd Sem. 4.05%; 8,485 8,530 

3rd Sem. 4.10%; 4th Sem. 4.15%; 

5th Sem. 4.20%; 6th Sem. 4.25% 

Ob Cx BCP RGViii Sep 2007/12 September, 2007 September, 2012 Indexed to portfolio of indexes 6,500 6,241 

BCP Ob Cx RGViii 2E Sep 2007/12 September, 2007 September, 2012 Indexed to portfolio of indexes 6,538 5,845 

BCP Ob Cx M.C. Aug 2010 September, 2007 August, 2010 1st Sem. 3.5%; 2nd Sem. 3.625%; 23,849 23,988 

3rd Sem. 3.750%; 4th Sem. 4.0%; 

5th Sem. 4.250%; 6th Sem. (5 months)=4.5% 

BCP SFI Ob Cx M.C. Aug 2010 September, 2007 August, 2010 1st Sem. 3.5%; 2nd Sem. 3.625%; 13,411 13,506 

3rd Sem. 3.750%; 4th Sem. 4.0%; 


BCP Ob Cx M.C. Sep 2007/09 September, 2007 September, 2009 1st Sem. 3.5%; 2nd Sem. 3.750%; 43,736 44,240 

3rd Sem. 3.875%; 4th Sem. 4.0% 

BCP SFI Ob Cx M.C. Sep 2007/09 September, 2007 September, 2009 1st Sem. 3.5%; 2nd Sem. 3.750%; 58,222 58,893 

3rd Sem. 3.875%; 4th Sem. 4.0% 

BCP SFE Ob Cx M.C. Sep 2007/10 September, 2007 September, 2010 1st Sem. 4.%; 2nd Sem. 4.05%; 299 301 

3rd Sem. 4.10%; 4th Sem. 4.15%; 

5th Sem. 4.20%; 6th Sem. 4.25% 

BCP SFE Ob Cx M.C. Aug 2010 September, 2007 August, 2010 1st Sem. 3.5%; 2nd Sem. 3.625%; 309 312 

3rd Sem. 3.750%; 4th Sem. 4.0%; 

5th Sem. 4.250%; 6th Sem. 

(5 months)=4.5% 

BCP SFE Ob Cx M.C. Sep 2007/09 September, 2007 September, 2009 1st Sem. 3.5%; 2nd Sem. 3.750%; 5,248 5,308 

3rd Sem. 3.875%; 4th Sem. 4.0% 

BCP Ob Cx RGIx Oct 2007/12 October, 2007 October, 2012 Indexed to DJ EuroStoxx 50 index 3,275 3,160 

BCP Ob Cx M.C. Jan 2010 October, 2007 January, 2010 1st Sem. 3.50%; 2nd Sem. 3.60%; 48,374 49,331 

3rd Sem. 4.%; 4th Sem. 4.10%; 

5th Sem. (3 months)=4.50% 

BCP SFI Ob Cx M.C. Jan 2010 October, 2007 January, 2010 1st Sem. 3.50%; 2nd Sem. 3.60%; 29,404 29,986 

3rd Sem. 4.%; 4th Sem. 4.10%; 


BCP Ob Cx M.R.Eur. Oct2010 October, 2007 October, 2010 Indexed to DJ EuroStoxx 50 index 13,144 14,479 

BCP SFE Ob Cx M.C. Jan 2010 October, 2007 January, 2010 1st Sem. 3.50%; 2nd Sem. 3.60%; 1,909 1,947 

3rd Sem. 4.%; 4th Sem. 4.10%; 


BCP Ob Cx I.S.Mund. Nov 07-09 November, 2007 November, 2009 1st Quart. 3%; 2nd Quart. 3.25%; 19,972 19,988 




of 4 shares 

(continue)





BCP Ob Cx Inv. P. Nov 2009 November, 2007 November, 2009 1st Sem. 3.50%; 2nd Sem. 3.75%; 52,369 53,216 

3rd Sem. 4.15%; 4th Sem. 4.50% 

BCP SFI Ob Cx I.P. Nov 2009 November, 2007 November, 2009 1st Sem. 3.50%; 2nd Sem. 3.75%; 33,945 34,493 

3rd Sem. 4.15%; 4th Sem. 4.50% 

BCP SFE Ob Cx I.P. Nov 2009 November, 2007 November, 2009 1st Sem. 3.50%; 2nd Sem. 3.75%; 4,514 4,587 

3rd Sem. 4.15%; 4th Sem. 4.50% 

BCP Ob Cx RGX Dec 2007/12 December, 2007 November, 2012 Indexed to DJ EuroStoxx 50 index 2,500 2,389 

BCP Ob Cx Inv Europa Dec 07/09 December, 2007 December, 2009 1st Quart. 3%; 2nd Quart. 3.25%; 9,007 9,107 




of 4 shares 

BCP Ob Cx I.P. Dec 2009 December, 2007 December, 2009 1st Sem. 3.50%; 2nd Sem. 3.60%; 29,664 30,216 

3rd Sem. 3.80%; 4th Sem. 4.25% 

BCP SFI Ob Cx I.P. Dec 2009 December, 2007 December, 2009 1st Sem. 3.50%; 2nd Sem. 3.60%; 6,091 6,204 

3rd Sem. 3.80%; 4th Sem. 4.25% 

BCP SFE Ob Cx I.P. Dec 2009 December, 2007 December, 2009 1st Sem. 3.50%; 2nd Sem. 3.60%; 2,117 2,156 

3rd Sem. 3.80%; 4th Sem. 4.25% 

BCPOb Cx Inv Men Feb 08/10 February, 2008 February, 2010 1st month 3.85%; 2nd to 23th month: last 149,220 152,147 

month interest rate + 0.05%; 

24th month 12.% 

BCPsfi Ob Cx Inv Men Feb2008 February, 2008 February, 2010 1st month 3.85%; 2nd to 23th month: last 16,427 16,750 



BCPsfe Ob Cx Inv Men Feb 2008 February, 2008 February, 2010 1st month 3.85%; 2nd to 23th month: last 2,014 2,053 



BCPOb Cx Sup Inv 2008 Feb 08/11 February, 2008 February, 2011 1st Sem. 4.%; 2nd Sem. 4.25%; 3rd 49,981 50,307 

Sem. 4.5%; 4th Sem. 5%; 5th Sem. 6% 

BCPOb Cx Inv Cab Mu Feb 08/11 February, 2008 February, 2011 Indexed to portfolio of 3 indexes 9,265 8,768 

BCPOb Cx Inv Mercad Mar 08/11 March, 2008 March, 2011 Indexed to portfolio of 3 Commodities 18,656 17,957 

BCPOb Cx Inv Agua May 08/11 May, 2008 May, 2011 Indexed to S&P Global Water 13,727 13,903 

BCPCovered Bonds - 4.875 Pct May, 2008 May, 2010 Fixed rate of 4.875% 1,000,000 1,020,401 

BCPOb Cx Inv Ener Ren Jun 08/11 June, 2008 June, 2011 Indexed to portfolio of 4 shares 18,441 17,513 

BCPOb Cx Inv Saude July 08/11 July, 2008 July, 2011 Indexed to portfolio of 5 shares 5,713 5,292 

BCPOb Cx Inv Plus Sep 08/11 September, 2008 September, 2011 1º Quart.=5%; 2º Quart.=5%; 91,457 94,057 

3º Quart.=5.25%; 4º Quart.=5.25%; 

5º Quart.=5.5%; 6º Quart.=5.75% 

BCPOb Cx Inv Iber Sep 2008/11 September, 2008 September, 2011 Indexed to portfolio of indexes 3,897 4,008 

BCPSfi Ob Cx Inv Plus Sep 08/11 September, 2008 September, 2011 1º Quart.=5%; 2º Quart.=5%; 27,252 28,031 

3º Quart.=5.25%; 4º Quart.=5.25%; 

5º Quart.=5.5%; 6º Quart.=5.75% 

BCPSfe Ob Cx Inv Plus Sep 08/11 September, 2008 September, 2011 1º Quart.=5%; 2º Quart.=5%; 2,816 2,896 

3º Quart.=5.25%; 4º Quart.=5.25%; 

5º Quart.=5.5%; 6º Quart.=5.75% 

BCPOb Cx Inv Plus Oct 08/11 October, 2008 October, 2011 1º e 2º Sem.=4.75% ; 3º e 4º 56,964 58,705 

Sem.=5.0% ; 5º e 6º Sem.=5.25% 

BCPSfi Ob Cx Inv Plus Oct 08/11 October, 2008 October, 2011 1º e 2º Sem.=4.75% ; 3º e 4º 21,640 22,301 

Sem.=5.0% ; 5º e 6º Sem.=5.25% 

BCPOb Cx Inv Petroleo Oct 08/11 October, 2008 October, 2011 Indexed to portfolio of shares 3,165 3,075 

BCPSfe Ob Cx Inv Plus Oct 08/11 October, 2008 October, 2011 1º e 2º Sem.=4.75% ; 3º e 4º 4,141 4,268 

Sem.=5.0% ; 5º e 6º Sem.=5.25% 


MTN - EUR 5 Millions February, 2007 February, 2009 Indexed to portfolio of 2 indexes 2,684 2,679 

MTN - EUR 1.7 Millions February, 2007 February, 2010 Indexed to portfolio of 2 shares 1,651 17 

MTN - EUR 1 Millions February, 2007 February, 2010 Indexed to portfolio of 2 shares 997 35 

MTN - EUR 1.405 Millions February, 2007 February, 2010 Indexed to portfolio of 3 shares 1,405 1,344 

MTN - EUR 4.282 Millions February, 2007 February, 2009 Indexed to DJ EuroStoxx 50 index 4,006 3,991 

MTN - EUR 1.1 Millions February, 2007 February, 2010 Indexed to portfolio of 2 shares 1,100 36 

MTN - USD 1.4 Millions March, 2007 March, 2010 Indexed to portfolio of 3 indexes 1,006 928 

MTN - EUR 5.7 Millions March, 2007 March, 2010 Indexed to portfolio of 3 shares 5,650 5,276 



MTN - EUR 1 Millions March, 2007 March, 2011 Indexed to DJ EuroStoxx 50 index 1,000 908 

(continue)





MTN - USD 1.25 Millions April, 2007 April, 2010 Fixed rate of 8.04% 898 865 

MTN - USD 1.33 Millions April, 2007 April, 2010 Fixed rate of 8.04% 956 897 

MTN - EUR 1 Millions April, 2007 April, 2010 Fixed rate of 4.5% 1,000 993 

MTN - USD 1.32 Millions April, 2007 April, 2010 Indexed to portfolio of 3 indexes 948 873 

MTN - EUR 5 Millions April, 2007 April, 2010 Indexed to portfolio of 3 shares 4,825 4,624 

MTN - USD 1.065 Millions April, 2007 April, 2009 Indexed to portfolio of 3 indexes 765 815 

MTN - USD 5.86 Millions May, 2007 May, 2010 Indexed to portfolio of 3 shares 3,977 3,862 

MTN - EUR 8.4 Millions May, 2007 May, 2011 6M EURIBOR + 1.30% (CLN) 5,400 5,236 

MTN - JPY 4100 Millions May, 2007 October, 2010 3M JPY LIBOR 32,504 31,292 

MTN - USD 100 Millions June, 2007 June, 2009 3M USD-LIBOR-BBA + 0.03% 71,855 71,683 

MTN - EUR 3.445 Millions July, 2007 January, 2009 Indexed to WTI price 3,445 3,445 

MTN - EUR 4.24 Millions July, 2007 July, 2010 Indexed to portfolio of 3 shares 4,215 3,826 

MTN - EUR 5.1 Millions July, 2007 July, 2010 Indexed to portfolio of 2 shares 5,012 41 

MTN - CAD 50 Millions July, 2007 July, 2010 3M CDOR 29,415 28,935 

MTN - USD 5 Millions August, 2007 August, 2009 Fixed rate of 5.25% 3,536 3,628 

MTN - EUR 1.3 Millions August, 2007 August, 2010 Indexed to portfolio of 3 indexes 1,300 1,014 

MTN - USD 1.05 Millions August, 2007 August, 2010 Indexed to portfolio of 3 indexes 683 539 

MTN - EUR 1.695 Millions August, 2007 August, 2010 Indexed to portfolio of commodities 1,695 1,795 

MTN - EUR 2.03 Millions August, 2007 August, 2010 Indexed to portfolio of 2 shares 2,030 1,228 

MTN - USD 3 Millions September, 2007 September, 2009 Fixed rate of 5.125% 2,156 2,203 

MTN - EUR 1.41 Millions October, 2007 October, 2010 Indexed to portfolio of 3 shares 1,360 1,248 

MTN - EUR 3.425 Millions October, 2007 October, 2010 Indexed to portfolio of 3 indexes 3,201 1,280 

MTN - USD 3.95 Millions October, 2007 October, 2010 Indexed to portfolio of 3 indexes 2,759 1,190 

MTN - USD 4 Millions October, 2007 February, 2010 Fixed rate of 4.2857143% 2,225 2,298 

MTN - EUR 18.26 Millions October, 2007 October, 2010 Indexed to portfolio of 3 indexes 18,055 7,977 

MTN - EUR 2.075 Millions October, 2007 October, 2011 Fixed rate of 6% 2,025 1,692 

MTN - EUR 8.2 Millions November, 2007 November, 2010 Indexed to portfolio of 3 indexes 7,535 3,492 


MTN - USD 2.8 Millions November, 2007 November, 2010 Indexed to portfolio of 3 indexes 1,979 868 


MTN - USD 2.1 Millions November, 2007 November, 2010 Indexed to portfolio of 3 indexes 1,509 775 

MTN - USD 3 Millions November, 2007 June, 2010 Fixed rate of 4.6451613% 2,031 2,203 

MTN - EUR 2.4 Millions December, 2007 June, 2009 Indexed to portfolio of 3 shares 2,370 788 

MTN - EUR 21 Millions December, 2007 December, 2010 Indexed to portfolio of 3 indexes 21,000 11,654 

MTN - EUR 2.9 Millions December, 2007 December, 2010 Indexed to portfolio of 3 indexes 2,900 1,550 

MTN - USD 7.488 Millions December, 2007 December, 2010 Indexed to portfolio of 3 indexes 4,978 2,444 



MTN - USD 0.84 Millions December, 2007 December, 2010 Indexed to portfolio of 3 indexes 604 298 

MTN - EUR 1 Millions January, 2008 January, 2011 Indexed to portfolio of 3 shares 1,000 897 

MTN - EUR 11 Millions January, 2008 January, 2011 Indexed to portfolio of 3 indexes 11,000 5,994 

MTN - EUR 5.872 Millions January, 2008 January, 2011 Indexed to portfolio of 3 indexes 5,872 3,561 

MTN - EUR 2.96 Millions February, 2008 February, 2011 Indexed to portfolio of 3 commodities 2,945 2,673 

MTN - EUR 5.235 Millions February, 2008 February, 2009 Indexed to portfolio of 10 shares 5,235 5,216 

MTN - EUR 1.25 Millions February, 2008 February, 2009 Indexed to DJ EuroStoxx 50 index 1,250 1,243 

MTN - EUR 1.5 Millions March, 2008 March, 2011 Indexed to portfolio of 3 indexes 1,400 973 

MTN - EUR 2.5 Millions March, 2008 March, 2011 Indexed to portfolio of 3 indexes 2,500 1,650 

MTN - EUR 2.5 Millions March, 2008 March, 2011 Indexed to portfolio of 3 indexes 2,500 1,711 

MTN - EUR 1.325 Millions March, 2008 March, 2010 Indexed to S&P500 1,325 1,381 


MTN - EUR 25 Millions March, 2008 March, 2016 Euribor 3M + 2.34% per year (CLN) 25,000 23,219 








MTN - EUR 1.01 Millions March, 2008 September, 2009 Indexed to DJ EuroStoxx 50 index 1,010 1,000 

MTN - EUR 1 Millions March, 2008 March, 2011 Indexed to portfolio of 3 indexes 1,000 668 

MTN - EUR 1.147 Millions March, 2008 March, 2011 Indexed to portfolio of 3 commodities 1,147 1,061 

MTN - EUR 20 Millions April, 2008 April, 2016 Euribor 3M + 2.50% per year (CLN) 20,000 20,104 




(continue)








MTN - EUR 3 Millions April, 2008 April, 2011 Indexed to portfolio of 3 indexes 3,000 2,160 




MTN - USD 2.95 Millions April, 2008 April, 2010 Indexed to underlying portfolio 1,979 1,901 

MTN - EUR 2.455 Millions April, 2008 April, 2009 Indexed to portfolio of 3 shares 2,455 447 

MTN - EUR 3.117 Millions April, 2008 April, 2009 Fixed rate of 11.50% 2,594 884 

MTN - EUR 2.5 Millions April, 2008 April, 2009 Indexed to portfolio of 3 shares 2,500 694 

MTN - EUR 1 Millions April, 2008 October, 2009 Indexed to portfolio of 3 indexes 1,000 723 

MTN - EUR 15 Millions May, 2008 May, 2016 Euribor 3M + 2.35% per year (CLN) 15,000 15,303 

MTN - EUR 12.5 Millions May, 2008 May, 2016 Euribor 3M + 2.20% per year (CLN) 12,350 12,145 

MTN - EUR 12.5 Millions May, 2008 May, 2016 Euribor 3M + 2.20% per year (CLN) 12,500 12,300 

MTN - EUR 5.078 Millions May, 2008 November, 2009 Indexed to portfolio of 3 shares 5,028 1,324 

MTN - USD 2.8 Millions May, 2008 November, 2009 Indexed to portfolio of 3 shares 1,994 1,108 

MTN - USD 3.975 Millions May, 2008 November, 2009 Indexed to portfolio of 3 shares 2,856 646 

MTN - EUR 21 Millions May, 2008 May, 2016 Euribor 3M + 1.40% per year (CLN) 21,000 19,508 

MTN - USD 3.75 Millions May, 2008 November, 2009 Indexed to portfolio of 3 shares 2,665 602 

MTN - EUR 4 Millions June, 2008 June, 2011 Indexed to portfolio of 3 indexes 4,000 2,203 

MTN - USD 4.94 Millions June, 2008 June, 2009 Index to Indice iShares MSCI 3,550 1,109 

Brazil Index Fund 

MTN - USD 2.386 Millions June, 2008 December, 2009 Indexed to portfolio of 3 shares 1,714 342 

MTN - EUR 5.964 Millions June, 2008 December, 2009 Indexed to portfolio of 3 shares 5,849 1,066 

MTN - EUR 9 Millions June, 2008 June, 2013 Indexed to DB SALSA Sect EUR index 8,955 10,267 

MTN - EUR 1.5 Millions June, 2008 June, 2009 Indexed to evolution of FX EUR/USD 1,500 1,571 

MTN - EUR 4.367 Millions June, 2008 June, 2009 Indexed to portfolio of 10 shares 4,297 4,242 

MTN - EUR 25 Millions June, 2008 May, 2009 Euribor 6 months + 0.85% per year (CLN) 24,975 25,081 

MTN - EUR 1.02 Millions June, 2008 June, 2011 Indexed to portfolio of 3 indexes 1,020 942 

MTN - EUR 21 Millions June, 2008 June, 2016 Euribor 3 months + 2.25% per year (CLN) 21,000 18,738 



MTN - PLN 20 Millions June, 2008 March, 2009 Fixed rate of 8.40% 4,815 2,455 

MTN - EUR 1.925 Millions June, 2008 June, 2009 Indexed to portfolio of 10 shares 1,925 2,021 

MTN - EUR 8 Millions July, 2008 July, 2016 Euribor 3 months + 1.57% per year (CLN) 8,000 7,570 




MTN - EUR 8 Millions July, 2008 July, 2016 Euribor 3 months + 1.50% per year (CLN) 8,000 7,409 

MTN - EUR 2.51 Millions July, 2008 January, 2010 Indexed to portfolio of 3 shares 2,510 1,022 

MTN - EUR 1.64 Millions July, 2008 July, 2011 Indexed to portfolio of 3 indexes 1,640 1,108 

MTN - EUR 7.5 Millions July, 2008 July, 2013 Euribor 3 months + 2.30% per year (CLN) 7,500 6,896 





MTN - EUR 3.302 Millions July, 2008 January, 2010 Indexed to Hang Seng China Ent Index 3,297 2,024 

MTN - USD 1.1 Millions July, 2008 January, 2010 Indexed to Hang Seng China Ent Index 790 491 


MTN - EUR 1.05 Millions July, 2008 July, 2011 Indexed to evolution of FX EUR/USD 1,050 1,114 

MTN - EUR 2.855 Millions July, 2008 July, 2009 Indexed to portfolio of 3 shares 2,780 819 

MTN - EUR 1.15 Millions July, 2008 July, 2011 Indexed to Fin Sel Sector SPDR Fund 1,150 1,184 

MTN - USD 3.24 Millions July, 2008 July, 2009 Indexed to portfolio of 3 shares 2,328 691 






MTN - EUR 1.5 Millions August, 2008 February, 2010 Indexed to portfolio of 3 indexes 1,400 1,002 

MTN - EUR 1 Millions August, 2008 August, 2011 Indexed to portfolio of 3 indexes 1,000 692 

MTN - EUR 7 Millions August, 2008 August, 2013 Euribor 3 months + 2.9471% per year (CLN) 7,000 6,643 


MTN - EUR 12 Millions August, 2008 July, 2009 1st Coupon: 6% per year (CLN); 2nd Coupon: 12,000 12,084 

Euribor 6 months + 0.85% per year (CLN) 

(continue)



MTN - EUR 4.5 Millions August, 2008 August, 2016 Euribor 3 months + 1.95% per year (CLN) 4,500 4,325 

MTN - EUR 12.5 Millions August, 2008 August, 2016 Euribor 3 months + 2.336% per year (CLN) 12,500 12,099 



MTN - USD 4.248 Millions September, 2008 September, 2010 Fixed rate of 3.5% 2,979 3,035 

MTN - EUR 2.5 Millions September, 2008 September, 2013 Euribor 3 months + 1.67% per year (CLN) 2,500 2,451 

MTN - EUR 1 Millions September, 2008 September, 2013 Euribor 3 months + 1.33% per year (CLN) 1,000 980 


MTN - EUR 10 Millions September, 2008 September, 2013 Euribor 3 months + 1.804% per year (CLN) 10,000 9,900 



MTN - EUR 9 Millions October, 2008 October, 2013 Euribor 3M + 2.08% per year (CLN) 9,000 9,122 




MTN - USD 1 Millions October, 2008 January, 2009 Indexed to shares 719 711 

MTN - EUR 7 Millions November, 2008 November, 2013 Euribor 3M + 1.27% 7,000 6,850 

MTN - EUR 8 Millions November, 2008 November, 2016 Euribor 3M + 1.32% 8,000 7,731 

MTN - EUR 1.148 Millions November, 2008 February, 2009 Fixed rate of 17.2% 1,148 1,131 

MTN - EUR 1.9 Millions December, 2008 June, 2010 Indexed to portfolio of 3 indexes 1,900 1,915 

MTN - EUR 1.9 Millions December, 2008 December, 2011 Euribor 3M + 1.5% per year (CLN) 1,900 1,896 





MTN - EUR 4 Millions December, 2008 December, 2013 Euribor 3M + 1.35% per year (CLN) 4,000 3,964 



MTN - EUR 5 Millions December, 2008 December, 2013 Euribor 3M + 1.5% per year (CLN) 5,000 4,928 


BCP Finance Bank - USD 109 M November, 2008 January, 2009 Fixed rate of 3.12% 78,321 78,007 

BCP Finance Bank - CHF 330 M December, 2008 January, 2009 Fixed rate of 1.04% 222,222 222,153 

BCP Finance Bank - JPY 125 M December, 2008 January, 2009 Fixed rate of 1.52% 198,192 197,934 

BCP Finance Bank - USD 15 M December, 2008 April, 2009 Fixed rate of 2.33% 10,778 10,678 

BCP Finance Bank - USD 20 M September, 2008 January, 2009 Fixed rate of 3.2% 14,371 14,351 

Subordinated debt: 



MBCP Ob Cx Sub 1 Serie 08/18 September, 2008 September, 2018 1st year 6%; from 2nd to 5th year: 295,000 293,648 

Euribor 6 M + 1.0%; 6th year and 

following = Euribor 6 M + 1.4% 

4,682,662 


4,743,447



2008 2007 

Euros ’000 

Bonds issued: 

Up to 3 months 189,237 28,220 

3 to 6 months 447,338 43,789 

6 to 12 months 422,952 37,403 

1 to 5 years 2,235,883 1,602,934 


3,865,891 1,712,346 

Accruals 56,262 10,991 

3,922,153 1,723,337 



3 to 6 months 10,678 - 

523,123 - 



293,648 - 

Accruals 4,523 - 

298,171 - 

35. Provisions for liabilities and charges 


2008 2007 

Euros ’000 

Provision for guarantees and other commitments 77,729 73,705 

Technical provision for the insurance activity: 

For direct insurance and reinsurance accepted: 

Unearned premium / reserve 6,147 4,626 

Life insurance 40,161 35,774 

Bonuses and rebates 1,217 3,613 

Other technical provisions 4,527 - 

Provision for pension costs 3,048 2,643 

Other provisions 89,007 126,588 

221,836 246,949


Changes in Provision for guarantees and other commitments are analysed as follows: 

2008 2007 

Euros ’000 


Transfers (869) (528) 



Amounts charged-off - (292) 

Exchange rate differences (611) 168 


Changes in Other provisions are analysed as follows: 

2008 2007 

Euros ’000 


Transfers 12,618 9,985 






The provisions were accounted in accordance with the probability of occurrence of certain contingencies related with the Group's inherent risks, which is revised in 

each reporting date in order to reflect the best estimate of the amount and probability of payment.. 

36. Subordinated debt 


2008 2007 

Euros ’000 

Bonds 2,595,812 2,922,257 

Other subordinated debt 2,848 2,871 

2,598,660 2,925,128


As at 31 December 2008, the characteristics of subordinated debt issued are analysed as follows: 


Issue date date Interest rate Euros ’000 Euros '000 

Non Perpetual Bonds 


BCP March 2011 September 2001 March 2011 Fixed rate of 6.35% 149,300 153,596 

BCP September 2011 September 2001 September 2011 Fixed rate of 6.15% 120,000 121,920 

Mbcp Ob Cx Sub 1 Serie 2008-2018 October 2008 October 2018 See reference (i) 80,256 80,256 

Bank Millennium: 

Bank Millennium December 2001 December 2011 Fixed rate of 6.360% 80,443 80,443 

Bank Millennium 2007 December 2007 December 2017 Fixed rate of 6.337% 150,604 150,604 

Banco de Investimento Imobiliário: 

BII 2004 December 2004 December 2014 See reference (ii) 15,000 14,959 


EMTN 44 Issue - 1 Tranche March 2001 March 2011 Fixed rate of 6.25% 399,967 411,930 

EMTN 44 Issue - 2 Tranche May 2001 March 2011 Fixed rate of 6.25% 199,983 205,965 

BCP Fin. Bank Ltd EMTN -295 December 2006 December 2016 See reference (iii) 368,100 367,307 

BCP Fin. Bank Ltd 2005 May 2005 September 2015 See reference (iv) 300,000 299,721 

1,886,701 

Perpetual Bonds 

BCP - Euro 200 millions September 2002 - See reference (v) 198,675 198,248 

BCP - Euro 175 millions November 2002 - See reference (vi) 175,000 175,169 

BPA 1997 September 1997 - Euribor 3 months + 0.95% 199,519 199,520 

TOPS's BPSM 1997 December 1997 - Euribor 6 months + 0.4% 88,758 89,785 

BCP Leasing 2001 December 2001 - See reference (vii) 4,986 4,986 

667,708 

Other subordinated debt 

BIM December 2000 - 50% Discount rate of 2,845 2,845 

B. Mozambique 


2,598,660 

References: (i) - 1st year 6%; 2nd to 5th year Euribor 6 months + 1%; after 6th year Euribor 6 months + 1,4% 

(ii) - Until 10th cupon Euribor 6 months + 0.40%; After 10th coupon Euribor 6 months + 0.90% 

(iii) - Euribor 3 months + 0.3% (0.80% after December 2011) 

(iv) - Euribor 3 months + 0.35% (0.85% after June 2010) 

(v) - Until 40th coupon 6.130625%; After 40th coupon Euribor 3 months + 2.4% 

(vi) - Until 40th coupon 5.41%; After 40th coupon Euribor 3 months + 2.4% 

(vii) - Until 40th coupon Euribor 3 months + 1.75%; After 40th coupon Euribor 3 months + 2.25% 

The analysis of the subordinated debt by the period to maturity, is as follows: 

2008 2007 

Euros ’000 

Up to 1 year - 29,907 

1 to 5 years 973,854 941,845 

More than 5 years 912,847 1,261,442 

Undetermined 670,553 646,917 

2,557,254 2,880,111 

Accruals 41,406 45,017 

2,598,660 2,925,128


37. Other liabilities 


2008 2007 

Euros ’000 

Creditors: 

Suppliers 66,436 122,551 

From factoring operations 29,372 40,533 


Other creditors 338,353 440,935 


Other amounts payable 103,741 177,675 

Deferred income 1,750 29,345 

Holiday pay and subsidies 66,330 65,432 

Other administrative costs payable 5,583 4,205 

Amounts payable on trading activity 179,384 107,422 

Other liabilities 498,595 346,745 

1,383,633 1,399,757 

The balance Other liabilities includes the amount of Euros 73,540,000 (31 December 2007: Euros 95,139,000), related to the obligations with retirement benefits 

already recognised in Staff costs, payable to previous members of the Board of Directors. The referred obligations are not covered by the Pension Fund of the Group, 

and therefore correspond to amounts payable by the Group. 

38. Share capital and preference shares 

The share capital of the Bank, amounts to Euros 4,694,600,000 and is represented by 4,694,600,000 shares with a nominal value of 1 Euro each, which is fully paid. 

In May 2008, the Banco Comercial Português, S.A. increased its share capital from Euros 3,611,329,567 to Euros 4,694,600,000 through the issue of 1,083,270,433 

shares pursuant to the exercise of shareholders proportional rights with a nominal value of 1 Euro per share and a subscription price of 1.2 Euro per share. 

The balance Preference shares corresponds to two issues by BCP Finance Company which according to IAS 32 and in accordance with the accounting policy 

presented in note 1 h), were considered equity instruments. The issues are analized as follows: 

– 5,000,000 Perpetual Non-cumulative Guaranteed Non-voting Preference Shares with par value Euros 100 each, issued by BCP Finance Company on 9 June, 2004, 

amounting to Euros 500,000,000, issued to redeem the 8,000,000 Non-cumulative Guaranteed Non-voting Preference Shares of par value Euros 50 each, issued by 

BCP Finance Company on 14 June, 1999, amounting to Euros 400,000,000. 

– 10,000 preference shares with par value of Euros 50,000 each without voting rights issued in 13 October 2005, in the amount of Euros 500,000,000, issued to finance 

the early redemption of the 6,000,000 preference shares of Euros 100 each, in the amount of Euros 600,000,000, issued by BCP Finance Company at 28 September 

2000. 

39. Legal reserve 

Under Portuguese legislation, the Bank is required to set-up annually a legal reserve equal to a minimum of 10 percent of annual profits until the reserve equals the 

share capital. Such reserve is not normally distributable in cash. In accordance with the proposal for application of the results approved in the General Shareholders 

meeting held on 27 May, 2008, the Bank increased the Legal reserves in the amount of Euros 33,884,000. As referred in note 40, part of this amount was transferred 

to the balance "Other reserves", in accordance with the proposal for application mentioned above. 

In accordance with current legislation, the Group companies must set-up annually a reserve with a minimum percentage between 5 and 20 percent of their net annual 

profits depending on the nature of their economic activity.


40. Fair value reserves, other reserves and retained earnings 


2008 2007 

Euros ’000 

Fair value reserves 

Financial instruments available for sale 201,635 219,752 

Cash-flow hedge 5,810 (272) 

Tax 

Financial instruments available for sale 8,252 (1,034) 

Cash-flow hedge (1,104) 52 

214,593 218,498 

Reserves and retained earnings: 

Legal reserve 380,291 477,202 

Statutory reserve - 84,000 

Interim dividends - (133,619) 

Other reserves and retained earnings 2,460,365 1,016,989 

Goodwill arising on consolidation (2,883,580) (2,883,580) 

Exchange differences arising on consolidation (61,731) 23,836 

Other reserves arising on consolidation (169,967) (183,532) 

(274,622) (1,598,704) 

The legal reserve changes are analysed in note 39. The Fair value reserves correspond to the accumulated fair value changes of the financial instruments available for 

sale and cash flow hedge, in accordance with the accounting policy presented in note 1 d). 

The balance Statutory reserves correspond to a reserve to stabilise dividends that, according with the Bank’s By-Laws can be distributed. 

In accordance with the proposal for application of the results approved in the General Shareholders meeting held on 27 May, 2008, the balances Share Premium in 

the amount of Euros 881,707,000, Other reserves in the amount of Euros 1,176,854,000, Statutory reserves in the amount of Euros 84,000,000 and the amount of 

Euros 130,795,000 from Legal reserves were allocated to Other reserves and retained earnings. 

The balance Reserves and Retained Earnings includes, as at 1 January 2006, a restatement in the amount of Euros 220,500,000 (net of deferred tax) resulting from 

the decision taken by the Executive Board of Directors of recording a provision regarding an asset booked on the consolidated financial statements. 

The gross movements in Fair value reserves for financial instruments available for sale, during 2008 are analysed as follows: 

Euros ’000 

Balance on Impairment Balance on 

1 January Revaluation in results Sales 31 December 

Eureko, B.V. 249,488 7,227 - - 256,715 

Others (29,736) (16,800) 2,744 (11,288) (55,080) 

219,752 (9,573) 2,744 (11,288) 201,635 

As refered in note 22 the position held in Eureko B.V. is re-valuated on an annual basis considering independent and external valuations obtained in the first quarter 

of each year. 

The balance Others includes a negative amount of Euros 27,864,000 (31 December 2007: Euros 43,389,000) related to the appropriation of 49% of the fair value 

reserves of Millenniumbcp Fortis. 


Euros ’000 



Eureko, B.V. 188,000 61,488 - - 249,488 

EDP – Energias de Portugal 131,502 41,819 - (173,321) - 

Banco Sabadell, S.A. 138,932 (22,045) - (116,887) - 

Banco BPI, S.A. - (79,838) 79,838 - - 

Others 5,086 (51,982) 16,236 924 (29,736) 

463,520 (50,558) 96,074 (289,284) 219,752 

During 2007, and as referred in note 7 and 22, the Group sold the investments in Banco Sabadell and in EDP - Energias de Portugal. The potential gains previously 

recorded as fair value reserves, on a consolidated bases, in the amounts of Euros 116,887,000 and Euros 173,321,000, respectively were recognized in results in 2007 

as referred in note 7.


41. Treasury stock 


Euros ’000 

2008 2007 

Net book Number of Average book Net book Number of Average book 

value securities value value securities value 

Banco Comercial Português, S.A. shares 13,248 15,820,158(*) 0.84 7,377 2,526,439 2.92 

Other trasury stock 45,383 51,059 

58,631 58,436 

Treasury stock refers to own securities held by the companies included in the consolidation perimeter. These securities are held within the limits established by the 

By-Laws and "Código das Sociedades Comerciais". 

(*) As at 31 December 2008, this balance includes 10,322,555 shares (31 December 2007: 1,343,631 shares) owned by clients which acquisition was financed by the 

Bank. Considering that for these clients that there is evidence of impairment, under the IAS 32/39 the shares of the Bank owned by these clients were, only for 

accounting purposes and in respect for this standard, considered as treasury stock. 

42. Minority interests 


Balance 

Euros ’000 

Statement of Income 

2008 2007 2008 2007 

Bank Millennium, S.A. 233,722 241,839 40,668 42,016 

BIM – Banco Internacional de Moçambique 49,702 35,437 17,668 14,232 

Other subsidiaries 4,320 4,297 (1,507) (889) 

287,744 281,573 56,829 55,359 

The movements of the minority interests are analysed as follows: 

2008 2007 

Euros ’000 


Exchange differences (36,039) 14,608 

Net income attributable to minority interests 56,829 55,359 

Dividends (19,505) (15,785) 

Other 4,886 1,343 

287,744 281,573 

43. Guarantees and future commitments 

Guarantees and future commitments are analysed as follows: 

2008 2007 

Euros ’000 

Guarantees granted 8,613,752 8,036,989 

Guarantees received 26,814,666 23,562,219 

Commitments to third parties 12,923,843 13,771,122 

Commitments from third parties 12,694,394 11,699,959 

Securities and other items held for safekeeping on behalf of customers 139,668,817 143,768,679 

Securities and other items held under custody by the Securities Depository Authority 126,742,438 124,323,617 

Other off balance sheet accounts 149,920,250 124,604,829


The amounts of Guarantees granted and Commitments to third parties are analysed as follows: 

Euros ’000 

2008 2007 

Guarantees granted: 

Guarantees 7,849,130 7,422,260 

"Stand-by" letter of credit 258,779 183,280 

Open documentary credits 368,324 275,591 

Bails and indemnities 137,519 155,858 

8,613,752 8,036,989 

Commitments to third parties 

Irrevocable commitments 

Time deposits contracts 404,475 1,596,108 

Irrevocable credit lines 3,480,464 3,821,477 

Securites subscription 44,191 46,786 

Other irrevocable commitments 373,346 318,151 

Revocable commitments 

Revocable credit lines 6,743,785 5,673,652 

Bank overdraft facilities 1,864,466 2,314,043 

Other revocable commitments 13,116 905 

12,923,843 13,771,122 

Within its normal business, the Group offers certain financial products that traditionally include credit related instruments accounted in off-balance sheet accounts 

and whose risks are therefore not partially or totally reflected on the consolidated financial statements. 

The guarantees granted by the Group may or may not be related with loan transactions, where the Group grants a guarantee in connection with a loan granted to 

a client by a third entity. According with its specific characteristics it is expected that some of these guarantees expire without being executed and therefore these 

transactions do not necessarily represent a cash-outflow. 

Stand-by letters and open documentary credits aim to ensure the payment to third parties from commercial deals with foreign entities and therefore financing the 

shipment of the goods. Therefore the credit risk of these transactions is limited once they are collateralized by the shipped goods and are generally short term 

operations. 

Irrevocable commitments are non-used parts of credit facilities granted to corporate or retail customers. Many of these transactions have a fixed term and a variable 

interest rate and therefore the credit and interest rate risk is limited. 

The financial instruments accounted as Guarantees and other commitments are subject to the same approval and control procedures applied to the credit portfolio, 

namely regarding the analysis of objective evidence of impairment, as described in note 1c). The maximum credit exposure is represented by the nominal value that 

could be lost related to guarantees and commitments undertaken by the group in the event of default by the respective counterparties, without considering potential 

recoveries or collaterals. 

Considering their nature, as described above, no material losses are anticipated as a result of these transactions. 

44. Assets under management 

In accordance with article 29 of Decree-Law 252/03 of October 17, which regulates the investment organisms, the funds managing companies together with the 

custodian Bank of the Funds, are jointly responsible to all the funds investors, for the compliance of all legal obligations arising from the applicable Portuguese legislation 

and in accordance with the regulations of the funds. The total value of the funds managed by the Group companies is analysed as follows: 

2008 2007 

Euros ’000 

Banco Comercial Português, S.A. 348,944 673,447 

Millennium bcp - Gestão de Fundos de Investimento, S.A. 2,257,207 5,175,837 

BII Investimentos International, S.A. 332,464 650,705 

Interfundos Gestão de Fundos de Investimento Imobiliários, S.A. 1,143,160 320,233 

Millennium TFI S.A. 412,909 1,435,916 

4,494,684 8,256,138


The Group provides custody, trustee, corporate administration, investment management and advisory services to third parties, which involve the Group making allocation 

and purchase and sale decisions in relation to a wide range of financial instruments. Those assets held in a fiduciary capacity are not included in the financial statements. 

For certain services are set objectives and levels of return for assets under management. The total assets under management by Group companies is analysed as follows: 

2008 2007 

Euros ’000 

Investment funds 3,002,580 6,168,806 

Real-estate investment funds 1,143,160 1,413,885 

Wealth management 348,944 673,447 

Assets under deposit 132,075,555 133,359,987 

136,570,239 141,616,125 

45. Distribution of profit 

The distribution of profit to shareholders and employees, is analysed as follows: 

2008 2007 

Euros ’000 

Dividends paid by Banco Comercial Português, S.A. 

Dividends declared and paid related to previous year - 173,344 

Interim dividend for the year - 133,619 

- 306,963 

46. Relevant events occured during 2008 

Banco Comercial Português, S.A. share Capital increase from Euros 3,611,329,567 to Euros 4,694,600,000 

In May 2008, the Bank executed the share capital increase, corresponding to the issue of 1,083,270,433 ordinary shares with a nominal value of 1 Euro each. After this 

increase the Banco Comercial Português, S.A. share capital amounts to Euros 4,694,600,000. 

Third issue of Coverd Bonds 

Banco Comercial Português, S.A. performed in May 2008 the third issue of covered bonds in the amount of Euros 1,000 million and maturity of three years. This issue 

was performed under the BCP Covered Bonds Programme, established in June 2007. The interest rate is 4.875%. 

Sale of the stake in Banco BPI 

Banco Comercial Português S.A. established in December 2008 a contract for the sale of 87,214,836 shares, representing 9.69%, of Banco BPI share capital. With 

this contract BCP has agreed to sell the BPI shares for a price of euros 1.88 a share. This sale is subject to approval by the Bank of Portugal, under the terms of the 

General Banking and Financial Institutions Law. As a result of the execution of this contract Banco Comercial Português ceased to hold a qualified position in Banco 

BPI, S.A. 

Banco Comercial Português, S.A. informs about Millennium Bank AS in Turkey 

Banco Comercial Português following the analysis of its portfolio of international operations, and taking into consideration the strategy of focusing on priority markets, 

initiated, with the support of external advisors, a process to ascertain the different options, in relation to Millennium Bank AS, in Turkey. 

Merger by incorporation BCP Participações Financeiras, SGPS, Sociedade Unipessoal, Lda 

Banco Comercial Português, S.A. (BCP), finalized, as at 31 December 2008, the merger of its fully-owned subsidiary BCP Participações Financeiras, SGPS, Sociedade 

Unipessoal, Lda (BCP PF) into BCP, through the transfer of the total assets of BCP PF. 

Agreement with Sonangol and Banco Privado Atlântico 

Following the partnership agreement established in December 2007 and the agreements signed in May 2008 with Sonangol - Sociedade Nacional de Combus tíveis 

de Angola, Empresa Pública ("Sonangol") and Banco Privado Atlântico S.A. ("BPA"), Banco Comercial Português, S.A. has agreed on the remaining elements of the 

transactions. 

The agreement sets the price and the conditions under which Sonangol and BPA will take 29.9% and 20% positions, respectively, in the capital of Banco Millennium 

Angola, as well as the price and the conditions under which Banco Millennium Angola will acquire a 10% position in BPA. It is estimate that these opera tions have 

accounting impacts during 2009. 

Banco Comercial Português and Banco Millennium bcp Investimento, S.A. merger process 

Banco Comercial Português, S.A. decided in December 2008 to resume the process of merger by incorporation of Banco Millennium bcp Investimento, S.A., in order 

to directly pursue the investment banking activity. 

The merger process should be concluded during 2009 and will not impact the Group's consolidated accounts, as the company is a wholly owned subsidiary.

Annual Report Volume II Financial Statements 2008 Banco Comercial Português 109 

47. Fair value 

Fair value is based on market prices, whenever these are available. If market prices are not available, as occurs regarding many products sold to clients, fair value is 

estimated through internal models based on cash-flow discounting techniques. Cash-flows for the different instruments sold are calculated according with its financial 

characteristics and the discount rates used include both the interest rate curve and the current conditions of the pricing policy in the Group. 

Therefore, the fair value obtained is influenced by the parameters used in the evaluation model that, necessarily have some degree of judgement and reflect exclusively 

the value attributed to different financial instruments. However it does not consider prospective factors, like the future business evolution. Therefore the values 

presented cannot be understood as an estimate of the economic value of the Group. 

The main methods and assumptions used in estimating the fair value for the financial assets and financial liabilities of the Group are presented as follows: 

Cash and deposits at central banks, Loans and advances to credit institutions repayable on demand and Amounts owed to other credit institutions 

Considering the short term of these financial instruments, the amount in the balance sheet is a reasonable estimate of its fair value. 

Other loans and advances to credit institutions, Amounts owed to other credit institutions from Inter-bank Money Market transactions and Assets with repurchase agreements 

The fair value of these financial instruments is calculated discounting the expected principal and interest future cash flows for these instruments, considering that the 

payments of the instalments occur in the contractually defined dates. The discount rate used reflects the current conditions applied by the Group in identical 

instruments for each of the different maturities. 

The discount rate include the market rates for the residual maturity date (rates from the monetary market or from the interest rate swap market, at the end of the 

year). As at 31 December 2008, the average discount rate was 3.22% for loans and advances and 3.08% for the deposits. As at 31 December 2007 the rates were 

4.20% and 4.66%, respectively. 

Financial assets held for trading (except derivatives), Financial liabilities held for trading (except derivatives), Financial assets available for sale and Other financial liabilities held 

for trading at fair value through profit or loss 

These financial instruments are accounted at fair value. Fair value is based on market prices, whenever these are available. If market prices are not available, fair value 

is estimated through numerical models based on cash-flow discounting techniques, using the interest rate curve adjusted for factors associated, predominantly the 

credit risk and liquidity risk, determined in accordance with the market conditions and time frame. 

Interest rates are determined based on information disseminated by the suppliers of content financial - Reuters and Bloomberg - more specifically as a result of prices 

of interest rate swaps. The values for the very short-term rates are obtained from similar source but regarding interbank money market. The interest rate curve obtained 

is calibrated with the values of interest rate short-term futures. Interest rates for specific periods of the cash flows are determined by appropriate interpolation 

methods. The same interest rate curves are used in the projection of the non-deterministic cash flows such as indexes. 

When optionality is involved, the standard templates (Black & Scholes, Black, Ho and others) considering the volatility areas applicable are used. Whenever there are 

no references in the market of sufficient quality or that the available models do not fully apply to meet the characteristics of the financial instrument, it is applied specific 

quotations supplied by an external entity, typically a counterparty of the business. 

In case of shares not listed, they are recognized at historical cost when there is no available market value and it is not possible to determine reliably its fair value. 

Financial assets held to maturity 

These financial instruments are accounted at amortized cost net of impairment. Fair value is based on market prices, whenever these are available. If market prices 

are not available, fair value is estimated through numerical models based on cash-flow discounting techniques, using the interest rate curve adjusted for factors 

associated, predominantly the credit risk and liquidity risk, determined in accordance with the market conditions and time frame. 

Hedging and trading derivatives 

All derivatives are recorded at fair value. 

In case of those who are quoted in organised markets it is used its market price. As for derivatives traded " Over-the-counter", it is applied methods based on 

numerical cash-flow discounting techniques and models for assessment of options considering variables of the market, particularly the interest rates on the instruments 

in question, and where necessary, their volatilities. 


of interest rate swaps. The values for the very short-term rates are obtained from similar source but regarding interbank money market. The interest rate curve obtai - 

ned is calibrated with the values of interest rate short-term futures. Interest rates for specific periods of the cash flows are determined by appropriate interpolation 

methods. 

The interest rate curves are used in the projection of the non-deterministic cash flows such as indexes. 

Loans and advances to customers with defined maturity date 

The fair value of these instruments is calculated discounting the expected principal and interest future cash flows for these instruments, considering that the payments 

of the instalments occur in the contractually defined dates. The discount rate used reflects the current conditions applied by the Group in similar instruments for each of 

the homogeneous classes of this type of instrument and with similar maturity. The discount rate includes the market rates for the residual maturity date (rates from 

the monetary market or from the interest rate swap market, at the end of the year) and the spread used at the date of the report, which was calculated from the 

average production of the last three months of the year. For 31 December 2008, the average discount rate was 4.83% and for December 2007 was 6.03%. The 

calculations also includes the credit risk spread.


Loans and advances to customers without defined maturity date 

Considering the short maturity of these financial instruments, the conditions of the portfolio are similar to conditions used at the date of the report. Therefore the 

amount in the balance sheet is a reasonable estimate of its fair value. 

Deposits from customers 

The fair value of these financial instruments is calculated by discounting the expected principal and interest future cash flows, considering that payments occur in the 

contractually defined dates. The discount rate used reflects the current conditions applied by the Group in identical instruments with a similar maturity. The discount 

rate used reflects the actual rates of the Group to this type of funds and with similar residual maturity date. The discount rate includes the market rates of the resi - 

dual maturity date (rates of monetary market or the interes rate swap market, at the end of the year) and the spread of the Group at the date of the report, which 

was calulated from the average prodution of the last three months of the year. For 31 December 2008, average discount rate was of 4.11% and for December 2007 

was 4.51%. 

Debt securities issued and Subordinated debt 

For these financial instruments, the fair value was calculated for components that are not yet reflected in the balance sheet. The instruments that are at fixed rate and 

for which the Group adopts "hedge-accounting", the fair value related to the interest rate risk is already recorded. 

For the fair value calculation, it were considered other components of risk in addition to the interest rate risk already recorded. The fair value is based on market 

prices, whenever these are available. If market prices are not available, fair value is estimated through numerical models based on cash-flow discounting techniques, 

using the interest rate curve adjusted by associated factors, predominantly the credit risk and trading margin, the latter only in the case of issues placed for non-ins - 

titutional customers of the Group. As original reference, the Group applies the curves resulting from the interest rate swaps markets for each specific currency. The 

credit risk (spread credit) is represented by an excess from the curve of interest rate swaps established specifically for each term and class of instruments based on 

the market prices on equivalent instruments. 

For own emissions placed among non institutional costumers of the Group, it was added one more differential (spread trade), which represents the margin between 

the financing cost in the institutional market and the cost obtained by distributing the respective instrument in the commercial network owned. 

The average reference rates of the curve of income obtained from quotations of the market in EUR and used in the calculation of the fair value of debt issued was 

6.39% (31 December 2007: 5.60%) for subordinated issues and 4.82% (31 December 2007: 5.22%) senior and collateralized issues. 

For financial liabilities with embedded derivatives separable and for which the Group makes revaluation, the calculation of fair value focused on all the components 

of these instruments, so that the difference found as at 31 December 2008, an increase in the amount of Euros 358,543,000 (31 December 2007: Euros 33,130,000), 

which correspond to an increase in financial liabilities, includes a receivable amount of Euros 3,977,000 (31 December 2007: a payable amount of Euros 45,371,000) 

which are recorded in financial assets and liabilities held for trading and reflect the fair value of derivatives embedded. 

As at 31 December 2008, the following table presents the values of the interest rates used in the clearance of the curves interest rate of major currencies, including 

EUR, USD, GBP and PLN used to determine the fair value of the assets and liabilities of the Group: 

Currencies 

EUR USD GBP PLN 

1 day 1.98% 0.18% 1.50% 5.49% 

7 days 2.20% 0.43% 1.85% 5.36% 

1 month 2.50% 0.50% 1.95% 5.51% 

2 months 2.76% 1.40% 2.45% 5.64% 

3 months 2.90% 1.68% 2.55% 5.78% 

6 months 2.98% 1.88% 2.69% 5.85% 

9 months 2.99% 2.10% 2.78% 5.87% 

1 year 3.05% 2.22% 2.93% 4.40% 

2 years 2.68% 1.44% 2.60% 4.30% 

3 years 3.03% 1.73% 2.85% 4.21% 

5 years 3.23% 2.13% 3.15% 4.16% 

7 years 3.46% 2.36% 3.31% 4.25% 

10 years 3.74% 2.57% 3.45% 4.38% 

15 years 3.90% 2.82% 3.67% 4.38% 

20 years 3.85% 2.78% 3.58% 4.23% 

30 years 3.54% 2.75% 3.32% 3.95%


The next table shows the main adjustments to the financial assets and liabilities of the Group that do not represent its fair value: 

2008 

Held for Available Amortized Book Fair 

Trading for sale cost Others value value 

Cash and deposits at central banks - - - 2,064,407 2,064,407 2,064,407 


Repayable on demand - - - 1,048,348 1,048,348 1,048,348 

Other loans and advances - - 2,892,345 - 2,892,345 2,903,292 

Loans and advances to customers - - 75,165,014 - 75,165,014 74,324,137 

Financial assets held for trading 3,903,267 - - - 3,903,267 3,903,267 

Financial assets available for sale - 1,714,178 - - 1,714,178 1,714,178 

Assets with repurchase agreement - - 14,754 - 14,754 14,754 

Hedging derivatives 117,305 - - - 117,305 117,305 

Held to maturity - - 1,101,844 - 1,101,844 1,083,727 

Investments in associated companies - - - 343,934 343,934 343,934 

4,020,572 1,714,178 79,173,957 3,456,689 88,365,396 87,517,349 

Deposits from central banks - - 3,342,301 - 3,342,301 3,342,301 

Deposits from other credit institutions - - 5,997,066 - 5,997,066 6,007,949 

Amounts owed to customers - - 44,907,168 - 44,907,168 44,932,678 

Debt securities - - 20,515,566 - 20,515,566 20,157,023 

Financial liabilities held for trading 2,138,815 - - - 2,138,815 2,138,815 

Other financial liabilities held for trading 

at fair value through profit or loss 6,714,323 - - - 6,714,323 6,714,323 


Subordinated debt - - 2,598,660 - 2,598,660 2,361,892 

9,204,098 - 77,360,761 - 86,564,859 86,005,941 

Euros ’000 

Euros ’000 

2007 





Repayable on demand - - - 820,699 820,699 820,699 





Assets with repurchase agreement - - 8,016 - 8,016 8,016 


Investments in associated companies - - - 316,399 316,399 316,399 

3,215,961 4,418,534 72,140,503 3,095,337 82,870,335 83,085,903 

Deposits from central banks - - 784,347 - 784,347 784,347 






at fair value through profit or loss 1,755,047 - - - 1,755,047 1,755,047 



3,176,080 - 78,402,711 - 81,578,791 81,534,238


48. Pensions 

The Group assumed the liability to pay to their employees, pensions on retirement or disabilities and other responsibilities. These liabilities also comply with the terms 

of the 'Acordo Colectivo de Trabalho do Sector Bancário' (ACT). The Group's pension obligations and other liabilities are covered through the Banco Comercial 

Português Pension Fund managed by PensõesGere - Sociedade Gestora de Fundo de Pensões, S.A. At 31 December, 2008 and 2007 the number of participants 

covered by this pension plan is analysed as follows: 

2008 2007 

Number of participants 

Pensioners 15,591 15,551 

Employees 10,668 10,777 

26,259 26,328 

In accordance with the accounting policy, described in note 1 w), the pension obligation and the respective funding for the Group as at 31 December, 2008 and 2007 

based on an actuarial valuation made using the projected unit credit method are analysed as follows: 

Euros ’000 

2008 2007 2006 2005 2004 

Projected benefit obligations 

Pensioners 4,415,254 4,525,481 4,466,823 4,256,913 3,738,983 

Employees 1,307,655 1,353,257 1,248,536 1,182,435 811,789 

5,722,909 5,878,738 5,715,359 5,439,348 4,550,772 

Seniority premium 54,916 53,723 51,526 52,670 52,038 

Value of the Pension Fund (5,322,224) (5,616,436) (5,578,010) (5,015,958) (3,659,282) 

Provisions for defined 

contributions complementary plan (12,812) - - - - 

Liabilities not financed by the Pension Fund 442,789 316,025 188,875 476,060 943,528 

Liabilities covered outside the Pension Fund (445,453) (456,598) (461,376) (429,796) (352,098) 

(Surplus) / Deficit (2,664) (140,573) (272,501) 46,264 591,430 

As at 31 December 2008, the value Projected benefit obligations includes the amount of Euros 319,826,000 (31 December 2007: Euros 336,488,000) related with 

the obligations with past services for the Complementary Plan which are totally funded. 

Following the decision of the Executive Board of Directors dated 21 September 2006, the ‘Complementary Pension Plan’ which was established in the ‘Plano de Pensões 

do Fundo de Pensões do Grupo Banco Comercial Português’ (Defined benefit), will be funded through a defined contribution. However, the employees hired until 

the reference date of this decision maintain the benefits that they were entitled to under the previous plan (‘Defined Benefit’). This defined benefit is guaranteed by 

the Group company to which they are contractually related at the date of retirement. 

On this basis, Group companies have, annually, to fund the Pension Fund in order to cover this benefit, in case of a deficit. The amount is determined in accordance 

with the actuarial valuation performed each year, and funding will be performed annually. 

The change in the present value of obligations during 2008 is analysed as follows: 

Euros ’000 

2008 2007 

Extra-Fund 

Pension Benefit Seniority Other retirement 

obligations premium Benefits Total Total 

Balance as at 1 January 5,475,863 53,723 402,875 5,932,461 5,766,885 

Service cost 84,621 3,576 1,920 90,117 78,744 

Interests costs 280,147 2,747 20,450 303,344 266,861 

Actuarial (gains) and losses 

Not related with changes in actuarial assumptions 24,031 - 3,277 27,308 69,252 

Arising from changes in actuarial assumptions (267,184) - (22,764) (289,948) 10,263 

Payments (285,217) (2,280) (23,519) (311,016) (301,546) 

Early retirement programmes 2,633 - 3,092 5,725 31,091 

Contributions of employees 11,210 - - 11,210 11,266 

Other charges 6,269 (2,850) 5,205 8,624 (355) 

Balance as at 31 December 5,332,373 54,916 390,536 5,777,825 5,932,461


As at 31 December 2008, the value of the pensions paid by the Pension Fund amounted to Euros 285,217,000 (31 December 2007: Euros 275,014,000). 

The elements of the assets of the Pension Fund are analysed as follows: 

2008 2007 

Euros ’000 

Variable income securities: 

Shares 1,075,404 1,939,000 

Bonds 959,183 1,249,684 

Fixed income securities 1,156,162 759,492 

Premises 382,697 387,541 

Investment fund units 921,521 1,086,818 

Loans and advances to credit institutions 818,805 142,300 

Others 8,452 51,601 

Balance as at 31 December 5,322,224 5,616,436 

The balance Premises includes the buildings owned by the Fund and used by the Group companies that as at 31 December 2008, amounted to Euros 379,206,000 

(31 December 2007: Euros 383,699,000). The securities issued by companies of the Group accounted in the portfolio of the Fund are analysed as follows: 

2008 2007 

Euros ’000 

Fixed income securities 364,388 156,068 

Variable income securities 61,497 229,107 

425,885 385,175 

The change in the fair value of assets of the Fund during 2008 and 2007 is analysed as follows: 

2008 2007 

Euros ’000 

Balance as at 1 January 5,616,436 5,578,010 

Expected return on plan assets 293,182 289,552 

Actuarial gains / (losses) (1,090,002) (80,358) 

Contributions to the Fund 776,602 93,731 

Payments (285,217) (275,014) 

Contributions of employees 11,210 11,266 

Other charges 13 (751) 

Balance as at 31 December 5,322,224 5,616,436


The contributions made by the Group to the Pension Fund during 2008 did not result in any actuarial gain or loss, since they were made in cash. The evolution of 

the fair value of the securities related with those asset contributions made in 2006 and 2005 that resulted in significant actuarial gains or losses in 2007 and 2006 is 

presented as follows: 

Euros ’000 

Potential and realized Gains / (Losses) 

2007 2006 

Issuer 

Contribution 

year 

Contribution 

Value 

Year Acumulated Year Acumulated 

Friends Provident PLC (i) 2005 82,531,602 (32,333) (10,428) 14,873 21,905 

Comercial Imobiliária (ii) 2005 200,000,000 (2,866) (115,866) (113,000) (113,000) 

EDP - Energia de Portugal (i) 2005 164,228,497 49,742 188,705 97,905 138,963 

Banca Intesa Spa (i) 2005 486,656,411 (54,799) 187,128 171,248 241,927 


Banco de Sabadell (i) 2006 20,467,500 (803) (14,910) 2,205 (14,108) 

Banco Sabadell (i) 2006 83,079,500 (2,622) (64,925) 7,203 (62,304) 

(34,546) 190,294 198,414 224,838 

Type: 

(i) - shares 

(ii) - commercial paper 

As referred in note 54, the Pensions Fund registered an actuarial loss in the approximate amount of Euros 115.000.000 related to the commercial paper issued by 

Comercial Imobiliária. The amount of the actuarial loss, net of amortizations, as at 31 December 2008, is Euros 98.000.000. The amount will be amortized by the 

remaining term of 17 years with a annual amortization of approximatly Euros 5,750,000. 

The change in the amounts payable to the Pension Fund related with the obligations, during 2008 and 2007 is analysed as follows: 

Euros ’000 

(Surplus) / Deficit 

2008 2007 

Extra-fund 



Balance as at 1 January (140,573) 53,723 402,875 316,025 188,875 

Service cost 84,621 3,576 1,920 90,117 78,744 

Interest costs 280,147 2,747 20,450 303,344 266,861 

Cost with early retirement programs 8,890 - 8,297 17,187 31,091 

Expected return on plan assets (293,182) - - (293,182) (289,552) 


Not related with changes in actuarial assumptions 1,114,033 - 3,277 1,117,310 149,610 


Contributions to the Fund (776,602) - - (776,602) (93,731) 

Benefits paid - (2,280) (23,519) (25,799) (26,532) 

Other charges (12,813) (2,850) - (15,663) 396 

Balance as at 31 December (2,663) 54,916 390,536 442,789 316,025 

The contributions to the Pension Fund, made by the companies of the Group, are analysed as follows: 

2008 2007 

Euros ’000 

Other securities - 78,735 

Cash 776,602 14,996 

776,602 93,731


In accordance with IAS 19, deferred actuarial losses, including the corridor, as at 31 December 2008 are analysed as follows: 

Corridor 

Euros ’000 


Amount in excess 

of the Corridor 

Balance as at 1 January 2008 587,876 765,032 

Actuarial gains and losses 

Not related with changes in actuarial assumptions - 1,117,310 

Arising from changes in actuarial assumptions - (289,948) 

Amortisation of actuarial gains and losses - (38,260) 

Other variations - (2,065) 

Variation in the corridor (15,585) 15,585 

Balance as at 31 December 2008 572,291 1,567,654 

As at 31 December 2008, considering the value of the actuarial gains and losses registered in the calculation of the benefit obligations and in the value of the Fund, 

the value of the corridor calculated in accordance with paragraph 92 of IAS 19, amounted to Euros 572,291,000 (31 December 2007: Euros 587,876,000). 

As at 31 December 2008, the net actuarial gains and losses in excess of the corridor amounted to Euros 1,567,654,000 (31 December 2007: Euros 765,032,000) 

and will be amortized against staff costs over a 20 year period considering the year-end balance of the previous year, as referred in the accounting policy presented 

in note 1 w). 

In 2008, the Group accounted as pension costs the amount of Euros 154,940,000 (31 December 2007: Euros 135,672,000). The cost of the year is analysed as 

follows: 

Euros ’000 

2008 2007 

Pension 

and other Seniority 

Benefits Costs premium Total Total 

Service cost 86,541 3,576 90,117 78,744 

Interest costs 300,597 2,747 303,344 266,861 

Expected return on plan assets (293,182) - (293,182) (289,552) 

Amortization of actuarial gains and losses 38,260 - 38,260 34,412 

Costs with early retirement programs 5,725 - 5,725 31,091 

Reversal of the actuarial losses from the responsibilities 

of early retirement 'curtailment' 2,064 - 2,064 13,720 

Other charges 11,462 (2,850) 8,612 396 

Cost of the year 151,467 3,473 154,940 135,672 

The balance Other charges includes the amount of 11,462,000 Euros relating to the transfer of responsibilities in the Bank's balance sheet as retirement benefits and 

related members of the Executive Board of Directors who were retired in 2007. This transfer did not cause any increase in costs in the profit and loss account of the 

year in 2008 as it had already been accrued for in 2007. 

As referred in note 37, as at 31 December 2008, the Group accounted the amount of Euros 73,540,000 (31 december 2007: Euros 95,139,000), related to the obli - 

gations with pensions already recognised in Staff costs, related to previous members of the Board of Directors. The referred obligations are not covered by the Pension 

Fund of the Group, and correspond to amounts payable by the Bank.


The movement of the amounts of the responsibilities with retirement pensions payable to former members of the Board of Directors is analysed as follows: 

Euros ’000 

Balance as at 31 December 2007 95,139 

Purchase of insurance policies (13,052) 

Write-back (6,430) 

Payments (2,117) 


Considering the market indicators, particularly the estimations of the inflation and the long term interest rate for Euro Zone as well as the demographic characteristics 

of the participants, the Group changed the actuarial assumptions used for the calculation of the liabilities for the pension obligations with reference to 31 December 

2008. The comparative analysis of the actuarial assumptions is shown as follows: 

Banco Comercial Português Fund 

2008 2007 

Increase in future compensation levels 3.25% 3.25% 

Pensions increase rate 2.25% 2.25% 

Projected rate of return of fund assets 5.5% 5.5% 

Discount rate 5.75% 5.25% 

Mortality tables 

Men TV 73/77 - 1 year TV 73/77 - 1 year 

Women TV 88/90 - 2 years TV 88/90 

Disability rate 0% 0% 

Turnover rate 0% 0% 

Costs with health benefits increase rate 6.5% 6.5% 

The assumptions used in the calculation of the pension liabilities are in accordance with the requirements of IAS 19. No disability decreases are considered in the 

calculation of the total liabilities. 

The projected rate of return of the Funds assets was determined on a consistent way according with current market conditions and with the nature and return of 

the plan assets. 

Net actuarial losses related to the diference between the actuarial assumptions used for the estimation of the pension liabilities and the actual liabilities as well as the 

impact of changing assumptions, for the year ended 31 December 2008 amounted to Euros 827,363,000 (31 December 2007: actuarial losses of Euros 159,873,000) 

and are analysed as follows: 

Actuarial (Gains) / Losses 

2008 2007 

Deviation between expected and actual liabilities 27,308 79,515 

Discount rate (402,314) - 

Mortality tables 112,367 - 

Return of Plan assets 1,090,002 80,358 

827,363 159,873 

Euros ’000 

Health benefit costs have a significant impact in pension costs. Considering this impact we produced a sensitivity analysis to a positive one percent variation in health 

benefit costs (from 6.5% to 7.5% in 2008) and a negative variation (from 6.5% to 5.5% in 2008) of one percent in health benefit costs, whose impact is analysed as 

follows: 

Euros ’000 

Positive variation of 1% Negative variation of 1% 

(6.5% to 7.5%) (6.5% to 5.5%) 

2008 2007 2008 2007 

Pension cost impact 547 524 (547) (524) 

Liability impact 44,168 45,670 (44,168) (45,670) 

The liabilities with health benefits are fully covered by the Pension Fund and amount to Euros 287,092,000 (31 December 2007: Euros 296,852,000). The estimated 

value of contributions to the pension plan in 2009 is Euros 133,426,000.


49. Related parties 

The Group grants loans in the ordinary course of its business within the Group and to other related parties. Under the Collective Agreement of Labour for Employees 

of the Portuguese Banking Sector which includes substantially all employees of banks operating in Portugal, the Group grants loans to employees at interest rates 

fixed under the above referred agreement for each type of loan upon request by the employees. 

As at 31 December, 2008, loans to members of the Executive Board of Directors and their direct family members amounted to Euros 754,000 (31 December 2007: 

Euros: 111,000), which represented 0.01% of shareholders’ equity (31 December 2007: 0.01%). The amount of loans recorded in 2007 are credit cards expenses, which 

are totally paid in the next month. 

As at 31 December 2008, the principal loans and guarantees (excluding interbank and money market transactions) the Group has made to shareholders holding, 

together with their affiliates, 2% or more of the share capital whose holdings in aggregate, together with their affiliates, represent 51.2% of the share capital as of 31 

December 2008 (31 December 2007: 61.7%) described in the Executive Board of Directors report, amounted to approximately Euros 2,219,572,000 (31 December 

2007: 2,272,183,000). Each of these loans was made in the ordinary course of business, on substantially the same terms as those prevailing at the time for comparable 

transactions with other persons. 

Remunerations to the Executive Board of Directors 









(2007: Euros 6,518,000). 


fixed and variable remunerations were paid to them in the amount of Euros 1,001,000, the variable part being related to 2007. 

Transactions with the Pension Fund 

During the first semester of 2008, BCP Group repurchased to the Pension Fund, BII Finance Company bonds issued on 25 September 1996 and with maturity on 

25 September 2011, in the amount of Euros 232,000,000. 

During 2008 all the contributions to the Pension Fund were made in cash. 

The Group has made transactions with the Pension Fund, during 2007, that are analysed as follows: 

– Contribution of 77,000,000 bonds BPA Floating 29/09/2049 in the amount of Euros 77,205,000, as referred in note 48 Pensions. 

– Contribution of the economic rights related with the shares of Brisal, Lusoscut – A.E. da Beira Litoral and Lusoscut – A.E. Grande Porto, in the amount of Euros 

1,530,000, as referred in note 48 Pensions. 

– Additionally and as referred in note 48 Pensions, other additional contributions in 2007 were made by the Group in cash, in the amount of Euros 14,997,000. During 

the year 2007, the Group also sold to the Pension Fund, 23,920,412 shares of Banco Sabadell in the amount of Euros 180,671,000, as referred in notes 7, 22 and 39. 

Recovery of loans previously charged-off 

During the year 2007 the Group has accounted for a recovery of loans previously charged-off in the amount of Euros 14,300,000 regarding a set of loans to 

companies related with a member of the family of a member of the Governing Boards. 

Retirements of the members of the Executive Board of Directors 

In 2007, the Group booked Euros 78,864,000 under staff costs related to the present value of the retirement benefits granted to the members of the Executive Board 

of Directors, who retired during the year. 

Additionally there was a termination of the contracts with three former Board members in functions at 31 December 2007, for which the Group paid the amount 

of Euros 18,700,000. Considering the amount provisioned and financed at that time related to the liabilities with pensions, the impact in the net income for the year 

amounted to Euros 12,770,000, which was compensated by the reversal of the accrual of the pluriannual variable remunerations described above. 

Regarding the retirement and termination of the employment contracts of the former members of the Executive Board of Directors, curtailment costs were accounted 

in the amount of Euros 16,633,000.


The shareholder and bondholder position of members of the Corporate's Boards, is as follows: 

Shareholders/Bondholders Security Number of 

securities at 

31/12/2008 31/12/2007 

Changes during 2008 

Acquisitions Disposals Date 

Unit 

Price 

Euros 

Members of Corporate Boards 

Armando Vara BCP shares 10,000 0 10,000 18-Apr-08 1.84 

Paulo José Ribeiro Moita Macedo BCP shares 259,994 200,001 59,993 (a) 5-May-08 1.20 

Luis Maria França de Castro Pereira Coutinho BCP shares 247,288 190,228 4 (b) 10-Apr-08 2.00 

57,060 (a) 24-Apr-08 1.20 

Vitor Manuel Lopes Fernandes BCP shares 20,000 0 12,500 (e) 7-Apr-08 2.12 

12,500 (c) 7-Apr-08 0.10 

3,749 (a) 24-Apr-08 1.20 

64 (a) 29-Apr-08 1.20 

3,687 2-Jun-08 1.62 

José João Guilherme BCP shares 51,000 50,500 500 22-Jan-08 2.08 

51,000 (b) 16-Apr-08 0.20 

Nelson Ricardo Bessa Machado BCP shares 259,992 200,000 2 (b) 15-Apr-08 0.25 

59,992 (a) 24-Apr-08 1.20 

Members of Supervisory Board 

Gijsbert Swalef BCP shares 282,633 217,416 65,217 (a) 24-Apr-08 1.20 

Ângelo Ludgero da Silva Marques BCP shares 1,765,013 357,740 1,000,000 17-Apr-08 2.74 

407,273 (a) 24-Apr-08 1.20 

BCP Finance Company 5,543 PCT Eur 2,500 2,500 

António Luis Guerra Nunes Mexia BCP shares 1,299 1,000 3 (b) 17-Apr-08 0.18 

299 (a) 24-Apr-08 1.20 

António Manuel Ferreira da Costa Gonçalves BCP shares 4,440,807 4,015,577 1,204,530 (a) 24-Apr-08 1.20 

74,182 24-Apr-08 1.85 

725,818 28-Apr-08 1.86 

20,700 (a) 29-Apr-08 1.20 

Bcp Obrg Cx Sup Inv Mill II 12/10 2,000 2,000 

Francisco de La Fuente Sánchez BCP shares 2,313 1,780 533 (a) 29-Apr-08 1.20 

BCP Bonds Cx Rend. Cresc. Feb 06/08 0 900 900 14-Feb-08 50 

BCP Bonds Cx TOP 6 May 06/08 0 1,000 1,000 9-May-08 50 

Bonds Cx Aforro Cresct 6% Sep 2006/08 0 1,600 1,600 5-Sep-08 50 

BCP Bonds Cx Top 10 November 2006/2008 0 400 400 27-Nov-08 50 

BCP Ob Cx Millennium Cresc August 2010 500 500 

BCP Ob Cx Multi-Rend Europa Oct. 2010 1,500 1,500 

BCP Obg Cx Inv. Selec. Mundial Nov 07/09 2,000 2,000 

BCP Obg Cx Inv. Especial 2007/2009 3ª Em 300 300 

BCP Obg Cx Super Investimento Feb 08/11 1,000 0 1,000 (d) 12-Feb-08 50 

BCP Obg Cx Inv. Mercadorias March 08/11 1,500 0 1,500 (d) 25-Mar-08 50 

BCP Obg Cx Energias Renováveis 08/2011 1,000 0 1,000 (d) 17-Jun-08 50 

BCP Obg Cx Subordinadas 1ª Série 1,600 0 1,600 (d) 26-Sep-08 50 

João Alberto Pinto Basto BCP shares 162,737 125,186 1 (b) 16-Apr-08 0.20 

37,551 (a) 24-Apr-08 1.20 

José Eduardo Faria Neiva dos Santos BCP shares 1,383 1,000 304 (a) 24-Apr-08 1.20 

158 31-Jul-08 1.37 

2 4-Aug-08 1.12 

6 1-Sep-08 1.18 

93 9-Sep-08 1.25 

5 2-Oct-08 1.11 

105 6-Oct-08 1.02 

104 10-Oct-08 0.93 

BCP Obg Cx Sup Aforro Millennium 1ª 2013 700 0 700 (d) 25-Mar-08 50.00 

BCP Obg Cx Sup Aforro Mil Sr B 1ªE 2013 500 0 500 (d) 28-Oct-08 50.00 

Keith Satchell BCP shares 3,769 2,900 869 (a) 24-Apr-08 1.20 

(continue)




securities at 

31/12/2008 31/12/2007 



Unit 

Price 

Euros 

Luís Francisco Valente de Oliveira BCP shares 81,775 62,659 18,795 (a) 24-Apr-08 1.20 

321 (a) 29-Apr-08 1.20 

Luís de Melo Champalimaud BCP shares 20,000 5,000 45,007 (e) 10-Apr-08 0.22 

1 (b) 10-Apr-08 0.22 

15,000 (a) 24-Apr-08 1.20 

Mário Branco Trindade BCP shares 53,620 41,085 12,324 (a) 24-Apr-08 1.20 

211 (a) 29-Apr-08 1.20 

Spouse and Dependent Children 

Alexandra Maria Ferreira C. Gonçalves BCP shares 290,868 170,000 50 4-Apr-08 2.11 

31,000 7-Apr-08 1.98 

51,007 (a) 24-Apr-08 1.20 

875 (a) 29-Apr-08 1.20 

15,036 22-Jul-08 1.13 

5,100 22-Sep-08 1.27 

45,000 25-Sep-08 1.19 

55,000 30-Sep-08 1.13 

50,000 7-Nov-08 0.90 

50,000 26-Nov-08 0.75 

BCP Ob Cx Inv. Especial 2007/2009 2ª Em 1,000 1,000 1,000 (a) 4-Dec-07 50 

BCP Fin Ilin Wr Bask Enhanc X Eur Dec/10 80 80 80 (a) 14-Dec-07 1,000 

(a) Subscription of share capital increase of BCP. 

(b) Sale of subscription rights of share capital increase of BCP. 

(c) Subscription. 

(d) Subscription. 

(e) Internal Deposit / Internal Transfer. 

As at 31 December 2008, the Bank's credits over subsidiaries and the Millennium bcp Fortis Group, represented or not by securities, included in the items of Loans 

and advances to credit institutions and to customers and financial assets held for trading and available for sale, are analysed as follows: 

Loans and advances 

Financial assets 

Credit 

Available 

Institutions Customers Trading for Sale Total 

Banco de Investimento Imobiliário, S.A. 2,473,967 - - 575,646 3,049,613 

Banque Privée BCP (Suisse) S.A. 643,089 - - - 643,089 

BCP Bank & Trust Company (Cayman) Limited 1,373,126 - - - 1,373,126 

BCP Finance Bank Ltd 520,500 - 6,287 141,183 667,970 

Banca Millennium S.A. 5,420 - - - 5,420 

Millennium bcp - Prestação de Serviços, A.C.E. - 38,816 - - 38,816 

Millennium bcp Investimento Group 853,731 - - 518,528 1,372,259 

Millennium Bank (Greece) Group 1,147,337 - 60,755 551,440 1,759,532 

Banco Millennium Angola, S.A. 82,992 - - - 82,992 

Millennium Bank, Anonim Sirketi (Turkey) 112,524 - - - 112,524 

Others 7,313 - - - 7,313 

7,219,999 38,816 67,042 1,786,797 9,112,654 

Euros ’000 

As at 31 December 2008, the Bank had credits over associated companies, represented or not by securities, included in the items of Loans and advances to credit 

institutions and to customers, and financial assets held for trading and available for sale, in the amount of Euros 117,756,000.


As at 31 December 2008, the Bank's liabilities with subsidiaries and the Millennium bcp Fortis Group, represented or not by securities, included in items Deposits 

from credit institutions and to customers, Debt securities issued and in Subordinated debt, are analysed as follows: 

Euros ’000 

Deposits from 

Credit Debt Subordinated 

Institutions Customers Securities Issued Debt Total 

Banco Activobank (Portugal), S.A. 234,368 - - - 234,368 

Banco de Investimento Imobiliário, S.A. 528,092 767 - - 528,859 

Bank Millennium (Poland) Group 24,256 - - - 24,256 



BCP Finance Bank Ltd 11,760,061 - - 1,786,349 13,546,410 

BCP Finance Company, Ltd - 3,040 - 1,000,000 1,003,040 

BCP Internacional II, S.G.P.S. 

Sociedade Unipessoal, Lda. - 44,466 - - 44,466 

BCP Investment, B.V. - 157,721 - - 157,721 

BIM - Banco Internacional de Moçambique, S.A.R.L. 117,291 - - - 117,291 

Millennium bcp Investimento Group 580,310 15,665 599,003 2,282 1,197,260 

Millennium Bank (Greece) Group 666,847 - - - 666,847 

Millennium bcp - Gestão de Fundos de Investimento, S.A. - 13,865 - - 13,865 

Baía de Luanda 109 9,034 - - 9,143 

BCP Capital Finance Limited 4,216 - - - 4,216 

Comercial Imobiliária, S.A. - 11,418 - - 11,418 

Seguros & Pensões Gere, S.G.P.S., S.A. - 846,967 - - 846,967 



Millennium bcp Fortis Group - 876,830 - - 876,830 

Others 3,570 1,999 - - 5,569 

17,672,251 1,995,327 599,003 2,788,631 23,055,212 

As at 31 December 2008, the Bank's liabilities with associated companies, represented or not by securities, included in items Deposits from credit institutions and to 

customers, Debt securities issued and in Subordinated debt, in the amount of Euros 7,894,000. 

As at 31 December 2008, the income generated by the Bank on inter-company transactions with subsidiaries, included in the items of Interest income, Commissions, 

Other operating income and Gains arising from trading activity, are analysed as follows: 

Euros ’000 

Other 

Gains arising 

Interest Commissions operating from trading 

income income income activity Total 

Banco Activobank (Portugal), S.A. - - 2,689 - 2,689 

Banca Millennium S.A (Romania) 6,606 - - 541 7,147 

Banco de Investimento Imobiliário, S.A. 216,293 - 3,106 438 219,837 

Bank Millennium (Poland) Group 10 - - 1,795 1,805 


BCP Bank & Trust Company (Cayman) Limited 113,672 - - 104,070 217,742 

BCP Finance Bank Ltd 32,599 - 116 883,713 916,428 

Millennium Bank, Anonim Sirketi (Turkey) 2,444 - - 40,474 42,918 

BitalPart, B.V. 2,308 - - - 2,308 

BIM - Banco Internacional de Moçambique, S.A.R.L. 151 - 3,516 - 3,667 

Millennium bcp Investimento Group 33,750 - 6,969 49,496 90,215 

Millennium Bank (Greece) Group 87,447 - - 30,620 118,067 

Millennium bcp - Gestão de Fundos de Investimento, S.A. - 17,496 1,701 - 19,197 

Comercial Imobiliária, S.A. 18,112 4 - - 18,116 

Millennium bcp - Prestação de Serviços, A.C.E. 2,486 - 9,977 - 12,463 

Millennium bcp Fortis Group 16,486 44,210 14,624 - 75,320 

Others 2,840 16 184 - 3,040 

572,137 61,726 42,882 1,111,147 1,787,892


As at 31 December 2008, the costs incurred by the Bank on inter-company transactions with subsidiaries, included in items Interest expense, Commissions, Admi - 

nistrative costs and Losses arising from trading activity, are analysed as follows: 

Euros ’000 

Losses arising 

Interest Commissions Administrative from trading 

expense costs costs activity Total 

Banco Activobank (Portugal), S.A. 11,562 206 - - 11,768 

Banca Millennium S.A. (Romania) 20 - - 4,192 4,212 

Banco de Investimento Imobiliário, S.A. 28,077 6,229 - 409 34,715 




BCP Finance Bank Ltd 841,211 - - 827,190 1,668,401 

BCP Finance Company, Ltd 49,725 - - - 49,725 


Sociedade Unipessoal, Lda. 5,082 - - - 5,082 

BCP Investment, B.V. 10,219 - - - 10,219 

Millennium Bank, Anonim Sirketi (Turkey) 247 - - 18,456 18,703 


Millennium bcp Investimento Group 37,648 758 - 44,357 82,763 


Seguros & Pensões Gere, S.G.P.S., S.A. 29,697 - - - 29,697 


Millennium bcp - Prestação de Serviços, A.C.E. 169 - 130,761 - 130,930 

Millennium bcp Fortis Group - - 6,859 - 6,859 

Others 1,526 1,699 218 - 3,443 

1,234,055 8,892 137,838 990,413 2,371,198 

The inter-company balances and transactions are eliminated on consolidation, as referred in note 1 b). 

50. Segmental reporting 

Millennium bcp offers a wide range of banking activities and financial services in Portugal and abroad, with a special focus on Commercial Banking, Investment Banking 

and Private Banking and Asset Management. 

Segments description 

Commercial Banking is the core business in the Group’s activity, both in terms of volumes and contribution to results. The Commercial Banking activity includes 

Millen nium bcp’s network in Portugal, operating as a distribution channel targeting the segments of Retail Banking and Corporate and Companies, focusing the acti - 

vity on satisfying customers’ financial needs, both for individuals and companies. Commercial Banking also includes the segment of Foreign Business, operating through 

several banking operations in markets with affinity to Portugal and in markets of recognised growth potential, in Europe and in other regions. 

The strategic approach of Retail Banking in Portugal, was to target “Mass market” customers, who appreciate a value proposition based on innovation and speed, as 

well as Affluent and Small businesses customers, whose specific characteristics, financial assets or income imply a value proposition based on innovation and persona - 

lisation, requiring a dedicated Account Manager. Retail Banking also includes ActivoBank7, a universal Bank, focusing on brokerage and on the selection and advisory 

of long-term investment products. Within the scope of the cross-selling strategy, Retail Banking also acts as a distribution channel for financial products and services 

of the Millennium bcp business as a whole. 

The Corporate and Companies segment includes: (i) the Corporate network in Portugal, targeting corporate and institutional customers with an annual turnover in 

excess of Euro 100 million, providing a complete range of value added products and services; (ii) the Companies network in Portugal, which covers the financial needs 

of companies with an annual turnover between Euro 7.5 million and Euro 100 million, focused on innovation and on offering a wide range of traditional banking pro - 

ducts complemented by specialised financing; and (iii) the activity of the Bank's International Division. 

The Investment Banking business is undertaken essentially by Millennium investment banking, a company specialised in capital markets, providing strategic and financial 

advisory, specialised financial service – Project finance, Corporate finance, Securities brokerage and Equity research as well as in structuring risk-hedging derivatives 

products. 

The Private Banking and Asset Management activity comprises the Private Banking network in Portugal, Millennium Banque Privée, a private banking platform 

incorporated under Swiss law, and subsidiary companies specialised in the asset management business.


The Foreign Business comprises the operations outside Portugal, namely in Poland, Greece, Turkey, Romania, Mozambique, Angola and United States. The Group is 

represented by a universal bank in Poland and by an operation based on the innovation of products and services in Greece. The activity in Turkey is performed through 

an operation focused on financial advising, and in Romania it is represented through a greenfield operation launched in 2007, focused on Mass market and Businesses, 

Companies and Affluent. All the above operations develop their activities under the same commercial brand of Millennium. The Group is represented in Mozambique 

by Millennium bim, a universal bank targeting both companies and individual customers, in Angola by Millennium Angola, a bank focused on individuals and public and 

private sector companies and institutions, and in the United States by Millennium bcpbank, a local bank that serves the local population, in particular the Portuguese 

community. 

The segment Other includes the centralized management of shareholdings and the remaining corporate activities and operations that are not included in the business 

segments, namely the bancassurance activity, a joint-venture with the Belgian-Dutch Group Fortis, and the remaining amounts not allocated to the segments. 

Business Segments Activity 

The figures reported for each segment result from aggregating the subsidiaries and business units integrated in each segment, including the impacts arising from the 

capital allocation and from the balancing process of each entity’s level, both at balance sheet and income statement, based on average figures. Balance sheet headings 

for each subsidiary and business unit are re-calculated, given the replacement of their original own funds by the outcome of the capital allocation process, according 

to regulatory solvency criteria. Considering that, the process of capital allocation should follow the regulatory criteria of solvency in place, the risk weighted assets 

and, consequently, the business segments’ capital allocation, were determined in accordance with the Basel II framework for 2008 figures and in accordance with the 

Basel I for 2007. Each operation is balanced through internal transfers of funds, with no impact on consolidated accounts. 

Operating costs determined for each business area rely on the amounts accounted directly in the respective cost centres, on one hand, and on the amounts resul - 

ting from internal cost allocation processes, on the other hand. 

For example, in the first set of costs are included costs related to phone communication, to travel, hotel and representation expenses and to advisory services, and 

in the second set are included costs related to mail, to water and electricity and to rents related to spaces occupied by organic units, among other. 

The allocation of this last set of costs is based on the application of previously defined criteria, related to the level of activity of each business area, like the number 

of current accounts, the number of customers or employees, the business volume and the space occupied. 

The financial fluxes generated by the business areas, in particular the placement of funds from new deposits and funding of loans granted, are processed at market 

prices, having the Bank’s Treasury Department as counterparty. These market prices are determined according to the currency, the maturity of the transactions and 

their repricing periods. Additionally, all financial fluxes resulting from capital allocation are based on the average 6-month Euribor interest rate for each given period. 

To ensure comparability, the structural changes that occurred in 2008 were reflected in the segments as of 31 December 2007. ActivoBank7 is included in Retail Banking, 

previously in Private Banking and Asset Management. The Corporate was incorporated in the Corporate and Companies Segment. Investment Banking business was 

individualized. 

From the beginning of 2008, the liquidity premium started to be allocated to the Bank’s business areas, in order to adequately reflect the contractual deadlines of the 

operations in internal transfer prices of the respective funds. Each segment’s net contribution reflects the individual results reached by business units, independent of 

the percentage held by the Group, including the impacts of the funds transfers mentioned above. The following information is based on financial statements prepared 

according to IFRS and on the organizational model in place at BCP Group. 

Geographical Segments 

The Group operates with special emphasis in the Portuguese and Polish markets, and also in a few affinity markets. Considering this, the geographical segments 

include Portugal, Poland, Greece and Other. The segment Portugal reflects, essentially, the activities carried out by Millennium bcp in Portugal, Millennium investment 

banking, ActivoBank7, Banco de Investimento Imobiliário and the operation in Switzerland. The segment Poland includes the business carried out by Bank Millennium 

(Poland) while the segment Greece contains the activity of Millennium Bank (Greece). The segment Other comprises the Group’s operations not included in the 

remaining segments, namely the activities developed in other countries, such as Turkey, Romania, United States, Mozambique and Angola.


At 31 December 2008, the net contribution of the major business segments is analysed as follows: 

Euros ’000 

Commercial Banking 

Private 

Banking 

Retail Corporate and Foreign Investment and Asset 

Banking Companies Business Total Banking Management Other Consolidated 

Income statement 

Interest income 2,287,736 1,413,997 1,319,566 5,021,299 134,923 207,132 (93,757) 5,269,597 

Interest expense (1,380,999) (1,086,511) (823,960) (3,291,470) (126,478) (149,784) 19,183 (3,548,549) 

Net interest income 906,737 327,486 495,606 1,729,829 8,445 57,348 (74,574) 1,721,048 

Commissions and other income 433,139 154,578 296,558 884,275 52,927 81,485 99,707 1,118,394 

Commissions and other costs (24,296) (7,254) (80,501) (112,051) 43,311 (31,011) (166,440) (266,191) 

Net commissions and other income 408,843 147,324 216,057 772,224 96,238 50,474 (66,733) 852,203 

Net gains arising from trading activity (31) - 147,605 147,574 10,789 (5,956) (134,308) 18,099 

Staff costs and administrative costs 747,829 105,899 576,709 1,430,437 44,380 57,185 25,946 1,557,948 

Depreciations 1,456 185 45,830 47,471 190 325 64,857 112,843 

Operating costs 749,285 106,084 622,539 1,477,908 44,570 57,510 90,803 1,670,791 

Impairment and provisions (204,092) (164,671) (77,978) (446,741) 859 (52,366) (90,975) (589,223) 

Share of profit of associates under 

the equity method - - - - (2,356) - 21,436 19,080 

Net gain from the sale of other assets - - 10,031 10,031 (4) - (18,434) (8,407) 

Profit before income tax 362,172 204,055 168,782 735,009 69,401 (8,010) (454,391) 342,009 

Income tax (96,233) (54,075) (40,494) (190,802) (20,954) 7,463 120,295 (83,998) 

Minority interests - - (52,531) (52,531) - - (4,298) (56,829) 

Profit after income tax 265,939 149,980 75,757 491,676 48,447 (547) (338,394) 201,182 

Balance sheet 

Cash and Loans and advances 

to credit institutions 5,157,114 5,735,714 2,573,991 13,466,819 3,618,067 484,471 (11,564,257) 6,005,100 

Loans and advances to customers 34,819,394 22,875,892 14,710,611 72,405,897 1,166,017 3,426,477 (1,833,377) 75,165,014 

Financial assets 1,404 - 2,681,480 2,682,884 2,098,165 24,497 1,913,743 6,719,289 

Other assets 743,733 83,050 481,126 1,307,909 231,111 35,348 4,959,953 6,534,321 

Total Assets 40,721,645 28,694,656 20,447,208 89,863,509 7,113,360 3,970,793 (6,523,938) 94,423,724 

Deposits from other credit institutions 8,217,757 8,558,035 3,285,747 20,061,539 3,985,897 1,050,365 (15,758,434) 9,339,367 

Deposits from customers 18,503,091 5,745,855 12,959,772 37,208,718 10 2,145,075 5,553,365 44,907,168 

Debt securities issued 8,333,626 8,572,001 1,088,423 17,994,050 2,152,731 368,760 25 20,515,566 

Other financial liabilities held for 

trading at fair value through 

profit or loss 3,319,287 3,414,233 1,131,797 7,865,317 607,833 156,308 223,680 8,853,138 

Other liabilities 975,974 893,428 1,110,423 2,979,825 217,104 96,728 1,266,594 4,560,251 

Total Liabilities 39,349,735 27,183,552 19,576,162 86,109,449 6,963,575 3,817,236 (8,714,770) 88,175,490 

Equity and minority interests 1,371,910 1,511,104 871,046 3,754,060 149,785 153,557 2,190,832 6,248,234 

Total Liabilities, Equity 

and minority interests 40,721,645 28,694,656 20,447,208 89,863,509 7,113,360 3,970,793 (6,523,938) 94,423,724


At 31 December 2007, the net contribution of the major business segments is analysed as follows: 

Euros ’000 

Commercial Banking 

Private 

Banking 

Retail Corporate and Foreign Investment and Asset 

Banking Companies Business Total Banking Management Other Consolidated 


Interest income 2,019,870 1,213,987 901,186 4,135,043 162,830 165,745 (131,431) 4,332,187 

Interest expense (1,008,527) (851,923) (502,396) (2,362,846) (149,931) (117,309) (164,798) (2,794,884) 

Net interest income 1,011,343 362,064 398,790 1,772,197 12,899 48,436 (296,229) 1,537,303 

Commissions and other income 446,623 161,774 300,310 908,707 59,410 123,525 82,806 1,174,448 

Commissions and other costs (26,514) (14,949) (71,958) (113,421) (1,780) (51,225) (197,000) (363,426) 

Net commissions and other income 420,109 146,825 228,352 795,286 57,630 72,300 (114,194) 811,022 

Net gains arising from trading activity (59) - 116,583 116,524 64,373 226 (78,996) 102,127 

Staff costs and administrative costs 744,954 115,785 481,230 1,341,969 54,729 58,898 178,083 1,633,679 

Depreciations 1,556 204 45,499 47,259 207 460 66,970 114,896 

Operating costs 746,510 115,989 526,729 1,389,228 54,936 59,358 245,053 1,748,575 

Impairment and provisions (108,886) (29,714) (41,169) (179,769) (634) (6,859) (167,836) (355,098) 


the equity method - - - - (560) - 51,775 51,215 

Net gain from the sale of other assets - - - - - - 290,222 290,222 

Profit before income tax 575,997 363,186 175,827 1,115,010 78,772 54,745 (560,311) 688,216 

Income tax (152,632) (96,245) (34,540) (283,417) (13,920) (10,554) 238,321 (69,570) 

Minority interests - - (49,521) (49,521) - - (5,838) (55,359) 

Profit after income tax 423,365 266,941 91,766 782,072 64,852 44,191 (327,828) 563,287 

Balance sheet 


to credit institutions 3,845,003 2,926,774 2,363,853 9,135,630 5,770,849 564,344 (6,209,847) 9,260,976 

Loans and advances to customers 33,674,109 18,912,627 11,446,889 64,033,625 920,977 3,235,308 (2,539,461) 65,650,449 

Financial assets 21,887 2,572,513 639,717 3,234,117 503,253 1,576 679,588 4,418,534 

Other assets 1,101,465 99,572 1,775,077 2,976,114 1,666,198 40,058 4,153,832 8,836,202 

Total Assets 38,642,464 24,511,486 16,225,536 79,379,486 8,861,277 3,841,286 (3,915,888) 88,166,161 

Deposits from other credit institutions 6,824,389 5,612,165 3,940,872 16,377,426 2,529,986 1,309,587 (10,784,517) 9,432,482 

Deposits from customers 18,190,557 4,830,695 10,181,547 33,202,799 10 1,602,737 4,441,065 39,246,611 

Debt securities issued 11,069,610 11,621,774 642,434 23,333,818 2,761,622 648,604 54,446 26,798,490 

Other liabilities 1,319,595 1,079,860 919,906 3,319,361 3,283,935 141,246 1,044,781 7,789,323 

Total Liabilities 37,404,151 23,144,494 15,684,759 76,233,404 8,575,553 3,702,174 (5,244,225) 83,266,906 

Equity and minority interests 1,238,313 1,366,992 540,777 3,146,082 285,724 139,112 1,328,337 4,899,255 


and minority interests 38,642,464 24,511,486 16,225,536 79,379,486 8,861,277 3,841,286 (3,915,888) 88,166,161


At 31 December 2008, the net contribution of the major geografic segments is analysed as follows: 

Euros ’000 

Portugal 

Private 

Corporate 

Banking 

Retail and Investment and Asset 

Banking Companies Banking Management Other Total Poland Greece Other Consolidated 


Interest income 2,287,736 1,413,997 134,923 207,132 (93,757) 3,950,031 710,529 378,876 230,161 5,269,597 

Interest expense (1,380,999) (1,086,511) (126,478) (149,784) 19,183 (2,724,589) (446,325) (258,570) (119,065) (3,548,549) 

Net interest income 906,737 327,486 8,445 57,348 (74,574) 1,225,442 264,204 120,306 111,096 1,721,048 

Commissions and other income 433,139 154,578 52,927 81,485 99,707 821,836 178,207 50,725 67,626 1,118,394 

Commissions and other costs (24,296) (7,254) 43,311 (31,011) (166,440) (185,690) (36,767) (16,838) (26,896) (266,191) 

Net commissions and 

other income 408,843 147,324 96,238 50,474 (66,733) 636,146 141,440 33,887 40,730 852,203 

Net gains arising from trading activity (31) - 10,789 (5,956) (134,308) (129,506) 99,380 7,936 40,289 18,099 

Staff costs and administrative costs 747,829 105,899 44,380 57,185 25,946 981,239 315,265 117,192 144,252 1,557,948 

Depreciations 1,456 185 190 325 64,857 67,013 20,089 9,089 16,652 112,843 

Operating costs 749,285 106,084 44,570 57,510 90,803 1,048,252 335,354 126,281 160,904 1,670,791 

Impairment and provisions (204,092) (164,671) 859 (52,366) (90,975) (511,245) (39,155) (16,744) (22,079) (589,223) 


the equity method - - (2,356) - 21,436 19,080 - - - 19,080 

Net gain from the sale of 

other assets - - (4) - (18,434) (18,438) 2,727 7,304 - (8,407) 

Profit before income tax 362,172 204,055 69,401 (8,010) (454,391) 173,227 133,242 26,408 9,132 342,009 

Income tax (96,233) (54,075) (20,954) 7,463 120,295 (43,504) (27,939) (8,205) (4,350) (83,998) 

Minority interests - - - - (4,298) (4,298) (36,319) - (16,212) (56,829) 

Profit after income tax 265,939 149,980 48,447 (547) (338,394) 125,425 68,984 18,203 (11,430) 201,182 

Balance sheet 


to credit institutions 5,157,114 5,735,714 3,618,067 484,471 (11,564,257) 3,431,109 814,395 1,182,570 577,026 6,005,100 

Loans and advances to customers 34,819,394 22,875,892 1,166,017 3,426,477 (1,833,377) 60,454,403 8,125,242 4,793,701 1,791,668 75,165,014 

Financial assets 1,404 - 2,098,165 24,497 1,913,743 4,037,809 2,214,766 54,336 412,378 6,719,289 

Other assets 743,733 83,050 231,111 35,348 4,959,953 6,053,195 162,080 160,125 158,921 6,534,321 

Total Assets 40,721,645 28,694,656 7,113,360 3,970,793 (6,523,938) 73,976,516 11,316,483 6,190,732 2,939,993 94,423,724 

Deposits from other credit 

institutions 8,217,757 8,558,035 3,985,897 1,050,365 (15,758,434) 6,053,620 1,254,189 1,501,154 530,404 9,339,367 

Deposits from customers 18,503,091 5,745,855 10 2,145,075 5,553,365 31,947,396 7,712,772 3,234,430 2,012,570 44,907,168 

Debt securities issued 8,333,626 8,572,001 2,152,731 368,760 25 19,427,143 223,275 865,148 - 20,515,566 


trading at fair value through 

profit or loss 3,319,287 3,414,233 607,833 156,308 223,680 7,721,341 1,059,227 54,309 18,261 8,853,138 

Other liabilities 975,974 893,428 217,104 96,728 1,266,594 3,449,828 626,280 277,012 207,131 4,560,251 

Total Liabilities 39,349,735 27,183,552 6,963,575 3,817,236 (8,714,770) 68,599,328 10,875,743 5,932,053 2,768,366 88,175,490 

Equity and minority interests 1,371,910 1,511,104 149,785 153,557 2,190,832 5,377,188 440,740 258,679 171,627 6,248,234 


and minority interests 40,721,645 28,694,656 7,113,360 3,970,793 (6,523,938) 73,976,516 11,316,483 6,190,732 2,939,993 94,423,724


At 31 December 2007, the net contribution of the major geografic segments is analysed as follows: 

Euros ’000 

Portugal 

Private 

Corporate 

Banking 

Retail and Investment and Asset 

Banking Companies Banking Management Other Total Poland Greece Other Consolidated 


Interest income 2,019,870 1,213,987 162,830 165,745 (131,431) 3,431,001 425,225 270,742 205,219 4,332,187 

Interest expense (1,008,527) (851,923) (149,931) (117,309) (164,798) (2,292,488) (241,098) (160,413) (100,885) (2,794,884) 

Net interest income 1,011,343 362,064 12,899 48,436 (296,229) 1,138,513 184,127 110,329 104,334 1,537,303 

Commissions and other income 446,623 161,774 59,410 123,525 82,806 874,138 189,766 48,498 62,046 1,174,448 

Commissions and other costs (26,514) (14,949) (1,780) (51,225) (197,000) (291,468) (31,361) (15,365) (25,232) (363,426) 

Net commissions 

and other income 420,109 146,825 57,630 72,300 (114,194) 582,670 158,405 33,133 36,814 811,022 

Net gains arising from trading activity (59) - 64,373 226 (78,996) (14,456) 87,399 7,478 21,706 102,127 

Staff costs and administrative costs 744,954 115,785 54,729 58,898 178,083 1,152,449 254,459 104,732 122,039 1,633,679 

Depreciations 1,556 204 207 460 66,970 69,397 22,995 7,752 14,752 114,896 

Operating costs 746,510 115,989 54,936 59,358 245,053 1,221,846 277,454 112,484 136,791 1,748,575 

Impairment and provisions (108,886) (29,714) (634) (6,859) (167,836) (313,929) (17,744) (14,963) (8,462) (355,098) 


the equity method - - (560) - 51,775 51,215 - - - 51,215 

Net gain from the sale of other assets - - - - 290,222 290,222 - - - 290,222 

Profit before income tax 575,997 363,186 78,772 54,745 (560,311) 512,389 134,733 23,493 17,601 688,216 

Income tax (152,632) (96,245) (13,920) (10,554) 238,321 (35,030) (28,738) (6,048) 246 (69,570) 

Minority interests - - - - (5,838) (5,838) (36,557) - (12,964) (55,359) 

Profit after income tax 423,365 266,941 64,852 44,191 (327,828) 471,521 69,438 17,445 4,883 563,287 

Balance sheet 


to credit institutions 3,845,003 2,926,774 5,770,849 564,344 (6,209,847) 6,897,123 643,676 1,205,277 514,900 9,260,976 

Loans and advances to customers 33,674,109 18,912,627 920,977 3,235,308 (2,539,461) 54,203,560 6,128,922 3,966,430 1,351,537 65,650,449 

Financial assets 21,887 2,572,513 503,253 1,576 679,588 3,778,817 528,640 13,358 97,719 4,418,534 

Other assets 1,101,465 99,572 1,666,198 40,058 4,153,832 7,061,125 1,142,828 160,550 471,699 8,836,202 

Total Assets 38,642,464 24,511,486 8,861,277 3,841,286 (3,915,888) 71,940,625 8,444,066 5,345,615 2,435,855 88,166,161 

Deposits from other credit institutions 6,824,389 5,612,165 2,529,986 1,309,587 (10,784,517) 5,491,610 1,632,362 1,949,837 358,673 9,432,482 

Deposits from customers 18,190,557 4,830,695 10 1,602,737 4,441,065 29,065,064 5,792,838 2,568,618 1,820,091 39,246,611 

Debt securities issued 11,069,610 11,621,774 2,761,622 648,604 54,446 26,156,056 236,949 405,485 - 26,798,490 

Other liabilities 1,319,595 1,079,860 3,283,935 141,246 1,044,781 6,869,417 495,372 238,668 185,866 7,789,323 

Total Liabilities 37,404,151 23,144,494 8,575,553 3,702,174 (5,244,225) 67,582,147 8,157,521 5,162,608 2,364,630 83,266,906 

Equity and minority interests 1,238,313 1,366,992 285,724 139,112 1,328,337 4,358,478 286,545 183,007 71,225 4,899,255 


and minority interests 38,642,464 24,511,486 8,861,277 3,841,286 (3,915,888) 71,940,625 8,444,066 5,345,615 2,435,855 88,166,161


51. Risk Management 

The Group is subject to several risks during the course of its business. The risks from different companies of the Group are managed centrally co-ordinating with the 

local departments and considering the specific risks of each business. 

The Group's risk-management policy is designed to ensure adequate relationship at all times between its own funds and the business it carries on, and also to 

evaluate the risk/return profile by business line. 

In this connection, monitoring and control of the main types of financial risk – credit, market, liquidity and operational – to which the Group's business is subject are 

of particular importance. 

Main Types of Risk 

Credit – Credit risk is associated with the degree of uncertainty of the expected returns as a result of the inability either of the borrower (and the guarantor, if any) 

or of the issuer of a security or of the counterparty to an agreement to fulfile their obligations. 

Market – Market risk reflects the potential loss inherent in a given portfolio as a result of changes in rates (interest and exchange) and/or in the prices of the various 

financial instruments that make up the portfolio, considering both the correlations that exist between them and the respective volatility. 

Liquidity – Liquidity risk reflects the Group's inability to meet its obligations at maturity without incurring in significant losses resulting from the deterioration of the 

funding conditions (funding risk) and/or from the sale of its assets below market value (market liquidity risk). 

Operational – Operational risk is understood to be the potential loss resulting from failures or inadequacies in internal procedures, persons or systems, and also the 

potential losses resulting from external events. 

Internal Organisation 

The Banco Comercial Português Executive Board of Directors is responsible for the definition of the risk policy, including approval at the very highest level of the 

principles and rules to be followed in risk management, as well as the guidelines dictating the allocation of economic capital to the business lines. 

The General and Supervisory Board, through the Audit and Risk Committee, ensures the existence of adequate risk control and of risk-management systems at the 

level both of the Group and of each entity. At the proposal of the Banco Comercial Português Executive Board of Directors, the General and Supervisory Board is 

also charged with approving the risk-tolerance level acceptable to the Group. 

The Risk Committee is responsible for monitoring the overall levels of risk incurred, ensuring that they are compatible with the objectives and strategies approved 

for the business. This Committee has four sub-committees, the Credit Risk, the Market and Liquidity risks, the Operational Risk and the Pension Fund Monitoring Sub - 

-Committees. 

Group Risk Office is responsible for the control of risks in all the Group entities, in order to ensure that the risks are monitored on an overall basis and that there is 

alignment of concepts, practices and objectives. It must also keep the Risk Committee informed of the Group’s level of risk, proposing measures to improve control 

and implementing the approved limits. 

The activity of every entity included within the Banco Comercial Português consolidation perimeter is governed by the principles and decisions established centrally 

at Risk Sub-Committee level, and they are provided with Risk Office structures whose dimension is in accordance with the risks inherent in their particular business. 

A Risk Control Committee has been set up at each subsidiary, responsible for the control of risks at local level, in which the Group Risk Office takes part. 

Risk Evaluation and Management Model 

For purposes of profitability analysis and quantification and control of risks, each entity is divided into the following management areas: 

– Trading: involves those positions whose objective is to obtain short-term gains through sale or revaluation. These positions are actively managed, are tradable without 

restriction and may be valued frequently and precisely, including the securities, the derivatives and the sales activities; 

– Financing: involves the Bank’s institutional financing and money market activity of the Group; 

– Investment: includes those positions in securities to be held during a longer period of time or those that are not tradable on liquid markets; 

– Commercial: commercial activity with customers; 

– Structural: deals with balance sheet elements or operations that, because of their nature, are not directly related with any of the other areas; 

– ALM: is the function of managing assets and liabilities. 

The definition of the management areas allows effective separation of the management of the trading and banking portfolios. 

Risk assessment 

Credit Risk 

Credit granting is based on prior classification of the customers’ risk and on thorough assessment of the level of protection provided by the underlying collateral. In 

order to do so, a single risk-notation system has been introduced, the Rating Master Scale. It is based on the expected probability of default, allowing greater 

discrimination in the assessment of the customers and better establishment of the hierarchies of the associated risk. The Rating Master Scale also identifies those 

customers showing worsening credit capacity and, in particular, those classified as being in default in keeping with the new Basel II Accord. 

All the rating and scoring models used by the Group are being duly calibrated for the Rating Master Scale. 

The protection-level concept has been introduced as a crucial element of evaluation of the effectiveness of the collateral in credit-risk mitigation, leading to more 

active collateralisation of loans and more adequate pricing of the risk incurred. 

The Group adopts a continuous monitoring policy towards its decision processes, promoting changes and improvements in those processes whenever it considers 

necessary, in order to ensure a greater consistency and efficiency in decision taking.


To quantify the credit risk at the level of the various portfolios, the Group has developed a model based on an actuarial approach, which provides the probability 

distribution of total loss. In addition to the Probability of Default (PD) and of the Amount of the Loss Given Default (LGD) as the central points, consideration is also 

given to the uncertainty associated with the development of these parameters, through the introduction of the respective volatility. The effects of diversification 

and/or concentration between the sectors of the loan portfolios are quantified by introducing the respective correlations. 

The following map presents information related to the Group’s exposition to the credit risk: 

2008 2007 

Euros ’000 


Repayable on demand 1,048,348 820,699 

Other loans and advances 2,542,326 5,081,882 

Loans and advances to customers 75,165,014 65,650,449 

Financial assets held for trading and available for sale 4,761,658 6,166,926 


Hedging derivatives 117,305 131,069 

Financial assets held to maturity 1,101,844 - 

Investments in associated companies 343,934 316,399 

Non current assets held for sale 19,558 24,180 

Other assets 1,137,285 1,167,274 


Irrevocable commitments 4,302,476 5,782,522 

Credit default swaps (notional) 90,000 165,500 

99,258,254 93,351,905 

Market Risks 

The main measure used by the Group in evaluating the market risk is the VaR (Value at Risk). The VaR is calculated on the basis of the analysis approximation defined 

in the methodology developed by the RiskMetrics. It is calculated considering a 10-working day time horizon and an unilateral statistical confidence interval of 99%. 

In calculating the volatility associated with each risk vector, the model assumes a greater weighting for the market conditions seen in the more recent days, thus ensuring 

more accurate adjustment to market conditions. 

A specific risk evaluation model is also applied to securities and associated derivatives for which the performance is related to its value. With the necessary adjustments, 

this model follows regulatory standard methodology. Capital at risk values are determined both on an individual basis for each one of the position portfolios of those 

areas having responsibilities in risk taking and management and also in consolidated terms, taking into account the effects of diversification between the various 

portfolios. 

To ensure that the VaR model adopted is appropriate to the evaluation of the risks involved in the positions that have been assumed, a backtesting process has been 

instituted. This is carried out on a daily basis and it confronts the VaR indicators with the actual results. 

Two other complementary measures are used: a measure for the non-linear risk, at a confidence level of 99% and a standard measure for the commodities risk. 

The following table shows these major indicators for 2008 for the trading book: 

Euros ’000 

2008.12.31 Average Maximum Minimum 2008.01.01 

Generic Risk ( VaR ) 9,162 9,094 47,743 1,600 3,734 

Interest Rate Risk 5,460 4,164 5,313 1,392 2,829 

FX Risk 7,132 6,147 49,408 247 732 

Equity Risk 500 1,035 1,014 770 1,225 

Diversification effects 3,930 2,250 7,993 809 1,052 

Specific Risk 508 2,557 5,975 496 3,806 

Non Linear Risk 718 448 3,080 11 334 

Commodities Risk 3 6 70 0 25 

Global Risk 10,391 12,105 51,043 4,058 7,899 

Evaluation of the interest rate risk originated by the banking portfolio is performed via a risk sensitivity analysis process carried out every month for all operations 

included in the Group’s consolidated balance sheet. 

In this analysis consideration is given to the financial characteristics of the contracts available on the information systems. On the basis of these data the respective 

expected cash flows are projected in accordance with the repricing dates. 

Aggregation of the expected cash flows for each time interval for each of the currencies under analysis allows determination of the interest rate gaps per repricing 

period. 

The interest rate sensitivity of the balance in each currency is calculated through the difference between the present value of the interest rate mismatch after 

discounting the market interest rates and the discounted value of the same cash flows parallel shift of the market interest rates.


The following table shows the expected impact on the banking book economic value due to parallel shifts of the yield curve by +/- 100 and +/- 200 basis points, on 

each of the main currencies: 

Euros ’000 

2008 

Currency - 200 pb - 100 pb + 100 pb + 200 pb 

CHF (4,717) (2,350) 2,332 4,646 

EUR (91,243) (44,907) 41,735 78,644 

PLN (796) (424) 474 993 

USD 8,858 4,599 (4,983) (10,507) 

Total (87,898) (43,082) 39,558 73,776 

Euros ’000 

2007 


CHF 3,642 1,763 (1,658) (3,218) 

EUR (174,004) (85,167) 81,573 159,666 

PLN 18,919 9,340 (9,111) (18,004) 

USD 17,090 11,184 (7,326) (10,934) 

Total (134,353) (62,880) 63,478 127,510 

Each month the Group undertakes hedging operations on the market aiming to reduce the interest rate mismatch of the risk positions associated with the portfolio of 

transactions of the commercial and structural areas. 

Liquidity risk 

Evaluation of the Group’s liquidity risk is carried out using indicators defined by the Supervisory Authorities on a regular basis and other internal metrics for which exposure 

limits are also defined. 

The evolution of the Group’s liquidity situation for short-term time horizons (up to 3 months) is reviewed daily on the basis of two indicators defined in-house, immediate 

liquidity and quarterly liquidity. These measure the maximum fund-taking requirements that could arise on a single day, considering the cash-flow projections for periods of 3 

days and of 3 months, respectively. 

Calculation of these indicators involves adding to the liquidity position of the day under analysis the estimated future cash flows for each day of the respective time horizon 

(3 days or 3 months) for the transactions as a whole brokered by the markets areas, including the transactions with customers of the Corporate and Private networks that, for 

their dimension, have to be quoted by the Trading Room. To the value calculated the amount of assets in the Bank’s securities portfolio considered highly liquid is added, leading 

to determination of the liquidity gap accumulated for each day of the period under review. 

In parallel, the evolution of the Group’s liquidity position is calculated on a regular basis identifying all the factors that justify the variations that occur. This analysis is submitted to 

the Capital and Assets and Liabilities Committee (CALCO) for appraisal, in order to enable the decision making that leads to the maintenance of financing conditions adequate 

to the continuation of the business. In adition, the Risks Commission is responsible for controlling the liquidity risk. This control is reinforced with the monthly execution of 

stress tests, to characterize the Bank's risk profile and to ensure that the Group and each of its subsidiaries, fulfil its obligations in the event of a liquidity crisis. These tests are 

also used to support the liquidity contingency plan and management decisions. 

Operational Risk 

The approach to operational risk management is based on the business and support end-to-end processes. Process management is the responsibility of the Process Owners, 

who are the first parties responsible for evaluation of the risks and for strengthening the performance within the scope of their processes. The Process Owners are respon sible 

for keeping up to date all the relevant documentation concerning the processes, for ensuring the real adequacy of all the existing controls through direct supervision or by 

delegation on the departments responsible for the controls in question, for co-ordinating and taking part in the risk self-assessment exercises, and for detecting and implementing 

improvement opportunities, including mitigating measures for the more significant exposures. 

In the operational risk model implemented in the Group, there is a systematic process of gathering information on operational losses, that defines on a systematic form, the 

causes and the efects associated to an eventual detected loss. From the analises of the historical information and its relationships, processes involving greater risk are identified 

and mitigated measures are launched to reduce the critical exposures.


52. Solvency 

Consolidated own funds of Banco Comercial Português are determined according to the applicable regulatory rules, namely the Regulation 12/92 from the Bank of 

Portugal. The own funds result from the adding the core own funds (Tier 1) with the complementary own funds (Tier 2) and subtracting the component of De ductions. 

The Tier 1 include the paid-up capital and the share premium, the reserves and the retained earnings, the minority interests and the deferred impacts related to the 

transition adjustments to the International Financial Reporting Standards. The preference shares are also included within the Tier 1, after the Bank of Portugal's approval 

and as long as they do not exceed the limit defined by that entity versus the total amount of Tier 1, determined before the deduction related to the qualified in vestments. 

Furthermore, the following are negative components of Tier 1: own shares, goodwill and other intangible assets, deferred costs related with actuarial variations in excess 

of the corridor and the deduction related to the qualified investments. This deduction refers to the investments owned in financial institutions, on one hand, and in 

insurance companies, on the other, above 10% and 20% of their share capital, respectively, as long as they are not fully consolidated. This deduction, which is done in 

equal parts to Tier 1 and Tier 2, is also applied to the part of the aggregate amount of investments on financial institutions, representing up to 10% of their share capital, 

that exceed the respective regulatory limit. 

Tier 1 can also be influenced by the existence of revaluation differences on other assets, on cash-flow hedge transactions or on financial liabilities at fair value through 

profits and losses, to the extent related to own credit risk, by the existence of a fund for general banking risks or by a provisioning shortage, if credit impairment, 

determined in accordance with the International Financial Reporting Standards, stands below the amount of credit provisions defined by Regulation 3/95 from the Bank 

of Portugal, on an unconsolidated basis. 

In 2008, the Bank of Portugal introduced some changes to the own funds calculation. Thus, through the new Regulation 6/2008, similarly to credit and other receivables, 

potential gains and losses arising from available for sale debt securities were excluded from the own funds, to the portion exceeding the impact of related hedging 

transactions, maintaining, however, the obligation of deducting to Tier 1 the positive revaluation reserves representing non realized gains on available for sale equity ins - 

truments (net of taxes), in excess to the potential related impaired amounts. 

Simultaneously, through Regulation 7/2008, the Bank of Portugal extended, for three additional years, the amortization plan of the transition adjustments to the 

International Financial Reporting Standards that were not fully recognized in the own funds of June 30, 2008, concerning post-retirement health benefits and liabilities 

of the pension fund. On the other hand, the Bank of Portugal published Regulation 11/2008, which allowed the enlargement of the pension fund corridor up to the 

amount of the actuarial losses of 2008, excluding the expected return of the fund's assets in 2008, to be amortized steadily through the next four years. 

Finally, the Bank of Portugal increased the limit of preference shares within the Tier 1, from 20% to 35%, as long as it corresponds perpetual instruments, with no incen - 

tives to redeem, and suspended the 10% limit applied to the amount of deferred tax assets that could be included in the Tier 1. 

The complementary own funds include the subordinated debt and 45% of the unrealized gains in available for sale equity securities and other assets, as well as the 

amounts related to preference shares and provisions for general credit risks from the Regulation 3/95 that have been deducted to the Tier 1. These components are 

part of the Upper Tier 2, except the subordinated debt, that is split between Upper Tier 2 (perpetual debt) and Lower Tier 2 (the remaining). 

Subordinated debt can only be included in the own funds with the agreement of the Bank of Portugal and as long as their total amount stay within the following limits: 

a) the Tier 2 cannot surpass the amount of the Tier 1; and b) the Lower Tier 2 cannot surpass 50% of the Tier 1. Additionally, non-perpetual subordinated loans should 

be amortized at a 20% yearly rate, along their last five years to maturity. The Tier 2 is also subject to the deduction of 50% of investments owned in financial insti tutions 

and insurance companies, as already mentioned. If the amount of Tier 2 is not enough to accommodate this deduction, the excess should be subtracted to the Tier 1. 

In order to conclude the calculation of the consolidated regulatory capital, there are still some deductions to the own funds that need to be performed, namely the 

amount of real-estate assets resulting from recovered loans that have remained in the Bank’s accounts for a certain period, the impairment concerning unrecognized 

assets from securitization transactions that have not reached the regulatory definition of effective risk transfer, to the extent of the amounts not recognized in the Bank's 

accounts, and the potential excess of exposure to the High Risks limits.


Capital requirements have been determined in accordance with the Basel II framework since the beginning of 2008. In this scope, the Bank timely filed with the Bank 

of Portugal a formal request, which is currently under analysis, regarding the use of the internal ratings based approach for credit risk and the internal models approach 

for market risk, as well as the standard approach for calculating operational risk requirements. As of the end of December 2008, capital requirements for credit risk 

were determined taking into account the risks recorded both on balance and off-balance sheet, weighted based on the type of counterparties, the maturity of 

transactions and the existing collaterals, as defined by the Regulation 5/2007 for the standard approach. The requirements for securitized assets were determined in 

accordance with the Regulation 7/2007. In the scope of Basel II framework, capital requirements for operational risk were also calculated, following the basic-indicator 

approach described in the Regulation 9/2007 from the Bank of Portugal. Additionally, specific requirements for the trading portfolio were also calculated, according to 

the Regulation 8/2007. 

2008 2007 

Euros ’000 

Core own funds 

Paid-up capital and share premium 4,877,968 4,493,037 

Reserves and retained earnings (63,284) (1,193,741) 

Minority interests 283,475 277,648 

Preference shares 954,617 688,037 

Intangible assets (540,157) (536,303) 

Net impact of accruals and deferrals (659,286) (281,118) 

Other regulatory adjustments (73,676) (85,099) 

4,779,657 3,362,461 

Complementary own funds 

Upper Tier 2 675,725 914,319 

Lower Tier 2 1,682,112 1,642,370 

2,357,837 2,556,689 

Deductions to total own funds (80,345) (22,387) 

Total own funds 7,057,149 5,896,763 

Own fund requirements 

Requirements from Regulation 1/93 - 4,895,316 

Requirements from Regulation 5/2007 4,947,614 - 

Trading portfolio 34,918 39,676 

Operacional risk 411,522 - 

5,394,054 4,934,992 

Capital ratios 

Tier 1 7.1% 5.5% 

Tier 2 (*) 3.4% 4.1% 

Solvency ratio 10.5% 9.6% 

(*) Includes deductions to total own funds


53. Accounting standards recently issued 

The new standards and interpretation that have been issued, but that are not yet effective and that the Group has not yet applied on its Financial Statements, can be 

analyzed as follows: 

IAS 1 (amendment) – Presentation of Financial Statements 

The International Accounting Standards Board (IASB) has issued in September 2007, IAS 1 (amendment) Presentation of Financial Statements, which is applicable 

from 1 January, 2009, although allowing for an early adoption. 

Changes regarding the current text of IAS 1: 

– The presentation of the financial position statement (balance sheet) is required for current and comparative periods. According with changed IAS 1, the financial 

position statement should also be presented for the beginning of the comparative period whenever an entity restates the comparatives following a change in an 

accounting policy, a correction of an error or the reclassification of an item in the financial statements. In theses cases, three statements of the financial position will 

be presented, comparatively to the other two required statements. 

– Following the changes required by this standard, the users of the financial statements will be able to distinguish, in an easier way, the variations in the equity of the 

Group on transactions with shareholders, as shareholders (ex. dividends, transactions with own shares) and transactions with third parties, that are summarized in 

the comprehensive income statement. 

Given the nature of these changes the impact will be exclusively regarding presentation. However as at 31 December 2008, the Group is still evaluating the impact 

of these changes. 

IAS 23 (amendment) – Borrowing costs 

The International Accounting Standards Board (IASB) has issued in March, 2007 an amendment to IAS 23 Borrowing costs, which is applicable from 1 January, 2009, 

although allowing for an early adoption. 

This standard requires the capitalization of borrowing costs that are directly related to the acquisition, production or construction of a qualifying asset, as part of the 

cost of that asset. As a result, the option to recognize such borrowing costs as an expense in the period which they arise was eliminated. 

IAS 32 (amendment) - Financial Instruments: Presentation - Puttable Financial Instruments and obligations arising from liquidation 

The International Accounting Standards Board (IASB) has issued in February, 2008 an amendment to IAS 32 Financial Instruments - Presentation - Puttable Financial 

Instruments and obligations arising from liquidation, which is applicable from 1 January, 2009. 

According with the current requirements of IAS 32, if an issuer can be required to make a payment in money or in other financial asset in exchange for the redemption 

or repurchase of the financial instrument, the instrument is classified as a financial liability. As a result of this review, some financial instruments that currently comply 

with the definition of a financial liability will be classified as an equity instrument if (i) they represent a residual interest in the net assets of the entity are included in 

a class of instruments subordinated to any other class of instruments issued by the Bank; and (iii) is all instruments in the class have the same terms and conditions. 

A change in IAS 1 Presentation of Financial Statements was also performed to add a new presentation requirement for puttable financial instruments and obligations 

arising from liquidation. 

The Group does not expect any material impact from the adoption of this amendment. 

IAS 39 (amendment) - Financial Instruments: Recognition and measurement – Eligible hedged items 

The International Accounting Standards Board (IASB) has issued an amendment to IAS 39 Financial Instruments: Recognition and measurement – Eligible hedged items, 

which is applicable from 1 July, 2009. 

This change clarifies the application of the existing principles that determine what risks or which cash-flows can be designated as a hedged item. 

The Group is evaluating the impact of adopting this amendment. 

IFRS 1 (amendment) - First time adoption of the International Financial Reporting Standards and IAS 27 - Consolidated and Separate Financial Statements 

The changes to the IFRS 1 - First time adoption of the International Financial Reporting Standards and IAS 27 - Consolidated and Separated Financial Statements are 

effective from 1 January 2009. 

These changes allowed entities adopting IFRS for the first time in the preparation of the individual accounts, to use as deemed cost of the investments in subsidiaries, 

joint-ventures and associated companies, the respective fair value at the transition date to the IFRS or the carrying amount determined based on the previous 

accounting framework. 


IFRS 2 (amendment) - Share-based payment: Acquisition conditions 

The International Accounting Standards Board (IASB) has issued in January, 2008 an amendment to IFRS 2 (amendment) - Share-based payment: Acquisition conditions, 

which is applicable from 1 January, 2009, although allowing for an early adoption. 

This change to IFRS 2 allowed clarifying that: (i) the acquisition conditions of the inherent rights for a share-based payment plan are limited to service or perfor mance 

conditions and that (ii) any cancellation of these programmes, by the entity itself or by third parties, has the same accounting treatment. 

As for 31 December 2008, the Group does not have any share-based payment plan and therefore the issue of this amendment does not have any impact in the 

financial statements of the Group.


IFRS 3 (amendment) - Business Combinations and IAS 27 (amendment) Consolidated and Separate Financial Statements 

The International Accounting Standards Board (IASB) has issued in January, 2008 an amendment to IFRS 3 (amendment) - Business Combinations, which is applicable 

for years starting after 1 July, 2009, although allowing for an early adoption. 

The main impacts of the changes to these standards are: (i) the treatment of partial acquisitions where the non-controlling interests (previously defined as minority 

interests) will be measured at fair value (which implies also the recognition of goodwill attributable to non-controlling interests) or as an alternative allows for the 

attri butable to non controlling interest of the fair value of the net assets acquired (as currently required) to be measured at fair value; (ii) the step acquisition that 

require, at the time when the goodwill is determined, the revaluation against profit and loss, of the fair value of any non-controlling interest held previously to the 

acqui sition; (iii) the costs directly related with the acquisition of a subsidiary will be accounted in profit and loss; (iv) the changes in the estimates of the contingent 

prices are accounted in profit and loss and do not affect goodwill; (v) the changes in percentages of subsidiaries held that do not result in a loss in control are 

accounted as equity changes. 

Additionally, following the changes to IAS 27, the accumulated losses in a subsidiary will be attributed to the non-controlling interests (recognition of negative non - 

-controlling interests) and when a subsidiary is sold with a subsequent loss of control, the remaining non-controlling interests are measured at the fair value determined 

at the date of the transaction. 


IFRS 8 – Operational segments 

The International Accounting Standards Board (IASB) has issued on 30 November 2006 the IFRS 8 Operational segments, which was endorsed by the European 

Commission on 21 November, 2007. This standard is applicable to periods from or on 1 January, 2009. 

IFRS 8 sets out the requirements for disclosures of information about an entity’s operational segments and also about services and products, geographical areas where 

the entity operates and its major clients. This standard specifies how an entity should disclose its information in the annual financial statements and, as a consequential 

amendment to IAS 34 Interim Financial Reporting, regarding the information to be disclosed in the interim financial reporting. Each entity should also provide a 

description of the segmental information disclosed namely profit or loss and of assets, as well as a brief description of how the segmental information is produced. 

Considering the nature of this change (disclosure) the impact will be limited to the presentation of the financial statements. As at 31 December 2008, the Group is 

evaluating the impact of adopting this standard. 

IFRIC 12 – Service Concession Arrangements 

The International Financial Reporting Interpretations Committee (IFRIC) has issued in July, 2007 IFRIC 12 – Service Concession Arrangements, which is applicable 

from 1 January, 2008, although allowing for an early adoption. The endorsement by the European Union was not yet approved. however, it is expected for the first 

quarter of 2009. The IFRIC 12 applies to public-to-private service concession arrangements. This interpretation will be applicable only when (i) the grantor controls 

or regulates what services the operator must provide and (ii) the grantor controls any significant residual interest in the infrastructure at the end of the term of the 

arrangement. 

Considering the nature of the contracts considered, the Group does not expect any impact from the adoption of this interpretation. 

IFRIC 13 – Customer Loyalty Programmes 

The IFRIC 13 Customer Loyalty Programmes was issued on July, 2007 and will be effective from 1 July, 2008, although allowing for an early adoption. 

This interpretation addresses how companies grant their customers loyalty award credits (often called ‘points’) when buying goods or services, allowing them to 

exchange these credits, in the future, by free goods or services or with a discount. Considering the available information, it is still not possible to reliably determine 

the impact of this interpretation and therefore no estimate is presented. However the Group is evaluating the impact of adopting this standard. 

IFRIC15 - Agreements for the Construction of Real Estate 

The IFRIC15 - Agreements for the Construction of Real Estate will be effective from 1 January, 2009. 

This interpretation includes guidance that allows determining if a contract for the construction of real estate is within the scope of IAS 18 Revenue or IAS 11 Cons - 

truction Contracts. Is expected that IAS 18 will be applied to a larger number of transactions. 

The Group does not expect this interpretation to have a material impact on its financial statements. 

IFRIC 16 – Hedges of a Net Investment in a Foreign Operation 

The International Financial Reporting Interpretations Committee (IFRIC), issued in July, 2008, IFRIC 16 – Hedges of a Net Investment in a Foreign Operation, with 

mandatory application date for years started after 1 October, 2008, although allowing for an early adoption. 

This interpretation intends to clarify that: 

• The hedge of a net investment in a foreign operation can only be applied to exchange differences resulting from the foreign subsidiaries' financial statements 

conversion from its functional currency to the parent company's functional currency and only for an amount equal or smaller to the subsidiary's net assets; 

• The hedge instrument can be contracted by any of the Group's entities, except by the entity that is being hedged; and 

• At the moment of the hedged subsidiary's sale, the accumulated gain or loss related to the effective hedge component is reclassified to profit and loss. 

This interpretation allows an entity that uses the step by step consolidation method to choose an accounting policy that allows determining the accumulated foreign 

exchange conversion adjustment that is reclassified to profit and loss when the subsidiary is sold, as it would do if applying the direct consolidation method. This inter - 

pretation has a prospective application. 

The Group is evaluating the impact of this interpretation's adoption in its financial statements.


IFRIC 17 – Distributions of Non-cash Assets to Owners 

The International Financial Reporting Interpretations Committee (IFRIC) issued in November, 2008, IFRIC 17 – Distributions of Non-cash Assets to Owners, with 

effective application date to years started after 1 July, 2009, early adopting being allowed. 

This interpretation intends to clarify the accounting treatment of non-cash assets distribution to owners. It establishes that non-cash assets distributions must be 

accounted at fair value and the difference to the distributed assets carrying amount recognized in profit and loss in the period of the distribution. 

The Group doesn't expect this interpretation to have a material impact in its financial statements. 

IFRIC 18 – Transfers of Assets from Customers 

The International Financial Reporting Interpretations Committee (IFRIC) issued in November, 2008, IFRIC 18 – Transfers of Assets from Customers, with effective 

application date to years started after 1 July, 2009, early adopting being allowed. 

This interpretation intends to clarify the accounting treatment of agreements through which an entity receives assets from customers for its own use and with the 

intent of establishing a future connection of the clients to a network or of granting continued access to the supply of services and goods to customers. 

The interpretation clarifies: 

• The conditions in which an asset is within the scope of this interpretation; 

• The assets recognition and initial measurement; 

• The identification of the identifiable services (one or more services in exchange for the transferred asset); 

• Revenue recognition; 

• Accounting of money transfers from customers. 


Annual Improvement Project 

In May, 2008, the IASB published the Annual Improvement Project that implied changes to the standards in force. The effective date of the referred changes depends 

on the specific standard, although the majority will be mandatory for the Group in 2009. 

The main changes resulting from the Annual Improvement Project are as follows: 

• Changes to IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations, effective for years starting after 1 July 2009. This change clarifies that all the 

assets and liabilities of a subsidiary must be classified as non-current assets held for sale in accordance with IFRS 5 if a plan for the partial sale of the subsidiary, that 

will imply losing the subsidiary's control, exists. This standard will be adopted prospectively by the Group. 

• Changes to IAS 1 Financial Statements presentation, which is applicable from 1 January 2009. The change clarifies that only some financial instruments classified as 

trading instruments are an example of current assets and liabilities. Until this change all trading instruments were classified as current assets and liabilities. The Group 

does not expect any material impact from the adoption of this change. 

• Changes to IAS 16 Property, Plant and Equipment, which is applicable from 1 January 2009. The change that occurred on this standard establishes classification rule 

(i) for the income originated by the sale of rented assets subsequently sold and (ii) for the income from these assets during the period between the date of termination 

of the rental agreement and the date of the sale agreement. The Group does not expect any material impact from the adoption of the changes referred above. 

• Changes to IAS 19 Employee Benefits, which is applicable from 1 January 2009. The changes allowed clarifying (i) the concept of negative costs associated to past 

services resulting from changes in the defined benefit plan, (ii) the interaction between the expected return from the assets and the costs of managing the plan, and 

(iii) the distinction between short and medium and long term benefits. 

The changes to IAS 19 will be adopted by the Group in 2009. However, the Group does not expect any material impact from the adoption of the changes referred 

above in its consolidated financial statements. 

• Changes to IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, which is applicable from 1 January 2009. This change established 

that the benefit arising from obtaining a government loan at rates below market rates, should be measured as the difference between the fair value of the liability at 

granting date, determined according with IAS 39 Financial Instruments: Recognition and Measurement and the amount received. This benefit should be subsequently 

accounted according with IAS 20. The Group doesn't expect any significant impact from the adoption of this change. 

• Changes to IAS 23 Borrowing Costs, applicable from 1 January 2009. The concept of borrowing costs was changed to clarify that these costs should be determined 

according with the effective interest rate as defined in IAS 39 Financial Instruments: Recognition and Measurement, thus eliminating the inconsistency between IAS 

23 and IAS 39. The Group doesn't expect any significant impact from the adoption of this change. 

• Changes to IAS 27 Consolidated and Separate Financial Statements, applicable from 1 January 2009. The change to this standard determines that in the cases when 

an investment in a subsidiary is accounted at fair value in the individual accounts, according with IAS 39 Financial Instruments: Recognition and Measurement and qualifies 

for classification as a non-current asset held for sale according with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, the investment should 

continue to be measured as defined in IAS 39. This change will not have an impact on the financial statement of the Group considering that, in the individual accounts, 

the investments in subsidiaries are accounted at acquisition cost, according with IAS 27; 

• Change to IAS 28 Investments in Associates, applicable from 1 January 2009. The changes to IAS 28 Investments in Associates had the objective of clarifying (i) that 

an investment in an associate should be treated as a single asset for impairment testing purposes under the scope of IAS 36, (ii) that any impairment loss to be recog - 

nized shouldn't be allocated to specific assets namely to goodwill and (iii) that the impairment reversions are accounted as an adjustment to the carrying amount of 

the associate as long as and to the extent that the recoverable amount of the investment increases. The Group doesn't expect any significant impact from the 

adoption of this change. 

• Change to IAS 38 Intangible Assets, applicable from 1 January 2009. This change determined that an incurred deferred expense related with publicity or promotional 

activities can only be recognized in the balance sheet if an advance payment was made regarding goods and services that will be received in a future date. The 

recognition in profit and loss should occur when the entity has the right to receive the goods and services. The Group doesn't expect any significant impact from 

the adoption of this change.


• Changes to the IAS 39 Financial Instruments: Recognition and Measurement, applicable from 1 January 2009. These changes include mainly (i) the clarification that 

it is possible to perform transfers from and to the category of fair value through profit and loss regarding derivatives, whenever these start or end an hedge relationship 

in cash-flows hedge models or net investment in an associate or subsidiary, (ii) the change to the definition of financial instrument at fair value through profit and loss 

in what relates the trading portfolio, determining that in the case of financial instrument portfolios jointly managed and for which there is evidence of a recent and 

real model of short-term profit taking, these should be classified as trading on initial recognition; (iii) the change to the documentation requirements and the 

effectiveness tests of the hedge relationship for the operational segments defined under the scope of IFRS 8 - Operating Segments; and (iv) the clarification that the 

measurement of a financial liability at amortized cost, after the interruption of the respective fair value hedge relationship, should be performed based on the new 

effective rate calculated at the interruption date. The Group doesn't expect any significant impact from the adoption of this change. 

• Change to IAS 40 Investment Properties, applicable from 1 January 2009. Following this change, the properties under construction or development for subsequent 

use as investment properties are included under the scope of IAS 40 (before they were included under the scope of IAS 16 Property, Plant and Equipment). These 

properties under construction can be accounted at fair value except if they cannot be reliably measured in which case they should be accounted at acquisition cost. 

The Group ie evaluating the impact from the adoption of this change. 

54. Accounting impact arising from the inspection from the supervisory authorities 

In the scope of the investigations which are currently being performed by the supervisory authorities, which are described in note 55, the Bank promoted an internal 

investigation in relation to the transactions realized with off-shore entities. 

This internal investigation identified that, between 1999 and 2002, BCP Group financed off-shore entities for the purposes of acquisition of shares issued by the Group. 

In November 2002, the referred off-shore entities sold, to a financial institution, the BCP shares held, which represented 4.99% of the share capital of the Bank as at 

that date and, simultaneously acquired notes (Notes), issued by that financial institution, with an amount equivalent to 50% of the proceeds from the sale. This financial 

institution communicated to the market, on 9 December 2002, the acquisition of a qualified investment in the Bank. 

The above referred loans were subject to a restructuring, occurred in March 2004, having been assumed by a group whose main activity, developed through the 

company Edifícios Atlântico, S.A., consists on the development of real estate projects (from now on referred to as “GI”). Following this restructuring, GI assumed net 

liabilities amounting to 450 million euros, net of the reimbursement of the Notes occurred in December 2004. On the same date, the Bank sold to GI an entity named 

Comercial Imobiliária, for 26 million euros, and a real estate portfolio for 61 million euros. 

Regarding the above mentioned restructuring, as referred to in note 48, GI through Comercial Imobiliária issued commercial paper in the amount of Euros 210 million 

subscribed by BCP Group and that in 2005 was contributed in kind to the BCP Group Pension Fund and shares issued by quoted companies. As referred in note 48, 

after this contribution, and as a result of the communication by Comercial Imobiliária that it didn’t have conditions to meet the instalments, the Pensions Fund 

registered an actuarial loss in the approximate amount of Euros 115,000,000 in 2006 and 2007 related to the commercial paper issued by Comercial Imobiliária. The 

total amount net of amortizations, as at 31 December 2008, in accordance with the accounting policy described in note 1 w), is Euros 98,000,000. The amount will 

be amortized by the remaining term of 17 years with a annual amortization of approximatly Euros 5,750,000. 

Considering the significant exposure of the Bank towards GI and the real-estate sector in which this entity operates, in 2005, the Bank allocated a provision, in the 

amount of 85 million euros, to the existing loans resulting from the above referred transactions. 

In June 2006, the Bank, which previously had acquired a minority shareholding of 11.5% in Comercial Imobiliária, granted shareholders loans to this entity, in the amount 

of 300 million euros, in order to allow Comercial Imobiliária to acquire, from another GI subsidiary, an indirect majority shareholding in an Angolan entity which owned 

the so called Baia de Luanda Project. This entity had obtained, in October 2005, the concession, for 60 years, of the Baia de Luanda leasehold. With the proceeds 

from this transaction, GI repaid to BCP an additional portion of the loan, corresponding to 305 million euros. 

Considering the significance of the Project, the additional financing requirements for its development and the extent of GI’s indebtedness with BCP, this entity proposed 

and BCP accepted, a holding of 68.34% of Comercial Imobiliária share capital, that at the date held an economic interest of 54% in the Baia de Luanda Project, as a 

repayment of the residual loan, which amounted to 61 million euros, which, in June 2007, extinguished the remaining of the above mentioned net liabilities assumed 

in the amount of Euros 450 million. As a result of this transaction, BCP become owner of 90% of Comercial Imobiliária share capital and, indirectly, of 54% of the 

future economic benefits of the above mentioned project. 

Considering the existing indications arising from the ongoing investigations conducted by the supervisory authorities regarding a more thorough review of the 

economic substance of the above referred transactions, the Bank decided to consider a more prudent interpretation, regarding the risks identified, the nature of the 

transactions and restructurings which occurred, and recorded an adjustment of 300 million euros with effect at 1 January 2006, with a net impact of 220.5 million 

euros after considering the tax effect. 

As referred to in note 55, such decision does not represent any kind of recognition by the Bank of the existence of the alleged infractions which may be attributed 

to it. As referred also in note 55, as at 12 December 2008, the Bank was notified for the administrative proceeding nº 24/07/CO constituted by the Bank of Portugal 

and for the administrative proceeding nº 41/2008 constituted by CMVM related to the inquiry processes referred above. The Bank maintains the position of contesting 

any possible infractions attributed to this matter considering the legal terms applicable. Notwithstanding this fact, the Executive Board of Directors considers that the 

financial statements for the years ended 31 December 2008 and 2007 include, in all material respects the disclosures regarding the impact on the financial position 

of the Group of the referred matters, as disclosed in notes 1, 40, 48, 54 and 55. The Executive Board of Directors has maintained contacts with Supervisory Authorities 

regarding this matter. 

It should be noted, in any case, that the Bank maintains its expectation about the future profitability of the Baia de Luanda Project (the market value of which attribu - 

table to the Group, determined by independent valuers in 2007, is estimated to be between Euros 278.8 million and Euros 231.6 million), which will be recognised 

as income by the Bank when it is generated.


The above referred adjustment, recognised in accordance with IFRS and in the notes to the financial statements, can be analysed as follows: 

Restated 

Equity Net income Equity 

31.12.2006 2006 01.01.2006 

Euros ’000 

Previously reported 4,841,892 779,894 4,247,494 

Adjustments: 

Loan granted (300,000) - (300,000) 

Provision for loan losses 9,825 9,825 - 

Deferred tax 76,896 (2,604) 79,500 

Total (213,279) 7,221 (220,500) 

Restated 4,628,613 787,115 4,026,994 

55. Administrative proceedings 

1. At the end of the year of 2007, the Bank received a formal notice dated 27 December 2007 informing that administrative proceeding no. 24/07/CO was being brought 

by the Bank of Portugal against the Bank, “based in preliminary evidence of administrative offences foreseen in the General Framework of credit Institutions and Financial 

Companies (approved by Decree-Law no. 298/92, of December 31), in particular with respect to breach of accounting rules, provision of false or incomplete information to the 

Bank of Portugal, in particular in what respect to the amount of own funds and breach of prudential obligations”. 

A press release issued by the Bank of Portugal on 28 December 2007 mentioned that such administrative proceeding was brought “based in facts related with 17 off - 

-shore entities, which nature and activities were always hidden from the Bank of Portugal, in particular in previous inspections carried out”. 

On 12 December 2008, the Bank was notified of an accusation under the process of administrative proceeding no. 24/07/CO instructed by the Bank of Portugal. 

The Bank did not accept the charges or accusations against it reduced, and will provide defense under this process of administrative proceeding within their term, which 

ends on 13 March, 2009. 

2. On 12 December 2008, the Bank was notified by the CMVM of accusation under the process of administrative proceeding no No. 41/2008. 

The Bank did not accept the accusation made against it and has already provided, on 27 January 2009, defense under the process of administrative proceeding in question, 

having sustained a total rejection of the accusation. 

3. On 21 December 2007, CMVM had addressed a notice to the Bank, indicating that it should make public disclosure thereof, which the Bank did on 23 December 

2007. The notice read as follows: 

“The CMVM, pursuant to its powers, is now engaged in a supervision action on BCP (as a listed company), in order to determine the nature and the activities of several off-shore 

entities responsible for investments in securities issued by BCP Group or related entities. Despite the process of supervision being in progress, in particular in order to obtain a 

complete and final description of the situation and of the market behaviour of those entities, as well as to determine the relevant liabilities (including personal liabilities), the CMVM 

came to the following preliminary findings: 

a) The mentioned off-shore entities have constituted securities portfolios – which included almost exclusively shares of BCP – with financing obtained from Banco Comercial 

Português, and there is, in general, no evidence that such entities were financed for this purpose by any other significant transfer from an entity external to the BCP Group; 

b) It is already known that part of the debts was eliminated through the assignment of credits to third parties for a residual consideration; 

c) The conditions of these financings and the governance of such entities give the appearance that BCP has assumed all the risk concerning those off-shore entities, and that it 

had power to control the life and business of such entities; 

d) Thus, such transactions are in fact the financing for the acquisition of own shares not reported as such. This configuration is also present in a transaction made with a financial 

institution, which lead this institution to disclose a qualified shareholding, even though the economic interest and the possibility of exercising the voting rights remained within 

BCP; 

e) Pursuant to the described circumstances, it may be concluded that the information given to the authorities and to the market, in the past, was not always complete and/or 

true, in particular in what concerns the amount of BCP’s own funds and its owners; 

f) Significant market transactions made by the mentioned entities were detected, involving significant considerations; these transactions require a deeper analysis, in order to 

find out about possible infringements of the market rules. 

Thus, given the nature of these conclusions and the urgency of the matter, the CMVM, under article 360, no. 1, f) of the Portuguese Securities Code, asks BCP to immediately: 

a) Inform the market about whether the financial information recently disclosed by it already reflects all the financial losses pursuant to the above mentioned situation; 

b) Inform about the existence of any other situations which were not disclosed, in order to allow the investors to make a properly reasoned judgment about the securities issued 

by BCP; 

c) Transcribe in its communication the full text of this CMVM notice; BCP may inform, if it deems appropriate, the fact that BCP was not yet formally heard about these conclusions. 

The CMVM will continue the current process of supervision within its powers and with all its consequences, and will notify the appropriate authorities of any illegalities of different 

nature, and will further cooperate with the Bank of Portugal within the framework of Bank of Portugal’s powers.”


4. In the process mentioned in 1. above, the Bank of Portugal charges the Bank against the practice of six administrative proceedings referred in g) and three 

administrative proceedings referred in r), both of article 211 of the General Framework of Credit Institutions and Financial Companies ( "RGICSF) . 

The administrative proceedings, in case the types of conduct listed in the accusation are demonstrated, would be the following: 

a) the breach of accounting rules or procedures set forth in the law or by the Bank of Portugal which does not cause a serious harm to the knowledge of the 

patrimonial and financial standing of the Institution constitutes an administrative offence foreseen in article 210, f), of RGICSF, punished, in the case of companies, with 

a fine between Euros 750 and Euros 750,000. If, on the other hand, the relevant conduct causes such serious harm, that may constitute an administrative offence 

foreseen in article 211, g), of RGICSF, punished, in the case of companies, with a fine between Euros 2,500 and Euros 2,494,000. 

b) The (i) omission of information and communications due to the Bank of Portugal in the relevant delays; or (ii) the provision of incomplete information, constitute 

an administrative offence foreseen in article 210, h) (now i)), of RGICSF, punished, in the case of companies, with a fine between Euros 750 and Euros 750,000. On 

the other hand, the provision to the Bank of Portugal of (i) false information, or (ii) incomplete information, capable of leading to erroneous conclusions with identical 

or similar effect to that of the provision of false information on the matter constitute an administrative offence foreseen in article 211, r), of RGICSF, punished, in the 

case of companies, with a fine between Euros 2,500 and Euros 2,494,000; 

According to the accusation, each of the administrative proceedings are punished by a fine between Euros 2,493.99 and Euros 2,493,989.49, which, according to the 

rule of the contest of offenses foreseen in the article 19º, no. 1 and 2 of the General of the Administrative Proceedings, in case of conviction of several administrative 

proceedings in contest, there can only be one fine, of which the upper limit can not exceed twice the highest limit of administrative proceedings in contest. 

5. In the accusation notified to the Bank in the administrative proceeding no. 41/2008 CMVM referred in 2. above, the Bank is charged against seven administrative 

proceeding for alleged violation of article 7. Portuguese Securities Code ( "CVM") and article 389, paragraph 1, a) of the CVM. 

Pursuant to article 7 of the CVM, the information relating to financial instruments, securities markets, financial intermediation activities, settlement and clearing of 

transactions, public offers and issuers should be complete, truthful, up-to-date, clear, objective and lawful. 

According to the accusation, each of the administrative proceedings are punished by a fine between Euros 25,000 and Euros 2,500,000, which, according to the rule 

of the contest of offenses foreseen in the article 19º, no. 1 and 2 of the General of the Administrative Proceedings, in case of conviction of several administrative 

proceedings in contest, there can only be one fine, of which the upper limit can not exceed twice the highest limit of administrative proceedings in contest, in the 

maximum amount of Euros 5,000,000.


56. BCP Group list of companies 

As at 31 December 2008, the Banco Comercial Português Group's subsidiary companies included in the consolidated accounts using the purchase method according, 

were as follows: 

Group 

Bank 

Head Share % de % % 

Subsidiary companies office capital Currency Activity control held held 

Millennium bcp - Gestão de Fundos de Lisbon 6,720,691 EUR Investment fund management 100.0 100.0 100.0 

Investimento, S.A. 

Interfundos Gestão de Fundos de Lisbon 1,500,000 EUR Investment fund management 100.0 100.0 100.0 

Investimento Imobiliários, S.A. 

BII Investimentos International, S.A. Luxembourg 150,000 EUR Investment fund management 100.0 100.0 – 

Banco Millennium BCP Investimento, S.A. Lisbon 75,000,000 EUR Banking 100.0 100.0 100.0 

BCP Capital - Sociedade de Lisbon 28,500,000 EUR Venture capital 100.0 100.0 – 

Capital de Risco, S.A. 

Banco de Investimento Imobiliário, S.A. Lisbon 157,000,000 EUR Banking 100.0 100.0 100.0 

BII Internacional, S.G.P.S., Lda. Funchal 25,000 EUR Holding company 100.0 100.0 – 

BII Finance Company Limited George Town 25,000 USD Investment 100.0 100.0 – 

Banco ActivoBank (Portugal), S.A. Lisbon 23,500,000 EUR Banking 100.0 100.0 – 

BIM - Banco Internacional de Maputo 741,000,000 MZN Banking 66.7 66.7 – 

Moçambique, S.A. 

Banco Millennium Angola, S.A. Luanda 2,008,956,625 AOA Banking 100.0 100.0 100.0 

Bank Millennium, S.A. Warsow 849,181,744 PLN Banking 65.5 65.5 65.5 

Millennium TFI S.A. Warsow 10,300,000 PLN Investment fund management 100.0 65.5 – 

Millennium Dom Maklerski S.A. Warsow 16,500,000 PLN Broker 100.0 65.5 – 

Millennium Leasing Sp. z o.o. Warsow 43,400,000 PLN Leasing 100.0 65.5 – 

Millennium Lease Sp.z o.o. Warsow 86,318,000 PLN Leasing 100.0 65.5 – 

BBG Finance BV Rotterdam 18,000 EUR Investment 100.0 65.5 – 

TBM Sp.z o.o. Warsow 500,000 PLN Advisory and services 100.0 65.5 – 

MB Finance AB Stockholm 500,000 SEK Investment 100.0 65.5 – 

Millennium Service Sp. z o.o Warsow 1,000,000 PLN Services 100.0 65.5 – 

Banque Privée BCP (Suisse) S.A. Geneve 70,000,000 CHF Banking 100.0 100.0 – 

Millennium BCPBank Newark 2,500,000 USD Banking 100.0 100.0 – 

Millennium Bank, Societé Anonyme Athens 176,100,000 EUR Banking 100.0 100.0 – 

Millennium Bank, Anonim Sirketi Istanbul 202,535,316 TRY Banking 100.0 100.0 – 

Millennium Fin, Vehicles, Vessels, Athens 249,980 EUR Investment 100.0 100.0 – 

Appliances and Equipment Trading, 

Societé Anonyme 

Millennium Mutual Funds Management Athens 1,176,000 EUR Investment fund management 100.0 100.0 – 

Company, Societe Anonyme 

Banca Millennium S.A. Bucarest 227,750,000 RON Banking 100.0 100.0 – 

BCP Internacional II, S.G.P.S., Funchal 25,000 EUR Holding company 100.0 100.0 100.0 

Sociedade Unipessoal, Lda. 

BitalPart, B.V. Rotherdam 19,370 EUR Holding company 100.0 100.0 100.0 

BCP Investments, B.V. Amsterdam 620,774,050 EUR Holding company 100.0 100.0 100.0 

Comercial Português Ireland Limited Dublin 10,000 EUR Financial Services 100.0 100.0 100.0 

BCP Holdings (USA), Inc. Newark 250 USD Holding company 100.0 100.0 – 

Seguros & Pensões Gere, S.G.P.S., S.A. Lisbon 380,765,000 EUR Holding company 100.0 100.0 89.0 

Anjala Holdings , S.A. Tortola 54,402,000 USD Holding company 100.0 99.9 – 

Luanda Waterfront Corporation George Town 5,000 USD Services 50.0 50.0 – 

Baía de Luanda Luanda 19,200,000 USD Services 64.5 64.5 – 

BCP Bank & Trust Company Ltd. George Town 340,000,000 USD Banking 100.0 100.0 – 

BCP Capital Finance Limited George Town 16,000,000 USD Investment 100.0 100.0 100.0 

BCP Finance Bank Ltd George Town 246,000,000 USD Banking 100.0 100.0 – 

BCP Finance Company, Ltd George Town 1,434,843,700 USD Investment 100.0 3.0 – 

Millennium bcp - Escritório de Sao Paulo 19,310,539 BRL Financial Services 100.0 100.0 100.0 

Representações e Serviços, S/C Ltda. 

(continue)



Head Share % % % 


Millennium bcp - Serviços de Comércio Lisbon 240,000 EUR Videotex services 100.0 100.0 100.0 

Electrónico, S.A. 

Caracas Financial Services, Limited George Town 25,000 USD Financial Services 100.0 100.0 100.0 

Banpor Consulting S.R.L. Bucarest 1,750,000 RON Services 100.0 100.0 100.0 

Comercial Imobiliária, S.A. Lisbon 50,000 EUR Real-estate management 99.9 99.9 99.9 

Paço de Palmeira - Sociedade Braga 39,905 EUR Agriculture industry 100.0 100.0 100.0 

Agrícola e Comercial, Lda 

Millennium bcp - Prestação Lisbon 329,500 EUR Services 93.1 93.7 52.7 

de Serviços, A. C. E. 

Servitrust - Trust Management and Funchal 100,000 EUR Trust services 100.0 100.0 100.0 

Services, S.A. 

Group 

Bank 

As at 31 December 2008, the associated companies , were as follows: 

Group 

Bank 


Associated companies office capital Currency Activity control held held 

Banque BCP, S.A.S. Paris 65,000,000 EUR Banking 19.9 19.9 19.9 

Banque BCP (Luxembourg), S.A. Luxembourg 12,500,000 EUR Banking 19.9 19.9 – 

SIBS - Sociedade Interbancária de Serviços, S.A. Lisbon 24,642,300 EUR Banking services 21.9 21.9 21.5 

Unicre - Cartão de Crédito Internacional, S.A. Lisbon 10,000,000 EUR Credit cards 30.3 30.3 30.0 

VSC - Aluguer de Veículos Lisbon 12,500,000 EUR Long term rental 50.0 50.0 – 

Sem Condutor, Lda. 

As at 31 December 2008, the Banco Comercial Português Group's subsidiary and associated insurance companies included in the consolidated accounts under the 

purchase method and equity method were as follows: 

Group 

Bank 



Millennium Insurance Agent Unipersonal Athens 18,000 EUR Insurace broker 100.0 100.0 – 

Limited Liability Company 

Seguros & Pensões RE Limited Dublin 1,500,000 EUR Life reinsurance 100.0 100.0 – 

SIM - Seguradora Internacional de Maputo 147,500,000 MZN Insurance 89.9 60.0 – 

Moçambique, S.A.R.L.


Group 

Bank 


Associated companies office capital Currency Activity control held held 

Millenniumbcp Fortis Grupo Segurador, Lisbon 1,000,002,375 EUR Holding company 49.0 49.0 – 

S.G.P.S., S.A. 

Companhia Portuguesa de Seguros de Lisbon 12,000,000 EUR Health insurance 49.0 49.0 – 

Saúde, S.A. 

Ocidental - Companhia Portuguesa de Lisbon 22,375,000 EUR Life insurance 49.0 49.0 – 

Seguros de Vida, S.A. 

Ocidental - Companhia Portuguesa de Lisbon 12,500,000 EUR Non-life insurance 49.0 49.0 – 

Seguros, S.A. 

Pensõesgere, Sociedade Gestora Fundos Lisbon 1,200,000 EUR Pension fund management 49.0 49.0 – 

de Pensões, S.A. 

57. Subsequents events 

Banco Comercial Português statement on Millennium BIM in Mozambique 

Banco Comercial Português informs that it is in negotiations with a Mozambican group regarding that group's possible acquisition of a stake of up to 10% of BIM - 

Banco Internacional de Moçambique, S.A. ("BIM").


Banco Comercial Português, S.A.

142 Annual Report Volume II Financial Statements 2008 Banco Comercial Português, S.A. 

Income Statement for the years ended 31 December, 2008 and 2007 


Notes 

2008 

2007 

Interest and similar income 3 4,206,114 3,550,211 

Interest expense and similar charges 3 (3,154,278) (2,628,902) 

Net interest income 1,051,836 921,309 

Dividends from equity instruments 4 609,689 345,476 

Net fees and commission income 5 463,176 350,463 

Net gains / (losses) arising from trading and hedging activities 6 55,149 85,078 

Net gains / (losses) arising from available for sale financial assets 7 (298,154) 61,758 

Other operating income 8 79,824 119,703 


Staff costs 9 560,561 698,651 

Other administrative costs 10 398,922 433,726 

Depreciation 11 50,806 51,628 

Operating expenses 1,010,289 1,184,005 

951,231 699,782 

Loans impairment 12 (413,472) (252,839) 

Other assets impairment 29 (47,380) (32,862) 

Other provisions 13 (1,977) (93,792) 


Gains/(losses) from the sale of subsidiaries and other assets 14 (17,163) (4,044) 

Profit before income tax 471,239 316,245 

Income tax 

Current 15 16,567 (16,871) 

Deferred 15 (36,623) 39,470 


Earnings per share (in euros) 16 

Basic 0.10 0.08 

Diluted 0.10 0.08 



See accompanying notes to the individual financial statements

Annual Report Volume II Financial Statements 2008 Banco Comercial Português, S.A. 143 

Balance Sheet as at 31 December, 2008 and 2007 


Notes 

2008 

2007 

Assets 

Cash and deposits at central banks 17 1,046,774 1,341,470 


Repayable on demand 18 971,333 1,347,567 

Other loans and advances 19 9,865,971 13,228,408 

Loans and advances to customers 20 55,673,236 48,832,375 

Financial assets held for trading 21 2,495,847 1,773,280 

Other financial assets held for trading at fair value through profit or loss 22 60,755 59,216 

Financial assets available for sale 21 8,061,960 5,043,127 


Financial assets held to maturity 24 1,095,769 - 

Investments in associated companies 25 3,958,477 1,879,744 

Non current assets held for sale 29 14,601 15,991 

Property and equipment 26 418,963 416,332 

Intangible assets 27 9,985 6,692 

Current income tax assets 7,623 7,437 

Deferred income tax assets 28 491,727 497,323 

Other assets 29 4,743,402 6,029,381 

89,025,397 80,514,121 

Liabilities 

Deposits from central banks 3,062,886 781,682 

Deposits from other credit institutions 30 20,722,531 29,664,904 

Deposits from customers 31 31,713,736 29,105,626 

Debt securities issued 32 10,425,895 8,441,947 

Financial liabilities held for trading 33 1,466,781 1,154,317 

Other financial liabilities held for trading at fair value through profit or loss 34 5,716,381 1,362,880 


Provisions for liabilities and charges 35 834,074 823,548 

Subordinated debt 36 3,858,383 4,141,117 

Current income tax liabilities 81 22,658 

Other liabilities 37 5,638,522 960,051 


Equity 

Share capital 38 4,694,600 3,611,330 

Treasury stock 41 (4,387) - 


Fair value reserves 40 (48,669) (16,508) 

Reserves and retained earnings 40 273,485 (840,259) 


Total Equity 5,549,580 3,975,114 

89,025,397 80,514,121 





Cash Flows Statement for the years ended 31 December, 2008 and 2007 


2008 

2007 

Cash flows arising from operating activities 

Interest income received 3,605,612 3,289,211 

Commissions income received 587,174 584,972 

Fees received from services rendered 288,461 127,455 

Interest expense paid (3,166,903) (2,464,145) 

Commissions expense paid (196,831) (311,622) 

Recoveries on loans previously written off 80,225 134,632 

Payments to suppliers and employees (1,021,544) (972,717) 

176,194 387,786 

Decrease / (increase) in operating assets: 

Loans and advances to credit institutions 2,317,706 1,612,002 

Deposits with Central Banks under monetary regulations 1,325,276 (1,529,272) 

Loans and advances to customers (6,946,666) (5,774,350) 

Short term trading account securities 142,158 (32,000) 

Increase / (decrease) in operating liabilities: 

Deposits from credit institutions repayable on demand (469,085) 234,654 

Deposits from credit institutions with agreed maturity date (3,619,796) (2,440,363) 

Deposits from clients repayable on demand (443,349) (600,254) 

Deposits from clients with agreed maturity date 3,008,469 3,509,633 

(4,509,093) (4,632,164) 

Income taxes (paid) / received 3,036 1,200 

(4,506,057) (4,630,964) 

Cash flows arising from investing activities 

Acquisition of shares in subsidiaries and associated companies (50,229) (16,720) 

Dividends received 609,689 345,476 

Interest income from available for sale financial assets 313,610 201,870 

Proceeds from sale of available for sale financial assets 6,896,790 2,686,681 

Available for sale financial assets purchased (32,458,254) (15,021,689) 

Proceeds from available for sale financial assets on maturity 24,147,470 11,982,803 

Acquisition of fixed assets (106,816) (51,466) 

Proceeds from sale of fixed assets 31,321 57,361 

Increase / (decrease) in other sundry assets (176,814) (27,431) 

(793,233) 156,885 

Cash flows arising from financing activities 

Proceeds from issuance of subordinated debt 376,000 - 

Reinbursement of subordinated debt (400,000) (251,342) 

Proceeds from issuance of debt securities 5,554,587 6,471,919 

Repayment of debt securities (2,168,000) (1,246,823) 

Share capital increase 1,083,270 - 

Share premium 183,368 - 

Dividends paid - (306,963) 

Increase / (decrease) in other sundry liabilities and minority interests 274,274 (272,855) 

4,903,499 4,393,936 

Net changes in cash and equivalents (395,791) (80,143) 

Cash and equivalents balance at the beginning of the year 1,767,755 1,847,898 

Cash (Note 17) 400,631 420,188 

Other short term investments (note 18) 971,333 1,347,567 

Cash and equivalents balance at the end of the year 1,371,964 1,767,755 



Statement of Changes in Equity for the years ended 31 December, 2008 and 2007 

Total 

equity 

Share 

capital 

Share 

premium 

Legal and 

statutory 

reserves 

Fair value 

reserves 

Other reserves 

and retained 

earnings 


Treasury 

stock 

Balance on 31 December, 2006 4,124,827 3,611,330 881,707 481,300 88,898 (938,408) - 


Legal reserve - - - 60,902 - (60,902) - 

Statutory reserve - - - 19,000 - (19,000) - 

Dividends paid in 2007 (306,963) - - - - (306,963) - 

Profit for the year 338,844 - - - - 338,844 - 

Fair value reserves (note 40) (126,223) - - - (126,223) - - 

Amortization of the transition adjustment 

to pensions (Regulation no.12/01) (102,603) - - - - (102,603) - 

Deferred taxes related to balance sheet changes 

charged against reserves 47,232 - - - 20,817 26,415 - 

Balance on 31 December, 2007 3,975,114 3,611,330 881,707 561,202 (16,508) (1,062,617) - 


Share premium - - (881,707) - - 881,707 - 

Legal reserve - - - (96,911) - 96,911 - 

Statutory reserve - - - (84,000) - 84,000 - 

Profit for the year 451,183 - - - - 451,183 - 

Increase in share capital by the issue of 

1,083,270,433 shares (note 38) 1,299,924 1,083,270 216,654 - - - - 

Registration costs related with the 

share capital increase (33,286) - (33,286) - - - - 

Treasury stock (4,387) - - - - - (4,387) 

Fair value reserves (note 40) (44,735) - - - (44,735) - - 

Merger Reserves by incorporation of 

BCP Participações Financeiras S.G.P.S. (57,517) - - - - (57,517) - 

Amortization of the transition adjustment 

to pensions (Regulation no.12/01) (71,603) - - - - (71,603) - 

Deferred taxes related to 

balance sheet changes charged against reserves 31,031 - - - 12,574 18,457 - 

Other reserves (note 40) 3,856 - - - - 3,856 - 

Balance on 31 December, 2008 5,549,580 4,694,600 183,368 380,291 (48,669) 344,377 (4,387) 



Notes to the Individual Financial Statements 31 December, 2008 

1. Accounting policies 

a) Basis of presentation 

Banco Comercial Português, S.A. (the ‘Bank’) is a public bank, established in Portugal in 1985. It commenced operations on 5 May, 1986, and these financial statements 

reflect the results of the operations of the Bank, for the years ended 31 December, 2008 and 2007. 

In accordance with Regulation (EC) no. 1606/2002 from the European Parliament and the Counsel, of 19 July 2002, and its adoption into Portuguese Law through 

Decree-Law no. 35/2002, of 17 February and Regulation no. 1/2005 from the Bank of Portugal, the Bank’s financial statements are required to be prepared in 

accordance with International Financial Reporting Standards (‘IFRS’) as endorsed by the European Union ('EU') since the year 2005, except regarding the issues defined 

at no.2 and no.3 of Regulation no.1/2005 and no.2 of Regulation 4/2005 from the Bank of Portugal (NCA'S). NCA'S comprise accounting standards issued by the 

International Accounting Standards Board (‘IASB’) as well as interpretations issued by the International Financial Reporting Interpretations Committee (‘IFRIC’) and 

their predecessor bodies, with the exception of the issues referred in no. 2 and 3 of Regulation no. 1/2005 and no. 2 of Regulation no. 4/2005 of Bank of Portugal: i) 

maintenance of the actual requirements related with measurement and provision of loans and advances to customers, ii) employee benefits through the definition 

of a deferral period for the transition impact to IAS 19 and iii) restriction to the application of some issues established in IAS/IFRS. The Executive Board of Directors 

approved these financial statements on 11 February 2009. The financial statements are presented in thousands of euros, rounded to the nearest thousand. 

The Bank adopted IFRS 7 - Financial Instruments: disclosures and IAS 1 - Presentation of Financial Statements (amendment) – Capital Disclosures since 1 January, 

2007. It should be noted that the impact of the adoption of the standards mentioned above relates to additional disclosure requirements, without any impact on the 

equity of the Bank. In accordance with the transitional rules, comparative information is also provided. 

Additionally, the Bank adopted since 2008 IAS 39 and IFRS 7 - Reclassification of Financial Instruments, IFRIC 11 and IFRS 2 - Group and Tresuary Shares Transactions 

and IFRIC 14 and IAS 19 - The limit of a defined benefit asset, minimum pending requirements and their interaction. The adoption of these interpretations did not 

have any impact on the financial statements. 

The Bank's financial statements for the year ended 31 December, 2008 have been prepared in terms of recognition and measurement in accordance with the IFRS, 

effective and adopted for use in the EU. 

The financial statements are prepared under the historical cost convention, as modified by the application of fair value basis for derivative financial instruments, financial 

assets and liabilities at fair value through profit or loss (trading, and fair value option) and available-for-sale assets, except those for which a reliable measure of fair 

value is not available. Recognized assets and liabilities that are hedged under hedge accounting are stated at fair value in respect of the risk that is being hedged. Other 

financial assets and liabilities and non-financial assets and liabilities are stated at amortised cost or historical cost. Non-current assets and disposal groups held for sale 

are stated at the lower of carrying amount and fair value less costs to sell. 

The accounting policies set out below have been applied consistently for all periods presented in these financial statements. 

Within the scope of the investigations in progress by the Supervisory Authorities that are described in notes 40, 51 and 52, the balance Reserves and Retained Earnings 

includes, with effect as at 1 January 2006, a restatement resulting from the decision taken by the Executive Board of Directors of booking a provision regarding an 

asset booked on the financial statements resulting from the transactions described in notes 40, 51 and 52. 

The preparation of the financial statements in accordance with IFRS requires the Executive Board of Directors to make judgements, estimates and assumptions that 

affect the application of the accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are 

based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making 

the judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The 

issues involving a higher degree of judgement or complexity, or where assumptions and estimates are considered to be significant are presented in note 1 aa). 

b) Loans and advances to customers 

Loans and advances to customers include loans and advances originated by the Bank, which are not intended to be sold in the short term and are recognised when 

cash is advanced to borrowers. 

The derecognition of these assets occurs in the following situations: (i) the contractual rights of the Bank have expired; or (ii) the Bank transferred substantially all the 

associated risks and rewards. 

Loans and advances to customers are initially recognized at fair value plus any directly attributable transaction costs and fees and are subsequently measured at 

amortized cost using the effective interest method, less impairment losses. 

Impairment 

As referred in the accounting policy described in note 1 a), the Bank has prepared its financial statements in accordance with NCA’s therefore, in accordance with 

no. 2 and 3 of Regulation no. 1/2005 of Bank of Portugal, the Bank adopted the same requirements for measurement and provision of loans and advances to 

customers used in the previous years, described as follows: 

Specific provision for loan losses 

The specific provision for loan losses is based on the appraisal of overdue loans including the related non overdue amounts and loans subject to restructuring, to 

cover specific credit risks. This provision is shown as a deduction against loans and advances to customers. The adequacy of this provision is reviewed regularly by the 

Bank taking into consideration the existence of asset-backed guarantees, the overdue period and the current financial situation of the client. 

The provision calculated under these terms, complies with the requirements established by the Bank of Portugal, in accordance with Regulations no. 3/95, of 30 June, 

no. 7/00, of 27 October and no. 8/03, of 30 January.


General provision for loan losses 

This provision is established to cover latent bad and doubtful debts which are present in any loan portfolio, including guarantees, but which have not been specifically 

identified as such. This provision is recorded under provision for liabilities and charges. 

The general provision for loan losses is in accordance with Regulation no. 3/95, of 30 June 1995, Regulation no. 2/99, of 15 January 1999 and Regulation no. 8/03, of 

8 February 2003 of the Bank of Portugal. 

Provision for country risk 

The provision for country risk is in accordance with Regulation no. 3/95, of 30 June of the Bank of Portugal, and is based on the Instruction no. 94/96, of 17 June, of 

the Bank of Portugal, including the adoption of changes made to paragraph 2.4 of the referred Instruction published in October 1998. 

Write-off of loans 

The write-off of loans is performed against the related provision for loan impairment, when this corresponds to 100% of the loans amount. Subsequent recoveries 

of amounts previously written off are accounted as gains in the period they occur. 

c) Financial instruments 

(i) Classification, initial recognition and subsequent measurement 

1) Financial assets and liabilities at fair value through profit and loss 

1a) Financial assets held for trading 

The financial assets and liabilities acquired or issued with the purpose of sale or re-acquisition on the short term, namely bonds, Treasury Bills or shares or that make 

part of a financial instruments portfolio that are jointly managed and for which there is evidence of a recent and real model of short-term profit taking or that can 

be included in the definition of derivative (except in the case of a derivative that is an effective hedge instrument) are classified as trading. The dividends associated 

to these portfolios are accounted in Profits arising from trading activity. 

Trading derivatives with a positive fair value are included in Financial assets held for trading and the trading derivatives with negative fair value are included in Financial 

liabilities held for trading. 

1b) Financial assets and liabilities at fair value by decision of the own institution (“Fair Value Option”) 

The Group has adopted the Fair Value Option for certains bond issues, loans and deposits performed since 2007 that contain embedded derivatives or with related 

hedge derivatives. The variations of the credit risk of the Bank related with financial liabilities at Fair Value Option are disclosed in note 6 Net gains / (losses) arising 

from trading and hedging activities. 

The designation of the financial assets and liabilities at fair value through profit and loss is performed whenever at least one of the requirements is fulfilled: 

– the assets and liabilities are managed, evaluated and reported internally at their fair value; 

– the designation eliminated or significantly reduced the accounting mismatch of the transactions; 

– the assets and liabilities include derivatives that significantly change the cash-flows of the original contracts (host contracts). 

The financial assets and liabilities at fair value through profit and loss are initially accounted at their fair value, with the expenses and income related to the transactions 

being recognized in profit and loss and subsequently measured at fair value. The subsequent expenses and income resulting from changes in the fair value and the 

related dividends are recognized in Net gains / (losses) arising from trading and hedging activities of the statement of income. The accrual of interest and 

premium/discount (when applicable) is recognized in Net Interest Income according with the effective interest rate of each transaction, as well as that of the derivatives 

associated to financial instruments classified as Fair Value Option. 

2) Financial assets available for sale 

Financial assets available for sale held with the purpose of being maintained by the Bank, namely bonds, Treasury Bills or shares, are classified as available for sale, except 

if they are classified as trading or in another category of financial assets. The financial assets available for sale are initially accounted at fair value, including all expenses 

or income associated with the transactions. The financial assets available for sale are subsequently measured at fair value. The changes in fair value are accounted for 

against fair value reserves until they are sold or an impairment loss exists. In the sale of the financial assets available for sale, the accumulated gains or losses recognized 

as fair value reserves are recognized in the balance Net gains and losses arising from available for sale financial assets. Interest income is recognized based on the effective 

interest rate, considering the useful life of the asset. In the situations where there is premium or discount associated to the assets, the premium or discount is included 

in the calculation of the effective interest rate. Dividends are recognized in income statement when the right to receive the dividends is attributed. 

3) Financial assets held-to-maturity 

The financial assets held-to-maturity include financial assets, except derivatives, with fixed or determined payments and fixed maturity, for which the Bank has the 

intention and the capacity of maintaining until the maturity of the assets and that were not included in the category of financial assets at fair value through profit and 

loss or financial assets available for sale. These financial assets are initially recognised at fair value and subsequently measured at amortised cost. The impairment losses 

are recognised in profit and loss. 

Any reclassification or sale of the financial assets included in this category, which is not performed near the maturity of the assets, will require the Bank to reclassify 

this portfolio of financial assets for sale and the Bank will not be allowed to classify any assets under this category for the following two years.


4) Loans and receivables 

The Bank also has financial assets classified in loans and receivables when the management’s intention is not its immediate sale or in a near future. As an example, the 

Bank may account unquoted bonds in this category. The financial assets recognised in this category are initially accounted at fair value and subsequently at amortised 

cost net of impairment. The transaction costs are initially recognised in the balance sheet and amortised through profit and loss, based on the effective interest rate 

method. 

5) Other financial liabilities 

The other financial liabilities are all financial liabilities that are not accounted as financial liabilities at fair value through profit and loss. This category includes money 

market transactions, deposits from customers and from other financial institutions, issued debt, and other transactions. 

ii) Impairment 

An assessment is made at each balance sheet date as to whether there is any objective evidence of impairment, namely circumstances where an adverse impact on 

estimated future cash flows of the financial asset or group of financial assets can be reliably estimated based on a significant or prolonged decrease in the fair value, 

below the acquisition cost. 

If an available-for-sale asset is determined to be impaired, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less 

any impairment loss on that financial asset previously recognised in the income statement) is removed from fair value reserves and recognised in the income statement. 

If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring 

after the impairment loss was recognised in the income statement, the impairment loss is reversed through the income statement. The impairment losses recognised 

in equity instruments classified as available for sale, when reverted, are recognized against reserves. 

(iii) Embedded derivatives 

Embedded derivatives should be accounted for separately as derivatives if the economic risks and benefits of the embedded derivative are not closely related to the 

host contract, unless the hybrid (combined) instrument is initially measured at fair value with changes through profit and loss. Embedded derivatives are classified as 

trading and accounted for at fair value with changes through profit and loss. 

d) Derivatives hedge accounting 

i) Hedge accounting 

The Bank uses financial instruments to hedge its exposure to currency and interest rate risks, resulting from financing and investment activities. However, derivatives 

not qualified for hedging are accounted for as trading instruments. 

Derivative hedging instruments are stated at fair value and gains and losses on remeasurement are recognized in accordance with the hedging accounting model 

adopted by the Bank. An hedging relationship exists when: 

– at the inception of the hedge there is formal documentation of the hedge; 

– the hedge is expected to be highly effective; 

– the effectiveness of the hedge can be reliably measured; 

– the hedge is valuable in a continuous basis and highly effective throughout the reporting period; and 

– for hedges of a forecasted transaction, the transaction is highly probable and presents an exposure to variations in cash flows that could ultimately affect net profit 

or loss. 

When a derivative financial instrument is used to hedge exchange fluctuations arising from monetary assets or liabilities items, no hedge accounting model is applied. 

Any gain or loss associated to the derivative or exchange differences associated with the monetary item is recognized through income. 

ii) Fair value hedge 

Changes in the fair value of derivatives that are designated and qualify as fair value hedging instruments are recorded in the income statement, together with changes 

in the fair value of the asset or liability or group thereof that are attributable to the hedged risk. If the hedging relationship no longer meets the criteria for hedge 

accounting, the cumulative adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised through the income 

statement over the residual period to maturity. 

iii) Cash flow hedge 

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity. Any gain or loss relating 

to an ineffective portion is recognised immediately in the income statement. 

Amounts accumulated in equity are reclassified to the income statement in the periods in which the hedged item will affect profit or loss. However, when the 

forecasted transaction being hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity are 

transferred from equity and included in the initial measurement of the cost of the asset or liability. 

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at 

that time remains in equity until the forecasted transaction is ultimately recognised in the income statement. When a forecasted transaction is no longer expected 

to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.


iv) Hedge effectiveness 

For each hedging relation in order to be classified as such according to IAS 39, effectiveness has to be demonstrated. As such the Bank performs prospective tests at 

inception date and retrospective tests in order to demonstrate in each reporting period the effectiveness, showing that the changes in the fair value of the hedging 

instrument are neutralized by the changes in the hedged item for the risk covered. Any ineffectiveness is recognised immediately in the income statement. 

(v) Hedge of a net investment in a foreign operation 

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective 

portion of the hedge is recognised in equity; the gain or loss relating to the ineffective portion is recognised immediately in the income statement. Gains and losses 

accumulated in equity related to the investment in a foreign operation and to the associated hedge operation are included in the income statement on the disposal 

of the foreign operation. 

e) Reclassifications between financial instruments categories 

In October 2008, the IASB issued a change to the IAS 39 – Reclassification of Financial Assets (Amendments to IAS 39 Financial Investments: Recognition and 

Measurement and IFRS 7: Financial Investments Disclosures). This change allowed an entity to transfer financial assets from financial assets at fair value through profit 

and loss – trading to financial assets available for sale, to Loans and Receivables or to financial assets held-to-maturity, as long as these financial assets comply with the 

characteristics of an each category. The Bank adopted this possibility for a group of financial assets on 1 July 2008 and 31 October 2008 as disclosed in note 21. 

Transfer of Financial assets available for sale to "Loans and receivables" and "Held to maturity" are also authorised. Transfers from and to assets and liabilities decided 

by the Bank ("Fair value option") are prohibited. 

f) Derecognition 

The Bank derecognizes financial assets when all rights to future cash flows have expired or the assets are transferred. In the event of a transferral of assets, derecognition 

can only occur either when risks and rewards have substantially been transferred or the Bank has not retained control of the assets. The derecognition of financial 

assets is largely applied to the securitization operations issued by the Bank, through Special Purpose Entities (‘SPE’). 

The evaluation of the existence of control is determined based on the criteria established by SIC 12, which can be analysed as follows: 

– The activities of the SPE, in substance, are being conducted on behalf of the Bank, in accordance with the specific needs of the Bank’s business, so as to obtain benefits 

from these activities; 

– The Bank has the decision-making powers to obtain the majority of the benefits of the activities of the SPE or, by setting up an "autopilot" mechanism, the Bank has 

delegated these decision-making powers; 

– The Bank has the rights to obtain the majority of the benefits of the SPE and therefore may be exposed to risks inherent to the activities of the SPE; or 

– The Bank retains the majority of the residual or ownership risks related to the SPE or its assets in order to obtain benefits from its activities. 

The Bank derecognizes financial liabilities when these are discharged, cancelled or extinguished. 

g) Equity instruments 

An instrument is classified as an equity instrument when there is no contractual obligation at settlement to deliver cash or another financial asset to another entity, 

independently from its legal form, and shows a residual interest in the assets of an entity after deducting all of its liabilities. 

Transaction costs directly attributable to an equity transaction are recognised under shareholders’ equity and accounted for as a deduction from the amount issued. 

Amounts paid or received related to sales or acquisitions of equity instruments are recognised in shareholders’ equity, net of transaction costs as treasury stock. 

Distributions to holders of an equity instrument are debited directly to shareholders’ equity as dividends when declared. 

Preference shares issued by the Bank are considered as an equity instrument when redemption of the shares is solely at the discretion of the issuer and dividends 

are paid at the discretion of the Bank. 

Income from equity instruments (dividends) are recognised when its payment is done. 

h) Compound financial instruments 

Non-derivative financial instruments that contain both a liability and an equity component (convertible bonds) are classified as compound financial instruments. For 

those instruments to be considered as compound financial instruments, the terms of its conversion to ordinary shares (number of shares) does not vary with changes 

in their fair value. The liability component corresponds to the present value of the future interest and principal payments, discounted at the market rate of interest 

applicable to similar liabilities that do not have a conversion option. The equity component corresponds to the difference between the proceeds of the issue and the 

amount attributed to the liability. The interest expense recognised in the income statement is calculated using the effective interest method. 

i) Securities borrowing and lending business and repurchase transactions 

(i) Securities borrowing and lending 

Securities lent under securities lending arrangements continue to be recognized in the balance sheet and are measured in accordance with the accounting policy for 

assets held for trading or available-for-sale as appropriate. Cash collateral received in respect of securities lent is recognized as a financial liability. Securities borrowed 

under securities borrowing agreements are not recognized. Cash collateral placements in respect of securities borrowed are recognized under loans and advances 

to either banks or customers. Income and expenses arising from the securities borrowing and lending business are recognized on an accrual basis over the period 

of the transactions and are included in interest income or expense.


(ii) Repurchase agreements 

Investments sold under repurchase agreements at a predetermined price ('repos') continue to be recognized in the balance sheet and are measured in accordance 

with the accounting policy for either assets held for trading or available-for-sale as appropriate. The proceeds from the sale of the investments are reported as 

liabilities to either banks or customers. Investments purchased subject to commitments to resell them at future dates ('reverse repos') are not recognized on the 

balance sheet and the amounts paid are recognized in loans to either banks or customers. 

The difference between the sale and repurchase conditions is recognised on an accrual basis over the period of the transaction and is included in interest, income 

or expense. 

j) Non-current assets held for sale 

Non-current assets or disposal groups (groups of assets to be disposed of together and related liabilities that include at least a non-current asset) are classified as 

held for sale when the assets or disposal groups are available for immediate sale and its sale is highly probable. 

The Bank also classifies as non-current assets held for sale those non-current assets or disposal groups acquired exclusively with a view to its subsequent disposal, 

that are available for immediate sale and its sale is highly probable. 

Immediately before classification as held for sale, the measurement of the non-current assets or all assets and liabilities in a disposal group, is performed in accordance 

with the applicable IFRS. After their reclassification, these assets or disposal groups are measured at the lower of their carrying amount determined annually in 

accordance with the applicable IFRS and the fair value less costs to sell. 

k) Finance lease transactions 

Finance lease transactions for a lessee are recorded at the inception date of the lease as an asset and liability, at the fair value of the leased asset, which is equivalent 

to the present value of the future lease payments. 

Lease rentals are apportioned between the finance charge and amortisation of the capital outstanding. The finance charge is allocated to the periods during the lease 

term so as to produce a constant periodic rate of interest on the remaining liability balance for each period. 

Assets held under finance leases for a lessor are recorded in the balance sheet as a receivable at an amount equal to the net investment in the lease. 

Lease rentals are apportioned between the financial income and amortisation of the capital outstanding. 

Recognition of the financial result reflects a constant periodical return rate over the remaining net investment of the lessor. 

l) Interest income and expense 

Interest income and expense for all financial instruments measured at amortised cost are recognised in the income statement using the effective interest method. 

The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument (or, when 

appropriate, a shorter period), to the net carrying amount of the financial asset or financial liability. 

When calculating the effective interest rate, the Bank estimates future cash flows considering all contractual terms of the financial instrument but without considering 

future impairment losses. The calculation includes all paid or recived fees considered as included in the effective interest rate, transaction costs and all other premiums 

or discounts directly related with the transaction. 

If a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest 

used to discount the future cash flows for the purpose of measuring the impairment loss. 

For derivative financial instruments, except those classified as hedging instruments of interest rate risk, the interest component of the changes in the fair value is not 

separated out and is classified under net losses/gains from financial assets. For hedging derivatives of interest rate risk, the interest component of the changes in their 

fair value is recognised under interest and similar income or interest expense and similar charges. 

m) Fee and commission income 

Fees and commissions are recognised according to the following criteria: 

– Fees and commissions which are earned as services are provided are recognised in income over the period in which the service is being provided; 

– Fees and commissions that are earned on the execution of a significant act, are recognised as income when the service is completed. 

Fees and commissions that are an integral part of the effective interest rate of a financial instrument are recognized in the net margin. 

n) Results arising from trading and hedging activities and available for sale financial assets 

The results arising from trading and hedging activities and available for sale financial assets correspond to gains and losses arising from financial assets and liabilities 

classified as trading (including fair value charges and interest on derivatives and embeded derivatives) and the corresponding dividends. Also included are the gains 

and losses arising from the available for sale financial assets portfolio, and the changes of the fair value of the hedging derivatives and the hedged items, when applicable. 

o) Fiduciary activities 

Assets held in the scope of the fiduciary activity are not recognized in the consolidated financial statements of the Bank. Fees and commissions arising from this activity 

are recognised in the income statement in the year to which they relate.


p) Property and equipment 

Property and equipment are stated at deemed cost less accumulated depreciation and impairment losses. Subsequent costs are recognised as a separate asset only 

when it is probable that future economic benefits associated with the item will flow to the Bank. All other repairs and maintenance are charged to the income 

statement during the financial period in which they are incurred. 

The Bank performs impairment testing whenever events or circumstances show that the book value exceeds the recoverable amount. The difference between the 

book value and recoverable amount is charged to the profit and loss. 

Depreciation is calculated on a straight-line basis, over the following periods which correspond to their estimated useful life: 

Number of years 

Premises 50 

Expenditure on freehold and leasehold buildings 10 

Equipment 4 to 12 

Other fixed assets 3 

Whenever there is an indication that a fixed tangible asset might be impaired, its recoverable amount is estimated and a impairment loss is recognized if the net value 

of the asset exceeds that recoverable amount. 

The recoverable amount is determined as the higher between the sale price net of sale costs and its value in use calculated based on the present value of future 

cash-flows estimated to be obtained from the continued use of the asset and its sale at the end of the useful life. 

The impairment losses of the fixed tangible assets are recognized in profit and loss. 

q) Intangible Assets 

Research and development expenditure 

The Bank does not capitalised any research and development costs. All expenses are recognized as costs in the year in which they occur. 

Software 

The Bank accounts as intangible assets the costs associated to software acquired from external entities and performs a linear depreciation through an estimated period 

of three years. The Bank does not capitalize the internal costs arising from software development. 

r) Assets arising out of recovered loans 

The Bank, following the requirements of IFRS 5, classifies as non-current assets held for sale the buildings arising out of recovered loans for which there is a sale 

agreement for the next 12 months. These assets accounted for in accordance with the accounting policy presented in note 1 j) are recognised by the amount agreed 

in the sale agreement. 

Assets arising out of recovered loans include buildings and other assets arising from the settlement of loan contracts for which there is not sale agreement. These 

assets are recognised in ‘Other assets’, considering that the holding period until the sale of these assets is in the majority of the cases more than one year. These assets 

are inicially measured by the lower of its fair value net of expenses and the carrying amount of the loan at the date of possession of the asset, either through 

agreement or judicial auction. 

Fair value is based on the market value, being determined based on the expected selling price estimated through periodic valuations performed by the Bank. 

Subsequent measurement of these assets is at the lower between its carrying amount and fair value net of expenses and are not subject to depreciation. Any 

subsequent write-down of the acquired asset to fair value is recorded as an impairment loss and included in the income statement. 

s) Cash and cash equivalents 

For the purposes of the cash flow statement, cash and cash equivalents comprise balances with less than three months’ maturity from the balance sheet date, including 

cash and deposits with banks. 

Cash and cash equivalents exclude restricted balances with central banks. 

t) Offsetting 

Financial assets and liabilities are offset and the net amount is reported in the balance sheet when the Bank has a legally enforceable right to offset the recognized 

amounts and the transactions are intended to be settled on a net basis. 

u) Foreign currency transactions 

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign 

currencies, which are stated at historical cost, are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are 

recognized in the income statement. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated at the 

foreign exchange rate ruling at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are 

translated to the reporting currency at the foreign exchange rates ruling at the dates that the values were determined.


v) Employee benefits 

Defined benedit plans 

The Bank has the responsability to pay to their employees retirement pensions and widow and orphan benefits and permanent disability pensions, in accordance 

with the agreement entered with the collective labour agreements. These benefits are estimated in the pensions plans ‘Plano ACT’ and ‘Plano ACTQ’ of the Pension 

Plan of BCP, which corresponds to the referred collective labour agreements (the conditions are estimated in the private social security of the banking sector for the 

constitution of the right to receive a pension). 

As for the benefits estimated in the two previous pensions plans, the Bank also assumes the responsability, if some conditions are met in each year, of the attribution 

of a complementary plan to the employees of the Bank, after due consideration of the requirements of the collective labour agreements applicable to each sector 

(complementary plan). 

The Bank’s net obligation in respect of pension plans (defined benefit pensions plan) is calculated annually at each balance sheet date. 

According to IFRS1, the Bank opted for the retrospective application of IAS 19, performing the recalculation of the pension obligations and the corresponding actuarial 

gains and losses which will be deferred under the corridor method as defined in IAS 19. The calculation is made using the projected unit credit method and following 

actuarial and financial assumptions in line with parameters required by IAS 19. In accordance with no. 2 of Regulation no. 4/2005 of the Bank of Portugal was 

established a deferral period for the transition impact to IAS 19 as at 1 January 2005 analysed as follows: 

Balances 

Obligations with healthcare benefits and other liabilities 

Liabilities for death before retirement 

Cost of early retirement 

Actuarial losses charged-off related with early retirement 

Increase of deferred actuarial losses 

Reversal of amortization of actuarial losses in accordance with local GAAP 

Deferred period 

7 years 

5 years 

5 years 

5 years 

5 years 

5 years 

The current services cost plus the interest cost on the unwiding of the Pension liabilities less the expected return on the Plan assets are recorded in operational costs. 

The Bank’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees 

have earned in return for their service in the current and prior periods. The benefit is discounted in order to determine its present value, being applied the discount 

rate determined by reference to interest rates of high-quality corporate bonds that have maturity dates approximating the terms of the Bank’s obligations. The net 

obligations are determined after the deduction of the fair value of the assets of the Pensions Plan. 

Employee benefits, other than pension plans, namely post retirement health care benefits and death before retirement benefits are also included in the benefits plans 

calculation. 

Costs arising from early retirements, as well as the corresponding actuarial gains and losses are recognized in the income statement on the year in which the early 

retirement is approved and announced. 

Under the ‘corridor’ method, actuarial gains and losses not recognized, exceeding 10% of the greater of the present value of the defined benefit obligation and the 

fair value of plan assets, are recognized in the income statement over a period of 20 years, corresponding to the expected remaining working life of the employees 

participating in the plan. 

The funding policy of the Plan is to make annual contributions by the Bank so as to cover the projected benefits obligations, including the non-contractual projected 

benefits. The minimum level required is 100% regarding the liability with pensioners and 95% regarding the employees in service. 

Defined contributions plans 

For the defined Contributions Plan for the Complementary non-contractual retirement benefit attributable to the employees of the Bank, obligations are recognised 

as an expense in profit and loss when they are due. 

Share based compensation plan (stock options) 

As at 31 of December 2008, there are no share based compensation plans in force. 

Variable remuneration paid to employees 

The Executive Board of Directors decides on the most appropriate criteria of allocation among employees. 

This variable remuneration is charged to income statement in the year to which it relates. 

w) Income tax 

Income tax on the income for the year comprises current and deferred tax effects. Income tax is recognized in the income statement, except to the extent that it 

relates to items recognized directly to reserves in which case it is recognized in reserves. Deferred taxes arising from the revaluation of financial assets available for 

sale and cash flow hedging derivatives are recognized in shareholders’ equity and are recognized in the profit and loss in the period the results that originated the 

deferred taxes are recognized. 

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any 

adjustment to tax payable in respect of previous years.


Deferred taxes are calculated in accordance with the liability method based on the balance sheet, considering temporary differences, between the carrying amounts 

of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes using the tax rates approved or substantially approved at balance 

sheet date for each jurisdiction and that is expected to be applied when the temporary difference is reversed. 

Deferred taxes assets are recognized to the extent when it is probable that future taxable profits, will be available to absorb deductible temporary differences for 

taxation purposes (including reportable taxable losses). 

The Bank compensates, as established in IAS 12, paragraph 74 the deferred tax assets and liabilities if, and only if: (i) has a legally enforceable right to set off current 

tax assets against current tax liabilities; and (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on 

either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and 

settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. 

x) Segmental reporting 

A business segment is a distinguishable component of an entity that is engaged in providing an individual product or service or a group of related products or services 

and that is subject to risks and returns that are different from those of other business segments. 

A geographical segment is a distinguishable component of an entity that is engaged in providing products or services within a particular economic environment that 

are subject to risks and returns that are different from those segments operating in other economic environments. 

Taking into consideration that the individual financial statements are present with the Group's report, in accordance with the paragraph 6 of IAS 14, the Bank is dismissed 

to present individual information regarding Segmental Reporting. 

y) Provisions 

Provisions are recognised when (i) the Bank has a present obligation (legal or resulting from past practices or published policies that imply the recognition of certain 

responsibilities), (ii) it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation as a result of past events 

and (iii) a reliable estimate can be made of the amount of the obligation. 

Provisions are reviewed at each balance sheet date and adjusted to reflect the best estimate, being reverted through profit and loss in the proportion of the payments 

that are not probable. 

The provisions are derecognised through their use, for the obligations for which they were initially accounted. 

z) Earnings per share 

Basic earnings per share are calculated by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding 

during the year, excluding the average number of ordinary shares purchased by the Bank and held as treasury stock. 

For the diluted earnings per share, the weighted average number of ordinary shares outstanding is adjusted to consider conversion of all dilutive potencial ordinary 

shares, such as convertible debt and stock options granted to employees. Potential or contingent share issues are treated as dilutive when their conversion to shares 

would decrease net earnings per share. 

If the earnings per share are changed as a result of a issue with premium or discount or other event that changed the potential number of ordinary shares or as a 

result of changes in the accounting policies, the earnings per share for all presented periods should be adjusted retrospectively. 

aa) Critical accounting estimates and fudgements in applying accounting policies 

IFRS set forth a range of accounting treatments and require the Executive Board of Directors and management to apply judgment and make estimates in deciding 

which treatment is most appropriate. The Executive Board of Directors was elected on 15 of January 2008 and the judments and estimates used, were based in the 

information, gathered from the internal analyses and the contacts with CMVM and Bank of Portugal during the course of the current supervisiory activities. The most 

significant of these accounting policies are discussed in this section in order to improve understanding of how their application affects the Bank’s reported results and 

related disclosure. 

Considering that in some cases there are several alternatives to the accounting treatment chosen by management, the Bank’s reported results would differ if a 

different treatment were chosen. Management believes that the choices made are appropriate and that the financial statements present the Bank’s financial position 

and results fairly in all material aspects. 

The alternative outcomes discussed below are presented solely to assist the reader in understanding the financial statements and are not intended to suggest that 

other alternatives or estimates would be more appropriate. 

Impairment of available for-sale equity investments 

The Bank determines that available-for-sale equity investments are impaired when there has been a significant or prolonged decline in the fair value below its acquisition 

cost. This determination of what is significant or prolonged requires judgement. In making this judgement, the Bank evaluates among other factors, the volatility in price 

of the financial assets. 

In addition, valuations are generally obtained through market quotation or valuation models that may require assumptions or judgment in making estimates of fair 

value. 

Alternative methodologies and the use of different assumptions and estimates could result in a higher level of impairment losses recognised with a consequent 

impact in the income statement of the Bank.


Impairment losses on loans and advances 

The Bank reviews its loan portfolios to assess impairment losses on a regularly basis, as described in note 1b). 

The evaluation process in determining whether an impairment loss should be recorded in the income statement is subject to numerous estimates and judgments. 

The frequency of default, risk ratings, value of associated collaterals, recovery rates and the estimation of both the amount and timing of future cash flows, among 

other things, are considered in making this evaluation. 

Alternative methodologies and the use of different assumptions and estimates could result in a different level of impairment losses with a consequent impact in the 

income statement of the Bank. 

Fair value of derivatives 

Fair values are based on listed market prices if available; otherwise fair value is determined either by dealer price quotations (both for that transaction or for similar 

instruments traded) or by pricing models, based on net present value of estimated future cash flows which take into account market conditions for the underlying 

instruments, time value, yield curve and volatility factors. These pricing models may require assumptions or judgments in estimating their values. 

Consequently, the use of a different model or of different assumptions or judgments in applying a particular model could produce different financial results for a 

particular period. 

Securitisations and special purpose entities 

The Bank sponsors the formation of special purpose entities (SPE's) primarily for asset securitisation transactions and for liquidity purposes and for capital management. 

The Bank does not consolidate SPE's that it does not control. As it can sometimes be difficult to determine whether the Bank does control a SPE, it makes judgements 

about its exposure to the risks and rewards, as well as about its ability to make operational decisions for the SPE in question. 

The determination of the SPE that needs to be consolidated by the Bank requires the use of estimates and assumptions in determining the respective expected residual 

gains and losses and which party retains the majority of such residual gains and losses. Different estimates and assumptions, as for example for credit risks, antecipated 

liquidation and interest rate, could lead the Bank to a different scope of consolidation with a direct impact in net income. 

Accordingly, the securitization operations NovaFinance n. 4 and Magellan n. 5 were not derecognised in the Bank's financial statements. 

The Bank derecognised the following SPEs also resulted from operations of securitization: NovaFinance n. 3, Magellan n. 1, 2, 3 and 4. For these SPEs, the Bank 

concludes that the main risks and benefits were substancially transferred, as the Bank do not detain any security issued by the referred SPEs. Additionally the Bank is 

not assuming any risk regarding the performance of the credit portfolios. 

Income taxes 

To determine the income tax charge, significant interpretations and estimates were required. There are many transactions and calculations for which the ultimate tax 

determination is uncertain during the ordinary course of business. 

Different interpretations and estimates would result in a different level of income taxes, current and deferred, recognised in the year. 

The Tax Authorities are entitled to review the Bank’s determination of its annual taxable earnings, for a period of four years or six years in case there are tax losses 

brought forward. Hence, it is possible that some additional taxes may be assessed, mainly as a result of differences in interpretation of the tax law. However, the Executive 

Board of Directors of the Bank is confident that there will be no further material tax assessments within the context of the financial statements. 

Pension and other employees’ benefits 

Determining pension liabilities requires the use of assumptions and estimates, including the use of actuarial projections, estimated returns on investment, and other 

factors that could impact the cost and liability of the pension plan. 

Changes in these assumptions could materially affect these values.


2. Net interest income and net gains arising from trading, hedging and available for sale activities 

IFRS requires separate disclosure of net interest income and net gains from trading, hedging and available for sale (AFS) activities, as presented in notes 3, 6 and 7. 

A particular business activity can generate impact in net interest income and net gains arising from trading, hedging and AFS activities. This required disclosure, however, 

does not demonstrate that net interest margin and net gains from trading, hedging and AFS activities are generated by a range of different business activities. 


Euros '000 

2008 

2007 


Net gains from trading, hedging and AFS activities (243,005) 146,836 

808,831 1,068,145 

3. Net interest income 


2008 

2007 

Interest and similar income 

Interest on loans and advances 3,174,949 2,637,924 

Interest on trading securities 51,920 43,364 

Interest on other financial assets valued 

at fair value through profit and loss account 19,103 - 

Interest on available for sale securities 292,909 201,870 

Interest on held to maturity securities 12,425 - 


Interest on derivatives associated to financial instruments 

through profit and loss account 13,575 2,921 

Interest on deposits and other investments 620,465 636,466 

4,206,114 3,550,211 

Interest expense and similar charges 

Interest on deposits and inter-bank funding 2,270,772 2,107,594 

Interest on securities issued 687,474 449,017 


Interest on derivatives associated to financial instruments through 

profit and loss account 41,291 7,301 

Interest on other financial liabilities valued at fair value trhough profit and loss 118,200 18,724 

3,154,278 2,628,902 


Euros '000 

The balance Interest on loans and advances includes the amount of Euros 22,877,000 (2007: Euros 21,763,000) related to commissions which are accounted under 

the effective interest method, as referred in the accounting policy, note 1 b).


4. Dividends from equity instruments 


Euros '000 

2008 

2007 

Dividends from available for sale securities 22,568 20,266 

Dividends from subsidiaries and associated companies 587,121 325,210 

609,689 345,476 

The balance Dividends from available for sale securities corresponds to dividends received during the year. 

The balance Dividends from subsidiaries and associated companies includes the amount of Euros 175,971,000 related to the distribution, at 31 January 2008, by BCP 

Participações Financeiras, S.G.P.S., Sociedade Unipessoal, Lda of net income, reserves and retained earnings. The referred balance also includes the amount of Euros 

232,482,000 related to dividends received from subsidiaries and associated companies that were transferred to Banco Comercial Português, S.A. following the merge 

with BCP Participações Financeiras, S.G.P.S., Sociedade Unipessoal, Lda, as referred in note 44. 

5. Net fees and commission income 


Euros '000 

2008 

2007 

Fees and commissions income: 

From guarantees 65,652 66,961 

From credit and commitments 249 305 



561,039 561,202 

Fees and commissions expenses: 

From guarantees 222 178 



97,863 210,739 


The balance Commissions expenses from banking services included, as at 31 December 2007, the amount of Euros 88,694,000 related to the costs incurred with 

the Public Tender Offer for the acquisition of BPI, S.A. The referred amounts were recognized in net income for the year following the fact that the Public Tender Offer 

was unsuccessful, as established in IFRS 3. 

This caption also included, as at 31 December 2007, the amount of Euros 14,500,000 related to the costs incurred with the merger negotiations with BPI, S.A., during 

the fourth quarter of 2007.


6. Net gains / (losses) arising from trading and hedging activities 


Euros '000 

2008 

2007 

Gains arising on trading and hedging activities: 


Financial instruments associated to transactions booked at fair value through profit and loss 



Derivatives associated to financial instruments through profit and loss 133,087 30,262 


Other financial instruments through profit and loss 20,186 21,748 



Hedged item 60,761 29,646 


6,179,807 2,847,473 

Losses arising on trading and hedging activities: 


Financial instruments associated to transactions booked at fair value through profit and loss 



Derivatives associated to financial instruments through profit and loss 82,235 29,522 


Other financial instruments through profit and loss 48,776 5,822 



Hedged item 161,384 46,430 


6,124,658 2,762,395 

Net gains / (losses) arising from trading and hedging activities 55,149 85,078 

The balance Net gains / (losses) arising from trading and hedging activities, includes for the year ended at 31 December 2008, for the financial instruments through 

profit and loss, the amount of Euros 40,036,000 (2007: Euros 6,958,000) which reflects the fair value changes arising from changes in the credit risk (spread) of 

operations. 

The caption Net gains / (losses) arising from trading and hedging activities - Financial instruments associated to transactions booked at fair value through profit and 

loss account - held for trading - other financial instruments derivatives also includes the amount of Euros 118.400.000 resulting from the discontinuance of an interest 

rate hedging relationship of a mortgage backed bond issue due to the break of its effectiveness. The discontinuance was decided in accordance with paragraph 91, 

c) of IAS 39.


7. Net gains / (losses) arising from available for sale financial assets 


Euros '000 

2008 

2007 

Gains arising from available for sale financial assets 5,892 183,464 

Losses arising from available for sale financial assets (304,046) (121,706) 

Net gains / (losses) arising from available for sale financial assets (298,154) 61,758 

The value Losses arising from available for sale financial assets includes, for 2008, the amount of Euros 268,076,000 (2007: Euros 79,838,000) related with impairment 

losses for the investment held in Banco BPI S.A. recognized as a result of a significative decrease in the share price of this entity, during 2008, and whose recognition 

was made in accordance with the accounting policy described in note 1 c). 

As referred in note 21 and 40, Banco Comercial Português S.A. established in December 2008 a contract for the sale of 87,214,836 shares, or 9.69%, of Banco BPI. 

As a result of the execution of this contract Banco Comercial Português ceased to hold a qualified position in Banco BPI, S.A. 

The balance Gains arising from available for sale financial assets includes, for 2007, the amounts of Euros 173,321,000 related with the gains arising from the sale of 

shares of EDP - Energias de Portugal, as referred in notes 21 and 40. About 13,256,894 of the 73,256,894 shares included in this agreement, were sold to BCP Group 

Pension Fund. The remain shares were sold in the market. 

8. Other operating income 


Euros '000 

2008 

2007 

Operating income 

Income from services 41,721 46,254 

Cheques and others 23,300 27,826 


98,129 142,681 

Operating costs 

Indirect taxes 3,922 2,782 

Donations and quotizations 4,510 5,980 

Other operating expenses 9,873 14,216 

18,305 22,978 

79,824 119,703 

9. Staff costs 


Euros '000 

2008 

2007 

Remunerations 341,766 390,239 

Mandatory social security charges 176,412 272,754 

Voluntary social security charges 37,687 13,073 

Other staff costs 4,696 22,585 

560.561 698.651 

As referred in note 45, the balance Mandatory social security charges includes, for 2008, the amount of Euros 7,789,000 (2007: Euros 43,796,000) related to early 

retirements during the year and the amount of Euros 137,933,000 (2007: Euros 84,588,000) related to the pension cost for the year. 




of the remunerations annualy received by each member are deducted to the fixed annual remuneration.






(2007: Euros 6,518,000). 

Considering that some members of the Executive Board of Directors were Directors of the Bank and other companies of the Group during 2007 and until their 

election in 2008, fixed and variable remunerations were paid to them in the amount of Euros 1,001,000, the variable part being related to 2007. 

During the year of 2007, the Group accounted in staff costs the amount of Euros 78,864,000 related to liabilities with the retirement of the members of the Executive 

Board of Directors, occurred during the year. Additionally there was a termination of the contracts with three former Board members at 31 December 2007, for 

which the Group paid the amount of Euros 18,700,000 as a compensation for the contract's conditions. Considering the amount provisioned and/or financed until 

that date regarding pension liabilities, the impact in the net income for the year was Euros 12,770,000, which was compensated by the reversal of the accrual of the 

attributable pluriannual variable remunerations. Regarding the retirement and termination of the employment contracts of the former members of the Executive Board 

of Directors, curtailment costs in the amount of Euros 16,633,000 were accounted for in 2007. 

The average number of employees by professional category, at service in the Bank, is analysed as follows by category: 

2008 

2007 

Management 1,181 1,138 

Managerial staff 1,889 1,924 

Staff 3,194 3,177 

Other categories 4,011 4,121 

10,275 10,360 

10. Other administrative costs 


Euros '000 

2008 

2007 

Water, electricity and fuel 12,918 11,330 

Consumables 4,915 5,355 

Rents 49,095 47,289 

Communications 21,491 22,425 

Travel, hotel and representation costs 11,812 17,426 

Advertising 21,843 22,281 

Maintenance and related services 19,665 19,366 

Credit cards and mortgage 10,914 9,178 

Advisory services 19,672 33,803 

Information technology services 12,025 12,501 

Outsourcing 160,262 174,599 

Other specialised services 13,657 13,254 

Training costs 1,978 2,363 

Insurance 7,432 9,190 

Legal expenses 5,641 9,457 

Transports 9,008 9,975 

Other supplies and services 16,594 13,934 

398,922 433,726 

The balance Rents, includes the amount of Euros 44,402,000 (2007: Euros 42,688,000), related to rents paid regarding buildings used by the Bank as leaser.


11. Depreciation 


Euros '000 

2008 

2007 

Intangible assets: 

Software 2,741 1,799 

Other intangible assets 24 92 

2,765 1,891 

Property and equipment: 


Equipment 

Furniture 3,219 3,617 

Office equipment 184 233 



Motor vehicles 341 664 


Other tangible assets 13 8 

48,041 49,737 

50,806 51,628 

12. Loans impairment 


Euros '000 

2008 

2007 

Loans and advances to credit institutions: 


Impairment for the year 103 47 

Loans and advances to customers: 



Write-back for the year (14) (495) 

Recovery of loans and interest charged-off (80,225) (134,632) 

413,369 252,792 

413,472 252,839 

The balance Impairment for the year is related to an estimate of the incurred losses determined according with the methodology, as described in note 1 b).


13. Other provisions 


2008 

2007 

Provision for credit risks 



Provision for country risk 


Write-back for the year (2,550) (774) 

Other provisions for liabilities and charges 



1,977 93,792 

Euros '000 

The balance Provision for country risk - Charge for the year includes the amount of Euros 72,847,000 related to loans and advances to entities residents in Angola, 

Turkey and Belize, in accordance with the increase in the volume of transactions with entities of these countries. 

14. Gains from the sale of subsidiaries and other assets 


Euros '000 

2008 

2007 

Sale of subsidiaries (253) (807) 

Sale of other assets (16,910) (3,237) 

(17,163) (4,044) 

The balance Sale of other assets corresponds to gains arising from the sale of buildings. 

15. Income tax 

The charge for the years of 2008 and 2007 is comprised as follows: 

Euros '000 

2008 

2007 

Current tax (16,567) 16,871 

Deferred tax 

Temporary diferences 97,978 (42,201) 

Effect of changes in tax rate 5,108 2,731 

Tax losses utilized (66,463) - 

36,623 (39,470) 

20,056 (22,599) 

The charge for income tax amounted to Euros 20,056,000 (2007: Euros 22,599,000), which represents an average tax rate of 4.3% of the net income before income 

tax (2007: -7.1%). 

The balance Deferred tax - Temporary differences includes the recognition of deferred taxes related to taxable provisions of the year. It also includes the effect of 

the deduction of the dividends that were distributed this year, but made available on the previous year.


The main adjustments made to the accounting profit for the calculation of the net taxable profit arising from timing differences are as follows: 

– Loan impairment which, under the applicable legislation, was not considered for tax purposes in the current year, in the amount of Euros 208,564,928 (2007: Euros 

198,879,000), and will be deductible in future years when the losses are realised; 

– The difference between the charges of the year, which will be allowable for tax purposes in future periods, and the costs with early retirements accounted for prior 

years, which are deductible in the calculation of the net taxable income for the year, in accordance with apllicable tax regulations. The net amount to be deducted to 

taxable income is Euros 82,027,000 (2007: Euros 62,533,000); 

– Deduction of dividends distributed in the year, but made available on the previous year, in the amount of Euros 80,100,000; 

– Deduction of profits of not resident companies, added in previous years for the purposes of calculating the net taxable income, which were distributed during the 

year, in the amount of Euros 79,556,000 (2007: increase of Euros 38,499,000); 

The main adjustments to net income to calculate the net taxable income, with a permanent nature, are as follows: 

– Dividends received which are not considered for calculating the net taxable profit, under the double taxation agreements, in the amount of Euros 599,153,000 (2007: 

Euros 335,312,000); 

– Charges on pensions in excess of the limit on staff costs in accordance with applicable law, in the amount of Euros 29,639,000; 

– Deduction in the calculation of the net taxable profit of the tax benefits related to the granting of employment to young people, in the amount of Euros 4,151,000 

(2007: Euros 3,570,000); 

The difference between the applicable nominal income tax rate and the average effective rate results from the adjustments considered in the calculation of the taxable 

income, under the current legislation. 

The reconciliation of the standard tax rate to the effective tax rate is analysed as follows: 

2008 

2007 

% Euros ‘000 % Euros ‘000 

Profit before income taxes 471,239 316,245 

Current tax rate 26.5% (124,878) 26.5% (83,805) 

Non deductible expenses (i) 9.6% (45,323) 10.6% (33,622) 

Tax exempt income (ii) -34.2% 161,386 -45.8% 144,983 

Fiscal incentives (iii) -0.2% 1,100 -0.3% 946 

Utilization of losses brought forward 0.0% (136) 2.1% (6,608) 

Tax rate effect (iv) 1.1% (5,108) 0.9% (2,731) 

Previous years corrections 1.3% (6,060) -1.3% 4,085 

Autonomous tax (v) 0.2% (1,037) 0.2% (649) 

4.3% (20,056) -7.1% 22,599 

References : 

(i) Corresponds to tax associated to non deductible provisions in accordance with the applicable legislation; 

(ii) Tax associated with dividends received which are not considered under the double taxation agreement, in the amount of Euros 599,153,000 (Tax: Euros 

158,775.000); 

(iii) Includes tax benefits resulting from granting employment to people under the age of 30 in the amount of Euros 4,155,000 (Tax: Euros 1,100,000); 

(iv) The difference between the tax associated to the temporary differences and the tax applicable to losses brought forward; 

(v) Corresponds to autonomous taxation, according with the current legislation, of representation and non-deductible vehicle costs.


For the years 2008 and 2007, the amount of deferred taxes in the Income Statement is attributable to temporary differences arising from the following balances: 

2008 2007 

Euros '000 

Intangible assets 185 1,400 

Tangible assets 142 691 

Provisions 72,223 (19,144) 

Pensions (3,024) (86,462) 

Derivatives - 41,161 

Tax losses utilized (66,463) - 

Others 33,560 22,884 

Deferred taxes 36,623 (39,470) 

16. Earnings per share 

The earnings per share are calculated as follows: 

2008 2007 

Euros ’000 


Weighted average number of ordinary shares 4,461,172,816 4,013,206,594 

Basic earnings per share (euros) 0.10 0.08 

Diluted earnings per share (euros) 0.10 0.08 

In May 2008, following the decision of the General Assembly of Shareholders, Banco Comercial Português, S.A. increased its share capital from Euros 3,611,329,567 

to Euros 4,694,600,000 through the issue of 1,083,270,433 shares pursuant to the exercise of shareholders proportional rights with a nominal value of 1 Euro per 

share and a subscription price of 1.2 Euro per share. This fact was also considered when doing the average number of shares for the calculation of the basic and diluted 

earnings per share. 

The average number of shares indicated above, results from the number of existing shares at the beginning of each year, adjusted by the number of shares repurchased 

or issued in the period weighted by a time factor. 

17. Cash and deposits at central banks 


2008 2007 

Euros ’000 

Cash 400,631 420,188 

Central banks 646,143 921,282 

1,046,774 1,341,470 

The balance Central banks includes deposits with the Central Bank to satisfy the legal requirements to maintain a cash reserve for which the value is based on the 

value of deposits and other liabilities. The cash reserve requirements, acording with the European Central Bank System for Euro Zone, establishes the maintenance 

of a deposit with the Central Bank equivalent to 2% of the average value of deposits and other liabilities, during each reserve requirement period.


18. Loans and advances to credit institutions repayable on demand 


2008 2007 

Euros ’000 

Credit institutions in Portugal 740 1,107 

Credit institutions abroad 441,480 793,333 


971,333 1,347,567 

The balance Amounts due for collection represents essentially cheques due for collection on other financial institutions. 

19. Other loans and advances to credit institutions 


2008 2007 

Euros ’000 

Bank of Portugal 350,020 1,400,156 

Credit institutions in Portugal 4,311,002 3,756,534 

Credit institutions abroad 5,194,866 8,071,718 

9,855,888 13,228,408 

Overdue loans - less than 90 days 10,186 - 

9,866,074 13,228,408 

Impairment for credit risk (103) - 

9,865,971 13,228,408 


2008 2007 

Euros ’000 

Up to 3 months 5,316,669 8,340,379 

3 to 6 months 353,299 787,187 

6 to 12 months 859,770 1,958,133 

1 to 5 years 2,659,095 924,512 


Undetermined 10,186 - 

9,866,074 13,228,408 

Impairment for credit risks in credit institutions for the Bank is analysed as follows: 

2008 2007 

Euros ’000 

Impairment for credit risks in credit institutions 

Balance on 1 January - - 

Transfers - (47) 

Impairment for the year 103 47 

Balance on 31 December 103 -


20. Loans and advances to customers 


Euros ’000 

2008 2007 


Asset-backed loans 27,758,581 24,714,326 

Personal guaranteed loans 14,026,236 11,389,174 

Unsecured loans 3,435,560 3,060,547 

Foreign loans 3,752,803 3,298,893 

Factoring 1,541,003 1,402,308 


55,772,140 48,941,996 

Overdue loans - less than 90 days 100,634 46,109 


56,294,481 49,249,824 

Impairment for credit risk (621,245) (417,449) 

55,673,236 48,832,375 

As at 31 December 2008, the balance Loans and advances to customers includes the amount of Euros 3,708,740,000 (2007: Euros 2,667,661,000) regarding mortgage 

loans which are a collateral for asset-back securities issued in 2008 by the Bank, as referred in note 44. 

The analysis of loans and advances to customers, by type of credit, is as follows: 

2008 2007 

Loans not represented by securities 

Discounted bills 1,299,922 1,409,016 

Current account credits 4,872,000 4,754,359 

Overdrafts 1,801,393 1,277,080 

Loans 18,659,663 17,501,189 

Mortgage loans 20,189,449 18,168,454 

Factoring 1,541,003 1,402,308 


53,096,363 48,941,996 

Loans represented by securities 

Commercial paper 2,487,178 - 

Bonds 188,599 - 

2,675,777 - 

55,772,140 48,941,996 

Overdue loans - less than 90 days 100,634 46,109 


56,294,481 49,249,824 


55,673,236 48,832,375 

Euros ’000 

The balance Loans represented by securities includes, as at 31 December 2008, the amount of Euros 1,431,413,000 related to non derivatives financial assets (bonds 

and commercial paper) reclassified during 2008 from Financial assets available for sale to Loans and advances to customers, as referred in note 21.


The analysis of loans and advances to customers by sector of activity is as follows: 

Euros ’000 

2008 2007 

Agriculture 570,528 471,289 

Mining 257,845 159,607 


Textiles 610,667 655,392 

Wood and cork 292,218 284,418 


Chemicals 1,041,665 903,331 

Engineering 1,048,363 956,870 

Electricity, water and gas 896,572 572,192 

Construction 4,260,491 3,821,317 

Retail business 1,871,379 1,738,737 

Wholesale business 2,570,882 2,629,257 

Restaurants and hotels 1,142,751 985,705 

Transports and communications 1,612,775 1,260,552 

Services 12,988,155 9,691,442 

Consumer credit 3,103,274 3,084,660 

Mortgage credit 18,591,761 17,272,476 

Other domestic activities 920,879 873,209 

Other international activities 3,597,307 3,089,090 

56,294,481 49,249,824 


55,673,236 48,832,375 

The analysis of loans and advances to customers, by maturity date and by sector of activity as at 31 December, 2008, is as follows: 

Loans 

Euros ’000 

Due whitin 1 year to Over Undetermined 


Agriculture 212,615 125,468 228,455 3,990 570,528 

Mining 136,501 54,649 64,534 2,161 257,845 

Food, beverage and tobacco 383,926 101,700 106,119 2,496 594,241 

Textiles 330,035 85,579 166,268 28,785 610,667 

Wood and cork 199,312 38,930 46,289 7,687 292,218 

Printing and publishing 166,658 84,854 68,779 2,437 322,728 

Chemicals 571,436 227,351 239,906 2,972 1,041,665 

Engineering 544,360 189,964 289,717 24,322 1,048,363 

Electricity, water and gas 192,397 46,172 657,892 111 896,572 

Construction 2,261,368 1,055,130 875,788 68,205 4,260,491 

Retail business 919,263 396,863 533,796 21,457 1,871,379 

Wholesale business 1,467,457 417,283 616,334 69,808 2,570,882 

Restaurants and hotels 277,522 277,713 570,430 17,086 1,142,751 

Transports and communications 693,546 398,846 505,728 14,655 1,612,775 

Services 6,357,992 2,786,746 3,759,140 84,277 12,988,155 

Consumer credit 1,064,592 1,083,417 885,562 69,703 3,103,274 

Mortgage credit 33,242 153,767 18,323,838 80,914 18,591,761 

Other domestic activities 500,505 175,602 238,436 6,336 920,879 

Other international activities 657,109 934,116 1,991,143 14,939 3,597,307 

16,969,836 8,634,150 30,168,154 522,341 56,294,481


The analysis of loans and advances to customers, by type of credit and by maturity date as at 31 December, 2008, is as follows: 

Loans 

Euros ’000 

Due whitin 1 year to Over Undetermined 


Public sector 525,024 - - - 525,024 

Asset-backed loans 5,072,685 4,225,050 18,460,846 260,921 28,019,502 

Personal guaranteed loans 5,422,213 4,756 8,599,267 136,727 14,162,963 

Unsecured loans 3,435,560 - - 109,766 3,545,326 

Foreign loans 957,693 2,611,934 183,176 14,927 3,767,730 

Factoring 1,541,003 - - - 1,541,003 

Finance leases 15,658 1,792,410 2,924,865 - 4,732,933 

16,969,836 8,634,150 30,168,154 522,341 56,294,481 

Loans and advances to customers includes the effect of traditional securitization transactions owned by SPE's consolidated under SIC 12, in accordance with the 

accounting policy 1 b) and synthetic securitization transactions. 

BCP engages mainly in the securitization of consumer loans, mortgage, commercial paper and corporate loans. The traditional and synthetic securitizations are 

performed through Special Purpose Entities (SPEs). 

The balance Loans and Advances to customers includes the following amounts related to securitization transactions, by type of transaction: 

Traditional Synthetic Total 

Euros ’000 

2008 2007 2008 2007 2008 2007 

Consumer credit 699,024 738,810 - - 699,024 738,810 

Mortgage credit 1,490,629 - - - 1,490,629 - 

Commercial Paper 510,198 - - - 510,198 - 

Loans to companies 1,961,842 - 2,430,546 2,762,024 4,392,388 2,762,024 

4,661,693 738,810 2,430,546 2,762,024 7,092,239 3,500,834 

During 2008, the Bank issued three securitization transaction namely Magellan n.º 5 (Mortgage loans), Caravela SME (loans to small and medium sized companies) 

and Nova Finance n.º4 (Consumer credit). Considering the characteristics of these securitizations and as referred in note 1 f), these transactions were not 

derecognized from the Bank's financial statements. 

The balance Loans and advances to customers includes the following amounts related with finance leases contracts: 

Euros ’000 

2008 2007 

Gross value 6,209,227 5,841,837 

Interest not yet due (1,476,294) (1,412,247) 

Net book value 4,732,933 4,429,590 

The analysis of the financial leasing contracts by type of client, is presented as follows: 

Euros ’000 

2008 2007 

Individualls 

Home 132,794 137,304 

Consumer 108,022 144,540 

Others 328,097 323,071 

568,913 604,915 

Companies 

Mobiliary 1,361,974 1,233,928 

Mortgage 2,802,046 2,590,747 

4,164,020 3,824,675 

4,732,933 4,429,590 

Regarding the Operational Leasing, the Bank does not present significant contracts as leaser. 

In accordance with note 10, the balance Rents, includes as at 31 December 2008, the amount of Euros 44,402,000 (2007: Euros 42,688,000), corresponding to rents 

paid regarding buildings used by the Bank as leaser.


The loans portfolio includes restructured loans that have been formally negotiated with the clients, in order to reinforce collaterals, defer the maturity date or change 

the interest rate. The analysis of restructured loans by sector of activity is as follows: 

Euros ’000 

2008 2007 


Mining 726 2,242 

Food, beverage and tobacco 910 1,199 

Textiles 9,826 10,035 


Printing and publishing 97 777 







Transports and communications 244 599 

Services 10,884 24,271 


Other domestic activities 893 726 

65,795 98,085 

The analysis of overdue loans by sector of activity for the Bank is as follows: 

Euros ’000 

2008 2007 


Mining 2,161 1,116 


Textiles 28,785 14,978 



Chemicals 2,972 2,209 








Services 84,277 30,251 





522,341 307,828


The analysis of overdue loans, by type of credit, for the Bank is as follows: 

Euros ’000 

2008 2007 



Unsecured loans 109,766 83,162 


522,341 307,828 

The movements of impairment for credit risk are analysed as follows: 

2008 2007 

Euros ’000 

Impairment for overdue loans and 

for other credit risks: 


Transfers 6,930 (26,056) 


Write-back for the year (14) (495) 


Exchange rate differences - 10 


If the impairment loss decreases on a subsequent period to its initial accounting and this decrease can be objectively associated to an event that occurred after the 

recognition of the loss, the impairment in excess is charged-off. 

The table below shows the analysis of the impairment for credit risk by classes of overdue loans as at 31 December, 2008: 

Euros ’000 

Classes of overdue loans 

Up to 3 months to 6 months 1 year to over 

3 months 6 months to 1 year 3 years 3 years Total 

Secured overdue loans 65,648 78,311 104,911 152,353 11,352 412,575 

Impairment 656 8,057 28,075 88,779 11,352 136,919 

Unsecured overdue loans 34,986 31,054 38,489 4,854 383 109,766 

Impairment 350 7,763 22,050 4,854 383 35,400 

Total overdue loans 100,634 109,365 143,400 157,207 11,735 522,341 

Total impairment for overdue loans 1,006 15,820 50,125 93,633 11,735 172,319 

Total impairment for overdue loans and for other credit risks 448,926 

Total impairment for credit risks 621,245


The analysis of the impairment, by sector of activity, is as follows: 

Euros ’000 

2008 2007 


Mining 6,889 4,643 


Textiles 19,042 14,852 



Chemicals 2,713 1,445 


Electricity, water and gas 2,290 171 






Services 141,323 175,245 




Other international activities 88,292 - 

621,245 417,449 

The impairment for credit risk, by type of credit, is analysed as follows: 

Euros ’000 

2008 2007 





621,245 417,449


The analysis of the loans charged-off, by sector of activity, is as follows: 

Euros ’000 

2008 2007 


Mining 3,255 1,245 


Textiles 16,831 19,809 











Services 37,523 66,354 





296,728 360,194 

Loans and advances to customers are charged-off when there are no expectations, from an economic point of view, of recovering the loan amount and for collatera - 

lized loans, when the funds arising from the execution of the respective collaterals was already received. This charge-off is carried out for loans that are fully provided. 

This criteria has been applied consistently by the Bank in the previous periods. 

The analysis of the loans charged-off, by type of credit, is as follows: 

Euros ’000 

2008 2007 





296,728 360,194


The analysis of recovered loans and overdue interest, during 2008 and 2007, which were charged-off during the year or in previous years, by sector of activity is as follows: 

Euros ’000 

2008 2007 


Mining 2,710 1,408 


Textiles 8,957 6,049 


Printing and publishing 1,225 900 



Electricity, water and gas - 541 






Services 4,477 18,631 



Other domestic activities 777 2,618 

Other international activities 1,006 - 

80,225 134,632 

The analysis of recovered loans and overdue interest during 2008 and 2007 which were charged-off during the year or in previous years, by type of credit, is as follows: 

Euros ’000 

2008 2007 




Foreign loans 1,006 - 

80,225 134,632 

21. Financial assets held for trading and available for sale 

The balance Financial assets held for trading and available for sale is analysed as follows: 

Euros ’000 

2008 2007 


Issued by public entities 384,544 728,292 

Issued by other entities 7,716,474 3,979,440 

8,101,018 4,707,732 

Overdue securities 5,427 5,427 


8,101,018 4,707,732 

Shares and other variable income securities 879,530 1,306,127 

8,980,548 6,013,859 

Trading derivatives 1,577,259 802,548 

10,557,807 6,816,407 

The balance Trading derivatives includes the valuation of the embedded derivatives separated from the host contract in accordance with the accounting policy 

presented in note 1 c) in the amount of Euros 1,756,000 (31 December 2007: Euros 2,106,000).


The analysis of the financial assets held for trading and available for sale by the type of asset is as follows: 

2008 2007 

Euros ’000 

Securities 

Securities 

Available 

Available 

Trading for sale Total Trading for sale Total 

Fixed income: 


Portuguese issuers 304,792 464 305,256 343,683 389 344,072 

Foreign issuers 32,010 - 32,010 308,215 76,005 384,220 


Portuguese issuers 107,669 871,604 979,273 141,194 1,081,375 1,222,569 

Foreign issuers 425,264 6,317,364 6,742,628 176,125 224,947 401,072 

Treasury bills and other 

Government bonds 47,278 - 47,278 - - - 

Commercial paper - - - - 2,361,226 2,361,226 

917,013 7,189,432 8,106,445 969,217 3,743,942 4,713,159 

of which: 

Quoted 802,410 6,313,388 7,115,798 795,917 510,189 1,306,106 

Unquoted 114,603 876,044 990,647 173,300 3,233,753 3,407,053 


Shares in Portuguese companies - 49,266 49,266 - 428,725 428,725 

Shares in foreign companies - 2,661 2,661 - 465 465 

Investment fund units 1,575 826,028 827,603 1,515 875,388 876,903 

Other securities - - - - 34 34 

1,575 877,955 879,530 1,515 1,304,612 1,306,127 

of which: 

Quoted - 135,187 135,187 - 660,046 660,046 

Unquoted 1,575 742,768 744,343 1,515 644,566 646,081 

Impairment for overdue securities - (5,427) (5,427) - (5,427) (5,427) 

918,588 8,061,960 8,980,548 970,732 5,043,127 6,013,859 

Trading derivatives 1,577,259 - 1,577,259 802,548 - 802,548 

2,495,847 8,061,960 10,557,807 1,773,280 5,043,127 6,816,407 

The trading portfolio is recorded at fair value with changes through profit and loss, in accordance with accounting policy 1 c). 

As referred in the accounting policy presented in note 1 c), the available for sale securities are presented at market value with the respective fair value accounted 

for against fair value reserves, as referred in note 39. The negative amount of fair value reserves of Euros 64,148,000 (31 December 2007: Euros 19,414,000) is 

presented net of impairment losses in the amount of Euros 60,041,000 (31 December 2007: Euros 110,543,000). 

As referred in note 7, Banco Comercial Português S.A. made an agreement in December 2008 for the sale of 87,214,836 shares, representing 9.69%, of Banco BPI 

share capital. As a result of the execution of this contract Banco Comercial Português ceased to hold a qualified position in Banco BPI, S.A. 

The Bank analised this sale within the scope of IAS 39 with the objective of assessing the conditions for derecognition and concluded that the transaction could be 

qualified as a true sale. This decision was based on the following aspects: (i) existence of an irrevocable contract for the sale of the shares; (ii) transfer of all risks and 

rewards associated with the shares, including dividends and voting rights; (iii) communication of the transaction to supervisory authorities; and (iv) existence of a deposit 

in the amount of Euros 30,000,000 as a collateral.


Additionally, it is expected that the Bank grants a loan for financing the transaction in the amount corresponding to the difference between the value of the sale and 

Euros 50.000.000 corresponding to the amount of the deposit established as collateral and the share capital of the acquirer. 

During 2007, the shares held in EDP - Energias de Portugal were sold, as referred in note 7 and 40. The sale of shares held in EDP - Energias de Portugal, resulted in 

a write-off of provisions for impairment losses in the amount of Euros 104,257,000. 

During the second semester of 2008, the Bank reclassified the non derivatives financial assets from the available for sale portfolio to loans to the customers portfolio 

(see note 20) as referred in the accounting policy note 1 e) and in accordance with the revision occurred on IAS 39 - Financial instruments: Classification and 

measurement (Reclassification of financial instruments) from financial assets held for trading portfolio to financial assets available for sale and financial assets held to 

maturity (see note 24). 

This reclassification is analised as follows: 

Euros ’000 

At the reclassification date December 2008 

Book value Fair value Book value Fair value Difference 


Financial assets held to maturity (July 08) 194,855 194,855 195,053 189,906 (5,147) 

Financial assets held to maturity (October 08) 549,001 549,001 549,661 549,190 (471) 


Loans represented by securities (October 08) 156,750 156,750 153,468 136,257 (17,211) 

Loans represented by securities (December 08) 2,435,530 2,435,530 1,277,945 1,277,945 - 

2,176,127 2,153,298 (22,829) 

The amounts accounted in Profits and losses and in fair value reserves, in 2008 related to reclassified financial assets are analysed as follows: 

Euros ’000 

P&L 

Changes 

Fair value 

Fair value 


At the reclassification date 


Financial assets held to maturity (July 08) 3,371 (5,168) (1,797) - (1,797) 

Financial assets held to maturity (October 08) 15,838 (8,908) 6,930 - 6,930 


Loans represented by securities (October 08) 3,142 - 3,142 (1,636) 1,506 

Loans represented by securities (December 08) 21,850 - 21,850 - 21,850 

Euros ’000 

P&L 

Changes 

Fair value 

Fair value 


After the reclassification 


Financial assets held to maturity (July 08) 5,218 - 5,218 - 5,218 

Financial assets held to maturity (October 08) 6,437 - 6,437 - 6,437 


Loans represented by securities (October 08) 2,210 - 2,210 52 2,262 

Loans represented by securities (December 08) 9,680 - 9,680 - 9,680


In 2007 the Bank recognized in profit and loss, interests and fair value changes in the amount of Euros 19,347,000 and a negative amount of Euros 1,000 respectively, 

and also a variation of Euros 39,000 referred to fair value reserves, related to the reclassifications occurred during 2008. 

If the reclassifications described previously had not occurred, the additional amounts recognized in profit and loss and in fair value reserves would be as follows: 

Euros ’000 

P&L 

Changes 

Fair value 

Fair value 


Without considering the reclassifications 


Financial assets held to maturity (July 08) - (5,147) (5,147) - (5,147) 

Financial assets held to maturity (October 08) - (471) (471) - (471) 


Loans represented by securities (October 08) 52 - 52 (17,263) (17,211) 

Loans represented by securities (December 08) - - - - - 

52 (5,618) (5,566) (17,263) (22,829) 

The movements of the impairment of the financial asstes available for sale are analised as follows: 

Euros ’000 

2008 2007 






60,041 110,543 

The Bank recognizes impairment on financial assets available for sale when there is a significant or prolonged decrease in its fair value or when there is an impact on 

expected future cash flows of the assets. This valuation involves judgement, in which the Bank takes into consideration among other factors, the volatility of the prices 

of securities. 

Thus, as a consequence of the low liquidity and significant volatility in financial markets in 2008, the following factors were taken into consideration in determining 

the existence of impairment: 

– Equity instruments: (i) decreases of more than 30% (20% in 2007) against the purchase price; or (ii) the market value below the purchase price for a period 

exceeding 12 months (6 months in 2007); 

– Debt instruments: when there is objective evidence of events with impact on the recoverable value of future cash flows of these assets. 

During 2008, as referred in note 7 and in accordance with the criteria mentioned above, impairment losses were recognized in the amount of Euros 301,232,000 

(31 December 2007: Euros 92,344,000), of which Euros 268,076,000 (31 December 2007: Euros 79,838,000) related to the investment held in Banco BPI, S.A. 

As at the year-end and in accordance with the agreement established for the sale of the position held in Banco BPI, S.A., the impairment loss recognized was realized 

at the selling date.



Due within 3 months to Over Undetermined 


Fixed income: 


Portuguese issuers - 229 305,027 - 305,256 



Portuguese issuers - - 973,846 5,427 979,273 

Foreign issuers - 13,465 6,729,163 - 6,742,628 

Treasury bills and other Government bonds 11,304 35,974 - - 47,278 

11,304 49,668 8,040,046 5,427 8,106,445 

of which: 

Quoted 9,287 36,202 7,070,309 - 7,115,798 

Unquoted 2,017 13,466 969,737 5,427 990,647 





879,530 879,530 

of which: 

Quoted 135,187 135,187 

Unquoted 744,343 744,343 


Euros ’000 

11,304 49,668 8,040,046 879,530 8,980,548 


Due within 3 months to Over Undetermined 


Fixed income: 


Portuguese issuers - 160,221 183,851 - 344,072 

Foreign issuers - 18,769 365,451 - 384,220 


Portuguese issuers - 278,354 938,788 5,427 1,222,569 

Foreign issuers - 1,715 399,357 - 401,072 

Commercial paper 1,654,466 706,760 - - 2,361,226 

1,654,466 1,165,819 1,887,447 5,427 4,713,159 

of which: 

Quoted - 436,483 869,623 - 1,306,106 

Unquoted 1,654,466 729,336 1,017,824 5,427 3,407,053 



Shares in foreign companies 465 465 


Other securities 34 34 

1,306,127 1,306,127 

of which: 

Quoted 660,046 660,046 

Unquoted 646,081 646,081 


Euros ’000 

1,654,466 1,165,819 1,887,447 1,306,127 6,013,859


The analysis of the securities portfolio included in the financial assets held for trading and available for sale portfolios, by sector of activity, as at 31 December 2008 

is as follows: 

Euros ’000 

Other financial Overdue Gross 

Bonds Shares assets Securities Total 

Mining - 73 - - 73 

Textiles - 81 - 1,037 1,118 

Wood and cork - - - 126 126 

Printing and publishing - 3,518 - - 3,518 

Engineering - 2 - 187 189 

Electricity, water and gas - 3,003 - - 3,003 

Construction - 11,879 - 645 12,524 

Wholesale business - 1 - 63 64 

Restaurants and hotels - 51 - - 51 

Transport and communications - - - 17 17 

Services 7,716,474 33,319 827,603 3,352 8,580,748 

7,716,474 51,927 827,603 5,427 8,601,431 

Government and Public securities 337,266 - 47,278 - 384,544 


8,053,740 51,927 874,881 - 8,980,548 

The analysis of the securities portfolio included in the financial assets held for trading and available for sale portfolios, by sector of activity, as at 31 December 2007 

is as follows: 

Euros ’000 

Other financial Overdue Gross 

Bonds Shares assets Securities Total 

Agriculture - - 23,485 - 23,485 

Mining 835 74 2,650 - 3,559 

Food, beverage and tobacco - 1 53,614 - 53,615 

Textiles 868 81 34,741 1,037 36,727 

Wood and cork - - 13,540 126 13,666 

Printing and publishing - 9,464 25,535 - 34,999 

Chemicals - - 23,665 - 23,665 

Engineering - 1,540 47,261 187 48,988 

Electricity, water and gas 4,815 - 304,002 - 308,817 

Construction - 158 76,118 645 76,921 

Retail business - - 30,321 - 30,321 

Wholesale business 907 - 190,904 63 191,874 

Restaurants and hotels - 51 17,452 - 17,503 

Transport and communications 100,431 - 49,790 17 150,238 

Services 1,510,358 417,821 2,345,085 3,352 4,276,616 

1,618,214 429,190 3,238,163 5,427 5,290,994 

Government and Public securities 728,292 - - - 728,292 


2,346,506 429,190 3,238,163 - 6,013,859



2008 

Euros ’000 


Fair values 

Less than 3 months to More than 

3 months 1 year 1 year Total Assets Liabilities 


OTC Market: 

Forward rate agreements - 227,000 - 227,000 565 424 

Interest rate Swaps 4,161,777 5,255,856 41,518,128 50,935,761 1,133,685 943,125 



Other interest rate contracts 6,890 198,321 5,808,617 6,013,828 71,772 72,832 

4,283,429 6,360,761 50,070,327 60,714,517 1,228,948 1,039,306 


Interest rate Futures 77,600 - - 77,600 - - 


OTC Market: 

Forward exchange contract 250,522 78,990 3,617 333,129 12,413 23,173 

Currency Swaps 4,992,521 779,738 - 5,772,259 137,663 183,927 

Currency Options (purchase) 54,695 5,188 - 59,883 1,696 - 

Currency Options (sale) 54,095 5,304 - 59,399 - 1,745 

5,351,833 869,220 3,617 6,224,670 151,772 208,845 


OTC Market: 

Shares/indexes Swaps 151,970 345,925 821,856 1,319,751 130,730 140,124 

Other shares/indexes contracts - - 50,000 50,000 - 6,896 

151,970 345,925 871,856 1,369,751 130,730 147,020 


Shares/indexes Options (purchase) 220,000 - - 220,000 - - 

Shares/indexes Options (sale) 220,000 - - 220,000 - - 

440,000 - - 440,000 - - 


OTC Market: 

Credit Default Swaps 10,599 91,661 5,761,651 5,863,911 64,053 60,606 

Others credit derivatives (purchase) - - 14,286 14,286 - - 

Others credit derivatives (sale) 4,269 30,748 81,824 116,841 - - 

14,868 122,409 5,857,761 5,995,038 64,053 60,606 


traded in: 

OTC Market 9,802,100 7,698,315 56,803,561 74,303,976 1,575,503 1,455,777 

Stock Exchange 517,600 - - 517,600 - - 


10,319,700 7,698,315 56,803,561 74,821,576 1,577,259 1,466,781



2007 

Euros ’000 


Fair values 




OTC Market: 

Interest rate Swaps 8,392,009 14,682,816 24,356,726 47,431,551 585,889 474,575 



8,894,729 15,514,646 26,813,204 51,222,579 592,858 481,316 


Interest rate Futures 18,600 - - 18,600 - - 


OTC Market: 

Forward exchange contracts 285,589 69,824 2,482 357,895 6,409 8,768 

Currency Swaps 7,471,041 3,151,757 - 10,622,798 23,647 445,848 

Currency Options (purchase) 6,853 15,733 1,516 24,102 759 - 

Currency Options (sale) 6,863 15,746 1,633 24,242 - 782 

7,770,346 3,253,060 5,631 11,029,037 30,815 455,398 


OTC Market: 

Shares/indexes Swaps 57,055 542,320 1,033,700 1,633,075 30,757 31,126 

Shares/indexes Options (purchase) - 359,710 - 359,710 293 - 

Shares/indexes Options (sale) - 359,710 - 359,710 - 293 

57,055 1,261,740 1,033,700 2,352,495 31,050 31,419 


OTC Market: 

Credit Default Swaps - 119,010 7,497,718 7,616,728 4,420 5,531 

Others 25,017 631,288 9,983,284 10,639,589 141,299 144,381 

25,017 750,298 17,481,002 18,256,317 145,719 149,912 


traded in: 

OTC Market 16,747,147 20,779,744 45,333,537 82,860,428 800,442 1,118,045 

Stock Exchange 18,600 - - 18,600 - - 


16,765,747 20,779,744 45,333,537 82,879,028 802,548 1,152,401


22. Other financial assets held for trading at fair value trough profit or loss 

The balance Other financial assets held for trading at fair value trough profit or loss corresponds to Loans and advances to credit institutions (Millennium Bank, Societe 

Anonyme - Greece). 

23. Hedging derivatives 


2008 2007 

Assets: 

Swaps 108,974 35,778 

Liabilities: 

Swaps 36,547 80,277 

Euros ’000 

The Bank uses derivatives to hedge interest and exchange rate risks. The accounting method depends on the nature of the hedged risk, namely if the Bank is exposed 

to fair value changes, variability in cash-flows or highly probable forecasted transactions. 

Since 1 January 2005, for the hedging relationships which comply with the hedging requirements of IAS 39, the Bank adopted the hedge accounting method, namely 

through the fair value hedge model, and holds in its derivatives portfolio mainly interest rate swaps, which are hedging fair value changes in interest rate risk of Debt 

securities issued and Deposit, Loans of inter-bank money market and Financial assets available for sale. 

The Bank performs periodical effectiveness tests of the hedging relationships. For this year a negative amount of Euros 1,655,000 (31 December 2007: Euros 8,753,000) 

was accounted against profit and loss, corresponding to the ineffective part of the fair value hedge relationships. The Bank also designated a portfolio of fixed inte - 

rest rate loans with maturity of more than one year for which adopted an hedging policy regarding the interest rate risk. For the referred hedging relationships, the 

ineffective part of the fair value hedge amounted to a negative value of Euros 165,000 (31 December 2007: Euros 2,240,000). 

As referred in note 6, during 2008 the Bank discontinued an interest rate hedging relationship of a mortgage backed bond issue in the amount of Euros 1,500,000,000 

in accordance with paragraph 91, c) of IAS 39, due to the break of its effectiveness. 

The adjustment on financial risks covered performed on the assets and liabilities which includes hedged items is analysed as follows: 

2008 2007 

Hedged item 

Loans 41,867 (11,295) 

Deposits / Loans (15,504) (510) 

Debt issued (116,815) 22,871 

Financial assets available for sale (344) (546) 

(90,796) 10,520 

Euros ’000 



2008 

Fair values 





OTC Market: 

Interest rate Swaps 228,928 23,000 2,861,301 3,113,229 108,974 36,547 

228,928 23,000 2,861,301 3,113,229 108,974 36,547 

Euros ’000




2007 

Fair values 





OTC Market: 

Interest rate Swaps 434,585 1,958,152 5,782,744 8,175,481 35,778 80,277 

434,585 1,958,152 5,782,744 8,175,481 35,778 80,277 

Euros ’000 

24. Financial assets held to maturity: 

The balance Financial assets held to maturity is analysed as follows: 

Euros ’000 

2008 2007 


Issued by Government and public entities 513,304 - 

Issued by other entities 582,465 - 

1,095,769 - 

The balance Financial assets held to maturity includes, as at 31 December 2008, the amount of Euros 744,714,000 related to non derivatives financial assets (bonds) 

reclassified, during 2008, from financial assets held for trading caption to financial assets held to maturity caption, as referred in the accounting policy note 1 e) and 

note 21. 

The analysis of the securities portfolio included in the Financial assets held to maturity, by maturity date, as at 31 December 2008, is as follows: 

Up to 3 months to Over Undetermined 


Fixed income: 







- - 1,095,769 - 1,095,769 

of which: 

Quoted - - 959,448 - 959,448 

Unquoted - - 136,321 - 136,321 

Euros ’000 

The analysis of the securities portfolio included in the Financial assets held to maturity, by sector of activity, as at 31 December 2008 and 2007, is as follows: 

Euros ’000 

2008 2007 

Transport and communications 97,118 - 

Services 485,347 - 

582,465 - 

Government and Public securities 513,304 - 

1,095,769 -


25. Investments in associated companies 


Euros ’000 

2008 2007 

Portuguese credit institutions 377,206 202,464 

Foreign credit institutions 742,527 742,544 

Other Portuguese companies 1,314,369 1,111,549 

Other foreign companies 3,319,316 5,713 

5,753,418 2,062,270 

Impairment for investments in associated companies 

In subsidiary companies (1,794,941) (182,526) 

3,958,477 1,879,744 

of which: 

Quoted 696,245 696,245 

Unquoted 5,057,173 1,366,025 

The balance of Investments in associated companies is analysed as follows: 

Euros ’000 

2008 2007 

Banca Millennium S.A. 4 4 

Banco de Investimento Imobiliário, S.A. 200,235 200,235 

Bank Millennium S.A. 696,245 696,245 

Banque BCP, S.A.S. 12,949 12,949 

Banco Millennium Angola, S.A. 33,329 33,329 

Banco Millennium BCP Investimento, S.A. 174,742 - 

BCP Capital Finance Limited 10,806 - 

BCP Investment, BV 1,301,303 - 

BCP Internacional II, Sociedade Unipessoal, S.G.P.S., Lda. 25 25 

BCP Participações Financeiras, SGPS Sociedade Unipessoal, Lda. - 119,933 

BitalPart, B.V. 1,999,825 - 

Banpor Consulting, S.R.L. 500 500 

Comercial Português Ireland Limited 10 - 

Interfundos Gestão de Fundos de Investimento Imobiliários, S.A. 1,500 - 

Millennium bcp - Escritório de representações e Serviços, S/C Lda. 6,845 5,186 

Millennium bcp - Gestão de Fundos de Investimento, S.A. 28,009 - 

Pinto Totta Internacional Finance, Ltd. - 17 

Seguros & Pensões Gere, S.G.P.S., S.A. 935,993 935,993 

Caracas Financial Services, Limited 27 27 

CISF Veículos - Sociedade de Aluguer, Lda. - 132 

Comercial Imobiliária SA 341,088 46,916 

Luso Atlântica - Aluguer de Viaturas, S.A. - 796 

Millennium bcp -Serviços de Comércio Electrónica, S.A. 885 885 

Paço de Palmeira - Sociedade Agrícola e Comercial, Lda. 68 68 

Servitrust - Trust Management Services S.A. 100 100 

SIBS - Sociedade Interbancária de Serviços, S.A. 6,700 6,700 

UNICRE - Cartão Internacional de Crédito, S.A. 2,230 2,230 

5,753,418 2,062,270 

Impairment for investments in associated companies (1,794,941) (182,526) 

3,958,477 1,879,744


The movements for impairment for investments in associated companies are analysed as follows: 

2008 2007 

Impairment for investments in associated companies 


Transfers 1,612,415 20,746 

Balance on 31 December 1,794,941 182,526 

Euros ’000 

The Bank companies are presented in note 53. 

The increase occurred during 2008, results from the merge of BCP Participações Financeiras, S.G.P.S., Sociedade Unipessoal, Lda in Banco Comercial Português, S.A., 

as referred in note 44. 

The increase occurred in the investment owned in Comercial Imobiliária, S.A. results from the conversion of supplementary capital contribution into share capital 

following the measures implemented under art. 35º of the Commercial Companies Code. This investment has a provision allocated in the amount of Euros 312,000,000 

(see notes 51 and 52). As referred in note 29, in consequence of the conversion this provision was transferred, during 2008, from Impairment for other assets. 

The investment in BitalPart, B.V. has a provision allocated, accounted in previous years, in the amount of Euros 1,320,000,000 (2007: Euros 1,320,000,000), which, as 

referred in note 29, was transferred to Provision for investments in associated companies following the merge process referred above. 

26. Property and equipment 


2008 2007 

Euros ’000 


Equipment 

Furniture 67,516 66,193 






Work in progress 35,147 19,999 


1,109,332 1,128,896 

Accumulated depreciation and impairment 



(690,369) (712,564) 

418,963 416,332


The Property and equipment movements during 2008 are analysed as follows: 

Euros ’000 



Cost: 

Land and buildings 730,396 36,722 (78,280) - - 688,838 

Equipment: 

Furniture 66,193 1,714 (394) - 3 67,516 

Office equipment 15,152 94 (129) - 2 15,119 

Computer equipment 127,815 15,134 (3,113) 30 3 139,869 

Interior installations 92,050 995 (668) - 1 92,378 

Motor vehicles 5,003 72 (1,388) - 4 3,691 

Security equipment 69,224 1,268 (6,937) - - 63,555 

Work in progress 19,999 42,954 (27,887) 81 - 35,147 

Other tangible assets 3,064 157 (217) 219 (4) 3,219 

1,128,896 99,110 (119,013) 330 9 1,109,332 

Accumulated depreciation: 

Land and buildings 376,361 29,700 (58,076) - - 347,985 

Equipment: 

Furniture 58,138 3,219 (385) - 3 60,975 

Office equipment 14,429 184 (129) - - 14,484 

Computer equipment 111,613 9,726 (3,034) 30 2 118,337 

Interior installations 83,526 2,615 (649) - - 85,492 

Motor vehicles 3,624 341 (1,064) - 1 2,902 

Security equipment 61,813 2,243 (6,937) 1 - 57,120 

Other tangible assets 3,060 13 (218) 218 1 3,074 

712,564 48,041 (70,492) 249 7 690,369 

27. Intangible assets 


2008 2007 

Euros ’000 

Software 10,935 12,176 


15,925 17,453 

Accumulated amortisation 



(5,940) (10,761) 

9,985 6,692


The Intangible assets movements during 2008 are analysed as follows: 

Euros ’000 



Cost: 

Software 12,176 4,228 (5,470) - 1 10,935 

Other intangible assets 5,277 3,478 (3,684) (81) - 4,990 

17,453 7,706 (9,154) (81) 1 15,925 

Accumulated amortisation: 

Software 7,880 2,741 (5,469) - - 5,152 

Other intangible assets 2,881 24 (2,116) - (1) 788 

10,761 2,765 (7,585) - (1) 5,940 

28. Deferred income tax assets and liabilities 

Deferred income tax assets and liabilities as at 31 December, 2008 and 2007 are analysed as follows: 

2008 2007 

Euros ’000 

Assets Liabilities Assets Liabilities 

Intangible assets - 77 107 - 

Other tangible assets - 3,381 - 3,238 

Impairment losses 204,037 59,840 216,420 - 

Pensions 277,997 - 274,973 - 

Derivatives 36,553 - 52,874 - 

Others 25,732 87,617 29,892 73,705 

Tax losses carried forward 98,323 - - - 

642,642 150,915 574,266 76,943 

Net deferred tax 491,727 497,323 

Deferred tax related to the losses carried forward are recognised only if it is probable the existence of future taxes profits. The uncertainty of the recoverability of 

the tax losses carried forward is considered in the deferred tax assets calculation. 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when deferred taxes 

relate to the same tax. 

The net deferred tax asset movement is analysed as follows: 

2008 2007 

Euros ’000 


Charged to profit (36,623) 39,470 

Charged to equity 31,027 14,883 


The variation in the net deferred tax does not corresponds to the deferred tax expense for the year considering that the potential gains and losses resulted from the 

revaluation of financial assets held for sale are charged directly to shareholders' equity.


29. Other assets 


2008 2007 

Euros ’000 

Debtors 374,024 248,677 

Investments arising from recovered loans 781,686 650,550 

Suplementary investments contributions 69,167 327,644 

Other financial investments 48,664 50,221 


Recoverable tax 53,921 53,947 

Recoverable government subsidies on mortgage loans 34,022 52,466 


Other amounts receivable 29,515 55,819 

Prepayments and deferred costs 1,937,238 1,350,316 

Amounts receivable on trading activity 98,137 5,745 

Amounts due from customers 199,493 188,295 

Suplementary capital contributions 1,119,454 4,491,950 

Sundry debtors 113,177 136,026 

4,891,565 7,760,637 

Impairment for other assets (148,163) (1,731,256) 

4,743,402 6,029,381 

In accordance with accounting policy 1 r), the balance Investments arising from recovered loans includes buildings and other assets resulting from the foreclosure of 

contracts of loans to customers, originated by (i) delivery of the assets, with option to repurchase or leasing, accounted with the celebration of the contract or the 

promise to delivery the asset and the respective irrevocable power of attorney issued by the customer in the name of the Bank; or (ii) the adjudication of the assets 

as a result of a judicial process of guarantees execution, accounted with the title of adjudication or following the adjudication request after the record of the first 

(payment pro-solvency). 

The balance Investments arising from recovered loans includes buildings for which there is a sale agreement in the amount of Euros 70,072,000 (2007: Euros 

12,242,000) but which considering their characteristics, do not comply with the requirements of IFRS 5 - Non-current assets held for sale, as referred in the accounting 

policy presented in note 1 r). 

As at 31 December 2008, the balance Prepayments and deferred costs includes the amount of Euros 563,439,000 (31 December 2007: Euros 579,281,000) related 

to the corridor value and deferred actuarial losses in the amount of Euros 1,535,360,000 (31 December 2007: Euros 765,032,000), in accordance with the accounting 

policy presented in note 1 v). 

The balance Suplementary capital contributions is analysed as follows: 

2008 2007 

Euros ’000 

BCP Finance Bank Ltd. 403,104 381,084 

BCP Internacional II, S.G.P.S., Lda. 382,135 275,166 

BCP Bank & Trust Company Ltd. 244,306 230,963 

BCP Participações Financeiras, SGPS, Lda. - 3,574,856 

Others 89,909 29,881 

1,119,454 4,491,950


The deferred costs related to pensions, included in Prepayments and deferred costs are, analysed as follows: 

2008 2007 

Euros ’000 

Projected benefit obligations 5,634,393 5,789,755 

Value of the Pension Fund (5,239,077) (5,535,037) 

395,316 254,718 


Corridor 563,439 578,976 

Amount in excess of the corridor 1,535,359 741,753 

2,098,798 1,320,729 

2,494,114 1,575,447 

The difference between the Projected benefit obligation and the Value of the Pension Fund in the amount of Euros 395,316,000 (2007: Euros 254,718,000) cor respond 

to other benefits not covered by the Pension Fund which are fully provided for. 

The movement of impairment for other assets is analysed as follows: 

2008 2007 

Euros ’000 

Balance on 1 January 1,731,256 1,704,489 

Transfers (1,616,367) 2,439 



Balance on 31 December 148,163 1,731,256 

As referred in note 25, related to the conversion in capital of the supplementary capital of the company Comercial Imobiliária, S.A., the impairment associated in the 

amount of Euros 312,000,000, was transferred to the Impairment for investments in associated companies account (see note 51 and 52). 

As referred in note 36, based on the merge of the company BCP Participações Financeiras, S.G.P.S., Sociedade Unipessoal, Lda in Banco Comercial Português, S.A., 

the Bank is owning directly the investment in BitalPart, B.V. Therefore, the impairment in the amount of Euros 1,320,000,000 associated to this investment was 

transferred to the Impairment for investments in associated companies account. 

30. Deposits from other credit institutions 


Euros ’000 

2008 2007 



Credit institutions in Portugal 469,187 1,179,245 1,648,432 84,646 863,583 948,229 

Credit institutions abroad 1,029,976 18,044,123 19,074,099 253,853 28,462,822 28,716,675 

1,499,163 19,223,368 20,722,531 338,499 29,326,405 29,664,904 

This balance is analysed by the maturity date, as follows: 

2008 2007 

Euros ’000 

Up to 3 months 10,011,316 13,682,982 

3 to 6 months 1,725,311 3,932,032 

6 to 12 months 3,137,107 2,511,013 

1 to 5 years 4,497,377 8,594,041 

More than 5 years 1,351,420 944,836 

20,722,531 29,664,904


31. Deposits from customers 


Euros ’000 

2008 2007 



Deposits from customers: 

Repayable on demand 10,915,009 942,415 11,857,424 11,233,865 1,066,881 12,300,746 

Term deposits - 14,782,008 14,782,008 - 12,955,373 12,955,373 

Saving accounts - 4,755,144 4,755,144 - 3,507,549 3,507,549 

Other - 319,160 319,160 - 341,958 341,958 

10,915,009 20,798,727 31,713,736 11,233,865 17,871,761 29,105,626 

In accordance with Regulation 180/94 of 15 December, the Deposit Guarantee Fund was established to guarantee the reimbursement of funds deposited in Credit 

Institutions. The calculations of the annual contributions for this Fund are based on the criteria laid out in Regulation 11/94 of the Bank of Portugal. 


2008 2007 

Euros ’000 

Deposits from customers repayable on demand: 11,857,424 12,300,746 

Term deposits and saving accounts from customers: 

Up to 3 months 15,559,207 13,306,734 

3 to 6 months 2,651,904 2,040,960 

6 to 12 months 1,172,239 988,280 

1 to 5 years 39,905 14,754 


19,537,152 16,462,922 

Other: 

Up to 3 months - 87,136 

3 to 12 months - 18,190 

More than 1 year 319,160 236,632 

319,160 341,958 

31,713,736 29,105,626 

32. Debt securities issued 


2008 2007 

Euros ’000 

Bonds 10,425,895 8,437,257 

Other - 4,690 

10,425,895 8,441,947 

The balance Bonds includes issues for which the embedded derivative was separated from the host contract, in accordance with note 21 and accounting policy 

in note 1 c).


The characteristics of the bonds issued by the Bank as at 31 December, 2008, are analysed as follows: 

Bonds issued: 



EMTN BCP-SFE 21ª Em. May, 2000 May, 2010 Fixed rate of 5.2% 65,000 66,032 



BCP 5.34% March-02/Mar-12 March, 2002 March, 2012 Fixed rate of 5.34% 164,500 169,560 

BCP Ob Cx Sep 2003/2011 September, 2003 September, 2011 Fixed rate of 4.37% 123,240 124,543 

BCP SFI Glo.Eq.Inc.Bui.Strat. January, 2004 January, 2009 Indexed to portfolio of 20 shares 2,725 2,725 

BCP SFE Glob.Target Red. May, 2004 May, 2009 Indexed to portfolio of 20 shares 2,395 2,395 

BCP SFI Glob.Target Red. May, 2004 May, 2009 Indexed to portfolio of 20 shares 2,605 2,605 

BCP Super Inv.Mill.Nov 04/09 November, 2004 November, 2009 Indexed to portfolio of funds 60,000 60,000 

BCP Rend.Cr.Feb 05/09 February, 2005 February, 2009 Increasing rate of: 1st year 2%; 2nd 45,000 45,056 

year 2.25%; 3rd year 2.5%; 4th year 

3.125% 

BCP Rend. 8 March 10 March, 2005 March, 2010 1st year 4%; 2nd year and following 30,000 30,000 


BCP Mill. Ind. Mun. Mar 05/10 March, 2005 March, 2010 Indexed to portfolio of indexes 15,573 15,573 

BCP Super Inv.Mill. 05/10 April, 2005 December, 2010 Indexed to portfolio of funds 50,000 47,719 

BCP Rend. 8 May 10 May, 2005 May, 2010 1st year 4%; 2nd year and following 20,000 19,501 


BCP Rend. 8 May 10 2ª em. May, 2005 May, 2010 1st year 4%; 2nd year and following 10,000 9,780 


BCP Activo 4 June 05/09 June, 2005 June, 2009 Indexed to portfolio of shares 5,322 5,267 

BCP Ob Cx Aex Aug 05/10 August, 2005 August, 2010 Indexed to Aex index 10,000 9,764 

BCP Ob Cx Sp/Mib Aug 05/10 August, 2005 August, 2010 Indexed to Mib index 10,000 9,764 

BCP Ob Cx Dj euroxx50 August, 2005 August, 2010 Indexed to Dj euroxx50 index 10,000 9,764 

BCP Ob Cx Cac 40 August, 2005 August, 2010 Indexed to Cac 40 index 10,000 9,764 

BCP Ob Cx Ibex 35 August, 2005 August, 2010 Indexed to Ibex 35 index 10,000 9,764 

BCP Ob Cx Rend. 7 - Aug 2010 August, 2005 August, 2010 1st year 3.25%; 2nd year and following 32,000 31,117 


BCP Ob Cx Triplo R. Sep 05/10 September, 2005 September, 2010 Indexed to Down Jones Global Titans 9,525 9,272 

50 index 

BCP Ob Cx Rend. 7 Oct 2010 October, 2005 October, 2010 1st year 3.5%; 2nd year and following 10,224 9,826 


BCP Ob Cx Rend. Real Nov 10 November, 2005 November, 2010 Indexed to IPC index 15,000 14,331 

BCP Ob Cx E. Gr. S. Dec 05/15 December, 2005 December, 2015 Indexed to Dj euroxx50 index 2,427 2,262 

BCP Ob Cx R. Cr. Jan 2009 January, 2006 January, 2009 1st Sem. 2.125%; 2nd Sem. 2.25%; 45,500 45,504 

3rd Sem. 2.5%; 4th Sem. 2.65%; 

5th Sem. 2.85%; 6th Sem. 3.10% 

BCP SFI Ob Cx R. Cr. Jan 2009 January, 2006 January, 2009 1st Sem. 2.125%; 2nd Sem. 2.25%; 7,631 7,632 

3rd Sem. 2.5%; 4th Sem. 2.65%; 

5th Sem. 2.85%; 6th Sem. 3.1% 

BCP SFE Ob Cx R. Cr. Jan 2009 January, 2006 January, 2009 1st Sem. 2.125%; 2nd Sem. 2.25%; 1,869 1,869 

3rd Sem. 2.5%; 4th Sem. 2.65%; 

5th Sem. 2.85%; 6th Sem. 3.1% 

BCP Ob Cx M.S. Act. Jan 05/11 January, 2006 January, 2011 Indexed to portfolio of indexes 10,243 10,115 

BCP Ob Cx I. Glob.12 Feb 06/11 February, 2006 February, 2011 Indexed to portfolio of indexes 20,000 20,000 

BCP Ob Cx E. I. S. Mar 06/16 March, 2006 March, 2016 Index to Down Jones EuroStoxx 50 index 1,100 1,026 

BCP Ob Cx M. Oport Mar 06/10 March, 2006 March, 2010 Index to portfolio of indexes 15,000 14,738 

BCP Ob Cx. 3.84% Apr 2016 April, 2006 April, 2016 Fixed rate 3.84 % 1,000 1,041 

BCP Ob Cx Cab. W. Eq. Jul 06/09 July, 2006 July, 2009 Indexed to portfolio of 3 indexes 2,425 2,386 

BCP Ob Cx Cab. Mund. Jul 06/09 July, 2006 July, 2009 Indexed to portfolio of 3 indexes 3,750 3,686 

BCP Ob Cx N. D. Var Aug 06/09 August, 2006 August, 2009 Indexed to portfolio of shares 19,679 19,598 

BCP Ob Cx R. Global 06/11 November, 2006 November, 2011 Index to Down Jones EuroStoxx 50 index 10,000 9,601 

BCP Ob Cx R. Global II 06/11 December, 2006 December, 2011 Index to Down Jones EuroStoxx 50 index 10,000 9,681 

BCP Ob Cx R. Global II 2E 06/11 December, 2006 December, 2011 Index to Down Jones EuroStoxx 50 index 2,000 1,936 

(continue)





BCP FRN May 07/14 May, 2007 May, 2014 Euribor 3M + 0.15% 1,228,500 1,228,500 

BCP FRN May 07/11 May, 2007 May, 2011 Euribor 3M + 0.15% 400,000 400,000 

BCP Cov Bonds Jun 07/17 June, 2007 June, 2017 Fixed rate of 4.75% 1,500,000 1,519,617 

BCP FRN Sep 12 August, 2007 September, 2012 Euribor 3M + 0.10% 310,000 310,000 

BCP Cov Bonds Oct 07/14 October, 2007 October, 2014 Fixed rate of 4.75% 1,000,000 1,078,528 

BCP FRN Mar 17 December, 2007 March, 2017 Euribor 3M + 0.18% 100,000 100,000 








0.250%; 4th year 0.750%; 5th year 1.5% 



0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfi Ob Cx S Af 1E Mar 08/13 March, 2008 March, 2013 Euribor 3M + Remain Prize: 38,686 38,686 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfe Ob Cx S Af 1E Mar 08/13 March, 2008 March, 2013 Euribor 3M + Remain Prize: 6,873 6,873 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcp Ob Cx S Af 3E May 08/13 May, 2008 May, 2013 Euribor 3M + Remain Prize: 590,383 590,383 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfi Ob Cx S Af 3E May 08/13 May, 2008 May, 2013 Euribor 3M + Remain Prize: 24,013 24,013 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfe Ob Cx S Af 3E May 08/13 May, 2008 May, 2013 Euribor 3M + Remain Prize: 7,858 7,858 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcp Frn May 2010 / Emtn 468 May, 2008 May, 2010 Euribor 3M + 0.75% 1,250,000 1,249,998 

Bcp Ob Cx S Af 4E Jun 08/13 June, 2008 June, 2013 Euribor 3M + Remain Prize: 485,440 485,440 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfi Ob Cx S Af 4E Jun 08/13 June, 2008 June, 2013 Euribor 3M + Remain Prize: 18,253 18,253 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfe Ob Cx S Af 4E Jun 08/13 June, 2008 June, 2013 Euribor 3M + Remain Prize: 3,720 3,720 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcp Ob Cx S Af 5E Jul 08/13 July, 2008 July, 2013 Euribor 3M + Remain Prize: 136,955 136,955 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfi Ob Cx S Af 5E Jul 08/13 July, 2008 July, 2013 Euribor 3M + Remain Prize: 15,781 15,781 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcpsfe Ob Cx S Af 5E Jul 08/13 July, 2008 July, 2013 Euribor 3M + Remain Prize: 3,657 3,657 


0.250%; 4th year 0.750%; 5th year 1.5% 

Bcp O Cx S A M B 1E Oct 08/13 October, 2008 October, 2013 Euribor 3M + Remain Prize: 364,133 364,133 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfi O Cx S A M B 1E 08/13 October, 2008 October, 2013 Euribor 3M + Remain Prize: 25,711 25,711 

1st year 0.125%; 2nd year 0.250%; 

3rd year 0.50%; 4th year 0.750%; 

5th year 1.5% 

(continue)





Bcp Sfe O Cx S A M B1E Oct08/13 October, 2008 October, 2013 Euribor 3M + Remain Prize: 4,202 4,202 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp O Cx S A M B2E Nov 08/13 November, 2008 November, 2013 Euribor 3M + Remain Prize: 213,236 213,236 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfi O Cx S A M B2E 08/13 November, 2008 November, 2013 Euribor 3M + Remain Prize: 10,501 10,501 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfe O Cx S A M B2E Nov 08/13 November, 2008 November, 2013 Euribor 3M + Remain Prize: 1,952 1,952 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp O Cx S A M B3E Dec 08/13 December, 2008 December, 2013 Euribor 3M + Remain Prize: 235,521 235,521 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfi O Cx S A M B3E 08/13 December, 2008 December, 2013 Euribor 3M + Remain Prize: 12,223 12,223 


0.50%; 4th year 0.750%; 5th year 1.5% 

Bcp Sfe O Cx S A M B3E Dec 08/13 December, 2008 December, 2013 Euribor 3M + Remain Prize: 2,951 2,951 


0.50%; 4th year 0.750%; 5th year 1.5% 

10,338,632 


10,425,895 


2008 2007 

Euros ’000 

Bonds: 

Up to 3 months 102,786 357,137 

3 to 6 months 10,267 396,843 

6 to 12 months 657,375 1,403,852 

1 to 5 years 5,637,230 2,324,295 

More than 5 years 3,930,974 3,881,433 

10,338,632 8,363,560 

Accruals 87,263 73,697 

10,425,895 8,437,257 

Other: 

3 to 12 months - 4,690 

- 4,690 

10,425,895 8,441,947


33. Financial liabilities held for trading 


2008 2007 

Euros ’000 

Securities loans - 1,916 

FRA 424 - 

Swaps 1,400,614 1,101,440 

Futures 6,896 - 

Options 1,745 2,157 


Others 46,098 14,448 

1,466,781 1,154,317 

The balance Financial liabilities held for trading includes, the embedded derivatives valuation separated from the host contract in accordance with the accounting policy 

presented in note 1 c), in the amount of Euros 11,004,000 (31 December 2007: Euros 34,356,000). This note should be analysed with note 21. 

34. Other financial liabilities held for trading at fair value through profit 


Euros ’000 

2008 2007 

Deposits from credit institutions 2,458,477 31,710 

Deposits from customers 35,522 - 

Bonds 2,924,211 1,331,170 

Subordinated debt 298,171 - 

5,716,381 1,362,880 

The financial liabilities included in this balance were revaluated against profit and loss, as referred in note 1 c), and was recognized for 2008, an amount of Euros 40,036,000 

(31 December 2007: Euro 6,958,000) related with changes in fair value associated to credit risk (spreads) of the Bank.


The characteristics of the bonds and subordinated debt issued by the Bank at fair value through profit or loss as at 31 December, 2008, are analysed as follows: 



Bonds issued: 

BCP Ob Cx C.Call Feb 2007/09 February, 2007 February, 2009 Indexed to DJ EuroStoxx 50 index 1,250 1,246 

BCP Ob Cx 8%Feb 2007/09 February, 2007 February, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 99,507 100,079 




BCP Ob Cx 8%Feb 2007/09 2Em February, 2007 February, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 24,032 24,170 




BCP SFI Ob Cx.8%Feb 2007/09 February, 2007 February, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 26,963 27,118 




BCP Ob Cx Eurostoxx50 Feb 2007/09 February, 2007 February, 2009 Indexed to DJ EuroStoxx 50 index 28,500 28,403 

BCP Ob Cx MR Dax Feb 2007/10 February, 2007 February, 2010 Indexed to DAX 30 index 15,000 15,767 

BCP Ob Cx R.G.III Feb 2007/12 February, 2007 February, 2012 Indexed to DJ EuroStoxx 50 index 25,000 22,171 

BCP SFE Ob Cx 8%Feb 2007/09 February, 2007 February, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 6,498 6,536 




BCP Ob Cx 9%Mar 2007/09 March, 2007 March, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 124,775 126,493 




BCP SFI Ob Cx 9%Mar 2007/09 March, 2007 March, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 24,843 25,185 




BCP Ob Cx Eurostoxx50 Mar 2007/09 March, 2007 March, 2009 Indexed to DJ EuroStoxx 50 index 16,848 16,731 

BCP Ob Cx Op 4%+ Mar 2007/10 March, 2007 March, 2010 Indexed to portfolio of shares 21,838 20,818 

BCP Ob Cx RGIv Mar 2007/12 March, 2007 March, 2012 Indexed to DJ EuroStoxx 50 index 13,000 11,610 

BCP Ob Cx RGIv 2Em Mar 2007/12 March, 2007 March, 2012 Indexed to DJ EuroStoxx 50 index 13,500 12,008 

BCP SFE Ob Cx 9%Mar 2007/09 March, 2007 March, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 2,980 3,021 




BCP Ob Cx 9%May 2007/09 May, 2007 May, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 82,515 83,857 




BCP SFI Ob Cx 9%May 2007/09 May, 2007 May, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 14,465 14,700 




BCP Ob Cx I. M. May 2010 May, 2007 May, 2010 Indexed to portfolio of indexes 6,889 6,956 

BCP Ob Cx RGV 2Em May 2007/12 May, 2007 May, 2012 Indexed to DJ EuroStoxx 50 index 5,000 4,484 

BCP Ob Cx RGV May 2007/12 May, 2007 May, 2012 Indexed to DJ EuroStoxx 50 index 12,250 10,938 

BCP SFE Ob Cx 9%May 2007/09 May, 2007 May, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 634 644 




BCP Ob Cx Obr 10 E-J Jun 2007/10 June, 2007 June, 2010 Indexed to portfolio of indexes 6,540 6,370 

BCP Ob Cx 10 %Jun 2007/09 June, 2007 June, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 86,358 88,262 




BCP SFI Ob Cx 10%Jun 2007/09 June, 2007 June, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 14,690 15,014 



7th Quart. 4.250%; 8th 

Quart. 10.0% 

BCP Ob Cx RGVi Jun 2007/12 June, 2007 June, 2012 Indexed to portfolio of indexes 20,000 18,022 

(continue)





BCP SFE Ob Cx 10%Jun 2007/09 June, 2007 June, 2009 1st Quart. 2.5%; 2nd Quart. 2.5%; 1,021 1,044 




BCP Ob Cx Inv. 16 Aug 2007/09 August, 2007 August, 2009 1st Quart. 3%; 2nd Quart. 3.25%; 31,000 30,830 




of 4 shares 

BCP Ob Cx M.C. Aug 2007/09 August, 2007 August, 2009 1st Sem. 3.750%; 2nd Sem. 4.0%; 63,076 63,970 

3rd Sem. 4.250%; 4th Sem. 4.5% 

BCP SFI Ob Cx M.C. Aug 2007/09 August, 2007 August, 2009 1st Sem. 3.750%; 2nd Sem. 4.0%; 16,881 17,120 

3rd Sem. 4.250%; 4th Sem. 4.5% 

BCP Ob Cx RGVii Aug2007/12 August, 2007 August, 2012 Indexed to portfolio of indexes 12,750 11,902 

BCP SFE Ob Cx M.C. Aug 2007/09 August, 2007 August, 2009 1st Sem. 3.750%; 2nd Sem. 4.0%; 1,464 1,485 

3rd Sem. 4.250%; 4th Sem. 4.5% 

BCP Ob Cx I.Eur. Sep 2007/09 September, 2007 September, 2009 1st Quart. 3%; 2nd Quart. 3.25%; 25,500 25,601 




of 4 shares 

BCP Ob Cx M.C. Sep 2007/10 September, 2007 September, 2010 1st Sem. 4.00%; 2nd Sem. 4.05%; 40,892 39,434 

3rd Sem. 4.10%; 4th Sem. 4.15%; 

5th Sem. 4.20%; 6th Sem. 4.25% 

BCP SFI Ob Cx M.C. Sep 2007/10 September, 2007 September, 2010 1st Sem. 4%; 2nd Sem. 4.05%; 8,809 8,855 

3rd Sem. 4.10%; 4th Sem. 4.15%; 

5th Sem. 4.20%; 6th Sem. 4.25% 

Ob Cx BCP RGViii Sep 2007/12 September, 2007 September, 2012 Indexed to portfolio of indexes 6,500 6,241 

BCP Ob Cx RGViii 2E Sep 2007/12 September, 2007 September, 2012 Indexed to portfolio of indexes 6,800 6,079 

BCP Ob Cx M.C. Aug 2010 September, 2007 August, 2010 1st Sem. 3.5%; 2nd Sem. 3.625%; 25,614 25,763 

3rd Sem. 3.750%; 4th Sem. 4.0%; 


BCP SFI Ob Cx M.C. Aug 2010 September, 2007 August, 2010 1st Sem. 3.5%; 2nd Sem. 3.625%; 14,016 14,115 

3rd Sem. 3.750%; 4th Sem. 4.0%; 


BCP Ob Cx M.C. Sep 2007/09 September, 2007 September, 2009 1st Sem. 3.5%; 2nd Sem. 3.750%; 47,099 47,641 

3rd Sem. 3.875%; 4th Sem. 4.0% 

BCP SFI Ob Cx M.C. Sep 2007/09 September, 2007 September, 2009 1st Sem. 3.5%; 2nd Sem. 3.750%; 59,843 60,533 

3rd Sem. 3.875%; 4th Sem. 4.0% 

BCP SFE Ob Cx M.C. Sep 2007/10 September, 2007 September, 2010 1st Sem. 4%; 2nd Sem. 4.05%; 299 301 

3rd Sem. 4.10%; 4th Sem. 4.15%; 

5th Sem. 4.20%; 6th Sem. 4.25% 

BCP SFE Ob Cx M.C. Aug 2010 September, 2007 August, 2010 1st Sem. 3.5%; 2nd Sem. 3.625%; 370 373 

3rd Sem. 3.750%; 4th Sem. 4.0%; 


BCP SFE Ob Cx M.C. Sep 2007/09 September, 2007 September, 2009 1st Sem. 3.5%; 2nd Sem. 3.750%; 5,248 5,308 

3rd Sem. 3.875%; 4th Sem. 4.0% 

BCP Ob Cx RGIx Oct 2007/12 October, 2007 October, 2012 Indexed to DJ EuroStoxx 50 index 3,300 3,184 

BCP Ob Cx M.C. Jan 2010 October, 2007 January, 2010 1st Sem. 3.50%; 2nd Sem. 3.60%; 51,716 52,740 

3rd Sem. 4%; 4th Sem. 4.10%; 


BCP SFI Ob Cx M.C. Jan 2010 October, 2007 January, 2010 1st Sem. 3.50%; 2nd Sem. 3.60%; 30,671 31,278 

3rd Sem. 4%; 4th Sem. 4.10%; 


BCP Ob Cx M.R.Eur. Oct2010 October, 2007 October, 2010 Indexed to DJ EuroStoxx 50 index 14,913 16,428 

BCP SFE Ob Cx M.C. Jan 2010 October, 2007 January, 2010 1st Sem. 3.50%; 2nd Sem. 3.60%; 1,943 1,981 

3rd Sem. 4%; 4th Sem. 4.10%; 


BCP Ob Cx I.S.Mund. Nov 07-09 November, 2007 November, 2009 1st Quart. 3%; 2nd Quart. 3.25%; 21,000 21,017 




of 4 shares 

BCP Ob Cx Inv. P. Nov 2009 November, 2007 November, 2009 1st Sem. 3.50%; 2nd Sem. 3.75%; 55,996 56,901 

3rd Sem. 4.15%; 4th Sem. 4.50% 

(continue)





BCP SFI Ob Cx I.P. Nov 2009 November, 2007 November, 2009 1st Sem. 3.50%; 2nd Sem. 3.75%; 35,284 35,854 

3rd Sem. 4.15%; 4th Sem. 4.50% 

BCP SFE Ob Cx I.P. Nov 2009 November, 2007 November, 2009 1st Sem. 3.50%; 2nd Sem. 3.75%; 4,600 4,675 

3rd Sem. 4.15%; 4th Sem. 4.50% 

BCP Ob Cx RGX Dec 2007/12 December, 2007 November, 2012 Indexed to DJ EuroStoxx 50 index 2,500 2,389 

BCP Ob Cx Inv Europa Dec 07/09 December, 2007 December, 2009 1st Quart. 3%; 2nd Quart. 3.25%; 9,456 9,561 




of 4 shares 

BCP Ob Cx I.P. Dec 2009 December, 2007 December, 2009 1st Sem. 3.50%; 2nd Sem. 3.60%; 31,037 31,614 

3rd Sem. 3.80%; 4th Sem. 4.25% 

BCP SFI Ob Cx I.P. Dec 2009 December, 2007 December, 2009 1st Sem. 3.50%; 2nd Sem. 3.60%; 6,471 6,592 

3rd Sem. 3.80%; 4th Sem. 4.25% 

BCP SFE Ob Cx I.P. Dec 2009 December, 2007 December, 2009 1st Sem. 3.50%; 2nd Sem. 3.60%; 2,187 2,228 

3rd Sem. 3.80%; 4th Sem. 4.25% 

BCPOb Cx Inv Men Feb 08/10 February, 2008 February, 2010 1st month 3.85%; 2nd to 23th month: last 159,037 162,156 

month interest rate + 0.05%; 24th 

month 12% 

BCPsfi Ob Cx Inv Men Feb2008 February, 2008 February, 2010 1st month 3.85%; 2nd to 23th month: last 17,423 17,764 


month 12% 

BCPsfe Ob Cx Inv Men Feb 2008 February, 2008 February, 2010 1st month 3.85%; 2nd to 23th month: last 2,014 2,053 


month 12% 

BCPOb Cx Sup Inv 2008 Feb 08/11 February, 2008 February, 2011 1st Sem. 4.%; 2nd Sem. 4.25%; 3rd 53,207 53,554 

Sem. 4.5%; 4th Sem. 5%; 5th Sem. 6% 

BCPOb Cx Inv Cab Mu Feb 08/11 February, 2008 February, 2011 Indexed to portfolio of 3 indexes 9,556 9,044 

BCPOb Cx Inv Mercad Mar 08/11 March, 2008 March, 2011 Indexed to portfolio of 3 Commodities 19,890 19,146 

BCPOb Cx Inv Agua May 08/11 May, 2008 May, 2011 Indexed to S&P Global Water 13,955 14,133 

BCPCovered Bonds - 4.875 Pct May, 2008 May, 2010 Fixed rate of 4.875% 1,000,000 1,020,401 

BCPOb Cx Inv Ener Ren Jun 08/11 June, 2008 June, 2011 Indexed to portfolio of 4 shares 18,807 17,861 

BCPOb Cx Inv Saude July 08/11 July, 2008 July, 2011 Indexed to portfolio of 5 shares 5,850 5,419 

BCPOb Cx Inv Plus Sep 08/11 September, 2008 September, 2011 1º Quart.=5%; 2º Quart.=5%; 94,480 97,166 

3º Quart.=5.25%; 4º Quart.=5.25%; 

5º Quart.=5.5%; 6º Quart.=5.75% 

BCPOb Cx Inv Iber Sep 2008/11 September, 2008 September, 2011 Indexed to portfolio of indexes 3,920 4,032 

BCPSfi Ob Cx Inv Plus Sep 08/11 September, 2008 September, 2011 1º Quart.=5%; 2º Quart.=5%; 27,537 28,324 

3º Quart.=5.25%; 4º Quart.=5.25%; 

5º Quart.=5.5%; 6º Quart.=5.75% 

BCPSfe Ob Cx Inv Plus Sep 08/11 September, 2008 September, 2011 1º Quart.=5%; 2º Quart.=5%; 2,816 2,896 

3º Quart.=5.25%; 4º Quart.=5.25%; 

5º Quart.=5.5%; 6º Quart.=5.75% 

BCPOb Cx Inv Plus Oct 08/11 October, 2008 October, 2011 1º e 2º Sem.=4.75% ; 3º e 4º 57,695 59,458 

Sem.=5.0% ; 5º e 6º Sem.=5.25% 

BCPSfi Ob Cx Inv Plus Oct 08/11 October, 2008 October, 2011 1º e 2º Sem.=4.75% ; 3º e 4º 21,737 22,402 

Sem.=5.0% ; 5º e 6º Sem.=5.25% 

BCPOb Cx Inv Petroleo Oct 08/11 October, 2008 October, 2011 Indexed to portfolio of shares 3,179 3,088 

BCPSfe Ob Cx Inv Plus Oct 08/11 October, 2008 October, 2011 1º e 2º Sem.=4.75% ; 3º e 4º 4,172 4,300 

Sem.=5.0% ; 5º e 6º Sem.=5.25% 


MBCP Ob Cx Sub 1 Serie 08/18 September, 2008 September, 2018 1st year 6%; from 2nd to 5th year: 295,000 293,648 

Euribor 6 M + 1.0%; 6th year and 

following = Euribor 6 M + 1.4% 

3,170,485 


3,222,382



2008 2007 

Euros ’000 

Bonds issued: 


3 to 6 months 203,521 - 

6 to 12 months 420,930 - 

1 to 5 years 1,893,404 1,321,450 

2,876,837 1,321,450 

Accruals 47,374 9,720 

2,924,211 1,331,170 



293,648 - 

Accruals 4,523 - 

298,171 - 

3,222,382 1,331,170 

35. Provisions for liabilities and charges 


2008 2007 

Euros ’000 

General provision for loan losses 657,397 696,687 

Provision for country risk 108,008 21,434 

Other provisions 68,669 105,427 

834,074 823,548 

Changes in Provision for country risk are analysed as follows: 

2008 2007 

Euros ’000 



Write-back for the year (2,550) (774) 


The balance Provision for country risk includes the amount of Euros 78,091,000 (2007: Euros 8,234,000) related to provisions to loans granted to resident entities 

in Angola, Turkey and Belize. The increase of the amount of the provision is explained by the increase of the transactions volume with these countries, as referred in 

note 13.


Changes in General provision for loan losses are analysed as follows: 

2008 2007 

Euros ’000 

General provision for loans 


Transfers 25,425 10,028 



Amounts charged-off (1,488) (30) 

Exchange rate differences 170 (81) 


General provision for guarantees 


Impairment for the year - 3,349 

Write-back for the period (62,024) - 

Amounts charged-off - (292) 

Exchange rate differences - (1) 


657,397 696,687 

The General provision for loan losses, was calculated in accordance with Regulation 3/95, 2/99 and 8/03 of the Bank of Portugal, as referred in note 1 b). 

Changes in Other provisions are analysed as follows: 

2008 2007 

Euros ’000 


Transfers 491 8,887 





The provisions were accounted in accordance with the probability of occurrence of certain contingencies related with the Bank's inherent risks, which is revised in 

each reporting date in order to reflect the best estimate of the amount and probability of payment. 

36. Subordinated debt 


2008 2007 

Euros ’000 

Bonds 3,858,383 4,141,117


As at 31 December 2008, the characteristics of subordinated debt issued are analysed as follows: 

Non Perpetual Bonds 



Issue date date Interest rate Euros ’000 Euros '000 

BCP 2001 - March 2001 March 2001 March 2011 Euribor 6 months + 1.03% 400,000 400,000 

BCP 2001 - May 2001 May 2001 March 2011 Euribor 6 months + 0.98% 200,000 200,000 

BCP March 2011 June 2001 March 2011 Fixed rate of 6.35% 150,000 154,316 

BCP September 2011 September 2001 September 2011 Fixed rate of 6.15% 120,000 121,920 

Mbcp Ob Cx Sub 1 Serie 2008-2018 October, 2008 October 2013 See reference (i) 80,256 80,256 

Subord. Debt by BCP Finance Bank May 2005 May 2015 See reference (ii) 300,000 300,000 

Subord. Debt by BCP Finance Bank December 2006 December 2016 See reference (iii) 399,400 399,400 

1,655,892 

Perpetual Bonds 

BCP 2000 January 2000 - Euribor 3 months + 0.2075% 486,949 486,949 

BCP - Euro 200 millions June 2002 - See reference (iv) 200,000 199,396 

BCP - Euro 175 millions November 2002 - See reference (v) 175,000 175,169 

BCP - Euro 500 millions June 2004 - See reference (vi) 500,000 500,000 

BPA 1997 June 1997 - Euribor 3 months + 0.95% 199,519 199,519 

TOPS's BPSM 1997 December 1997 - Euribor 6 months + 0.4% 88,965 88,965 

BCP Leasing 2001 December 2001 - See reference (vii) 4,986 4,986 

Subord.debt BCP Finance Company October 2005 - See reference (viii) 500,000 500,000 

2,154,984 


References: (i) - 1st year 6%; 2nd to 5th year Euribor 6 months + 1%; after 6th year Euribor 6 months + 1.4% 

(ii) - Euribor 3 months + 0.35% (0.85% after June 2010) 

(iii) - Until December 2011Euribor 3 months + 0.335%; After December 2011 Euribor 3 months + 0.8% 

(iv) - Until 40th coupon 6.130625%; After 40th coupon Euribor 3 months + 2.4% 

(v) - Until 40th coupon 5.41%; After 40th coupon Euribor 3 months + 2.4% 

(vi) - Until June 2014 fixed rate of 5.543%; After July 2014 Euribor 6 months + 2.07% 

(vii) - Until 40th coupon Euribor 3 months + 1.75%; After 40th coupon Euribor 3 months + 2.25% 

(viii) - Until October 2015 fixed rate of 4.239%; After November 2015 Euribor 3 months + 1.95% 

The analysis of the subordinated debt by the period to maturity, is as follows: 

3,858,383 

2008 2007 

Euros ’000 

1 to 5 years 876,236 462,391 


Undetermined 2,154,984 2,131,139 

3,810,876 4,091,835 

Accruals 47,507 49,282 

3,858,383 4,141,117


37. Other liabilities 


2008 2007 

Euros ’000 

Creditors: 

Suppliers 31,917 105,083 

From factoring operations 29,372 40,533 

Associate companies 340 27,173 

Other creditors 208,134 270,225 


Other amounts payable 17,492 87,277 

Deferred income 405 537 

Holiday pay and subsidies 52,725 52,657 

Amounts payable on trading activity 102,332 12,249 

Other liabilities 5,129,599 319,954 

5,638,522 960,051 

The balance Other liabilities includes the amount of Euros 73,540,000 (2007: Euros 95,139,000), related to the obligations with pensions already recognised in Staff 

costs, related to previous members of the Board of Directors. The referred obligations are not covered by the Pension Fund of the Group, and therefore cor respond 

to amounts payable by the Bank. 

As at 31 December 2008, the balance Other liabilities includes the amount of Euros 4,678,682,000 related to the loans portfolio securitized in operations Nova Finance 

3, Nova Finance 4, Magellan 5 and Caravela SME. 

38. Share capital, preference shares and other capital instruments 

The share capital of the Bank, amounts to Euros 4,694,600,000 and is represented by 4,694,600,000 shares with a nominal value of 1 Euro each, which is fully paid. 

In May 2008, the Banco Comercial Português, S.A. increased its share capital from Euros 3,611,329,567 to Euros 4,694,600,000 through the issue of 1,083,270,433 

shares pursuant to the exercise of shareholders proportional rights with a nominal value of 1 Euro per share and a subscription price of 1.2 Euro per share. 

39. Legal reserve 

Under Portuguese legislation, the Bank is required to set-up annually a legal reserve equal to a minimum of 10 percent of annual profits until the reserve equals the 

share capital. Such reserve is not normally distributable in cash. In accordance with the proposal for application of the results approved in the General Shareholders 

meeting held on 27 May, 2008, the Bank increased the Legal reserves in the amount of Euros 33,884,000. As referred in note 40, part of this amount was transferred 

to the balance "Other reserves", in accordance with the proposal for application mentioned above.


40. Fair value reserves, other reserves and retained earnings 


2008 2007 

Euros ’000 

Fair value reserves (64,148) (19,414) 

Deferred tax (AFS) 15,479 2,906 

(48,669) (16,508) 

Reserves and retained earnings: 

Legal reserve 380,291 477,202 

Statutory reserve - 84,000 

Interim dividends - (133,619) 

Other reserves and retained earnings (106,806) (1,267,842) 

273,485 (840,259) 

The legal reserve movement is analysed in note 38. The Fair value reserves correspond to the accumulated fair value changes of the financial instruments available 

for sale, in accordance with the accounting policy presented in note 1 c). 

The balance Statutory reserves correspond to a reserve to stabilise dividends that, according with the Bank’s By-Laws can be distributed. 

In accordance with the proposal for application of the results approved in the General Shareholders meeting held on 27 May, 2008, the balances Share Premium in 

the amount of Euros 881,707,000, Other reserves in the amount of Euros 1,176,854,000, Statutory reserves in the amount of Euros 84,000,000 and the amount of 

Euros 130,795,000 from Legal reserves were allocated to Other reserves and retained earnings. 

The balance Other reserves and retained earnings includes, as at 1 January 2006, a restatement in the amount of Euros 220,500,000 (net of deferred tax) resulting 

from the decision taken by the Executive Board of Directors refering to an asset booked in the financial statements. 


Euros ’000 



Fair value reserves (19,414) (74,812) 32,036 (1,958) (64,148) 


Euros ’000 



EDP - Energias de Portugal 131,502 41,819 - (173,321) - 

BPI, S.A. - (79,838) 79,838 - - 

Other (24,693) (26,445) 12,506 19,218 (19,414) 

106,809 (64,464) 92,344 (154,103) (19,414) 

During 2007, and as referred in note 7 and 21, the Bank sold the investment in EDP - Energias de Portugal. The potential gain previously recorded in 2007 as fair 

value reserves, in the amount of Euros 116,887,000 was recognized in results, as referred in note 7. 

41. Treasury stock 


Euros ’000 

2008 2007 

Net book Number of Average book Net book Number of Average book 

value securities value value securities value 

Banco Comercial Português, S.A. shares 4,387 5,120,094 0.86 - - - 

Treasury stock refers to own shares held by Banco Comercial Português, S.A. These shares are held within the limits established by the By-Laws and "Código das 

Socie dades Comerciais".


42. Obligations and future commitments 

Obligations and future commitments are analysed as follows: 

2008 2007 

Euros ’000 


Guarantees received 24,111,197 21,185,132 

Commitments to third parties 10,605,372 13,053,238 

Commitments from third parties 12,168,725 10,927,481 

Securities and other items held for safekeeping on behalf of customers 129,602,496 130,707,638 

Securities and other items held under custody by the Securities Depository Authority 122,983,489 120,504,488 

Other off balance sheet accounts 100,186,626 85,496,887 

The amounts of Guarantees granted and Commitments to third parties are analysed as follows: 

Euros ’000 

2008 2007 

Guarantees granted: 

Guarantees 11,065,884 14,545,217 

Open documentary credits 287,958 237,941 

Bails and indemnities 139,618 157,983 

Other liabilities 10,849,706 13,178,987 

22,343,166 28,120,128 

Commitments to third parties 

Irrevocable commitments 

Term deposits contracts 750,835 3,129,581 

Irrevocable credit lines 2,001,858 2,358,840 

Other irrevocable commitments 246,101 140,332 

Revocable commitments 

Revocable credit lines 5,771,938 5,020,675 

Bank overdraft facilities 1,834,640 2,403,810 

10,605,372 13,053,238 

Within its normal business, the Bank offers certain financial products that traditionally include credit related instruments accounted in off-balance sheet accounts and 

whose risks are therefore not partially or totally reflected on the financial statements. 

The guarantees granted by the Bank might or not might be related with loan transactions, where the Bank grants a guarantee in connection with a loan granted to 

a client by a third entity. According with its specific characteristics it is expected that some of these guarantees expire without being demanded and therefore these 

transactions do no necessarily represent a cash-outflow. 

Stand-by letters and open documentary credits aim to ensure the payment to third parties from commercial deals with foreign entities and therefore financing the 

shipment of the goods. Therefore the credit risk of these transactions is limited once they are collateralized by the shipped goods and are generally short term 

opera tions. 

Irrevocable commitments are non-used parts of credit facilities granted to corporate or retail customers. Many of these transactions have a fixed term and a variable 

interest rate and therefore the credit and interest rate risk is limited. 

The financial instruments accounted as Guarantees and other commitments are subject to the same approval and control procedures applied to the credit port folio, 

namely regarding the analysis of objective evidence of impairment, as described in note 1 b). The maximum credit exposure is represented by the nominal value that 

could be lost related to guarantees and commitments undertaken by the group in the event of default by the respective counterparties, without considering potential 

recoveries or collaterals. 

Considering their nature, as described above, no material losses are anticipated as a result of these transactions.


43. Distribution of profit 

The distribution of profit to shareholders is analysed as follows: 

2008 2007 

Euros ’000 

Dividends paid by Banco Comercial Português, S.A. 

Dividends declared and paid related to last year - 173,344 

Dividends antecipaded for the current year - 133,619 

- 306,963 

44. Relevant events occured during 2008 

Banco Comercial Português, S.A. share capital increase from Euros 3,611,329,567 to Euros 4,694,600,000 

In May 2008, the Bank executed the share capital increase, corresponding to the issue of 1,083,270,433 ordinary shares with a nominal value of 1 Euro each. After 

this increase the Banco Comercial Português, S.A. share capital amounts to Euros 4,694,600,000. 

Third issue of Coverd Bonds 

Banco Comercial Português, S.A. performed in May 2008 the third issue of covered bonds in the amount of Euros 1,000 million and maturity of three years. This 

issue was performed under the BCP Covered Bonds Programme, established in June 2007. The interest rate is 4.875%. 

Sale of the stake in Banco BPI 

Banco Comercial Português S.A. established in December 2008 a contract for the sale of 87,214,836 shares, representing 9.69%, of Banco BPI share capital. 

With this contract BCP has agreed to sell the BPI shares for a price of Euros 1.88 a share. This sale is subject to approval by the Bank of Portugal, under the terms 

of the General Banking and Financial Institutions Law. 

As a result of the execution of this contract Banco Comercial Português ceased to hold a qualified position in Banco BPI, S.A. 

Merger by incorporation BCP Participações Financeiras, SGPS, Sociedade Unipessoal, Lda. 

Banco Comercial Português, S.A. (BCP), finalized, as at 31 December 2008, the merger of its fully-owned subsidiary BCP Participações Financeiras, SGPS, Sociedade 

Unipessoal, Lda (BCP PF) into BCP, through the transfer of the total assets of BCP PF. 

Agreement with Sonangol and Banco Privado Atlântico 

Following the partnership agreement established in December 2007 and the agreements signed in May 2008 with Sonangol - Sociedade Nacional de Combustíveis 

de Angola, Empresa Pública ("Sonangol") and Banco Privado Atlântico S.A. ("BPA"), Banco Comercial Português, S.A. has agreed on the remaining elements of the 

transactions. 

The agreement sets the price and the conditions under which Sonangol and BPA will take 29.9% and 20% positions, respectively, in the capital of Banco Millennium 

Angola, as well as the price and the conditions under which Banco Millennium Angola will acquire a 10% position in BPA. It is estimate that these operations have 

accounting impacts during 2009. 

Banco Comercial Português and Banco Millennium bcp Investimento, S.A. merger process 

Banco Comercial Português, S.A. decided in December 2008 to resume the process of merger by incorporation of Banco Millennium bcp Investimento, S.A., in order 

to directly pursue the investment banking activity. 

45. Fair value 

Fair value is based on market prices, whenever these are available. If market prices are note available, as it happens regarding many products sold to clients, fair value 

is estimated through internal models based on cash-flow discounting techniques. Cash-flows for the different instruments sold are calculated according with its financial 

characteristics and the discount rates used include both the interest rate curve and the current conditions of the pricing policy in the Bank. 

Therefore, the fair value obtained is influenced by the parameters used in the evaluation model that, necessarily have some degree of judgement and reflect exclusively 

the value attributed to different financial instruments. However it does not consider prospective factors, like the future business evolution. Under these conditions, 

the values presented cannot be understood as an estimate of the economic value of the Bank. 

The main methods and assumptions used in estimating the fair value for the assets and liabilities of the Bank are presented as follows: 

Cash and deposits at central banks, Loans and advances to credit institutions repayable on demand and Amounts owed to other credit institutions 

Considering the short maturity of these financial instruments, the amount in the balance sheet is a reasonable estimate of its fair value. 

Other loans and advances to credit institutions, Amounts owed to other credit institutions from Inter-bank Money Market transactions and Assets with repurchase agreement 

The fair value of these financial instruments is calculated discounting the expected principal and interest future cash flows for these instruments, considering that the 

payments of the instalments occur in the contractually defined dates. The discount rate used reflects the current conditions applied by the Bank in identical instruments 

for each of the different maturities. 

The discount rate include the market rates for the residual maturity date (rates from the monetary market or from the interest rate swap market, at the end of the 

year). As at 31 December 2008, the average discount rate was 3.08% for loans and advances and 2.92% for the deposits. As at 31 December 2007 the rates were 

4.20% and 4.66%, respectively.


Financial assets held for trading (except derivatives), Financial liabilities held for trading (except derivatives), Financial assets available for sale and Other financial liabilities held 

for trading at fair value trough profit 

These financial instruments are accounted at fair value. Fair value is based on market prices, whenever these are available. If market prices are not available, fair value 

is estimated through numerical models based on cash-flow discounting techniques, using the interest rate curve adjusted for factors associated, predominantly the 

credit risk and liquidity risk, determined in accordance with the market conditions and time frame. 



is still calibrated against the values of interest rate short-term futures. Interest rates for specific periods of the cash flows are determined by appropriate methods of 

interpolation. The same interest rate curves are used in the projection of the cash flows not deterministic such as indexes. 

When optionality is involved, the standard templates (Black & Scholes, Black, Ho and others) considering the volatility areas applicable are used. Whenever there are 

no references in the market of sufficient quality or that the available models do not fully apply to meet the characteristics of the financial instrument, it is applied specific 

quotations supplied by an external entity, typically a counterparty of the business. 

In case of shares not listed, they are recognized at historical cost when there is not available a market value and it is not possible to determine reliably its fair value. 

Financial assets held to maturity 

These financial instruments are accounted at amortized cost net of impairment. Fair value is based on market prices, whenever these are available. If market prices 

are not available, fair value is estimated through numerical models based on cash-flow discounting techniques, using the interest rate curve adjusted for factors 

associated, predominantly the credit risk and liquidity risk, determined in accordance with the market conditions and time frame. 

Hedging and trading derivatives 

All derivatives are recorded at fair value. 

In case of those who are quoted in organised markets it is used its market price. As for derivatives traded " Over-the-counter", it is applied methods based on 

numerical cash-flow discounting techniques and models for assessment of options considering variables of the market, particularly the interest rates on the instruments 

in question, and where necessary, their variability. 



is still calibrated against the values of interest rate short-term futures. Interest rates for specific periods of the cash flows are determined by appropriate methods of 

interpolation. The interest rate curves are used in the projection of the cash flows not deterministic such as indexes. 

Loans and advances to customers with defined maturity date 

The fair value of these instruments is calculated discounting the expected principal and interest future cash flows for these instruments, considering that the payments 

of the instalments occur in the contractually defined dates. The discount rate used reflects the current conditions applied by the Bank in similar instruments for each 

of the homogeneous classes of this type of instrument and with similar maturity. The discount rate includes the market rates for the residual maturity date (rates from 

the monetary market or from the interest rate swap market, at the end of the year) and the actual spread of the Bank, which was calculated from the average 

production of the last three months of the year. For 31 December 2008, the average discount rate was 4.72% and for December 2007 was 6.03%. The calculations 

also includes the credit risk spread. 

Loans and advances to customers without defined maturity date 

Considering the short maturity of these financial instruments, the conditions of the portfolio are similar to current conditions used at the date of the report. Therefore 

the amount in the balance sheet is a reasonable estimate of its fair value. 

Deposits from customers 

The fair value of these financial instruments is calculated by discounting the expected principal and interest future cash flows, considering that payments occur in the 

contractually defined dates. The discount rate used reflects the current conditions applied by the Bank in identical instruments with a similar residual maturity. 

The discount rate includes the market rates of the residual maturity date (rates of monetary market or the interes rate swap market, at the end of the year) and the 

actual spread of the Bank, which was calulated from the average prodution of the last three months of the year. For 31 December 2008, average discount rate was 

of 3.22% and for December 2007 was 4.51%. 

Debt securities issued and Subordinated debt 

For these financial instruments, the fair value was calculated for components that are not yet reflected in the balance sheet. The instruments that are at fixed rate 

and for which the Bank adopts an accounting policy of "hedge-accounting", the fair value related to the interest rate risk is already recorded. 

For the fair value calculation, it were considered other components of risk in addition to the interest rate risk already recorded. The fair value is based on market 

prices, whenever these are available. If market prices are not available, fair value is estimated through numerical models based on cash-flow discounting techniques, 

using the interest rate curve adjusted by associated factors, predominantly the credit risk and trading margin, the latter only in the case of issues placed for noninstitutional 

customers of the Bank. 

As original reference, the Bank applies the curves resulting from the interest rate swaps markets for each specific currency. The credit risk (spread credit) is represented 

by an execess from the curve of interest rate swaps established specifically for each term and class of instruments based on the market prices on equivalent 

instruments. 

For own emissions placed among non institutional costumers of the Bank, it was added one more differential (spread trade), which represents the margin between 

the financing cost in the institutional market and the cost obtained by distributing the respective instrument in the commercial network owned. 

The average reference rates of the curve of income obtained from quotations of the market in EUR and used in the calculation of the fair value of treasury stock 

was 6.48% for subordinated issues (31 december 2007: 5.82%) and 4.71% senior and collateralized issues (31 December 2007: 5.00%).


For financial liabilities with embedded derivatives separable and for which the Bank makes revaluation, the calculation of fair value focused on all the components of 

these instruments, so that the difference found as at 31 December 2008, in the amount of Euros 256,677,000 (31 December 2007: Euro 15,028,000), which cor - 

respond to an decrease in financial liabilities, includes a payable amount of Euros 9,248,000 (31 December 2007: a payable amount of Euros 32,250,000) which are 

recorded in Financial assets and liabilities held for trading and reflect the fair value of derivatives embedded. 

As at 31 December 2008, the following table presents the values of the interest rates used in the clearance of the curves interest rate of major currencies, including 

EUR, USD, GBP and PLN used to determine the fair value of the assets and liabilities of the Bank: 

Currencies 

EUR USD GBP PLN 

1 day 1.98% 0.18% 1.50% 5.49% 

7 days 2.20% 0.43% 1.85% 5.36% 

1 month 2.50% 0.50% 1.95% 5.51% 

2 months 2.76% 1.40% 2.45% 5.64% 

3 months 2.90% 1.68% 2.55% 5.78% 

6 months 2.98% 1.88% 2.69% 5.85% 

9 months 2.99% 2.10% 2.78% 5.87% 

1 year 3.05% 2.22% 2.93% 4.40% 

2 years 2.68% 1.44% 2.60% 4.30% 

3 years 3.03% 1.73% 2.85% 4.21% 

5 years 3.23% 2.13% 3.15% 4.16% 

7 years 3.46% 2.36% 3.31% 4.25% 

10 years 3.74% 2.57% 3.45% 4.38% 

15 years 3.90% 2.82% 3.67% 4.38% 

20 years 3.85% 2.78% 3.58% 4.23% 

30 years 3.54% 2.75% 3.32% 3.95%


The next table shows the main adjustments to the financial assets and liabilities of the Bank that do not represent its fair value: 

2008 





Repayable on demand - - - 971,333 971,333 971,333 




Other financial assets held 

for trading at fair value through results 60,755 - - - 60,755 60,755 



Held to maturity - - 1,095,769 - 1,095,769 1,077,652 

Investments in associated companies - - - 3,958,477 3,958,477 3,958,477 

2,665,576 8,061,960 66,634,976 5,976,584 83,339,096 82,146,045 

Deposits from central banks - - 3,062,886 - 3,062,886 3,062,886 






trading at fair value trough results 5,716,381 - - - 5,716,381 5,716,381 



7,219,709 - 69,783,431 - 77,003,140 76,192,765 

Euros ’000 

2007 





Repayable on demand - - - 1,347,567 1,347,567 1,347,567 




Other financial assets held 

for trading at fair value through results 59,216 - - - 59,216 59,216 



Investments in associated companies - - - 1,879,744 1,879,744 1,879,744 

1,868,274 5,043,127 62,060,783 4,568,781 73,540,965 73,483,556 

Deposits from central banks - - 781,682 - 781,682 781,682 


Amounts owed to customers - - 29,105,626 - 29,105,626 29,090,136 




trading at fair value trough results 1,362,880 - - - 1,362,880 1,362,880 



2,597,474 - 72,135,276 - 74,732,750 74,575,607 

Euros ’000


46. Pensions 

The Bank assumed the liability to pay to their employees, pensions on retirement or disabilities and other responsibilities. These liabilities also comply with the terms 

of the 'Acordo Colectivo de Trabalho do Sector Bancário' (ACT). The Group's pension obligations and other liabilities are covered through the Banco Comercial 

Português Pension Fund managed by PensõesGere - Sociedade Gestora de Fundo de Pensões, S.A. At 31 December, 2008 and 2007 the number of participants 

covered by this pension plan is analysed as follows: 

2008 2007 

Number of participants 

Pensioners 15,504 15,463 

Employees 10,263 10,349 

25,767 25,812 

In accordance with the accounting policy, described in note 1 v), the pension obligation and the respective funding for the Bank as at 31 December, 2008 and 2007 

based on an actuarial valuation made using the projected unit credit method are analysed as follows: 

Euros ’000 

2008 2007 2006 2005 

Projected benefit obligations 

Pensioners 4,382,647 4,493,727 4,458,474 4,223,479 

Employees 1,251,746 1,296,028 1,166,107 750,031 

5,634,393 5,789,755 5,624,581 4,973,510 

Seniority premium 52,076 50,941 48,572 49,455 

Value of the Pension Fund (5,239,077) (5,535,037) (5,493,903) (4,654,625) 

Provisions for defined contributions complementary plan (12,188) - - - 

Liabilities not financed by the Pension Fund 435,204 305,659 179,250 368,340 

Liabilities covered outside the Pension Fund (434,953) (446,028) (449,817) (394,094) 

(Surplus) / Deficit 251 (140,369) (270,567) (25,754) 

As at 31 December 2008, the value Projected benefit obligations includes the amount of Euros 300,224,000 (31 December 2007: Euros 317,649,000) related with 

the obligations with past services for the Complementary Plan which are totally funded. 

Following the decision of the Executive Board of Directors dated 21 September 2006, the ‘Complementary Pension Plan’ which was established in the ‘Plano de Pensões 

do Fundo de Pensões do Grupo Banco Comercial Português’ (Defined benefit), will be funded through a defined contribution. However, the employees hired until 

the reference date of this decision maintain the benefits that they were entitled to under the previous plan (‘Defined Benefit’). This defined benefit is guaranteed by 

the Group company to which they are contractually related at the date of retirement. 

On this basis, Group companies will, annually, fund the Pension Fund in order to cover this benefit, in case of a deficit. The amount will be determined in accordance 

with the actuarial valuation performed each year, and funding will be performed annually.


The change in the present value of obligations during 2008 is analysed as follows: 

2008 2007 

Extra-Fund 



Euros ’000 

Balance as at 1 January 5,394,668 50,941 395,087 5,840,696 5,673,153 

Service cost 80,331 3,372 1,851 85,554 74,119 



Not related with changes in actuarial assumptions 23,043 - 2,988 26,031 72,171 


Payments (283,651) (2,226) (22,963) (308,840) (298,814) 

Early retirement programmes 2,633 - 3,092 5,725 30,338 

Contributions of employees 10,708 - - 10,708 10,763 

Other charges 7,920 (2,627) 5,214 10,507 6,619 

Balance as at 31 December 5,251,515 52,076 382,876 5,686,467 5,840,696 

As at 31 December 2008, the value of the pensions paid by the Pension Fund amounted to Euros 283,651,000 (31 December 2007: Euros 273,396,000). 

The elements of the assets of the Pension Fund are analyzed: 

2008 2007 

Euros ’000 

Variable income securities: 

Shares 1,058,801 1,911,029 

Bonds 944,186 1,231,797 

Fixed income securities 1,137,803 747,913 

Premises 376,793 381,969 

Investment fund units 907,082 1,071,263 

Loans and advances to credit institutions 806,091 140,240 

Others 8,321 50,826 

5,239,077 5,535,037 

The balance Premises includes the buildings owned by the Fund and used by the Group companies that as at 31 December 2008, amounted to Euros 373,302,000 

(31 December 2007: Euros 378,127,000). 

The securities issued by the Bank accounted in the portfolio of the Fund are analysed as follows: 

2008 2007 

Euros ’000 

Fixed income securities 358,767 153,834 

Variable income securities 60,548 225,817 

419,315 379,651


The change in the fair value of assets of the Fund during 2008 and 2007 is analysed as follows: 

Euros ’000 

2008 2007 

Balance as at 1 January 5,535,037 5,493,903 

Expected return on plan assets 288,803 285,036 

Actuarial gains and losses (1,073,724) (76,995) 

Contributions to the Fund 760,208 89,276 

Payments (283,651) (273,396) 

Contributions of employees 10,708 10,763 

Other charges 1,696 6,450 

Balance as at 31 December 5,239,077 5,535,037 

The contributions made by the Group to the Pension Fund during 2008 did not result in any actuarial gain or loss, since they were made in cash. 

The evolution of the fair value of the securities related with those asset contributions made in 2006 and 2005 that resulted in significant actuarial gains or losses in 

2007 and 2006 is presented as follows: 

Euros ’000 

Potential and realized Gains / (Losses) 

2007 2006 

Issuer 

Contribution 

Year 

Contribution 

Value 

Year Acumulated Year Acumulated 

Friends Provident PLC (i) 2005 82,531,602 (32,333) (10,428) 14,873 21,905 

Comercial Imobiliária (ii) 2005 200,000,000 (2,866) (115,866) (113,000) (113,000) 


Banca Intesa Spa (i) 2005 486,656,411 (54,799) 187,128 171,248 241,927 


Banco de Sabadell (i) 2006 20,467,500 (803) (14,910) 2,205 (14,108) 

Banco Sabadell (i) 2006 83,079,500 (2,622) (64,925) 7,203 (62,304) 

(34,546) 190,294 198,414 224,838 

Type: 

(i) - shares 

(ii) - commercial paper 

As referred in note 51, the Pensions Fund registered an actuarial loss in the amount of Euros 115.000.000 approximately related to the commercial paper issued by 

Comercial Imobiliária. The amount of the actuarial loss, net of amortizations, as at 31 December 2008, is Euros 98.000.000. This amount will be amortized by the 

remaining term of 17 years with a annual amortization of approximately Euros 5,750,000.

Annual Report Volume II Financial Statements 2008 Banco Comercial Português, S.A. 209 

The change in the amounts payable to the Pension Fund related with the obligations, during 2008 and 2007 is analysed as follows: 

Euros ’000 

(Surplus) / Deficit 

2008 2007 

Extra-fund 



Balance as at 1 January (140,369) 50,941 395,087 305,659 179,250 

Service cost 80,331 3,372 1,851 85,554 74,119 


Cost with early retirement programs 8,890 - 8,297 17,187 30,338 

Expected return on plan assets (288,803) - - (288,803) (285,036) 


Not related with changes in actuarial assumptions 1,096,767 - 2,988 1,099,755 149,166 


Contributions to the Fund (760,208) - - (760,208) (89,276) 

Benefits paid - (2,226) (22,963) (25,189) (25,418) 

Other charges (12,221) (2,627) 9 (14,839) 169 

Balance as at 31 December 250 52,076 382,876 435,202 305,659 

The contributions to the Pension Fund, made by the Bank, are analysed as follows: 

2008 2007 

Euros ’000 

Other securities - 77,384 

Cash 760,208 11,892 

760,208 89,276 

In accordance with IAS 19, deferred actuarial losses, including the corridor, as at 31 December 2008 are analysed as follows: 

Corridor 

Euros ’000 


Amount in excess 

of the Corridor 

Balance as at 1 January 2008 578,976 741,753 


Not related with changes in actuarial assumptions - 1,099,755 

Arising from changes in actuarial assumptions - (282,534) 

Amortisation of actuarial gains and losses - (37,088) 

Other variations - (2,064) 

Variation in the corridor (15,537) 15,537 

Balance as at 31 December 2008 563,439 1,535,359 

As at 31 December 2008, considering the value of the actuarial gains and losses registered in the calculation of the benefit obligations and in the value of the Fund, 

the value of the corridor calculated in accordance with paragraph 92 of IAS 19, amounted to Euros 563,439,000 (31 December 2007: Euros 578,976,000). 

As at 31 December 2008, the net actuarial gains and losses in excess of the corridor amounted to Euros 1,535,359,000 (31 December 2007: Euros 741,753,000) 

and will be amortized against staff costs over a 20 year period considering the year-end balance of the previous year, as referred in the accounting policy presented 

in note 1 v).


In 2008, the Bank accounted as pension costs the amount of Euros 149,083,000 (31 December 2007: Euros 128,384,000). The cost of the year is analysed as 

follows: 

Euros ’000 

2008 2007 

Pension 

and other Seniority 

Benefits Costs premium Total Total 

Service cost 82,182 3,372 85,554 74,119 

Interest costs 296,004 2,616 298,620 262,482 

Expected return on plan assets (288,803) - (288,803) (285,036) 

Amortization of actuarial gains and losses 37,088 - 37,088 33,023 

Costs with early retirement programs 5,725 - 5,725 30,338 

Reversal of the actuarial losses from the 

responsibilities of early retirement 'curtailment' 2,064 - 2,064 13,720 

Other 11,462 (2,627) 8,835 (262) 

Cost of the year 145,722 3,361 149,083 128,384 

The balance Other charges includes the amount of 11,462,000 Euros relating to the transfer of responsibilities in the Bank's balance sheet as retirement benefits and 

related members of the Executive Board of Directors who were retired in 2007. This transfer did not cause any increase in costs in the profit and loss account of the 

year in 2008 as it had already been accrued for in 2007. 

As referred in note 37, as at 31 December 2007, the Group accounted the amount of Euros 95,139,000, related to the obligations with pensions already recognised 

in Staff costs, related to previous members of the Board of Directors. The referred obligations are not covered by the Pension Fund of the Group, and correspond 

to amounts payable by the Bank. 

The movement of the amounts of the responsibilities with retirement pensions payable to former members of the Board of Directors is analysed as follows: 


Purchase of insurance policies (13,052) 

Write-back (6,430) 

Payments (2,117) 


Euros ’000 

Considering the market indicators, particulary the estimations of the inflation and the long term interest rate for Euro Zone as well as the demografic carachteristics 

of the participants, the Group changed the actuarial assumptions used for the calculation of the liabilities for the pension obligations with reference to 31 December 

2008. The comparative analysis of the actuarial assumptions is shown as follows: 

Banco Comercial Português Fund 

2008 2007 

Increase in future compensation levels 3.25% 3.25% 

Pensions increase rate 2.25% 2.25% 

Projected rate of return of fund assets 5.50% 5.50% 

Discount rate 5.75% 5.25% 

Mortality tables 

Men TV 73/77 - 1 year TV 73/77 - 1 year 

Women TV 88/90 - 2 years TV 88/90 

Disability rate 0.00% 0.00% 

Turnover rate 0.00% 0.00% 

Costs with health benefits increase rate 6.50% 6.50% 

The assumptions used in the calculation of the pension liabilities are in accordance with the requirements of IAS 19. No disability decreases are considered in the 

calculation of the total liabilities. 

The projected rate of return of the Funds assets was determined on a consistent way according with current market conditions and with the nature and return of 

the plan assets.


Net actuarial losses related to the diference between the actuarial assumptions used for the estimation of the pension liabilities and the actual liabilities as well as the 

impact of changing assumptions, for the year ended 31 December 2008 amounted to Euros 817,222,000 (31 December 2007: actuarial losses of Euros 158,295,000) 

and are analysed as follows: 

Actuarial (gains) / losses 

2008 2007 

Deviation between expected and actual liabilities 26,032 81,299 

Discount rate (392,822) - 

Mortality tables 110,288 - 

Return of Plan assets 1,073,724 76,996 

817,222 158,295 

Euros ’000 

Health benefit costs have a significant impact in pension costs. Considering this impact we produced a sensitivity analysis to a positive one percent variation in health 

benefit costs (from 6.5% to 7.5% in 2008) and a negative variation (from 6.5% to 5.5% in 2008) of one percent in health benefit costs, whose impact is analysed as 

follows: 

Euros ’000 

Positive variation of 1% Negative variation of 1% 

(6.5% to 7.5%) (6.5% to 5.5%) 

2008 2007 2008 2007 

Pension cost impact 524 498 (524) (498) 

Liability impact 43,571 45,069 (43,571) (45,069) 

The liabilities with health benefits are fully covered by the Pension Fund and amount to Euros 283,214,000 (31 December 2007: Euros 292,946,000). The estimated 

value of contributions to the pension plan in 2009 is Euros 128,233,000. 

47. Related parties 

The Group grants loans in the ordinary course of its business within the Group and to other related parties. Under the Collective Agreement of Labour for Employees 

of the Portuguese Banking Sector (the “ACTV”) which includes substantially all employees of banks operating in Portugal, the Group grants loans to employees at 

interest rates fixed under the ACTV for each type of loan upon request by the employees. 

As at 31 December, 2008, loans to members of the Executive Board of Directors and their direct family members amounted to Euros 754,000 (31 December 2007: 

Euros: 111,000), which represented 0.01% of shareholders’ equity (31 December 2007: 0.01%). The amount of loans recorded in 2007 are credit cards expenses, 

which are totally paid in the next month. 

As at 31 December 2008, the principal loans and guarantees (excluding interbank and money market transactions) the Group has made to shareholders holding, 

together with their affiliates, 2% or more of the share capital whose holdings in aggregate, together with their affiliates, represent 51.2% of the share capital as of 

31 December 2008 (31 December 2007: 59.2%) described in the Executive Board of Directors report, amounted to approximately Euros 2,219,572,000 (31 

December 2007: Euros 2,272,183,000). Each of these loans was made in the ordinary course of business, on substantially the same terms as those prevailing at the 

time for comparable transactions with other persons. 

Remunerations to the Executive Board of Directors 









(2007: Euros 6,518,000). 


fixed and variable remunerations were paid to them in the amount of Euros 1,001,000, the variable part being related to 2007.


Transactions with the Pension Fund 

During the first semester of 2008, BCP Group repurchased to the Pension Fund, BII Finance Company bonds issued on 25 September 1996 and with maturity on 

25 September 2011, in the amount of Euros 232,000,000. 

During 2008 all the contributions to the Pension Fund were made in cash. 

The Group has made transactions with the Pension Fund, during 2007, that are analysed as follows: 

– Contribution of 77,000,000 bonds BPA Floating 29/09/2049 in the amount of Euros 77,205,000, as referred in note 46 Pensions. 

– Additionally and as referred in note 46 Pensions, other additional contributions in 2007 were made by the Bank in cash, in the amount of Euros 11,892,000. 

Recovery of loans previously charged-off 

During the year 2007 the Bank has accounted for a recovery of loans previously charged-off in the amount of Euros 14,300,000 regarding a set of loans to companies 

related with a member of the family of a member of the Governing Boards. 

Retirements of the members of the Executive Board of Directors 

In 2007, the Bank booked Euros 78,864,000 under staff costs related to the present value of the retirement benefits granted to the members of the Executive Board 

of Directors, who retired during the year. 

Additionally there was a termination of the contracts with three former Board members in functions at 31 December 2007, for which the Bank paid the amount of 

Euros 18,700,000. Considering the amount provisioned and financed at that time related to the liabilities with pensions, the impact in the net income for the year 

amounted to Euros 12,770,000, which was compensated by the reversal of the accrual of the pluriannual variable remunerations described above. 

Regarding the retirement and termination of the employment contracts of the former members of the Executive Board of Directors, curtailment costs were accounted 

in the amount of Euros 16,633,000. 

The shareholder and bondholder position of members of the Corporate's Boards, is as follows: 



securities at 

31/12/2008 31/12/2007 


Unit 

Price 

Euros 

Members of Corporate Boards 



Luis Maria França de Castro Pereira Coutinho BCP shares 247,288 190,228 4 (b) 10-Apr-08 2.00 

57,060 (a) 24-Apr-08 1.20 


12,500 (c) 7-Apr-08 0.10 

3,749 (a) 24-Apr-08 1.20 

64 (a) 29-Apr-08 1.20 

3,687 2-Jun-08 1.62 


51,000 (b) 16-Apr-08 0.20 


59,992 (a) 24-Apr-08 1.20 

Members of Supervisory Board 



407,273 (a) 24-Apr-08 1.20 


António Luis Guerra Nunes Mexia BCP shares 1,299 1,000 3 (b) 17-Apr-08 0.18 

299 (a) 24-Apr-08 1.20 

António Manuel Ferreira da Costa Gonçalves BCP shares 4,440,807 4,015,577 1,204,530 (a) 24-Apr-08 1.20 

74,182 24-Apr-08 1.85 

725,818 28-Apr-08 1.86 

20,700 (a) 29-Apr-08 1.20 

Bcp Obrg Cx Sup Inv Mill II 12/10 2,000 2,000 

(continue)




securities at 

31/12/2008 31/12/2007 



Unit 

Price 

Euros 

Francisco de La Fuente Sánchez BCP shares 2,313 1,780 533 (a) 29-Apr-08 1.20 

BCP Bonds Cx Rend. Cresc. Feb 06/08 0 900 900 14-Feb-08 50 

BCP Bonds Cx TOP 6 May 06/08 0 1,000 1,000 9-May-08 50 

Bonds Cx Aforro Cresct 6% Sep 2006/08 0 1,600 1,600 5-Sep-08 50 


BCP Ob Cx Millennium Cresc Agosto 2010 500 500 

BCP Ob Cx Multi-Rend Europa Out. 2010 1,500 1,500 

BCP Obg Cx Inv. Selec. Mundial Nov 07/09 2,000 2,000 

BCP Obg Cx Inv. Especial 2007/2009 3ª Em 300 300 




BCP Obg Cx Subordinadas 1ª Série 1,600 0 1,600 (d) 26-Sep-08 50 


37,551 (a) 24-Apr-08 1.20 

José Eduardo Faria Neiva dos Santos BCP shares 1,383 1,000 304 (a) 24-Apr-08 1.20 

158 31-Jul-08 1.37 

2 4-Aug-08 1.12 

6 1-Sep-08 1.18 

93 9-Sep-08 1.25 

5 2-Oct-08 1.11 

105 6-Oct-08 1.02 


BCP Obg Cx Sup Aforro Mil Sr B 1ªE 2013 500 0 500 (d) 28-Oct-08 50.00 



321 (a) 29-Apr-08 1.20 


1 (b) 10-Apr-08 0.22 

15,000 (a) 24-Apr-08 1.20 


211 (a) 29-Apr-08 1.20 

Spouse and Dependent Children 


31,000 7-Apr-08 1.98 

51,007 (a) 24-Apr-08 1.20 

875 (a) 29-Apr-08 1.20 

15,036 22-Jul-08 1.13 

5,100 22-Sep-08 1.27 

45,000 25-Sep-08 1.19 

55,000 30-Sep-08 1.13 

50,000 7-Nov-08 0.90 

50,000 26-Nov-08 0.75 

BCP Ob Cx Inv. Especial 2007/2009 2ª Em 1,000 1,000 1,000 (a) 4-Dec-07 50 


(a) Subscription of share capital increase of BCP. 

(b) Sale of subscription rights of share capital increase of BCP. 

(c) Subscription. 

(d) Subscription. 

(e) Internal Deposit / Internal Transfer.


As at 31 December 2008, the Bank had credits over subsidiaries and the Millennium bcp Fortis Group, represented or not by securities, included in the items of Loans 

and advances to credit institutions and to customers and financial assets held for trading and available for sale, are analysed as follows: 

Loans and advances 

Financial assets 

Credit 

Available 

Institutions Customers Trading for sale Total 

Banco de Investimento Imobiliário, S.A. 2,473,967 - - 575,646 3,049,613 



BCP Finance Bank Ltd 520,500 - 6,287 141,183 667,970 

Banca Millennium S.A. 5,420 - - - 5,420 


BCP Investimento Group 853,731 - - 518,528 1,372,259 

Millennium Bank (Greece) Group 1,147,337 - 60,755 551,440 1,759,532 


Millennium Bank, Anonim Sirketi (Turquia) 112,524 - - - 112,524 

Others 7,313 - - - 7,313 

7,219,999 38,816 67,042 1,786,797 9,112,654 

Euros ’000 

As at 31 December 2008, the Bank had credits over associated companies, represented or not by securities, included in the items of Loans and advances to credit 

institutions and to customers, and financial assets held for trading and available for sale, in the amount of Euros 117,756,000. 

As at 31 December 2008, the Bank's liabilities with subsidiaries and the Millennium bcp Fortis Group, represented or not by securities, included in items Deposits 

from credit institutions and to customers, Debt securities issued and in Subordinated debt, are analysed as follows: 

Euros ’000 

Deposits from 

Credit Debt Subordinated 

Institutions Customers Securities Issued Debt Total 

Banco Activobank (Portugal), S.A. 234,368 - - - 234,368 

Banco de Investimento Imobiliário, S.A. 528,092 767 - - 528,859 

Bank Millennium Group (Poland) 24,256 - - - 24,256 



BCP Finance Bank Ltd 11,760,061 - - 1,786,349 13,546,410 

BCP Finance Company, Ltd - 3,040 - 1,000,000 1,003,040 


Sociedade Unipessoal, Lda. - 44,466 - - 44,466 

BCP Investment, B.V. - 157,721 - - 157,721 

BitalPart, B.V. - - - - - 


BCP Investimento Group 580,310 15,665 599,003 2,282 1,197,260 

Millennium Bank (Greece) Group 666,847 - - - 666,847 

Millennium bcp - Gestão de Fundos de Investimento, S.A. - 13,865 - - 13,865 

Baía de Luanda 109 9,034 - - 9,143 

BCP Capital Finance Limited 4,216 - - - 4,216 

Comercial Imobiliária, S.A. - 11,418 - - 11,418 

Seguros & Pensões Gere, S.G.P.S., S.A. - 846,967 - - 846,967 



Millennium bcp Fortis Group - 876,830 - - 876,830 

Others 3,570 1,999 - - 5,569 

17,672,251 1,995,327 599,003 2,788,631 23,055,212 

As at 31 December 2008, the Bank's liabilities with associated companies, represented or not by securities, included in items Deposits from credit institutions and to 

customers, Debt securities issued and in Subordinated debt, in the amount of Euros 7,894,000.


As at 31 December 2008, the income generated by the Bank on inter-company transactions with subsidiaries, included in the items of Interest income, Commissions, 

Other operating income and Gains arising from trading activity, are analysed as follows: 

Euros ’000 

Other 

Gains arising 

Interest Commissions operating from trading 

income income income activity Total 

Banco Activobank (Portugal), S.A. - - 2,689 - 2,689 

Banca Millennium S.A 6,606 - - 541 7,147 

Banco de Investimento Imobiliário, S.A. 216,293 - 3,106 438 219,837 




BCP Finance Bank Ltd 32,599 - 116 883,713 916,428 

Millennium Bank, Anonim Sirketi (Turkey) 2,444 - - 40,474 42,918 

BitalPart, B.V. 2,308 - - - 2,308 

BIM - Banco Internacional de Moçambique, S.A.R.L. 151 - 3,516 - 3,667 

Millennium bcp Investimento Group 33,750 - 6,969 49,496 90,215 


Millennium bcp - Gestão de Fundos de Investimento, S.A. - 17,496 1,701 - 19,197 

Comercial Imobiliária, S.A. 18,112 4 - - 18,116 

Millennium bcp - Prestação de Serviços, A.C.E. 2,486 - 9,977 - 12,463 

Millennium bcp Fortis Group 16,486 44,210 14,624 - 75,320 

Others 2,840 16 184 - 3,040 

572,137 61,726 42,882 1,111,147 1,787,892 

As at 31 December 2008, the costs incurred by the Bank on inter-company transactions with subsidiaries, included in items Interest expense, Commissions, 

Administrative costs and Losses arising from trading activity, are analysed as follows: 

Euros ’000 

Losses arising 

Interest Commissions Administrative from trading 

expense costs costs activity Total 

Banco Activobank (Portugal), S.A. 11,562 206 - - 11,768 

Banca Millennium S.A 20 - - 4,192 4,212 

Banco de Investimento Imobiliário, S.A. 28,077 6,229 - 409 34,715 




BCP Finance Bank Ltd 841,211 - - 827,190 1,668,401 

BCP Finance Company, Ltd 49,725 - - - 49,725 

BCP Internacional II, S.G.P.S. Sociedade Unipessoal, Lda. 5,082 - - - 5,082 

BCP Investment, B.V. 10,219 - - - 10,219 

Millennium Bank, Anonim Sirketi (Turkey) 247 - - 18,456 18,703 


Millennium bcp Investimento Group 37,648 758 - 44,357 82,763 


Seguros & Pensões Gere, S.G.P.S., S.A. 29,697 - - - 29,697 


Millennium bcp - Prestação de Serviços, A.C.E. 169 - 130,761 - 130,930 

Millennium bcp Fortis Group - - 6,859 - 6,859 

Others 1,526 1,699 218 - 3,443 

1,234,055 8,892 137,838 990,413 2,371,198


48. Risk Management 

The Group is subject to several risks during the course of its business. The risks from different companies of the Group are managed centrally co-ordinating with the 

local departments and considering the specific risks of each business. 

The Group's risk-management policy is designed to ensure adequate relationship at all times between its own funds and the business it carries on, and also to 

evaluate the risk/return profile by business line. 

In this connection, monitoring and control of the main types of financial risk – credit, market, liquidity and operational – to which the Group's business is subject are 

of particular importance. 

Main Types of Risk 

Credit – Credit risk is associated with the degree of uncertainty of the expected returns as a result of the inability either of the borrower (and the guarantor, if any) 

or of the issuer of a security or of the counterparty to an agreement to fulfile their obligations. 

Market – Market risk reflects the potential loss inherent in a given portfolio as a result of changes in rates (interest and exchange) and/or in the prices of the various 

financial instruments that make up the portfolio, considering both the correlations that exist between them and the respective volatility. 

Liquidity – Liquidity risk reflects the Group's inability to meet its obligations at maturity without incurring in significant losses resulting from the deterioration of the 

funding conditions (funding risk) and/or from the sale of its assets below market value (market liquidity risk). 

Operational – Operational risk is understood to be the potential loss resulting from failures or inadequacies in internal procedures, persons or systems, and also the 

potential losses resulting from external events. 

Internal Organisation 

The Banco Comercial Português Executive Board of Directors is responsible for the definition of the risk policy, including approval at the very highest level of the 

principles and rules to be followed in risk management, as well as the guidelines dictating the allocation of economic capital to the business lines. 

The General and Supervisory Board, through the Audit and Risk Committee, ensures the existence of adequate risk control and of risk-management systems at the 

level both of the Group and of each entity. At the proposal of the Banco Comercial Português Executive Board of Directors, the General and Supervisory Board is 

also charged with approving the risk-tolerance level acceptable to the Group. 

The Risk Committee is responsible for monitoring the overall levels of risk incurred, ensuring that they are compatible with the objectives and strategies approved 

for the business. This Committee has four sub-committees, the Credit Risk, the Market and Liquidity risks, the Operational Risk and the Pension Fund Monitoring 

Sub-Committees. 

Group Risk Office is responsible for the control of risks in all the Group entities, in order to ensure that the risks are monitored on an overall basis and that there is 

alignment of concepts, practices and objectives. It must also keep the Risk Committee informed of the Group’s level of risk, proposing measures to improve control 

and implementing the approved limits. 

The activity of every entity included within the Banco Comercial Português consolidation perimeter is governed by the principles and decisions established centrally 

at Risk Sub-Committee level, and they are provided with Risk Office structures whose dimension is in accordance with the risks inherent in their particular business. 

A Risk Control Committee has been set up at each subsidiary, responsible for the control of risks at local level, in which the Group Risk Office takes part. 

Risk Evaluation and Management Model 

For purposes of profitability analysis and quantification and control of risks, each entity is divided into the following management areas: 

– Trading: involves those positions whose objective is to obtain short-term gains through sale or revaluation. These positions are actively managed, are tradable 

without restriction and may be valued frequently and precisely, including the securities, the derivatives and the sales activities; 

– Financing: involves the Bank’s institutional financing and money market activity of the Group; 

– Investment: includes those positions in securities to be held during a longer period of time or those that are not tradable on liquid markets; 

– Commercial: commercial activity with customers; 

– Structural: deals with balance sheet elements or operations that, because of their nature, are not directly related with any of the other areas; 

– ALM: is the function of managing assets and liabilities. 

The definition of the management areas allows effective separation of the management of the trading and banking portfolios. 

Risk assessment 

Credit Risk 

Credit granting is based on prior classification of the customers’ risk and on through assessment of the level of protection provided by the underlying collateral. 

In order to do so, a single risk-notation system has been introduced, the Rating Master Scale. It is based on the expected probability of default, allowing greater 

discrimination in the assessment of the customers and better establishment of the hierarchies of the associated risk. The Rating Master Scale also identifies those 

customers showing worsening credit capacity and, in particular, those classified as being in default in keeping with the new Basel II Accord. 

All the rating and scoring models used by the Group are being duly calibrated for the Rating Master Scale.


The protection-level concept has been introduced as a crucial element of evaluation of the effectiveness of the collateral in credit-risk mitigation, leading to more 

active collateralisation of loans and more adequate pricing of the risk incurred. 

The Group adopts a continuous monitoring policy towards its decision processes, promoting changes and improvements in those processes whenever it considers 

necessary, in order to ensure a greater consistency and efficiency in decision taking. 

To quantify the credit risk at the level of the various portfolios, the Group has developed a model based on an actuarial approach, which provides the probability 

distribution of total loss. In addition to the Probability of Default (PD) and of the Amount of the Loss Given Default (LGD) as the central points, consideration is also 

given to the uncertainty associated with the development of these parameters, through the introduction of the respective volatility. The effects of diversification 

and/or concentration between the sectors of the loan portfolios are quantified by introducing the respective correlations. 

Market Risks 

The main measure used by the Group in evaluating the market risk is the VaR (Value at Risk). The VaR is calculated on the basis of the analysis approximation defined 

in the methodology developed by the RiskMetrics. It is calculated considering a 10-working day time horizon and an unilateral statistical confidence interval of 99%. 

In calculating the volatility associated with each risk vector, the model assumes a greater weighting for the market conditions seen in the more recent days, thus ensuring 

more accurate adjustment to market conditions. 

A specific risk evaluation model is also applied to securities and associated derivatives for which the performance is related to its value. With the necessary adjustments, 

this model follows regulatory standard methodology. Capital at risk values are determined both on an individual basis for each one of the position portfolios of those 

areas having responsibilities in risk taking and management and also in consolidated terms, taking into account the effects of diversification between the various 

portfolios. 

To ensure that the VaR model adopted is appropriate to the evaluation of the risks involved in the positions that have been assumed, a backtesting process has been 

instituted. This is carried out on a daily basis and it confronts the VaR indicators with the actual results. 

Two other complementary measures are used: a measure for the non-linear risk, at a confidence level of 99% and a standard measure for the commodities risk. 

The following table shows these major indicators for 2008 for the trading book: 

Euros ’000 

2008.12.31 2008.01.01 

Generic Risk ( VaR ) 2,552 2,501 

Specific Risk 924 112 

Non Linear Risk 40 18 

Commodities Risk 0 0 

Global Risk 3,516 2,631 

Evaluation of the interest rate risk originated by the banking portfolio is performed via a risk sensitivity analysis process carried out every month for all operations 

included in the Group’s consolidated balance sheet. 

In this analysis consideration is given to the financial characteristics of the contracts available on the information systems. On the basis of these data the respective 

expected cash flows are projected in accordance with the repricing dates. 

Aggregation of the expected cash flows for each time interval for each of the currencies under analysis allows determination of the interest rate gaps per repricing 

period. 

The interest rate sensitivity of the balance in each currency is calculated through the difference between the present value of the interest rate mismatch after 

discounting the market interest rates and the discounted value of the same cash flows parallel shift of the market interest rates.


The following table shows the expected impact on the Banking Book Economic Value due to parallel shifts of the yield curve by +/- 100 and +/- 200 basis points, on 

each of the main currencies: 

December 2008 


CHF 1,514 750 (737) (1,461) 

EUR (78,815) (38,765) 35,734 66,779 

PLN 10,905 5,397 (5,291) (10,478) 

USD 14,176 7,073 (6,936) (13,754) 

Total (52,220) (25,545) 22,770 41,086 

Euros ’000 

Euros ’000 

December 2007 


CHF 1,053 521 (510) (1,009) 

EUR (215,781) (104,968) 99,563 194,128 

PLN 12,456 6,167 (6,048) (11,981) 

USD 12,927 6,389 (6,245) (12,350) 

Total (189,345) (91,891) 86,760 168,788 

Each month the Group undertakes hedging operations on the market with a view to reducing the interest-rate mismatch of the risk positions associated with the 

portfolio of transactions belonging to the commercial and structural areas. 

Liquidity risk 

Evaluation of the Group’s liquidity risk is carried out using indicators defined by the Supervisory Authorities on a regular basis and other internal metrics for which 

exposure limits are also defined. 

The evolution of the Group’s liquidity situation for short-term time horizons (up to 3 months) is reviewed daily on the basis of two indicators defined in-house, 

immediate liquidity and quarterly liquidity. These measure the maximum fund-taking requirements that could arise on a single day, considering the cash-flow projections 

for periods of 3 days and of 3 months, respectively. 

Calculation of these indicators involves adding to the liquidity position of the day under analysis the estimated future cash flows for each day of the respective time 

horizon (3 days or 3 months) for the transactions as a whole brokered by the markets areas, including the transactions with customers of the Corporate and Private 

networks that, for their dimension, have to be quoted by the Trading Room. To the value thus calculated the amount of assets in the Bank’s securities portfolio 

considered highly liquid is added, leading to determination of the liquidity gap accumulated for each day of the period under review. 

In parallel, the evolution of the Group’s liquidity position is calculated on a regular basis identifying all the factors that justify the variations that occur. This analysis is 

submitted to the Capital and Assets and Liabilities Committee (CALCO) for appraisal, with a view to decisions being taken leading to the upkeep of financing 

conditions adequate to the continuation of the business. In adition, the Market and Liquidity Risks Sub-Committee is responsible for controlling the liquidity risk. 

This control is reinforced with the monthly execution of stress tests, to characterize the Bank's risk profile and to ensure that the Group and each of its subsidiaries, 

fulfil its obligations in the event of a liquidity crisis. These tests are also used to support the liquidity contingency plan and management decisions. 

Operational Risk 

The approach to operational risk management is based on the business and support end-to-end processes. Process management is the responsibility of the Process 

Owners, who are the main parties responsible for evaluation of the risks and for strengthening the performance within the scope of their processes. The 

Process Owners are responsible for keeping up to date all the relevant documentation concerning the processes, for ensuring the real adequacy of all the existing 

controls through direct supervision or by delegation on the departments responsible for the controls in question, for co-ordinating and taking part in the risk selfassessment 

exercises, and for detecting and implementing improvement opportunities, including mitigating measures for the more significant exposures. 

In the operational risk model implemented in the Group, there is a systematic process of gathering information on operational losses, that defines on a systematic 

form, the causes and the efects associated to an eventual detected loss. From the analises of the historical information and its relationships, processes involving greater 

risk are identified and mitigated measures are launched to reduce the critical exposures.


49. Solvency 

The own funds of Banco Comercial Português are determined according to the applicable regulatory rules, namely the Regulation 12/92 from the Bank of Portugal. 

The own funds result from the adding the core own funds (Tier 1) to the complementary own funds (Tier 2) and subtracting the component of Deductions. 

The Tier 1 include the paid-up capital and the share premium, the reserves, the retained earnings and the deferred impacts related to the transition adjustments to the 

International Financial Reporting Standards. 

Furthermore, the following are negative components of Tier 1: own shares, intangible assets, deferred costs related with actuarial variations in excess of the corridor 

and the deduction related to the qualified investments. This deduction refers to the investments owned in financial institutions, on one hand, and in insurance companies, 

on the other, above 10% and 20% of their share capital, respectively, as long as they are not fully consolidated. This deduction, which is done in equal parts to Tier 1 

and Tier 2, is also applied to the part of the aggregate amount of investments on financial institutions, representing up to 10% of their share capital, that exceed the 

respective regulatory limit. 

Tier 1 can also be influenced by the existence of revaluation differences on other assets, on cash-flow hedge transactions or on financial liabilities at fair value through 

profits and losses, to the extent related to own credit risk, and by the existence of a fund for general banking risks. 

In 2008, the Bank of Portugal introduced some changes to the own funds calculation. Thus, through the new Regulation 6/2008, similarly to credit and other receivables, 

potential gains and losses arising from available for sale fixed rate securities were excluded from the own funds, to the portion exceeding the impact of related hedging 

transactions, maintaining, however, the obligation of deducting to Tier 1 the positive revaluation reserves representing non realized gains on available for sale equity 

instruments (net of taxes), in excess to the potential related impaired amounts. 

Simultaneously, through the Regulation 7/2008, the Bank of Portugal extended, for three additional years, the amortization plan of the transition adjustments to the 

Inter national Financial Reporting Standards that were not fully recognized in the own funds of June 30, 2008, concerning post-retirement health benefits and liabilities 

of the pension fund. On the other hand, the Bank of Portugal published the Regulation 11/2008, which allowed the enlargement of the pension fund corridor up to 

the amount of the actuarial losses of 2008, excluding the expected return of the fund's assets in 2008, to be amortized steadily through the next four years. 

Finally, the Bank of Portugal suspended the 10% limit applied to the amount of deferred tax assets that could be included in the Tier 1. 

The complementary own funds include the subordinated debt and the provisions for general credit risks, as well as 45% of the unrealized gains in available for sale 

equity securities and other assets. Provisions for general credit risks are included in the Upper Tier 2 and subordinated debt is split between Upper Tier 2 (perpetual 

debt) and Lower Tier 2 (the remaining). 

Subordinated debt can only be included in the own funds with the agreement of the Bank of Portugal and as long as their total amount stay within the following limits: 

a) the Tier 2 cannot surpass the amount of the Tier 1; and b) the Lower Tier 2 cannot surpass 50% of the Tier 1. Additionally, non-perpetual subordinated loans should 

be amortized at a 20% yearly rate, along their last five years to maturity. The Tier 2 is also subject to the deduction of 50% of investments owned in financial institutions 

and insurance companies, as already mentioned. If the amount of Tier 2 is not enough to accommodate this deduction, the excess should be subtracted to the Tier 1.


In order to conclude the calculation of the Bank's regulatory capital, there are still some deductions to the own funds that need to be performed, namely the amount 

of real-estate assets resulting from recovered loans that have remained in the Bank’s accounts for a certain period, the impairment concerning unrecognized assets 

from securitization transactions that have not reached the regulatory definition of effective risk transfer, to the extent of the amounts not recognized in the Bank's 

accounts, and the potential excess of exposure to the High Risks limits. 

Capital requirements have been determined in accordance with the Basel II framework since the beginning of 2008. In this scope, the Bank timely filed with the Bank 

of Portugal a formal request, which is currently under analysis, regarding the use of the internal ratings based approach for credit risk and the internal models approach 

for market risk, as well as the standard approach for calculating operational risk requirements. As of the end of December 2008, capital requirements for credit risk 

were determined taking into account the risks recorded both on balance and off-balance sheet, weighted based on the type of counterparties, the maturity of 

transactions and the existing collaterals, as defined by the Regulation 5/2007 for the standard approach. The requirements for securitized assets were determined in 

accordance with the Regulation 7/2007. In the scope of Basel II framework, capital requirements for operational risk were also calculated, following the basic-indicator 

approach described in the Regulation 9/2007 from the Bank of Portugal. Additionally, specific requirements for the trading portfolio were also calculated, according to 

the Regulation 8/2007. 

2008 2007 

Euros ’000 

Core own funds 

Paid-up capital and share premium 4,877,968 4,493,037 

Reserves and retained earnings 566,541 (740,864) 

Intangible assets (9,985) (6,692) 

Net impact of accruals and deferrals (835,384) (539,986) 

Other regulatory adjustments (20,012) (10,939) 

4,579,128 3,194,556 

Complementary own funds 

Upper Tier 2 2,157,463 2,162,051 

Lower Tier 2 1,581,266 1,032,505 

3,738,729 3,194,556 

Deductions to total own funds (1,557,187) (14,576) 

Total own funds 6,760,670 6,374,536 

Own fund requirements 

Requirements from Regulation 1/93 - 5,375,837 

Requirements from Regulation 5/2007 4,433,103 - 

Trading portfolio 8,680 54,759 

Operacional risk 248,618 - 

4,441,783 5,430,596 

Capital ratios 

Tier 1 7.8% 4.7% 

Tier 2 (*) 3.7% 4.7% 

Solvency ratio 11.5% 9.4% 

(*) Includes deductions to total own funds


50. Accounting standards recently issued 

The new standards and interpretation that have been issued, but that are not yet effective and that the Group has not yet applied on its Financial Statements, can be 

analyzed as follows: 

IAS 1 (amendment) – Presentation of Financial Statements 

The International Accounting Standards Board (IASB) has issued in September 2007, IAS 1 (amendment) Presentation of Financial Statements, which is applicable 

from 1 January, 2009, although allowing for an early adoption. 

Changes regarding the current text of IAS 1: 

– The presentation of the financial position statement (balance sheet) is required for current and comparative periods. According with changed IAS 1, the financial 

position statement should also be presented for the beginning of the comparative period whenever an entity restates the comparatives following a change in an 

account ing policy, a correction of an error or the reclassification of an item in the financial statements. In theses cases, three statements of the financial position will 

be presented, comparatively to the other two required statements. 

– Following the changes required by this standard, the users of the financial statements will be able to distinguish, in an easier way, the variations in the equity of the 

Group on transactions with shareholders, as shareholders (ex. dividends, transactions with own shares) and transactions with third parties, that are summarized in 

the comprehensive income statement. 

Given the nature of these changes the impact will be exclusively regarding presentation. However as at 31 December 2008, the Group is still evaluating the impact 

of these changes. 

IAS 23 (amendment) – Borrowing costs 

The International Accounting Standards Board (IASB) has issued in March, 2007 an amendment to IAS 23 Borrowing costs, which is applicable from 1 January, 2009, 

although allowing for an early adoption. 

This standard requires the capitalization of borrowing costs that are directly related to the acquisition, production or construction of a qualifying asset, as part of the 

cost of that asset. As a result, the option to recognize such borrowing costs as an expense in the period which they arise was eliminated. 

IAS 32 (amendment) - Financial Instruments: Presentation - Puttable Financial Instruments and obligations arising from liquidation 

The International Accounting Standards Board (IASB) has issued in February, 2008 an amendment to IAS 32 Financial Instruments - Presentation - Puttable Financial 

Instruments and obligations arising from liquidation, which is applicable from 1 January, 2009. 

According with the current requirements of IAS 32, if an issuer can be required to make a payment in money or in other financial asset in exchange for the redemption 

or repurchase of the financial instrument, the instrument is classified as a financial liability. As a result of this review, some financial instruments that currently comply 

with the definition of a financial liability will be classified as an equity instrument if (i) they represent a residual interest in the net assets of the entity are included in 

a class of instruments subordinated to any other class of instruments issued by the Bank; and (ii) is all instruments in the class have the same terms and conditions. 

A change in IAS 1 Presentation of Financial Statements was also performed to add a new presentation requirement for puttable financial instruments and obligations 

arising from liquidation. 


IAS 39 (amendment) - Financial Instruments: Recognition and measurement – Eligible hedged items 

The International Accounting Standards Board (IASB) has issued an amendment to IAS 39 Financial Instruments: Recognition and measurement – Eligible hedged 

items, which is applicable from 1 July, 2009. 

This change clarifies the application of the existing principles that determine what risks or which cash-flows can be designated as a hedged item. 

The Group is evaluating the impact of adopting this amendment. 

IFRS 1 (amendment) - First time adoption of the International Financial Reporting Standards and IAS 27 - Consolidated and Separate Financial Statements 

The changes to the IFRS 1 - First time adoption of the International Financial Reporting Standards and IAS 27 - Consolidated and Separated Financial Statements 

are effective from 1 January 2009. 

These changes allowed entities adopting IFRS for the first time in the preparation of the individual accounts, to use as deemed cost of the investments in subsidiaries, 

joint-ventures and associated companies, the respective fair value at the transition date to the IFRS or the carrying amount determined based on the previous 

accounting framework. 


IFRS 2 (amendment) - Share-based payment: Acquisition conditions 

The International Accounting Standards Board (IASB) has issued in January, 2008 an amendment to IFRS 2 (amendment) - Share-based payment: Acquisition conditions, 

which is applicable from 1 January, 2009, although allowing for an early adoption. 

This change to IFRS 2 allowed clarifying that: (i) the acquisition conditions of the inherent rights for a share-based payment plan are limited to service or performance 

conditions and that (ii) any cancellation of these programmes, by the entity itself or by third parties, has the same accounting treatment. 

As for 31 December 2008, the Group does not have any share-based payment plan and therefore the issue of this amendment does not have any impact in the 

financial statements of the Group.


IFRS 3 (amendment) - Business Combinations and IAS 27 (amendment) Consolidated and Separate Financial Statements 

The International Accounting Standards Board (IASB) has issued in January, 2008 an amendment to IFRS 3 (amendment) - Business Combinations, which is applicable 

for years starting after 1 July, 2009, although allowing for an early adoption. 

The main impacts of the changes to these standards are: (i) the treatment of partial acquisitions where the non-controlling interests (previously defined as minority 

interests) will be measured at fair value (which implies also the recognition of goodwill attributable to non-controlling interests) or as an alternative allows for the 

attributable to non controlling interest of the fair value of the net assets acquired (as currently required) to be measured at fair value; (ii) the step acquisition that 

require, at the time when the goodwill is determined, the revaluation against profit and loss, of the fair value of any non-controlling interest held previously to the 

acquisition; (iii) the costs directly related with the acquisition of a subsidiary will be accounted in profit and loss; (iv) the changes in the estimates of the contingent 

prices are accounted in profit and loss and do not affect goodwill; (v) the changes in percentages of subsidiaries held that do not result in a loss in control are 

accounted as equity changes. 

Additionally, following the changes to IAS 27, the accumulated losses in a subsidiary will be attributed to the non-controlling interests (recognition of negative non - 

-controlling interests) and when a subsidiary is sold with a subsequent loss of control, the remaining non-controlling interests are measured at the fair value determined 

at the date of the transaction. 


IFRS 8 – Operational segments 

The International Accounting Standards Board (IASB) has issued on 30 November 2006 the IFRS 8 Operational segments, which was endorsed by the European 

Commission on 21 November, 2007. This standard is applicable to periods from or on 1 January, 2009. 

IFRS 8 sets out the requirements for disclosures of information about an entity’s operational segments and also about services and products, geographical areas where 

the entity operates and its major clients. This standard specifies how an entity should disclose its information in the annual financial statements and, as a consequential 

amendment to IAS 34 Interim Financial Reporting, regarding the information to be disclosed in the interim financial reporting. Each entity should also provide a 

description of the segmental information disclosed namely profit or loss and of assets, as well as a brief description of how the segmental information is produced. 

Considering the nature of this change (disclosure) the impact will be limited to the presentation of the financial statements. As at 31 December 2008, the Group is 

evaluating the impact of adopting this standard. 

IFRIC 12 – Service Concession Arrangements 

The International Financial Reporting Interpretations Committee (IFRIC) has issued in July, 2007 IFRIC 12 – Service Concession Arrangements, which is applicable 

from 1 January, 2008, although allowing for an early adoption. The endorsement by the European Union was not yet approved. however, it is expected for the first 

quarter of 2009. The IFRIC 12 applies to public-to-private service concession arrangements. This interpretation will be applicable only when (i) the grantor controls 

or regulates what services the operator must provide and (ii) the grantor controls any significant residual interest in the infrastructure at the end of the term of the 

arrangement. 

Considering the nature of the contracts considered, the Group does not expect any impact from the adoption of this interpretation. 

IFRIC 13 – Customer Loyalty Programmes 

The IFRIC 13 Customer Loyalty Programmes was issued on July, 2007 and will be effective from 1 July, 2008, although allowing for an early adoption. 

This interpretation addresses how companies grant their customers loyalty award credits (often called ‘points’) when buying goods or services, allowing them to 

exchange these credits, in the future, by free goods or services or with a discount. 

Considering the available information, it is still not possible to reliably determine the impact of this interpretation and therefore no estimate is presented. However 

the Group is evaluating the impact of adopting this standard. 

IFRIC15 - Agreements for the Construction of Real Estate 

The IFRIC15 - Agreements for the Construction of Real Estate will be effective from 1 January, 2009. 

This interpretation includes guidance that allows determining if a contract for the construction of real estate is within the scope of IAS 18 Revenue or IAS 11 Cons - 

truction Contracts. Is expected that IAS 18 will be applied to a larger number of transactions. 

The Group does not expect this interpretation to have a material impact on its financial statements. 

IFRIC 16 – Hedges of a Net Investment in a Foreign Operation 

The International Financial Reporting Interpretations Committee (IFRIC), issued in July, 2008, IFRIC 16 – Hedges of a Net Investment in a Foreign Operation, with 

mandatory application date for years started after 1 October, 2008, although allowing for an early adoption. 

This interpretation intends to clarify that: 

• The hedge of a net investment in a foreign operation can only be applied to exchange differences resulting from the foreign subsidiaries' financial statements 

conversion from its functional currency to the parent company's functional currency and only for an amount equal or smaller to the subsidiary's net assets; 

• The hedge instrument can be contracted by any of the Group's entities, except by the entity that is being hedged; and 

• At the moment of the hedged subsidiary's sale, the accumulated gain or loss related to the effective hedge component is reclassified to profit and loss.


This interpretation allows an entity that uses the step by step consolidation method to choose an accounting policy that allows determining the accumulated foreign 

exchange conversion adjustment that is reclassified to profit and loss when the subsidiary is sold, as it would do if applying the direct consolidation method. This 

interpretation has a prospective application. 

The Group is evaluating the impact of this interpretation's adoption in its financial statements. 

IFRIC 17 – Distributions of Non-cash Assets to Owners 

The International Financial Reporting Interpretations Committee (IFRIC) issued in November, 2008, IFRIC 17 – Distributions of Non-cash Assets to Owners, with 

effective application date to years started after 1 July, 2009, early adopting being allowed. 

This interpretation intends to clarify the accounting treatment of non-cash assets distribution to owners. It establishes that non-cash assets distributions must be 

accounted at fair value and the difference to the distributed assets carrying amount recognized in profit and loss in the period of the distribution. 


IFRIC 18 – Transfers of Assets from Customers 

The International Financial Reporting Interpretations Committee (IFRIC) issued in November, 2008, IFRIC 18 – Transfers of Assets from Customers, with effective 

application date to years started after 1 July, 2009, early adopting being allowed. 

This interpretation intends to clarify the accounting treatment of agreements through which an entity receives assets from customers for its own use and with the 

intent of establishing a future connection of the clients to a network or of granting continued access to the supply of services and goods to customers. 

The interpretation clarifies: 

• The conditions in which an asset is within the scope of this interpretation; 

• The assets recognition and initial measurement; 

• The identification of the identifiable services (one or more services in exchange for the transferred asset); 

• Revenue recognition; 

• Accounting of money transfers from customers. 


Annual Improvement Project 

In May, 2008, the IASB published the Annual Improvement Project that implied changes to the standards in force. The effective date of the referred changes depends 

on the specific standard, although the majority will be mandatory for the Group in 2009. 

The main changes resulting from the Annual Improvement Project are as follows: 

• Changes to IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations, effective for years starting after 1 July 2009. This change clarifies that all the 

assets and liabilities of a subsidiary must be classified as non-current assets held for sale in accordance with IFRS 5 if a plan for the partial sale of the subsidiary, that 

will imply losing the subsidiary's control, exists. 

This standard will be adopted prospectively by the Group. 

• Changes to IAS 1 Financial Statements presentation, which is applicable from 1 January 2009. The change clarifies that only some financial instruments classified as 

trading instruments are an example of current assets and liabilities. Until this change all trading instruments were classified as current assets and liabilities. 

The Group does not expect any material impact from the adoption of this change. 

• Changes to IAS 16 Property, Plant and Equipment, which is applicable from 1 January 2009. The change that occurred on this standard establishes classification rule 

(i) for the income originated by the sale of rented assets subsequently sold and (ii) for the income from these assets during the period between the date of termination 

of the rental agreement and the date of the sale agreement. 

The Group does not expect any material impact from the adoption of the changes referred above. 

• Changes to IAS 19 Employee Benefits, which is applicable from 1 January 2009. The changes allowed clarifying (i) the concept of negative costs associated to past 

services resulting from changes in the defined benefit plan, (ii) the interaction between the expected return from the assets and the costs of managing the plan, and 

(iii) the distinction between short and medium and long term benefits. 

The changes to IAS 19 will be adopted by the Group in 2009. However, the Group does not expect any material impact from the adoption of the changes referred 

above in its consolidated financial statements. 

• Changes to IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, which is applicable from 1 January 2009. This change established 

that the benefit arising from obtaining a government loan at rates below market rates, should be measured as the difference between the fair value of the liability at 

granting date, determined according with IAS 39 Financial Instruments: Recognition and Measurement and the amount received. This benefit should be subsequently 

accounted according with IAS 20. 

The Group does not expect any significant impact from the adoption of this change. 

• Changes to IAS 23 Borrowing Costs, applicable from 1 January 2009. The concept of borrowing costs was changed to clarify that these costs should be determined 

according with the effective interest rate as defined in IAS 39 Financial Instruments: Recognition and Measurement, thus eliminating the inconsistency between IAS 

23 and IAS 39. 


• Changes to IAS 27 Consolidated and Separate Financial Statements, applicable from 1 January 2009. The change to this standard determines that in the cases when 

an investment in a subsidiary is accounted at fair value in the individual accounts, according with IAS 39 Financial Instruments: Recognition and Measurement and qualifies


for classification as a non-current asset held for sale according with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, the investment should 

continue to be measured as defined in IAS 39. 

This change will not have an impact on the financial statement of the Group considering that, in the individual accounts, the investments in subsidiaries are accounted 

at acquisition cost, according with IAS 27; 

• Change to IAS 28 Investments in Associates, applicable from 1 January 2009. The changes to IAS 28 Investments in Associates had the objective of clarifying (i) that 

an investment in an associate should be treated as a single asset for impairment testing purposes under the scope of IAS 36, (ii) that any impairment loss to be 

recognized shouldn't be allocated to specific assets namely to goodwill and (iii) that the impairment reversions are accounted as an adjustment to the carrying 

amount of the associate as long as and to the extent that the recoverable amount of the investment increases. 


• Change to IAS 38 Intangible Assets, applicable from 1 January 2009. This change determined that an incurred deferred expense related with publicity or promotional 

activities can only be recognized in the balance sheet if an advance payment was made regarding goods and services that will be received in a future date. The 

recognition in profit and loss should occur when the entity has the right to receive the goods and services. 


• Changes to the IAS 39 Financial Instruments: Recognition and Measurement, applicable from 1 January 2009. These changes include mainly (i) the clarification that 

it is possible to perform transfers from and to the category of fair value through profit and loss regarding derivatives, whenever these start or end an hedge relationship 

in cash-flows hedge models or net investment in an associate or subsidiary, (ii) the change to the definition of financial instrument at fair value through profit and loss 

in what relates the trading portfolio, determining that in the case of financial instrument portfolios jointly managed and for which there is evidence of a recent and 

real model of short-term profit taking, these should be classified as trading on initial recognition; (iii) the change to the documentation requirements and the 

effectiveness tests of the hedge relationship for the operational segments defined under the scope of IFRS 8 - Operating Segments; and (iv) the clarification that the 

measurement of a financial liability at amortized cost, after the interruption of the respective fair value hedge relationship, should be performed based on the new 

effective rate calculated at the interruption date. 


• Change to IAS 40 Investment Properties, applicable from 1 January 2009. Following this change, the properties under construction or development for subsequent 

use as investment properties are included under the scope of IAS 40 (before they were included under the scope of IAS 16 Property, Plant and Equipment). These 

properties under construction can be accounted at fair value except if they cannot be reliably measured in which case they should be accounted at acquisition cost. 

The Group is evaluating the impact from the adoption of this change. 

51. Accounting impact arising from the inspection from the supervisory authorities 

In the scope of the investigations which are currently being performed by the supervisory authorities, which are described in note 52, the Bank promoted an internal 

investigation in relation to the transactions realized with off-shore entities. 

This internal investigation identified that, between 1999 and 2002, BCP Group financed off-shore entities for the purposes of acquisition of shares issued by the Group. 

In November 2002, the referred off-shore entities sold, to a financial institution, the BCP shares held, which represented 4.99% of the share capital of the Bank as at 

that date and, simultaneously acquired notes (Notes), issued by that financial institution, with an amount equivalent to 50% of the proceeds from the sale. This financial 

institution communicated to the market, on 9 December 2002, the acquisition of a qualified investment in the Bank. 

The above referred loans were subject to a restructuring, occurred in March 2004, having been assumed by a group whose main activity, developed through the 

company Edifícios Atlântico, S.A., consists on the development of real estate projects (from now on referred to as “GI”). Following this restructuring, GI assumed net 

liabilities amounting to 450 million euros, net of the reimbursement of the Notes occurred in December 2004. On the same date, the Bank sold to GI an entity named 

Comercial Imobiliária, for 26 million euros, and a real estate portfolio for 61 million euros. 

Regarding the above mentioned restructuring, as referred to in note 46, GI through Comercial Imobiliária issued commercial paper in the amount of Euros 210 million 

subscribed by BCP Group and that in 2005 was contributed in kind to the BCP Group Pension Fund and shares issued by quoted companies. As referred in note 

46, after this contribution, and as a result of the communication by Comercial Imobiliária that it didn’t have conditions to meet the instalments, the Pensions Fund 

registered an actuarial loss in the approximate amount of Euros 115,000,000 in 2006 and 2007 related to the commercial paper issued by Comercial Imobiliária. The 

total amount net of amortizations, as at 31 December 2008, in accordance with the accounting policy described in note 1 v), is Euros 98,000,000. The amount will 

be amortized by the remaining term of 17 years with a annual amortization of approximatly Euros 5,750,000. 

Considering the significant exposure of the Bank towards GI and the real-estate sector in which this entity operates, in 2005, the Bank allocated a provision, in the 

amount of 85 million euros, to the existing loans. 

In June 2006, the Bank, which previously had acquired a minority shareholding of 11.5% in Comercial Imobiliária, granted shareholders loans to this entity, in the amount 

of 300 million euros, in order to allow Comercial Imobiliária to acquire, from another GI subsidiary, an indirect majority shareholding in an Angolan entity which owned 

the so called Baía de Luanda Project. This entity had obtained, in October 2005, the concession, for 60 years, of the Baía de Luanda leasehold. With the proceeds 

from this transaction, GI repaid to BCP an additional portion of the loan, corresponding to 305 million euros. 

Considering the significance of the Project, the additional financing requirements for its development and the extent of GI’s indebtedness with BCP, this entity proposed 

and BCP accepted, a holding of 68.34% of Comercial Imobiliária share capital, that at the date held an economic interest of 54% in the Baía de Luanda Project, as a 

repayment of the residual loan, which amounted to 61 million euros, which, in June 2007, extinguished the remaining of the above mentioned net liabilities assumed 

in the amount of Euros 450 million. As a result of this transaction, BCP become owner of 90% of Comercial Imobiliária share capital and, indirectly, of 54% of the 

future economic benefits of the Baía de Luanda project. 

Considering the existing indications arising from the ongoing investigations conducted by the supervisory authorities regarding a more thorough review of the 

economic substance of the above referred transactions, the Bank decided to consider a more prudent interpretation, regarding the risks identified, the nature of 

the transactions and restructurings which occurred, and recorded an adjustment of 300 million euros with effect at 1 January 2006, with a net impact of 220.5 million 

euros after considering the tax effect.


As referred to in note 52, such decision does not represent any kind of recognition by the Bank of the existence of the alleged infractions which may be attributed 

to it. As referred also in note 52, as at 12 December 2008, the Bank was notified for the administrative proceeding nº 24/07/CO constituted by the Bank of Portugal 

and for the administrative proceeding nº 41/2008 constituted by CMVM related to the inquiry processes referred above. The Bank maintains the position of contesting 

any possible infractions attributed to this matter considering the legal terms applicable. Notwithstanding this fact, the Executive Board of Directors considers that the 

financial statements for the years ended 31 December 2008 and 2007 include, in all material respects the disclosures regarding the impact on the financial position 

of the Group of the referred matters, as disclosed in notes 1, 40, 46, 51 and 52. The Executive Board of Directors has maintained contacts with Supervisory Authorities 

regarding this matter. 

It should be noted, in any case, that the Bank maintains its expectation about the future profitability of the Baía de Luanda Project (the market value of which 

attributable to the Group, determined by independent valuers in 2007, is estimated to be between Euros 278.8 million and Euros 231.6 million), which will be 

recognised as income by the Bank when it is generated. 

The above referred adjustment, recognised in accordance with IFRS and in the notes to the financial statements, can be analysed as follows: 

Restated 

Equity Net income Equity 

31.12.2006 2006 01.01.2006 

Euros ’000 

Previosly reported 4,841,892 779,894 4,247,494 

Adjustments: 

Loan granted (300,000) - (300,000) 

Provision for loan losses 9,825 9,825 - 

Deferred tax 76,896 (2,604) 79,500 

Total (213,279) 7,221 (220,500) 

Restated 4,628,613 787,115 4,026,994 

52. Administrative proceedings 

1. At the end of the year of 2007, the Bank received a formal notice dated 27 December 2007 informing that administrative proceeding no. 24/07/CO was being brought 

by the Bank of Portugal against the Bank, “based in preliminary evidence of administrative offences foreseen in the General Framework of credit Institutions and Financial 

Companies (approved by Decree-Law no. 298/92, of December 31), in particular with respect to breach of accounting rules, provision of false or incomplete information to the 

Bank of Portugal, in particular in what respect to the amount of own funds and breach of prudential obligations”. 

A press release issued by the Bank of Portugal on 28 December 2007 mentioned that such administrative proceeding was brought “based in facts related with 17 offshore 

entities, which nature and activities were always hidden from the Bank of Portugal, in particular in previous inspections carried out”. 

On 12 December 2008, the Bank was notified of an accusation under the process of administrative proceeding no. 24/07/CO instructed by the Bank of Portugal. 

The Bank did not accept the charges or accusations against it reduced, and will provide defense under this process of administrative proceeding within their term, which 

ends on 13 March, 2009. 

2. On 12 December 2008, the Bank was notified by the CMVM of accusation under the process of administrative proceeding No. 41/2008. 

The Bank did not accept the accusation made against it and has already provided, on 27 January 2009, defense under the process of administrative proceeding in question, 

having sustained a total rejection of the accusation. 

3. On 21 December 2007, CMVM had addressed a notice to the Bank, indicating that it should make public disclosure thereof, which the Bank did on 23 December 

2007. The notice read as follows: 

“The CMVM, pursuant to its powers, is now engaged in a supervision action on BCP (as a listed company), in order to determine the nature and the activities of several off-shore 

entities responsible for investments in securities issued by BCP Group or related entities. Despite the process of supervision being in progress, in particular in order to obtain a 

complete and final description of the situation and of the market behaviour of those entities, as well as to determine the relevant liabilities (including personal liabilities), the CMVM 

came to the following preliminary findings: 

a) The mentioned off-shore entities have constituted securities portfolios – which included almost exclusively shares of BCP – with financing obtained from Banco Comercial 

Português, and there is, in general, no evidence that such entities were financed for this purpose by any other significant transfer from an entity external to the BCP Group; 

b) It is already known that part of the debts was eliminated through the assignment of credits to third parties for a residual consideration; 

c) The conditions of these financings and the governance of such entities give the appearance that BCP has assumed all the risk concerning those off-shore entities, and that it 

had power to control the life and business of such entities; 

d) Thus, such transactions are in fact the financing for the acquisition of own shares not reported as such. This configuration is also present in a transaction made with a financial 

institution, which lead this institution to disclose a qualified shareholding, even though the economic interest and the possibility of exercising the voting rights remained within 

BCP; 

e) Pursuant to the described circumstances, it may be concluded that the information given to the authorities and to the market, in the past, was not always complete and/or 

true, in particular in what concerns the amount of BCP’s own funds and its owners;


f) Significant market transactions made by the mentioned entities were detected, involving significant considerations; these transactions require a deeper analysis, in order to find 

out about possible infringements of the market rules. 

Thus, given the nature of these conclusions and the urgency of the matter, the CMVM, under article 360º, no. 1, f) of the Portuguese Securities Code, asks BCP to immediately: 

a) Inform the market about whether the financial information recently disclosed by it already reflects all the financial losses pursuant to the above mentioned situation; 

b) Inform about the existence of any other situations which were not disclosed, in order to allow the investors to make a properly reasoned judgment about the securities issued 

by BCP; 

c) Transcribe in its communication the full text of this CMVM notice; BCP may inform, if it deems appropriate, the fact that BCP was not yet formally heard about these conclusions. 

The CMVM will continue the current process of supervision within its powers and with all its consequences, and will notify the appropriate authorities of any illegalities of different 

nature, and will further cooperate with the Bank of Portugal within the framework of Bank of Portugal’s powers.” 

4. In the process mentioned in 1. above, the Bank of Portugal charges the Bank against the practice of six administrative proceedings referred in g) and three administrative 

proceedings referred in r), both of article 211º of the General Framework of Credit Institutions and Financial Companies ("RGICSF”). 

The administrative proceedings, in case the types of conduct listed in the accusation are demonstrated, would be the following: 

a) the breach of accounting rules or procedures set forth in the law or by the Bank of Portugal which does not cause a serious harm to the knowledge of the patrimonial 

and financial standing of the Institution constitutes an administrative offence foreseen in article 210º, f), of RGICSF, punished, in the case of companies, with a fine 

between Euros 750 and Euros 750,000. If, on the other hand, the relevant conduct causes such serious harm, that may constitute an administrative offence foreseen in 

article 211º, g), of RGICSF, punished, in the case of companies, with a fine between Euros 2,500 and Euros 2,494,000. 

b) The (i) omission of information and communications due to the Bank of Portugal in the relevant delays; or (ii) the provision of incomplete information, constitute an 

administrative offence foreseen in article 210º, h) (now i)), of RGICSF, punished, in the case of companies, with a fine between Euros 750 and Euros 750,000. On the 

other hand, the provision to the Bank of Portugal of (i) false information, or (ii) incomplete information, capable of leading to erroneous conclusions with identical or 

similar effect to that of the provision of false information on the matter constitute an administrative offence foreseen in article 211º, r), of RGICSF, punished, in the case 

of companies, with a fine between Euros 2,500 and Euros 2,494,000; 

According to the accusation, each of the administrative proceedings are punished by a fine between Euros 2,493.99 and Euros 2,493,989.49, which, according to the 

rule of the contest of offenses foreseen in the article 19º, no. 1 and 2 of the General of the Administrative Proceedings, in case of conviction of several administrative 

proceedings in contest, there can only be one fine, of which the upper limit can not exceed twice the highest limit of administrative proceedings in contest. 

5. In the accusation notified to the Bank in the administrative proceeding no. 41/2008 CMVM referred in 2. above, the Bank is charged against seven administrative 

proceeding for alleged violation of article 7. Portuguese Securities Code ( "CVM") and article 389º, paragraph 1, a) of the CVM. 

Pursuant to article 7 of the CVM, the information relating to financial instruments, securities markets, financial intermediation activities, settlement and clearing of 

transactions, public offers and issuers should be complete, truthful, up-to-date, clear, objective and lawful. 

According to the accusation, each of the administrative proceedings are punished by a fine between Euros 25,000 and Euros 2,500,000, which, according to the rule of 

the contest of offenses foreseen in the article 19º, no. 1 and 2 of the General of the Administrative Proceedings, in case of conviction of several administrative proceedings 

in contest, there can only be one fine, of which the upper limit can not exceed twice the highest limit of administrative proceedings in contest, in the maximum amount 

of Euros 5,000,000.


53. BCP list of subsidiary companies 

As at 31 December 2008, the Banco Comercial Português S.A list of subsidiary companies included in the consolidated accounts using the purchase method according, 

were as follows: 

Head Share % 

Subsidiary companies office capital Currency Activity held 

Bank Millennium, S.A. Warsow 849,181,744 PLN Banking 65.5 

Banco Millennium Angola, S.A. Luanda 2,008,956,625 AOA Banking 100.0 

Banco de Investimento Imobiliário, S.A. Lisbon 157,000,000 EUR Banking 100.0 

Banco Millennium BCP Investimento, S.A Lisbon 75,000,000 EUR Banking 100.0 

BCP Capital Finance Limited George Town 16,000,000 USD Investment 100.0 

BCP Investment, BV Amsterdam 620,774,050 EUR Holding company 100.0 

BCP Internacional II, S.G.P.S., Funchal 25,000 EUR Holding company 100.0 

Sociedade Unipessoal, Lda. 

Banpor Consulting S.R.L. Bucharest 1,750,000 RON Services 100.0 

BitalPart, B.V. Rotherdam 19,370 EUR Holding company 100.0 

Caracas Financial Services, Limited George Town 25,000 USD Financial Services 100.0 

Comercial Português Ireland Limited Dublin 10,000 EUR Financial Services 100.0 

Interfundos Gestão de Fundos de Lisbon 1,500,000 EUR Investment fund management 100.0 

Investimento Imobiliários, S.A 

Millennium bcp - Escritório de Sao Paulo 16,874,724 BRL Financial Services 100.0 

Representações e Serviços, S/C Ltda. 

Millennium bcp - Gestão de Fundos de Lisbon 6,720,691 EUR Investment fund management 100.0 

Investimento, S.A. 

Millennium bcp - Prestação de Serviços, A. C. E. Lisbon 329,500 EUR Services 52.7 

Millennium bcp - Serviços de Comércio Lisbon 240,000 EUR Videotex services 100.0 

Electrónico, S.A. 

Paço de Palmeira - Sociedade Braga 39,905 EUR Agriculture industry 100.0 

Agrícola e Comercial, Lda 

Servitrust - Trust Management and Services, S.A. Funchal 100,000 EUR Trust services 100.0 

Comercial Imobiliária, S.A. Lisbon 293,747,255 EUR Real-estate management 99.9 

Seguros & Pensões Gere, S.G.P.S., S.A. Lisbon 380,765,000 EUR Holding company 89.0 

As at 31 December 2008, the associated companies , were as follows: 

Head Share % 

Associated companies office capital Currency Activity held 

Banque BCP, S.A.S. Paris 65,000,000 EUR Banking 19.9 

SIBS - Sociedade Interbancária de Serviços, S.A. Lisbon 24,642,300 EUR Banking services 21.5 

Unicre - Cartão de Crédito Internacional, S.A. Lisbon 10,000,000 EUR Credit cards 30.0

228 Annual Report Volume II Declaration of Compliance 

Declaration of Compliance

Annual Report Volume II Declaration of Compliance 229 


It is declared, that in the extent of the knowledge of the below signed, the individual and 

consolidated financial statements of Banco Comercial Português, S.A. (“BCP” or “Bank”), which 

comprehend (i) the individual and consolidated balance sheet as at December 31, 2008, (ii) the 

individual and consolidated income statements, the changes in equity and the cash flow statement 

for the year ended December 31, 2008, (iii) a summary of the significant accounting policies and 

(iv) the notes to individual and consolidated accounts, give a true and appropriate image of the 

individual and consolidated financial position of the Bank as at December 31, 2008 and of the 

individual and consolidated income of their operations and changes in the equity and of their 

individual and consolidated cash flow statements for the year ended in that date according to the 

Adjusted Accounting Standards (NCA) as defined by the Bank of Portugal and International 

Financial Reporting Standards (IFRS) as endorsed by the European Union, respectively. 

The individual and consolidated financial statements of the Bank for the year ended December 

31, 2008 were approved by the Executive Board of Directors on February 11, 2009. 

It is also declared that the 2008 management report of BCP truly describes the evolution of the 

businesses, of the performance and position of the Bank and its subsidiaries included in the 

consolidation perimeter, and contains a description of the main risks and uncertainties that they 

face. The management report was approved by the Executive Board of Directors in its meetings 

on February 11, 2009. 

Porto Salvo, 11 February, 2009 

Carlos Santos Ferreira 

(Chairman) 

Armando Vara 

(Vice-Chairman) 

Paulo Macedo 

(Vice-Chairman) 

José João Guilherme 

(Member) 

Nelson Machado 

(Member) 

Luís Pereira Coutinho 

(Member) 

Vítor Fernandes 

(Member)

230 Annual Report Volume II External Auditor’s Report 

External Auditor’s Report

Annual Report Volume II External Auditor’s Report 231

232 Annual Report Volume II External Auditor’s Report


234 Annual Report Volume II External Auditor’s Report


236 Annual Report Volume II Corporate Governance Report 

Corporate 

Governance Report

Annual Report Volume II Corporate Governance Report 237

238 Annual Repport Volume II Corporate Governance Report

Annual Report Volume II Corporate Governance Report 239 

Corporate 

Governance Report 

Introduction 

The objective of the present report is to describe the Corporate Governance practices followed 

by Banco Comercial Português, in a clear and comprehensive way. 

For purposes of increased transparency and an easier comparison and search, the present report 

was elaborated according to the format annexed to the CMVM (Portuguese Stock Market 

Regulator) Regulation 1/2001, with the changes introduced by the CMVM Regulation 5/2008, 

and has taken into consideration the recommendations included in the Corporate Governance 

Code. 

Index 

240 Chapter 0 Compliance Statement 

254 Chapter I General Meeting 

259 Chapter II Manegement and Supervisory Bodies 

284 Chapter III Information


Chapter 0 – Compliance 

Statement 

The Code of Conduct enumerates the principles and rules to be observed in banking practice, 

regarding financial activities as well as operations involving securities and related assets traded in 

organised markets, particularly with respect to matters regarding conflict of interests, secrecy 

and incompatibilities. The above-mentioned code is disclosed to all employees, who are given a 

copy at the time of their respective contracting and to which permanent access is ensured either 

through the internal portal (Intranet), either through the Internet Portal. 

The Internal Regulations Relative to the Financial Intermediation Activities establish the 

fundamental rules and procedures, as well as general rules of conduct to be observed in activities 

developed by the Bank as a financial intermediary and are disclosed to employees via the internal 

portal (Intranet), and also in the internet 

The Terms of Reference of the Management and Supervisory Bodies establish their duties and 

scope of action and regulate the functioning of these bodies and standards of conduct of the 

respective members, complementing the Bank’s Articles of Association, the Group’s Code of 

Conduct and Internal Regulations Relative to the Financial Intermediation Activities. 

These documents are provided to the members of each of these bodies upon their election or 

appointment. 

Indication of the place where the texts on corporate governance codes are available to the 

public, and to which the issuer is subject and, if applicable, those to which it has voluntarily 

chosen to be subject. 

The activities of the Bank and Group Millennium bcp follow the rules of conduct established 

by the Bank of Portugal and CMVM, applicable to credit institutions and to the members of 

their governing bodies, as well as a set of own regulations ensuring that management is based 

on the principle of risk diversification and application security, taking into account the interests 

of depositors, investors and other Stakeholders. In this respect, the professional secrecy regime 

is adhered to, applicable to members of management and supervisory bodies, employees, 

attorneys and any service providers, who may not reveal or use information relative to facts 

or elements involving the institution or its relationships with customers. 

The Code of Conduct, the Internal Regulations Relative to Financial Intermediation Activities, 

the Terms of Reference of the Supervisory Board, Executive Board of Directors and the 

Compliance Manual describe the duties and obligations applicable not only to the activities of 

Banco Comercial Português, as a cohesive entity, but also to the individual behaviour of each 

employee and member of the management and supervisory bodies of the Bank and Group, in 

the exercise of their respective functions.


The Compliance Manual enumerates a set of principles, rules and procedures, the objective of 

which is to ensure that the members of the Management and Supervisory Bodies and other 

employees of the Group guide their actions by the applicable internal and external laws and 

regulations, both in spirit and wording, business standards of the Bank and its associates, in order 

to prevent the risk of financial loss or damage to image and reputation. In all countries where the 

Group is present through a controlled entity, compliance with country legislation is ensured, with 

the local Compliance Officer being responsible for this compliance. This Manual is disclosed to 

all employees via the internal portal (Intranet). 

Description of the recommendations contained 

in the Corporate Governance Code of the CMVM 

Recommendation 

1. General Meeting 

1.1. General Meeting Board 

1.1.1. The Chairman of the General Meeting 

Board shall be equipped with the necessary 

and adequate human resources and logistic 

support, taking the financial position 

of the company into consideration. 

Compliance 

Compliance 

Development of the issue 

in the present 

Report and justification 

of non-compliance 

Chapter I 

Introdução 

I.1.2. The remuneration of the Chair 

of the General Meeting Board shall 

be disclosed in the annual report 

on corporate governance. 

Compliance 

Chapter I 

1.3. 

1.2. Participation at the Meeting 

1.2.1. The obligation to deposit or block 

shares before the General Meeting, 

contained in the articles of association, 

shall not exceed 5 working days. 

Compliance 

Chapter I 

1.4. 

I.2.2. Should the General Meeting 

be suspended, the company shall 

not compel share blocking during 

that period until the meeting is resumed 

and shall then follow the standard 

requirement of the first session. 

Compliance 

Chapter I 

1.5. 

I.3. Voting and Exercising Voting Rights 

I.3.1. Companies may not impose 

any statutory restriction on postal voting. 

Compliance 

Chapter I 

1.8. 

I.3.2. The statutory deadline for receiving 

early voting ballots by mail shall not exceed 

3 working days. 

Compliance 

Chapter I 

1.10. 

(continues)




I.3.3. The company’s articles of association 

shall provide for the one share-one vote 

principal. 

Compliance 

Not Complied 





Each 1,000 euros of capital corresponds 

to 1 vote and the shares have the 

nominal value of €1 each. Considering 

the number of shareholders present 

in the last General Meetings of the 

Bank, between 350 and 950 and those 

present or represented, between 

1,500 and 3,500, and since shareholders 

holding less than €1,000 of capital may 

form groups and in this way 

be represented at the Meeting, 

the adoption of this measure will 

not achieve any effective benefit 

in the defence of shareholders’ rights. 

To the contrary, its adoption 

may transform the General Meetings 

into overcrowded meetings, difficult 

to control, which would effectively 

be harmful to the defence 

of shareholder rights, by making 

any intervention requests 

as well as the sheer number 

uncontrollable, facilitating chaos 

and preventing a more thorough 

and clarifying debate on Company 

related issues which require greater 

and more in-depth detail in the debate. 

I.4. Quórum and Resolutions 

I.4.1. Companies shall not set a constitutive 

or deliberating quorum that outnumbers 

that which is prescribed by Law. 

Not complied 

The statutory constitutive quorum 

is 1/3 of the share capital, except 

for Meetings resolving on mergers, 

demergers or transformation 

in which the constitutive quorum 

is half of the share capital. 

The deliberative quorum established 

in the articles of association 

corresponds to the one established 

by law, with the exception 

of resolutions on the company’s 

merger, demerger and transformation, 

operations which require 3/4 

of the votes issued in order 

to be approved. The Bank considers 

it potentially harmful to the interests 

of its shareholders for the General 

Meeting to be held with whatever 

(continues)




Compliance 





number of shareholders is present, 

also being of the opinion 

that for the best defence 

of the shareholders, resolutions which 

significantly and in a potentially 

irreversible manner affect 

the company’s structure, should 

necessarily deserve the approval 

of a relevant number of shareholders. 

I.5. Attendees List, Minutes 

and Information on Resolutions Passed 

I.5.1. The minutes of the General Meetings 

shall be made available to shareholders 

on the company’s website within a 5 day 

period, irrespective of the fact that such 

information may not be legally classified 

as material information. The list of attendees, 

agenda items of the minutes and resolutions 

passed during such meetings shall be kept 

on file on the company’s website 

for a 3 year period. 

Complied 

The Bank maintains, on its Internet site, 

historical records of the attendances, 

agendas, resolutions adopted and 

percentage of votes cast, of the last 

3 years, having sent the minutes 

of the General Meetings free of charge 

to shareholders requesting such, 

as well as provided access 

to the attendance lists. 

I.6. Measures on Corporate Control 

I.6.1. Measures aimed at preventing 

successful takeover bids, shall 

respect both the company’s and 

the shareholders’ interests. 

Complied 

The company considers that 

no measures whatsoever exist that, 

in detriment of the interests 

of the company and majority 

of its shareholders, seek to prevent 

the success of public takeover bids. 

In contrast, the existence 

of a limitation on voting rights 

(10% of the votes corresponding 

to the entirety of share capital), 

far from seeking to prevent 

the success of public takeover bids, 

ensures that small and medium-sized 

Shareholders are entitled to have 

a more effective influence 

on decisions which, on these 

or other matters, are submitted 

to the General Meeting. 

1.6.2. In observance to the principle 

of the previous sub-paragraph, 

the company’s articles of association that 

Complied 

In the 2008 Annual General Meeting 

was approved by 99.99% of the votes 

expressed a proposal that, objectively, 

(continues)




restrict/limit the number of votes that 

may be held or exercised by a sole 

shareholder, either individually 

or in concert with other shareholders, 

shall also foresee for a resolution 

by the General Meeting, (5 year intervals, 

at least) on whether that statutory 

provision is to prevail – without super 

quorum requirements as to the one legally 

in force – and that in said resolution, 

all votes issued be counted, without 

applying said restriction. 

Compliance 





changed the referred limitation, 

which started to be measured 

not in relation to the share capital 

present at each moment in the General 

Meeting, but in relation to the totality 

of the share capital. All the shareholders 

affected by the mentioned vote 

limitation voted this proposal favourably. 

I.6.3. In cases such as change of control 

or changes to the composition 

of the Board of Directors, defensive 

measures should not be adopted 

that instigate an immediate and serious 

asset erosion in the company, and further 

disturb the free transmission 

of shares and voluntary assessment 

of the performance of the Board 

of Directors by the shareholders. 

Complied 

There are no measures whatsoever 

with these characteristics. 

1I. Management and Supervisory 

Boards 

II.I. Geral Points 

II.1.1. Structure and Duties 

II.1.1.1. The Board of Directors 

shall assess the adopted model 

in its governance report 

and pin-point possible hold-ups 

to its functioning and shall propose 

measures that it deems fit for surpassing 

such obstacles. 

Complied 

Chapter II 

Introduction 

II.1.1.2. Companies shall set up internal 

control systems in order to efficiently detect 

any risk to the company’s activity 

by protecting its assets and keeping 

its corporate governance transparent. 

Complied 

Chapter II 

II.4 

II.1.1.3. The Management and Supervisory 

Boards shall establish internal regulations 

and shall have these disclosed 

on its website. 

Complied 

As follows from the consultation 

to the Bank’s institutional Internet site. 

(continues)




II.1.2. Governance Incompatibility 

and Independence 

II.1.2.1. The Board of Directors 

shall include a number of non-executive 

members that ensure the efficient 

supervision, auditing and assessment 

of the executive members’ activity. 

Compliance 

Not applicable 





In the governance model adopted 

by the Bank, the supervision 

of the executive directors 

is committed to an autonomous 

body called the Supervisory Board. 

The majority of the members 

of this body is independent, being 

mandatorily composed of a number 

of members greater than that 

of the Executive Board of Directors, 

therefore it is considered 

that the objective of the present 

recommendation has been achieved. 

II.1.2.2. Non-executive members must 

include an adequate number of independent 

members. The size of the company 

and its shareholder structure must be taken 

into account when devising this number 

and may never be less than a fourth 

of the total number of Directors. 


In the governance model adopted 

by the Bank the present recommendation 

should be considered as regarding 

the Supervisory Board, the majority 

of members of which is independent, 

therefore it is considered that 

the objective of the present 


II.1.3. Eligibility Criteria for Appointment 

II.1.3.1. Depending on the applicable 

model, the Chair of the Audit Board, 

the Audit Committee or the Financial 

Matters Committees shall be independent 

and be adequately capable to carry 

out its duties. 

Complied 

Chapter II 

II.2 

Annex VI 

II.I.4. A Policy on the Reporting 

of Irregularities 

II.1.4.1. The company shall adopt 

a policy whereby irregularities occurring 

within the company, are reported. 

Such reports should contain the following 

information: i) the means through 

which such irregularities may 

be reported internally, including 

the persons that are entitled 

to receive the reports; ii) how 

the report is to be handled, including 

Complied 

Chapter III 

II.3 – Client Ombudsman 

Chaptert II 

II.22 

(continues)




confidential treatment, should 

it be required by the reporter. 

the declarant. 

Compliance 





II.1.4.2 The general guidelines 

on this policy should be disclosed 

in the corporate governance report. 

II.1.5. Remuneration 

II.1.5.1 The remuneration 

of the members of the Board of Directors 

shall be aligned with the interests 

of the shareholders. Thus: 

i) The remuneration of Directors carrying 

out executive duties should be based 

on performance and a performance 

assessment shall be carried 

out periodically by the competent 

body or committee; ii) the level 

of remuneration shall be consistent 

with the maximization of the long 

term performance of the company, 

and shall be dependent 

on sustainability of the levels 

of the adopted performance; 

iii) when the remuneration 

of non-executive members of the Board 

of Directors is not legally imposed, 

a fixed amount should be set. 

Complied 

Complied 

Chapter II 

II.3 Client Ombudsman 

Chapter II 

II.22 

Chapter II 

II.18 

Chapter II 

II.20 

II.1.5.2. The Remuneration Committee and 

the Board of Directors shall submit 

a statement on the remuneration policy 

to be presented at the Annual 

Shareholders General Meeting 

on the Management and Supervisory 

bodies and other directors as provided 

for in Article 248/3/b of the Securities 

Code. The shareholders shall 

be informed on the proposed criteria 

and main factors to be used 

in the assessment of the performance 

for determining the level (share bonuses; 

option on share acquisition, annual 

bonuses or other awards). 

Complied 

Chapter II 

II.18 

Annex III 

There are not any remuneration criteria 

or other that distinguish the directors 

in the meaning of the nr. 3 of the article 

248.-B of the Securities Markets Code 

of the remaining senior management 

members of the Group, so: 

The respective remuneration 

comphreends the base remuneration: 

of the Collective Labour Agreement 

(ACT) classification level, added 

of a complement that integrates 

(continues)




Compliance 





the compensation corresponding 

to the exemption of working hours, 

to the principle of exclusive dedication, 

to the diuturnity and other subsidiary 

included in the ACT. 

The individual differentiation equally 

adopted by the remaining employees 

of the Bank is based on the following 

criteria; ACT classification level; Level 

of Seniority; Individual Merit; Level 

of reponsibility. 

The process of bonus attribution 

is based on the same principles 

of the other employees and varies 

individually according to the following 

factors: Result of the individual 

performance, in terms 

of de degree of realisation of objectives; 

Value of the gross monthly remuneration. 

II.1.5.3. At least one of the Remuneration 

Committee’s representatives shall 

be present at the Annual Shareholders’ 

General Meeting. 

Complied 

Both members of the Remunerations 

and Welfare Board elected 

by the General Meeting, as well 

as the members of the Nomination 

and Remuneration Committee 

of the Supervisory Board 

have always been present at the General 

Meetings of the Bank. 

II.1.5.4. 4 A proposal shall be submitted 

at the General Meeting on the approval 

of plans for the allotment of shares 

and/or options for share purchase 

or further yet on the variations in share 

prices, to members of the Management 

and Supervisory Boards and other 

Directors within the context of Article 

248/3/B of the Securities Code. 

The proposal shall mention 

all the necessary information 

for its correct assessment. The proposal 

shall contain the regulation plan 

or in its absence, the plan’s general 

conditions. The main characteristics 

of the retirement benefit plans 

for members of the Management 

Complied 

At present none of these plans exist, 

however, during the periods when they 

did exist they were not addressed 

to the members of the corporate bodies 

(Management or Supervisory), but were 

submitted to the General Meeting. 

Chapter II 

II.18 

Annex IV 

The principes rulling the retiremet 

conditions of the directors, in the meaning 

of the nr. 3 of the article 248.º – B 

of the Securities Market Code are 

(continues)




and Supervisory Boards and other 

Directors within the context of Article 

248/3/B of the Securities Code, shall also 

be approved at the General Meeting. 

Compliance 





common to all the Bank’s employees. 

II.1.5.5. The remuneration of the members 

of the Management and Supervisory 

Boards shall be individually and annually 

disclosed and, information on fixed 

and variable remuneration must be 

discriminated as well as any other 

remuneration received from other 

companies within the group 

of companies or companies controlled 

by shareholders of qualifying holdings. 

Complied 

The Bank considers that the global 

disclosure of the remuneration 

of the Executive Board of Directors, 

as well as the remuneration policy 

of the Executive Directors which 

by it self is clear concerning 

the repartition of the remuneration 

between the several Executive 

Directors mainly in years 

in which, as the current one, 

and in the sequence of the proposal 

of Executive Board of Directors itself 

the Executive Board of Directors 

will not receive variable remuneration, 

is the appropriate and sufficient 

method to fully meet the objective 

of the present recommendation, 

while safeguarding the privacy 

of the majority of the members 

of the Board of Directors. 

II.2. Board of Directors 

II.2.1. Within the limits established 

by Law for each Management 

and Supervisory structure, and unless 

the company is of a reduced size, the Board 

of Directors shall delegate the day-to-day 

running and the delegated duties should 

be identified in the Annual Report 

on Corporate Governance. 


Since the Board of Directors 

is Executive, there is no delegation 

of duties in the strict sense of the term, 

although there is a clear distribution 

of responsibilities, as noted in Page 268 

Therefore it is considered that 



II.2.2. The Board of Directors shall ensure 

that the company acts in accordance with 

its goals, and should not delegate its duties, 

namely in what concerns: i) definition 

of the company’s strategy and general 

policies; ii) definition of the corporate 

structure of the group; iii) decisions 

taken that are considered to be strategic 

due to the amounts, risk and particular 

characteristics involved. 


The Executive Board of Directors 

does not delegate any of the duties 

referred to in the present 

recommendation, since it is certain 

that, under the terms of the law 

and the bank’s articles of association, 

and due to the two-tier model 

adopted by the company, 

the matters identified in sub-paragraphs 

i), ii) and iii) are necessarily submitted 

(continues)




Compliance 





for appraisal to the Supervisory Board. 




II.2.3. Should the Chair of the Board 

of Directors carry out executive duties, 

the Board of Directors shall set up efficient 

mechanisms for coordinating non-executive 

members that can ensure that these may 

decide upon, in an independent and informed 

manner, and furthermore shall explain these 

mechanisms to the shareholders 

in the corporate governance report. 


By guaranteeing total autonomy between 

the Supervisory Board and the Executive 

Board of Directors, the governance 

model adopted by the Bank, by definition, 

meets the objective of the present 

recommendation. Therefore it is considered 

that the objective of the present 


II.2.4. The annual management report shall 

include a description of the activity carried 

out by the non-executive Board Members 

and shall mention any restraints encountered. 


Given that the governance regimen 

adopted by the Bank does not apply, 

the questions that the present 

recommendation aims to cover 

are in the Supervisory Board, which 

is part of this Report. 

All the members of the Executive 

Board of Directors are still completing 

their first term-of-office. 

II.2.5. The management body should 

promote member replacement 

for financial matters at least after 

a 2 year term-of-office. 

Complied 

All the members of the Executive 

Board of Directors are still completing 

their first term-of-office. 

II.3 Chief Executive Officer (CEO), 

Executive Committee and Executive 

Board of Directors 

II.3.1. When Directors that carry 

out executive duties are requested by other 

Board Members to supply information, 

the former shall do so in a timely manner 

and the information supplied must 

adequately suffice the request made. 

Complied 

This recommendation is fully 

complied with, as results from 

the opinions of the Supervisory 

Board and the Committee 

on Financial Matters, as well 

as the opinion of the Statutory 

Auditor and External Auditor, which is 

part of this Report. 

II.3.2 The Chair of the Executive 

Committee shall send the convening 

notices and minutes of the meetings 

to the Chair of the Board 


Given that the governance regimen 

adopted by the Bank does not apply, 

the questions that the present 

recommendation aims to cover are fully 

(continues)




of the Directors and, when applicable, 

to the Chair of the Supervisory Board 

or the Auditing Committee. 

Compliance 





saveguard, as results form the answer 

to the recommendation II.3.3. 




II.3.3 The Chair of the Executive Board 

of Directors shall send the convening 

notices and minutes of the meetings 

to the Chair of the General 

and Supervisory Board and to the Chair 

of the Financial Matters Committee. 

Complied 

The folder relative to each 

meeting of the Executive Board 

of Directors, including the draft 

minutes for approval, agenda 

and supporting documents, 

are sent to the Office 

of the Chairman of the Supervisory 

Board, structure that also supports 

the Financial Matters Committee, 

on the same date as it is distributed 

to the Executive Directors. 

II.4. General and Supervisory Board, 

Financial Matters Committee, Audit 

Committee and Audit Board 

II.4.1. Besides fulfilling its supervisory 

duties, the General and Supervisory 

Board shall advise, follow-up and carry 

out on an on-going basis, the assessment 

on the management of the company 

by the Executive Board of Directors. 

Besides other subject matters, 

the General and Supervisory Board shall 

decide on: i) definition of the strategy 

and general policies of the company; 

ii) the corporate structure of the group; 

and iii) decisions taken that 

are considered to be strategic 

due to the amounts, risk and particular 

characteristics involved. 

Complied 

Compliance with this recommendation 

results from the duties attributed 

by law and by the articles of association 

to the Supervisory Board. Due 

to its legal and statutory duties, 

it is the responsibility 

of the Supervisory Board to express 

an opinion on all matters referred 

to in i), ii) and iii). Therefore 

it is considered that the objective 

of the present recommendation 

has been achieved. 

II.4.2. The annual reports and financial 

information on the activity carried 

out by the General and Supervisory 

Committee, the Financial Matters 

Committee, the Audit Committee 

and the Audit Board shall 

be disclosed on the company’s 

website together with the financial 

statements. 

Complied 

As results from the contents 

of the page on the Bank’s Internet 

site relative to the General Meeting. 

(continues)




II.4.3 The annual reports on the activity 

carried out by the General 

and Supervisory Board, the Financial 

Matters Committee, the Audit 

Committee and the Audit Board 

shall include a description 

on the supervisory activity 

and shall mention any restraints 

that they may have come up against. 

Complied 

Compliance 






Supervisory Board and Audit and Risk 

Committee Reports, that is part 

of this Report. 

II.4.4 The Financial Matters Committee, 

the Audit Committee and the Audit Board 

(depending on the applicable model) 

shall represent the company for all 

purposes at the external auditor, 

and shall propose the services supplier, 

the respective remuneration, ensure 

that adequate conditions for the supply 

of these services are in place within 

the company, as well 

as being the liaison officer between 

the company and the first recipient 

of the reports. 

Complied 

The Audit and Risk Committee 

is the first receiver of the Reports 

of the Statutory Auditor and External 

Auditors, regularly meeting with 

the CFO, Risk Officer, Compliance 

Officer and Person Responsible 

for the Internal Audit, having 

the capacity to question 

any person responsible as considered 

appropriate. The Supervisory Board, 

through the Audit and Risk Committee, 

also selects the Statutory Auditor 

and the External Auditor whose election 

is proposed at the General Meeting, 

supervising the establishment 

of the respective remuneration 

and conditions for the appropriate 

exercise of the respective functions. 

II.4.5 According to the applicable 

model, the Financial Matters Committee, 

Audit Committee and the Audit Board, 

shall assess the external auditor 

on an annual basis and advise 

the General Meeting that 

he/she be discharged whenever justifiable 

grounds are present. 

Complied 


Audit and Risk Committe. 

II.5. Special Committees 

II.5.1 Unless the company is of a reduced 

size and depending on the adopted model, 

the Board of Directors and the General 

and Supervisory Committees, shall 

set up the necessary Committees 

in order to: i) ensure that a competent 

and independent assessment 

Complied 

The Supervisory Board created three 

Committees within it, aimed 

at achieving the objectives of the present 

recommendation: Committee for Financial 

Matters, named Audit and Risk 

Committee, The Nomination 

and Remunerations Committee 

(continues)




of the Executive Directors’ performance 

is carried out, as well as its own overall 

performance and further yet, 

the performance of all existing 

Committees; ii) study the adopted 

governance system and verify its efficiency 

and propose to the competent bodies, 

measures to be carried out with 

a view to its improvement. 

Compliance 





and the Corporate Governance 

Committee. 

Chapter II 

II 


Supervisory Board Report, which 

is part of this Report. 

II.5.2 Members of the Remuneration 

Committee or alike, shall be independent 

from the Members of the Board 

of Directors. 

Complied 

Both Remuneration and Welfare Board 

members and Nomination 

and Remunerations Committee 

members are independent from 

the management board. 

II.5.3 All the Committees shall draw 

up minutes of the meetings held. 

Complied 

Compliance with this recommendation 

results from the terms of reference 

of these committees. 

III. Information and Auditing 

III.1. General Disclosure Duties 

III.1.2 Companies shall maintain 

permanent contact with the market 

thus upholding the principle of equality 

for shareholders and ensure that investors 

are able to access information 

in a uniform fashion. To this end, 

the company shall create 

an Investor Assistance Unit. 

Complied 

Chapter III 

III.12 

III.1.3 The following information 

that is made available on the company’s 

Internet website, shall be disclosed 

in the English language: a) The company, 

public company status, headquarters 

and remaining data provided for 

in Article 171 of the Commercial 

Companies Code; b) Articles 

of Association; c) Credentials 

of the members of the Board 

of Directors and the Market Liaison 

Officer; d) Investor Assistance Unit 

– its functions and access tools; 

Complied 

As results from consulting the site. 

(continues)




e) Accounts Reporting documents; 

f) Half-Yearly Calendar 

on Company Events; g) Proposals 

sent through for discussion and voting 

during the General Meeting; 

h) Notices convening meetings. 

Compliance 





The considerations relative to the independence of the members of 

the corporate boards to which this qualification is applicable, are in 

the declaration of the Corporate Governance Committee inserted in 

the Chapter I and Chapter II of this Report.


Chapter I – General Meeting 

The General Meeting is the highest corporate body, representing all shareholders. This body is 

responsible for electing and dissolving its own Board, members of the Management and 

Supervisory Bodies, approving alterations to the articles of association, resolving on reports, 

accounts and proposals on the appropriation of profits, on any matters submitted at the request 

of the Management and Supervisory Bodies and, in general, on all matters specifically attributed 

to it by the law or the company’s articles of association, or which have not been attributed to 

other corporate bodies. 

The resolutions of the General Meeting are taken by simple majority of votes issued, except in 

cases where legal or statutory provisions require a qualified majority. Resolutions on alterations 

to the articles of association being a particular example of the latter, which should be approved 

by two thirds or three quarters of the votes cast, in accordance with article 21 of the 

abovementioned articles of association. 

The Chairman of the Board of the General Meeting is provided with the respective supporting 

human and logistical resources, throughout the entire year by the Company Secretary and 

respective Office and, in each General Meeting and its preparatory period, by a Work Group 

especially constituted for the effect which, in addition to the Company Secretary, includes 

members of the Operations, Information Technology, Mobile Internet Direct Banking Division 

and Audit Departments. International External Audit services are also contracted to certify the 

voting procedures. 

I.1. Identification of the members of the board of the general meeting 

The Board of the General Meeting is composed by: 

• Chairman – António Manuel da Rocha e Menezes Cordeiro (independent) 

• Vice-Chairman – Manuel António de Castro Portugal Carneiro da Frada (independent) 

Due to her functions as Company Secretary, Ms. Ana Isabel dos Santos de Pina Cabral, also acts 

as the Board Secretary. 

I.2. Indication of the beginning and end of the respective term-of-offices 

The current term-of-office of the elected members of the Board of the General Meeting is 2008/ 

2010. 

I.3. Indication of the remuneration of the chairman of the board of the 

general meeting 

The annual remuneration of the Chairman of the Board was established by the Remunerations 

and Welfare Board, for 2008, at 150 thousand euros.


I.4. Indication of the time required in advance for the deposit or blocking 

of shares for participation in the general meeting 

The Financial Institution where the shares are registered confirms the legitimacy for the exercise 

of voting rights. The document certifying the quantity of shares held by the shareholder on the 

the 5 th business day before the date of the General Meeting, and the blocking of the shares on 

that same date, should be received at the Bank by 17:00 hours on the second last business day 

before the meeting date. 

I.5. Indication of the rules applicable to the blocking of shares in the case 

of the suspension of the general meeting 

Whenever the Meeting is suspended for continuation on a later date, the shareholders should 

send the Bank a new statement confirming their quality on the 5 th business day before the date 

booked for the continuation of the General Meeting, since the certificate for the blocking of 

shares issued by the entities registering the shares is valid only for the date of the initial session 

of the Meeting. 

I.6. Number of shares corresponding to one vote 

Each 1,000 euros of capital corresponds to one vote. Shareholders holding a smaller number of 

shares may group themselves in order to complete the minimum required and are represented 

by a person with full legal capacity. 

Each share has the nominal value of 1 euro. 

I.7. Existence of statutory rules on the exercise of voting rights 

The Bank ensures the effective exercise of the corporate rights of its Shareholders through a 

series of mechanisms, in particular those relative to participation in General Meetings and exercise, 

therein, of voting rights. 

Hence, for each General Meeting, the Bank ensures the full and timely disclosure of the event: 

a) by sending the shareholders mentioned in the list prepared by the Bank, updated as near as 

possible to the date booked for the Meeting, a copy of the respective call notice, as well as a 

letter of the Chairman of the Board explaining the various possible ways of participating in the 

General Meeting (through attendance, representation, or voting by postal ballot or electronic 

means) and forms to be used in each of these circumstances. A pre-paid envelope (SASE) 

addressed to the Bank is enclosed with this documentation. 

b) by providing, at least during the entire month prior to the date of the meeting, on the Bank’s 

Internet site (www.millenniumbcp.pt), all the relevant information, such as the agenda, proposals 

and documents to be submitted to the Meeting, letters requesting the blocking of shares for 

participation in the Meeting and proxy letters, postal ballot and forms for voting by electronic 

means.


This relevant information is placed on the General Meeting’s own webpage created on the 

Bank's institutional Internet site on wherein, complying with the legal deadlines, it is possible 

not only to consult and print all the documentation which, being known to the company, is 

destined to the shareholders, as well as an explanatory note on how to participate in the 

meeting, indicating the steps the shareholders will have to take in order to assure their 

presence at the Meeting and exercise their right to vote. 

c) under the terms of the law and the Bank’s Articles of Association, the call notice of the General 

Meeting clearly and unequivocally indicates not only the date, time and location of the General 

Meeting, but also: 

i) the respective agenda; 

ii) the mechanisms to confirm the quality of the shareholder; 

iii) the number of shares corresponding to one vote; 

iv) the possibility of the shareholders being represented by any person of their choice provided 

that this person possesses full legal capacity; 

v) the possibility of exercising voting rights by postal ballot; 

vi) the possibility of exercising voting rights through electronic means. 

The shareholders of Banco Comercial Português are not subject to reservations on the free 

transmission of their shares, since the letter confirming the blocking of the shares must only be 

received at the company until 17:00 hours of the second last business day before the date of the 

Meeting. The Bank has accepted all formal requests for the cancellation of the blocking which have 

arrived by 17:00 hours of the day before the date of the Meeting. 

Likewise, there has been no limitation on the exercise of voting rights, with the exception of the 

quantitative limitation established in no. 10 of article 16 of the Articles of Association, which limits 

the votes which may be cast by each shareholder or Group of related shareholders to 10% of 

the totality of the votes corresponding to the share capital. 

The abovementioned restrictions do not include votes cast by a shareholder in representation 

of another or others, without prejudice to the application of the limitations provided for therein 

to the represented entity or entities. 

There are no special rights, voting or other, and the shares representing the share capital of the 

Bank are of a single category. 

There are no restrictions on the transmission of shares, nor is the company aware of any 

shareholders’ agreements that may lead to restrictions on matters concerning the transmission 

of securities or voting rights. 

I.8. Existence of statutory rules on the exercise of voting rights by postal ballot 

Under the terms of no. 13 of article 16 of the Articles of Association, the exercise of voting rights 

by postal ballot includes all the matters contained in the call notice, under the terms and 

conditions established therein.


I.9. Provision of a model for the exercise of voting rights by postal ballot 

The methodology to adopt for the exercise of voting rights by postal ballot is publicised, both in 

the call notice of the General Meeting, as well as on the Bank’s Internet site, with the voting form 

being sent to the shareholders by mail and provided at the Bank’s registered office and on the 

respective Internet site. 

Both the form for voting by postal ballot and the form for voting by electronic means are updated 

on the Internet page dedicated to the Meetings, both relative to the proposals received as well 

as regarding any alteration in the agenda. 

I.10. Requirement of a period of time between the reception of the votes 

by correspondence and the date of the general meeting 

The Bank has established the deadline for the reception of the postal ballot at 17:00 of the second 

last business day before the date of the General Meeting, thus coinciding with the deadline for the 

reception of the rest of the documentation for the Meeting. 

I.11. Exercise of voting rights through electronic means 

The exercise of voting rights through electronic means includes all the matters contained in the 

call notice, under the terms and conditions established therein. 

The methodology to adopt for the exercise of voting rights through electronic means is publicised, 

both in the call notice of the General Meeting, as well as on the Bank’s Internet site, with the 

document to request the respective voting code being sent by mail and provided on the Internet. 

Voting though electronic means, as defined by the Bank, may be exercised between the fourth 

and second last business day before the date of the General Meeting, by shareholders who have 

requested the respective code in due time. 

I.12. Information on the intervention of the general assembly with respect 

to the company’s remuneration policy and assessment of the performance 

of the members of the management body 

The General Meeting, in the annual meeting held on 27 th May 2008, proceeded with the 

consultative appraisal of the new Remuneration Policy for the Executive Board of Directors, 

approved on April 2008, by the Nomination and Remunerations Committee (Committee 

appointed by the Supervisory Board under the terms of no. 1 of article 13 of the Articles of 

Association and article 429 of the Companies Code), once that, with the alteration of the Bank’s 

statutory model in 2006, the Supervisory Board was created, to which the law and articles of 

association attribute competence to resolve on the remunerations of the Executive Board of 

Directors. 

The General Meeting, at its annual meeting, is responsible for proceeding with the general 

appraisal of the company’s management and supervision, with the amplitude established by the 

law.


Both the Regulations on the Remuneration of the members of the Executive Board of Directors 

and the Regulations on the Retirement of the Directors were altered in the current year. 

Therefore, they shall be submitted to the forthcoming General Meeting with a consultive 

character. Those documents constitute Annexes III and IV of this Report. 

I.13. Indication of defensive measures which have the effect of automatically 

causing serious erosion in the value of company assets in the event of 

the transfer of control or change of composition of the management board 

Not applicable. 

I.14. Significant agreements to which the company subscribes and which 

enter into force, are altered or cease in the case of change of control of the 

company, as well as the respective effects, except if, due to their nature, 

their disclosure would be seriously harmful to the company, unless the 

company is specifically forced to divulge this information due to other legal 

imperatives 

Not applicable. 

I.15. Agreements between the company and members of the management 

body and directors, in compliance with no. 3 of article 248-B of the 

Securities Code (compensation payments in the case of resignation, 

dismissal without fair cause or work severance following an alteration of 

control of the company) 

Not applicable.


Chapter II – Management 

and Supervisory Bodies 

Banco Comercial Português has made permanent efforts to incorporate the evaluation criteria 

of Good Corporate Governance – equity, transparency, internal alignment and accountability – 

simultaneously with the adoption of practices which enable achieving the objectives of the best 

models of Corporate Governance – separation of functions, specialisation of supervision, financial 

and management control, risk control, conflicts of interest and orientation towards sustainability. 

Therefore, this Board considers that the two-tier model adopted since June 2006 allows the 

strict separation between management and supervision, ensuring that non-executive members 

hold the latter and that these members are independent in relation to the company, in accordance 

with the criteria established by the Companies Code. The Executive Board of Directors does not 

detect any constraints to its action, by which it judges not to justify to propose any acting 

measures having in view to change the Corporate Governance regimen adopted. 

II.1. Identification and composition of the company’s management 

and supervisory bodies 

Having adopted the two-tier model, the management and supervision of the Bank is structured 

as follows: 

Executive Board of Directors; 

Supervisory Board; 

Statutory Auditor. 

The Group also counts with a company of External Auditors that carry out audits to the 

consolidated accounts and of the various Group companies. 

The Bank also has its own corporate body composed of shareholders, who are responsible for 

the special monitoring of the company’s activities. 

Executive Board of Directors 

The Executive Board of Directors (EBD) is responsible for the management of the company, 

being composed of an odd number of members, of at least seven and no more than thirteen, 

elected by the General Meeting for a period of three years, and who may be re-elected one or 

more times.


The Executive Board of Directors has broad competences established in the law and articles of 

association of the company, which covers, amongst others, the following attributions: 

• manage the Bank, practising all acts and operations included in its corporate object; 

• freely decide, observing all prescriptions laid down by the law, on the participation of the company 

in share the capital of companies with any object and in companies regulated by special laws or in 

joint ventures or any other form of entrepreneurial association; 

• mobilise financial resources and carry out legally permitted credit operations; 

• constitute attorneys to carry out certain acts; 

• implement and ensure compliance with legal and statutory prescriptions and resolutions of 

the General Meeting; 

• define the Bank’s organisation and work methods, prepare regulations and determine 

instructions as considered appropriate; 

• represent the Bank in and out of court, actively and passively; 

• appoint, amongst its members, one or more Vice-Chairmen, who, by order of appointment, 

will replace the Chairman in his absence or inability to carry out his functions, without prejudice 

to the exercise of the rest of the functions attributed by the Board. 

The current Executive Board of Directors of the Bank was elected at the General Meeting of 

Shareholders held on 15 th January 2008 and is composed of the following members: 

Chairman: 

Vice-Chairmen: 

Voting members: 

Carlos Jorge Ramalho dos Santos Ferreira (59 years old) 

Armando António Martins Vara (54 years old) 

Paulo José de Ribeiro Moita de Macedo (45 years old) 

José João Guilherme (51 years old) 

Nelson Ricardo Bessa Machado (49 years old) 

Luís Maria França de Castro Pereira Coutinho (46 years old) 

Vítor Manuel Lopes Fernandes (45 years old) 

All the Directors show the technical competence, knowledge and professional experience 

appropriate to the exercise of their respective functions, employing in the exercise of their 

functions the diligence required of a careful and throughout manager, observing the duties of 

loyalty in the interest of the company and taking into account the long-term interests of the 

shareholders and other Stakeholders. For this effect, see the Curricula annexed to this report. 

In compliance with the Bank’s Articles of Association and current terms of reference of the 

Executive Board of Directors, all Executive Directors are obliged to observe a strict regime of 

exclusivity, being prohibited from exercising functions, of any nature, by appointment or corporate 

position or work contract in any other commercial company in which the Group headed by 

Banco Comercial Português has no interests or without the explicit authorisation of the 

Supervisory Board. 

The term-of-office of the Executive Board of Directors is 2008/2010.

Annual Reports Volume II Corporate Governance Report 261 


The Supervisory Board is a supervision body, responsible for the following, under the terms 

established by the law and the Articles of Association of the Bank: 

• permanent monitoring of the activities of the Statutory Auditor and External Auditor of the 

company, proposing their election and appointment to the General Meeting, respectively, 

expressing an opinion on their independence and other relationships with the company, as well 

as the respective exoneration, a decision which, to the extent permitted by the law, will be 

binding, with the corporate bodies being required to proceed in conformity; 

• permanent monitoring of the company’s systems and process of financial reporting and risk 

management and of the activities of the Statutory Auditor and External Auditor; 

• evaluate and monitor the internal procedures on accounting matters, effectiveness of the risk 

management system, internal control system and internal audit system, including the reception 

and processing of claims and related doubts, received, or not, from employees; 

• permanent monitoring of the company’s management activities and provision of advice and 

assistance to the Executive Board of Directors on the above activities; 

• express, on its own initiative or when requested by the Chairman of the Executive Board of 

Directors, an expert opinion on the annual vote of confidence on the directors (article 455 of 

the Companies Code); 

• monitor and appraise issues concerning corporate governance, sustainability, ethics, codes of 

conduct and systems for the evaluation and resolution of conflicts of interests. 

The Supervisory Board is composed of 11 full members and one alternate, including also, as 

inherent to the function, the Chairman of the Senior Board. All the members of this Board are, 

due to the nature of the actual governance model adopted, non-executive and most of its 

members are independent. Of the 5 Board Members who do not meet the requisites of 

independence, four are related to entities with holdings greater than 2% of the Bank’s share 

capital and one was elected for more than 2 consecutive term-of-offices to the Bank’s supervisory 

body. All the members comply with the rules on incompatibility established in no. 1 of article 414-A, 

including sub-paragraph f) and exercise their respective functions throughly, in accordance with 

the high standards of professional diligence and duties of loyalty, in the interest of the company. 

The Supervisory Board was elected at the General Meetings of Shareholders of 13 th March 2006 

(beginning of the 2006-2008 three-year period) and 15 th January 2008 (occupation of vacancies), 

having the following composition: 

Chairman: 

Vice-Chairman: 

Voting Members: 

Gijsbert J. Swalef (68 years old), Not Independent 

António Manuel Ferreira da Costa Gonçalves (68 years old), Independent 

António Luís Guerra Nunes Mexia (51 years old), Not Independent 

Francisco de la Fuente Sánchez (66 years old), Not Independent 

João Alberto Ferreira Pinto Basto (77 years old), Independent 

José Eduardo Faria Neiva Santos (71 years old), Independent 

Keith Satchell (57 years old), Independent 

Luís Francisco Valente de Oliveira (71 years old), Independent


Luís de Melo Champalimaud (56 years old), Independent 

Manuel Domingos Vicente (52 years old), Not Independent 

Mário Branco Trindade (72 years old), Not Independent 

Alternate Voting Member: 

Ângelo Ludgero da Silva Marques (70 years old), Independent 

The term-of-office of the Supervisory Board ended on 31st December 2008. 

Statutory Auditor 

Under the current two-tier regime of Banco Comercial Português, the supervision of the Bank’s 

business, without prejudice to the responsibilities of the Bank of Portugal, is exercised by a 

Statutory Auditor, elected by the Shareholders at the General Meeting for a 3-year term, being 

particularly responsible for: 

• verifying the integrity of the accounting ledgers and records; 

• verify the accuracy of the financial documents; 

• verify the adopted accounting policies and valuation criteria, being responsible for preparing an 

annual report on his/her supervisory action; 

• make a monthly report on its supervision actions. 

The Statutory Auditor, effective and alternate, was elected at the annual General Meeting of 

2008, to exercise functions over the 2008/2010 triennial. 

Effective: Vítor Manuel da Cunha Ribeirinho, Statutory Auditor, no. 1087/KPMG & Associados – 

Sociedade de Revisores Oficiais de Contas, S.A. 

Alternate: Ana Cristina Soares Valente Dourado, Statutory Auditor, no. 1111/KPMG & Associados 

– Sociedade de Revisores Oficiais de Contas, S.A. 

At the time of the making of this report a lawsuit has been brought before Vila Nova de Gaia 

Comercial Court requiring the nullity of the resolution which proceeded to the election of 

Statutory Auditor, Efective and Alternate. 

Remunerations and Welfare Board 

The Remunerations and Welfare Board was elected at the Annual General Meeting held on 15 

January 2008 to exercise function during the triennial 2008/2010 and is responsible for resolving 

on the remuneration of the members of the corporate bodies, with the exception of the 

Executive Board of Directors, whose remuneration is established by the Supervisory Board under 

proposal of the Nomination and Remunerations Committee. 

The Remunerations and Welfare Board is composed as follows: 

Chairman: 


José Manuel Rodrigues Berardo (65 years old) 

Luís de Melo Champalimaud (56 years old) 

Manuel Pinto Barbosa (65 years old)

Annual Reports Volume II Corporate Governance Report 263 

Senior Board 

The Senior Board is a specific corporate body of the Bank’s organisation structure, being 

composed exclusively of shareholders associated to qualified, institutional, minority, national and 

foreign shareholders, including the Chairman of the Board of the General Meeting, all the 

members of the Supervisory Board and the Chairman of the Executive Board of Directors. 

The Senior Board is responsible for the monitoring of the company and by issuing prior opinions, 

comment on aspects of the activities of the Bank and the Group, such as: 

• general management policy; 

• annual activities plan, budgets and investment plans; 

• requests for calling a General Meeting and proposals or reports to be submitted to it, annual 

management report and accounts, important extensions or reductions of the company’s activities 

and; 

• important alterations to the company’s organisation; 

• change of the registered office, increases of share capital and company demerger, merger and 

transformation projects. 

On 31st December 2008, the Senior Board had the following composition: 

Chairman: 

Vice-Chairmen: 


António Manuel Ferreira da Costa Gonçalves (68 years old) 

Gijsbert J. Swalef (68 years old) 

João Alberto Ferreira Pinto Basto (77 years old) 

Ângelo Ludgero da Silva Marques (70 years old) 

António Augusto Serra Campos Dias da Cunha (75 years old) 

António Luís Guerra Nunes Mexia (51 years old) 

Dimitrios Contominas (69 years old) 

E. Alexandre Soares dos Santos (74 years old) 

Francisco de la Fuente Sánchez (66 years old) 

Henrique Jaime Welsh (74 years old) 

Hipólito Mendes Pires (61 years old) 

José de Sousa Cunhal Melero Sendim (44 years old) 

José Eduardo Faria Neiva dos Santos (71 years old) 

José Manuel Pita Goes Ferreira (71 years old) 

Josep Oliu Creus (59 years old) 

Keith Satchell (57 years old) 

Luís Manuel de Faria Neiva dos Santos (66 years old) 

Luís Francisco Valente de Oliveira (71 years old) 

Luís de Melo Champalimaud (56 years old) 

Maarten W. Dijkshoom (58 years old) 

Manuel Alfredo da Cunha José de Mello (60 years old) 

Manuel Domingos Vicente (52 years old) 

Manuel Roseta Fino (84 years old) 

Mário Branco Trindade (72 years old) 

Mário Fernandes da Graça Machungo (68 years old) 

Ricardo Herculano Freitas Fernandes (48 years old) 

Vasco Luís Quevedo Pessanha (66 years old)


As inherent to the functions: The Chairman of the General Meeting Board – António 

Manuel da Rocha e Menezes Cordeiro (55 years old). 

The Chairman of the Executive Board of Directors – Carlos 

Jorge Ramalho dos Santos Ferreira (59 years old). 

The term-of-office of the Senior Board ended on 31 st December 2008. 

II.2. Identification and composition of other committees with company 

management or supervisory responsibilities 

In accordance with the legal requirements and the Bank’s Articles of Association, the Supervisory 

Board created three specialised or monitoring committees. These committees have their own 

regulations and resolve by the majority of the votes of the Board members present. 

A) Audit and Risk Committee (ARC) – This Committee corresponds to the commission on 

financial matters referred to in no. 2 of article 444 of the Companies Code, being responsible, in 

compliance with the above-mentioned legal requirement, for supervising the Management, 

financial reports, Internal Control Systems, Risk Management policy and Compliance policy. It is 

also responsible for ensuring the independence of the Statutory Auditor, respective election 

proposal, contracting and remunerative conditions, as well as receiving notifications of irregularities 

presented by shareholders, employees or others. 

This committee is composed as follows: 

Chairman: 


Member : 

Luís Francisco Valente de Oliveira (Independent) 

João Alberto Ferreira Pinto Basto (Independent) 

José Eduardo Faria Neiva dos Santos (Independent) 

Assisting this Committee as an Expert: Jeff Medlock. 

Professor Luís Francisco Valente de Oliveira, is qualified as an Independent and, as result of his 

curriculum annexed to the present Report, he has the knowledge and professional experience 

appropriate to the exercise of his function. 

B) Corporate Governance Committee (CGC) – This Committee assists and advises the 

Supervisory Board on matters relative to Corporate Governance policies.Its essential mission is 

to coordinate the ponderation on the Bank’s governance model, in order to recommend the 

most appropriate governance solutions to its management, culture and strategy needs, namely 

following international best practices.


The CGC has the following composition: 

Chairman: 


Member: 

Francisco de la Fuente Sánchez (Non-independent) 

João Alberto Ferreira Pinto Basto (Independent) 

Luís de Melo Champalimaud (Independent) 

Assisting this Committee as Experts: Carlos Jorge Ramalho dos Santos Ferreira (Chairman of 

the Executive Board of Directors) 

António Augusto Serra Campos Dias da Cunha (Expert) 

José de Sousa Cunhal Melero Sendim (Expert) 

Morais Leitão, Galvão Teles, Soares da Silva & Associados – 

Sociedade de Advogados, represented by Miguel Galvão 

Teles (Expert) 

C) Nomination and Remunerations Committee (NRC): As a Committee established by the SB 

for all nomination issues, this Committee assists and advises the Supervisory Board on matters 

relative to the definition of competence profiles and composition of internal structures and bodies 

issues, formation of lists of members for the corporate bodies of the Bank and subsidiary 

companies and opinions on the annual vote of confidence in members of the Management Body. 

It also issues opinions on the appointment of Corporate Officers and Senior Managers. 

As a Committee established by the SB for all remuneration issues, it pertains to the NRC the 

definition of the remunerations and welfare policy of the members of the EBD, individually 

establish the remuneration and welfare policy of the members of the EBD and respective package 

of remuneration and welfare, as well as remuneration conditions applicable in case of the 

termination of the respective work contracts; agree with the EBD the performance evaluation 

criteria relevant for the remuneration of the EBD members and monitor the compliance with 

the established performance criteria 

The NRC has the following composition: 

Chairman: 


Members: 

João Alberto Pinto Basto (Independent) 

Francisco de la Fuente Sánchez (Non-Independent) 

António Luís Guerra Nunes Mexia (Non-Independent) 

Keith Satchell (Independent) 

Assisting this Committee as Experts: Ângelo Ludgero da Silva Marques 

Luís Manuel de Faria Neiva dos Santos 

II.3. Organisational diagrams or functional charts relative 

to the distribution of competences of the different corporate bodies, 

committees, and/or departments of the company, including information 

on the scope of the delegations of competences or distribution 

of areas of responsibility amongst members of the management 

and supervisory bodies and list of matters that cannot be assigned 

Corporate Governance Model of the Banco Comercial Português 

The two-tier model adopted by the Bank seeks to guarantee separation between the 

management and supervision carried out by non-executive and mostly independent members 

in relation to the company and its management body.


Corporate Governance Model 

General Meeting 

Senior Board 

Remunerations 

and Welfare Board 

Ombudsman 

Executive Board 

of Directors 


Statutory Auditor 

• Audit and Risk Committee 

• Nomination and Remuneration 

Committee 

• Corporate Governance Committee 

Coordination Committees 

Specialised Commissions 

and Committees 

• Retail 

• Corporate and Companies 

• Private Banking 

and Asset Management 

• European Businesses 

• Banking Services 

• Capital, Assets and Liabilities Management 

Committee(CALCO) 

• Risk Commission 

• Pension Fund Monitoring Commission 

• Stakeholders Commission 

Millennium bcp investimento 

Corporate Areas 

Given that the numbers above have presented in detail the areas of competence of the General 

Meeting, Senior Board, Supervisory Board and its delegate Committees as well as the 

Remunerations and Welfare Board, this number addresses the scope of action of the Ombudsman, 

the distribuiction of responsibilities amongst the members of the Executive Board of Directors and 

the main structures reporting directly to it.


Client Ombudsman 

The Ombudsman is an independent entity whose mission is the defence and promotion of the 

legitimate rights, guarantees and interests of the Customers of Millennium bcp who address it, 

by recommending the alteration of practices or procedures. Its actions are governed by the 

Ombudsman Regulations, by the principles of impartiality, celerity, free of charge and 

confidentiality. 

During 2008, the Ombudsman monitored the evolution of 2,640 dossiers related to requests and 

corresponding claims, the processing of which is assured with the collaboration of the Direct 

Banking Department and, acting as an appeals entity, analysed 80 appeals. A recommendation was 

formulated addressed by the Ombudsman to the Executive Board of Directors on the payment 

of cheques with irregular endorsements through the forged signature of the beneficiary, which 

did not obtain the agreement of the Executive Board of Directors. 

Client Ombusman’s annual activity 

Year of 2008 

80 

Apeeals 

1.129 

Solicitations 

1.431 

Claims 

The deadlines for a response to the claims and appeals filed, as dictated by the Ombudsman 

Regulations, respected its provisions, since the overall average response time was 23 days. The 

claims were granted in 58% of the cases and the appeals were granted in 19% of the cases. In 

the case of eleven appeals that were granted it was not necessary for the pertinent 

recommendation to be addressed to the Supervisory Board – due to their not overly complex 

nature – and were directly implemented in the relevant areas of the Bank. 

The functions of the Ombudsman are appropriately disclosed on the portal of the Millennium 

bcp via the “Ombudsman” link that mainly provides information on how claims or complaints 

should be expressed, with direct access to the Ombudsman Regulations. 

The Ombudsman has his own autonomous office and functional structures with three full-time 

employees, with functions of technical, operational and administrative suport to the Ombudsman. 

During 2008, the Ombudsman Office provided a traineeship to a Law course finalist.



Areas of Responsability 


The distribuiction of responsibilities amongst the members of the Executive Board of Directors 

is the indicated in the figure below. 

Carlos Santos Ferreira (CSF) Armando Vara (AV) Paulo Macedo (PM) 

• General Secretariat 

• Relations with Authorities 

• Communication Department (1) 

• People Management Support Division (2) 

• Millennium Angola 

• Millennium 2010 

• Audit (3) 

(PM) 

(PM) 

(AV) 

(PM) 

(AV) 

(AV) 

(PM) 

• Corporate Network 

• Companies Network 

• Specialised Loans 

• Companies Marketing 

• Procurement, Assets and Security 

• Fundação Millennium bcp 

• Millennium bim (Mozambique) 

• Real Estate Promoters Division 

(JJG) 

(JJG) 

(JJG) 

(JJG) 

(PM) 

(PM) 

(PM) 

(JJG) 

• Corporate Centre 

• Accounting 

• Relations with Investors 

• Risk Office 

• Compliance Office 

• Credit Recovery 

• Legal Department 

(VF) 

(VF) 

(VF) 

(VF) 

(VF) 

(VF) 

(VF) 

José Guilherme (JJG) Luís Pereira Coutinho (LPC) Nelson Machado (NM) 

• Investment Banking 

• International Division 

• Innovation and Commercial 

Promotion Department 

• Commercial Management 

Information (DIGAC) 

• ActivoBank7 

• Financial Stakes and Valuation Department 

(AV) 

(AV) 

(NM) 

(NM) 

(NM) 

(AV) 

• Bank Millennium (Poland) 

• Millennium bank (Greece) 

• Banca Millennium (Romania) 

• Millennium bank (Turkey) 

• Millennium bcpbank (USA) 


• Millennium Banque Privée (Switzerland) 

• WMU London 

• Asset Management 

(NM) 

(NM) 

(NM) 

(NM) 

(NM) 

(NM) 

(NM) 

(NM) 

(NM) 

• Retail Network (Portugal) 

• Madeira and Azores operations 

• Direct Banking Division 

• Microcredit 

• Insurance 

(JJG) 

(JJG) 

(JJG) 

(JJG) 

(JJG) 

Vítor Fernandes (VF) 

• I.T. 

• Central Services Planning and 

Control Division 

• Operations Department 

• Credit Department 

• Quality and Processes 

• Tax Issues 

(PM) 

(PM) 

(PM) 

(PM) 

(PM) 

(LPC) 

Alternate Director 

( ) in parenthesis 

1 st in charge 

(1) 

Armando Vara 

(2) 

Paulo Macedo 

(3) 

Vítor Fernandes


Company Secretary 

The Executive Board of Directors appoints the Company Secretary and his/her Alternate, 

with their functions ceasing upon the termination of the term-of-office of the Board that 

elected them. Their essential function is to provide secretarial services in corporate body 

meetings, certify their actions, as well as the powers of the respective members, meet 

legitimate requests for information by Shareholders, certify copies of minutes and any other 

corporate documents. 

Company Secretary: Ana Isabel dos Santos de Pina Cabral; 

Alternate Company Secretary: António Augusto Amaral de Medeiros. 

Both the Company Secretary and Alternate Company Secretary are Law graduates and were 

renominated to their respective functions by the current Executive Board of Directors. 

Committees, Commissions and Corporate Areas 

Regarding the company’s internal organisation and decision-making structure, it is 

important to note the existence of a series of Committees and Commissions which, in 

addition to the Directors who have been entrusted with the special follow-up of matters 

within their scope of action, also include the Employees of the Bank or Group responsible 

for the respective areas. 

Coordination Committees 

Currently there are five Coordination Committees, whose objective is to facilitate the 

articulation of current management decisions, involving the senior Management of all the units 

included in each of the Business Areas and Banking Services Unit, with the mission of aligning 

perspectives and supporting management decision-making on behalf of the Executive Board 

of Directors. 

Retail Coordination Committee – ccomposed of 10 members, includes, in addition to the 

Directors with the related Areas of Responsibility, Nelson Machado and José João Guilherme, the 

persons responsible for the North Commercial Division, Centre-South Commercial Division, 

Centre-North Commercial Division, South Commercial Division, Direct Banking Division, 

Commercial Area Management Information Division, Innovation and Commercial Promotion 

Division and ActivoBank7. 

The mission of this Committee is the coordination of the Bank’s Retail business in Portugal, 

being responsible for the definition of commercial strategy and its implementation at the level 

of the various distribution channels. This Committee is also responsible for the Innovation and 

Commercial Promotion Division, which serves the Retail Network and all other Commercial 

Networks for cross-selling products and the Bank’s Direct Banking area. The Committee 

proposes guidelines within the context of the management of the respective area of action to 

the Executive Board of Directors, being responsible for their articulation with the other 

functional areas of the Bank.


It also manage the relations established with the several Chambers of Commerce of which the 

bank is a member and the relations established with Public Entities such as the IAPMEI, AICEP, and 

mutual guarantee companies. 

European Banking Coordination Committee – composed of six members, includes, in addition to 

the Directors with the related Areas of Responsibility, Luís Pereira Coutinho and Nelson Machado, the 

head of the Group’s Banks in Poland, Romania, Greece and Turkey. 

Its mission is to monitor, coordinate and articulate the management of European subsidiary 

companies, by implementing procedures for activities and financial development reporting to 

enable a systematic and harmonized approach of the different operations, both at the level of the 

control of budgetary implementation, financial activity and evolution, as well as in terms of support 

for decision-making and the subsequent implementation of resolutions on restructuring, 

investment and disinvestment. 

Banking Services Coordination Committee – composed of 14 members, includes, in addition 

to the Directors with the related Areas of Responsibility, Armando Vara, Paulo Macedo and Vítor 

Fernandes, the heads of the Central Services Planning and Control Division, Operations Division, 

Procurement Division, Prevention and Security Office, Credit Division Credit Recovery Division, 

IT Division and Banking Services Division of the Banks in Greece, Romania and Poland. 

Private Banking and Asset Management Coordination Committee – composed of seven 

members, includes, in addition to the Directors with the related Areas of Responsibility, Luís Pereira 

Coutinho and Nelson Machado, the persons responsible for the Private Banking Division, 

Commercial Area Management Information Division, Millennium Banque Privée, Asset 

Management and Wealth Management Unit (WMU). 

The mission of this Committee is to monitor the areas responsible for the Private Banking and 

Asset Management businesses. Its competences include the evaluation of aspects related to the 

management of each of the areas under its sphere of action, particularly business analysis, the 

valuation of entrusted assets, results obtained and analysis of the sales and performance of 

investment funds. This Committee also includes the Heads of subsidiary companies that at a 

domestic and multi-domestic level pursue their activities in the sphere of action of the 

Committee. 

Companies and Corporate Coordination Committee – composed of 10 members, includes, in 

addition to the Directors with the related Areas of Responsibility, Armando Vara and José João 

Guilherme, the persons responsible for the Corporate, Enterprises, International Division, 

Factoring, Leasing, Commercial Area Management Information Division, Corporate Marketing 

and one Investment Banking representative. 

Its mission is to serve, in Portugal, the Customers of the Corporate, Enterprises and Investment 

Banking segment, pursuing its personalised monitoring as well as attracting potential Customers, 

developing competences in terms of design, management and support to the sale of products 

and services, proactively creating instruments to enable optimising Customer management, with 

the objective of maximising the respective value created and level of satisfaction. It is also 

responsible for the monitoring and management of the international area, and supply of Leasing, 

Renting and Factoring products, Real Estate Promotion, Protocol Loans and/or Re-financed, 

throughout the Group.


Its mission is to serve the Business Units in Portugal and other geographic areas, by contributing 

in a sustainable manner to cost reductions and service quality improvement, ensuring a degree 

of innovation compatible with the Group growth targets. The Committee analyses the proposals 

presented and submit them for decision on subjects related to the management of the Credit, 

Credit Recovery, Operations, Procurement, Assets and Security, Banking Services Planning and 

Control and IT Departments. 

Commissions 

Risk Commission – The Risk Committee is responsible for monitoring overall global risk levels 

incurred (credit, market, liquidity and operational risks), ensuring that they are compatible with 

the objectives and strategies approved for the development of the Group’s activities. 

All the members of the Executive Board of Directors are included in this Commission, as well 

as: the Head of Treasury; the Head of the Corporate Centre; the Head of the Risk Office; the 

Head of the Audit Division, the Head of the Compliance Office and the Head of the Credit 

Department. 

Pension Fund Monitoring Commission – The Pensions Fund Monitoring Commission is 

responsible for the risk monitoring and management of the Group’s Pensions Funds, including the 

definition of appropriate hedging strategies and investment policies. 

In addition to the Directors Carlos Santos Ferreira, EBD Chairman, Paulo Macedo, EBD Vice 

Chairman and Nelson Machado, EBD Member, the Commission also includes: the Head of the 

Corporate Centre; the Head of the Risk Office; the General Manager of Pensões Gere (Pensions 

Fund management company); the Head of the People Management Support Division as well as 

the F&C (fund management company Advisor of the Pensions Fund management company). 

Stakeholders Commission – This Commission establishes relations with Stakeholders, functioning 

as a privileged channel for the dissemination of company internal information and as a forum for 

debate and strategic advisory services for the Executive Board of Directors. Its members are 

elected by groups Stakeholder panels (Employees and Shareholders) or invited – individuals of 

recognised merit and prestige. 

The Executive Board of Directors has created 4 Commissions, essentially with global and 

transverse attributions, responsible for the study and evaluation of the policies and principles 

that should guide the actions of the Bank and the Group’s actions in each area of intervention 

Capital, Assets and Liabilities Management Committee (CALCO) – CALCO is responsible for 

the monitoring and management of assets and liabilities and for the allocation of capital, including 

the definition of appropriate liquidity and market risk management policies of the Group. 

All the members of the Executive Board of Directors are included in this Commission, as well 

as: the Head of Treasury; the Head of the Information and Management Department – 

Commercial Areas; the Head of the Corporate Centre; the Head of the Risk Office; and the 

Chief Economist.


Business and Supporting Areas 

This Commission comprises the following members: Carlos Santos Ferreira; EBD Chairman, 

Armando Vara; EBD Vice-Chairman, the Chairman of the General Meeting; the Ombudsman; Luís 

Arezes (Representative of the Workers Commission); Luís Mota Freitas (Representative of Fundação 

Millennium bcp); Jorge Morgado (DECO, representing Customers); José Joaquim Oliveira (IBM, 

representing Suppliers); Luís Campos e Cunha (Universidade Nova, representing the Universities); 

and the Head of the Executive Board of Directors Chairman’s Office, Miguel Maya. 

Business and Supporting Areas 

The diagram below represents the Bank’s rganization relative to its commercial and supporting 

activities. 

Business areas 

Supporting areas 

Retail 

Banking 

• Portuguese Retail Network 

(DCN, DCCN, DCCS, DCS, DRM, DRA) 

• Direct Banking 

• Microcrédit 

• Innovation and Commercial Promotion Department (DIPC) 

• Commercial Management Information (DIGAC) 

• ActivoBank7 

Banking 

Services 

• IT 

• Operations Department 

• Credit Department 

• Credit Recovery Department 

• Administrative, Premises and Procurement Division 

• Prevention and Security Office 

• Corporate Network 

Corporate and 

Companies 

Private 

Banking and 

A.M 

Millennium bcp 

Investimento 

• Companies Network 

• Internacional Div. 

• Marketing Companies 

• Specialised Credit 

• Real Estate Promoters Division 


• Millennium Banque Privée (Switzerland) 

• Asset Management 

• WMU London 

• Investment Banking 

– BI-Global Markets 

– BI-Investment Banking 

– BI-Project Finance Global 

– BI-Finance and Support 

Corporate 

Areas 

• Risk Office 

• Compliance Office 

• Corporate Centre 

• Accoubting 

• Investor Relations 

• Audit 

• Legal 

• People Management Support Division 

• General Secretariat 

• Fundação Millennium bcp (Foundation) 

• Quality and Processes 

• Communication 

• Financial holdings and Valuation 

• Central Services Planning and Control Division (DPCSC) 

• Bank Millennium (Poland) 

European 

Business 

• Millennium bank (Greece) 

• Millennium bank (Turkey) 

• Banca Millennium (Romania) 

Other 

internacional 

business 

• Millennium bim (Mozambique) 

• Millennium bcpbank (USA) 

• Millennium Angola


Amongst all the corporate areas, the Compliance Office, Risk Office and the Audit Division are 

presented below, due to not having been addressed earlier in this Report and their specific sphere 

of action. 

Compliance Office – Its main attributions are as follows: ensure strict compliance with the law and 

all internal and external rules and regulations applicable to the Bank and its associated companies; 

ensure that the internal rules and regulations reflect the alterations introduced to the legislation in 

force; ensure compliance with international best practices on matters relative to Know your 

Counterpart, Know your Transactions, Know your Process and Prevent Operational Risk and Due 

Diligence. The Compliance Office has representatives at the various business areas in Portugal and 

the Bank’s operations abroad. 

Compliance Officer: Carlos António Torroaes Albuquerque. 

Audit Division – This Division is responsible for the internal audits of Banco Comercial Português. 

It carries out its mission through the adoption of internal audit principles that are acknowledged 

and accepted at an international level, aiming to assess if the processes of identification of risk 

management, internal control systems and corporate procedures in the Bank and Group are 

adequate, effective and designed to: 

• duly identify and manage risks; 

• implement controls that are correct and proportional to the risks; 

• ensure that the several management boards interact adequately, effectively and efficiently; 

• verify that operations are registered correctly and operational, financial and management 

information is rigorous, reliable and updated; 

• employees perform their duties in compliance with polices, regulations and internal procedures 

and with applicable laws and other regulations; 

• adequately safeguard the interests and assets of the Bank and the Group or those entrusted to it; 

• the resources are acquired in an economic manner, are used efficiently and are properly 

protected; 

• the programs, plans and goals defined by the management are complied with; 

• the organization’s gobal quality and its continuous improvement are enhanced by the internal 

control systems; 

• the legal and regulatory issues with impact in the organization are recognized, clearly 

understood and duly handled. 

The activity of the Audit Division contributes to the achievement of the targets defined in Notice 

no. 5/2008 of the Bank of Portugal for the internal control system of institutions under the 

General Credit Institutions and Financial Companies Act. It should ensure the existence of: 

• an adequate control environment;


• a solid risk management system; 

• an efficient information and communication system; and 

• an effective monitoring process 

Head: António Pedro Nunes de Oliveira. 

Risk Office: Its main function is to support the Executive Board of Directors in the development 

and implementation of the risk management and control processes, its activity is further described 

in the following section. 

Risk Officer: José Miguel Bensliman Schorcht da Silva Pessanha. 

II.4. Description of the internal control and risk management systems 

implemented in the company, in particular concerning the process of 

disclosure of financial information 

The Internal Control System 

The Internal Control System (ICS) is defined as the set of principles, strategies, policies, systems, 

processes, rules and procedures established in the Group aimed at ensuring: 

• the efficient and profitable performance of its activities, in the medium and long term, to guarantee 

the effective use of assets and resources, business continuity and the actual survival of the Group, 

namely through the appropriate management and control of the activity risks, prudent and correct 

evaluation of the assets and liabilities, as well as the implementation of mechanisms of prevention 

and protection against non-authorised actions, whether intentional or negligent; 

• the existence of financial and management information which is complete, pertinent, reliable and 

timely, to support decision-making and control processes, both at the internal and external level; 

• observance of the applicable legal and regulatory provisions, including those relative to the 

prevention of money laundering and financing of terrorism, as well as of the rules and 

professional and ethical rules and practices, internal and statutory rules – rules of conduct and 

on customer relations, guidelines of the corporate bodies and recommendations of the Basel 

Committee on Banking Supervision and Committee of European Banking Supervisors (CEBS), 

so as to preserve the image and reputation of the institution before its customers, shareholders, 

employees and supervisors. 

To achieve these objectives, the ICS is based on the functions of Compliance, Risk Management and 

Internal Auditing, centralised and transversal to the Group, with the respective persons in charge 

being appointed by the Executive Board of Directors of BCP and to which they report directly. 

The ICS is based on: 

• an appropriate internal control environment; 

• a solid risk management system, which identifies, evaluates, monitors and controls all risks that 

might influence the activities of the Millennium Group;


• an efficient information and communication system, instituted to ensure the collection, 

processing and transmission of relevant, complete and consistent data, within deadlines and in 

a manner allowing for the effective and timely performance of the management and control 

of the institution’s activities and risks; 

• an effective monitoring process, implemented with a view to ensuring the appropriateness and 

efficiency of the internal control system over time, to guarantee, in particular, the immediate 

identification of any deficiencies (defined as the existing, potential or real ones, or opportunities 

for the introduction of improvements to strengthen the internal control system); 

• strict compliance with all the legal and regulatory provisions in force, by the Group’s employees 

in general, and by the persons holding management or head positions and members of the 

management bodies in particular, as well as compliance with the Group’s Code of Conduct and 

other codes to which activities related to banking, financial, insurance and intermediation of 

securities and derivatives are subject. 

The Risk Management, Information and Communication systems 

The ICS includes 2 internal control sub-systems: the Risk Management System (RMS) and 

Information and Communication System (ICS). 

The former is responsible for taking into consideration risks related to credit, market, interest rates, 

exchange rates, liquidity, compliance, operations, information systems, strategy and reputation, as well 

as all risks that, in light of the specific situation of the Group's institutions, might be materially relevant. 

The activities of the RMS include the evaluation, monitoring and control of risks, consisting of 

appropriately and clearly defined policies and procedures, aimed at ensuring that the institution’s 

objectives are achieved and that the necessary actions are taken to respond appropriately to the 

previously identified risks. 

The respective function of the ICS is to ensure the existence of substantive, up-to-date, complete, 

timely and reliable information providing an overall and encompassing view of the financial 

situation, development of the activities, compliance with the defined strategy and objectives, risk 

profile and conduct of the institution and perspectives on the evolution of relevant markets. 

The financial information process is supported by the accounting and management support 

systems which record, classify, associate and archive all the operations carried out by the institution 

and its subsidiaries in a timely, systematised, reliable, complete and consistent manner, in 

accordance with the definitions and policies issued by the Executive Board of Directors. 

The Risk Office, Corporate Centre and areas responsible for the accounts in the different 

subsidiaries manage these 2 sub-systems of the ICS, respectively. The activities of the Risk Office 

are transversal to the Group and include the coordination of the local risk management structures. 

The Corporate Centre receives and centralises the financial information of all the subsidiaries. 

Therefore, the Risk Office and Corporate Centre ensure the implementation of the procedures 

and means required to obtain all the relevant information for the process of consolidation of 

information at the level of the Group – both in terms of accounts, as well as management support 

and risk monitoring and control – which should cover, in particular:


• the definition of the contents and format of the information to be reported by the Entities included 

in the consolidation perimeter, in accordance with the accounting policies and guidelines defined 

by the Executive Board of Directors, as well as the dates on which the reporting is required; 

• the identification and control of intra-Group operations; 

• the guarantee that the management information provided by the different Entities is coherent, 

so that it is possible to measure and monitor the evolution and profitability of each business, 

verify the achievement of the established objectives, as well as evaluate and control the risks 

incurred by each Entity, both in absolute and relative terms. 

Responsibilities of the Executive Board of Directors in the context 

of the ICS 

Within the context of the Internal Control System and, more specifically the RMS, the Executive 

Board of Directors (EBD) of BCP should ensure that it has sufficient knowledge on the types 

of risks to which the institution is exposed and processes used to identify, evaluate, monitor 

and control these risks, as well as the legal obligations and duties to which the institution is 

subject, being responsible for the development and maintenance of an appropriate and effective 

risk management system. Therefore, the EBD is responsible for: 

• defining and reviewing the global objectives and the specific objectives for each functional area, 

with respect to the risk profile, decision levels and degree of tolerance relative to the risk; 

• approving specific, effective and appropriate policies and procedures for the identification, 

evaluation, monitoring and control of the risks to which the institution is exposed, ensuring 

their implementation and compliance; 

• approving, prior to their introduction, the institution's new products and activities, as well as their 

respective risk management policies; 

• verifying, in a regular manner, compliance with risk tolerance levels and risk management policies 

and procedures, evaluating their effectiveness and continued appropriateness to the institution’s 

activities, so as to enable the detection and correction of any deficiencies; 

• requesting and subsequent appraising of accurate and complete periodic reports on the main 

risks to which the institution is exposed and reports which identify the control procedures 

implemented to manage these risks; 

• ensuring the effective implementation of its guidelines and recommendations on corrections 

and improvements to be made to the RMS; 

• ensuring that the risk management activities have sufficient independence, status and visibility 

and are subject to periodic reviews; 

• issuing an opinion on the reports prepared by the Risk Management and Compliance functions, 

in particular, on the recommendations for the adoption of corrective measures. 

The EBD is also responsible for ensuring the implementation and maintenance of information and 

communication processes appropriate to the institution’s activities and risks, definition of the 

accounting policies to be adopted, establishment of guidelines and definition of the choices which 

should be made within the context of these policies, and approving the reporting or external 

disclosure outputs produced by the Corporate Centre.


II.5. Powers of the management body, namely with respect to 

resolutions of capital increases 

In accordance with the Bank’s articles of association, the Executive Board of Directors may, if 

considered appropriate and having obtained the favourable opinion of the Supervisory Board and 

of the Senior Board, increase the share capital, one or more times, up to the total amount of 

increase corresponding to three quarters of the existing share capital at the date on which the 

authorisation was granted or on the date of each of any renewals. 

The Executive Board of Directors has already used part of this authorisation in 2008, with it 

currently being reduced to 1,625,226,742 euros. 

II.6. Indication on the existence of regulations regarding the functioning 

of the company’s bodies, or other rules relative to internally defined 

incompatibilities and maximum number of positions that may be 

accumulated and location where they may be consulted 

Both the Supervisory Board and Executive Board of Directors have Internal Terms of Reference 

that may be consulted on the Bank’s Internet/Intranet. 

With respect to the rules on incompatibilities and the maximum number of positions that can be 

accumulated, Banco Comercial Português, apart from complying with the applicable legislation on 

these matters, has its own specific statutory limitations, contained in article 12, transcribed below: 

Article 12 

INCOMPATIBILITIES 

1 – The exercise of functions in any corporate body is incompatible: 

a) with the exercise of functions, of any nature whatsoever, by appointment to a 

corporate position or by employment contract, in another credit institution with a 

registered office in Portugal or with an affiliate or branch in Portugal, in a controlled 

or group relationship with it; 

b) with direct or indirect ownership of more than 2% of the share capital or voting 

rights in another credit institution with a registered office in Portugal or with an affiliate 

or branch in Portugal. 

2 – The exercise of functions in any corporate body is also incompatible: 

a) with the concurrent quality of legal person, or legal or natural person, related to a 

concurrent legal person, of the Bank; 

b) with the indication, even if only factual, for member of a corporate body by a 

concurrent legal person or legal or natural person, related to the concurrent legal 

person of the Bank.


3 – For the effects of the present articles of association, a person related to a concurrent legal 

person is defined as: 

a) one whose voting rights are imputable to him under the terms of article 20 of the 

Securities Code or any legislation which may modify or replace it; 

b) one who, directly or indirectly, owns, in a concurrent legal person, in a company, 

controlled or in a relationship with it, as configured in article 21 of the Securities Code 

or any legislation which may modify or replace it, or in a relationship of dependency, 

directly or indirectly, with the same company, holdings equal to or greater than 10% 

of the voting rights corresponding to the share capital of the participated company. 

4 – The position of director is further incompatible with the exercise of functions, of any nature 

whatsoever, by appointment to a corporate position or by employment contract, in any other 

commercial company. 

5 – Excluded from the provisions in the previous numbers is the holding of positions in corporate 

bodies or the ownership of holdings in companies in which Banco Comercial Português has 

direct or indirect holdings greater than 2%, or in the case of the holding of a corporate 

position, if the appointment has been made with the vote of the Bank or company controlled 

by the Bank, or if the Bank or such company has previously expressed prior agreement. 

6 – The incompatibilities set forth in the previous numbers constitute an impediment to the exercise 

of functions in Banco Comercial Português for which the person has been elected; if the 

impediment lasts for six months, without it having been ended, this will determine loss of office. 

7 – The incompatibilities referred to in the previous numbers of this article, to the extent 

permitted by the law, through prior favourable deliberation of the General Meeting before 

the election or of the Senior Board, in any other cases, may not apply to the functions of 

elected members of the Senior Board or Supervisory Board provided that, cumulatively: 

a) the concurrent legal person or legal or natural person, related to a concurrent legal 

person has no registered office, domicile, delegation or representation on Portuguese 

territory, nor exercises concurrent activities therein in any manner; 

b) the relationship of concurrence is explicitly referred to and accurately identified in the 

election proposal; 

c) the shareholder concurrent legal person or natural or legal person, related to the 

concurrent legal person, or, necessarily, the last legal person controlling the concurrent 

legal person when it is a company dependent on another legal person, has signed with 

the company a contract in favour of it and of a third party, of which the other 

shareholders of the company are also beneficiaries or at least those which have been 

proposed for election as members of the Senior Board are beneficiaries, under terms 

which oblige him, with the exception of the case of consent deliberated through a 

vote of more than half of the shares held by the beneficiaries, to not acquire or hold, 

directly or indirectly, shares which, under the terms of article 20 of the Securities 

Code, or any legislation modifying or replacing it, corresponds to a percentage greater 

than 10% of the votes corresponding to the share capital of the company.


8 – The contracts referred to in sub-paragraph c) of the number above should be approved by 

the Senior Board as a requisite for the effectiveness of the election, which is considered met 

under this suspensive condition. 

9 – Members of the Senior Board or Supervisory Board elected under the terms of number 7 

of this article may not attend or participate in meetings, or in the parts of meetings, where 

matters on risk or competition sensitivity are discussed, particularly including matters related 

to markets where there is competition with the company, nor may they have access to the 

respective information and documentation, with the Senior Board and especially its chairman 

being responsible for ensuring compliance with the present rule and application of the 

provisions in number 5 of article 33 to it. 

10 – In addition to the specific provisions in these articles of association, the legal and regulatory 

provisions aimed at preventing intervention in situations of conflict of interests will always 

be applicable to all corporate bodies. 

III.7. Rules applicable to the appointment and replacement of members 

of the management and supervisory bodies 

The members of the Supervisory Board and Statutory Auditor may only be elected at the 

General Meeting. If there are vacancies the same cannot be occupied by the elected alternate 

members, only the General Meeting may proceed with their respective occupation through a new 

election. 

Regarding the absence or temporary unavailability of any members of the Executive Board of 

Directors, who are also elected at the General Assembly, the Senior Board and the Supervisory 

Board are responsible for providing for their replacement, which should be ratified at the following 

General Meeting. 

II.8. Number of meetings of the management and supervisory bodies and 

of other committees with competences on management and supervisory 

matters during the year in question 

Number of meetings held during the 2008 financial year: 

Executive Board of Directors 55 

Supervisory Board 8 

Senior Board 8 

Audit and Risk Committee 13


II.11. Functions exercised by members of the management board in other 

companies, detailing those exercised in other companies of the same group 

The functions that members of the management board exercise in other companies are indicated 

in an annex to the present report. 

Regarding this matter, it should be noted that, under the terms of the Articles of Association of 

the Bank, the position of Director is incompatible with the exercise of functions, of any nature 

whatsoever, by appointment to a corporate position or by employment contract, in another 

credit institution with a registered office in Portugal or with an affiliate or branch in Portugal, 

controlled or in a group relationship with it, with direct or indirect ownership of more than 2% 

of the share capital or voting rights of another credit institution with a registered office in Portugal 

or with an affiliate or branch in Portugal or proposed as a member of corporate body, even if 

only factual, by a concurrent legal person. 

II 12 to 14 – Not applicable 

II.15. Identification of the members of the supervisory board, and other 

committees constituted within the former, detailing the members who 

comply with the rules on incompatibility established in no. 1 of article 414-A, 

including sub-paragraph f), and independence criteria established in no. 5 of 

article 414, both of the Companies Code 

Information already provided in point II.I above 

II.9. Identification of the members of the board of directors, and other 

committees constituted within the former, distinguishing executive and nonexecutive 

members and, amongst these, detailing the members who comply 

with the rules on incompatibility established in no. 1 of article 414-A of the 

Company Code, with the exception established in sub-paragraph b), and 

independence criteria established in no. 5 of article 414, both of the 

Companies Code 

Because of the corporate governance model adopted, the present number is not applicable. 

II.10. Professional qualifications of the members of the board of directors, 

indication of the professional activities exercised by them, at least, over 

the last five years, number of company shares they hold, date of their first 

appointment and end date of the term-of-office 

An annex to the present report indicates the respective professional qualifications and activities 

exercised over the last five years, as well as the number of company shares held. 

The Executive Board of Directors was elected at the General Meeting held on January 15, 2008 for 

the 2008/2010 term-of-office. It is foreseeable that the Annual General Meeting to be held in 2010 

up to the end of May will be an elective one.


II.18. Description of the remuneration policy, particularly including the 

means to align the interests of the executive to those of the non- executive 

members, and a summary and explanation of company policy relative to the 

terms of compensation negotiated through contract or though transaction 

in the case of removal from office and other payments linked to the early 

termination of contracts 

In the governance model adopted by the Bank, the Supervisory Board is responsible for 

establishing the remuneration of the Executive Directors as well as for approving the retirement 

regulations. The retirement of the Executive Directors will be established by its remunerations 

committee, in strict compliance, however, with the statutory provisions that determine that the 

remunerations of the Executive Board of Directors consist of a fixed part and a variable part, with 

the latter expressed in participation not in excess of 2% of the profits for the year. The 

Supervisory Board should submit a statement on the remuneration policy, with a consultative 

nature, for the appraisal of the Annual General Meeting. 

Both the remuneration of the members Executive Board of Directors’ policy, and the respective 

Retirement Regulations were altered in the 2008 financial year, being its current version transcribed 

in annex III of this Report in order to be submitted to the General Meeting with a consultive nature. 

II.19. Indication of the composition of the remunerations committee or 

equivalent body, when it exists, identifying the respective members who are 

also members of the management body, as well as their spouses, family 

members and similar in direct line up to the 3 rd degree, inclusively 

In light of the governance model adopted by the Bank, there is a Remunerations and Welfare 

Board, which is responsible for setting the remunerations of the elected members of the General 

Meeting and of the members of the Supervisory Board and Senior Board and a Nomination and 

Remunerations Committee which advises the Supervisory Board in setting the remuneration of 

the Executive Board of Directors. 

II.16. Professional qualifications of the members of the supervisory board 

and other committees constituted within the former, indication of the 

professional activities exercised by them, at least over the last five years, 

number of company shares they hold, date of their first appointment and end 

date of the term-of-office. 

An annex to the present report indicates the respective professional qualifications and activities 

exercised over the last five years, as well as the number of company shares held and date of 

their first appointment. 

II.17. Functions that members of the senior board and supervisory board, and 

other committees constituted within them exercise in other compamies, 

detailing those exercised in other companies of the same group 

The functions that members of the senior board and Supervisory Board exercise in other 

companies are indicated in an annex to the present report.


As previously mentioned, the respective composition is the following: 

Remunerations and Welfare Board: Chairman: José Manuel Rodrigues Berardo; Voting Members: 

Luís de Melo Champalimaud and Manuel Pinto Barbosa. 

Nomination and Remunerations Committee: Chairman: João Alberto Pinto Basto; Vice-Chairman: 

Francisco de la Fuente Sánchez; Members: António Luís Guerra Nunes Mexia, Keith Satchell. 

None of the persons identified above is spouse, family member and similar in direct line up to 

the 3 rd degree inclusively of the members of the Executive Board of Directors, being the 

members of the Remunerations and Welfare Board and Luís de Melo Champalimaud members 

of the Supervisory Board. 

II.20. Indication of individual or collective remuneration, defined in the broad 

sense to include, in particular, performance bonuses gained during the year 

in question by members of the management bodies 

The fixed remunerations that were paid to the members of the Executive Board of Directors in 

2008 totalled 3,413 thousand euros, of which 367 thousand euros were supported by subsidiary 

companies or by companies in which corporate bodies represent interests of the Group. By its 

own proposal addressed to the Remunerations and Welfare Board:, the members of the 

Executive Board of Directors will not receive any annual variable remuneration regarding the 

2008 financial year. 

In the extent that some members of the Executive Board of Directors had functions in the 

Management of the Bank and in the Group during 2007 and, until their election as Directors, 

during 2008, they were paid in this quality fixed and variable remunerations, relating to the year 

of 2007, in the amount of 1.001 thousand euros. 

Regarding the members of the Executive Board of Directors that have ended functions in 2008, 

besides the remunerations due, were paid, where appropriate, compensation decurring from the 

termination by mutual agreement of the labour contracts or expenses related with retirement 

responsibilities, in the amount of 28,179 thousand euros, already reflected in the 2007 financial 

statements. 

Already in 2009 and relating to the variable remuneration, the Nomination and Remuneration 

Committee and the Supervisory Board, having recognized the merit of the EBD in the 

performance of its functions during the 2008 financial year ended on 31 December 2008, 

accepted the proposal made by the EBD itself in the sense that no annual variable Remuneration 

be attributed to it relating the 2008 financial year. Concerning the Pluri-annual Variable 

Remuneration, it determined that the same be not attributed as well. Thus, the 2008 financial 

year should be neutral and will not influence the computation of the average to assess in the 

following years.


II.21. Indication, in individual terms, of the established amounts to pay, 

independently of its nature, in the case of termination of functions during 

the term-of-office, when, these amounts exceed double the fixed monthly 

remuneration established 

There is no contract with these characteristics. 

II.22. Information on the communication of irregularities policy adopted 

in the company 

With the purpose of adopting the best practices of corporate governance and reinforcing the 

culture of responsibility and compliance that has ever guided the Bank’s action, was established, 

namely for situations where the communication system through the hierarchy may not be able 

to achieve the desired objectives, a system for communicating irregularities allegedly occurred 

within the Bank. 

In order to contribute to a climate of greater social responsibility, this communication should 

have a strict nature and be assumed as a contribution for that effect. 

This way, the responsible for the communication should disclose his/her identity, using for the 

effect the internal e-mail address that is affected to him/her. The Bank assures the total 

confidentiality of the communication. 

In this sense, an e-mail address was especially created to exclusively receive the communication 

of irregularities (comunicar.irregularidade@millenniumbcp.pt). Where the communication relates 

to any of the members of the Supervisory Board or some of its specialized committees, the 

same should be done through a specific e-mail address (presidente.cgs@millenniumbcp.pt). 

The management and redirecting of the communication of irregularities pertains to the 

Supervisory Board that has delegated it on the Audit and Risk Committee.


Chapter III – Information 

III.1. Capital structure, including indications of shares not admitted for 

negotiation, different categories of shares, the rights and duties inherent 

to these shares and percentage of capital each category represents 

All shares issued by Banco Comercial Português are listed in the stock exchange, are of a single 

category and confer the same rights and duties. Consequently there are no Shareholders entitled 

to special rights. 

III.2. Qualified holdings in the share capital of the issuer, estimated in 

accordance with article 20 of the Securities Code 

On 31 December 2008, the qualified holdings in the share capital of Banco Comercial Português, 

estimated in accordance with article 20 of the Securities Code and according to the information 

available at the Bank, were as follows: 

Shareholders 

Number 

of shares 

% of capital 

% Voting 

rights 

Sonangol 469,000.000 9.990% 10.000% (1) 

Eureko Group (2) 

Eureko BV 216,444.868 4.611% 4.616% 

Achmea Holding NV 115,511.380 2.461% 2.463% 

Total 331,956.248 7.071% 7.079% 

Teixeira Duarte Group 

Teixeira Duarte – Sociedade Gestora de Participações Sociais, S.A. 

Teixeira Duarte – Gestão de Participações e Investimentos 

Imobiliarios, S.A. (3) 202,505.992 4.314% 4.319% 

C+P.A. – Cimentos e Produtos Associados, S.A. 102,483.872 2.183% 2.186% 

Arenopor – Investimentos SGPS, S.A. 23.000.000 0.490% 0.490% 

Other (Members of the Board of Directors) 1,765.391 0.038% 0.038% 

Total 329,755.255 7.025% 7.032% 

Fundação José Berardo (4) 

Fundação José Berardo 198,324.440 4.225% 4.229% 

Fundação José Berardo (Equity Swap with Banco Espírito Santo) 29,710.526 0.633% 0.634% 

Total 228,034.966 4.857% 4.863% 

Metalgest – Sociedade de Gestão, SGPS, S.A. (4) 

Metalgest – Sociedade de Gestão, SGPS, S.A. 63,328.399 1.349% 1.351% 

Kendon Properties 721,480 0.015% 0.015% 

Moagens Associadas, S.A. 13,245 0.000% 0.000% 

Cotrancer – Comércio e transformação de cereais, S.A. 13,245 0.000% 0.000% 

Bacalhôa, Vinhos de Portugal, S.A. 10,596 0.000% 0.000% 

Members of the Board of Directors of Metalgest, SGPS, S.A. 19,547 0.000% 0.000% 

Total 64,106.512 1.366% 1.367% 

Banco Sabadell 

Bansabadell Holding SL 208,177.676 4.434% 4.440% 

Total 208,177.676 4.434% 4.440% 

(continues)



Shareholders 

Number 

of shares 

% of capital 

% Voting 

rights 

Caixa Geral de Depósitos Group 

Caixa Geral de Depósitos, S.A. (participação estratégica) 153,830.235 3.277% 3.281% 

Companhia de Seguros Fidelidade – Mundial, S.A. 23,179.492 0.494% 0.494% 

Caixa Geral de Depósitos, S.A. (carteira de negociação) 366,262 0.008% 0.008% 

Companhia de Seguros Império Bonança, S.A. 203,235 0.004% 0.004% 

Multicare 21,544 0.000% 0.000% 

Via Directa – Companhia de Seguros, S.A. 7,098 0.000% 0.000% 

Total 177,607.866 3.783% 3.788% 

EDP Group (5) 

EDP – Imobiliária e Participações, S.A. 123,509.341 2.631% 2.634% 

OPTEP – Sociedade Gestora de Participações Sociais, S.A. 28,167.603 0.600% 0.601% 

Members of the Board of Directors and Supervisory Commitees 398,783 0.008% 0.009% 

Total 152,075.727 3.239% 3.243% 

Sogema 

Sogema SGPS, S.A. 125,766.734 2.679% 2.682% 

Total 125,766.734 2.679% 2.682% 

Privado Financeiras, S.A. 

Privado Financeiras, S.A. – own portfolio 108,599.093 2.313% 2.316% 

Banco Privado Português, S.A. – Clients’ portfolio under management 2,808 0.000% 0.000% 

Iberian Opportunities Fund 860,000 0.018% 0.018% 

Total 109,461.901 2.332% 2.334% 

Stanley Ho Group 

Sociedade de Diversões e Turismo de Macau, S.A. 76,112.854 1.621% 1.623% 

Stanley Hung Sun Ho 30,142.080 0.642% 0.643% 

Total 106,254.934 2.263% 2.266% 

SFGP – Investimentos e Participações, SGPS, S.A. 43,574.742 0.928% 0.929% 

IPG – Investimentos, Participações e Gestão SGPS, S.A. 58,488.113 1.246% 1.247% 

Total 102,062.855 2.174% 2.177% 

Total Qualified Shareholdings 2,404,260.674 51.213% 51.273% 

Source: Information received from the shareholders + File from the Securities Centre 

(1) 

According number 10 a) of Article 16 of Banco Comercial Português Articles of Association, votes exceeding 10% of the share capital are 

not considered. 

(2) 

Although Eureko has entered into a series of derivative transactions with JP Morgan regarding 135,238,429 BCP shares, the Portuguese Securities 

Market Commission (CMVM) considers that the voting rights inherent to those shares should be attributed to Eureko, thus increasing its 

participation to 9.96% of total voting rights. 

(3) 

Teixeira Duarte – Sociedade Gestora de Participações Sociais, S.A. informed, through an announcement dated December 12, that its subsidiary 

company Teixeira Duarte – Gestão de Participações e Investimentos Imobiliários, S.A. has agreed to acquire 102,483,872 BCP shares from 

C+P.A. – Cimentos e Produtos Associados, S.A., and therefore the voting rights related to those shares should be attributable to the former. 

(4) 

The shares and voting rights held by Fundação José Berardo and Metalgest are subject to reciprocal imputation. 

(5) 

EDP Pension Fund held 52,805,044 BCP shares, corresponding to 1.125% of the bank share capital. 

III.3. Identification of shareholders entitled to special rights and description 

of these rights 

There are no shareholders entitled to special rights. 

III.4. Any restrictions on the transfer of shares, such as clauses of consent for 

divestiture or limitations to the holding of shares 

There are no statutory restrictions to the free transmissibility of Shares.


III.5. Shareholders agreements known to the company and which may lead to 

restrictions on matters concerning the transfer of securities or voting rights 

There are no shareholders agreements known to the company, which may lead to restrictions 

on matters concerning the transmission of securities or voting rights. 

III.6. Rules applicable to alterations of the company’s articles of association 

Constitutive quorum – Article18 of the Articles of Association 

The General Meeting may only be held on first call when shareholders or their representatives 

holding more than one third of the capital are present. When the General Meeting intends to 

resolve on the merger, demerger and transformation of the company, the shareholders or their 

representatives present on first call, must hold shares corresponding to at least half of the share 

capital. 

On its second call, the General Meeting may meet and resolve independently of the number of 

shareholders present or represented and the amount of capital allocated to them. 

Deliberative quorum – Article 21 of the Articles of Association 

III.7. Control mechanisms established for any system of participation of 

workers in the capital whenever they do not directly exercise the voting rights 

No system has been established with these characteristics. 

III.8. Description of the evolution of listed market prices of the issuer’s 

shares, namely: 

a) The issuing of shares or other securities providing share subscription or acquisition rights; 

During April 2008 the Bank increased its share capital from 3,611,329,567 euros to 

4,694,600,000 euros. This increase was fully subscribed and involved the issue of 1,083,270,433 

ordinary, dematerialised nominative shares each of a par value of 1 euro, which were offered 

for subscription by the Bank’s shareholders in the exercise of their preference rights. 

Total demand amounted to 2,364,219.647 shares, more than twice oversubscribed. Emphasis must 

be given to the strong support of shareholders in exercising their preference rights, who subscribed 

1,071,230,855 shares, or about 98.9% of the total number of shares to be issued within the scope 

of the public offering. A total of 12,039,578 shares were available for pro rata distribution, while 

applications for pro rata distribution totalled 1,292,988,792 shares. The 1,083,270,433 new shares 

were admitted to trading on Eurolist by Euronext Lisbon on May 6, 2008. 

b) The disclosure of earnings; 

Whether the Meeting is held on its first or second call, any alterations to the articles of association 

require the approval of two thirds of the votes issued, with resolutions on the merger, demerger 

and transformation of the company requiring the approval of three quarters of the votes issued.


See annex VIII “Earnings Statement” 

Main events and impact in the price of the share 

Date 

Event 

Price 

variation 

next day 

Price 

variation 

next day 

Dec./17/08 Announcement of the sale of shares in Banco BPI -0.62% -0.75% 

Dec./13/08 Announcement of notification in administrative offence proceedings +0.99% -6.05% 

Oct./28/08 Release of 3 rd Quarter 2008 consolidated results +5.35% +6.98% 

Oct./27/08 Announcement of the confirmation of Moody’s ratings -1.71% +1.14% 

Oct./24/08 Announcement of the use of State guarantees -3.31% +0.88% 

Oct./14/08 Announcement of the maintenance of the Standard & Poor’s ratings -2.67% -8.09% 

Jul./22/08 Release of 1 st half 2008 consolidated results +1.74% +0.87% 

Jun./26/08 Announcement of the small investor mediation procedure -4.76% -13.95% 

May/27/08 General Meeting -1.49% -4.76% 

May/15/08 Announcement of agreement with Sonangol -0.87% -0.29% 

May/12/08 Release of 1 st Quarter 2008 consolidated results 0.00% -2.84% 

Apr./3/08 Announcement of the 2008 capital increase -2.98% -0.57% 

Feb./19/08 Release of 2007 consolidated results -4.27% -0.27% 

Jan./15/08 General Meeting -6.76% -19.55% 

Jan./8/08 Meeting of the Supervisory Board and of the Senior Board -0.36% -3.27% 

The following chart provides a graphic illustration of the performance of BCP shares during 2008. 

Performance of BCP shares during 2008 


of Shareholders 

Announcement 

of 2007 Earnings 

1Q08 Earnings 

Announcement 


of Shareholders 

1 st half Earnings 

Announcement 

Announcement of the 

intention to issue debt 

guaranteed by the 

Portuguese Republic 

3Q08 Earnings 

Announcement 

2,5 

2,0 

Supervisory Board and 

Senior Board Meeting 

Capital increase 

announcement 

Announcement of the 

agreement with Sonangol 

Announcement 

regarding the mediation 

procedure 

Re-affirmation 

of ratings by S&P 

Re-affirmation of 

ratings by Moody's 

Notifications from 

the CMVM regarding 

the accusations of 

infractions against 

the Bank 

Sale of BPI 

Shares 

Jan. 31 Feb. 29 Mar. 31 Apr. 30 May. 30 Jun. 30 Jul. 31 Aug. 29 Sep. 30 Oct. 31 Nov. 28 Dec. 31 

1,5 

1,0 

0,5


c) The dividends paid by category of shares, indicating the net value per share. 

The following table details the dividends paid by BCP since 2000: 

Year 

Paid in 

Gross Dividend 

per Share 

(euros) 

Net Dividend per Share (euros) 

Residents Non-residents 

Payout 

Ratio (1) 

Dividend 

Yield (2) 

2000 (3) 2001 0.150 n.a. n.a. 62.4% 2.65% 

2001 2002 0.150 0.120 0.105 61.1% 3.30% 

2002 2003 0.100 0.080 0.070 49.2% (4) 4.39% 

2003 2004 0.060 0.051 0.045 44.7% 3.39% 

2004 

Interim dividend 2004 0.030 0.02550 0.02250 

Final dividend 2005 0.035 0.02975 0.02623 

Total dividend 0.065 0.05525 0.04875 41.3% 3.44% 

2005 




2006 




2007 




2008 

Total dividendl (5) 2009 0.017 0.0136 0.0136 39.7% 2.09% 

(1) 

Payout ratio is the percentage of net profit distributed to shareholders in the form of dividend; 

(2) 

Dividend yield is the annual return, as a percentage, expressed by dividing the amount of the gross dividend by the share price at the end 

of the year to which the dividend refers; 

(3) 

Paid in the form of script dividend through the issue of new shares and their proportional distribution to shareholders holding shares 

representing the Bank’s equity capital; 

(4) 

On the basis of the net profit before setting aside general banking risk provisions in the sum of 200 million euros; 

(5) 

Proposal to be submitted to the Annual General meeting. 

III.9. Description of the dividend distribution policy adopted by the 

company, identifying, namely, the value of the dividend per share distributed 

in the last three years 

Maintaining the judicious principles and of prudence that characterize the policy of distribution 

of profits adopted by BCP, the Executive Board of Directors has proposed and the Supervisory 

Board meeting issued a favourable opinion on not to pay the interim dividend relative to 2008, 

having present, on one hand the high uncertainty as regards the international financial 

environment and the markets functioning and, on the other hand, either the level of results 

generated in a consolidated basis in the first three months, either the recent orientations relative 

to the level of own funds issued by the Bank of Portugal.


Notwithstanding this decision of not proceed to the distribution of the 2008 interim dividend, 

the Bank reiterates the maintenaince of its policy of distribution of dividends already announced, 

having, as principle, the goal of distributing 40% of net income, a proposal that it will submit to 

the forthcoming General Meeting of Shareholders. 

III.10. Description of the main characteristics of the share attribution plans 

and stock option plans adopted or in force in the year in question, namely 

justification for the adoption of the plan, category and number of beneficiaries 

of the plan, attribution conditions, clauses on restrictions on the divestiture 

of shares, criteria relative to share prices and the price of the exercise of 

options, period of time when the options may be exercised, characteristics of 

the shares to be attributed, existence of incentives for the acquisition of 

shares and/or exercise of options and competence of the management body 

to implement or modify the plan 

There are no share attribution plans or stock option plans. 

III.11. Description of the main elements of the business and operations 

carried out between the company on the one hand, and, on the other 

hand, its management and supervisory boards, qualified shareholders or 

companies in a controlled or group relationship, provided that they have 

economic significance to any of the parties involved, except with respect 

to business or operations which, cumulatively, are carried out under 

normal market conditions for similar operations and are part of the 

company’s current activities 

All operations in the context of this number were carried out under normal market conditions 

for similar operations and are part of the company’s current activities. 

On this issue, it should be noted that the operations in question are not the object of resolution 

by the Executive Board of Directors since they are submitted for the opinion of the committee 

for financial matters of the Supervisory Board. 

III.12. Reference to the existence of an Investor Support Office or other 

similar service 

Through the Investor Relations Department (IRD), the Bank establishes a permanent dialogue 

with the financial world – Shareholders, Investors and Analysts as well as the financial markets in 

general and respective regulatory entities. 

a) Functions of the IRD; 

The main functions of the IRD are to inform, foster and reinforce the trust of the different 

market agents in the Bank, through the disclosure of financial information and relevant facts 

to allow for a correct evaluation of the value of the BCP share and Bank.


b) Type of information provided by the IRD: 

In 2008, the Bank developed wide-reaching communication activities with the market, thus 

adopting the recommendations of the CMVM (Portuguese Stock Market Regulator) and 

international best practices in terms of financial and institutional communication. 

All information of institutional nature that is public and relevant is available on the Bank’s site, in 

its institutional area. 

Hence, as a principle, immediately after disclosure to the market of information relative to 

Privileged Information, General Meetings, Disclosure of Earnings and other announcements, the 

Bank provides the respective documents and presentations in the institutional area of its portal. 

c) Access to the IRD 

Telephone: + 351 21 113 10 80 

Fax: + 351 21 113 69 82 

Address: Av. Prof. Doutor Cavaco Silva, Edifício 1 Piso 0B 

2744-002 Porto Salvo, Portugal 

e-mail: investors@millenniumbcp.pt 

d) Company Internet site; 

www.millenniumbcp.pt 

e) Identification of the representative for market relations 

Pedro Esperança Martins. 

III.13. Indication of the amount of annual remuneration paid to the auditor 

and other natural or corporate entities belonging to the same network 

supported by the company or by corporate entities in a dominance or 

group relationship, as well as the breakdown of the percentage concerning 

specific services. 

Relationship with the Independent Auditors 

Activity Monitoring 

Monitoring of the activity of the Group Auditor, KPMG & Associados, SROC, S.A. (‘KPMG’) is 

ensured by the Supervisory Board, through the Audit and Risk Committee, which is also 

responsible for proposing the appointment of the Group Auditor to the General Meeting of 

Shareholders, as well as issuing its opinion on the auditor’s independence conditions and other 

relations between the Auditor and the Group. 

The aforementioned monitoring is achieved through regular contact with KPMG, allowing the 

Supervisory Board and the Audit and Risk Committee to discuss solutions and criteria resulting 

from audit activities in a timely manner.


Remuneration 

During the financial year of 2008, the Banco Comercial Português and/or corporate entities 

controlled by the Bank or as part of the same group contracted services from KPMG (in Portugal 

and abroad), whose corresponding fees totalled 7,263 thousand euros, distributed by the various 

types of services provided, as follows: 

KPMG Network December 31 st 2008 

Portugal 

Abroad 

Total 

% 

Legal accounts review services 2,254 1,292 3,546 49% 

Other guarantee and reliability services 1,504 812 2.316 32% 

Fiscal consultancy services 546 138 684 9% 

Other services than legal review 446 271 717 10% 

4,750 2,513 7,263 100% 

Relationship with the independent auditors 

A description of the main services included in each category of services provided by KPMG, 

relative to December 31 st 2008, is presented. 

a) Legal accounts review services 

Includes fees charged by KPMG and by the Statutory Auditor within the scope of auditing and legal 

revision of consolidated accounts for the Group and its various companies, on an individual basis, 

auditing of subsidiaries for consolidation purposes and other services associated to legal accounts 

revision, including the audit relative to December 31 st and the limited revision relative to June 30 th . 

b) Other guarantee and reliability services 

Includes fees charged by KPMG within the scope of provision of services that, considering their 

characteristics, are associated to the auditing activity and should, in most cases, be provided by 

statutory auditors, namely: issuing of comfort letters (including in 2008 the work performed within 

the scope of the share capital increase) and opinions on specific themes (internal control under 

Notification Number 5/2008 and economic provisions within the scope of Bank of Portugal 

regulatory requirements and services associated to security operations and other accounting 

services). 

c) Fiscal consultancy services 

Includes fees charged by KPMG within the scope of fiscal support provided to the Group relative 

to the review of the fiscal obligations of the various existing companies, in Portugal and abroad. 

d) Other services than legal review 

Includes fees charged by KPMG within the scope of services that do not fall into the category 

of legal revision, allowed in accordance with the defined independence rules. 

Established Regime in Order to Safeguard the Auditor’s Independence 

Approval of services 

Millennium bcp has a very strict independence policy in order to avoid any conflicts of interest 

in using the services of External Auditors. As auditor for Group BCP, KPMG complies with the


KPMG Risk Management and Quality Control Process 

Risk management 

KPMG responsibility is to ensure that these services don’t put their independence as an auditor 

for Grupo BCP at risk. The auditor’s independence requirements are determined based on a 

combination between the policies of Grupo BCP regarding the independence of external 

auditors, each country’s legal requirements, when these are more demanding, and KPMG’s internal 

rules. Every year KPMG reports to the Executive Board of Directors and the Audit and Risk 

Committee on all established measures to safeguard its independence as an auditor for the 

Grupo BCP. 

KPMG implemented a system on its Intranet, at an international level, designated “Sentinel”, which 

conditions service provision by any office of the KPMG network to authorization by the Global 

Lead Partner responsible for the customer. This procedure implies that the KPMG Units from 

which the service in question is requested must obtain previous authorization from the referred 

Global Lead Partner. Service requests must include presentation of a rationale for the requested 

activities, namely factors allowing evaluation of compliance with applicable risk management rules 

and, consequently, KPMG independence. 

The Global Lead Partner is also responsible for verifying that service proposals presented through 

“Sentinel” comply with service pre-approval rules and, when applicable, proceeds with any 

necessary diligences before the Audit and Risk Committee, so as to verify the strict compliance 

with applicable independence rules. 

All KPMG employees must comply with the independence rules described in the KPMG 

International Risk Management Manual, besides being obliged to fully comply with the rules 

established by the Auditors Order and, when applicable, the Independence Standards Board, SEC 

and other regulatory entities. 

KPMG professionals are responsible for maintaining their independence, being obliged to 

periodically review their financial interests, as well as their personal and professional relationships, 

to ensure strict compliance with KPMG and professional independence requirements. It is 

independence rules defined by the Group, as well as with the independence rules defined by 

KPMG, by the International Standards on Auditing and by the local independence rules when 

these are more demanding. 

With the objective of safeguarding auditor independence and taking into account good practices, 

as well as national and international rulings, a series of regulatory principles was approved by the 

Supervisory Board, through the Bank’s Audit and Risk Committee, and KPMG, as described below: 

• KPMG, companies or corporate entities belonging to the same (“Network”) will not be able 

to provide services that are considered prohibited to the Bank or Group 

• Contracting of remaining non-prohibited services by any Organic Unit of the Bank or company 

controlled by the Bank entails previous approval by the Bank’s Audit and Risk Committee. The 

referred approval is issued for a pre-defined series of services, for a renewable 12-month period. 

For the remaining services, a specific approval by the Audit and Risk Committee is required.


forbidden for KPMG employees to collaborate with any other entities or organisations (customers 

or not), as managers, executive members, independent professionals or employees. 

In order to guarantee its independence and that of its professionals, in reality and appearance, KPMG 

developed an application – the KPMG Independence Compliance System (KICS) – that includes 

information concerning independence rules, a search engine allowing access to the list of restricted 

entities, where KPMG professionals are not allowed to hold financial interests, and an employee 

financial investment reporting system, where professionals record the names of the entities where 

they hold financial interests. This way, this application fulfils AICPA independence demands without 

compromising privacy policies. 

An annual independence statement is required from all KPMG professionals, signed by occasion of 

their joining and renewed on an annual basis, where these commit not to acquire financial interests, 

directly or indirectly, in KPMG customers, keep all information they may access confidential, and avoid 

any relationships with customer employees that may compromise KPMG’s independence and 

objectiveness. 

Quality control 

Quality control by national office internal teams 

So as to guarantee service quality to its customers, KPMG annually conducts quality control of 

the performed activities, which essentially consists of the following aspects: 

• Revision of each activity by the involved team, allowing identification of areas requiring additional 

work on a particular component of the customer’s financial statements, before the work in 

question is concluded; 

• Annual revision, by a team consisting of KPMG’s most experienced professionals, of a 

representative sample of customer’s documents, in order to ensure that work planning was 

performed in the most effective manner, as well as to ensure that the information collected at 

this stage allowed to structure and design adequate internal control tests, and that these 

guaranteed the analysis of all risk areas identified in work planning stages and, eventually, in 

subsequent stages. 

Quality control by international office internal teams 

In addition to quality control activities continuously carried out by our professionals in Portugal, 

KPMG annually performs quality audits of general procedures, as well as of risk and quality evaluation 

procedures of the conducted work. These audits are performed by KPMG international office staff 

with adequate training to carry out these control activities. 

These control activities allow to share and harmonize the knowledge of KPMG, worldwide, enabling 

the identification of risks and the use of determined assessment and risk minimization tools, already 

developed in other countries. The quality assessment and evaluation made by the professionals of 

the offices in Portugal and of those abroad are supported by another IT tool especially developed 

for that purpose – the Risk Compliance Checklist (RCC).

294 Annual Report Volume II Annexes to the Corporate Governance Report 

Annexes to the Corporate 

Governance Report

Annual Report Volume II Annexes to the Corporate Governance Report 295


Annex I 

Supervisory Board’s Remuneration approved by the General Meeting of Shareholders of Banco 

Comercial Português, S.A. on 28/05/2007, approved by 99.85% of the shareholders present or 

represented.

Annual Report Volume II Annexes to the Corporate Governance Report 297 

Annex II 

Remuneration Policy of the members of the Supervisory Board 

In accordance with the company’s articles of association it is a competence of the Remunerations 

and Welfare Board (RWB) to submit a statement on the remuneration policy of the members 

of corporate bodies to the appraisal of the General Meeting of Shareholders. 

The current RWB was elected at the Annual General Meeting of 2008 with the following 

composition: 

Chairman 


José Manuel Rodrigues Berardo (non-independente) 

Luís de Melo Champalimaud (independent); 

Manuel Pinto Barbosa (independent). 

In accordance with the articles of association, it pertains to the WRB to resolve on the 

remunerations of all corporate bodies. 

In 2008, before the General Meeting that elected this Remunerations and Welfare Board, the 

Supervisory Board became responsible, in accordance with article 13 (1) of the Articles of 

Association, for establishing the remuneration conditions of the members of the Executive Board 

of Directors. 

Considering the provisos of the articles of association, the RWB considers that it is not 

responsible for establishing the remunerations of the governance bodies that are not, at the same 

time, corporate bodies. 

On the date this RWB was elected, the remunerations of the several corporate bodies exercising 

functions at the time had already been established. 

Considering that the term-of-office of the current Supervisory Board ended on 31 December 

2008, the forthcoming Annual General Meeting of Shareholders must elect a new one. 

Hence, this is the right moment for the WRB to present before all Shareholders its remuneration 

policy, at least in what concerns the Supervisory Board to be elected. 

The remuneration policy for the corporate bodies of Millennium BCP must be straightforward, 

transparent and competitive, thus assuring the creation of value for the shareholders and 

remaining Stakeholders. 

Considering the functions of the Supervisory Board, its remuneration should also guarantee the 

full independence of its members from the Bank’s executive bodies. 

These remunerations shall be fixed and not accrue with any other remunerations for functions 

in other corporate and/or governance bodies of the Bank.


The RWB also deemed that the remunerations of the Supervisory Board should be established 

bearing in mind the Bank’s effort to meet the interests of Millennium BCP’s shareholders, obtained 

by substantially reducing the remunerations of the current Executive Board of Directors elected 

at the General Meeting of 15 January 2008. 

Therefore, the RWB foresees a significant decrease of the costs with the functioning of the 

Supervisory Board – estimated at around 50% –, without incurring the risk of disturbing the 

Supervisory Board’s effective and efficient exercise of its functions. 

Thus, bearing in mind the principles listed above, as well as the practices of large Portuguese 

companies, the responsibilities and functions of the members of the Supervisory Board and the 

present market conditions, the RWB adopted the following rules: 

Chairman, autonomous remuneration; 

Vice-Chairman, who is member of a Specialized Committee, between 50% and 75% of the 

Chairman’s remuneration; 

Chairman of the ARC, between 50% and 75% of the Chairman’s remuneration; 

Vice-Chairman, who is not member of a Specialized Committee, between 25% and 50% of the 


Effective member, who is member of a Specialized Committee, between 25% and 50% of the 


Effective member, who is not member of a Specialized Committee, between 10% and 25% of the 

Chairman’s remuneration.


Annex III 

Remuneration Policy for the members of the Executive Board 

of Directors 

The global remuneration includes the following components: 

• Fixed Remuneration, paid 14 times a year. The Selection and Remunerations Committee shall, based 

on international benchmarks, define the remuneration of the Chairman, being the remuneration of 

the Vice-Chairmen between 70% and 80% and that of the remaining members between 60% and 

70% of the remuneration of the Chairman. The benchmark for the remuneration is based on the 

comparison with the Portuguese benchmark universe, composed by companies listed in PSI-20 

with size or features similar to those of Millennium bcp. 

• Variable Remuneration has two components and was designed to incentive the Bank’s top 

performance in a sustained manner in the long term: 

• annual Variable Remuneration, paid only once to the members of the Executive 

Board of Directors in effect in the month of the payment of dividends approved at 

the Annual General Meeting. This remuneration compensates the accomplishment 

of the annual results and may amount to 130% of the Annual Fixed Remuneration, 

depending on the compliance with the goals set forth. This remuneration depends 

on a benchmark based on the practices followed by the European financial sector. 

• multiannual Variable Remuneration, computed for the three year term-of-office and 

paid only once in the year after the end of the term-of-office. This remuneration 

compensates the accomplishment of the annual results and may amount to 130% of 

the Fixed Annual Remuneration, depending on the compliance with the goals set 

forth. This remuneration depends on a benchmark based on practices followed by 

the European financial sector. 

The variable remuneration, as a whole and for all the members of the Executive Board of 

Directors, cannot surpass 2% of the net income.


Criteria for granting the annual variable remuneration 

The Annual Variable Remuneration is computed based on the Group’s results and on the 

individual performance of each Executive Director. 

The Group’s results are computed in absolute terms, from a growth standpoint, and against the 

performance of the BEBANKS – Bloomberg Europe Banks and Financial Services Index, based 

on the growth indicators of Banking Product, the improvement of the Cost-to-Income ratio, the 

increase of net earnings, the Return on Equity and the total Shareholder Return. These indicators 

are pondered based on their level of strategic importance. 

Besides verifying these indicators while assessing the Executive Board of Directors as a team (Group 

Earnings), the members’ individual performance is also appraised (Individual Multiple) based on the 

performance and individual results achieved, as well as their contribution to the company’s image 

and reputation in their relation with the shareholders and with the Stakeholders in general. 

Criteria for granting the multiannual variable remuneration 

This component of the Variable Remuneration aims to ensure the sustainability of Millennium 

bcp’s performance and to continuously bind the members of the Executive Board of Directors 

Under these terms and conditions, this component shall not be paid in case of resignation or loss 

of mandate when caused by the member, except death or retirement on account of age or 

disability. Failure to be re-elected does not hurt the computation of the multiannual remuneration. 

The Multiannual Variable Remuneration is also computed based on the Group’s results and on 

the individual performance of the Executive Directors during their term-of-office. 

The Group’s results are computed in terms of absolute and relative performance against the 

BEBANKS, taking into consideration the average three-year growth of the indicators for Banking 

Product, Cost-to-Income ratio, Net Earnings, Return on Equity and Total Shareholder Return. These 

indicators are pondered based on their level of strategic importance. 

The Individual Multiple is computed based on the appraisal of the individual performance during 

the term-of-office.


Other compensations: 

The members of the Executive Board of Directors are only entitled to the compensations 

disclosed and shall receive no additional compensations for their functions. The existing benefits 

in terms of home loans, health insurance, occupational disease insurance, personal injury insurance, 

credit card and mobile phone remain in effect. Regarding cars, the benchmark is the average 

amount considered to be the practice in the benchmark market (companies listed in PSI-20 with 

similar size or features). 

Retirement Regime 

The supplements for the retirement and survivor pension are granted based on the functions 

as Director in the Bank’s executive management body, under the terms and conditions of the 

Regulations hereto attached.


Annex IV 

Retirement Regulations for Executive Directors of Banco Comercial 

Português, S.A. 

Article 1 

(Object) 

These Regulations set forth, in accordance with Art. 13 of the Articles of Association of Banco 

Comercial Português, S.A. (the Bank), the supplemental regime of benefits due to retirement, 

disability or survivorship, granted based on the functions as Director in the Bank’s executive 

management body. 

Article 2 

(Scope) 

1. Are within the scope of these Regulations the Beneficiaries, 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-office as 

of 2008/2010, for purposes of protection in case of disability or retirement. 

2. These Regulations also comprise the beneficiaries of the survivorship pensions referred in 

Article 5. 

Article 3 

(Supplemental retirement and disability pension) 

1. The right to the supplemental retirement or disability pension is granted if the beneficiary 

retires due to old age or disability, under the terms of the applicable social security regime. 

2. 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. 

3. 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. 

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) 

1. The supplemental benefits plan regulated herein is financed through individual applications to 

an open pension fund. 

2. The Bank’s annual contribution to the plan established in these regulations equals, before 

applying any income tax deductions for individuals, 23% of the difference between the annual 

gross fixed remuneration of the Director for being a member of the Bank’s Executive Board 

of Directors and the annual gross fixed remuneration used as base for the Bank’s mandatory 

contributions to the welfare system applicable to the Director in case of disability, old age or 

death (Social Security General Regime; Social Security Private Regime for the Banking Sector 

and the supplemental Plan for Employees of Banco Comercial Português, S.A.). 

Article 7 

(Accumulation of retirement benefits and remunerations) 

The accumulation of retirement benefits 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 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 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) 

1. These Regulations, as adopted in 2008, shall apply to the benefits to grant after the date of their 

approval by the competent corporate body and approval by or notification to Instituto de 

Seguros de Portugal (Portuguese Insurance Institute), as required. 

2. These Regulations shall be interpreted and applied by the Remunerations Board or Committee 

referred in the previous article. 

3. The Remunerations Board or Committee must submit any amendments to these Regulations 

to the appraisal of the Annual General Meeting.


Annex V 

Curricula Vitae of the Members of the Executive Board 

of Directors of Banco Comercial Português, S.A. 

Carlos Jorge Ramalho dos Santos Ferreira 

Personal data: 

• Date of Birth: 23 February 1949; 

• Place of Birth: Lisbon; 

• Nationality: Portuguese; 

• Position: Chairman of the Executive Board of Directors; 

• Beginning of functions: 16 January 2008; 

• Term-of-office: 2008/2010. 

Management Positions presently held in Companies of the Group: 

In Portugal: 

• Manager of BCP Internacional II, Sociedade Unipessoal, SGPS, Lda; 

• Chairman of the Board of Directors of Millennium bcp – Prestação de Serviços, ACE; 

• Chairman of the Board of Directors of Fundação Millennium bcp. 

Abroad: 

• Chairman of the Supervisory Board of Bank Millennium, S.A. (Poland). 

Current positions outside the Group: 

• Member of the Board of Directors of Banco Sabadell, as representative of Banco Comercial 

Português S.A. (BCP); 

• Member of the Supervisory Board of EDP – Energias de Portugal, S.A. 

Direct Responsibilities within the Group’s organization: 

• General Secretariat; 

• Relations with the Authorities; 

• Communication Department; 

• People Management Support Division; 

• Millennium Angola; 

• Millennium 2010; 

• Audit. 

Academic Education: 

• 1971 – Licentiate Degree in Law from the Faculty of Law of Universidade Clássica de Lisboa; 

• 1977 a 1988 – Lecturer in charge of overseeing the courses of Public Finances, Financial Law, 

International Economic Law and Currency and Credit in the Faculty of Law of the Universidade 

Clássica de Lisboa, in the Faculty of Law of the Universidade Católica Portuguesa and in the 

Faculty of Economics of the Universidade Nova.

Experiência profissional: 

• 1972/1974 – Technician in the Collective Agreements Division of the Development and Labour 

Fund, and Assistant of the Centre for Social and Corporate Studies of the Ministry for 

Corporations and Social Welfare; 

• 1976/1977 – Member of Parliament for the Socialist Party and Vice-Chairman of the 

Parliamentary Committee for Security and Health; 

• 1977/1987 – Member of the Management Board of the state-owned company ANA – 

Aeroportos e Navegação Aérea; 

• 1984/1988 – Member of the Tax Reform Commission; 

• 1987/1989 –Chairman of the Board of Directors of Fundição de Oeiras; 

• 1989/1991 – Chairman of the Board of Directors of Companhia do Aeroporto de Macau; 

• 1992/1999 – In Group Champalimaud, Director and subsequently Chairman of the Board of 

Directors of the Insurance Company Mundial Confiança and Chairman of the Board of the General 

Meeting of Banco Pinto & Sotto Mayor; 

• 1992/2001 – Vice-Chairman of the Board of the General Meeting of Estoril-Sol; 

• 1999/2003 – In Group BCP, Director of ServiBanca- Empresa de Prestação de Serviços, ACE; 

Vice-Chairman and Member of the Board of Directors of Seguros & Pensões Gere, SGPS, S.A.; 

Director and Chairman of the Board of Directors of Império Bonança, of the insurance companies 

Ocidental and Ocidental Vida, Seguro Directo, ICI – Império Comércio Indústria, Companhia 

Portuguesa de Seguros de Saúde, Autogere – Companhia Portuguesa de Seguros, S.A., 

Corretoresgest, S.A. and of Pensões Gere – Sociedade Gestora de Fundos de Pensões, S.A. and 

Director of Eureko, BV; 

• 2003/2005 – Vice-Chairman of Estoril-Sol SGPS, S.A., Vice-Chairman of Finansol – SGPS, S.A. 

and Non-executive Chairman of Willis Portugal – Corretores de Seguros, S.A.; 

• 2003/2005 – Member of the Board of Directors of Varzim Sol – Turismo, Jogo e Animação, S.A.; 

• 2005 – Director of the Seng Heng Bank; 

• 2005/2008 – Chairman of the Board of Directors of Caixa Geral de Depósitos, S.A.; 

• 2005/2008 – Chairman of Banco Nacional Ultramarino, S.A. (Macau); 

• 2005/2008 – Chairman of Caixa – Banco de Investimento, S.A.; 

• 2005/2008 – Chairman of Caixa Seguros, SGPS, S.A.; 

• 2005/2008 – Member of the Supervisory Board of EDP – Energias de Portugal, S.A. 

Member of the Board of the Steering and Strategy Committee of Foment Invest, SGPS, S.A.; 

• February to December of 2008 – Member of the Board of the Steering and Strategy Committee 

of Foment Invest, SGPS, S.A. 



Armando António Martins Vara 


• Date of Birth: 27 March 1954; 

• Place of Birth: Vinhais – Bragança; 


• Position: Vice-Chairman of the Executive Board of Directors; 




In Portugal: 

• Vice-Chairman of the Board of Directors of Fundação Millennium bcp; 

• Chairman of the Board of Directors of Banco de Investimento Imobiliário, S.A.; 

• Vice-Chairman of the Board of Directors of Banco Millennium bcp Investimento, S.A.; 

• Manager of BCP Internacional II, Sociedade Unipessoal, SGPS, Lda.; 

• Manager of BII Internacional, SGPS, Lda.; 

• Manager of VSC – Aluguer de Viaturas sem Condutor, Lda; 

• Vice-Chairman of the Board of Directors of Millennium bcp – Prestação de Serviços, ACE. 

Abroad: 

•Vice-Chairman of the Board of Directors of BIM – Banco Internacional de Moçambique, S.A. 

Functions within the organizational framework of the Group: 

• Corporate and Companies Coordination Committee; 

• Banking Services Coordination Committee. 

Direct Responsibilities: 

• Corporate Network; 

• Companies Network; 

• Specialised Loans; 

• Companies Marketing; 

• Procurement, Assets and Security; 

• Department of Assets Disposai; 

• Fundação Millennium bcp; 

• Millennium Moçambique; 

• Real Estate Promoters Department. 


• 2005 – Licentiate Degree in International Relations (UNI); 

• 2004 – Post Graduate Degree in Business Administration (ISCTE). 

Professional Experience 

• 1987/1991 – Member of the Parliamentary Assembly of the Council of Europe; 

• 1989/1991 – Member of the Parliamentary Assembly of the Western European Union; 

• 1992/1996 – Chairman of the Board of Directors of Fundação José Fontana; 

– Councillor of Amadora Town Hall; 

– Member of the Management of Instituto da Imprensa Democrática (Democratic Press Institute); 

– Member of the corporate bodies of Institute Portuguese – Arab Cooperation;

• 1995/1997 – Secretary of State of Internal Administration of the XIII Constitutional Government; 

– Member of the Parliament during the IV, V, VI and VII Legislatures; 

– Vice-Chairman of the Social Equipment and Youth Parliamentary Commissions; 

• 1997/1999 – Deputy Secretary of State of Internal Administration of the XIII Constitutional 

Government; 

• October of 1999 to September of 2000 – Deputy Minister of the Prime Minister of the XIV 

Constitutional Government; 

• September of 2000 to December of 2000 – Minister of Youth and Sport of the XIV 

Constitutional Government; 

• 2001/2005 – Manager and Coordinator-Manager at Caixa Geral de Depósitos, S.A.; 

• 2005/2008 – Member of the Board of Directors of CAIXATEC – Tecnologias de Comunicação, S.A.; 

• 2005/2008 – Member of the Board of Directors of CAIXA PARTICIPAÇÕES, SGPS, S.A.; 

• 2005/2008 – Chairman of the Board of Directors of SOGRUPO, IV – Gestão de Imóveis, S.A.; 

• 2005/2008 – Chairman of the Board of Directors of IMOCAIXA, S.A.; 

• 2005/2008 – Member of the Board of Directors of Caixa Geral de Depósitos, S.A.; 

• 2006/2008 – Member of the Board of Directors of Portugal Telecom, SGPS, S.A.; 

• February to December 2008 – Manager of BCP Participações Financeiras, SGPS, Sociedade 

Unipessoal, Lda.; 



Paulo José de Ribeiro Moita de Macedo 


• Date of Birth: 14 July 1963; 

• Place of Birth: Lisboa; 


• Position: Vice-Chairman of the Executive Board of Directors; 




In Portugal: 


• Member of the Board of Directors of Millennium bcp – Prestação de Serviços, ACE; 

• Vice-Chairman of the Board of Directors of Fundação Millennium bcp. 

Abroad: 

• Member of the Supervisory Board of Bank Millennium, S.A. (Poland); 

• Member of the Board of Directors of BCP Holdings (USA), Inc. (USA). 




• Corporate Centre; 

• Accounting; 

• Investor Relations; 

• Risk Office; 

• Compliance Office; 

• Credit Recovery; 

• Legal Department. 


• 1986 – Licentiate Degree in Corporate Organization and Management at the School of 

Economics of Universidade Técnica de Lisboa; 

• 1986/1991 – Trainee Lecturer at the School of Economics and Management of Universidade 

Técnica de Lisboa – Management Department; 

• 2001 – Company’s Senior Management Programme – AESE; 

• 1991/2002 – Guest Lecturer at the School of Economics and Management of Universidade 

Técnica de Lisboa – Management Department;

Annual Report Volume II Annexes to the Corporate Governance Report 309 

– Teacher of the Post-Graduate Degree on Tax Matters at the Instituto de Estudos 

Superiores Financeiros e Fiscais (School of Tax and Financial Studies); 

– Teacher of the Post-Graduate Degree on Management of Banks and Insurance 

Companies at the School of Economics and Management of Universidade Técnica 

de Lisboa; 

– Teacher of the Post-Graduate Degree on Management of Banks and Insurance 

Companies at the School of Economics and Management of Universidade Técnica 

de Lisboa; 

– Teacher of the MBA of AESE. 

Professional Experience: 

• September of 1986/September of 1993 – Arthur Andersen (a company that, from August 

2002 onwards merged its activities in Portugal with Deloitte, Portugal), Tax Advising Division, 

Assistant, Senior Assistant and Manager; 

• September of 1993/1998 – Banco Comercial Português, S.A., having performed the following 

functions: 

– Manager – Strategic Marketing Unit; 

– Manager – Credit Cards Commercial Department; 

– Manager – Marketing of the Trade and Entrepreneurs Network; 

– Manager – Corporate Centre; 

– Manager – Euro Cabinet. 

• 1998/2000 – Director of Comercial Leasing, S.A.; 

• 2000/2001 – Director of Interbanco, S.A.; 

• 2001/2004 – Member of the Board of Directors of Companhia Portuguesa de Seguros de 

Saúde, S.A. (Médis); 

• 2003/2004 – Member of the Management Commission of Seguros e Pensões, SGPS, S.A.; 

• May of 2004 to July of 2007 – Tax General Director and Chairman of the Tax Administration Board; 

• August of 2007 to January of 2008 – Senior Manager of Banco Comercial Português, S.A., in 

charge of the implementation of the Millennium 2010 Program; 

• February to December of 2008 – Manager of BCP Participações Financeiras, SGPS, Sociedade 

Unipessoal, Lda. 

Other Activities: 

• 1994/1996 – Member of the Tax Reform Commission; 

• 1997 – Member of the Work Group for the Re-Assessment of Tax Benefits.


José João Guilherme 


• Date of Birth: 16 June 1957; 

• Place of Birth: Coruche; 


• Position: Member of the Executive Board of Directors; 




In Portugal: 

• Chairman of the Board of Directors of Banco Millennium bcp Investimento, S.A.; 

• Chairman of the Board of Directors of Banco Activobank (Portugal), S.A.; 



• Member of the Board of Directors of Fundação Millennium bcp. 

Abroad: 



• Member of Executive Board of the ELO – Portuguese Association for the Economical 

Development and Cooperation, representing Banco Comercial Português, S.A.; 

• Member of the Board of Directors of the Fund PVCi – Portugal Venture Capital Initiative as 

representative of BCP Internacional II. 


• Retail Coordination Committee; 

• Corporate and Companies Coordination Committee. 


• Investment Banking; 

• International Division; 

• Innovation and Commercial Promotion Department; 

• Commercial Management Information (DIGAC) ; 

• ActivoBank7; 

• Financial Stakes and Valuation Department. 


• 1981 – Licentiate degree in Economics from the Portuguese Catholic University. 


• 1990/1994 – Manager of Banco Comercial Português de Investimento, S.A.; 

• 1991/1994 – Non-executive Director of CISF RISCO Companhia de Capital de Risco, S.A.; 

• 1995 – Coordination Department – South, of NOVAREDE; 

• 1998/2001 – Member of the Board of Directors of Big Bank Gdansk S.A.; 

• 2000/2001 – Member of the Supervisory Board of the company Polcard (Poland), in the credit 

card business;

• 2001/2005 – Member of the Board of Directors of Ocidental – Companhia Portuguesa de 

Seguros, S.A.; 

• 2001/2005 – Member of the Board of Directors of Ocidental Vida Companhia de Seguros, S.A.; 

• 2002/2005 – Member of the Board of Directors of Seguro Directo Companhia de Seguros, S.A.; 

• 2003/2005 – Member of the Board of Directors of Seguros & Pensões SGPS; 

• 2005/2006 – General Manager of Banco Comercial Português, S.A.; 

• October of 2007/March of 2008 – Chairman of the Board of Directors of Millennium bcp 

Teleserviços – Serviços de Comércio Electrónico, S.A.; 

• October of 2007 to May of 2008 – Member of the Board of Directors of Millennium bcp 

Gestão de Fundos de Investimento, S.A.; 

• February to December of 2008 – Manager of BCP Participações Financeiras, SGPS. 



Nelson Ricardo Bessa Machado 


• Date of Birth: 15 September 1959; 

• Place of Birth: Oporto; 








• Member of the Board of Directors of Fundação Millennium bcp; 

• Vice-Chairman of the Board of Directors of Millennium bcp Fortis Grupo Segurador, SGPS, S.A.; 

• Vice-Chairman of the Board of Directors of Médis – Companhia Portuguesa de Seguros de 

Saúde, S.A.; 

• Vice-Chairman of the Board of Directors of Ocidental – Companhia Portuguesa de Seguros, 

S.A.; 

• Vice-Chairman of the Board of Directors of Ocidental – Companhia Portuguesa de Seguros 

de Vida, S.A.; 

• Vice-Chairman of the Board of Directors of Pensões Gere – Sociedade Gestora de Fundos de 

Pensões, S.A. 

Abroad: 


• Vice-Chairman of the “Conseil de Surveillance” of Banque BCP, S.A.S. (France); 

• Member of the Board of Directors of Millennium Bank, SA (Greece); 



• Retail Coordination Committee; 

• Private Banking and Asset Management Coordination Committee; 

• European Banking Coordination Committee. 


• Retail Network (Portugal); 

• Direct Bank Division; 

• Insurances. 


• 1982 – Licentiate Degree in Economics from the School of Economics of the University of Oporto; 

• 1982/83 to 1986/87 – Lecturer in the Faculty of Economics of Oporto; 

• 1987/88 – Guest lecturer in the Faculty of Engineering.


• September of 1982 to June of 1983 – Department for Economic and Marketing Studies of 

Banco Português do Atlântico (6 months in the Centre for Studies and Marketing); 

• June of 1984 to February of 1987 – Industrial Association of Oporto, in the Department for 

Economic Studies, between January and October 1986 as interim Deputy General Secretary; 

• March of 1987 – Returns to BPA to the Corporate Studies Department of DEMP; 

• January of 1988 – Commercial Manager of PRAEMIUM – Sociedade Gestora de Fundos de 

Pensões, in charge of launching of the Pension Funds; 

• March of 1989 – Deputy Director of PRAEMIUM; 

• 1991 – Member of the Board of Directors of BPAVIDA, S.A.; 

• 1996 – Head of the Direct Banking Department of BPA; 

• 1996 – Head of the Project “In Store Banking” leading to the opening of Banco Expresso 

Atlântico; 

• November of 1996 – Coordinating Manager of NovaRede – North; 

• October of 1997 to October of 2000 – additionally Head of Project NRSECXXI; 

• December of 2000 to February of 2000 – Member of the Board of Directors of Crédibanco 

– Banco de Crédito Pessoal, S.A.; 

• October of 2001 to February of 2002 – Member of the Board of Directors of Leasefactor, SGPS, S.A.; 

• March of 2002 to June of 2003 – Director of Interamerican Life Insurance Company – the largest 

life and health insurance company in Greece; 

• July of 2003 to July of 2006 – Director and General Manager of NovaBank (later Millennium bank) 

in Greece; 

• July of 2003 to July of 2006 – Non-executive Director of Bank Europa (later Milennium bank 

Turkey); 

• August of 2006 to January of 2008 – General Manager of MillenniumBcp with the functions of 

Coordinating Manager of one of the retail coordination areas; 





Luís Maria França de Castro Pereira Coutinho 


• Date of Birth: 2 March 1962; 







In Portugal: 

• Member of the Board of Directors of Banco Activobank (Portugal), S.A.; 




Abroad: 

• Vice Chairman of the Executive Board of Directors of Bank Millennium (Poland); 

• Member of the Supervisory Board of Millennium Leasing Sp. Z.o.o. (Poland); 

• Member of the Supervisory Board of Millennium Dom Maklerski S.A. (Poland); 

• Member of the Supervisory Board of Millennium Lease Sp. Z.o.o. (Poland); 

• Chairman of the Board of Directors of Banque Privée BCP (Suisse), S.A.; 

• Vice-Chairman of the Board of Directors of Millennium Bank, S.A. (Greece): 

• Chairman of the Board of Directors of BCP Holdings (USA), Inc. (USA). 


• Private Banking and Asset Management Coordination Committee; 

• European Banking Coordination Committee. 


• Bank Millennium (Poland); 

• Millennium bank (Greece); 

• Banca Millennium (Romania); 

• Millennium bank (Turkey); 

• Millennium bcpbank (USA); 

• Private Banking; 

• Millennium Banque Privée (Switzerland); 

• WMU London; 

• Asset Management. 


• 1984 – Licentiate degree in Economics from the Universidade Católica Portuguesa (Portuguese 

Catholic University).


• 1985/1988 – Responsible for the Dealing-Room of Credit Lyonnais (Portugal); 

• 1988/1991 – General Manager, Treasury and Capital Markets – Banco Central Hispano; 

• 1991/1993 – Member of the Board of Directors of Geofinança – Sociedade de Investimentos; 

• 1993/1998 – Member of the Executive Committee and of the Board of Directors of Banco 

Mello, S.A.; 

• 1998/2000 – Vice-Chairman of the Executive Committee and Member of the Board of 

Directors of Banco Mello; 

• 2000/2001 – General Manager of Banco Comercial Português, S.A.; 

• 2001/2003 – Head of the Office of the Chairman of the Board of Directors of Banco Comercial 

Português, S.A.; 

• 2003/2008 – Vice-Chairman of the Board of Directors of Bank Millennium, S.A. (Poland); 





Vítor Manuel Lopes Fernandes 


• Date of Birth: 13. November 1963; 







In Portugal: 




Abroad: 


• Member of the Board of Directors of Millennium Bank, S.A. (Greece); 



• Member of the Board of Directors of SIBS – Sociedade Interbancária de Serviços, S.A., as 

representative of Banco Comercial Português, S.A. 




• IT 

• Management Planning and Control (IT); 

• Operations Department; 

• Credit Department; 

• Quality and Processes; 

• Tax. 

Number of shares of Banco Comercial Português, S.A. held on 30 April 2008: 

• 20,000. 


• 1986 – Licentiate Degree in Business Management from the Faculty of Human Sciences of 

Universidade Católica Portuguesa (Portuguese Catholic University); 

• Chartered Accountant since 1992, registered in the Ordem dos Revisores Oficiais de Contas 

(Portuguese Chartered Accountants Association).


• 1986/1992 – Arthur Andersen, S.A., as Manager between 1990 and 1992. 

• 1992/September of 2002 – Insurance Company Mundial – Confiança: 

– July to October of 1992 – Advisor to the Board of Directors; 

– October of 1992 to June of 1993 – Audit Manager; 

– June of 1993 to March of 1995 – Technical General Manager; 

– 31 of March 1995 to 17 June of 1999 – Director; 

– June of 1999 to June of 2000 – Chairman; 

– June of 2000 – Vice-Chairman; 

– April of 2001 to September of 2002 – Chairman; 

• April of 2000 to March of 2001 – Director of the insurance company Fidelidade; 

• April of 2001 to September of 2002 – Chairman of the insurance company Fidelidade; 

• June of 2000 to December of 2007 – Member of the Board of Directors of Caixa Geral de 

Depósitos, S.A.; 

• 2002/2007 – Chairman of the insurance company Fidelidade Mundial, S.A.; 

• January of 2005 to December of 2007 – Chairman of the insurance company Império Bonança 

– Companhia de Seguros, S.A.; 

• July of 2005 to December of 2007 – Vice-Chairman of Caixa Seguros, SGPS, S.A.; 

• January of 2005 to December of 2007 – Chairman of Império Bonança, SGPS, S.A.; 

• February of 2006 to December of 2007 – Chairman of SOGRUPO, SGPS, S.A.; 





Curricula Vitae of the Members of the Supervisory Board 

of Banco Comercial Português, S.A., 


Age: 68 years old. 

António Manuel Ferreira da Costa Gonçalves 


Annex VI 

Current position in the Group: Vice-Chairman of the Supervisory Board and Vice-Chairman of 

the Senior Board of Banco Comercial Português, S.A. 

Academic qualifications: degree in Economics at Columbia University in 1964 and in Textile 

Engineering at Pennsylvania Textile Institute in 1966. 

Professional experience: promoting and founding member of Sociedade Portuguesa de 

Investimentos, of which he was Vice-Chairman of the General Council, Vice-Chairman of the Senior 

Board of Banco Comercial Português, S.A from 1996 to March 2005, and founding member of 

COTEC Portugal, Fundação de Serralves and Casa da Música. He is currently Chairman of the 

Board of Directors of the companies comprising Grupo Têxtil Manuel Gonçalves. 

António Luís Guerra Nunes Mexia 


Current position in the Group: Voting Member of the Supervisory Board of Banco Comercial 

Português, S.A. since the General Meeting of 15 January 2008. 

Current position in the Group: Vice-Chairman of the Supervisory Board of Banco Comercial 

Português, S.A. since March 2006, holding the position of Chairman since 1st January 2008, following 

the resignation of Jorge Jardim Gonçalves. 

Academic qualifications: various diplomas from Business Management higher education institutions in 

Holland, his place of birth, and abroad. 

Professional experience: his career began in the insurance sector in 1957, having been involved 

in the foundation of the company Equity & Law in 1970, of which he was a director. In 1989 he 

was elected Chairman of the Board of Directors of Centraal Beheer and Chairman of the Board 

of Directors of the Achmea Group, a company that resulted from the merger of Centraal Beheer 

with various other institutions, a position held up to April 2000. Chairman of the Board of Directors 

of Eureko B.V. from December 2002 to October 2005. Among other positions, he was chairman 

and vice-chairman of the Comité Européen des Assurances (CEA) Paris, chairman of the 

Supervisory Board of Conyplex B.V., NV Bank voor de Bouwnijverheid and member of the board 

of directors of Koningin Juliana tot Steun Foundation and of Yura International Holding, B.V. He 

is currently Chairman of the Executive Board of the Association Achmea and of the 

Administratiekantoor Achmea, Zeist Foundation.


Academic qualifications and experience: degree in Economics in 1979 at Geneva University. 

From 1979 to 1981, he was Assistant at the Economics Department of Geneva University. 

From 1985 to 1989, he was a post-graduate lecturer of European Studies at Universidade 

Católica and Regent at Universidade Nova and Universidade Católica where he lectured 

from 1982 to 1995. 

Professional experience: From 1986 to 1989, he was Deputy Secretary of State for External 

Trade. In 1989, he held the position of Deputy Chairman of the Board of Directors of ICEP 

– Instituto do Comércio Externo, responsible for Foreign Investment. From 1990 to 1998, he 

was a Director at Banco Espírito Santo de Investimento, responsible for the areas of Capital 

Markets, Brokerage and Project Finance. In 1998, he was appointed Chairman of the Boards 

of Directors of GDP – Gás de Portugal and Transgás. In 2000, he was Vice-Chairman of the 

Board of Directors of Galp Energia, being Executive Chairman from 2001 to 2004. From 2001 

to 2004, he was also Chairman of the Boards of Directors of Petrogal – Petróleos de Portugal, 

GDP – Gás de Portugal, Trangás and Trangás-Atlântico. In 2004, he was appointed Minister for 

Public Works, Transport and Communications of the XVI Constitutional Government. He was 

also Chairman of APE – Associação Industrial Portuguesa de Energia from 1999 to 2002, 

member of the Trilateral Committee from 1992 to 1998, Deputy Chairman of AIP – 

Associação Industrial Portuguesa and Chairman of the General Council of Ambelis, as well as 

Representative of the Portuguese Government at the European Union in the working party 

for the development of trans-European networks. He is currently Chairman of the Executive 

Board of Directors of EDP – Energias de Portugal, EDP – Energias do Brasil, EDP – Estudos 

e Consultadoria, positions that he held since March 2006. He is also non-executive Director 

at Aquapura – Hotels Resort & SPA. 

Francisco de la Fuente Sánchez 



Português, S.A. since March 2006, Chairman of the Corporate Governance Committee and Vice- 

Chairman of the Nominations and Remunerations Committee since 2007. 

Academic qualifications: degree in Electrical Engineering in 1965 at Instituto Superior Técnico. 

Professional experience: his career began in the Joint Gas and Electricity Companies. He has been 

a Director at companies of the EDP Group since 1994, from 1997 to 2000 he was a Voting Member 

of the Board of Directors of EDP when he held the position of non-executive director at 

Companhia de Electricidade do Rio de Janeiro, S.A. (Brazil) and EBE – Empresa Bandeirante de 

Energia, S.A. (Brazil). From 2000 to 2003 he was Chairman of the Executive Committee of EDP, from 

2002 to 2005 he was a Director at Hidroeléctrica del Cantábrico, S.A. and from 2003 to 2005 he 

was Director of the Business Council for Sustainable Development (Portugal) and Director of the 

Forum for Competitiveness. From 2000 to 2006, he was Chairman of the Board of Directors of 

EDP. Currently holds the position of Chairman of the Board of Directors of Fundação EDP, nonexecutive 

Director of Fundação Portugal-África and Chairman of the General Board of Proforum. 

Member of the Advisory Council of the Portuguese Association for the Development of 

Communications, honorary member of the Business Council for Sustainable Development 

(Portugal), member of the Council of Curators of the Luso-Brazilian Foundation and of the Luso-


José Eduardo de Faria Neiva Santos 


Spanish Foundation, member of the Advisory Board of the Portuguese Institute of Corporate 

Governance, member of the Consultative Council of the Forum for Competitiveness, Chairman 

of the Board of Directors of EFACEC and non-executive Director of Sonae Capital S.A. 

João Alberto Ferreira Pinto Basto 



Português, S.A. since March 2006, Chairman of the Nominations and Remunerations Committee 

and Vice-Chairman of the Corporate Governance Committee. 

Academic qualifications: Medical degree in 1958 by Lisbon University. 


Português, S.A. since July 2007 and member of the committee for financial matters (Audit and Risk 

Committee). Effective Statutory Auditor of BCP Internacional II, Sociedade Unipessoal, SGPS, Lda. 

Academic qualifications: degree in Economics in 1963 at Universidade de Economia do Porto; 

became a Chartered Accountant in 1964 and a Statutory Auditor in 1974. 

Professional experience: held the positions of Voting Member of the Board of Auditors and 

Statutory Auditor in various companies including Banco Comercial Português (1985-2006), 

Banco Português do Atlântico (1995-2000), Salvador Caetano – Comércio de Automóveis, S.A., 

L.J. Carregosa, Sociedade Financeira de Corretagem, S.A. (1994-2005), amongst others. Voting 

Member of the Board of Auditors and Statutory Auditor of various companies. 



Current position in the Group: Member of the Supervisory Board of Banco Comercial Português, 

S.A. since March 2006 and member of the Nomination and Remunerations Committee. 

Academic qualifications: Bachelors’ degree in Science at Ashton University in Birmingham in 1972. 

Professional experience: began his career at Duncan C. Fraser (currently part of Mercers) where 

he worked from 1972 to 1975, he worked at UK Provident from 1975 to 1986, when he took a 

managerial position at Friends Provident plc.. He was Chief Executive of Friends Provident plc 

between 1997 and 2006, and Chairman of the British Association of Insurers between 2005 and 

2007. Since 2006 he is advisor a consultant to Goldman Sachs and non-executive Chairman of the 

Barnett Waddingham (actuaries and consultants). 

Professional experience: Chairman of the Board of Directors of the companies of the Vista Alegre 

Group from 1980 to 1997. From 1997 to 2005, he was also Director of Pinto Basto, SGPS, S.A.


Luís Francisco Valente de Oliveira 



Português, S.A. since March 2006 and Chairman of the committee for financial matters (Audit and 

Risk Committee). 

Academic qualifications and experience: degree in Civil Engineering in 1961 at Porto University, 

where he completed a Doctorate in the same area in 1973. He became a Professor at Porto 

University in 1980 where he lectured until 1997. 

Professional experience: from 1973 to 1975 he was Director of the Technical Office of the 

Planning Commission of the Northern Region. From 1977 to 1978 he held the government 

position of Minister for Education and Scientific Research and from 1985 to 1995 of Minister for 

Territorial Planning and Administration, he returned to the Government in 2002/2003 as Minister 

of Public Works, Transport and Housing. From 1985 to 2002 he was Chairman of the Board of 

the General Meeting of Banco Comercial Português, S.A., from 1995 to 2002 he was Member 

of the Board of Directors of Fundação D. Manuel II and from 1998 to 2000 Member of the 

Board of Directors of Fundação de Serralves. He is currently Director of the Portuguese 

Entrepreneurial Association, Member of the Board of Trustees of Fundação Luso-Americana, 

Chairman of the Board of the General Meeting of Mesquita & Filhos, S.A. and Independent 

Director of Mota Engil. 



Current position in the Group: Member of the Supervisory Board of Banco Comercial Português, 

S.A. since March 2006; Member of the Corporate Governance Committee and member of the 

Remunerations and Welfare Board of Banco Comercial Português S.A. since May 2008. 

Academic qualifications: attended the course in Economics at Instituto Superior de Economia 

e Sociologia de Évora. 

Professional experience: Director of Sales of Cimentos Liz, S.A. (former Soeicom S.A.), from 1975 

to 1982, after which he became Chief Executive Officer of the company and later Vice-Chairman 

of the Board of Directors with non-executive functions in 1992. This position was held until 2000. 

From 1992 to 1993 he was also a Director at the insurance company Mundial-Confiança, S.A., and 

Chairman of the company from 1993 to 1995. From 1995 to 2000 he was Chairman of Banco 

Pinto & Sotto Mayor, a position accumulated, between 1996 and 2000, with that of Chairman of 

Banco Chemical and from 1997 to 2000, with that of Chairman of the banks Totta & Açores and 

Crédito Predial Português. Chairman of the Advisory Board of Cimentos Liz, S.A. since 2005 and 

in the 2004/2006 three year period he held the position of non-executive Director at Portugal 

Telecom, SGPS, S.A., he is currently Chairman of the Board of Directors of Confiança Participações, 

SGPS, Chairman of the Supervisory Board of Tracção, S.A. (Brasil) and Chairman of the Supervisory 

Board the Company Cimentos de Liz, S.A.Cimentos de Liz, S.A. (Brasil).


Manuel Domingos Vicente 



Português, S.A. since the General Meeting of 15 January 2008. 

Academic qualifications: degree in Electronic Engineering specialised in power systems, at 

Universidade Agostinho Neto. 

Professional experience: held positions of responsibility as Chief Engineer, Head of the SONEFE 

Projects Department from 1981 to 1987, and Head of the Technical Department of the Ministry 

for Energy and Oil from 1987 to 1991, having been appointed Deputy General Manager of 

Sonangol U.E.E. in 1991. He is currently Chairman of Sonangol, Chairman of the Board of the 

General Meeting of UNITEL, consultant of GAMEK, Chairman of the Luanda Base Management 

Committee and Vice-Chairman of Fundação Eduardo dos Santos (FESA). 

Mário Branco Trindade 



Português, S.A. Currently Voting Member of the Board of Auditors – Statutory Auditors of Banco 

Millennium bcp Investimento, S.A. and Statutory Auditor in various companies. 

Academic qualifications: degree in Economics in 1962 at Universidade de Economia do Porto; 

became a Chartered Accountant in 1965 and a Statutory Auditor in 1974. 

Professional experience 

• Voting Member of the Board of Auditors – Statutory Auditor: 

• Banco Comercial Português (1985-2006); 

• Banco Millennium bcp Investimento S.A. (1993-2008); 

• Banco Português do Atlântico (1995-2000). 

Other companies Single Auditor – Statutory Auditor: 

• Salvador Caetano – Comércio de Automóveis, S.A. (1981-2001); 

• L.J.Carregosa – Sociedade Financeira de Corretagem, S.A. (1994-2005); 

• Cª Editora do Minho, S.A. (1982-2003); 

• Chairman of the Audit Board – not as Statutory Auditor; 

• Cofipsa – S.G.P.S., S.A. (1989-1996); 

• Sociedade Portuguesa de Leasing, S.A. (1989-1996).


Ângelo Ludgero da Silva Marques 


Current position in the Group: Alternate Voting Member of the Supervisory Board of Banco 

Comercial Português, S.A. since the General Meeting of 15 January 2008, and Expert Member 

of the Nominations Committee. 

Academic qualifications: degree in Mechanical Engineering in 1968 at Porto University. 

Professional Experience: Chairman of the Board of Directors of LUDAMARK, SGPS, Director 

of ENERVENTO – Energias Renováveis, Manager of Earth Life and Manager of GooSun,Lda. 

Presently he is Chairman of of the Boards of Directors of CIFIAL SGPS, CIFIAL – Centro Industrial 

de Ferragens, CIFIAL – Fundição e Tecnologia, CIFIAL Torneiras, CIFIAL – Indústria Cerâmica, 

Manager of CIFIAL SI – Serviços de Consultadoria e Informação, and Chairman of the General 

Meeting of AEP – Associação Empresarial de Portugal.


Annex VII 

Shareholder and bondholder position of the members of management and supervision bodies 


Shareholders / Bondholders 

Security 

Number of securities at 

31-12-2008 31-12-2007 

Acquisitions 

Disposals 

Date 

Unit 

Price 

Euros 

Members of Coporate Boards 



Luis Maria França de Castro 

Pereira Coutinho BCP shares 247,288 190,228 4 (b) 10-Apr-08 2.00 

57,060 (a) 24-Apr-08 1.20 


12,500 (c) 07-Apr-08 0.10 

3,749 (a) 24-Apr-08 1.20 

64 (a) 29-Apr-08 1.20 

3,687 02-Jun-08 1.62 


51,000 (b) 16-jan-08 0.20 


59,992 (a) 24-Apr-08 1.20 

Members of Supervisor Board 



407,273 (a) 24-Apr-08 1.20 


António Luís Guerra Nunes Mexia BCP shares 1,299 1,000 3 (b) 17-Apr-08 0.18 

299 (a) 24-Apr-08 1.20 

António Manuel Ferreira 

da Costa Gonçalves BCP shares 4,440,807 4,015,577 1,204,530 (a) 24-Apr-08 1.20 

74,182 24-Apr-08 1.85 

725,818 28-Apr-08 1.86 

20,700 (a) 29-Apr-08 1.20 

Bcp Obrg Cx Sup Inv Mill II 12/10 2,000 2.000 

Francisco de la Fuente Sánchez BCP shares 2,313 1,780 533 (a) 29-Apr-08 1.20 

BCP Bonds Cx Rend. Cresc. Fev 06/08 0 900 900 14-Feb-08 50 

BCP Bonds Cx TOP 6 Maio 06/08 0 1,000 1,000 09-May-08 50 

Bonds Cx Aforro Cresct 6% Set 2006/08 0 1,600 1,600 05-Sep-08 50 


BCP Ob Cx Millennium Cresc August 2010 500 500 

BCP Ob Cx Multi-Rend Europa Oct. 2010 1,500 1,500 

BCP Obg Cx Inv Selec. Mundial Nov 07/09 2,000 2,000 

BCP Obg Cx Inv. Especial 2007/2009 3.ª Em 300 300 




BCP Obg Cx Subordinadas 1.ª Série 1,600 0 1,600 (d) 26-Sep-08 50 

(continues)




Shareholders / Bondholders 

Security 

Number of securities at 

31-12-2008 31-12-2007 

Acquisitions 

Disposals 

Date 

Unit 

Price 

Euros 


37,551 (a) 24-Apr-08 1.20 

José Eduardo Faria Neiva dos Santos ABCP shares 1,383 1,000 304 (a) 24-Apr-08 1.20 

158 31-Jul-08 1.37 

2 04-Aug-08 1.12 

6 01-Sep-08 1.18 

93 09-Sep-08 1.25 

5 02-Ouc-08 1.11 

105 06-Ouc-08 1.02 

104 10-Ouc-08 0.93 


BCP Obg Cx Sup Aforro Mil Sr B 1ª E 2013 500 0 500 (d) 28-Ouc-08 50.00 



321 (a) 29-Apr-08 1.20 


1 (b) 10-Apr-08 0.22 

15,000 (a) 24-Apr-08 1.20 


211 (a) 29-Apr-08 1.20 

Spouse and dependent children 


31,000 07-Apr-08 1.98 

51,007 (a) 24-Abr-08 1.20 

875 (a) 29-Apr-08 1.20 

15,036 22-Jul-08 1.13 

5,100 22-Sep-08 1.27 

45,000 25-Sep-08 1.19 

55,000 30-Sep-08 1.13 

50,000 07-Nov-08 0.90 

50,000 26-Nov-08 0.75 

BCP Ob Cx Inv. Especial 2007/2009 2.ª Em 1,000 0 1,000 (a) 04-Dec-07 50 


(a) 

Subscription of share increase of BCP. 

(b) 

Sale of subscription rights of share capital increase of BCP. 

(c) 

Subscription. 

(d) 

Subscription. 

(e) 

Internal Deposit / Internal Transfer.


Annex VIII 

Press-Release 

Reuters>bcp.Is Exchange>MCP Bloomberg>bcp pl ISIN PTBCP0AM00007 

2009-02-17 Millennium bcp earnings release for 2008 

 

 

Consolidated net income of Euro 201.2 million in 2008, reflecting the 

depreciation in BPI shares. Excluding specific items consolidated net income 

totalled Euro 426.2 million (-27.4%); 

Operating income, on a comparable basis, increased 7.7% to Euro 2,851 million; 

Net interest income amounted Euro 1,721 million, up by 12%; 

 

 

Net commissions totalled Euro 740 million, down by 3.6%, on a comparable 

basis; 

Operating costs, excluding specific items, totalled Euro 1,681 million (+3.3%); in 

Portugal operating costs were reduced by 3.8%; 

Improvement in consolidated cost to income to 58.6% and in Portugal to 53.7%, 

on a comparable basis, down 1.7 p.p. and 3.6 p.p., respectively; 

 

 

Total assets grew 7.1% to Euro 94,424 million; 

Customers’ deposits increased 14.4% to Euro 44,907 million, growing 9.9% in 

Portugal and 27.3% in the international activity; 

Customers’ funds totalled Euro 66,264 million, up by 3.6%; 

Loans to customers, excluding loans represented by securities, increased 10,4% 

to Euro 73,849 million; activity in Portugal grew 6.6% and international activity 

grew 28.3%; 

Overdue loans by more than 90 days stood at 0.9% of total loans (0.7% in 2007); 

the coverage ratio stood at 211%; 

 

Own Funds amounted to Euro 7,057 million, an increase of 19.7%; Tier I stood at 

7.1% and solvency ratio at 10.5%; 

Proposed dividend of Euro 0.017 per share, representing a payout ratio of 40%. 

Investor Relations 

Pedro Esperança Martins 

Avenida Professor Doutor Cavaco Silva 

Edifício 1, Piso 0 B 

2744-002 PORTO SALVO 

Tel +351 211 131 080 

pmartins@millenniumbcp.pt 

Corporate Communication 

Miguel Magalhães Duarte 

Rua São Julião, 149, Piso 2 

1100-063 LISBOA 

Tel +351 211 132 840 

miguel.duarte@millenniumbcp.pt 

Specific items, in Euro million, net of tax 

2008 2007 

BPI: Impairment, take-over bid and merger project -232.6 -145.4 

Early retirements and cancelation of variable remuneration 7.5 -89.6 

Gains from the sale of shareholdings 272.6 

Other impairment and provisions (incl. potential regulatory charges) -61.1 

-225.1 -23.5 

Banco Comercial Português, S.A., a public company (sociedade aberta) having its registered office at Praça D. João I, 28, Oporto, registered 

at the Commercial Registry of Oporto, with the single commercial and tax identification number 501 525 882 and the share capital of 

EUR 4,694,600,000.00. 

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Financial Highlights 

Euro million 31 Dec. 08 31 Dec. 07 

Change 

08 / 07 

Balance sheet 

Total assets 94,424 88,166 7.1% 

Loans to customers (net) (1) 72,372 65,650 10.2% 

Total customers' funds (2) 66,264 63,953 3.6% 

Balance sheet customers' funds 51,682 45,355 13.9% 

Results 

Net interest income 1,721.0 1,537.3 12.0% 

Net operating revenues (3) 2,602.0 2,791.9 -6.8% 

Operating costs (4) 1,670.8 1,748.6 -4.4% 

Loan impairment provision 637.5 407.2 56.5% 

Loan recoveries 92.8 147.0 -36.9% 

Income taxes 84.0 69.6 20.7% 

Minority interests 56.8 55.4 2.7% 

Net income 201.2 563.4 -64.3% 

Net income excluding specific items (5) 426.2 586.8 -27.4% 

Profitability 

Net operating revenues / Average net assets (6) 2.8% 3.3% 

Return on average assets (ROA) (7) 0.4% 0.6% 

Income before taxes and minority interests / Average net assets (6) 0.4% 0.8% 

Return on average equity (ROE) (7) 8.3% 14.2% 

Income before taxes and minority interests / Average equity (6) 7.2% 17.2% 

Credit Quality 

Overdue loans/ Total loans (1)(6) 1.4% 1.0% 

Overdue loans, net / Total loans, net (1)(6) -0.7% -0.8% 

Impairment for loans losses / Overdue loans by more than 90 days (1) 211.1% 251.8% 

Impairment for loan losses / Overdue loans (1) 173.5% 220.4% 

Efficiency ratios 

Operating costs / Net operating revenues (6)(7) 58.6% 60.3% 

Operating costs / Net operating revenues (Portugal) (6)(7) 53.7% 57.3% 

Staff costs / Net operating revenues (6)(7) 32.2% 32.8% 

Capital 

Total regulatory capital (8) 7,057 5,897 

Risk-weighted assets (8) 67,426 61,687 

Tier I Solvency ratio (6) (8) 7.1% 5.5% 

Total Solvency ratio (6) (8) 10.5% 9.6% 

Branches 

Portugal 918 885 3.7% 

Foreign activity 885 743 19.1% 

Employees 

Portugal 10,667 10,821 -1.4% 

Foreign activity 11,922 10,301 15.7% 

(1) Excludes loans represented by securities transferred from financial assets available for sale. 

(2) Amounts due to customers (including securities), assets under management and capitalisation insurance. 

(3) Net interest income, income from securities, net commissions, net trading income, equity accounted earnings, other net operating income 

(4) Staff costs, other administrative costs and depreciation. 

(5) Specific items in 2008 in the amount of Euro -225.1 million (net of tax) and in 2007 of Euro -23.5 million (net of tax). 

(6) According to rule 16/2004 from the Bank of Portugal. 

(7) Excludes the impact of specific items. 

(8) Indicators for 31 December 2008 determined in the scope of Basel II. Indicators for 31 December 2007 determined in scope of Basel I. 

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Presenting earnings for 2008, the Chairman of the Executive Board of Directors of Millennium bcp, Carlos 

Santos Ferreira, said that “given an environment that will be remembered as one of the most challenging 

ever for the global financial system, Millennium bcp was able to present net profit of Euro 201.2 million in 

2008, rising to Euro 426.2 million excluding specific items, particularly losses associated with the 

depreciation of the 9.69% stake the Bank held in Banco BPI.” 

In addition to the net profit, the Chairman highlighted a number of aspects of the current earnings report 

that deserve particular attention: 

a) Operating profit, excluding the impact of specific items, rose 7.7%, driven by a 12% increase in 

net interest income; 

b) The trust that customers placed in Millennium, and the support the Bank provided to its 

clients, translated into a 14.4% rise in deposits and a 10.4% rise in loans; 

c) The bank’s commercial network, in Portugal and abroad, grew 11%, adding 175 new branches; 

d) Costs remained under control, despite the expansion of the network, with an overall rise of 

just 3.3% and a decline in Portugal of 3.8%. That underpinned a decrease in the bank’s 

consolidated cost-to-income ratio to 58.6% from 60.3%, and in Portugal to 53.7% from 57.3%. 

Referring to Millennium bcp’s strategy, Carlos Santos Ferreira said “the strategy as defined was followed in a 

manner appropriate to the current economic and financial environment, with redoubled attention paid to 

liquidity and risk management, as well as capital ratios.” Of the many strategic initiatives and programmes 

carried out over the year, the Chairman highlighted the following: 

(i) 

(ii) 

(iii) 

(iv) 

(v) 

The strengthening of the Bank’s capital base, benefiting from the rights issue in April 2008 that 

prepared the Bank to better weather market instability. At the end of 2008, the capital ratio 

stood at 10.5% from 9.6% as at 31 December 2007, and the “Tier 1” ratio stood at 7.1%; 

The efforts made at the level of institutional reputation, with the Bank initiating, among other 

actions, a mediation process, in collaboration with the Portuguese Securities Market Commission, 

designed to resolve outstanding litigation issues with small shareholders; 

Renewal of the focus on Customers service, with the result that in Portugal in 2008 the Bank 

brought in the largest number of new clients in this decade. Customer satisfaction indicators in 

Millennium also recovered, rising to levels that hadn’t been achieved in three years; 

The strengthening of the commercial capacity in the markets with the greatest potential. For 

example, Millennium established agreements with Angolan companies designed to provide 

appropriate conditions for the development of a successful operation – Millennium Angola – in a 

high-growth market of strategic importance to the Group; 

The simplification of the Bank’s structure, with the proportion of employees working in the 

central services dropping to 29% in 2008 from 31% in 2007.” 

In conclusion, he noted “the five main strategic guidelines for Millennium bcp in 2009: i) reinforcing the 

commitment to our Customers; ii) implementing a more effective risk management; iii) seeking new levels 

of simplicity and efficiency; iv) focusing the international presence; v) taking full advantage of the 

distinctive capabilities of the Bank as a strategic and differentiating element in the markets where it is 

present.” 

The Chairman ended by noting that “Millennium once again showed tenacity and resilience when confronted 

with challenges,” stressing that “the Executive Board of Directors remains committed to managing the 

demands of the short term while simultaneously promoting profitable and sustainable growth for the long 

term.” 

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RESULTS 

BCP’s financial statements were prepared in accordance with International Financial Reporting Standards 

(IFRS) as endorsed by the European Union, in compliance with Regulation (EC) 1606/2002, of July 19th and in 

accordance with the reporting statements defined by the Bank of Portugal (Notice n.º 1/2005) following the 

adoption by the Portuguese legal system of the European Commission Directive 2003/51/EC of June 18th of 

the European Parliament and Council. 

Millennium bcp’s consolidated net income stood at Euro 201.2 million in 2008, down from Euro 563.3 

million in 2007, mostly conditioned by the evolution of net trading income and by the higher impairment 

charges for loan losses, associated with the considerable uncertainty and volatility seen in the markets 

during 2008. Consolidated net income includes the booking of specific items, in particular, the impact of 

impairment losses related with the depreciation of shares in BPI, in the sum of Euro 232.6 million (net of 

tax), despite the agreement signed by the Group for the sale of 9.69% of Banco BPI’ share capital. As a result 

of the execution of this agreement Banco Comercial Português will no longer have a qualified holding in 

Banco BPI, S.A.. Specific items booked also included the impacts of the reduction in the variable 

remuneration already accrued in 2007, in the sum of Euro 13.2 million (net of tax), and of the restructuring 

costs related with the early retirement of employees, in the sum of Euro 5.7 million (net of tax). Excluding 

specific items, consolidated net income in 2008 totalled Euro 426.2 million, down 27.4% from 2007, and 

return on equity (ROE) stood at 8.3% in 2008. 

Consolidated net income in 2008 reflects the reduction in net trading income, determined by the 

performance of capital markets, and the increase in impairment charges for loans losses (net of recoveries), 

driven by the revaluation of financial collaterals and the identification of impairment indicators in the loans 

portfolio. These impacts were partially offset by the favourable performance of net interest income, 

supported by the sustained growth in business volumes, both of loans to customers and of customers’ funds, 

and by the increase of net commissions, as well as the reduction in operating costs, influenced by cost 

control in Portugal. Excluding specific items, the evolution of net income, between 2007 and 2008, was 

positively influenced by the performance of operating income, which includes net interest income, dividends 

from equity instruments, net commissions, net trading income and other net operating income, that 

achieved Euro 2,851.0 million in 2008, up by 7.7% from Euro 2,647.7 million in 2007. 

Consolidated net income in 2008 was sustained by the positive results determined both in Portugal and in 

international activity. Excluding specific items, net income in Portugal totalled Euro 332.3 million, 29.9% 

down from 2007. This evolution was influenced by the higher impairment charges for loan losses and by the 

reduction in net commissions and in other net operating income, partially offset by the favourable impact of 

the increases in net interest income and in net trading income, as well as by the control of operating costs. 

In the international business, net income in 2008 was supported by superior levels of income, driven by the 

growths in net interest income and in net trading income, reflecting the increase in business volumes 

achieved by most operations abroad. This was insufficient, however, to offset higher operating costs 

incurred, essentially related with the expansion plans that were implemented in several countries. The net 

income of the international business, excluding the impact of the Romanian operation (launched in October 

2007), fell by 4.8%, between 2007 and 2008. 

Net interest income amounted to Euro 1,721.0 million in 2008, up 12.0% from Euro 1,537.3 million in 2007, 

boosted by favourable volume effect, driven by the increase in business volumes, in particular loans to 

customers and customers’ funds, in Portugal and in the international activity, which outweighed the 

unfavourable interest rate effect, hindered by higher funding costs, as a result of capital markets behaviour 

and the greater restriction in access to alternative sources of funding. Net interest margin in 2008 stood at 

2.06%, compared with 2.09% in 2007. Notably, net interest margin showed a recovery in the fourth quarter 

of 2008 and stood at 2.11%. The evolution of net interest income reflected the selective assets and liabilities 

management policy followed by the Group, and was influenced by the repricing of credit operations, aiming 

to adjust these to the competitive environment and to the markets evolution, focused in the pricing 

alignment regarding the higher cost of risk. Simultaneously, several initiatives were implemented aiming to 

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retain and further increase customers’ funds, sustained by the reinforcement of the attractiveness of 

traditional saving and investment solutions, to meet the growing demand, from customers, for products with 

lower exposure to risk and to capital market volatility. 

AVERAGE BALANCES 

31 Dec. 08 31 Dec. 07 

Euro million Balance Yield % Balance Yield % 

Deposits in banks 7,255 5.64 7,881 5.14 

Financial assets 5,845 6.00 5,548 5.37 

Loans and advances to customers 69,206 6.39 60,247 6.02 

Interest earning assets 82,306 6.30 73,676 5.88 

Non interest earning assets 9,635 9,687 

91,941 83,363 

Amounts owed to credit institutions 9,875 7.28 10,912 5.68 

Amounts owed to customers 41,769 3.09 35,019 2.55 

Debt securities 29,042 4.51 26,235 4.26 

Subordinated debt 2,954 5.77 2,880 5.63 

Interest bearing liabilities 83,640 4.17 75,046 3.72 

Non interest bearing liabilities 2,557 3,276 

Shareholders’ equity and minority interests 5,744 5,041 

91,941 83,363 

Net interest margin (1) 2.06 2.09 

(1) Net interest income as a percentage of average interest earning assets. 

Net commissions reached Euro 740.4 million in 2008, 11.4% up from Euro 664.6 million reported in 2007. Net 

commissions in 2007 include the impact of costs associated with the potential merger and the general tender 

offer for the acquisition of Banco BPI, in the amount of Euro 103.2 million, booked in “other commissions”. 

Excluding this impact, net commissions would have declined 3.6% between 2007 and 2008, determined by 

smaller commissions related to asset management and transactions on securities (-33.1%), influenced mainly 

by capital markets volatility. The reduction of these commissions was partly offset by the growth in 

commissions associated with the cards business, which increased 14.2%, and in commissions related to credit 

operations, which rose 2.6%, both sustained by the activity in Portugal and the international operations. 

Other commissions in 2008 include the accounting of fees related to the bancassurance activity transferred 

from other operating income; on a comparable basis, other commissions were conditioned by the lower 

commissioning level as a result of promotions to customers under the “Preference Programme” and 

“Frequent Customer Solution” commercial campaigns, as well as by the unfavourable impact of regulatory 

changes, especially the introduction of a maximum limit on commissions on early repayment of mortgage 

loans in Portugal. Net commissions in foreign operations increased 0.3% between 2007 and 2008, favourably 

influenced by the performance achieved in Greece, Mozambique and Angola. 

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Net trading income, which include net gains arising from trading and hedging activities and net gains arising 

from available for sale financial assets, amounted to Euro 18.1 million in 2008, a reduction from Euro 392.3 

million in the previous year, determined by the impact of the accounting of impairment losses of Euro 268.1 

million in 2008 (Euro 94.0 million in 2007), mainly associated with the devaluation of the shareholding in 

Banco BPI. Additionally, during 2007, net trading income included gains obtained on the sales of shares in 

EDP and in Banco Sabadell of Euro 173.3 million and of Euro 116.9 million, respectively. Excluding the 

impairment losses and the gains booked in 2007 and 2008, net trading income would have increased from 

Euro 196.2 million in 2007 to Euro 286.2 million in 2008. Net trading income booked in 2008 included the 

income, in the fourth quarter, related to the economic hedging strategy for interest-rate risk associated 

with a fixed-rate liability, through an interest-rate swap. As a result of markets volatility, the tests 

performed to access the effectiveness of the accounting hedge, as required under IAS 39, showed that there 

had been a break of the hedge relation, and the Bank decided to interrupt the hedge relation. The evolution 

of results from foreign exchange transactions between 2007 and 2008 reflects the impact of foreign currency 

exchange operations derivatives associated with fund-taking in dollars as a result of the change in the dollar 

interest rate compared to the euro observed throughout 2007 and 2008. 

Other net operating income, which includes other operating income, other net income from non banking 

activities and gains from the sale of subsidiaries and other assets, amounted to Euro 66.6 million in 2008, 

compared with Euro 118.6 million in 2007. This evolution was influenced by the reduction in operating 

income, mostly due to the change in the accounting of fees from bancassurance activity, which in mid 2008 

started to be booked in net commissions, and by the simultaneous increase in expenses, both in Portugal and 

in the international activity. 

Dividends from equity instruments, which include dividends received on investments in available for sale 

financial assets, totalled Euro 36.8 million in 2008, compared with Euro 27.9 million in 2007. Dividends 

received in 2008 were essentially related to the shareholdings in Eureko and Banco BPI. 

OTHER NET INCOME 

Euro million 2008 2007 

Change 

08/07 

Net commissions 

Cards 190.0 166.4 14.2% 

Asset management and securities 177.4 265.4 -33.1% 

Credit operations 142.7 139.1 2.6% 

Other (1) 230.3 93.7 145.9% 

740.4 664.6 11.4% 

Net trading income (2) 18.1 392.3 -95.4% 

Other net operating income 66.6 118.6 -43.8% 

Dividends from equity instruments 36.8 27.9 31.9% 

Equity accounted earnings 19.1 51.2 -62.7% 

Total other net income 881.0 1,254.6 -29.8% 

Other income / Net operating revenues (3) 33.9% 44.9% 

(1) Includes the impact of costs accounted in the 2007, related to the potential merger and the general tender offer for the acquisition 

of Banco BPI, in the amount of Euro 103.2 million. 

(2) Includes in 2008 the impairment losses related to the shareholding in Banco BPI in the amount of Euro 268.1 million. Includes in 2007 

gains from the sale of the shareholdings in EDP and Banco Sabadell, in the amount of Euro 290.2 million, and the impairment losses 

accounted mainly related to the shareholding in BPI, in the amount of Euro 94.0 million. 

(3) Calculated according to rule 16/2004 from the Bank of Portugal. 

Equity accounted earnings stood at Euro 19.1 million in 2008, down from Euro 51.2 million in 2007, chiefly 

evidencing the earnings appropriation of the 49% shareholdings in the insurance company Millenniumbcp 

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Fortis, which despite the good performance were influenced by the capital market volatility in the fourth 

quarter of 2008. 

Operating costs (staff costs, other administrative costs and depreciation) stood at Euro 1,670.8 million in 

2008, showing a reduction of 4.4% from Euro 1,748.6 million in 2007. Operating costs included, in 2007, the 

accounting of costs associated with the early retirement of employees and of members of the Executive 

Board of Directors, amounting to Euro 121.8 million and, in 2008, the accounting of Euro 7.8 million of 

restructuring costs related to the retirement of employees and a Euro 18.0 million reduction in the variable 

remuneration accrued in 2007. Excluding these impacts, operating costs increased 3.3% between 2007 and 

2008, driven by the international activity, which grew 18.2%, as a result of the branch network expansion 

plans implemented in several markets, in particular Poland, Greece, Romania, Angola and Mozambique. 

Nevertheless, operating costs were favourably influenced by the activity in Portugal, which reduced costs by 

3.8% from 2007, excluding specific items. The consolidated cost to income ratio improved from 60.3% in 

2007 to 58.6% in 2008. In Portugal the cost to income ratio also improved, from 57.3% in 2007 to 53.7% in 

2008 achieving an efficiency gain of 3.6 p.p.. 

Staff costs totalled Euro 915.3 million in 2008, down from Euro 1,066.2 million in 2007. Staff costs included, 

in 2008, the Euro 18.0 million reduction in the variable remuneration already accrued in the previous year 

and Euro 7.8 million of restructuring costs in Portugal and, in 2007, the costs associated with the early 

retirement of employees and of members of the Executive Board of Directors, as previously mentioned. Staff 

costs were influenced by the growth of costs in the international activity, as a result of the increase in the 

number of employees, driven by the expansion plans implemented in several international operations, 

particularly in Poland, Greece, Mozambique and Angola, and also by the activity launched in Romania at the 

end of 2007. The number of employees at international operations as of 31 December 2008 represented 53% 

of the Group’s total number of employees. In Portugal, the staff costs fell 18.9% from 2007 (representing a 

1.5% decrease excluding specific items previously mentioned), reflecting the cancellation of the variable 

remuneration accrued of the Executive Board of Directors and the lower amount of variable remuneration 

accrued for the employees, and also the reduction in the number of employees, due to the partial 

replacement of voluntary exits of employees, despite the additional 33 branches in the distribution network, 

reflecting the focus on the incentive policies aimed at transferring employees from support areas to the 

commercial network. 

Other administrative costs amounted to Euro 642.6 million in 2008, up 2.4% from Euro 627.5 million in 

2007, driven by the 20.6% increase in international activity, despite the 7.4% reduction in Portugal. The 

evolution of other administrative costs in the international activity reflects the costs associated with the 

network expansion plans, in particular costs related to rent, specialised services, maintenance, advertising 

and communications. Amongst the international operations, the higher growth levels were registered in 

Poland, Angola and Romania. In Portugal, other administrative costs benefited from reductions achieved in 

most line items, as a result of the operative rationalisation measures carried out, highlighting the lower 

costs related to consulting and advisory services, travel expenses, legal services and temporary labour. 

Depreciation totalled Euro 112.9 million in 2008, down 1.8% from Euro 114.9 million in 2007, as a result of 

the lower amount registered in Portugal and the stabilisation of the depreciation in the international 

activity. The reduction in Portugal was mostly influenced by the lower depreciation related to real estate, 

reflecting the end of the depreciation period for investments completed in previous years. 

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OPERATING COSTS 

Euro million 2008 2007 

Change 

08/07 

Staff costs (1) 915.3 1,006.2 -9.0% 

Other administrative costs 642.6 627.5 2.4% 

Depreciation 112.9 114.9 -1.8% 

1,670.8 1,748.6 -4.4% 

Of which: 

Activity in Portugal 1,048.3 1,221.9 -14.2% 

Foreign activity 622.5 526.7 18.2% 

Operating costs / Total income (2) (3) 53.7% 57.3% 

(1) Includes in 2008 the Euro 18.0 million reduction in the variable remuneration already accrued in the previous year and 

Euro 7.8 million of restructuring costs in Portugal. Includes in 2007 Euro 121.8 million of costs associated with the early 

retirement of employees and of members of the Executive Board of Directors. 

(2) Activity in Portugal. Calculated according to rule 16/2004 from the Bank of Portugal. 

(3) Excludes the impact of specific items. 

Impairment for loans losses (net of recoveries) totalled Euro 544.7 million in 2008, compared with Euro 

260.2 million in 2007. The evolution of impairment for loans losses (net of recoveries) was determined by 

the increase in the volume of loans to customers and overdue loans, together with the lower level of credit 

recoveries from 2007, in Portugal and in the international activity. Impairment for loan losses increase to 

Euro 637.5 million in 2008, compared to Euro 407.2 million in 2007, determined by the coverage of 

impairment indicators in the loans portfolio, including the impact of the devaluation of financial collaterals, 

as an effect of the continuous volatility in the capital markets. The cost of risk, measured by the proportion 

of impairment charges, net of recoveries, in the total loans portfolio, stood at 74 b.p.. 

Other provisions, which include other assets impairment and other provisions, totalled Euro 44.5 million in 

2008, down from Euro 94.8 million in 2007. In 2008, other provisions fundamentally include impairment 

charges related to the revaluation of assets, in particular, real estate assets received in kind not fully 

covered by guarantees, while in 2007 were also included provisions related to potential charges related to 

enquires from regulatory entities. 

BALANCE SHEET 

Total assets amounted to Euro 94,424 million as of 31 December 2008, an increase of 7.1% from Euro 88,166 

million as of 31 December 2007. 

Loans to customers, excluding loans represented by securities transferred from financial assets available for 

sale, totalled Euro 73,849 million as of 31 December 2008 up by 10.4% from Euro 66,873 million at 31 

December 2007. The increase in loans to customers was boosted by both the activity in Portugal and the 

international activity, benefiting from the 10.1% increase in loans to companies and the 10.8% rise in loans 

to individuals, which was supported by the 11.9% growth in mortgage loans. In Portugal, loans to customers 

grew 6.6%, determined by loans to companies, which increased 8.2%, while loans to individuals rose 4.5%, 

chiefly sustained by mortgage loans, while consumer loans remained stable. In the international activity, 

loans to customers increased 28.3% from 31 December 2008, boosted by loans to individuals (+31.3%) 

together with loans to companies (+23.7%), benefiting from the favourable evolution in all foreign 

operations, in particular in Poland and Greece. The performance achieved in Poland was mostly determined 

by the growth in mortgage loans, while in Greece the major increase was in loans to companies. Between 31 

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December 2007 and 31 December 2008 the loans portfolio showed a stable and balanced structure, with 

loans to individuals and loans to companies representing 45% and 55%, respectively, of the total loans 

portfolio. 

LOANS TO CUSTOMERS (1) 

Individuals 


Change 

08 / 07 

Mortgage loans 28,538 25,503 11.9% 

Consumer loans 4,877 4,645 5.0% 

Companies 

33,415 30,148 10.8% 

Services 13,409 11,841 13.2% 

Commerce 5,184 5,083 2.0% 

Other 21,841 19,801 10.3% 

40,434 36,725 10.1% 

Total 73,849 66,873 10.4% 

Of which: 

Activity in Portugal 58,860 55,194 6.6% 


(1) Excludes loans represented by securities transferred from financial assets available for sale. 

Credit quality, determined by the non-performing loans indicators, shows that the ratio of overdue loans by 

more than 90 days as a proportion of total loans, excluding loans represented by securities transferred from 

financial assets available for sale, registered an unfavourable evolution from 30 September 2008 and stood 

at 0.9% as at 31 December 2008. The coverage ratio stood at 211.1% as of 31 December 2008. 

OVERDUE LOANS BY MORE THAN 90 DAYS AND IMPAIRMENTS AT 31 DECEMBER 2008 (1) 

Individuals 

Euro million 

Overdue loans 

by more than 

90 days 

Impairment 

for loan losses 

Overdue loans 

more than 90 

days / 

Total loans 

Coverage 

ratio 

Mortgage loans 112 209 0.4% 186.5% 

Consumer loans 148 205 3.0% 139.3% 

Companies 

260 414 0.8% 159.6% 

Services 81 320 0.6% 395.2% 

Commerce 90 170 1.7% 188.5% 

Other 269 573 1.2% 213.1% 

440 1,063 1.1% 241.5% 

Total 700 1,477 0.9% 211.1% 

(1) Excludes loans represented by securities transferred from financial assets available for sale 

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The Group does not have any exposure to the US subprime / Alt-A mortgage market, in particular through 

Residential Mortgage-Backed Securities (RMBS), Commercial Mortgage-Backed Securities (CMBS), Asset- 

Backed Securities (ABS) or Collateralized Debt Obligations (CDO). The Group also does not have any exposure 

to monoline insurance companies. 

The Group’s exposure to structured credit products potentially affected by the markets turmoil in 2008 was 

limited to the exposure of its subsidiary company Millennium bcpbank in United States, through which the 

Group owns, as at 31 December 2008, Euro 52.3 million of Residential Mortgage-Backed Securities (RMBS), 

Euro 10.8 million of bonds with senior AAA debt, both issued by Government Sponsored Entities (GSEs), and 

Euro 9.6 million of Commercial Mortgage-Backed Securities (CMBS) issued by Government Agencies. 

Total customers’ funds reached to Euro 66,264 million as of 31 December 2008, a 3.6% increase from Euro 

63,953 million in 2007. The favourable performance of total customers’ funds was boosted by the increase of 

13.9% in balance sheet customers’ funds, highlighting the growth of 14.4% in customers’ deposits, which 

more than offset the reduction of 21.6% in off-balance sheet customers’ funds, determined by the evolution 

of assets under management. The growth in balance sheet customers’ funds, in particular in customers’ 

deposits, reflects the higher propensity of investors to take refuge in products with lower risk, such as the 

traditional term deposits, driven by the instability context in the stock markets. The evolution of offbalance 

sheet customers’ funds was hindered by the drop in assets under management (-45.5%), influenced 

by the evolution of unit trust funds, despite the favourable performance of capitalisation insurance, which 

grew 1.1% from 31 December 2007. The increase of total customers’ funds benefited from the activity in 

Portugal (+1.8%), where the growth in customers’ deposits more than offset the decrease in assets under 

management, and also benefited from the performance achieved in the international activity (+10.9%), 

highlighting the further increase in customers’ deposits in Poland, Greece, Mozambique and Angola. 

TOTAL CUSTOMERS’ FUNDS 

Balance sheet customers’ funds 


Change 

08 / 07 

Deposits 44,907 39,247 14.4% 

Debt securities 6,775 6,108 10.9% 

Off-balance sheet customers’ funds 

51,682 45,355 13.9% 

Assets under management 4,927 9,044 -45.5% 

Capitalisation insurance 9,655 9,554 1.1% 

14,582 18,598 -21.6% 

Total 66,264 63,953 3.6% 

Of which: 

Activity in Portugal 52,322 51,380 1.8% 


In the scope of the Group’s liquidity management, balance sheet customers’ funds, especially customers’ 

deposits from Retail network, remained as a major contributor to the funding structure for the 

Millennium bcp’s intermediation activity, notwithstanding the importance of wholesale funding operations, 

in particular the regular recourse to securities issuance within the Euro Medium Term Notes (EMTNs) 

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Programme, to assets securitisation operations and to covered bonds operations settled amongst financial 

institutions, boosted by the greater ability of the Group to access to international financial markets. 

Millennium bcp developed in 2008 important initiatives aiming to reduce the unfavourable impact from 

monetary and capital markets in its liquidity position, highlighting the favourable impact of the share capital 

increase in April 2008, through the issuance of 1,083,270,433 new ordinary shares, for subscription by Banco 

Comercial Português, S.A. shareholders through the exercise of their pre-emptive subscription rights, which 

were fully subscribed, in the amount of Euro 1.3 billion. 

Notwithstanding the unfavourable conditions of the financial markets, especially during the second half of 

the year, Millennium bcp essentially achieved its financing plan for 2008 in the area of wholesale funding, by 

the strict monitoring of the commercial gap (coverage of loans to customers by the customer’s balancesheet 

funds), reflected in a sustained growth of customer balance-sheet funds and in the moderate growth 

of loans to customers. 

In early 2009 Millennium bcp successfully launched a fixed-rate 3-year debt issue (Euro Fixed Rate Notes), 

guaranteed by the Portuguese Republic, in the sum of Euro 1.5 billion, which was placed at a price 

equivalent to the mid-swaps rate plus 100 b.p.. Despite the uncertainty that characterised the international 

financial markets and the highly competitive scenarios for new issues, the success of this operation confirms 

the receptiveness and importance of Banco Comercial Português as an issuer in the international financial 

markets. 

PENSION FUND 

The pension fund liabilities, which at the end of 2008 amounted to Euro 5,723 million, were fully financed, 

and at a level higher than the minimum limit defined by the Bank of Portugal, to which contributed cash 

payments in the amount of Euro 777 million. 

In 2008 the actuarial assumptions regarding the discount rate and the women’s mortality table were 

changed. The discount rate rose from 5.25% in 2007 to 5.75% in 2008 and the women’s mortality table 

considered a life expectancy extended by two years. 

The stock markets volatility in 2008 determined negative actuarial differences in the Pension fund in the 

amount of Euro 827 million, and consequently a negative return rate of 14%. 

CAPITAL 

The capital ratios of the Group as of 31 December 2008 were determined in accordance with the Basel II 

framework, with the calculation of capital requirements following the standard approach in respect to credit 

risk and the basic indicator approach for the operational risk. 

In accordance with a clarification from the Bank of Portugal, capital deductions related to shareholdings in 

insurance and banking companies are now deducted from Tier I, when previously they were deducted from 

Core Tier I. 

The solvency ratio as at 31 December 2008 stood at 10.5% and Tier I at 7.1%. Core Tier I stood at 5.8%, 

compared with 6.5% as at 30 September 2008, essentially reflecting the negative impact related to the 

deduction of the expected return of the pension fund’s assets in 2008. 

The Bank of Portugal, through the Notice 11/2008, authorized the deferral of the actuarial losses of 2008 

over the next four years, except for the expected return of the fund’s assets, as referred above, which led 

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to the deduction of Euro 293 million from Core Tier I. The impacts related to the pension fund led to a 

decrease of 50 b.p. on the Core Tier I ratio, from 30 September 2008. 

The activity in the quarter was influenced, in particular, by negative foreign exchange differences, related 

to the zloty devaluation associated with the shareholding in Bank Millennium in Poland, which impacted both 

equity (down Euro 114 million) and minority interests, down by Euro 40 million. These impacts determined 

the negative contribution of the fourth quarter activity in Core Tier 1 ratio, which reached 19 b.p., despite 

positive recurrent earnings and the moderate increase of risk weighted assets related to the business. 

Investment in BPI registered an additional net devaluation of Euro 18 million in the fourth quarter, as the 

selling price was lower than market value at 30 September 2008, while the negative impacts of net 

restructuring costs (Euro 6 million) and Bank of Portugal deferrals for the period (Euro 20 million) should also 

be highlighted, corresponding, all together, to –5 b.p. in Core Tier I ratio. 

In the scope of Basel II a formal request has been filed with the Bank of Portugal, which is currently being 

analysed, regarding the use of the internal ratings based approach for credit risk and the internal models 

approach for the general market risk requirements, as well as the standard approach for calculating 

operational risk requirements. However, regarding recent developments, it is expected that this approval 

will occur during 2009. 

SOLVENCY 

Euro million 

Basel II 

Basel I 

31 Dec. 08 30 Sep.08 31 Dec.07 

Own Funds 

Tier I Capital 4,780 5,234 3,362 

of which: Preference shares 955 962 688 

Deductions on shareholdings (1) (60) (92) (78) 

Tier II Capital 2,358 2,314 2,557 

Deductions to Total Regulatory Capital (81) (41) (22) 

Total Regulatory Capital 7,057 7,507 5,897 

Risk Weighted Assets 67,426 66,976 61,687 

Solvency ratios 

Core Tier I (2) 5.8% 6.5% 4.5% 

Tier I 7.1% 7.8% 5.5% 

Tier II 3.4% 3.4% 4.1% 

Total 10.5% 11.2% 9.6% 

(1) Includes, in particular, the deductions related to the shareholdings in Millenniumbcp Fortis, Banque BCP (France and 

Luxembourg). 

(2) In accordance with a clarification from the Bank of Portugal, the capital deductions related to shareholdings in 

insurance and banking companies are deducted from Tier I, previously deducted from Core Tier I. The ratio as at 31 

December 2007 is on a comparable basis. 

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SEGMENTAL REPORTING 

Millennium bcp offers a wide range of banking activities and financial services in Portugal and abroad, with a 

special focus on Commercial Banking, Investment Banking and Private Banking and Asset Management. 

SEGMENTS DESCRIPTION 

Commercial Banking is the core business in the Group’s activity, both in terms of volumes and contribution 

to results. The Commercial Banking activity includes Millennium bcp’s network in Portugal, operating as a 

distribution channel targeting the segments of Retail Banking and Corporate and Companies, focusing the 

activity on satisfying customers’ financial needs, both for individuals and companies. Commercial Banking 

also includes the segment of Foreign Business, operating through several banking operations in markets with 

affinity to Portugal and in markets of recognised growth potential, in Europe and in other regions. 

The strategic approach of Retail Banking in Portugal was to target “Mass market” customers, who appreciate 

a value proposition based on innovation and speed, as well as Affluent and Small businesses customers, 

whose specific characteristics, financial assets or income imply a value proposition based on innovation and 

personalisation, requiring a dedicated Account Manager. Retail Banking also includes ActivoBank7, a 

universal Bank, focusing on brokerage and on the selection and advisory of long-term investment products. 

Within the scope of the cross-selling strategy, Retail Banking also acts as a distribution channel for financial 

products and services of the Millennium bcp business as a whole. 

The Corporate and Companies segment includes: (i) the Corporate network in Portugal, targeting corporate 

and institutional customers with an annual turnover in excess of Euro 100 million, providing a complete 

range of value added products and services; (ii) the Companies network in Portugal, which covers the 

financial needs of companies with an annual turnover between Euro 7.5 million and Euro 100 million, 

focused on innovation and on offering a wide range of traditional banking products complemented by 

specialised financing; and (iii) the activity of the Bank's International Division. 

The Investment Banking business is undertaken essentially by Millennium Investment Banking, a company 

specialised in capital markets, providing strategic and financial advisory, specialised financial service – 

Project finance, Corporate finance, Securities brokerage and Equity research - as well as in structuring riskhedging 

derivatives products. 

The Private Banking and Asset Management activity comprises the Private Banking network in Portugal, 

Millennium Banque Privée, a private banking platform incorporated under Swiss law, and subsidiary 

companies specialised in the asset management business. 

The Foreign Business comprises the operations outside Portugal, namely in Poland, Greece, Turkey, 

Romania, Mozambique, Angola and United States. The Group is represented by a universal bank in Poland 

and by an operation based on the innovation of products and services in Greece. The activity in Turkey is 

performed through an operation focused on financial advising, and in Romania, it is represented through a 

greenfield operation launched in 2007, focused on Mass market and Businesses, Companies and Affluent. All 

the above operations develop their activities under the same commercial brand of Millennium. The Group is 

represented in Mozambique by Millennium bim, a universal bank targeting both companies and individual 

customers, in Angola by Millennium Angola, a bank focused on individuals and public and private sector 

companies and institutions, and in the United States by Millennium bcpbank, a local bank that serves the 

local population, in particular the Portuguese community. 

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BUSINESS SEGMENT ACTIVITY 

The figures reported for each business segment result from aggregating the subsidiaries and business units 

integrated in each segment, including the impacts from capital allocation and balancing process of each 

entity’s level, both at balance sheet and income statement, based on average figures. Balance sheet 

headings for each subsidiary and business unit are re-calculated, given the replacement of their original own 

funds by the outcome of the capital allocation process, according to regulatory solvency criteria. As the 

process of capital allocation follows the regulatory criteria of solvency in place, the risk weighted assets 

and, consequently, the business segments’ capital allocation, were determined in accordance with the Basel 

II framework for 2008 figures and in accordance with the Basel I for 2007. Each operation is balanced 

through internal transfers of funds, with no impact on consolidated accounts. 

To ensure comparability, the changes that occurred in 2008 were reflected in the segments as of 31 

December 2007. It should be noted that the liquidity premium started to be allocated to the Bank’s business 

areas, in order to properly reflect the contractual maturities of the operations in internal transfer prices of 

the respective funds. Each segment’s net contribution reflects the individual results reached by business 

units, independent of the percentage held by the Group, including the impact of the fund transfers 

previously mentioned. The following information is based on financial statements prepared according to IFRS 

and on the organisational model in place in the Group. 

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Retail Banking in Portugal 

The net contribution of Retail Banking in Portugal amounted to Euro 267.0 million in 2008, compared to Euro 

399.0 million in 2007. The evolution of net contribution reflects the decline in income, due to the reduction 

in the net interest income from deposits repayable on demand and the lower net commissions, as well as the 

increase in charges for impairment and provisions. 

The growing importance of mortgage loans and the increasing competition in the Small business segment and 

in consumer loans led to a significant reduction in credit spreads, despite the increase of business volumes. 

Net commissions showed a favourable evolution, in particular in commissions related to deposits repayable 

on demand, stock exchange operations and credit operations, mainly in mortgage credit operations, due to 

the lower amount of new credit granted. The increase in charges for impairment and provisions reflects the 

coverage of impairment indicators in the loan portfolio and the depreciation in financial collaterals. The 

increase in staff costs resulted from the transfer of employees from support areas to the commercial 

network, despite the control of administrative costs, notwithstanding the opening of new branches. 

Total customer funds reached Euro 34,014 million as of 31 December 2008, declining 1.6% from Euro 34,556 

million at 31 December 2007, as a result of the 57.8% reduction in investment funds and assets under 

management. However, the strategy to further increase the number of customers and the total customers’ 

funds, focused on supplying investment and savings products with attractive returns and suited to the 

various risk profiles, led to a 1.7% increase in customers’ deposits. 

Loans to customers totalled Euro 34,788 million at 31 December 2008, rising 3.3% from Euro 33,674 million in 

the same date of 2007, supported by both the growth of Small business loans and the good performance of 

mortgage loans, despite the slow down evidenced. 

In terms of cross-selling, Retail Banking registered positive progress, growing from 3.99 products per client 

in 2007 to 4.12 in 2008. Customers’ global satisfaction index reached 78.8% at the end of 2008, comparing 

positively with the 2007 level (77.9%). 

Euro million 31 Dec.08 31 Dec.07 

Change 

08 / 07 

Income Statement 

Net interest income 906.7 955.5 -5.1% 

Other net income 408.8 420.0 -2.7% 

1,315.5 1,375.5 -4.4% 

Operating costs 747.9 723.9 3.3% 

Impairment and provisions 204.1 108.9 87.4% 

Pre-tax contribution 363.5 542.7 -33.0% 

Taxes 96.5 143.7 -32.9% 

Net contribution 267.0 399.0 -33.1% 

Summary of Indicators 

Capital employed 1,084 1,178 

Return on capital employed 24.6% 33.9% 

Weighted risks 21,674 24,399 

Cost-to-income ratio 56.8% 52.6% 

Loans and advances to customers 34,788 33,674 3.3% 

Total customer funds 34,014 34,556 -1.6% 

Note: Capital employed was calculated in accordance with the Basel I 

methodologies for 2007 and Basel II for 2008. 

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Corporate and Companies 

The Corporate and Customers segment showed a net contribution of Euro 150.6 million in 2008, compared to 

232.4 million in the same period of 2007. The performance of this business segment was determined by the 

higher charges for impairment despite the favourable evolution registered in total operating income and 

operating cost. 

The increase of net interest income reflects the growth in business volumes, both in terms of loans to 

customers and customers’ deposits. Notwithstanding the effort to align pricing of operations with the 

associated cost of risk, the price effect was negative. Overall, commissions showed a positive performance. 

Operating costs decreased when compared with the same period of 2007, showing sustained savings 

throughout 2008. 

The higher level of charges for impairment and provisions reflects the increasing impairment indicators in 

the loan portfolio and the depreciation of financial collaterals, following the decline of capital markets. 

Corporate and Companies network activity was focused in the effort to further increase customers funds and 

in the discipline in the repricing policy and risk management, in order to optimise the use of capital. The 

return on allocated capital at 31 December 2008 stood at 12.6%. 

Total customers’ funds increased 15.0%, to Euro 11,323 million at 31 December 2008, compared to Euro 

9,849 million as of 31 December 2007. The rise in total customers’ funds, despite the intense competition in 

this business segment, was supported by commercial activity focused on providing diversified treasury, 

investment and saving solutions, as well as on the continuous identification of new business opportunities. It 

also reflects the rise in funds from institutional customers. 

Loans to customers totalled Euro 22,848 million at the end of December 2008, rising 6.5% from Euro 21,459 

million at the end of December 2007. The favourable evolution in loans to customer was achieved despite 

the increasing restrictive access to funding sources and a more selective credit approval, with additional 

pricing discipline, through the repricing of credit operations, aligned with the cost of risk and associated 

capital needs. 


Change 

08 / 07 


Net interest income 327.5 310.2 5.6% 

Other net income 147.3 146.8 0.3% 

474.8 457.0 3.9% 

Operating costs 105.3 111.1 -5.2% 

Impairment and provisions 164.7 29.7 - 


Taxes 54.2 83.8 -35.2% 



Capital employed 1,194 1,300 




Loans and advances to customers (1) 22,848 21,459 6.5% 

Total customer funds 11,323 9,849 15.0% 

(1) Includes commercial paper. 



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Investment Banking 

The net contribution of Investment Banking stood at Euro 48.4 million in 2008, compared to Euro 63.7 

million in 2007. This was mainly driven by the drop in income line items, in particular net commissions 

related to securities and net trading income, mostly as a result of the adverse performance of capital 

markets, together with the persistence of an unfavourable macroeconomic environment in Portugal, despite 

the operating costs control. The return on allocated capital stood at 40.9% at the end of December 2008. 

Loans to customer increased by 26.6% between the end of December 2007 and end of December 2008, 

sustained by the participation of Millennium Investment Banking in major Project finance and Structured 

finance operations, in the framework of structural investment projects, especially the tourism and 

renewable energy sectors. 

Notwithstanding the unfavourable capital markets environment, Millennium Investment Banking was actively 

involved in the organisation and structuring of various finance intermediation operations, in particular in the 

debt issuance segment, which resulted in a significant volume of bonds and commercial paper being issued. 


Change 

08 / 07 


Net interest income 8.4 9.1 -7.4% 


113.1 130.5 -13.4% 


Impairment and provisions -0.9 0.6 -- 


Taxes 21.0 11.3 86.3% 



Capital employed 118 117 




Loans and advances to customers 1,166 921 26.6% 



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Private Banking and Asset Management 

The Private Banking and Asset Management segment evidenced a negative net contribution of Euro 0.5 

million in 2008, down from Euro 41.8 million in 2007. The evolution of the net contribution reflects the 

higher impairment and provisions charges, driven by the devaluation of financial collateral influenced by the 

falling stock markets, in particular in Millennium Banque Privée, and the lower commissions related to asset 

management. These performances were partly offset by the rise in net interest income, sustained by the 

repricing of credit operations. 

Assets under management totalled Euro 10,593 million at 31 December 2008, 27.7% down from the same 

date of 2007. This reflects the adverse development of capital markets, which determined financial products 

withdrawal and led to the devaluation of assets under management portfolio. Term deposits in the Private 

Banking network in Portugal achieved an increase of 35.6% in 2008, compared with 2007, and also real 

estate investment funds registered a favourable evolution. 

Loans to customers amounted to Euro 3,426 million at 31 December 2008, growing by 5.9% from Euro 3,235 

million at 31 December 2007, sustained by the performance of Private Banking network in Portugal, which 

increased 9.7%, driven by the efforts to expand the business base. 


Change 

08 / 07 




101.8 117.2 -13.1% 


Impairment and provisions 52.4 6.9 -- 

Pre-tax contribution -8.1 51.9 -- 

Taxes -7.6 10.1 -- 

Net contribution -0.5 41.8 -- 



Return on capital employed -0.5% 33.1% 




Assets under management 10,593 14,662 -27.7% 



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Foreign Business 

In the Foreign Business segment, net contribution was down by 5.8% to Euro 128.3 million in 2008, from Euro 

136.1 million in 2007. This evolution includes the impact of the Romanian operation, which was launched at 

the end of 2007. 

It is worth noting the sustained growth in income line items, in particular in net interest income (positive 

volume and interest margin effects, especially in Poland, Angola, Mozambique and Greece). Other net 

income also showed a favourable performance (mostly driven by commissions, in particular in Angola and 

Mozambique), sustained by the significant growth in business volumes. The improvements in incomes, more 

than offset the rise in operating costs, driven by the expansion of the distribution networks in the 

international operations, which led to an increase in the number of employees. The return on allocated 

capital stood at 13.1% at the end of 2008. 

The cost to income ratio stood at 71.6%, as a result of the strategy of organic growth carried out in the 

international operations, as reflected by the expansion plans in Poland, Greece, Mozambique, Angola, and 

most recently in Romania. 

Loans to customers grew 28.5% to Euro 14,711 million at 31 December 2008, benefiting from the 

developments in both loans to individuals and loans to companies, strengthened by the continuous launching 

of innovative products and services, tailored to customers needs and risk profile. This performance was 

determined by the increases achieved by all foreign operations, in particular Poland, Angola and 

Mozambique. 

Total customers’ funds boosted 9.2%, totalling Euro 13,942 million at 31 December 2008, influenced by the 

further increase in customers’ deposits, especially in Poland. 


Change 

08 / 07 



Other net income 373.7 344.9 8.3% 

869.3 737.0 17.9% 

Operating costs 622.5 526.7 18.2% 

Impairment and provisions 78.0 41.2 89.4% 


Taxes 40.5 33.0 22.7% 








Total customer funds 13,942 12,772 9.2% 



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SIGNIFICANT EVENTS 

Despite the adverse environment, Millennium bcp kept up efforts to cut costs and streamline the 

organization, searching simultaneously to promote the improvement of service quality, risk minimization, an 

adequate liquidity and capital management, and preserving the institutional reputation. Of particular note 

regarding Millennium bcp’s activities in the fourth quarter of 2008 were: 

 

 

 

Announcement of the deliberation to resume the process of merger by incorporation of 

Banco Millennium bcp Investimento, SA, into Banco Comercial Português, S.A.; 

Registration of the merge by incorporation of BCP Participações Financeiras, SGPS, 

Sociedade Unipessoal, Lda, into Banco Comercial Português, S.A.; 

Notification of Order nº 31835-A/2008 issued by the secretary of State for the Treasury and 

Finances, authorising the granting of a personal guarantee by the Portuguese State 

securing the capital and interest obligations within the scope of the 3 fixed-rate issue in 

the sum of up to Euro 1.5 billion, under the Millennium bcp Euro Medium Term Notes 

Programme, which took place on 12 January 2009; 

Conclusion of the 4 th and of the 5 th editions of the Commercial Skills Development 

Programmes, to encourage employee mobility from central services to commercial areas; 

 

 

 

 

 

 

 

 

 

Notification of charges received from the Portuguese Securities Market Commission (CMVM) 

and from the Bank of Portugal concerning administrative offence proceedings brought 

against it in respect of facts that occurred prior to 2008, particularly with regard to 

alleged irregularities related with the financing of the acquisition of shares issued by the 

Bank granted to companies headquartered in foreign jurisdictions; 

Sale of 87,214,836 shares representing 9.69% of the share capital of Banco BPI, S.A., to 

Santoro Financial Holdings, SGPS, S.A., a company incorporated under Portuguese law. As a 

result of the execution of this agreement Banco Comercial Português will no longer have a 

qualified holding in Banco BPI, S.A.; 

Millennium Investment Banking became a direct trading service provider in the Amsterdam 

and Brussels Euronext markets; 

Fitch Ratings reaffirmed the long and short term ratings on Banco Comercial Português, 

S.A., A+/F1, keeping the outlook stable; 

Moody’s reaffirmed the long and short term ratings on Banco Comercial Português, S.A., 

Aa3/P-1, keeping the outlook stable; 

Standard & Poor's reaffirmed the long and short term ratings on Banco Comercial 

Português, S.A., A/A-1, revising at the same time the outlook from stable to negative. 

Already on 3 February 2009, Standard & Poor’s reaffirmed the counterparty ratings on 

Banco Comercial Português, S.A.; 

Millennium bcp was named Best Foreign Exchange Bank in Portugal, by Global Finance 

magazine and Best Commercial Bank in Portugal, by Euromoney magazine; 

Bank Millennium 2007 Report and Accounts was distinguished as the best in the 

“Application of International Standards“ category in Poland; 

Millennium bim was named “Bank of the Year in Mozambique” by “The Banker” magazine. 

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ECONOMIC ENVIRONMENT 

During 2008 the world economy has faced multiple shocks that led to a significant deceleration of economic 

activity. This ripple effect was more pronounced during the last quarter of the year, as the financial turmoil 

rapidly spread to the non-financial sectors of the economy. The past buoyancy of the developing economies 

suddenly came to a halt on the ferocity and speed of the downturn in world trade and financial flows. 

Countries from Europe and Southeast Asia, more vulnerable to the reversion of short-term capital flows, had 

to look for external aid and, in the more extreme situations, decided to end their currency’s full 

convertibility and imposed restrictions on free capital mobility. 

With the full impact of this environment still to be felt over the coming months, as companies adjust their 

production plans and businesses and households revise down their expected investment and consumption 

spending, the economic outlook for the main economies is dismal, pointing to a recessionary period ahead. 

The contribution to growth from the developing countries will be well below last year’s levels amid an 

unusually high level of uncertainty as regards the timing and extent of the forthcoming recovery. The decline 

in the price of raw materials has fostered a strong disinflation dynamic. As the moderation in world activity 

adds to increasing economic slack the risk of development of a deflationary trend has increased. 

Financial instability was a common feature across 2008, but particularly so after the summer months, in the 

aftermath of the financial difficulties that took place in some of the most prominent financial institutions of 

the US. The risk premium rose to unprecedented levels, more markedly in the more complex financial 

instruments, with dramatic negative implications in the performance of most financial markets and funding 

deals. The investment fund industry was specially hit, facing an unusually high level of redemptions. It was 

also very distressful for the major stock markets. Stock indices retraced on average by 40% to 50% on a yearly 

basis, in an extremely volatile day-to-day environment. The interbank money market has been mostly 

dysfunctional in its role of allocating excessive savings among market participants. 

Governments and central banks have been pursuing pro-cyclical policies, through accommodative monetary 

stance, public spending largesse, stabilization of the financial system and provision of funds for 

recapitalization purposes. The combined policies are starting to have some effect, more noticeably in the 

reduction of risk premia charged and on resumption of primary debt issuance, but with a slight perverse 

effect on the widening of the sovereign spreads. Despite the tentative signs of lower risk aversion in the 

early days of 2009, restoring the regular functioning of financial markets is still seen as a complex task. 

The banking activity has been impacted as well. The global financial turmoil derailed funding markets, 

lowered asset valuations, increased the need for provisioning and raised nonperforming loans and overall 

impairment levels. At the same time, an improving trend of capital adequacy is underway. In the case of 

Portugal, this has been further reinforced by the Bank of Portugal’s proposal for banks to have a Tier I Ratio 

of 8% by the end of the third quarter of 2009. 

In the main European countries economic activity heavily downshifted during the second half of the year and 

inflationary pressures retreated. The European Central Bank cut the main refinancing rate on several 

occasions, from 4.25% in July to 2.00% in early 2009. Further rate cuts are expected, though logically by a 

smaller amount. In most countries, internal demand lacks the means and the incentives to be a growth driver 

and the monetary policy effectiveness is impaired due to the poor functioning of the money markets. So, a 

large share of the economic impulse has to come from public initiatives, though subject to the public 

finances’ long-term sustainability. 

The contagion of domestic economies has been mainly indirect, through the marked reduction in external 

demand and the much more restrictive financial terms. This mix of conditions has been somewhat amplified 

by some vulnerabilities of these countries: in Portugal and Greece making more difficult for the regular 

financing of the current account deficit; in the Eastern European countries, by the inversion of short term 

capital inflows; in the African economies by the less friendly state of key commodity markets. All countries 

will face a sharp deceleration in economic activity and risks are tilted further to the downside, as related to 

the ability and cost of refinancing maturing debt. Once financial stability is restored, interest rates in 

countries with own monetary policies will likely be cut further contributing to ease the burden of financial 

and external constraints. 

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“Disclaimer” 

This document may include certain sections or statements, in particular relating to the Banco Comercial Português (“BCP”) Group, that 

are neither reported financial results nor other historical information. These statements, which may include, without limitation, 

targets, forecasts, projections, statements regarding the possible development or possible assumed future results of operations and any 

statement preceded by, followed by or that includes the words “believes”, “expects”, “aims”, “intends”, “may”, “expect”, 

“estimate”, “project”, “anticipate”, “should”, “intend”, “plan”, “probability”, “risk”, “Value-at-Risk” (“VaR”), “target”, “goal”, 

“objective”, “will”, “endeavour”, “outlook”, “optimistic”, “prospects” or similar expressions or negatives or combinations thereof are 

or may constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, 

regulations and case law, or other applicable laws and regulations. By their nature, forward-looking statements are inherently 

predictive, speculative and are subject to 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 condition in individual countries in which the BCP 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 movements in securities markets, currency exchange rates 

and interest rates, monetary policies, inability to hedge certain risks economically; the adequacy of loss reserves; acquisitions or 

restructurings; technological changes; changes in consumer spending and saving habits, changes in financial position or credit 

worthiness of our customers, obligors and counterparties, and the success of the Group in managing the risk involved in the foregoing. 

BCP does not undertake to update or to release publicly any revision to any forward-looking statements included in this document, 

whether to reflect events, circumstances or unanticipated events occurring after the date hereof, or otherwise. 

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BANCO COMERCIAL PORTUGUÊS 

Consolidated Income Statement 

for the years ended 31 December, 2008 and 2007 

2008 2007 

(Thousands of Euros) 

Interest income 5,269,597 4,332,187 

Interest expense (3,548,549) (2,794,884) 


Dividends from equity instruments 36,816 27,921 


Net gains / losses arising from trading and 

hedging activities 277,631 199,138 

Net gains / losses arising from available for 

sale financial assets (259,532) 193,211 


2,573,960 2,720,017 

Other net income from non banking activity 17,390 12,925 


Staff costs 915,307 1,006,227 

Other administrative costs 642,641 627,452 

Depreciation 112,843 114,896 

Operating costs 1,670,791 1,748,575 

920,559 984,367 

Loans impairment (544,699) (260,249) 

Other assets impairment (60,024) (45,754) 

Other provisions 15,500 (49,095) 


Share of profit of associates under the equity method 19,080 51,215 

Gains from the sale of subsidiaries and other assets (8,407) 7,732 

Profit before income tax 342,009 688,216 

Income tax 

Current (44,001) (73,045) 

Deferred (39,997) 3,475 

Profit after income tax 258,011 618,646 

Attributable to: 

Shareholders of the Bank 201,182 563,287 


Profit for the period 258,011 618,646 

23/24 



EUR 4,694,600,000.00.


Assets 

Press-Release 


BANCO COMERCIAL PORTUGUÊS 

Consolidated Balance Sheet as at 31 December, 2008 and 2007 

2008 2007 

Cash and deposits at central banks 2,064,407 1,958,239 


Repayable on demand 1,048,348 820,699 

Other loans and advances 2,892,345 6,482,038 

Loans and advances to customers 75,165,014 65,650,449 

Financial assets held for trading 3,903,267 3,084,892 

Financial assets available for sale 1,714,178 4,418,534 



Financial assets held to maturity 1,101,844 - 

Investments in associated companies 343,934 316,399 

Non current assets held for sale 19,558 24,180 

Property and equipment 745,818 699,094 

Goodwill and intangible assets 540,228 536,533 

Current tax assets 18,127 29,913 

Deferred tax assets 586,952 650,636 

Other assets 4,147,645 3,355,470 

Liabilities 

94,423,724 88,166,161 

Amounts owed to central banks 3,342,301 784,347 

Amounts owed to others credit institutions 5,997,066 8,648,135 

Amounts owed to customers 44,907,168 39,246,611 

Debt securities 20,515,566 26,798,490 

Financial liabilities held for trading 2,138,815 1,304,265 


at fair value through results 6,714,323 1,755,047 


Provisions for liabilities and charges 221,836 246,949 

Subordinated debt 2,598,660 2,925,128 

Current income tax liabilities 4,826 41,363 

Deferred income tax liabilities 336 46 

Other liabilities 1,383,633 1,399,757 

Equity 

(Thousands of Euros) 


Share capital 4,694,600 3,611,330 

Treasury stock (58,631) (58,436) 


Preference shares 1,000,000 1,000,000 

Fair value reserves 214,593 218,498 

Reserves and retained earnings (274,622) (1,598,704) 

Profit for the period attributable to Shareholders 201,182 563,287 

Total Equity attributable to Shareholders of the Bank 5,960,490 4,617,682 


Total Equity 6,248,234 4,899,255 

94,423,724 88,166,161 

24/24 



EUR 4,694,600,000.00.

Annual Report 2008 


©Millennium bcp 

www.millenniumbcp.pt 

Banco Comercial Português, S.A., 

Public Company 

Head Office: 

Praça D. João I, 28 

4000-295 Oporto 

Share Capital: 

4.694.600.000 euros 

Public deed registered 

in the Oporto Commercial Registry, 

with the unic registry 

and tax number of 501 525 882 

Pre-press: 

Choice – Comunicação Global, Lda. 

Ilustration: 

Luís Oliveira 

Printing: 

Gráfica Maiadouro, S.A. 

Compulsory Deposit: 

148713/00 

Printed in March 2009

09-041334 Relatorio INGLES Vol 2 - BCP KOMORI 4 - Millennium bcp

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