SAVE THE DATE - Hypoport AG

BCP
Portugal/Banks Analyser
BCP (Buy)
Buy
Recommendation unchanged
Share price: EUR
closing price as of 07/05/2012
Target price: EUR
Target Price unchanged
Reuters/Bloomberg
0.11
0.40
BCP.LS/BCP PL
Market capitalisation (EURm) 793
Current N° of shares (m) 7,207
Free float 60%
Daily avg. no. trad. sh. 12 mth 65,810,336
Daily avg. trad. vol. 12 mth (m) 15
Price high 12 mth (EUR) 0.54
Price low 12 mth (EUR) 0.10
Abs. perf. 1 mth -13.39%
Abs. perf. 3 mth -37.50%
Abs. perf. 12 mth -79.91%
Key financials (EUR) 12/11 12/12e 12/13e
Total Revenue (m) 2,555 2,606 2,787
Pre-Provision Profit (PPP) (m) 632 1,040 1,200
Operating profit (OP) -1,236 160 473
Earnings Before Tax (m) -1,222 184 498
Net Profit (adj.) (m) -849 31 248
Shareholders Equity (m) 3,827 2,994 3,184
Tangible BV (m) 5,277 6,148 6,268
RWA (m) 55,254 53,390 51,503
ROE (adj.) -16.3% 0.5% 4.0%
Tier1 Ratio 8.7% 8.6% 9.0%
Cost/Income 64.0% 56.4% 53.7%
P/PPP 1.6 0.8 0.7
P/E (adj.) nm 25.8 3.2
P/BV 0.3 0.3 0.2
P/NAV 0.2 0.1 0.1
Dividend Yield 26.7% 0.0% 0.0%
PPPPS 0.09 0.14 0.17
EPS (adj.) -0.12 0.00 0.03
BVPS 0.53 0.42 0.44
NAVPS 0.73 0.85 0.87
DPS 0.03 0.00 0.00
0.55 vvdsvdvsdy
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12
Source: Factset
BCP Stox x Banks (Rebased)
Shareholders: Sonangol 12%; Teixeira Duarte Group
6%; Ocidental -Seguros de Vida, S.A.
5%; Fundação Berardo & Metalgest 4%;
Analyst(s):
André Rodrigues, Caixa-Banco de Investimento
andre.rodrigues@caixabi.pt
+351 21 389 68 39
1Q12 results - Net profit of EUR 40.8m supported by
liability management operations. ROE at 4.5%.
The facts: BCP disclosed its 1Q12 results yesterday after the market close. Today
BCP management will host a conference call to discuss the results (15:00 GMT).
Our analysis: BCP disclosed a net profit of EUR 40.8m in 1Q12 (vs. EUR 90.1m
net profit in 1Q11, i.e. -54.8% YoY). As described in our preview note, this
performance was supported by the impact of a liability management operation,
namely the repurchase of c. EUR 918.7m of covered bonds issued by BCP (capital
gain around EUR 96m, gross of taxes). This one-off operation sustained the
banking product (growth of 3.2% YoY) as the core revenues of the bank, margin
and commissions decreased 20.9% YoY and 13.1% YoY, respectively (12.4% and
9.4% in our forecasts).
Net interest income (“NII”) was significantly impacted by the increased funding
costs (namely on customers‟ deposits), the low interest rate environment and the
deleveraging process. We also refer to the impact in the NII of a liability
management operations (- c. EUR 48m YoY).
BCP 1Q12 vs. 1Q11 and CaixaBI estimates:
Customer funds increased 6.5% to EUR 54.53bn driven by customer deposits
which increased 8.8% to EUR 48.83bn. On the other side, the loan portfolio
decreased 5.4% to EUR 71.24bn. Loan-to-Deposits ratio was reduced to 138%,
in a context where the commercial gap (Loans vs. Deposits) decreased EUR 9bn.
Asset quality deterioration - NPL (>90 days) deteriorated 160bps to 5.0% vs.
3.4% in 1Q11. Overdue and doubtful loans ratio > 90 days increased to 9.7% (6.9%
in 1Q11). The provisioning effort made in 2011 strengthened the on-BS provisions
to 5% of total loans (EUR 3.6bn of loan impairments on balance sheet) whereas
coverage (overdue loans >90 days) stood at 100.3%.
Liquidity - Refinance of EUR 1.9b until the end of FY13. Use of ECB funding
increased to EUR 14.7bn vs. EUR 12.7bn in 4Q11 (c. 16% of total assets).
Capital: Core TIER I at 9.2% (Core TIER I increased 253bps in 2011, from 6.7% in
1Q11, boosted by the exchange of subordinated debt by equity, exchange of
preference shares, scrip dividend policy and RWA reduction).
Conclusion & Action: Very low profitability supported by one off item, namely one
liability management operation (+ EUR 96m capital gain). Strong decrease in NII as
the reinforcement of the B/S remained the top priority. International operations
maintained a positive performance (international operation net profit reached EUR
26.2m, c. 64% of consolidated net income). A post results note will be published
following the CC with management.
Page 46 of 80 European Securities Network
Please refer to important disclaimer on the last page
1Q12 1Q11 Chg. YoY 1Q12e (%)
Net interest income 317.8 401.6 -20.9% 351.8 (34.0) -9.7%
Commissions (net) 169.9 195.4 -13.1% 177.1 (7.2) -4.1%
Gains and losses in financial operations 191.3 26.5 n.m. 155.7 35.6 n.m.
Operating income and charges (14.5) 20.2 -171.8% 3.5 (18.0) -514.3%
Net operating income from banking 664.6 643.7 3.2% 688.1 (23.5) -3.4%
Personnel costs (206.6) (174.6) 18.3% (202.1) (4.5) 2.2%
Other administrative expenses (141.3) (139.4) 1.4% (149.5) 8.2 -5.5%
Depreciation of fixed assets (21.5) (24.8) -13.3% (24.2) 2.7 -11.2%
Total Expenses (369.4) (338.9) 9.0% (375.8) 6.4 -1.7%
Operating profit before provisions 295.2 304.8 -3.2% 312.3 (17.1) -5.5%
Equity-accounted results of subsidiaries 12.9 16.7 -22.8% 8.6 4.3 50.3%
Loan provisions and impairments (net) (170.3) (166.6) 2.2% (214.6) 44.3 -20.6%
Other impairments and provisions (46.3) (31.4) n.m. (22.5) (23.8) 105.8%
Profits before taxes 91.5 123.6 -26.0% 83.8 7.7 9.2%
Corporate income tax (32.2) (14.8) 117.6% (27.7) (4.5) n.m.
Minority shareholders' share of profit (18.5) (18.8) -1.6% (22.4) 3.9 -17.3%
Net Profit 40.8 90.1 -54.8% 33.8 7.0 20.7%