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A Unique Opportunity to Acquire a Leading Portuguese Banking Franchise with Selected European and International Operations

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A Unique Opportunity to Acquire a Leading Portuguese Banking Franchise with Selected European and International Operations A unique opportunity to acquire a leading Portuguese banking franchise with selected European and international operations December 2014 Background and opportunity On 3-Aug-14, the central bank of Portugal, Banco de Portugal used its statutory powers to resolve Banco Espírito Santo S.A. (“BES”) (the “Resolution” or the “Resolution Measure”). The majority of the assets and liabilities of BES were transferred to a newly created bank NOVO BANCO (the “Bank”). The equity capital of NOVO BANCO, to the amount of €4.9bn, was fully subscribed by the Portuguese Resolution Fund (“Resolution Fund”) which became the sole shareholder of the Bank The sale of NOVO BANCO is a unique opportunity to acquire the control of a leading financial institution in Portugal with international operations: A bank born out of the Resolution which has retained its customer base and franchise , whilst exposure to the former shareholders and junior creditors has been removed A leading bank in Portugal with a blended 18% market share, the number one in the corporate segment and a leading retail capacity Market-leading sales efficiency in Portugal A universal bank with a wide distribution network in Portugal , complemented by a successful multi-channel approach A meaningful presence in key European markets and selected dynamic geographies around the world, primarily focused on countries with cultural and economic ties with Portugal A new management team in place, fully aligned with the objectives of the new shareholder and focused on the consolidation of the business and its transition to the private sector An opportunity to further optimise the cost base The Resolution Fund intends to offer to qualifying interested parties the opportunity to acquire 100% of NOVO BANCO Any questions or requests for further information and/or clarification, in accordance with the Terms of Reference available on the website www.fundoderesolucao.pt, should be requested to BNP Paribas by email to [email protected] Should you be interested in pursuing this opportunity, please provide your expression of interest by 31-Dec-14 to BNP Paribas, in the form specified in the Terms of Reference, by email to [email protected] Note: Data shown in this presentation before 3-Aug-14, as well as references to past performance, relate to Banco Espírito Santo S.A. prior to the Resolution December 2014 2 Unique opportunity to acquire a leading Portuguese banking institution 1 Unique opportunity to acquire substantial market share in Portugal through a significant financial institution in the European banking union(1) Well-known and recognised leading franchise LEADING 18% market share in the Portuguese banking sector (2) (Aug-14) FINANCIAL #1 in the corporate segment in Portugal INSTITUTION IN PORTUGAL Wide banking network across the country targeting Retail, Private Banking and Corporate clients , with market-leading sales efficiency Complementary and fully articulated insurance and asset management offering 2 NOVO BANCO offers a range of international products, including wholesale commercial banking, trade finance and asset management that ensures significant exposure of NOVO WIDE BANCO to opportunities in geographies outside of Portugal INTERNATIONAL International platform focused on key European markets , where it is classified as a FOOTPRINT significant financial institution in the European banking union , complemented by presence in dynamic geographies, primarily focused on countries with cultural and economic ties with Portugal 3 Portugal shows signs of economic recovery and growth potential Positive GDP growth in recent years, second best among Southern European peers A STABILISING Decline of the unemployment rate expected to continue PORTUGUESE MACRO Structural reforms have strengthened the country’s competitive position PICTURE Portuguese banking sector is well into the recovery upswing with deleveraging of the system, capital ratios significantly reinforced since the start of the crisis and NPL formation slowing 4 SIGNIFICANT Growth potential in domestic corporate and retail markets POTENTIAL Opportunity to further develop integrated offering MARKET Ability to fully leverage on the international platform OPPORTUNITIES Note: (1) NOVO BANCO is classified as a significant financial institution within the Single Supervisory Mechanism, the mechanism which has granted the European Central Bank a supervisory role to monitor the financial stability of banks based in participating states, starting from 4-Nov-14 (2) Volume-based market share across all products December 2014 3 1 NOVO BANCO at a glance NOVO BANCO is a leading universal bank in Portugal, offering a broad range of financial products to its retail and corporate client base General overview Market position (Sep-14, €bn)(1) NOVO BANCO is one of a Headquartered in Lisbon, NOVO BANCO is a leading Total assets Total gross loans Total deposits few financial institutions to domestic institution in the Portuguese financial system with a have operations across all blended 18% market share , focusing on corporates 100.3 major financial product 89% of large corporates and 66% of SMEs in Portugal lines in Portugal with 78.8 71.9 69.7 are clients of NOVO BANCO 72.5 64.9 significant market shares 57.9 supplemented by an Customer base: over 2m customers, including over 43.8 international network 161,000 customers for corporate banking 43.3 41.6 27.3 25.7 25.9 25.1 As a diversified banking group, NOVO BANCO offers a full 20.4 range of products and services: commercial banking offering is complemented by asset management and insurance products BPI BPI BPI BCP BCP BCP CGD CGD NOVO BANCO is classified as a significant financial CGD Totta Totta institution within the Single Supervisory Mechanism Totta Santander Santander Santander Presence in 22 countries worldwide driven by the operations of Portuguese corporates Headcount: c. 8,000 people Gross loans breakdown (4-Aug-14) (1) Deposits breakdown (4-Aug-14) (1) Corporates Mortgages 36% 24% International 19% Other €43.8bn €43.8bn individuals €25.1bn 4% Corporates 72% Portugal Retail 81% Source: Company information 64% (1) NOVO BANCO data as of 4-Aug-14 including BESI December 2014 4 1 Strong positions across all business lines Product offering Geographical presence Market share / ranking / awards Corporate lending Portugal 22.0% cross-product market share by volume in Portugal Key business line allowing Trade finance (Aug-14) to leverage existing customer Point of Sale base in cross-selling and Domestic Corporate international expansion Factoring Leasing Mortgages Portugal 13.0% cross-product market share by volume in Portugal (Aug-14) Full capacity retail network Consumer across Portugal Domestic Retail and Cards Private Banking Other Corporate banking Spain #4 in Mozambique with 5.2% market share by total assets (Dec- 13) A well diversified global International Retail banking Europe coverage to leverage Commercial #4 in Cape Verde with 12.5% market share by total assets (Dec- Private banking Mozambique growth opportunities Banking 13) International As a division supporting the Traditional and investment Portugal #2 life insurer in Portugal by total premiums (Jun-14) commercial activities, it has a insurances strong position in life Spain Capitalisation products insurance complemented by non-life insurance Life Insurance Risk products business (25% stake in Retirement savings plans GNB Seguros) Discretionary and portfolio Portugal 11.8% by AuM in Portugal (Sep-14) management services Recognised as the Best Spain #5 by AuM in Portugal (Sep-14) Domestic Multi Asset and Mutual funds, real estate Fixed Income Fund House Asset Management funds, pension funds Luxembourg in Portugal by Morningstar Angola Source: Company information December 2014 5 1 NOVO BANCO is a market leader in the large corporate and SME sectors Client segmentation – a market leader in large Key highlights corporate and SMEs 89% of large corporates NOVO BANCO is #1 bank for corporate clients in Portugal with Segmentation criteria and 66% of SMEs in 22.0% market share by volume as of Aug-14 Portugal are clients of NOVO BANCO’s corporate business line serves approx. 21,000 Large Turnover > €50m NOVO BANCO clients with a total financial involvement of more than €24bn Corporate Specialised relationship NOVO BANCO’s corporate segment operates through a network banking service spread across the country, with Lisbon and Oporto being the Turnover between €2.5m largest coverage centers through corporate centres and €50m or loans ≥ €0.25m SMEs and dedicated teams for 2 regional divisions (North and South) large corporates and SMEs 24 corporate centres Micro Corporate banking business also includes the International Turnover ≤ €2.5m and Leading position in Premium Department , with the main focus on supporting Managed by Retail € Corporate segment with a loans < 0.25m Portuguese companies abroad division market share of 22.0% (1) (Aug-14) mainly driven by: Leading platform for trade finance with a 29.5% market share Municipal / Institutional Long-term relationships Accounted for in Large Corporate and SMEs Broad geographic coverage (2) Attractive, Weight of corporate credit in overall portfolio (Sep-14) Corporate market shares by volume (Aug-14) comprehensive and appropriate offering 72% 28.2% 29.5% Powerful sales-support tools Total market 23.1% 49% share: 22% 20.8% Relationship managers 45% 44% supported by expert 17.9% 37% 33% teams 11.9% Focus on the most
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