PRIVILEGED INFORMATION Performance, most relevant aspects and results obtained by Banif Financial Group in the 3 rd quarter of 2011

Summary

The business activity of Banif – SGPS, SA, the holding for Banif – Grupo Financeiro, was affected during the 3 rd quarter of 2011 not only by the effects of the strong economic downturn in but also by the worsening of the sovereign debt crisis across . Thus, consolidated net profits at Banif – SGPS, SA, the holding for Banif – Grupo Financeiro, stood at 2.2 million Euros at the end of the 3 rd quarter of 2011, in comparison to 22.9 million Euros at the same point in the previous year.

Profit & Loss account

Group turnover reached 423.4 million Euros at the end of the 3 rd quarter of 2011, an increase of 4.5% over the previous year. A number of factors contributed to this result, including:

• A 18.8% fall in net interest income, to 211.6 million Euros, caused by the increased funding costs related to the indebtedness of the Group’s holdings (+177% or an increase of 16.1 million Euros). The margin decline also reflects the consolidation of new units, with financing costs of 5 million Euros (Banif Imopredial), and the change in the consolidation method applied to Banif Corretora de Valores e Câmbio to equity method, following the sale of 70% of this unit. This latter had a negative impact on interest income of 4 million Euros. Also of note was the deterioration in customer resource costs and reduced loan activity, particularly in the 1 st quarter of 2011. Overall, the sustained increase in loan spreads for the corporate sector was not sufficient to compensate for the increased average costs of customer term deposits, leading the commercial margin to register a slight fall over the period.

• Other income rose by 43.1% to 176.0 million Euros. This amount can be broken down into a 9.0% fall in net commissions, to 83.3 million Euros, and an increase of 192.4% in other operational income up to 93.0 million Euros. Regarding the latter, it is worth noting the capital gain resulting from the sale of 70% of Banif Corretora de Valores e Câmbio, which contributed 34 million Euros gross (or 25.6 million Euros, net of taxes).

• Net results from financial operations rose to 35.9 million Euros by the end of the 3 rd quarter of 2011, implying a 66.0% increase. Of particular note is the fact that, during this period, the Group recognised 14.3 million Euros arising from the repurchase of own debt instruments (versus 11.1 million Euros booked in the 3rd quarter of 2010). The number also includes the Group’s recognition, in the period in question, of the put option held on the remaining 30% stake in Banif Corretora de Câmbios e Valores, in the gross amount of 14.4 million Euros.

BANIF SGPS, SA Publically-Traded Company Head Office: Rua de João Tavira, 30 - 9004-509 Funchal Share Capital: 570,000,000 Euros Company Registration and Corporate Taxpayer Number: 511 029 730

Regarding the cost structure, general administrative costs and staff costs (operating costs) totalled 236.8 million Euros, a 2.7% global reduction versus the 3 rd quarter of 2010. This decrease reflects the rationalisation and optimisation measures being pursued by the Group, which included the closure of 11 branches in Portugal by the end of the 3 rd quarter of 2011. The cost to income ratio (operating costs + amortisations/operating revenue) 1 fell from 67.7% at the end of the 3 rd quarter of 2010, to 60.7% at the end of the 3 rd quarter of 2011.

Consolidated operating cash flow for Banif – Grupo Financeiro at the 30 th of December 2011 stood at 186.6 million Euros, an increase of 15.4% over the 3 rd quarter of 2010.

Net provisions and impairments increased by 78.0% to 151.9 million Euros by the end of the 3 rd quarter of 2011. Given the current economic background, the Group maintained its prudent and conservative policy with regard to the assessment of impairment charges in its loan portfolio. This resulted in the booking of loan loss charges of139.6 million Euros until the end of the 3 rd quarter of 2011, compared with 75.7 million Euros recorded a year before.

Overall, Banif – Grupo Financeiro recorded a return on equity (ROE) of 0.3% by the end of September 2011, compared to 3.2% by the end of the 3 rd quarter of 2010. Return on assets (ROA) stood at 0.02%, versus 0.20% registered in the same period in 2010. Both of these rates were calculated on an annual basis and using average values for group equity and assets.

Balance sheet

As of September 2011, net assets at Banif - Grupo Financeiro totalled 16,519.4 million Euros, implying a 7.2% increase over the 3 rd quarter of 2010.

Gross customer loans, minus securities classified in loans placed and accounts payable, stood at 12,145.9 million Euros at the 30th of September 2011, implying a 3.8% year-on-year decline. In the same period, the ratio of credit impairments to total loans rose from 4.59% to 5.90%, notably as a result of rising delinquency levels in the corporate segment, in Portugal.

Regarding customer resources, deposits increased 4.8% on a year-on-year basis, standing at 8,082.7 million Euros. Should we consider global customer balance sheet resources (i.e., including, in addition to deposits, certificates of deposits and other debt securities), the stock stood at 9,109.0 million Euros by the end of the 3 rd quarter of 2011, having recorded a 7.0% year-on-year increase. This translates into a transformation ratio of 126%, compared to 144% for September 2010 (calculated on the basis of the net loan book against total customer resources). Off-balance sheet resources amounted to 3,543 million Euros at the 30 th of September 2011, registering a 1.7% year-on-year decline.

Equity, less minority interests, rose by 2.4%, from 956.0 million Euros to 978.8 million Euros, over the year from the end of the 3 rd quarter of 2010 to the end of the 3 rd quarter of 2011. The following factors impacted on this rise (increases (+); decreases (-)):

(+) An 80 million Euros capital increase, fully paid-up in December 2010;

(+) Accumulated profit for the final quarter of 2010 of 10.5 million Euros;

(+) Accumulated profit until the end of the 3 rd quarter of 2011 of 2.2. million Euros;

1 These figures do not include non-financial and auxiliary activities. Operating income includes the profit/loss from “Investments in associates”, not included in the consolidation.

BANIF SGPS, SA Publically-Traded Company Head Office: Rua de João Tavira, 30 - 9004-509 Funchal Share Capital: 570,000,000 Euros Company Registration and Corporate Taxpayer Number: 511 029 730

(-) A 50.8 million Euros fall in revaluation reserves;

(-) Negative exchange rate changes of 18.5 million Euros.

The Group’s tier 1 capital, based on IAS/IFRS and Basel, totalled 1,103.5 million Euros, while risk weighted assets stood at 12,848.9 million Euros, resulting in a Tier 1 ratio of 8.59% at the end of the 3 rd quarter of 2011, which compares to 7.87% at the end of the 3 rd quarter of 2010. The Group’s core tier 1 capital, also based on IAS/IFRS and Basel, at the end of the 3 rd quarter of 2011 was 8.00% versus 6.71% at the end of the 3 rd quarter of 2010. Banif – Grupo Financeiro’s total own funds rose to 1,289.7 million Euros, which equates to a total solvency ratio of 10.04%, compared to 9.57% at the end of the 3 rd quarter of 2010.

Results by business area

Banif - Financial Group organises its activities into five major business areas, which performed as follows:

Commercial Banking: the segment booked losses of 5.6 million Euros which compares with a 8.5 million Euros profit in the same period in 2010. Whereas Banif – Banco Internacional do Funchal, SA registered a 8.8 million Euros loss, on IAS/IFRS basis, driven by ue the significant increase in loan loss charges to 105 million Euros (a 85% increase year-on-year), the international units contributed with a global profit of 6.3 million Euros. Specialised credit : profits stood at 5.0 million Euros at the end of the 3 rd quarter of 2011, compared to the 19.3 million Euros earned a year before. Despite the strong performance by the units making up the Banif Mais SGPS, SA sub-holding, which generated profits of 18.1 million Euros at the end of the 3rd quarter of 2011, the ongoing merger of Banif Go – Instituição Financeira de Crédito SA into Banif Mais, SA, and the resulting decline in production levels along with increased funding costs, had a negative effect on the performance of Banif Go, which recorded a loss of 9.1 million Euros, on a IAS/IFRS basis.

Investment Banking : profits reached 21.0 million Euros, compared with a loss of 3.5 million Euros at the end of the 3 rd quarter of 2010. This result basically reflects the net capital gain of 34.2 million Euros earned through the sale ofof Brazilian-based Banif Corretora de Valores e Câmbio.

Insurance : the contribution from Rentipar Seguros, SGPS, SA to the results of Banif – Grupo Financeiro stood at 1.6 million Euros, compared to the 0.2 million Euros earned by the end of the 3 rd quarter of 2010. This positive performance mainly reflects the successful restructuring measures put in place following the acquisition of the companies in the Global Seguros Group and the subsequent integration of these units into Companhia de Seguros Açoreana, SA.

Holdings : the negative contribution of the Group’s holdings deteriorated from 1.6 million Euros to 19.7 million Euros at the end of the 3 rd quarter of 2011, largely due to increased funding costs.

BANIF SGPS, SA Publically-Traded Company Head Office: Rua de João Tavira, 30 - 9004-509 Funchal Share Capital: 570,000,000 Euros Company Registration and Corporate Taxpayer Number: 511 029 730

Domestic International €M TOTAL Activity Activity

Business Unit Set-10 Set-11 Set-10 Set-11 Set-10 Set-11

Commercial Banking 5,1 -11,9 3,4 6,3 8,5 -5,6

Investment Banking 8,2 -0,6 -11,7 21,6 -3,5 21,0

Specialised Credit 18,4 4,5 0,9 0,4 19,3 5,0

Insurance 0,2 1,6 - - 0,2 1,6

Holdings and Others -1,5 -22,2 0,0 2,5 -1,6 -19,7 Total 30,4 -28,6 -7,5 30,9 22,9 2,2

Commercial network

The points of sale of Banif - Grupo Financeiro’s fell from 615 to 579 over the 12 months ending in September 2011, mostly reflecting the rationalisation strategy undertaken in the Group’s insurance business, which saw its points of sale fell from 76 to 59 over the period. The number of bank branches also fell, from 380 to 372, over the last 12 months, with openings in 2010 and early 2011 being more than compensated for by closures over the year. Given the current economic background, the Group will continue to carefully assess the size of its network on Portugal on the basis of rigorous efficiency and productivity criteria.

As regards the Banif – Grupo Financeiro’s insurance business, premium income stood at 352.2 million Euros, a 5.2% year-on-year decline, mainly in the non-life segment (-20.8% year-on- year), as production in the life segment increased by 7.9%

THE BOARD OF DIRECTORS

Lisbon, 28 November 2011

Contacts: Office for Investor and Institutional Relations [email protected] | [email protected] (+351) 217 211 200

BANIF SGPS, SA Publically-Traded Company Head Office: Rua de João Tavira, 30 - 9004-509 Funchal Share Capital: 570,000,000 Euros Company Registration and Corporate Taxpayer Number: 511 029 730

ANNEX 1 – Financial Indicators

COMPARATIVE ANALYSIS Banif – Grupo Financeiro Amounts in thousands of Euros

BALANCE SHEET 30-09-2011 30-09-2010 €M %

1 Net Assets 16.519.407 15.413.930 1.105.477 7,2% 2 Gross Loan Book (1) 12.145.908 12.620.407 -474.499 -3,8% 3 Customer Deposits 8.082.708 7.709.201 373.507 4,8% 4 Customer funds (On-Balance Sheet) 9.109.071 8.513.155 595.916 7,0% 5 Total Equity (2) 978.770 956.028 22.742 2,4%

PROFIT & LOSS ACCOUNT 30-09-2011 30-09-2010 €M %

6 Net Interest Income 211.569 260.607 -49.038 -18,8% 7 Net Trading Gains 35.858 21.600 14.258 66,0% 8 Other Income 175.959 122.953 53.006 43,1% 9 Total Income 423.386 405.160 18.226 4,5% 10 Staff Costs 132.918 139.548 -6.630 -4,8% 11 Administrative Expenses 103.848 103.831 17 0,0% 12 Cash Flow 186.620 161.781 24.839 15,4% 13 Depreciation 26.949 28.340 -1.391 -4,9% 14 Provisions and Impairments (net) 151.945 85.371 66.574 78,0% 15 Equity M ethod Income 8.137 -5.975 14.112 236,2% 16 Badwill ---- 17 Results before Taxes 15.863 42.095 -26.232 -62,3% 18 Taxes (current and deferred) 6.237 11.920 -5.683 -47,7% 19 M inority Interests 7.408 7.284 124 1,7% 20 Consolidated Net Profit 2.218 22.891 -20.673 -90,3%

OTHER INDICATORS 30-09-2011 30-09-2010 €M % Insurance activity 21 Total Insurance Premiums 352.245 371.661 -19.416 -5,2% - Life 134.689 170.071 -35.382 -20,8% - N on-Life 217.556 201.590 15.966 7,9% Solvency Ratio 22 Solvency ratio (Basel Core Criteria) 10,04% 9,57% - - 23 Tier 1 (Basel Core Criteria) 8,59% 7,87% - - 24 Core Tier 1 (Basel Core Criteria) 8,00% 6,71% - - 25 Solvency ratio (Bank of Portugal) 8,33% 7,95% - - 26 Tier 1 (Bank of Portugal) 7,05% 5,67% - - 27 Core Tier 1 (Bank of Portugal) 6,47% 4,52% - - Asset Quality 32 Credit Impairment / Total Credit 5,90% 4,59% - - P rofitability 33 ROE 0,3% 3,2% - - 34 ROA 0,02% 0,20% - - 35 Results before Taxes and M inorities / Average Net A ssets 0,10% 0,37% - - 36 Banking Income / Average Net Assets 2,62% 3,59% - -

37 Results before Taxes and M inorities / Average Equity (Including Minority Interests) 1,2% 4,7% - -

Efficiency 38 Operating Costs + Depreciation / Banking Income (3) 60,7% 67,7% - - 39 Personnel Costs / Banking Income (3) 31,3% 34,4% - - Transformation 40 Total Credit, net / Deposits 142,0% 161,1% - - 41 Total Credit, net / Total on-BS client resources 126,0% 144,0% Other indicators 41 Assets under management (Eur million) 3.543 3.603 -60 -1,7%

BANIF SGPS, SA Publically-Traded Company Head Office: Rua de João Tavira, 30 - 9004-509 Funchal Share Capital: 570,000,000 Euros Company Registration and Corporate Taxpayer Number: 511 029 730