02 - Banif

Transcription

02 - Banif

BOARD OF DIRECTORS
AND OFFICERS
GENERAL MEETING
BOARD OF DIRECTORS
SUPERVISION BOARD
Chairman
Prof. Doutor António Soares Pinto Barbosa
Chairman
Comendador Horácio da Silva Roque
Secretaries
Comendador Jorge de Sá
Dr. José Lino Tranquada Gomes
Vice Chairmen
Dr. Joaquim Filipe Marques dos Santos
Dr. Carlos David Duarte de Almeida
Full Members
Ernst & Young Audit & Associados
– Sociedade de Revisores Oficiais
de Contas, SA,
represented by
Dr. Alfredo Guilherme da Silva Gândara
Dr. José Luís Pereira de Macedo
Directors
Dr. António Manuel Rocha Moreira
Dr. Artur Manuel da Silva Fernandes
Dr. Artur de Jesus Marques
Dr. José Marques de Almeida
Alternate Director
Dr. Fernando José Inverno da Piedade
Report
and Accounts
4
04
Secretary General
Dr. Carlos Oliveira
ADVISORY BOARD
Chairman
Comendador Horácio da Silva Roque,
representing
Rentipar - Sociedade Gestora
de Participações Sociais, SA.
Vice Chairmen
Dr. Fernando José Inverno da Piedade,
representing
Renticapital - Investimentos Financeiros, SA.
Comendador João Francisco Justino
Dr. Fernando Mário Teixeira de Almeida
Dr. Rui Alberto Faria Rebelo,
representing
Empresa de Electricidade da Madeira, SA.
Dr. Gonçalo Cristóvam Meirelles de Araújo Dias
Prof. Doutor Luis Manuel Moreira Campos e Cunha
Eng. António Fernando Couto dos Santos
Dr. Miguel José Luis de Sousa
Eng. Nicolau de Sousa Lima
Auditors
Ernst & Young Audit & Associados – S.R.O.C., SA.
Board of Directors
Artur Marques
Rocha Moreira
Marques dos Santos
Horácio Roque
Duarte de Almeida
Artur Fernandes
Marques de Almeida
5
Banif SGPS, SA
NOTE
This CD ROM contains the full version of the Report and Accounts for 2004
of the company Banif SGPS, SA, this version can also be found in our web site
www.grupobanif.pt as well as in the internet site of the Portuguese Securities
Market Commission. There can be found a summarized version of this document printed in which we have included information considered to be of
greatest interest of the general public.
Report
and Accounts
6
04
NOTICE
OF ANNUAL GENERAL MEETING
On the request of the Board of Directors, I hereby notify the shareholders, in
accordance with the law and the articles of association, of the Annual General
Meeting to be held at the registered offices of the company, at Rua de João
Tavira no. 30, Funchal, on 21 March 2005, at 11 a.m., with the following
order of business:
1. To receive the Management Report of Banif SGPS, SA, Individual and
Consolidated, for the Financial Year of 2004, and the Financial Statements
of Banif SGPS, SA, Individual and Consolidated, relating to the same period;
2. To resolve on the proposal for allocation of profits;
3. To assess in general terms the management and auditing of the company;
4. To resolve on a proposal from the Board of Directors for the acquisition and
disposal of own shares.
5. To elect the Chairman and two full members of the Audit Board, to serve
until the end of the current term of office.
For the purposes of attendance at the General Meeting and exercise of voting
rights, the following rules shall be observed:
a) Without prejudice to the right to form groups, as provided for in article
379-5 of the Companies Code, participation and voting rights at the
meeting shall depend on registration, no less than eight days prior to the
date set for the meeting, of no less than one hundred shares in an account
with a financial broker authorized by the Securities Market Commission.
b) For the purposes of participation, Shareholders with voting rights shall
prove this capacity to the chairman of the general meeting, by delivering to
the company’s registered offices, by seventeen hundred hours on the last
business day prior to the date of the meeting, a certificate issued for this
purpose by the financial broker, attesting to registration of their shares.
7
Banif SGPS, SA
NOTICE
OF ANNUAL GENERAL MEETING
(cont.)
c) Shareholders who wish to be represented shall notify the Chairman of the
General Meeting of the name of their representative, by means of a proxy
letter received at the registered offices of the company, by seventeen
hundred hours on the business prior to the date of the meeting, the same
rule applying to instruments proving the constitution of any groupings as
referred to in a) above.
d) Corporate shareholders shall notify the Chairman of the General Meeting,
by letter received by the same by the opening of the meeting, of the name
of their representative.
e) Shareholders with voting rights may only exercise such rights through
postal votes in resolutions concerning amendment of the Articles of
Association and election of company officers. Postal votes shall be
considered when sent by registered mail with recorded delivery, received at
the registered offices of the company by seventeen hundred hours on the
business day prior to the date of the meeting. Such letters shall be
addressed to the Chairman of the General Meeting, at the registered
offices of the company, at Rua de João Tavira no. 30, 9004-509 Funchal.
Each letter shall contain:
1. The certificate referred to in b) above.
2. A closed envelope indicating that it contains postal votes, and the General
Meeting to which they relate. This envelope shall contain the voting
declaration, indicating (i) the full name of the Shareholder, (ii) the vote in
favour, or against, the corresponding item on the order of business,
identifying the proposal to which it relates. The voting declaration shall be
signed, and the signatory, in the case of individuals, shall indicate the number,
date and issuer of their identity card or equivalent document issued by the
relevant authority of a European Union country, or of their passport. In the
case of corporate shareholders, the voting declaration shall contain the
company stamp, signature and capacity of the representative.
Report
and Accounts
8
04
Postal votes received in due time at the Company shall be delivered to the
Chairman at the beginning of the General Meeting to which they relate. The
Company Secretary shall organize postal votes and, in particular, (I) verify the
number of votes held by the voter and the authenticity of the vote, by
examining the certificate referred to in b), (II) at the start of voting on each
item of the order of business where postal votes are allowed, open each of the
postal votes, annotating the time of opening on the respective envelope, and
signing the same. In counting the votes on each of the items on the order of
business where postal votes are permitted, postal votes shall be included in
accordance with the expression of intention contained in the voting
declaration.
The documents and preparatory information for the General Meeting referred
to in article 289 of the Companies Code shall be available for consultation by
the Shareholders at the registered offices, as from the fifteenth day prior to
the date of the meeting, during office hours. The financial statements,
together with the proposals to be submitted to the Annual General Meeting
by the Board of Directors, shall also be made available for consultation, as
from the fifteenth day prior to the date of the meeting, on the Company’s
website, at www.grupobanif.pt.
Lisbon, 16 February 2005
The Chairman of the General Meeting
António Soares Pinto Barbosa
9
Banif SGPS, SA
MESSAGE
TO SHAREHOLDERS
In 2004, the Banif Group
continued with the drive
for expansion and reorganization
which had started in 2002, with
the central aim of shaping an
increasingly integrated, efficient
and functional business structure,
thereby strengthening the
Group’s capacity to compete and
intervene in the market.
Despite the relatively unfavourable
economic climate in 2004, Banif
SGPS, SA recorded consolidated
cash flow of 105.6 million Euros
and consolidated profits for the
period of 37.3 million Euros,
which represent growth of 10.1%
and 47.1%, respectively, over the
previous year. The Banif Group’s net assets stood at 6.455,7 million Euros at
the end of the year, corresponding to growth of 13.0% over 2003. These are
results which we may regard as revealing positive performance.
Cross-selling of products has once again proved to be a key factor in boosting
the integration of the companies making up the Banif Group. Results in
this area were once again worthy of note, revealing growth at above the
market rate for the different products marketed through this project. Crossselling is therefore a policy to be pursued with determination, not only
because of the excellent commercial results, but also because of its valuable
contribution to consolidating the Group attitude and culture essential for the
full affirmation of the Banif Group.
Report
and Accounts
10
04
The ratings initially assigned to Banif – Banco Internacional do Funchal, SA
by the Moody’s and Fitch agencies in January 2003, of Baa1 and BBB+
(long term) and P-2 and F2 (short term), were confirmed on two
occasions during the year, in March and November. This was a very
significant boost for the Bank’s business, providing evidence of its
institutional stability and contributing to growing acceptance on the
international capital markets, with obvious benefits for the Banif Group as
a whole.
For the third year running, Companhia de Seguros Açoreana, SA was
considered to be the best life insurance company in Portugal. This distinction,
awarded in the light of research conducted by Exame magazine, in partnership
with Dun & Bradstreet and Deloitte & Touche, once more acknowledged
the efforts made by the Group’s insurance company to assure the quality of
the products and services offered to its clients. We may regarded this as
further encouraging news, as we believe that quality, in all areas, is the
ultimate key to business success.
At the end of the year, a Memorandum of Understanding was concluded with
CTT (the Portuguese Post Office), with a view to creation of a specialist
commercial bank specializing in retail for private and small business clients, to
use a network of branches located in existing post offices. To the extent
possible, this new project will be based on the distribution of Banif products
through the CTT network and, in operating terms, on the Banif infrastructure,
both for central functions and for back office support for products and
services.
This is evidently a major project, and although the administrative permits
required by law have yet to be obtained, we will not fail to place our full efforts
and capacity at its service, in view of its importance for the future
development of the Banif Group.
11
Banif SGPS, SA
MESSAGE
TO SHAREHOLDERS
(cont.)
Since its founding in 1988, more than 17 years ago, the Banif Group has been
built up into a strong force on the market, to an extent which few believed to
be possible. The Group’s employees have legitimate reason to be proud of all
their achievements which, thanks to their efforts, dedication and skill, have
contributed to Banif’s success, and I wish to address a special word of
appreciation to all our staff. And these achievements should serve to
encourage us to take the Group’s success further, gaining an increasingly
active role in the markets on which we operate.
Aware of the complexity of the challenges posed by the modern world, I wish
to conclude by expressing my full confidence in the future of the Banif Group,
and by assuring all those who have accompanied our work, and especially our
Clients, who are the main focus of our activities, that we shall do everything
to continue to merit their trust.
Horácio da Silva Roque
Chairman of the Board of Directors
Report
and Accounts
12
04
BANIF SGPS, SA
13
Banif SGPS, SA
BANIF GROUP
DISTRIBUTION NETWORKS
POINTS OF SALES AS AT 31/12/04
Mainland
Madeira
Açores
Abroad
Banif Comercial
151
39
49
13
252
1. Banif
147
38
0
2
187
- Branches
123
33
0
0
156
- Business/Client Centres
19
2
0
0
21
- Call Centre
1
0
0
0
1
- Offshore Branch
0
2
0
0
2
- Others
4
1
0
2
7
2. BCA
1
0
49
5
55
- Branches
1
0
43
0
44
- Client Centres
0
0
5
0
5
- Offshore Branch
0
0
1
1
2
- Others
0
0
0
4
4
3. Banif Leasing/Banif Crédito
3
1
0
0
4
4. Banif-Primus
0
0
0
6
6
Banif Seguros
39
1
19
0
59
1. CSA
39
1
19
0
59
Banif Investimentos
2
1
1
7
11
1. Banif-Cayman
0
0
0
1
1
2. Banif Banco de Investimento
2
1
1
0
4
3. Others
0
0
0
6
6
TOTAL
192
41
69
20
322
Report
and Accounts
14
Total
04
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’01
‘
OUR
PROPERTY’
YOUR UNIVERSE
Economic
Background
Report
and Accounts
04
’01
Economic
Background
1. THE INTERNATIONAL
ECONOMY
The financial year of 2004 produced one of the highest rates of growth of the
last decade – the World Bank estimates that the global economy grew by
approximately 4% - due essentially to stimulus from the Chinese, American
and Japanese economies, and a more favourable money supply, as interest
rates remained at historically low levels. However, the year was also marked
by a series of factors which are more usually associated with an economic
slowdown: oil prices reached an all-time high at 54.26 dollars and the
American Federal Reserve started on a new cycle of interest rate hikes after
two years of stability. The year also witnessed the historical expansion of the
European Union to 25 members, taking in ten Eastern European nations, and
the re-election of George W. Bush, in a scenario of continued political
instability in Iraq and Palestine.
From a strictly economic point of view, there were a number of major
developments in 2004. Unlike previous oil shocks, the sudden rise in oil prices
from the second quarter onwards had only a moderate impact on the pace of
growth and the inflationary effects were short lived. The pace of growth in
the Chinese economy remained fairly high, at around 9%, as against 15% in
the previous year, despite expectations of an abrupt deceleration. The US
budget and trade deficits, generally known as the “twin deficits”, worsened,
meaning that careful attention still needs to be paid to readjustment. Japan
recorded the highest rate of growth for 13 years and appears to be on the
verge of overcoming the problem of deflation. And finally, the European bloc
recorded almost anaemic growth, as the Euro shot up in value and
unemployment stagnated.
The US economy is estimated to have grown by approximately 4.3% in 2004,
but this healthy figure conceals an uneven trend over the course of the year.
First quarter growth was impressive, with GDP up 4.5% between January and
March in comparison with the previous quarter, but this was followed by a
more ambiguous period, with most consumer and business confidence indexes
Report
and Accounts
16
04
showing a downward trend. This was probably due to a combination of
factors, such as the end of fiscal incentives for families, the prospect of an
impending rise in the Federal Reserve interest rates, the slack rate of job
creation and the upward trend in oil prices. In particular, and although it grew
by approximately 4.3%, the US economy generated employment at lower
levels than is normal in similar phases of the cycle, which caused concern to
analysts and investors over much of the year.
Towards the end of 2004, with oil prices stabilizing and a palpable recovery in
business confidence (not unrelated to a package of fiscal incentives for
investment) and the capital markets, most indicators showed more positive
signs, which permitted the US economy to close the final quarter with growth
estimated at 4.0%. As regards inflation, 2004 made it possible to set aside
fears of deflation, which had caused so much concern to the monetary
authorities in 2003. Nonetheless, whilst rising oil prices naturally affected the
current inflation rate, the underlying rates, which exclude food and energy
prices, suffered significantly less, and fluctuated between 1.1% and 2.2%, a
more comfortable level from the perspective of the central banks, and the
Federal Reserve in particular.
The Euro Zone appears to have recovered at a significantly slower rate than
other regional blocks in 2004, with output up by approximately 1.8%. Despite
a relatively encouraging start to the year, the combine effect of the rise in oil
prices and the strong appreciation of the Euro took their toll on the European
economy, which is the largest exporter bloc in the world and consequently
very sensitive to sudden changes on the foreign exchanges and in external
demand. In addition to this, the slowdown experienced from the summer
onwards was probably due in the main to the less positive signals coming out
of the American economy in the preceding months. In general, the current
problem facing the European economy lies in the slackness of domestic
demand, due to a significant extent to stagnation in the labour market (the
17
’01
Economic
Background
ECONOMY
(cont.)
unemployment rate has held steady at between 8.9% and 9.0% since March
2003).
Japan recorded in 2004 its highest rate of growth since the early nineteen
nineties, with output rising by approximately 4.3%, stimulated essentially by
external demand and, in particular, by China. In effect, the pattern of Japanese
growth has a number of similarities with the European situation, given the
importance of external demand, as opposed to domestic demand, as the
engine of growth.
Curiously, although the labour market recovered somewhat over the course of
the year, with the jobless rate dropping from 5% to 4.5%, in keeping with an
across-the-board improvement in business confidence indicators, consumer
confidence indicators fluctuated significantly over the course of the year,
hitting the lowest point for the year in December. Despite this, 2004 can be
regarded as a fairly positive year for Japan, not only because of strong
economic growth but also because there were encouraging signs of an end to
deflation: the November year-on-year inflation rate stood at 0.8%, and there
were several months with zero price increases (instead of negative
variations).
Report
and Accounts
18
04
GROWTH IN GDP (REAL VARIATION RATE)
%
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
2002
2003
EU
2004
USA
JAPAN
The principal Asian economies maintained a pace of growth in line with the
trends observed in 2003, with growth, even so, remaining fairly high (at
approximately 7.8%), driven by lively internal demand, which in turn helped to
increase the volume of trade at global level. China’s importance in this context
continues to grow, in the wake of its recent accession to the World Trade
Organization. Accordingly, although widely-held expectations in early 2004
pointed to a sudden slowdown in the Chinese economy, the country recorded
growth for 2004 of 8.8%.
This was a historic year for Eastern Europe: on May 1, ten new countries joined
the European Union (EU), in what in numerical terms was the largest ever
expansion of the Union in its history. It is also the most challenging, given the
stage of economic development of most of the new members. The new EU
members include Cyprus, the Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland, Slovakia and Slovenia. In general, the group has
19
’01
Economic
Background
ECONOMY
(cont.)
recorded fairly solid rates of growth, at around 5% on average, reflecting
flows of foreign investment associated with integration, although they face
ongoing challenges as concerns consolidation of budgetary policy. As a whole,
Eastern Europe, including non-member countries, and Russia in particular, is
estimated to have recorded growth of approximately 7.0% in 2004, as against
5.9% for the previous year.
Latin America benefited in 2004 from a number of positive factors, which
allowed it to record a rate of growth in the region of 4.7%, well above the level
for 2003. Continued low interest rates in the US (much of the foreign debt of
these countries is dollar indexed) helped to maintain financial stability,
enhancing the benefits of orthodox economic policies, whilst the export
sector was also stimulated by demand from China and also by favourable
trends in raw materials prices.
Brazil merits special mention in this respect, giving recorded growth of 4.5%
in a context of falling inflation and budgetary consolidation: the year-on-year
inflation rate ended the year at 7.3%, as against 9.3% in the previous year,
whilst the budget deficit fell from 5.2% to 3.0% of GDP. In effect, the decision
to embrace orthodox economic policies – the Brazilian government has set
itself the target of a primary surplus of 4.5% and the central bank has been
particularly careful in its management of inflationary risks, having increased its
rate by 1.25% over the year as a whole – was eventually reflected in the rise
of the Real against the Dollar by 8% over the year, and in the narrowing of the
main reference for Brazilian risk (the spread of the EMBI+ index) to 383 bps,
an unprecedented level for this country.
The harmonization of monetary policy, especially in the English speaking
world, was another of the main themes of 2004, with the American Federal
Reserve increasing its reference rate by 125 base points, from 1% to 2.25%,
in the space of six months, after almost two years of stability. The hike in rates
Report
and Accounts
20
04
was due more to the need to tighten monetary policy – the real interest rate
had remained negative for a large part of the ear – than to any type of
inflationary pressures, given that the inflation rate remained within a relatively
comfortable band. Despite rising oil prices (between December 2003 and the
peak in October 2004, the WTI index rose 92%), the underlying inflation
indexes, which seek to measure price trends excluding more volatile factors
and which the monetary authorities follow more closely, reacted very
moderately. If we exclude oil, the factors which most contribute to creating
inflationary pressures (high capacity utilization rates in manufacturing and an
overheated labour market) remained absent from both the USA and Europe,
which explains the European Central Bank’s decision to keep its reference rate
at 2% throughout the year.
INFLATION (YEAR-ON-YEAR RATE)
%
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
2002
2003
EU
2004
USA
JAPAN
21
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’01
‘
OUR
PROPERTY’
YOUR UNIVERSE
Economic
Background
Report
and Accounts
04
’01
Economic
Background
2. THE PORTUGUESE
ECONOMY
CENTRAL BANKS (LEADING RATES)
%
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Dec-02
Apr-03
Aug-03
Dec-03
Apr-04
FED
Aug-04
Dec-04
ECB
The Portuguese economy recorded uneven growth over the course of 2004,
due to internal and external factors. Although consumer confidence remained
fairly poor throughout the year, the 1st half witnessed an upturn in the rate of
growth, with GDP growing by approximately 1.4% in the 1st quarter and by
2.1% in the 2nd, stimulated essentially by external demand and investment.
However, there was an abrupt turnaround in this trend in the summer months,
and the rate of growth is estimated to have slowed to approximately 0.8%,
due above all to a negative net contribution from net external demand,
reflecting both an acceleration in imports and a slowdown in exports, which
once again brought down the country’s external balances. Over the year as a
whole, the Portuguese economy is thought to have grown by 1.1%, which is
nonetheless a recovery after negative growth of 1.3% in 2003. In any case,
performance was below the community average, which puts Portugal even
further behind in the process of real convergence within the Euro Zone.
Report
and Accounts
22
04
GROWTH IN GDP (REAL VARIATION RATE)
%
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
1997
1998
1999
2000
2001
2002
PORTUGAL
2003 2004 (E)
EU
In terms of the breakdown of GDP, the largest contribution to economic
performance in 2004 appears to have come from the export sector, with
growth in the order of 6.8%, although consumer spending also rallied
remarkably (up 2.2%, as against to negative growth of 0.7% in 2003) in view
of the worsening of the labour market (unemployment up from 6.5% to 6.8%
in the 3rd quarter) and stagnation of real salaries. The stimulus from external
demand appears to have been critical in boosting capital expenditure, which
after falling by 9.6% in 2003, grew by an estimated 1.9%. Finally, in the field
of public spending, the restrictive framework imposed by the Stability and
Growth Pact remained in place, with public spending growing at a modest
rate, in line with that recorded in 2003 (0.6% as against 0.5%).
23
’01
Economic
Background
2. THE PORTUGUESE
ECONOMY
(cont.)
CONSUMER CONFIDENCE (INDEX)
120
0
-5
-10
-15
-20
-25
-30
-35
-40
-45
100
80
60
40
20
0
1997
1998
1999
2000
2001
2002
2003 2004 (E)
PORTUGAL
EU
Despite the economic recovery, the Harmonized Retail Price Index (HRPI) was
down on 2003, falling from 3.3% to approximately 2.5%, although this
reduction conceals a degree of intra-annual volatility, caused by the rise in oil
prices.
INFLATION (RETAIL PRICE INDEX)
%
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1997
1998
1999
2000
2001
2002
PORTUGAL
Report
and Accounts
24
04
2003 2004 (E)
EU
In relation to external accounts, and contrary to initial expectations, the
balance of payments on current account worsened in 2004, and in
combination with the capital account reached -5.4% of GDP, as against 3.6% in 2003. This was due above all to the deterioration of the trade balance
in the second half of the year, as referred to above.
25
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’01
‘
OUR
PROPERTY’
YOUR UNIVERSE
Economic
Background
Report
and Accounts
04
3. THE FINANCIAL SYSTEM
3.1 OVERVIEW
Despite the improvement in the domestic economy, the Portuguese banking
sector continued to be faced with a challenging situation, especially in view of
the brokerage margin due to continued low interest rates, added to which it
was not able to benefit from a capital markets situation as favourable as in
2003. In this context, the strategic focus continues to be on improving
efficiency standards, which in terms of revenue means increased cross-selling
of products, and in terms of costs means cutting staff and closing branches.
Despite the pressures from the economy, a number of strategies have begun
to emerge for taking advantage of the recovery, albeit only incipient, in the
Portuguese economy.
Although GDP started to grow again in 2004, total lending was down on
2003 (October 2004 figures), in both the business and private sectors. Total
lending to private customers fell by approximately 5.7% between December
2003 and October 2004, with the drop of 11.5% in the housing segment
contributing significantly to this performance, given that consumer credit
contracted by approximately 2.4% and other lending grew by 11%.
25
’01
Economic
Background
3. THE FINANCIAL
SYSTEM
(cont.)
3.2 MONEY MARKETS AND FOREIGN EXCHANGES
The worsening of the US budget and trade deficits was a major topic of debate
over the course of the year, reinforcing the widely held view that depreciation of
the Dollar was needed to restore a degree of balance to the balance of payments
and to slow down internal demand. The Dollar consequently fell by approximately
7% against the Euro, although this trend was sharper in the final part of the year,
especially in the period following the US presidential elections, with the exchange
rate closing the year at 1.3554/Euro as against 1.2595 at year-end 2003. The
downward pressure even managed to override the fact that differentials between
the money market curves have fallen in favour of the American side, due to
increases in the Federal Reserve rates in the face of interest rate stability at the
ECB. In relation to the Yen, the Dollar’s losses were partially mitigated by the
foreign exchange intervention of the Bank of Japan, which has sought not only to
protect Japan’s export sector but also to avoid renewed risks of deflation through
exchange rate management. The Dollar accordingly closed the year at 102.63
yens/dollar, as against 107.22 at year-end 2003.
EXCHANGE RATES
116
114
112
110
108
106
104
102
100
31-12-2003
1.40
1.35
1.30
1.25
1.20
0
24-03-2004
16-06-2004
DOLLAR / YEN
Report
and Accounts
26
04
08-09-2004
01-12-2004
DOLLAR / EURO
Euribor rates presented a healthy yield curve for nearly all the year, although
the steeper climb in the Euro in the final quarter contributed to a flatter curve,
incorporating expectations of postponement of rate rises by the ECB or even
of a fall, if the rate of appreciation had continued. In general, rates stayed at
practically the same level as the previous year, with minimal fluctuations: the
3 month rate closed at 2.16% (up 3 base points), the 6 month rate at 2.22%
(up 5 base points) and the 12 month rate at 2.36% (up 5 base points). The
1st quarter constituted an exception to the overall pattern for the year,
because of the doubts accumulating at the time as to the health of the US
economy, which were subsequently dispelled.
EURIBOR RATES (YIELD CURVES)
%
2.5
2.4
2.3
2.2
2.1
2.0
1.9
1.8
3M
31-12-2003
31-03-2004
6M
30-06-2004
9M
30-09-2004
12M
31-12-2004
27
’01
Economic
Background
3. THE FINANCIAL
SYSTEM
(cont.)
3.3 BOND MARKET
No overall clear trends emerged from the bond market in 2004: although,
at the start of the year, expectations of strong economic growth, with the
inevitable inflationary impact deriving from this, pointed towards
significant falls in bond prices, i) fears of an economic slowdown worldwide
as a result of rising oil prices, ii) the poor performance of the labour market
and iii) the fact that inflation remained within a perfectly comfortable band
from the point of view of the central banks, caused prices to remain stable
or event to register gains. As a result, the rate of return on American 10year bonds stayed within a band of 4.0% to 4.2% for a large part of the
year, although it occasionally dropped below 4.0%, a level which is normally
interpreted as indicating expectations of recession. In some cases, the rate
hikes by the Federal Reserve, in a context of sharply rising oil prices,
accentuated these decreases, causing the yield curve to flatten off over
the year.
In addition, there was another major factor influencing the prices of US bonds
in addition to the respective fundamentals, the impact of which it is difficult
to measure: the massive buying of US treasuries by Asian central banks, and
especially those of China and Japan, which channelled into these bills the
dollars acquired as part of their foreign exchange policies. This policy has in
fact been regularly mentioned as the main reason why the yields on US bonds
have remained at a relatively low level, not justified by the imbalance in
American budget and trade accounts.
The situation in Europe was not significantly different, although in this case
there were no rate hikes from the European Central Bank and fears of an
economic downturn have been generated above all by the appreciation of the
Euro against the Dollar, which in itself is a sign of monetary restrictions. In this
context, and insofar as, from the American side, doubts about the future of
Report
and Accounts
28
04
the economy have been mitigated, the differential in 10-year interest rates
between the two blocs widened to an almost unprecedented extent: whilst,
at year-end 2003, the difference was 5 base points, in favour of the US, in
December 2004, the differential had turned around to 54 base points,
revealing a reduction in the correlation between the two curves. This
reduction is unusual, but fairly much in keeping with the fundamentals of the
two economies.
GERMAN TREASURY BONDS (YIELD CURVE)
%
4.5
4.0
3.5
3.0
2.5
2.0
2 YEARS
31-12-2003
31-03-2004
5 YEARS
30-06-2004
10 YEARS
30-09-2004
31-12-2004
The Portuguese yield curve accompanied the movements in the Euro bloc,
in particular the fall observed in the 1st quarter and the strong downwards
trend in the last quarter, which caused the Treasury Bond yield to drop to a
historic low, of 3.68%. The differential in relation to equivalent German
bonds fluctuated between 10 and 15 base points over the course of the
year.
29
’01
Economic
Background
3. THE FINANCIAL
SYSTEM
(cont.)
3.4 THE EQUITY MARKET
The equity markets repeated the pattern of gains observed in 2003, albeit
on a smaller scale and a degree of volatility over the course of the year. In
general terms, we may identify a number of factors which led to this
positive performance on the equity markets: favourable money supply
conditions, due to interest rates at historic lows, led investors to prefer
equities, whilst solid economic growth and high levels of productivity
pushed up corporate profitability. At the same time, a commitment to
shareholder remuneration, with the payment of bonus dividends and share
redemption schemes, continued to be well received by the investment
community.
Despite this, market performance was rather patchy over the year, and can be
divided into three main periods: i) the 1st quarter brought fairly positive
performance as a result of expectations of strong growth in the American
economy (output had grown by 7.4% in the 3rd quarter of 2003), generating
optimism as to the evolution of corporate business; ii) from April onwards,
rising oil prices and a wholly unexpected turnaround in the US labour market
brought fears of an economic downturn, which was borne out by a drop in
yields on treasuries, causing markets to hit their annual low in August; iii)
insofar as this adjustment resulted in more attractive valuations and as some
of the doubts about the economic future were dispelled, the markets
recovered some ground but only recorded sustained gains after the US
elections in November.
Report
and Accounts
30
04
EQUITY MARKETS
120
115
110
105
100
95
90
31-12-2003
29-03-2004
24-06-2004
S&P
20-09-2004
EUROSTOXX50
14-12-2004
PSI20
Most markets ended 2004 with yields of between 5% and 10%: Standard &
Poors rose by approximately 8.9%, Eurostoxx gained 6.9% and the Nikkei rose
by 7.6%. In Europe, the top performing markets were in Spain (17.4%), Italy
(15.0%) and Portugal (12.6%), which continued to offer amongst the best
returns in the Euro Zone for a large part of the year.
One sign of increased stability on the equity markets, after the depression of
2000-2002, was the number of initial public offerings, which in the US
included the stock market launch of Google, the world’s largest internet
search engine. The Portuguese market also witnessed, for the first time since
2000, the floating of a new company to the market: Media Capital, which
owns the TVI television channel, as well as a number of radio stations and
advertising businesses. The operation was valued at 217 million Euros, and
attracted both corporate and retail clients, generating great interest amongst
foreign institutional investors.
31
’01
Economic
Background
3. THE FINANCIAL
SYSTEM
(cont.)
In a relatively more favourable context, trading increased by approximately
37%, from 21.7 thousand million Euros to 29.8 thousand million Euros,
although a significant part of this increase was associated with specific
transactions and the transfer of large blocs of some of the main securities on
the market.
3.5 RETAIL MARKET
The retail market performed unevenly, with regard to interest rates, with
some segments seeing lending rates fall whilst others benefited from falls,
although the variations were practically marginal. In the case of finance
houses, interest rates for lending operations of up to one year held practically
stable at around 3.5% between December 2003 and October 2004, with
fluctuations of between 5 and 10 base points, depending on the segments.
The same scenario was to be found in relation to lending rates for private
borrowers over periods of more than 5 years (essentially mortgage lending).
These rates held steady at around 3.4% from December 2003 to October
2004. In relation to deposit rates offered by banks over the same
period, the average deposit rates for up to one year and longer remained at
1.8% for private customers and 2.1% for the business segment.
Report
and Accounts
32
04
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’02
‘
OUR
VALUES’
YOUR UNIVERSE
Banif Group
Operations in 2004
Report
and Accounts
04
’02
Banif Group Operations
in 2004
1. Banif SGPS, SA
The Group’s operations, as carried on by each of its individual companies, are
described in the following sections.
During 2004, the company centred its operations on managing its financial
holdings and developing strategies and measures to be implemented and
developed by its subsidiaries.
One important achievement in this area was the conclusion of a Memorandum
of Understanding with CTT, the Portuguese Post Office, with a view to setting
up a bank designed to serve a significant segment of the retail market,
thereby complementing the Banif Group’s penetration in terms of coverage of
mainland Portugal.
Also in 2004, the Banif Group was able to position itself as one of the leading
financial groups in cross-selling performance in Portugal. Various projects
were designed with the objective of increasing the Group’s results by
optimizing existing structures and exploiting synergies within the Group.
Two of these main projects developed consisted of improving cross-selling
ratios in banking channels and developing assurfinance business.
Results from banking channels were highly satisfactory for the third
consecutive year. Sales of investment products through banking channels
grew by 30%, as compared to market growth of 7.6%. For the third year
running, banking channels recorded growth far in excess of the market, which
has been fundamental in building up the Banif Group’s market share in the
investment product area.
Report
and Accounts
34
04
The same has happened in the insurance sector, where banking channels
recorded 40% growth, whilst the market failed to break through the 10%
barrier. Most significantly, the Group’s performance outstripped that of the
market in both of the two main areas – life and property business.
Property leasing business grew by 37%, as against market growth of 35.9%.
Growth in equipment leasing was more modest, at 12.4% for Banif and 7.2%
for the market, as a result of the fact that this form of leasing is at a much
more mature stage of development.
It should also be noted that performance in banking channels was extremely
satisfactory in the three main segments (retail, corporate and private).
The assurfinance project, despite recording growth over the previous year, is
expected to experience a steep increase in business, and is without doubt one
of the key projects for 2005.
In view of the specific nature of the business carried on by this type of
company and the need to maintain adequate return on equity, the company
recorded as income the dividends to be distributed by subsidiaries under the
terms of Circular no. 18/04/DSBDR of 5/03, of the Bank of Portugal and of
IAS no. 18, namely, Banif Imobiliária, SA, Banif Seguros SGPS, SA, Banif
Investimentos SGPS, SA and Banif Comercial, SGPS, SA, totalling 1,050,000
Euros, 2,190,200 Euros, 2,100,000 Euros and 5,698,560 Euros,
respectively.
Turning to the leading indicators, the company’s net assets stood at 31
December 2004 at 440,406.8 thousand Euros, as against 426,097.4
thousand Euros at year-end 2003, and after-tax profits stood at 15,819.2
thousand Euros, as against net profits in 2003 of 12,442.7 thousand Euros,
representing growth of 27%.
35
’02
in 2004
The company’s net worth stood at 289,817.5 thousand Euros at 31
December 2004, as against 283,998.2 thousand Euros at year-end 2003.
The company had no employees as at the end of 2004.
Report
and Accounts
36
04
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’02
‘
OUR
VALUES’
YOUR UNIVERSE
Banif Group
Operations in 2004
Report
and Accounts
04
’02
in 2004
1.1 BANIF COMERCIAL SGPS, SA
In keeping with its company objects, Banif Comercial concentrated its
activities on managing its financial holdings.
On 13 February 2004, the company acquired a further 9.13% of the share
capital of Banco Banif Primus, SA, for a total price of 1.4 million Euros, giving
it a holding of 84.13% in the bank.
Over the course of the financial year, as a result of the reorganization
operation in its subsidiary Banco Banif Primus, SA, the company acquired the
remainder of the shares in the bank, giving it 100% ownership of the share
capital.
As a result of this reorganization, the company increased the share capital of
the bank, from R$ 31,000,000.00 to R$ 41,000,000.00.
As a result of the public takeover bid launched on 14 November 2003, for all
the shares in Banco Comercial dos Açores, SA (BCA), at a unit price of 6.00
Euros per share, the company became the owner of 10,334,178 shares,
representing 99.57% of the share capital of the bank. In accordance with
article 195 of the Securities Market Code, the Board of Directors of the
company resolved, at the end of 2003, to proceed with the compulsory
acquisition of the 51,463 remaining shares at the same price as in the
takeover bid.
Report
and Accounts
36
04
Accordingly, the company acquired 7,168 shares at the end of 2003, and a
further 44,295 shares during the first quarter of 2004, giving it 100%
ownership of the bank.
In order to rationalize its liquidity position, at the end of the year the company
repaid short term finance borrowing to Rentipar Financeira SGPS, SA (5 million
Euros) and Banif – Banco Internacional do Funchal, SA (12 million Euros).
However, in view of the investments it had to make, it obtained short term
finance of 12 million Euros from Banco Comercial dos Açores, SA and
increased its shareholders’ funds through supplementary capital subscriptions
from shareholders amounting to € 12,464,000.00.
Given that its subsidiaries Banif Leasing, SA and Banif Rent, SA needed to
increase their shareholders’ funds, in the former case because of business
growth and in the latter case due to the legal requirement in article 35 of the
Companies Code, the company subscribed supplementary capital of 7,000
thousand Euros and 350 thousand Euros, respectively.
The company had no employees as at the end of 2004.
1.1.1 Banif – Banco Internacional do Funchal, SA
1. Business in Madeira
With implementation of the final phase of the government programme, the
regional economy recorded growth in comparison with the previous year
(estimated growth in GDP of 6.6%), with obvious repercussions for the
development of Banif’s business in the region.
37
’02
in 2004
Given the economic situation during the year, sustainable growth in the
business of the Madeira Commercial Division (MADCD) was supported by an
increase of 12% in lending, which offset slower growth in deposits, which
stood at 7%.
In terms of total financial contribution, the MADCD obtained excellent levels
of growth (15%), thanks to a large increase in commissions charged (16%)
and healthy growth in the financial contribution from deposits and lending
(14%).
The increase in investment lending, reflecting the positioning of the Bank
within the regional business community, counterbalanced fading growth in
consumer credit. In order to revive short/medium term lending, the MADCD
also worked in partnership with regional institutions to promote the granting
of credit lines for the acquisition of specific consumer goods.
Growth in deposits, although less significant than in the same period in the
preceding year, was based on increased intake from residents, given that the
depreciation of the Dollar against the Euro made it difficult to increase
deposits from non-resident clients.
As part of the 50,000 Programme (a project developed by the Bank in 2004,
in collaboration with external consultants, with the aim of extending our active
client base by 50,000), commercial agreements were signed with a number of
public and private bodies, which helped the Bank to maintain a significant share
of the regional market and to bring in 9,000 new active accounts.
The extension of the branch network, with the opening of the Cancela Park
branch and the creation of the sixth customer service team at the Regional
Business Centre made it possible to maximize quality standards in the
provision of a personalized service to current and potential clients.
Report
and Accounts
38
04
In order to increase the Bank’s visibility in the region, Banif signed new
sponsorship and arts patronage contracts which show the Bank’s commitment
to promoting social welfare and culture in the region.
The bank’s high profile in the business community was further boosted by
sponsorship of the regional “100 Best Companies” competition. In the area of
sport, in addition to sponsorship of the now traditional “Banif Golf
Tournament” and sponsorship of Clube Sport Marítimo, Banif has increased its
visibility by also signing a sponsorship deal with Clube Desportivo Nacional.
In the academic world, a cooperation agreement was signed with the
University of Madeira, and the bank again supported the “School Games”
event, which involves basic and secondary level schools in the region.
In addition to periodic visits, the Bank’s efforts to support and keep in touch
with the Portuguese community abroad included the “Banif Golf Tournament”
held in South Africa, in January, and support for the organization of the “3rd
Meeting of Generations”, held in Venezuela in May.
VARIATION 2004/2003
Lending
Deposits
12%
7%
Client Base
10%
Total Financial Contribution
15%
39
’02
in 2004
2. Business in Mainland Portugal
2.1 Business in the Corporate Segment
At the end of 2004 it was decided to merge the Business Centres Division
(BCD) with the High Income Private Clients Division (HIPCD), creating the
Corporate and Private Banking Division (CPBD), whose task it is to coordinate
and develop corporate banking operations in Mainland Portugal, managing
existing clients and helping to bring in new clients, together with the bank’s
business in the medium/high income private clients and institutional segment.
Over the course of 2004, the CPBD (previously the BCD) pursued its
traditional task of following through and managing the portfolio of small and
medium sized businesses, through the various Business Centres (and
branches) in mainland Portugal, continuing with the strategy of direct
placement of products and services, but also as a channel supplying business
to other areas of the Bank.
Lending policies remained rigorous, with moderate growth based on forms of
credit able to provide the greatest financial contribution, especially in terms of
commissions.
Customers with warning signs as regards credit risks have continued to be
closely monitored, with a view to minimizing risks, namely through:
- plans for eliminating and reducing involvement with higher risk clients;
- reduction of overall exposure in some sectors where difficult economic
conditions have been felt most acutely.
Report
and Accounts
40
04
In terms of cross-selling with other Group companies, the bank achieved the
following:
- growth of 15% in the placement of leasing products
(property and equipment), in comparison with 2003;
- growth in insurance premiums of 218%;
- totals of 9.9 million Euros and 1.1 million Euros placed in investment funds
retirement savings schemes, respectively, over the course of the year.
In 2004, Banif consolidated its strategy of stepping up the placement of new
products, such as factoring, credit cards and renting, with these clients, as
well as boosting take-up of the Banif@st e-banking service.
A good flow of customer contacts were provided to the branch network with
the potential for Cash Management Accounts (CMA) and home loans.
This was also the first full year of factoring business, which started up in
2003. This project is being conducted by the Bank, through the former BCD.
Taking advantage of the existing relationship with the Bank’s corporate clients,
a busy sales campaign led to the signing of 112 new contracts.
With a view to bolstering Banif’s presence in the corporate segment, the number
of client service teams was increased with the creation of 2 new teams in
Portimão and Viana do Castelo, bringing the total up to 51 at the end of 2004.
As a result of these marketing efforts, the CPDB recorded growth in lending
of 7.7% over the year, representing an increase of 122 million Euros.
Commissions were up by 17% which, added to the financial contribution from
lending and deposits (financial brokerage margin), represents an increase in
the total financial contribution of approximately 6.9% in comparison with
2003. It should also be noted that the Bank gained 866 new corporate clients,
bringing the total number up to 5,785 active clients at the end of 2004.
41
’02
in 2004
VARIATION 2004/2003
Lending
7.7%
Deposits
–12%
Client Base
10%
6.9%
2.2 Business in the Middle/High Income Private Client Segment
The decision, referred to above, to combine corporate and middle/high
income private clients in a single division was designed above all to exploit and
develop synergies between these two market segments, namely by attracting
the private custom of the partners/shareholders of the Bank’s corporate
clients.
With 11 Private Managers in Mainland Portugal at the end of the year,
business was taken over by two Banif Privado Centres, one in Oporto and the
other in Lisbon (with a branch in Faro).
Targeting their work increasingly on the business segment, the Private
Managers have sought to bring in deposits from business people and to place
other Banif products and services, through a strategy of strengthening
customer loyalty and cross sales.
Each Private Manager now works in close connection with the Corporate
Managers for their respective areas of influence, thereby benefiting from the
synergies offered by this new approach. The two Banif Privado Centres
currently manage approximately 1,200 clients, with deposits in the region of
533 million Euros and lending of 38 million Euros.
Report
and Accounts
42
04
The Centres have meanwhile been successful in increasing the average
number of products per client in Banif Privado, thanks to the strategy of
cross-selling, thereby increasing customer loyalty to Banif.
There has been increased coordination with Banif – Banco de Investimento,
allowing for significant growth in the distribution of investment products. In
2004 this included the placement of 33 million Euros in investment funds, 40
million Euros in structured products and approximately 700 thousand Euros
in retirement savings schemes.
The new strategy defined at the end of 2004 will be founded on consolidating
the existing client base, in attracting the custom of the partners/shareholders
of corporate clients, improving returns and reducing the cost to income ratio
in this business area, taking advantage of synergies with the Business Centres
and Banif – Banco de Investimento.
2.3 Business in the retail segment
During 2004, the Branch Network Division (BND) continued primarily focused
on selling products and providing services, aimed essentially at private clients,
professionals and small businesses.
The main role in marketing strategic products (home loans, Cash Management
Accounts, cards and personal loans) is taken by the branches, together with
that of maintaining a good level of deposits and exploiting the potential of
cross-selling with other group companies.
At present, the BND has a structure comprising 123 branches in Mainland
Portugal, including 6 which first opened their doors during the financial year
– Lamaçães (Braga), Lagoa, Cacia, Vizela, Ponte de Lima and Barreiro. In an
increasingly competitive marketplace, special attention has been paid to the
43
’02
in 2004
image of branches as perceived by customers, and various changes have been
made to branch premises, to bring them up to date.
The financial year of 2004 was marked by two major projects, the 50,000
Programme and the implementation of the “New Branch Software”.
In 2004, the Branch Network Division recorded fairly positive growth in
deposits, which were up by 12% to a total of 1,134 million Euros. The division
recorded growth of approximately 10% in lending, corresponding to an
increase of 141 million Euros, with the best results in lending to small business
(up by 4%), credit cards (up by 7%) and home loans (up by 13%). As at 31
December 2004, total lending stood at 1,538 million Euros.
Banif has been successful in attracting its clients to its e-banking service,
Banif@st, with appreciable advantages in terms of bringing the bank closer to
its customers, and vice versa, and reduction of operating costs. At year-end
2004, the take-up rate stood at 61.7%, and of the clients registered for the
service, approximately 15% were regular users.
Efforts continued in 2004 to improve working links with the Agency Channels
Office, which helped to channel customers and business to the branches.
The BND’s total financial contribution in 2004 grew by only 4% over the
previous year, as a result of the squeeze on the financial brokerage margin on
lending, in view of greater growth in home loans, and the receipt of
extraordinary commissions in the 1st half of 2003, relating to the
securitization of mortgage lending.
Report
and Accounts
44
04
VARIATION 2004/2003
Lending
10%
Deposits
12%
Client Base
16%
4%
2.4 Home Loans
Banif’s mortgage lending business continued to develop positively, growing in
absolute terms at exactly the same rate as in 2003. Against the background
of a clear slowdown in demand, the bank was once again able to increase its
market share, which is estimated to have risen from 1.63% to 1.68%.
At the start of the year, total mortgage lending stood at 1,248.4 million Euros
(Mainland: 1,031 million Euros and Madeira: 217.4 million Euros),
corresponding to approximately 24,500 contracts.
During the financial year of 2004, this total increased by 170.4 million Euros,
representing growth of approximately 14%, the average LTV standing at 52%.
Total lending under Banif’s management, including securitized home loans,
therefore amounted to 1,418.8 million Euros (Mainland: 1,162.9 million Euros
and Madeira: 255.9 million Euros), corresponding to approximately 27,500
contracts. The securitized balance stood at 413.1 million Euros at year-end.
The balance of home loan transfers continues in Banif’s favour, demonstrating
our quality in terms of competitive products, the speed of processing
applications and aggressive sales stance.
45
’02
in 2004
The market remains fiercely competitive, with constant marketing campaigns,
new product variants and aggressive pricing policies on the part of certain
operators. Although it is not immune to these pressures, Banif managed not to
alter its pricing policy and to preserve margins, staying close to the market
averages.
In the course of the financial year, Banif also started to market two new
products with specific features. These are Banif Holiday Home Loans and Banif
Capital+ Home Loans (offering our customers the possibility of a 3-year grace
period on the principal), which helped us to broaden our range to include these
market niches.
We may therefore once again conclude that, in view of the ferocious
competition in this market, our results can be regarded as a clear success.
2.5 Consumer credit
- Payment cards
Banif’s payment card business continued in 2004 to be influenced by the
recession in the Portuguese economy.
This recession, combined with the fact that the population already presents a
high bank card coverage rate, caused the market to record only
modest growth, of only 2%, in the number of cards in Portugal.
In contrast with the wider market situation, Banif recorded growth of
approximately 19% in the number of cards issued, in comparison with 2003,
allowing it to increase its market share considerably.
Report
and Accounts
46
04
The best-performing product was the Banif Electron Card, a Visa network
debit card, for which the number of cards issued was up by 22% in comparison
with the previous year, and the number of transactions up by 50% over 2003.
The Excellence Card, a Visa Gold card, also performed well, with growth in
various indicators: number of cards (10%), lending (12%) and invoicing
(17%).
Revolving credit (interest generating) granted by Banif cards also grew at a
healthy rate, up by 18% on the previous year.
Over the course of 2004, Banif undertook various direct marketing initiatives
for credit cards sales, with the Call Centre taking a leading role.
At the end of 2004, Banif launched a new card, the Banif University Card. This
card, which in financial terms serves as a Visa Electron debit card, is aimed
at students, lecturers and other employees of higher education institutions
with which Banif has reached agreements, providing, amongst other things,
for the issue of cards. This card also serves as an identity card for the
university.
Over the course of the year, the bank also took an active part in Visa’s
promotional campaign in Portugal, with the slogan “Go to the Olympics with
Visa”. Three prizes in this campaign were awarded to customers with Banif
cards.
- Personal loans
In 2004, Banif maintained the general thrust of its positioning with regard to
the placement of consumer credit products.
47
’02
in 2004
The placement of personal loans continued to be centred on sales to
well-established Banif clients with a good track record. Personal loan products
were used less to win new customers than to bolster customer loyalty, with
preferential terms for the bank’s existing clients.
Lending to “non-clients” or “recent clients” represented only 14% of
production in 2004, as against 33% in 2003.
The branches are the main distribution channel for personal loans, strongly
supported by the Agency Channels and the Call Centre.
The partnership with Banco Cetelem SA continued in 2004 on products aimed
at specific segments, making it possible to broaden the range of products
offered to Banif customers, especially with regard to pure revolving products
and low value loans.
Business in 2004 (excluding the partnership with Banco Cetelem, SA)
amounted to the granting of 3,759 new loans for a total of 38,917 thousand
Euros, representing an increase in value of 6% over 2003, although with a
reduction of 8% in the number of contracts. The average value of new loans
rose from 9,012 Euros to 10,353 Euros, as a result of specialization in lower
value loans through the partnership referred to above.
Banif recorded a decrease in its personal loans portfolio from 104.1 million
Euros in December 2003 to 94.5 million at year-end 2004, corresponding to
a reduction of 9%, due to a high rate of repayment of principal, not offset by
new lending.
Report
and Accounts
48
04
Various initiatives were launched in 2004 in order to boost sales of personal
loans to customers, in partnership with Banco Cetelem. These included:
-
“Banif Prestige Audiovisual Offer” Campaign
“Film and Photography” Campaign
Banif Pessoal Summer Promotion Campaign
Pre-approved Credit to customers with positive track record
The success of the Banif Pessoal Summer Promotion Campaign was partly
responsible for the recovery in output during 2004.
In December 2004, as a result of internal reorganization, management of
Banif personal loans products was transferred to the new Consumer Credit
Division. In 2005, new initiatives will be launched with a view to exploiting the
client base provided by the 50,000 Programme, implemented in 2004, and
new products will be developed aimed at specific segments.
2.6 Specialist Credit
- Factoring
The Bank’s factoring unit concluded in December 2004 its first full year of
operation.
Taking advantage of the existing relationship with Banif’s corporate clients,
marketing efforts for factoring were stepped up, with 112 new contracts
being signed in 2004.
Active contracts made a contribution of 147 million Euros in credit granted,
of which 46.6 million remained as active credit at 31 December. This enabled
Banif to achieve a market share of 1% in this product by the end of the year.
49
’02
in 2004
This level of business generated commissions of 514 thousand Euros. The
average balance of advances stood at 45.6 million Euros in December, and
interest of approximately 1 million Euros was collected during 2004.
- Cash Management Account
Growth in the Cash Management Account stagnated somewhat in 2004 in
relation to small businesses, and individual entrepreneurs in particular, who are
the target market for this product.
The prime marketing weapon continues to be cooperation agreements with
business associations, for the placement of this product with their members.
The indicators for this product remained firm and stable in 2004, both in
terms of client numbers and credit granted, with a credit balance of 235.4
million Euros, used by a total of 16,338 clients. In December 2003, this
balance had stood at 226.8 million Euros, meaning that growth in 2004 stood
in the region of 3.8%.
Lending associated with this account also held firm, with a total balance of
36.6 million Euros, corresponding to growth of 11.9% in relation to December
2003, when the balance stood at 32.7 million Euros.
The stability of this portfolio was also due to a clear improvement in credit
quality, achieved over the year by shedding higher risk clients, and by
reviewing scoring grids and policies for associated lending.
Plans are afoot for reviving this product in 2005, through renewed marketing,
realignment of product pricing and the offering of new forms of the product.
Report
and Accounts
50
04
2.7 New Distribution and Business Area Support Channels
2.7.1. Call Centre Operations
The Direct Network Division (DND) conducted a number of campaigns in
2004 aimed at clients and potential clients.
These initiatives included work in the business segment, aimed essentially at
potential clients, promoting placement of the Cash Management Account,
through cooperation agreements with industrial and commercial associations.
In the area of lending to private clients, with the focus on personal loans,
activities centred on support for the “Audiovisual” and “Pre-approved”
campaigns, and on the pro-active placement of credit cards.
As part of the “50,000 Programme”, the DND provided validation and
logistical support for the member get member initiative.
In relation to the products of other Banif Group companies, the DND took part
in campaigns organised by Banif Leasing and Banif Crédito, and conducted
specific campaigns for the BCA, in relation to revolving personal loans and the
allocation of credit cards, with the placement of approximately 3,800 cards.
Operation of customer support lines grew across the board in comparison
with 2003, with the Linha Banif recording 14% growth in activity, with
44,927 calls, the Linha Banifone recording 2% growth, with 14,398 calls, and
the “Point of Sale Credit Line” up by 32%, with 1,476 proposals approved.
The average number of calls answered on the different lines was 5,932 per
operator.
51
’02
in 2004
The number of contacts made through outbound calls was 5% up on 2003,
totalling 1,020,000, which represents an average of 31,000 contacts per
operator.
2.7.2 Agency Channels
Various initiatives adopted in 2004 helped to add significant added value to
Banif’s agency channels. This represents the consolidation of a project which
started in 2001 and which continues to make rapid progress.
In addition to consolidating the project, a number of management control
tools were also designed which permit daily control of business contracted by
our salesmen.
In 2004, the Bank implemented the Overall Management Targets Model for
the Agency Channels (ACD), which has resulted in full automation of
the procedures for controlling targets for business and winning new clients,
which are controlled by product, sales coordinator, agency channel and
salesman.
Despite the difficult economic situation, the ACD recorded highly significant
business development indexes, especially in what are regarded as
traditional products (home loans, current accounts and deposit/savings
accounts) which, in accrued terms, represented growth of 20% over the
previous year.
The ACD also took an active part in the 50,000 Programme, bringing in 4,457
new accounts, for which it achieved a high activation rate.
Report
and Accounts
52
04
Thanks to a structure designed to maximise outreach, the agency channels
played an important role in raising the profile of the Banif brand throughout
Portugal.
As in previous years, the ACD organized an Annual Salesmen Convention,
which brought together approximately 300 salesmen, as well as organizing
various training initiatives, in order to equip them with better technical skills
and know-how for promoting Banif products and services.
Another feature of the financial year was the forging of closer relations with
the Banif Group’s subsidiaries, and in particular with Companhia de Seguros
Açoreana, with which synergies were developed as part of an ongoing process
designed to push sales through its brokers and commercial agents. In the
second half of the year, work started on marketing of products from Banif
Crédito and Banif Rent through the agency channels. This extended the range
of cross-selling within the Banif Group, giving the salesmen access to
products with the potential to expand the Bank’s overall business operations.
2.7.3 Electronic Channels and Means of Payment
In terms of technology, 2004 was a year of stabilization of the systems used
in e-banking activities, which contributed significantly to improving user
satisfaction, both internally and externally, thereby establishing Banif’s
e-channels as a benchmark for the rest of the market.
The reorganization of the Banif and Banif Group sites, a process which began
in 2003, was fully implemented with great success in 2004, resulting in a
growing number of hits and, most noticeably, in an increase in the average
length of visits, which rose to over 5 minutes.
53
’02
in 2004
One major innovation in 2004 was the launch of the new SMSBanif channel,
which allows customer to access and interact with the Bank through mobile
phone text messages. This increased the range of channels through which
customers can communicate with the bank, and the implementation of this
technology made Banif one of the first banks on the market to offer a
comprehensive e-banking service.
In terms of transactions, the results achieved benefited from the efforts to
bring in new custom in 2004, through the 50,000 Programme. Banif@st’s
take-up rate, in relation to the Bank’s total clients, rose from 30% at the end
of 2003 to 45% in 2004. Thanks to this vigorous growth, the percentage of
clients frequently using the e-channels stood at 18%.
Alongside this success, results for deposits brought in through e-channels
showed that the monthly product promotion campaigns led to growth of
111% in relation to deposits in 2003.
3. Communication and Image
Banif’s marketing activities over the course of 2004 were geared to providing
a framework for the campaign to gain 50,000 new customers for the Bank,
through advertising and promotional initiatives designed as tools for attaining
this target. At the same time, the marketing department was engaged in
supporting the launch and re-launch of products and services, in line with the
strategy of consolidating and bolstering the sustained growth which the Bank
has recorded since it was founded in January 1988.
This involved organizing a competition during 2004, designed to involve
existing customers in attracting new clients to the bank, rewarding them for
their success, and also to offer prizes to new customers opening accounts
with the bank. At the same time, this marketing tool was extended to the
Report
and Accounts
54
04
bank’s employees, with the organization of specific prize draws, as an
incentive for recruiting new custom.
A number of initiatives were adopted in 2004 in order to strengthen the social
and cultural values projected as part of the Bank’s internal and external image.
One example of this was a classical concert organized in Oporto, on 10 June,
at the Praça da Cordoaria, with the participation of Ala dos Namorados and Rui
Veloso, as well as the three Golf tournaments, aimed at customers, held in
Amarante, in May, at Quinta do Perú, in Azeitão, in July, and in Santo da Serra,
in Madeira, in September.
Work continued on renewing Banif’s product range, with the launch of valueenhancing products designed to attract new clients, including the Banif
University Account, tailored specifically to students in higher
education and intended to serve as an anchor product for penetration of this
market segment. Another approach is reflected in the Classical, TOP and VIP
Protocols, which are integrated solutions for approaching the employees of
our corporate clients and the members of business and professional
associations.
At the same time, the department worked on supporting the launch of a
deposit account with an increasing interest rate, which was baptized Banif
4X4, in Mainland Portugal, and Banif Valor+, in Madeira, and on the
segmentation of mortgage lending business into Standard Home Loans, Senior
Home Loans, and Holiday Home Loans, aimed at the market for second homes
and holiday homes, as well as Capital+ Home Loans, designed to finance the
transition period for customers moving home.
55
’02
in 2004
Other marketing initiatives in 2004 included the re-launch of Poupança Banif
4, a segment-specific variant of Banif personal loans, as part of the
partnership with Banco Cetelem, promotion of Pensioner Savings Accounts
and Homebuyer’s Savings Accounts, and also, at the end of the year, Banifast,
Banifiscal and “Generation+”, a product package designed to gain the loyalty
of young clients, marketed in Madeira.
Corporate communication initiatives related to the campaign to attract
50,000 new clients included the launch of a monthly information resource,
designed to publish the target attainment status of all bank employees.
4. Strategic Marketing
In late 2004, Banif set up a new body with specific responsibility for
developing strategic marketing, through permanent analysis of leading market
trends and identification of existing and potential products and segments.
The new body, known as the Strategic Marketing Office (SMO), has taken
over the task of analyzing opportunities, and is geared to detecting attractive
opportunities, in view of the associated risks and returns. The SMO works
with a view to the medium and long term.
The objectives currently assigned to the SMO therefore include the following:
- Maintenance of the existing information system and designing a
comprehensive project for a new information system, as well as a marketing
information system;
- Integration and maintenance of customer data bases, with ongoing
segmentation;
Report
and Accounts
56
04
- Development of a corporate pricing policy, envisaged primarily as a
strategic framework, with a view to continuous integration, review and
monitoring of prices;
- Benchmarking studies and comparative analysis of the Bank’s product and
service portfolio, in relation to the market;
- Integrated management of the Bank’s product and service portfolio,
ensuring that it is aligned at all times with corporate targets, in a concerted
manner with price management, avoiding unprofitable areas and optimizing
applicability of the product range.
A number of different projects were undertaken by this new arm of the Bank
in 2004, including:
- Launch of an ongoing programme for measuring the satisfaction level of
the Bank’s private customers, with development of a barometer for
results. This programme was designed to be applied on a recurring basis
within the bank, and to contribute towards systematic monitoring of
satisfaction levels;
- Model for analyzing the commercial attractiveness of the municipal
districts of the country, to assist in defining the Bank’s commercial strategy;
- Development of a model for analyzing private customer loyalty and
retention;
- Laying the foundations for Banif’s marketing information system.
57
’02
in 2004
5. Credit Recovery and Legal Department
The Legal Department recovered a total of 36,151 thousand Euros in overdue
credit in 2004. This included the recovery of credit already written off
on the balance sheet, amounting to 5,328 thousand Euros. At the end of the
year, the total volume of credit transferred to the Legal Department
amounted to 61,642 thousand Euros.
The Bank’s total overdue credit stood at 72,961 thousand Euros at the end of
2004, whilst doubtful debts amounted to 24,092 thousand Euros.
Banif has complied with Bank of Portugal rules on provisions, which at
year-end 2004 stood at 61,975 thousand Euros for specific lending risks
(including overdue credit and interest and doubtful debts). Total provisions
(specific and general lending risks) amounted to 93,418 thousand Euros,
corresponding to 128.04% of overdue credit (104.66% in 2003).
The quality of the lending portfolio improved, reflected in the respective
indicators at the end of the year, when overdue credit represented 1.95% of
total lending (2.22% in 2003).
Total write-offs from the balance sheet in 2004 amounted to 19,216
thousand Euros, in respect of credit regarded as uncollectible; full provision
was made for this.
A number of improvements were made during the year to the software for
processing overdue credit and credit transferred to the legal department. This
allows for greater efficiency in managing the process, whilst preparations are
underway for starting up new and specific software during the first half of
2005.
Report
and Accounts
58
04
In keeping with efforts to equip the Bank with an organizational structure able
to face up to the successive challenges posed by its operations, it was also
decided at the end of the year to separate credit recovery from the legal
department. This led to the creation of a Legal Advisory Division for general
legal questions and a Credit Recovery Division to deal specifically with this
area. This should add further momentum to the process of collection, without
neglecting judicial solutions, to be adopted in the last instance, given the high
costs of legal proceedings and the length of time required for actual collection
of the amounts involved.
6. Human Resources
Banif’s personnel policy continued to be geared to the objectives mapped out
in previous years, aiming to strengthen and improve human resources
management systems (performance assessment, personnel recruitment and
training, all of this contemplated in the Omega Project), in order to highlight
and recognize the role played by all employees in the attainment of the Bank’s
goals, to promote employee development and to determine rewards for
obtaining results obtained.
Joint projects have been undertaken by the Bank and various Banif Group
companies, in order to standardize policies and procedures in the field of
personnel, with the ultimate aim of ensuring that activities, methods,
processes and overall aims form a coherent whole and serve to strengthen the
Group culture.
With this end in view, work has proceeded on developing the Omega Project in
Banif and a number of other Group companies. It is believed that full
implementation of this will make an important contribution to consolidating a
culture of management by objectives, of improvement in individual and team
results, of increased self-advancement and participation, and recognition of merit.
59
’02
in 2004
The work carried out in this field in 2004 included initiatives in the fields of
recruitment, training, corporate atmosphere, development of operational
software and support for the 50,000 Programme and implementation of new
branch software, through a training programme with an e-learning
component.
As at 31/12/2004, Banif had a total of 1,550 employees, 72 more than on
the same date in the previous year (this number includes various temporary
employees for whom there is no permanent vacancy, and whose contracts
expire during the 1st half of 2005). A total of 181 new employees joined the
Bank in 2004, and 109 left its service. In terms of the Group’s total workforce,
which stood at 2,910, the personnel of Banif, SA represented 53%.
The characteristics of the Bank’s workforce may be illustrated by the figures
for age and academic qualifications: the average age rose from 36.84 to 37
years, from year-end 2003 to year-end 2004, whilst the proportion with
higher educational qualifications rose from 37.7% to 40% of the total.
Special mention should also be made of training. A total of 301 training
sessions and courses were organized in 2004, 281 internally and 20
externally. These initiatives included a total of 2,536 participants (some
employees taking part in more than one training activity), representing
31,576 training hours. This amounts to approximately 20 training hours per
employee.
These initiatives included induction training for new employees during the first
fortnight of each month, and training for the new branch software.
In connection with questions of corporate atmosphere, the 3rd Satisfaction at
Work study was undertaken, this time taking in all Group companies, with
overall satisfactory results, practically identical to those in previous years.
Report
and Accounts
60
04
Particularly positive were the findings for the internal relationship between
employees, and between employees and managers, and also for the type of
duties performed by employees. Some degree of dissatisfaction was detected
with regard to careers policy and interaction between different departments
and divisions.
An important and ongoing contribution to modernization and rationalization
has been made by the computer programs included in DRH.Web and
e.learning.
7. Information Systems and Technology
The work carried out by BanifServ in its mission of supporting the Bank’s
business has increasingly required an adequate technological infrastructure
able to respond quickly and effectively to Banif’s needs.
BanifServ has not neglected this area, and thanks to its contribution the Banif
Group is today a leading example in the financial market of the use of the
latest technology, not as an end in itself, but purely and simply as a tool for
responding to business and management needs, designed in accordance with
criteria of utility, rationalization and cost cutting. Indeed, the Group’s suppliers
and also its competitors frequently request information, disclosure or
demonstration of the platforms used and the software installed.
Technological development has been guided by an overall architectural
framework, which hosts and guarantees system availability and growth
capacity, whilst also safeguarding security, software reliability and cost
reduction.
Banif’s central systems were re-engineered in 2004 with the installation of
IBM iSeries 825 equipment, which made it possible to consolidate various
61
’02
in 2004
AS/400 units in a single electronic complex, which permits activation of
processors (up to a maximum of six) through a key, in real time, without
requiring any reconfiguration. It also allows for dynamic provision and
allocation machine resources to different tasks, in line with changing needs. In
addition to this, the new equipment can accommodate up to double the power
currently installed, and full provision has been made for increasing needs and
complete virtualization of the various OS/400 operating systems within the
same hardware. The costs of this system over three years (860 thousand
Euros) represent approximately 40% of the costs of the previous system for
an identical period.
Work was also carried out and completed in 2004 on consolidation of
corporate servers, which involved the consolidation of approximately 80
servers, in an IBM xSeries complex, through virtualization of various operating
systems (Windows and/or Linux), on a single hardware platform, with
dynamic sharing of its resources.
This was not limited to servers which, in view of their uses, require specific
support, namely the security zone (DMZ), Swift and the Large Transactions
Payment System (SPG). A cost saving of approximately 30% was also made
on operations in this area, even before considering the highly significant
reduction in the costs of technical management of these systems. In addition,
it was the dynamic allocation and sharing characteristics of the resources
which, for example, made it possible to implement the branch software in
a non-disruptive manner, with the necessary availability of the resources
required.
A new process was also installed for distributing the load of the basic web
applications, which achieved its aim of optimum use of machine resources.
Report
and Accounts
62
04
A new CPD was installed, with equipment protection resources in the event of
accidents (fire and flood) and a generator for possible power cuts, with
equipment rooms in masonry and glass, with fire doors. The equipment is
divided between various rooms and the CPD area has its own 24-hour
security system and access control procedures.
There is an up-to-date Disaster Recovery Plan, which has been regularly
tested (twice a year), based on a contract with an outside firm, for recover at
an alternative centre (Oporto), where premises and equipment is made
available. In the wake of a study conducted with external consultants, the
findings of which have already been approved, a Business Continuity Plan is
currently being implemented, presupposing recovery by synchronous online
synchronization.
Physical and data security has been paid very special attention in 2004, and
in addition to the question referred to above, regular intrusion tests have been
instituted, and are carried out by specialist international companies.
Capital expenditure in this field has gradually led to a reduction in operating
costs.
Last but not least, work has continued on standardizing methodologies and
development processes. Combined with a standard technological model, this
has made it possible to develop systems with prospects of a longer useful life,
and above all with lower future maintenance costs.
A total of 31 projects were concluded during 2004 (some of these had been
inherited from 2003), and 27 projects were underway at the end of the year.
Requests for evolutive maintenance numbered 104, and work on 83 of these
was completed during the year.
63
’02
in 2004
8. Control of Operating Risks
Control and management of operating risks has for several years been one of
the Bank’s priorities as regards the security of its assets. Risk management has
been developed to function in an integrated manner.
Responsibility for this area in Banif is taken essentially by the Overall Risk
Management Division (RMD), and efforts have been made to ensure that
other Bank departments and divisions have been involved and carry out their
duties in keeping with the risk principles adopted.
The RMD’s mission involves the following tasks, amongst other
responsibilities:
- Helping to define the management policies and methods for the Bank’s
assets and liabilities, proposing rules and general standards designed to limit
the Bank’s exposure to the risks of banking activities;
- Promoting and transmitting the risk management policy defined by the
Bank and the monetary authorities, ensuring it is properly applied and
implemented;
- Analysis of the lending portfolio, other investments and the sources of
funds, resulting from the Bank’s commercial and financial activities, in order
to detect and monitor the various risk levels involved, warning of situations
which may lead to losses;
- Reporting to the Bank’s management on the evolution of asset risk and
operations in an irregular situation;
- Preparation of specific studies contributing to an improved overall level of
risk management;
- Helping to improve, innovate and create operational systems which
optimise risk management;
- Co-operation with the sales divisions on plans for training in lending risk;
Report
and Accounts
64
04
- Collaboration on implementation of the technological resources needed for
risk control;
- Participation in the process of analysing and deciding on lending operations,
giving its opinion on the acceptability to the Bank of the risk levels
potentially involved.
Risk management is based on three fundamental principles:
- Independence of risk management work, so as to permit the production
and management of the information needed for adopting appropriate
decisions;
- Uniformity of structures and systems assisting in the acceptance of risks, in
accordance with the objectives defined;
- Homogeneity and coherence of decision support methodologies.
- Lending Risk
The principles and rules for granting and maintaining credit, granted to clients,
are established in the General Credit Regulations, applied across the board.
There is also a set of rules on risk taking, applicable to each business area and
the respective marketing networks.
Credit risk was previously managed by a group of credit analysts who,
although reporting to the RMD, were located in the business areas. In 2004,
all the credit analysts were centralized in the Overall Risk Management
Division, in a move designed to ensure greater uniformity in criteria for risk
assessment and decisions, to increase productivity and to work towards more
consistent application of risk policies.
The Bank has internal risk scoring systems, assigning to each counterpart
(corporate segment) and operation (retail segment) a risk score which
65
’02
in 2004
corresponds to the expected likelihood of default. These risk scores limit the
process of approval of operations, in relation to both size and price.
Credit monitoring at the post-contract phase and on renewal of credit lines is
another task to which the RMD pays special attention. The systems for
detecting warning signals and the regular meetings which are held to follow
through more problematic cases has proved effective, making it possible to
adopt decisions better geared to mitigating the risks of default.
Banif sets limits and systematically controls its aggregated exposure at
various levels, in accordance with Bank of Portugal recommendations on
internal control.
As in previous years, exposure limits were established in 2004 by sector,
geographical region, rating, type of guarantee and type of guarantee
associated with rating, and also for the dispersal/concentration of risk. These
limits constitute the qualitative basis for the commercial targets allocated to
the business networks, and are controlled each month.
Below we give a number of indicators in connection with the Bank’s lending
portfolio:
Lending to clients is distributed mostly through the corporate and equivalent
segment and the retail segment, which includes private clients and small
businesses, which in 2004 accounted for 64.3% and 35.7%, respectively.
Banif’s positioning in the corporate segment is fairly diverse, given that credit
has been granted mostly to small and medium sized companies, where the
average value of exposure, per client, rose from 132 thousand Euros, in 2003,
to 142 thousand Euros, in 2004. Although the figure for 2004 is higher, it
gives a higher level of dispersal for the sector.
Report
and Accounts
66
04
Indicators of portfolio concentration are appropriate in view of the number of
clients and the size of the Bank, and it should be noted that the Bank’s 20
largest clients represented only around 5.8% of overall exposure.
In the private clients segment, average exposure per client is 36 thousand
Euros, (as against 34 thousand Euros in 2003), most of this relating to home
loans, which at the end of the year accounted for approximately 22% of the
total lending portfolio.
The security of lending operations was reinforced by obtaining greater
coverage by real guarantees. Lending secured by mortgages and other real
guarantees rose to 49% in 2004, as against 43% in 2003.
Mortgage lending accounted for 77% of lending to private clients, and for
corporate clients represented 22% of total. If lending secured by other real
guarantees is added to this figure, we arrive at a total of 34%. Lending to
private clients guaranteed by mortgage represents more than 76% of total,
and in the case of lending to corporate clients, this indicator stands at
approximately 34%.
67
’02
in 2004
Distribution of lending to corporate clients, by the main industrial sectors:
Dec-03
2.13%
2.27%
Textile
2.50%
2.09%
1.26%
Timber, cork and associated products
1.45%
Pulp, paper, cardboard and related products, publishing and printing
1.26%
1.07%
Chemicals, power and plastics
1.01%
0.87%
Other non-metal mineral products
1.07%
0.83%
Basic metallurgy and metal products
1.61%
1.53%
Other manufacturing industry
1.79%
1.54%
Construction
18.99%
19.99%
20.54%
Wholesale and retail
21.31%
Hotel and catering (restaurants and similar)
4.27%
4.23%
Transport, storage and communications
2.68%
2.32%
Financial
5.31%
7.36%
Real estate, rental and corporate services
20.90%
21.30%
Education, health, other community, social and personal services
3.63%
4.56%
Report
and Accounts
68
Dec-04
Food, drink and tobacco
04
Breakdown of total lending portfolio, by the most representative
geographical areas:
Dec-03
Dec-04
Aveiro
6.40%
6.18%
Braga
5.39%
4.80%
Coimbra
1.26%
1.38%
Faro
Funchal
4.94%
5.31%
27.75%
27.92%
Leiria
3.60%
3.48%
Lisboa
26.81%
26.94%
Porto
14.03%
13.50%
Setúbal
5.64%
5.74%
Viana do Castelo
0.87%
1.00%
Vila Real
1.03%
1.02%
Viseu
1.04%
1.12%
- Market Risks
Banif continues to pursue a prudent policy for management of market risks,
through review and adjustment of the respective limits by the management
departments. Activities in this field are guided by rules on operations and
control contained in internal regulations and standards set by supervisory
bodies.
Banif’s portfolio of marketable securities includes foreign exchange, flat rate
and variable rate risks, which are accounted for and periodically revalued at
market prices. The essential work in this area is to hedge against the risk of
more volatile assets, which are the flat rate products and foreign exchange
aspects of operations contracted with clients.
69
’02
in 2004
Structural liquidity is measured in keeping with the time scale of commitments
accepted and resources obtained. Policies for the obtaining of funding from
clients and through recourse to the money market have ensured the stability
of resources, with the liquidity gap and the cumulative gap remaining with the
limits established for the different periods.
Interest rate risk is assessed periodically in keeping with the repricing periods
for assets and liabilities, and stress limits approved by the authorities were
maintained through the period.
– Adjustment to the New Basle Agreement
In 2004, work began on implementing the Master Plans prepared for the
Group in 2003 with a view to adjustment to the New Basle II Agreement.
In relation to lending risks:
- Work started on alterations to computer systems and data bases;
- Internal risk models were reassessed and work started on adaptations;
- Lending processes were altered, with a view to greater centralization.
In relation to operating risks:
- The governance model for the Group’s operating risk was selected;
- A set of tools was developed for identifying the operating risks applicable
to the pre-selected pilot areas;
- Work started on the functional model for collecting qualitative and
quantitative operating risk events.
In relation to market risks and balance sheet management:
- Work started on the needs assessment for improvements and adaptations;
Report
and Accounts
70
04
- Software needs were identified and the process of researching the solutions
best suited to the Group was started.
In each of the programme areas, plans have been established and progress is
monitored by the different project teams.
- Credit Impairment
The RMD was also responsible for management of the Credit Impairment
Project, in order to equip the Group’s financial companies with a conceptual
model for determining impairment, dealing also with the definition of policies,
procedures and preparation of consolidated financial information to be
reported.
9. Financial Operations
The Financial Division continued to focus on integrated management of the Bank’s
assets and liabilities, intervening on behalf of the Bank and other Banif Group
companies in the money markets and foreign exchanges, and coordinating the
bank’s activities with other financial institutions in Portugal and abroad, as well as
supporting the Commercial and Product Divisions in their respective fields.
In view of the volatility of the markets, the Bank diversified its areas of
activity with a view to obtaining better returns on investment, with the result
that it limited its equity portfolios, giving priority to liquidity and the bond
markets.
- Performance of the Bond Portfolio
The financial year of 2004 was particularly favourable for the international
debt market, with spreads narrowing across the board, as illustrated by a 10
71
’02
in 2004
bps reduction in the iBoxx Corporates five year index. Taking
advantage of this situation, Banif increased its investments in bonds to a
figure in excess of 20 million Euros, as against 80 million Euros at the start of
the year.
The investment policy was conducted with the support of Banif – Banco de
Investimento, adopting conservative criteria in the selection of issues and
diversifying into different sectors.
In terms of the relationship between risk and returns, the policy adopted in
terms of allocation by sector, giving priority to investment in the financial
sector (including asset backed securities), as well as the automobile and
telecommunications sectors, at the expense of utilities and power, made it
possible, with an average rating of A-, to achieve significant returns,
equivalent to the Euribor six month rate (2004 average) plus 1.076%.
This performance was boosted by capital gains of 680 thousand Euros.
- Results on financial operations
Overall net profits from financial operations were down by 52.3%, at 2.9
million Euros at the end of 2004, due to the obtaining, in the 1st half of 2003,
of a capital gain on the sale of the mortgage lending portfolio to the Atlantes
Mortgage no. 1 securitization operation of 5 million Euros.
In effect, the profit recorded other financial operations in 2004 stood at 949
thousand Euros, as against 6.1 million Euros in 2003, due to the capital gains
mentioned above.
Report
and Accounts
72
04
Results on portfolios of investment and marketable securities corresponded
to a profit of 1.1 million Euros, as against a loss of 1 million Euros in 2003.
The foreign exchanges were highly volatile in 2004. During the 1st half of the
year, the US Dollar crept up against the Euro, as a result of promising
economic indicators in the US, the prospect of rising US interest rate, the rise
in the oil price and slower recovery in the Euro zone. However, in the final
quarter of the year, although US interest rates went up, the Euro gained
against the dollar, reaching 1.3670 at the end of the year, as a result of the
US trade deficit remaining above USD 50 thousand million per month, and due
to unemployment at 5.4%, with no sign of a turnaround, and to the fact that
the oil price returned to levels of USD 40 a barrel.
These factors led to a slight increase in activity on the foreign exchanges in
the final quarter of the year, as a result of commercial operations, with
companies which had obtained external finance in USD opting to liquidate
these debts.
The volatility in the financial markets was another reason contributing to the
fact that the Bank failed to obtain significant results on its risk operations,
leading to a decrease in the Bank’s foreign exchange results, which stood at
840 thousand Euros at the end of 2004, as against 988 thousand Euros at
the end of 2003.
- Liquidity Management
The Bank followed a consistent policy of balance liquidity management, in
order to minimize market risks, giving priority to lower-risk investments, and
hedging risks in more volatile assets. This also involved reducing interest rate
mismatches and conducting periodic analyses of interest rate risks in order to
reduce exposure in this area.
73
’02
in 2004
Liquidity stability was assured through Client funding, recourse to the money
markets and operations on international markets through medium/long term
loans, with an increase in the maturity on this borrowing.
In the course of 2004 the Bank’s clients revealed a preference for
medium/long term deposit certificates, due to the prospect of the ECB
maintaining current interest levels during 2005, thereby taking advantage of
higher interest rates and longer maturities. These deposit certificates totalled
78.3 million Euros at the end of 2004.
On the capital markets, the Bank issued a second tranche of the European
Medium Term Notes in the 1st half of 2004, for a value of 225 million Euros,
maturing in five years. This tranche was placed during July.
Finally, it should be mentioned that the financial year of 2004 witnessed a
gradual improvement in the Bank’s liquidity, and the respective ratio, as
measured by the Bank of Portugal, rose from 76% in the 1st quarter to 94%
in the final quarter.
10. International Operations
In keeping with the general policy thrust, great importance was attached to
keeping correspondent banks fully aware of Banif and Group activities, and to
promoting a high profile for the Bank in new markets, with the aim of
establishing relations with new business partners.
To this end, a highly significant number of visits were made to banks in
European Union countries and elsewhere, including visits to two new EU
members, the Czech Republic and Hungary.
Report
and Accounts
74
04
Future prospects for business with the ten new EU member states led us to
follow the development of their economies with great interest, now that they
are integrated in the European Union. We have also paid careful attention to
other applicant countries, where the Bank has also sought to extend its
business and its client base.
Another major development in the second half was the opening of an office in
the United Kingdom. The new London office will focus primarily on supporting
the commercial and merchant banking operations of the Banif Group.
The ratings assigned by Moody’s and Fitch, in January 2003, of Baa1 and
BBB+, for the long term, and P-2 and F2, for the short term, were confirmed
twice during the year, in March and November. This was an important and
highly positive achievement for the bank, bearing witness to its stability and
helping it to gain increasing acceptance in the international capital markets.
As a consequence of this, it was possible to place a syndicated 3-year loan on
the market in April, which had originally be planned for 75 million Euros, but
which was increased, due to the strong demand, to 90 million. Also on the
syndicated market, a 5-year loan was placed for the first time in November,
originally planned for 75 million Euros, but eventually rising to 110 million, due
to the success of the placement.
Under the Euro Medium Term Note Programme for 1,000 million Euros, signed
in November 2003, a fresh 5-year operation was placed in July. This was also
very well received by the market and was issued with a value of 225 million
Euros, attracting an extremely varied range of investors.
Banif Finance Ltd. increased its share capital from 25 million Euros to 75
million Euros, through an issue of preference shares, guaranteed by the Bank,
designed to bring the Group’s equity ratio (tier 1) to the required level. Banif
75
’02
in 2004
Finance Ltd. also served as the vehicle for an issue of subordinated 10-year
bonds, with a value of 50 million Euros, designed to bolster the Group’s
consolidated equity (tier 2).
There was continued success in bringing in short term (up to one year) trade
finance operations (Brazil risk), all issued in dollars, and mostly originating
from Banco Banif Primus, leading to exposure at year-end 2004 of USD 62
million. As a result of efforts to diversify the portfolio of trade related
operations, financing operations (up to one year) were also carried out with
other countries (bank risk), namely Kazakhstan, Turkey, Ukraine and Russia,
totalling only USD 5 million. A syndicated 5-year Brazil risk loan operation was
also effected, for a value of USD 2 million, as part of a B Loan from
International Finance Corporation (IFC).
The portfolio of trade related operations represented only 1.28% of the Banif
Group’s total consolidated lending portfolio at the end of 2004.
Despite the number of operations presented to us over the course of the year,
forfaiting business failed to reach the scale hoped for, largely due to the poor
economic situation.
Thanks to the healthy business carried on over the year by Banif Mortgage
Company, the Bank was asked to provide funding for this subsidiary’s
mortgage lending portfolio, and these operations amounted to a total of USD
44 million. At year-end, exposure in this area stood at USD 14 million.
In late May, the Groupement Européen de Banques held its meetings in
Lisbon, organized this year by Banif. The GEC is an association of European
regional banks from eleven countries, and Banif has been a member since
2000. The prime aim of the association, which has 11 member banks, is to
promote the exchange of information and cooperation between its
Report
and Accounts
76
04
members, allowing them to sell products and services to their clients in the
European Union.
The annual conference of the International Forfaiting Association (IFA), which
Banif joined in June 2004, was also held in Lisbon in mid-September, with
Banif as co-sponsor of the event.
- Foreign Residents/Offshore Branch
The operations of the Foreign Residents Division (FRD) and the Madeira
Offshore Branch (OB) were negatively affected in 2004 by various factors in
the international economy. Foremost amongst these were the strong
devaluation of the US Dollar (down almost 8% over the year), low interest
rates and the restrictions imposed by the countries of residence of the two
largest communities of expatriates from Madeira – Venezuela and South
Africa.
This situation led to a reduction in deposits of approximately 5.5% of the
portfolio balance (32 million Euros), as a result of a lower contribution from
the FRD and the OB to total client deposits with the Bank.
Over the course of the year, preparations were made for equipping the
Bank’s offices abroad with human and information resources able to
strengthen their good performance and the support provided to the Bank’s
clients.
The Offshore Branch continued in 2004 to display the technical capacity and
know-how needed to work with non-resident clients, and was able to
increase the flow of capital from abroad, thanks to marketing efforts aimed at
management companies.
77
’02
in 2004
Another aspect of the Bank’s activities in this area consisted of continued
support and sponsorship of cultural events organized by Portuguese
communities in the countries where the Banif Group operates.
11. Client Support Office
The Client Support Office received a total of 279 complaints in 2004, which
represents a decrease of approximately 20% in relation to 2003.
The office was set up in November 2000, and Banif’s clients are increasingly
aware of its work, thanks to the publicity it has been given. It may therefore
be inferred that this reduction may correspond, in some areas, to an
improvement in the standard of services provided.
During the year, a total of 260 complaints were resolved, which corresponds
to a good rate of settlement of the representations made by customers.
In comparison with previous years, the complaints received in 2004 reveal a
sharp increase in the diversity of the questions raised by clients.
12. Analysis of Accounts
Net profits for 2004 stood at 20.5 million Euros. Return on equity and return
on assets stood at 7.5% and 0.45%, respectively.
A comparative analysis of the financial statements clearly reflects the main
features of the Bank’s operations in 2004:
- In terms of balance sheet indicators, growth in turnover was confirmed by
positive evolution in Net Assets, up by 18.7%, to 4,899 million Euros,
Report
and Accounts
78
04
Lending, up by 14.3% to 3,745.5 million Euros, and Client Deposits, which
increased by 7.8% to 2,498.1 million Euros at year-end 2004.
- In view of this evolution, the deposits to lending conversion ratio increased
by 8.6 p.p., standing at 149.9% at the end of 2004. The financial margin
(including earnings from securities) was up by 10.5% on 2003, offsetting
the negative effect of the narrowing of financial brokerage margins over
recent years.
- Despite the difficult economic situation in Portugal and abroad, and the
changes made to the calculation of provisions by Bank of Portugal Notice
8/2003, the ratio of overdue credit to total lending stood at 1.95% in
2004 (2.2% in 2003) and coverage by provisions continued at over 100%,
at a level of 131.7% at year-end 2004, thanks to a lending policy where
priority is given to quality and risk management.
- The Bank recorded pre-tax profits for 2004 of 24.7 million Euros, up 5.7%
on 2003, whilst net profits for the period totalled 20.5 million Euros, due to
a tax burden of 16.9%.
Balance Sheet
The account for “cash and funds with central banks”, which mostly consists of
isolated current account deposits with the Bank of Portugal, in order to meet
the legal cash reserve requirements, rose by 5.5% over the figure recorded at
the end of 2003 to 202.9 million Euros.
The account for “sight deposits with banks” presented a balance of 43.9
million Euros at the end of 2004 (10.5% down on the balance for year-end
2003), and consisted primarily of collectables (28.2 million Euros). These
79
’02
in 2004
items decreased their proportional weight in the Banif balance sheet
structure, from 5.9% in 2003 to 5.0% in 2004.
The account “other loans and advances to banks” rose by 46.7% in comparison
with 2003, standing at 456.3 million Euros. At the end of 2004, it
represented 9.3% of Net Assets (7.6% at the end of 2003).
The account for “loans and advances to clients” was up in gross terms by
14.1% in 2004, corresponding to a net increase of 454.1 million Euros, when
compared to 2003. In terms of credit granted, mortgage lending performed
particularly well, up by 13.6% over the period, to 1,137.9 million Euros,
accounting to more than 38% of total lending. Total credit granted, in gross
terms, represented 76.5% of Banif’s Gross Assets in 2004.
Despite the impact of the clearly unfavourable economic situation at home
and abroad, overdue credit as a proportion of total lending continued to
decrease as in previous years, falling from 2.22% in 2003 to 1.95% in 2004.
Provisions for Specific Risks totalled 62.2 million Euros at year-end 2004, up
31.0% from 2003. Provisions for doubtful debts increased by 6,314
thousand Euros, to 14,946 thousand Euros, whilst provisions for overdue
credit stood at 47,000 thousand Euros in 2004, up by 22.1% when compared
with 2003. As a result, coverage of overdue credit by specific provisions
increased from 65.31% in 2003 to 85.24% in 2004.
Provisions for specific credit risks, added to provisions for general credit risks,
totalled 96.1 million Euros in 2004 (81.7 million Euros in 2003),
corresponding to 2.57% of the total lending portfolio, and to 131.74% of
overdue credit (2.48% and 111.80% at year-end 2003).
Report
and Accounts
80
04
Defaulting credit (Bank of Portugal Circular of 5 November), which combines
credit more than 90 days overdue and doubtful debts reclassified as overdue for
the purposes of provisions, represented 2.3% of total lending (2.4% in 2003).
A total of 19.2 million Euros was written off in the balance sheet against
provisions in 2004 in respect of credit deemed to be either very difficult to
recover, or else irrecoverable (33.1 million Euros in 2003).
Fixed assets accounts (“intangible fixed assets” and “tangible fixed assets”)
recorded an overall increase in value, net of depreciation, of 780 thousand
Euros, standing at 24.6 million Euros at year end 2004 (as against 23.9 million
Euros at the end of 2003). Fixed assets continued to represent 0.5% of the
total balance sheet structure.
The Bank’s fixed asset ratio (which includes financial fixed assets), determined
according to Bank of Portugal rules, fell from 16.3% in 2003 to 13.34% in
2004.
The account for “other assets” recorded growth, in net terms, of 11.8% in
2004, when compared with 2003, rising to 64.2 million Euros. This account
comprises essentially “property not allocated to operations”, totalling 44.7
million Euros, and “debtors”, totalling 12.7 million Euros. As a proportion of
total net assets, this account fell from 1.4% in 2003 to 1.3% in 2004.
Accruals and deferrals (on the assets and liabilities side) registered a net credit
balance of 15.4 million Euros, representing a substantial reduction of 21.4%
when compared with the total of 19.6 million Euros recorded in 2003. These
accounts continue to represent only a small proportion of net assets and
liabilities recorded by Banif (2.4% and 2.7% respectively in 2004, and 1.6%
and 2.1% respectively in 2003).
81
’02
in 2004
In relation to liabilities, third party deposits, which stood at 4,590.2 million
Euros in 2004, were up by 19.8% when compared with the previous year. Net
asset coverage by third party deposits increased 0.9 p.p. from 92.8% to
93.7%.
The account for “deposits by banks” increased by 40.3%, augmenting its
proportional importance in the balance sheet structure to 37.1% in 2004
(31.4% in 2003), due to deposits brought in by MMI and other funds from
banks abroad.
Total client deposits stood at 2,380.4 million Euros, up 4.7% from 2003.
Current accounts grew by 11.4%, to 887 million Euros in 2004 (796.6 million
in 2003), whilst deposit and savings accounts also recorded growth, albeit
more moderate at 1.1%, totalling 1,493.4 million Euros (1,477.4 million in
2003). The appetite amongst our clients for alternative products led the bank
to offer a more varied range of investment products, and there was
substantial growth in the placement of these products, especially investment
funds and financial insurance, with growth of 8.7% and 71.8%, respectively.
The account for “debts represented by securities” increased by 73,782
thousand Euros in 2004, standing at 117.7 million Euros, which includes the
bonds issued by Banif, with a value of 24.2 million Euros, and long term
deposit certificates with a value of 93.5 million Euros.
As a result of the above, total client funds (excluding off-balance sheet funds)
increased by 7.8% over 2003, standing at 2,498.1 million Euros at the end of
2004 (2,317.9 million Euros in 2003).
The Bank’s shareholders’ funds stood at 276.8 million Euros in 2004, up 3.2
over the figure of 268.3 million Euros recorded in 2003, due to an increase in
reserves of 11,2 million Euros, through accrual of retained earnings from
Report
and Accounts
82
04
2003. Shareholders’ funds represented 5.7% of total net assets for the
financial year of 2004.
The Bank’s solvency indicators, consolidated with those for Banif Finance Ltd.
and Banif (Açores) SGPS, SA (calculated in accordance with the instructions
of the Bank of Portugal) stood at appropriate levels, with a total solvency ratio
at the end of 2004 of 12.07% (10.61% in 2003), well above the lower
limit of 8%, whilst the Tier I ratio stood at 7.93% (7.68 in 2003).
In terms of the Bank’s individual accounts, the solvency ratio stood at 8.8% at
the end of 2004, and shareholders’ funds (calculated in accordance with Bank
of Portugal instructions) totalled 336 million Euros (as against 345 million
Euros at the end of 2003).
83
’02
in 2004
BALANCE SHEET STRUCTURE
(Percentage)
2004
2003
Var%
2004
2003
Var%
Cash and funds with Central Banks
4.1
4.7
5.5
Deposits with Banks
37.1
31.4
38.5
Sight Deposits with Banks
0.9
1.2
-10.6
Client Accounts – Sight
18.1
19.3
7.2
Loans and Advances to Banks
9.3
7.6
46.7
Client Accounts – Term
30.4
35.9
-4.2
Loans and Advances to Clients
75.2
78.4
12.4
Debts Represented by Securities
2.4
1.1
-45.6
Investments in Securities
5.8
4.1
4.2
Other Liabilities
0.6
0.3
-5.6
Shares in Related Companies
0.5
0.5
0.6
Accruals and Deferrals
2.7
2.1
14.1
Intangible Fixed Assets
0.1
0.1
0.7
Subordinated Debt
2.3
2.7
0
Tangible Fixed Assets
0.4
0.4
1.6
Other Provisions
0.7
0.7
-20.3
Shareholders’ Funds and Results
5.6
6.5
5.2
100
100
-17
Own Shares
0
0
0
Other Assets
1.3
1.4
1.4
Accruals and Deferrals
2.4
1.6
50.0
100
100
14.9
Report
and Accounts
84
04
Income Statement
The financial margin, including earnings from securities, rose by 10.5% over
the period in question, to 115,524 thousand Euros (104,509 thousand Euros
in 2003). The Bank’s financial brokerage margin recorded a slight rise, up by
83 b.p., from an average of 3.14% in 2003 to an average of 3.22% in 2004.
The account for net profits from financial operations, which at year-end 2004
stood at 3,039 thousand Euros, was 3.0 million Euros down on the previous
period. If we remove the effect of the capital gain of 5 million Euros recorded
in connection with the securitization operation involving the sale of mortgage
credits in the 1st quarter of 2003, this account would have recorded net
growth of 1,961 thousand Euros.
The account for other net earnings stood at 44,111 thousand Euros at the
end of 2004, 8.9% up from the end of 2003. In the 1st half of 2003,
commissions worth approximately 2 million Euros relating to the securitization
operation mentioned above were recorded under other operating income. If
we remove this effect, the balance would have grown by 14.5% over the
period.
Net banking revenues stood at 162,674 thousand Euros in 2004, up 7.7% in
comparison with 2003 (151,096 thousand Euros). This figure reflects
annualized rates of return of 3.7% and 59.7% (3.4% and 57.8% in 2003), on
net assets and shareholders’ funds, at average 2004 values.
General overheads (which include personnel costs and third party supplies and
services) stood at 94,052 thousand Euros, up 14.0% on the figure of 82,480
thousand Euros recorded in 2003.
85
’02
in 2004
Personnel costs amounted to 51,990 thousand Euros at the end of 2004, up
by 8.7% on the figure of 47,843 thousand Euros recorded in 2003.
The workforce was increased by 72 employees, representing growth of 4.9%
in comparison with 2003, and the average cost per employee rose by 3.4%
from 32.4 thousand Euros in 2003 to 33.5 thousand Euros in 2004.
The account for other administrative overheads (third party supplies and
services) totalled 42,062 thousand Euros at year-end 2004, as against
34,637 thousand Euros at the end of 2003, representing an increase of
21.4%, due above all to the unfavourable effect of the rentals which the Bank
started to pay to Banif Imobiliária after disposal of all the property allocated
to operations, as referred to above.
As a result of the above, the cost-to-income ratio (overheads +
depreciation/gross operating margin) revealed an efficiency loss of 2.05 p.p.,
rising from 61.3% in 2003 to 63.3% in 2004.
As a result, the operating cash flow stood in 2004 at 68,622 thousand Euros,
at much the same level as in 2003 (68,616 thousand Euros), reflecting rates
of returns of 1.5% and 25.2% (1.5% and 26.2% in 2003) on average net
assets and shareholders’ funds, respectively.
Allocations to depreciation amounted to 8,984 thousand Euros, down 11.3%,
due to the disposal of the premises used for operations to Banif Imobiliária.
Likewise, allocations to provisions (net of reinstatement), prudently
determined, in compliance with the provisions of Bank of Portugal Notice
3/95, rose by 17.7%, to 34,541 thousand Euros. Extraordinary results
corresponded to a modest loss of 401 thousand Euros (as against a loss of
5,767 thousand Euros in 2003).
Report
and Accounts
86
04
Pre-tax profits for the period amounted to 24,696 thousand Euros, up by
5.7% from the figure of 23,364 thousand Euros recorded in 2003.
The tax burden rose by 16.2 p.p. in 2004 to 16.9% (0.75% in 2003) due to
measures adopted in 2003 with a view to efficient and effective fiscal
management. As a result, the profits for the period, after tax, were down by
11.6%, at 20,512 thousand Euros (23,190 thousand Euros in 2003).
87
’02
in 2004
OVERVIEW OF LEADING ECONOMIC AND FINANCIAL INDICATORS FORT BANKING BUSINESS UNDER THE BANIF BRAND
(In thousand Euros)
31/12/04
Net assets
Net lending
Net fixed assets
Client funds
Shareholders’ funds
Financial margin
Profits on financial operations (net)
Other earnings (net)
Banking Revenues
General Administrative Overheads
Operating Cash Flow
Depreciation
Provisions (net)
Operating result
Extraordinary gains (net)
Provision for tax on profits
Result for the period (net of tax)
ROE
ROA
Equity adequacy ratio (*) (**)
Basic equity adequacy ratio (*) (**)
Defaulting credit / total lendingl (*)
Defaulting credit (net) / total lending (net) (*)
Profits before tax and min. int. / av. net assets (*)
Banking revenues / av. net assets (*)
Profits before tax and min. int. / banking revenues (*)
Financial Costs + Depreciation / Banking Revenue (*)
Personnel costs / Banking revenues (*)
4,898,966
3,683,261
24,632
2,498,141
276,797
115,524
3,309
44,111
162,674
-94,052
68,622
-8,984
-34,541
25,097
-401
-4,184
20,512
7.53%
0.45%
12.07%
7.93%
2.37%
0.73%
0.55%
3.65%
9.30%
63.34%
31.96%
(*)- As per Bank of Portugal Instruction 16/2004
(**)- Figures recorded the Consolidated Banif, SA with Banif Finance Ltd and Banif (Açores) SGPS, SA.
Report
and Accounts
88
04
31/12/03 Absolute var.
4,126,690
3,229,141
23,852
2,317,896
268,286
104,509
6,708
40,510
151,096
-82,480
68,616
-10,130
-29,356
29,130
-5,767
-174
23,190
8.87%
0.51%
10.61%
7.68%
0.52%
3.40%
9.15%
61.29%
31.66%
722,275
454,119
780
180,245
8,512
11,015
-3,039
3,601
11,578
-11,571
7
1,146
-5,185
-4,034
5,365
-4,010
-2,678
Variation %
18.70%
14.10%
3.30%
7.80%
3.20%
10.50%
-50.00%
8.90%
7.70%
14.00%
0.00%
-11.30%
17.70%
-13.80%
2310.20%
-11.60%
1.1.2 Banco Comercial dos Açores, SA
The main strategy guidelines adopted for Banco Comercial dos Açores, (BCA)
were maintained and reinforced in 2004: client orientation, increased visibility
and market leadership, ongoing additions to the range of financial products
and services and a wider spectrum of distribution options. All this is designed
to lever sound organic growth, secure and adjusted to the markets in which
the Bank operates, which are the Azores and communities of Azorean
expatriates.
The strategic decision to continue operating in only these markets, which are
small in size increasingly competitive, means that in addition to policies and
measures to lever business, the Bank has to strive at all times to keep down
overheads, in order to obtain levels of productivity and profitability as closely
in line with the sector as possible. As a result, investment in new technologies
and re-engineering of processes, with a view to efficiency gains, are also areas
which require ongoing attention.
Two initiatives in 2004 merit special mention: (i) a mortgage lending
securitization operation and (ii) launch and conclusion of a new programme to
cut and rejuvenate the workforce.
The securitization operation, placed in full on the Portuguese and international
markets, with a balance as at 31 December 2004 of 275 million Euros, was
intended to assure the liquidity and funds needed for the Bank to maintain the
pace of its lending operations, given that the volume of primary resources was
not sufficient to support further development of lending. Since privatization,
the deposits to lending transformation rate has risen from 60% in 1996 to
115% in 2003.
89
’02
in 2004
The programme for reduction and rejuvenation of the workforce is intended
to reduce the structure, with improvements in productivity indexes,
accompanied by acquisition of the new skills needed to face the
challenges posed by the Bank’s operations.
A total of 40 employees left the Bank in 2004, as against the contracting of
16 new recruits.
Below we present an overview of the main developments in 2004 in BCA’s
commercial and central sectors.
- Commercial Activities
The Bank refined its segmented approach to the market and widened the
scope of intervention of the Sales Division, which brings together and
coordinates all of BCA’s sales activities.
In relation to the segment-based market approach, the Private and Corporate
Network was merged with the Business Centre Network, creating the Client
Centre Network which took over management of banking business with
companies and higher income clients, seeking thereby to obtain greater
internal synergies and a more unified approach to these markets.
The Sales Division took over coordination of the remote channels (e-banking),
allowing it to take on responsibility for all the Bank’s distribution channels:
traditional distribution networks (branches and client centres), the network of
agency channels, e-banking and the website.
The cross-selling and operational marketing units complete the new structure
of the Division. The cross-selling unit seeks to increase the Bank’s involvement
in the sale of products and services offered by other Banif Group companies,
Report
and Accounts
90
04
and the operational marketing unit is responsible to planning and running
ongoing specific campaigns for different market niches.
A pro-active approach was maintained over the course of the year to
innovation in BCA products and services. One major development in this field
was the launch of a new home loans product – BCA Casa Sénior, aimed at
older clients – and also the new site with the new corporate image, more
functions and greater interaction with user clients.
At the same time, the Bank made significant changes to its credit card
business, making it possible to increase the total number of cards by 50% in
2004.
Work continued in 2004 on the programme for improving the quality of the
branch premises, with renewed layouts, designed to make the premises more
comfortable, up-to-date and convenient. The revamping of all the branches
on Pico was concluded, a new BCA branch was opened in Lajes das Flores and
it was also possible to complete the project for a complete redesign of the
BCA Building in Angra do Heroísmo.
Thanks to intensive sales activity, the Bank recorded growth in lending in the
order of 96 million Euros (including securitized lending), corresponding to
an increase of 10% in the total balance under BCA management in 2003.
As in the previous year, it was lending to private clients which presented the
highest growth, at 13%, levered by home loans which are the single largest
component in the lending under the Bank’s management.
91
’02
in 2004
Similarly positive performance was recorded in client deposits, which were up,
at the close of the year, by approximately 57 million Euros, corresponding to
7% growth over the year, to which must be added all off-balance sheet
resources, namely investment funds.
- Central Areas
Work was concluded, during 2004, on the first phase of a new branch
software project shared by Banif and BCA. This is a project of structural
importance in the main technologies supporting operations, which in itself
represents a major and necessary step along the strategic path towards
standardization of procedures between the two commercial banks in the Banif
Group.
In addition to this specific project, all activities in supporting areas were
guided by strategic goals, with a view overall to economies of scale and gains
in efficiency and productivity, without undermining the Bank’s quality
standards and capacity to respond to the market.
This meant that other investment was needed in technological infrastructure,
such as in new voice and data communication networks, as well as continued
programmes for harmonization of the central departments shared by Banif
and BCA.
Balance sheet indicators, and especially those for overdue credit, were
likewise positive, given that the Bank closed the financial year of 2004 with a
total of overdue credit smaller, in absolute terms, than one year previously.
This performance meant that the indicators normally used in this field
remained at excellent levels, despite the home loans securitization operation
mentioned above. Indicators which measure lending quality, after writing off
a sum of 1,871 thousand Euros, evolved as follows:
Report
and Accounts
92
04
2004
2003
Overdue Credit/Total Lending
1.54%
1.42%
Defaulting Credit/Total Lending
1.27%
1.06%
At the close of the year, provisions for Credit – Doubtful Debts and Overdue
Credit assured 77.5% cover for the balance of lending in this situation (73.3%
one year earlier), with a coverage level rising to 133.4% if we also consider
the provisions for General Lending Risks. This indicator had stood at 128.4%
at the end of 2003.
Banco Comercial dos Açores remained in disagreement in 2004 with the
Decision of the European Commission on Adaptation of the Fiscal System to
the Specific Characteristics of the Azores Autonomous Region, which results
in the financial sector being excluded from application of the Corporation Tax
rates in the Azores. In any case, full provision has been made for the sums
relating to the difference in Corporation Tax rates, meaning that there is no
contingency in this respect.
It follows from the above that BCA was broadly successful in reaching the goal
of its general operational plan, allowing the Bank to maintain its positioning
and visibility, and also to improve the value chain offered. This, combined with
streamlining measures, allowed for a positive impact on results and other
performance indicators, as illustrated in the following table:
93
’02
in 2004
(In thousand Euros)
2004
2003
Variation %
Net assets
1,161,389
1,184,260
-1.9%
Client deposits
855,558
798,942
7.1%
Credit granted
731,073
908,948
-19.6%
Total lending under management
1,064,913
970,265
9.8%
Shareholders’ equity and results
84,572
85,685
-2.2%
Banking revenue
44,988
41,062
9.6%
Operating cash flow
18,748
16,393
14.4%
Cost to Income (*)
62.9%
66.5%
-3.6 p.p.
-2.6 p.p.
Produto Bancário (*)
Banking revenues (*)
34.2%
36.8%
Profits for the period
10,246
6,543
56.6%
ROE
13.8%
8.3%
+4.5 p.p.
PTP/ANA(*)
1.0%
0.7%
+0.3 p.p.
BR/ANA (*)
3.8%
3.6%
+0.3 p.p.
PTP/ ASF(*)
15.4%
10.5%
+4.9 p.p.
(*) Standard indicators as defined in Instruction 16/2004, of the Bank of Portugal.
Cost to Income: (Operating Costs + Depreciation)/Banking Revenue
PTP/ANA: Pre-Tax Profits / Average Net Assets
BR/ANA: Banking Revenue / Average Net Assets
PTP/ASF: Pre-Tax Profits / Average Shareholders’ Funds
The Bank had a workforce of 417 as at 31 December 2004, as against 441
one year earlier.
Report
and Accounts
94
04
1.1.3 Banif Leasing, SA
Banif Leasing, SA recorded total business in 2004 of approximately 164,804
thousand Euros, of which 125,045 thousand Euros related to equipment
leases and 39,759 million Euros to property leases.
These figures represent overall growth of 23.3% over the previous year, led
by growth of 45.5% in property leases.
Banif’s distribution networks contributed 45.2% of new equipment leasing
business, and were also the main source of property leasing contracts
(73.9%).
Total lending stood at 246,617 thousand Euros at the end of 2004, up 33.3%
from 2003. Four rollovers were effected in 2004, with a value of 29,201
thousand Euros, under the Atlantes 2 securitization operation, currently
underway.
The financial margin increased by 13.1%, rising from 4,970 thousand Euros in
2003 to 5,620 thousand Euros in 2004.
The operating lease yield rose in turn from 6,753 thousand Euros in 2003 to
7,501 thousand Euros in 2004, representing an increase of 11.1%.
The cost to income ratio, considering operating costs and leasing income,
improved, moving from 47.8% to 40.8%.
Net profits were up by 1756% in relation to 2003, standing at 1,643
thousand Euros. The cash flow generated stood at 5,124 thousand Euros,
representing growth of 36.8% over 2003.
95
’02
in 2004
Special mention should be made of the provisions constituted, amounting to
4,327 thousand Euros (up 19.8% on 2003).
As at 31 December 2004, the company had 37 employees.
(In thousand Euros)
2004
2003
Variation %
Total new business
133,618
164,804
23.3
Net assets
253,106
185,112
36.7
Total lending
246,617
185,047
33.3
13,688
12,070
13.4
Net profits
1,643
89
1,756.2
Pre-Tax Profits / Average Net Assets
1.2%
0.34%
246.4
Banking Revenue / Average Net Assets
3.5%
4.6%
- 23.7
Pre-Tax Profits / Average Shareholders’ Funds
19.4%
4.0%
380.9
ROE
12.0%
0.7%
1,527.8
ROA
0.7%
0.1%
1,250.1
Capital Adequacy Ratio
8.2%
8.8%
- 6.8
Cost to Income
(operating costs / Depreciation) Banking Revenue
40.8%
47.8%
- 14.7
Personnel Costs / Banking Revenue
15.7%
19.3%
- 18.5
Overdue Credit / Total Lending
1.9%
3.3%
- 43.6
Defaulting Credit / Total Lending
2.4%
3.6%
- 33.7
Default Credit, net / Total Lending, net
1.6%
1.9 %
- 14.7
Total Provisions / Overdue Credit
138.9%
112.1%
23.9
Report
and Accounts
96
04
1.1.4 Banif Crédito – Sociedade Financeira para Aquisições a Crédito, SA
The company concluded a total of 2,448 new contracts in 2004 (up 2.3% on
the previous year), representing business worth a total of 25,100 thousand
Euros, figures which correspond to overall growth in business of 10% in
relation to 2003.
This success was due to various factors:
- Increased commercial presence in the field, which brought in new suppliers;
- Building on the loyalty of suppliers, through agreements setting targets,
supported by annual recall and service standards;
- Launch of the Financial Advance product (at the trial stage), enabling
suppliers to acquire stocks.
The lending portfolio stood at 46.4 million Euros at the end of 2004, up
22.7% over the previous year.
Most contracts being financed continued to be for second hand vehicles and
the borrowers private clients.
Net profits stood in December at 586 thousand Euros, as against 406
thousand for the same period in the previous year, which represents growth
of 44.4%.
Nonetheless, the cost to income evolved favourably, from 37% to 36%.
In terms of organizational improvements, the company has successfully
centralized risk assessment and adjusted the lending decision procedure.
As at 31 December 2004, the company had 31 employees.
97
’02
in 2004
(In thousand Euros)
Total new business
2004
2003
%
25,100
22,830
9.94
Net assets
47,129
38,335
22.94
Net lending portfolio
46,418
37,829
22.71
21.03
Financial margin
4,407
3,641
4,785
4,373
9.41
Net Profits
586
406
44.39
PTP / Average Net Assets
2.0%
1.9%
5.26
Banking Revenue / Average Net Assets
10.2%
11.0%
-7.27
PTP / Average Shareholders’ Funds
18.5%
15.5%
19.35
ROE
12.2%
9.3%
31.18
ROA
1.24%
1.06%
16.98
Capital Adequacy Ratio
8.8%
9.7%
- 9.28
(Operat. Costs + Depr.) / Banking Revenue
36.0%
37.0%
-2.70
Personnel Costs / Banking Revenue
18.7%
19.8%
-5.55
Overdue credit / Total lending
5.5%
6.3%
-12.29
-15.15
Defaulting Credit / Total Lending
5.6%
6.6%
Defaulting Credit, net / Total Lending, net
0.86%
0.85%
1.18
Total Provisions / Overdue Credit
111%
113.44%
-2.40
1.1.5 Banif Rent – Aluguer, Gestão e Comércio de Veículos Automóveis, SA
Banif Rent concluded a total of 851 new contracts in 2004, with an overall
investment value of 11,177.3 thousand Euros. These successful business
figures result to a large extent from the action plan in the last quarter, with
the launch of a new sales team and the Banif Group distribution channels,
based on a new strategy for Banif automobile products.
Report
and Accounts
98
04
Banif Rent closed the year with a fleet of 828 vehicles, corresponding to an
equal number of fleet management contracts, of which 457 included a
maintenance contract. In view of the specific criteria for depreciation of the
fleet and the fact that the company has recently started business, pre-tax
results stood at a loss of 488,116 Euros, and the operating margin rose to
966 thousand Euros. It is hoped that with the level of business expected for
2005, the company will be able to reach breakeven point by the end of the
first half, turning around its operating results from the second half onwards.
Fresh energy was imparted to the company’s sales organization in 2003, with
various training initiatives involving the Banif distribution networks, including
both branches and business centres. This served to kick-start the sales team,
promoting BanifRent as a competitive vehicle solution for the market, and
giving priority to offering vehicles to the Banif Group’s client base.
Business in the final quarter can therefore be considered as clearly influenced
by these initiatives, with the internal organization of the company benefiting
from this positive trend, which resulted in gains in effectiveness. This had a
large impact on the organizational culture of the company, and also on the
range of renting products, with the emphasis on automobile products
designed for the private client, business and small company sectors, for which
a specific communication plan was developed in the Bank’s sales networks.
1.1.6 Banco Banif Primus, SA
Banco Banif Primus SA centred its activities in 2004 on the development and
expansion of commercial lending and foreign trade operations, with medium
and large companies, as well as making determined efforts to bring in deposits
for its lending activities from its clients and financial institutions, in order to
make it less dependent on external resources.
99
’02
in 2004
The strong commitment to commercial banking operations in Brazil led Banif
Comercial SGPS, SA to complete, in 2004, its acquisition of 100% of the share
capital of Banco Banif Primus, and to boost its holding in Banif Primus
Corretora, in which it now holds 75%.
In order to gain a higher profile for the Banif brand in Brazil, and to make it
better known to clients, it was decided to alter the name of the commercial
bank to Banif Banco Internacional do Funchal (Brasil) S.A., a process which is
at an advanced stage of approval by the Brazilian Central Bank.
Also as part of this strategy of expansion and development, it was decided
during the financial year to extend the branch network. A branch in Barra da
Tijuca, Rio de Janeiro, and another in the region of Jardim Anália Franco,
Tatuapé, in São Paulo, are at the final stages of construction and in the process
of inaugurating their services. These locations were chosen as corresponding
to strategic areas with great potential for bringing in new clients and serving
the existing clientele, and also to areas with a strong presence of Portuguese
expatriates and descendants of Portuguese immigrants.
In order to support steady and stable growth in commercial banking business
in Brazil, Banif Comercial SGPS, SA increased the share capital of the Bank to
2.8 million Euros, in October 2004. This was further complemented, in
December 2004, by an issue of subordinated bonds by the Bank, with a value
of 5.2 million Euros. The Bank therefore closed the financial year of 2004 with
total shareholders’ funds of 13.0 million Euros, 32.7% up on the previous year,
when this total had stood at 9.8 million Euros.
Report
and Accounts
100
04
In developing its business, the Bank kept to a policy of controlled growth and
expansion of lending, with special care to the duration of loans. This also
involved concentrating on lower risk products and requiring security, in order
to minimize lending risks, seeking at all times to maximize the Bank’s returns.
Commercial lending, including foreign trade finance business, lending to
private clients with repayments deducted from salaries and transfers of local
authority and foreign loans, recorded stable and gradual growth over 2004,
closing the year at a total of 70.7 million Euros in lending, up by 19% in
comparison with the figure of 59.4 million Euros in the previous year.
In the field of short term finance, three foreign debt issues were made, on 1
March, 15 March and 5 November 2004, for totals of 12.5 million Euros,
12.5 million Euros and 17.5 million Euros respectively.
In September 2004, Banif – Banco de Investimento set up and distributed in
full an issue of trade related notes of 12.5 million Euros, resulting from the
securitization of Brazilian export credits, deriving from business
generated by Banco Banif Primus. Locally, a total of 38.2 million Euros was
brought in from clients and financial institutions, as at December 2004, in
order to support lending operations. This figure was 92% higher than the
deposits recorded in December 2003, which stood at 19.9 million Euros.
The Bank maintained a significant presence on the interbank markets,
especially in financing small and medium-sized banks, as in previous years,
remaining amongst the 20 largest banks in foreign exchange dealings in the
country, according to the ranking published by the Brazilian Central Bank.
101
’02
in 2004
The profits recorded in 2004 were strongly influenced by the stability
achieved by the country, as the abundant money supply increased
competition for credit between banks, resulting in a substantial
reduction in their spreads.
In this climate of fierce competition, which caused banks to lose revenues,
Banco Banif Primus presented excellent performance, with a net profit of 1.1
million Euros, supported by excellent results on the commercial
lending, foreign exchange and foreign trade portfolio.
(In thousand Euros)
2004
2003
Net Assets
162,064
178,740
-9.3%
Lending
70,803
60,346
17.3%
Client Deposits
35,763
17,516
104.2%
Shareholders’ Funds
13,038
9,820
32.8%
Cash Flow
2,552
-18
Net Results
1,057
-316
Report
and Accounts
102
Variation %
04
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’02
‘
OUR
VALUES’
YOUR UNIVERSE
Banif Group
Operations in 2004
Report
and Accounts
04
’02
in 2004
1.2 Banif Seguros SGPS, SA
The company continued to carry on its business in keeping with the legal
framework for holding companies.
The company’s activities were therefore relatively limited, consisting of
managing its holding in Companhia de Seguros Açoreana, SA.
Report
and Accounts
102
04
The balance sheet structure is based essentially on the financial holding of
approximately 23,325 throusand Euros, in the form of 3,792,500 shares
representing 52.31% of the share capital in Companhia de Seguros Açoreana,
SA.
However, in accordance with Accounting Directive no. 9, the company applied
the equity method in order to value this holding, with the result that the value
of the holding as at 31 December 2004 stood at 39,385 thousand Euros.
The company recorded a profit in 2004 of 6,726 thousand Euros in 2004, as
compared with 5,269 thousand Euros in 2003.
The company had no employees at year-end 2004.
1.2.1 Companhia de Seguros Açoreana, SA
Four leading facts merit attention with regard to the operations of Companhia
de Seguros Açoreana, SA (CSA) in 2004:
- The sustained trend towards a larger market share. In 1996, CSA had an
individual market share of 0.64%; today, this share stands at 3.7%. In life
business, the company has a 3.6% share, and in non-life business it rises to
3.9% (as per provisional data supplied by the Portuguese Insurance
Association).
- Consistent improvements in results and cash flow, and a financial and assets
situation which is increasingly sound.
- The extraordinarily good progress on projects for modernization and
automation of business support systems, with an impact on the
improvement of efficiency and productivity indexes.
- Consolidation of the process of reorganization and change, and bolstering
of the corporate culture and image.
103
’02
in 2004
In the field of modernisation of business, systems and operating platforms,
various projects in the field of automation and computerization of business
processes were launched and are currently being implemented.
These concern the process of issuing contracts in non-life business,
underwriting and claims management operations in life business and
management of legal department affairs. Work also proceeded on various
initiatives designed to automate a number of internal activities.
A project is currently underway for unification of policy holders, in order to
eliminate duplication and inconsistencies in the entities recorded in the
company’s data base.
Preliminary work is also in progress with a view to changing the operating
system to Windows XP.
The company website has been revamped, in terms of both image and
content. Açornet has proven to be a first-rate platform for communication
and interaction with the brokerage network, in view of the number of
registered users, which has already risen to 120. A number of new functions
have been developed and made available online, making this an increasingly
indispensable working tool for the sales network.
The contact centre platform has also been playing an increasingly important
role in supporting a wide range of company initiatives.
Improvements were also made in the course of the year to tools already
implemented, such as MGCOR and CRM, which are designed to boost and
lever sales activities.
Report
and Accounts
104
04
A number of pioneering initiatives were launched during the year, including a
home insurance solution and an insurance e-kiosk.
Work also continued on a number of projects of structural importance, which
include increasing cross selling and developing partnerships within the Banif
Group, by stepping up business in the assurfinance sector, and promoting sales
through the private and corporate client networks of Banif and BCA, as well
as through the distribution channels of Banif Leasing, Banif Crédito and Banif
Rent. Also in the field of assurfinance, programmes continued for involvement
of the CSA brokerage network in sales of banking and leasing products, with
some success.
A number of Group-wide initiatives were undertaken during the year,
including the design and implementation of a disaster recovery solution, and
a coordinated and integrated approach to implementation of IAS/IFRS
standards.
The company’s offices have been revamped, with the adoption of a standard
model, and a new functional design for internal circuits and organization has
been adopted.
A negotiation and relationship management platform is currently being
designed and implemented for dealings with external agents; in the first
phase, this platform involves only external agents in the automobile claims
area.
With a view to assessing, monitoring and improving performance in the
different areas of claims management, the SIGSIN Project has contributed to
improving the quality and availability of data associated with insurance sector
management information. This is a powerful tool, which provides extensive
105
’02
in 2004
information on business, allowing the user to interact in the creation of
statistics and comparative tables.
Another important development has been the start of a project in the field of
internal control, designed to establish methodologies for the assessment, followthrough, monitoring and mitigation of different operating risks, and at the same
time to provide formal descriptions in manuals of distinct business processes.
Work also proceeded on development and integration of software with the
Segurnet, and Açoreana took part in all projects and initiatives in this area.
The company further widened its product range, with the launch of two new
products, “IMED” and “InvestSeguro”, both of which offer in their specific
segments specialist and distinctive cover, in relation to the products of the
competition. Efforts also continued on repositioning and broadening the range
of products in the areas of life insurance (Opção Vital), property (Multi
Protecção Condomínio) and household insurance (Multi Familiar).
In order to publicise the brand and gain greater corporate visibility, partnership
agreements were signed with prestigious sports clubs, including Sport Lisboa
e Benfica, Sporting Clube de Portugal, Futebol Clube do Porto and Estoril Praia.
Finally, the drive to assert and consolidate a quality image in the market was
supported by the classification of CSA as best Life Insurance Company, for the
third year running, in the ranking published by Exame magazine, on the basis
of a comparison of a set of economic and financial indicators.
In economic terms, CSA’s business, measured through gross premiums written,
was in excess of 386 million Euros, of which 162.4 million related to property
business and 223.8 million Euros to life business, representing, respectively,
growth of 21.3%, 10.8% and 30.2% in comparison with figures for 2003.
Report
and Accounts
106
04
The market share grew from 3.4% in 2003 to 3.7%, overall, according to
provisional figures published by APS. But if we take life business alone, the
market share rose to 3.9% at the end of 2004.
Net profits stood at over 10.8 million Euros, 7.7% higher than in 2003, clearly
illustrating the company’s capacity to generate funds over the period.
The evolution of operating cash flow also reflects a dynamic of growth and
improvement in the company’s economic and financial situation, rising to a
total of 14.9 million Euros, 8.1% up on the figure recorded for 2003. In terms
of solvency, the solvency margin and the guarantee fund, calculated in
accordance with the model in force, show that Companhia de Seguros
Açoreana has surplus capacity for meeting its future commitments, with a
coverage rate of 123.2%.
Net assets were in excess of 679 million Euros, up by 18.1% from the previous
year, and shareholders’ funds rose from 64 million Euros to 75 million Euros
(up by 17.3%).
VARIATION 2003/2004
(In thousand Euros)
2004
2003
Life premiums written
223,770
171,846
Variation %
30.2%
Non-life premiums written
162,381
146,572
10.8%
Total premiums written
386,151
318,418
21.3%
Operating cash flow
14,925
13,803
8.1%
Net assets
679,606
575,423
18.1%
Net capital expenditure
622,999
519,249
20.0%
75,292
64,198
17.3%
Net profits
10,896
10,120
7.7%
107
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’02
‘
OUR
VALUES’
YOUR UNIVERSE
Banif Group
Operations in 2004
Report
and Accounts
04
’02
in 2004
1.3 Banif Investimentos SGPS, SA
The company operated in accordance with the legal framework for holding
companies, as defined by Decrees-Law nos. 495/88, of 30 December, no.
318/94, of 24 December and no. 378/98 of 27 November, concentrating
essentially on supervising and supporting its subsidiaries.
The Banif Group reorganized its international operations in 2004, and as part
of this Banif Investimentos SGPS, SA sold to Banif – Information and
Technology Holdings (now known as Banif International Holdings, Ltd.) its
entire holdings in Banif Financial Services, Ltd. and Banif Mortgage Company,
for a price of USD 128,156.00 and USD 401,134.00, respectively.
As part of the same wider operation, the company sold to Banif – Banco
Internacional do Funchal (Cayman), Ltd, 30% of Banif – Information and
Technology Holdings, for a total of 30,000 Euros, and acquired from
Conimbriga – Investments, Ltd., 15% of the share capital of Banif Securities
Holdings, for a sum of USD 180,000, giving it sole ownership
of this company.
The company made supplementary capital subscriptions of 1,064,000 Euros
to its subsidiary Banif Comercial SGPS, SA.
In view of the specific nature of the business carried out by companies of this
type, where results are derived from dividends received, the company
recognized as income the dividends to be distributed by its subsidiaries, in
accordance with circular no. 18/04/DSVDR of 5/03, of the Bank of Portugal,
and IAS no. 18, namely from Banif – Banco Internacional do Funchal
(Cayman), Ltd and Banif Comercial SGPS, SA, amounting to 1,817,064.56
Euros and 1,021,440 Euros, respectively.
Report
and Accounts
108
04
The company paid dividends to its sole shareholder, Banif SGPS, SA, of
1,162,061.23 Euros, from the Free Reserves.
In the course of the year the company received dividends from its subsidiaries
Banif Banco de Investimento, SA (1,500,000 Euros), Banif – Banco
Internacional do Funchal (Cayman), Ltd. (284,730.83 Euros) and Banif
Comercial SGPS, SA (851,700 Euros).
The company had no employees at the end of 2004.
1.3.1 Banif – Banco de Investimento, SA
Banif – Banco de Investimento, SA (“Banif Investimento”) is the Banif Group
company which currently centralises and co-ordinates all the Group’s national
and international business in the field of investment banking, namely the
activities of Banif Securities, Inc. (in the United States) and Banif Primus
C.V.C, S.A. (in Brazil).
Fund management business (securities, property and pension funds) and
venture capital business is carried on by subsidiaries of Banif Investimento,
whilst all other forms of business are carried on within the investment bank
itself.
In the course of 2004, an alteration was made to the structural organization
of the Bank, in order to bring it into line with the characteristics of the markets
in which it operates and also to encourage synergies and to promote the
ongoing specialization of its employees.
The change consisted of splitting the Investment Management Division into
the Securities Investment Management Division and the Property Investment
Management Division (specialization by product), as well as splitting the Sales
109
’02
in 2004
Division into the Cross-Selling Division and the Asset Management Products
Division (specialization by business area).
At the same time, some activities were relocated within the existing structure:
in April, the Corporate Finance and M&A Division changed its name to the
Project and Corporate Finance Division, taking over responsibility for project
finance activities, and at the end of the year the Division once again changed
names to the Financial Advisory Division, when it also took over responsibility
for securitization activities.
Also as part of this process, the Private Banking Division changed its name to
the Corporate and Private Banking Division, which is now primarily geared to
facilitating the process of attracting new clients (private and corporate),
encouraging synergies through cross-selling of Bank products and services
between these two client types.
In relation to subsidiaries, Banif Imo – Sociedade Gestora de Fundos de
Investimento Imobiliário, SA was merged in early 2004 into Banifundos –
Sociedade Gestora de Fundos de Investimento Mobiliário, SA, which company
changed its name to “Banif Gestão de Activos – Sociedade Gestora de Fundos
de Investimento Mobiliário, SA”. This merger made it possible, as from the
beginning of the financial year, to carry on all securities and property investment
fund management business in a single company; this is the first company on the
Portuguese market to manage both types of fund simultaneously.
Banif Investimento’s main asset, its own bond portfolio, stood at a total value
of approximately 211 million Euros at 31 December 2004. The most
significant alteration in this portfolio in 2004 was the increase in the relative
importance of structured finance securities, notably RMBS and CMBS, in view
of the objectives of diversifying into more stable classes of assets, and into
assets with a more interesting return/risk ratio.
Report
and Accounts
110
04
In trading of its own equity portfolio, worsening conditions on the main equity
markets in the second quarter of the year caused Banif Investimento to
redefine its investment portfolio. The portfolio originally consisted of
directional positions, and was thoroughly overhauled, in order to be able to
generate funds in an adverse market situation. The investment priorities are
now to reduce exposure to directional market risk, which allowed this portfolio
to close the year with a slightly positive balance in terms of results.
In relation to the funding policy, the existing structure was maintained, based
on a number of medium term resources, the Bank’s available capital, repo lines
granted by leading international banks and the issue of deposit certificates.
In the field of derivatives and foreign exchange operations, Banif Investimento
carried out a number of operations with a total nominal value of approximately
172.5 million Euros, associated in all cases with capital market operations,
meaning that they involved no financial risk for the Bank’s balance sheet.
As a result of the need to develop the Banif Group’s investment banking
business at international level, with the consequent fragmentation of
revenues, and the increase in the human and material resource structure of
Banif Investimento, combined with the fact that the financial year of 2003
had provided exceptional market conditions for both realizing substantial
capital gains on the bonds portfolio and for structuring and placing large scale
operations, the net results obtained by the Bank in 2004 were down by
approximately 21% on those recorded in 2003.
Nonetheless, this reduction in the Bank’s earnings was more than offset by the
increased net profits from its subsidiaries, and especially from Banif Gestão de
Activos, which doubled its results over 2003.
111
’02
in 2004
It should be noted that this structural change in the make-up of Banif
Investimento’s results fits in with the strategy mapped out for developing
more stable business areas with more consistent results, in order to
complement other results with a more cyclical nature, which depend on the
behaviour of the markets.
Banif Investimento generated banking revenues in 2004 of 11.5 million Euros,
corresponding to a cash flow of 3.5 million Euros and an individual net profit
of 1.8 million Euros:
(In thousand Euros)
Individual Accounts
2004
2003
Variation %
Net Assets
406,582.0
274,895.5
47.9%
23,586.0
23,298.4
1.2%
Banking Revenues
11,494.7
12,012.1
-4.3%
Cash Flow
3,476.8
4,787.8
-27.4%
Result for the Period
1,787.6
2,271.3
-21.3%
ROA
0.52%
1.01%
-
ROE
7.88%
10.25%
-
Cost-to-Income
79.27%
71.31%
-
Solvency Ratio
9.5%
12.60%
-
In consolidated terms, Banif Investimento’s net results were up by 10.6% from
2003 to 2004, and in 2004 the Bank generated banking revenues of 15.6
million Euros and cash flow of 5.7 million Euros:
Report
and Accounts
112
04
(In thousand Euros)
Consolidated Accounts
2004
2003
Variation %
Net Assets
405,140.4
273,382.4
48.2%
26,341.0
24,399.9
8.0%
Banking Revenues
15,627.2
14,315.3
9.2%
Cash Flow
5,692.8
6,042.9
-5.8%
Result for the Period
3,442.4
3,113.0
10.6%
ROA
1.01%
1.40%
-
ROE
13.98%
13.62%
-
Cost-to-Income
70.87%
67.78%
-
The operations of Banif – Banco de Investimento, S.A. in 2003 are described
sector by sector below:
1. Financial Advisory
In 2004, the Financial Advisory Division continued to proceeded with its
activities in connection with the provisions of financial advisory services and
support for the preparation of structured operations, whilst continuing to give
priority to the quality of the work done and ongoing follow-up of clients.
With regard to the scope of the activities of the Financial Advisory Division in
the field of financial consultancy, special mention should be made of the
active role taken by the Division (i) in the consultancy services provided to the
Azores Regional Government in connection with the privatization of EDA –
Electricidade dos Açores, SA; (ii) in the financial advisory services provided to
Lisbon City Council in connection with the privatization of EMEL – Empresa
Pública Municipal de Estacionamento de Lisboa and the respective company
113
’02
in 2004
valuation, and (iii) in the economic and financial valuation of a number of
companies in the Web-Lab SGPS, SA Group.
Reference should also be made to the advisory services provided to various
entities in the property sector, in connection with economic and financial
valuations of companies and projects, and in relation to market studies and
analyses.
In the course of 2004, Banif Investimento also structured and organized
Commercial Paper Issue Programmes for MTO SGPS, SA (the Martifer Group
holding company) and for Inapa – Investimentos e Participações, SA, as well
as taking part in a syndicated finance operation for TI GESTS GPS, SA, in
connection with the acquisition of Transinsular – Transportes Marítimos
Insulares, SA.
The Financial Advisory Division continued to play an active role in brokering
and placing public offerings. Of particular relevance were its participation in
the initial public offering of Media Capital SGPS, SA and its involvement in the
Compulsory Takeover Bid launched by Banif Comercial SGPS, SA for the shares
in Banco Comercial dos Açores, SA.
2. Capital Markets – Debt
Over the course of the year, Banif Investimento was involved in a total of 22
operations, including leadership and participation in syndicates for the
placement of various issues for international and Portuguese entities.
In terms of leadership of bond issues, one major project in 2004 was the
structuring of an issue of 5-year notes for Brasturinvest – Investimentos
Turísticos, SA (Pestana Group), with a total value of 18 million Euros, in
partnership with Banco Itáu Europa SA. In structured products for retail
Report
and Accounts
114
04
clients, the Bank was involved in the structuring of three operations for Banif
Group issuers, namely an issue of bonds indexed linked to the EUR/USD
exchange rate for Banif – Banco internacional do Funchal (Cayman), Ltd., with
a value of 12.5 million Euros, and two issues of cash bonds for the Offshore
Branch of Banif – Banco Internacional do Funchal, SA, with a total value of
USD 33 million, with interest indexed to the performance of the US Dollar
Libor Rate. In addition, Banif Investimento led a particularly innovative issue of
notes for Trade Invest, with a total value of 60 million Euros. The principal and
the interest for this issue were indexed to the lending risk of a set of carefully
selected assets included in 3 portfolios: one of lending risks of European and
US companies, one of sovereign risk of the Republic of Brazil and one of trade
finance operations of Brazilian companies.
Banif Investimento’s experience in the capital markets, accumulated over the
last 4 years, led to the institution being invited to take part in the
Underwriting Syndicate for various European issues, including the issue of
floating rate notes (“FRN”) by EBS Building Society, with a total value of 500
million Euros, the issue of FRN by Model Continente SGPS, SA, with a total
value of 100 million Euros, the issue of Sagres STC Explorer 2004 Series 1
notes, with a total value of 1,610 million Euros (Securitization of Fiscal Credits
of the Portuguese State) and also the issue of notes by ANAM – Aeroportos
e Navegação Aérea da Madeira, SA, with a total value of 50 million Euros,
guaranteed by ANA – Aeroportos de Portugal, SA.
In Brazil, a market where Banif Investimento continues to have a leading
position, the financial year wasmarked by close collaboration with Banco Banif
Primus, SA.
115
’02
in 2004
In this context, various issues were structured, including: two issues of
Deposit Certificates, with a total value of 25 million Euros, one issue of
Promissory Notes, with a total value of 17.5 million Euros, and one issue of
Subordinated Notes with a total value of USD 8 million. The Bank was also
involved in the Underwriting Syndicate for a number of issues of Notes by well
known international organizations, acting as Co-Lead Manager in the issue of
Fixed Rate Notes by BNP Paribas Brasil, SA, with a total value of USD 60
million, and as Manager in the issue of Fixed rate Notes by Banco Nossa Caixa,
with a total value of USD 100 million. Following the success of the MutiCurrency Commercial Paper Programme by Brazcomp 1 Limited (Votorantim
Group) in 2003, Banif Investimento was once again invited to take part in the
Underwriting Syndicate, acting as dealer in the renewal of this programme.
The Bank also took part in the banking syndicate for financing the IDB BSyndicated Loan Facility for Bandeirante Energia, SA, with a total value of USD
61.1 million.
In the derivatives segment, Banif Investimentos structured and carried out an
interest rate hedge for ANAM – Aeroportos e Navegação Aérea da Madeira,
SA, with a value of approximately 25 million Euros.
Two innovative financing operations (Schuldschein loans) were effected on
the international capital markets for the Regional Health Service, E.P.E. and
APRAM – Administração dos Portos da Região Autónoma da Madeira, SA, in
conjunction with ABN Amro Bank (Regional Health Service) and Barclays
Capital (APRAM), with total values of 75 million and 28 million Euros,
respectively.
Over the course of 2004, the main secondary markets for international fixed
income securities performed extremely well, especially as regarded the
evolution of credit spreads on Asset Backed Securities (“ABS”) and corporate
bonds in the automobile and telecommunications sectors, and in emerging
Report
and Accounts
116
04
markets. This situation allowed Banif Investimento to reach a record value for
trading on the secondary market, at over three thousand million Euros. A
further contribution to this excellent performance was made by the launch of
the market making service, through a Bloomberg electronic platform and by
the extension of fixed rate activities to the United States (Miami), through
Banif Securities Inc..
3. Capital Markets – Equities
In keeping with the trend in previous years, the financial year witnessed
increasing competition in the equity brokerage business. This situation,
combined with the modest performance of the main European and US
indexes, acted as a constraint on Banif Investimento’s brokerage revenue.
Gross brokerage commissions amounted to 1.93 million Euros in 2004, as
against 2.17 million in 2003. It should be noted that, despite the excellent
performance of the Portuguese equity market (now part of the Euronext
unit), the contribution of 42% made to the Bank’s revenues by this market
was not sufficient to offset the less favourable performance of business in
other markets.
The financial year of 2004 was also marked by the successful completion of
the process of concentrating sales and order reception activities in Lisbon
(with the closure of the units in Oporto, Madeira and the Azores). The
implementation of the sales service for institutional investors and the
extension of the scope of research activities acted as the main pillars for the
strategy of diversifying the revenue base in the business area. In the field of
research, organization into 3 coverage units, including Brazil (Banif Primus
CVC), the rest of Latin America (Banif Securities) and the Iberian Peninsula
(Banif Investimento) is helping to form the raw material for developing an
innovative and integrated concept of trading ideas. This approach will ensure
that a distinctive sales service is offered to Banif Investimento’s institutional
117
’02
in 2004
investors, and will encourage the synergies needed for the use of the local
brokerage platforms of Banif Securities (United States) and Banif Primus CVC
(Brazil).
Finally, as confirmation of the market’s recognition of the benefits of the
reorganization and restructuring of Banif Investimento’s brokerage business,
the Bank was invited to take a leading position (co-manager) in the IPO for
Media Capital (with a total value of approximately 217.4 million Euros), one
the largest operations of the year.
Thanks to efforts to diversify sources of revenue by market, trading on
foreign stock exchanges in 2004 represented 45% of total trading, as against
to 40% in 2003.
4. Asset Management
Asset management business was carried on by Banif Investimento, through
management of the assets of private and institutional clients, by Banif Gestão
de Activos – Sociedade Gestora de Fundos de Investimento Mobiliário, SA,
through securities and property funds, and by Banif Açor Pensões – Sociedade
Gestora de Fundos de Pensões, SA, through pension funds.
The strategy for the Asset Management Sector in 2004 was based on the
following central aims:
- To further foster the relationship with the Banif Group, boosting the
existing levels of cross selling and penetration rates for this type of product
with Group clients;
- To achieve repeated sales of investment funds to these clients;
Report
and Accounts
118
04
- To develop the relationship with companies and institutional investors
outside the Banif Group, in order to encourage these investors to put funds
into investment funds and asset management services;
- To maintain the emphasis on innovation, as reflected in the creation of new
investment funds.
As at 31 December 2004, the asset management sector had total assets
under management of 951.6 million Euros, as against 604.9 million Euros as
at 31 December 2003, representing growth of 57%.
4.1 Banif Gestão de Activos (Securities and Property Investment Funds)
In view of the strategic direction mapped out for the Asset Management
Sector, the Company’s central aims were to position its funds at above the
average level of returns for the respective classes, on a regular basis, to
promote a range of funds suited to the commercial interest they arouse and
to strengthen its relationship with the placement networks for its funds.
Following on from the success in 2002, when more than half of the
Company’s funds were in the Top 3 of their respective classes, and in 2003,
when 9 out of 12 funds were in the Top 5 of their classes, in 2004 Banif
Gestão de Activos positioned 7 of the 11 funds under management in the Top
5 for returns in their respective classes. This served to confirm the
consistency of our management performance. As a result, Banif Gestão de
Activos continues to be one of the investment fund management companies
with the best average ranking for the funds under management.
It should also be noted that Banif Gestão de Activos won 4 prestigious 1st
prizes in the Diário Económico / Standard & Poor’s Awards for the best funds
marketed in Portugal.
119
’02
in 2004
As at 31 December 2004, assets under management stood at 604.5 million
Euros, up 81% on the figure at year-end 2003. As a result of this, the market
share of Banif Gestão de Activos rose from 1.2% in December 2003 to
approximately 1.9% at the close of the financial year.
In securities funds and special investment funds, the assets under
management rose from 189 million Euros at the end of 2003 to 228.2 million
Euros at the end of 2004 (growth of 21%), whilst property funds continued
to grow at a fast rate, up from 144.9 to 375.3 million Euros, over the same
period, representing an increase of 159%.
One example of the company’s innovative approach was the launch and
placement of Art Invest – FEI, the 1st special investment fund, and also the
first art fund in Portugal. In April, Banif Gestão de Activos set up a new special
investment fund, Banif Gestão Patrimonial – FEI, which invests in traditional
assets (money markets, bonds and equities) as well as in property, hedge
funds, art, private equity, commodities or other alternative investments,
either directly or through other investment funds.
In 2004 the company set up to closed-end private subscription property
funds, Citation and Lusíadas, and in the second quarter also effected a further
increase of 40 million Euros in the capital of the Imogest closed-end property
fund.
These operations helped to boost the proportional importance of institutions
and companies from outside the Banif Group as investors in the funds under
management, a trend which the company will seek to encourage further in
years to come.
This significant increase in the company’s business was reflected in net profits
of 1,528.7 thousand Euros, more than double the results obtained in 2003.
Report
and Accounts
120
04
(In thousand Euros)
2004
2003
Net Assets
6,452.8
3,903.3
Variation %
65.3%
4,677.0
3,148.3
48.6%
Profits for the Period
1,528.7
758.9
101.4%
4.2 Banif Açor Pensões (Pension Funds)
The Company has been enjoying brisk business, reflected in contacts made
with more than 100 new companies, with a view to obtaining contracts for
pension fund management. This busy sales activity made it possible to gain
one more contract, at the end of the year, for setting up and managing a fund
for the Association of Official Auditors, and also won the company a place on
the shortlist for a number of other contracts.
The investment strategy pursued for funds under management remained
primarily conservative during the financial year, with equities representing a
relatively small part of total investment, at between 10% and 15%. Average
returns over the period stood at 6.3%, above the median for the sector, which
was 5.7%.
Assets under management rose from 125.4 million Euros at the end of 2003
to 151.9 million at the end of 2004, representing growth of 21%.
The net profit obtained by the company in 2004 stood at 181.7 thousand
Euros, as against 139.6 thousand Euros in 2003, corresponding to an increase
of 30%
(In thousand Euros)
2004
2003
Variation %
Net Assets
3,161.0
2,873.8
10.0%
2,771.4
2,589.7
7.0%
181.7
139.6
30.1%
121
’02
in 2004
4.3 Banif Investimento (Asset Management)
Asset management business was affected by the climate of geopolitical and
economic uncertainty prevailing in the financial markets over the course of
2004, which placed a brake on growth in the assets under management in the
period.
At the end of the year, Banif Investimento had total assets under management
of 167.6 million Euros, as against 135.5 million Euros in 2003, reflecting
growth, in these difficult circumstances, of 24%.
5. Cross-selling
After the huge growth in 2003 in cross-selling indicators for investment
products in the Banif Group marketing networks, the main strategic thrust of
the Banif Investimento’s Cross-selling Division was as follows:
- To increase repeat sales of investment funds and structured products to
Group clients;
- To promote the marketing of products designed for distinct client
segments, further strengthening the Group’s image of innovation (for
instance: the special investment funds Art Invest and Banif Gestão
Patrimónial);
- To develop the quality of investment product sales in the Group networks,
through training plans implemented by this Division.
Investment funds and structured products totalling 326 million Euros were
placed in 2004, 5% more than the figure of 311 million marketed in 2003.
Although structured products placed in 2004 amounted to only 149 million
Euros, as against 200 million Euros placed in 2003 (a reduction of 25%), the
increase in net placement of investment funds, which rose from 111 million to
Report
and Accounts
122
04
178 million Euros from 2003 to 2004 (an increase of 60%) more than offset
this decrease.
6. Corporate and Private Banking
In keeping with the strategy defined, Banif Investimento sought to bolster its
presence in the private banking segment, basing its activities on integrated
analysis of client needs and the provision of a set of solutions designed not
only to respond to the financial requirements identified, but also to offer
optimum performance in terms of assets and fiscal issues.
Private banking activities in 2004 were also geared towards broadening the
product range, and carefully selected products from outside the Group are
now included in our commercial approach and advisory service. As a result, it
was possible to adopt an investment strategy which whilst preserving out
clients’ assets allows us to construct investment solutions able to provide
good returns on the assets under management, with a view at all times to
increasing customer satisfaction and loyalty.
The strategy adopted led to a doubling of our direct client base, which at
year-end 2004 stood at approximately 240 clients. This increase made it
possible to adopt a structured commercial approach which, based on
significant knowledge of our clients, resulted in the doubling of assets under
management, and most significantly to doubling of assets under Discretionary
Management and the quadrupling of credit granted in this field.
7. Securitization
In addition to following through and monitoring the characteristics of
securitized contracts and the financial flows relating to the securitization
operations for the Banif Group’s mortgage lending, personal loans and leasing
123
’02
in 2004
contracts carried out in previous years, the Securitization Division also
provided support for a new mortgage lending securitization operations, with
a value of 281 million Euros, for Banco Comercial dos Açores, SA.
In the course of the year, the Securitization Division prepared and submitted
a number of proposals to potential clients, and contacts are currently being
made with a view to providing structuring services in this field.
8. Private Equity
NewCapital, Sociedade de Capital de Risco, S.A (“New Capital”) is the venture
capital company set up by Banif Investimento to carry on its private equity
business.
In the course of 2004, the Portuguese Business Association (AEP) and the
Luso-American Foundation for Development (FLAD) each took up a 20%
holding in NewCapital, leaving Banif Investimento with only 60% of the share
capital. This new partnership between Banif Investimento, FLAD and AEP for
the private equity sector will allow us to enjoy high potential for deal-flow in
terms of investment opportunities.
In the first half of 2004, NewCapital acquired from FLAD shares representing
6.5% of the capital of Sociedade Quinta de Pancas – Vinhos, S.A., and shares
representing 4% of the share capital of Empresa e Investigação de
Desenvolvimento Electrónico. At the same time, the company disinvested
from CPTP – Companhia Portuguesa de Trabalhos Portuários e Construções,
SA and Imobiliária Construtora Grão Pará.
At the end of the first half of 2004, NewCapital took over the management
of the CAPVEN Fund, and launched a new venture capital fund for qualified
investors - NEW EARLY STAGE FUND, which was formally incorporated on 2
Report
and Accounts
124
04
July 2004. In addition, NewCapital was selected as management company for
a new Venture Capital Fund for Qualified Investors, subscribed in full by IDE
Madeira, known as MADEIRA CAPITAL. This new fund started up on 10
September 2004.
NewCapital currently manages three venture capital funds, with total
committed capital of 16 million Euros:
a) CAPVEN Fund, with capital subscribed and paid up of 7.5 million Euros,
aimed primarily at investment in expansion of Portuguese SMEs, in keeping
with European Union criteria;
b) New Early Stage Fund, with committed capital of 4.5 million Euros, and paid
up capital of 1.8 million Euros, focussing on start-ups, early stages of
financing and innovative projects by Portuguese SMEs;
c) Madeira Capital Fund, with pledged capital of 4 million Euros and paid up
capital of 1 million Euros, for investment in SMEs based in Madeira,
focussing on start-ups, early stages of financing and innovative projects.
In March 2004, the CAPVEN Fund invested 158.25 thousand Euros in
Money Media – Edição e Publicações, Lda. (“Money Media”), the company
publishing Carteira magazine. Carteira is the first publication in Portugal
devoted exclusively to personal finance. Money Media also has a custom
publishing business. Since taking up the holding in Money Media, Carteira
magazine has been listed in Bareme Imprensa, a readership index for
periodicals, and the magazine has also recorded growth in subscriptions and
advertising revenue.
The CAPVEN fund also continues to own a holding, acquired in 2003, in
Serzedelo & Rocha Duarte, S.A., know for the Bluebird brand, a retail chain
specialising in clocks and watches. In both cases, the CAPVEN Fund has a 50%
holding and shareholders’ agreements were concluded in order to ensure
125
’02
in 2004
significant intervention by the Fund management body in important company
affairs.
Under the terms of the cooperation agreement signed between NewCapital
and Venture Capital Syndication Fund (VCSF) on 30 July 2003, NewCapital
applied for VCSF’s share in the subscription of participation units in a new
fund, the New Family Companies Fund, which is expected to be set up at the
beginning of the second half of 2005, with capital of 6 million Euros, with
VCSF holding a 45% share. The participation targets will be family SMEs well
established in the market, with high-profit or well-known products, brands or
services, but which are going through problems of family management or
succession. The fund is also designed to support MBO, MBI and LBO
operations in the transfer of family firms, providing them with dynamic and
competent management teams, which will ensure the sustainability of their
capacity for innovation and the continued existence of the company.
As at 31 December 2004, the company recorded total net assets of 3,091.0
thousand Euros, shareholders’ funds of 819.7 thousand Euros and net profits
of 53.0 thousand Euros.
(In thousand Euros)
2004
2003
Variation %
Net Assets
3,091.0
2,772.8
11.5%
819.7
789.1
3.9%
53.0
39.1
35.6%
Report
and Accounts
126
04
9. Investment banking in Brazil and the United States
The financial year of 2004 was the fist full year in which the Banif Group’s
investment banking activities, including operations in Portugal, Brazil and the
United States, was coordinated by Banif Investimento, and a number of
strategic decisions were adopted in this regard.
Some of these decisions were implemented in the course of 2004, such as
discontinuing our presence on the floor of the New York Stock Exchange and
a significant reduction in own portfolio operations by Banif Securities Inc..
Other decisions were at the final stages of implementation at the end of the
year, such as the capitalization of our broker in the United States (which took
place in early January 2005) and separating off our business in Brazil, with the
transformation of Banif Primus CVC into an Investment Bank (in operational
terms this has already been achieved, and legal formalization of the change is
expected during the first four months of 2005).
Other strategic decisions are still at an early stage of implementation, and
work on these will be completed in the course of 2005. These plans include
the private banking project based at the Miami office of Banif Securities Inc.
and the opening of a formal presence in Mexico.
Below we outline the Banif Group’s investment banking operations in Brazil
and the United States during 2004, carried out through Banif Primus CVC, SA
and Banif Securities Inc., respectively.
- Banif Primus Corretora de Valores e Câmbio
Formal applications were made in 2004 to the Brazilian Central Bank with a
view to reorganization, by separating investment banking business from other
operations, in line with the model adopted in Portugal. This process will involve
127
’02
in 2004
transforming Banif Primus Corretora de Valores e Câmbio, SA into an
investment bank, with the subsequent incorporation of a new brokerage firm.
Final approval of this transformation is now awaited from the Brazilian Central
Bank.
In the area of corporate finance and capital markets, the Bank has been
significantly active on the market, taking part in various operations including
some of a specialist nature.
The Bank acted as adviser to Aços Villares in the renegotiation of interest and
security terms for Metaltrust’s debt of R$ 90 million, issued in 1998, also by
Banif Primus.
Also in this field, Banif coordinated the 8th issue of CADIP bonds, with a value
of R$ 120 million. This was the first securitization operation for receivables
deriving from renegotiation of tax payments. CADIP is a company which
assists the State Government of Rio Grande do Sul in managing public
borrowing.
Banif Primus was also contracted as “registry bank” for bank credit notes
operation by Brascan Imobiliário, SA, structured by Banco Brascan, with a
value of approximately R$ 40 million.
The Bank also acted as exclusive financial consultant to SAG do Brasil, in
structuring mezzanine finance of US$ 16 million, maturing in 7 years.
Banif Primus Asset Management recorded growth very close to that of the
sector itself, broadening its base of institutional, corporate and private clients,
as well as adding new products to its management range. Assets under
management rose from R$ 167 million at year-end 2003 to R$ 192 million
at year-end 2004, representing growth of 15%.
Report
and Accounts
128
04
In 2004, Banif Primus Corretora de Valores e Câmbio reached a total of R$2
thousand million on the Brazilian stock exchange, four times more than in
2003, and well in excess of growth for the sector over the same period.
Econofinance, the broker’s homebroker channel, climbed two places in the
Bovespa e-brokerage ranking, ending the year in 6th position.
At the end of 2004, a new company, Beta Securitizadora, was incorporated
with a view to business in the property investment sector and for structured
receivables securitization operations.
- Banif Securities, Inc.
In order to streamline, focus and maximise the returns from Banif Securities,
Inc., a number of unprofitable activities were discontinued during the first half
of 2004. As a result, the company pulled out from the floor of the New York
Stock Exchange and significantly reduced trading on its own portfolio. These
structural changes to its business were reflected in a 40% reduction in
personnel and a 50% cut in costs as from the second half of the year.
The company then placed the emphasis on business with institutional clients
in the United States and on broadening its range, which resulted in an
improvement in the standard of services and in operational efficiency. A
number of investments were made in technological resources and the
contracts with the custodian and services providers were renegotiated.
At the same time, the company opened an office in Miami, geared to sale of
fixed income assets to institutional investors.
Also in the course of the year, Banif Securities Inc. turned its attention to
identifying and exploiting cross-selling opportunities with other Banif Group
companies, and examples of this were the dissemination in the United State of
129
’02
in 2004
research reports prepared in Portugal and Brazil by other Group companies,
with a view to attracting business for these companies.
The company recorded a net loss in 2004 of USD 824 thousand, a substantial
part of this being due to the costs incurred as a result of the decision to pull
out from the floor of the New York Stock exchange (representing
approximately 52% of the net loss) and to the investment in opening the
Miami office (which accounts for approximately 17% of this figure).
(In thousand USD)
2004
2003
Net Assets
4,544
5,482
Variation %
-17.1 %
59,4
476
-87.5 %
(824)
(521)
58.2 %
1.3.2 Banif – Banco Internacional do Funchal (Cayman), Ltd.
The Bank recorded a 5.1% increase in its clients portfolio in relation to 2003,
without this being reflected in a proportional increase in total deposits.
Deposits were in fact down by 16.6% on 2003, falling from USD 795.6 million
in 2003 to USD 663.5 million in 2004.
At the start of the year, new funds were brought in through a bond issue
(“Banif Cayman 4.5% Euro-Dollar, 2004/2007”), with a value of 12.5 million
Euros, placed in full through the Banif Group clients network. This issue was
then redeemed early in July 2004.
Report
and Accounts
130
04
On the same occasion, the Bank also proceeded with early redemption of four
other bond issues (“Banif Cayman – Banif Capital Portugal 2002/2005”,
“Banif Cayman Brazil Linked Notes 8,125%/2007 – Series A”, “Banif Cayman
Invest Europa, 2003/2007” e “Banif Cayman – Banif Capital Europa,
2003/2005”), for a total of 43 million Euros, then substituting these by a
single issue of notes worth 60 million Euros (Trade Invest Limited Global Asset
Backed Notes 2004/2007), most of which was also placed with the same
clients.
In connection with this last issue, the Bank issued 2 Deposit Certificates, for
48 million Euros and 12 million Euros, maturing in July 2007.
Lending business performed well, growing by approximately 39% in 2004, up
from USD 169.6 million to USD 235.4 million. Of this total portfolio, only USD
59.8 million concerns short term Brazil trade related operations,
corresponding to pre-export and export financing with well known companies
and banks. The remainder of the portfolio relates, almost entirely, to short
term financial credit operations for clients of the bank.
The Bank continued to conduct active financial business, with operations on
the money markets and foreign exchanges, almost all within the Banif Group,
which stood at approximately 81% of Total Net Assets at year-end 2004.
Assets were up by 41.9%, from USD 1,184 million at year-end 2003 to USD
1,668 million at the end of 2004, largely due to the significant increase in the
volume of three-way interbank operations, in which the counterparts were
other financial institutions in the Banif Group.
In operating terms, the Bank recorded substantial growth in net profits (up
from USD 447 thousand in 2003 to USD 3,667 thousand in 2004),
benefiting from significant reductions in allocations to provisions and
administrative overheads, down by 58% and 32% respectively on 2003, and
131
’02
in 2004
also benefiting from the positive performance of the financial margin, which
rose from USD 6.2 million in 2003 to USD 7.0 million in 2004.
The strong performance in these two items contrasted with a reduction in
profits from financial operations (USD 202 thousand in 2004, as against USD
981 thousand in 2003).
In the course of 2004, the Bank acquired a further 55% in the share capital of
BIH – Banif International Holdings (the former BITH – Banif Information and
Technology Holdings Ltd.), giving it now 85% control of the share capital. This
company is in turn the sole owner of Banif Mortgage Company and Banif
Financial Services.
- Finab – International Corporate Management Services
The Bank continues to own a 60% holding in Finab, a corporate management
company based in the Cayman islands.
The company recorded a significant increase in business in 2004, due to
increased sales efforts for Finab’s products and services, especially as regards
the incorporation of offshore companies.
Offshore incorporation services were also extended in 2004, as Finab is now
operating in other well-known jurisdictions.
Report
and Accounts
132
04
Thanks to these combined efforts, Finab incorporated a further 48 companies,
85% more than in 2003, and this was reflected in a 95% increase in
commissions charged by the company, which stood at approximately USD
181 thousand. Finab had 105 companies under management at the end of
2004.
(In thousand USD)
2004
2003
Variation %
Net Assets
1,668,105
1,184,097
40.88%
Client Deposits
1,480,731
1,043,724
41.87%
Lending
253,374
170,640
37.94%
-100.00%
Overdue Credit
0
3,000
53,404
49,577
7.72%
Financial Margin
7,019
6,234
12.59%
Net Results
3,667
447
720.36%
- International Private Banking
At the end of 2004, the Bank had total assets under management of close to
USD 851 million, divided between a total of 3,885 clients, consisting of
private individuals and offshore companies with medium/high financial
potential.
In view of the real needs and demands of the segment at which the Bank’s
services are aimed, where confidentiality, facility and availability are key
requisites, the International Private Banking division developed and
implemented an operating model which combines specialist and personalized
133
’02
in 2004
advisory services for each client, provided by a traditional account
manager, with sophisticated internet banking.
The Banif IPB Portal therefore represents a valuable facility for IPB clients,
combining the advantages of offshore banking with the security, convenience
and speed of the internet. It enables each client to consult his financial assets,
from any location, at any time of day, any day of the week, and also to carry out
various operations in relation to a vast range of products and services, in addition
to gaining access to information of use for managing his business affairs.
1.3.3 Banif Mortgage Company
Banif Mortgage Company (BMC) was incorporated in February 2002, and is
based in Miami, Florida (USA).
BMC’s main area of business is mortgage lending, but the company’s aims also
include taking up equity participations in property developments of proven
interest to the Group.
In the field of mortgage lending, the company not only finances the purchase
and/or construction of homes or investment property for the clients of Banif
International Private Banking, but also deals with finance for the purchase
and/or construction of commercial property for institutional clients. All
lending operations are based on a credit analysis and/or project feasibility
analysis, in addition to a valuation conducted by an independent firm. All
properties financed are mortgaged to the company.
In the course of 2004, the company increased its share capital by USD 1.2
million, from USD 300 thousand to USD 1.5 million. The company recorded a
total of 70 new operations, which represented lending of USD 47.7 million.
The average loan duration was 11 years, whilst the loan to value ratio stood
Report
and Accounts
134
04
at 56%. The average weighted interest rate was 6.12%. Commissions charged
to Clients in 2004 totalled USD 297 thousand, an increase of almost 300%
over the figures recorded in the previous year.
The budget for 2005 is fairly ambitious, envisaging new operations with a
value of USD 100 million, total income of USD 3.6 million and an operating
profit in the order of USD 1 million.
The following table shows the main operating indicators:
(Em milhares de USD / In thousand USD)
2004
2003
Variation %
Total Income
1,840
491
274.7%
Operating Profit
323
198
63.1%
Net Profit
213
149
43.0%
1.3.4 Banif Financial Services, Inc.
Banif Financial Services, Inc. was incorporated in 2001 and is based in Miami,
Florida (USA). The company operates in the US as a US Financial Adviser, with
the following mission:
- To develop and support the business of the International Private Banking
Division (IPB), through a team of private bankers who, from their based in
Miami, currently cover the Brazilian market, but who will soon extend their
activities to other countries, such as Venezuela, Argentina and Uruguay.
- To coordinate the entire process of creating, implementing and maintaining
IPB services and products with Banco Banif Primus and Banif Cayman, as
well as with other service producers, such as American Express and
Hemisphere National Bank.
135
’02
in 2004
- To support the structuring of trade finance operations by Banco Banif
Primus and to distribute these operations to institutional and IPB clients.
At the end of 2004, the company had a total of 70 clients, representing an
increase of 75% over the previous year. Total assets under management
almost quadrupled over the year, rising to a figure in excess of USD 22 million.
The following table shows the main operating indicators:
(In thousand USD)
2004
2003
Total Income
406
334
Variation %
21.6%
Operating Profit
78
(43)
281.4%
Net Profit
78
(51)
252.9%
The budget for 2005 points to total commissions in the region of USD 500
thousand, and a net profit of USD 100 thousand.
Report
and Accounts
136
04
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’02
‘
OUR
VALUES’
YOUR UNIVERSE
Banif Group
Operations in 2004
Report
and Accounts
04
’02
in 2004
1.4. Other Banif Group Companies
1.4.1 Banif Imobiliária, SA
Banif Imobiliária’s mission is to manage property “allocated to the operations
of the subsidiaries of Banif Comercial, SGPS, SA of the Banif Group”, through
rental of this property, especially to the Group’s commercial banks (Banif and
BCA). The company also carries on its business in connection with property
“not allocated to operations”, belonging to Group companies, located in both
Mainland Portugal and the island regions, with the prime objective of selling,
letting or else enhancing its value with a view to subsequent let or sale.
Report
and Accounts
136
04
As a result of the redefinition of the company’s remit, the total value of
property under the management of Banif Imobiliária, as at 31 December
2004, stood at 140.9 million Euros, which breaks down as follows:
- Property not allocated to operations: 41.5 million Euros
- Property allocate to operations: 99.4 million Euros.
In relation to disinvestment, sales recorded by Banif Imobiliária during 2004
stood at 5.5 million Euros. The company also negotiated new leases which will
generate annual income in the order of 85.3 thousand Euros and which
correspond to an average yield of 6.09%. Rentals collected during the period
totalled 6,455 thousand Euros, whilst commissions for services rendered
totalled 159 thousand Euros.
Total investment in the acquisition of property for operations stood at
approximately 6 million Euros.
It should be stressed that the company was active in efforts to enhance the
value of property, through contacts with local councils and other authorities,
and it is hoped that the result of this work will be visible in 2005.
(In thousand Euros)
2004
2003
Variation %
Net Assets
107,163
110,684
-3%
2,596
1,553
67 %
Profit for the Period
1,225
313
291%
137
’02
in 2004
1.4.2 BanifServ – Empresa de Serviços, Sistemas e Tecnologias de
Informação, ACE
Two highly important projects were launched in 2004 in the fields of financial
regulation and reporting, relating specifically to adaptation of information
systems to the requirements of the Basel II agreements and the new IAS/IFRS
rules.
As the provide of Information Systems (IS) services, BanifServ has a major
role to play in this process and in 2004 started work on some of the tasks
required for achieving these objectives. Although the work in this area
represented only a marginal proportion of BanifServ’s total workload, this
proportion is set to increase in 2005 (rising to an estimated 30% of the total
workload), and then to diminish gradually from 2006 onwards.
In addition to this new area of activity, business support operations in 2005
included the first phase of the new Branch software, which was installed in
237 points of sale (180 in Banif and 57 in BCA), between August and October
2004.
This new system not only increases considerably the number of automated
functions at the branch (28 “transactions” available in the previous system, as
against 87 in the first phase of the new software), but also significantly
improves response times, eliminated previously manual tasks and minimizing
failure risks in executing operations.
Over the last four years, the distribution channels have been a strategic focus
in the development of information systems, and support has continued for
e-banking business, with systems offering increased strength and availability.
Work started on installation of a Banif Group network of multifunctional
ATMs, a project expected to be completed in 2005.
Report
and Accounts
138
04
A number of similarly important systems have also been concluded and
implemented for sales support, the most important being that for
management of credit applications in connection with Cash Management
Accounts (the home loan and personal loan components were implemented in
2003, and in 2005 it is hoped to extend this support to corporate credit and
cards), the factoring and confirming system, a new system for deposit and
savings accounts which, on the basis of the product and service catalogue,
allows for the easy and swift launch of new products, the securities and funds
system which automates most of the functions needed in this area and
stabilized the processing of cheque clearance with decentralized imaging.
Special mention should also be made of the start-up of the commercial
protocol management system, the re-engineering effected on opening
accounts and contracts, now more ergonomic, easier to navigate around and
more effective, and support for the 50,000 Programme.
In the area of structural software, an access management and control system
was finalized which, on the basis of utilization profiles, makes it possible to
control all access to information and, in accordance with set parameters, to
determine automatically the access of each user to each business function.
This system complies with rules on traceability and auditability.
In the first half of 2004, BanifServ recorded income of 10,657 thousand
Euros (including 73 thousand Euros from financial and extraordinary gains), of
which 7,594 thousand Euros related to services provided to Group members
and 2,989 thousand Euros to work for BanifServ itself.
139
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’03
‘
OUR
IDENTITY’
YOUR UNIVERSE
Analysis of Individual and
Consolidated Financial Statements
Report
and Accounts
04
’03
Analysis of Individual
and Consolidated Accounts
1. INDIVIDUAL ACCOUNTS
Comparative analysis of the accounting documents reveals the following:
- Net assets stood at 440.4 million Euros, up 3.4% when compared with the
figure of 426.1 million Euros recorded at year-end 2003.
- The account for “shares in related companies”, which records all holdings in
other Group companies, totalled 272.4 million Euros, the same as the figure
recorded in 2003, as there were no changes in the company’s holdings.
- The account for “other assets” stood 152.9 million Euros at the end of
2004, up by 2.3%. This account includes shareholder loans to the
company’s subsidiaries (Banif Comercial SGPS, SA and Banif Imobiliária, SA),
totalling 138.6 million Euros.
- In the course of 2004, the company did not issue any bonds with the result
that, at the end of the year, the account for “debts represented by
securities” stood at the same value as at the end of 2003 (120 million
Euros) relating to two bond issues (Banif SGPS 2003/2006, with a total
value of 50 million Euros, and Banif SGPS 2003/2008, with a value of 70
million Euros) effected in 2003.
- The financial margin, including earnings from securities, stood at 16.3
million Euros at the end of 2003, representing growth of 9.8 million Euros
over the end of 2003, due to payment of dividends by subsidiaries totalling
17.2 million Euros, which was sufficient to cover the costs of interest on
the finance obtained.
- Operating cash flow stood at 15.6 million Euros (up by 5.4 million Euros on
2003).
Report
and Accounts
141
04
- Extraordinary results totalled 290 thousand Euros, down by 6.8 million
Euros, due to capital gains on the disposal of a 15.2% share in Banif
Comercial, in 2003.
- At the close of 2004, Banif SGPS recorded an increase in after-tax profit of
3,376 thousand Euros, in comparison with 2003, at a total of 15,819
thousand Euros.
CORPORATE ANALYSIS BANIF SGPS, SA
(In thousand Euros)
31/12/04
31/12/03 Absolute variation
Net assets
440,407
426,098
14,309
Variation %
3.4%
Shares in related companies
272,114
272,364
-250
-0.1%
Other assets
152,914
149,493
3,421
2.3%
Debts represented by securities
120,000
120,000
0
0.0%
289,852
283,999
5,853
2.1%
Financial margin
16,332
6,576
9,756
148.4%
0
0
0
-
Other income (net)
-174
-577
403
-69.8%
169.3%
Gross margin
16,158
5,999
10,159
General overheads
-550
-574
24
-4.2%
Cash flow
15,608
5,425
10,183
187.7%
-8.1%
Depreciation
-79
-86
7
Provisions (net)
0
0
0
-
Operating result
15,529
5,339
10,190
190.9%
-95.9%
290
7,104
-6,814
0
0
0
-
15,819
12,443
3,376
27.1%
142
’03
2. CONSOLIDATED ACCOUNTS
We have consolidate the accounts of Banif SGPS, SA, as parent company, with
those of its subsidiaries and associates, as required by Decree-Law 36/92, of
28 March 1992, and in accordance with the Technical Rules for Consolidation
of Accounts issued by the Bank of Portugal under the terms of article 7 of the
said Decree-Law.
Analysis of the Banif Group’s consolidated financial statements reveals some
of the main trends in the Group’s business and results in 2004:
- In 2004, Banif SGPS, SA, the Banif Group holding company, recorded
consolidated profits of 37.3 million Euros, up by 47.1% on the previous
year, thanks to expansion in business, reflected in the increase in both
deposits and lending, and also due to improve operational and fiscal
efficiency.
- This led to a corresponding improvement in the leading indicators of
profitability, with returns of 0.61% and 11.1% on average net assets and
average equity (as against 0.43% and 8.0% respectively, in the
previous year). The cost-to-income ratio also evolved positively, ending the
year at 62.8%, which represents an efficiency gain of 0.9 p.p. in 2004.
- Banif Group net assets increased by 13.0%, from 5,711.6 million Euros at
the end of 2003 to 6,455.7 million Euros at the end of 2004, thanks to the
effect of the situations indicated below.
- Loans and advances to client totalled 4,674.9 million Euros in 2004, up by
7.6% on the figure recorded in 2003. If we add to this figure the credit sold
through the BCA mortgage lending securitization operation, with a value of
281 million Euros, growth in this account would have stood at 14.1% for
the period.
Report
and Accounts
143
04
- Despite the difficult economic situation, continued tight controls of lending
risks, careful analysis and follow-through of operations and a consequent
reduction in new instances of default, combined with constant work at the
overdue credit balance, all contributed to ensuring that the quality of the
lending portfolio has been maintained at appropriate levels. As a result of
this, overdue credit continued to decrease as a proportion of total lending,
falling from 2.21% to 1.94%, whilst coverage of overdue credit by total
provisions for lending risks increased from 114.1% to 131.1% between
year-end 2003 and year-end 2004.
- Defaulting credit (defined, in accordance with Bank of Portugal Circular
99/03, as combining credit overdue by more than 90 days and doubtful
debts reclassified as overdue for the purposes of provisions) represented
2.25% of total lending at the end of 2004.
- The account for “bonds and other fixed yield securities” stood at 541.8
million Euros at the end of 2004, representing an increase of 64.8% over
the end of the previous year, and reflecting greater Group liquidity over the
year in question and greater involvement in capital markets operations,
both by Banif-Banco de Investimento and by the commercial banks in the
Group (Banif and BCA).
- The Banif Group’s net assets (including financial holdings) grew by 8.2%, to
159.7 million Euros at the end of 2004 (as against 147.7 million Euros
in 2003).
- Total Client Funds (deposits plus debts represented by securities) totalled
4,666.9 million Euros, having increased by 10.6% in comparison with 2003.
Current accounts recorded healthy growth, up by 19.5% to 1,398.4 million
Euros, whilst deposit and savings accounts contracted by 3.0%, to 2,461.2
million Euros. However, in the field of cross-selling, there was a substantial
144
’03
(cont.)
increase in the placement through the Group’s banking networks of
investment products (namely securities and property investment funds,
with growth of 39%, property leasing products, up by 82.2%, financial
insurance, up by 45.4% and non-financial insurance, up by 22.8%).
- The accounts for debts represented by securities rose by 57.4% over the
course of the year, standing at year-end at 807.3 million Euros. This total
includes, amongst other things, bonds and long term deposit certificates
issued by Banif SA, with a value of 117.7 million Euros, floating rate notes
issued by Banif Finance Ltd., with a value of 425 million Euros,
and bonds issued by Banif SGPS, SA, with a value of 120 million Euros,
placed with clients and institutional investors at home and abroad.
- Although the conversion ratio for client deposits into lending fell from
104.4% in 2003 to 101.8% in 2004 (down 2.6 p.p.), due to the fact that
growth in funds outstripped growth in lending, this ratio continues to make
it possible not only to maintain reasonable levels of liquidity but also to
ensure a balance between the Group’s positions in the interbank markets as
placer and taker of funds on these markets.
- The Banif Group’s solvency ratio, calculated in accordance with Bank of
Portugal instructions, rose from 9.8% to 10.0% from 2003 to 2004, as a
result of an increase in shareholders’ funds of approximately 95 million
Euros and an increase in weighted assets, deriving from growth of 907
million Euros in the Banif Group’s business. The Group’s shareholders’ funds
stood at 556.8 million Euros at the end of 2004 (461.8 million Euros at the
end of 2003). Tier I equity totalled at 356.1 million Euros at the end of
2004, whilst the solvency ratio stood at 6.4%.
Turning to the Banif Group’s Income Statement, we may point to the following
developments, which led to the final result described above:
Report
and Accounts
145
04
- The financial margin, including earnings from securities, totalled 171,206
thousand Euros, reflecting a substantial increase (12.2%) over the end of
2003, thanks to an increase in lending activity and a slight widening in
financial brokerage margins.
- Net earnings from banking services totalled 62,933 thousand Euros at the
end of 2004, up by 3.7% over the end of the previous year. Commissions
and other income from baking services totalled 46,173 thousand Euros, up
a hefty 30.4%, reflecting the Banif Group’s growth in new business areas,
where commissions and other income can be generated. This account
decreased as a proportion of the Group’s gross operating margin, from
26.8% at the end of 2003 to 25.7% at the end of 2004.
- General administrative overheads stood at 139,717 thousand Euros at the
end of 2004, up 7.3% on the end of 2003. This was due to increases of
8.8% in personnel costs and 5.2% in third party supplies and services. The
increase in staff costs, which totalled 81,883 thousand Euros at the end of
2004 (75,262 thousand Euros in 2003) pushed up the average cost per
employee by 5.3%, from 26.7 thousand Euros in 2003 to 28.1 thousand
Euros in 2004. In connection with other overheads, the slowdown in
growth (5.2% in 2004, as opposed to 21.1% in 2003) was achieved by
continuing with a management policy based on tight control of
consumption, streamlining and synergies in the control of costs at Group
level. As a proportion of the gross operating margin, this account fell from
57.59% at the end of 2003 to 56.96% at the end of 2004.
- The Banif Group’s cost-to-income ratio (Operating Costs + Depreciation /
Gross Operating Margin) revealed an efficiency gain of 0.9 p.p., falling to
62.8% at the end of 2004 (63.7% in 2003).
146
’03
(cont.)
- As a result of growth in the Group’s business and improvement performance
in its main banking sectors, the Banif Group’s operating cash glow continued
to grow at a rate of more than 10%, standing at 105,579 thousand Euros,
as against the figure of 95,924 thousand Euros recorded in the previous
year.
- The Group recorded negative extraordinary results of 1,630 thousand
Euros. The reduction of 9,623 thousand Euros in relation to 2003 was due
to the fact that losses had been recorded in that year in connection with
frauds at Banif and BCA, as reported at the time.
- The Banif Group recorded significant growth (47.1%) in net after-tax
profits, which rose from 25,358 thousand Euros at year-end 2003 to
37,306 thousand Euros at year-end 2004, despite a rise in the tax burden
from 13.95% to 18.73%.
Report
and Accounts
147
04
COMPARATIVE ANALYSIS - Banif Group
(In thousand Euros)
31/12/04
Net assets
Gross lending
Net lending
Total net fixed assets (including financial holdings)
Total deposits
Client funds
Minority interests
Financial margin (including earnings from securities)
Other earnings (net)
Gross margin
Banking Revenues (*)
General Administrative Overheads
Cash Flow
Depreciation
Provisions (net)
Operating result
Minority interests
Results of non-consolidated associates (net)
ROE
ROA
Equity adequacy ratio (**)
Basic equity adequacy ratio (**)
Defaulting credit / total lending (**)
Defaulting credit (net) / total lending (net) (**)
Profits before tax and min. int. / av. net assets (**)
Banking revenues / av. net assets (**)
Profits before tax and min. int. / banking revenues (**)
Financial Costs + Depreciation / Banking Revenue (**)
Personnel costs / banking revenues (**)
6,455,684
4,750,385
4,674,911
159,735
4,702,159
4,666,915
346,826
90,622
171,206
11,157
62,933
245,296
256,139
-139,717
105,579
-21,024
-42,382
42,173
-1,630
-8,597
-1,652
7,011
37,306
11.10%
0.61%
9.95%
6.40%
2.23%
0.74%
0.80%
4.20%
12.20%
62.80%
32.00%
31/12/03 Absolute var.
5,711,558
4,406,902
4,343,287
147,685
4,453,679
4,219,451
327,676
42,186
152,534
12,976
60,672
226,182
235,096
-130,258
95,924
-19,577
-41,097
35,250
-11,253
-4,109
-1,267
6,737
25,358
8.00%
0.43%
9.80%
6.90%
744,126
343,483
331,624
12,050
248,479
447,464
19,150
48,436
18,672
-1,819
2,261
19,114
21,043
-9,459
9,655
-1,447
-1,285
6,923
9,623
-4,488
-385
274
11,948
Variation %
13.0%
7.8%
7.6%
8.2%
5.6%
10.6%
5.8%
114.8%
12.2%
-14.0%
3.7%
8.5%
9.0%
7.3%
10.1%
7.4%
3.1%
19.6%
109.2%
30.4%
4.1%
47.1%
0.60%
4.20%
8.90%
63.70%
32.00%
(*) Banking revenues = Gross margin + Results from associated companies excluded from the consolidated accounts
(**) As per Bank of Portugal Instruction 16/2004
148
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’04
‘
OUR
STRUCTURE’
YOUR UNIVERSE
Allocation of
Profits
Report
and Accounts
04
’04
Allocation
of Profits
Whereas:
1. In the financial year of 2004, Banif SGPS, SA obtained, as a result of its
specific activities as a holding company, an individual result of EUR
15,819,273.56 and a consolidated profit of EUR 37,306,111.00;
2. It has been the company’s policy to distribute profits to its Shareholders in
all financial years, in keeping with the results obtained and the need to plough
back profits;
3. All the requirements of the articles of association and the law, namely
articles 32 and 33 of the Companies Code, have been complied with;
4. The dividend proposed below corresponds to distribution of approximately
37.5% of the consolidated profits for the period, seeking thereby to provide
an adequate return for shareholders,
The Board of Director proposes: Under the terms of para. 1 b) of article 376
of the Companies Code and article 97 of the General Regulations on Credit
Institutions and Finance Companies, that the Results be allocated as follows:
Legal Reserve
Distribution of Dividends
Free Reserves
TOTAL
(*) Dividend of € 0.35 (thirty five cents) per share
Report
and Accounts
150
04
1,581,927.35
14,000,000,00(*)
237,346.21
15,819,273.56
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’05
‘
OUR
STRATEGY’
YOUR UNIVERSE
Closing Remarks and
Acknowledgements
Report
and Accounts
04
’05
Closing Remarks
and Acknowledgements
By letter of 11/01/2005, received by the Company on 21/01/2005, the
alternate member of the Audit Board, Dr. Pedro Manuel Travassos de Carvalho
(ROC no. 634), tendered his resignation from office.
By letter of 28/01/2005, received by the Company on 1/02/2005, the
alternate member of the Audit Board, Dr. Luciano Joaquim Jardim, tendered
his resignation from office.
We regret to record the death, on 3 February 2005, of the Chairman of the
Audit Board, Dr. Carlos Alberto Rosa.
In closing this report on the company’s operations in 2004, the Directors
would like to thank the Audit Board and the Advisory Board for their ready
support and co-operation throughout the year.
THE BOARD OF DIRECTORS
Horácio da Silva Roque – Chairman
Joaquim Filipe Marques dos Santos - Vice-Chairman
Carlos David Duarte de Almeida – Vice-Chairman
António Manuel Rocha Moreira
Artur Manuel da Silva Fernandes
Artur de Jesus Marques
José Marques de Almeida
Report
and Accounts
152
04
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’06
‘
OUR
CAPITAL’
YOUR UNIVERSE
Financial
Statements
Report
and Accounts
04
’06
Financial
Statements
Banif SGPS, SA
INDIVIDUAL BALANCE SHEET
AS AT 31/12/2004
(In Thousand Euros)
31/12/04
ASSETS
GROSS
PROV. AND DEP.
31/12/03
NET
NET
1,217
940
272,364
272,364
8
87
1. Cash and funds with central banks
1,217
2. Sight deposits with Banks
3. Other loans and advances to Banks
4. Loans and avdances to Clients
5. Bonds and other fixed yield securities
a) Public
b) Other
c) Own shares and bonds
6. Shares and other variable yield securities
7. Shares and investments
8. Shares in related companies
272,364
9. Intangible fixed assets
258
250
10. Tangible fixed assets
(Of which: Property)
11. Own shares
12. Other assets
152,914
152,914
149,493
13. Accruals and deferrals
13,904
13,904
3,214
440,407
426,098
14. Loss for the period
TOTAL
440,657
250
(In Thousand Euros)
MEMORANDUM ACCOUNTS
1. Guarantees given and contingent liabilities
Of which:
1.1. Bills accepted and endorsed
1.2. Guarantees
1.3. Others
2. Commitments
Of which:
2.1. Sales with repurchase option
2.2. Others
TOTAL
The Accountant
31/12/03
0
0
The Board of Directors
Report
and Accounts
154
31/12/04
04
Banif SGPS, SA
INDIVIDUAL BALANCE SHEET
AS AT 31/12/2004
(In Thousand Euros)
31/12/04
31/12/03
27,400
20,000
LIABILITIES AND SHAREHOLDERS’ FUNDS
1. Deposits by Banks
a) On Demand
b) Term or prior notice
2. Client accounts
a) Savings accounts
b) On Demand accounts
c) Term accounts
27,400
20,000
3. Debts represented by securities
120,000
120,000
a) Bonds in circulation
120,000
120,000
b) Others
4. Other Liabilities
1,373
433
1,239
1,088
6. Provision for risks and charges
578
578
578
578
9. Paid up share capital
200,000
200,000
10. Issue premiums
58,214
58,214
11. Reserves
15,784
a) Provisions for pensions and other charges
b) Other provisins
7. Fund for general banking risks
8. Subordinated liabilities
The Accountant
14,425
(1,083)
12. Profit and loss account brought forward
13. Profit for the period
15,819
12,443
TOTAL
440,407
426,098
155
’06
Financial
Statements
Banif SGPS, SA
INCOME STATEMENT
AS AT 31/12/04
31/12/04
31/12/03
DEBIT
1. Interest and equivalent costs
9,240
5,271
2. Commissions
121
251
4. Administrative overheads
550
574
4.1. Personnel costs
145
127
4.2. Other Administrative Overheads
405
447
5. Depreciation in the period
79
86
26
307
11. Other taxes
53
326
12. Profit for the period
15,819
12,443
TOTAL
25,888
19,258
3. Losses on financial operations
6. Other operating costs
7. Provisions for outstanding credit and other risks
8. Provision for financial fixed assets
9. Extraordinary losses
10. Corporation Tax
The Accountant
Report
and Accounts
156
04
(in Thousand Euros)
31/12/04
31/12/03
CREDIT
1. Interest and equivalent earnings
8,397
1,887
2. Earnings from securities
17,175
9,960
316
7,411
25,888
19,258
3. Commissions
4. Profits on financial operations
5. Adjustments to provisions
6. Results in related companies not included in consolidated accounts
7. Other operating income
8. Extraordinary gains
9. Minority interests
10. Loss for the period
TOTAL
157
’06
Financial
Statements
Banif SGPS, SA
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2004
(In Thousand Euros)
31/12/04
ASSETS
GROSS
1. Cash and funds with central banks
228,907
2. Sight deposits with Banks
86,309
3. Other loans and advances to Banks
279,836
PROV. AND DEP.
43
31/12/03
NET
NET
228,907
277,056
86,266
85,288
279,836
120,643
4. Loans and avdances to Clients
4,750,385
75,474
4,674,911
4,343,287
5. Bonds and other fixed yield securities
542,435
596
541,839
328,811
a) Public
89,393
10
89,383
63,477
b) Other
453,042
586
452,456
265,334
100,859
9,843
91,016
75,792
55,288
48,084
c) Own securities
6. Shares and other variable yield securities
7. Shares in associated companies
8. Shares in affiliated companies not incl. in consol. accounts
55,288
9. Other financial holdings
5,552
307
5,245
4,336
10. Intangible fixed assets
54,527
34,632
19,895
21,824
11. Tangible fixed assets
180,155
45,561
134,594
121,525
(Of which: property)
117,369
11,709
105,660
103,745
12. Revaluation differences - equity method
2,070
220
1,850
2,057
13. Goodwill
26,908
12,101
14,807
16,013
16. Other assets
114,011
6,497
213,716
14. Unrealized share capital
15. Own shares
107,514
106,737
213,716
160,105
6,455,684
5,711,558
18. Consolidated loss for the period
TOTAL
6,640,958
185,274
(In Thousand Euros)
MEMORANDUM ACCOUNTS
31/12/04
31/12/03
1. Guarantees given and contingent liabilities
Of which:
1.1. Bills accepted and endorsed
1.2. Guarantees
1.3. Others
2. Commitments
Of which
2.1. Sales with repurchase option
2.2. Others
TOTAL
906,563
669,250
571,208
335,355
896,695
536,514
132,736
557,751
896,695
1,803,258
557,751
1,227,001
The Accountant
Report
and Accounts
158
04
Banif SGPS, SA
CONSOLIDATED BALANCE SHEET
(In Thousand Euros)
31/12/04
31/12/03
1. Deposits by Banks
842,568
746,996
a) On Demand
19,283
15,809
b) Term or prior notice
823,285
731,187
3,706,683
LIABILITIES AND SHAREHOLDERS’ FUNDS
2. Client accounts
3,859,591
a) Savings accounts
218,459
166,765
b) On Demand accounts
1,398,394
1,169,747
c) Term accounts
2,242,738
2,370,171
3. Debts represented by securities
807,324
512,768
a) Bonds in circulation
628,434
438,483
b) Others
178,890
74,285
4. Other Liabilities
55,524
31,379
175,973
126,516
6. Revaluation differences - equity method
3,602
3,629
7. Goodwill
6,207
8,468
8. Provision for risks and charges
49,356
43,833
43,833
a) Provision for pensions and other charges
b) Other provisions
49,356
9. Fund for general banking risks
796
1,854
10. Subordinated liabilities
210,447
153,597
11. Paid up share capital
200,000
200,000
12. Issue premiums
58,214
58,214
13. Reserves
56,214
49,220
14. Revaluation reserves
1,940
1,940
15. Profit and loss account brought forward
0
(1,083)
42,186
The Accountant
90,622
17. Consolidated profit for the period
37,306
25,358
TOTAL
6,455,684
5,711,558
159
’06
Financial
Statements
Banif SGPS, SA
CONSOLIDATED INCOME
STATEMENT
31/12/04
31/12/03
183,539
155,912
DEBIT
1. Interest and equivalent costs
2. Commissions
6,577
8,240
3. Losses on financial operations
95,010
88,786
4. Administrative overheads
139,717
130,258
4.1. Personnel costs
81,883
75,262
4.2. Other administrative overheads
57,834
54,996
5. Depreciation in the period
21,024
19,577
6. Other operating costs
13,030
5,023
7. Provisions for outstanding credit and other risks
72,782
60,795
8. Provision for financial fixed assets
1
1
9. Extraordinary losses
6,449
22,875
10. Corporation Tax
8,597
4,109
11. Other taxes
3,831
2,178
12. Results from associated companies
and aff. not included in the com. acc.
327
179
1,652
1,267
14. Consolidated profit for the period
37,306
25,358
Total
589,842
524,558
The Accountant
Report
and Accounts
160
04
(In Thousand Euros)
31/12/04
31/12/03
352,860
306,973
CREDIT
1. Interest and equivalent earnings
1,885
1,473
3. Commissions
52,750
43,649
4. Profits on financial operations
106,167
101,762
5. Adjustments to provisions
30,401
19,700
6. Results from associated companies and aff. not included in the con. acc.
7,339
6,915
7. Other operating income
33,621
32,464
8. Extraordinary gains
4,819
11,622
589.842
524,558
10. Consolidated loss for the period
Total
161
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’07
‘
OUR
MISSION’
YOUR UNIVERSE
Documentation Attached
to the Financial Statements
Report
and Accounts
04
’07
31 DECEMBER
2004
Figures in ‘000 euros,
save as otherwise indicated
1.1.2 Banif SGPS, SA - Consolidated Accounts
1.6 FINANCIAL HOLDINGS
Banif SGPS, SA, in its capacity as parent company of the Group, has a holding greater than or equal to 20% in the following companies:
Name and Registered Offices
% Holding
owned by
Banif Group (for
consolidation
Share capital
purposes)
Value
of Holding
(1)
Shareholders’
Funds
December
2004
(2)
Diff. between value
of holding (1) and
corresponding
Results
portion in
December
shareholders’
2004
funds (2)
Banif Comercial - SGPS, SA
Rua João Tavira, 30
Funchal
280,000
100 %
289,545
299,569
15,126
(10,024)
240,000
100% (1)
240,451
276,797
20,512
(36,346)
51,892
100% (1)
70,888
84,572
10,246
(13,684)
10,000
100% (1)
12,563
13,688
1,643
(1,125)
3,000
100% (1)
4,133
4,785
586
(652)
11,343
100% (1) (3)
17,197
13,175
1,057
4,022
20,085
100% (9)
24,932
22,131
2,045
2,801
750
100%
985
2,596
1,225
(1,611)
Banif – Banco Internacional do Funchal, SA
Rua João Tavira, 30
Funchal
Banco Comercial dos Açores,SA
Largo da Matriz, 42
Ponta Delgada
Banif Leasing S.A.
Av. Columbano Bordalo Pinheiro
Lt A – 81 2º Lisboa
Banif Crédito – SFAC, S.A.
Banco Banif Primus, SA
Av. República do Chile, 230-9º
Rio de Janeiro – Brasil
Banif ( Açores ) SGPS, SA
Rua Dr. José Bruno Tavares Carreiro
Edifício Sol Mar - Ponta Delgada
Banif – Imobiliária, S.A.
Avª José Malhoa, lote 1792,
1099-012 Lisboa
Report
and Accounts
163
04
% Holding
owned by
Banif Group (for
consolidation
Share capital
purposes)
Value
of Holding
(1)
Shareholders’
Funds
December
2004
(2)
Diff. between value
of holding (1) and
corresponding
Results
portion in
December
shareholders’
2004
funds (2)
Banif Seguros – SGPS, SA
1099-012 Lisboa
23,300
100%
23,325
23,702
(13)
(377)
8,750
100 %
8,729
13,382
2,477
(4,653)
20,000
100% (6)
21,879
23,586
1,788
(1,707)
30,835
100% (6)(12)
19,265
39,207
2,692
(19,942)
2,000
100% (5)
2,137
4,677
1,529
(2,540)
41
100% (2)
41
19
(3)
22
881
85% (4)
749
869
136
10
Banif Investimentos - SGPS, SA
Rua João Tavira, 30 - Funchal
(Âmbito Institucional
da Zona Franca da Madeira )
Banif – Banco de Investimento, S.A.
1099-012 Lisboa
Banif-Banco Internacional
do Funchal (Cayman) Ltd
P.O. Box 30124 Georgetown
Grand Cayman
Banif Gestão Activos, SA
Rua Tierno Galvan, Torre 3 – 14º
Lisboa
Banif (Brasil),SA
Alameda Jaú, nr. 389 – 14º Sala 141
São Paulo – Brasil
Banif Internacional Holdings, Ltd
Genesis Building- 3rd Floor
Grand Cayman
164
’07
% Holding
owned by
Banif Group (for
consolidation
Share capital
purposes)
Value
of Holding
(1)
Shareholders’
Funds
December
2004
(2)
Diff. between value
of holding (1) and
corresponding
Results
portion in
December
shareholders’
2004
funds (2)
Banif Securities Holding, Ltd
Genesis Building- 3rd Floor
Grand Cayman
1,548
100% (6)
1,448
743
(492)
705
272
100% (7)
94
152
57
(58)
1,165
100% (8)
1,333
(559)
(603)
1,892
1,101
100% (7)
1,175
1,412
156
(237)
26
60% (4)
15
78
51
(32)
780
100% (8)
1,210
(224)
(19)
1,434
Banif Financial Services, Inc
1001 Brickell Bay Drive
Suite 1712
Miami – USA
Banif Securities Inc
40 Wall Street 33rd floor
New York NY 10005-1304
U.S.A.
Banif Mortgage Company
Suite 1712
Miami – USA
FINAB
P.O. Box 30124
GeorgeTown – Grand Cayman
Cayman Islands, B.W.I.
Econofinance
Av. República do Chile, 230 - 8º andar
Cep 20031-170 RIO DE JANEIRO
BRASIL
Report
and Accounts
165
04
% Holding
owned by
Banif Group (for
consolidation
Share capital
purposes)
Value
of Holding
(1)
Shareholders’
Funds
December
2004
(2)
Diff. between value
of holding (1) and
corresponding
Results
portion in
December
shareholders’
2004
funds (2)
Banif International Asset Management
Genesis Building, 3rd Floor
P.O. Box 32338-SMB, Grand Cayman
Cayman Islands
37
100% (5)
37
55
13
(18)
1
100% (9) (13)
1
76,173
1,218
(76,172)
750
60% (5)
450
820
53
(42)
50
100% (10)
70
(141)
(15)
211
300
70% (1)
260
(514)
(488)
620
73
100% (11)
73
73
0
0
0
100% (11)
0
(45)
(7)
45
Banif Finance Ltd
PO BOX 1093 GT
Queensgate House
South Church Street, George Town
Grand Cayman
Newcapital
Lisboa
Sociedade Imobiliária Piedade
Av. José Malhoa, lote 1792, 9º
Lisboa
Banif Rent, SA
Com. Açores – San José
2 B North 33 rd Street
S. José Califórnia
Com. Açores – Fall River
1645, Pleasant Street
Fall River – Massachusetts
166
’07
(1) The holding indicated corresponds to that held by Banif Comercial SGPS, S.A.
(2) Held indirectly as follows: 20% by Banif, SA and 80% by Banif Investimentos, SGPS, SA
(3) Amounts consolidated with Banif Primus – Corretora de Valores e Câmbios, S.A. and Banif
Primus Asset Management
(4) The holding indicated corresponds to that held by Banif Cayman, Ltd.
(5) The holding indicated corresponds to that held by Banif – Banco de Investimento, SA
(6) The holding indicated corresponds to that held by Banif Investimentos SGPS, S.A.
(7) Held by: Banif International Holdings, Ltd.
(8) Held by: Banif Securities Holding, Lrd.
(9) The holding indicated corresponds to that held by Banif – Banco de Internacional do
Funchal, SA
(10) Held by Banif Imobiliária, SA.
(11) Held by Banco Comercial dos Açores.
(12) Percentage control of voting stock is 100%, the share capital comprising: 26,000,000
ordinary shares with a unit nominal value of USD 1 and 16,000,000 non-voting preference
shares, with a nominal value of USD 1.
(13) Percentage control of voting stock is 100%, the share capital comprising: 1000 ordinary
shares with a unit nominal value of USD 1 and 75000 non-voting preference shares with a unit
nominal value of EUR 1.
Other holdings of more than 20% but excluded from the consolidated accounts are set out
in point 6 of these Notes.
A BanifServ, ACE has no share capital, and is therefore detailed in point 5.
1.8 ACCOUNTS RECEIVABLE - ASSOCIATES AND SUBSIDIARIES
Banif SGPS, SA, as the parent company of the Banif Group, has no credits over
associated or subsidiary companies.
Report
and Accounts
167
04
1.9 ACCOUNTS RECEIVABLE - AFFILIATED COMPANIES
In relation to consolidation operations, credits between related companies are detailed below:
2004
From:
With:
Banif, SA
Liquid Assets
in Banks
Other Investm.
in Banks
Credit
Granted
2003
Securities
Total
1,616
1,616
866
BanifServ
13,025
13,025
13,185
Banif (Cayman), Ltd
24,031
11,012
35,043
15,078
Banif Leasing
160,390
4,200
164,590
116,614
26,467
Banif Crédito
31,708
31,708
Banif Banco de Investimento
22,886
22,886
44,295
154,565
154,568
172,260
BCA
3
SIP
248
248
240
Banif Comercial
4,000
4,000
12,000
10,026
10,026
8,008
Banif Rent
10,760
10,760
NewCapital
Banif (Açores) SGPS, SA
Banif Primus
286
236
3
Banif Investimentos SGPS, SA Banif, SA
393,580
39,675
15,212
448,470
409,535
5,646
5,646
5,842
5,646
5,646
5,842
Banif, SA
2,194
2,194
3
BCA
5
5
5
2,199
2,199
8
312
211
Banif, SA
110
Banif Cayman, Ltd
443
553
BanifServ
Total
Banif Primus
Banif, SA
202
443
202
755
2
2
2
2
211
168
’07
2004
From:
Banif (Cayman), Ltd
With:
Liquid Assets
in Banks
Other Investm.
in Banks
Banif, SA
24,505
908,778
Credit
Granted
2003
Securities
Total
Total
933,283
710,578
71,216
Banif Investimentos SGPS, SA
71,216
71,216
Banif Primus
14,966
14,966
BCA
FINAB
Banif Banco Investimentos
141
18,380
141
171
18,380
20,773
Banif Int. Holdings Ltd
1,321
1,321
1,424
Banif securities Holdings Ltd
5,931
5,931
4,972
Banif Finance
42,885
Banif Crédito
Banif, SA
908,778
93,575
34,164
9,017
1,079,402
836,914
7
7
7
Banif, SA
2,466
Banif (Cayman), Ltd
377
BCA
34,164
34,164
7
10
Banif Leasing
299
8
2,466
3,278
387
133
299
299
8
Banif SGPS
NewCapital
Banif Imobiliária
Banif, SA
5
1,133
2,120
2,120
Banif Primus
1,850
5,183
2,851
10
268
1,000
SIP
2,120
25
Banif SGPS
268
1,000
Report
and Accounts
169
8,263
10,500
04
299
5,280
11,881
1268
8,546
25
2,400
2,400
2,425
3,693
8,546
2004
From:
BCA
With:
Liquid Assets
in Banks
Other Investm.
in Banks
Banif, SA
1,235
272,972
Credit
Granted
Banif Primus
Banif Leasing
3,208
Banif crédito
Banif Banco Investimento
2003
Securities
5,900
5,900
2,000
4,958
7,993
998
276,180
Total
73,234
1,750
1,483
2,718
Total
274,207
8,648
998
998
1,483
10,500
287,546
94,725
Banif Int. Holdings
Banif (Cayman), Ltd
975
975
975
975
Banif Securities Holdings, Ltd
3,671
3,671
3,959
3,671
3,671
3,959
Banif Financial Services
Banif Mortgage
Banif Comercial SGPS, SA
Banif SGPS, SA
Banif Seguros
New Capital
15
15
15
15
Banif, SA
219
219
BCA
5
5
224
224
566
Banif, SA
1,177
1,177
860
BCA
40
40
40
1,217
1,217
900
Banif, SA
566
384
384
185
384
384
185
Banif
13
13
40
40
15
53
53
15
170
’07
2004
From:
BIAM
With:
Liquid Assets
in Banks
Banif Cayman
45
Banif Finance
Banif Cayman
Banif Gestão Activos
SIP
Other Investm.
in Banks
2003
Securities
Total
275
275
320
320
549,224
549,224
224,226
549,224
549,224
224,226
Banif
119
119
5,511
5,511
5,630
5,630
Banif, SA
Total
45
TOTAIS
10
10
3
10
10
3
2,394,723
1,597,516
615,169
1,579,750
Report
and Accounts
171
Credit
Granted
04
137,810
61,994
1.10 Inventory of Securities
Type of Securities
Currency
Quantity Denomination
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
Total Quoted Total Balance
Value
Sheet Val.
EUR
EUR
A SECURITIES - TRADING
74,402,514.88 74,402,514.88
Fixed yield securities
58,133,654.09 58,133,654.09
Issued by residents
Portuguese public debt
- Short term
OB TESOURO 5,25% 14/10/05
EUR
10,000.00
102.27%
102.27%
10,227.20
10,227.20
10,227.20
10,227.20
10,227.20
10,227.20
10,227.20
10,227.20
Issued by non-residents
58,123,426.89 58,123,426.89
Foreign public issuers
43,089,245.23 43,089,245.23
- Medium and long term
43,089,245.23 43,089,245.23
PORTUGUESE TREASURY BILLS
EUR
7,302,221.16
100.00%
100.00%
EUR
10,168,895.73
100.00%
100.00% 10,168,895.73 10,168,895.73
EUR
22,108,847.41
100.00%
100.00% 22,108,847.41 22,108,847.41
PORTUGUESE TREASURY NOTES
EUR
1,941,390.48
100.00%
100.00%
1,941,390.48
1,941,390.48
US TREASURY N/B 5 3/8 02/15/31
USD
1,468,320.00
106.78%
106.78%
1,567,890.45
1,567,890.45
Other non-residents
7,302,221.16
7,302,221.16
15,034,181.66 15,034,181.66
- Short term
4,476,263.52
4,476,263.52
BANK DEPOSIT CERTIFICATE
BRL
909,781.68
100.00%
100.00%
909,781.68
909,781.68
SECURITIZED DEBTS
BRL
8,681.18
100.00%
100.00%
8,681.18
8,681.18
RURAL PRODUCER BILL
BRL
34,396.34
100.00%
100.00%
34,396.34
34,396.34
DEBENTURES
BRL
2,285,834.23
100.00%
100.00%
2,285,834.23
2,285,834.23
172
’07
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
Value
Sheet Val.
EUR
EUR
PROPERTY RECEIVABLES CERTIFICATE
BRL
1,186,761.21
100.00%
100.00%
1,186,761.21
1,186,761.21
INVESTMENT FUND UNITS
BRL
50,808.87
100.00%
100.00%
50,808.87
50,808.87
EURO INVEST LIMITED 4 03/31/07
EUR
289,000.00
101.00%
101.00%
291,890.00
291,890.00
CSFB INTL 12/03/07
EUR
1,000,000.00
102.30%
102.30%
1,023,000.00
1,023,000.00
MARLIN (EMC-II) BV
EUR
1,652,698.38
100.60%
100.60%
1,662,614.56
1,662,614.56
GENL MOTORS ACCEPT CORP
USD
734,160.00
98.01%
98.01%
719,579.58
719,579.58
GENL MOTORS 8 3/8 07/05/33
EUR
2,000,000.00
108.10%
108.10%
2,162,000.00
2,162,000.00
MARBLE ARCH RESIDENTIAL SECURISATIO
EUR
3,000,000.00
100.75%
100.75%
3,022,500.00
3,022,500.00
GRANITE MORTGAGES PLC
EUR
1,000,000.00
101.00%
101.00%
1,010,000.00
1,010,000.00
BPI CAP FIN LTD
EUR
634,000.00
105.10%
105.10%
666,334.00
666,334.00
10,557,918.14 10,557,918.14
Variable yield securities
16,268,860.79 16,268,860.78
Issued by residents
14,004,353.56 14,004,353.56
- Shares
1,843,555.71
1,843,555.71
150,000.00
EUR
1.00
150,000.00
9.10
9.10
1,365,000.00
1,365,000.00
SONAE SGPS
30,000.00
EUR
1.00
30,000.00
1.07
1.07
32,100.00
32,100.00
BCP
20,000.00
EUR
1.00
20,000.00
1.89
1.89
37,800.00
37,800.00
BANCO BPI
40,000.00
EUR
1.00
40,000.00
2.98
2.98
119,200.00
119,200.00
EDP
50,000.00
EUR
1.00
50,000.00
2.23
2.23
111,500.00
111,500.00
2,016.00
EUR
0.50
1,008.00
18.49
18.49
37,275.84
37,275.84
139,287.00
EUR
1.00
139,287.00
1.01
1.01
140,679.87
140,679.87
PORTUGAL TELECOM
PT MULTIMÉDIA
TEIXEIRA DUARTE
Report
and Accounts
173
04
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
- Participation Units
BANIF IMOPREDIAL
Value
Sheet Val.
EUR
EUR
12,160,797.85 12,160,797.85
1,610,381.00
EUR
1.00
1,610,381.00
6.04
6.04
9,729,277.85
9,729,277.85
80,000.00
EUR
1.00
80,000.00
30.39
30.39
2,431,520.00
2,431,520.00
2,264,507.23
2,264,507.22
- Shares
2,251,208.88
2,251,208.87
1,669,294.82
BANIF IMOGEST
MILLENIUM
1,669,294.82
BRL
1.00
1,669,294.82
1.00
1.00
1,669,294.82
DIVERSOS
1,644.42
BRL
1.00
1,644.42
1.00
1.00
1,644.42
1,644.42
PHILIPS ELECTRONICS NV
3,150.00
EUR
1.00
3,150.00
19.51
19.51
61,456.50
61,456.50
UNILEVER NV
1,040.00
EUR
1.00
1,040.00
49.33
49.33
51,303.20
51,303.20
600.00
EUR
1.00
600.00
160.70
160.70
96,420.00
96,420.00
TOTALFINA ELF SA
DEUTSCHE LUFTHANSA REG
4,800.00
EUR
1.00
4,800.00
10.55
10.55
50,640.00
50,640.00
WAL-MART STORES INC
2,000.00
USD
0.73
1,468.32
38.78
38.78
77,556.66
77,556.66
BANK OF AMERICA CORP
2,000.00
USD
0.73
1,468.32
34.50
34.50
68,996.36
68,996.36
950.00
USD
0.73
697.45
76.38
76.38
72,562.91
72,562.91
30,000.00
EUR
1.00
30,000.00
0.11
0.11
3,300.00
3,300.00
2,250.00
CHF
0.65
1,458.29
43.57
43.57
98,034.00
98,034.00
13,298.35
13,298.35
499.00
EUR
1.00
499.00
26.65
26.65
13,298.35
13,298.35
GOLDMAN SACHS GROUP INC
PARMALAT FINANZIARIA SPA
HOLCIM LTD REGISTRED CHF 2 (NEW)
- Other securities
LLOYDS BANK TSB BANK PLC 6,625
174
’07
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
B SECURITIES - INVESTMENT
564,602,424.94 568,757,494.32
482,257,430.90 481,769,998.96
Fixed yield securities
Issued by residents
68,546,893.46 68,307,542.28
Portuguese public debt
41,795,667.63 41,148,033.09
- Short term
OB TESOURO 5,25% 14/10/05
32,672.00
32,325.74
32,672.00
32,325.74
EUR
32,000.00
101.02%
102.10%
OB TESOURO 97-23/02/07
EUR
5,704,267.00
104.18%
107.80%
6,149,199.83
5,942,753.29
OB TESOURO 98-23/06/08
EUR
100.00
101.59%
106.05%
106.05
101.59
OT TESOURO 4,875% 07
EUR
15,000,000.00
105.42%
105.35% 15,802,500.00 15,812,355.03
OB TESOURO 3% 2006
EUR
8,500,000.00
99.96%
100.60%
8,551,000.00
OB TESOURO 9,5% 23/02/06
EUR
1,250.00
110.95%
108.00%
1,350.00
1,386.92
OB TESOURO 5,45% 23/09/13
EUR
5,081,580.00
104.55%
112.01%
5,691,877.76
5,312,624.59
OB TESOURO 1999-07/2009
EUR
5,358,000.00
103.58%
103.90%
5,566,962.00
5,549,832.47
41,762,995.63 41,115,707.35
8,496,653.46
Other public issuers
2,069,089.71
2,033,178.16
- A médio e longo prazo
2,069,089.71
2,033,178.16
G R AÇORES 1992-2005
EUR
37,984.67
100.01%
100.00%
37,984.67
37,986.57
G R AÇORES 1993-2005 - 1º EMISSÃO
EUR
1,995,191.59
100.00%
101.80%
2,031,105.04
1,995,191.59
Report
and Accounts
175
Value
Sheet Val.
EUR
EUR
04
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
Value
Sheet Val.
EUR
EUR
Other residents
24,682,136.11 25,126,331.03
- Short term
13,386,771.37 13,386,771.37
Commercial paper
13,386,771.37 13,386,771.37
TERTIR
EUR
1,237,018.79
1.00
1.00
1,237,018.79
1,237,018.79
INAPA -INVESTIMENTOS, PARTICIPAÇÕES E GESTÃO, SA
EUR
4,100,000.00
1.00
1.00
4,100,000.00
4,100,000.00
JMA, SGPS, SA
EUR
1,680,763.08
1.00
1.00
1,680,763.08
1,680,763.08
SOMAGUE - ENGENHARIA SA
EUR
2,000,000.00
1.00
1.00
2,000,000.00
2,000,000.00
LISGRÁFICA - IMPRESSÃO E ARTES GRÁFICAS SA
EUR
1,250,000.00
1.00
1.00
1,250,000.00
1,250,000.00
EDA-ELECTRICIDADE DOS AÇORES 23ª EM
EUR
2,493,989.50
1.00
1.00
2,493,989.50
2,493,989.50
LISGRÁFICA 31ª,EM.
EUR
625,000.00
1.00
1.00
625,000.00
625,000.00
CARRIS 98-05
EUR
35,913.44
100.00%
100.00%
35,913.44
35,913.44
FNI 2003/2008
EUR
1,495,000.00
100.00%
100.00%
1,495,000.00
1,495,000.00
11,295,364.74 11,739,559.66
METRO 95-07
EUR
99,800.00
100.00%
100.00%
99,800.00
99,800.00
PARTEST 98-08
EUR
498,797.90
100.00%
99.50%
496,303.91
498,797.90
SECIL/CMP 95- 01/03/2005
EUR
71,826.39
100.00%
99.90%
71,754.56
71,826.39
SONAE IMOBILIARIA 98-05
EUR
473,843.04
99.93%
99.40%
470,999.98
473,496.32
EDP/1996-2006 - 22ª Emissão
EUR
154,627.35
100.00%
99.92%
154,503.65
154,627.35
FNACINVESTE/91
EUR
387,772.90
100.00%
0.00%
0.00
387,772.90
COBRE/87 - SÉRIE A
EUR
24,950.00
100.00%
0.00%
0.00
24,950.00
AGERG
EUR
24,950.00
100.00%
0.00%
0.00
24,950.00
BCPN 0 02/06/09
EUR
5,000,000.00
99.98%
99.93%
4,996,500.00
4,998,922.52
MODPLF FLOAT 18/03/09
EUR
3,450,000.00
100.00%
99.97%
3,449,034.00
3,450,000.00
CPDPPL 0 06/49
EUR
36,497.00
64.40%
70.02%
25,555.20
23,502,84
176
’07
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
413,710,537.44 413,462,456.67
Foreign public issuers
3,084,870.40
3,082,073.81
- Short term
3,084,870.40
3,082,073.81
BUNDESSCHATZANW 2 06/17/05
EUR
580,000.00
99.73%
99.91%
579,495.40
578,451.70
BUNDESSCHATZANW 4 1/4 03/12/04
EUR
2,500,000.00
100.14%
100.22%
2,505,375.00
2,503,622.11
International financial organizations
1,338,862.53
1,260,692.02
1,338,862.53
1,260,692.02
BEI/1996-2006
EUR
748,196.85
102.65%
108.37%
810,820.93
768,039.03
BEI/1997-2007
EUR
496,000.00
99.33%
106.46%
528,041.60
492,652.99
409,286,804.52 409,119,690.84
Other non-residents
- Short term
6,853,717.00
6,857,721.56
PORTUGAL TELECOM INT FIN 05
EUR
2,200,000.00
100.49%
100.07%
2,201,540.00
2,210,799.45
USIMINAS
USD
1,835,400.00
100.12%
100.50%
1,844,577.00
1,837,632.57
GENL MOTORS ACCEPT CORP 07/05/05
EUR
2,000,000.00
100.49%
100.41%
2,008,100.00
2,009,789.54
BANCO ESPIRITO SANTO 05
EUR
650,000.00
123.00%
123.00%
799,500.00
799,500.00
AAB 0 09/16/11
EUR
9,000,000.00
99.75%
99.71%
8,973,900.00
8,977,398.37
ABN FLT 16SET11
EUR
3,500,000.00
99.75%
99.71%
3,489,675.00
3,491,329.76
ALPHA 0 11/16/09
EUR
8,000,000.00
99.77%
99.71%
7,976,800.00
7,981,509.78
AMSTEL SEC, 15AGO2013
EUR
2,000,000.00
100.00%
100.25%
2,005,000.00
2,000,000.00
402,433,087.52 402,261,969.29
Report
and Accounts
177
Value
Sheet Val.
EUR
EUR
04
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
Value
Sheet Val.
EUR
EUR
ARENA 2004-II D
EUR
2,000,000.00
100.00%
100.00%
2,000,000.00
2,000,000.00
ARENA FLOAT 17OUT2051
EUR
1,500,000.00
100.00%
100.00%
1,500,000.00
1,500,000.00
AURUM INVESTMENTS SA
EUR
2,000,000.00
100.00%
100.00%
2,000,000.00
2,000,000.00
AUTOSTRADE FLT JUN11
EUR
10,000,000.00
100.51%
100.62% 10,062,250.00 10,050,800.59
AVOCA II-X B
EUR
1,000,000.00
100.00%
100.00%
1,000,000.00
AZOR 1 C
EUR
2,000,000.00
100.00%
100.19%
2,003,800.00
2,000,000.00
BAC 0 06/28/11
EUR
5,000,000.00
100.25%
100.25%
5,012,620.00
5,012,404.24
BANCAJA FONDO TIT ACT FLOAT 18ABR2035
EUR
2,000,000.00
101.64%
101.92%
2,038,440.00
2,032,733.05
BANCO ITAU EUR FLOAT 24JUL06
EUR
5,000,000.00
100.35%
100.39%
5,019,500.00
5,017,574.37
BBVA FLT JUN2016
EUR
2,500,000.00
100.00%
100.05%
2,501,250.00
2,500,000.00
BCO BRADESCO 3,625% 3JAN2007
USD
161,515.31
99.66%
100.00%
161,515.31
160,965.07
BCP F BK FLT OUT09
EUR
6,000,000.00
99.91%
99.93%
5,995,800.00
5,994,527.42
BEAR STEARNS FLOAT 30JAN2009
USD
2,202,481.46
100.11%
100.17%
2,206,225.68
2,204,863.25
BEAR STEARNS FLOAT OUT09
EUR
12,000,000.00
99.96%
BES FIN FLT OUT09
EUR
2,000,000.00
100.03%
100.03%
2,000,600.00
2,000,570.05
BK AMERICA FLT JUN11
EUR
5,000,000.00
100.11%
100.25%
5,012,500.00
5,005,362.53
BNP PARIBAS 3,875% 27DEZ2006
USD
734,160.49
99.66%
100.00%
734,160.49
731,667.37
BOOT 0 10/19/07 EMTN
EUR
6,000,000.00
100.15%
100.19%
6,011,400.00
6,009,196.60
1,000,000.00
99.95% 11,994,000.00 11,995,282.10
BPI CAPITAL FIN FLOAT PERP
EUR
500,000.00
105.11%
105.10%
525,500.00
525,550.00
BRADES 0 08/20/10
USD
1,835,400.00
100.00%
100.00%
1,835,400.00
1,835,400.00
BREBAN 0 11/03/06
EUR
1,400,000.00
100.24%
100.15%
1,402,100.00
1,403,363.95
BROOK 2004-1X CE
EUR
2,500,000.00
100.00%
100.00%
2,500,000.00
2,500,000.00
BROOKLANDS FLT DEZ54
EUR
2,500,000.00
100.00%
100.00%
2,500,000.00
2,500,000.00
BSC 0 01/30/09
USD
4,404,960.00
100.00%
100.17%
4,412,448.43
4,404,960.00
178
’07
Type of Securities
Currency
Nominal
Value
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
Value
Sheet Val.
EUR
EUR
BSC 0 10/20/09
EUR
3,500,000.00
99.91%
99.95%
3,498,250.00
C 0 06/03/11
EUR
8,000,000.00
99.79%
99.79%
7,983,200.00
7,982,921.12
CAMBER FLOAT 11FEV2052
EUR
2,500,000.00
100.68%
100.43%
2,510,750.00
2,516,970.36
CARDS FLT SET13
EUR
3,500,000.00
100.60%
100.60%
3,521,035.00
3,521,148.58
CASTA 1 C
EUR
5,000,000.00
101.04%
101.01%
5,050,671.60
5,052,195.52
3,496,889.68
CFC 0 11/24/08
EUR
5,000,000.00
100.20%
100.25%
5,012,500.00
5,010,000.00
CIT 0 05/13/09
EUR
2,500,000.00
100.00%
100.15%
2,503,750.00
2,500,000.00
CORSAIR JY FLT JUN07
EUR
4,000,000.00
99.94%
100.00%
4,000,000.00
3,997,676.11
DAIMLERCHRYSLER FLOAT 2JUL07
EUR
3,000,000.00
100.23%
100.26%
3,007,800.00
3,007,023.04
DCX 4 1/4 10/04/11
EUR
3,000,000.00
100.77%
100.88%
3,026,400.00
3,023,008.56
DELPH 2004-II C
EUR
1,500,000.00
100.00%
100.00%
1,500,000.00
1,500,000.00
DEU TEL FLT NOV09
EUR
15,000,000.00
99.91%
DZ BANK CAP FUNDING FLOAT PERP
EUR
1,815,000.00
103.35%
103.63%
1,880,793.75
EAUG 0 07/12/07
EUR
2,000,000.00
100.53%
100.52%
2,010,380.00
2,010,659.20
EIGER 1X C
EUR
1,743,183.83
97.03%
103.72%
1,807,982.25
1,691,352.44
EIRLES FLT OUT07
EUR
5,000,000.00
99.93%
99.84%
4,991,750.00
4,996,304.75
EMPOR 0 11/01/07
EUR
2,500,000.00
99.81%
99.76%
2,494,075.00
2,495,155.80
ESPSAN 0 10/08/09
EUR
8,000,000.00
100.01%
100.03%
8,002,400.00
8,000,548.04
99.86% 14,979,000.00 14,986,796.95
1,875,837.93
EURO INVEST LTD 4% 31MAR2007
EUR
411,000.00
100.30%
101.00%
415,110.00
412,239.27
EUROB 0 10/10/08
EUR
2,500,000.00
100.28%
100.25%
2,506,250.00
2,506,986.44
F 0 07/16/07
EUR
2,500,000.00
100.38%
99.97%
2,499,150.00
2,509,612.87
F 4 7/8 01/15/10
EUR
1,500,000.00
99.55%
99.98%
1,499,700.00
1,493,246.48
F 5 3/4 01/12/09
EUR
2,000,000.00
104.19%
104.13%
2,082,600.00
2,083,896.33
FCE BK FLT SET09
EUR
5,000,000.00
97.63%
97.03%
4,851,500.00
4,881,497.40
Report
and Accounts
179
Total Value
Nominal
EUR
04
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
Value
Sheet Val.
EUR
EUR
FRENCH RES ASSET FLOAT DEZ43
EUR
2,500,000.00
100.00%
100.24%
2,506,000.00
2,500,000.00
FRENCH RES ASSET FLOAT MAR43
EUR
3,250,000.00
100.52%
100.89%
3,278,925.00
3,266,766.61
FRIES 0 05/27/11
EUR
2,500,000.00
100.20%
100.15%
2,503,750.00
2,505,014.80
GALP 1 B
EUR
500,000.00
101.00%
101.02%
505,100.00
505,007.84
GAMA FLT DEZ11
EUR
5,000,000.00
100.04%
100.00%
5,000,000.00
5,002,096.77
4,986,497.66
GE 0 05/04/11
EUR
5,000,000.00
99.73%
99.57%
4,978,500.00
GMAC FLT JUL05
EUR
2,000,000.00
100.52%
100.40%
2,008,000.00
2,010,341.01
GOLDMAN SACHS FLOAT 21OUT08
EUR
7,500,000.00
100.48%
100.46%
7,534,500.00
7,535,876.94
GRAN 2004-3 2C
EUR
2,000,000.00
100.45%
100.61%
2,012,200.00
2,009,000.00
GS 0 10/21/08
EUR
2,500,000.00
100.27%
100.46%
2,511,500.00
2,506,809.50
HARBM 4X A3
EUR
1,500,000.00
100.00%
100.00%
1,500,000.00
1,500,000.00
HARVT IX B2
EUR
1,500,000.00
100.40%
100.39%
1,505,850.00
1,505,981.24
HBOS FLOAT PERPETUAL
EUR
2,500,000.00
99.95%
100.00%
2,500,000.00
2,498,750.00
HERTZ FIN. JUL07
EUR
1,500,000.00
99.86%
99.97%
1,499,490.00
1,497,954.96
HICDO 2004-1X A2A 3,05
USD
1,468,320.00
100.00%
100.00%
1,468,320.00
1,468,320.00
HICDO 2004-1X B1A
USD
1,101,240.00
100.00%
100.00%
1,101,240.00
1,101,240.00
HICDO 2004-1X B2 3,6
USD
1,468,320.00
100.00%
100.00%
1,468,320.00
1,468,320.00
HIPO-BANK 2007
EUR
1,745,792.65
100.00%
100.00%
1,745,792.65
1,745,792.65
HYPINT 0 02/23/07
EUR
2,500,000.00
99.85%
100.05%
2,501,250.00
2,496,334.80
INVPLC 0 10/12/07
EUR
2,000,000.00
99.86%
99.90%
1,998,000.00
1,997,293.59
ITAU 0 07/24/06
EUR
6,000,000.00
100.37%
100.39%
6,023,400.00
6,022,149.51
4,838,328.63
100.10%
100.25%
4,850,424.45
4,843,133.11
ITAU FLT MAR07
KONINKLIJKE KPN 21JUL2009
EUR
13,000,000.00
100.51%
100.50% 13,065,572.49 13,066,247.15
LADF III C1
EUR
1,500,000.00
100.00%
100.80%
1,512,000.00
1,500,000.00
LEEK FIN FLT MAR36
EUR
1,500,000.00
100.75%
100.73%
1,510,905.00
1,511,220.40
180
’07
Type of Securities
Currency
Nominal
Value
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
Value
Sheet Val.
EUR
EUR
LEHMAN B H ABR2011
EUR
19,000,000.00
100.34%
100.33% 19,062,700.00 19,065,011.63
MARL 1 C
EUR
1,652,698.38
100.60%
100.60%
MERRILL LYNCH FLOAT 22MAR11
EUR
23,000,000.00
100.01%
1,662,614.57
1,662,614.57
99.97% 22,993,100.00 23,002,766.01
METRO FLOAT OUT09
EUR
7,183,000.00
99.90%
99.94%
7,178,905.69
7,175,699.06
MIDGAARD FINANCE FLOAT 23ABR2029
EUR
1,500,000.00
100.00%
100.63%
1,509,450.00
1,500,000.00
MORGAN 97-07
EUR
349,300.00
99.55%
99.55%
347,728.15
347,728.15
MORGAN ST FLT JAN09
USD
2,936,641.95
99.97%
100.03%
2,937,522.94
2,935,843.32
MORGAN ST FLT JAN10
EUR
11,000,000.00
99.87%
MWD 0 01/15/10 EMTN
EUR
3,000,000.00
99.86%
99.88%
2,996,400.00
MWD 0 01/22/09
USD
4,404,960.00
99.94%
100.03%
4,406,281.49
4,402,275.38
NYMPH 2002-1 M 3,243
EUR
2,000,000.00
100.18%
100.07%
2,001,400.00
2,003,645.77
OTE 0 11/13/06
EUR
1,250,000.00
99.98%
100.28%
1,253,500.00
1,249,774.65
PARGN 7X B1B
EUR
1,500,000.00
100.76%
100.75%
1,511,250.00
1,511,386.23
PILLAR FOUNDING PLC 15SET2011
USD
3,450,552.97
100.00%
100.05%
3,452,278.25
3,450,552.97
99.88% 10,986,800.00 10,985,655.13
2,995,704.18
PREPS 2004-2 B1
EUR
1,000,000.00
100.00%
100.30%
1,003,000.00
1,000,000.00
PROMS COL-03 B
EUR
2,000,000.00
100.49%
100.46%
2,009,200.00
2,009,800.00
PROVI A04-1 C
EUR
1,250,000.00
100.00%
100.24%
1,253,000.00
1,250,000.00
PROVIDE FLOAT 27DEZ2039
EUR
1,910,029.51
99.70%
99.70%
1,904,299.42
1,904,213.13
PROVIDE FLOAT 28JUL2055
EUR
2,000,000.00
100.84%
100.83%
2,016,600.00
2,016,772.71
PRTP 0 10/22/07
EUR
4,000,000.00
100.09%
100.19%
4,007,600.00
4,003,498.91
RCI BANQUE FLOAT 17SET2007
EUR
1,000,000.00
100.54%
100.61%
1,006,100.00
1,005,394.60
RCI BANQUE FLOAT MAI2009
EUR
15,000,000.00
100.18%
100.18% 15,026,966.88 15,027,162.06
RMS 14X M2 3,597% 10JUN2036
EUR
2,000,000.00
101.38%
101.33%
2,026,600.00
2,027,544.75
SAECURE FLOAT 31AGO2070
EUR
2,000,000.00
100.83%
101.07%
2,021,400.00
2,016,579.24
SBERRU 0 10/24/06
USD
367,080.00
99.89%
100.50%
368,915.40
366,680.98
SLM FLOAT 26ABR2011
EUR
5,000,000.00
100.04%
99.87%
4,993,500.00
5,002,138.83
TEMPO 1 B
EUR
2,000,000.00
100.55%
100.00%
2,000,000.00
2,010,970.52
Report
and Accounts
181
Total Value
Nominal
EUR
04
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
Value
Sheet Val.
EUR
EUR
VOLKSWAGEN JAN 2007
EUR
6,000,000.00
100.00%
100.00%
6,000,000.00
VTB 0 06/22/06
USD
367,080.00
100.00%
100.07%
367,336.97
6,000,000.00
367,080.00
WINDM IIIX D
EUR
2,517,831.85
100.40%
100.47%
2,529,665.66
2,527,902.58
Variable yield securities
79,935,097.90 84,590,238.48
Issued by residents
32,067,270.66 36,055,887.48
- Shares
6,582,467.51
7,815,783.97
1,000,615.00
EUR
1.00
1,000,615.00
2.89
2.98
2,981,832.70
2,891,495.64
20.00
EUR
5.00
100.00
1.00
1.00
20.00
20.00
360.00
EUR
1.00
360.00
4.80
6.75
2,430.00
1,727.00
CIPAN
24,841.00
EUR
1.77
43,984.61
1.77
2.37
58,873.17
43,984.61
DIDIER & QUEIROZ, S.A.
50,000.00
EUR
5.00
250,000.00
3.00
2.96
147,870.00
150,000.00
BANCO BPI SA
BENFICA SAD
BRISA - Nom (Priv.)
EDP
FUTEBOL CLUBE DO PORTO
GALERIAS NAZONI
IMOVALOR
IMPRESA SGPS - NOM
INAPA
MACEDO & COELHO
124,350.00
EUR
1.00
124,350.00
2.68
2.23
277,290.40
333,495.33
23,000.00
EUR
5.00
115,000.00
3.32
2.54
58,420.00
76,295.93
750.00
EUR
1.00
750.00
9.98
4.99
3,741.00
7,481.96
19,890.00
EUR
4.99
99,251.10
14.12
15.66
311,477.40
280,766.85
23,648.00
EUR
1.00
23,648.00
6.23
5.80
137,158.40
147,416.48
416,372.00
EUR
5.00
2,081,860.00
5.58
2.75
1,145,023.00
2,323,029.37
188.00
EUR
4.99
938.12
0.33
0.03
5.64
62.04
PORTUGAL TELECOM
18,495.00
EUR
1.00
18,495.00
9.05
9.10
168,304.50
167,367.59
PT MULTIMÉDIA
10,250.00
EUR
0.50
5,125.00
11.33
18.49
189,522.50
116,165.00
REAL SEGUROS
2,116.00
EUR
5.00
10,580.00
107.76
46.91
99,261.26
228,014.49
SC BRAGA SAD
20.00
EUR
5.00
100.00
16.14
1.16
23.20
322.81
SEMAPA SGPS
58,265.00
EUR
1.00
58,265.00
3.97
4.10
238,886.50
231,162.05
SONAE SGPS
556,000.00
EUR
1.00
556,000.00
0.92
1.07
594,920.00
509,981.69
61,547.00
EUR
5.00
307,735.00
4.99
2.72
167,407.84
306,995.14
TERTIR - Terminais Portugal
182
’07
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
- Quota-shares
PRETÓRIA - VIAGENS E TURISMOS LDA
Value
Sheet Val.
EUR
EUR
475,603.80
475,603.80
5,736.18
EUR
1.00
5,736.18
1.00
1.00
5,736.18
5,736.18
469,867.62
EUR
1.00
469,867.62
1.00
1.00
469,867.62
469,867.62
ART INVEST
310,880.00
EUR
1.00
310,880.00
5.00
5.01
1,556,203.10
1,554,400.00
BANIF ESTRATÉGIA AGRESSIVA
498,570.00
EUR
1.00
498,570.00
2.78
2.81
1,400,532.99
1,387,869.31
BANIF IMOGEST
PORTICENTRO LDA
- Participation units
25,009,199.35 27,764,499.71
499,090.00
EUR
25.94
7,402,183.00
29.16
BANIFUNDO ESTRATÉGIA AGRESSIVA
24,975.00
EUR
5.00
124,875.00
5.00
2.85
71,151.28
BANIFUNDO ESTRATÉGIA CONSERVADORA
79,927.00
EUR
5.00
399,635.00
5.00
5.11
408,450.95
399,635.00
BANIFUNDO ESTRATÉGIA EQUILIBRADA
49,951.00
EUR
5.00
249,755.00
5.00
4.17
208,205.76
249,755.00
BANIFUNDO EURO ACÇÕES
FUNDO CAPITAL DE RISCO CAPVEN
30.92 15,432,923.11 14,551,575.40
124,875.00
1,299,278.00
EUR
5.00
6,496,390.00
5.00
2.25
2,929,222.25
6,496,390.00
600.00
EUR
5,000.00
750,450.00
5,000.00
5,004.18
3,002,509.92
3,000,000.00
0.00
47,867,827.23 48,534,351.00
- Shares
K FORCE
UNIÃO BANCOS BRASILEIROS
TELE NORDESTE CELULAR-CM RC
224,139.22
USD
0.01
37.61
5.08
8.15
40,745.91
25,375.16
6,000,000.00
BRL
0.00
16,482.61
0.01
0.00
11,287.24
71,566.11
2,298.00
BRL
0.27
631.28
0.00
0.00
2.57
2.07
300,000.00
BRL
0.27
82,413.05
0.12
0.32
97,103.49
36,877.20
1,500.00
EUR
1.00
1,500.00
50.00
50.00
75,000.00
75,000.00
9,247,146.75
9,145,754.85
AGGRESSIVE STRATEGY FUND
5,000.00
USD
73.42
367,080.24
72.60
75.45
377,246.82
362,983.56
BALANCED STRATEGY FUND
7,500.00
USD
73.42
550,620.37
83.39
86.14
646,038.03
625,421.19
BRAZILIAN BOND FUND
15,000.00
USD
73.42
1,101,240.73
73.28
73.15
1,097,271.20
1,099,207.62
BRAZILIAN EQUITY FUND
5,000.00
USD
73.42
367,080.24
88.75
93.43
467,153.58
443,729.00
CIA SIDERURGIA PAU PRF
SHOTGUN PICTURES
- Participation units
Report
and Accounts
183
208,820.53
5,000.00
04
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
USD
73.42
1,101,240.73
75.23
76.71
1,150,698.34
USD
73.42
734,160.49
88.29
92.51
925,084.61
882,938.01
15,000.00
EUR
100.00
1,500,000.00
107.05
110.41
1,656,213.00
1,605,785.25
Type of Securities
Currency
BRAZILIAN MONEY MARKET FUND
15,000.00
CONSERVATIVE STRATEGY FUND
10,000.00
EUROPEAN BOND FUND
EUROPEAN EQUITY FUND
EUROPEAN MONEY MARKET FUND
FINE ART FUND
PORTUGAL EQUITY FUND
Value
Sheet Val.
EUR
EUR
1,128,501.61
5,000.00
EUR
100.00
500,000.00
95.00
76.98
384,924.00
475,000.00
12,000.00
EUR
100.00
1,200,000.00
102.40
104.52
1,254,204.00
1,228,808.25
1.00
USD
0.73
0.73
734,160.00
734,160.00
734,160.00
734,160.00
5,000.00
EUR
201.00
351,500.00
111.84
114.95
574,770.00
559,220.35
11,475,418.58
100.00%
100.00% 11,475,418.58 11,475,418.58
- Other securities
39,179,775.63 39,179,775.63
ATLANTES Nº2 CLASS D NOTES
EUR
ATLANTIS CERTIFICATES Nº1
EUR
2,970,740.00
100.00%
100.00%
ATLANTIS mortgage nº1
EUR
12,942,979.89
100.00%
100.00% 12,942,979.89 12,942,979.89
MADRAGOA EXPEDIÇÃO SGPS - A
EUR
166,667.00
120.83%
120.83%
201,378.74
201,378.74
MADRAGOA EXPEDIÇÃO SGPS - B
EUR
166,667.00
120.83%
120.83%
201,378.74
201,378.74
MADRAGOA EXPEDIÇÃO SGPS - C
EUR
166,666.00
120.83%
120.83%
201,377.53
201,377.53
AZOR MORTGAGES PUBLIC LIMITED CO,
EUR
10,000,000.00
100.00%
100.00% 10,000,000.00 10,000,000.00
MONEY FUND SBGH
USD
1,186,502.15
73.42%
2,970,740.00
1,186,502.15
1,186,502.15
Subordinated securities
2,409,896.14
2,397,256.88
2,409,896.14
2,397,256.88
1,250,000.00
BAYER HIPO 05MAI2014
73.42%
2,970,740.00
1,250,000.00
EUR
1.00
1,250,000.00
100.00%
101.00%
1,262,500.00
20,000.00
EUR
0.00
99.76
97.20%
100.00%
99.76
96.96
100.00
EUR
0.60
60.00
66.82%
99.21%
59.53
40.09
OB CAIXA SUB, BCP/1995-2005
74,819,685.00
EUR
0.01
748,196.85
99.99%
100.00%
748,196.85
748,156.45
OB CAIXA SUB. ESSI/1996-2006
8,000.00
EUR
49.88
399,040.00
99.98%
100.00%
399,040.00
398,963.38
BANCO TOTTA & ACORES 07/06
CAIXA ECO MONTEPIO GERAL 12/06
184
’07
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
D FINANCIAL FIXED ASSETS
83,532,043.65 82,336,596.96
Participating interests
- In other companies in Portugal
AMBELIS
Value
Sheet Val.
EUR
EUR
6,747,576.25
5,552,129.55
6,732,740.01
5,541,133.14
400.00
EUR
50.00
20,000.00
49.88
0.00
0.00
19,951.92
87,860.00
EUR
5.00
439,300.00
5.74
20.28
1,781,704.98
503,980.41
DA MADEIRA, LDA
800.00
EUR
5.00
4,000.00
4.99
7.77
6,212.64
3,990.38
FINANGEST
526.00
EUR
5.00
2,630.00
1,017.55
675.51
355,316.84
535,230.10
SIBS- SOC INTERBANCARIA DE SERVIÇOS, SA 103,436.00
EUR
5.00
517,180.00
4.30
6.41
663,363.03
444,897.88
497,370.03
CABO TV MADEIRENSE SA
CENTRO DE EMPRESAS E INOVAÇÃO
UNICRE- CARTÃO INTERNACIONAL
DE CRÉDITO, SA
24,335.00
EUR
5.00
121,675.00
20.44
20.28
493,531.67
VIA LITORAL, SA
4,750.00
EUR
5.00
23,750.00
166.64
145.20
689,692.92
791,547.50
HABIPRESE
5,000.00
EUR
5.00
25,000.00
250.00
250.00
1,250,000.00
1,250,000.00
ATLNTICO CLUBE INT. FÉRIAS AÇORES
250.00
EUR
4.99
1,247.50
4.99
0.00
0.00
1,246.99
66,000.00
EUR
5.00
330,000.00
5.39
5.39
355,543.14
355,543.14
COLISEU MICAELENSE, SA
83.00
EUR
0.50
41.50
0.60
0.60
49.88
49.88
TEATRO MICAELENSE, SA
83.00
EUR
0.50
41.50
0.60
0.60
49.88
49.88
NORMA AÇORES - SOC. EST. APOIO DESM REG., SA 10,000.00
EUR
5.00
50,000.00
4.99
4.99
49,879.79
49,879.79
SOGEO-SOC. GEOTERMICA DOS AÇORES, SA
24,529.00
EUR
5.00
122,645.00
4.99
4.99
122,350.14
122,350.14
2,000.00
EUR
5.00
10,000.00
5.49
5.49
10,973.55
10,973.55
BEIRA VOUGA
20,317.00
EUR
0.47
9,627.41
0.47
0.47
9,627.41
9,627.41
BEIRA VOUGA ACÇÕES PREFERENCIAIS
21,500.00
EUR
0.47
10,187.99
0.47
0.47
10,187.99
10,187.99
NOVA C. GRANDE HOTEL
50,300.00
EUR
3.66
184,255.94
3.66
3.66
184,255.94
184,255.94
EID
88,080.00
EUR
5.68
500,000.21
5.68
5.68
500,000.21
500,000.21
QUINTA DAS PANÇAS
38,997.00
EUR
6.41
250,000.00
6.41
6.41
250,000.00
250,000,00
CABO TV AÇOREANA, SA
TRANSINSULAR (AÇORES)-TRANSP. M. INSUL, SA
Report
and Accounts
185
04
Type of Securities
Currency
Nominal
Value
EUR
Total Value
Nominal
EUR
Av. Acq.
Value
EUR
Quoted
Value
EUR
- In other companies abroad
14,836.24
10,996.41
11.00
EUR
12.27
135.00
957.77
1,306.79
14,374.66
10,535.52
206.00
EUR
1.00
206.00
0.92
0.92
189.94
189.25
1.00
USD
271.64
271.64
271.64
271.64
271.64
271.64
SWIFT
EURONEXT N V
Value
Sheet Val.
EUR
EUR
BETA SECURITIZADORA
Other financial holdings
21,496,860.40 21,496,860.41
- Shareholder loan contracts
14,640,625.00 14,640,625.00
VIA LITORAL
EUR
HABIPREDE - SOCIEDADE DE CONSTRUÇÕES, SA
EUR
890,625.00
890,625.00
890,625.00
890,625.00
13,750,000.00 13,750,000.00 13,750,000.00 13,750,000.00
- Others
6,856,235.40
6,856,235.41
VISA
EUR
14,963.94
1.00
1.00
14,963.94
14,963.94
TITULOS PATRIMONIAIS
EUR
4,354,420.28
1.00
1.00
4,354,420.28
4,354,420.28
AÇÕES EMPRESARIAIS DE LIQUIDAÇÃO E CUSTODIA
EUR
442,020.16
1.00
1.00
442,020.16
442,020.16
OUTROS INVESTIMENTOS
EUR
44,831.02
1.00
1.00
44,831.02
44,831.02
CAPVEN
EUR
2,000,000.00
5,000.00
5,000.00
2,000,000.00
2,000,000.00
- Capital holdings in affiliated companies excluded
from consolidated accounts
55,287,607.00 55,287,607.00
ESPAÇO DEZ
EUR
COMPANHIA DE SEGUROS AÇOREANA
EUR
BANIF AÇOR PENSÕES
EUR
1,617,939.00
1,617,939.00
INVESTAÇOR
EUR
3,689,736.00
3,689,736.00
TOTAL
1,359.00
1,359.00
49,978,573.00 49,978,573.00
722,536,983.46 725,496,606.16
186
’07
1.11 Intangible and tangible fixed assets
Prior
period balance
Increases
ACCOUNTS
Gross
Accrued
deprec.
INTANGIBLE FIXED ASSETS
48,606
37,798
Revaluations
Acquisit.
(net)
5,623
Goodwill
0
0
0
Formation costs
3,691
3,348
756
Depreciation
for the
period
Transfers
8,740
Adjustm.
Write-offs
(net)
Net
as at
31.12.04
649
0
11,243
0
4,201
0
0
0
0
0
0
0
156
172
0
771
Costs
3,520
3,055
0
0
0
246
0
0
219
Research and development expenses
8,040
6,969
50
0
739
682
24
0
1,154
Software
33,186
24,341
4,817
0
3,462
7,640
453
0
9,031
Others
169
85
0
0
0
16
0
0
68
TANGIBLE FIXED ASSETS
189,796
71,220
18,897
0
1,770
10,309
(287)
625
128,596
Property in own use
96,891
1,529
638
0
641
2,349
(253)
441
94,104
Works in rented property
13,239
7,434
1,446
0
1,068
1,092
1
112
7,114
Other property
25
10
0
0
0
0
1
0
14
Equipment
72,738
58,135
16,758
0
61
6,431
(36)
72
24,955
Art works
690
9
0
0
0
0
0
699
Fixed assets acquired
under finance leases – equipment
610
610
0
0
0
0
0
0
0
Other tangible fixed assets
5,603
3,502
46
0
0
437
0
0
1,710
FIXED ASSETS IN PROGRESS
13,965
11,200
0
(5,971)
73
4,471
14,650
Intangible fixed assets
10,277
6,051
0
(3,205)
0
4,471
8,652
Property
2,563
3,643
0
(1,709)
70
0
4,427
Equipment
262
1,332
0
(262)
0
0
1,332
Art works
0
0
0
0
0
0
0
Other tangible fixed assets
124
174
0
(56)
3
0
239
0
0
(739)
35,720
0
0
Prepayments for fixed assets
739
TOTAL
252,367
109,018
Report
and Accounts
187
04
19,049
0
0
0
435
5,096
154,489
1.14 OTHER ACCOUNTS RECEIVABLE - BANKS AND CLIENTS
OTHER ACCOUNTS RECEIVABLE - BANKS
The balance for other accounts receivable from other banks breaks down as follows:
Investments in banks in Portugal
2004
2003
Interbank money market and dep. cert.
32,000
19,578
Loans
37,442
17,419
Other investments
17,859
10,439
87,301
47,436
Investments in foreign banks
Loans
Other investments
Gross balance
Provisions
Net balance
2004
2003
10,615
14,784
181,920
58,423
192,535
73,207
279,836
120,643
-
-
279,836
120,643
Amounts in this account break down into the following residual terms to maturity:
Up to 3 months
2004
2003
185,676
99,707
3 months to 1 year
70,720
6,686
1 year to 5 years
23,440
14,250
More than 5 years
-
-
Indefinite duration
-
-
279,836
120,643
188
’07
ACCOUNTS RECEIVABLE – CLIENTS
Trade discount
Credit secured by effects
Current account credits
Overdrafts on current accounts
Other credits
Credits and interest accrued
Gross balance
2004
2003
175,653
169,098
206,299
200,003
1,285,641
1,237,971
89,585
89,086
2,901,441
2,613,989
4,658,619
4,310,147
91,766
96,755
4,750,385
4,406,902
Provisions for credit, interest accrued,
doubtful debts and country risk
Net balance
75,474
63,615
4,674,911
4,343,287
Amounts in this account break down into the following residual terms to
maturity:
Up to 3 months
2003
1,863,841
3 months to 1 year
327,102
418,475
1 year to 5 years
921,583
454,771
1,578,025
1,573,060
More than 5 years
Indefinite duration (Overdue credit)
Report
and Accounts
189
2004
1,831,909
04
91,766
96,755
4,750,385
4,406,902
1.18 FUNDS OBTAINED
DEPOSITS BY BANKS
The balance for deposits by banks breaks down as follows:
2004
2003
11,721
12,594
SIGHT
In Portugal
Abroad
7,562
3,215
19,283
15,809
TERM OR PRIOR NOTICE
In Portugal
Interbank Money Market
46,000
58,000
Term deposits and other funds
88,919
107,360
134,919
165,360
Abroad
Term deposits and other funds
688,366
565,827
823,285
731,187
842,568
746,996
maturity:
Up to 3 months
2004
2003
507,096
515,979
3 months to 1 year
182,831
117,791
1 year to 5 years
152,641
113,226
More than 5 years
-
-
Indefinite duration
-
-
842,568
746,996
190
’07
DEPOSITS BY CLIENTS
The balance for Client deposits breaks down as follows:
2004
2003
Current Accounts
1,398,394
1,169,747
Deposit Accounts
2,178,695
2,357,564
218,459
166,765
Saving Accounts
Cheques and Payment Orders
Other Funds
3,359
2,457
60,684
10,150
3,859,591
3,706,683
maturity:
2004
2003
Up to 3 months
2,393,264
2,311,489
3 months to 1 year
1,064,527
1,094,077
1 year to 5 years
258,727
199,560
More than 5 years
143,073
101,557
Indefinite duration
-
-
3,859,591
3,706,683
DEBITS REPRESENTED BY SECURITIES
2004
2003
Bonds in circulation
178,890
74,285
Deposit certificates
628,434
438,483
Report
and Accounts
191
04
Amounts in this account break down into the following residual terms to maturity:
Up to 3 months
3 months to 1 year
2004
2003
10,829
22,958
48,247
21,301
119,814
30,026
More than 5 years
-
-
Indefinite duration
-
-
178,890
74,285
1 year to 5 years
1.21 DEBITS TO AFFILIATED/RELATED COMPANIES
Within the scope of the consolidation operations, the following debits exist between subsidiaries (‘000 Euros):
2004
With:
Total
Total
Banif, SA Banif Investimentos SGPS, SA
5,646
5,646
5,842
2,194
2,194
3
Banif Primus
312
312
211
From:
BanifServ
Debits
to Clients
2
Debits Rep.
by Securities
2003
Debits
to Banks
Subordinated
Liabilities
2
Banif (Cayman) Ltd
933,283
933,283
Banif Leasing
2
2
Banif Crédito
7
BCA
7
119
2,466
Banif Imobiliária
710,578
1,268
274,207
119
18
2,466
3,260
1,268
8,546
274,207
73,234
219
219
566
Banif SGPS, SA
1,177
1,177
860
384
384
185
10
10
3
Banif Seguros SGPS
8,008
SIP
NewCapital
1,219,513
13
13
1,796
1,221,309
811,314
192
’07
2004
From:
With:
Debits
to Banks
Debits
to Clients
Debits Rep.
by Securities
2003
Subordinated
Liabilities
Total
Total
Banif (Cayman) Ltd
Banif Primus
71,216
71,216
71,216
71,216
71,216
71,216
Banif, SA
1,616
1,616
866
Banif (Cayman) Ltd
14,966
14,966
8,263
BCA
5,900
5,900
16,582
BanifServ
Banif, SA
Banif (Cayman)
5,900
13,185
18,025
18,025
13,185
35,043
15,078
387
133
24,031
387
11,012
BIH
975
975
Banif Finance
549,224
549,224
Banif Primus
443
443
BIAM
45
574,085
Banif, SA
160,390
11,012
4,200
Banif Comercial SGPS
299
3,208
1,750
7,000
586,117
239,437
164,590
116,614
299
299
4,958
7,993
7,000
170,598
5,950
299
176,847
124,906
26,467
Banif, SA
31,708
31,708
BCA
998
998
998
32,706
32,706
27,465
Report
and Accounts
193
224,226
45
1,020
BCA
16,312
18,025
Banif, SA
Banif Crédito
22,482
18,025
Banif Leasing
2,000
5,183
04
2004
From:
With:
Debits
to Banks
Banif, SA
22,886
BCA
1,483
Banif Cayman
2003
Subordinated
Liabilities
18,380
Total
Total
22,886
44,295
1,483
10,500
5,511
1,560
18,380
20,773
15
Newcapital
40
40
BIAM
275
275
Banif SGPS, SA
BCA
Debits Rep.
by Securities
5,511
42,749
Banif Imobiliaria
Debits
to Clients
Banif, SA
5,826
48,575
77,143
103,500
103,500
103,500
103,500
103,500
103,500
154,568
172,260
154,568
5
5
5
Banif (Cayman) Ltd
10,500
Banif Leasing
3
Banif Crédito
8
Banif SGPS, SA
154,576
FINAB
Econofinance
Banif (Cayman) Ltd
Banif (Cayman) Ltd
5
5
40
40
40
50
154,626
182,813
141
141
171
141
141
171
Banif Inf. Tech. Holdings
Banif Int, Holdings
8
5
258
258
255
258
258
255
1,321
1,321
1,424
1,321
1,321
1,424
Banif Securities Holding Ltd
Banif (Cayman) Ltd
5,931
5,931
4,972
5,931
5,931
4,972
194
’07
2004
From:
With:
Debits
to Banks
Debits
to Clients
Debits Rep.
by Securities
2003
Subordinated
Liabilities
Total
Total
3,671
3,671
3,959
3,671
3,671
3,959
11,400
46,500
43,100
Banif SGPS, SA
BCA
35,100
12,000
12,000
Banif Investimentos SGPS
Banif SA
1,064
4,000
16,000
Banif SGPS, SA
35,100
Banif Imobiliária
12,464
1,064
4,000
12,000
63,564
55,100
2,400
2,400
2,400
2,400
SIP
Banif, SA
1,133
248
Banif Imobilária
25
248
Banif Mortgage
Banif SA
Banif Rent
Banif SA
25
10,026
1,859
273
2,099
15
15
10,041
10,076
10,076
Newcapital Banif Banco Investimentos
10,426
2,120
1,850
2,120
1,850
151,837
04
350
350
2,120
Banif Cayman
2,343,808
350
2,120
Report
and Accounts
195
240
25
10,041
10,076
TOTAL
248
10,026
Banif Comercial
Banif Finance
1,133
34,164
34,164
9,017
34,164
34,164
9,017
2,569,713
1,747,271
46,014
28,054
1.22 SUBORDINATED LIABILITIES
The Banif Group’s account for subordinated liabilities refers to subordinated
cash bonds and supplementary capital subscriptions (20,222 thousand
Euros), amounting to 238,502 thousand Euros, of which 210,447 thousand
Euros is outside the Banif Group. Subordinated cash bonds break down as
follows:
- On 9 December 1996 Banif – Banco Internacional do Funchal, SA, issued
subordinated cash bonds of 24,940 thousand Euros represented by
2,493,989,488 certificates of 0,01 Euros each. The interest on these
bonds matures at six month intervals and in arrears on 9 June and
9 December each year and were calculated for the 1st coupon on the basis
of a rate of 7.25% and for subsequent coupons in accordance with the
Lisbor rate resulting from the arithmetical average of the last 5 business
days prior to the penultimate business day of the six months period, plus
0.25% and rounded up to 1/16 of the nearest percentage point. The loan
is to be repaid at par in one instalment, on 9 December 2006 but may
however be paid back in advance on the Bank’s option (call option), with
authorization from the Bank of Portugal, on maturity of the 10th, 12th,
14th 16th or 18th coupons, with no premium on the amount repaid.
2.493.989.488 certificates of 0,01 Euros each The interest on these
bonds matures at six month intervals and in arrears on 2 June and
2 December each year and were calculated for the 1st coupon on the basis
of a rate of 5.75% and for subsequent coupons in accordance with the
Lisbor rate resulting from the arithmetical average of the last 5 business
days prior to the penultimate business day of the six months period,
plus 0.30% and rounded up to 1/16 of the nearest percentage point.
The loan is to be repaid at par in one instalment, on 2 December 2007 but
196
’07
may however be paid back in advance on the Bank’s option (call option),
with authorization from the Bank of Portugal, on maturity of the 10th,
12th, 14th 16th or 18th coupons, with no premium on the amount repaid.
- On 31 July 2000 Banif – Banco Internacional do Funchal, SA, issued
25,000 certificates of 1,000 Euros each The interest on these bonds
matures at six month intervals and in arrears on 31 January and 31 July
each year and were calculated for the 1st coupon on the basis of a rate
of 5.648% and for subsequent coupons in accordance with the Euribor
6 months rate in force on the second business day prior to the beginning of
each six month period, plus 0.75% and rounded up to 1/16 of the nearest
percentage point. As from the 11th coupon, the interest rate will be the
Euribor six month rate plus 1.15%. The loan is to be repaid at par in one
instalment, on 31 July 2010 but may however be paid back in advance
on the Bank’s option (call option), with authorization from the Bank of
Portugal, on maturity of the 10th, 12th, 14th 16th or 18th coupons, with
no premium on the amount repaid.
subordinated cash bonds of 25,000 thousand Euros represented
by 25,000 certificates of 1,000 Euros each The interest on these bonds
matures at six month intervals and in arrears on 8 June and 8 December
of 5.701% and for subsequent coupons (up to the 10th coupon)
in accordance with the Euribor 6 months rate in force on the second
business day prior to the beginning of each six month period, plus 0.75%
and rounded up to 1/16 of the nearest percentage point. As from the
11th coupon, the interest rate will be the Euribor six month rate plus
1.15%. The loan is to be repaid at par in one instalment, on 8 December
2010 but may however be paid back in advance on the Bank’s option
Report
and Accounts
197
04
(call option), with authorization from the Bank of Portugal, on maturity of
the 10th, 12th, 14th 16th or 18th coupons, with no premium on the
amount repaid.
- On 16 July 2001 Banif – Banco Internacional do Funchal, SA, issued
12,500 certificates of 1,000 Euros each The interest on these bonds
matures at six month intervals and in arrears on 16 January and 16 July
of 5.375% and for subsequent coupons in accordance with the Euribor
6 months rate in force on the second business day prior to the beginning of
each six month period, plus 0.75%.
The loan is to be repaid at par in one instalment, on 16 July 2011 but may
however be paid back in advance on the Bank’s option (call option), with
authorization from the Bank of Portugal, on maturity of the 10th, 12th,
14th 16th or 18th coupons, with no premium on the amount repaid.
- Mundileasing/97 subordinated cash bonds, with a value of 3,741 thousand
Euros issued on 6 June 1997 for a period of 10 years, variable rate,
indexed to Lisbor + 0,30% and rounded up to 1/16 of the nearest
percentage point;
- BCA/98 subordinated cash bonds Variable Rate - 1998 - 2008
On 27 November 1998 BCA issued subordinated cash bonds with a value
of 1,000,000 thousand PTE, represented by 100,000 certificates for
10,000$00 each.
On 25 October 2001, this bond issue was redenominated, and the issue
was from then on represented by 498,797,897 bonds with a nominal value
of one cent, with a total value of 4,987,978.97 Euros.
198
’07
The interest on these bonds matures at six month intervals and in arrears
on 27 May and 27 November each year and were calculated for the
1st coupon on the basis of a rate of 4.5% and for subsequent coupons in
accordance with the Lisbor rate resulting from the arithmetical average
of the last 5 business days prior to the penultimate business day of the six
months period, plus 0.5% and rounded up to 1/16 of the nearest percentage
point. The rates for the 2nd, 3rd, 4th, 5th, 6th and 7th coupons were
3.1875%, 4.0625%, 5.25%, 5.75%, 5.125% and 3.875% respectively.
The loan is to be repaid at par in one instalment, on 27 November 2008 but
12th, 14th 16th or 18th coupons.
- BCA/00 subordinated cash bonds Variable Rate - 2000 - 2010 – 1st Issue
On 23 October 2000 BCA issued subordinated cash bonds with a value
of 1,000,000 thousand PTE, represented by 100,000 certificates for
10,000$00 each.
On 25 October 2001, this bond issue was redenominated, and the issue
was from then on represented by 498,797,897 bonds with a nominal value
of one cent, with a total value of 4,987,978.97 Euros.
on 23 April and 23 October each year and were calculated for the first five
years of the loan at the Euribor 6 months rate in force on the second
business day prior to the beginning of each six month period, plus 0.75%
and rounded up to 1/16 of the nearest percentage point. As from the 11th
coupon, and for the remaining lifetime of the loan, the interest rate will
be the Euribor six month rate plus 1.15%. The interest rates for the 1st,
2nd, 3rd, 4th, 5th, 6th, 7th, 8th and 9th coupons were 5.847%, 5.369%,
4.249 %, 4.322%, 3.958%, 3.301%, 2.978%, 2.863% and 2.956%.
Report
and Accounts
199
04
The loan is to be repaid at par, in one instalment, on 23 October 2010, but
12th, 14th 16th or 18th coupons.
- BCA/00 subordinated cash bonds Variable Rate - 2000 - 2010 – 1st Issue
On 4 December 2000 BCA issued subordinated cash bonds with a value of
10,000,000 thousand Euros, represented by 200,000 certificates for 50
Euros each.
The interest on these bonds matures at six month intervals and in arrears on
4 June and 4 December each year and were calculated for the first five years
of the loan at the Euribor 6 months rate in force on the second business day
prior to the beginning of each interest period, plus 0.75% and rounded up
to 1/16 of the nearest percentage point. As from the 11th coupon, and for
the remaining lifetime of the loan, the interest rate will be the Euribor six
month rate plus 1.15%. The interest rates for the 1st, 2nd, 3rd, 4th, 5th,
6th, 7th, 8th and 9th coupons were 5.848%, 5.258%, 4.037%, 4.438%,
3.768%, 2.981%, 3.024%, 2.933% and 2.977%. The loan is to be repaid
at par, in one instalment, on 04 December 2010, but may however be paid
back in advance on the Bank’s option (call option), with authorization from the
Bank of Portugal, on maturity of the 10th, 12th, 14th 16th or 18th coupons.
- BCA/02 subordinated cash bonds Variable Rate - 2002 - 2012
On 25 September 2002, BCA issued subordinated cash bonds with a value
of 10,000,000 thousand Euros, represented by 200,000 certificates
for 50 Euros each.
on 25 March and 25 September each year and were calculated for the first
five years of the loan at the Euribor 6 months rate in force on the second
200
’07
business day prior to the beginning of each interest period, plus 0.75%
and rounded up to 1/16 of the nearest percentage point. As from the 11th
coupon, and for the remaining lifetime of the loan, the interest rate will
be the Euribor six month rate plus 1.15%. The interest rates for the 1st,
2nd, 3rd, 4th and 5th coupons were 4.022%, 3.247%, 2.929%, 2.775%
and 2.981%. The loan is to be repaid at par, in one instalment, on
25 September 2012, but may however be paid back in advance on the
Bank’s option (call option), with authorization from the Bank of Portugal,
on maturity of the 10th, 12th, 14th 16th or 18th coupons.
- Issue of subordinated cash bonds by Banif (Cayman), Ltd, wholly owned by
Banif-Banco Internacional do Funchal, SA (with a value of 17,020 thousand
Euros) on 15 June 1998 for a period of 10 years, variable rate, indexed at
the Lisbor 6 month rate + 2.50%. The loan is to be repaid at par in one
instalment, on 27 November 2008, and may be repaid in advance at the
option of Banif (Cayman) (call option), in full or in tranches of 3,000,000
USD, as from maturity of the 10th coupon.
- Cash bonds issued by Banif – Banco de Investimento, SA, Variable Rate –
2001 – 2011 – 1st Issue.
On 29 June 2001, Banif – Banco de Investimento, SA, issued subordinated
cash bonds with a value of 7,500,000 Euros represented by 7.500.000
certificates of 1 Euro each.
on 29 December and 29 June each year and were calculated for the first
five years of the loan at the Euribor 6 months rate in force on the second
business day prior to the beginning of each interest period, plus 0.75%.
As from the 11th coupon (inclusive), and for the remaining lifetime of the
loan, the interest rate will be the Euribor six month rate plus 1.15%
Report
and Accounts
201
04
- Cash bonds issued by Banif Securities Inc., variable rate 2005
On 26 July 2002 Banif Securities Inc., issued subordinated cash bonds with
a value of 5,000,000 USD, with interest maturing quarterly and calculated
at the Libor index rate for 3 months plus 1.5%. These bonds were held
at the end of 2004 by Banif Securities Holding, Ltd..
- Cash bonds issued by Banif Finance, Ltd. Variable Rate 2004 / 2014
On 29 December 2004, Banif Finance, Ltd. issued subordinated cash bonds
with a value of 50,000,000 Euros represented by 50.000 certificates
of 1000 Euros each.
The interest on these bonds matures quarterly and in arrears on 29 March,
29 June, 29 September and 29 December each year, starting on 29 March
2005, and is calculated for the first five years of the loan at the Euribor
3 months rate in force on the second business day prior to the beginning
of each interest period, plus 0.80%. As from the 21st coupon (inclusive),
and for the remaining lifetime of the loan, the interest rate will be the
Euribor three month rate plus 1.30%.
The loan is to be repaid at par, in one instalment, on 29 December 2014,
but may however be paid back in advance on the Bank’s option (call option),
with authorization from the Bank of Portugal, on any interest payment date
as from maturity of the 20th coupon. The loan may also be repaid
in advance for fiscal reasons (tax option), on any interest payment date
by means of prior notice of 30 to 60 days to the hoond holders, if due
to alteration of the laws applicable, Banif Finance is requirement to make
additional payments and this cannot be avoided by taking reasonable
measures.
202
’07
1.25 MARKETABLE SECURITIES, INVESTMENT SECURITIES AND FINANCIAL
HOLDINGS
Securities are recorded as marketable securities when they are acquired with
the intention of selling them in the subsequent six months and when there is
no doubt as to their market liquidity, with a view to benefiting from potential
gains on their disposal. Securities are recorded as investment securities when
acquired with the intention of being kept for a period of more than six months.
Securities initially recorded as marketable securities, but which are not
disposed of within six months of acquisition, are also recorded as investment
securities.
Financial holdings comprise securities acquired with the objective of
establishing a permanent presence in the institution, through holdings in
related companies and other financial investments with the nature of fixed
assets.
Securities acquired with the intention of keeping them through to repayment
are recorded as Securities held to Maturity.
Report
and Accounts
203
04
1.27 ACCRUALS AND DEFERRALS
ASSETS
2004
2003
39,545
46,265
Expenses with deferred costs
32,484
17,963
Other accruals and deferrals
141,687
95,877
213,716
160,105
Income receivable
LIABILITIES
2004
2003
11,091
11,067
Costs payable
29,303
41,784
Liabilities for holiday pay and subsidies
11,157
9,400
124,422
64,265
175,973
126,516
Revenues with deferred income
Other accruals and deferrals
1.28 SECURITIES PORTFOLIO
BONDS AND OTHER FIXED YIELD SECURITIES
The composition of this account is detailed in the Inventory of Securities and
Financial Holdings included in this report.
The make-up of this account may be summarized as follows:
2004
2003
41,158
22,145
Bonds issued by public issuers:
Portuguese public debt securities
Bonds – other public issuers
2,033
2,109
Foreign public debt securities
46,201
39,236
89,392
63,490
Gross balance
Provisions
Net balance
10
13
89,382
63,477
204
’07
2004
2003
Subordinated cash bonds
1,147
1,147
Other bonds, not mature
12,552
6,824
Commercial paper
13,387
16,433
Bonds issued by other issuers, residents:
Other bonds, mature
437
24,841
1,250
1,250
Other bonds, not mature
424,268
240,105
Commercial paper
Gross balance
Provisions
-
-
425,518
241,355
453,042
266,196
586
862
452,456
265,334
Own securities
-
-
-
-
Net balance
Report
and Accounts
205
438
27,524
04
SHARES AND OTHER VARIABLE YIELD SECURITIES
The composition of this account is detailed in the Inventory of Securities and
Financial Holdings included in this report. In brief :
2004
2003
Shares, issued by residents
10,135
13,382
Participation units issued by residents
39,925
23,800
Shares, issued by non-residents
2,473
6,564
Participation units issued by non-residents
9,146
8,264
Other securities
Gross balance
Provisions
Net balance
39,180
37,010
100,859
89,020
9,843
13,228
91,016
75,792
a) Differences, as at 31 December 2004, between the book value and nominal
value of investment securities:
Securities acquired at above par
3,031 thousand Euros
Securities acquired at below par
330 thousand Euros
b) Valuation differences for Bonds and other Fixed Yield Securities break down
as follows, as at 31/12/04:
Public Issuers - Residents
OB,. TESOURO MÉDIO PRAZO 97-23/02/07
OT TESOURO 4,875% 07
gains
losses
207
-
-
10
OB. TESOURO MEDIO PRAZO 3% 2006
54
-
OB TESOURO 1999-07/2009
17
-
OB.GRA 1993/2005 – 1st Issue
36
-
314
10
206
’07
Securities maturing
gains
losses
FNACINVESTE 91
-
388
COBRE 87 SÉRIE A
-
25
ARGERG
-
25
-
438
Other issuers – Residents
gains
losses
PARTEST 98-08
-
2
SONAE IMOBILIARIA 98-05
-
3
BCPN 0 02/06/09
-
2
MODPLF FLOAT 18/03/09
-
1
CPDPPL 0 06/49
2
-
2
8
Public Issuers – Non-residents
gains
losses
BUNDESSCHATZANW 2 06/17/05
1
-
BUNDESSCHATZANW 4 1/4 03/12/04
2
-
3
-
International Financial Organisations
gains
losses
BEI/1996-2006
43
-
BEI/1997-2007
35
-
78
-
Other issuers – Non-residents
gains
losses
PORTUGAL TELECOM INT FIN 05
-
9
USIMINAS
7
-
GENL MOTORS ACCEPT CORP 07/05/05
-
2
AAB 0 09/16/11
-
4
ABN FLT 16SET11
-
2
Report
and Accounts
207
04
gains
losses
ALPHA 0 11/16/09
-
5
AMSTEL SEC. 15AGO2013
5
-
11
-
AUTOSTRADE FLT JUN11
AZOR 1 C
4
-
BANCAJA FONDO TIT ACT FLOAT 18ABR2035
6
-
BANCO ITAU EUR FLOAT 24JUL06
2
-
BBVA FLT JUN2016
1
-
BCO BRADESCO 3,625% 3JAN2007
1
-
BCP F BK FLT OUT09
1
-
BEAR STEARNS FLOAT 30JAN2009
1
-
BEAR STEARNS FLOAT OUT09
-
1
BK AMERICA FLT JUN11
7
-
BNP PARIBAS 3,875% 27DEZ2006
3
-
BOOT 0 10/19/07 EMTN
2
-
BREBAN 0 11/03/06
-
1
BSC 0 01/30/09
7
-
BSC 0 10/20/09
1
-
CAMBER FLOAT 11FEV2052
-
6
CASTA 1 C
-
2
CFC 0 11/24/08
2
-
CIT 0 05/13/09
4
-
CORSAIR JY FLT JUN07
2
-
DAIMLERCHRYSLER FLOAT 2JUL07
1
-
DCX 4 1/4 10/04/11
3
-
DEU TEL FLT NOV09
-
8
DZ BANK CAP FUNDING FLOAT PERP
5
-
EIRLES FLT OUT07
-
5
EMPOR 0 11/01/07
-
1
ESPSAN 0 10/08/09
2
-
208
’07
EURO INVEST LTD 4% 31MAR2007
losses
3
-
58
-
F 0 07/16/07
-
11
F 4 7/8 01/15/10
7
-
F 5 3/4 01/12/09
-
1
FCE BK FLT SET09
-
30
FRENCH RES ASSET FLOAT DEZ43
6
-
FRENCH RES ASSET FLOAT MAR43
12
-
FRIES 0 05/27/11
-
1
GAMA FLT DEZ11
-
2
GE 0 05/04/11
-
8
GMAC FLT JUL05
-
2
GOLDMAN SACHS FLOAT 21OUT08
-
1
GRAN 2004-3 2C
3
-
GS 0 10/21/08
5
-
HBOS FLOAT PERPETUAL
1
-
HERTZ FIN. JUL07
2
-
HYPINT 0 02/23/07
5
-
INVPLC 0 10/12/07
1
-
ITAU 0 07/24/06
1
-
ITAU FLT MAR07
7
-
KONINKLIJKE KPN 21JUL2009
-
1
EIGER 1X C
LADF III C1
12
LEEK FIN FLT MAR36
-
LEHMAN B H ABR2011
-
2
MERRILL LYNCH FLOAT 22MAR11
-
10
METRO FLOAT OUT09
MIDGAARD FINANCE FLOAT 23ABR2029
MORGAN ST FLT JAN09
Report
and Accounts
209
gains
04
1
3
-
10
-
2
-
gains
losses
MORGAN ST FLT JAN10
1
-
MWD 0 01/15/10 EMTN
1
-
MWD 0 01/22/09
4
-
NYMPH 2002-1 M 3.243
-
2
OTE 0 11/13/06
4
-
PILLAR FOUNDING PLC 15SET2011
2
-
PREPS 2004-2 B1
3
-
PROMS COL-03 B
-
1
PROVI A04-1 C
3
-
PRTP 0 10/22/07
4
-
RCI BANQUE FLOAT 17SET2007
1
-
RMS 14X M2 3,597% 10JUN2036
-
1
SAECURE FLOAT 31AGO2070
5
-
SBERRU 0 10/24/06
2
-
SLM FLOAT 26ABR2011
-
9
TEMPO 1 B
-
11
WINDM IIIX D
2
-
248
140
Subordinated securities
gains
losses
BAYER HIPO 05MAI2014
12
-
657
596
TOTAL PROVISIONS
210
’07
Valuation differences in variable rate securities break down as follows, as at
31/12/04 (‘000 Euros):
Shares - Residents
BANCO BPI SA
BRISA - Nom (Priv.)
CIPAN
losses
90
-
1
-
15
-
DIDIER & QUEIROZ, S.A.
-
2
EDP
-
56
FUTEBOL CLUBE DO PORTO
-
18
GALERIAS NAZONI
-
4
IMOVALOR
31
-
-
10
INAPA
-
1,178
PORTUGAL TELECOM
1
-
IMPRESA SGPS - NOM
PT MULTIMÉDIA
REAL SEGUROS
73
-
-
129
SEMAPA SGPS
8
-
SONAE SGPS
85
-
TERTIR - Terminais Portugal
Report
and Accounts
211
gains
04
-
140
304
1,537
Participation units - Residents
ART INVEST
BANIF ESTRATÉGIA AGRESSIVA
BANIF IMOGEST
gains
losses
2
-
13
-
881
-
BANIFUNDO ESTRATÉGIA AGRESSIVA
-
54
BANIFUNDO ESTRATÉGIA CONSERVADORA
9
-
BANIFUNDO ESTRATÉGIA EQUILIBRADA
-
42
BANIFUNDO EURO ACÇÕES
-
3,567
FUNDO CAPITAL DE RISCO CAPVEN
2
-
907
3,663
gains
losses
Shares – Non-residents
K FORCE
Participation units – Non-residents
15
-
-
60
60
-
75
60
gains
losses
AGGRESSIVE STRATEGY FUND
14
-
BALANCED STRATEGY FUND
22
-
-
2
BRAZILIAN BOND FUND
BRAZILIAN EQUITY FUND
23
-
BRAZILIAN MONEY MARKET FUND
22
-
CONSERVATIVE STRATEGY FUND
42
-
EUROPEAN BOND FUND
50
-
EUROPEAN EQUITY FUND
-
90
EUROPEAN MONEY MARKET FUND
26
-
PORTUGAL EQUITY FUND
16
-
215
92
212
’07
Other securities
gains
losses
ATLANTES CERTIFICATES Nº1 CLASSE D NOTES (1)
-
715
ATLANTES CERTIFICATES Nº2 CLASSE D NOTES (1)
-
2,498
ATLANTIS MORTGAGE Nº1 (1)
-
121
AZOR MORTGAGES PUBLIC LIMITED CO.
-
1,130
-
4,464
Country risk
24
3
27
TOTAL PROVISIONS
9,843
(1) These losses reflect provisions created for securitised credit (live credit, doubtful debts and
overdue credit) in accordance with Notice 3/95, of the Bank of Portugal.
c) and d)
As at 31/12/2004, marketable securities had an accounting value 356 thousand
Euros higher than would derive from valuation on the basis of acquisition.
The following associated amounts are recorded in Costs and Income:
Positive revaluation differences in trading portfolio
Negative revaluation differences in trading portfolio
361
5
356
Report
and Accounts
213
04
1.31 OTHER ASSETS
Debtors
2004
2003
35,655
40,494
Gold and other precious metals, coins,
medals and other liquid assets
Property not in own use
Other investments
Other financial fixed assets
Gross balance
599
4,089
52,397
45,192
3,862
1,755
21,498
19,326
114,011
110,856
Provisions for other assets, property not in own use
and other financial fixed assets
Net balance
6,497
4,119
107,514
106,737
OTHER LIABILITIES
2004
2003
Sundry accounts payable
16,293
8,212
Creditors
37,764
22,734
1,467
433
Suppliers of fixed assets on finance leases
Other liabilities
-
-
55,524
31,379
214
’07
1.34 Information on the workforce of the Banif Group and professional
categories is given in note 12.
PERSONNEL COSTS
Remuneration of Directors and Members of Audit Board
2004
2003
4,485
4,556
Remuneration of employees
56,627
52,240
Mandatory social charges
18,943
16,493
Other charges
1,828
1,973
81,883
75,262
1.38 BREAKDOWN OF INCOME
This information is contained in Note 11
1.39 OTHER OPERATING COSTS AND INCOME AND EXTRAORDINARY GAINS
OTHER OPERATING COSTS
Donations and subscriptions
Valuation costs
Losses on disposal of fixed assets acq. through finance leases
Others
2004
2003
535
513
-
-
172
250
12,323
4,260
13,030
5,023
2004
2003
EXTRAORDINARY LOSSES
Losses on disposal of fixed assets
Prior period losses
Others
Report
and Accounts
215
04
578
548
4,793
6,019
1,078
16,308
6,449
22,875
OTHER OPERATING INCOME
Earnings from services
Reimbursement of expenses
2004
2003
7,333
4,586
14,867
13,598
Property income
247
642
Gains on disposal of fixed assets acq. through finance leases
252
133
10,922
13,505
33,621
32,464
2004
2003
Other Income
EXTRAORDIDARY GAINS
Indemnity payments
460
98
Profits on disposal of property
359
4,895
Prior period profits
1,780
2,013
Others
2,220
4,616
4,819
11,622
1.43 The accounts of Banif SGPS, SA are consolidated with those of its parent
company, which are in turn consolidated by Rentipar Financeira, SGPS, S.A., in
its capacity as a Finance Company, as classified on 24 December 1997, by the
Bank of Portugal.
1.48 SECURITIZATION OPERATIONS
Four securitization operations have been effected to date:
- Atlantes Finance No. 1:
November 1999
May 2002
- Atlantes Mortgage No. 1: February 2003
- Azor Mortgages:
November 2004
216
’07
Through these securitization operations, the risk associated with personal
loans, leasing contracts and mortgage lending granted by the organizations
involved has been transferred in full to the following vehicles:
- Atlantes Finance No. 1, to the company Atlantes No. 1 Limited, based in
Jersey
- Atlantes Finance No. 2, to the company Atlantes Finance No. 2 Plc, based in
Dublin
- Atlantes Mortgage No. 1, to the company Atlantes Mortgage No. 1 Plc,
based in Dublin
- Azor Mortgages, to the company Azor Mortgages Plc, based Dublin.
Azor Mortgages, concluded in November/04, was the first securitization
operation of mortgage lending carried out by BCA (the second in the Banif
Group), with a total value of 281 million Euros and a maximum duration
of 43 years. A number of the features of this transaction (geographical
concentration, seismic risk, the size of the operation and the fact that the
originator is not rated) led to some difficulties in placement, but these were
easily offset by the quality of the lending portfolio sold and the good practice
followed by BCA, as borne out by the pricing obtained (of the 49 operations
carried out in Portugal up to 31/12/04, only one had lower levels than Azor
Mortgages).
In structuring the Azor Mortgages operation, a number of features were
included which give the originator a degree of flexibility, namely the possibility
of replacing contracts, within certain limits, where, for commercial reasons,
BCA decides to alter the respective basic conditions (amount, interest rate,
index linkage, spread, duration, etc.), by others with the same characteristics
of the contracts substituted. There is also a step-up date in September 2011,
which allows, amongst other things for repayment of the operation.
Report
and Accounts
217
04
Operation “Atlantes no.1”, with a value of 200 million Euros, involved the
transfer of personal loans by Banif – Banco Internacional do Funchal, SA
(approx. 57.5 million Euros), Banco Comercial dos Açores, SA (approx. 32.1
million Euros) and Banif Crédito, SA (approx. 25.5 million Euros), and also the
transfer of leasing contracts by Banif Leasing, SA (approx. 84.9 million Euros).
The Atlantes no. 1 operation has a maximum duration of 9.5 years and
a revolving period of 2.5 years, ending in May 2002, during which the
organizations involved could transfer further personal loans and leasing
contracts each quarter, replacing loans and contracts which had already been
repaid. This option for reinstatement of the value of the credits and contracts
transferred was subject to a series of conditions related to the characteristics
of these credits and contracts and to maintenance of default and legal
proceedings within upper limits defied in the respective documentation.
It should be noted that this reinstatement option has been exercised by Banif
Group companies in full.
Operation “Atlantes no 2”, with a total value of 300 million Euros, involved the
transfer of credits with a value of 150 million Euros, and involved the transfer
of personal loans by Banif (approx. 65.4 million Euros) and Banco Comercial
dos Açores (approx. 24.6 million Euros) and also the transfer of leasing
contracts by Banif Leasing, SA (approx. 60.0 million Euros).
The Atlantes no. 2 Operation also has a maximum duration of 9.5 years and
a revolving period of 2.5 years, and the Banif Group did not exercise the
option to transfer further credits of up to 150 million Euros, in order to reach
the total operation value of 300 million Euros.
As with Atlantes no. 1, the organizations involved in Atlantes no. 2 may, during
the revolving period, transfer further personal loans and leasing contracts
each quarter, replacing loans and contracts which had already been repaid.
218
’07
This option for reinstatement of the value of the credits and contracts
transferred was subject to a series of conditions related to the characteristics
of these credits and contracts and to maintenance of default and legal
proceedings within upper limits defied in the respective documentation. Note
that the possibility of additional sales of credit has been taken up in all cases
by the organizations participating.
In relation to the “Atlantes Mortgage No. 2” operation, and under the legislation
in force, a Credit Securitization Fund was also created with the name Atlantes
Mortgage Finance No. 2 Fundo, managed by Navigator – Sociedade Gestora
de Fundos de Titularização de Créditos, SA, which acquired the mortgage
lending from the transferors, and obtaining finance by selling participation
units in the fund.
In the “Atlantes Mortgage No. 1” operation, with a total value of 500 million
Euros and a maximum duration of 33 years, only mortgage lending from Banif
– Banco Internacional do Funchal, SA (“Banif”) was transferred.
In relation to the “Atlantes Mortgage No. 1” operation, and under the legislation
in force, a Credit Securitization Fund was also created with the name Atlantes
Mortgage Finance No. 1 Fundo, managed by Navigator – Sociedade Gestora
de Fundos de Titularização de Créditos, SA, which acquired the mortgage
lending from the transferors, and obtaining finance by selling participation
units in the fund.
In order to obtain finance, the company Atlantes no. 1 Limited issued notes
with a total value of 200 million Euros, and residual certificates (securities
with a higher degree of subordination and unrated), with a nominal value
of 16,768 million Euros.
Report
and Accounts
219
04
In order to obtain finance, the company Atlantes Finance no. 2 Plc also issued
notes with a total value of 150.0 million Euros and residual certificates with
a nominal value of 10,325 million Euros.
In order to obtain finance, the company Atlantes Mortgage No. 1 Plc. also
issued notes with a total value of 500 million Euros and residual certificates
with a nominal value of 15.4 million Euros.
The company Azor Mortgages Plc has also issued notes with a total value of
281 million Euros, and residual certificates with a nominal value of 10 million
Euros.
The companies Atlantes No. 1 Limited, Atlantes Finance No. 2 Plc and Atlantes
Mortgage No.1 Plc. have no other business interests other than holding the
personal loans, leasing contracts and mortgage lending sold by the Banif
Group, meaning that payment of the capital and interest on the notes issued
by these companies will depend solely on these investments and on the
amounts obtained from the issue of residual certificates.
As the credits are sold outright and without recourse, the Banif Group cannot
be held liable for any default on these operations, save to the extent of the
residual certificates which it holds.
In relation to the 200 million Euros in notes issued by Atlantes No. 1 Limited,
the agencies Standard & Poor´s and Fitch Ratings gave the following
ratings:
AAA:
AA:
A:
91%
5%
4%
220
’07
The notes rated “AAA” and “A” were issued at variable interest rates indexed
to the Euribor 3 month rate, whilst the notes rated “AA” were issued at a flat
rate.
The company Atlantes Finance No. 2 Plc issued 150 million Euros in notes
which were rated as follows by Standard & Poor´s, Moody’s e Fitch
Ratings:
S&P
- AAA
-A
- BBB
Moody’s
Aaa
A2
Baa3
Fitch
AAA
A
BBB
93%
5%
2%
All these rated notes were issued at variable interest rates indexed to the
Euribor 3 month rate.
The company Atlantes Mortgage No. 1 Plc issued 500 million Euros in notes
which were rated as follows by Standard & Poor´s, Moody’s e Fitch
Ratings:
S&P
- AAA
-A
- BBB
- BB
Moody’s
Aaa
A2
Baa2
Baa2
Fitch
AAA
A
BBB
BB
92.5%
4.5%
2.5%
0.5%
All these rated notes were issued at variable interest rates indexed to the
Euribor 3 month rate.
Report
and Accounts
221
04
The company Azor Mortgages Plc issued 281 million Euros in bonds which
were rated as follows by Standard & Poor´s, Moody’s e Fitch Ratings:
S&P
- AAA
-A
- BBB
Moody’s
Aaa2
Aa2
Baa1
Fitch
AAA
A+
BBB+
90.04%
6.76%
3.20%
All these rated bonds were issued at a variable interest rate indexed to the
Euribor 3 months rate.
The rated notes issued by these securitization vehicles were placed in full
by Deutsche Bank and Citigroup on the international financial markets, and
at 31 December 2004 2 million Euros in bonds issued by Azor Mortgages
were held in Banif Group companies trading portfolios.
The residual certificates, on the other hand, are held in full by Banif Group
companies, and their gross balance sheet value as at 31 December 2004 was
as follows:
- Atlantes Finance No 1.:
- Atlantes Finance No.2:
- Atlantes Mortgage No. 1:
- Azor Mortgages:
2.97 million Euros
11.48 million Euros
12.94 million Euros
10.00 million Euros
In addition to the Banif Group organisations already referred to, taking part
in these securitization operations in the twofold capacity of transferors of
the credits and servicers, on behalf of the companies Atlantes no. 1 Limited,
Atlantes Finance no. 2 Plc, Atlantes Mortgage No. 1, Plc, Azor Mortgages Plc
and Navigator – SGFTC, SA and Sagres – Sociedade de Titularização
222
’07
de Créditos, SA, this operation also involved participation by various
organizations belonging to the Deutsche Bank Group, the Credit Suisse First
Boston Group and Citigroup, in the capacity as purchasers, agents, payer
agents, cash administrators, parties to swap contracts and trustees.
In return for administrative services for management and collection of
the credits to which these securitization operations relate, each Banif Group
company transferring the loans or leasing contracts receives quarterly
an annual servicing fee of 1% of the credits transferred, for personal loans
and leasing contracts, and 0.15% per annum for mortgage lending.
In recording these transactions and the related flows, the Banif Group companies
have adopted the accounting principles and policies laid down by the Bank
of Portugal, and as a result the assets transferred cease to be recorded in the
balance sheets of the transferor companies and are recorded in current
accounts. In the cases of Atlantes Finance No. 1, Atlantes Mortgage No. 1 and
Azor Mortgages, the differences between the nominal value of the credits
transferred and the transfer value has been recorded immediately under
income. In the case of Atlantes Finance No. 2, capital gains have been
deferred, over the lifetime of the operation, as the Bank of Portugal does not
recognize this as an effective transfer.
Provisions have been created for the assets transferred in accordance with
Notice no. 3/95 and Instruction no. 27/2000 of the Bank of Portugal.
In this context, as at 31 October 2004, the date of the last rollover prior
to 31 December 2004, the securitization vehicle Atlantes no. 1, Limited had
risks relating to personal loan contracts issued by Banif – Banco Internacional
do Funchal, SA with a value of approx. 30 million Euros, transferred by:
Report
and Accounts
223
04
- Banif:
- Banif Crédito:
- Banif Leasing:
- BCA:
7,50 million Euros
4,30 million Euros
13,60 million Euros
4,60 million Euros
As at 31 December 2004, the date of the last rollover, the securitization
vehicle Atlantes Finance No. 2 Plc had risks relating to personal loan contracts
issued by Banif – Banco Internacional do Funchal, SA with a value of approx.
150 million Euros, transferred by:
- Banif:
- Banif Leasing:
- BCA:
52,10 million Euros
45,00 million Euros
52,90 million Euros
As at 31 December 2004, the securitization vehicle Atlantes Mortgage No. 1
Plc had risks relating to mortgage loans issued by Banif – Banco Internacional
do Funchal, SA with a value of approx. 413.65 million Euros.
As at 31 December 2004, the securitization vehicle Azor Mortgages Plc had
risks relating to mortgage loans issued by BCA with a value of approximately
277.18 million Euros.
In relation to the Atlantes Finance No. 1, Atlantes Finance No. 2. Atlantes
Mortgage No. 1 and Azor Mortgage securitization operations, a total of six
interest rate swaps have been contracted with Deutsche Bank AG, Credit
Suisse First Boston and Citigroup (floating rate for floating rate), two for each
operation. The notional values for these as at 31/12/04 were as follows:
- Atlantes Mortgage No. 1:
- Azor Mortgages:
13.6 and 6.4 million Euros
268,4 and 8,8 million Euros
224
’07
1.49 RETIREMENT AND SURVIVORS’ PENSIONS
In accordance with the Vertical Collective Employment Agreement for the
Banking Sector, Banif – Banco Internacional do Funchal, SA, has accepted full
liability for the payment of retirement, disability and survivors’ pensions for its
employees or their families, to complement the pensions paid by the national
social security system.
On 7 December 1989, with a view to financing its liabilities in this field,
Banif – Banco Internacional do Funchal, SA, constituted an independent pension
fund, in keeping with Decree-Law no. 396/86, of 25 November. This pension
fund is managed by Banif Açor Pensões – Sociedade Gestora de Fundos
de Pensões, SA.
From 2001 onwards, these liabilities were hedged and the cost of contributions
to the pension fund recognized in accordance with the new rules established
in Notice 12/2001 of the Bank of Portugal, of 23 November.
As at 31 December 2004, the fund covered a population of 47 pensioners
and 1,435 employees.
Taking into account the new accounting framework deriving from the
adoption of the International Accounting Standards (IAS/IFRS) and the
respective transitional rules applicable to the pension funds of banks as from
1/1/2005, in particular as regards the discount rate, and in view of the trend
in market rates, the Bank decided to anticipate, in its financial statements
as at 31 December 2004, the reduction in the discount rate assumed in the
calculation of liabilities in respect of benefits promised, from 6% to 5.25%.
Consequently, liabilities and the respective coverage stood as follows at
year-end:
Report
and Accounts
225
04
Liabilities
Current value of pensions payable
8,790
Current value of liability for past services
28,883
Total
37,673
Coverage of liabilities
Value of pension fund
Mathematical provision for income insurance
Total
38,112
1,484
39,596
The current value of liabilities for future services, as at 31 December 2004,
is 21,340 thousand Euros.
In the financial year of 2004, the Bank recognized the following costs of
hedging liabilities for retirement and survivors’ pensions:
Cost of current services
+ 1,816
Cost of interest
+ 1,766
Expected income on Fund assets
- 1,998
Total
1,584
The actuarial losses resulting from the alteration of the discount rate from
6% to 5.25%, as referred to above, amounting to 4,057 thousand Euros, were
recorded under “Expenses with Deferred Cost”, in accordance with paras. 1 d)
and 2 of Notice 12/2001, and these losses will be depreciated in accordance
with the transitional rules which the Bank of Portugal is set to fix for
transition to IAS/IFRS.
In the course of 2004, the Pension Fund paid out pensions with a value of 553
thousand Euros, and received contributions of 3,990 thousand Euros, paid
in cash.
226
’07
The total value of property making up the assets of the pension fund and
which are used, under leases, either by the Bank or by companies in the same
group, totals 5,454 thousand Euros.
- The main actuarial and financial assumptions were:
Actuarial valuation method:
Unit Credit Projected (UCP)
Discount rate:
5.25%
Expected return on fund assets:
5.25%
Expected rate of growth in salaries and other benef.:
3.00%
Expected rate of growth in pensions:
2.00%
Mortality table:
TV 73/77
Disability table:
EVK 80
Turnover table:
Not applied
Type of decrements used:
Disability 3) art. 7 Notice 12/2001
Rates effectively recorded during the financial year::
Rate of return on value of pension fund:
6.50%
Rate of growth in salaries and other benef.:
7.33%
Rate of growth in pensions:
-6.70%
Mortality table:
2.10%o
Disability table:
2.10%o
Turnover table:
1.77%
- In addition to the pension fund, there are two insurance contracts for life
annuities to cover the retirement pension of one pensioner, taken out with
insurance companies outside the group. The pension insured is fixed, paid
14 times a year, and is 40% reversible on the death of the pensioner under
the terms of the pension plan, the respective annual increments being borne
by the pension fund.
Report
and Accounts
227
04
In accordance with para. 1) e) of no. 2 of Notice 12/2001, as at 31 December
2003 the Bank recorded an accrued sum of 3,409.6 thousand Euros relating
to actuarial losses resulting from differences between actuarial and financial
assumptions used and the conditions effectively encountered, in a specific
account for “Floating Values”, up to the limit of the “corridor” established
in the said provision.
The value of actuarial losses and gains in the previous year resulting from
differences between actuarial assumptions and plan conditions and those
resulting from differences between the actuarial and financial assumptions
used and the conditions actually encountered, in excess of the corridor,
amounting to 8,494.4 thousand Euros and 3,621.4 thousand Euros, respectively,
were recorded in accounts for Revenues with deferred income and Expenses
with deferred cost, and depreciated by 1/10 during the period (in
Extraordinary results from prior periods – losses of 361 thousand Euros and
gains of 849 thousand Euros). The value of actuarial gains in the period,
amounting to 439 thousand Euros, was recorded as a credit in the account
for Expenses with deferred cost.
In accordance with the Vertical Collective Employment Agreement for the
Banking Sector, Banco Comercial dos Açores, SA has accepted liability for
payment of retirement, invalidity and survivors’ pensions to employees or
their families, insofar as they are not covered by the national social security
system.
On 30 December 1988, with a view to financing its liabilities in this field,
Banco Comercial dos Açores, SA, constituted an independent pension fund,
in keeping with Decree-Law no. 396/86, of 25 November. This pension fund
is managed by Banif Açor Pensões – Sociedade Gestora de Fundos de
Pensões, SA.
228
’07
From 2001 onwards, these liabilities were hedged and the cost of contributions
to the pension fund recognized in accordance with the new rules established
in Notice 12/2001 of the Bank of Portugal, of 23 November.
As at 31 December 2004, the fund covered a population of 219 pensioners
and 416 employees.
Taking into account the new accounting framework deriving from the adoption
of the International Accounting Standards (IAS/IFRS) and the respective
transitional rules applicable to the pension funds of banks as from 1/1/2005,
in particular as regards the discount rate, and in view of the trend in market
rates, the Bank decided to anticipate, in its financial statements as at 31
December 2004, the reduction in the discount rate assumed in the calculation
of liabilities in respect of benefits promised, from 6% to 5.25%. Consequently,
liabilities and the respective coverage stood as follows at year-end:
Liabilities
Current value of pensions payable
40,217
Current value of liability for past services
38,529
Total
78,746
Coverage of Liabilities
Value of pension plan
67,255
Balance repayments plan (para. 1 c) Notice 12/2001)
5,064
Amounts payable
6,427
Total
78,746
The repayment plan provided for in para. 1 c) of Notice no. 12/2002 of the Bank
of Portugal, relates to the shortfall in financing for liabilities for past service of
employees in service as at 31 December 1994, expected to retire after 31
December 1997, and which is still recognized as a cost and financed in according
with this payment plan, with fixed instalments over 20 years, ending on 31/12/2014.
Report
and Accounts
229
04
The accounts payable correspond to the non-financed part of liabilities as
at 31 December 2004, in accordance with para. 5 of Notice 12/2001,
which are recognized as a liability, under account 305 - Other Accounts
Payable – Contributions to Pension Fund.
The current value of liabilities for future services, as at 31 December 2004,
was 26,604 thousand Euros.
In the financial year of 2004, the Bank recognized the following costs
of hedging liabilities for retirement and survivors’ pensions:
+ Cost of current service
1,522
+ Cost of interest
3,580
- Expected income on Fund assets
3,269
+ Balance Repayments Plan (para. 1 c) of Notice 12/2001)
342
+ Cost of early retirement programmes
1,637
Cost of current service
3,812
In accordance with para. 2 1) e) of Notice 12/2001, the Bank recorded
actuarial gains for the period deriving from differences between the actuarial
and financial assumptions used and the conditions effectively encountered
during the period, of 1,593 thousand Euros, in the account for Floating Values,
the balance of which stood at 2,749 thousand Euros, as at 31 December
2004, within the limits of the “corridor”
In accordance in para 1 e) of no. 2 of Notice 12/2001, the Bank recorded
under “Expenses with deferred cost” the accrued liabilities deriving from
33 early retirement pensions which occurred during the period, amounting
to 8,844 thousand Euros, of which it amortised approximately 1/10.
In June 2004, having obtained authorization from the Bank of Portugal,
the Bank wrote off against retained earnings a sum of 7,728 thousand Euros
230
’07
corresponding to the balance at that date in “Expenses with deferred cost”
relating to early retirement pensions prior to 2004.
The actuarial losses resulting from the alteration of the discount rate from 6%
to 5.25%, as referred to above, amounting to 8,853 thousand Euros, were
recorded under “Expenses with Deferred Cost”, in accordance with paras. 1 d)
and 2 of Notice 12/2001, and these losses will be depreciated over five
years, in accordance with the rules for transition to IAS/IFRS, as mentioned
in the summary document on regulatory alterations issued by the Bank
of Portugal. Coverage of these accrued liabilities, as at 31 December 2004,
stood below the minimum value of financing provided for in Notice 12/2001,
and the remainder was financed as at 3 January 2005.
As at 31 December 2004, the balance for “Expenses with deferred cost”
stood at 16,811 thousand Euros.
In the course of 2004, the Pension Fund paid pensions with a value of 2,285
thousand Euros and received contributions of 12,559 thousand Euros, of
which 2,501 thousand related to current contributions and 10,058 thousand
related to extraordinary contributions. Contributions were paid in cash.
The banks uses, on the basis of leases, property belonging to the Pension
Fund, with a value of 8,690 thousand Euros.
Report
and Accounts
231
04
The main actuarial and financial assumptions used were:
Actuarial valuation method:
Unit Credit Projected (UCP)
Discount rate:
5.25%
Expected return on fund assets:
5.25%
Expected rate of growth in salaries and other benef.:
3.00%
Expected rate of growth in pensions:
Mortality table:
2.00%
TV 73/77
Disability table:
EVK 80
Turnover table:
Not applied
Type of decrements uses:
Disability 3) art. 7 Notice 12/2001 200112/2001 12/2001
Rates effectively recorded during the financial year:
Rate of return on value of pension fund:
6.09%
Rate of growth in salaries and other benef.:
4.64%
Rate of growth in pensions:
2.13%
Mortality table:
0.16%
Disability table:
0.16%
Turnover table:
0.47%
232
’07
1.50 FINANCIAL HOLDINGS
Holdings
No Shares
Market
value
Presumable
Trading value
Accrued
Provisions
Net
Value
Gains
Losses
400
20
-
0
20
0
0
0
87,860
504
-
2,673
0
504
2,169
0
800
4
-
9
0
4
5
0
AMBELIS
CABO TV MADEIRENSE S.A.
CENTRO DE EMP.E INOVAÇÃO DA MADEIRA, LDA
FINANGEST
S.I.B.S.- SOC. INTERBANCARIA DE SERVIÇOS,SA
UNICRE- CARTÃO INTERNAC. DE CRÉDITO, SA
VIA LITORAL, SA
ATLNTICO CLUBE INT. FÉRIAS AÇORES
CABO TV AÇOREANA, SA
Valuation
Acquisition
value
526
535
-
5
180
355
0
350
103,436
445
-
995
0
445
550
0
24,335
497
-
746
4
494
0
0
4,750
792
-
1,034
102
690
0
0
250
1
-
0
1
1
0
0
66,000
356
-
533
0
355
178
0
NORMA AÇORES- Soc. Est. Apoio Des. Reg., SA
10,000
50
-
75
0
50
25
0
SOGEO- Soc. Geotermica dos Açores, SA
24,529
122
-
184
0
122
62
0
TRANSINSULAR (Açores)- Transp. M. Insul., SA
S.W.I.F.T.
Habiprede
2,000
11
-
16
0
11
5
0
11
11
-
22
0
11
11
0
5,000
1,250
-
1,250
0
1,250
0
0
BEIRA VOUGA
20,317
10
-
14
0
10
4
0
BEIRA VOUGA ACÇÕES PREFERENCIAIS
21,500
10
-
15
0
10
5
0
NOVA C. GRANDE HOTEL
50,300
184
-
276
0
184
92
0
EID
88,080
500
-
750
0
500
250
0
QUINTA DAS PANÇAS
38,997
250
-
375
0
250
125
0
Report
and Accounts
233
04
The valuation criteria used to account for financial holdings are those established
in Notice 3/95, of 30 June and Notice 4/2002, of 30 June;
The presumable vale of transaction is determined by multiplying the
corresponding part of the net worth of the company in question by a factor
of 1.5.
There are no risk reduction instruments hedging the devaluation risks of these
investments.
1.51 OTHER COMPLEMENTARY DISCLOSURES RELATING TO THE CONSOLIDATED
ACCOUNTS
a) CASH AND FUNDS WITH CENTRAL BANKS
Portuguese notes and coins
Foreign notes and coins
Current accounts with the Central Banks
2004
2003
25,320
29,107
5,286
4,590
198,301
243,359
228,907
277,056
b) SIGHT DEPOSITS WITH BANKS
Deposits with banks in Portugal
Current accounts
Accounts receivable
Other deposits
2004
2003
5,861
6,574
33,636
37,872
-
-
39,497
44,446
234
’07
Deposits with banks abroad
Current accounts
Accounts receivable
Gross balance
Provisions
Net balance
2004
2003
45,002
39,452
1,810
1,433
46,812
40,885
86,309
85,331
43
43
86,266
85,288
c) ISSUE PREMIUMS
Issue premiums expressed in the balance sheet of Banif SGPS, AS, the company
which resulted from the change in the name of Banif – Banco Internacional do
Funchal, SA, as referred to in the introductory note to chapter VII, and relate
to issue premiums on capital increases by public deed of 26 July 1988,
31 January 1989, 02 September 1996, and 29 September 1998, of,
respectively, 19,952 thousand Euros, 12,470 thousand Euros, 2,494
thousand Euros, 23,658 thousand Euros and from incorporation of reserves
of 360 thousand Euros in the share capital, as a result of redenomination
in Euros.
d) The company has no outstanding debts to the State, the social security
authorities or other public bodies.
2. The valuation criteria used for the different items in the consolidated
accounts, and the methods for calculating provisions and depreciation,
together with conversion method used for figures originally expressed in
foreign currency, are detailed in point 1.3.
Report
and Accounts
235
04
3. GOODWILL
Calculations effected to determine “Goodwill”
The account for “Goodwill” in the consolidated balance sheet reflects the net
contribution to the Banif Group of companies included by means of the full
consolidation method, corresponding to the difference between the book
value of the holding in the share capital of each company and the proportional
share in the respective Shareholders’ Funds and Retained Earnings, determined
when first consolidated.
Goodwill breaks down as follows (in ‘000 Euros):
GOODWILL
Empresa – Filial
Gross
Assets
Depr.
Net
Banif Leasing - Soc. Locação Fin.
Liabilities
188
FINAB– Int. Corp. Management Services, Ltd
3
Banif Securities Holding, Inc
2
4,722
Banco Comercial Açores
1,265
Banif Rent
Banif Banco de Investimento, SA
27
755
755
0
Banif (Brasil)
21
4
17
Banif Int. Holdings
21
8
13
Banif Açores SGPS
Banif Imobiliária, SA
Sociedade Imobiliária Piedade, SA
Banco Comercial dos Açores
1
0
1
1,574
572
1,002
20
20
0
200
60
140
8,794
15,355
6,561
Banif Crédito
9
9
0
Banif Primus
8,890
4,100
4,790
36
7
29
Com. Açores San José
26
5
21
26,908
12,101
14,807
6,207
236
’07
The Goodwill for Banif Açores SGPS, is determined as follows:
Detail of Goodwill in Banif (Açores), SGPS, SA
This difference results from the reorganization of the Banif Group, which
resulted in the sale of the holdings of Banif (Açores), SA in Banco Comerical
dos Açores, S.A. and Companhia de Seguros Açoreana, SA, meaning that the
Goodwill on the 1st consolidation on that date should be considered.
Movements were accordingly made in the equity accounts, as detailed below:
Share capital at the date of the 1st Consolidation
Retained Earnings at the date of 1st Consolidation
25,075
- 641
24,434
Investment cost
Goodwill on 1st consolidation
Share capital at the date of 2nd Consolidation
Retained earnings at the date of the 2nd Consolidation
23,021
1,413
25,075
-7,567
17,508
10% of Shareholders’ Funds
1,750
Investment cost
1,911
Goodwill of 2nd consolidation
Total
161
1,574
The Goodwill for Banif Açores SGPS will be depreciated over 20 years, with
depreciation of 79 thousand Euros imputed to the financial year of 2004.
Report
and Accounts
237
04
The Goodwill in Banco Banif Primus, SA was calculated as follows:
Share capital at date of 1st consolidation (51%)
17,264
Reserves at date of 1st consolidation (51%)
358
Retained earnings at date of 1st consolidation (51%)
- 97
Result for the period at date of 1st consolidation (51%)
612
18,137
51% of Shareholders’ funds
Investment cost (51%)
Goodwill on 1st consolidation
Share capital at date of 2nd consolidation
Reserves at date of 2nd consolidation
Retained earnings at date of 2nd consolidation
Result for the period at date of 2nd consolidation
9,249
16,172
6,923
16,336
416
1,239
17,991
2,699
Investment costs (15%)
3,739
Fluctuation in values
Goodwill on 2nd consolidation
Share capital at date of 3rd consolidation
Reserves at date of 3rd consolidation
Retained earnings at date of 3rd consolidation
Result for the period at date of 3rd consolidation
86
1,126
11,009
855
- 530
1,272
12,606
Investment costs (4%)
Fluctuation in values
Goodwill on 3rd consolidation
504
796
- 106
186
238
’07
Share capital at date of 4th consolidation
Reserves at date of 4th consolidation
Retained earnings at date of 4th consolidation
Result for the period at date of 4th consolidation
9,426
729
1,191
-251
11,095
567
Investments cost
661
Goodwill on 4th consolidation
94
8,739
666
735
-101
10,039
9.13% of Shareholders’ funds
Investment cost (9.13%)
917
1,419
502
8,470
696
117
178
9,461
15.87% of Shareholders’ funds
1,501
Investments cost (15.87%)
1,560
Total Goodwill
59
8,890
The Goodwill in Banco Banif Primus, SA will be depreciated over 10 years, with
depreciation of 889 thousand Euros imputed to the financial year of 2004.
Report
and Accounts
239
04
Goodwill in Banco Comercial dos Açores, SA was calculated as follows:
Goodwill on 1st consolidation (positive)
15,355
Goodwill on 2nd consolidation
Increase in holding (74,202 thousand Euros X 5.56%)
4,126
Investment cost
3,284
New goodwill (negative)
842
Goodwill on 3rd consolidation
Increase in holding (74,202 thousand Euros X 5.77%)
4,281
Investment cost
4,062
219
The negative goodwill was recognized under Income during 2002
Increase in holding (89,574 thousand Euros x 25.59%)
22,922
Investment Cost
15,898
7,024
Amount recognized in negative goodwill
3,553
Amount recognized under income in 2003
3,471
The negative goodwill of 3,553 thousand Euros corresponds to future losses
which refer to the extraordinary contribution to pension funds for early
retirement and the shortfall in coverage of liabilities for past services of
current employees as at 31.12.1994; in other words, this should be
recognized as a income when the future expenses are recognized (in the
financial year of 2004 a sum of 206 thousand Euros was recognized in
the consolidated result). The figure of 3,471 thousand Euros is the surplus
goodwill recorded as income in 2003.
240
’07
After recognition under retained earnings of future losses relating to the
contribution to pension funds for early retirement pensions, made by Banco
Comercial dos Açores in June 1994, as referred to in Note 1.49, the amount
corresponding to the negative goodwill constituted in 2003, amounting
to 2,082 thousand Euros, was consequently also recognized in reserves.
In December 2004, the negative goodwill stood at 1,265 thousand Euros.
The negative goodwill of Banco Comercial dos Açores, S.A. will be depreciated
over twenty years, and depreciation in 2004 totalled 768 thousand Euros.
Minority Interests
The Minority Interests accounts refers to the proportional value of the
shareholders’ funds in each of the companies included in the consolidated
accounts by the full consolidation difference, corresponding to the part not
held by the Banif Group.
Report
and Accounts
241
04
As at 31 December 2004 this account breaks down as follows:
Minority Interests
Subsidiary
2004
2003
Banif Primus
1,618
2,247
Banif Cayman
12,352
12,710
14
2,055
FINAB
31
14
130
(15)
76,068
25,000
Banif Int. Holdings
Banif Finance
57
Econofinance
(82)
Banif Securities Holdings
Banif Rent
NewCapital
200
23
212
(154)
328
90,622
42,186
Revaluation Differences – Equity Method
The account for Revaluation Difference – Equity Method results from the
difference between the book value of the holding in the companies revalued
under the equity methods and the value of the share they represent in the
respective shareholders’ funds.
242
’07
The amount recorded in the consolidated balance sheet of the Banif Group
for this item breaks down as follows:
Equity Method Differences
Banif Açor Pensões, SA
Companhia de Seguros Açoreana, SA
Espaço Dez - Sociedade Imobiliária, Lda
Investaçor
Gross
Assets
Deprec.
Net
34
13
21
22
-
-
-
3,580
-
4
4
0
2,032
203
1,829
2,070
220
1,850
Liabilities
3,602
Revaluation differences – equity method are depreciated over the anticipated
useful of the investments, which has been set at 10 years.
3. BANIF GROUP STRUCTURE
The structure of the Banif Group, the respective organizational chart and
changes in the course of 2004 are described in the chapter on Banif Group
Operations of this Report.
Report
and Accounts
243
04
4. AFFILIATED/RELATED COMPANIES INCLUDED IN THE CONSOLIDATED ACCOUNTS
Percentage holding
of Banif Group
Affiliates holding the direct interest
Banif Imobiliaria, SA
Av. José Malhoa. Lote 1792
Lisboa
100%
Banif SGPS, SA
100%
100%
Banif Imobiliaria, SA
100%
100%
A.C.E.
Soc. Imobiliaria Piedade, SA
Lisboa
Banifserv. ACE
Rua de João Tavira. 30
Funchal
(*)
Lisboa
100%
Banif SGPS, SA
84.80%
15.20%
Funchal
100%
Banif SGPS, SA
100%
100%
100%
100%
Banif-Banco Internacional do Funchal, SA
100%
100%
100%
Funchal
Banco Comercial dos Açores, SA
244
’07
Percentage holding
of Banif Group
Comercial dos Açores, Inc
1645. Pleasant Street - Fall River
Massachusetts - EUA
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Comercial dos Açores, Inc.
2B 33rd North Street - San José
Califórnia - EUA
Banif Leasing, SA
Banif Crédito SFAC, SA
Av. República do Chile. 230-9º
Banif Primus Corretora
75%
75%
75%
100%
100%
100%
100%
100%
100%
100%
Banif Primus Asset Management
Lisboa
Banif Gestão de Activos
Lisboa
Banif (Cayman) Ltd
P.O. Box 30124 Georgetown
Grand Cayman
Report
and Accounts
245
04
Percentage holding
of Banif Group
FINAB
Genesis Building. 3rd Floor
PO Box 32338-SMB
Georgetown. Cayman Islands. BWI
60%
Banif (Cayman) Ltd
60%
Banif Securities Holdings Ltd
Genesis Building. 3rd Floor
PO Box 32338-SMB
Georgetown. Cayman Islands. BWI
100%
100%
100%
100%
100%
20%
80%
Banif (Cayman) Ltd
85%
Suite 1712
Miami. Fl. 33131 – USA
Banif (Brasil), Ltd
Alameda Jaú nº 389.14º sala 141
São Paulo – Brasil
Banif Int. Holdings
Genesis Building-3rd Floor
Grand Cayman
85%
Econofinance
100%
100%
Banif Int. Holdings
100%
Banif Financial Services Inc
Suite 1712
Miami. Fl. 33131- USA
85%
246
’07
Percentage holding
of Banif Group
Suite 1712
Miami. Fl. 33131- USA
85%
Banif Int. Holdings
100%
Banif SGPS, SA
100%
Banif Seguros, SGPS
Lisboa
100%
Newcapital
Lisboa
60%
60%
100%
100%
Banif International Asset Management
Genesis Building, 3rd Floor
P.O. Box 32338-SMB, Grand Cayman
Cayman Islands
Banif Rent
70%
70%
Banif Finance
PO Box 1093 GT, Queensgate House
South Church Street, George Town
Grand Cayman
100%
(*) A Banifserv – ACE is a joint venture by the following Banif Group companies:
50.0%
25.0%
10.0%
Banif Crédito
2.5%
2.5%
5.0%
Banif Investimentos, SGPS, SA
5.0%
Report
and Accounts
247
04
100%
5. AFFILIATED/RELATED COMPANIES NOT INCLUDED IN THE CONSOLIDATED ACCOUNTS
Percentage holding
of Banif Group
Companhia Seguros Açoreana, SA
Largo da Matriz. 45-52
Ponta Delgada
66.38%
Banif Seguros, SGPS, SA
52.31%
14.07%
R: Dr. José Bruno T. Carreiro
Edifício BCA - 9º- Ponta Delgada
58.38%
47.57%
10.81%
Espaço Dez
Av. Barbosa du Bocage. 83 a 85 - 5º
Lisboa
25%
25%
InvestAçor
Rua de Santa Catarina
Ponta Delgada
48.38%
Banif (Açores) SGPS
BCA
40%
8.38%
In accordance with Decree-Law 36/92, of 28 March, the structure and
content of the consolidated accounts, together with the methods and criteria
used, as fixed by the Bank of Portugal, with a view to providing a fair picture
o the assets, financial affairs and results of the group of companies.
This means that the accounts of the above companies are excluded from the
consolidated accounts, given the different nature of their operations.
7. COMPANIES INCLUDED IN THE CONSOLIDATED ACCOUNTS BY THE
PROPORTIONAL METHOD
No companies have been included in the consolidated accounts by the
proportional method.
248
’07
8. ASSOCIATED COMPANIES
There are no companies, other than those referred to in points 5 and 6, where
the direct or indirect holding is greater than 20%.
9. The consolidated balance sheet includes 1,578,024 thousand Euros
in debts where the residual maturity is greater than 5 years; none of these
were contracted by the Banif Group.
10. Financial commitments accepted by the Banif Group, as reflected in
memorandum accounts and not written off in the consolidation process, total
896,695 thousand Euros.
Of these, 5,373 thousand Euros relate to commitments accepted in relation
to payment of pensions.
Report
and Accounts
249
04
11. Breakdown of income statement accounts by business areas and geographical markets
Business Area
Corporate
Finance
Interest and equivalent income
Commissions (income)
and other inc.
Payments
Retail Commerc.
and
Banking
Banking Settlements
106,556
65,521
Asset
Custody Managem.
157,538
Others
TOTAL
1,658
352,860
45,217
70,724
2,077
183,539
0
21,587
0
61,339
86,814
0
0
0
(419)
169,321
4,323
650
1,231
19,354
15,905
15,275
3,181
6,046
20,406
86,371
50
1,002
3,503
786
578
131
13,557
19,607
Commissions (cost)
and other costs
Earnings from securities
Profits on financial operations
Losses on financial operations
Other taxes
Brokerage
(retail)
87,108
Interest and equivalent costs
Financial Margin
Trading
and sales
1,885
1,885
106,167
106,167
95,010
95,010
66
542
4
1,151
1,522
226
47
93
180
3,831
4,257
34,687
225
76,039
100,411
14,471
3,003
5,953
6,250
245,296
Personnel costs
1,421
11,579
75
24,602
32,529
4,831
1,002
1,987
3,857
81,883
Other overheads
1,003
8,178
53
17,377
22,976
3,412
708
1,404
2,723
57,834
Result of Banking Operations 1,833
14,930
97
34,060
44,906
6,228
1,293
2,562
(330)
105,579
30,401
Banking Revenues
Reinstatement and use
of provisions
8,247
7,902
11,388
2,864
Provisions for the period
4,459
25,755
36,690
5,879
72,783
Depreciation for the period
Operating result
365
2,973
19
6,317
8,352
1,240
257
510
991
21,024
1,468
15,745
78
9,890
11,252
4,988
1,036
2,052
(4,336)
42,173
(1,630)
(1,630)
Extraordinary gains (losses)
Results in related companies not
included in consolidated accounts
Minority interests
Pre-tax profits
Tax on profits
Net profit for the period
7,012
7,012
(1,630)
(1,630)
45,903
1,468
15,745
78
9,890
11,252
4,988
1,036
2,052
(606)
275
2,949
15
1,852
1,993
934
194
384
0
8,597
1,193
12,796
63
8,038
9,259
4,054
842
1,668
(606)
37,306
250
’07
Geographical Markets
Portugal
Interest and equivalent income 304,329
Rest
of E.U.
Rest
of Europe
North
America
Latin
America
11,773
36,758
Africa
Rest
of World
Others
TOTAL
352,860
Interest and equivalent costs
130,000
31,703
21,836
183,539
Financial Margin
174,329
(19,930)
14,922
169,321
Commissions (income)
and other inc.
79,325
3,768
3,278
86,371
Commissions (cost)
and other costs
10,037
5,177
4,393
19,607
1,212
21
652
1,885
Profits on financial operations
60,813
618
44,736
106,167
Losses on financial operations
48,792
360
45,858
95,010
1,910
231
1,690
3,831
254,940
(21,291)
11,647
245,296
Personnel costs
75,460
1,619
4,804
81,883
Other overheads
51,748
1,843
4,243
57,834
Result of Banking Operations127,732
(24,753)
2,600
105,579
Earnings from securities
Other taxes
Banking Revenues
Reinstatement and use
of provisions
28,614
1,787
Provisions for the period
71,229
834
720
Depreciation for the period
20,452
355
217
21,024
Operating result
64,665
(24,155)
1,663
42,173
Extraordinary gains (losses)
(1,255)
(375)
30,401
Minority interests
Pre-tax profits
Tax on profits
Net profit for the period
72,783
(1,630)
Results in related companies not
included in consolidated accounts 7,012
7,012
(113)
1,749
16
(1,652)
63,410
(24,530)
1,663
45,903
8,092
81
424
8,597
55,318
(24,611)
1,239
37,306
Report
and Accounts
251
Asia
04
12. At year end 2004, the workforce of the Banif Group divided into the
following professional categories:
2004
2003
Senior Management
193
165
Technical Staff
542
546
Middle ranking staff
395
390
1.154
1085
Administrative
Others
Average annual workforce
44
40
2,328
2,226
2,303
2,217
The workforces of Companhia de Seguros Açoreana, SA and Banif Açor
Pensões, SA (not included in the above figures) break down as follows :
2004
2003
580
581
2
2
582
583
13. No Banif Group companies are consolidated by the proportional method.
252
’07
14. TAXATION
Differences between taxation imputed to the financial year and previous two
financial years and tax actually paid in relation to the same:
Period
Imputed
TAX
Paid
Difference
2002
9,213
4,933
4,280
2003
4,109
2,736
1,373
2004
8,597
4,282
4,315
15. REMUNERATION OF DIRECTORS AND AUDITORS
Total remuneration paid to the directors and auditors, considering the
liabilities of directly and indirectly controlled companies in relation to directors
and auditors, stood at 2,813 thousand Euros as at 31 December 2004.
The directors of Banif SGPS, S.A. earned total remuneration of 2,755 thousand
Euros, for performance of duties as directors of Banif SGPS, SA and
subsidiaries.
The members of the Audit Board of Banif (excluding the respective official
auditors) earned remuneration of 58 thousand Euros for their duties as
auditors of Banif – Banco Internacional do Funchal, SA, and Banco Comercial
dos Açores, S.A..
There are commitments of 5,373 thousand Euros deriving or contracted
in relation to retirement pensions for former members of the above boards.
No credits have been granted to the members of these boards, other than
those resulting from personnel policies and for welfare reasons.
Report
and Accounts
253
04
16. No credits have been granted to the members of these boards, other than
those resulting from personnel policies and for welfare reasons.
17. a) FORMATION OF CONSOLIDATED RESULTS
The Banif Group’s consolidated results were formed as follows:
2004
2003
Banif SGPS, SA
15,819
10,765
15,126
12,219
2,477
(9)
(13)
(25)
20,512
23,190
10,246
5,040
7,233
6,718
Banif Seguros SGPS, SA
1,788
2,271
2,045
1,966
Banif (Cayman) Ltd
2,692
354
106
81
Banif (Brasil), SA
(3)
7
Banif Financial Services Inc
49
(26)
1,529
758
Banif Imobiliária, SA
1,226
313
116
(69)
Banif Int, Holdings
Banif Mortage Company
Banco Banif Primus
133
156
1,057
(237)
(492)
(227)
(603)
(351)
Com. Açores – Fall River
(7)
(6)
Com. Açores – San José
0
0
(20)
(105)
Econofinance SA
254
’07
2004
2003
Espaço Dez
(7)
116
FINAB
30
1
586
406
Banif Crédito SFAC, SA
Banif Leasing, SA
1,644
89
(15)
(14)
Banif Finance
1,218
(45)
Banif Rent
(342)
(179)
Newcapital
32
17
Banif Inter. Assent Management
13
5
InvestAçor
(320)
0
83,855
63,179
Adjustments to net results of the Group
Write-off of provisions
Write-off of dividends and other intra-group operations
Depreciation of goodwill
Consolidated result
Report
and Accounts
255
04
(1,058)
(1,418)
(43,516)
(34,690)
(1,975)
(1,713)
(46,549)
(37,821)
37,306
25,358
b) T R A N S I T I O N T O I N T E R N A T I O N A L F I N A N C I A L R E P O R T I N G S T A N D A R D
(International Accounting Standards/International Financial Reporting
Standards)
In accordance with Regulations no. 1606/2002, issued by the Council and the
European Parliament, on the application of international accounting standards,
companies governed by the legislation of a Member State with securities
listed on regulated markets in any Member State are required to present
consolidated accounts in accordance with the IAS/IFRS (International
Accounting Standards/International Financial Reporting Standards) adopted
at European level, for financial periods starting on or after 1 January 2005.
This requirements applies to Banif-SGPS, SA, the parent company of the Banif
Group.
The financial statements of the Banif Group, as at 31 December 2004, have
been drawn up in accordance with accounting principles generally accepted
in Portugal for the banking sector. This note sets out to describe the main
aspects of the work carried out within the Banif Group with a view to preparing
consolidated accounts under IAS/IFRS, and to disclose the main differences
identified so far between the existing accounting policies and IAS/IFRS.
The disclosures made in this note should not be regarded as an exhaustive
analysis of all the differences between the current standards and the IAS/IFRS
with a potential impact on the Banif Group’s individual or consolidated financial
statements.
Programme of Conversion to IAS/IFRS
In order to adapt to the requirements of the IAS/IFRS, the Banif Group has
decided to implement an integrated project, organized in two phases.
256
’07
The Needs Analysis Phase, carried out and completed in the second half of 2003,
with help from an independent external consultant, consisted of a critical analysis
of the principal qualitative impacts of introduction of the IAS/IFRS, in the light of
existing procedures, with a High Level Action Plan being drawn up. This phase also
involved training on IAS/IFRS aimed at accounts staff in the main Group companies.
The Implementation Phase, which started in the second quarter of 2004 has
been designed to carry out the tasks provided for in the High Level Action
Plan, with the following main objectives:
- overhaul of the Group’s Accounting Policies and Procedures Manual;
- reformulation of the “Reporting Package” and consolidation instructions;
- assessment and selection of the options permitted by IAS/IFRS, including
the options for transition, as defined in IFRS 1 – First-time adoption
of International Financial Reporting Standards;
- analysis and implementation of alterations to various processes and administrative
business models, and in the information systems of Group companies.
- preparation of “pro forma” financial statements, with reference to the opening
balance sheet at the transition date, 1 January 2004, and the end of each quarter
of 2004, for the purposes of presenting consistent comparisons in the interim
and annual financial statements for 2005, in keeping with IAS/IFRS principles.
A project team has been set up to implement this, comprising various working
parties as well as the team of external consultants which conducted the
preliminary needs analysis. In view of the specific nature and complexity of the
models for calculation and recognition of impairment losses in lending, which
are to replace the regulatory provisions in the consolidated accounts, the
Group has also contracted the services of a specialist external body.
Implementation of the programme is being supervised by a steering committee,
with representation from the executive board, where progress reports are
periodically presented.
Report
and Accounts
257
04
The main impacts identified
As stated above, this note does not seek to provide an exhaustive account
of all the impacts which might derive from adoption of the IAS/IFRS, nor does
it deal with differences in terms of disclosure, classification and presentation
of the financial statements. For the purposes of this note, there is likewise no
requirement or intention that the quantitative impacts be disclosed, given
that work is still proceeding on quantification and validation tests and that, in
theory, the options may yet be altered prior to publication of the first
accounts prepared under the IAS/IFRS.
From the analysis conducted, the main impacts on the Group’s financial statements
may be felt in the following areas, amongst others:
• Credit impairment
Under the current rules, the Group creates provisions for lending in keeping
with Bank of Portugal rules contained in Notice 3/95 and subsequent
amendments.
According to IAS 39, lending is to be valued at amortised cost and subject to
impairment tests. The impairment loss corresponds in value to the difference
between the book value of the credits and the present value of estimated
future cash flows, discounted at the effective original interest rate of the
contract.
The calculation and recognition of impairment losses on lending is fairly
complex and will only apply to the consolidated accounts, whilst at the same
time the Bank of Portugal rules on the calculation of regulatory provisions will
continue to apply to the individual accounts
258
’07
• Financial Instruments
Under IAS 39, financial instruments are classified in one of the following
categories:
- Financial assets recorded at fair value through profit or loss (including those
held for trading);
- Held-to-maturity financial assets;
- Loans and receivables;
- Available-for-sale financial assets.
Financial assets are carried at fair value (“the amount for which an asset
may be exchanged, or a liability liquidated, between knowledgeable, willing
parties in an arm’s length transaction”), except for “loans and receivables”,
“held-to-maturity financial assets” and unlisted variable yield financial assets
whose value cannot be reliably determined. These financial assets which are
not carried at fair value should be recorded in the balance sheet at amortised
cost and subject to impairment tests.
In comparison with the accounting principles currently applicable, the following
effects will be felt on the measurement and recognition of variations in the
balance sheet value:
- investment securities which are classified as “available-for-sale assets” will
have the respective potential capital gains and losses recorded in reserves,
except in the case of impairment losses, which will be recorded under
results;
- potential capital gains and losses on financial holdings, to be included in the
category of available-for-sale assets, will be reflected in the balance sheet
value against reserves;
- all derivatives (hedges or embedded in other instruments) are recorded at
fair value.
Report
and Accounts
259
04
The Group has classified its portfolios of securities and financial holdings in the
IAS/IFRS categories in keeping with the respective investment strategies,
with a view to application of the new measurement principles as from 1
January 2005.
• Derecognition of assets and consolidation of SPEs
Under the PSCB rules, assets transferred by the Group through securitization
operations are derecognized (i.e. no longer recorded as assets in the balance
sheet) provided the operation amounts to effective and fully transfer.
According to IAS 39, assets are only derecognized when the entity loses control
of the contractual rights attaching to the asset. The principles for derecognition
of financial assets are applicable to transactions occurring after 1 January
2004.
All the SPEs (Special Purpose Entities) with which the Group has relations have
been analyzed in the light of the consolidation rules applicable to these entities
(SIC 12), namely all the entities created in connection with the securitization
operations already carried out. In most cases it was found that they meet the
conditions for consolidation under the IAS/IFRS framework.
• Property in own use and investment property
The Group will opt in its consolidated accounts to value property in own use
and investment property at fair value. In the individual accounts, the principles
of the accounting model to be implemented by the Bank of Portugal shall
apply.
In relation to investment property, the option for measurement at fair value
implies that capital gains and losses will be recognized directly in the income
statement.
260
’07
In relation to property in own use, the option for fair value means that capital
gains will be recorded in reserves and capital losses directly in the income
statement.
• Intangible assets
Under the IAS/IFRS rules, the definition of intangible assets is tighter than that
currently prevailing, and expenses which do not meet the new requirements
will be recorded as costs for the year (for instance, advertising expenses,
research and development, formation and reorganization costs, etc).
• Employee benefits
With the adoption of the IAS/IFRS rules, IAS 19 will regulate all accounting
matters relating to the recognition of employee benefits, and in particular
liabilities relating to retirement and survivor’s pensions, causing the provisions
of Bank of Portugal Notice 12/2001 to be set aside. The main effects on the
Group’s financial statements will results from:
- the write-off, against reserves, of balances in for Fluctuation of Values
(“corridor”) and deferred costs and income related to pensions at the transition
date, due to the option for prospective application of IAS19;
- the write-off, against reserves, of balances for deferred costs relating to
early retirement pensions, which are currently depreciated over 10 years,
and which in future will be recognized in the year in which the pensions are
negotiated with the employees;
- review of the actuarial and financial assumptions used in assessing liabilities
and which will have to be adjusted in keeping with expectations and the
estimated evolution of relevant variables. To this end, the Banif Group revised
the discount rate on 31 December 2004, with a view to convergence with
the principles established in IAS 19;
Report
and Accounts
261
04
- recognition of other long term employee benefits, including health care
benefits granted to employees at retirement age, length-of-service bonuses
and death allowances.
• Deferred taxes
Under Bank of Portugal rules, it is not possible to recognize deferred tax
assets. IAS 12 permits the recognition of deferred tax assets, to the extent to
which it is probable that future taxable profits will permit such assets to be
utilized.
262
’07
2. STATEMENT
OF CASH FLOWS
2.1 BANIF SGPS (INDIVIDUAL ACCOUNTS)
(In thousand Euros)
Dec-04
Dec-03
12,443
1. CASH FLOWS OPERATING ACTIVITIES
1.1 Operating Result
Profit for the period
15,819
Depreciation in the period
79
86
Exceptional profits, net
290
7,104
16,188
19,633
1.2 Variations in Assets and Oper. Liabilities
Increase in other assets
(3,421)
Variations in accruals and deferrals/asset side
(10,691)
(87,276)
(1,443)
Variations in accruals and deferrals/liabilities side
151
(2,363)
Reduction in deposits by banks
(100,000)
Increase in deposits by clients
7,400
Increase in other liabilities
940
Total cash flows from Operating Activities
140,000
267
(5,621)
(50,815)
10,567
(31,182)
2.CASH FLOWS INVESTING ACTIVITIES
Variations in financial holdings
42,900
Total Cash Flows fromInvesting Activities
0
42,900
3. CASH FLOWS FINANCING ACTIVITIES
Dividends distributed. financial year of 2003
(10,000)
(7,500)
Exceptional gains
(290)
(7,104)
Total Cash Flows from Financing Activities
(10,290)
(14,604)
277
(2,886)
4. FLOWS OF CASH AND CASH EQUIVALENTS
Opening cash and cash equivalents
940
Closing cash and cash equivalents
1,217
940
277
(2,886)
Report
and Accounts
263
04
3,826
2.2 BANIF SGPS (CONSOLIDATED Accounts)
(In thousand Euros)
Dec-04
Dec-03
25,358
1. CASH FLOWS OPERATING ACTIVITIES
1.1 Operating Result
Profit for the period
37,306
Provisions for overdue credit
54,738
40,872
Other provisions
18,045
19,924
Depreciation in the period
21,024
19,577
Allocation for taxes
8,597
4,109
Exceptional profits, net
1,630
11,253
Minority interests
1,652
Result of companies not included in consoldated acc.
(7,012)
1,267
135,980
(6,736)
115,624
1.2 Variations in Assets and Operating Liabilities
Increase in investments in other banks
(159,193)
Reduction in investments in other banks
647,502
Increase in investments in securities
(224,588)
Increase in client lending
(343,483)
(131,669)
Reduction in client lending
17,817
Increase in other assets
(3,155)
(19,831)
Variations in accruals and deferrals - asset side
(53,611)
(63,035)
Variations in accruals and deferrals - liabilities side
49,457
58,411
Increase in deposits by banks
95,572
Reduction in deposits by banks
(633,906)
Increase in deposits by clients
447,464
Increase in other liabilities
24,145
Total cash flows from Operating Activities
185,140
2,065
(167,392)
62,494
(31,412)
178,118
2. CASH FLOWS INVESTING ACTIVITIES
Acquisition of fixed assets
(35,721)
(32,830)
Disposal of fixed assets (net)
5,096
30,042
Adjustments to fixed assets
436
253
Variations in financial holdings
(8,107)
(16,813)
Goodwill and revaluation differences - equity method/asset side
(561)
(2,175)
Goodwill and revaluation differences - equity method/liabilities side
(2,288)
1,760
Depreciation of goodwill and revaluation differences - equity method
(207)
(3)
Deprec. for the period of goodwill-first consolidation
(1,768)
(1,714)
Gains on disposal of fixed assets
359
(4,348)
Minority interests
48,436
17,612
5,675
(8,216)
264
’07
2. STATEMENT
OF CASH FLOWS
(cont.)
2.2 BANIF SGPS (CONSOLIDATED Accounts)
(In thousand Euros)
Dec-04
Dec-03
3. CASH FLOWS FINANCING ACTIVITIES
Dividends distributed, financial year of 2003
(10,000)
(7,500)
Use and reinstatement of provisions
(57,753)
(55,119)
Exchange rate variations in provisions
(2)
(129)
Allocation to tax on profits for 2004
(8,597)
(4,109)
Results of companies excluded from consolidated acc.
7,012
6,736
Exceptional gains
(1,989)
(11,253)
Subordinated liabilities
56,850
Other variations in shareholders’ funds
6,955
4,091
(21,434)
(67,283)
(47,171)
112,619
4. FLOWS OF CASH AND CASH EQUIVALENTS
Opening cash and cash equivalents
362,387
Closing cash and cash equivalents
315,216
362,387
(47,171)
102,619
Report
and Accounts
265
04
259,768
3. INCOME STATEMENT
- BY FUNCTION
3.1 BANIF SGPS INDIVIDUAL
(In thousand Euros)
Dec-04
Dec-03
1. Financial margin
(843)
(3,384)
2. Provision for credit risks
0
0
3 . Net financial margin
(843)
(3,384)
4. Net commissions
(121)
(251)
5. Other net operating results
(53)
(326)
6. Service margin
(174)
(577)
17,175
9,960
8. Results of companies excluded from consolidation
0
0
9. Results of financial operations
0
0
10. Provisions for decpreciation of securities
0
0
11. Depreciation of goodwill
0
0
12. Operating result before transformation costs
16,158
5,999
13. Personnel costs
145
127
14. Other administrative costs
405
447
15. Depreciation
79
86
16. Transformation costs
629
660
17. Operating result
15,529
5,339
18. Other provisions
0
0
19. Results from disposal of financial holdings
0
0
20. Others extraordinary results
290
7,104
21. Result before tax and minority interests
15,819
12,443
22. Taxes
0
0
0
0
24. Net result
15,819
12,443
25. Result per share
0,40
0,31
Other earnings / Total earnings
105.1%
125.8%
Transformation costs / Total earnings
3.8%
5.0%
266
’07
3. INCOME STATEMENT
- BY FUNCTION
(cont.)
3.2 CONSOLIDATED ACCOUNTS
(In thousand Euros)
1. Financial margin
Dec-03
151,061
2. Provision for credit risks
44,413
38,948
3. Net financial margin
124,908
112,113
35,409
4. Net commissions
46,173
5. Other net operating results
16,760
25,263
6. Service margin
62,933
60,672
1,473
1,885
8. Results of companies excluded from consolidation
7,012
6,736
9. Results of financial operations
11,157
12,976
10. Provisions for decpreciation of securities
(3,770)
3,571
11. Depreciation of goodwill
1,975
1,714
12. Operating result before transformation costs
209,690
188,685
13. Personnel costs
81,883
75,262
14. Ohter administrative costs
57,834
54,996
15. Depreciation
19,049
17,863
16. Transformation costs
158,766
148,121
17. Operating result
50,924
40,564
18. Other provisions
1,739
(1,423)
19. Results from disposal of financial holdings
0
0
20. Others extraordinary results
(1,630)
(11,253)
21. Result before tax and minority interests
47,555
30,734
22. Taxes
8,597
4,109
(1,652)
(1,267)
25,358
24. Net result
37,306
25. Result per share
0,93
0,63
Other earnings / Total earnings
32.5%
31.9%
Transformation costs / Total earnings
63.3%
66.8%
Report
and Accounts
267
Dec-04
169,321
04
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’08
‘
OUR
COMMITMENT’
YOUR UNIVERSE
Report on
Corporate Governance
Report
and Accounts
04
’08
Report
on Corporate Governance
CHAPTER 0
The following disclosures on Corporate Governance comply with the
requirements of Regulations 7/2001 of the Securities Market Commission.
CHAPTER 0
DECLARATION OF COMPLIANCE
In accordance with Chapter 0 of the Annex to Regulations 7/2001 of the
Securities Market Commission, information is provided below on the SMC
corporate governance recommendations adopted and those not adopted.
I – Disclosure of information
1. Because of the very small number of enquiries from investors, there is no
investor support office, and the questions raised are answered directly by
the Board of Directors or by the Company Secretary.
II – Exercise of Voting Rights and Representation of Shareholders
1. Under the terms of article 17 of the Articles of Association, “Shareholders
may attend and take part in General Meetings provided they comply with
the general requirements of the law, and provided also that they register in
their names, no less than 8 (eight) days (inclusive) prior to the date set for
the respective meeting, shares entitling them to no less than one vote, such
shares remaining listed or registered at least until the close of the General
Meeting” (para. 3) and “Save in respect of resolutions on the amendment of
the Articles of Association and the election of company officers,
shareholders shall not exercise voting rights at General Meetings by means
of postal votes” (para. 5). There is therefore deemed to exist a slight
difference between the visions of para. 3 of article 17 of the articles of
association in relation to the freezing of shares (8 days) and the provisions
Report
and Accounts
269
04
of para. 2 a) of the recommendations (maximum of 5 business days). In
view of the content of article 17, para. 5, of the articles of association,
transcribed above, the recommendation contained in para. 2 b) has not
been adopted. With regard to para. 2 c) of the recommendations, the
recommendation is adopted insofar as it has been determined that postal
votes received up to the last business day prior to the holding of the General
Meeting shall be accepted. A detailed explanation of the procedures for
postal votes, without using pre-existing voting slips, is set out in the notice
of general meetings, although no postal votes have yet been cast, meaning
that the company has not regarded it necessary to provide voting slips.
III – Company Rules
3. The company has a Risk Committee, as detailed below; the
recommendation contained in item III 3 is therefore deemed to have been
adopted.
4. No measures have been adopted to prevent the success of public takeovers.
As provided for in article 17, para. 2, of the articles of association, each 100
shares carries one vote at the General Meeting, with no restrictions. The
recommendation on this point is not therefore applicable.
IV – Management Body
5. The recommendation contained in this item has been adopted.
6. The recommendation contained in this item has been adopted.
270
’08
Report
CHAPTER 0
(cont.)
7. In view of the company’s activity as a holding company, with no
employees, no need has arisen for the creation of internal monitoring
commissions to assess company structure and governance.
8. The remuneration of directors makes it possible to align their interests with
those of the company. The individual remuneration of directors is not
disclosed annually, as it is considered that the added openness which this
might create would not compensate the drawbacks of such a move, and
also that it is unlikely that this would permit effective assessment of the
performance of each sector of the company.
9. This recommendation has not been adopted in full in view of the situation
explained in Chapter I, item 9, below.
10. Not applicable given that no share allocation or share option schemes
have been established.
V – Institutional Investors
Not applicable.
Report
and Accounts
271
04
CHAPTER I
DISCLOSURES
1. Company Structure
As shown in the holdings diagram for the Banif Group at the beginning of the
Report and Accounts for 2004, Banif SGPS, SA controls 3 holding companies:
Banif Comercial SGPS, SA, Banif Investimentos SGPS, SA and Banif Seguros,
SGPS, SA, which function essentially as sub-holdings for commercial banking,
investment and insurance business, respectively.
The Board of Directors of Banif SGPS, SA includes members of the Board of
Directors of the main Group companies, in the 3 business areas referred to
above, ensuring co-ordination and centralised management of the companies
in the Banif Group. Accordingly, a number of Committees and Offices have
been created, answerable to the Board of Directors, and comprising directors
of the various Group companies, as shown in the following diagram:
272
’08
Report
CHAPTER I
(cont.)
Banif SGPS, SA
Structure - Corporate Governance
Banif SGPS, SA
Board of Directors
Technical
and
Administrative Office
Media
and
Image Office
Strategic Planning
and Budget
Committee
Risc
Committee
Procurement
Committee
Cross Selling
Committee
2. Specific committees
No specific committees have been created in the company.
3. Risk control system
The risk control system in the Banif Group has over the years been the
responsibility of the bodies set up in its various member companies, and this has
increasingly been regarded as an activity of strategic and overall importance. A
Risk Committee has been set up with the objectives of applying the risk strategy
and policies approved by the management bodies for the Group.
Report
and Accounts
273
04
The “Basle II Programme” has been set up with a view to adaptation to the
terms of the new capital framework. This has led to various project teams
being created, dealing with specific risks (lending, market and operational),
supported by specialist staff.
These teams draw on employees of the Group’s financial entities, and share
the same sources of know-how and working methods, which are designed to
achieve the objectives defined in a coherent manner.
This Programme has been a major driving force behind the adoption of
advanced risk management methods, notably the application of RAROC, and
the strategic management of capital and transfer prices.
Also in relation to ALM management, preparations are underway for creating
a team to set up an ALCO committee for the Group.
Another project in this field which will contribute to greater procedural and
methodological integrity with regard to risk, within the Group as a whole,
is centred on the conceptual model of determining losses through credit
impairment. This project is currently being developed, and will seek to
standardize criteria, procedures and analyses, making credit information more
coherent and consistent. This will be achieved through the choice of a set of
data based on the best choice of practices followed by different Group
companies, in line with the guiding principles enunciated by International
Standards.
274
’08
Report
CHAPTER I
(cont.)
The ongoing need for an exchange of information for analysis of credit
impairment at group level leads to additional use of synergies and develops
interaction between the staff of the different institutions making up the
Group, including those located abroad, thereby contributing to the cohesion
and unity of the Banif Group.
4. Quoted share prices
The shares representing the capital of Banif SGPS, SA have been quoted on
the official Euronext Lisboa market (formerly known as the Lisbon Stock
Exchange), since November 1992.
On 1 April 2002, as a result of the reorganization of the Banif Group
implemented on this date, the company name of the entity with shares
quoted on this market was changed to Banif – SGPS, SA.
In the course of 2004, 40 million ordinary, nominal and book-entry shares
were listed on the market with a unitary par value of 5 Euros in Banif - SGPS,
SA, the entity with the status of “company with capital open to public
investment”.
Shares in Banif –SGPS, SA were traded at 175 of the 259 normal sessions of
Euronext Lisbon. A total of approximately 465 thousand shares were traded
during the year, with a value of approximately 2.9 million Euros, corresponding
to an average of approximately 1.8 thousand Banif shares being traded daily.
Stock market capitalisation of listed shares in Banif – SGPS, SA stood at 274
million Euros as at 31 December 2004, representing 0.24% of stock market
capitalisation of shares listed on the official Euronext Lisbon market as at the
same date.
Report
and Accounts
275
04
On 26 February and on 11 August advertisements were published disclosing
the consolidated results for 2003 and the 1st half of 2004, respectively.
The consolidated results for the 1st and 3rd quarters of 2004 were published
on 30 April and 18 November 2004, respectively.
The following graph shows the quoted prices of shares in Banif compared with
the PSI index for the financial brokerage sector (PSI Index 209) from 2
January 2004 to 4 February 2005.
QUOTED PRICES OF SHARES IN BANIF SGPS, SA COMPARED
WITH INDEX FOR THE FINANCIAL SECTOR (DAILY RATES)
7.0
2.500
6.8
2.400
2.300
6.4
2.200
6.2
Index
Banif Listed Price
6.6
2.100
6.0
5.8
2.000
5.6
1.900
01-04 02-04 03-04 04-04 05-04 06-04 07-04 08-04 09-04 10-04 11-04 12-04 01-05 02-05
BANIF SHARES
PSI INDEX FIN. SERV.
276
’08
Report
CHAPTER I
(cont.)
5. Dividend distribution policy
As from 22 April 2004, in keeping with the resolution adopted by the General
Meeting of Shareholders of 29 March 2004, a gross dividend per share of
0.250 Euro, in relation to the financial year of 2003, was placed at the
disposal of shareholders, with shares without voting rights being traded as
from 19 April. The net value of this dividend was 0.2125 Euro per share, when
held by residents, and 0.1875 Euro per share, when held by non-residents.
The following table shows the main indicators relating to the market
performance and value of Banif shares over the last five years, against the
benchmark of consolidated accounting values:
(In Euros)
31-12-2000
31-12-2001
31-12-2002
31-12-2003
No. of shares issued
30,000,000
30,000,000
40,000,000
40,000,000
40,000,000
No. of shares listed
30,000,000
30,000,000
30,000,000
40,000,000
40,000,000
Price (€)
7.01
6.40
4.89
6.10
6.85
Market capitalisation (‘000 €)
210,300,0
192,000,0
146,700,0
244,000,0
274,000,0
Net result per share (€)
0.5664
0.6694
0.5217
0.6340
0.9327
Cash flow per share (€)
1.8700
2.2993
2.0831
2.3981
3.0064
Book value per share (€)
7.9508
8.2608
7.7197
8.1919
8.6707
Listed price/book value (PBV)
0.88
0.77
0.63
0.74
0.79
Listed price/cash flow (PCF)
3.75
2.78
2.35
2.54
2.28
Listed price/net earnings per share (PER)
12.38
9.56
9.37
9.62
7.34
Gross dividend per share (€)
0.3000
0.3000
0.2500
0.2500
0.3500
0.2975
Net dividend per share (€)
0.2250
0.2400
0.2000
0.2125
Gross dividends/net result
53.00%
44.80%
35.90%
39.40%
37.5%
Divid. per share/Av. book value
3.84%
3.70%
3.13%
3.14%
4.15%
Dividend per share/Av. price
3.85%
4.57%
4.22%
5.09%
5.69%
Report
and Accounts
277
31-12-2004
04
6. Share allocation or share option schemes
No such schemes have been instituted in the company.
7. Transactions and operations with company officers, holders of qualifying
holdings and related companies
As stated in the Corporate Governance Report for the previous financial year,
it was resolved on 18/12/2003 to request Rentipar, SGPS, SA, holder of a
qualified holding in the capital, to provide finance of up to € 20,000,000.00,
for short term cash needs, as from 30 December 2003, maturing up to one
year, at the quarterly EURIBOR interest rate plus 1.25%, the interest being
calculated daily on the principle and paid quarterly. This financing was
reclassified during 2004 as finance obtained as a shareholder loan
(suprimentos).
A further shareholder loan of € 5,000,000.00 was obtained from the
shareholder Rentipar Financeira, SGPS, SA, starting on 29 December 2004, at
the quarterly Euribor interest rate plus 1.25%.
8. Investor Support Office
There is currently no office with specific responsibility for investor relations.
When necessary, support is provided directly by the Board of Directors or
through the company secretary. The company’s internet site is at
www.grupobanif.pt. The representative for market relations is Dr. Carlos
David Duarte de Almeida, Vice-Chairman of the Board of Directors.
278
’08
Report
CHAPTER I
(cont.)
9. Remuneration Committee
The Remuneration Committee elected for 2003-2005 comprises Rentipar,
SGPS, SA, Vestiban – Gestão e Investimentos, SA and Renticapital –
Investimentos Financeiros, SA. These companies are represented by Dra.
Teresa Henriques da Silva Moura Roque, Dr. Carlos Gomes Nogueira and Mr.
Vítor Hugo Simons. Dra. Teresa Henriques da Silva Moura Roque is next of kin
of Comendador Horácio da Silva Roque, Chairman of the Board of Directors.
10. Annual remuneration paid to the auditor
As per the following table.
ERNST & YOUNG- AUDITOR ANNUAL REMUNERATION BY TYPE OF SERVICES AND COMPANIES
GROUP COMPANY
Total
Statutory audit
services
%
Other assurance
services
Tax consultant
services
%
Banif SGPS
104,910.00
97,160.00
93%
BanifServ
9,400.00
9,400.00
100%
7,750
7%
15,901.00
15,901.00
100%
Banif. SA
278,563.00
57,500.00
21%
Banif (Açores) SGPS
2,575.00
2,575.00
100%
15%
180,063.00
65%
105,230.00
49,250.00
47%
Banif Leasing
24,260.00
19,260.00
79%
48,000.00
46%
7,980.00
8%
5,000.00
21%
Banif Crédito SFAC
19,430.00
12,880.00
66%
5,000.00
26%
Banif Rent
28,920.00
10,300.00
36%
18,620.00
64%
1,550.00
8%
31,600.00
25%
32,927.00
27%
2,000.00
100%
232,270.00
27%
41,000.00
Banco Banif Primus
42,880.00
42,880.00
100%
13,832.00
13,832.00
100%
Banif Seguros SGPS
14,040.00
14,040.00
100%
Comp. Seguros Açoreana
123,327.00
58,800.00
48%
Banif Investimentos SGPS
13,690.00
13,690.00
100%
40,850.00
32,450.00
79%
8,400.00
21%
9,850.00
6,250.00
63%
3,600.00
37%
Banif Açor Pensões
2,000.00
Banif (Cayman)
25,000.00
25,000.00
100%
TOTAL
874,658.00
481,168.00
55%
161,220.00
18%
(Excluding VAT)
Report
and Accounts
279
04
Ernst & Young have established and internal control and monitoring system for
policies established relating to independence, which take into account the
independence rules in force in Portugal and internationally, the threats to
independence and the respective safeguards. This policy establishes
the services prohibited due to impact on the auditor’s independence.
Compliance with these policies worldwide is monitored through intranet
software entitled “Ernst & Young Global Monitoring System – GMS”. Each
partner, manager and professional employee attests to his knowledge of this
policy or alterations to it. Periodic training is provided on this policy.
The fiscal consultancy services provided to the Banif Group included review of
tax returns and help in matters relating to fiscal planning and advice on fiscal
affairs. It should be noted that the services rendered are permitted in the light
of the provisions of Recommendation of the European Commission
no. C (2002) 1873, of 16 May 2002.
In keeping with the policy established for the provision of these services, it
was assured that no decisions were taken nor any part taken in adopting
decisions on behalf of Banif SGPS, SA, or any of its subsidiaries, on fiscal or
connected matters.
280
’08
Report
CHAPTER II
CHAPTER II
EXERCISE OF VOTING RIGHTS AND REPRESENTATION OF
SHAREHOLDERS
1. Exercise of voting rights
Under the terms of article 17, para. 1 of the Articles of Association,
shareholders entitled to no less than one vote may attend the General
Meeting. As stated in Chapter 0, Item II above, “Save in respect of
resolutions on the amendment of the Articles of Association and the election
of company officers, shareholders shall not exercise voting rights at
General Meetings by means of postal votes” (article 17, para. 5 of the Articles
of Association).
2. Postal vote form
There is currently no pre-existing form for postal voting.
3. Electronic voting
Electronic voting is currently not permitted.
4. Deposit or freezing of shares for the purpose of attendance of General
Meetings
Under article 17, para. 3 of the Articles of Association, attendance by
shareholders of General Meetings and the respective exercise of voting rights
is dependant on their registering in their name, no less than eight days prior to
the date set for the meeting in question, shares entitling them to no less than
one vote.
Report
and Accounts
281
04
5. Period between receipt of postal votes and the date of the General
Meeting
When postal votes are permitted, votes sent by registered letter with
recorded delivery and received at the head offices of the company by 17.00
hours on the business day prior to the date of the general meeting are
considered.
6. Number of shares corresponding to one vote
Under article 17, para. 2 of the Articles of Association, shareholders are
entitled to one vote for each one hundred shares.
CHAPTER III
COMPANY RULES
1. Company Code of Conduct
Banif SGPS, SA does not have specific rules of conduct, in its exclusive
capacity as holding company of the Banif Group.
However, internal rules on professional ethics have been instituted in the main
Group companies in the banking and insurance sectors.
There are also Internal Regulations on Rules of Conduct in the Exercise of
Securities Brokerage, defining rules and procedures to be followed in
brokerage activities, established in the light of the rules in this field
contained in the Securities Code and the Code of Conduct drawn up by the
Portuguese Association of Banks.
282
’08
Report
CHAPTER III
(cont.)
2. Internal risk control procedures
Information on this item can be found in item 3 of Chapter I, above.
3. Measures which may interfere with the success of Takeover Bids
There are no limits on the exercise of voting rights, except for the restricting
on technical voting procedures referred to in Chapter II above, nor are there
any restrictions on the transferability of shares, the special rights of any
shareholders or shareholders’ agreements of which the company should be
informed.
Report
and Accounts
283
04
CHAPTER IV
MANAGEMENT BODY
1. Description
a) The Board of Directors of Banif SGPS, SA currently comprises the following
members:
Chairman:
Vice-Chairmen:
Directors:
All members of the Board of Directors are executive directors. Under the terms
of article 1, para. 1 of Regulations 7/2001 of the Securities Market Commission,
the directors Comendador Horácio da Silva Roque and Dr. José Marques de
Almeida are not considered independent, both being members of the Board of
Directors of Rentipar Financeira SGPS, SA, the company controlling Banif SGPS,
SA. Comendador Horácio da Silva Roque is also the holder of a qualifying holding
of more than 10% in the company, under the terms of article 20 of the Securities
Code. For the same reasons, Dr. Joaquim Filipe Marques dos Santos is also not
considered independent, insofar as he holds paid office as Chairman of the
General Meeting of Banif - Banco de Investimento, SA and also of Companhia de
Seguros Açoreana, SA, which are Banif Group companies.
b) Below we give a list of the offices held in other companies by members of
the management body, such duties being performed within the scope of the
Rentipar Financeira SGPS, SA Group, unless otherwise indicated:
284
’08
Report
CHAPTER IV
(cont.)
A) Companies whose accounts are consolidated with those of Rentipar
Financeira, SGPS, SA
- Rentipar Financeira, SGPS, S.A.
- Banif Comercial – SGPS, S.A.
- Banif – Banco Internacional do Funchal, S.A.
- Banco Comercial dos Açores, S.A
- Banco Banif Primus, S.A.
- Banif Primus – Corretora de Valores e Câmbio, S.A.
- Banif - (Açores) - S.G.P.S., S.A.
- Banif - Investimentos, SGPS, S.A.
- Banif - Banco de Investimento, S.A.
- Banif Securities Holding, Ltd.
- Banif – Seguros, SGPS, S.A.
- Companhia de Seguros Açoreana, S.A.
- Renticapital - Investimentos Financeiros, S.A
Chairman of the General Meeting
- Banif Leasing, SA (representing Rentipar Financeira - SGPS, S.A)
- Banif Crédito – Sociedade Financeira para Aquisições a Crédito, S.A
(representing Rentipar Financeira- SGPS, S.A)
- Banif Rent, S.A.
- Banco Banif Primus, S.A.
- Banif Primus – Corretora de Valores e Câmbio, S.A.
- Banif Gestão de Activos – Sociedade Gestora de Fundos de Investimento
Mobiliário, S.A. (representing Rentipar Financeira, SGPS, S.A.)
- New Capital – Sociedade de Capital de Risco, S.A. (representing Rentipar
Financeira, SGPS, S.A)
- Banif Imobiliária, S.A (representing Rentipar Financeira - SGPS, S.A)
- SIP – Sociedade Imobiliária Piedade, S.A.
(representing Rentipar Financeira - SGPS, S.A)
Report
and Accounts
285
04
B) Other companies
Member of the Board of Directors or management:
- Rentipar Indústria, SGPS, S.A.- (Chairman)
- Rentiglobo – SGPS, S.A. (Chairman)
- Siet - Sociedade Imobiliária de Empreendimentos Turísticos Savoi, S.A (Chairman)
- Soil – SGPS, S.A.- (Chairman)
- Mundiglobo - Habitação e Investimentos, S.A - (Chairman)
- Rentimundi - Investimentos Imobiliários, S.A - (Chairman)
- Tivil – Sociedade Imobiliária, S.A. - (Chairman)
- EMT - Empresa Madeirense de Tabacos, S.A – (Vice-Chairman)
- Vitecaf - Fábrica de Rações da Madeira, S.A – (Vice-Chairman)
- RAMA - Rações para Animais, S.A – (Vice-Chairman)
- Aviatlântico – Avicultura, S.A. – (Vice-Chairman)
- Fomentinvest – SGPS, S.A. – (Director)
- Ronardo - Gestão de Empresas, Lda. – (Manager)
Officer of the General Meeting:
- Genius – Mediação de Seguros, S.A. – (Chairman)
- Rentimedis - Mediação de Seguros, S.A – (Chairman)
- EMT - Empresa Madeirense de Tabacos, S.A – (Chairman)
- Vitecaf - Fábrica de Rações da Madeira, S.A – (Chairman)
- RAMA - Rações para Animais, S.A – (Chairman)
- Investaçor - S.G.P.S., S.A. (Chairman)
- SIET - Sociedade Imobiliária de Empreendimentos Turísticos Savoi, S.A –
(Vice-Chairman)
286
’08
Report
CHAPTER IV
(cont.)
- Banif Leasing – Sociedade de Locação Financeira, SA
- Banif Crédito, SFAC, SA
- Banif Rent – Aluguer, Gestão e Comércio de Veículos Automóveis, SA
- Banif - Banco Internacional do Funchal (Cayman), Ltd.
- BanifServ - Empresa de Serviços e Tecnologias de Informação, ACE.
- Banif Finance, Ltd.
Chairman of the Executive Board and Vice-Chairman of the Board of
Directors
- Banif - Banco Internacional do Funchal, SA
- Banco Comercial dos Açores, SA
Vice-Chairman of the Board of Directors
- Banco Banif Primus, SA
- Banif Primus Corretora de Valores e Câmbio, SA
- Banif Securities Holdings, Ltd.
- Banif International Holdings, Ltd
Member of the Board of Directors
- Banif Investimentos SGPS, SA
- Banif (Açores) Sociedade Gestora de Participações Sociais, SA
- Banif Comercial, SGPS, SA
- Banif Seguros, SGPS, SA
Member of the Board of Governors of the Associação Portuguesa de Bancos,
representing Banif - Banco Internacional do Funchal, SA
Report
and Accounts
287
04
- Banif – Banco de Investimento, SA
- Companhia de Seguros Açoreana, SA
- UNICRE – Cartão Internacional de Crédito, SA
- SIBS – Sociedade Interbancária de Serviços, SA
- Banif Financial Services Inc.
- Banif Mortgage Company
Vice- Chairman of the Board of Directors
- Banif – Banco Internacional do Funchal, SA
- Banif – Banco de Investimento, SA
- Banif Comercial – SGPS, SA
- Banif Seguros – SGPS, SA
- Banif – Banco Internacional do Funchal (Cayman), Ltd
- Banif – Investimentos – SGPS, SA
- Banif (Açores) – SGPS, SA
- Banco Comercial dos Açores, SA
- Banco Banif Primus, SA
- Banif Primus Corretora de Valores e Câmbio, SA
- BanifServ – Empresa de Serviços, Sistemas e Tecnologias de Informação,
ACE
- Econofinance, SA
- Banif Securities Holdings, Ltd
- Banif Finance, Ltd
- Banif International Holdings, Limited
288
’08
Report
CHAPTER IV
(cont.)
Vice-Chairman of the Board of Directors:
- Banco Comercial dos Açores, S.A.
- Banif Rent – Aluguer, Gestão e Comércio de Veículos Automóveis, SA
- Banif - Banco Internacional do Funchal, SA
- Banif Leasing – Sociedade de Locação Financeira, SA
- Banif Crédito, SFAC, SA
- Banif (Açores)- Sociedade Gestora de Participações Sociais, SA
- BanifServ - Empresa de Serviços, Sistemas e Tecnologias de Informação,
A.C.E
- Banif - Banco Internacional do Funchal (Cayman), Ltd.
- Banif Comercial, SGPS, SA
- Banif Multifund, Ltd (até Maio 2004)
- Banif Finance, Ltd.
Other office held outside the Rentipar Financeira, SGPS Group
Chairman of the Audit Board
- Cabo TV Madeirense, SA
- Cabo TV Açoreana
Report
and Accounts
289
04
- Banif Multifund,Ltd
- NewCapital – Sociedade de Capital de Risco, S.A. ,
- Banif International Asset Management, Ltd.
- Banif Açor Pensões SGFP, SA
- Banif Gestão de Activos - Sociedade Gestora de Fundos de Investimento
Mobiliário, SA
Chairman of the Executive Board and Vice-Chairman of the Board of
Directors
- Banif - Banco de Investimento, S.A.
- Banco Banif Primus, S.A.,
- Banif Primus Corretora de Valores e Câmbio, S.A.,
- BanifServ Empresa de Serviços, Sistemas e Tecnologias de Informação, ACE.
- Banif Investimentos – SGPS, S.A.
- Econofinance, S.A.
- Banif Financial Services, Inc.
290
’08
Report
CHAPTER IV
(cont.)
Chairman of the Executive Board
Director
- Banif Banco Internacional do Funchal, SA
- Banif Seguros SGPS, SA
- BanifServ Empresa de Serviços, Sistemas e Tecnologias de Informação, ACE
Chairman of the Advisory Board
- APS – Associação Portuguesa de Seguradores
Director
- Banif – Banco Internacional do Funchal, SA
- Rentipar Financeira SGPS, SA
- Vestiban – Gestão e Investimentos, SA
Report
and Accounts
291
04
2. Existence or otherwise of Executive Board
As no director has been appointed as managing director and no executive
board has been created, all directors are executive directors.
3. Management body procedures
In the absence of an executive board in Banif SGPS, SA, all questions of
ordinary management and strategy, and all matters relating to the life of the
company, are considered and resolved on by the Board of Directors.
In accordance with the Articles of Association, the Board of Directors meets
no less than once a quarter, and extraordinary meetings are held whenever
called by the Chairman or two other directors. A total of 14 meetings of the
Board of Directors were held in 2004.
4. Remuneration Policy
The directors’ annual remuneration consists of a fixed component and a
variable component; the form of fixing the variable component constitutes a
factor aligning the interests of the members of the management body with
those of the company.
5. Remuneration of members of the management body
The following remuneration was paid to directors by the Group companies in
which they hold office
Fixed Remuneration - € 1,447,669.97
Variable Remuneration - € 1,307,200
The company does not have an Executive Board.
292
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’09
‘
OUR
NAME’
YOUR UNIVERSE
Other Disclosures
Report
and Accounts
04
’09
Other
Disclosures
1. Own shares
As at either 1/01/04 or 31/12/04 the company held no own shares or the
equivalent under the terms of article 325 A of the Companies Code,
and there was likewise no trading in such shares during 2004.
2. Holders of qualifying holdings
Under the terms of para. 1 e) of article 8 of Regulations no. 4/2004 of the
Securities Market Commission, the following information is disclosed
on shareholders with qualifying holdings at the end of the financial year, as
defined by article 20 of the Securities Market Code, in accordance with the
information available at the company:
– Horácio da Silva Roque, resident at Av. Conde de Barcelona, 1057, Estoril –
Held directly, as at 31/12/2004, 124,656 shares in Banif SGPS SA.,
corresponding to 0.31% of the share capital.
The voting rights corresponding to the following are imputed to this holding:
– 22,468,280 shares held by Rentipar Financeira SGPS, SA (company in
which Horácio da Silva Roque is the majority shareholder), corresponding to
56.17% of the share capital;
– 93.056 shares held by members of the Board of Directors of Rentipar,
SGPS, SA corresponding to 0.23% of the share capital;
– 3,989,998 shares held by Renticapital – Investimentos Financeiros, S.A.
(company in which Rentipar Financeira, SGPS, SA is the majority
shareholder), corresponding to 9.97% of the share capital;
Report
and Accounts
294
04
– 1,853 held by Mundiglobo – Habitação e Investimentos, S.A. (company in
which Horácio da Silva Roque has an indirect majority holding),
corresponding to 0.005% of the share capital.
– 40,000 shares held by Espaço Dez – Sociedade Imobiliária, Lda (company
in which Horácio da Silva Roque has an indirect majority holding),
corresponding to 0.1% of the share capital;
– 30,000 shares held by a manager of Espaço Dez – Sociedade Imobiliária,
Lda, corresponding to 0.075% of the share capital.
– Seguros e Pensões Gere, SGPS, SA, corporate person no. 502 352 914,
with registered offices at Rua Alexandre Herculano 53, in Lisbon, with share
capital of 380,765,000 Euros and registered at the Lisbon Companies
Registry under no. 1 532, controls the companies Ocidental – Companhia
de Seguros de Vida, SA, Império Bonança – Companhia de Seguros, SA and
Ocidental – Companhia Portuguesa de Seguros, SA, which together had a
holding corresponding to 1,616,700 shares (875,830, 708,900 and
31,970, respectively), representing, overall, 4.04% of the share capital
(2.19%, 1.77% and 0.08%).
– Instituto de Seguros de Portugal – Fundo de Garantia Automóvel ,
corporate person no. 501 328 599, with registered offices at Av. de Berna,
no. 19, 1050-037, Lisboa, held 1,528,560 shares, representing 3.82%
of the share capital.
– Fundo de Pensões do Grupo Banco Comercial Português, represented by
Pensões Gere – Sociedade Gestora de Fundos de Pensões, SA, corporate
person no. 503 455 229, with registered offices at Rua Alexandre
Herculano 53, Lisbon, registered at the Lisbon Companies Registry under
no., 04529 with share capital of 1,200,000 Euros, held 1,468,877 shares
representing 3.67% of the share capital.
295
’09
Other
Disclosures
– Vestiban – Gestão e Investimentos, SA – corporate person no. 505 775
212, with registered offices at Av. José Malhoa Lote 1792, Lisbon,
registered at the Lisbon Companies Registry under no. 12161 and with
share capital of 250,000 Euros, held 1,381,666 shares, corresponding to
3.45% of the share capital.
Voting rights corresponding to 9,666 acções held by directors of Vestiban –
Gestão e Investimentos, SA, corresponding to 0.02% of the share capital are
imputed to this holding.
(NB: Given that two members of the Board of Directors of Rentipar Financeira
SGPS, SA also sit on the board of Vestiban – Gestão e Investimentos, SA, the
shares held by them in Banif SGPS, SA are only considered once – in respect of
the first of these companies – for the purpose of imputing voting rights).
– Jorge Sá , resident at Rua do Til, n.º 56, Funchal, tax payer no.
102.136.297, holder of identity card no. 47528.9, indirectly held
836,651 shares, corresponding to 2.09% of the share capital. Also
imputable to him are the voting rights corresponding to 13,450 shares
(corresponding to 0.03% of the share capital) and 150,000 shares
(corresponding to 0.38% of the share capital) in Banif SGPS, SA, held by
companies he controls J. Sá & Filhos, Lda and Oliveira, Freitas & Ferreira, Lda,
respectively.
Report
and Accounts
296
04
Given that there were no non-voting shares as at 31/12/04, the percentage
of voting rights for each share coincides with the respective percentage share
in the capital.
Shareholder
No. of shares
(total imputable)
% Voting rights
(total imputable)
Horácio da Silva Roque
26,747,843
66.87%
Seguros e Pensões Gere, SGPS, SA
1,616,700
4.04%
Instituto de Seguros de Portugal-FGA
1,528,560
3.82%
Fundo de Pensões do
Grupo Banco Comercial Portugês
1,468,877
3.67%
Vestiban – Gestão e Investimentos, SA
1,391,332
3.48%
Jorge Sá
1,000,101
2.5%
297
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’09
‘
OUR
NAME’
YOUR UNIVERSE
Other Disclosures
Report
and Accounts
04
’09
Other
Disclosures
REPORT AND OPINION
OF THE AUDIT BOARD
Shareholders,
1. In compliance with provisions of paragraph g) of article 420 of the
Companies Code, the Supervisory Board has drawn up this report on its
auditing work during 2004 and to give its opinion under the terms
of the said law on the report, accounts and proposals submitted by the
Directors.
2. The Audit Board has maintained, as is its custom, a constant dialogue with
the auditors and the official audit firm, as this is essential for many aspects
of its supervisory duties.
3. The Directors’ Report provides a detailed account of the operations of the
different Group companies over the course of 2004. It should be noted
that, in relation to the operations and accounts of each of these companies,
the respective audit board and sole auditors have drawn up their opinions
and reports, meaning that no further comment is required here.
4. The Audit Board has analysed the Report of the Official Audit Firm and the
respective Legal Certificate issued by such firm, and hereby declares its
agreement with this, for the purposes of para. 2 of article 452
of the Companies Code.
The Audit Board has also examined the company’s consolidated accounts, as
at 31 December 2004, and assessed the conformity of these accounts with
the consolidated management report, in accordance with article 508, para. 1,
of the Companies Code.
Report
and Accounts
298
04
5. In conclusion, the Audit Board recommends that the General Meeting:
a) Approves the Directors’ Report for the Financial Year ended on 31
December 2004.
b) Approves the Accounts for the same financial year.
c) Approves the proposal for the Distribution of Profits contained in the
Directors’ Report, which accords with the relevant legal requirements.
d) Approves the Consolidated Management Report and the Consolidated
Accounts for the same financial year.
e) Under the terms of article 455 of the Companies Code, assesses the work
of the Bank’s Directors and the Supervisory Board.
f) Issues a vote of thanks to the Directors and the Executive Board for their
sterling work in managing the affairs of the Bank in 2004.
Ernst & Young Audit & Associados - Sociedade de Revisores Oficiais de
Contas, SA, represented by:
Dr. Alfredo Guilherme da Silva Gândara (ROC)
Dr. José Luís Pereira de Macedo
299
’OUR PROPERTY
’OUR VALUES
’OUR IDENTITY
’OUR STRUCTURE
’OUR STRATEGY
’OUR CAPITAL
’OUR MISSION
’OUR COMMITMENT
’OUR NAME
’YOUR UNIVERSE
’09
‘
OUR
NAME’
YOUR UNIVERSE
Other Disclosures
Report
and Accounts
04
’09
Other
Disclosures
LEGAL ACCOUNTS CERTIFICATE
AND EXTERNAL AUDITOR’S REPORT
(INDIVIDUAL ACCOUNTS)
INTRODUCTION
1 Under the terms of the relevant legislation, we are pleased to present the
Legal Accounts Certificate and the External Auditor’s Report on the
Management Report and Consolidated Financial Statements attached for
the financial year ended 31 December 2004 of Banif SGPS, SA, which
comprise: the Balance Sheet as at 31 December 2004 (which records a
total of 440,407 thousand Euros and total shareholders’ funds of 289,817
thousand Euros, including a net profit of 15,819 thousand Euros), the
Consolidated Income Statement (by nature and by function), the
consolidated statement of cash flows for the financial year then ended, and
the corresponding notes to the financial statements.
RESPONSIBILITIES
2. It is the responsibility of the Directors of the Bank to:
a) prepare the consolidated financial statements for the financial year which
give a true and fair view of the financial position of the group of companies
included in the consolidated accounts, the consolidated result of their
operations and consolidated cash flows;
b) to provide historic financial information, which shall be prepared in
accordance with generally accepted accounting principles and which is
complete, true, current, clear, objective and lawful, as required
by the Securities Code;
c) adopt appropriate accounting policies and criteria;
d) maintain an appropriate system of internal control; and
e) report on any relevant occurrence which has influenced the activities of the
group of companies included in the consolidated accounts, their state
of affairs or results.
Report
and Accounts
300
04
3. It is our responsibility to check the financial information given in the
financial statements referred to above, and to ensure that it is complete,
true, current, clear, objective and lawful, as required by the Securities Code,
and to express a professional and independent opinion on such information,
on the basis of our audit.
SCOPE
4. Our audit was performed in accordance with the Rules and
Recommendations of the Chamber of Official Auditors, and, on a
supplementary basis, with International Audit Standards, which require that
the audit be planned and performed in such a way as to give a reasonable
assurance that the consolidated financial statements are free from, or that
they are not free from, material misstatement. To this end
our audit included:
– checking that the financial statements of the companies included in the
consolidated accounts have been correctly audited and, in significant
instances where this is not the case examination, on a test basis, of evidence
relevant to the amounts and disclosures in the financial statements and an
assessment of estimates, based on judgements and criteria defined
by the respective directors, used in preparing the financial statements;
– an examination of consolidation operations and the application of the equity
method;
– an assessment of the suitability of the accounting policies adopted and
disclosure of these policies, taking the circumstances into account;
- checking whether or not the going concern principle is applicable;
301
’09
Other
Disclosures
(INDIVIDUAL ACCOUNTS)
(cont.)
– an assessment of the overall adequacy of the presentation of information in
the consolidated financial statements; and
– an assessment of whether the consolidated financial information is
complete, true, current, clear, objective and lawful.
5. Our audit also included checking that the financial information contained in
the consolidated management report corresponding to the other
financial statements.
6. We believe that our audit gives us a reasonable basis on which to issue our
opinion.
OPINION
7. In our opinion, the financial information contained in the documents
referred to above gives a true and fair view, in all materially relevant
aspects, of the state of affairs of the companies included in the
consolidated accounts of Banif SGPS, S.A. as at 31 December 2004 and the
consolidated result of their operations and consolidated cash flows in the
financial year then ended, in keeping with accounting principles generally
accepted in Portugal, and that the information which they contain is
Report
and Accounts
302
04
REMARK
8. Without affecting our opinion as set out in the preceding paragraph, we
wish to draw attention to the following situation:
a) As stated in Notes 3 and 51 d) to the Financial Statements, in keeping with
the faculty established in Bank of Portugal Circular 18/04/DSBDR, of
5 March, the company recorded a sum of 11,038,760 Euros under
earnings from securities in the income statement, against accruals and
deferrals in the balance sheet, relating to profits from 2004 approved for
distribution, on 14 and 15 February, by the Board of Directors of the
subsidiaries Banif Imobiliária, SA, Banif Seguros SGPS, SA, Banif Comercial
SGPS, SA and Banif Investimentos SGPS, SA.
ERNST & YOUNG AUDIT & ASSOCIADOS – SROC, SA
Registered with the Stock Market Board under no. 9011
Represented by:
Alfredo Guilherme da Silva Gândara
303
’09
Other
Disclosures
(CONSOLIDATED ACCOUNTS)
INTRODUCTION
1. Under the terms of the relevant legislation, we are pleased to present the
Legal Accounts Certificate and the External Auditor’s Report on the
Management Report and Consolidated Financial Statements attached for
the financial year ended 31 December 2004 of Banif SGPS, SA, which
comprise: the Balance Sheet as at 31 December 2004 (which records a
total of 6,455,684 thousand Euros and total shareholders’ funds of
353,674 thousand Euros, including a net profit of 37,306 thousand Euros),
the Consolidated Income Statement (by nature and by function), the
consolidated statement of cash flows for the financial year then ended, and
the corresponding notes to the financial statements.
RESPONSIBILITIES
2. It is the responsibility of the Directors of the Bank to:
a) prepare the consolidated financial statements for the financial year which
give a true and fair view of the financial position of the group of companies
included in the consolidated accounts, the consolidated result of their
operations and consolidated cash flows;
b) to provide historic financial information, which shall be prepared in
accordance with generally accepted accounting principles and which is
complete, true, current, clear, objective and lawful, as required by the
Securities Code;
c) adopt appropriate accounting policies and criteria;
d) maintain an appropriate system of internal control; and
e) report on any relevant occurrence which has influenced the activities of the
group of companies included in the consolidated accounts, their state of
affairs or results.
Report
and Accounts
304
04
3. It is our responsibility to check the financial information given in the
financial statements referred to above, and to ensure that it is complete,
true, current, clear, objective and lawful, as required by the Securities Code,
and to express a professional and independent opinion on such information,
on the basis of our audit.
SCOPE
4. Our audit was performed in accordance with the Rules and
Recommendations of the Chamber of Official Auditors, and, on a
supplementary basis, with International Audit Standards, which require that
the audit be planned and performed in such a way as to give a reasonable
assurance that the consolidated financial statements are free from, or that
they are not free from, material misstatement. To this end our audit
included:
– checking that the financial statements of the companies included in the
consolidated accounts have been correctly audited and, in significant
instances where this is not the case examination, on a test basis, of evidence
relevant to the amounts and disclosures in the financial statements and an
assessment of estimates, based on judgements and criteria defined
by the respective directors, used in preparing the financial statements;
– an examination of consolidation operations and the application of the equity
method;
– an assessment of the suitability of the accounting policies adopted and
disclosure of these policies, taking the circumstances into account;
– checking whether or not the going concern principle is applicable;
305
’09
Other
Disclosures
(CONSOLIDATED ACCOUNTS)
(cont.)
– an assessment of the overall adequacy of the presentation of information in
the consolidated financial statements; and
– an assessment of whether the consolidated financial information is
5. Our audit also included checking that the financial information contained in
the consolidated management report corresponding to the other
financial statements.
6. We believe that our audit gives us a reasonable basis on which to issue our
opinion.
OPINION
7. In our opinion, the financial information contained in the documents
referred to above gives a true and fair view, in all materially relevant
aspects, of the state of affairs of the companies included in the
consolidated accounts of Banif SGPS, S.A. as at 31 December 2004 and the
consolidated result of their operations and consolidated cash flows in the
financial year then ended, in keeping with accounting principles generally
accepted in Portugal, and that the information which they contain is
ERNST & YOUNG AUDIT & ASSOCIADOS – SROC, SA
Registered with the Stock Market Board under no. 9011
Represented by:
Alfredo Guilherme da Silva Gândara
Report
and Accounts
306
04
Banif – SGPS, SA
Public Limited Company
Registered Offices: Rua de João Tavira, 30 – 9004-509 Funchal
Share Capital: 200,000,000 Euros – Corporate person no. 511 029 730
Registered under no. 3658 at the Funchal Companies Registry
www.grupobanif.pt
Technical Credits
Design and Pagination – Shift design
LEGAL DEPOSIT – 2088441/04

02 - Banif

Transcription

Similar documents

Business premises for sale in Javea 40,000 € Ref: L-1293

Peter Sadlo - Percussion - Hochschule für Musik FRANZ LISZT

(Español) Alquiler Residencial San Fernando Media Luna Ref

changing landscape in portugal - Noticiaria – Um espaço de

ACCOMMODATION Wyższa Szkoła Języków Obcych w Szczecinie

the future…

Julie Jones ESSENCE Therapeutics 0641474613 julie

the brochure

2015 at a glance

Life style drugs