Competing as a Strong and Independent Portuguese Bank

Continuing to deliver improved profitability... I novobanco announces a net income of €428.3mn (9M21: €154.1mn; 3Q22: €161.6mn) and ROTE¹ improving to 12.4%. The business performance is in line with expectations. The results confirm continued and stable profitability of novobanco as well as its underlying ability to consistently and organically generate capital. Moving towards an expanding loan book with €2.9bn customer loans origination in 9M22 (+44% YoY), of which 57% in the corporate segment. Net customer loans at €24.6bn (+€934mn YTD) reflecting the growth of the market-leading corporate segment, as well as the mortgage loan book. Deposits increasing by 4.6% YTD (€1.3bn), driven by the Retail segment. NII was €405.9mn (-5.6% YoY), with YoY evolution reflecting the improvement of the assets average rate and, on the other side, the impact of senior debt issuance in 4Q21 and accounting of TLTRO 3 interest expense based on forward-looking ECB deposit rate. NII, reflecting amended TLTRO III, would be €7.5mn higher. Reflecting a strong performance and an improved quarterly trend, fee income increased by +3.8% YoY. Operating costs of €314.2mn (+2.8% YoY) given one-off costs, cost control remains in place with Cost/Income ratio² at 49% on a recurrent basis. COR of 20bps (9M21: 61bps or 40bps ex-Covid related provisions) benefiting from successful recovery of moratoria clients, resilient asset quality and contained macroeconomic impacts. NPL ratio of 5.0% (Dec-21: 5.7%; Dec-20: 8.9%) and a NPL coverage at 77.2% (Dec-21: 71.4%), given the successful ongoing de-risking strategy. RE exposure decreasing to 1.5% of total assets (-0.3pp YTD). Driven by strong bottom-line profitability, CET 1 increased 90bps in the quarter to 12.7% reaching a capital generation of 160bps YTD, fully-loaded CET 1 at 12.1% (+200bps YTD). Total capital ratio reached 14.9% (Jun/22: 13.9%), above the 13.5% OCR³ requirement allowing build-up of P2G buffer. A capital accretive business model, RWA discipline, combined with specific management action ensure early compliance with normalised post- pandemic capital requirements. novobanco (1) Tangible Equity = average phased-in RWA x 12%; Annualized; Considers Underlying profitability pre-tax deducted by special tax on banks (€34mn on annual basis) and contributions to Resolution Funds (€40.9mn on annual basis); (2) Cost to Income defined as Operational Costs divided by Commercial Banking Income; (3) OCR - Overall Capital Requirement 20 20

View entire presentation