Vision
O Millennium bcp aspires to be a reference bank in Customer Service, on the
basis of innovative distribution platforms. Its growth will be focused on Retail,
in which over two-thirds of the capital should be allocated to retail and companies,
in markets of high potential, with an expected annual growth of business volumes
of more than 10%. It also aims for superior efficiency levels, reflected in
the commitment to achieve a benchmark cost-to-income ratio, and reinforced capital
and cost management discipline.
Mission
Create value for Customers through the offer of superior quality financial products
and services, complying with rigorous and high standards of conduct and corporate
responsibility, growing with profitability and sustainability, so as to provide
an attractive return to Shareholders, which justifies and reinforces strategic
autonomy and corporate identity.
Strategy
The banking sector and the Bank face an uncertain context regarding the future
and are under pressure from multiple exogenous variables, namely from world
economic growth and growth in the countries where it operates, facing interest
rates and asset prices pressure, overall uncertainty in the light of the high
losses reported by international financial institutions and shortness of capital
and liquidity. Millennium bcp considers that, after a period of stabilisation
of the Bank, new priorities should be set for 2009, considering that the Millennium
2010 Programme was designed in market conditions that were completely distinct
from the current reality.
The new priorities of Millennium bcp for 2009 are based on three fundamental
pillars: Soundness and Trust; Commitment and Performance; Sustainability and
Value, defining six priority action vectors that aim to "Reinforce the
Commitment, Towards the Future".
The six action vectors integrated in the Programme "Rumo ao Futuro"
consider a set of initiatives that are summarised as follows.
1. Proactive and rigorous risk management
Risk management is assumed as a fundamental priority of the Bank, to be reinforced
with the
following initiatives:
- deepening of risk identification, assessment and management process;
- raising sustainability and risk mitigation of Pension Fund, in what regards
both liabilities and assets;
- enhancement of processes for preventive identification of impairment warning
signals;
- new credit recovery models, for Retail and large clients / large risks;
- increasing automation of client risk assessment and credit decision making;
and
- reinforcement of both internal and external risk reporting.
2. Integrated and prudent liquidity and capital management
Considering the increase of liquidity risk in the past year and a half, the
necessary prudence in capital management, and bearing in mind that the Bank
of Portugal has issued a recommendation regarding the Tier I ratio, the Bank
decided that it should reinforce its initiatives in this area:
- integrated planning and control of capital and liquidity, and implementation
of a return/risk-based management;
- development of Treasury strategic management, in coordination with business
areas;
- diversification of the funding structure, as well as the alternative contingency
financing instruments;
- transition to Internal Ratings-Based methodologies (IRB - Basel II);
- development of the economic capital evaluation and allocation process (Pillar
II - ICAP); and
- optimisation of risk weighted assets (RWAs), namely through the divestment
of non-strategic assets and reinforcement of adequate collaterals.
3. Deepen the commitment to customers and maximization of balance sheet
customers' funds and value
To deepen the commitment to customers, the following initiatives are highlighted:
- programs to promote higher proximity to the customers base in all operations;
- acquisition plan for balance sheet customers' funds across different segments,
and particularly in Retail, in all geographies;
- more rigorous management of leakage/commercial exemptions, including commissions,
across all networks;
- consistent pricing adjustments in order to reflect the credit and liquidity
risk (risk-based pricing); and
- customers acquisition programs in all geographies.
4. Acceleration of cost reduction and organisational streamlining
The Bank aims to proceed and deepen the efforts of cost cutting, namely through
a transverse personnel cost-reduction program, continuous administrative cost-cutting
efforts in Portugal and significant cost-reduction in all operations through
the adjustment of structure to business volume, in the new market context.
With regards to organizational streamlining and process optimisation, the Bank
should launch new initiatives for the delayering and merger of support areas
in Portugal and to simplify the operational model in all European platforms,
namely through centralisation of support functions and integration of back offices.
5. Adjustment of business models and materialization of growth opportunities
In Portugal, several adjustments will be made to the business model and strategy
of Private Banking in light of the new business opportunities, as well as a
review of the business and organisational model for Corporate and Investment
Banking. In Direct banking, the Bank will launch innovative distribution models
oriented to customers' new habits and needs.
In international operations, the Bank will carry out the implementation of the
expansion plan in Angola, consubstantiating the partnership with Sonangol/BPA.
It will also launch initiatives for net interest income optimisation and customer
acquisition in African operations. The Bank will review of growth strategy in
Europe, focusing on individuals and SMEs, leveraging the brand and the branch
network as a distribution platform.
6. Talent management and employees' mobilisation
The reinforcement of commitment to employees implies the launch and strengthening
of initiatives oriented towards performance, accountability and professional
improvement:
- reinforcement of talent management programs;
- implementation of a new incentive scheme in commercial areas;
- implementation of the new performance review process, oriented towards a
higher accountability of employees;
- rollout of professional development projects, such as Master in Retail or
Financial Risk Manager; and
- increased involvement and intense communication at all organisational levels.
In line with priorities for 2009, the key principles of the Bank's strategy
over the long term emerge.
- Commitment to Customers;
- Effective Risk Management;
- Simplicity and Efficiency;
- Diversified International Presence;
- Bank focused on its capabilities, namely in the scope of the Retail/Commercial
banking, with its employees, that are recognized as the best of the Portuguese
Banking system, with the aim of creating value for its Shareholders.
