Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — 9M 2002 Earnings Presentation
55 slides from Dexia Holding SA's earnings presentation, Dec 5, 2002
Slide 1: Activity and Financial Results at Sept. 30th, 2002
Activity and Financial Results at Sept. 30th, 2002 December 5, 2002
Slide 2: Agenda
Agenda ! Key topics Pierre Richard, Group CEO ! Activity and results at Sept. 30th, 2002 Rembert von Lowis, Group CFO
Slide 3: Key Topics
Key Topics ! Costs ! Artesia: update on integration ! Dexia Bank Nederland
Slide 4: Artesia integration: Impact on personnel
Artesia integration Impact on personnel EFT reduction objective Realised 30/09/02 vs EFT headcount at 30/06/01 Head Offices -1,400 -405 Employee network -870 -193 -2,270 -598 26% realised Evolution of FTE’s at Dexia Bank and former Artesia after 15 months 12,660 12,580 12,340 12,150 12,050 9,150 9,0
Slide 5: Artesia integration: Cost synergy achievements
Artesia integration Cost synergy achievements 33 30 25 ⇒ 22 M€ linked to staff costs (M€) ⇒ 11 M€ linked to other operating expenses Best Worst case case Objective full Achieved year 2002 9M 2002
Slide 6: Dexia Bank Nederland
Dexia Bank Nederland DEXIA
Slide 7: Share Leasing – The Product
Dexia Bank Nederland Share Leasing – The Product ! A successful product introduced in the Netherlands in the 1990’s: Invest in Dutch « blue chips » stocks with borrowed money ! A package for the Dutch middle affluents, with an important tax incentive: Interests on borrowed funds were tax deductible
Slide 8: Claims and settlements to date
Dexia Bank Nederland Claims and settlements to date ! Number of share leasing contracts holders who joined the Stichting’s movement launched in April 2002 ≈ 38,000 * ! Number of standard complaint forms received since April 2002 ≈ 15,000 ! Number of individual complaint letters with justifications r
Slide 9: Cases to be individually settled
Dexia Bank Nederland Cases to be individually settled « Clients who have entered into share leasing contracts with Dexia Bank Nederland or Labouchere and who are in Dexia’s judgment not in a position to meet their financial obligations in view of their income and/or personal wealth, and/or age, and/
Slide 10: Commercial offer
Dexia Bank Nederland Commercial offer Clients who end up with a deficit at term will be offered three choices: # • Zero Interest Loan to reimburse shortfall at termination • Monthly instalments continue until full redemption $ • Extention of contract for 3 years • Monthly instalment continue until f
Slide 11: Way Forward
Dexia Bank Nederland Way Forward ! New structures ! Management ! Provisions
Slide 12: Activity and Results
Activity and Results DEXIA
Slide 13: Changes in scope – Restatements since June 30, 2002
Changes in scope – Restatements since June 30, 2002 ! No material change in scope in third quarter 2002 ! SPVs of ex-Labouchere now fully consolidated (which has no impact on total revenue line) All series have been adjusted, corrected and restated accordingly* * With one exception: Banques Vernes A
Slide 14: Summary of YTD 2002 P&L
Summary of YTD 2002 P&L Year-to-date Underlying Year-to-date (M€) Sept 01 ∆% Sept 02 pro-forma ∆% Revenues +3,904 +4,246 -8.0% -7.5% Costs -2,382 -2,416 -1.4% -3.2% Gross Operating Income +1,522 +1,830 -16.8% -13.9% Cost of Risk -582 -173 x3.4 -16.0% Net gains + impairments on -20 +60 n.s. n.s. LT i
Slide 15: Dexia Bank Nederland Financial impacts (1)
Dexia Bank Nederland Financial impacts (1) Stock of provisions at 30.09.2002 ! Restructuring Costs 30 M€ ! Specific Provisions for Credit Risk 32 M€ ! Generic 435 M€ Total 497 M€ Impact on P&L in 2002 ! Restructuring Costs - 30 M€ ! Specific Provisions for Credit Risk - 27 M€ ! Generic - 410 M€ Tota
Slide 16: Dexia Bank Nederland Financial impacts (2)
Dexia Bank Nederland Financial impacts (2) Impairment of participation in DBNL ! Acquisition cost DBNL (Labouchere & Kempen) 1,984 M€ ! Revaluation 949 M€ Impairment (in Q3 2002) - 1,035 M€ Tax Credit (in Q3 2002) +215 M€
Slide 17: Dexia Bank Nederland Financial impacts (3)
Dexia Bank Nederland Financial impacts (3) Synthesis (2002) ! Provisions - 467 M€ ! Tax effect of Provisions + 163 M€ ! Impairment* - ! Tax deduction on impairments + 215 M€ Total P&L impact - 89 M€ * Neutral on consolidated accounts
Slide 18: Key Performance indicators
Key Performance indicators Sept. 2002 Sept. 2001 RWA* (Bn€) 107.7 107.7 Tier one Ratio* 9.2% 9.0% ROE** 16.0% 18.8% Profit Margin 26.2% 27.3% C/I Ratio 61.0% 56.9% * End of period ** Annualized
Slide 19: Underlying Cost of Risk related to total net O/S commitments
Underlying Cost of Risk related to total net O/S commitments (in basis points) 2.6 bp Credit 1.2 bp 0.7 bp 0.6 bp 0.6 bp 0.4 bp Enhancement 12.2 bp* 8 bp 7 bp 6 bp 5.9 bp* 2 bp Banking Activities 1997 1998 1999 2000 2001 9M 2002** * Excluding Dexia Bank Nederland provisions ** Annualized
Slide 20: Summary of Q3 2002 P&L
Summary of Q3 2002 P&L Q3 2001 Underlying (M€) Q3 2002 ∆% pro-forma ∆% Revenues +1,129 +1,321 -14.5% -13.6% Costs -782 -847 -7.7% -10.0% Gross Operating Income +348 +474 -26.7% -20.1% Cost of Risk -456 -52 x8.8 +6.1% Net gains + impairments on -41 +8 n.s. n.s LT invest. Taxes +264 -115 n.s. -6.5% GB
Slide 21: Impact of Equity Markets downturn in Q3 2002
Impact of Equity Markets downturn in Q3 2002 Capital Retail Investment Public Markets + Total Total Financial Management Unallocated Finance Treasury Q3 2002 Q3 2001 Services Services Activities Revenues -7.0 -20.0 - -17.7 -55.0 -99.7 -33.9 Of which underlying -7.0 -20.0 - -17.7 -45.5 -90.2 -33.9 Ne
Slide 22: Quarterly evolution of the underlying Gross Operating Income
Quarterly evolution of the underlying Gross Operating Income (M€) 1,348 1,379 1,362 1,312 1,328 Revenues 1,274 1,133 837 838 785 788 795 784 Costs 753 562 592 524 543 475 480 Gross 379 Operating Income Q1 2001* Q2 2001* Q3 2001* Q4 2001* Q1 2002* Q2 2002* Q3 2002 * Q1 2001 to Q2 2002 are pro-forma
Slide 23: Segment Reporting
Segment Reporting DEXIA
Slide 24: Public / Project Finance & Credit Enhancement: Production of L.T. facilities
Activity Highlights Public / Project Finance & Credit Enhancement ! Production of L.T. facilities (in & off B/S)* + 33.5 % 17,4 2,6 Other (Bn €) 13,0 1,8 Public Sector 14,8 11,2 9 months 01 9 months 02 * Fully consolidated Co’s ; Germany excluded ;
Slide 25: Public / Project Finance & Credit Enhancement: L.T. Outstandings
Activity Highlights Public / Project Finance & Credit Enhancement ! L.T. Outstandings (in & off B/S)* +10.0 % 125,5 114,1 13,4 (Bn €) 13,4 Other Public Sector 112,1 100,6 Sept 2001 Sept 2002 * Fully consolidated Co’s ; Germany excluded
Slide 26: Public / Project Finance & Credit Enhancement: Deposits & Customer Assets
Activity Highlights Public / Project Finance & Credit Enhancement ! Deposits & Customer Assets * + 4.8% 16,6 15,9 (Bn €) 5,9 6,0 Off B/S 9,9 10,8 B/S Sept 2001 Sept 2002 * Off B/S of Artesia excluded (estimated to 3.3 Bn€ at September 2002)
Slide 27: Public / Project Finance & Credit Enhancement: New Insurance Premiums
Activity Highlights Public / Project Finance & Credit Enhancement ! New Insurance Premiums + 29.4 % 338,7 14,6 (M€) 261,8 73,7 58,8 Others DVV/AP Sofaxis 250,4 203,0 09 2001 09 2002
Slide 28: Public / Project Finance & Credit Enhancement: FSA Gross Present Value of Premiums
Activity Highlights Public / Project Finance & Credit Enhancement ! FSA Gross Present Value of Premiums + 45.3 % 635 (M €) 437 276 ABS 268 359 Muni 169 09 2001 09 2002
Slide 29: Public/Project Finance & Credit Enhancement: Analysis of underlying P&L
Public/Project Finance & Credit Enhancement Analysis of underlying P&L Year-to-date Year-to-date ∆ Sept 02 / (M€) Sept. 02 Sept. 01 Sept. 01 % Pro-forma Revenues 1,337 1,282 +4.3% Costs -481 -477 +1.0% Gross Operating Income 856 805 +6.3% Cost of Risk -92 -141 -34.8% Corporate income tax -221 -185 +
Slide 30: Public/Project Finance & Credit Enhancement: Quarterly underlying Gross Operating Income
Public/Project Finance & Credit Enhancement Quarterly evolution of the underlying Gross Operating Income (M€) 463 461 457 463 417 418 Revenues 401 305 304 290 289 256 263 244 Costs 170 168 157 158 162 158 155 Gross Operating Income Q1 2001* Q2 2001* Q3 2001* Q4 2001* Q1 2002* Q2 2002* Q3 2002 * Q1 2
Slide 31: Retail Financial Services: Customers' Assets
Activity Highlights Retail Financial Services ! Customers’ Assets + 0.6 % (Bn €) - 2.3 % 77,3 79,6 77,8 OPC + unit linked : 23,0 24,0 - Market effect : -1.1 23,2 off B/S products - inflows : +0.3 in B/S products 54,3 55,6 54,6 Sept. 2001 June 2002 Sept. 2002
Slide 32: Retail Financial Services: Dexia Bank in its competitive environment
Activity Highlights Retail Financial Services Dexia Bank in its competitive environment ! Customers’ Assets: volumes growth in first 8 months 2002 Market Dexia Bank G4* without Actors Dexia outside G4* Sight & Term -10.3% +0.2% -16.3% -0.5% Deposits Saving +3.4% +2.0% +1.8% +6.8% Deposits Saving Bon
Slide 33: Retail Financial Services: Credit Outstandings
Activity Highlights Retail Financial Services ! Credit Outstandings + 5.1 % 21,7 (Bn €) 20,7 6,6 6,1 SME 14,6 15,1 Personal Sector Sept. 2001 Sept. 2002
Slide 34: Retail Financial Services: Insurance Premiums
Activity Highlights Retail Financial Services ! Insurance Premiums 438 420 407 (M€) 372 72 67 345 70 65 46 54 71 55 Non Life 39 79 89 59 34 54 Traditional Life 73 Assurance Life Guaranted yield 240 (Branch 21) 209 224 167 214 Life Unit-linked (Branch 23) Q3 2001 Q4 2001 Q1 2002 Q2 2002 Q3 2002
Slide 35: Retail Financial Services: Analysis of underlying P&L
Retail Financial Services Analysis of underlying P&L Year-to-date Year-to-date ∆ Sept 02 / (M€) Sept. 02 Sept. 01 Sept. 01 % Pro-forma Revenues 1,254 1,335 -6.0% Costs -1,037 -1,081 -4.0% Gross Operating Income 217 254 -14.5% Cost of Risk -29 -20 +46.9% Corporate Income tax -69 -67 +3.5% Other Items
Slide 36: Retail Financial Services: Quarterly underlying Gross Operating Income
Retail Financial Services Quarterly evolution of the underlying Gross Operating Income (M€) Revenues 463 444 441 429 417 410 403 368 356 356 354 353 354 Costs 331 Gross 106 87 87 80 Operating 60 63 50 Income Q1 2001* Q2 2001* Q3 2001* Q4 2001* Q1 2002* Q2 2002* Q3 2002 * Q1 2001 to Q2 2002 are pro-f
Slide 37: Investment Management Services: Private Banking / Affluent Customer Assets
Activity Highlights Investment Management Services ! Private Banking / Affluent Customer Assets* Conso & (Bn €) technic.effect** New Money Market effect 34,3 +0,4 - 0,1 -1,3 33,3 June 2002 September 2002 *Excluding share leasing products **Identification of Artesia Vernes’ and former Yves Mahé Gesti
Slide 38: Investment Management Services: Assets under management
Activity Highlights Investment Management Services ! Assets under management Conso & technic.effect* New money Market effect (Bn €) 80,5 +0,4 -1,8 -4,5 74,5 June 2002 September 2002 * Identification of Artesia Vernes’ and former Yves Mahé Gestion’s customers’ assets, impact of Fortior’s deconsolidat
Slide 39: Fund Administration
Activity Highlights Fund Administration # of transactions # of portfolios # of transactions (mios) processed (000’s) managed 393,0 1575 3,80 3,86 320,9 1274 3,50 267,2 996 Sept. Sept. 02 02 9 Sept. Sept. Sept 02 mths Sept 02 9 9 01 scope 02 01 scope mths mths 01* scope 01* 01 02 01* Custody Central
Slide 40: Investment Management Services: Analysis of underlying P&L
Investment Management Services Analysis of underlying P&L Year-to-date Year-to-date ∆ Sept 02 / (M €) Sept 02 Sept 01 Sept 01 % Pro-forma Revenues 788 883 -10.8% Costs -520 -551 -5.6% Gross Operating Income 268 332 -19.4% Cost of Risk -3 -5 -28.3% Corporate Income Tax -78 -115 -32.2% Other Items -3
Slide 41: Investment Management Services: Quarterly underlying Gross Operating Income
Investment Management Services Quarterly evolution of the underlying Gross Operating Income (M€) 313 Revenues 298 296 272 271 260 257 193 182 185 183 178 169 173 Costs 130 113 103 Gross 89 93 91 84 Operating Income Q1 2001* Q2 2001* Q3 2001* Q4 2001* Q1 2002* Q2 2002* Q3 2002 * Q1 2001 to Q2 2002 ar
Slide 42: Segment contributions within Investment Management Services
Segment contributions within Investment Management Services Private Banking Asset Fund Equity-related Total IMS (incl. share leasing) Management Administration activities (M€) Q2 2002 Q3 2002 Q2 2002 Q3 2002 Q2 2002 Q3 2002 Q2 2002 Q3 2002 Q2 2002 Q3 2002 underlying Revenues 132 134 48 44 50 52 30 2
Slide 43: Capital Markets & Treasury Activities: Analysis of underlying P&L
Capital Markets & Treasury Activities Analysis of underlying P&L Year-to-date Year-to-date ∆ Sept 02 / (M€) Sept 02 Sept 01 Sept 01 % Pro-forma Revenues 411 528 -22.3% Costs -125 -134 -6.7% Gross Operating Income 286 394 -27.5% Cost of Risk -5 2 n.s Corporate Income Tax -67 -120 -44.2% Other Items -
Slide 44: Capital Markets & Treasury Activities: Quarterly underlying Gross Operating Income
Capital Markets & Treasury Activities Quarterly evolution of the underlying Gross Operating Income (M€) 182 Revenues 175 171 175 164 151 138 129 127 130 124 104 72 47 44 44 47 45 Costs 40 40 Gross 32 Operating Income Q1 2001* Q2 2001* Q3 2001* Q4 2001* Q1 2002* Q2 2002* Q3 2002 * Q1 2001 to Q2 2002
Slide 45: Synthesis: Underlying Income of the Business Lines
Synthesis: Underlying Income of the Business Lines Year-to-date Year-to-date ∆ Sept 02 / (M€) Sept 02 Sept 01 Sept 01 Public Finance 536 446 +91 Retail Banking 137 174 -37 Investment Management Services 184 210 -26 Capital Markets and Treasury Activities 212 262 -50 TOTAL BUSINESS LINES / Underlying
Slide 46: Non Allocated: Analysis of underlying P&L
Non Allocated Analysis of underlying P&L Year-to-date Year-to-date ∆ Sept 02 / (M€) Sept 02 Sept 01 Sept 01 Pro-forma Revenues -56 11 -67 Costs -168 -167 -1 Gross Operating Income -224 -157 -67 Cost of Risk -15 -9 -6 Corporate Income Tax 68 68 - Other Items -56 -51 -5 Net Income -227 -149 -78
Slide 47: Non allocated: Quarterly underlying Gross Operating Income
Non allocated Quarterly evolution of underlying Gross Operating Income Q1 Q2 Q3 Q4 Q1 Q2 Q3 (M€) 2001* 2001* 2001* 2001* 2002* 2002* 2002 Revenues -5 4 12 36 -32 0 -24 Costs -43 -45 -80 -74 -50 -63 -55 Gross Operating -47 -41 -68 -37 -82 -63 -79 Income * Q1 2001 to Q2 2002 are pro-forma
Slide 48: Impact of the Exceptionals on P&L
Impact of the Exceptionals on P&L Year-to-date Year-to-date (M€) Sept 02 Sept 01 pro-forma Revenues 170 207 Costs -50 -6 Gross Operating Income 120 201 Cost of Risk -437 0 Net gains + impairments on LT -34 +87 investments Corporate Income Tax +386 -85 Allocation to GBBR +82 -44 Net Income 115 161
Slide 49: Main Exceptional Items in 2002
Main Exceptional Items in 2002 ! Revenues • Net gains on OLO: +135 M€ • Net gains on Clearstream: +75 M€ • CLN: -59 M€ ! Costs • Dexia Bank Nederland restructuring costs: -53M€ (first tranche of -23 M€ ; new provision of -30 M€) ! Provisions • Dexia Bank Nederland provision: -437 M€ ! Net gains on L
Slide 50: Incidence of Exceptional Items on P&L variation
Incidence of Exceptional Items on P&L variation (M€) Year-to-date Year-to-date ∆ Sept 02 / Sept 02 Sept 01 Sept 01 Total Capital Gains 238 226 +12 of which Revenues 213 162 of which gains on LT Investments 25 64 Total Impairment -118 -5 -113 of which Revenues -59* -28* of which provisions and losses
Slide 51: Summary of Net Income Variations 9 months 2002 / 2001
Summary of Net Income Variations 9 months 2002 / 9 months 2001 Year-to-date Year-to-date ∆ Sept 02 / ∆ Sept 02 / (M€) 2002 Sept 01 Sept 01 Sept 01 % Total Business Lines 1,069 1,092 -23 -2.1% Unallocated -227 -149 -78 -52.4% TOTAL UNDERLYING 842 943 -101 -10.7% Exceptional 115 161 -46 -28.6% TOTAL 9
Slide 52: Outlook 2002
Outlook 2002 October 30th, 2002 Guidance is confirmed: Full Year 2002 Net Income is expected to be about 10% lower than 2001
Slide 53: Appendices
DEXIA Appendices
Slide 54: Group's Equity portfolios
Group’s Equity portfolios* Market Net Cap. Book (M€) Value Gain/Loss Value 30/09/02 30/09/02 (when available) % Shares in Equity Acc’t Co’s 470 n.a. % Long term Investments 1,234 o Quoted 653 537 -116 o Non-quoted 581 n.a. % Other 1,985 o Quoted 1,671 1,541 -130 Insurance Co’s portfolios of quoted s
Slide 55: Impact P&L of Group's Equity portfolios in 2002
Impact P&L of Group’s Equity portfolios in 2002 Retail Financial Investment Capital Markets + Public Finance Unallocated Total Services Management Services Treasury activities Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Net Banking -7.0 -20.0 +3.2 -0.5 -0.8 -17.7 -19.8 +77.2 -55.0 -17.1 +7