Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q1 2006 Earnings Presentation
48 slides from Dexia Holding SA's earnings presentation, May 23, 2006
Slide 1: Analysts' Meeting Q1 2006 Results
Analysts’ Meeting Q1 2006 Results Paris, May 23, 2006 Rembert von Lowis Member of the Management Board
Slide 2: Highlights
Highlights
Slide 3: Strong originations in the commercial business lines
Strong originations in the commercial business lines Business volumes (12 months growth) Public/Project • LT banking commitments o/s + 19.3 % Finance and Credit Enhancement • Net par o/s FSA + 6.1 % • Customer assets o/s + 8.3 % Personal Financial Services • Customer loans o/s + 13.2 % • Assets unde
Slide 4: Group results
Group results
Slide 5: Changes in scope and conventions
Changes in scope and conventions x Scope (M€) Reported net income – Group share Q1 2005 475 - Exits (Eural, Rekord) and : Impact JV RBC (proportional integration) Pro forma* net income – Group share Q1 2005 475 Variation 0 Of which: Income 3 M€ Costs 3 M€ * All four quarters of 2005 have been re-sta
Slide 6: Summary of Q1 2006 P&L account
Summary of Q1 2006 P&L account FIRST QUARTER 2006 Variation (M€) Q1 2005 Q1 2006 reported underlying* Income 1,453 1,786 + 22.9 % + 6.3 % Costs - 773 -820 + 6.1 % + 6.4 % Gross operating income 680 966 + 42.1 % + 6.1 % Cost of risk -90 0 n.s. + 67.6 % Impairments on (in)tangible assets 0 0 n.s.
Slide 7: Focus on revenues (1)
Focus on revenues (1) 1. ACCOUNTING VIEW (M€) Variation Q1 2005 Q1 2006 M€ % Total income (reported) 1,453 1,786 + 333 + 22.9 % Net interest, dividend and related 1,088 1,414 + 326 + 30.0 % income Net commissions 290 325 + 35 + 12.1 % Technical margin of insurance 49 21 - 28 - 57.1 % activitie
Slide 8: Focus on revenues (2)
Focus on revenues (2) 2. INCOME BY TYPE OF ACTIVITIES (M€) Variation Q1 2005 Q1 2006 M€ % Underlying pro forma 1,431 1,521 90 + 6.3 % Banking activities 1,201 1,273 + 72 + 6.0 % FSA 115 136 + 21 + 18.2 % Insurance activities 115 112 -3 - 2.6 % 8
Slide 9: Cost of risk
Cost of risk related to total net O/S commitments** (in basis points) 2.5 1.2 1.2 Credit 0.4 0.7 0.6 0.6 0.6 0.6 0.4 enhancement 12.2* 9.8* 7.8 6.4 6.6 5.7* 2.2 1.8* 1.7* 1.6* Banking activities 1997 1998 1999 2000 2001 2002 2003 2004 2005 Q1 2006 annualized * Excluding impact of charges for Legio L
Slide 10: Non-operating items
Non-operating items (M€) Q1 2005 Q1 2006 Variation Income + 18 + 265 + 247 of which . capital gains + 11 + 237* . MTM, CDS FSA -2 + 24 . interest DBNL +9 +4 Costs 0 0 - Cost of risk (DBNL) - 83 + 13 + 96 Tax expense + 63 - 16 - 79 of which . tax credit on impairments + 17 - . Write-back of a tax pro
Slide 11: Incidence of FSA's MTM on CDS portfolio on the quarterly results
Incidence of FSA’s MTM on CDS portfolio on the quarterly results (M US$) 60 + 48 50 40 + 29 30 20 10 0 -10 -3 -20 - 16 - 18 -30 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 11
Slide 12: Key performance indicators (1)
Key performance indicators (1) Q1 2005 Q1 2006 C/I ratio 53.2 % 45.9 % C/I ratio underlying 53.8 % 53.9 % ROE 18.7 % 28.0 % 19.7 %* Return on risk-weighted assets 1.84 % 2.69 % Profit margin 33.6 % 44.1 % Variation 35.5 %* Q1 06/ Q1 05 EPS (€) 0.43 0.71 + 64.3 % 0.49* Underlying EPS (€) 0.43 0.47 +
Slide 13: Key performance indicators (2)
Key performance indicators (2) Variation in 31/12/05 31/03/06 3 months Tier 1 ratio 10.3 % 10.3 % - Tier 1 ratio without hybrid 9.3 % 9.3 % - Tier 1 capital (M€) 11,894 12,291 + 3.3 % Risk weighted assets (Bn€) 115.0 119.2 + 3.7 % NAV per share (€) Core shareholders’ equity* 9.86 10.34 + 4.8 % Total
Slide 14: Business lines
Business lines Activity and Results
Slide 15: Public/Project Finance & Credit Enhancement: activity highlights
Activity highlights Public/Project Finance & Credit Enhancement 9 Long-term banking commitments* (Bn€) + 19.3 % 237.0 26.1 198.6 43.5 America 16.6 (+ 31.2 %) 33.2 Project/ Corporate Finance 102.8 80.0 Other countries (+ 28.4 %) 210.9 182.0 Public Finance 85.4 90.7 France + Belgium + Luxembourg (+ 6.
Slide 16: Public/Project Finance & Credit Enhancement: credit enhancement (FSA)
Activity highlights Public/Project Finance & Credit Enhancement Credit enhancement (FSA) Gross present value originations Net par outstanding (M US$) (Bn US$) - 34.4 % + 6.1 % 193 353 13 333 10 13 13 30 33 13 29 127 9 15 79 88 9 61 23 26 193 217 77 54 Q1 2005 Q1 2006 31/03/05 31/03/06 U.S. Muni U.S.
Slide 17: Public/Project Finance & Credit Enhancement: Q1 2006 underlying P&L
Public/Project Finance & Credit Enhancement Analysis of Q1 2006 underlying P&L FIRST QUARTER 2006 ' ' (M€) Q1 2005* Q1 2006 Q1 06 / At constant rate Q1 05 of exchange Income 541 604 + 11.8 % + 9.0 % Costs - 179 - 197 + 9.9 % + 8.1 % Gross operating income 361 407 + 12.7 % + 9.4 % Cost of risk +1 - 1
Slide 18: Public/Project Finance & Credit Enhancement: quarterly gross operating income
Public/Project Finance & Credit Enhancement Quarterly variation of the underlying gross operating income (M€) 604 575 578 541 546 Income 407 387 382 Gross 361 361 operating income Costs 185 187 195 197 179 Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 * Based on pro forma accounts 18
Slide 19: Personal Financial Services: Total Customer Assets
Activity Highlights Personal Financial Services 9 Total Customer Assets (Retail and Private Banking) (Bn€) + 8.3 % 122.3 125.7 of which 116.0 9.6 10.0 8.0 Insurance 43.0 (Life insurance technical Private reserves) Banking 60.4 62.5 54.7 Off Balance Sheet products (Mutual funds, direct securities,...
Slide 20: Personal Financial Services: Total Customer Loans
Activity Highlights Personal Financial Services 9 Total Customer Loans (Retail and Private Banking) (Bn€) + 13.2 % 28.6 29.3 Loans to Private banking 2.8 customers 25.9 2.8 2.5 Loans to SME, independents 6.4 6.4 6.0 Consumer loans 2.3 2.3 2.3 Mortgage loans 17.1 17.8 15.1 March 2005 Dec. 2005 March
Slide 21: Personal Financial Services: Q1 2006 underlying P&L
Personal Financial Services Analysis of Q1 2006 underlying P&L FIRST QUARTER 2006 ' (M€) Q1 2005* Q1 2006 Q1 06 / Q1 05 Income 543 560 + 3.0 % Costs - 385 - 393 + 2.1 % Gross operating income 158 167 + 5.3 % Cost of risk -9 -5 - 46.0 % Tax expense - 44 - 43 - 2.6 % Other items 0 0 n.s. Net income –
Slide 22: Personal Financial Services: quarterly gross operating income
Personal Financial Services Quarterly variation of the underlying gross operating income (M€) 566 560 543 551 553 Income 394 399 393 385 385 Costs Gross 158 167 159 168 167 operating income Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 * Based on pro forma accounts 22
Slide 23: Asset Management, Insurance Services, Investor Services
• Asset Management • Insurance Services • Investor Services Following Group reorganization, above segments are now presented separately. 23
Slide 24: Asset Management: assets under management
Activity Highlights Asset Management 9 Assets under management Organic growth: +19.3% +28.4 % Market effect: + 9.1% Organic growth: + 6.0% (Bn€) +7.3 % Market effect: + 1.3% +5.4 +1.2 97.2 +5.7 90.6 Market effect +9.2 Organic growth 75.7 Market effect Organic growth March 2005 Dec. 2005 March 2006 2
Slide 25: Asset Management: Q1 2006 underlying P&L
Asset Management Analysis of Q1 2006 underlying P&L FIRST QUARTER 2006 ' (M€) Q1 2005* Q1 2006 Q1 06 / Q1 05 Income 45 59 + 31.0 % Costs - 24 - 31 + 27.2 % Gross operating income 21 28 + 35.3 % Cost of risk 0 0 n.s. Tax expense -1 -3 x 2.8 Other items 0 0 n.s. Net income – Group share 20 25 + 26.0 %
Slide 26: Asset Management: quarterly gross operating income
Asset Management Quarterly variation of the underlying gross operating income (M€) 62 59 45 46 Income 44 35 31 Costs 27 24 25 27 28 21 20 19 Gross operating income Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 * Based on pro forma accounts 26
Slide 27: Insurance Services: gross written premiums
Insurance Services 9 Insurance gross written premiums across the Group (M€) 1,297 94 Non life 257 947 Life Branch 23 829 823 686 127 Life Branch 21 120 101 115 123 149 99 117 946 705 586 573 470 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Gross Grosswritten writtenpremiums premiumsQ1 2006: 947M€ Q12006:
Slide 28: Insurance Services: Q1 2006 underlying P&L
Insurance Services Analysis of Q1 2006 underlying P&L FIRST QUARTER 2006 ' (M€) Q1 2005* Q1 2006 Q1 06 / Q1 05 Income 57 52 - 8.7 % Costs - 30 - 33 + 11.6 % Gross operating income 27 18 - 31.4 % Cost of risk 0 0 n.s. Tax expense -3 +6 n.s. Other items 0 0 n.s. Net income – Group share 24 24 - 1.0 %
Slide 29: Insurance Services: quarterly gross operating income
Insurance Services Quarterly variation of the underlying gross operating income (M€) 71 57 Income 54 52 33 32 33 30 30 Costs 33 Gross operating income 27 24 -1 39 18 Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 * Based on pro forma accounts 29
Slide 30: Investor Services: activity highlights
Activity Highlights Investor Services* Assets under administration** Number of funds Number of shareholder (Bn USD) under administration accounts in transfer agent (in thousands) + 19.0 % + 4.7 % + 3.6 % 1,978 3,898 3,998 5,049 5,240 1,796 3,859 5,005 1,662 March Dec. March March Dec. March March De
Slide 31: Investor Services: Q1 2006 underlying P&L
Investor Services Analysis of Q1 2006 underlying P&L FIRST QUARTER 2006 ' ' (M€) Q1 2005* Q1 2006 Q1 06 / At constant rate Q1 05 of exchange Income 69 89 + 27.6 % + 17.8 % Costs - 51 - 59 + 14.3 % + 5.8 % Gross operating income 18 30 + 65.5 % + 52.0 % Cost of risk 0 0 n.s. Tax expense -6 -9 + 54.0 %
Slide 32: Investor Services: quarterly gross operating income
Investor Services Quarterly variation of the underlying gross operating income (M€) 89 84 79 80 69 Income 61 61 59 56 51 Costs 30 22 23 Gross 18 18 operating income Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 * Based on pro forma accounts 32
Slide 33: Treasury and Financial Markets: funding activities
Treasury and Financial Markets (TFM) Group Treasury - Funding activities New LT issues Average 8.1 years 8.1 years life 10.8 (Bn€) 8.9 AAA AAA AA AA Q1 2005 Q1 2006 33
Slide 34: Treasury and Financial Markets: Fixed Income CSP portfolio
Treasury and Financial Markets (TFM) Fixed Income – CSP portfolio Average 7.3 years 8.2 years life + 6.8 - 2.9 66.8 62.9 Repayments (Bn€) & sales New investments 92 % 95 % 31/12/05 31/12/06 Available for sale & held to maturity Trading 34
Slide 35: Treasury and Financial Markets: Q1 2006 underlying P&L
Treasury and Financial Markets Analysis of Q1 2006 underlying P&L FIRST QUARTER 2006 ' (M€) Q1 2005* Q1 2006 Q1 06 / Q1 05 Income 136 152 +11.7 % Costs -41 -41 -1.1 % Gross operating income 95 111 +17.3 % Cost of risk +1 0 n.s. Tax expense -13 -29 x 2.2 Other items -2 -1 n.s. Net income – Group shar
Slide 36: Treasury and Financial Markets: quarterly net income
Treasury and Financial Markets Quarterly variation of the underlying net income – Group share (M€) 152 136 135 Income 117 101 Net income 81 - Group share 81 74 58 57 Costs 48 41 42 42 41 Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 * Pro forma 36
Slide 37: Underlying contribution of the business line's segments
Treasury and Financial Markets Underlying contribution of the business line’s segments Market Engineering Treasury Fixed Income and Trading (M€) Q1 2005* Q1 2006 Q1 2005* Q1 2006 Q1 2005* Q1 2006 Income 41 40 84 86 11 27 Costs - 12 - 12 - 14 - 15 - 15 - 14 Gross operating income 29 28 69 71 -4 13 Ta
Slide 38: Focus on Central Assets (underlying)
Focus on Central Assets (underlying) (M€) Q1 2005* Q1 2006 Variation Income 40 5 - 35 Costs -59 -66 -7 Gross operating income -20 -61 - 41 Cost of risk 0 2 +2 Tax expense 19 31 + 12 Minority interests 2 6 +4 Net income – Group share -2 -34 - 32 * Pro forma 38
Slide 39: Appendices
Appendices • Recap Asset Management, Insurance and Investor Services • View on Insurance activities across the Group • Update on DBNL/Legio • Branch network in Belgium • Evolution of outstanding shares
Slide 40: Recap Asset Management, Insurance and Investor Services
Recap Asset Management, Insurance and Investor Services Analysis of Q1 2006 underlying P&L FIRST QUARTER 2006 ' ' (M€) Q1 2005* Q1 2006 Q1 06 / At constant rate Q1 05 of exchange Income 172 200 + 16.5 % + 12.5 % Costs - 106 - 123 + 16.5 % + 12.4 % Gross operating income 66 77 +16.4 % + 12.7 % Cost o
Slide 41: View on insurance activities across the Group (1)
View on insurance activities across the Group (1) 9 Insurance gross written premiums (M€) 1,297 94 Non life 257 947 Life Branch 23 829 823 686 127 Life Branch 21 120 101 115 123 149 99 117 946 705 586 573 470 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Gross Grosswritten writtenpremiums premiumsQ1 2006:
Slide 42: View on insurance activities across the Group (2)
View on insurance activities across the Group (2) Contribution to the proforma underlying revenues* (M€) Q1 Q12006 2006revenues: revenues: 112M€ 112 M€ --33% %versus versusQ1 Q12005 2005 By business lines By reporting entities 44% 6% 85% 15% 50% Public/Project Finance Personal Financial Services Dex
Slide 43: View on insurance activities across the Group (3)
View on insurance activities across the Group (3) Focus on Dexia Insurance Services (DIS) 2005 2005 2006 Variation (M€) Q1 Q2 Q3 Q4 Q1 Q1 2006 / Q1 2005 Total Group Insurance Revenues 115 108 84 135 112 -3.1% of wich Dexia Insurance Services 100 91 68 119 95 -5.1% Dexia Insurance Services P&L 2005 2
Slide 44: View on insurance activities across the Group (4)
View on insurance activities across the Group (4) Performance ratios of Dexia Insurance Services Q1 2005* Q1 2006 9 Life • Margin on outstanding 1.8 % 1.5 % (income life direct business/ mathematical life reserves) • Cost ratio 2.5 % 2.3 % (operating expenses, networkfees included / gross written pr
Slide 45: Evolution of the share leasing portfolio outstanding
DBNL/Legio Evolution of the share leasing portfolio outstanding 4,178 (M€) 140 3,269 Total 172 1,298 2,401 2,448 147 Of which Of which Of which 1,868 contracts Accepted Not 1,625 with an accepted 1,370 capital agreement an 1,489 repayments agreement 300 357 302 1,637 1,034 458 509 331 1,229 815 789
Slide 46: Share Leasing – Evolution of the stock of provisions
DBNL/Legio Share Leasing – Evolution of the stock of provisions (M€) - 104 Net Reversal of + 315 prior provisions - 224 (AEX,…) 510 497 - 13 85 Settlement Utilizations Duisenberg 145 Reversal of - 91 393 (400) net of prior provisions existing (AEX, …) Utilizations 105 provisions 425 of which: 352 •
Slide 47: Branch network in Belgium
Branch network in Belgium -- 29 29 % % 1,483 1,411 1,283 1,187 1,069 1,054 940 912 889 871 833 823 543 499 394 316 236 231 2001 2002 2003 2004 2005 Q1 2006 Employee network Independent agents network 47
Slide 48: Evolution of outstanding shares
Evolution of outstanding shares Outstanding Outstanding Shares cancelled at Shareholders’ shares shares General Meeting of 1,107,469,030 1,107,469,030 May 10, 2006 Outstanding -22,096,720 shares 1,085,372,310 Of which: 2,369,120 bought back in 2006 Treasury shares Treasury shares 20,550,020 22,711,7