Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — H1 2002 Earnings Presentation
47 slides from Dexia Holding SA's earnings presentation, Sep 13, 2002
Slide 1: Activity and Financial Results at June 30th, 2002
Analysts’ meeting Activity and Financial Results at June 30th, 2002 September 13, 2002 Brussels
Slide 2: Meeting's agenda
Meeting’s agenda ! Activity and results at June 30th, 2002 Rembert von Lowis, Group Chief Financial Officer ! Conclusion and outlook Pierre Richard, Group Chief Executive Officer
Slide 3: Activity and Results
Activity and Results Rembert von Lowis Group Chief Financial Officer
Slide 4: Restatements – Changes in scope
Restatements – Changes in scope ! Restated accounts • FSA charge to general reserve now in “Cost of Risk” at consolidated level (previously a “negative” revenue) introduced in Q2 2002 • “depositor’s guarantee premiums” and “renting activities” respectively introduced in Q4 2001 and Q1 2002 ! Proform
Slide 5: P&L – Q2 2002 / Q1 2002
P&L – Q2 2002 / Q1 2002 Q1 2002 ∆% (M€) Q2 2002 ∆% Pro forma underlying Revenues • Net Interest and Related Income 954 848 +12.5% +4.6% • Net Commissions and Other 282 306 -7.8% -2.8% • Insurance 206 180 +14.4% +14.4% • Total Revenues 1,442 1,335 +8.0% +4.2% Of which exceptional 114 59 Costs -805 -7
Slide 6: Analysis of quarterly revenues
Analysis of quarterly revenues (M €) Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 1,463 1,464 83 1,442 114 35 1,396 114 1,381 1,361 1,349 10 1,335 1,328 1,321 59 1,311 1,275 +4.2% Underlying Exceptionals Total (pro forma Q1 2001 through Q1 2002)
Slide 7: Analysis of quarterly costs
Analysis of quarterly costs (M €) Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 100 937 10 846 836 837 1 20 805 795 797 786 -2 784 788 -2 787 785 -1.3% Underlying Exceptionals Total (pro forma Q1 2001 through Q1 2002)
Slide 8: Quarterly evolution of the underlying Gross Operating Income
Quarterly evolution of the underlying Gross Operating Income (M€) 1,381 1,361 1,349 1,328 Revenues 1,311 1,275 836 837 786 788 795 785 Costs 563 592 524 543 475 480 Gross Operating Income Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002
Slide 9: Cost of risk related to total net O/S commitments
Cost of risk related to total net O/S commitments (in basis points) 3.4 bp Credit 1.2 bp 0.7 bp 0.6 bp 0.6 bp 0.4 bp Enhancement 14 bp 8 bp 7.8 bp 7 bp 6 bp Banking 2 bp Activities 1997 1998 1999 2000 2001 H1 2002* * annualized
Slide 10: Key Performance indicators
Key Performance indicators Q2 2002 Q1 2002 H1 2002 H1 2001 RWA* (Bn€) 106.4 106.2 106.4 105.0 Tier one Ratio* 9.3% 9.3% 9.3% 9.9% RORWA** 1.51% 1.62% 1.58% 1.93% ROE** 19.1% 20.1% 19.6% 20.5% Profit Margin 28.0% 31.7% 29.8% 29.6% C/I Ratio 55.8% 59.7% 57.7% 53.7% * End of period ** annualized
Slide 11: 1st Half 2002 P&L Account
1st Half 2002 P&L Account H1 2001 Evolution of (M€) H1 2002 pro forma ∆% underlying Revenues • Net Interest and Related Income 1,802 1,860 -3.1% • Commissions and Other 588 716 -17.9% • Technical & Financial Margin / Insurance 387 352 +9.9% Total Revenues 2,777 2,927 -5.1% -4.6% Of which exceptional
Slide 12: Segment Activity and Results
Segment Activity and Results
Slide 13: 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)* + 43.1 % 11.5 1.5 Other (Bn €) 8.0 0.9 Public Sector 10.0 + 39.6 % 7.1 Half 2001 Half 2002 * fully consolidated Co’s ; Germany excluded ; Artesia excluded (estimation of 260 M€ for half
Slide 14: Public / Project Finance & Credit Enhancement: L.T. Outstandings
Activity Highlights Public / Project Finance & Credit Enhancement ! L.T. Outstandings (in & off B/S)* +9.1 % +0.2 % 123.4 123.6 113.3 14.3 13.4 (Bn €) 13.8 Other Public Sector 109.1 110.2 99.5 June 2001 March 2002 June 2002 * fully consolidated Co’s ; Germany excluded
Slide 15: Public / Project Finance & Credit Enhancement: Deposits & Customer Assets
Activity Highlights Public / Project Finance & Credit Enhancement ! Deposits & Customer Assets * + 15.0% 17.3 -2.3% 16.9 14.7 5.2 5.2 (Bn €) 5.3 Off B/S 12.1 11.7 9.4 B/S June 2001 March 2002 June 2002 * Off B/S of Artesia excluded (estimated to 3.3 Bn€ at June 2002)
Slide 16: Public / Project Finance & Credit Enhancement: New Insurance Premiums
Activity Highlights Public / Project Finance & Credit Enhancement ! New Insurance Premiums +32.4 % 280.3 (M€) 11.3 Others* 47.2 211.8 45.8 x 2.7 DVV Insurance 100.7 7.0 221.8 6.9 166.0 37.5 Sofaxis 86.8 13.9 23.6 Q2 2001 Q2 2002 H1 2001 H1 2002 *Dexia Prévoyance and Dexia Life and Pensions
Slide 17: Public / Project Finance & Credit Enhancement: FSA Gross Present Value of Premiums
Activity Highlights Public / Project Finance & Credit Enhancement ! FSA Gross Present Value of Premiums + 28.5 % 374.7 (M US$) 291.5 84.7 + 14.4 % 49.7 199.9 139.5 174.8 118.5 61.4 Int'l 23.3 75.9 63.6 ABS 123.3 150.5 75.6 74.9 Muni H1 2001 H1 2002 Q1 2002 Q2 2002
Slide 18: Public/Project Finance & Credit Enhancement: Analysis of quarterly P&L
Public/Project Finance & Credit Enhancement Analysis of quarterly P&L (M€) Q2 2002 Q1 2002 ∆ Q2/Q1 % ∆ Q2/Q1 % Pro forma underlying Revenues 463 470 -1.5% +1.3% Of which exceptional 14 Costs -158 -168 -6.0% -6.0% Of which exceptional Gross Operating Income 304 302 +0.7% +5.2% Cost of Risk -43 -14 x3
Slide 19: Public/Project Finance & Credit Enhancement: Quarterly evolution of GOI
Public/Project Finance & Credit Enhancement Quarterly evolution of the underlying Gross Operating Income (M€) 463 461 457 463 417 401 Revenues 305 304 290 289 256 244 Costs 162 170 168 157 158 158 Gross Operating Income Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002
Slide 20: Focus on FSA: cost of risk
Focus on FSA: cost of risk ! Thorough review of CDOs and CDSs portfolio, in the context of the deterioration of corporate credit quality in the US ! Identification of 7 CDO transactions (originated in 1998-1999) with insufficient protection • Present Value of potential future losses: 51 M$ • Now ful
Slide 21: CDOs and CDSs portfolio: credit quality remains very high
CDOs and CDSs portfolio: credit quality remains very high Others BBB 1.8% A 3.4% 5.1% AA 15.0% "Super AAA" (1) 47.5% AAA 27.2% (1) « Super AAA » = level of protection is at least 1.3 times higher than required to obtain an AAA rating
Slide 22: Retail Financial Services: Customers' Assets
Activity Highlights Retail Financial Services + 0.4 % ! Customers’ Assets - 0.6 % (Bn €) 80.7 79.8 80.1 OPC + unit linked : 24.4 25.2 - Market effect : -1.7 24.0 off B/S products - New money : +0.5 in B/S products 55.4 55.4 56.1 June 2001 March 2002 June 2002
Slide 23: Retail Financial Services: Credit Outstandings
Activity Highlights Retail Financial Services ! Credit Outstandings + 7.5 % + 2.1 % (Bn €) 21.1 21.5 20.1 6.5 6.7 6.0 SME 14.1 14.6 14.8 Personal Sector June 2001 March 2002 June 2002
Slide 24: Retail Financial Services: Insurance Premiums
Activity Highlights Retail Financial Services ! Insurance Premiums 511 (M€) 67 438 420 407 40 372 72 67 70 55 Non Life 65 46 54 55 39 79 Traditional Life 54 89 59 Assurance Life Guaranted yield (Branch 21) 349 214 209 240 224 Life Unit-linked (Branch 23) Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002
Slide 25: Retail Financial Services: Analysis of quarterly P&L
Retail Financial Services Analysis of quarterly P&L (M€) Q2 2002 Q1 2002 ∆ Q2/Q1 % ∆ Q2/Q1 % Pro forma underlying Revenues 441 403 +9.4% +9.4% Of which exceptional Costs -354 -354 0.0% +0.3% Of which exceptional -1 Gross Operating Income 87 49 +77.6% +74.0% Cost of Risk -9 -11 -18.2% Operating Incom
Slide 26: Retail Financial Services: Quarterly evolution of GOI
Retail Financial Services Quarterly evolution of the underlying Gross Operating Income (M€) 463 Revenues 444 441 429 417 403 368 356 356 354 353 354 Costs Gross 106 Operating 87 87 60 63 Income 50 Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002
Slide 27: Investment Management Services: Private Banking / Affluent Customer Assets
Activity Highlights Investment Management Services ! Private Banking / Affluent Customer Assets (Bn €) 37.3 New Money Market effect - 0.7 -2.3 34.3 March 2002 June 2002
Slide 28: Investment Management Services: Equity-leasing
Activity Highlights Investment Management Services ! Equity-leasing: Total outstanding loans & market value of customer assets (Bn €) 4.4 4.2 4.1 4.2 4.0 3.4 Dec. 2001 March 2002 June 2002 Outstanding loans Market value of customer assets
Slide 29: Investment Management Services: Assets under management
Activity Highlights Investment Management Services ! Assets under management (Bn €) New money Market effect 86.1 -0.3 -5.3 80.5 March 2002 June 2002
Slide 30: Fund Administration
Activity Highlights Fund Administration # of transactions # of portfolios # of transactions processed (000’s) managed (Millions) +9.9% +3.5% +7.8% 137.7 +7.9% 1,476 1.36 1.36 +19.9% 1.30 126.3 +10.9% 1,378 114.9 1,331 Q1 Q2 Q2 Q1 Q2 Q2 Q1 Q2 Q2 2002 2002 2002 * 2002 2002 2002 * 2002 2002 2002 * Cust
Slide 31: Investment Management Services: Analysis of quarterly P&L
Investment Management Services Analysis of quarterly P&L (M€) Q2 2002 Q1 2002 ∆ Q2/Q1 % ∆ Q2/Q1 % Pro forma underlying Revenues 251 271 -7.4% -3.7% Of which exceptional -11 Costs -181 -179 +1.1% -5.0% Of which exceptional -12 Gross Operating Income 69 93 -25.8% -2.2% Cost of Risk -32 -2 n.m. Operati
Slide 32: Investment Management Services: Quarterly evolution of GOI
Investment Management Services Quarterly evolution of the underlying Gross Operating Income (M€) 314 299 294 Revenues 271 271 261 186 192 183 182 179 170 Costs 131 113 103 Gross 89 93 91 Operating Income Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002
Slide 33: 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€) Q1 2002 Q2 2002 Q1 2002 Q2 2002 Q1 2002 Q2 2002 Q1 2002 Q2 2002 Q1 2002 Q2 2002 underlying Revenues 137 133 54 48 47 50 33 3
Slide 34: Focus on Dexia Bank Nederland
Focus on Dexia Bank Nederland IMS Dexia Bank Nederland excluding Dexia Bank Nederland (M€) Q4 2001 Q1 2002 Q2 2002 ∆% Q4 2001 Q1 2002 Q2 2002 ∆% undelying Q2 02/Q4 01 Q2 02/Q4 01 Revenues 110 89 82 -25.5% 184 182 179 -2.7% Costs -59 -51 -47 -20.3% -133 -128 -123 -7.5% Gross Operating 51 38 35 -31.4%
Slide 35: Capital Markets & Treasury Activities: Analysis of quarterly P&L
Capital Markets & Treasury Activities Analysis of quarterly P&L (M€) Q2 2002 Q1 2002 ∆ Q2/Q1 % ∆ Q2/Q1 % Pro forma underlying Revenues 156 164 -4.9% -6.3% Of which exceptional -8 -11 Costs -40 -45 -11.1% -11.1% Of which exceptional Gross Operating Income 116 119 -2.5% -4.6% Cost of Risk -2 3 Operati
Slide 36: Capital Markets & Treasury Activities: Quarterly evolution of GOI
Capital Markets & Treasury Activities Quarterly evolution of the underlying Gross Operating Income (M€) 182 175 171 175 Revenues 164 151 138 129 127 130 124 104 Costs 47 44 44 47 45 40 Gross Operating Income Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002
Slide 37: Non allocated
Non allocated (M€) Q2 2002 Q1 2002 Pro forma Revenues 133 25 Of which exceptional 132 57 Costs -72 -50 Of which exceptional -9 Gross Operating Income 61 -25 Cost of Risk -8 -8 Operating Income 53 -33 Other Items -25 21 Net Income 28 -12
Slide 38: Non allocated: Quarterly evolution of underlying GOI
Non allocated Quarterly evolution of underlying Gross Operating Income (M€) Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 Revenues -4 4 12 37 -31 0 Costs -43 -45 -80 -74 -50 -63 Gross Operating Income -47 -41 -68 -37 -82 -63
Slide 39: Conclusion and Outlook
Conclusion and Outlook Pierre Richard Group Chief Executive Officer
Slide 40: Artesia integration: Update on social negotiations
Artesia integration Update on social negotiations ! 3 agreements signed allowing for the realization of expected synergies " Overall agreement : 26/03/02 " Detailed agreement on the organisation of the « Employees » network : 23/05/02 " Convention Collectives de Travail : 03/07/02 ! Rules of geograp
Slide 41: Artesia integration: Impact on personnel
Artesia integration Impact on personnel EFT reduction objective Realised 30/06/02 vs EFT headcount at 30/06/01 Head Offices -1,400 -396 Employee network -870 -100 -2,270 -496 22% realised after 12 months Evolution of FTE’s at Dexia Bank* and former Artesia 12,660 12,580 12,340 12,150 June-01 Decembe
Slide 42: Artesia integration: Downsizing the branch networks
Artesia integration Downsizing the branch networks 386 341 45 19 24 5 "Independent" branches "Employee" Network Total Realized as of August 31, 2002 Objective 2005
Slide 43: Artesia integration: Cost synergy achievements
Artesia integration Cost synergy achievements 30 25 ⇒ 11 M€ linked to staff costs 19 (M€) ⇒ 8 M€ linked to other operating expenses Best Worst case case Objective full Achieved year 2002 H1 2002
Slide 44: Overall cost objective will be met in 2002
Costs Overall cost objective will be met in 2002 Initial 7/12 of the objective yearly objective: 3,304 M€ ¼ of the 1,894 M€ yearly -2.6% objective: 3,248 M€ 812 M€ Achieved: 1,845 M€ Revised -2.1% objective following Achieved: changes of 795 M€ scope and method 795 1845 March 31, 2002 July 31, 2002
Slide 45: Conclusion
Conclusion DEXIA
Slide 46: Appendices
Appendices DEXIA
Slide 47: Equity portfolios at June 30th 2002
Equity portfolios* at June 30th 2002 Market Net Cap. (M€) Book Value Value Gain/Loss (when available) " Shares in Equity Acc’t Co’s 477 n.a. " Long term Investments 1,122 o Quoted 644 697 +53 o Non-quoted 478 n.a. " Other 2,351 o Insurance Co’s portfolios of quoted shares 623 574 -49 o Other quoted