Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q3 2006 Earnings Presentation
54 slides from Dexia Holding SA's earnings presentation, Nov 16, 2006
Slide 1: Analysts' Meeting Q3 2006 Results
Analysts' Meeting Q3 2006 Results Paris, Rembert von Lowis November 16th, 2006 Member of the Management Board
Slide 2: Agenda
Agenda Highlights Group Results Business Lines : Activity & Results Appendices 1
Slide 3: Business volumes (12 months growth) in the Commercial Business Lines
Business volumes (12 months growth) in the Commercial Business Lines Public/Project • LT banking commitments o/s + 18.0 % Finance and Credit Enhancement • Net par o/s FSA + 3.9 % • Customer assets o/s + 5.3 % Personal Financial Services • Customer loans o/s + 14.3 % • Assets under management + 16.4
Slide 4: Agenda
Agenda Highlights Group Results Business Lines : Activity & Results Appendices 3
Slide 5: Changes in Scope
Changes in Scope (M€) Reported net income – Group share September 30, 2005 1,485 - Exits (Eural, Rekord, Private banking London) - Impact JV RBC (proportional integration) - Impact of the IFRS adjustments booked in Q4 2005 Pro forma net income – Group share September 30, 2005 1,486 Variation +1 Of w
Slide 6: Summary of 9M 2006 P&L Account
Summary of 9M 2006 P&L Account Variation (M€) 9M 2005 9M 2006 (1) reported underlying Income 4,406 5,127 +16.4% +9.5% Costs -2,387 -2,509 +5.1% +6.1% Gross operating income 2,019 2,618 +29.7% +13.8% Cost of risk -26 -69 x 2.7 +49.3% Impairments on (in)tangible assets +1 -1 n.s. n.s. Tax expens
Slide 7: Summary of Q3 2006 P&L Account
Summary of Q3 2006 P&L Account Variation (M€) Q3 2005 Q3 2006 reported underlying(1) Income 1,510 1,663 +10.1% +8.4% Costs -821 -850 +3.5% +5.1% Gross operating income 689 813 +18.0% +12.8% Cost of risk +24 -8 n.s. +68.4% Impairments on (in)tangible assets 0 -1 n.s. n.s. Tax expense -195 -177
Slide 8: Focus on Revenues (1)
Focus on Revenues (1) 1. ACCOUNTING VIEW (M€) Variation 9M 2005 9M 2006 M€ % Total income (reported) 4,406 5,127 +721 +16.4% Net interest, dividend and related 3,340 4,032 +692 +20.7% income Net commissions 868 936 +68 +7.8% Technical margin of insurance 125 79 -46 -36.8% activities Net inco
Slide 9: Focus on Revenues (2)
Focus on Revenues (2) 2. INCOME BY TYPE OF ACTIVITIES (M€) Variation 9M 2005 9M 2006 M€ % Total income (underlying) 4,255 4,658 +403 +9.5% Banking activities 3,563 3,886 +323 +9.1% FSA 385 418 +33 +8.5% Insurance activities 307 354 +47 +15.5% 8
Slide 10: Cost of Risk
Cost of Risk Related to Total Net o/s Commitments (2) (in bas is points) 2.5 1.2 1.2 Credit 0.7 0.6 0.6 0.6 0.6 0.8 0.4 enhancement (1) 12.2 9.8 (1) 7.8 6.4 6.6 (1) 5.7 2.2 1.8 (1) 2.1 (1) Banking 1.6(1) activities 1997 1998 1999 2000 2001 2002 2003 2004 2005 9M 2006 annualized (1) Excluding impact
Slide 11: Non-Operating Items
Non-Operating Items (M€) Q3 2005 Q3 2006 9M 2005 9M 2006 Income 82 133 128 469 (1) of which . capital gains +40 +132 +79 +435 . MTM, CDS FSA +35 -1 +21 +20 . interest DBNL +7 +2 +25 +10 Costs -2 0 -3 0 Cost of risk (DBNL) 36 14 9 -15 Tax expense -27 -4 25 -8 of which . tax credit on impairments - -
Slide 12: Incidence of FSA's MTM on CDS Portfolio on the Quarterly Income
Incidence of FSA’s MTM on CDS Portfolio on the Quarterly Income 40 (M€) 35 30 24 20 10 0 -1 -2 -3 -10 -11 -12 -20 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 11
Slide 13: Key Performance Indicators (1)
Key Performance Indicators (1) 9M 2005 9M 2006 C/I ratio 54.2% 48.9% C/I ratio underlying 55.6% 53.9% ROE 19.3% 23.0% Return on risk-weighted assets 1.89% 2.21% Profit margin 34.7% 39.4% 12
Slide 14: Key Performance Indicators (2)
Key Performance Indicators (2) Variation in 30/06/06 30/09/06 3 months Tier 1 ratio 9.9% 10.8% - Tier 1 ratio with 50% hybrid 9.4% 10.4% - Tier 1 capital (M€) 12,591 13,922 +10.6% Risk weighted assets (Bn€) 127.1 128.9 +1.4% NAV per share (€) (1) (2) Core shareholders’ equity 10.67 11.45 +7.3% (3) T
Slide 15: Earnings Per Share
Earnings Per Share (€) +32.7% 1.80 1.36 1.39 (1) +19.1% 1.21 (1) +14.7% 0.56 0.47 0.43 (1) 0.38 (1) +11.9% Q3 2005 Q3 2005 Q3 2006 Q3 2006 9M 2005 9M 2005 9M 9M 2006 2006 (1) Excluding non-operating items 14
Slide 16: Agenda
Agenda Highlights Group Results Business Lines : Activity & Results Appendices 15
Slide 17: Long-Term Banking Commitments
Long-Term Banking Commitments (1) PUBLIC / PROJECT FINANCE & CREDIT ENHANCEMENT (Bn€) + 18.0 % 253.3 America 214.7 31,4 44,8 (+ 13.1 %) 18,6 Project/ 39,6 Corporate Finance 117,7 Other countries 88,6 (+ 32.9 %) 221,9 196,1 Public Finance France + 86,6 90,8 Belgium + Luxembourg (+ 5.0 %) 30/09/2005 3
Slide 18: Credit Enhancement (FSA)
Credit Enhancement (FSA) PUBLIC / PROJECT FINANCE & CREDIT ENHANCEMENT Gross present value originations Net par outstanding (M US$) (Bn US$) -14.3 % + 3.9 % 721 365 352 73 618 13 16 47 33 30 85 10 16 86 23 87 77 171 219 74 209 226 345 217 9M 2005 9M 2006 30/09/05 30/09/06 U.S. Muni U.S. ABS Internat
Slide 19: Analysis of 9M 2006 Underlying P&L - Public/Project Finance
Analysis of 9M 2006 Underlying P&L PUBLIC / PROJECT FINANCE & CREDIT ENHANCEMENT Variation Variation (M€) 9M 2005 (1) 9M 2006 9M 06 / at constant rate 9M 05 of exchange Income 1,661 1,833 +10.3% +10.2% Costs -552 -582 +5.5% +5.4% Gross operating income 1,109 1,251 +12.7% +12.5% Cost of risk -20 -36
Slide 20: Analysis of Q3 2006 Underlying P&L - Public/Project Finance
Analysis of Q3 2006 Underlying P&L PUBLIC / PROJECT FINANCE & CREDIT ENHANCEMENT Variation Variation (M€) Q3 2005(1) Q3 2006 Q3 06 / at constant rate Q3 05 of exchange Income 575 608 +5.7% +7.2% Costs -187 -192 +2.6% +3.6% Gross operating income 387 415 +7.2% +8.9% Cost of risk -13 -11 -9.8% Tax exp
Slide 21: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income PUBLIC / PROJECT FINANCE & CREDIT ENHANCEMENT (M€) 621 604 608 575 578 541 546 Income 428 415 407 387 382 Gross 361 361 operating income Costs 185 187 195 197 193 192 179 (1) (1) (1) (1) Q1 2005 Q 2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3
Slide 22: Total Customer Assets (Retail & Private banking)
Total Customer Assets (Retail & Private banking) PERSONAL FINANCIAL SERVICES (Bn€) +5.3% 127.8 of which 121.4 122.3 10.4 8.9 9.6 Insurance 45.5 (Life insurance Private technical rese rves) Banking 59.9 60.5 63.6 Off Balance Sheet products (Mutual funds, direct securities,...) 82.4 Retail Balance She
Slide 23: Total Customer Loans (Retail and Private banking)
Total Customer Loans (Retail and Private banking) PERSONAL FINANCIAL SERVICES (Bn€) +14.3% 31.3 28.6 Loans to Private banking 27.4 3.4 customers 2.9 2.7 6.5 Loans to SME, 6.4 independents 6.2 2.4 Consumer loans 2.3 2.3 Mortgage loans 19.0 16.3 17.1 Sept. 2005 Dec. 2005 Sept. 2006 22
Slide 24: Analysis of 9M 2006 Underlying P&L - Personal Financial Services
Analysis of 9M 2006 Underlying P&L PERSONAL FINANCIAL SERVICES Variation (1) (M€) 9M 2005 9M 2006 9M 06 / 9M 05 Income 1,647 1,684 +2.2% Costs -1,163 -1,180 +1.5% Gross operating income 484 504 +4.1% Cost of risk -16 -16 -3.1% Tax expense -142 -121 -14.9% Other items 0 +1 n.s. Net income – Group sha
Slide 25: Analysis of Q3 2006 Underlying P&L - Personal Financial Services
Analysis of Q3 2006 Underlying P&L PERSONAL FINANCIAL SERVICES Variation (M€) Q3 2005 (1 ) Q3 2006 Q3 06 / Q3 05 Income 553 563 +1.9% Costs -394 -394 +0.1% Gross operating income 159 169 +6.5% Cost of risk -1 -10 n.s. Tax expense -48 -37 -22.2% Other items -1 0 n.s. Net income – Group share 109 122
Slide 26: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income PERSONAL FINANCIAL SERVICES (M€) 551 553 566 560 561 563 543 Income 394 399 393 393 394 385 385 Costs 158 167 159 168 167 168 169 Gross operating income Q1 2005(1) Q2 2005(1) Q3 2005 (1) Q4 2005(1) Q1 2006 Q2 2006 Q3 2006 (1) Based on pro
Slide 27: Asset Management, Insurance Services, Investor Services
Asset Management Insurance Services Investor Services 26
Slide 28: Assets under Management
Assets under Management ASSET MANAGEMENT (Bn€) Organic growth: YTD + 10.4% Market effect: YTD + 2.5% + 12.9 % 2.0 2.0 3.0 102.3 5.4 1.2 97.2 97.3 87.9 1.5 1.1 90.6 M arket O rganic O rganic M arket O rganic effect grow th -1.9 grow th effect O rganic M arket grow th M arket grow th effect effect Sep
Slide 29: Analysis of 9M 2006 Underlying P&L - Asset Management
Analysis of 9M 2006 Underlying P&L ASSET MANAGEMENT Variation (M€) 9M 2005 (1) 9M 2006 9M 06 / 9M 05 Income 136 172 +26.5% Costs -76 -97 +28.4% Gross operating income 60 74 +24.0% Cost of risk 0 0 n.s. Tax expense -4 -5 +6.1% Other items -1 -2 n.s. Net income – Group share 55 68 +23.6% Cost-income r
Slide 30: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income ASSET MANAGEMENT (M€) 62 61 59 51 45 46 44 Income 35 34 31 32 27 24 25 Costs 27 28 27 21 20 19 19 Gross operating income Q1 2005(1) Q2 2005(1) Q3 2005 (1) Q4 2005(1) Q1 2006 Q2 2006 Q3 2006 (1) Based on pro forma accounts 29
Slide 31: Insurance Gross Written Premiums
Insurance Gross Written Premiums INSURANCE SERVICES (M€) 1,297 94 257 1,057 947 106 885 829 823 127 87 101 120 101 686 115 123 149 99 56 Nonlife 117 946 864 705 728 Life Branch 23 586 573 470 Life Branch 21 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Gross Grosswritten writtenpremiums pr
Slide 32: Analysis of 9M 2006 Underlying P&L - Insurance Services
Analysis of 9M 2006 Underlying P&L INSURANCE SERVICES Variation (1) (M€) 9M 2005 9M 2006 9M 06 / 9M 05 Income 144 186 +29.4% Costs -93 -105 +13.1% Gross operating income 51 81 +59.4% Cost of risk 0 -1 n.s. Tax expense +3 -1 n.s. Other items -2 0 n.s. Net income – Group share 52 79 +50.2% Cost-income
Slide 33: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income INSURANCE SERVICES (M€) 77 71 57 57 Income 54 52 35 32 37 33 33 30 30 Costs Gross operating income 27 24 -1 39 18 42 20 Q1 2005(1) Q2 2005(1) Q3 2005 (1) Q4 2005(1) Q1 2006 Q2 2006 Q3 2006 (1) Based on pro forma accounts 32
Slide 34: Investor Services: Activity Highlights
Investor Services (1): Activity Highlights INVESTOR SERVICES Number of shareholder Assets under administration (2 ) Number of funds accounts in transfer agent (Bn USD) under administration (in thousands) + 20.6 % + 19.2 % + 13.8 % 4,585 2,170 6,341 3,845 3,898 5,783 1,799 1,796 5,573 Sept. Dec. Sept
Slide 35: Analysis of 9M 2006 Underlying P&L - Investor Services
Analysis of 9M 2006 Underlying P&L INVESTOR SERVICES Variation Variation (M€) 9M 2005(1) 9M 2006 9M 06 / at constant rate of 9M 05 exchange Income 228 277 +21.4% +15.8% Costs -169 -183 +8.3% +3.4% Gross operating income 59 94 +59.0% +51.4% Cost of risk 0 0 n.s. Tax expense -20 -31 +55.2% Other items
Slide 36: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income INVESTOR SERVICES (M€) 100 89 88 84 79 80 69 Income 61 61 63 61 59 56 51 Costs 37 30 27 22 23 Gross 18 18 operating income (1) (1) (1) (1) Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 (1) Based on pro forma accounts 35
Slide 37: Group Treasury – Funding Activities
Group Treasury – Funding Activities New Long-Term Issues TREASURY AND FINANCIAL MARKETS Average life 8.7 years 7.9 years 24.9 (Bn€) 22.3 AA AA AAA AAA 9M 05 9M 06 36
Slide 38: Fixed Income – CSP Portfolio
Fixed Income – CSP Portfolio TREASURY AND FINANCIAL MARKETS Average life 7.3 years 8.2 years + 16.8 - 8.7 (Bn€) 71.0 62.9 Repayments & sales New investments 94 % 97 % 31/12/05 30/09/06 Available for sale & held to maturity Trading 37
Slide 39: Analysis of 9M 2006 Underlying P&L - Treasury and Financial Markets
Analysis of 9M 2006 Underlying P&L TREASURY AND FINANCIAL MARKETS Variation (M€) 9M 2005 (1) 9M 2006 9M 06 / 9M 05 Income 372 413 +10.9% Costs -125 -124 -0.6% Gross operating income 248 289 +16.6% Cost of risk +1 0 n.s. Tax expense -32 -62 +93.2% Other items -3 -3 n.s. Net income – Group share 214 2
Slide 40: Quarterly Variation of the Underlying Net Income – Group Share
Quarterly Variation of The Underlying Net Income – Group Share TREASURY AND FINANCIAL MARKETS (M€) 152 136 135 137 Income 123 117 101 Net income 81 81 81 - Group share 74 62 58 57 Costs 48 41 42 42 41 41 42 (1) (1) (1) (1) Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 (1) Based on pro form
Slide 41: Underlying Contribution of the Business Line's Segments
Underlying Contribution of the Business Line’s Segments TREASURY AND FINANCIAL MARKETS Market Engineering Treasury Fixed Income and Trading (1) (1) (1) (M€) 9M 05 9M 06 9M 05 9M 06 9M 05 9M 06 Income 99 93 253 251 20 69 Costs -37 -37 -44 -45 -44 -42 Gross operating income 63 56 209 207 -24 27 Taxes
Slide 42: Focus on Central Assets (Underlying)
Focus on Central Assets (Underlying) (M€) Q3 05(1) Q3 06 9M 05(1) 9M 06 Income -10 40 66 93 Costs -64 -91 -188 -237 Gross operating income -74 -52 -122 -144 Cost of risk 1 -1 0 -1 Tax expense -4 5 24 43 Minority interests 1 5 4 17 Net income – Group share -79 -53 -101 -121 (1) Pro forma 41
Slide 43: Agenda
Agenda Highlights Group Results Business Lines : Activity & Results Appendices 42
Slide 44: Appendices contents
FSA from US GAAP (USD) to IFRS (EUR) Recap Asset Management, Insurance & Investor Services View on Insurance Activities Across the Group Update on DBNL / Legio Branch Network in Belgium Evolution of Outstanding Shares 43
Slide 45: FSA from US GAAP (USD) to IFRS (EUR)
FSA from US GAAP (USD) to IFRS (EUR) Variation (M$) 9M 05 9M 06 9M 06 / 9M 05 US GAAP – Net Income (as reported by FSA) 266 331 +24.4% Fair value adjustments for economic interest rate hedges 2.1 -38.5 Fair value adjustments for insured CDS -17.4 -15.9 US GAAP – Operating Earnings (as reported by FS
Slide 46: Recap Asset Management, Insurance & Investor Services
Recap Asset Management, Insurance & Investor Services Analysis of 9M 2006 Underlying P&L Variation Variation (1) (M€) 9M 05 9M 06 9M 06 / at constant rate of 9M 05 exchange Income 508 635 +25.0% +22.5% Costs -338 -386 +14.1% +11.6% Gross operating income 170 249 +46.8% +44.1% Cost of risk 0 -1 n.s.
Slide 47: View on Insurance Activities across the Group (1)
View on Insurance Activities across the Group (1) Insurance Gross Written Premiums (M€) 1,297 94 1,057 257 947 106 885 829 823 127 87 101 120 101 686 115 123 149 99 56 Nonlife 117 946 864 705 728 Life Branch 23 586 573 470 Life Branch 21 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Gross
Slide 48: View on Insurance Activities across the Group (2)
View on Insurance Activities across the Group (2) Contribution to the Pro Forma Underlying Revenues (1) (M€) 9M 9M2006 2006revenues: revenues: 354 354M€ M€ ++16 16% %versus versus9M 9M2005 2005 By business lines By reporting entities 50% 5% 85% 45% 15% Public/Project Finance Personal Financial Servi
Slide 49: View on Insurance Activities Across the Group (3)
View on Insurance Activities Across the Group (3) Focus on Dexia Insurance Services (DIS) Variation Variation Q3 Q3 Q3 06 / 9M 9M 9M 06 / 2005 2006 Q3 05 2005 2006 9M 05 T otal Group Insurance Revenues 84 114 35,7% 307 354 15,5% of wich Dexia Insurance Services 68 100 46,0% 260 303 16,4% Variation V
Slide 50: View on Insurance Activities Across the Group (4)
View on Insurance Activities Across the Group (4) Performance Ratios of Dexia Insurance Services 9M 2005 9M 2006 9 Life • Margin on outstanding 1.5%(1) 1.5 % (income life direct business/ mathematical life reserves) • Cost ratio 2.7 % 2.3 % (operating expenses, network fees included / gross written
Slide 51: DBNL / Legio Evolution of the Share Leasing Portfolio Outstanding
DBNL / Legio Evolution of the Share Leasing Portfolio Outstanding (M€) 3,269 172 2,448 147 1,868 Total 956 1,625 1,489 Of which Of which Of which 300 1,370 contracts Not with A ccepted accepted 357 1,145 capital an an 219 990 repayments agreement agreement 1,034 297 318 392 1,229 815 694 319 245 33
Slide 52: DBNL / Legio Share Leasing – Evolution of the Stock of Provision
DBNL / Legio Share Leasing – Evolution of the Stock of Provision (M€) IAS 37 Provision (in Liabilities) IAS 39 Portfolio provision (deducted from Assets) 497 - 13 - 91 Cost of risk + 42 - 44 145 (reversal) 393 391 -14 -14 363 Utilizations Cost of risk Utilizations (allocation,…) Cost of risk + 105 +
Slide 53: Branch Network in Belgium
Branch Network in Belgium -- 30 30 % % 1,483 1,411 1,283 1,187 1,069 1,034 940 912 889 871 833 812 543 499 394 316 236 222 2001 2002 2003 2004 2005 Sept. 2006 Employee network Independent agents network 52
Slide 54: Evolution of Outstanding Shares
Evolution of Outstanding Shares Capital increase of Outstanding Sept. 11, 2006 Shares Shares cancelled at 62,176,166 1,148,414,466 (1) Outstanding Shareholders’ General Shares meeting of May 10, 2006 1,107,469,030 -22,096,720 Exercise of warrants 865,990 Of which: 2,369,120 bought back in 2006 Treas