Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q1 2011 Earnings Presentation
56 slides from Dexia Holding SA's earnings presentation, May 11, 2011
Slide 1: 1Q 2011 Results and Business Highlights
1Q 2011 Results and Business Highlights 11 May 2011 Pierre Mariani, CEO Philippe Rucheton, CFO
Slide 2: Disclaimer
Disclaimer This presentation and the information contained herein are provided for information purposes only and may not be complete. It does not constitute an offer to sell or the solicitation to buy any securities issued by Dexia or any entity of the Dexia Group. This presentation includes unaudit
Slide 3: Key Messages
Key Messages Net Income group share of EUR 69 m in 1Q 2011 Commercial momentum supporting Core revenues, up by 8% Strong rise in the pre-tax income of the commercial business lines*: +36% vs. 1Q 2010 Fast pace of the group’s transformation leading to decreasing Legacy revenues Transformation p
Slide 4: Agenda
Agenda Group summary 1Q 2011 Group results 1Q 2011 results by division Core Division Legacy Portfolio Management Division Transformation plan still on a fast track Update on liquidity and solvency 4
Slide 5: Reported Statement of Income 1Q 2011
Reported Statement of Income 1Q 2011 Revenues driven by strong (EUR m) 1Q10* 4Q10* 1Q11 operational performance but impact Income 1 475 1 197 1 127 of fast transformation pace Expenses -869 -955 -847 EUR 89 m increase in Core division Gross operating income 606 242 280 more than offset by EUR 437
Slide 6: Agenda
Agenda Group summary 1Q 2011 Group results 1Q 2011 results by division Core Division Legacy Portfolio Management Division Transformation plan still on a fast track Update on liquidity and solvency 6
Slide 7: 1Q 2011 results by division - Core Division: Pre-Tax Income
1Q 2011 results by division - Core Division Focus on Pre-Tax Income Retail & Commercial Public & Wholesale Asset Management & Group Center* Banking Banking Services (EUR m) (EUR m) (EUR m) (EUR m) +16.8% 1Q10 1Q11 251 +22.1% 85 +50.9% 91 78 70 -6 166 +106 1Q10 1Q11 1Q10 1Q11 1Q10 1Q11 -112 At EUR 42
Slide 8: 1Q 2011 results by division - Core Division: Revenues
1Q 2011 results by division - Core Division Focus on Revenues Retail & Commercial Public & Wholesale Asset Management & Group Center* Banking Banking Services (EUR m) (EUR m) +0.5% (EUR m) (EUR m) +4.6% +16.9% 233 234 259 728 696 221 +18 31 13 1Q10 1Q11 1Q10 1Q11 1Q10 1Q11 1Q10 1Q11 Revenues growing
Slide 9: 1Q 2011 results by division - Core Division: Costs
1Q 2011 results by division - Core Division Focus on Costs Retail & Commercial Public & Wholesale Asset Management & Group Center* Banking Banking Services (EUR m) +0.1% (EUR m) (EUR m) +7.8% (EUR m) -0.7% 95 461 461 164 -32% 132 131 152 65 1Q10 1Q11 1Q10 1Q11 1Q10 1Q11 1Q10 1Q11 Total costs down 2%
Slide 10: 1Q 2011 results by division - Core Division: Cost of Risk
1Q 2011 results by division - Core Division Focus on Cost of Risk Cost of risk in bp* Global customers loan portfolio remaining of 1Q10 2Q10 3Q10 4Q10 1Q11 sound quality in 1Q11 as evidenced by 55 limited amount of net allocation to provisions RCB 44 35 23 7 RCB CoR and NPL still on a positive trend
Slide 11: 1Q 2011 results by division - Legacy Portfolio Management Division
1Q 2011 results by division - Legacy Portfolio Management Division Revenues Costs Cost of risk Pre-tax income (EUR m) (EUR m) (EUR m) (EUR m) 312 159 -2 -65 -370 123 28 26 94 159 -284 1Q10 1Q11 1Q10 1Q11 Capital gain -125 1Q10 1Q11 1Q10 1Q11 -247 Transformation ahead of schedule: revenues down by EU
Slide 12: Agenda
Agenda Group summary 1Q 2011 Group results 1Q 2011 results by division Core Division Legacy Portfolio Management Division Transformation plan still on a fast track Update on liquidity and solvency 12
Slide 13: RCB - Retail business delivering good performance
RCB - Retail business delivering good performance Income up 5% vs. 1Q10 at EUR 728 m Income by country (1Q11) Favorable deposit mix in Belgium leading to 12% Luxembourg growth in revenues Belgium 17% 52% In Turkey, volumes and fee income linked to higher cross selling compensating pressure on ma
Slide 14: RCB - Focus on Belgium and Luxembourg
RCB - Focus on Belgium and Luxembourg High customer acceptance of new distribution model Globally solid commercial momentum Customer deposits and loans Deposits up EUR 2.3 bn vs. March 2010 driven (EUR bn) mainly by Fidelity savings accounts in Belgium 76.5 78.5 75.0 Life insurance reserves: +EU
Slide 15: RCB - Focus on Turkey
RCB - Focus on Turkey Fast business development confirmed in 1Q11 Customer deposits and loans Sustained loan and deposit growth (TRY bn) 25.7 Deposits up 33% vs. March 2010 and up 6% vs. 23.8 Dec. 2010 mainly driven by retail 20.9 19.4 19.7 Loans rising by 32% vs. March 2010 (8% vs. Dec. 15.7 20
Slide 16: PWB – Focus on value added activities
PWB – Focus on value added activities Income: stable vs. 1Q10 at EUR 234 m, Income by segment (1Q11) higher margins compensating increase in funding costs Corporate Public Banking Banking 28% 47% Costs under control at EUR 131 m, in line with 1Q10 Cost of risk down by EUR 11 m vs. 1Q10 at EUR 13 m,
Slide 17: PWB - Selective lending policy
PWB - Selective lending policy Public banking New LT commitments New commitments down by EUR 0,7 bn vs. 1Q10 (EUR bn) 3.0 as a result of selective lending strategy and low 0.5 level of demand; French public finance market 2.2 0.4 down by around 40% in 1Q11 0.1 0.3 Total long term commitments dec
Slide 18: AMS – Performance driven by quality of franchise and market recovery
AMS – Performance driven by quality of franchise and market recovery Asset Management Income by segment (1Q11) Pre-tax result in line with 1Q10 and up by 37% Asset Mgt vs. 4Q10 at EUR 17 m 19% Stable revenues and costs under control: total costs on average AuM further reducing at 14.6 basis poin
Slide 19: AMS – Good commercial dynamic
AMS – Good commercial dynamic Asset Management Activity figures AuM + 1.3 bn vs. March 2010: EUR 400 m net new cash in 1Q11; improving product mix vs. 2.10 2.06 1Q10 1.83 85.0 86.4 86.3 75% funds 3, 4 and 5 stars: performance above market average 18.9 16.8 18.4 Expertise awarded in 2011 (globa
Slide 20: Agenda
Agenda Group summary 1Q 2011 Group results 1Q 2011 results by division Core Division Legacy Portfolio Management Division Transformation plan still on fast track Update on liquidity and solvency 20
Slide 21: Legacy Portfolio Management Division: Bond portfolio in run-off
Legacy Portfolio Management Division Bond portfolio in run-off Bond portfolio in run-off (EUR bn) AAA AA A BBB NIG Total Public sector 1.6 11.8 7.6 3.0 1.3 25.3 Sovereigns 0.9 6.6 0.9 4.7 3.1 16.1 Banks 2.3 3.1 8.8 2.9 0.5 17.6 Covered bonds 5.1 6.1 0.4 0.5 0.1 12.3 ABS 5.8 1.3 0.9 0.5 0.4 8.9 MBS 4
Slide 22: Legacy Portfolio Management Division: Financial Products portfolio
Legacy Portfolio Management Division Financial Products portfolio Financial Products portfolio (USD 13.5 bn / EUR 9.5 bn) AAA AA A BBB NIG Total US RMBS 0.1 0.3 0.2 0.1 8.1 8.8 o/w Subprime RMBS 0.1 0.3 0.2 0.1 5.8 6.4 o/w Alt-A first lien 0.0 0.1 0.0 0.0 2.1 2.2 Other ABS 0.0 0.4 0.4 0.7 0.2 1.7 Ag
Slide 23: Agenda
Agenda Group summary 1Q 2011 Group results 1Q 2011 results by division Core Division Legacy Portfolio Management Division Transformation plan still on a fast track Update on liquidity and solvency 23
Slide 24: Transformation plan still on a fast track: 2011 deleveraging program
Transformation plan still on a fast track More than half of the 2011 deleveraging program executed More than half of the 2011 deleveraging Total sales of bonds and loans target executed in 1Q11 with a loss rate at (EUR bn) EUR 60.7 bn 0.9%, in line with the average rate for 2009 27.2 and 2010 4.8 EU
Slide 25: Improvement of short-term liquidity ahead of schedule
Transformation plan still on a fast track Improvement of short-term liquidity ahead of schedule Short-term liquidity gap Accelerated decrease of Group short-term funding need in 1Q11 (EUR bn) Funding need down a further EUR 15 bn vs. EUR -156 bn 260 Dec. 2010 (EUR -43 bn vs. March 2010) at EUR 104
Slide 26: Balance Sheet
Balance Sheet Total Group assets Total assets down EUR 40 bn vs. Dec. 2010 mainly under the combined effect (EUR bn) of: 588 567 Other assets Rise of interest rates resulting in EUR 17 527 19 47 14 47 13 bn reduction in fair value of assets and Derivatives 55 57 36 52 derivatives and EUR 7 bn decr
Slide 27: Agenda
Agenda Transformation plan still on a fast track Group summary 1Q 2011 Group results 1Q 2011 results by division Core Division Legacy Portfolio Management Division Update on liquidity and solvency 27
Slide 28: Update on Liquidity and Solvency: Head start in 2011 long-term funding
Update on Liquidity and Solvency Head start in 2011 long-term funding Head start in 2011 long-term issuance Wholesale long-term funding activity, reaching more than half of the As at 29 April 2011 budget by end of April 2011 Funding no longer reliant on government Senior unsecured guarantee since en
Slide 29: Gains and losses on securities not recognized in P&L
Update on Liquidity and Solvency Gains and losses on securities not recognized in P&L AFS reserve (after tax) AFS reserve (exc. L&R) improving by EUR (EUR bn) 0.3 bn vs. Dec. 2010 31/03/10 31/12/10 31/03/11 0.4 0.4 0.3 Positive impact of EUR 0.4 bn on the AFS reserve on bond mainly explained by ne
Slide 30: Further solvency improvement confirming financial strength
Update on Liquidity and Solvency Further solvency improvement confirming financial strength Increase of Tier 1 and Core Tier 1 in 1Q11 Tier 1 and Core Tier 1 ratio confirming robust group’s solvency 13.1% 13.4% 12.5% Tier 1 ratio at 13.4% (+27 bps vs Dec. 2010 and +82 bps vs. March 2010) Core Ti
Slide 31: Appendices
Appendices 1 Segment Reporting 2 P&L by Segment 3 Activity Figures 4 Maximum Credit Risk Exposure and Update of Sovereign exposure 5 VaR and BSM 6 Capital Adequacy 7 Capital Adequacy, Weighted Risks and Quality of risks 8 Ratings 9 Data per Share 10 Balance Sheet 11 State Guarantees 12 DenizBank Con
Slide 32: 1 – Segment Reporting
1 – Segment Reporting STATEMENT OF INCOME 1Q 2011 Legacy Retail and Public and Asset portfolio Commercial Wholesale Management management (m EUR) Core division Banking Banking & Services Group Center division Dexia A=B+C+D+E B C D E F G=A+F Income 1,252 728 234 259 31 (125) 1,127 Expenses (821) (461
Slide 33: 2 – P&L by Segment: Core and LPM Divisions
2 – P&L by Segment Core and LPM Divisions CORE DIVISION – STATEMENT OF INCOME (EUR m) 1Q10 4Q10 1Q11 %yoy %qoq Income 1,163 1,168 1,252 7.6% 7.2% Expenses -840 -926 -821 -2.3% -11.4% Gross operating income 323 243 433 33.5% 77.9% Cost of risk -106 45 -4 -96.3% n.s. Other impairments & provisions -15
Slide 34: 2 – P&L by Segment: Core and LPM quarterly series
2 – P&L by Segment Core and LPM Divisions – quarterly series CORE DIVISION (m EUR) 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 Income 1,163 1,296 1,227 1,168 1,252 Expenses (840) (831) (927) (926) (821) Gross operating income 323 466 300 243 431 Cost of risk (106) (55) (34) 45 (4) Other impairments & pr
Slide 35: 2 – P&L by Segment: Retail & Commercial Banking
2 – P&L by Segment Retail & Commercial Banking RCB – STATEMENT OF INCOME (EUR m) 1Q10 4Q10 1Q11 %yoy %qoq Income 696 691 728 4.6% 5.4% Expenses -461 -502 -461 0.1% -8.1% Gross operating income 235 189 266 13.3% 41.2% Cost of risk -68 -47 -10 -85.5% -78.9% Other impairments & provisions 0 0 -5 n.s. n
Slide 36: 2 – P&L by Segment: Public & Wholesale Banking
2 – P&L by Segment Public & Wholesale Banking PWB – STATEMENT OF INCOME (EUR m) 1Q10 4Q10 1Q11 %yoy %qoq Income 233 254 234 0.5% -7.9% Expenses -132 -128 -131 -0.7% 2.0% Gross operating income 102 126 104 2.0% -17.9% Cost of risk -24 102 -13 -47.0% n.s. Other impairments & provisions 0 -7 0 n.s. n.s
Slide 37: 2 – P&L by Segment: Asset Management & Services
2 – P&L by Segment Asset Management & Services AMS – STATEMENT OF INCOME (EUR m) 1Q10 4Q10 1Q11 %yoy %qoq Income 221 247 259 16.9% 4.7% Expenses -152 -169 -164 7.8% -3.2% Gross operating income 69 78 95 36.8% 21.9% Cost of risk 0 -10 -9 n.s. -6.9% Other impairments & provisions 0 -1 0 n.s. n.s. for
Slide 38: 2 – P&L by segment: Group Center
2 – P&L by segment Group Center GROUP CENTER – STATEMENT OF INCOME (EUR m) 1Q10 4Q10 1Q11 %yoy %qoq Income 13 -23 31 18 54 Expenses -95 -127 -65 30 62 Gross operating income -83 -150 -33 50 117 Cost of risk -14 0 28 42 28 Other impairments & provisions -15 115 -1 14 -116 for legal litigations Pre-ta
Slide 39: 3 – Activity Figures: Retail & Commercial Banking
3 – Activity Figures Retail & Commercial Banking 2010 2011 Variation Variation March 31, 2011/ March 31, 2011/ (m EUR) March 31 June 30 Sept. 30 Dec. 31 March 31 March 31, 2010 Dec. 31, 2010 Total customer assets & liabilities 180,647 184,216 185,726 187,919 192,633 6.6% 2.5% Total customer assets 1
Slide 40: 3 – Activity Figures: Public & Wholesale Banking
3 – Activity Figures Public & Wholesale Banking LONG-TERM COMMITMENTS LONG-TERM ORIGINATIONS March 31, March 31, (m EUR) 2010 2011 Variation 1Q 2010 1Q 2011 Variation Dexia 230,283 220,717 -4.2% 2,227 1,421 -36.2% of which public sector 193,006 185,547 -3.9% 1,810 1,115 -38.4% of which project finan
Slide 41: 3 – Activity Figures: Asset Management & Services
3 – Activity Figures Asset Management & Services Assets under Management (1) 2010 2011 Variation Variation March 31, 2011/ March 31, 2011/ (bn EUR) March 31 June 30 Sept. 30 Dec. 31 March 31 March 31, 2010 Dec. 31, 2010 Total assets under management 85.0 82.6 86.2 86.4 86.3 1.5% -0.1% By type of man
Slide 42: 3 – Activity Figures: Legacy Portfolio Management Division
3 – Activity Figures Legacy Portfolio Management Division 2010 2011 Var. qoq Current Constant (bn EUR) March 31 June 30 Sept. 30 Dec. 31 March 31 exch. rate exch. rate Total commitments * 179.4 176.7 157.9 153.4 138.2 -15.2 -11.0 Financial Products portfolio 11.1 11.9 10.4 10.3 9.5 -0.8 -0.2 Bond po
Slide 43: 4 – Maximum Credit Risk Exposure
4 – Maximum Credit Risk Exposure Maximum Credit Risk Exposure as of March 31, 2011* DEXIA GROUP EXPOSURE BY DEXIA GROUP EXPOSURE BY GEOGRAPHICAL REGION CATEGORY OF COUNTERPART (m EUR) (m EUR) Belgium 111,396 Central governments 60,385 France 97,842 Local public sector 246,176 Germany 35,126 Corporat
Slide 44: 4 – Update of the Sovereign Exposures
4 – Update of the Sovereign Exposures* published in the context of the CEBS stress test in 2010 Sovereign exposures* as of 31 March, 2011 G ross Gro ss Variation exposures as of which of which exposures as of which of which Gross (m EUR) o f 31/12/2010 Banking book Trading book of 31/03/2011 Banking
Slide 45: 5 – VaR and BSM: Value at risk
5 – VaR and BSM Value at risk (1) IR & FX (Trading and banking) EQT Trading 1Q11 1Q11 1Q11 1Q11 VaR (10 days, 99%), in m EUR 1Q 10 4Q10 1Q11 1Q 10 4Q10 1Q11 Core Non core Core Non core Average 14.7 16.0 13.3 12.8 1.2 1.8 2.0 1.7 1.7 - By risk factor Q end 13.0 19.0 10.5 10.5 1.0 1.4 1.0 1.5 1.5 - Ma
Slide 46: 5 – VaR and BSM: sensitivity and VaR
5 – VaR and BSM BSM & Dexia FP sensitivity and VaR (2) Interest rate Equity BSM 1Q10 2Q10 3Q10 4Q10 1Q11 1Q10 2Q10 3Q10 4Q10 1Q11 Banking companies Sensitivity, in m EUR -83 -116 29 -148 -36 (1) (4) ALM Var 10d 99% in m EUR 48 45 21 85 44 7 11 12 14 15 Sensitivity, in m EUR 22 45 168 84 55 Insurance
Slide 47: 6 – Capital Adequacy
6 – Capital Adequacy Comparison total equity (financial statements) and total equity as calculated for regulatory purposes Dec. 31, 2010 March 31, 2011 Financial Regulatory Financial Regulatory (m EUR) Statements purposes Statements purposes Total shareholders' equity 8,945 8,945 9,638 9,638 Non-con
Slide 48: 7 – Capital Adequacy, Weighted Risks and Quality of Risks
7 – Capital Adequacy, Weighted Risks and Quality of Risks Capital adequacy (m EUR, except where indicated) March 31, 2010 June 30, 2010 Sept. 30, 2010 Dec. 31, 2010 March 31, 2011 Tier 1 capital 17,880 18,216 18,418 18,425 18,442 Total regulatory capital 20,378 20,708 20,661 20,636 20,455 Weighted r
Slide 49: 8 – Ratings
8 – Ratings Ratings Long-term Outlook Short-term Dexia Bank Belgium Fitch A+ Stable outlook F1+ Moody's A1 Review possible P-1 downgrade Standard & Poor's A Negative outlook A-1 Dexia Crédit Local Fitch A+ Stable outlook F1+ Moody's A1 Review possible P-1 downgrade Standard & Poor's A Negative outlo
Slide 50: 9 – Data per Share
9 – Data per Share Number of shares March 31, 2010 June 30, 2010 September 30, 2010 December 31, 2010 March 31, 2011 Number of shares 1,762,478,783 1,846,406,344 1,846,406,344 1,846,406,344 1,846,406,344 of which Treasury Shares 293,570 307,548 307,548 307,548 307,548 Number of options 71,242,716 (1
Slide 51: 10 – Balance Sheet: Assets
10 – Balance Sheet Assets ASSETS (m EUR) March 31, 2010 Dec. 31, 2010 March 31, 2011 I. Cash and balances with central banks 2,487 3,266 2,765 II. Loans and advances due from banks 52,103 53,379 49,543 III. Loans and advances to customers 353,941 352,307 336,195 IV. Financial assets measured at fair
Slide 52: 10 – Balance Sheet: Liabilities
10 – Balance Sheet Liabilities LIABILITIES (m EUR) March 31, 2010 Dec. 31, 2010 March 31, 2011 I. Due to banks 104,795 98,490 83,011 II. Customer borrowings and deposits 126,101 127,060 124,031 III. Financial liabilities measured at fair value through profit or loss 20,486 20,154 19,759 IV. Derivati
Slide 53: 10 – Balance Sheet: Core and LPM Divisions
10 – Balance Sheet Core and LPM Divisions Core Division LPM Division (as of March 31, 201) (as of March 31, 2011) (EUR bn) (EUR bn) 404 404 RCB, 55 Covered bonds, 71 122 122 FP, 10 FP (GICS), 4 PWB run-off Covered commitments, Commercial bonds, 27 12 funding, 114 PWB core, 209 LT State Long-term *,
Slide 54: 11 – State Guarantees
11 – State Guarantees (amounts and amortization of funding) Total guaranteed debt outstanding as at 31 March 2011: EUR 38.3 bn State guarantee fees (EUR m) 1Q10 2Q10 3Q10 4Q10 1Q11 Funding related -87 -96 -101 -96 -90 Financial Products portfolio related -28 -29 -27 -25 -22 Total fees paid -115 -125
Slide 55: 12 - DenizBank's Consolidated Financial Statements
12 - DenizBank’s Consolidated Financial Statements (EUR m) 1Q10 4Q10 1Q11 % yoy % qoq Income 268 274 241 -9.9% -11.8% Expenses -111 -144 -120 8.3% -17.0% Gross operating income 157 129 121 -22.7% -6.0% Cost of risk & impairments -54 -40 -8 -84.6% -79.2% Pre-tax income 103 89 113 10.0% 27.0% Tax expe
Slide 56: 13 – Shareholding Structure
13 – Shareholding Structure As of March 31, 2011 Belgian Federal State French State Caisse des Dépôts 5.7% 5.7% et Consignations 17.6% Three Belgian Regions 5.7% CNP Assurances 3.0% Holding Communal 14.1% Other Institutional and Individual Arco Group Shareholders 13.9% 28.3% Ethias Group Employee 5.