Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — FY2005 Earnings Presentation
50 slides from Dexia Holding SA's earnings presentation, Mar 2, 2006
Slide 1: Year 2005 and Q4 2005 Results Analysts' Meeting
Year 2005 and Q4 2005 Results Analysts’ Meeting Paris, March 2, 2006 Rembert von Lowis Member of the Group Management Board
Slide 2: Highlights
DEXIA 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 + 25.0 % Finance and Credit Enhancement • Net par o/s FSA + 7.9 % • Customer assets o/s + 7.9 % Personal Financial Services • Customer loans o/s + 11.4 % • Assets unde
Slide 4: Strong organic development in 2005 has led to giving more means to the business lines
Strong organic development in 2005 has led to giving more means to the business lines translating in : • Higher expenses • More economic capital allocated to the business lines 4
Slide 5: Earnings Per Share (€)
Earnings Per Share (€) CAGR: CAGR: + + 12.3% 12.3 %p.a. p.a. ++14.5 14.5% % 1.87 1.63 1.58 1.25 1.24 1.15 1.13 0.98 0.85 1.64* 0.75 ++14.5 14.5% % 0.66 1.43* 1996 1997 1998 1999 2000 2001 2002 2003 2004 2004 2005 Dexia Gaap IFRS as adopted by the EU * Excluding non-operating items 5
Slide 6: Dividend Per Share (€)
Dividend Per Share (€) CAGR: CAGR: + + 11.6% 11.6 %p.a. p.a. ++14.5 14.5% % 0,71 0,62 0,53 0,48 0,48 0,43 0,39 0,36 0,32 0,31 0,27 97 98 99 00 01 02 03 04 ed os 19 19 19 20 20 20 20 20 op pr 05 20 Dexia France Dexia Belgium Dexia 6
Slide 7: Group results
DEXIA Group results
Slide 8: Changes in scope and conventions
Changes in scope and conventions • Scope (M€) Reported net income – Group share 2004 1,822 - Exits (Kempen & Co, SMBP, Eural) -3 + Additions (FMS Hoche) ≅0 Pro forma net income – Group share 2004 1,819 Variation -3 Of which: Income - 23 M€ Costs + 20 M€ • Conventions Change of the fee structure in
Slide 9: IFRS
IFRS • Dexia applies IFRS as adopted by EU (i.e. with « carve out ») • Comparison 2004 – 2005 not totally relevant : IAS 32 & 39 and IFRS 4 not applied in 2004 • Adjustments made in Q4 2005 • Mortgages early repayment penalties (IAS 39) - 18 • Structured Eurobonds (IAS 39) - 8 • Liability Adequacy T
Slide 10: Summary of FY 2005 P&L account
Summary of FY 2005 P&L account FULL YEAR 2005 Variation Variation of (M€) FY 2004* FY 2005** FY 05 / underlying FY 04 *** Income 5,623 5,976 + 6.3 % + 6.3 % Costs - 3,057 - 3,229 + 5.6 % + 5.8 % Gross operating income 2,566 2,747 + 7.1 % + 6.9 % Cost of risk - 226 - 52 - 77.0 % + 21.4 % Impairme
Slide 11: Focus on revenues (1)
Focus on revenues (1) (M€) 1. Accounting view Variation 2004 2005 M€ % Total income (reported) 5,623 5,976 + 353 + 6.3 % Net interest, dividend and related 4,220 4,507 + 287 + 6.8 % income Net commissions 1,048 1,172 + 124 + 11.8 % Technical margin of insurance 290 208 - 82 - 28.3 % activities
Slide 12: Focus on revenues (2)
Focus on revenues (2) (M€) 2. Revenues by type of business Variation 2004 2005 M€ % Underlying pro forma 5,416 5,755 + 339 + 6.3 % Banking activities 4,542 4,793 + 251 + 5.5 % FSA 483 519 + 35 + 7.3 % Insurance activities 391 443 + 52 + 13.3 % 12
Slide 13: 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 enhancement 12.2 * 9.8 * 7.8 6.4 6.6 5.7 * Banking 2.2 1.8 * 1.6* activities 1997 1998 1999 2000 2001 2002 2003 2004 2005 * Excluding impact of charges for Legio Lease at Dexia Bank Neder
Slide 14: Non-operating items
Non-operating items Variation (M€) 2004 2005 M€ Income + 182 + 221 + 39 of which . capital gains + 141 + 166 + 25 . MTM, CDS FSA - +9 +9 . interest DBNL + 41 + 31 - 10 0 - 17 - 17 Costs of which . closure Rekord - 13 . JV RBC set up costs -3 Cost of risk (DBNL) - 177 +7 + 184 Impairments - 19 0 + 19
Slide 15: Key performance indicators (1)
Key performance indicators (1) FY 2004 FY 2005 C/I ratio 54.4 % 54.0 % C/I ratio underlying 56.1 % 55.8 % ROE 17.2 % 20.0 % EPS (€) 1.63 1.87 Return on risk-weighted assets 1.78 % 1.92 % Profit margin 33.6 % 35.0 % 15
Slide 16: Key performance indicators (2)
Key performance indicators (2) Variation in 01/01/05 31/12/05 12 months Tier 1 ratio 10.0 % 10.3 % Tier 1 capital (M€) 10,336 11,894 Risk weighted assets (Bn€) 103.4 115.0 + 11.3 % NAV per share (€) Core shareholders’ equity* 8.87 9.86 + 11.2 % Total shareholders’ equity** 10.32 12.25 + 18.7 % * Wit
Slide 17: Summary of Q4 2005 P&L account
Summary of Q4 2005 P&L account FOURTH QUARTER 2005 Variation Variation of (M€) Q4 2004* Q4 2005** Q4 05 / underlying Q4 04 *** Income 1,438 1,571 + 9.2 % + 9.1 % Costs - 793 - 842 + 6.2 % + 6.8 % Gross operating income 645 728 + 12.9 % + 12.2 % Cost of risk - 203 - 25 - 87.5 % + 12.6 % Impairmen
Slide 18: Business lines
Business lines Activity and Results
Slide 19: Public/Project Finance & Credit Enhancement: Activity highlights
Activity highlights Public/Project Finance & Credit Enhancement 9 Long-term banking commitments* (Bn€) + 25 % 241.3 23.7 193.0 42.5 America Project/ (+ 58.7 %) Corporate 15.1 26.8 Finance 107.9 Other countries 80.8 (+ 33.4 %) 217.6 177.9 Public Finance France + Belgium 85.4 90.9 + Luxembourg (+ 6.5
Slide 20: 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$) (Bn US$) + 9.4 % + 7.9 % 1,014 927 93 74 56 58 326 351 185 7 13 128 29 32 12 9 234 195 82 91 433 485 215 187 FY 2004 FY 2005 31/12/04 31/12/05 U.S. Mu
Slide 21: Public/Project Finance & Credit Enhancement: Analysis of underlying P&L
Public/Project Finance & Credit Enhancement Analysis of underlying P&L FULL YEAR 2005 Variation (M€) FY 2004* FY 2005** FY 05 / FY 04 Income 2,037 2,253 + 10.6 % Costs - 687 - 752 + 9.5 % Gross operating income 1,351 1,501 + 11.1 % Cost of risk - 30 - 34 + 14.7 % Tax expense - 394 - 421 + 6.8 % Othe
Slide 22: Public/Project Finance & Credit Enhancement: Quarterly evolution
Public/Project Finance & Credit Enhancement Quarterly evolution of the underlying gross operating income (M€) 590 571 540 541 551 Income 499 500 499 382 393 Gross 362 361 365 operating 335 330 323 income 186 188 197 170 175 178 180 Costs 163 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005** Q2 2005** Q3
Slide 23: Personal Financial Services: Total Customer Assets
Activity Highlights Personal Financial Services 9 Total Customer Assets (Retail and Private Banking) (Bn€) + 7.9 % 122.3 123.2 of which 114.1 8.9 9.6 8.0 Insurance 41.7 (Life insurance technical Private reserves) Banking 52.8 60.7 61.3 Off Balance Sheet products (Mutual funds, direct securities,...)
Slide 24: Customer assets: new money flows & market effect 2005
Activity Highlights Customer assets: new money flows & market effect 2005 (Bn€) New money Market effect 123.2 Life +2.7 Savings insurance bonds & term Mutual deposits funds +2.1 Private +1.2 118.4 Banking Deposits Bonds +0.3 +0.9 Retail Banking Private +1.2 +2.2 Banking - 2.0 +0.5 Direct 114.1 secur
Slide 25: Personal Financial Services: Total Customer Loans
Activity Highlights Personal Financial Services 9 Total Customer Loans (Retail and Private Banking) (Bn€) + 11.4 % 28.6 Loans to Private banking 27.5 customers 25.7 2.7 2.9 2.5 Loans to SME, independents 6.4 6.2 5.9 Consumer loans 2.3 2.3 2.4 Mortgage loans 16.3 17.1 14.9 Dec. 2004 Sept. 2005 Dec. 2
Slide 26: Personal Financial Services: Analysis of underlying P&L
Personal Financial Services Analysis of underlying P&L FULL YEAR 2005 Variation (M€) FY 2004* FY 2005** FY 05 / FY 04 Income 2,150 2,219 + 3.2 % Costs - 1,568 - 1,596 + 1.8 % Gross operating income 583 623 + 6.9 % Cost of risk - 35 - 23 - 34.4 % Tax expense - 179 - 182 + 1.6 % Other items +2 +1 -20.
Slide 27: Personal Financial Services: Quarterly evolution
Personal Financial Services Quarterly evolution of the underlying gross operating income (M€) 572 545 547 557 543 531 534 540 Income 531 530 528 517 406 394 393 397 406 400 382 386 Costs : without upfront fees on structured products Gross 154 154 160 167 149 152 142 operating 129 income Q1 2004* Q2
Slide 28: Investment Management and Insurance Services: Assets under Management
Activity Highlights Investment Management and Insurance Services 9 Assets under Management* (Bn€) Organic growth: YTD + 17.0 % Market effect: YTD + 9.8 % + 26.8 % 1.5 1.1 90.6 2.3 87.9 4.2 2.3 81.4 Market 3.4 Organic 1.2 75.7 Market effect 3.0 Organic effect growth 71.5 Market growth Organic Market
Slide 29: Investment Management and Insurance Services: Fund Administration
Activity Highlights Investment Management and Insurance Services 9 Fund Administration Capital managed at end # of NAV to calculate # of transactions of period (Bn€) in the year (x 1000)** (in millions) + 5.6 % + 4.6 % + 17.5 % 420 409 397 7.98 7.63 348 154 160 Other* 255 Mandates to 189 DFS 12 12 D
Slide 30: Investment Management and Insurance Services: Analysis of underlying P&L
Investment Management and Insurance Services Analysis of underlying P&L FULL YEAR 2005 Variation (M€) FY 2004* FY 2005** FY 05 / FY 04 Income 630 701 + 11.2 % Costs - 379 - 423 + 11.6 % Gross operating income 251 278 + 10.6 % Cost of risk -1 0 ns Tax expense - 63 - 42 - 32.4 % Other items -9 -6 - 39
Slide 31: IMIS Quarterly evolution: Asset Management
IMIS Quarterly evolution of the underlying gross operating income (M€) Asset Management 62 62 50 45 44 46 42 51 34 35 35 43 45 35 33 41 29 25 27 34 24 21 22 22 20 28 13 34 21 19 20 27 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005** Q2 2005** Q3 2005** Q4 2005** • Income Costs Income without performa
Slide 32: IMIS Quarterly evolution: Fund Administration
IMIS Quarterly evolution of the underlying gross operating income (M€) Fund Administration 71 73 74 65 62 64 61 60 47 49 48 43 44 44 44 40 25 24 26 21 22 20 16 17 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005** Q2 2005** Q3 2005** Q4 2005** • Income Costs Gross Operating Income * Without IAS 32, IAS
Slide 33: IMIS Quarterly evolution: Insurance
IMIS Quarterly evolution of the underlying gross operating income (M€) Insurance 73 58 58 56 49 46 41 34 41 27 31 29 30 30 27 33 32 28 26 31 18 18 14 1 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005** Q2 2005** Q3 2005** Q4 2005** • Income Costs Gross Operating Income * Without IAS 32, IAS 39 and IFR
Slide 34: Treasury and Financial Markets (TFM): Funding activities
Treasury and Financial Markets (TFM) Funding activities (Bn€) New LT issues ST funding outstanding 102.1 Average 7.3 years 9.0 years life 28.9 29.7 56.9 AAA AAA AA AA + + 60.7 60.7 % % 2004 2005 Dec. 2004 Nov. 2005 Other resources 34 Central Banks and fiduciary deposits
Slide 35: TFM: CSP portfolio
TFM : CSP portfolio (Bn€) Average 5.6 years 7.3 years life + 24.3 - 8.7 Repayments & sales 54.9 New investments 39.3 97 % 92 % 2004 2005 Available for sale & held to maturity Trading 35
Slide 36: TFM: market risks
TFM : market risks Interest rate and equity markets (M€) VaR 10 days – 99 % 73.0 73.0 Limit 95 % 95 % 27.2 26.9 Average utilized 2004 2005 Money Market + Financial Other desks Enginering & Derivatives 36
Slide 37: Treasury and Financial Markets: Analysis of underlying P&L
Treasury and Financial Markets Analysis of underlying P&L FULL YEAR 2005 Variation (M€) FY 2004* FY 2005** FY 05 / FY 04 Income 449 487 + 8.5 % Costs - 163 - 177 + 8.5 % Gross operating income 287 311 + 8.5 % Cost of risk + 20 +1 - 94.1% Tax expense - 73 - 42 - 42.9 % Other items -2 -3 + 51.2% Net i
Slide 38: Treasury and Financial Markets: Quarterly variation of underlying net income
Treasury and Financial Markets Quarterly variation of the underlying net income - Group share (M€) 138 Income 130 133 124 121 106 95 88 82 Net income – 74 73 Group share 65 59 53 47 45 Costs 49 40 41 42 42 43 43 39 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005** Q2 2005** Q3 2005** Q4 2005** * Without
Slide 39: Treasury and Financial Markets: Underlying contribution of main segments
Treasury and Financial Markets Underlying contribution of the business line’s main segments Credit Spread (M€) Money Market Other desks Portfolio FY 04* FY 05** FY 04* FY 05** FY 04* FY 05** Income 225 247 108 124 116 116 Costs - 28 - 27 - 40 - 47 - 95 - 103 Gross Operating 197 220 68 77 22 14 Incom
Slide 40: Focus on Central Assets (underlying)
Focus on Central Assets (underlying) (M€) 2004 2005 Variation Income 149 95 - 54 Costs - 241 - 265 - 24 Gross operationg income - 92 - 170 - 78 Costs of risk -3 -2 +1 Tax expense 50 44 +6 Minority interests 15 10 -5 Net income – Group - 59 - 138 - 79 share 40
Slide 41: Appendices
Appendices • View on Insurance activities across the Group • Update on DBNL/Legio • Update on Artesia integration • Evolution of outstanding shares
Slide 42: 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 971 257 Life Branch 23 91 841 845 105 Life Branch 21 210 113 700 123 149 101 117 946 670 605 591 481 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Gross Grosswritten writtenpremiums premiumsYTD 2005
Slide 43: View on insurance activities across the Group (2)
View on insurance activities across the Group (2) Contribution to the underlying revenues* (M€) Year Year2005 revenues: 443 2005revenues: 443M€ M€ + +13.3 13.3% %over overyear year2004 2004 By business lines By reporting entities 50% 5% 86% 45% 14% Public/Project Finance Dexia Insurance Services Per
Slide 44: View on insurance activities across the Group (3)
View on insurance activities across the Group (3) Focus on Dexia Insurance Services (DIS) (M€) 2004 2005** 2005 Variation * Q1 Q2 Q3 Q4 ** 05/04 Total Group Insurance 391 116 109 83 135 443 + 13.3 % Revenues of wich Dexia Insurance Services 344 101 93 68 119 381 + 10.8 % Dexia Insurance Services P&L
Slide 45: View on insurance activities across the Group (4)
View on insurance activities across the Group (4) Performance ratios of Dexia Insurance Services FY 2004 FY 2005 9 Life • Margin on outstanding 1.8 % 1.6 % (income life direct business/ mathematical life reserves) • Cost ratio 2.1 % 2.0 % (operating expenses / gross written premiums life) 9 Non Life
Slide 46: Evolution of the share leasing portfolio outstanding
DBNL/Legio Evolution of the share leasing portfolio outstanding (M€) 4,178 140 3,269 172 2.401 Total 2,448 2,291 1,505 147 1.868 174 2,059 180 1,844 Of which contracts Of which Of which Not 207 1,625 with Accepted an accepted capital agreement an 1.489 agreement 300 repayments 1.434 330 1.324 1.204
Slide 47: Share Leasing – Evolution of the stock of provisions
DBNL/Legio Share Leasing – Evolution of the stock of provisions (M€) - 104 + 315 Net reversals - 224 510 497 85 Settlement Duisenberg (400) net of existing 145 Utilisations provisions of which: 425 • 218 from Aegon • 97 from Dexia 352 01/01/2005 31/12/2005 IAS 39 provision (in Liabilities) Portfolio
Slide 48: Downsizing of the branch network in Belgium
Artesia integration Downsizing of the branch network in Belgium Objective Objectiveexceeded exceeded Target set in 2001 1,483 -- 28 28 % % 1,069 1,099 940 833 895 543 236 204 2001 2002 2003 2004 2005 End 2005 Employee network Independent agents network 48
Slide 49: Impact on personnel
Artesia integration Impact on personnel Objective Objectiveexceeded exceeded EFT reduction Achieved to objective 31/12/05 vs EFT headcount at 30/06/01 Head offices - 1,400 - 1,700 Employee network - 870 - 746 - 2,270 - 2,447 49
Slide 50: Evolution of outstanding shares
Evolution of outstanding shares Shares cancelled at General Outstanding Employees Exercice of Meeting of May shares share issue warrants 11, 2005 Outstanding 1,145,261,366 - 51,886,865 shares 4,935,322 9,159,207 1,107,469,030 of which: 1,105,210,431 12,980,000 1,086,919,010 bought back in 2005 of wh