Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q2 2007 Earnings Presentation
72 slides from Dexia Holding SA's earnings presentation, Aug 30, 2007
Slide 1: Analysts' Conference Call 2Q 2007 Results
short term has no future Analysts’ Conference Call 2Q 2007 Results Rembert von Lowis, Member of the Management Board August 30th , 2007
Slide 2: Agenda
Agenda Highlights 2Q 2007 Results Focus on Financial crisis, Capital Management Appendices 2
Slide 3: Highlights
Highlights Excellent 2Q net profit, up 34.8% at EUR 787 M and up 18.6% on a pro forma and underlying basis Underlying revenues increased 9.6% on a pro forma basis, almost twice as much as cost growth All businesses but one had net profit growth during 1H 2007 exceeding average growth targets for 200
Slide 4: Group Financial Targets for 2009
Group Financial Targets for 2009 Group’s targets vs 1H 2007 Target 2009 1H 2007 Cost-income ratio underlying < 52.0 % 51.8 % ROE underlying > 15.0 % 18.3 % ROE reported > 16.0 % 21.5 % EPS Underlying (in EUR) – CAGR 05-09 ∼ 10 % + 13.9 % yoy EPS Reported (in EUR) – CAGR 05-09 ∼ 10 % + 4.1 % yoy Net
Slide 5: Agenda
Agenda Highlights 2Q 2007 Results Focus on Financial crisis, Capital Management Appendices 5
Slide 6: Robust Growth of Business Volumes Across All Business Lines
Robust Growth of Business Volumes Across All Business Lines Over 12 months Public/Project • LT banking commitments o/s +14.7 % Finance and Credit Enhancement • Net par o/s FSA +10.4 % • Customer assets o/s(1) +8.5 % Personal Financial Services • Customer loans o/s +13.9 % • Assets under management +
Slide 7: Reported 2Q 2007: Net Income – Group Share
Reported 2Q 2007: Net Income – Group Share: 787 M€ ** 2Q 2006 2Q 2007 (M€) Variation reported reported The The203 203M€ M€increase increasecomes comesfrom: from: Income 1,676 1,964 + 17.2 % ªChangesininscope ªChanges scope ++19 19M€ M€ Expenses - 837 - 937 + 11.9 % Gross operating income 839 1,027 +
Slide 8: Reported 1H 2007: Net Income – Group Share: 1,507 M€
Reported 1H 2007: Net Income – Group Share: 1,507 M€ ** 1H 2006 1H 2007 (M€) Variation reported reported The The156 156M€ M€increase increasecomes comesfrom: from: Income 3,460 3,749 + 8.4 % ªChangesininscope ªChanges scope ++40 40M€ M€ Expenses - 1,655 - 1,863 + 12.6 % Gross operating income 1,805
Slide 9: Changes in Scope
Changes in Scope (M€) Reported net income – Group share June 30, 2006 1,351 - Consolidation of DenizBank + 65 - Deconsolidation (BAN, DBPF, Private banking London) - 12 - Funding costs & other - 13 Pro forma net income – Group share June 30, 2006 1,392 of which: • Income + 153 M€ Variation + 40 • Ex
Slide 10: High Level of Non-Operating Items in 1Q 2006 and in 2Q 2007
High Level of Non-Operating Items in 1Q 2006 and in 2Q 2007 (M€) 2Q 2006 2Q 2007 1H 2006 1H 2007 Income + 70 + 125 + 335 + 155 of which . capital gains + 66 + 158 + 303* + 197 . MTM, CDS FSA -3 - 34 + 21 - 43 . interest DBNL +3 -2 +8 -1 Expenses 0 0 0 0 Cost of risk (DBNL) - 42 +1 - 29 +5 Tax expens
Slide 11: Underlying Net Income in 2Q 2007
A Robust Double Digit Increase of the Underlying(1) Net Income in 2Q 2007 Variation 2Q 2006 underlying at 2Q 2007 (M€) underlying constant underlying underlying pro forma rate of exchange Income 1,677 1,838 + 9.6 % + 9.3 % Expenses -887 -936 + 5.6 % + 5.4 % Gross operating income 790 902 + 14.2 % +
Slide 12: Underlying Net Income in 1H 2007
A Robust Double Digit Increase of the Underlying(1) Net Income in 1H 2007 Variation 1H 2006 underlying at 1H 2007 (M€) underlying constant underlying underlying pro forma rate of exchange Income 3,278 3,594 + 9.6 % + 10.6 % Expenses -1,754 -1,863 + 6.2 % + 7.2 % Gross operating income 1,524 1,731 +
Slide 13: Cost of Risk Remains at a Low Level
Cost of Risk Remains at a Low Level (in basis points) 2.5 1.2 1.2 Credit 0.7 0.6 0.6 0.6 0.6 0.6 0.5 0.4 0.4 enhancement(1) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1Q 2Q (3) 2007 2007 12.2 annualized (3) 9.8 7.8 6.4 6.6 5.7(3) (3) (3) 3.7 (3) 3.4 2.2 (3) (3) 2.4 Banking 1.8 1.6 activities(
Slide 14: Key Ratios
Key Ratios: High ROE, Improving C/I Ratio, Increasing EPS 1H 2006 1H 2007 C/I ratio 47.8 % 49.7 % C/I ratio underlying 53.5 % 51.8 % ROE 24.3 % 21.5 % Return on risk-weighted assets 2.3 % 2.3 % Profit margin 40.2 % 41.5 % Variation 1H 2007/ 1H 2006 EPS (€) reported 1.24 1.30 + 4.1 % underlying 0.96
Slide 15: Improving Capital Ratios
Improving Capital Ratios Variation in 31/12/06 31/03/07 30/06/07 3 months Tier 1 ratio 9.8 % 9.7 % 9.9 % - Tier 1 ratio with 50% hybrid 9.2 % 9.2 % 9.4 % - Tier 1 capital (M€) 13,028 13,497 14,045 + 4.1 % Risk weighted assets (Bn€) 133.4 138.8 141.4 + 1.9 % NAV per share (1): (2) Core shareholders’
Slide 16: Public / Project Finance & Credit Enhancement: Long-term Banking Commitments
Long-term Banking Commitments(1) Keep on Increasing Strongly Public / Project Finance & Credit Enhancement (Bn€) + 14.7 % 281.4 + 15.4% At constant exch. rate 245.4 38.4 49.1 America 28.8 43.4 + 13.0 % Project/ + 19.9% Corporate At constant exch. rate Finance + 33.4 % 135.0 Other countries 110.7 + 2
Slide 17: Originations Stabilized in a Highly Competitive Market
Originations Stabilized in a Highly Competitive Market Where FSA Focused on High Quality Commitments Public / Project Finance & Credit Enhancement FSA - Gross present value originations FSA - Net par outstanding (M US$) (Bn US$) - 2.3 % + 10.4 % 425 415 53 49 399 14 30 362 17 14 30 56 30 20 138 15 8
Slide 18: Public / Project Finance: An Excellent 2Q
An Excellent 2Q After the Already Brilliant 1Q Public / Project Finance & Credit Enhancement (Underlying M€) 2Q 2006( 1) 2Q 2007 Δ 2Q 2007/2Q 2006 1H 2007 Δ 1H 2007/1H 2006 Income 655 727 +11.0% +12.0%* 1,433 +11.6% +14.1%* Expenses -209 -230 +10.2% +10.6%* -452 +6.6% +8.5%* Gross operating income 4
Slide 19: Public / Project Finance: Quarterly Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Public / Project Finance & Credit Enhancement (M€) 727 706 Income 655 643 639 629 485 497 Gross operating 446 431 414 408 income 231 222 230 Expenses 215 209 211 1Q 2006 (1) 2Q 2006 (1) 3Q 2006 (1) 4Q 2006(1) 1Q 2007 2Q 2007 (1) Based on p
Slide 20: Personal Financial Services: Off-balance Sheet Products Growth
A Nearly 10% Growth Rate in Off-balance Sheet Products in a Competitive Environment Personal Financial Services (Bn€) Customer assets + 8.5% 137.4 of which 131.3 126.6 13.9 11.9 12.8 + 15.3% 48.2 yoy Private Banking 62.6 63.9 58.6 89.2 + 5.2% yoy 56.1 55.9 59.6 Retail June 2006 De c. 2006 June 2007
Slide 21: Personal Financial Services: Double Digit Growth in Every Product Line
A Satisfying Double Digit Growth Rate in Every Product Line Personal Financial Services (Bn€) Customer loans + 13.9% 36.0 33.4 31.7 4.1 Loans to Private 3.7 3.6 banking customers 8.2 7.4 Loans to SME and the 7.0 self-employed 3.8 3.5 Consumer loans 3.3 Mortgage loans 18.8 19.9 17.8 June 2006 De c. 2
Slide 22: Personal Financial Services: Income Progression and Contained Costs
Income Progression and Contained Costs Pulled Down the C/I Ratio 1.3% Point in 12 Months Personal Financial Services (Underlying M€) 2Q 2006(1) 2Q 2007 Δ 2Q 2007/2Q 2006 1H 2007 Δ 1H 2007/1H 2006 Income 685 714 +4.3% +3.6%* 1,388 +3.4% +3.9%* Expenses -458 -468 +2.3% +1.7%* -924 +1.4% +1.9%* Gross o
Slide 23: Personal Financial Services: Quarterly Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Personal Financial Services (M€) 714 685 674 658 659 662 Income 453 458 463 465 455 468 Expenses Gross 246 227 218 operating 204 197 197 income 1Q 2006 (1) 2Q 2006 (1) 3Q 2006 (1) 4Q 2006 (1) 1Q 2007 2Q 2007 (1) Based on pro forma accounts
Slide 24: Asset Management: EUR 3.3 Bn New Money
EUR 3.3 Bn New Money in 6 Months, Mainly Institutional Asset Management (Bn€) Organic growth: + 6.0% in one year Market effect: + 8.2% in one year + 14.2 % 1.3 111.1 1.3 108.4 1.4 1.9 2.4 105.2 O rganic M arket effect 3.0 102.3 0.5 O rganic M arket effect grow th 2.0 O rganic M arket grow th 97.3 gr
Slide 25: Asset Management: 79% of Fund Volumes in 1st and 2nd Quartiles
79% of Fund Volumes in 1st and 2nd Quartiles Asset Management Dexia AM Sector Peer Group Fund Quartile Ranking (30/06/07) – 3-year rolling 42% 38% 37% 26% 26% % # Funds per quartile % Volume of funds 19% assets per quartile 10% 2% 1st 2nd 3rd 4th Source: Micropal 25
Slide 26: Asset Management: High Net Income Growth
High Net Income Growth Driven by Strong Increase in Revenues Asset Management (Underlying M€) 2Q 2006 (1) 2Q 2007 Δ 2Q 2007/2Q 2006 1H 2007 Δ 1H 2007/1H 2006 Income 61 74 +21.4% +21.4%* 142 +19.3% +19.3%* Expenses -34 -39 +13.2% +13.2%* -75 +14.5% +14.5%* Gross operating income 26 35 +31.9% +31.9%*
Slide 27: Asset Management: Quarterly Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Asset Management (M€) 81 74 69 59 61 Income 50 41 39 34 36 31 32 40 Expenses 35 33 28 26 Gross operating 18 income 1Q 2006 (1) 2Q 2006 (1) 3Q 2006 (1) 4Q 2006 (1) 1Q 2007 2Q 2007 (1) Based on pro forma accounts 27
Slide 28: Investor Services: Strong Growth in All Activities
Strong Growth in All Activities Investor Services Assets under administration (1) Number of funds under Number of shareholder accounts (Bn US$) administration in transfer agent (in thousands) + 26.6 % + 20.7 % 4,925 + 5.5 % 2,633 4,679 6,667 6,318 6,385 2,290 4,079 2,080 June Dec. June June Dec. Jun
Slide 29: Investor Services: High Income Growth and C/I Ratio Decreasing
High Income Growth and C/I Ratio Decreasing Investor Services (Underlying M€) 2Q 2006(1) 2Q 2007 Δ 2Q 2007/2Q 2006 1H 2007 Δ 1H 2007/1H 2006 Income 101 112 +10.9% +10.7%* 211 +10.7% +14.4%* Expenses -63 -69 +9.9% +9.4%* -135 +10.7% +14.1%* Gross operating income 38 43 +12.7% +12.8%* 76 +10.6% +14.7%
Slide 30: Investor Services: Quarterly Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Investor Services (M€) 112 101 99 95 89 89 Income 69 66 65 63 61 59 Expenses 43 38 31 33 Gross 28 29 operating income (1) (1) 1Q 2006 2Q 2006 (1) 3Q 2006 4Q 2006 (1) 1Q 2007 2Q 2007 (1) Based on pro forma accounts 30
Slide 31: Treasury and Financial Markets: LT Debt Issues
Dexia Keeps Issuing LT Debt at a High Pace Treasury and Financial Markets LT debt issues in the first half (Bn€) 16.1 14.6 AA AA AAA AAA 1H 2006 1H 2007 31
Slide 32: CSP Portfolio: Volumes up at Sustained Quality of Risk
CSP Portfolio: Volumes up at Sustained Quality of Risk Treasury and Financial Markets (Bn€) - 7.5 77.9 73.8 + 11.6 Repayments New & sales investments 31/12/2006 30/06/2007 32
Slide 33: Treasury and Financial Markets: Good Profitability
Good Profitability Mitigated by Development Expenses Treasury and Financial Markets (Underlying M€) 2Q 2006(1) 2Q 2007 Δ 2Q 2007/2Q 2006 1H 2007 Δ 1H 2007/1H 2006 Income 127 139 +9.2% +10.2%* 315 +9.0% +11.3%* Expenses -43 -51 +18.4% +19.1%* -102 +18.0% +19.5%* Gross operating income 84 88 +4.4% +5.
Slide 34: Treasury and Financial Markets: Quarterly Net Income
Quarterly Variation of the Underlying Net Income - Group Share Treasury and Financial Markets (M€) 176 Income 161 147 139 127 128 Net income 96 - Group share 87 86 71 77 65 Expenses 52 51 51 43 43 45 1Q 2006(1) 2Q 2006(1) 3Q 2006(1) 4Q 2006(1) 1Q 2007 2Q 2007 (1) Based on pro forma accounts 34
Slide 35: Fixed Income is the Driving Engine
Fixed Income is the Driving Engine Treasury and Financial Markets Market Engineering Treasury Fixed Income and Trading (M€) 2Q 2006* 2Q 2007 2Q 2006* 2Q 2007 2Q 2006* 2Q 2007 Income 13 18 86 96 27 24 Costs -15 -15 -14 -20 -14 -16 Gross operating income -1 3 72 76 13 8 Taxes -1 0 -15 -16 3 7 Net Inco
Slide 36: Underlying Contribution of Central Assets
Underlying Contribution of Central Assets (M€) 2Q 2006 (1) 2Q 2007 1H 2006(1) 1H 2007 Income + 47 + 71 + 52 + 104 Expenses - 80 - 78 - 146 - 175 Gross operating income - 32 -7 - 94 - 72 Cost of risk -2 0 0 -1 Tax expense + 11 -5 + 42 + 26 Minority interests 6 10 13 19 Net income – Group share - 31 -
Slide 37: Agenda
Agenda Highlights 2Q 2007 Results Focus on Financial crisis, Capital Management Appendices 37
Slide 38: Update On Current Financial Crisis – Wrap Up
Update On Current Financial Crisis – Wrap Up Exposure to sub-prime crisis: – Dexia is very well protected – Application of stress tests suggest 0 loss Exposure to credit spreads changes: – Possible AFS reserve adjustments and modest MtM P&L adjustment in debt instruments despite uniform very high qu
Slide 39: Sub-primes: No Losses Expected
Sub-primes: No Losses Expected Exposure to sub-prime crisis Dexia’s exposure to U.S. sub-prime residential mortgages, either directly or through FSA, remains very well protected and would not cause any losses, even in the case of further sub-prime market deterioration (stress tests). FSA’s continuou
Slide 40: Sub-Prime MBS Overview at FSA
Sub-Prime MBS Overview at FSA (excluding NIMs) Exposure to sub-prime crisis FSA’s MBS portfolio is very well positioned against deterioration, particularly in 2006 vintage sub-prime loans As of June 30, 2007, FSA’s total insured portfolio includes $3.8 billion ($4.2 billion including NIMs) net par b
Slide 41: FSA Insured Sub-Prime RMBS by Origination Year
FSA Insured Sub-Prime RMBS (excluding NIMs) Net Outstanding Par By Origination Year As of 30 June, 2007 Exposure to sub-prime crisis • Originations prior to 2004 have am ortized substantially as a result of prepayments Bn$ 1.4 • Since 2005, FSA has reduced sub-prime AAA category originations AA • Du
Slide 42: Insured Sub-Prime MBS Net Outstanding Par
Insured Sub-Prime MBS (excluding NIMs) Net Outstanding Par As of 30 June, 2007 Exposure to sub-prime crisis (M$) Overall portfolio quality is very high Pre-’01 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 Total % of Total AAA 73 110 75 149 1,346 766 150 1,020 3,689 96.9% AA 19 0 0 0 0 0 0 0 19 0.5% A 23 0 0 0 0 0 0
Slide 43: Insured NIM MBS
Insured NIM MBS Exposure to sub-prime crisis NIMs are securitizations of early excess cash flows and prepayment penalties of RMBS transactions NIMs perform differently from other RMBS because of the rapid paydown (average life of 0.6 – 1.5 years) Net par outstanding is $397M Since inception of the N
Slide 44: ABS CDOs: FSA has not participated in this market
ABS CDOs: FSA has not participated in this market Exposure to sub-prime crisis FSA has not participated in the sub-prime MBS ABS CDO market FSA has been concerned that much of the collateral purchased by ABS CDOs is highly compressed (so susceptible to high loss severities) and highly correlated FSA
Slide 45: FSA Financial Products Sub-Prime Mortgage Investment Portfolio
FSA Financial Products (“FP”) (excluding NIMs) Sub-Prime Mortgage Investment Portfolio As of 30 June, 2007 Exposure to sub-prime crisis Total FP portfolio of $17.7Bn Current balance of FP's sub-prime portfolio is $6.9Bn ($7.3Bn when NIMs are included). * Settlement Date Basis ($ Million) Mark-to-Mar
Slide 46: FSA Financial Products NIMs Investment Portfolio
FSA Financial Products (“FP”) NIMs Investment Portfolio (Cont’d) As of 30 June, 2007 Exposure to sub-prime crisis Portfolio of Financial Products composed of NIMs stands as follows at 6/30/2007: * Settlement Date Basis Current Number M ark-to-M arket Gain / (Loss) Rating of Balance of % NIM s ($MM)
Slide 47: Exposure at Dexia's Credit Spread Portfolio
Exposure at Dexia’s Credit Spread Portfolio Exposure to sub-prime crisis Direct US sub-prime exposure: $ 206 millions, 100% AAA EUR 2.5 billion Multi sector CDOs of ABS (only AAA) including EUR 1.2 Billion subprime are 100% covered by CDS sold by large international AA rated financial institutions 4
Slide 48: Stress tests
Stress tests Exposure to sub-prime crisis At Dexia group level, we have run a stress test based on worst case assumptions as published by Merrill Lynch (report published, 20 July 2007) – Assumptions: 25% future default and 45% loss severity on sub-primes and 7% future default and 35% loss severity o
Slide 49: FSA's Exposure to Subprime Quite Different from Competitors
FSA’s Exposure to Subprime Quite Different from Competitors Exposure to sub-prime crisis (M US$) CDOs net par insured with subprime exposure as of 30 June, 2007 (1) FSA Ambac MBIA FGIC XLCA 373 29,276 15,870 10,729 15,489 Total expected subprime / CDO pretax losses (2) 10% cumulated 15% cumulated 20
Slide 50: FSA Scenarios
FSA Scenarios Exposure to sub-prime crisis FSA went a step further than the Morgan and Merrill Lynch scenarios for its direct insured sub-prime portfolio (excluding NIMs and legacy transactions), and tested whether the sub- prime transactions from 2001 – 2007 (not just 2005 – 2007) with their presen
Slide 51: Impact on Debt Instruments Outstandings
Impact on Debt Instruments Outstandings Credit spread exposure Scope : - Public Finance business, where part of Dexia’s exposure is in bond format - Credit Spread Portfolio (CSP) - Financial Products business line at FSA Marked-to-Market fair value accounting is, mostly, not relevant as: - similar t
Slide 52: MtM of FSA's insured CDS may affect 3Q07 non operating earnings
MtM of FSA’s insured CDS may affect 3Q07 non operating earnings Credit spread exposure FSA’s insured portfolio subject to Fair-Value adjustments – FSA guarantees transactions either through issuing an insurance policy or executing a CDS – Unlike most financial guarantees, CDS must be marked to marke
Slide 53: Liquidity: Dexia in a relative strong position
Liquidity: Dexia in a relative strong position Liquidity crisis DEXIAM: as of today, not facing any liquidity issues – Monetary funds: assets with immediate possible disposals with no valuation impact represent 25-30% of funds – No US ABS in any fund Off-balance sheet liquidity commitments: – No fun
Slide 54: Long term funding: the benefit of AAA vehicles
Long term funding: the benefit of AAA vehicles Liquidity crisis Long term funding: – 5 years spreads on AA financial institutions widened 10-15bp.. – ..But AAA vehicles have benefited from the “flight to quality” (though ltd flows) – CSP portfolio as a liquidity reserve Dexia Long term issues 1H07 1
Slide 55: Capital Management: EUR 500 M share buy back program
Capital Management: EUR 500 M share buy back program Dexia sticks to its general policy regarding the usage of excess capital – If no project with required profitability, excess capital will be allocated to share buy back programs and/or exceptional dividends – In case of acquisition opportunity, ex
Slide 56: Basel II Update
Basel II Update IRB advanced: officially apply beginning of 2008 Dexia’s Basel II model is under review for homologation – Home and Host regulators Dual running in 2007 with calculation as for 31 March and 30 Sept, in compliance with Belgian regulator’s requirements Final validation (with/without ad
Slide 57: Basel II Would Boost Solvency Ratio by Around 30%
Basel II Would Boost Solvency Ratio by Around 30% As of 31 March, 2007 BASEL I BASEL II T 1 Capital (Bn€) 13.5 Negativ e adjustments f or f inancial stakes 13.1 RWA (Bn€) 138.8 RWA sav ings mainly coming f rom: -45 - Public Finance 102.2 - Retail Belgium Operational Risk +8.4 Market 7.1 Market 7.1 D
Slide 58: Agenda
Agenda Highlights 2Q 2007 Results Focus on Financial crisis, Capital Management Appendices 58
Slide 59: Split of Revenues and Net Income by Type
Split of Revenues and Net Income by Type FSA Turkey Insurance Activities DBNL / Legio 59
Slide 60: Split of Revenues and Net Income Across Group Activities
Split of Revenues and Net Income Across the Different Activities of the Group (M€) Variation 1H 1H 1H 2007 / 2006 2007 1H 2006 Revenues (underlying) 3,278 3,594 +9.6% - Banking activities 2,795 3,088 +10.5% - FSA 279 288 +3.4% - Insurance Activities 204 218 +6.8% Net income (underlying) 1,085 1,278
Slide 61: A Good Set of Operating Results at FSA
A Good Set of Operating Results at FSA … FSA Variation 1H07/1H06 (M$) 1H 06 1H 07 US GAAP – Net Income (as reported by FSA) 240 148 - 38.3 % - Fair value adjustments for economic interest rate hedges -43.7 +7.2 - Fair value adjustments for insured CDS -16.9 +38.2 US GAAP – Operating Earnings (as rep
Slide 62: Mitigated by the Exchange Rate Effect
… However Mitigated by the Exchange Rate Effect … FSA Contribution of FSA to PPFCE Variation Variation at 1H 2007/ cst. rate of 1H 2006 1H 2007 (M€) 1H 2006 exchange Income 250 265 +5.8% +14.0% Expenses (65) (67) +3.7% +11.7% Gross operating income 185 197 +6.5% +14.8% Net income - Group share 128 1
Slide 63: Incidence of the MTM on the CDS Portfolio
… and by the Incidence of MTM on the CDS Portfolio FSA (M€) Quarterly incidence of the MTM / CDS portfolio 24 6 -1 -9 -3 -34 1Q 2006 2Q 2006 3Q 2006 4Q 2006 1Q 2007 2Q 2007 63
Slide 64: DenizBank from BRSA to IFRS
DenizBank from BRSA (turkish) to IRFS (eur) Turkey Variation 1H07/1H06 Net income (MYTL) 1H 06 1H 07 BRSA GAAP (as reported by DenizBank) 109 168 + 54.2 % IFRS (as reported by DenizBank) 105 169 + 60.3 % Adjustments due to various factors (1) 32 - Underlying IFRS (as reported by DenizBank) 137 169 +
Slide 65: Scope of Insurance Activities Within Dexia Group
Scope of Insurance Activities Within Dexia Group Insurance Activities FSA Reported mainly in PPFCE Credit enhancement Dexia Sofaxis Reported mainly in PPFCE Insurance brokerage specialist in local authorities in France Dexia Insurance Life and non-life production and distribution Services Reported m
Slide 66: Insurance: Good Commercial Performance
Good Commercial Performance, Notably in Branch 21 Products Insurance Activities (M€) 1,055 1,031 1,048 945 106 108 87 880 887 131 127 98 109 100 92 115 56 74 Non life Life Branch 23 863 802 831 Life Branch 21 703 723 721 1Q 2006 2Q 2006 3Q 2006 4Q 2006 1Q 2007 2Q 2007 Gross Grosswritten writtenpremi
Slide 67: Insurance: A Strong Net Income Progression
A Strong Net Income Progression… Insurance Activities 1H 1H2007 2007underlying underlyingnet netincome income:: 99 99M€ M€ ++33.3 33.3% %versus versus1H 1H2006 2006 By business lines Geographically By type 12% 7% 5% 20% 88% 88% 80% Belgium France PFS PPFCE Luxembourg Life Non life 67
Slide 68: Insurance: Driven by High Revenues
… Driven by High Revenues … Insurance Activities (M€) 2Q 2Q Variation Variation 1H 1H Underlying P&L 2006 2007 2Q 2007 / 1H 2007 / 2006 2007 2Q 2006 1H 2006 Revenues 112 112 + 0.1% 204 218 + 7.0% of which: Financial revenues 162 240 + 47.7% 305 418 + 37.0% Net interest & dividend income 149 163 + 9.
Slide 69: Insurance: Attributable to Both PPFCE and PFS
… Attributable to Both PPFCE and PFS Insurance Activities (M€) 2Q 2Q Variation 1H 1H Variation Underlying contribution of DIS to PPFCE 2006 2007 2Q07/2Q06 2006 2007 1H07/1H06 Revenues 13 14 6.1% 25 28 12.2% Expenses -6 -7 17.0% - 12 - 14 18.0% Gross operating income 7 7 - 2.7% 13 14 7.0% Taxes and o
Slide 70: Dexia Bank Nederland Share Leasing – Provisions
Dexia Bank Nederland Share Leasing – Evolution of the Stock of Provision (M€) 391 -14 363 +20 -14 -33 350 Cost of risk Cost of risk -4 103 (reversal) Utilizations (allocation) Cost of risk -52 + 101 Utilizations 294 +2 295 106 (reversal) -1 adjustments + adjustments Utilizations Cost of risk 94 (rev
Slide 71: Evolution of the Share Leasing Portfolio Outstanding
Dexia Bank Nederland Evolution of the Share Leasing Portfolio Outstanding (M€) Pursuant to the application of the "Law of Settlement of Mass Damage" which bound all concerned clients to the Duisenberg Arrangement as long as they did not opt out, the overw helming maj ority of the share leasing clien
Slide 72: Outcome of the Opt-Out Option for Duisenberg Agreement
Outcome of the Opt-Out Option for Duisenberg Agreement Legal risk substantially reduced : of 190,000 clients concerned 85% ultimately accept the agreement and are bound by it Duisenberg Agreement is fully provisioned So far, no reason to increase provision level for opt-outs Under current circumstan