Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q2 2005 Earnings Presentation
45 slides from Dexia Holding SA's earnings presentation, Sep 8, 2005
Slide 1: Activity and Financial Results in Q2, 2005
Activity and Financial Results in Q2, 2005 Paris, September 8, 2005 Rembert von Lowis Group CFO
Slide 2: Changes in accounting referential, scope of consolidation, segmentation and conventions
Changes in accounting referential, scope of consolidation, segmentation and conventions Pro forma accounts Scope (M€) Reported net income – Group share J une 30, 2004 1,005 - Exits (Kempen & Co, SMBP) -2 + Additions (FMS Hoche) 0 Pro forma net income – Group share J une 30, 2004 1,003 -2 * All
Slide 3: Summary of H1 2005 P&L account
Summary of H1 2005 P&L account FI RST HALF 2005 Evolution of Evolution of underlying (M€) H1 2004* H1 2005* * H1 05 / underlying *** H2 04 *** at constant rate of exchange I ncome 2,865 2,896 + 1.1 % + 3.5 % + 3.9 % of which net commissions 545 583 + 7.0 % + 7.6 % Costs - 1,499 - 1,566 + 4.5 %
Slide 4: A positive evolution of the operating performance
A positive evolution of the operating performance Reported Net Income – Group share H1 05 / H1 04 = - 23 M€ Underlying: + 59 M€ Non-operating: - 82 M€ Business Lines: + 81 M€ • Change of scope - 2 M€ • Public Finance + 47 M€ • Nonrecurring items - 71 (+11 %) M€ • PFS + 27 M€ (+15 %) • MtM CDS FSA -
Slide 5: Key performance indicators
Key performance indicators H1 2004 H1 2005 C/ I ratio 52.3 % 54.1 % C/ I ratio underlying 54.0 % 54.9 % ROE 19.0 % 19.3 % EPS (€) 0.89 0.89 RORWA 1.93 % 1.85 % Profit margin 36.6 % 34.8 % Variation in 31/ 03/ 05 30/ 06/ 05 3 months Tier 1 ratio 9.6 % 9.4 % RWA (Bn€) 109.5 114.5 + 4.5 % NAV per share
Slide 6: 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 * 1.1 * activities 1997 1998 1999 2000 2001 2002 2003 2004 H1 2005 annualized * Excluding impact of charges for Legio Lease at D
Slide 7: Summary of Q2 2005 P&L account
Summary of Q2 2005 P&L account SECOND QUARTER 2005 Evolution of Evolution of underlying (M€) Q2 2004* Q2 2005* * Q2 05 / underlying *** Q2 04 *** at constant rate of exchange I ncome 1,408 1,443 + 2.6 % + 1.9 % + 1.9 % of which net commissions 275 293 + 6.5 % + 4.3 % Costs - 756 - 793 + 5.0 % +
Slide 8: Quarterly evolution of the underlying gross operating income
Quarterly evolution of the underlying gross operating income (M€) 1,435 1,415 1,363 1,389 1,365 1,311 Income Costs 765 794 773 792 730 758 633 632 662 623 546 571 Gross operating income Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005* * Q2 2005* * * Without IAS 32, IAS 39 and IFRS 4, based on pro forma
Slide 9: Business lines
Business lines Activity and Results
Slide 10: Strong top line performances and originations in the three commercial business lines
Strong top line performances and originations in the three commercial business lines Underlying revenues Business volumes growth (in 12 growth months) + 10.5 %* 1,092 FINANCE • LT commitments + 18.3 % PUBLIC 999 • Net par o/s FSA + 9.4 % H1 04 H1 05 + 3.6 % FINANCIAL PERSONAL 1,104 + 7.4 % SERVICES
Slide 11: Public/Project Finance & Credit Enhancement: Activity highlights
Activity highlights Public/Project Finance & Credit Enhancement LT originations LT commitments (excl. Germany) (incl. Germany) (Bn€) +18% 216. +70% 6 183. + 17 % at constant + 51 % 24.8 168. 1 scope at constant scope 1 7.4 199.9 15.0 14.6 2.8 New busines 21.3 167.2 Change of s 154.2 scope 12.6 10.9
Slide 12: Public/Project Finance & Credit Enhancement: Long-term banking commitments
Activity highlights Public/Project Finance & Credit Enhancement Long-term banking commitments (fully-consolidated (Bn€)companies) + 18.3 % 216. 16.7 6 183. 37.8 15.9 1 26.7 America Project/ Corporat e 94.4 Finance 77.7 Other countries 199.9 167.2 Public Finance France + Belgium 78.7 84.4 + Luxembo
Slide 13: Public/Project Finance & Credit Enhancement: Stable return on growing volumes
Activity highlights Public/Project Finance & Credit Enhancement Stable return on growing volumes Commitments* Gross return on commitments** Bn€ bp 250 170 160 231 150 218 140 200 209 204 206 206 130 120 110 150 100 90 69 bp 68 bp 70 bp 71 bp 68 bp 80 65 bp 100 70 60 50 40 50 30 20 10 0 0 Q1 2004 Q2
Slide 14: 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$) (Bn US$) - 11.2 % + 9.4 % 433 457 18 32 406 35 30 34 339 84 85 47 310 11 37 278 7 33 4 39 8 85 34 7 87 5 87 120 82 86 209 225 200 168 149 175 H1 2003
Slide 15: Public/Project Finance & Credit Enhancement: Analysis of H1 2005 underlying P&L
Public/Project Finance & Credit Enhancement Analysis of H1 2005 underlying P&L FI RST HALF 2005 at constant (M€) H1 2004* H1 2005* * H1 05 / rate of H1 04 exchange I ncome 999 1,092 + 9.4 % + 10.5 % Costs - 334 - 366 + 9.8 % + 10.7 % Gross operating income 665 726 + 9.2 % + 10.4 % Cost of risk -
Slide 16: Public/Project Finance & Credit Enhancement: Analysis of Q2 2005 underlying P&L
Public/Project Finance & Credit Enhancement Analysis of Q2 2005 underlying P&L SECOND QUARTER 2005 at constant (M€) Q2 2004* Q2 2005* * Q2 05 / rate of Q2 04 exchange I ncome 500 551 + 10.3 % + 11.0 % Costs - 170 - 186 + 9.2 % + 9.9 % Gross operating income 330 365 + 10.8 % + 11.5 % Cost of risk
Slide 17: Public/Project Finance & Credit Enhancement: Quarterly evolution
Public/Project Finance & Credit Enhancement Quarterly evolution of the underlying gross operating income (M€) 540 541 551 499 500 499 Income 362 361 365 Gross 335 330 323 operatin g income Costs 186 170 175 178 180 163 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005* * Q2 2005* * * Without IAS 32, IAS 3
Slide 18: Personal Financial Services: Total Customer Assets
Activity Highlights Personal Financial Services Total Customer Assets (Retail and Private Banking) (Bn€) + 7.4 % 123. 116. 1 of which 114.6 7 8.5 7.2 8.0 Insurance Private Banking (Life insurance technical reserves) 58.9 39.9 50.9 53.0 Off Balance Sheet products (Mutual funds, direct Retail securi
Slide 19: Personal Financial Services: Total Customer Loans
Activity Highlights Personal Financial Services Total Customer Loans (Retail and Private Banking) (Bn€) + 6.2 % 26.4 27.4 25.8 2.5 Loans to Private banking 2.4 2.5 customers 6.3 Loans to SME, independents 6.1 6.0 2.4 2.3 Consumer loans 2.3 Mortgage loans 14.9 15.5 16.3 J une 2004 Dec. 2004 J une 2
Slide 20: Personal Financial Services: Analysis of H1 2005 underlying P&L
Personal Financial Services Analysis of H1 2005 underlying P&L FI RST HALF 2005 (M€) H1 2004* H1 2005* * H1 05 / H1 04 I ncome 1,065 1,104 + 3.6 % Costs - 788 - 790 + 0.2 % Gross operating income 277 314 + 13.3 % Cost of risk - 15 - 15 - 3.4 % Tax expense - 82 - 92 + 11.9 % Other items +1 +1 n.s.
Slide 21: Personal Financial Services: Analysis of Q2 2005 underlying P&L
Personal Financial Services Analysis of Q2 2005 underlying P&L SECOND QUARTER 2005 (M€) Q2 2004* Q2 2005* * Q2 05 / Q2 04 I ncome 534 557 + 4.2 % Costs - 406 - 397 - 2.1 % Gross operating income 129 160 + 24.3 % Cost of risk -6 -5 - 5.7 % Tax expense - 41 - 48 + 17.9 % Other items 1 0 n.s. Net inc
Slide 22: Personal Financial Services: Quarterly evolution
Personal Financial Services Quarterly evolution of the underlying gross operating income (M€) 545 553 547 557 531 534 547 557 Income 531 530 528 530 Costs 406 394 396 397 382 393 : without upfront fees on structured product 149 152 157 154 160 Gross 129 operating income Q1 2004* Q2 2004* Q3 2004* Q4
Slide 23: Investment Management and Insurance Services: Assets under Management
Activity Highlights Investment Management and Insurance Services Assets under Management* (Bn€) Organic growth: YTD 9% + 14.0 % Market effect: YTD 5 % 3.4 2.3 81.4 3.0 1.2 75.7 2.1 1.7 71.5 Market 66.6 0.6 0.5 67.6 Market Organic effect Organic effect growth Market Organic Market Organic growth ef
Slide 24: Investment Management and Insurance Services: Fund Administration
Activity Highlights Investment Management and Insurance Services Fund Administration Capital managed at # of NAV to # of end of period (Bn€) calculate in the year transactions (in (x 1000)** million) 376 348 348 2.15 410 1.97 1.84 1.83 156 397 1.76 168 160 377 Other* 221 180 189 Mandates to DFS Ju
Slide 25: Investment Management and Insurance Services: Insurance premiums
Activity Highlights Investment Management and Insurance Services Insurance premiums (M€) 971 91 of which 841 845 105 PPF 113 688 686 19 % Non life 94 95 880 PFS 728 740 72 % 595 591 Life IMIS 9% Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 25
Slide 26: Investment Management and Insurance Services: Analysis of H1 2005 underlying P&L
Investment Management and Insurance Services Analysis of H1 2005 underlying P&L FI RST HALF 2005 at constant (M€) H1 2004* H1 2005* * H1 05 / rate of H1 04 exchange I ncome 317 339 + 7.1 % + 7.4 % Costs - 180 - 200 + 10.7 % + 10.7 % Gross operating income 136 139 + 2.4 % + 3.1 % Cost of risk 0 0
Slide 27: Investment Management and Insurance Services: Analysis of Q2 2005 underlying P&L
Investment Management and Insurance Services Analysis of Q2 2005 underlying P&L SECOND QUARTER 2005 at constant (M€) Q2 2004* Q2 2005* * Q2 05 / rate of Q2 04 exchange I ncome 173 172 - 0.6 % - 0.4 % Costs - 92 - 101 + 10.2 % + 10.2 % Gross operating income 81 70 - 12.9 % - 12.5 % Cost of risk 0
Slide 28: Investment Management and Insurance Services: Quarterly evolution
Investment Management and Insurance Services Quarterly evolution of the underlying gross operating income (M€) 173 171 172 168 144 143 Income 102 98 101 97 88 92 Costs 81 69 69 70 56 46 Gross operating income Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005* * Q2 2005* * * Without IAS 32, IAS 39 and IFRS
Slide 29: IMIS: Quarterly evolution of the underlying gross operating income
IMIS Quarterly evolution of the underlying gross operating income (M€) Asset Management Fund Administration 62 71 65 62 64 61 60 50 42 45 44 44 44 44 47 35 40 43 29 22 24 25 21 22 34 25 20 28 21 19 21 22 17 20 13 16 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005** Q2 2005** Q1 2004* Q2 2004* Q3 2004* Q
Slide 30: Insurance Activities at Group level: Contribution of the business lines
Insurance Activities* at Group level: Contribution of the business lines to the revenues (Underlying in M€) H1 2005 revenues: 226 M€ + 16.1 % over H1 2004 Public/ Project Finance 5% 51 % Personal Financial Services 44 % Investment Management and Insurance Services * Excluding FSA (credit enhancement
Slide 31: Treasury and Financial Markets: Analysis of H1 2005 underlying P&L
Treasury and Financial Markets Analysis of H1 2005 underlying P&L FI RST HALF 2005 at constant (M€) H1 2004* H1 2005* * H1 05 / rate of H1 04 exchange I ncome 255 233 - 8.6 % - 7.2 % Costs - 81 - 85 + 5.3 % + 5.8 % Gross operating income 174 148 - 15.0 % - 13.3 % Cost of risk + 11 0 n.s. Tax exp
Slide 32: Treasury and Financial Markets: Analysis of Q2 2005 underlying P&L
Treasury and Financial Markets Analysis of Q2 2005 underlying P&L SECOND QUARTER 2005 at constant (M€) Q2 2004* Q2 2005* * Q2 05 / rate of Q2 04 exchange I ncome 124 95 - 23.4 % - 22.6 % Costs - 41 - 43 + 4.3 % + 4.6 % Gross operating income 83 52 - 37.1 % - 36.1 % Cost of risk 0 0 n.s. Tax expe
Slide 33: Treasury and Financial Markets: Quarterly evolution of underlying net income
Treasury and Financial Markets Quarterly evolution of the underlying net income - Group share (M€) 82 74 65 53 47 45 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005* * Q2 2005* * * Without IAS 32, IAS 39 and IFRS 4, based on pro forma accounts ** With IAS 32, IAS 39 and IFRS 4 33
Slide 34: Treasury and Financial Markets: Underlying contribution of main segments
Treasury and Financial Markets Underlying contribution of the business line’s main segments Credit Spread Money Market Other desks Total (M€) portfolio H1 04 H1 05 H1 04 H1 05 H1 04 H1 05 H1 04 H1 05 Income 114 113 74 67 67 53 255 233 Costs - 14 - 13 - 20 - 24 - 47 - 48 - 81 - 85 Cost of risk + 11 +
Slide 35: Central Assets: Analysis of underlying P&L
Central Assets Analysis of underlying P&L (M€) Q2 2004* Q2 2005* * H1 2004* H1 2005* * I ncome + 58 + 40 + 117 + 81 Costs - 49 - 65 - 104 - 124 Gross operating income + 10 - 25 + 13 - 43 Tax expense -1 + 11 +1 + 28 Other items -7 -2 - 12 -5 Net income – Group share +2 - 16 +2 - 20 * Without IAS 32,
Slide 36: Impact of the non-operating items on the P&L
Impact of the non-operating items on the P&L (M€) Q2 2004* Q2 2005* * H1 2004* H1 2005* * I ncome + 20 + 28 + 98 + 47 of which MtM variations of FSA’s CDS portfolio - - 11 - - 14 Costs +1 -1 +1 -1 Gross operating income + 20 + 27 + 99 + 45 Cost of risk +1 + 56 +1 - 27 I mpairments on (in)tangible as
Slide 37: Main non-operating items
Main non-operating items (M€) Q2 2004* Q2 2005 I ncome I nterest discount on “Dexia offer” loans + 10 +9 Gains/ losses on equities - 10 + 28 CLN Portfolio +8 - Disposal of properties +4 - MtM of FSA’s CDS portfolio (impact I AS32&39) - - 11 Cost of risk Release of prior provisions (DBNL)
Slide 38: Appendices
Appendices • Update on DBNL/Legio • Update on Artesia integration • Evolution of outstanding shares • Capital Management • Impact of IAS 32/39
Slide 39: Evolution of the share leasing portfolio outstanding
DBNL/Legio Evolution of the share leasing portfolio outstanding 4,178 140 (M€) 3,269 172 2,401 2,448 Total 147 2,291 174 2,059 1,916 1,868 Of which Of which Of which 180 contracts Dexia Dexia 183 with Offer Offer 1,489 capital accepted not 1,434 repayments accepted 1,324 1,226 1,637 754 178 570 592
Slide 40: Share Leasing – Evolution of the stock of provisions
DBNL/Legio Share Leasing – Evolution of the stock of provisions (M€) 809 - 56 733 Reversal - 20 315 Of which: 288 of DBNL Utilisatio 218 provision ns 221 contribution 510 from Aegon s 85 - 14 -2 Settlement Reversal Utilisatio Duisenber of prior ns g (400) provision net of s (AEX, existing 521 512 42
Slide 41: Downsizing of the branch network in Belgium
Artesia integration Downsizing of the branch network in Belgium Objective already exceeded Target set in 2001 1,483 - 26 % 1,098 1,099 940 850 895 543 248 204 2001 2002 2003 2004 J une 2005 End 2005 Employee network I ndependent agents network 41
Slide 42: Impact on personnel
Artesia integration Impact on personnel EFT reduction Achieved to objective vs EFT30/06/01 headcount at 30/06/05 Head offices - 1,400 - 1,580 Employee network - 870 - 687 - 2,270 - 2,267 100 % realised 42
Slide 43: Evolution of outstanding shares
Evolution of outstanding shares Shares cancelled at Outstanding Exercice of General Meeting of shares warrants May 11, 2005 1,145,261,366 Outstanding 2,639,235 - 51,886,865 shares 1,096,013,736 of which: 12,980,000 bought back in 2005 Treasury shares of which: 7,281,570 6,388,400 31/12/2004 30/06/20
Slide 44: Capital Management
Capital Management Tier one capital (9.4 %) is “in excess” at 30/06/05 Basle 2 likely to release capital Management employs capital on organic development, as long as it improves ROE As was the case in H1 2005 Share Buy-backs 350 M€ achieved in H1 05 Programme continues in H2 05 Dexi
Slide 45: Impact of IAS 32/39
Impact of IAS 32/39 on specific items of the income statement Application of IAS 32/39 since Jan. 1st 2005 brings added volatility, among other, to the following items of the P&L I mpact on H1 05: (M€) I ncome - 41 Of which: CDS FSA - 14 Revenue on structured products - 17 (previously upfront,