Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q2 2007 Earnings Presentation
25 slides from Dexia Holding SA's earnings presentation, Aug 30, 2007
Slide 1: Press Conference Call 2Q 2007 Activity Results
short term has no future Press Conference Call 2Q 2007 Activity Results Axel Miller, CEO August 30th , 2007
Slide 2: 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 3: 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 4: Long-term Banking Commitments Keep on Increasing Strongly
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 5: FSA 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 6: A Nearly 10% Growth Rate in Off-balance Sheet Products
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 7: A Satisfying Double Digit Growth Rate 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 8: EUR 3.3 Bn New Money in 6 Months, Mainly Institutional
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 9: 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 10: Insurance Activities: 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 11: Financial Results
Financial Results 2Q 2007 1H 2007 Net income – Group share 787 M€ 1,507 M€ EPS 0.68 € 1.30 € 0.54 € in 2Q06 1.24 € in 1H06 ROE 22.1 % 21.5 % 11
Slide 12: 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 13: Reported 1H 2007: Net Income – Group Share
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 14: High Level of Non-Operating Items in 1Q 2006 and 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 15: Robust Double Digit Increase of 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 16: Robust Double Digit Increase of 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 17: 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 18: 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 19: 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 20: Underlying Gross Operating Income Strongly Up in All Business Lines
Underlying Gross Operating Income 2Q 07 Strongly Up in All Business Lines % GOI % increase at cst M€ increase / 2Q 06 rate of exchange Public / Project Finance & Credit Enhancement 497 +11.3% +12.7% Personal Financial Services 246 +8.4% +7.5% Asset Management 35 +31.9% +31.9% Investor Services 43 +1
Slide 21: 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 22: 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 23: 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 24: 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 25: 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