Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q3 2003 Earnings Presentation
44 slides from Dexia Holding SA's earnings presentation, Nov 20, 2003
Slide 1: Activity and Financial Results in Q3 2003
Activity and Financial Results in Q3 , 2003 November 20th, Rembert von Lowis, Group 2003 CFO
Slide 2: Changes in scope of consolidation and methodology
Changes in scope of consolidation and methodology Scope (M€) Reported Net I ncome Sept. 30, 2002 957 - Exits (Alex*, LBK*, BIL SIM Italy) +2.4 + Additions (Butterfield*) +0.9 - Funding costs -0.9 Pro forma Sept. 30, 2002 959 +2 Segment reporting Minor transfers occurred between business lines
Slide 3: Summary of 3rd Quarter 2003 P&L
Summary of 3rd Quarter 2003 P&L Evolution of underlying* Evolution of (M€) Q3 2002 Q3 2003 at constant underlying* rate of exchange Revenues Net Interest and Related Income 737 862 +17.0% Net Commissions and other Income 234 237 +1.0% Technical & Financial Margin / Insurance 150 181 +21.1
Slide 4: Quarterly evolution of the underlying Gross Operating Income
Quarterly evolution of the underlying Gross Operating Income (M€) 1,373 1,323 1,290 1,268 1,252 1,236 Revenues 1,087 777 753 772 745 747 Costs 725 732 641 537 551 521 475 491 362 Gross Operating Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003* Q2 2003* Q3 2003 * Pro forma 4
Slide 5: Cost of Risk related to total net O/S commitments
Cost of Risk related to total net O/S commitments (in basis points) 2.5 bp Credit 1.2 bp 1.3 bp 0.7 bp 0.6 bp 0.6 bp 0.4 bp Enhancement 12.2 bp* 9.8 bp* 7.8 bp 6.4 bp 6.6 bp 4.9 bp* 2.2 bp Banking Activities 1997 1998 1999 2000 2001 2002 9 months 2003* * * Excluding impact of provisions for Legio Le
Slide 6: 9 months 2003 P&L Account
9 months 2003 P&L Account Evolution of underlying* 9 months 9 months Evolution of (M€) at constant 2002 2003 underlying* rate of exchange Revenues Net Interest and Related Income 2.584 2,611 +1.1% Net Commissions and other Income 778 712 -8.5% Technical & Financial Margin / Insurance 519
Slide 7: Key Performance indicators
Key Performance indicators 30/09/2002 30/09/2003 EPS (€) 0.83 0.95 ROE* 16.0% 16.9% C/I Ratio 60.8% 57.9% Tier one Ratio* 9.2% 9.8% RWA** (Bn€) 107.7 108.5 RORWA 1.29% 1.42% Profit Margin 26.4% 29.9% NAV per share***(€) 8.74 9.22 * Annualized ** End of period *** Including GBRR Group share 7
Slide 8: Business Lines Activity and Results
Business Lines Activity and Results
Slide 9: Public / Project Finance & Credit Enhancement: Production of L.T. facilities
Activity Highlights Public / Project Finance & Credit Enhancement Production of L.T. facilities (in & off B/S)* + 13.7 % + 22.3 % at constant exchange rate (Bn€) 20.9 18.4 4.1 Other 3.2 Public Sector 16.8 15.2 9 months 2002 9 months 2003 * Fully consolidated Co’s ; Germany excluded 9
Slide 10: Public / Project Finance & Credit Enhancement: L.T. Outstandings
Activity Highlights Public / Project Finance & Credit Enhancement L.T. Outstandings (in & off B/S)* + 6.1 % + 9.1 % at constant exchange rate 168.1 (Bn€) 158.4 15.1 Other 14.2 Public Sector 144.2 153.0 * Fully consolidated Co’s Sept. 2002 Sept. 2003 10
Slide 11: Public / Project Finance & Credit Enhancement: Deposits & Customers' Assets
Activity Highlights Public / Project Finance & Credit Enhancement Deposits & Customers’ Assets* + 21.4 % 20.1 (Bn€) 16.5 8.1 Off B/ S 5.9 B/ S 12.0 10.6 Sept. 2002 Sept. 2003 * Off B/S of Artesia excluded 11
Slide 12: Public / Project Finance & Credit Enhancement: New Insurance Premiums
Activity Highlights Public / Project Finance & Credit Enhancement New Insurance Premiums + 18.0 % (M€) 407.0 28.4 345.0 14.6 95.7 80.0 Other* DVV I nsurance Dexia-Sofaxis 282.9 250.4 9 months 2002 9 months 2003 * Dexia Prévoyance and Dexia Life & Pensions 12
Slide 13: Public / Project Finance & Credit Enhancement: FSA Gross Present Value Origination
Activity Highlights Public / Project Finance & Credit Enhancement FSA Gross Present Value Origination (M US$) + 10.5 % 692 626 31 Investments Products 49 International ABS 57 105 + 3.1 % International Muni 52 US. ABS 100 U.S. Muni 138 163 251 259 13 31 14 17 21 369 50 51 254 50 160 103 9 months 9
Slide 14: Public/Project Finance & Credit Enhancement: Analysis of underlying P&L
Public/Project Finance & Credit Enhancement Analysis of underlying P&L at constant (M€) Q3 2002* Q3 2003 Q3 03 / rate of Q3 02 exchange Revenues 398 470 +17.9% +23.2% Costs -149 -157 +5.4% +8.6% Gross Operating I ncome 249 313 +25.5% +31.9% Cost of Risk -35 -27 -22.6% Corporate income tax -66 -8
Slide 15: Public/Project Finance & Credit Enhancement: Quarterly Gross Operating Income
Public/Project Finance & Credit Enhancement Quarterly evolution of the underlying Gross Operating Income (M€) 522 479 470 455 434 439 Revenues 398 347 326 301 313 294 272 249 Costs 163 175 149 154 153 157 144 Gross Operatin g Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003* Q2 2003* Q3 2003 * Pro
Slide 16: Public/Project Finance & Credit Enhancement: Analysis of underlying P&L
Public/Project Finance & Credit Enhancement Analysis of underlying P&L 9 months 9 months at constant (M€) 9 m 03 / 2002* 2003 rate of 9 m 02 exchange Revenues 1,271 1,404 +10.4% +17.0% Costs -456 -464 +1.7% +5.8% Gross Operating I ncome 815 940 +15.3% +23.3% Cost of Risk -90 -57 -37.5% Corporate
Slide 17: Retail Financial Services: Customers' Assets
Activity Highlights Retail Financial Services Customers’ Assets + 4.9 % (Bn€) + 3.4 % 81.4 77.6 78.7 23.3 - Market effect: + 25.0 23.1 0.7 - Inflows: + 1.0 off B/ S products 54.5 55.4 56.4 in B/ S products Sept. 2002 Dec. 2002 Sept. 2003 17
Slide 18: Retail Financial Services: Credit Outstandings
Activity Highlights Retail Financial Services Credit Outstandings + 4.6 % (Bn€) + 3.4 % 23. 22.1 22.3 1 6.7 7.0 6.7 SME Personal Sector 15.4 15.6 16.1 Sept. 2002 Dec. 2002 Sept. 2003 18
Slide 19: Retail Financial Services: Insurance Premiums
Activity Highlights Retail Financial Services Insurance Premiums + 46.7 % 704 73 48 (M€) Non Life 489 506 438 80 79 Traditional Life 65 42 Assurance 345 45 61 458 71 Life Guaranteed 34 214 yield (Branch 21) 124 282 73 Life Unit-linked (Branch 23) 187 151 167 125 101 Q3 2002 Q4 2002 Q1 2003 Q2 2003
Slide 20: Retail Financial Services: Analysis of underlying P&L
Retail Financial Services Analysis of underlying P&L Q3 03 / (M€) Q3 2002* Q3 2003 Q3 02 Revenues 413 444 +7.5% Costs -324 -347 +7.1% Gross Operating I ncome 89 97 +8.9% Cost of Risk -9 -10 +19.4% Corporate I ncome tax -44 -31 -30.3% Other I tems +9 +6 n.s. Net I ncome 45 62 +40.1% ROEE* * 9.8% 14
Slide 21: Retail Financial Services: Quarterly Gross Operating Income
Retail Financial Services Quarterly evolution of the underlying Gross Operating Income (M€) 452 444 436 413 420 401 410 Revenues 344 345 339 347 335 335 Costs 324 117 91 89 97 Gross 74 80 Operating 57 Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003* Q2 2003* Q3 2003 * Pro forma 21
Slide 22: Retail Financial Services: Analysis of underlying P&L
Retail Financial Services Analysis of underlying P&L 9 months 9 months 9 m 03 / (M€) 2002* 2003 9 m 02 Revenues 1,250 1,316 +5.3% Costs -1,013 -1,021 +0.8% Gross Operating I ncome 237 294 +24.3% Cost of Risk -27 -31 +15.4% Corporate I ncome tax -79 -88 +11.4% Other I tems +21 +24 n.s. Net I ncome
Slide 23: Investment Management Services: Private Banking/Affluent customers' assets
Activity Highlights Investment Management Services Private Banking/Affluent customers’ assets* - 4.9 % - 0.6 % (Bn€) -0.6 -1.0 +0.9 -0.6 -0.4 +0.3 Organic growth Market effect 30.8 Q1 2003 Q1 2003 29.1Organic growth Market effect 29.4 Organic growth Market effect 29.3 Q2 2003 Q2 2003 Q3 2003 Q3 20
Slide 24: Investment Management Services: Assets under management
Activity Highlights Investment Management Services Assets under management* + 7.9 % + 2.9 % (Bn€) +1.5 +0.6 +0.9 -2.1 +1.3 +3.3 Organic growthMarket effect 74.9 69.4Organic growth Market effect 68.2 Organic growth Market effect 72.8 Q3 2003 Q3 2003 74.9 Q1 2003 Q1 2003 Q2 2003 Q2 2003 Dec. 2002 Ma
Slide 25: Investment Management Services: Fund Administration and Securities Services
Investment Management Services Fund Administration and Securities Services Total assets Total assets under under # of NAV to # of transactions custody (Bn€) (Bn€) calculate in the year (in millions) (x 1000) 3.86 3.76 320 338 297 316 288 154 142 151 Other** Other** Other** 166 146 146 Mandates Manda
Slide 26: Investment Management Services: Analysis of underlying P&L
Investment Management Services Analysis of underlying P&L Q3 03 / at constant (M€) Q3 2002* Q3 2003 Q3 02 rate of exchange Revenues 242 219 -9.5% -8.6% Costs -161 -145 -10.0% -9.9% Gross Operating I ncome 81 74 -8.6% -6.2% Cost of Risk -4 -8 n.s. Corporate I ncome Tax -21 -19 -8.5% Other I tems
Slide 27: Investment Management Services: Quarterly Gross Operating Income
Investment Management Services Quarterly evolution of the underlying Gross Operating Income (M€) 273 Revenues 252 242 244 235 224 219 178 Costs 161 161 169 162 147 145 95 91 88 81 76 74 61 Gross Operating Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003* Q2 2003* Q3 2003 * Pro forma 27
Slide 28: Investment Management Services: Quarterly Gross Operating Income by unit
Quarterly evolution of the underlying Gross Operating Income DBNL Private and Affluent Banking without DBNL (M€) 83 Revenues 78 79 80 78 74 74 71 72 67 64 64 63 63 59 60 56 56 55 53 Costs 46 42 37 35 34 30 24 21 Gross 22 20 Operating 16 18 17 18 17 Income 36 34 28 32 23 40 26 Q1 2002* Q2 2002* Q3 20
Slide 29: Investment Management Services: Analysis of underlying P&L
Investment Management Services Analysis of underlying P&L 9 months 9 months 9m 03 / at constant (M€) 2002* 2003 9m 02 rate of exchange Revenues 767 678 -11.6% -10.5% Costs -499 -454 -9.0% -8.8% Gross Operating I ncome 268 223 -16.6% -13.7% Cost of Risk -4 -14 n.s. Corporate I ncome Tax -77 -61 -
Slide 30: Capital Markets & Treasury Activities: Analysis of underlying P&L
Capital Markets & Treasury Activities Analysis of underlying P&L Q3 03 / at constant (M€) Q3 2002* Q3 2003 Q3 02 rate of exchange Revenues 72 107 +47.9% +54.6% Costs -41 -40 -2.0% -0.6% Gross Operating I ncome 32 67 x 2.1 x 2.3 Cost of Risk -6 +7 n.s. Corporate I ncome Tax -7 -17 x 2.6 Other I t
Slide 31: Capital Markets & Treasury Activities: Quarterly Gross Operating Income
Capital Markets & Treasury Activities Quarterly evolution of the underlying Gross Operating Income (M€) 177 Revenues 165 148 138 123 131 125 107 72 106 94 86 67 Costs 46 43 40 41 41 37 40 Gross 32 Operating Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003* Q2 2003* Q3 2003 * Pro forma 31
Slide 32: Capital Markets & Treasury Activities: Analysis of underlying P&L
Capital Markets & Treasury Activities Analysis of underlying P&L 9 months 9 months 9 m 03 / at constant (M€) 2002* 2003 9 m 02 rate of exchange Revenues 415 378 -8.9% -4.3% Costs -127 -119 -6.3% -4.5% Gross Operating I ncome 288 259 -10.1% -4.2% Cost of Risk -5 +7 n.s. Corporate I ncome Tax -67
Slide 33: Central Assets: Analysis of underlying P&L
Central Assets Analysis of underlying P&L 9 months 9 months (M€) Q3 2002* Q3 2003 2002* 2003 Revenues -39 +28 -73 +102 Costs -50 -58 -161 -165 Gross Operating I ncome -89 -30 -234 -64 Cost of Risk +1 -2 -15 -8 Corporate I ncome Tax +34 +14 +74 +36 Other items -25 -16 -47 -47 Net I ncome -79 -34 -222
Slide 34: Impact of the Exceptionals on P&L
Impact of the Exceptionals on P&L 9 months 9 months (M€) Q3 2002 Q3 2003 2002 2003 Revenues -3 +13 +170 +12 Costs -28 -13 -50 -30 Gross Operating I ncome -31 -1 +120 -17 Cost of Risk -401 -7 -437 -17 Net gains + impairments on -41 +12 -34 -11 LT investments +386 +74 Corporate I ncome Tax +373 +24 Ne
Slide 35: Main Exceptional Items
Main Exceptional Items (M€) Q3 2003 Revenues CLN -0.5 Gains/ losses on equities +3.8 Utilisation of DBLN prov. +5.2 Litigation Bancoval -1.5 I nterest in arrears on tax litigation DBB +5.8 Costs Staff reduction plans Dexia BI L (Lux.) -4.6 Restructuration property at Dexia BI L -8.5
Slide 36: Appendices
Appendices • Update on DBNL/Legio • Update on Artesia integration • Group Equity Portfolio
Slide 37: Legio Update at November 7, 2003
DBNL/Legio Legio Update at November 7, 2003 Total amount of lease contracts 3,558 M€ Total amount of bullet contracts not accepting the Dexia Offer 1,155 M€ based on AEX index of 343 Lack of collateral on above contracts 522 M€ 37
Slide 38: The "Hardship Clause"
DBNL/Legio The “Hardship Clause” 2,327 files have been submitted to the Hardship Commission 1,318 have been ruled on 34% have received an agreement for compensation Cost range per contract: 11,000 € to 15,000 € 38
Slide 39: Specific provisions on delinquent accounts at Sept. 30, 2003
DBNL/Legio Specific provisions on delinquent accounts at Sept. 30, 2003 Risk Amount (M€) Loss Rate Provision 06/ 03 09/ 03 Deliquencies 0-30 days 32 13 - 31-90 days 55 14 25% Over 91 days and 82% 48 98 forced termination 135 125 39
Slide 40: Provisions in the accounts
DBNL/Legio Provisions in the accounts (M€) General Specific Total Provisions at 31.12.2002 448 30 478 Write-backs (-) or allowances (+) in Q1 2003 - +18 +18 Provisions at 31.03.2003 448 48 496 Write-backs (-) or allowances (+) in Q2 2003 -26 +8 -18 Provisions at 30.06.2003 422 56 478 Write-backs (-)
Slide 41: Artesia integration: Cost synergy achievements
Artesia integration Cost synergy achievements 104 95 (M€ 85 Best ) case 60 Worst 50 Best 64 M€ case linked to staff costs case 40 M€ Worst linked to other case operating Retail expenses 34 Initial objective Achieved Initial full year 2003 9 months objective 2003 full year 2004 41
Slide 42: Artesia integration: Impact on Personnel
Artesia integration Impact on Personnel EFT reduction Achieved to objective vs EFT30/06/01 headcount at 30/09/03 Head Offices -1,400 -885 Employee network -870 -369 -2,270 -1,254 55 % realized after 27 months 42
Slide 43: Artesia integration: Downsizing of the branch network
Artesia integration Downsizing of the branch network Closures to Objective Number of branches 2001 30/ 09/ 03 2005 I ndependent Network 940 -43 895 Employee Network 543 -98 204 Total 1,483 -141 1,099 Transfer of employees independent network 107 persons applied, of which 99 effectively transferred a
Slide 44: Group's Equity portfolios
Group’s Equity portfolios* Market Net Cap. Book (M€) Value Gain/ Loss Value 30/ 09/ 03 30/ 09/ 03 (when available) Long term I nvestments 1,124 - - o Quoted 736 792 +56 o Non-quoted 388 n.a Other 1,825 - - o Quoted 1,481 1,419 -62 Of which money/bond funds 289 289 Of which booked in I nsurance 6