Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — FY2004 Earnings Presentation
51 slides from Dexia Holding SA's earnings presentation, Mar 3, 2005
Slide 1: Year 2004 and Q4 2004 Results Analysts' Meeting
Year 2004 and Q4 2004 Results Analysts’ Meeting Brussels, March 3, 2005 Rembert von Lowis Group CFO
Slide 2: Changes in scope of consolidation
Changes in scope of consolidation Scope (M€) Reported 2003 net income 1,431 - Deconsolidation (Kempen, Alex, LBK) -33.9 + Addition (DHBB) +7.9 - Funding costs & other - 0.5 Pro forma 2003 net income 1,404 ∆≈ - 27 All series have been restated accordingly 2
Slide 3: Summary of 2004 P&L account
Summary of 2004 P&L account FULL YEAR 2004 Evolution of U underlying* 2003 2004 Evolution of (M€) 2004 / at constant underlying* 2003 rate of exchange Revenues net interest and related income 3,429 3,524 2.8% 2.6% 2.0% net commissions and other income 992 1,076 8.5% 15.3% 15.8% technical & financial
Slide 4: 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 1.2 bp 1.2 bp Credit 0.4 bp 0.7 bp 0.6 bp 0.6 bp 0.6 bp enhancement 12.2 bp* 9.8 bp* 7.8 bp 6.4 bp 6.6 bp 5.7 bp* 2.2 bp Banking 1.8 bp* activities 1997 1998 1999 2000 2001 2002 2003 2004 * Excluding impact of charges for L
Slide 5: Key performance indicators
Key performance indicators 2003 2004 C/I ratio 59.2% 55.9% C/I ratio underlying 58.4% 56.2% ROE 16.5% 19.8% EPS (€) 1.24 1.58 Tier 1 ratio* 9.9% 10.7% RWA* (Bn€) 106.5 103.4 RORWA 1.40% 1.76% Profit margin 29.3% 34.2% NAV per share** (€) 9.25 9.95 * End of period ** Including GBRR group share 5
Slide 6: Summary of Q4 2004 P&L account
Summary of Q4 2004 P&L account FOURTH QUARTER 2004 Evolution of U underlying* Evolution of (M€) Q4 2003 Q4 2004 Q4 04 / at constant underlying* Q4 03 rate of exchange Revenues net interest and related income 818 848 3.7% 2.3% 1.7% net commissions and other income 280 280 n.s. 16.4% 16.8% technical &
Slide 7: Quarterly evolution of the underlying Gross operating income
Quarterly evolution of the underlying Gross operating income (M€) 1,390 1,352 1,344 1,344 1,285 1,228 1,252 1,247 Revenues 778 753 748 752 764 Costs 737 718 734 634 642 591 580 518 533 491 469 Gross operating income Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004* Q2 2004* Q3 2004* Q4 2004 * Q1 2003 to
Slide 8: Earnings Per Share (€)
Earnings Per Share (€) CAGR: CAGR: + + 11.5% 11.5 %p.a. p.a. 1.58 + + 28.1 28.1 % % 1.44* 1.25 1.24 1.15 1.13 1.18* 0.98 0.85 0.75 0.66 1996 1997 1998 1999 2000 2001 2002 2003 2004 * Excluding nonrecurring items 8
Slide 9: Dividend Per Share (€)
Dividend Per Share (€) CAGR: CAGR: +11.5 +11.5%%p.a. p.a. +17.0 +17.0 % % 0.62 0.53 0.48 0.48 0.43 0.39 0.36 0.32 0.31 0.26 1997 1998 1999 2000 2001 2002 2003 2004 proposed Dexia France Dexia Belgium Dexia 9
Slide 10: Business lines
Business lines Activity and Results
Slide 11: 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)* + 0.7 % + 2.4 % at constant exchange rate (Bn€) 34.2 34.4 5.0 6.4 Other Public Sector 29.2 28.0 12 months 2003 12 months 2004 * Fully consolidated Co’s; Germany excluded 11
Slide 12: Public/Project Finance & Credit Enhancement: L.T. outstandings
Activity highlights Public/Project Finance & Credit Enhancement L.T. outstandings (in & off B/S)* + 8.6 % + 9.8 % at constant exchange rate 193.0 177.7 16.2 (Bn€) 15.8 Other Public sector 176.8 161.9 * Fully consolidated Co’s Dec. 2003 Dec. 2004 12
Slide 13: Public/Project Finance & Credit Enhancement: Deposits & customer assets
Activity highlights Public/Project Finance & Credit Enhancement Deposits & customer assets + 19.0 % 26.1 (Bn€) 21.9 10.7 Off B/S 8.7 B/S 15.4 13.2 Dec. 2003 Dec. 2004 13
Slide 14: Public/Project Finance & Credit Enhancement: New insurance premiums
Activity highlights Public/Project Finance & Credit Enhancement New insurance premiums (M€) + 15.5 % 342.9 297.5 + 38.0 % 225.4 163.4 2003 2004 2003 2004 Dexia Sofaxis (broker) Dexia Insurance (insurer)* * DVV Insurance, Dexia Prévoyance and Dexia Life & Pensions 14
Slide 15: Public/Project Finance & Credit Enhancement: FSA gross present value origination
Activity highlights Public/Project Finance & Credit Enhancement FSA gross present value origination + 3.6 % (M US$) 895 927 44 74 60 58 130 128 Investments products 178 234 International ABS International Muni U.S. ABS U.S. Muni 483 433 2003 2004 15
Slide 16: Public/Project Finance & Credit Enhancement: Analysis of 2004 underlying P&L
Public/Project Finance & Credit Enhancement Analysis of 2004 underlying P&L FULL YEAR 2004 ∆ ∆ at constant (M€) 2003* 2004 2004 / rate of 2003 exchange Revenues 1,877 2,013 7.3% 10.0% Costs -645 -674 4.5% 6.4% Gross operating income 1,232 1,340 8.7% 12.0% Cost of risk -85 -31 -64.1% Corporate income
Slide 17: Public/Project Finance & Credit Enhancement: Analysis of Q4 2004 underlying P&L
Public/Project Finance & Credit Enhancement Analysis of Q4 2004 underlying P&L FOURTH QUARTER 2004 ∆ ∆ at constant (M€) Q4 2003* Q4 2004 Q4 04 / rate of Q4 03 exchange Revenues 464 526 13.4% 16.5% Costs -172 -174 1.4% 3.2% Gross operating income 292 351 20.5% 24.3% Cost of risk -29 -14 -49.9% Corpor
Slide 18: Public/Project Finance & Credit Enhancement: Quarterly gross operating income
Public/Project Finance & Credit Enhancement Quarterly evolution of the underlying gross operating income (M€) 526 501 501 481 486 472 464 459 Revenues 378 at 338 346 345 constant 333 US$ 318 351 Gross 327 305 334 331 314 324 operating 300 292 income Costs 172 167 170 174 159 155 159 162 Q1 2003* Q2
Slide 19: Retail Financial Services: Customer assets
Activity highlights Retail Financial Services Customer assets + 7.3 % (Bn€) + 3.2 % 87.8 85.1 81.8 Mutual Funds: 28.4 -Inflows : +1.8 31.0 26.3 -Market effect : +0.6 off B/S products in B/S products 55.5 56.7 56.8 Dec. 2003 Sept. 2004 Dec. 2004 19
Slide 20: Retail Financial Services: Credit outstandings
Activity highlights Retail Financial Services Credit outstandings + 6.0 % + 0.7 % (Bn€) 24.0 24.2 22.8 7.2 7.1 6.6 SME Personal sector 16.2 16.8 17.1 Dec. 2003 Sept. 2004 Dec. 2004 20
Slide 21: Retail Financial Services: Insurance premiums
Activity highlights Retail Financial Services Insurance premiums (M€) 787 82 608 78 573 530 88 Nonlife 500 82 91 41 85 44 46 444 Traditional life 55 assurance 203 338 269 193 Life guaranteed yield (Branch 21) Life unit-linked 166 190 178 183 141 (Branch 23) Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 21
Slide 22: Retail Financial Services: Analysis of 2004 underlying P&L
Retail Financial Services Analysis of 2004 underlying P&L FULL YEAR 2004 ∆ (M€) 2003* 2004 2004 / 2003 Revenues 1,770 1,915 8.2% Costs -1,376 -1,396 1.5% Gross operating income 394 518 31.6% Cost of risk -32 -34 5.3% Corporate income tax -111 -163 46.6% Other items 36 38 n.s. Net income 287 359 24.8
Slide 23: Retail Financial Services: Analysis of Q4 2004 underlying P&L
Retail Financial Services Analysis of Q4 2004 underlying P&L FOURTH QUARTER 2004 ∆ (M€) Q4 2003* Q4 2004 Q4 04 / Q4 03 Revenues 449 474 5.6% Costs -351 -347 -1.1% Gross operating income 98 127 29.9% Cost of risk -1 -12 x8.4 Corporate income tax -22 -42 91.0% Other items +12 +9 n.s. Net income 87 82
Slide 24: Retail Financial Services: Quarterly gross operating income
Retail Financial Services Quarterly evolution of the underlying gross operating income (M€) 499 471 471 474 453 446 449 Revenues 422 349 351 354 349 347 347 341 336 Costs 150 117 117 125 127 Gross 98 98 81 operating income Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004* Q2 2004* Q3 2004* Q4 2004 * Q1 2
Slide 25: Investment Management Services: Assets under management
Activity highlights Investment Management Services Asset under management* + 12.3 % + 4.3 % (Bn€) +0.5 -0.2 +0.6 +0.6 +1.7 +1.8 +2.4 +2.0 85.8 80.8 81.1 82.3 76.4 Organic growth Market effect Organic growth Market effect Organic growth Market effect Organic growth Market effect Q1 2004 Q1 2004 Q2 20
Slide 26: Investment Management Services: Fund Administration
Investment Management Services Fund Administration Total assets under # of NAV to calculate # of transactions custody (Bn€) in the year (x 1000) (in millions) 357 7.63 348 329 303 5.38 160 164 Other** Other** Mandates to DFS* Mandates to DFS* 189 139 12 12 months months Dec. 03 Dec. 04 Dec. 03 Dec.
Slide 27: Investment Management Services: Private Banking customer assets
Activity highlights Investment Management Services Private Banking/affluent customer assets* (Bn€) +0.2 +0.6 -0.8 -0.1 +0.1 -0.1 +0.1 -0.1 27.7 Organic Market 28.5 Organic Market 27.6 Organic Market 27.7 Organic Market 27.7 growth effect growth effect growth effect growth effect Q1 2004 Q1 2004 Q2 2
Slide 28: Investment Management Services: Analysis of 2004 underlying P&L
Investment Management Services Analysis of 2004 underlying P&L FULL YEAR 2004 ∆ ∆ at constant (M€) 2003* 2004 2004 / rate of 2003 exchange Revenues 804 852 5.9% 6.5% Costs -532 -542 1.7% 1.7% Gross operating income 272 311 14.2% 15.8% Cost of risk -20 -3 -87.2% Corporate income tax -68 -69 1.7% Othe
Slide 29: Investment Management Services: Analysis of Q4 2004 underlying P&L
Investment Management Services Analysis of Q4 2004 underlying P&L FOURTH QUARTER 2004 ∆ ∆ at constant (M€) Q4 2003* Q4 2004 Q4 04 / rate of Q4 03 exchange Revenues 212 225 6.2% 6.7% Costs -135 -137 1.2% 1.2% Gross operating income 77 89 15.1% 16.3% Cost of risk -7 -1 -92.1% Corporate income tax -16
Slide 30: Investment Management Services: Quarterly gross operating income
Investment Management Services Quarterly evolution of the underlying gross operating income (M€) 225 216 219 212 200 204 Revenues 189 192 136 135 137 136 133 137 Costs 130 131 89 79 84 74 77 63 58 59 Gross operating income Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004* Q2 2004* Q3 2004* Q4 2004 * Q1 2
Slide 31: Investment Management Services: 2004 P&L without Dexia Bank Nederland
Investment Management Services Analysis of 2004 underlying P&L without Dexia Bank Nederland FULL YEAR 2004 ∆ ∆ at constant (M€) 2003* 2004 2004 / rate of 2003 exchange Revenues 649 753 16.1% 16.7% Costs -461 -486 5.6% 5.6% Gross operating income 188 266 41.6% 43.9% Cost of risk -21 -3 -87.3% Corpora
Slide 32: Asset Management
IMS Asset Management Quarterly evolution of the underlying gross operating income (M€) 63 50 45 45 Revenues 36 32 33 31 36 24 24 Costs 23 22 21 21 21 27 22 26 21 Gross 12 14 10 11 Operating Income Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004* Q2 2004* Q3 2004* Q4 2004 * Q1 2003 to Q3 2004 are pro for
Slide 33: Fund Administration
IMS Fund Administration Quarterly evolution of the underlying gross operating income (M€) 59 58 56 57 56 54 53 51 Revenues 42 39 39 37 37 37 37 38 Costs 19 19 20 17 16 17 17 Gross 14 Operating Income Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004* Q2 2004* Q3 2004* Q4 2004 * Q1 2003 to Q3 2004 are pro
Slide 34: Private and affluent Banking
IMS Private and affluent Banking Quarterly evolution of the underlying gross operating income (M€) 89 Revenues 82 79 79 74 74 74 72 Costs 60 58 58 58 56 56 55 56 Gross 28 23 23 21 operating 17 18 17 15 income Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004* Q2 2004* Q3 2004* Q4 2004 * Q1 2003 to Q3 2004
Slide 35: Treasury and Financial Markets: Analysis of 2004 underlying P&L
Treasury and Financial Markets Analysis of 2004 underlying P&L FULL YEAR 2004 ∆ ∆ at constant (M€) 2003* 2004 2004 / rate of 2003 exchange Revenues 510 531 4.2% 6.5% Costs -194 -177 -8.5% -7.8% Gross operating income 316 354 11.9% 15.3% Cost of risk 5 21 x4.2 Corporate income tax -59 -89 51.1% Other
Slide 36: Treasury and Financial Markets: Analysis of Q4 2004 underlying P&L
Treasury and Financial Markets Analysis of Q4 2004 underlying P&L FOURTH QUARTER 2004 ∆ ∆ at constant (M€) Q4 2003* Q4 2004 Q4 04 / rate of Q4 03 exchange Revenues 102 130 27.6% 30.2% Costs -42 -44 5.0% 6.0% Gross operating income 61 87 43.0% 46.9% Cost of risk -2 6 n.s. Corporate income tax -1 -27
Slide 37: Treasury and Financial Markets: Quarterly gross operating income
Treasury and Financial Markets Quarterly evolution of the underlying gross operating income (M€) 161 Revenues 152 137 130 130 116 111 102 105 104 96 87 83 67 67 Costs 61 56 47 49 48 42 42 44 44 Gross operating income Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004* Q2 2004* Q3 2004* Q4 2004 * Q1 2003 to
Slide 38: Central Assets: Analysis of underlying P&L
Central Assets Analysis of underlying P&L (M€) Q4 2003* Q4 2004 2003* 2004 Revenues +20 -12 +118 +51 Costs -79 -62 -221 -227 Gross operating income -58 -74 -103 -176 Cost of risk -17 -1 -25 -5 Net gains + impairments -4 -4 -3 +1 on LT investments Corporate Income tax +7 +29 +39 +54 Other items -13 -
Slide 39: Impact of the nonrecurring items on the P&L
Impact of the nonrecurring items on the P&L (M€) Q4 2003* Q4 2004 2003* 2004 Revenues +8 -7 +20 +30 Costs -12 -7 -49 +4 Gross operating income -4 -14 -29 +34 Cost of risk 0 -182 -17 -177 Net gains + impairments on LT investments +26 +46 +20 +85 Corporate income tax +65 +168 +141 +237 Net charge on G
Slide 40: Main nonrecurring items
Main nonrecurring items (M€) 2003 2004 Revenues • Utilization of DBNL provision +14.5 +40.8 • CLN portfolio +2.2 +4.7 • Capital losses on non-strategic assets -6.5 - • Interest in arrears following tax dispute settlement +6.1 +7.9 • Accelerated amortization of expenses at DBNL - -24.9 • Integration
Slide 41: Appendices
Appendices • Update on DBNL/Legio • Update on Artesia integration • Group equity portfolio • Evolution of outstanding shares
Slide 42: Evolution of the share leasing portfolio
DBNL/Legio Evolution of the share leasing portfolio 4,178 (M€) 140 3,269 172 2,401 Total 2,448 2,370 147 185 Of which Of which Of which 1,868 contracts Dexia Dexia with Offer Offer capital accepted not 1,489 repayments accepted 1,488 930 1,637 151 711 729 21 12 1,229 595 443 451 812 697 184 247 266
Slide 43: Recent developments: Agreement with Aegon
DBNL/Legio Recent developments announced on February 11, 2005 Agreement with Aegon Final settlement 218 M€ contributed in 2005 Dexia recognizes additional expenses in 2004 207 M€ (see next slide) Wim Duisenberg nominated by the Central Bank to act as a mediator 43
Slide 44: Coverage of risks and costs
DBNL/Legio Coverage of risks and costs Evolution of the provisions before (M€) Accounting for additional expenses Feb. 11, 2005 announcement announced on Feb. 11, 2005 478 456 577 30 Additional 395 expenses 125 recognized in 317 260 Q4 2004 158 80 + 102 + 25 = 207 448 331 237 237 158 31/12/2002 31/1
Slide 45: Litigations/legal risks outstanding
DBNL/Legio Ligitations/legal risks outstanding Several disputes underway, collective or individual, before the Civil Courts and the Dutch Securities Institute duty of care; misleading information; cold calling; consumer credit act; depot lease; Dexia Offer waivers; spouse consent; … Estimations of r
Slide 46: Artesia integration: Cost synergy achievements
Artesia integration Cost synergy achievements ⇒ 140 M€ 222 linked to staff costs ⇒ 82 M€ linked to other operating expenses 200 180 (M€) 149 146 101 95 85 55 60 39 50 76 48 25 30 16 Objective Achieved Objective Achieved Objective Achieved Objective Min. Max. Min. Max. Min. Max. Min. Max. 2002 2003 2
Slide 47: Artesia integration: Impact on personnel
Artesia integration Impact on personnel EFT reduction Achieved to objective 31/12/04 vs EFT headcount at 30/06/01 Head offices -1,400 -1,406 Employee network -870 -588 -2,270 -1,994 88 % realised 47
Slide 48: Downsizing of the branch network in Belgium
Artesia integration Downsizing of the branch network in Belgium -26% -26% Target 1,483 -20% -20% 1,187 1,099 940 871 895 543 316 204 2001 2002 2003 2004 2005 Employee network Independent agents network 48
Slide 49: Group's equity portfolios
Group’s equity portfolios1 Net cap. Book value Market value (M€) gain/loss 31/12/04 31/12/04 31/12/04 Long-term investments 941 - - 2 o quoted 611 826 +215 o non-quoted 330 - - Other 2,273 - - o quoted 2,094 2,351 +257 of which money/bond funds 442 443 of which booked in Insurance Co’s portfolios 1,
Slide 50: Quarterly revenue contribution from variable income securities
Quarterly revenue contribution from variable income securities is irregular throughout the year (M€) 59 51 44 17 14 13 11 10 8 5 5 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2002 2003 2004 50
Slide 51: Evolution of outstanding shares
Evolution of outstanding shares Shares cancelled at General Outstanding Exercice of Meeting of May shares warrants 12, 2004 1,175,222,680 1,500,690 -39,281,037 Outstanding shares 1,145,261,366 Treasury Shares that 38,906,865 will be proposed for cancellation at next AGM 31.12.2003 31.12.2004 51