Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — FY2003 Earnings Presentation
59 slides from Dexia Holding SA's earnings presentation, Mar 4, 2004
Slide 1: Year 2003 and Q4 2003 Results Analysts' Meeting
Year 2003 and Q4 2003 Results Analysts’ Meeting Paris, March 4, 2004
Slide 2: Part One: Activity and Results
Part One Activity and Results Rembert von Lowis Group CFO
Slide 3: Changes in scope of consolidation and methods
Changes in scope of consolidation and methods Scope (M€) Reported Net Income Dec. 31, 2002 1,299 - Exits (Alex*, LBK*) -0.8 + Additions (Butterfield*, DHBB) +3.4 - Funding costs & other -3.0 Pro forma Dec. 31, 2002 1,299 ∆≈ 0 Harmonization of methods Transfer of commissions paid to agents from the c
Slide 4: Summary of 2003 P&L
Summary of 2003 P&L Evolution of underlying* Evolution of (M€) 2002 2003 U at constant underlying* rate of exchange Revenues Net Interest and Related Income 3,422 3,429 0.2% Net Commissions and Other Income 1,015 992 -2.3% Technical & Financial Margin / Insurance 720 739 2.6% Total Revenues 5,157 5,
Slide 5: 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 1,254 1,237 1,261 Revenues 1,086 777 772 794 753 725 745 732 747 Costs 671 545 560 518 641 532 At 486 536 552 522 constant 476 367 492 467 US$ 361 Gross Operating Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2
Slide 6: 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 0.7 bp 0.6 bp 0.6 bp 1.2 bp 0.4 bp Enhancement 12.2 bp* 9.8 bp* 7.8 bp 6.4 bp 6.6 bp 5.7 bp* Banking 2.2 bp Activities 1997 1998 1999 2000 2001 2002 2003 6 * Excluding impact of charges for Legio Lease at Dexia
Slide 7: Summary of Q4 2003 P&L Account
Summary of Q4 2003 P&L Account Evolution of underlying* Evolution of (M€) Q4 2002 Q4 2003 U at constant underlying* rate of exchange Revenues Net Interest and Related Income 838 817 -2.5% Net Commissions and Other Income 237 280 18.0% Technical & Financial Margin / Insurance 201 173 -14.0% Total Rev
Slide 8: Business Lines
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)* + 13.0 % + 19.8 % at constant exchange rate (Bn€) 34.3 30.4 5.1 Other 4.6 Public Sector 29.2 25.7 12 months 2002 12 months 2003 9 * Fully consolidated Co’s ; Germany excluded
Slide 10: Public/Project Finance & Credit Enhancement: L.T. Outstandings
Activity Highlights Public / Project Finance & Credit Enhancement L.T. Outstandings (in & off B/S)* + 6.7 % + 10.0 % at constant exchange rate 177.2 166.1 15.5 (Bn€) 14.2 Other Public Sector 151.9 161.7 10 * Fully consolidated Co’s Dec. 2002 Dec. 2003
Slide 11: Public/Project Finance & Credit Enhancement: Deposits & Customers' Assets
Activity Highlights Public / Project Finance & Credit Enhancement Deposits & Customers’ Assets* + 17.2 % 19.9 (Bn€) 17.0 8.4 Off B/S 5.9 B/S 11.1 11.5 Dec. 2002 Dec. 2003 11 * Off B/S of Artesia excluded
Slide 12: Public/Project Finance & Credit Enhancement: New Insurance Premiums
Activity Highlights Public / Project Finance & Credit Enhancement New Insurance Premiums + 20.5 % (M€) 461.0 382.6 50.0 20.5 113.4 Other* 80.0 DVV Insurance Dexia-Sofaxis 297.5 259.0 12 months 2002 12 months 2003 12 * Dexia Prévoyance and Dexia Life & Pensions
Slide 13: FSA Gross Present Value Originations
Activity Highlights Public / Project Finance & Credit Enhancement FSA Gross Present Value Originations (M US$) + 1.5 % + 26.5 % 882 895 44 Investments Products 66 60 697 75 International ABS 4 129 124 97 International Muni 23 178 196 US. ABS 350 U.S. Muni 483 421 222 12 months 12 months 12 months 20
Slide 14: Public/Project Finance: Analysis of 2003 underlying P&L
Public/Project Finance & Credit Enhancement Analysis of 2003 underlying P&L ∆ ∆ at constant (M€) 2002* 2003 2003 / rate of 2002 exchange Revenues 1,793 1,867 4.1% 10.4% Costs -631 -635 0.6% 4.6% Gross Operating Income 1,162 1,232 6.0% 13.6% Cost of Risk -168 -84 -50.2% Corporate income tax -266 -319
Slide 15: Public/Project Finance: Quarterly evolution of underlying Gross Operating Income
Public/Project Finance & Credit Enhancement Quarterly evolution of the underlying Gross Operating Income at constant rate of exchange (M€) 522 479 470 455 463 Revenues 434 439 398 367 361 345 338 At 328 constant 304 347 US$ 326 301 313 294 260 292 272 249 Costs 163 175 171 149 154 153 157 Gross 144
Slide 16: Public/Project Finance: Analysis of Q4 2003 underlying P&L
Public/Project Finance & Credit Enhancement Analysis of Q4 2003 underlying P&L ∆ ∆ at constant (M€) Q4 2002* Q4 2003 Q4 03 / rate of Q4 02 exchange Revenues 522 463 -11.3% -5.7% Costs -175 -171 -2.5% 1.4% Gross Operating Income 347 292 -15.8% -9.3% Cost of Risk -77 -27 -65.0% Corporate income tax -5
Slide 17: Retail Financial Services: Customers' Assets
Activity Highlights Retail Financial Services Customers’ Assets + 4.8 % (Bn€) + 1.3 % 81.4 82.5 78.7 25.0 26.3 23.3 - Market effect: + 0.5 - Inflows: + 0.8 off B/S products in B/S products 55.4 56.5 56.2 Dec. 2002 Sept. 2003 Dec. 2003 17
Slide 18: Retail Financial Services: Credit Outstandings
Activity Highlights Retail Financial Services Credit Outstandings + 4.4 % (Bn€) + 1.0 % 23.1 23.3 22.3 7.0 7.0 6.7 SME Personal Sector 15.6 16.1 16.3 18 Dec. 2002 Sept. 2003 Dec. 2003
Slide 19: Retail Financial Services: Insurance Premiums
Activity Highlights Retail Financial Services Insurance Premiums + 14.1 % 704 73 (M€) 48 489 506 500 Non Life 438 79 80 85 65 42 45 55 458 Traditional Life 61 Assurance 124 214 193 282 Life Guaranteed yield (Branch 21) 187 151 Life Unit-linked 125 166 101 (Branch 23) Q4 2002 Q1 2003 Q2 2003 Q3 2003
Slide 20: Retail Financial Services: Analysis of 2003 underlying P&L
Retail Financial Services Analysis of 2003 underlying P&L ∆ 2003 / (M€) 2002* 2003 2002 Revenues 1,661 1,764 6.2% Costs -1,349 -1,371 1.7% Gross Operating Income 312 393 26.1% Cost of Risk -40 -34 -14.4% Corporate Income tax -109 -110 0.9% Other Items 27 37 37.0% Net Income 190 286 50.9% ROEE** 10.8
Slide 21: Retail Financial Services: Quarterly evolution of Gross Operating Income
Retail Financial Services Quarterly evolution of the underlying Gross Operating Income (M€) 452 445 446 435 412 421 402 411 Revenues 344 345 347 350 335 339 335 Costs 324 118 90 98 97 Gross 88 76 81 Operating 59 Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003* Q2 2003* Q3 2003* Q4 2003 21 * Pro f
Slide 22: Retail Financial Services: Analysis of Q4 2003 underlying P&L
Retail Financial Services Analysis of Q4 2003 underlying P&L ∆ Q4 03 / (M€) Q4 2002* Q4 2003 Q4 02 Revenues 411 446 8.6% Costs -335 -350 4.2% Gross Operating Income 76 97 27.7% Cost of Risk -13 -3 -76.0% Corporate Income tax -28 -21 -27.0% Other Items 6 13 n.s. Net Income 40 86 x 2.2 ROEE** 8.7% 18.
Slide 23: Investment Management Services: Private Banking/Affluent customers' assets
Activity Highlights Investment Management Services Private Banking/Affluent customers’ assets* - 8.9 % (Bn€) -0.6 -1.0 +0.9 -0.6 -0.4 +0.3 -1.3 +0.0 Organic Market Organic Market Organic Market Organic Market 30.8 growth effect 29.1 growth effect 29.4 growth effect 29.3 growth effect 28.0 Q1 2003 Q1
Slide 24: Investment Management Services: Assets under management
Activity Highlights Investment Management Services Assets under management* + 10.6 % (Bn€) +1.5 +0.6 +0.7 +1.2 +0.9 -2.1 +1.3 +3.3 Organic Market Organic Market Organic Market Organic Market 69.4 growth effect 68.2 growth effect 72.8 growth effect 74.9 growth effect 76.8 Q1 2003 Q1 2003 Q2 2003 Q2 2
Slide 25: Fund Administration and Securities Services
Investment Management Services ➼ Fund Administration and Securities Services Total assets under # of NAV to calculate # of transactions custody (Bn€) in the year (x 1000) (in millions) 5.38 329 5.24 297 303 314 149 151 Other** Other** 154 146 Mandates Mandates 12 12 to DFS* to DFS* months months Dec
Slide 26: Investment Management Services: Analysis of 2003 underlying P&L
Investment Management Services Analysis of 2003 underlying P&L ∆ ∆ 2003 / at constant (M€) 2002* 2003 2002 rate of exchange Revenues 1,011 914 -9.6% -8.4% Costs -668 -604 -9.5% -9.4% Gross Operating Income 343 310 -9.6% -6.5% Cost of Risk -6 -22 n.s. Corporate Income Tax -99 -80 -18.4% Other Items -
Slide 27: Investment Management Services: Quarterly evolution of Gross Operating Income
Investment Management Services Quarterly evolution of the underlying Gross Operating Income (M€) 273 Revenues 252 242 244 235 237 224 219 178 Costs 161 161 169 162 152 146 144 93 93 91 At 83 78 79 constant 95 91 89 65 85 US$ 81 76 75 62 Gross Operating Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2
Slide 28: Quarterly evolution of underlying Gross Operating Income by unit
Quarterly evolution of the underlying Gross Operating Income DBNL Private and Affluent Banking without DBNL (M€) 83 Revenues 87 79 80 78 74 74 74 72 71 63 63 67 59 60 64 64 58 62 56 56 55 Costs 54 50 46 37 38 35 34 23 25 Gross 20 22 Operating 20 18 17 18 17 16 15 Income 37 34 32 24 28 41 26 29 Q1 20
Slide 29: Investment Management Services: Analysis of Q4 2003 underlying P&L
Investment Management Services Analysis of Q4 2003 underlying P&L ∆ ∆ Q4 03 / at constant (M€) Q4 2002* Q4 2003 Q4 02 rate of exchange Revenues 244 237 -3.1% -1.8% Costs -169 -152 -9.7% -9.6% Gross Operating 76 85 11.6% 15.6% Income Cost of Risk -2 -7 n.s. Corporate Income Tax -22 -19 -12.1% Other I
Slide 30: Capital Markets & Treasury: Analysis of 2003 underlying P&L
Capital Markets & Treasury Activities Analysis of 2003 underlying P&L ∆ ∆ 2003 / at constant (M€) 2002* 2003 2002 rate of exchange Revenues 552 472 -14.6% -10.4% Costs -170 -153 -10.2% -8.4% Gross Operating Income 382 319 -16.6% -11.3% Cost of Risk -24 6 n.s. Corporate Income Tax -75 -60 -20.6% Othe
Slide 31: Capital Markets & Treasury: Quarterly evolution of Gross Operating Income
Capital Markets & Treasury Activities Quarterly evolution of the underlying Gross Operating Income (M€) 177 Revenues 165 148 138 130 123 131 125 113 107 72 95 94 94 106 94 86 76 67 At constant Costs 46 43 67 60 US$ 40 41 41 37 34 40 Gross 32 34 Operating Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1
Slide 32: Capital Markets & Treasury: Analysis of Q4 2003 underlying P&L
Capital Markets & Treasury Activities Analysis of Q4 2003 underlying P&L ∆ ∆ Q4 03 / at constant (M€) Q4 2002* Q4 2003 Q4 02 rate of exchange Revenues 138 94 -31.9% -28.6% Costs -43 -34 -21.8% -19.9% Gross Operating Income 94 60 -36.5% -32.6% Cost of Risk -19 -1 n.s. Corporate Income Tax -9 -1 n.s.
Slide 33: Central Assets: Analysis of 2003 underlying P&L
Central Assets Analysis of 2003 underlying P&L (M€) 2002* 2003 Q4 2002* Q4 2003 Revenues -65 123 8 21 Costs -210 -256 -50 -88 Gross Operating Income -275 -133 -42 -67 Cost of Risk -31 -25 -17 -17 Corporate Income Tax 137 49 63 12 Other items -79 -64 -30 -17 Net Income -248 -173 -26 -89 Variation of
Slide 34: Impact of the Exceptionals on P&L
Impact of the Exceptionals on P&L (M€) 2002 2003 Q4 2002 Q4 2003 Revenues 101 20 -69 8 Costs 60 -37 110 -7 Gross Operating Income 161 -17 41 0 Cost of Risk -448 -17 -11 0 Net gains + impairments on -44 -66 -11 -55 LT investments Corporate Income Tax 363 158 -22 84 Income from equity 0 4 0 4 accounte
Slide 35: Main Exceptional Items
Main Exceptional Items (M€) 2003 Revenues • CLN +2.2 • Gains/losses on equities +2.1 • Utilisation of DBLN provision +14.5 • Integration Sofaxis +4.5 • Interest in arrears on tax litigation DBB +6.1 • Capital losses on non-strategic assets -8.6 Costs • Restructuration provision at Dexia BIL Group -3
Slide 36: Legio Update at February 13, 2004
DBNL/Legio Legio Update at February 13, 2004 (M€) 04/07/03* 13/02/04 Total amount of lease contracts 3,757 3,162 Total lack of collateral 1,639 1,067 Total amount of bullet contracts not accepting the Dexia Offer 1,276 949 Lack of collateral on above contracts 664 378 based on AEX index of 293 356 3
Slide 37: The "Hardship Clause"
DBNL/Legio The “Hardship Clause” at 13/02/04 2,496 files have been submitted to the Hardship Commission 1,892 have been ruled on 41% have received an agreement for compensation 37
Slide 38: Specific provisions on delinquent accounts at Dec. 31, 2003
DBNL/Legio Specific provisions on delinquent accounts at Dec. 31, 2003 Risk Amount (M€) Loss Rate Provision 06/03 09/03 12/03 Deliquencies 0-30 days 32 13 41 ≈ 32% 31-90 days 55 14 29 ≈ 50% Over 91 days 48 98 100 ≈ 97% and forced termination 135 125 170 38
Slide 39: Provisions in the accounts
DBNL/Legio Provisions in the accounts (M€) Generic* Specific Total Provisions at 31.12.2002 448 30 478 Provisions at 31.12.2003 331 125 456 Management may decide to adjust provisions if model parameters differ sustainably by more than +/- 10% Legal risk provisioning – Accounts 2003 All individual ca
Slide 40: Key Performance indicators
Key Performance indicators 2002 2003 C/I Ratio 58.9 % 59.2 % (58.4 % at constant C/I Ratio underlying 61.1 % 58.7 % rate of exchange) ROE 16.2 % 16.5 % EPS (€) 1.13 1.24 Tier One Ratio* 9.3 % 9.9 % RWA* (Bn€) 109.4 106.5 RORWA 1.30 % 1.40 % Profit Margin 26.9 % 29.3 % NAV per share** (€) 8.79 9.25 *
Slide 41: Risk-Weighted Assets
Risk-Weighted Assets (Bn€) Net growth of O/S at constant rate of exchange Impact of exchange +0.4 109.4 -3.3 106.5 31.12.2002 31.12.2003 41
Slide 42: Tier One Capital
Tier One Capital (Bn€) +0.1 Dividends Changes of +1.5 Capital -0.6 scope Share increase -0.3 buy-backs -0.4 2003 10.5 10.2 results (adj.) 31.12.2002 31.12.2003 42
Slide 43: Evolution of Outstanding Shares
Evolution of Outstanding Shares 10,239,543 16,702,715 1,181,685,852 Capital Cancellation 31,187,892 * increase of shares in (staff) incl. 2003 exercice of options Until 31.12.03 8,093,145 Since 1.1.04 1,135,941,643 buy-backs of shares not cancelled to date 31.12.2002 03.02.2004** * 49,740 already ow
Slide 44: Part Two: Back on Track
Part Two Back on Track Pierre RICHARD Group CEO
Slide 45: Earnings Per Share
Earnings Per Share (€) CAGR: +9.4 % p.a. 1.25 1.24 1.15 1.13 0.98 0.85 0.75 0.66 1996 1997 1998 1999 2000 2001 2002 2003 45
Slide 46: Dividend Per Share
Dividend Per Share (€) CAGR: +10.5 % p.a. 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 proposed Dexia France Dexia Belgium 46 Dexia
Slide 47: Net Assets Per Share (incl. GBRR)
Net Assets Per Share (incl. GBRR) (€) CAGR: +5.0 % p.a. 9.3 8.5 8.8 8.1 8.4 8.0 7.5 6.6 1996 1997 1998 1999 2000 2001 2002 2003 47
Slide 48: ROE and Tier One Ratio
ROE and Tier One Ratio 18.7% ROE 17.7% 16.2% 16.5% 15.7% 14.0% 12.9% 13.2% Tier One Ratio 11.2% 10.2% 9.9% 9.6% 9.3% 9.3% 9.3% 9.0% 1996 1997 1998 1999 2000 2001 2002 2003 48
Slide 49: Dexia ranking in Euroland
Dexia ranking in Euroland 31/12/2000 31/12/2001 31/12/2002 23/02/2004 1 ALLIANZ DRESDNER 1 ALLIANZ DRESDNER 1 BNP Paribas 1 BNP Paribas 2 ING Groep 2 ING Groep 2 ING Groep 2 SANTANDER 3 DEUTSCHE BANK R 3 DEUTSCHE BANK R 3 SANTANDER 3 ING Groep 4 SANTANDER 4 BNP Paribas 4 BBVA 4 DEUTSCHE BANK R 5 BBV
Slide 50: Dexia: Road map to the future
Dexia: Road map to the future Values Know-How’s Ambitions 50
Slide 51: Long-term outstanding loans in Europe
Long-term outstanding loans in Europe CAGR +1.3% p.a. 451 Bn € 493 Bn € Europe 1996 1997 1998 1999 2000 2001 2002 CAGR +8.3% p.a. 129 Bn€ in Europe 79 Bn€ 53 +17.4% p.a. 20 59 +4.1% p.a. 76 1996 1997 1998 1999 2000 2001 2002 51 Local authorities Other local actors
Slide 52: LT Development in Public Finance
LT Development in Public Finance Geographic Central and Eastern Europe Slovakia, Poland… USA Dexia, FSA, Dexia GSF Australia Sub.: Dexia Asia Pacific Japan New opening in 2004 Product Range Dexia Finance Asset Management Insurance Services Fleet Leasing PFI’s 52
Slide 53: Artesia integration: Cost synergy achievements
Artesia integration Cost synergy achievements 200 (M€) ⇒ 91 M€ 180 149 linked to staff costs ⇒ 58 M€ linked to other operating expenses 101 95 85 55 60 39 50 48 25 30 16 Objective Achieved Objective Achieved Objective Objective Min. Max. Min. Max. Min. Max. Min. Max. 2002 2003 2004 2005 Retail Finan
Slide 54: New Organization: Segments
New Organization Group CEO Pierre RICHARD Public & Project Personal Investment Treasury and Group Finance Group Finance and Financial Management Financial Operations Credit Services and Insurance Markets & Technology Enhancement (PFS) Services (IMIS) Jacques Axel Marc Dirk Rembert Claude GUERBER MIL
Slide 55: Key financial ratios: Objective 2006
Key financial ratios Objective 2006 Cost income Ratio <54% Return on Equity 18% Earnings Per Share 1.70 € 55
Slide 56: Appendices
DEXIA Appendices
Slide 57: Artesia integration: Impact on Personnel
Artesia integration Impact on Personnel EFT reduction Achieved to objective 31/12/03 vs EFT headcount at 30/06/01 Head Offices -1,400 -1,037 Employee network -870 -422 -2,270 -1,459 64 % realized after 30 months 57
Slide 58: Artesia integration: Downsizing of the branch network
Artesia integration Downsizing of the branch network Closures to Number of branches 2001 2003 Objective 2005 31/12/03 Independent Network 940 -51 889 895 Employee Network 543 -149 394 204 Total 1,483 -200 1,283 1,099 Transfer of employees independent network 133 persons applied, of which 112 effecti
Slide 59: Group's Equity portfolios
Group’s Equity portfolios* Market Net Cap. Book (M€) Value Gain/Loss Value 31/12/03 31/12/03 (when available) Long-term Investments 917 - - o Quoted 544 669 125 o Non-quoted 373 - Other 1,847 - - o Quoted 1,588 1,629 41 Of which money/bond funds 251 251 Of which booked in Insurance 684 655 -30 Co’s