Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q2 2008 Earnings Presentation
29 slides from Dexia Holding SA's earnings presentation, Aug 29, 2008
Slide 1: Press Conference 2Q 2008 Results
short term has no future Press Conference 2Q 2008 Results Axel Miller, Chief Executive Officer Brussels - August 29th, 2008
Slide 2: Disclaimer
Disclaimer This presentation and the information contained therein are provided for information purposes only and may not be complete. It does not constitute an offer to sell or the solicitation to buy any securities issued by Dexia or any entity of the Dexia Group. This presentation may include fut
Slide 3: Agenda
Agenda Summary and Highlights Business lines performances Recap of Group financial performance Conclusion 3
Slide 4: 2Q 2008 Results – CEO's Comments
2Q 2008 Results – CEO’s Comments “During the second quarter of 2008, Dexia proved resilient in a particularly challenging market. Excluding FSA, underlying net income increased by 24% to EUR 760 million. Including the provisions made during 2Q08 for FSA, our solvency level of 11.4% improved and is w
Slide 5: Highlights (1)
Highlights (1) Reported Net Income : EUR 532 million Down 32.4% on 2Q07 Essentially because of provisions strengthening at FSA, causing its 2Q08 Reported Net Income to stand at EUR – 216 million (against EUR + 53 million in 2Q 07) Excluding FSA, Group Underlying Results achieve a very good score: Re
Slide 6: Highlights (2)
Highlights (2) Commercial Activity remains very high in Public Finance Originations in banking activities in H1 08/07: +58% (on a constant rate of exchange) Originations in Credit enhancement of US Muni and International Public Finance in H1 08/07 : x 2.3 Activities where customers manage theirs ass
Slide 7: Summary of 2Q 2008 Results
Summary of 2Q 2008 Results Group earnings down under the effect of FSA’s results + 23 % 760 (M EUR) Underlying Net Income 614 excluding FSA Reported net Income 2Q 07 2Q 08 Underlying Net Income 787 of FSA 79 532 -321 2Q 07 2Q 08 Non-operating items 94 92 92 7
Slide 8: Dynamic Revenues, Good Cost Control, Low Risk Charge and Taxes
Dexia excluding FSA Achieved a 23% Growth in Underlying Results Dynamic Revenues, Good Cost Control, Low Risk Charge and Taxes Variation (Underlying M EUR) 2Q 2007 2Q 2008 on a current on a constant exchange rate exchange rate Income 1,718 1,888 +9.9% +10.0% Expenses -897 -937 +4.5% +5.5% Gross oper
Slide 9: Significant Strengthening of Reserves at FSA in 2Q08
FSA Reduced Dexia’s Underlying Net Income By EUR 321 m Significant Strengthening of Reserves at FSA in 2Q08 (Underlying M EUR) 3Q 2007 4Q 2007 1Q 2008 2Q 2008 Income 136 168 135 -71 Expenses -35 -37 -27 -7 Gross operating income 101 131 108 -78 Cost of risk -7 -9 -197 -432 Tax expense -22 -34 39 188
Slide 10: Reasons and Overview of FSA losses
Reasons and Overview of FSA losses • Continued Deterioration of Prospects on the US Housing Market in 2Q 08 • Overview of FSA Economic P&L Losses (pre-tax USD million) 1Q 08 2Q 08 Public Finance insured portfolio 0 52 Mainly Jefferson County ABS insured portfolio 300 620 Mainly Helocs Financial prod
Slide 11: Non-Operating Items Mainly Coming From FSA
Overall Positive EUR 92m Impact From Non-Operating Items in 2Q08 Non-Operating Items Mainly Coming From FSA Non-Operating items: impact on P&L (M EUR) 2Q 2007 2Q 2008 Income 93 174 of which . capital gains 126 10 . interest DBNL -2 . MTM on FSA CDS -34 159 . Non-economic FP impairments FSA -470 . Ow
Slide 12: Cost of Risk on Banking Activities Remained at a Low Level excluding FSA
Cost of Risk on Banking Activities Remained at a Low Level excluding FSA in basis points Credit enhancement (1) 63 29 2,5 1,2 1,2 0,7 0,6 0,6 0,6 0,8 0,6 0,8 0,4 97 98 99 00 01 02 03 04 05 06 07 1Q08 2Q08 annualized 12.2 (3) Banking activities (2) 9.8 (3) 7.8 6.4 6.6 5.7 (3) 5.1 (3) (3) 4.3 (3) 4.3
Slide 13: Agenda – Business lines performances
Agenda Summary and Highlights Business lines performances Recap of Group financial performance Conclusion 13
Slide 14: Buoyant Activity in PPFCE
Buoyant Activity in PPFCE Over 12 months Public / Project • LT banking commitments + 21.3% on a constant exchange rate Finance and Credit • Net par outstanding FSA (USD) + 11.0% Enhancement Personal Financial • Customer assets (1) -3.9% Services • Customer loans + 12.9% Asset Management & • Assets u
Slide 15: Public / Project Finance: Long-Term Commitments
Long-Term Commitments(1) Continued to Increase Strongly Public / Project Finance Bn EUR + 17.0 % + 21.3 % on a cst. exch. rate 342.2 292.5 16,0 32,9 International headquarters 11,7 36,1 28,1 28,5 25,1 + 16 % 13,9 Corporate Tomorrow growth markets + 37 % + 81 % 148,3 171,7 Project Finance Growth mark
Slide 16: Public / Project Finance: Long-Term Originations
Robust 2Q Long-Term Originations(1) Public / Project Finance Bn EUR + 48 % + 58 % on a cst. exch. rate 43.6 1.4 4,0 International headquarters 5,6 8.9 - 63 % Corporate 29.5 2Q Tomorrow growth markets + 1.9 % 4,0 3.9 + 119 % 4,9 4.1 2Q Project Finance + 53 % 25.3 Growth markets + 14 % 13.4 34,0 + 89
Slide 17: Credit Enhancement
1H 2008: Strong US Public Finance Originations at FSA Credit Enhancement FSA - Gross present value originations FSA - Net par outstanding m USD + 42.3 % bn USD + 11.0 % 591 23 45 443 58 399 27 18 415 30 18 29 Financial products 50 20 88 25 89 International ABS 72 International Public Finance 466 118
Slide 18: Personal Financial Services: Loans
Growth in All Loan Segments Personal Financial Services bn EUR Loans + 12.9 % 40.3 35.7 37.8 5,3 5,1 4,9 Other loans 9,6 8,8 Business loans 8 2,6 2,4 Consumer loans 2,3 Mortgage loans 20,5 21,5 22,7 30/06/07 31/12/07 30/06/08 18
Slide 19: Personal Financial Services: Customer Assets
Decline in Customer Assets in the Context of Challenging Financial Markets Personal Financial Services bn EUR Customer assets - 3.9 % of which 137.5 136.0 132.1 14,3 15,9 16,6 Life insurance reserves 47,1 Private 53,8 50,9 Banking 43,4 Off-balance sheet assets Balance sheet assets 85,0 69,3 69,3 72,
Slide 20: Asset Management
Significant Negative Market Effect on AUM Asset Management bn EUR Organic growth : - 3.2 % in one year Market effect : - 7.8 % in one year - 11.0 % 111,1 112,0 109,7 +0.7 +0.2 - 0.5 - 1.8 102,2 - 1.9 98.8 - 5.6 Net Market Net Market - 1.9 - 1.4 New effect New Net Market effect New Net Market Cash Ca
Slide 21: Investor Services
Growth in All Activities Investor Services Assets under administration(1) Number of funds under Number of shareholder accounts in transfer agent (bn USD) administration (in thousands) + 5.0 % + 7.4 % + 19.4 % 7,961 2,882 5,134 5,288 7,645 2,765 4,925 2,633 6,667 30/06/07 31/12/07 30/06/08 30/06/07 3
Slide 22: Business Lines Underlying Performances (excluding FSA)
Business Lines Underlying Performances (excluding FSA) Variation 2Q 08/2Q 07 * Variation 2Q 08/ 2Q 07 Gross Revenues operating Net income income PPFCE without FSA +25.7% +33.1% +54.4% Personal Financial Services +3.3% -0.8% -9.9% Asset Management -11.5% -18.9% -21.6% Investor Services +3.3% -5.0% -2
Slide 23: Treasury and Financial Markets
Treasury: Record and Exceptionally High Quarter Treasury and Financial Markets Market Engineering Treasury Fixed Income (M EUR) and Trading 2Q 2007 2Q 2008 2Q 2007 2Q 2008 2Q 2007 2Q 2008 Income 91 122 75 100 29 40 Net income – Group share 59 77 45 74 17 20 2007 based on pro forma accounts 23
Slide 24: Agenda – Recap of Group financial performance
Agenda Summary and Highlights Business lines performances Recap of Group financial performance Conclusion 24
Slide 25: 2Q Group Reported Results
2Q Group Reported Results Affected by FSA’s Provisions Strenghtening 2Q 2007 2Q 2008 (M EUR) Variation reported reported Income 1,964 1,991 +1.4% * The EUR 255 m decrease comes from: Expenses -937 -945 +0.9% ªChanges in scope n.s. Gross operating income 1,027 1,046 +1.9% Cost of risk -30 -488 x 16.1
Slide 26: Underlying EPS Decreased by -25.1%
Underlying EPS Decreased by - 25.1% 2Q 2007 2Q 2008 Variation 1H 2007 1H 2008 Variation C/I ratio 47.7% 47.5% 49.7% 54.1% C/I ratio underlying 50.0% 52.0% 51.1% 51.7% ROE (1) 22.1% 14.2% 21.5% 10.9% EPS (EUR) reported (2) 0.68 0.46 -32.1% 1.30 0.71 -45.4% underlying (2) 0.60 0.38 -36.2% 1.12 0.84 -2
Slide 27: Good Capital Position
Good Capital Position Tier 1 Improved and Is Well Above 10.5% Target Variation 31/12/07 31/03/08 30/06/08 in 3 months Tier 1 ratio * 9.1% 11.2% 11.4% + 0.2 pts Tier 1 capital * (M EUR) 14,549 13,483 13,843 + 2.7% Total weighted risks * (M EUR) 159,383 120,113 121,670 + 1.3% Core shareholders’ equity
Slide 28: Agenda – Conclusion
Agenda Summary and Highlights Business lines performances Recap of Group financial performance Conclusion 28
Slide 29: Outlook 2H 2008
Outlook 2H 2008 “The second half of 2008 will obviously still be marked by a high level of volatility and economic uncertainties. We will continue to focus on the control of risks while still developing our franchises. Dexia is well prepared to face these challenges.” Axel Miller – Chief Executive O