Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q1 2003 Earnings Presentation
51 slides from Dexia Holding SA's earnings presentation, May 21, 2003
Slide 1: Analysts' Meeting
Analysts’ Meeting • Update on the “Dexia Offer ” in the Netherlands • Activity and Financial Results in Q1 , 2003 Brussels, May 21st, 2003
Slide 2: Update on the Dexia Offer in the Netherlands
Update on the “Dexia Offer” in the Netherlands Portfolio Scan /Status of the “Dexia Offer” Repayments / Delinquencies Provisions 2
Slide 3: Portfolio Scan (at May 9th, 2003) (1)
Portfolio Scan (at May 9th, 2003) (1) Total number of contracts: 427,000 Total number of clients: 270,000 Total amount due: 3,962 M€ Average amount per contract: 9,279 € Average amount per client: 14,634 € Total lack of collateral: 1,892 M€ Average lack of collateral per contract*: 4,838 € Average l
Slide 4: Portfolio Scan (2): Contracts with periodic repayment
Portfolio Scan (at May 9th, 2003) (2) Contracts with periodic repayment of principal Total number of contracts: 171,000 Total number of clients: 127,000 Total amount due: 1,404 M€ Total lack of collateral*: 500 M€ Credit risk is mitigated as balances decline to zero at maturity Only early redemption
Slide 5: Portfolio Scan (3): Contracts with Bullet repayment
Portfolio Scan (at May 9th, 2003) (3) Contracts with “Bullet” repayment Total number of contracts: 256,000 Total number of clients: 170,000 Total amount due: 2,559 M€ Total lack of collateral*: 1,391 M€ The “Dexia Offer” caters only to this category of contracts * Contracts with negative balances on
Slide 6: The Dexia Offer (1)
The Dexia Offer (1) Expands the possibilities normally offered at the term of the contract Options SELL DELIVERY EXTEND Normally included Shares are sold Shares are delivered Customer may in contracts Customer to the customer extend the loan for receives funds Customer pays cash 3 more years Custome
Slide 7: The Dexia Offer (2)
The Dexia Offer (2) For clients “in hardship”, and for whom the Dexia Offer is not a sufficient solution, Dexia Bank Nederland accepts to mitigate further their shortfall, and submit the case to the “Hardship Procedure” The “ Hardship Commission ” : is composed of 3 independent senior personalities
Slide 8: Customer Response to the Dexia Offer (1)
Customer Response to the Dexia Offer (1) (at May 9th, 2003) Number of Number of of which expired clients contracts Total mail sent 196,500 368,000 112,000* Waiting for responses 100,000 187,000 59,000 % of total mail sent 51% 51% Total responses 96,500 181,000 53,000 % of total mail sent 49% 49% YES
Slide 9: Customer Response to the Dexia Offer (2)
Customer Response to the Dexia Offer (2) (at May 9th, 2003) Bullet Contracts “Agreed” * Number of contracts : 102,000 Amounts of lease contracts: 962 M€ ** Total lack of collateral : 521 M€ * Excludes contracts expired to date and nevertheless benefiting from the Dexia Offer ** Contracts with negati
Slide 10: Customer response to the Dexia Offer (3)
Customer response to the Dexia Offer (3) Timing of responses indicate that customers take more than 6 weeks to reply (16% of replies received after the deadline) Offer will be extended for 3 more weeks (ending June 13th, 2003) 10
Slide 11: Summary
Summary Total undercollateralised*: 1,892 M€ Contracts with “Bullet contracts” “Bullet contracts” “No” to the periodic agreed to date waiting for answers Dexia Offer repayment of principal 500 M€ 521 M€ 1,021 M€ 713 M€ 158 M€ * Negative contracts only, at May 9th, 2003 11
Slide 12: Repayments / Delinquencies (1)
Repayments / Delinquencies (1) 1. Amounts due on demand* at May 9th, 2003 (M€) Total Over 90 days Overdue amounts 95.9 M€ 39.7 M€ Of which: • Terms not paid 9.6 M€ 6.2 M€ (64%) • Forced Terminations 11.2 M€ 9.3 M€ (83%) • Regular Terminations 75.1 M€ 24.2 M€ (32%) * Including payment agreements 12
Slide 13: Repayments / Delinquencies (2)
Repayments / Delinquencies (2) 2. Recoveries on contracts terminated until January 2003 Original % Amount Recovered (M€) * Regular Terminations at maturity 44.2 77% * Regular Terminations pre-maturity 7.9 86% Forced Terminations 7.3 13% * Excluding payment agreements 13
Slide 14: Repayments / Delinquencies (3)
Repayments / Delinquencies (3) 3. Recovery rates of regular terminations* Cohort ending April 02 95% Cohort ending May 02 94% Cohort ending June 02 92% Cohort ending July 02 87% Cohort ending August 02 77% Cohort ending September 02 80% * Expired, including payment agreements 14
Slide 15: Provisions (1)
Provisions (1) Until now, provisionning has been on the basis of cautious but rough assumptions, in the absence of significant default history At 31st March 2003, provisions on account of the credit risks stood at: Generic provision 448 M€ (allowed in 2002) Specific provisions 48 M€ (5 M€ in 2001; 2
Slide 16: Provisions (2)
Provisions (2) As from June 30th, 2003, provisions will cover: The cost of the commercial offer for contracts “agreed” – Zero Interest Loans proportions – Extension not yet – Call options known Cost of the “Hardship Clause” Residual credit risks on contracts, “agreed” and “not agreed” Considering co
Slide 17: Conclusion
Conclusion Success of the commercial offer mitigates credit risks at an acceptable cost Current level of provisions warrants adequate coverage of commercial costs and remaining credit risks 17
Slide 18: Q1 2003 Results
DEXIA Q1 2003 Results
Slide 19: Changes in scope of consolidation and methods
Changes in scope of consolidation and methods Scope (M€) Reported Net Income Q1 2002 397 - Exits (BIL SIM Italy) +1 + Additions (increase in shares of DVV & Fortior; acq. of Butterfield) +4 - Funding costs -1 Pro forma Q1 2002 399 ∆≈ +2 Methods Change of accounting method in Q1 2003 at DVV resulting
Slide 20: Key Performance indicators
Key Performance indicators Q1 2002 Q1 2003 RWA* (Bn€) 106.2 111.0 RORWA 1.62% 1.22% Tier one Ratio* 9.3% 9.3% ROE** 20.1% 14.6% Profit Margin 31.9% 26.9% C/I Ratio 59.4% 61.0% NAV per share***(€) 8.60 9.06 * End of period ** Annualized *** Including GBRR Group share 20
Slide 21: Summary of Q1 2003 P&L
Summary of Q1 2003 P&L ∆% ∆% underlying Q1 2002 (M€) Q1 2003 ∆% Underlying* at constant pro forma rate of exchange Revenues +1,329 +1,248 -6.1% -1.5% +1.1% Costs -789 -760 -3.6% -3.9% -2.9% Gross Operating +540 +487 -9.8% +2.5% +7.6% Income Cost of Risk -32 -65 x2 +50.3% Net gains + impairments on L
Slide 22: Quarterly evolution of the underlying Gross Operating Income
Quarterly evolution of the underlying Gross Operating Income (M€) 1,347 Revenues 1,312 1,270 1,251 1,114 788 774 793 Costs 745 757 538 553 482 494 Gross Operating 368 Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003 * Q1 2002 to Q4 2002 are pro forma 22
Slide 23: Underlying Cost of Risk related to total net O/S commitments
Underlying 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 0.9 bp 0.4 bp Enhancement 12.2 bp* 9.8 bp* 7.8 bp 6.4 bp 6.6 bp 6.7 bp* 2.2 bp Banking Activities 1997 1998 1999 2000 2001 2002 Q1 03** * Excluding impact of provisions for Legio
Slide 24: 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)* + 28.8 % + 39.0 % at constant (Bn€) exchange rate 6.8 5.3 1.4 Other 0.8 Public Sector 5.4 4.5 Q1 2002 Q1 2003 * Fully consolidated Co’s ; Germany excluded ; current exchange rate 24
Slide 25: Public / Project Finance & Credit Enhancement: L.T. Outstandings
Activity Highlights Public / Project Finance & Credit Enhancement L.T. Outstandings (in & off B/S)* + 7.6 % + 12.4 % at constant exchange rate 132.4 (Bn€) 123.1 13.6 Other 13.8 Public Sector 118.8 109.3 March 2002 March 2003 *Fully consolidated Co’s ; Germany excluded; current exchange rate 25
Slide 26: Public / Project Finance & Credit Enhancement: Deposits & Customer Assets
Activity Highlights Public / Project Finance & Credit Enhancement Deposits & Customer Assets * + 15.8% 19.8 (Bn€) 17.1 5.8 5.2 Off B/S 14.0 B/S 11.9 March 2002 March 2003 * Off B/S of Artesia excluded 26
Slide 27: Public / Project Finance & Credit Enhancement: New Insurance Premiums
Activity Highlights Public / Project Finance & Credit Enhancement New Insurance Premiums + 23.9 % 222.7 9.9 (M€) 179.7 4.2 51.8 40.5 Others DVV/AP Sofaxis 161.0 135.0 Q1 2002 Q1 2003 27
Slide 28: FSA Gross Present Value of Originations
Activity Highlights Public / Project Finance & Credit Enhancement FSA Gross Present Value of Originations - 41.8 % 174.8 (M$) 18.7 101.8 Investment 75.3 3.0 Products 25.9 ABS 80.8 72.9 Muni Q1 2002 Q1 2003 28
Slide 29: Public/Project Finance & Credit Enhancement: Analysis of underlying P&L
Public/Project Finance & Credit Enhancement Analysis of underlying P&L ∆% ∆% Q1 2002 at constant (M€) Q1 2003 Q1 03 / pro forma rate of Q1 02 exchange Revenues 438 455 +3.9% +11.6% Costs -163 -154 -5.6% -1.1% Gross Operating Income 275 301 +9.5% +19.1% Cost of Risk -13 -24 +82.9% Corporate income ta
Slide 30: Public/Project Finance & Credit Enhancement: Quarterly evolution of GOI
Public/Project Finance & Credit Enhancement Quarterly evolution of the underlying Gross Operating Income (M€) 512 455 438 442 Revenues 401 338 298 301 275 252 Costs 163 175 144 149 154 Gross Operating Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003 * Q1 2002 to Q4 2002 are pro forma 30
Slide 31: Retail Financial Services: Customers' Assets
Activity Highlights Retail Financial Services Customers’ Assets - 1.4 % (Bn€) + 0.3 % 80.1 78.7 79.0 - Market effect : -0.6 25.3 23.3 - Outflows : 0.0 22.7 off B/S products in B/S products 54.8 55.4 56.3 March 2002 Dec. 2002 March 2003 31
Slide 32: Retail Financial Services: Credit Outstandings
Activity Highlights Retail Financial Services Credit Outstandings + 4.0 % 22.3 22.4 (Bn€) 21.5 6.7 6.6 6.5 SME 15.0 15.6 15.8 Personal Sector March 2002 Dec. 2002 March 2003 32
Slide 33: Retail Financial Services: Insurance Premiums
Activity Highlights Retail Financial Services Insurance Premiums 502 (M€) 443 440 76 407 Non Life 72 68 46 70 345 46 61 Traditional Life 55 71 Assurance 80 214 59 34 124 Life Guaranteed 73 yield (Branch 21) Life Unit-linked 224 (Branch 23) 167 187 166 245 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 33
Slide 34: Retail Financial Services: Analysis of underlying P&L
Retail Financial Services Analysis of underlying P&L Q1 2002 ∆ Q1 03 / (M€) Q1 2003 pro forma Q1 02 Revenues 413 430 +4.1% Costs -351 -347 -1.0% Gross Operating Income 62 83 +33.2% Cost of Risk -11 -13 +21.8% Corporate Income tax -12 -26 x2 Other Items 7 7 n.s. Net Income 46 50 +8.1% ROEE* 10.4% 11.
Slide 35: Retail Financial Services: Quarterly evolution of GOI
Retail Financial Services Quarterly evolution of the underlying Gross Operating Income (M€) 449 422 421 430 413 Revenues 351 354 347 Costs 342 330 95 92 79 83 62 Gross Operating Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003 * Q1 2002 to Q4 2002 are pro forma 35
Slide 36: Investment Management Services: Private Banking/Affluent customers' assets
Activity Highlights Investment Management Services Private Banking/Affluent customers’ assets* Organic growth: -1.8% -12.8 % Market effect: -11.0% Organic growth: -2.0% -5.4 % Market effect: -3.3% (Bn€) ≈0 -2.6 33.4 33.4 -0.6 -1.0 Organic growth Market effect 30.8 9 months 9 months Organic growth Ma
Slide 37: Investment Management Services: Assets under management
Activity Highlights Investment Management Services Asset under management* Organic growth: +0.9% -12.5 % Market effect: -13.4% Organic growth: +1.2% -1.8 % Market effect: -3.0% (Bn€) 77.9 -0.2 -8.3 -8.3 +0.9 -2.1 Organic growth Market effect 69.4 Organic growth Market effect 68.2 68.2 9 months 9 mon
Slide 38: Fund Administration
Activity Highlights Fund Administration Capital managed at end # of NAV to calculate # of transactions of period (Bn€) * in the year (x 1000) (in million) 1.39 128 1.26 114 1.18 108 314 297 300 March Dec. March March Dec. March Q1 Q4 Q1 2002 2002 2003 2002 2002 2003 2002 2002 2003 Custody Central Ad
Slide 39: Investment Management Services: Analysis of underlying P&L
Investment Management Services Analysis of underlying P&L ∆% Q1 2002 ∆ Q1 03 / at constant (M€) Q1 2003 pro forma Q1 02 rate of exchange Revenues 273 224 -18.0% -15.9% Costs -178 -162 -8.6% -8.6% Gross Operating Income 95 61 -35.6% -29.4% Cost of Risk 0 -2 n.s. Corporate Income Tax -27 -16 -42.4% Ot
Slide 40: Segment contributions within Investment Management Services
Segment contributions within Investment Management Services underlying Total IMS excluding Dexia Bank Dexia Bank Total IMS Nederland Nederland Q1 02 Q1 02 Q1 02 (M€) pro Q1 03 ∆ pro Q1 03 ∆ pro Q1 03 ∆ forma forma forma Revenues 184 160 -13.1% 89 64 -28.2% 273 224 -18.0% Costs -126 -122 -3.4% -51 -4
Slide 41: Investment Management Services: Quarterly evolution of GOI
Investment Management Services Quarterly evolution of the underlying Gross Operating Income (M€) 273 Revenues 260 254 253 224 178 180 Costs 169 169 162 95 90 Gross 84 74 Operating 61 Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003 * Q1 2002 to Q4 2002 are pro forma 41
Slide 42: Capital Markets & Treasury Activities: Analysis of underlying P&L
Capital Markets & Treasury Activities Analysis of underlying P&L ∆% Q1 2002 ∆ Q1 03 / at constant (M€) Q1 2003 pro forma Q1 02 rate of exchange Revenues 177 148 -16.3% -13.6% Costs -46 -42 -9.1% -8.1% Gross Operating Income 131 107 -18.8% -15.5% Cost of Risk 3 -2 n.s. Corporate Income Tax -23 -27 +1
Slide 43: Capital Markets & Treasury Activities: Quarterly evolution of GOI
Capital Markets & Treasury Activities Quarterly evolution of the underlying Gross Operating Income (M€) Revenues 177 166 148 138 131 125 107 73 94 Costs 46 44 40 41 42 Gross 32 Operating Income Q1 2002* Q2 2002* Q3 2002* Q4 2002* Q1 2003 * Q1 2002 to Q4 2002 are pro forma 43
Slide 44: Central Assets: Analysis of underlying P&L
Central Assets Analysis of underlying P&L (M€) Q1 2002 Q1 2003 pro forma Revenues -31 -5 Costs -51 -52 Gross Operating Income -81 -57 Cost of Risk -7 -1 Corporate Income Tax +28 +16 Other Items -14 -19 Net Income -74 -61 44
Slide 45: Impact of the Exceptionals on P&L
Impact of the Exceptionals on P&L (M€) Q1 2002 Q1 2003 pro forma Revenues +59 -3 Costs -1 -4 Gross Operating Income +58 -7 Cost of Risk -4 -23 Net gains + impairments on LT +17 +50 investments Corporate Income Tax -6 -9 Net charge on GBBR -5 +1 Net Income +58 +13 45
Slide 46: Main Exceptional Items
Main Exceptional Items Q1 Q1 (M€) 2002 2003 Revenues • Net gains on OLO +44.4 - • Capital losses on sale non strategic assets - -4.7 • CLN -11.0 +1.4 • Interests on arrears on a transaction in Italy +13.6 - • Early redemption of bonds redeemable in shares at Dexia Crediop in Italy +12.4 - Costs • Co
Slide 47: Appendices
DEXIA Appendices
Slide 48: Group's Equity portfolios
Group’s Equity portfolios* Market Net Cap. (M€) Book Value Value Gain/Loss 31/03/03 31/03/03 (when available) Long term Investments 1,385 - - o Quoted 854 702 -152 o Non-quoted 531 n.a. Other 1,697 - - o Quoted 1,319 1,207 -112 Of which money/bond funds 200 206 Of which preferred shares 188 205 Of w
Slide 49: Cost synergy achievements
Artesia integration Cost synergy achievements 60 50 (M€) 27 Best Worst Worst case case case ⇒ 19 M€ linked to staff costs ⇒ 8 M€ linked to other operating expenses Objective full Achieved year 2003 Q1 2003 49
Slide 50: Impact on Personnel
Artesia integration Impact on Personnel EFT reduction Achieved to objective vs EFT headcount at 30/06/01 31/03/03 Head Offices -1,400 -725 Employee network -870 -323 -2,270 -1,048 46% realised 50
Slide 51: Downsizing of the branch network
Artesia integration Downsizing of the branch network Closures to Objective Number of branches 2001 31/03/03 2005 Independent Network 940 -32 895 Employee Network 543 -68 204 Total 1,483 -100 1,099 Transfer of employees independent network 93 persons applied, of which 72 effectively transferred at Ma