Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Shareholder Meeting (May 2016)
44 slides from Dexia Holding SA's shareholder meeting presentation, May 18, 2016
Slide 1: Dexia Group Annual Shareholders Meeting
Dexia Group Annual Shareholders Meeting Brussels, May 18th 2016
Slide 2: Disclaimer
Annual Shareholders Meeting Disclaimer ■ This presentation and the information contained therein are provided for informational purposes only. No representation or warranty is made as to the adequacy, accuracy, reliability or completeness of such information. ■ This presentation does not constitute
Slide 3: Agenda
Annual Shareholders Meeting Agenda Section 1 Fundamentals of the orderly resolution Section 2 Progress on strategic objectives Section 3 Tangible reduction of the systemic risk Section 4 Financial results 2015 and Q1 2016 Section 5 Looking ahead Section 6 Activity of the Board and Committees Section
Slide 4: Agenda
Annual Shareholders Meeting Agenda Section 1 Fundamentals of the orderly resolution Section 2 Progress on strategic objectives Section 3 Tangible reduction of the systemic risk Section 4 Financial results 2015 and Q1 2016 Section 5 Looking ahead Section 6 Activity of the Board and Committees Section
Slide 5: A complex structure in 2011, requiring a specific orderly resolution plan
Fundamentals of the orderly resolution A complex structure in 2011, requiring a specific orderly resolution plan 31/12/2008 31/12/2011 Balance Sheet (EUR bn) 651 Subprime Group 413 Sovereign Group Tier 1 ratio 10.6% crisis 7.6% debt crisis Restructuring Resolution Staff 36,700 22,460 Dexia had a ver
Slide 6: Target perimeter reached
Progress on strategic objectives Target perimeter reached 2008 2015 508 entities 46 entities Dexia SA Banque Associated Dexia Dexia Crédit Dexia Bank Dexia Asset Other Internationale à DenizBank Technology Local Belgium Management subsidiaries Luxembourg Services • Parfipar • Dexia Participation Dex
Slide 7: A legacy structure facing significant internal and external challenges
Fundamentals of the orderly resolution A legacy structure facing significant internal and external challenges Sizable asset portfolio with long-dated maturity profile • EUR 182 billion of bonds and loans1,mainly illiquid long term Public Finance assets • 36,840 exposures on 7,422 debtors • Assets he
Slide 8: A legacy structure facing significant internal and external challenges
Fundamentals of the orderly resolution A legacy structure facing significant internal and external challenges Sizable asset portfolio with long-dated maturity profile Financial markets Macro-economic context Other Dexia entities2 Complex legacy Necessity of a banking operational structure licence Re
Slide 9: Additional complexity due to divergent stakeholder expectations
Fundamentals of the orderly resolution Additional complexity due to internal and external stakeholders with divergent expectations Internal Stakeholders External Stakeholders European States as Central Bank guarantors Minority Supervisor shareholders and regulators States as European shareholders Co
Slide 10: Agenda
Annual Shareholders Meeting Agenda Section 1 Fundamentals of the orderly resolution Section 2 Progress on strategic objectives Section 3 Tangible reduction of the systemic risk Section 4 Financial results 2015 and Q1 2016 Section 5 Looking ahead Section 6 Activity of the Board and Committees Section
Slide 11: The resolution scope
Progress on strategic objectives The resolution scope Simplified Group structure Organigram Dexia SA 100% CEO Karel De Boeck Dexia Crédit Local (incl. branches in New York and Dublin) General 70% Funding & Secretary, Dexia Crediop Finance Assets Risk Markets Legal & Conformity Pierre Claude Piret Jo
Slide 12: A clear mission translated into three strategic objectives
Progress on strategic objectives A clear mission translated into three strategic objectives Manage the balance sheet wind-down while protecting the interests of the Group’s State shareholders and guarantors Strategic priorities 1 Secure the Group’s liquidity 2 Preserve the Group’s solvency 3 Ensure
Slide 13: Significant progress towards a more balanced funding profile
Progress on strategic objectives Significant progress towards a more balanced funding profile Significant increase of market funding EC Plan vs. realisations (2012-2015, % type of funding) Central bank funding 10% 24% -62% 11% 15% EUR 42 Bn 37% Eurosystem funding Other unsecured funding 29% Guarante
Slide 14: Higher CET1 ratio than anticipated
Progress on strategic objectives Higher CET1 ratio than anticipated Robust solvency despite regulatory changes EC Plan vs. realisations (2011-2015, CET1 ratio) CET1 ratio 21.2% Basel III +220 bp Implementation 19.7% 16.2% 16.4% 15.9% 15.9% 13.7% Capital Increase 6.4% 2015 in 2015 original Realised E
Slide 15: Make Dexia Crédit Local whole again
Progress on strategic objectives Make Dexia Crédit Local whole again Major focus on the entity sales Progress on the definition of the Target Operating Model • Sale of Dexia’s commercial franchises: Dexia Bank Belgium, Banque Internationale à Luxembourg, DenizBank, SFIL, As from 2013 : Dexia Asset M
Slide 16: Regulatory and prudential evolutions
Progress on strategic objectives Regulatory and prudential evolutions Strategic priorities 1 Secure the Group’s liquidity 2 Preserve the Group’s solvency 3 Ensure operational continuity In order to achieve its strategic priorities; recognition of Dexia’s unique and specific situation by the European
Slide 17: Agenda
Annual Shareholders Meeting Agenda Section 1 Fundamentals of the orderly resolution Section 2 Progress on strategic objectives Section 3 Tangible reduction of the systemic risk Section 4 Financial results 2015 and Q1 2016 Section 5 Looking ahead Section 6 Activity of the Board and Committees Section
Slide 18: Decrease of the Group's footprint
Tangible reduction of the systemic risk Decrease of the Group’s footprint Most important entities sold Balance sheet and derivatives Dexia Bank Belgium 2011 Total balance sheet 31/12/2012 31/12/2015 Banque Internationale à Luxembourg -127 bn RBC Dexia Investor Services 2012 DenizBank EUR 357 bn EUR
Slide 19: Reduction of the dependency to the Eurosystem
Tangible reduction of the systemic risk Reduction of the dependency to the Eurosystem European Central Bank funding Significant decrease of Central Bank funding EUR Billion • Central Bank funding down EUR 34 bn over the 50.1 EUR -34 bn period 2012 - 2015 • Exit from derogatory own used government gu
Slide 20: Reduction of the risk for the States
Tangible reduction of the systemic risk Reduction of the risk for the States Recourse to State guaranteed funding EUR Billion 31/12/2012 31/12/2013 31/12/2014 17/02/2015 31/12/2015 82.0 75.4 73.7 73.0 61.3 • Recourse to State guaranteed funding reduced by EUR ~12 bn since 2012 • State guaranteed fun
Slide 21: Active desensitisation of sensitive structured loans to local authorities
Tangible reduction of the systemic risk Active desensitisation of sensitive structured loans to local authorities in France Evolution of sensitive structured loans1 Desensitisation of a large share of structured loans • Reduction of outstanding of sensitive structured Outstanding (EUR M) Number of c
Slide 22: Agenda
Annual Shareholders Meeting Agenda Section 1 Fundamentals of the orderly resolution Section 2 Progress on strategic objectives Section 3 Tangible reduction of the systemic risk Section 4 Financial results 2015 and Q1 2016 Section 5 Looking ahead Section 6 Activity of the Board and Committees Section
Slide 23: FY 2015 – Income Statement
Results FY 2015 and Q1 2016 FY 2015 – Income Statement Net result Group share EUR +163 million Recurring elements EUR -328 million Accounting volatility elements1 EUR +516 million Non-recurring elements EUR -24 million A 2015 net result Group share showing : • Progressively improving fundamentals, a
Slide 24: FY 2015 – Analytical presentation
Results FY 2015 and Q1 2016 FY 2015 – Analytical presentation Evolution of the net income Group share EUR Million • Net recurring income negatively impacted 300 by cost of risk and new levies in 2015, offsetting the constant decrease in funding costs since 2014 200 129 • Very positive contribution o
Slide 25: FY 2015 – Focus on the net recurring income
Results FY 2015 and Q1 2016 FY 2015 – Focus on the net recurring income Funding costs (EUR million) Evolution of the net recurring income 0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 -50 EUR Million 150 -100 -150 -135 -138 100 -151 -144 -160 -159 -168 -200 -184 50 0 -28 Cost of
Slide 26: FY 2015 – Focus on the accounting volatility elements
Results FY 2015 and Q1 2016 FY 2015 – Focus on the accounting volatility elements Evolution of the accounting volatility elements Extreme sensitivity to market parameters EUR Million 400 • Accounting volatility elements consisting of CVA, DVA, OCR and hedge accounting & 300 inefficiencies 190 200 •
Slide 27: FY 2015 – Balance sheet
Results FY 2015 and Q1 2016 FY 2015 – Balance sheet Evolution of the balance sheet – asset side EUR Billion + 21 - 38 268 Bn 247 Bn 241 Bn 15 238 Bn 230 Bn 9 14 10 67 10 58 52 56 52 37 43 36 37 37 143 143 139 136 132 31/12/2014 31/03/2015 30/06/2015 30/09/2015 31/12/2015 Bonds and loans Cash collate
Slide 28: FY 2015 – Solvency
Results FY 2015 and Q1 2016 FY 2015 – Solvency Evolution of the CET1 ratio, CET1 capital and weighted risks CET1 ratio Basel II Basel III 21,2 % 16,2 % 16,4 % 15,9 % 11 56,3 58,0 EUR Billion 10,1 56,0 10 53,4 9,1 54,0 8,7 51,4 RWA 9 52,0 8,2 50,0 8 47,3 CET1 48,0 capital 46,0 7 44,0 6 42,0 31/12/201
Slide 29: Q1 2016 – Income Statement
Results FY 2015 and Q1 2016 Q1 2016 – Income Statement Net result Group share EUR -55 million Recurring elements EUR -90 million Accounting volatility elements1 EUR -14 million Non-recurring elements EUR +48 million • Recurring elements negatively impacted by two elements: − Booking of EUR -72 milli
Slide 30: Q1 2016 – Balance sheet and solvency
Results FY 2015 and Q1 2016 Q1 2016 – Balance sheet and solvency Evolution of the balance sheet - assets EUR Million Increase in total balance sheet by EUR 7.2 billion 230.3 +7.2 237.5 in Q1 2016 • Impact of decrease in interest rates over the +6.3 quarter on derivatives & elements at fair value (EU
Slide 31: Agenda
Annual Shareholders Meeting Agenda Section 1 Fundamentals of the orderly resolution Section 2 Progress on strategic objectives Section 3 Tangible reduction of the systemic risk Section 4 Financial results 2015 and Q1 2016 Section 5 Looking ahead Section 6 Activity of the Board and Committees Section
Slide 32: Asset reduction progressing steadily over a long time horizon
Looking ahead Asset reduction progressing steadily over a long time horizon Projected evolution of the balance sheet For illustration only Achieved Forecasts1 • Long term resolution as the least expensive option for the States and tax payers and the least risky for the banking sector and European ec
Slide 33: Projected Common Equity Tier 1 ratio
Looking ahead Projected Common Equity Tier 1 ratio Indicative consolidated CET 1 ratio1 For illustration only 22% 22.4 % 180 21% (Basel II) 170 20% IFRS 9 first 160 19% 150 18% 17.2 % application 17% 15.9 % 140 16% 130 15% 120 14% 110 13% 12% 100 11% 10.50% 90 10% 80 9% 8.625 % 70 8% 8.00% 60 7% 6%
Slide 34: Sensitivities of the orderly resolution plan projections
Looking ahead Sensitivities of the orderly resolution plan projections Sizable asset portfolio with long-dated maturity profile Financial markets Macro-economic context • Reduced appetite for secured and • Lower interest rates guaranteed funding • Deterioration of credits • Volatility of market para
Slide 35: Agenda
Annual Shareholders Meeting Agenda Section 1 Fundamentals of the orderly resolution Section 2 Progress on strategic objectives Section 3 Tangible reduction of the systemic risk Section 4 Financial results 2015 and Q1 2016 Section 5 Looking ahead Section 6 Activity of the Board and Committees Section
Slide 36: Regular meetings
Activity of the Board and Committees Regular meetings Number of meetings • Topics regularly dealt with by the board of directors and the specialised committees: 2009 2010 2011 2012 2013 2014 2015 - the execution of the revised orderly resolution plan and commitments of the States towards the Board o
Slide 37: New corporate governance
Activity of the Board and Committees New corporate governance January 1, 2016: Simplification of the governance • Merger of the Management board and the executive committee of Dexia SA • Identical composition of the Management board of Dexia SA and the one of Dexia Crédit Local • New Chief Risk Offi
Slide 38: Implementation of the Reverse Stock split of the Dexia SA shares
Activity of the Board and Committees Implementation of the Reverse Stock split of the Dexia SA shares • Wish to rationalise the number of shares in circulation to take account of the price evolution observed over recent years, as well as the extremely low price (EUR 0,04 on 27 January 2016) • Follow
Slide 39: Agenda
Annual Shareholders Meeting Agenda Section 1 Fundamentals of the orderly resolution Section 2 Progress on strategic objectives Section 3 Tangible reduction of the systemic risk Section 4 Financial results 2015 and Q1 2016 Section 5 Looking ahead Section 6 Activity of the Board and Committees Section
Slide 40: Human resources policy
Human resources Human resources policy Human resources challenges To keep qualified and experimented 1 members of staff to manage the balance- sheet in run-off 2 To improve the perception of the general interest mission To drive HR actions given 3 the particular challenges of a company in run-off 40
Slide 41: 2015 compensation report
Human resources 2015 compensation report • Implementation of the 2014 decisions in the compensation of the Directors - Harmonisation of the compensation between the Directors of Dexia SA and the ones of Dexia Crédit Local - Re-assessment of the compensation of the president of the audit committee -
Slide 42: Agenda
Annual Shareholders Meeting Agenda Section 1 Fundamentals of the orderly resolution Section 2 Progress on strategic objectives Section 3 Tangible reduction of the systemic risk Section 4 Financial results 2015 and Q1 2016 Section 5 Looking ahead Section 6 Activity of the Board and Committees Section
Slide 43: Dexia, more resilient in 2016 than in 2012
Achievements of the period 2012-2016 Dexia, more resilient in 2016 than in 2012 Reduction of asset portfolio Decrease in recourse to Reduction of State guarantee derivative portfolio Reduction of systemic risk Repayment of represented Simplified governance outstandings subscribed by Dexia by Belfius
Slide 44: Dexia Group Annual Shareholders Meeting
Dexia Group Annual Shareholders Meeting Brussels, May 18th 2016