Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q1 2008 Earnings Presentation
77 slides from Dexia Holding SA's earnings presentation, May 14, 2008
Slide 1: Analysts' and Investors' Conference Call 1Q 2008 Results
short term has no future Analysts’ and Investors’ Conference Call 1Q 2008 Results Rembert von Lowis, Member of the Management Board May 14th, 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 Highlights 1Q 2008 Results Focus on the Credit and Financial Crisis Appendices 3
Slide 4: Highlights
Highlights Overall Dexia reported solid underlying earnings in 1Q08 Underlying revenues were up 5.2% yoy on a constant exchange rate Operating efficiency i mproved, with an underlying C/I ratio at 51.4% vs. 52.3% in 1Q07 Underlying cost of risk, excluding FSA, remained low at 5bp of banking co mmitm
Slide 5: Highlights (con't)
Highlights (con’t) Reported earnings (EUR 289 m, -60%yoy) were affected by a number of accounting effects An after tax EUR 216 m negative MtM adjustment on FSA insured CDS which is not expected to result in realized losses A EUR 36 m after tax risk charge on share leasing agreements (in 1Q07, to tal
Slide 6: Agenda
Agenda Highlights 1Q 2008 Results Focus on the Credit and Financial Crisis Appendices 6
Slide 7: PPFCE marked by Strong Activity; Challenging Financial Markets had a Negative Impact on Customer Assets
PPFCE marked by Strong Activity; Challenging Financial Markets had a Negative Impact on Customer Assets Over 12 months Public / Project • LT banking commitments + 20.4 % on a constant exchange rate Finance and Credit • Net par outstanding FSA (USD) + 11.0 % Enhancement Personal Financial • Customer
Slide 8: Resilient 1Q Underlying Operating Performance
Resilient 1Q Underlying(1) Operating Performance Variation (Underlying M EUR) 1Q 2007 1Q 2008 on a current on a constant exch ange rate exchang e rate Income 1,760 1,833 + 4.1 % + 5.2 % Expenses - 921 - 942 + 2.3 % + 3.3 % Gross operating income 839 891 + 6.2 % + 7.2 % Cost of risk - 26 - 236 x 9.1
Slide 9: Main MtM Effects on Underlying Revenues: Neutral Impact, at Group Level
Main MtM Effects on Underlying Revenues: Neutral Impact, at Group Level (Underlying M EUR) 3Q 2007 4Q 2007 1Q 2008 PPFCE TFM TFM – Fixed income trading books - 89 - 91 - 259 Ö 0 - 259 PPFCE – trading books -6 - 20 -5 Ö -5 0 Securitisation – related CDS +9 + 35 + 243 Ö + 119 + 124 FSA liabilities 0 +
Slide 10: 1Q Reported Net Income Affected by HELOCs and CES Losses, Insured CDS MtMs
1Q Reported Net Income Affected by HELOCs and CES Losses, Insured CDS MtMs, And Lower Other Non-ops (M EUR) 1Q 2007 1Q 2008 Variation reported reported Inco me 1,785 1,499 - 16.0 % * The EUR 431 m decrease comes from: Expenses - 926 - 942 + 1.7 % Gross op erating income 859 557 - 35.2 % ª Changes in
Slide 11: 1Q 2008 Affected by Temporary Negative MtMs of FSA's Insured CDS
1Q 2008 Affected by Temporary Negative MtMs of FSA’s Insured CDS Non-Operating items: impact on P&L (M EUR) 1Q 2007 1Q 2008 Income + 19 - 334 of which . capital gains + 28 +1 . MTM on FSA CDS -9 - 335 . interest DBNL +1 0 Expenses 0 0 Cost of risk (DBNL) +4 - 51 Tax expense + 69 + 133 of which . liq
Slide 12: FSA Takes a Hit; Cost of Risk on Banking Activities Remained at a Low Level
FSA Takes a Hit Cost of Risk on Bkg Activities Remained at a Low Level in basis points Credit enhancement (1) 29.0 (or 7.3 2.5 non annualized) 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 1Q0 8 annualized 12.2 (3) Banking activities (2) 9.8 (3) 7.8 6.6 6.4 5.7 (3) 5.1 (3)
Slide 13: Underlying EPS Decreased by 14.5%
Underlying EPS Decreased by - 14.5% 1Q 2007 1Q 2008 Variation C/I ratio 51.9 % 62.8 % C/I ratio underlying 52.3 % 51.4 % ROE (1) 21.0 % 7.8 % EPS (EUR) reported (2) 0.62 0.25 - 59.8 % underlying (2) 0.54 0.46 - 14.5 % (1) The annualized ratio between the net income– Group share and the weighted aver
Slide 14: Continued Financial Strength
Continued Financial Strength Variation 31/12/07 31/03/08 in 3 months Tier 1 ratio * 9.1% 11.2% - Tier 1 capital * (M EUR) 14,549 13,483 - Total weighted risks * (M EUR) 159,383 120,113 - Core shareholders’ equit y (M EUR) 16,112 16,188 + 0.5% Total shareholders’ equity (M EUR) 14,525 9,529 - 34.4% N
Slide 15: Public / Project Finance: Long-Term Commitments Continued to Increase Strongly
Long-Term Commitments(1) Continued to Increase Strongly Public / Project Finance Bn EUR + 16.0 % + 20.4 % on a cst. exch. rate 326.6 281.5 15 34 31 International headquarters 10 22 + 28% 24 27 12 Corporate Tomorrow growth markets + 55 % + 80% 1 63 1 44 Project Finance Growth markets + 26 % 278 245 +
Slide 16: Robust 1Q Long-Term Originations
Robust 1Q Long-Term Originations(1) Public / Project Finance Bn EUR + 47 % + 54 % on a cst. exch. rate 18.9 0.6 2.2 International headquarters - 58 % 1.8 5.0 Corporate 12.8 Tomorrow growth markets + 92 % +134 % 1.1 1.4 1.9 Project Finance 2.2 9.7 Growth markets -4 % 14.9 + 63 % 6.0 9.8 Historic mark
Slide 17: Credit Enhancement: Strong US Public Finance Originations at FSA
1Q 2008: Strong US Public Finance Originations at FSA Credit Enhancement FSA - Gross present value originations FSA - Ne t par outstanding M USD Bn U SD + 42.7 % + 11.0 % 282 20 434 18 391 18 30 197 47 30 17 28 Financial products 19 90 27 International ABS 14 87 29 International Public Finance 54 19
Slide 18: PPFCE's Earnings Performance Mitigated by US RMBS losses
PPFCE’s Earnings Performance Mitigated by US RMBS losses Public / Project Finance & Credit Enhancement Variation (Underlyin g M EUR) 1Q 2007 1Q 2008 on a current on a constant exchange rate exchange rate Income 681 839 + 23.2 % + 27.9 % Expenses - 225 - 236 + 5.1 % + 7.8 % Gross operating income 457
Slide 19: PPFCE, excluding FSA, Boosted by a Non Economic MtM Gain
PPFCE, excluding FSA, Boosted by a Non Economic MtM Gain Public / Project Finance & Credit Enhancement Variation PPFC E (U nderlying M EUR) 1Q 2007 1Q 2008 on a curre nt o n a co nstant excludin g FSA exch ange ra te e xchang e rate Income 553 708 + 28.2 % + 29.9 % Expenses - 193 - 210 + 8.8 % + 9.6
Slide 20: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Public / Project Finance & Credit Enhancement M EU R 839 708 695 718 681 603 Income 457 475 457 463 Gross operating income 255 Expenses 225 233 238 236 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2007 based on pro forma accounts 20
Slide 21: Personal Financial Services: Growth in All Loan Segments
Growth in All Loan Segments, Especially in Business Loans Personal Financial Services Bn EUR Customer loans + 12.6 % 37.8 38.4 34.1 5.1 4.9 Other loans 4.7 8.8 9.1 Business loans 7.5 2.4 Consumer loans 2.1 2.4 Mortgage loans 19.8 21.5 22.0 31/03/07 31/12/07 31/03/08 21 • Loans to customers totalled
Slide 22: Personal Financial Services: Stable Customer Assets Volumes
Stable Customer Assets Volumes Personal Financial Services Bn EUR Customer assets - 0.1% of which 133.7 136.0 133.5 Life insurance reserves 13.7 15.9 16.8 47.3 Private Banking Off-balance sheet assets 52.8 50.9 46.4 Balance sheet assets 86.2 67.2 69.3 70.3 Retail & SME Banking 31/03/ 07 31/ 12/07 31
Slide 23: 1Q 2008 Double Digit Earnings Growth and C/I Ratio Down
1Q 2008 Double Digit Earnings Growth and C/I Ratio Down by 2.5 Point Personal Financial Services Variation (Underlying M EUR) 1Q 2007 1Q 2008 on a current on a constant exchange rate exchange rate Income 656 720 + 9.8 % + 10.0 % Expenses - 450 - 477 + 5.9 % + 6.1 % Gross operating income 206 244 + 1
Slide 24: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Personal Financial Services M EU R 704 692 700 720 656 Income 476 498 477 450 465 Expenses 238 244 206 216 202 Gross operating income 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2007 based on pro forma accounts 24
Slide 25: Moderate Outflows in Asset Management
Moderate Outflows in Asset Management Asset Management Bn EUR Organic growth : - 0.3 % in one year Market e ffect : - 5.4 % in one year - 5.7 % 111.1 112.0 109.7 108.4 +0.7 +0.2 - 0.5 - 1.8 +1.4 +1.3 - 1.9 102.2 - 5.6 Net New Market Net New Market Cash effect Net New Market Cash effect Cash effect N
Slide 26: 1Q 2008 Earnings Impacted by Financial Crisis
1Q 2008 Earnings Impacted by Financial Crisis Asset Management Variation (Underlying M EUR) 1Q 2007 1Q 2008 on a current on a constant exchange rate exchange rate Income 69 58 - 14.9 % - 14.9 % Expenses - 36 - 38 + 4.2 % + 4.2 % Gross operating income 33 21 - 35.9 % - 35.9 % Cost of risk 0 0 n.s. Ta
Slide 27: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Asset Management M EU R 74 73 69 68 Income 58 45 39 39 38 Expenses 36 33 35 30 28 Gross operating income 21 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2007 based on pro forma accounts 27
Slide 28: Investor Services: Growth in All Activities
Growth in All Activities Investor Services Assets under administration(1) Number of shareholder Number of funds under administration accounts in transfer agent (Bn USD) (in thousands) + 12.0 % + 8.9 % + 17.2 % 2,882 5,1 34 5 ,249 7,832 2,72 0 7,645 4,81 9 2,428 6 ,6 85 31/03/07 31/12/07 3 1/03/08 31
Slide 29: Resilient Performance and Investments to Support Commercial Development
Resilient Performance and Investments to Support Commercial Development Investor Services Variation (Underlyin g M EUR) 1Q 2007 1Q 2008 on a current on a constant exchange rate exchange rate Income 99 105 + 6.9 % + 10.1 % Expenses - 66 - 73 + 11.3 % + 13.1 % Gross operating income 33 32 - 1.9 % + 4.
Slide 30: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Investor Services M EU R 112 112 103 105 99 74 76 73 Income 66 69 Expenses 43 33 36 29 32 Gross operating income 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2007 based on pro forma accounts 30
Slide 31: Primary Market Almost as Dynamic as 1Q07
Primary Market Almost as Dynamic as 1Q07 Treasury and Financial Markets Bn EUR LT debt issues AAA issues (>= 2 years) AA issues (>= 2 years) 6.2 5.9 2.8 2.9 1Q 2007 1Q 2008 1Q 2007 1Q 2008 31 • The Group Treasury long-term funding segment was quite active in the first quarter of 2008 despite challen
Slide 32: CSP Portfolio: Attractive Margins and Strong Quality of Risk
CSP Portfolio: Attractive Margins and Strong Quality of Risk Treasury and Financial Markets Bn EUR 8 4.9 + 2.3 - 3.6 New Repayments - 11.1 72 .5 investments & sales Including 10.6 hedged Transfer to PPFC E exposure (cf slide 55) 61.9 3 1/12 /07 31/0 3/08 32 • The Credit Spread Portfolio (CSP) totall
Slide 33: Negative MtM Adjustments Partly Offset by Record Earnings from Liquidity Management
Negative MtM Adjustments Partly Offset by Record Earnings from Management of Group’s Liquidity Treasury and Financial Markets Variation (Underlyin g M EUR) 1Q 2007 1Q 2008 on a current on a constant exchange rate exchange rate Income 217 122 - 43.8 % - 42.2 % Expenses - 52 - 56 + 6.8 % + 8.8 % Gross
Slide 34: Treasury: Record and Exceptionally High Quarter
Treasury: Record and Exceptionally High Quarter Treasury and Financial Markets Market Engineering Treasury Fixed Income (M EUR) and Trading 1Q 2007 1Q 2008 1Q 2007 1Q 2008 1Q 2007 1Q 2008 Income 83 172 96 - 55 38 5 Expenses - 17 - 18 - 17 - 20 - 19 - 18 Gross operating income 66 154 79 - 75 19 - 14
Slide 35: Quarterly Variation of the Underlying Net Income
Quarterly Variation of the Underlying Net Income – Group Share Treasury and Financial Markets M EU R 217 Income 194 145 125 120 122 95 Net income – Group share 57 60 Expenses 52 53 52 56 25 -22 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2007 based on pro forma accounts 35
Slide 36: Underlying Contribution of Central Assets
Underlying Contribution of Central Assets (M EUR) 1Q 2007 1Q 2008 Income + 39 - 12 Expenses - 92 - 63 Gross operating income - 53 - 75 Cost of risk -1 0 Tax expense + 29 + 22 Minority interests +9 + 10 Net income – Group share - 34 - 62 1Q 2007 based on pro forma accounts 36
Slide 37: Agenda
Agenda Highlights 1Q 2008 Results Focus on the Credit and Financial Crisis Appendices 37
Slide 38: Update On Current Financial Crisis – Wrap Up
Update On Current Financial Crisis – Wrap Up Credit risks: Excl. HELOCs and CES mortgages at FSA, little deterioration in asset quality Dexia applies a conservative risk underwriting policy Dexia and FSA stayed out of the ABS CD O market Projected losses on H ELOC s and C ES mortgages up materially
Slide 39: Agenda
Agenda Highlights 1Q 2008 Results Focus on the Credit and Financial Crisis Credit risk expo sure Accounting effects from the widening of credit spreads Funding Appendices 39
Slide 40: US First-Lien RMBS: FSA's Exposure is Generally Well Protected
US First-Lien RMBS: FSA’s Exposure is Generally Well Protected Credit risk exposure FSA published a comprehensive review of its US RMBS exposure on May 14, 2008. The slide book (“First Quarter 2008 Results and Business Profile”) is available on FSA website FSA’s first-lien RMBS transactions remain w
Slide 41: No Material Exposure to Highly Toxic CDOs of ABS
No Material Exposure to Highly Toxic CDOs of ABS Losses in HELOCs and CES Above Expectations Credit risk exposure FSA is the only major incumbent financial guarantor which avoided the ABS CDO market FSA’s second-lien RMBS transactions: projected losses up materially since last quarter Default rates
Slide 42: Coverage of HELOC: Projected Weighted Average Future Pool Loss of 27%
Coverage of HELOC: Projected Weighted Average Future Pool Loss of 27% Credit risk exposure 42 • As insurer of a structured finance transaction, FSA is not required to fund all of the projected pool losses; the transaction structure provides much of the support. • FSA projects weighted average future
Slide 43: Coverage of Alt-A CES: Projected Weighted Average Future Pool Loss of 56%
Coverage of Alt-A CES: Projected Weighted Average Future Pool Loss of 56% Credit risk exposure 43 • As insurer of a structured finance transaction, FSA is not required to fund all of the projected pool losses; the transaction structure provides much of the support. • FSA projects weighted average fu
Slide 44: HELOC and CES Related Losses: Effect on Financial Statements
HELOC and CES Related Losses Effect on Financial Statements FSA FSA’s total projected net PV losses for second-lien mortgage transactions is USD 420 m, USD 333 m for HELOCs and USD 87 m for Alt-A CES To cover projected loss, FSA allocated USD 120 m from its non-specific reserve (USD 65 m in 2007 and
Slide 45: FSA to Discontinue Some Activities And to Further Leverage its Unique Position
FSA to Discontinue Some Activities And to Further Leverage its Unique Position in Public & Infrastr. Finance Credit risk exposure FSA's losses in H ELOC and CES sectors are far out of scale to historic loss expectations. Management has already decided to eliminate these areas of business and any oth
Slide 46: Excluding FSA, Dexia's Exposure And Risks to US RMBS Are Minimal
Excluding FSA, Dexia’s Exposure And Risks to US RMBS Are Minimal Credit risk exposure Credit exposure at Dexia, excluding FSA, on US non prime RMBS amounted to EUR 199 m, o/w EUR 164 m rated AAA, EUR 14 m rated AA and EUR 21 m rated BB Exposure concentrated within Dexia’s Credit Spread Portfolio Dex
Slide 47: Monolines: No Material Losses Expected
Monolines: No Material Losses Expected Credit risk exposure Dexia provides on its website a comprehensive review of assets which benefit from a guaranty or re-insurance provided by Monolines Unlike most banks, Dexia discloses notional amounts Unlike most banks, Dexia did not buy protection directly
Slide 48: No Commitments to Off-balance Sheet SIVs and Conduits
No Commitments to Off-balance Sheet SIVs and Conduits Credit risk exposure Dexia has no liquidity commitments to any off-balance sheet SIV or conduit Dexia has no net credit exposure to SIVs Group off-balance sheet commitments mainly refer to the financing of high quality US municipal bonds and do n
Slide 49: Agenda
Agenda Highlights 1Q 2008 Results Focus on the Credit and Financial Crisis Credit risk expo sure Accounting effects from credit spread widening Funding Appendices 49
Slide 50: The Widening of Credit Spreads Had Significant Impacts on Accounts but Little Economic Relevance
The Widening of Credit Spreads Had Significant Impacts on Accounts but Little Economic Relevance Accounting effects from credit spread widening Impact on IFRS total shareholders’ equity: Accumulated OCI decreased by 5.1 bn…… slide 51 Impact (1): Financial Product Portfolio………………………………………………… slide 5
Slide 51: Negative Fixed Income Accumulated OCI: No Impact on group solvency and cash flows
Negative Fixed Income Accumulated OCI: No Impact on group solvency and cash flows Accounting effects from credit spread widening – Impact on Equity Accu mulated OCI No impact on regulatory capital EUR M 1,863 Dec. 2007 Mar. 2008 Mar. 2007 AFS r eser ves of Fixed income por tfolio ar e negative -1,58
Slide 52: FSA's Financial Products Portfolio is Invested in Highly Rated RMBS
FSA’s Financial Products Portfolio is Invested in Highly Rated RMBS Accounting effects from credit spread widening – Impact on Equity (1) FP - Invested Assets by Se ctor FP – Invested Asse ts by rating USD 18.8 Bn (*) USD 18.8 Bn (*) Option A rm RMBS, $0.9 Other A BS, $0.4 Fed Funds PFI / Regulated
Slide 53: FSA's FP Portfolio Contributed to Group Accumulated OCI Erosion
FSA’s FP Portfolio Contributed to Group Accumulated OCI Erosion Accounting effects from credit spread widening – Impact on Equity (1) FP Portfolio Accu mulated OCI (U SD m) – after tax Source of Negative Mark-to- Market Example of subprime MBS volatility (Scale= 0-450 bps) Bal a nce Mov em e nt Bal
Slide 54: FSA's FP Negative Marks Will Revert Over Time
FSA’s FP Negative Marks Will Revert Over Time Accounting effects from credit spread widening – Impact on Equity (1) Financial Products MtM Reversal assu ming no change in market spreads (USD M) (*) (*) After-tax loss of 2,455 m As of 31/3/08 (US GAAP basis) 54 • Assuming no change in credit spreads
Slide 55: Credit Spread Portfolio: A Buy and Hold Model
Credit Spread Portfolio: A Buy and Hold Model which Benefits from its High Quality Orientation Accounting effects from credit spread widening – Impact on Equity (2) CSP – Asse t class breakdown CSP – Rating breakdown EUR 61.9 Bn credit ex posure and EUR 10.6 Bn hedged EUR 61.9 Bn credit ex posure AA
Slide 56: CSP Accumulated OCI Became Negative With Widening Spreads
CSP Accumulated OCI Became Negative With Widening Spreads – No Credit Deterioration Accounting effects from credit spread widening – Impact on Equity (2) AFS Reserves declined but credit quality remains very strong CSP – Accu mulated OCI (pre-tax) CSP – 1 Q08 Change in Acc. OCI (pre-tax) EUR m Cover
Slide 57: Public Finance Bond Denominated Exposure also Contributed to OCI Changes
The Public Finance Bond Denominated Exposure also Contributed to OCI Changes – No Credit Deterioration Accounting effects from credit spread widening – Impact on Equity (3) Part of the Public Finance Business is operated in Bond Format Public Finance Bond denominated Exposure Public Finance Bond den
Slide 58: FSA's Insured CDS: Very High Quality Assets
FSA’s Insured CDS: Very High Quality Assets Accounting effects from credit spread widening – Impact on P&L (1) FSA’s Insured Transactions Subject to MtM Transactions Subject to MtM by Rating (1) CLOs BIG A & BBB 1 .0% 36.1% 0 .3% AA 8.2 % CDOs European 4.2% MBS Sup er AAA 4.7% 61.0% AAA Regulat ory
Slide 59: FSA's Insured CDS MtM: Pricing Principles
FSA’s Insured CDS MtM: MtM Pricing Principles for Insured Credit Default Swaps Accounting effects from credit spread widening – Impact on P&L (1) Consistent with U.S. GAAP and IFRS accounting principles, FSA’s mark-to-market pricing methodology for guaranteed CDS derives market premium rates that: a
Slide 60: FSA's Insured CDS MtM: USD m Negative Marks in 1Q08
FSA’s Insured CDS MtM: USD 491 m Negative Marks in 1Q08 Accounting effects from credit spread widening – Impact on P&L (1) Pricing categories and pre-tax impact on P&L Pooled CDOs and European Regul atory Corporate CDS CLOs MBS Capital Other Total(3) 36.9 33.2 3.8 4.0 4.3 82.2 Net Par O/S ($ Bn) Net
Slide 61: FSA's Insured CDS Negative Marks to Reverse Over Time
FSA’s Insured CDS Negative Marks to Reverse Over Time Accounting effects from credit spread widening – Impact on P&L (1) Insured CDS MtM Re versal USD M, at 31/3/08 credit spread (1) (1) After tax negative mark of USD 648 M, as of 31/3/08 61 • Given the strong credit quality of FSA’s risks and its i
Slide 62: CSP Trading Portfolio – Negative Marks Expected to Be Recouped
CSP “Trading” Portfolio – Negative Marks Expected to Be Recouped Over Time Accounting effects from credit spread widening – Impact on P&L (2) CSP “trading” portfolio (EUR 4.55 Bn or 6 % of CSP Portfolio) CSP “ Trading” Portfolio breakdown Iboxx ABS 50 % 99 other ABS 98.5 all AAA 98 97.5 97 96.5 96 9
Slide 63: Agenda
Agenda Highlights 1Q 2008 Results Focus on the Credit and Financial Crisis Credit risk expo sure Accounting effects from credit spread widening Funding Appendices 63
Slide 64: Funding Capabilities Are Strong
Funding Capabilities Are Strong Funding Strong short-term liquidity positions Long-term funding: a very modest increase in the cost of funding Swaps Covered Bonds 5 years (spreads over Euribor) 90 Public Pfa ndbriefe 10 Y Cedula s 10 Y 80 UK CB 1 0Y 70 Dex iaMA 3.875 % 24 Nov 16 OF 10Y 60 Dex iaMA 4
Slide 65: Agenda
Agenda Highlights 1Q 2008 Results Focus on the Credit and Financial Crisis Appendices FSA DenizBank Insurance Activities Dexia Bank Nederland 65
Slide 66: FSA: Operating Results
Operating Results FSA (M USD) 1Q 2007 1Q 2008 US GAAP – Net Income (as reported by FSA) 85 - 422 Fair value adjustm ents for insured CDS + 8.6 + 318.0 Other fair value adjustments 0 + 7.3 IFRS A djustments + 1.2 - 2.7 IFRS – Operating Earnings 95 - 99 CDS M tM - 8.0 - 332.6 Credit ris k of liabiliti
Slide 67: Negative Contribution to PPFCE Earnings Due to HELOCs and CES Mortgages Losses
Negative Contribution to PPFCE Earnings Due to HELOCs and CES Mortgages Losses FSA Contribution of FSA to PPFCE Variation (Underlying M EUR) 1Q 2007 1Q 2008 on a current on a constant exchange rate exchange rate Income 129 131 + 1.6 % + 17.9 % Expenses - 32 - 26 - 17.6 % - 4.3 % Gross operating inco
Slide 68: Incidence of MTMs on the CDS Portfolio
Incidence of MTMs on the CDS Portfolio FSA M EUR Quarterly incidence of the MTM / CDS portfolio (income) 1Q 07 2 Q 07 3Q 0 7 4Q 07 1Q 08 -9 -34 -215 -203 -335 68
Slide 69: 1Q 2008: Strong US Public Finance Originations at FSA
1Q 2008: Strong US Public Finance Originations at FSA FSA USD M FSA – Gross present value originations 537 Financial products 318 282 International ABS 218 International Public Finance 197 U.S. ABS U.S. Public Finance 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 69
Slide 70: DenizBank: Another Good Set of Results
Another Good Set of Results DenizBank Variation (M YTL) 1Q 2007 1Q 2008 on a current on a constant exchange rate exchange rate BRSA GAAP – Net Income (as reported by DenizBank) 81 85 + 4.7 % IFRS (as reported by DenizBank) 81 87 + 8.4 % Adjustments due to various factors 1 1 Underlying IFRS (as repo
Slide 71: DenizBank: Quarterly Earnings
Quarterly Earnings DenizBank Contribution of DenizBank to Dexia Variation (Underlying M EUR) 1Q 2007 1Q 2008 on a current on a constant exchange rate exchange rate Income 137 170 + 24.5 % + 26.2 % Expenses - 77 - 100 + 29.1 % + 30.9 % Gross operating income 59 70 + 18.5 % + 20.1 % Cost of risk - 10
Slide 72: Insurance Activities: Very High Level of Commercial Activity
Very High Level of Commercial Activity Insurance Activities M EU R 1,786 1,775 98 140 146 61 1,010 1,048 Non life 108 925 131 104 Life Branch 23 95 109 1,530 1,585 66 Life Branch 21 784 831 754 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 Gross written premiums 1Q 2008: EUR 1,786 m + 76.8 % on 1Q 2007 7%
Slide 73: Insurance Activities: Net Income Flat Versus 1Q07
Net Income Flat Versus 1Q07… Insurance Activities 1Q 2008 underlying net income - Group share: EUR 47 m - 1.8 % versus 1Q 2007 By business lines Geographically By type 14% 27% 2% 0% 10% 88% 73% 86% Be lgiu m Fra nce PFS PPFCE L uxembo urg Turkey Life No n life 73
Slide 74: Driven by Lower Life Results and Higher Non-life Results
… Driven by Lower Life Results and Higher Non-life Results (better tech. results) Insurance Activities Underlying P &L (M EUR) 1Q 2007 1Q 2008 Variation Revenues 103 111 + 7.5 % of which Financial revenues 170 170 - 0.1 % Net interest & dividend income 110 142 + 28.5 % Net trading inc. & net inc. on
Slide 75: Attributable to both PPFCE & PFS
… Attributable to both PPFCE & PFS Insurance Activities Underlying contribution of DIS to PPFCE (M EUR) 1Q 2007 1Q 2008 V ariation Revenues 14 13 - 2.0 % Expenses -7 -6 - 7.0 % Gross operating income 7 7 + 3.1 % Taxes and other -0 -0 n.s. Net income – Group share 6 7 + 2.7 % Underlying contribution
Slide 76: Evolution of the Share Leasing Portfolio Outstanding
Evolution of the Share Leasing Portfolio Outstanding Dexia Bank Nederland M EUR 843 Total 450 661 Of which Of which Of which 296 contracts not proposed with Accepted an or not capital agreement accepted 255 487 463 450 repayments an agreement 149 101 105 303 44 0 21 342 250 243 270 113 194 34 10 7 1
Slide 77: Share Leasing – Evolution of the Stock of Provision
Share Leasing – Evolution of the Stock of Provision Dexia Bank Nederland M EUR 350 -5 Cost of risk (reversal) - 50 295 +8 106 - 23 280 +3 269 Utilizations Cost of risk - 20 + Utilizations Cost of risk + 51 adjustments 90 (reversal) + (allocati on) - 45 238 Utilizations adjustments 91 + Utilizations