Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Investor Presentation (June 2004)
54 slides from Dexia Holding SA's investor presentation, June 2004
Slide 1: World Leader of Public Finance - General Presentation
World Leader of Public Finance General Presentation June 2004
Slide 2: Contents
Contents ! Dexia within the Local Public Finance Market ! Group Financial Performances and Objectives ! Business Lines ! Appendices 2
Slide 3: Dexia within the Local Public Finance Market
Part One Dexia within the Local Public Finance Market
Slide 4: The main markets of Local Public Finance
The main markets of Local Public Finance LT Debt O/S: ≈1,600 Bn€ ≈500 Bn€* ≈1,500 Bn€ Bond Bank Loans Bond Market Access: Market & Bond Market & Bank Loans * Local Authorities only 4 Group
Slide 5: The Players
The Local Public Finance Market The Players Liability Driven Asset Driven Domestic Savings L.T. lending Intermediated Banks institutions Dexia Bank Dexia Crédit Local Arrangers Dexia Public Capital Markets Disintermediated (Municipal Bond Market) Bond Investors Insurers Dexia Municipal Agency Dexia
Slide 6: Market constituents – Clients’ expectations - Products
Market constituents – Clients’ expectations - Products Market constituents Clients’ expectations ! Municipalities ! Funding ! Regions ! Long lasting relationship ! Social Housing Institutions ! Assistance to Financial/Budget management ! Health care institutions ! Access to capital markets solutions
Slide 7: Dexia’s volume growth outperformed the market’s
Dexia’s volume growth outperformed the market’s Europe USA LT Loans O/S Muni Bonds insured O/S 1,763 Bn$ CAGR: +4.9% p.a. 1,262 Bn$ CAGR: +1.3% p.a. 493 Bn€ 451 Bn€ 1996 1997 1998 1999 2000 2001 2002 1996 1997 1998 1999 2000 2001 2002 Gr oup 201 Bn$ CAGR: +23.2% p.a. CAGR: +8.3% p.a. 129 Bn€ 79 Bn€
Slide 8: Key business model features
Key business model features ! Solvency of borrowers " Low risk asset weighting " Narrow margins " Low cost of risk ! Long Term " Annuity building business " Low revenue volatility ! Importance of Funding " High credit ratings needed ! Differential advantages " A “volume” business " Innovation: new p
Slide 9: History: In 1996 CCB and CLF combined into Dexia
History: In 1996 CCB and CLF combined into Dexia Crédit Communal de Belgique (CCB) Crédit local de France (CLF) Lendings to local public authorities LT Lendings to local Retail loans Retail public LT Bonds Customer authorities Issues Deposits Bond Portfolio Bond Portfolio assets liabilities assets l
Slide 10: Dexia Primary Franchise …
Dexia Primary Franchise … Assets Liabilities Retail Deposits Public/Project Finance Triple A Funding 10
Slide 11: … has been enlarged over the years
… has been enlarged over the years # Private banking # Asset management # Muni bonds # Fund administration # ABS rv me t Se age en s t ic e n m an st M ve In En Cre ce ha nc dit ran em ssu en n ca t Ba Public/Project Finance Retail Deposits Tre ial he as c a n to t r Fin ury in a a F es c to Ma nc i
Slide 12: Business Portfolio in 2003
Business Portfolio in 2003 Segment contributions* Net Income 2003: 1,431 M€ 13% 51% 19% 17% Public/Project Finance & Credit Enhancement Investment Management Services Retail Financial Services Treasury and Financial Markets * Excluding nonrecurring items 12
Slide 13: Main Business Aggregates (at 31.12.03)
Main Business Aggregates (at 31.12.03) Bn€ $ LT Loans and bonds to Public Institutions 174 $ LT Corporate and Project Finance 15 assets $ ST Loans 12 $ Retail Loans 26 Balance $ Credit Spread Portfolio* 39 Sheet $ Retail and Private Deposits 64 liabilities $ Institutional clients Deposits 45 $ Long
Slide 14: Financial Performances and Targets
Part Two Financial Performances and Targets
Slide 15: A different business model
A different business model Dexia Group of 9 European banks* 1,000 1,000 Customer Loans (1,000 basis) 658 955 Risk Weighted Assets B/S 570 1,068 Customer deposits 4 35 Non Performing Loans 1,000 1,000 Revenues (1,000 basis) 592 623 Costs P&L 34 89 Cost of risk 293 204 Net income before minorities * B
Slide 16: Return On Risk-Weighted Assets (RORWA)
Return On Risk-Weighted Assets (RORWA)* 2% 1.51% 1.50% 1.39% 1.40% 1.54% 1.30% 1.18% 1.32% 1.29% 1.23% 1% 1.12% 1.01% 0% 1998 1999 2000 2001 2002 2003 Dexia Peer Group ** * The ratio between the net income including minority interests and the average risk-weighted assets. ** Peer Group: Abn-Amro, Ba
Slide 17: 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 * Excluding impact of charges for Legiolease at Dexia Ban
Slide 18: Cost/Income Ratio (%)
Cost/Income Ratio (%) 59.0 58.9 59.2 Objective 54.8 ≤ 54.0 53.9 1999 2000 2001 2002 2003 2006 18
Slide 19: ROE
ROE Objective ROE 18.7% 17.7% 18.0% 16.2% 16.5% 15.7% 14.0% 12.9% 13.2% Tier One Ratio 11.2% 9.5% 10.2% 9.9% 9.6% 9.0% 9.3% 9.3% 9.3% 9.0% 1996 1997 1998 1999 2000 2001 2002 2003 2006 19
Slide 20: Earnings per Share (€)
Earnings per Share (€) Objective 1.70 CAGR: CAGR: +9.4 +9.4%%p.a. 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 2006 20
Slide 21: Dividend per Share
Dividend per Share (€) CAGR: CAGR: +10.5 +10.5%%p.a. 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 Dexia France Dexia Belgium Dexia 21
Slide 22: Summary of 2003 P&L
Summary of 2003 P&L Evolution of underlying * E volution of (M€) 2002 2003 ! * at constant underlying rate of exchange Reven ues # Net Interest and Related Incom e 3,422 3,429 0.2% # Net Com m issions an d Other Incom e 1,015 992 -2.3% # Technical & Financial M argin / Insurance 720 739 2.6% Total R
Slide 23: Business Lines
Part Three Business Lines
Slide 24: Public/Project Finance & Credit Enhancement
Public/Project Finance & Credit Enhancement This segment covers: • Municipal Finance • Project Finance • Structured Finance • Corporate Lending • Credit Enhancement 51% Net underlying* Income 2003: 783 M€ * Excluding nonrecurring items 24
Slide 25: Geographical origin of net income
Geographical origin of net income* USA Europe (FSA + NY branch) 39% 60% Dexia NY • Long and short-term • Liquidity Facilities financing to the public sector 1% • Project Finance Other • Other financial services to the • Bond portfolio public sector FSA • Credit Enhancement – Muni • Project Finance a
Slide 26: Public and Project Finance: Revenue metrics
Public and Project Finance: Revenue metrics In & off B/S outstandings* Net interest margin** Bn€ 201 170 200 184 24 160 Short Term 150 167 19 15 140 17 13 Other LT 130 150 140 162 133 4 14 152 120 4 11 110 10 136 Public Sector 125 100 Long Term 119 90 100 80 59 bp 58 bp 70 54 bp 53 bp 53 bp 60 50 50
Slide 27: Growth of outstandings stems from new markets
Growth of outstandings (banking activities) stems from new markets CAGR 2000-2003 (Bn€) +9.3% 184.7 171.8 24.1 +26.5% 154.4 21.1 141.3 17.4 11.9 USA 77.1 69.9 53.4 57.5 +13.0% Other Countries France+ 76.0 79.5 80.8 83.6 +3.2% Belgium 2000 2001 2002 2003 27
Slide 28: FSA: Revenue metrics
FSA: Revenue metrics Net Par Outstanding Margin* Bn$ 290 300 110 263 119 100 250 126 90 217 80 200 111 70 ABS 154 60 150 130 Muni 67 50 51 40 100 30 20 bp 17 bp 18 bp 18 bp 18 bp 20 50 10 79 87 106 137 171 0 0 1999 2000 2001 2002 2003 * Total revenues (excluding GICs revenues and net realized and un
Slide 29: FSA’s credit enhancement: a high growth business
FSA’s credit enhancement: a high growth business Net Par outstanding* CAGR 1996-2003 (Bn$) 290 +25.5% International Asset- Backed Obligations 263 38 +67.3% 34 6 +30.0% International Municipal Obligations 217 5 U.S. Asset-Backed 25 82 +20.4% Obligations 3 92 U.S. Muni Obligations 154 13 86 130 2 7 1
Slide 30: Public/Project Finance & Credit Enhancement: 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 31: Retail Financial Services
Retail Financial Services Net underlying* Income 2003: 286 M€ 19% * Excluding nonrecurring items 31
Slide 32: Dexia Bank Belgium: a key player in asset gathering
Dexia Bank Belgium: a key player in asset gathering Dexia Bank alone Dexia Bank + Artesia 82 80 79 6 7 6 Bn€ 18 18 19 57 59 2 53 2 49 1 13 12 6 9 56 55 56 22 22 23 43 43 44 45 7 7 7 11 13 14 9 4 5 2 3 15 15 16 7 8 9 9 Dec.1997 Dec.1998 Dec.1999 Dec.2000 Dec.2001 Dec. 2002 Dec.2003 Loans to Professio
Slide 33: Domestic market shares in Belgium
Domestic market shares in Belgium (as of Dec. 2003) Savings bonds Savings accounts Mutual funds Dexia market share: 25.9% 15.7% 17.1% Insurance* Mortgages Consumer loans Dexia market share: 9.2% 16.2% 15.6% * estimated 33
Slide 34: Merger of Dexia Bank and Artesia produces sizeable cost synergies
Merger of Dexia Bank and Artesia produces sizeable costs synergies in Retail Financial Services as well as in other divisions 200 (M€) 180 149 101 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 Retai
Slide 35: Number of branches
Number of branches -26% -26% target 1,483 1,283 1,099 940 889 895 543 394 204 2001 2002 2003 2004 2005 Employee Network Independent Agents Network 35
Slide 36: Retail Financial Services: 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 37: Investment Management Services
Investment Management Services 13% Net underlying* Income 2003: 204 M€ * Excluding nonrecurring items 37
Slide 38: Investment Management Services
Investment Management Services Segment contributions to the underlying Gross Operating Income (2003) 22% 35% Private/ Affluent Banking Dexia Nederland Asset Management Fund 21% Administration 22% 38
Slide 39: Recent evolution of the underlying Gross Operating Income
Recent evolution of the underlying Gross Operating Income Dexia Nederland Private and Affluent Banking (M€) 53 44 44 79 Revenues 40 74 74 72 74 35 Costs 56 56 55 58 56 23 24 22 22 20 Gross 30 Operating 22 23 Income 22 15 17 18 17 15 16 Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004 Q1 2003* Q2 2003* Q3
Slide 40: Private and Affluent Banking
Private and Affluent Banking* Total customers’ assets** : 28.0 Bn€ By geographical area By type of management Advisory Luxembourg Management Discretionary Management 40% 72% 19% 8% Belgium 9% 41% 7% 4% Switzerland Other Without France mandate *Excluding Dexia Nederland 40 **at Dec. 31, 2003
Slide 41: Dexia Asset Management
Dexia Asset Management Assets by type of management (Bn€) 60.9 62.2 55.1 Institutional Mandates 53.1 10.6 14.9 11.2 10.6 4.8 43.2 4.0 Private Clients Discretionary 4.1 Mandates 8.6 5.3 31.8 Mutual Funds (Ret & Instit.) 4.4 6.2 4.2 45.5 43.4 37.2 39.8 30.1 21.5 1998 1999 2000 2001 2002 2003 41
Slide 42: Fund Administration
Fund Administration Total assets under # of NAV to calculate in # of transactions (in custody (Bn€) the year (x 1000) millions) 5.38 329 5.24 301 297 303 314 4.67 272 159 151 149 Other** Other** Other** 146 154 142 Mandates Mandates Mandates to DFS* to DFS* to DFS* 12 12 12 Dec. Dec. Dec. Dec. Dec.
Slide 43: Investment Management Services: 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 44: Treasury and Financial Markets
Treasury and Financial Markets Net underlying* Income 2003: 263 M€ 17% * Excluding nonrecurring items 44
Slide 45: Missions and Key Figures
Treasury and Financial Markets Missions and Key Figures ! Missions ! Long and Short Term Funding ! Liquidity ! Financial Markets Desks (Forex, derivatives, equities, bonds…) ! In 2003 ! L.T. Debt Issued in 2003: 21.5 Bn€ ! CSP outstanding: 38.9 Bn€ ! S.T. Debt outstanding 2003: 38.8 Bn€ Credit Sprea
Slide 46: Capital Markets & Treasury Activities: 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 47: Appendices
Appendices
Slide 48: Dexia ranking in Euroland (market capitalisation)
Dexia ranking in Euroland (market capitalisation) 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
Slide 49: Profit Margin (2003)
Profit Margin * (2003) HVB Group Abbey National Allianz ** Deutsche Bank CA SA SP IMI Intesa ING Groep** SocGen ABN Amro KBC Average of 30 UBS first European Fortis ** Unicredito Banks Crédit Suisse AIB Standard Chartered RBOS Barclays BNP Paribas HSBC Nordea Dexia BBVA Santander HBOS Banco Popular
Slide 50: Credit Ratings of main subsidiaries
Credit Ratings of main subsidiaries S&P Moody’s Fitch Dexia Crédit Local AA Aa2 AA+ Dexia Bank Belgium AA Aa2 AA+ Dexia BIL AA Aa2 AA+ Dexia Municipal Agency AAA Aaa AAA FSA AAA Aaa AAA 50
Slide 51: Main Stock Indexes including the Dexia stock
Main Stock Indexes including the Dexia stock & Euronext 100 & CAC 40 & BEL 20 & FTSE Eurotop 100 & MSCI & Dexia is also included in 4 “Sustainable Growth” indexes: & DJ Sustainability Index “World”, & ASPI Eurozone, & FTSE 4 Good Europe & World, Ethibel Sustainability Index (ESI) 51
Slide 52: Shareholders’ base (at Dec. 31, 2003)
Shareholders’ base (at Dec. 31, 2003) Total number of shares outstanding: 1,175,222,680 15.3% Arcofin Holding Communal Groupe CDC 14.9% 49.5% Ethias (Formerly SMAP) Staff and Management 7.7% Treasury Shares 5.7% Others 2.8% 4.1% 52
Slide 53: Total Shareholder Return
Total Shareholder Return Value in € at 31/03/2004 of 1000 € invested* on November 20, 1996 on September 19, 1999 2,450 2,317 1,810 1,785 1,498 1,108 1,005 833 791 819 CAC 40 EuroStoxx50 BEL 20 EuroStoxx Dexia CAC 40 EuroStoxx50 BEL 20 EuroStoxx Dexia Banks Banks * With dividends reinvested 53
Slide 54: DEXIA
DEXIA 54