Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — FY2006 Earnings Presentation
58 slides from Dexia Holding SA's earnings presentation, Mar 1, 2007
Slide 1: Analysts' Meeting Q4 and Full Year 2006 Results
No achievement without commitment Analysts’ Meeting Q4 and Full Year 2006 Results Rembert von Lowis, Member of the Management Board March 1st, 2007, Istanbul
Slide 2: Agenda
Agenda Highlights Group Results Business Lines: Activity & Results Appendices 2
Slide 3: Agenda
Agenda Highlights Group Results Business Lines: Activity & Results Appendices 3
Slide 4: Business Volumes (12 months growth) in the Commercial Business Lines
Business Volumes (12 months growth) in the Commercial Business Lines 2006 / 2005 Public/Project • LT banking commitments o/s + 14.5 % Finance and Credit Enhancement • Net par o/s FSA + 7.1 % Personal Financial • Customer assets o/s + 5.3 % Services • Customer loans o/s + 11.8 % • Assets under manage
Slide 5: Earnings Per Share (€)
Earnings Per Share (€) 2.49 +33.2% CAGR: CAGR: ++14.2 14.2 % % p.a. p.a. 1.87 1.63 1.58 1.25 1.24 1.15 1.13 +12.8% 0.98 1.85 0.85 1.64 1.13 1.03 1.18 1.44 1.43 0.75 0.66 1996 1997 1998 1999 2000 2001 2002 2003 2004 2004 2005 2006 IFRS as adopted Dexia Gaap by EU 5 Excluding non-operating it ems – NA
Slide 6: Dividend Per Share (€)
Dividend Per Share (€) CAGR: CAGR: ++11.9 11.9 % % p.a. p.a. ++14.1 14.1 % % 0 .81 0 .71 0 .62 0 .53 0.48 0 .48 0.43 0.39 0.36 0.32 0.31 0.27 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 proposed Dexia France Dexia Belgium Dexia 6
Slide 7: Agenda
Agenda Highlights Group Results Business Lines: Activity & Results Appendices 7
Slide 8: Changes in Scope
Changes in Scope (M€) Reported net income – Group share December 31, 2005 2,038 - Exits (BAN, Eural, Rekord, Private banking London) +10 - Impact DenizBank (full integration of 75% participation in last +16 quarter) - Impact JV RBC (proportional integration) -10 Pro forma net income – Group share De
Slide 9: Summary of FY 2006 P&L Account
Summary of FY 2006 P&L Account Variation (M€) FY 2005 FY 2006 reported underlying(1) Income 5,976 7,012 +17.3% +8.2% Costs - 3,229 - 3,481 +7.8% +6.1% Gross operating income 2,747 3,531 +28.5% +10.9% Cost of risk -52 -124 x2.4 +55.4% Impairments on (in)tangible assets 0 0 n.s. n.s. Tax expense
Slide 10: Summary of Q4 2006 P&L Account
Summary of Q4 2006 P&L Account Variation (M€) Q4 2005 Q4 2006 reported underlying (1) Income 1,570 1,885 +20.0% +4.8% Costs - 842 -972 +15.4% +6.2% Gross operating income 728 913 +25.4% +3.0% Cost of risk -26 -55 x2.2 +65.8% Impairments on (in)tangible assets -1 1 n.s. n.s. Tax expense -135 -4
Slide 11: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income (M€) 1,685 1,646 1,608 1,614 1,569 Income 1,487 1,492 forma 2007 1,473 1,607 1,656 1,580 1,521 1,530 (1) Income 1,431 1,412 1,411 961 Costs 904 892 907 871 872 forma 2007 832 792 968 912 839 (1) 820 850 Costs 770 787 808 768 668 701 680 68
Slide 12: Focus on Revenues (1): Accounting View
Focus on Revenues (1) 1. Accounting View (M€) Variation FY 2005 FY 2006 M€ % Total income (reported) 5,976 7,012 +1,036 +17.3% Net interest, dividend and related 4,507 5,503 +996 +22.1% income Net commissions 1,172 1,307 +135 +11.5% Technical margin of insurance 208 100 -108 -51.9% activities
Slide 13: Focus on Revenues (2): Income by Type of Activities
Focus on Revenues (2) 2. Income by Type of Activities (M€) Variation FY 2005 FY 2006 M€ % Total income (underlying) 5,835 6,314 +479 +8.2% Banking activities 4,874 5,290 +416 +8.5% FSA 519 564 +45 +8.7% Insurance activities 442 460 +18 +4.2% 13
Slide 14: Cost of Risk Related to Total Net o/s Commitments
Cost of Risk Related to Total Net o/s Commitments (2) (in basis points) 2.5 1.2 1.2 Credit 0.7 0.6 0.6 0.6 0.6 0.6 0.4 enhancement 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 (1) 12.2 9.8 (1) 7.8 6.4 6.6 5.7 (1) (1) Banking 2.2 2.4 1.8 (1) (1) activities 1.6 1997 1998 1999 2000 2001 2002 2003
Slide 15: Non-Operating Items
Non-Operating Items (M€) Q4 2005 Q4 2006 FY 2005 FY 2006 Income +96 +229 +224 +698 of which . MTM, CDS FSA -12 +6 +9 +25 . interest DBNL +6 +2 +31 +12 . other (capital gains …) +102 +221 +177 +658 Costs -4 -4 -7 -4 Cost of risk (DBNL) -2 -20 +7 -35 Tax expense +15 +50 +40 +42 of which . tax credit o
Slide 16: Incidences of FSA's MTM on CDS Portfolio on the Quarterly Income
Incidences of FSA’s MTM on CDS Portfolio on the Quarterly Income (M€) 35 24 6 -1 -2 -3 -11 -12 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 16
Slide 17: Key Performance Indicators (1)
Key Performance Indicators (1) FY 2005 FY 2006 C/I ratio 54.0% 49.6% C/I ratio underlying 56.2% 55.1% ROE 20.0% 23.1% Return on risk-weighted assets 1.92% 2.29% Profit margin 35.0% 40.5% 17
Slide 18: Key Performance Indicators (2)
Key Performance Indicators (2) Variation in 31/12/05 31/12/06 12 months Tier 1 ratio 10.3% 9.8% - Tier 1 ratio with 50% hybrid 9.8% 9.2% - Tier 1 capital (M€) 11,894 13,028 +9.5% Risk weighted assets (Bn€) 115.0 133.4 +16.0% NAV per share (€) (1) (2) Core shareholders’ equity 9.86 11.60 +17.6% (3) T
Slide 19: Agenda
Agenda Highlights Group Results Business Lines: Activity & Results Appendices 19
Slide 20: Long-term Banking Commitments: Public / Project Finance & Credit Enhancement
Long-term Banking Commitments(1) Public / Project Finance & Credit Enhancement (Bn€) + 14.5 % 268.2 234.3 32.7 46.1 America (+ 8.6 %) 24.4 42.5 Project/ Corporate Finance 124.1 Other countries (+ 12.2 %) 98.3 (+ 26.2 %) 235.5 209.9 Public Finance 93.5 98.0 France + (+ 33.4 %) Belgium + Luxembourg (+
Slide 21: Credit Enhancement (FSA)
Credit Enhancement (FSA) Public / Project Finance & Credit Enhancement Gross present value originations Net par outstanding (M US$) (Bn US$) -10.2 % + 7.1 % 1,014 376 93 910 351 13 17 56 29 120 29 12 18 185 49 79 82 195 318 113 215 233 485 310 FY 2005 FY 2006 31/12/05 31/12/06 U.S. Muni U.S. ABS Int
Slide 22: Analysis of FY 2006 Underlying P&L: Public / Project Finance & Credit Enhancement
Analysis of FY 2006 Underlying P&L Public / Project Finance & Credit Enhancement Variation Variation (1) (M€) FY 2005 FY 2006 FY 06 / at constant rate FY 05 of exchange Income 2,256 2,478 +9.9% +10.6% Costs - 762 - 809 +6.1% +6.7% Gross operating income 1,493 1,669 +11.8% +12.6% Cost of risk - 30 -
Slide 23: Analysis of Q4 2006 Underlying P&L: Public / Project Finance & Credit Enhancement
Analysis of Q4 2006 Underlying P&L Public / Project Finance & Credit Enhancement Variation Variation (M€) Q4 2005(1) Q4 2006 Q4 06 / at constant rate Q4 05 of exchange Income 594 645 + 8.6 % + 10.8 % Costs - 210 - 227 + 7.7 % + 9.4 % Gross operating income 384 419 + 9.0 % + 11.6 % Cost of risk -10 -
Slide 24: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Public / Project Finance & Credit Enhancement (M€) 645 621 608 594 604 575 541 546 Income 428 415 419 407 387 384 Gross 361 361 operating income 227 Costs 210 197 179 185 187 193 192 (1) (1) (1) (1) Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006
Slide 25: Total Customer Assets: Personal Financial Services
Total Customer Assets(1) (Retail & Private banking) Personal Financial Services (Bn€) +5.3% 128.3 of which 127.2 121.9 10.4 10.5 9.6 Insurance 45.4 (Life insurance Private technical reserves) Banking 60.5 63.6 64.5 Off-balance sheet products (Mutual funds, direct securities,...) 83.0 Retail Balance
Slide 26: Total Customer Loans: Personal Financial Services
Total Customer Loans(1) (Retail & Private banking) Personal Financial Services (Bn€) +11.8% 30.9 30.3 Loans to Private banking 27.6 3.2 3.3 customers 2.7 6.6 Loans to SME, 6.5 independents 6.4 2.4 2.5 Consumer loans 2.3 Mortgage loans 18.1 18.6 16.3 Dec. 2005 Sept. 2006 De c. 2006 26 (1) excluding D
Slide 27: Analysis of FY 2006 Underlying P&L: Personal Financial Services
Analysis of FY 2006 Underlying P&L Personal Financial Services Variation (1) (M€) FY 2005 FY 2006 FY 06 / FY 05 Income 2,271 2,319 +2.1% Costs - 1,608 - 1,627 +1.2% Gross operating income 663 692 +4.4% Cost of risk -26 -32 +22.8% Tax expense -189 -151 -20.2% Other items -1 -4 n.s. Net income – Group
Slide 28: Analysis of Q4 2006 Underlying P&L: Personal Financial Services
Analysis of Q4 2006 Underlying P&L Personal Financial Services Variation (1) (M€) Q4 2005 Q4 2006 Q4 06 / Q4 05 Income 624 635 + 1.8% Costs - 445 - 447 + 0.4% Gross operating income 179 188 + 5.1% Cost of risk -9 -16 + 67.6% Tax expense - 48 - 30 - 36.1% Other items -1 -4 n.s. Net income – Group sha
Slide 29: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Personal Financial Services (M€) 624 635 551 553 560 561 563 543 Income 445 447 385 385 394 393 393 394 Costs 179 188 158 167 159 167 168 169 Gross operating income Q1 2005 (1) Q2 2005 (1) Q3 2005 (1) Q4 2005 (1) Q1 2006 Q2 2006 Q3 2006 Q4
Slide 30: Asset Management, Insurance Services, Investor Services
Asset Management Insurance Services Investor Services 30
Slide 31: Assets under Management
Assets under Management Asset Management (Bn€) Organic growth: YTD + 11.0% Market effect: YTD + 5.1% + 16.1 % 2.4 105.2 3.0 102.3 0.5 2.0 O rganic M arket 2.0 effect 1.2 97.2 97.3 M arket grow th 5.4 effect O rganic O rganic M arket grow th -1.9 grow th 90.6 effect M arket effect O rganic grow th De
Slide 32: Consistent High Performance of Dexia AM Products (5-year)
Consistent High Performance of Dexia AM Products Asset Management Dexia AM Sector Peer Group Fund Quartile Ranking (31/12/06) - 5-year (rolling) 53% 41% % # Funds per quartile 33% % Volume of funds 24% assets per quartile 20% 16% 10% 4% 1st 2nd 3rd 4th 32 Source: Micropal
Slide 33: Consistent High Performance of Dexia AM Products (3-year)
Consistent High Performance of Dexia AM Products Asset Management Dexia AM Sector Peer Group Fund Quartile Ranking (31/12/06) - 3-year (rolling) 4 7% 3 9% 3 7% 32 % % # Funds per quartile 2 2% % Volume of funds assets per quartile 12% 9% 2% 1st 2nd 3rd 4th 33 Source: Micropal
Slide 34: Analysis of FY 2006 Underlying P&L: Asset Management
Analysis of FY 2006 Underlying P&L Asset Management Variation (1) (M€) FY 2005 FY 2006 FY 06 / FY 05 Income 198 253 +28.2% Costs - 111 - 138 +24.9% Gross operating income 87 115 +32.5% Cost of risk 0 0 n.s. Tax expense -7 -9 +21.3% Other items -1 -2 n.s. Net income – Group share 79 104 +31.7% Cost-i
Slide 35: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Asset Management (M€) 82 62 61 59 51 45 44 46 Income 41 35 34 32 41 31 25 27 Costs 24 27 28 27 21 20 Gross 19 19 operating income Q1 2005 (1) Q2 2005 (1) Q3 2005 (1) Q4 2005 (1) Q1 2006 Q2 2006 Q3 2006 Q4 2006 35 (1) Based on pro forma acc
Slide 36: Insurance Gross Written Premiums
Insurance Gross Written Premiums Insurance Services (M€) 1,297 94 257 1,057 947 106 829 823 87 885 885 127 101 92 120 101 686 115 74 123 149 99 56 Nonlife 117 946 864 705 728 719 Life Branch 23 586 573 470 Life Branch 21 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Gross Grosswrit
Slide 37: Analysis of FY 2006 Underlying P&L: Insurance Services
Analysis of FY 2006 Underlying P&L Insurance Services Variation (1) (M€) FY 2005 FY 2006 FY 06 / FY 05 Income 215 228 + 6.1% Costs - 125 - 140 + 12.1% Gross operating income 90 88 - 2.3% Cost of risk 0 -1 n.s. Tax expense -4 +8 n.s. Other items -3 -1 n.s. Net income – Group share 83 94 + 12.1% Cost-
Slide 38: Investor Services: Activity Highlights
Investor Services (1): Activity Highlights Investor Services Number of shareholder accounts Assets under administration (2) Number of funds under in transfer agent (Bn USD) administration (in thousands) + 27.5 % + 20.0 % + 10.4 % 2,290 4,585 4,679 2,170 6,341 6,385 3,898 5,783 1,796 Dec. Sept. Dec.
Slide 39: Analysis of FY 2006 Underlying P&L: Investor Services
Analysis of FY 2006 Underlying P&L Investor Services Variation Variation (M€) FY 2005(1) FY 2006 FY 06 / at constant rate of FY 05 exchange Income 312 371 +18.9% +17.4% Costs - 230 - 249 + 8.4% +6.7% Gross operating income 82 121 + 48.3% +47.6% Cost of risk 0 0 n.s. Tax expense -28 -38 +38.8% Other
Slide 40: Quarterly Variation of the Underlying Gross Operating Income
Quarterly Variation of the Underlying Gross Operating Income Investor Services (M€) 100 94 89 88 84 79 80 69 Income 63 66 61 61 59 61 56 51 Costs 37 30 28 27 Gross 22 23 18 18 operating income (1) (1) Q1 2005 Q2 2005 (1) Q3 2005 Q4 2005 (1) Q1 2006 Q2 2006 Q3 2006 Q4 2006 40 (1) Based on pro forma a
Slide 41: Group Treasury – Funding Activities
Group Treasury – Funding Activities New Long-Term Issues Treasury and Financial Markets 29.7 29.9 (Bn€) AA AA AAA AAA FY 05 FY 06 41
Slide 42: Fixed Income – CSP Portfolio
Fixed Income – CSP Portfolio Treasury and Financial Markets (Bn€) + 21.7 - 10.6 74.0 62.9 Repayments & sales New investments 94 % 97 % 31/12/05 31/12/06 Available for sale & held to maturity Trading 42
Slide 43: Analysis of FY 2006 Underlying P&L: Treasury and Financial Markets
Analysis of FY 2006 Underlying P&L Treasury and Financial Markets Variation (1) (M€) FY 2005 FY 2006 FY 06 / FY 05 Income 503 561 +11.5% Costs - 175 - 176 + 0.7% Gross operating income 328 384 +17.3% Cost of risk +1 0 n.s. Tax expense - 47 - 71 + 53.6% Other items -5 -5 n.s. Net income – Group share
Slide 44: Quarterly Variation of the Underlying Net Income - Group Share
Quarterly Variation of the Underlying Net Income - Group Share Treasury and Financial Markets (M€) 152 148 136 135 137 Income 130 123 101 Net income 81 84 81 81 - Group share 74 63 62 58 Costs 51 53 41 42 42 41 41 42 (1) (1) (1) (1) Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 44
Slide 45: Underlying Contribution of the Business Line's Segments
Underlying Contribution of the Business Line’s Segments Treasury and Financial Markets Market Engineering Treasury Fixed Income and Trading (M€) FY 05(1) FY 06 FY 05 (1) FY 06 FY 05(1) FY 06 Income 140 122 334 356 29 83 Costs -52 -54 -60 -65 -63 -57 Gross operating income 88 68 274 291 -34 26 Taxes
Slide 46: Focus on Central Asset (Underlying)
Focus on Central Asset (Underlying) (1) (1) (M€) Q4 05 Q4 06 FY 05 FY 06 Income 14 11 80 104 Costs - 78 - 100 - 266 - 337 Gross operating income - 64 - 89 - 186 - 234 Cost of risk -2 1 -2 0 Tax expense +19 +34 +44 +76 Minority interests +1 8 3 25 Net income – Group share - 47 - 63 - 148 - 184 46 (1)
Slide 47: Agenda
Agenda Highlights Group Results Business Lines: Activity & Results Appendices 47
Slide 48: Appendices
2006 Targets Announced in 2004, and 2006 Achievement FSA from US GAAP (USD) to IFRS (EUR) Recap Asset Management, Insurance & Investor Services View on Insurance Activities Across the Group Update on DBNL / Legio Branch Network in Belgium Evolution of Outstanding Shares 48
Slide 49: 2006 Targets Announced in 2004, and 2006 Achievement
2006 Targets Announced in 2004, and 2006 Achievement Target 2006 Achieved announced in 2006 2004(1) Cost-income ratio underlying < 54% 55.1% EPS underlying EUR 1.70 EUR 1.85 ROE 18% 23.1% 49 (1) On March 4, 2004 (2003 results)
Slide 50: FSA from US GAAP (USD) to IFRS (EUR)
FSA from US GAAP (usd) to IFRS (eur) Variation (M$) FY 05 FY 06 FY 06 / FY 05 US GAAP – Net Income (as reported by FSA) 326 424 +30.1% Fair value adjustments for economic interest rate hedges 15.0 -40.5 Fair value adjustments for insured CDS -7.2 -20.7 US GAAP – Operating Earnings (as reported by FS
Slide 51: Recap Asset Management, Insurance & Investor Services: Analysis of FY 2006 Underlying P&L
Recap Asset Management, Insurance & Investor Services Analysis of FY 2006 Underlying P&L Variation Variation (1) (M€) FY 05 FY 06 FY 06 / at constant rate of FY 05 exchange Income 725 852 +17.6% +17.0% Costs -466 -528 +13.3% +12.4% Gross operating income 259 325 +25.4% +25.2% Cost of risk 0 -1 +162.
Slide 52: View on Insurance Activities Across the Group (1)
View on Insurance Activities Across the Group (1) Contribution to the Pro Forma Underlying Revenues (1) (M€) FY FY2006 2006revenues: revenues: 460 460M€ M€ ++44% %versus versusFY FY2005 2005 By business lines By reporting entities 47% 6% 86% 47% 14% Public/Project Finance Personal Financial Services
Slide 53: View on Insurance Activities across the Group (2)
View on Insurance Activities across the Group (2) Focus on Dexia Insurance Services (DIS) Variation Variation Q4 Q4 Q4 06 / FY FY FY 06 / 2005 2006 Q4 05 2005 2006 FY 05 Total Group Insurance Revenues 135 106 -21.7% 442 460 4.2% of wich Dexia Insurance Services 119 91 -23.7% 379 394 3.8% Variation V
Slide 54: View on Insurance Activities across the Group (3)
View on Insurance Activities across the Group (3) Performance Ratios of Dexia Insurance Services FY 2005 FY 2006 Life • Margin on outstanding 1.7% 1.4% (income life direct business/ mathematical life reserves) • Cost ratio 2.5% 2.4% (operating expenses, network fees included / gross written premiums
Slide 55: DBNL / Legio: Evolution of the Share Leasing Portfolio Outstanding
DBNL / Legio Evolution of the Share Leasing Portfolio Outstanding 3,269 172 (M€) January 25, 2007 : Duisenberg Arrangement is granted binding force by the Amsterdam Court of Appeal 2,448 147 1,868 Total 798 1,625 Of which Of which Of which 1,489 300 contracts Not w ith Accepted accepted 1,145 capita
Slide 56: DBNL / Legio: Share Leasing – Evolution of the Stock of Provision
DBNL / Legio Share Leasing – Evolution of the Stock of Provision (M€) 497 - 13 Cost of risk + 42 - 44 (reversal) - 91 145 393 391 -14 -14 363 +20 -33 Cost of risk Utilizations (allocation,…) Cost of risk 350 + Cost of risk 105 Utilizations 103 (reversal) adjustments Utilizations (allocation) + 101 U
Slide 57: Branch Network in Belgium
Branch Network in Belgium -- 31 31 % % 1,483 1,411 1,283 1,187 1,069 1,019 940 912 889 871 833 802 543 499 394 316 236 217 2001 2002 2003 2004 2005 2006 Employee network Independent agents network 57
Slide 58: Evolution of Outstanding Shares
Evolution of Outstanding Shares Capital increase of Outstanding Sept. 11, 2006 Shares Shares cancelled at 62,176,166 1,163,184,325 Outstanding Shareholders’ General Exercise of warrants & Shares meeting of May 10, 2006 Employees share issue 1,107,469,030 -22,096,720 15,635,849 Of which: 2,369,120 bo