Dexia Holding SA · EURONEXT:DEXB

Dexia Holding SA — FY2005 Earnings Presentation

50 slides from Dexia Holding SA's earnings presentation, Mar 2, 2006

  1. Slide 1: Year 2005 and Q4 2005 Results Analysts' Meeting

    Year 2005 and Q4 2005 Results Analysts’ Meeting Paris, March 2, 2006 Rembert von Lowis Member of the Group Management Board

  2. Slide 2: Highlights

    DEXIA Highlights

  3. Slide 3: Strong originations in the commercial business lines

    Strong originations in the commercial business lines Business volumes (12 months growth) Public/Project • LT banking commitments o/s + 25.0 % Finance and Credit Enhancement • Net par o/s FSA + 7.9 % Personal Financial • Customer assets o/s + 7.9 % Services • Customer loans o/s + 11.4 % • Assets unde

  4. Slide 4: Strong organic development in 2005 gave more means to business lines

    Strong organic development in 2005 has led to giving more means to the business lines translating in : • Higher expenses • More economic capital allocated to the business lines 4

  5. Slide 5: Earnings Per Share (€)

    Earnings Per Share (€) CAGR: + 12.3 % p.a. + 14.5 % 1.87 1.63 1.58 1.25 1.24 1.15 1.13 0.98 0.85 1.64* + 14.5 0.75 % 0.66 1.43* 1996 1997 1998 1999 2000 2001 2002 2003 2004 2004 2005 Dexia Gaap IFRS as adopted by the EU * Excluding non-operating items 5

  6. Slide 6: Dividend Per Share (€)

    Dividend Per Share (€) CAGR: + 11.6 % p.a. + 14.5 % 0,71 0,62 0,53 0,48 0,48 0,43 0,39 0,36 0,32 0,31 0,27 Dexia France Dexia Belgium Dexia 6

  7. Slide 7: Group results

    DEXIA Group results

  8. Slide 8: Changes in scope and conventions

    Changes in scope and conventions  Scope (M€) Reported net income – Group share 2004 1,822 - Exits (Kempen & Co, SMBP, Eural) -3 + Additions (FMS Hoche) 0 Pro forma net income – Group share 2004 1,819 Variation -3 Of which: Income - 23 M€ Costs + 20  Conventions M€  Change of the fee structure in

  9. Slide 9: IFRS

    IFRS • Dexia applies IFRS as adopted by EU (i.e. with « carve out ») • Comparison 2004 – 2005 not totally relevant : IAS 32 & 39 and IFRS 4 not applied in 2004 • Adjustments made in Q4 2005 • Mortgages early repayment penalties (IAS 39) - 18 • Structured Eurobonds (IAS 39) - 8 • Liability Adequacy T

  10. Slide 10: Summary of FY 2005 P&L account

    Summary of FY 2005 P&L account FULL YEAR 2005 Variation Variation of (M€) FY 2004* FY 2005* * FY 05 / underlying FY 04 *** I ncome 5,623 5,976 + 6.3 % + 6.3 % Costs - 3,057 - 3,229 + 5.6 % + 5.8 % Gross operating income 2,566 2,747 + 7.1 % + 6.9 %  Cost of risk - 226 - 52 - 77.0 % + 21.4 %  Impair

  11. Slide 11: Focus on revenues (1)

    Focus on revenues (1) (M€) 1. Accounting view Variation 2004 2005 M€ % Total income (reported) 5,623 5,976 + 353 + 6.3 %  Net interest, dividend and related 4,220 4,507 + 287 + 6.8 % income  Net commissions 1,048 1,172 + 124 + 11.8 %  Technical margin of insurance 290 208 - 82 - 28.3 % activities

  12. Slide 12: Focus on revenues (2)

    Focus on revenues (2) (M€) 2. Revenues by type of business Variation 2004 2005 M€ % Underlying pro forma 5,416 5,755 + 339 + 6.3 %  Banking activities 4,542 4,793 + 251 + 5.5 %  FSA 483 519 + 35 + 7.3 %  Insurance activities 391 443 + 52 + 13.3 % 12

  13. Slide 13: Cost of risk

    Cost of risk related to total net O/S commitments** (in basis points) 2.5 1.2 1.2 Credit 0.4 0.7 0.6 0.6 0.6 0.6 enhancement 12.2 * 9.8 * 7.8 6.4 6.6 5.7 * Banking 2.2 1.8 * 1.6* activities 1997 1998 1999 2000 2001 2002 2003 2004 2005 * Excluding impact of charges for Legio Lease at Dexia Bank Neder

  14. Slide 14: Non-operating items

    Non-operating items Variation (M€) 2004 2005 M€ I ncome + 182 + 221 + 39 of which . capital gains + 141 + 166 + 25 . MTM, CDS FSA - +9 +9 . interest DBNL + 41 + 31 - 10 0 - 17 - 17 Costs of which . closure Rekord - 13 . J V RBC set up costs -3 Cost of risk (DBNL) - 177 +7 + 184 I mpairments - 19 0 +

  15. Slide 15: Key performance indicators (1)

    Key performance indicators (1) FY 2004 FY 2005 C/ I ratio 54.4 % 54.0 % C/ I ratio underlying 56.1 % 55.8 % ROE 17.2 % 20.0 % EPS (€) 1.63 1.87 Return on risk-weighted assets 1.78 % 1.92 % Profit margin 33.6 % 35.0 % 15

  16. Slide 16: Key performance indicators (2)

    Key performance indicators (2) Variation in 01/ 01/ 05 31/ 12/ 05 12 months Tier 1 ratio 10.0 % 10.3 % Tier 1 capital (M€) 10,336 11,894 Risk weighted assets (Bn€) 103.4 115.0 + 11.3 % NAV per share (€) Core shareholders’ equity* 8.87 9.86 + 11.2 % Total shareholders’ equity* * 10.32 12.25 + 18.7 %

  17. Slide 17: Summary of Q4 2005 P&L account

    Summary of Q4 2005 P&L account FOURTH QUARTER 2005 Variation Variation of (M€) Q4 2004* Q4 2005* * Q4 05 / underlying Q4 04 *** I ncome 1,438 1,571 + 9.2 % + 9.1 % Costs - 793 - 842 + 6.2 % + 6.8 % Gross operating income 645 728 + 12.9 % + 12.2 %  Cost of risk - 203 - 25 - 87.5 % + 12.6 %  Impairm

  18. Slide 18: Business lines

    Business lines Activity and Results

  19. Slide 19: Public/Project Finance & Credit Enhancement: Activity highlights

    Activity highlights Public/Project Finance & Credit Enhancement  Long-term banking commitments* (Bn€) + 25 % 241. 23.7 3 42.5 193. America Project/ (+ 58.7 %) Corporat 15.1 0 26.8 e Finance 107.9 Other countries 80.8 (+ 33.4 %) 217.6 177.9 Public Finance France + Belgium 85.4 90.9 + Luxembourg (+ 6

  20. Slide 20: Public/Project Finance & Credit Enhancement: Credit enhancement (FSA)

    Activity highlights Public/Project Finance & Credit Enhancement Credit enhancement (FSA) Gross present value originations Net par outstanding (M US$) (Bn US$) + 9.4 % + 7.9 % 1,014 927 93 74 56 58 326 351 185 7 13 128 29 32 12 9 234 195 82 91 433 485 215 187 FY 2004 FY 2005 31/ 12/ 04 31/ 12/ 05 U.S

  21. Slide 21: Public/Project Finance & Credit Enhancement: Underlying P&L

    Public/Project Finance & Credit Enhancement Analysis of underlying P&L FULL YEAR 2005 Variation (M€) FY 2004* FY 2005* * FY 05 / FY 04 I ncome 2,037 2,253 + 10.6 % Costs - 687 - 752 + 9.5 % Gross operating income 1,351 1,501 + 11.1 % Cost of risk - 30 - 34 + 14.7 % Tax expense - 394 - 421 + 6.8 % Ot

  22. Slide 22: Public/Project Finance: Quarterly evolution of gross operating income

    Public/Project Finance & Credit Enhancement Quarterly evolution of the underlying gross operating income (M€) 590 571 540 541 551 Income 499 500 499 382 393 Gross 362 361 365 operatin 335 330 323 g income 186 188 197 170 175 178 180 Costs 163 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005* * Q2 2005* *

  23. Slide 23: Personal Financial Services: Total Customer Assets

    Activity Highlights Personal Financial Services  Total Customer Assets (Retail and Private Banking) (Bn€) + 7.9 % 122. 123. of which 114.1 3 2 8.9 9.6 8.0 Insurance 41.7 (Life insurance technical Private reserves) Banking 52.8 60.7 61.3 Off Balance Sheet products (Mutual funds, direct securities,..

  24. Slide 24: Customer assets: new money flows & market effect

    Activity Highlights Customer assets: new money flows & market effect (Bn€) 2005 New money Market effect 123.2 Life +2.7 Savings insuranc bonds e & term Mutual deposit funds +2.1 s Private +1.2 118.4 Bankin Deposits Bonds +0.3 g +0.9 Retail Bankin Private g +1.2 +2.2 Bankin - 2.0 +0.5 g Direct 114.1

  25. Slide 25: Personal Financial Services: Total Customer Loans

    Activity Highlights Personal Financial Services  Total Customer Loans (Retail and Private Banking) (Bn€) + 11.4 % 28.6 Loans to Private banking 27.5 customers 25.7 2.7 2.9 2.5 Loans to SME, independents 6.4 6.2 5.9 Consumer loans 2.3 2.3 2.4 Mortgage loans 16.3 17.1 14.9 Dec. 2004 Sept. 2005 Dec. 2

  26. Slide 26: Personal Financial Services: Underlying P&L

    Personal Financial Services Analysis of underlying P&L FULL YEAR 2005 Variation (M€) FY 2004* FY 2005* * FY 05 / FY 04 I ncome 2,150 2,219 + 3.2 % Costs - 1,568 - 1,596 + 1.8 % Gross operating income 583 623 + 6.9 % Cost of risk - 35 - 23 - 34.4 % Tax expense - 179 - 182 + 1.6 % Other items +2 +1 -2

  27. Slide 27: Personal Financial Services: Quarterly evolution

    Personal Financial Services Quarterly evolution of the underlying gross operating income (M€) 572 545 547 557 543 531 534 540 Income 531 530 528 517 406 394 393 397 406 400 382 386 Costs : without upfront fees on structured products 154 154 160 167 Gross 149 152 142 operating 129 income Q1 2004* Q2

  28. Slide 28: Investment Management and Insurance Services: Assets under Management

    Activity Highlights Investment Management and Insurance Services  Assets under Management* (Bn€) Organic growth: YTD + 17.0 % Market effect: YTD + 9.8 % + 26.8 % 1.5 1.1 90.6 2.3 87.9 4.2 2.3 81.4 Market 3.4 Organic 1.2 75.7 Market effect 3.0 Organic growth 71.5 Market growth effect Organic Market

  29. Slide 29: Investment Management and Insurance Services: Fund Administration

    Activity Highlights Investment Management and Insurance Services  Fund Administration Capital managed at # of NAV to # of end of period (Bn€) calculate in the year transactions (in (x 1000)** millions) + 5.6 % + 4.6 % + 17.5 % 420 409 397 7.98 7.63 348 154 160 Other* 255 Mandates 189 to DFS 12 12 D

  30. Slide 30: Investment Management and Insurance Services: Underlying P&L

    Investment Management and Insurance Services Analysis of underlying P&L FULL YEAR 2005 Variation (M€) FY 2004* FY 2005* * FY 05 / FY 04 I ncome 630 701 + 11.2 % Costs - 379 - 423 + 11.6 % Gross operating income 251 278 + 10.6 % Cost of risk -1 0 ns Tax expense - 63 - 42 - 32.4 % Other items -9 -6 -

  31. Slide 31: IMIS Quarterly evolution: Asset Management

    IMIS Quarterly evolution of the underlying gross operating income (M€) Asset Management 62 62 50 45 44 46 42 51 34 35 35 45 35 33 41 43 29 25 27 34 24 21 22 22 20 28 13 34 21 19 20 27 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005** Q2 2005** Q3 2005** Q4 2005** • Income  Costs Income without performa

  32. Slide 32: IMIS Quarterly evolution: Fund Administration

    IMIS Quarterly evolution of the underlying gross operating income (M€) Fund Administration 71 73 74 65 62 64 61 60 47 49 48 43 44 44 44 40 25 24 26 21 22 20 16 17 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005** Q2 2005** Q3 2005** Q4 2005** • Income  Costs Gross Operating Income * Without IAS 32, IAS

  33. Slide 33: IMIS Quarterly evolution: Insurance

    IMIS Quarterly evolution of the underlying gross operating income (M€) Insurance 73 58 58 56 49 46 41 34 41 27 31 29 30 30 27 33 32 28 26 31 18 18 14 1 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005** Q2 2005** Q3 2005** Q4 2005** • Income  Costs Gross Operating Income * Without IAS 32, IAS 39 and IFR

  34. Slide 34: Treasury and Financial Markets: Funding activities

    Treasury and Financial Markets (TFM) Funding activities ST funding (Bn€) New LT issues outstanding 102.1 Average 7.3 years 9.0 years life 28.9 29.7 56.9 AAA AAA AA AA + 60.7 % 2004 2005 Dec. 2004 Nov. 2005 Other resources 34 Central Banks and fiduciary

  35. Slide 35: TFM: CSP portfolio

    TFM : CSP portfolio (Bn€) 5.6 7.3 Average years years life + 24.3 - 8.7 Repayment New s & sales 54.9 investment s 39.3 97 % 92 % 2004 2005 Available for sale & held to maturity Trading 35

  36. Slide 36: TFM: market risks

    TFM : market risks Interest rate and equity markets (M€) VaR 10 days – 99 % 73.0 73.0 Limit 95 % 95 % 27.2 26.9 Average utilized 2004 2005 Money Market + Other desks Financial Enginering & 36 Derivatives

  37. Slide 37: Treasury and Financial Markets: Underlying P&L

    Treasury and Financial Markets Analysis of underlying P&L FULL YEAR 2005 Variation (M€) FY 2004* FY 2005** FY 05 / FY 04 I ncome 449 487 + 8.5 % Costs - 163 - 177 + 8.5 % Gross operating income 287 311 + 8.5 % Cost of risk + 20 +1 - 94.1% Tax expense - 73 - 42 - 42.9 % Other items -2 -3 + 51.2% Net

  38. Slide 38: TFM: Quarterly variation of underlying net income

    Treasury and Financial Markets Quarterly variation of the underlying net income - Group share (M€) 138 Income 130 133 124 121 106 95 88 82 Net income 74 73 – Group 65 59 share 53 47 45 Costs 49 40 41 42 42 43 43 39 Q1 2004* Q2 2004* Q3 2004* Q4 2004* Q1 2005* * Q2 2005* * Q3 2005* * Q4 2005* * * Wit

  39. Slide 39: Underlying contribution of the business line's main segments

    Treasury and Financial Markets Underlying contribution of the business line’s main segments Credit Spread (M€) Money Market Other desks Portfolio FY 04* FY 05** FY 04* FY 05** FY 04* FY 05** Income 225 247 108 124 116 116 Costs - 28 - 27 - 40 - 47 - 95 - 103 Gross Operating 197 220 68 77 22 14 Incom

  40. Slide 40: Focus on Central Assets (underlying)

    Focus on Central Assets (underlying) (M€) 2004 2005 Variation I ncome 149 95 - 54 Costs - 241 - 265 - 24 Gross operationg income - 92 - 170 - 78 Costs of risk -3 -2 +1 Tax expense 50 44 +6 Minority interests 15 10 -5 Net income – Group - 59 - 138 - 79 share 40

  41. Slide 41: Appendices

    Appendices • View on Insurance activities across the Group • Update on DBNL/Legio • Update on Artesia integration • Evolution of outstanding shares

  42. Slide 42: View on insurance activities across the Group (1)

    View on insurance activities across the Group (1)  Insurance gross written premiums (M€) 1,297 94 Non life 971 257 Life Branch 23 91 841 845 113 105 Life Branch 21 210 700 123 149 101 117 946 670 605 591 481 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Gross written premiums YTD 2005: 3,684 M€ + 22.7 %

  43. Slide 43: View on insurance activities across the Group (2)

    View on insurance activities across the Group (2) Contribution to the underlying revenues* (M€) Year 2005 revenues: 443 M€ + 13.3 % over year 2004 By business lines By reporting entities 50% 5% 86% 45% 14% Public/ Project Finance Dexia Insurance Services Personal Financial Services Investment Manage

  44. Slide 44: View on insurance activities across the Group (3)

    View on insurance activities across the Group (3) Focus on Dexia Insurance Services (DIS) (M€) 2004 2005* * 2005 Variation * Q1 Q2 Q3 Q4 ** 05/ 04 Total Group I nsurance 391 116 109 83 135 443 + 13.3 % Revenues of wich Dexia Insurance Services 344 101 93 68 119 381 + 10.8 % Dexia I nsurance Services

  45. Slide 45: View on insurance activities across the Group (4)

    View on insurance activities across the Group (4) Performance ratios of Dexia Insurance Services FY 2004 FY 2005  Life • Margin on outstanding 1.8 % 1.6 % (income life direct business/ mathematical life reserves) • Cost ratio 2.1 % 2.0 % (operating expenses / gross written premiums life)  Non Life

  46. Slide 46: Evolution of the share leasing portfolio outstanding

    DBNL/Legio Evolution of the share leasing portfolio outstanding (M€) 4,178 140 3,269 172 2.401 Total 2,448 2,291 1,505 147 1.868 174 2,059 180 1,844 Of which contracts Of which Of which Not 207 1,625 with Accepted an accepted capital an 1.489 agreement agreement 300 repayments 1.434 330 1.324 1.204

  47. Slide 47: Share Leasing: Evolution of the stock of provisions

    DBNL/Legio Share Leasing – Evolution of the stock of provisions (M€) - 104 + 315 Net reversals - 224 510 497 85 Settlement Duisenberg (400) 145 Utilisation net of existing s provisions of which: 425 • 218 from Aegon • 97 from Dexia 352 01/ 01/ 2005 31/ 12/ 2005 IAS 39 provision (in Liabilities) Port

  48. Slide 48: Downsizing of the branch network in Belgium

    Artesia integration Downsizing of the branch network in Belgium Objective exceeded Target set in 2001 1,483 - 28 % 1,069 1,099 940 833 895 543 236 204 2001 2002 2003 2004 2005 End 2005 Employee network Independent agents network 48

  49. Slide 49: Artesia integration: Impact on personnel

    Artesia integration Impact on personnel Objective exceeded EFT reduction Achieved to objective vs EFT30/06/01 headcount at 31/12/05 Head offices - 1,400 - 1,700 Employee network - 870 - 746 - 2,270 - 2,447 49

  50. Slide 50: Evolution of outstanding shares

    Evolution of outstanding shares Shares cancelled at Outstanding Employees Exercice of General shares share issue warrants Meeting of May Outstanding 1,145,261,366 11, 2005 shares 4,935,322 9,159,207 - 51,886,865 1,107,469,030 of which: 1,105,210,431 12,980,000 1,086,919,010 bought back in 2005 of wh

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