Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — H1 2011 Earnings Presentation
60 slides from Dexia Holding SA's earnings presentation, Aug 4, 2011
Slide 1: 2Q & 1H 2011 Results and Business Highlights
2Q & 1H 2011 Results and Business Highlights 4 August 2011 Pierre Mariani, CEO Philippe Rucheton, CFO
Slide 2: Disclaimer
Disclaimer This presentation and the information contained herein 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 includes unaudit
Slide 3: Key Messages
Key Messages 2Q11 results reflecting strong commercial business performance Pre-tax income of commercial business lines* up 25% vs. 2Q10 Fast expansion of the retail franchise in Turkey Major progress of the financial restructuring of the group USD 8.8 bn of guaranteed Financial Products asset
Slide 4: Agenda
Agenda Group summary 1H and 2Q 2011 group results 2Q 2011 results by division Core Division Legacy Portfolio Management Division Update on Financial Restructuring Update on Liquidity and Solvency 4
Slide 5: 2Q and 1H 2011 Group Results: Focus on one-off items
2Q and 1H 2011 Group Results Focus on one-off items Publication Impact on One-Off Items 2Q11 Tax impact Analytical Division Line Pre-Tax Fair-value adjustments and losses on Income EUR -1,928 m EUR -18 m Legacy Division FP assets sold Fair value adjustments for other assets Income EUR -1,745 m EUR 1
Slide 6: 2Q and 1H 2011 Group Results: Value adjustments for asset disposal
2Q and 1H 2011 Group Results Focus on value adjustments for asset disposal excluding Financial Products L&R Value adjustment through P/L « Non current assets or disposal groups held for sale » L&R with a (IFRS 5) Write back of AFS reserve « frozen » fair value Value adjustment through P/L Reclassifi
Slide 7: 2Q & 1H 2011 Group Results: Reported statement of income
2Q & 1H 2011 Group Results Reported statement of income Excluding one-off items booked in 2Q10 (EUR m) 2Q10* 2Q11 1H10* 1H11 (capital gains) and 2Q11, income mainly Income 1,356 -3,004 2,832 -1,877 driven by: of which one off items 98 -4,050 251 -4,050 7% growth of revenues of commercial Expenses
Slide 8: Agenda
Agenda Group summary 1H and 2Q 2011 group results 2Q 2011 results by division Core Division Legacy Portfolio Management Division Update on Financial Restructuring Update on Liquidity and Solvency 8
Slide 9: 2Q 2011 Results by Division – Core Division
2Q 2011 Results by Division – Core Division Focus on pre-tax income excluding one-off items Excluding one-off items, Core Division Pre-tax CoreCore Division pre-tax income Division pre-tax income up 17% (EUR m) 2Q10* 2Q11 2Q11/2Q10 Pre-tax income of commercial business Pre-tax income 275 40 -86% of
Slide 10: 2Q 2011 Results by Division – Legacy Portfolio Management Division
2Q 2011 Results by Division – Legacy Portfolio Management Division Focus on pre-tax income excluding one-off items Evolution of Legacy pre-tax income Aside one-offs, Legacy pre-tax income down EUR 215 m vs. 2Q10 mainly driven by: (EUR m) Higher costs of deleverage (EUR 150 m vs. 2Q10) 2Q10 ∆ ∆ ∆ 2
Slide 11: Agenda
Agenda Group summary 1H and 2Q 2011 group results 2Q 2011 results by division Core Division Legacy Portfolio Management Division Update on Financial Restructuring Update on Liquidity and Solvency 11
Slide 12: RCB – Good performance and low cost of risk
RCB – Good performance and low cost of risk Income by country (1H11) Pre-tax income at EUR 182 m, up 4% vs. 2Q10 at constant FX thanks to increased Luxembourg revenues in Belgium and drop of the cost Belgium 17% of risk (+27% in 1H11 at EUR 433 m) 52% Income up 4% vs. 2Q10 at constant FX Favorable
Slide 13: RCB – Focus on Belgium and Luxembourg
RCB – Focus on Belgium and Luxembourg Product mix focused on LT savings and higher loan volumes Customer deposits and loans Customer focus on long term savings products and rise in loans (EUR bn) 76.7 78.1 In 2Q11 strong demand for branch 21 and 76.5 bonds issued by the group Yoy deposits up EUR
Slide 14: RCB – Focus on Turkey
RCB – Focus on Turkey Rapid and successful deployment of DenizBank’s franchise Dynamic deposit collection and loan growth Customer deposits and loans Deposits up 41% vs. June 2010 (+12% vs. March (TRY bn) 28.3 2011) supported by both retail and corporate 23.8 23.4 20.9 19.7 banking 16.6 Loans ri
Slide 15: PWB – Positive Business Developments Supporting Pre-Tax Income
PWB – Positive Business Developments Supporting Pre-Tax Income Income by segment (1H11) Pre-tax income up 65% vs. 2Q10 exc. capital gain, at EUR 129 m (+ 41% vs 1H10 at EUR 220 m) Corporate Public Banking Banking Positive trend of income vs. 1Q10 and 1H10 27% 47% excl. EUR 69 m capital gain booked o
Slide 16: PWB – Good Performance of the Segments
PWB – Good Performance of the 3 Segments Public banking New LT commitments At EUR 1,805 m, new commitments up by (EUR bn) EUR 690 m vs. subdued activity in 1Q11; down EUR 301 m vs. 2Q10 3.0 Recovery of the activity in France with demand 2.8 resuming at higher margins 0.2 0.5 0.5 0.7 Deposits u
Slide 17: AMS – Strong Quarter Excluding Greece-Related Impairment
AMS – Strong Quarter Excluding Greece-Related Impairment Asset Management Income by segment (1H11) Pre-tax income in line with 2Q10 at EUR 18 m (flat Asset Mgt 19% on 1H10 at EUR 35 m) Stable revenues and costs well contained: total costs on average AuM at 14.9 bps as at end of June 2011 Insuran
Slide 18: AMS – Good Commercial Dynamic in Adverse Environment
AMS – Good Commercial Dynamic in Adverse Environment Asset Management Activity figures AuM EUR +2 bn vs. June 2010; improvement of the asset class mix notably sustained by growth 2.10 2.06 of alternative funds and advisory multi 1.98 management services 82.6 86.4 84.6 74% funds rated 3,4 and 5 s
Slide 19: Agenda
Agenda Group summary 1H and 2Q 2011 group results 2Q 2011 results by division Core Division Legacy Portfolio Management Division Update on Financial Restructuring Update on Liquidity and Solvency 19
Slide 20: Legacy Portfolio Management Division: Bond portfolio in run-off
Legacy Portfolio Management Division Bond portfolio in run-off Bond portfolio in run-off (EUR bn) AAA AA A BBB NIG Total Public sector 1.6 11.5 6.8 3.4 1.3 24.5 Sovereigns 0.9 6.5 3.0 2.3 3.1 15.8 Banks 2.2 2.7 7.8 2.4 0.5 15.6 Covered bonds 4.8 6.3 0.3 0.6 0.1 12.0 ABS 5.2 0.7 0.4 0.4 0.4 7.1 MBS 4
Slide 21: USD 8.8 bn of Financial Products guaranteed assets sold (1/2)
Legacy Portfolio Management Division USD 8.8 bn of the Financial Products guaranteed assets sold (1/2) Financial Products assets* As part of the accelerated deleverage (USD bn) announced on May 27th 2011, 94% of 12.6 Financial Products guaranteed assets sold: 9.5 USD 5.5 bn sold as at end of June
Slide 22: USD 8.8 bn of Financial Products guaranteed assets sold (2/2)
Legacy Portfolio Management Division USD 8.8 bn of the Financial Products guaranteed assets sold (2/2) By end of June, total impact of sales and value adjustment on Financial Products close to the EUR 1.8 bn announced in May 2011 Total accounting impact, including USD 34 m cash losses in 2Q11, amo
Slide 23: Agenda
Agenda Group summary 1H and 2Q 2011 group results 2Q 2011 results by division Core Division Legacy Portfolio Management Division Update on Financial Restructuring Update on Liquidity and Solvency 23
Slide 24: Update on Financial Restructuring: Asset and entity disposals
Update on Financial Restructuring Major progress achieved on assets and entities disposal Total sales of bonds and loans EUR 21.0 bn of assets sold as at 28 July 2011 including disposed guaranteed Financial (EUR bn) EUR 73.4 bn Products 27.2 4.8 94% of the guaranteed Financial Products 21.0 18.3 17.
Slide 25: Balance-sheet reduced by EUR 91 bn over one year
Update on Financial Restructuring Balance-sheet reduced by EUR 91 bn over one year Total assets At EUR 518 bn, total assets down EUR 91 bn vs. June 2010 mainly (EUR bn) driven by: 609 EUR 39 bn decrease (o/w EUR 7 bn FX 12 567 15 10 527 518 FP effect) of Legacy assets supported by 12 Legacy 125 10
Slide 26: Agenda
Agenda Group summary 1H and 2Q 2011 group results 2Q 2011 results by division Core Division Legacy Portfolio Management Division Update on Financial Restructuring Update on Liquidity and Solvency 26
Slide 27: Ongoing efforts to rebalance liquidity structure
Update on Liquidity and Solvency Ongoing efforts to rebalance liquidity structure Short-term liquidity gap Short-term Funding need down EUR 47 bn vs. June 2010 (EUR -8 bn over the quarter) (EUR bn) Cautious treasury management over 2Q11 in 260 EUR -164 bn response to volatile financial markets; co
Slide 28: Other Comprehensive Income improving by EUR 1.3 bn
Update on Liquidity and Solvency Other Comprehensive Income improving by EUR 1.3 bn versus March 2011 Frozen fair value of assets reclassified EUR 1.3 bn improvement of OCI mainly (EUR bn) driven by sale and fair value adjustment through P/L of assets reclassified in L&R 30/06/10 31/12/10 31/03/11 3
Slide 29: Strong solvency after impact of 2Q11 one-off items
Update on Liquidity and Solvency Strong solvency after impact of 2Q11 one-off items Weighted risks Weighted risks down EUR 11.1 bn vs. March 2011 (EUR bn) EUR 15.3 bn decrease in weighted credit risks o/w 149.3 10.4 140.8 138.1 EUR 15.1 bn linked to the sale and reclassification 3.3 9.7 2.9 9.7 12
Slide 30: Appendices
Appendices 1 Segment Reporting 2 P&L by Segment 3 Activity Figures 4 Maximum Credit Risk Exposure of the Group and of government bonds on a selection of european countries 5 Focus on Cost of Risk 6 VaR and sensitivities 7 Capital Adequacy, Weighted Risks and Quality of risks 8 Ratings 9 Data per Sha
Slide 31: 1 – Segment Reporting
1 – Segment Reporting STATEMENT OF INCOME 2Q 2011 Legacy Retail and Public and Asset portfolio Commercial Wholesale Management management (m EUR) Core division Banking Banking & Services Group Center division Dexia A=B+C+D+E B C D E F G=A+F Income 1,051 696 252 169 -67 (4,055) (3,004) Expenses (816)
Slide 32: 2 – P&L by Segment: Core and LPM Divisions
2 – P&L by Segment Core and LPM Divisions CORE DIVISION – STATEMENT OF INCOME (EUR m) 2Q10 1Q11 2Q11 %yoy %qoq 1H10 1H11 %yoy Income 1,296 1,252 1,051 -19.0% -16.1% 2,460 2,303 -6.4% Expenses (831) (821) (816) -1.8% -0.5% (1,671) (1,637) -2.0% Gross operating income 466 431 234 -49.7% -45.7% 789 666
Slide 33: 2 – P&L by Segment: Quarterly series
2 – P&L by Segment Core and LPM Divisions – quarterly series CORE DIVISION (m EUR) 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Income 1,163 1,296 1,227 1,168 1,252 1,051 Expenses (840) (831) (927) (926) (821) (816) Gross operating income 323 466 300 243 431 234 Cost of risk (106) (55) (34) 45 (4
Slide 34: 2 – P&L by Segment: Retail & Commercial Banking
2 – P&L by Segment Retail & Commercial Banking RCB – STATEMENT OF INCOME (EUR m) 2Q10 1Q11 2Q11 %yoy %qoq 1H10 1H11 %yoy Income 704 728 696 -1.1% -4.3% 1,400 1,424 1.7% Expenses (461) (461) (468) 1.5% 1.4% (922) (929) 0.8% Gross operating income 243 266 229 -6.0% -14.2% 478 495 3.5% Cost of risk (57
Slide 35: 2 – P&L by Segment: Public & Wholesale Banking
2 – P&L by Segment Public & Wholesale Banking PWB – STATEMENT OF INCOME (EUR m) 2Q10 1Q11 2Q11 %yoy %qoq 1H10 1H11 %yoy Income 285 234 252 -11.4% 7.7% 518 487 -6.1% Expenses (130) (131) (133) 1.7% 1.3% (262) (263) 0.5% Gross operating income 155 104 120 -22.5% 15.7% 256 223 -12.8% Cost of risk (7) (
Slide 36: 2 – P&L by Segment: Asset Management & Services
2 – P&L by Segment Asset Management & Services AMS – STATEMENT OF INCOME (EUR m) 2Q10 1Q11 2Q11 %yoy %qoq 1H10 1H11 %yoy Income 217 259 169 -22.0% -34.5% 438 428 -2.4% Expenses (161) (164) (162) 0.7% -1.0% (313) (326) 4.2% Gross operating income 56 95 7 -87.1% -92.3% 125 102 -18.7% Cost of risk 2 (9
Slide 37: 2 – P&L by Segment: Group Center
2 – P&L by segment Group Center GROUP CENTER – STATEMENT OF INCOME (EUR m) 2Q10 1Q11 2Q11 ∆ yoy ∆ qoq 1H10 1H11 ∆ yoy Income 90 31 (67) (158) (99) 103 (36) (139) Expenses (79) (65) (54) 25 11 (174) (119) 56 Gross operating income 12 (33) (121) (133) (88) (71) (155) (84) Cost of risk 7 28 (1) (8) (29
Slide 38: 3 – Activity Figures: Retail & Commercial Banking
3 – Activity Figures Retail & Commercial Banking Retail and Commercial Banking 2010 2011 Variation Variation June 30, 2011/ June 30, 2011/ (m EUR) June 30 Sept. 30 Dec. 31 March 31 June 30 June 30, 2010 March 31, 2010 Total customer assets & liabilities 184,121 185,642 187,840 192,566 192,846 4.7% 0
Slide 39: 3 – Activity Figures: Public & Wholesale Banking
3 – Activity Figures Public & Wholesale Banking Public and Wholesale Banking LONG-TERM COMMITMENTS LONG-TERM ORIGINATIONS June 30, June 30, Variation (m EUR) 2010 2011 Variation 2Q 2010 1Q 2011 2Q 2011 Variation yoy qoq Dexia 231,819 218,227 -5.9% 2,750 1,421 2,953 7.4% 107.8% of which public sector
Slide 40: 3 – Activity Figures: Asset Management & Services
3 – Activity Figures Asset Management & Services Assets under Management (1) 2010 2011 Variation Variation June 30, 2011/ June 30, 2011/ (bn EUR) June 30 Sept. 30 Dec. 31 March 31 June 30 June 30, 2010 March 31, 2011 Total assets under management 82.6 86.2 86.4 86.3 84.6 2.4% -2.0% By type of manage
Slide 41: 3 – Activity Figures: Legacy Portfolio Management Division
3 – Activity Figures Legacy Portfolio Management Division Legacy Portfolio Management Division 2010 2011 Var. qoq Current Constant (bn EUR) June 30 Sept. 30 Dec. 31 March 31 June 30 exch. rate exch. rate Total commitments * 176.7 157.9 153.4 138.2 124.9 -13.3 -12.2 Financial Products portfolio 11.9
Slide 42: 4 – Maximum Credit Risk Exposure
4 – Maximum Credit Risk Exposure ff Maximum Credit Risk Exposure as of June 30, 2011* DEXIA GROUP EXPOSURE BY DEXIA GROUP EXPOSURE BY GEOGRAPHICAL REGION CATEGORY OF COUNTERPART (m EUR) (m EUR) Belgium 113,555 Central governments 60,606 France 97,085 Local public sector 242,186 Germany 33,365 Corpor
Slide 43: 4 – Maximum Credit Risk Exposure of Government Bonds
4 – Maximum Credit Risk Exposure of Government Bonds on a selection of european countries as at 30 June 2011 Greece Ireland Italy Portugal Spain Total (m EUR) o/w Banking 2,967 - 12,202 1,851 1,365 18,385 o/w Insurance 817 359 1,166 218 1 2,561 o/w Trading 1 0 18 - 6 25 Total 3,785 359 13,387 2,069
Slide 44: 5 – Focus on Cost of Risk
5 – Focus on Cost of Risk Cost of risk in bp* Global customer loan portfolio remaining of 2Q10 3Q10 4Q10 1Q11 2Q11 sound quality in 2Q11 as evidenced by limited amount of net allocation to provisions RCB 44 35 31 23 7 RCB CoR and NPL still on a positive trend in o/w Belux 17 2Q11 13 12 11 9 In Bel
Slide 45: 6 – VaR and sensitivities
6 – VaR and sensitivities Value at risk (1) IR & FX (Trading and banking) EQT Trading 2Q11 2Q11 2Q11 2Q11 VaR (10 days, 99%), in m EUR 2Q 10 4Q10 2Q11 2Q 10 4Q10 2Q11 Core Non core Core Non core Average 16.5 16.0 12.3 11.7 0.9 2.0 2.0 2.7 2.7 - By risk factor Q end 19.1 19.0 10.8 10.3 0.9 1.6 1.0 2.
Slide 46: 6 – VaR and sensitivities
6 – VaR and sensitivities BSM, Dexia FP and TFM Credit Spread Banking (2) (3) Interest rate Credit spread BSM 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Banking companies Sensitivity, in m EUR -116 29 -148 -36 -68 -13 -14 -13 -12 -12 (1) (4) ALM Var 10d 99% in m EUR 45 21 85 44 46 375 428 362
Slide 47: 7 – Capital Adequacy
7 – Capital Adequacy Comparison total equity (financial statements) and total equity as calculated for regulatory purposes Dec. 31, 2010 June 30, 2011 Financial Regulatory Financial Regulatory (m EUR) Statements purposes Statements purposes Total shareholders' equity 8,945 8,945 6,945 6,945 Non-cont
Slide 48: 7 – Capital Adequacy, Weighted Risks and Quality of Risks
7 – Capital Adequacy, Weighted Risks and Quality of Risks Capital adequacy (m EUR, except where indicated) June 30, 2010 Sept. 30, 2010 Dec. 31, 2010 March 31, 2011 June 30, 2011 Tier 1 capital 18,216 18,418 18,425 18,442 14,448 Total regulatory capital 20,708 20,661 20,636 20,455 16,472 Weighted ri
Slide 49: 8 – Ratings
8 – Ratings Ratings Long-term Outlook Short-term Dexia Bank Belgium Fitch A+ Stable outlook F1+ Moody's A3 Stable outlook P-1 Standard & Poor's A Negative outlook A-1 Dexia Crédit Local Fitch A+ Stable outlook F1+ Moody's A3 Stable outlook P-1 Standard & Poor's A Negative outlook A-1 Dexia Banque In
Slide 50: 9 – Data per Share
9 – Data per Share Number of shares June 30, 2010 September 30, 2010 December 31, 2010 March 31, 2011 June 30, 2011 Number of shares 1,846,406,344 1,846,406,344 1,846,406,344 1,846,406,344 1,948,984,474 of which Treasury Shares 307,548 307,548 307,548 307,548 324,633 (1) Number of options 68,788,355
Slide 51: 10 – Balance Sheet: Assets
10 – Balance Sheet Assets ASSETS (m EUR) June 30, 2010 Dec. 31, 2010 June 30, 2011 I. Cash and balances with central banks 2,595 3,266 4,345 II. Loans and advances due from banks 60,527 53,379 48,498 III. Loans and advances to customers 363,949 352,307 316,432 IV. Financial assets measured at fair v
Slide 52: 10 – Balance Sheet: Liabilities
10 – Balance Sheet Liabilities LIABILITIES (m EUR) June 30, 2010 Dec. 31, 2010 June 30, 2011 I. Due to banks 109,222 98,490 89,719 II. Customer borrowings and deposits 126,733 127,060 125,279 III. Financial liabilities measured at fair value through profit or loss 20,587 20,154 19,758 IV. Derivative
Slide 53: 10 – Balance Sheet: Core and LPM Divisions
10 – Balance Sheet Core and LPM Divisions Core Division LPM Division (as of June 30, 2011) (as of June 30, 2011) (EUR bn) (EUR bn) 404 404 RCB, 56 Covered bonds, 73 113 113 FP, 7 FP (GICS), 4 Commercial PWB run-off commitments, Covered funding, 113 bonds, 26 PWB core, 11 209 Long-term *, LT state 45
Slide 54: 11 – State Guarantees
11 – State Guarantees (amounts and amortization of funding) Total guaranteed debt outstanding as at 30 June 2011: EUR 31.8 bn State guarantee fees (EUR m) 2Q10 3Q10 4Q10 1Q11 2Q11 1H10 1H11 Funding related -96 -101 -96 -90 -75 -182 -165 Financial Products portfolio related -29 -27 -25 -22 -21 -57 -4
Slide 55: 12 – DenizBank's Consolidated Financial Statements
12 - DenizBank’s Consolidated Financial Statements (EUR m) 2Q10 1Q11 2Q11 % yoy % qoq 1H10 1H11 % yoy Income 258 241 261 1.0% 8.0% 526 502 -4.6% Expenses -119 -120 -127 7.1% 5.9% -229 -247 7.7% Gross operating income 139 121 134 -4.1% 10.0% 297 255 -14.0% Cost of risk & impairments -29 -8 -21 -27.8%
Slide 56: 13 – Shareholding Structure
13 – Shareholding Structure As of June 30, 2011 Belgian Federal State French State Caisse des Dépôts 5.7% 5.7% et Consignations 17.6% Three Belgian Regions 5.7% CNP Assurances 3.0% Holding Communal 14.3% Other Institutional and Individual Arco Group Shareholders 13.7% 28.3% Ethias Group Employee 5.0
Slide 57: 14 – Specific Disclosures: Monolines exposure
14 – Specific Disclosures, Based on FSB Recommendations Counterparty risk on monolines: exposure Protection via other types of (EUR bn) Protection via CDS contracts Remaining Fair Value of the exposure to Gross notional protection before Credit Value counterparty risks Gross notional Total gross Und
Slide 58: 14 – Specific Disclosures: Monoline exposure quality
14 – Specific Disclosures, Based on FSB Recommendations Counterparty risk on monolines: quality of exposure (EUR bn) Underlying assets Monoline counterparty Public Finance Project/Corporate finance ABS by rating* IG NIG Total IG NIG Total IG NIG Total TOTAL AAA/AA 8.2 0.1 8.3 6.1 1.0 7.1 4.2 0.7 4.9
Slide 59: 14 – Specific Disclosures: Exposure to US RMBS
14 – Specific Disclosures, Based on FSB Recommendations Exposure to US RMBS* Protection Specific Net exposure Gross exposure (nominal) impairments **** (EUR bn) A B C A-B-C-D Prime 0.1 0.1 0.0 0.0 Alt-A ** 0.2 0.0 0.0 0.2 Subprime *** 3.9 0.0 0.0 3.8 Option ARM 0.0 0.0 0.0 0.0 Others 0.1 0.0 0.0 0.1
Slide 60: 14 – Specific Disclosures: Exposure to UK and Spanish RMBS
14 – Specific Disclosures, Based on FSB Recommendations Exposure to UK and Spanish RMBS* Protection Gross exposure (nominal) Net exposure (EUR bn) A B A-B-C-D UK 0.3 0.0 0.3 o/w Conforming 0.2 0.0 0.2 o/w Non conforming 0.0 0.0 0.0 o/w Buy to let 0.1 0.0 0.1 Spain 2.2 0.0 2.2 100% of UK RMBS are AAA