Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Shareholder Meeting (May 2015)
44 slides from Dexia Holding SA's shareholder meeting presentation, May 20, 2015
Slide 1: Shareholders Meeting
Shareholders Meeting Brussels, May 20th, 2015 1
Slide 2: Disclaimer
Disclaimer This presentation and the information contained therein are provided for informational purposes only. No representation or warranty is made as to the adequacy, accuracy, reliability or completeness of such information. This presentation does not constitute - and shall not be interpreted a
Slide 3: Annual Shareholders Meeting Agenda
Annual Shareholders Meeting Agenda Part I : Orderly resolution well on track Part II : Significant macro-economic and regulatory shifts Part III : Progress on strategic objectives in 2014 Part IV : Annual results 2014 and Q1 2015 Part V : Activity of the board of directors and dedicated committees P
Slide 4: Part I: Orderly resolution well on track
Part I: Orderly resolution well on track 4
Slide 5: Orderly resolution well on track: Fundamentals of the plan
Orderly resolution well on track Fundamentals of the plan Scope: Dexia SA 31/12/2008 31/12/2011 31/12/2014 Balance Sheet (EUR bn) 651 413 247 Group Group Tier 1 ratio 10.6% Restructuring 7.6% Resolution 16.4% Staff 36,700 22,460 1,265 Orderly Resolution Plan, approved by the European Commission on 2
Slide 6: Entity disposals achieved in 2014
Orderly resolution well on track Entity disposals achieved in 2014 Dexia Bank Belgium 2011 Banque Internationale à Luxembourg RBC Dexia Investor Services DenizBank 2012 2008 508 entities 2015 51 entities Société de Financement Local Sofaxis Advanced Dexia Technology Services 2013 Dexia Asset Managem
Slide 7: Target resolution scope reached in 2014
Orderly resolution well on track Target resolution scope reached in 2014 Dexia Group (consolidated) Total B/S: EUR 247.1 bn Staff : 1,265 Dexia SA 100% DCL Dublin (Ireland) Dexia Crédit Local Total B/S1: EUR 13.7 bn (incl. branches in New York and Dublin) Staff : 27 DKD (Germany) Total B/S1: EUR 45.
Slide 8: New corporate governance finalized in 2014
Orderly resolution well on track New corporate Governance finalized in 2014 Board of directors Governance organs of DSA mirror those of DCL DSA Board DCL’s board of directors has the same members member as DSA’s plus 1 executive director and 2 additional DCL Board member independent directors State
Slide 9: Overview of the asset portfolio
Orderly resolution well on track Overview of the asset portfolio Exposures by region Exposures by counterparty Exposures by rating Germany 12% Sovereigns France 16% A 16% Spain 11% Local public 29% sector 50% AA United Kingdom Financial 23% Italy 10% institutions BBB 16% 16% 20% Japan 3% Portugal 2%
Slide 10: Long term financial roadmap: assets and liabilities
Orderly resolution well on track Long term financial roadmap Indicative Consolidated Assets 2013-2019 Indicative Consolidated Liabilities 2013-2019 For illustration only For illustration only Achieved Forecasts1 Achieved Forecasts1 EUR 247 bn Natural asset amortization EUR 247 bn EUR 223 bn EUR 223
Slide 11: Long term financial roadmap: solvency and net result
Orderly resolution well on track Long term financial roadmap Forecasted solvency Forecasted Net Result For illustration only For illustration only Achieved Forecasts1 120 25% 2013 2014 2015 2016 2017 2018 2019 22,4% 100 20% 17,2% 80 15% 60 IFRS 9 First time application 10% 40 -0,66 bn 5% 20 0 0% -1,
Slide 12: Long term financial roadmap: plan assumptions
Orderly resolution well on track Long term financial roadmap The Orderly Resolution plan is based on a number of assumptions, updated semi-annually Operating assumptions Going concern Going concern and banking license maintained Rating Dexia Group and its entities maintain their current rating Accou
Slide 13: Long term financial roadmap: external sensitivities
Orderly resolution well on track Long term financial roadmap The realisation of the plan is dependent on external factors, over which the Group has little control Sensitivity to the macro-economic context Lower Increase in cash collateral, triggering higher funding needs interest rates Decreased inc
Slide 14: Part II: Significant macro-economic and regulatory shifts
Part II: Significant macro-economic and regulatory shifts 14
Slide 15: Two major external forces in 2014
Significant macro-economic and regulatory shifts Two major external forces in 2014 Major shift 1 2 Challenging in the prudential macro-economic and regulatory environment framework Impact on Solvency & Liquidity Balance sheet size Funding costs Cost of risk Reporting 15
Slide 16: A challenging macro-economic environment
Macro- Significant macro-economic and regulatory shifts 1 Environment Economic A challenging macro-economic environment Weak economic growth in the Eurozone Very low inflation in the Eurozone A modest economic recovery in 2014 with an average GDP growth of 0.9% Lower oil prices should support growth
Slide 17: ECB Intervention
Macro- Significant macro-economic and regulatory shifts 1 Environment Economic ECB Intervention An accomodating monetary policy conducted by the European Central Bank Several measures taken by the ECB in 2014 and the beginning of 2015 to foster inflation up to 2% Lowering of ECB policy interest rate
Slide 18: Impact on Dexia Group
Macro- Significant macro-economic and regulatory shifts 1 Environment Economic Impact on Dexia Group Macro-economic evolutions having an ambivalent impact on Dexia’s financials Positive impact Negative impact • Improvement of AFS reserve and therefore Tightening of of the regulatory capital base Sov
Slide 19: Funding need sensitive to exogenous factors
Macro- Significant macro-economic and regulatory shifts 1 Environment Economic Funding need sensitive to exogenous factors Macro-economic environment What happens with hedging contracts when rates move ? Interest rates 4% 3% - 0.1% + EUR 1.1 Bn of extra cash collateral that Dexia decrease of interes
Slide 20: Evolution of the prudential and regulatory framework
Prudential & Significant macro-economic and regulatory shifts 2 Framework Regulatory Evolution of the prudential and regulatory framework A flow of new prudential and regulatory initiatives increasing the pressure on European banks Regulatory pressure index - KPMG A series of regulatory initiatives,
Slide 21: Overview of recent and pending regulations
Prudential & Significant macro-economic and regulatory shifts 2 Framework Regulatory Overview of recent and pending regulations Financial institutions Financial Markets Corporate governance Central Securities Depository Directive Remuneration policies Securities Law Market Abuse Directive DGS and ba
Slide 22: Part III: Progress on strategic objectives in 2014
Part III: Progress on strategic objectives in 2014 22
Slide 23: A clear mandate
Progress on strategic objectives in 2014 A clear mandate Manage the balance sheet wind-down while protecting the interests of the Group’s State shareholders and guarantors Strategic priorities Maintain the Preserve the Ensure operational 1 2 3 ability to capital base to continuity by refinance the c
Slide 24: Main achievements
Progress on strategic objectives in 2014 Main achievements Over the year, we delivered on our strategic priorities: Prudent liquidity management Favourable evolution of the funding structure resulting in a decrease of the funding 1 Secure the liquidity cost and a positive recurring net banking incom
Slide 25: Prudent liquidity management
Progress on strategic objectives in 2014 1 Secure Liquidity Prudent liquidity management Two important liquidity challenges needed to be dealt with at the same time : 1. Significant long term funding redemptions to be replaced EUR 35.7 Bn 12.9 Bn of Government guaranteed debt repaid to Belfius in 20
Slide 26: Prudent liquidity management to face these challenges
Progress on strategic objectives in 2014 1 Secure Liquidity Prudent liquidity management Prudent liquidity management to face these challenges EUR 35.7 Bn of long term funding maturing Creation of a liquidity buffer placed at the Fed, reaching a high between end 2013 and Q1 2015 point of EUR 12.6 Bn
Slide 27: Prudent liquidity management: funding structure
Progress on strategic objectives in 2014 1 Secure Liquidity Prudent liquidity management Funding structure Further diversification of the funding structure Over the year, further development of repo funding 29% 33% 31% 34% with a significant increase in number of counterparties 15% 14% 11% 12% 20% P
Slide 28: Confirmation of the resolution trajectory by the ECB
Progress on strategic objectives in 2014 2 Preserve Capital Confirmation of the resolution trajectory by the ECB Dexia is the only bank in orderly resolution subject to the in-depth assessment conducted by the ECB Objectives Asset Quality Review and Stress Test Enhance banking transparency and resto
Slide 29: ECB conclusions confirm orderly resolution path
Progress on strategic objectives in 2014 2 Preserve Capital Confirmation of the resolution trajectory by the ECB The conclusions published by the ECB on 26 October 2014 confirm the path of Dexia’s orderly resolution Asset Quality Review Confirmation of the quality of Dexia’s asset portfolio and soun
Slide 30: First step towards a cost-efficient operating model
Progress on strategic objectives in 2014 Ensure 3 Operational Continuity First step towards a cost-efficient operating model 1. Make Dexia whole again 2. Streamlining of governance Complex disentanglement with SFIL and Simplification and unification of the Belfius: IT systems, employees, intra-group
Slide 31: Part IV: Annual results 2014 and Q1 2015
Part IV: Annual results 2014 and Q1 2015 31
Slide 32: FY 2014 – Income Statement
Results FY 2014 and Q1 2015 FY 2014 – Income Statement Net result Group share EUR -606 million Recurring elements EUR -248 million Accounting volatility elements EUR -425 million Non-recurring elements EUR 67 million Income slightly higher than assumed in the orderly resolution plan despite the impa
Slide 33: FY 2014 - Analytical Presentation
Results FY 2014 and Q1 2015 FY 2014 - Analytical Presentation EUR Million 100 0 -83 -95 -111 -100 -145 -166 -184 -200 -329 -300 -400 -500 -576 -600 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Net recurring income Accounting volatility elements Non-recurring income Net income Grou
Slide 34: FY 2014 - Focus on Recurring Elements
Results FY 2014 and Q1 2015 FY 2014 - Focus on Recurring Elements EUR Million 100 50 0 -50 -28 -88 -90 -42 -100 -145 -157 -160 -150 -207 -200 -250 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Cost of risk and net gains or losses on other assets Operating expenses Net banking incom
Slide 35: FY 2014 – Balance Sheet
Results FY 2014 and Q1 2015 FY 2014 – Balance Sheet Assets 2013/2014 EUR +21 Bn EUR 247 Bn EUR 226 Bn1 EUR +28 Bn EUR - 7 Bn 31/12/2013 31/12/2014 Bonds & loans Other assets (1) Estimation EUR/USD constant 31/12/2014 At constant exchange rate, balance sheet up by EUR 21 billion - Sharp decrease of i
Slide 36: FY 2014 – Solvency
Results FY 2014 and Q1 2015 FY 2014 – Solvency CAD ratio (Basel II) 22.4% 20.9% Total Capital ratio (Basel III) -5.5% 17.5% 17.3% Total capital RWA (EUR bn) (EUR bn) 14 56 12 54 10 Implementation of Basel III 52 RWA : EUR + 7 bn Total capital : EUR -1,1 bn 8 50 6 48 4 46 2 44 0 42 31/12/2012 31/12/2
Slide 37: Q1 2015 – Income Statement
Results FY 2014 and Q1 2015 Q1 2015 – Income Statement Net result Group share EUR -125 million Recurring elements EUR -212 million Accounting volatility elements EUR +127 million Non-recurring elements EUR -41 million Net recurring income at EUR -212 million, impacted by the cost of risk (EUR -130 m
Slide 38: Q1 2015 – Balance Sheet and Solvency
Results FY 2014 and Q1 2015 Q1 2015 – Balance Sheet and Solvency Assets 2014 / Q1 2015 EUR +18 Bn EUR 268 Bn EUR 250 Bn1 EUR +21 Bn EUR -3 Bn 31/12/2014 31/03/2015 Bonds & loans Other assets (1) Estimation EUR/USD constant 31/03/2015 At constant exchange rate, increase in balance sheet by EUR 18 bil
Slide 39: Part V: Activity of the Board of Directors and Dedicated Committees
Part V: Activity of the Board of Directors and Dedicated Committees
Slide 40: Activity of the Board of Directors and the Dedicated Committees
Activity of the Board of Directors and the Dedicated Committees ■ Topics regularly dealt with by the board of Number of meetings 2009 2010 2011 2012 2013 2014 directors and the specialised committees - the revised orderly resolution plan and State undertakings in relation to the Board of Directors 1
Slide 41: Part VI: Human resources
Part VI: Human resources
Slide 42: Human resources policy
Human resources Human resources policy ■ A human resources challenge: - To keep qualified and experienced members of staff to manage the balance-sheet in run-off - To improve the perception of the general interest mission - To make available HR tools considering compensation restrictions 42
Slide 43: 2014 compensation report
Human resources 2014 compensation report ■ Change in the compensation of the Directors - Harmonisation of the compensation between the Directors of Dexia SA and the ones of Dexia Crédit Local - Re-assessment of the compensation of the president of the audit committee - Reduced attendance fees when s
Slide 44: Annual Shareholders Meeting
Annual Shareholders Meeting Brussels, May 20th, 2015