Dexia Holding SA · EURONEXT:DEXB
Dexia Holding SA — Q2 2006 Earnings Presentation
53 slides from Dexia Holding SA's earnings presentation, Sep 5, 2006
Slide 1: Analysts' Meeting Q2 2006 Results
Analysts’ Meeting Q2 2006 Results Brussels, September 5, 2006 Rembert von Lowis Member of the Management Board
Slide 2: Highlights
DEXIA Highlights
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 + 17.0 % Finance and Credit Enhancement • Net par o/s FSA + 6.6 % • Customer assets o/s + 4.9 % Personal Financial Services • Customer loans o/s + 15.0 % • Assets unde
Slide 4: Group results
DEXIA Group results
Slide 5: Changes in scope
Changes in scope (M€) Reported net income – Group share June 30, 2005 982 - Exits (Eural, Rekord, Private banking London) - Impact JV RBC (proportional integration) - Impact of the IFRS adjustments booked in Q4 2005 Pro forma net income – Group share June 30, 2005 983 Variation +1 Of which: Income -
Slide 6: Summary of H1 2006 P&L account
Summary of H1 2006 P&L account FIRST HALF 2006 Variation (M€) H1 2005 H1 2006 reported underlying* Income 2,896 3,464 + 19.6% + 10.0% Costs - 1,566 - 1,659 + 5.9% + 6.5% Gross operating income 1,330 1,805 + 35.7% + 14.2% Cost of risk - 50 - 61 + 22.0% + 38.0% Impairments on (in)tangible assets +
Slide 7: Summary of Q2 2006 P&L account
Summary of Q2 2006 P&L account SECOND QUARTER 2006 Variation (M€) Q2 2005 Q2 2006 reported underlying* Income 1,443 1,678 + 16.3% + 13.8% Costs - 793 - 839 + 5.8% + 6.6% Gross operating income 650 839 + 29.0% + 22.8% Cost of risk + 40 - 61 n.s. + 22.9% Impairments on (in)tangible assets +1 0 n.s
Slide 8: Focus on revenues (1)
Focus on revenues (1) 1. ACCOUNTING VIEW (M€) Variation H1 2005 H1 2006 M€ % Total income (reported) 2,896 3,464 + 568 + 19.6% Net interest, dividend and related 2,182 2,725 + 543 + 24.9% income Net commissions 583 646 + 63 + 10.8% Technical margin of insurance 81 41 - 40 - 49.4% activities
Slide 9: Focus on revenues (2)
Focus on revenues (2) 2. INCOME BY TYPE OF ACTIVITIES (M€) Variation H1 2005 H1 2006 M€ % Total income (underlying) 2,843 3,128 + 285 + 10.0% Banking activities 2,391 2,608 + 217 + 9.1% FSA 229 279 + 50 + 21.4% Insurance activities 223 241 + 18 + 8.0% 9
Slide 10: Cost of risk
Cost of risk related to total net O/S commitments** (in bas is points) 2.5 1.2 1.2 Credit 0.4 0.7 0.6 0.6 0.6 0.6 0.6 enhancement 12.2 * 9.8 * 7.8 6.4 6.6 5.7* 2.2 1.8* 1.7 * 1.6* Banking activities 1997 1998 1999 2000 2001 2002 2003 2004 2005 H1 2006 annualized * Excluding impact of charges for Leg
Slide 11: Non-operating items
Non-operating items (M€) Q2 2005 Q2 2006 H1 2005 H1 2006 Income + 28 + 72 + 47 + 336 of which . capital gains + 28 + 67* + 39 + 304* . MTM, CDS FSA - 11 -3 - 14 + 21 . interest DBNL +9 +3 + 18 +8 Costs -1 0 -1 0 Cost of risk (DBNL) + 56 - 42 - 27 - 29 Tax expense - 11 + 13 +51 -3 of which . tax cred
Slide 12: Incidence of FSA's MTM on CDS portfolio on the quarterly income
Incidence of FSA’s MTM on CDS portfolio on the quarterly income (M€) 40 35 30 24 20 10 0 -2 -3 -10 -11 -12 -20 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 12
Slide 13: Key performance indicators (1)
Key performance indicators (1) H1 2005 H1 2006 C/I ratio 54.1% 47.9% C/I ratio underlying 54.8% 53.0% ROE 19.3% 24.3% Return on risk-weighted 1.85% 2.30% assets Profit margin 34.8% 40.2% 13
Slide 14: Key performance indicators (2)
Key performance indicators (2) Variation in 31/03/06 30/06/06 3 months Tier 1 ratio 10.3% 9.9% - Tier 1 ratio with 50% hybrid 9.8% 9.4% - Tier 1 capital (M€) 12,291 12,591 + 2.4% Risk weighted assets (Bn€) 119.2 127.1 + 6.6% NAV per share (€)* Core shareholders’ equity** 10.34 10.67 + 3.2% Total sha
Slide 15: Earnings per share
Earnings per share +39.1% (€) 1.24 0.89 0.97 (1) +15.8% 0.83 (1) +16.0% 0.53 0.46 0.50 (1) 0.40 (1) +24.8% Q2 2005 Q2 2005 Q2 2006 Q2 2006 H1 2005 H1 2005 H1 H2 2006 2006 (1) Excluding non-operating it ems 15
Slide 16: Business lines
Business lines Activity and Results
Slide 17: Public/Project Finance & Credit Enhancement
Activity highlights Public/Project Finance & Credit Enhancement 9 Long-term banking commitments* (Bn€) + 17.0 % 245.4 209.7 America 28.2 43.1 (+ 14.0 %) Project/ 17.5 Corporate 37.8 Finance 111.0 Other countries 85.9 (+ 29.3 %) 217.2 192.2 Public Finance France + 86.0 91.3 Belgium + Luxembourg (+ 6.
Slide 18: Public/Project Finance & Credit Enhancement
Activity highlights Public/Project Finance & Credit Enhancement Credit enhancement (FSA) Gross present value originations Net par outstanding (M US$) (Bn US$) +4.7 % + 6.6 % 425 406 362 34 53 339 14 11 40 14 30 33 15 44 8 139 80 87 120 53 200 222 168 167 H1 2005 H1 2006 30/06/05 30/06/06 U.S. Muni U
Slide 19: Public/Project Finance & Credit Enhancement: H1 2006 underlying P&L
Public/Project Finance & Credit Enhancement Analysis of H1 2006 underlying P&L FIRST HALF 2006 Variation Variation (M€) H1 2005* H1 2006 H1 06 / At constant rate H1 05 of exchange Income 1,087 1,226 + 12.8% + 11.8% Costs - 365 - 390 + 7.0% + 6.4% Gross operating income 722 835 + 15.7% + 14.5% Cost o
Slide 20: Public/Project Finance & Credit Enhancement: Q2 2006 underlying P&L
Public/Project Finance & Credit Enhancement Analysis of Q2 2006 underlying P&L SECOND QUARTER 2006 Variation Variation (M€) Q2 2005* Q2 2006 Q2 06 / at constant rate Q2 05 of exchange Income 546 621 + 13.8% + 11.8 % Costs - 185 - 193 + 4.2% + 2.9% Gross operating income 361 428 + 18.7% + 16.3% Cost
Slide 21: Public/Project Finance & Credit Enhancement: Quarterly gross operating income
Public/Project Finance & Credit Enhancement Quarterly variation of the underlying gross operating income (M€) 621 604 575 578 541 546 Income 428 407 387 382 Gross 361 361 operating income Costs 185 187 195 197 193 179 Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 Q2 2006 * Based on pro forma accounts
Slide 22: Personal Financial Services: Total Customer Assets
Activity Highlights Personal Financial Services 9 Total Customer Assets (Retail and Private Banking) (Bn€) + 4.9 % 125.5 of which 119.6 122.3 9.6 10.2 8.5 Insurance 43.2 (Life insurance technical Private reserves) Banking 57.8 60.4 60.8 Off Balance Sheet products (Mutual funds, direct securities,...
Slide 23: Personal Financial Services: Total Customer Loans
Activity Highlights Personal Financial Services 9 Total Customer Loans (Retail and Private Banking) (Bn€) + 15.0 % 30.6 28.6 3.3 Loans to Private banking 26.6 2.8 customers 2.5 Loans to SME, independen ts 6.4 6.4 6.2 2.4 Consumer loans 2.3 2.3 Mortgage l oans 17.1 18.5 15.7 June 20 05 Dec. 2005 June
Slide 24: Personal Financial Services: H1 2006 underlying P&L
Personal Financial Services Analysis of H1 2006 underlying P&L FIRST HALF 2006 Variation (M€) H1 2005* H1 2006 H1 06 / H1 05 Income 1,095 1,121 + 2.4% Costs - 769 - 786 + 2.2% Gross operating income 325 335 + 2.9% Cost of risk - 15 -6 - 59.8% Tax expense - 94 - 84 - 11.1% Other items +1 +1 n.s. Net
Slide 25: Personal Financial Services: Q2 2006 underlying P&L
Personal Financial Services Analysis of Q2 2006 underlying P&L SECOND QUARTER 2006 Variation (M€) Q2 2005* Q2 2006 Q2 06 / Q2 05 Income 551 561 + 1.7% Costs - 385 - 393 + 2.2% Gross operating income 167 168 + 0.6% Cost of risk -5 -1 - 83.4% Tax expense - 50 - 41 - 18.7% Other items 0 +1 n.s. Net inc
Slide 26: Personal Financial Services: Quarterly gross operating income
Personal Financial Services Quarterly variation of the underlying gross operating income (M€) 566 560 561 543 551 553 Income 394 399 393 393 385 385 Costs Gross 158 167 159 168 167 168 operating income Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 Q2 2006 * Based on pro forma accounts 26
Slide 27: Asset Management, Insurance Services, Investor Services
• Asset Management • Insurance Services • Investor Services 27
Slide 28: Asset Management: Assets under Management
Activity Highlights Asset Management 9 Assets under Management (Bn€) Organic growth: YTD + 8.2% + 7.4 % Market effect: YTD - 0.8% 5.4 1.2 97.2 2.0 97.3 2.3 87.9 1.5 1.1 90.6 -1.9 4.2 M arket O rganic 81.4 M arket O rganic effect grow th M arket O rganic grow th effect O rganic M arket effect grow th
Slide 29: Asset Management: H1 2006 underlying P&L
Asset Management Analysis of H1 2006 underlying P&L FIRST HALF 2006 Variation (M€) H1 2005* H1 2006 H1 06 / H1 05 Income 90 121 + 34.9% Costs - 49 - 65 + 32.6% Gross operating income 40 56 + 37.7% Cost of risk 0 0 n.s. Tax expense -2 -5 x 2.2 Other items 0 -3 n.s. Net income – Group share 38 48 27.9
Slide 30: Asset Management: Quarterly gross operating income
Asset Management Quarterly variation of the underlying gross operating income (M€) 62 61 59 45 46 Income 44 35 34 31 Costs 27 24 25 27 28 27 21 20 19 Gross operating income Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 Q2 2006 * Based on pro forma accounts 30
Slide 31: Insurance Services: gross written premiums
Insurance Services 9 Insurance gross written premiums (M€) 1,297 94 Non life 1,057 257 947 Life Branch 23 829 823 106 127 87 686 Life Branch 21 120 101 115 123 149 99 117 946 864 705 586 573 470 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Gross Grosswritten writtenpremiums premiumsH1 2006: 2,004
Slide 32: Insurance Services: H1 2006 underlying P&L
Insurance Services Analysis of H1 2006 underlying P&L FIRST HALF 2006 Variation (M€) H1 2005* H1 2006 H1 06 / H1 05 Income 111 129 + 15.8% Costs - 60 - 68 + 14.1% Gross operating income 51 60 + 17.8% Cost of risk 0 -1 n.s. Tax expense -9 -5 - 39.0% Other items 0 -1 n.s. Net income – Group share 42 5
Slide 33: Insurance Services: Quarterly gross operating income
Insurance Services Quarterly variation of the underlying gross operating income (M€) 77 71 57 Income 54 52 35 33 32 33 30 30 Costs 33 Gross operating income 27 24 -1 39 18 42 Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 Q2 2006 * Based on pro forma accounts 33
Slide 34: Investor Services: Activity Highlights
Activity Highlights Investor Services* Assets under administration** Number of funds Number of shareholder (Bn USD) under administration accounts in transfer agent (in thousands) + 26.3 % + 10.9 % + 3.8 % 2,080 6,318 4,079 3,929 3,898 5,696 5,783 1,796 1,647 June Dec. June June Dec. June June Dec. J
Slide 35: Investor Services: H1 2006 underlying P&L
Investor Services Analysis of H1 2006 underlying P&L FIRST HALF 2006 Variation Variation (M€) H1 2005* H1 2006 H1 06 / At constant rate H1 05 of exchange Income 148 189 + 27.4% + 19.4% Costs - 108 - 122 + 13.0% + 6.1% Gross operating income 40 67 + 65.8% + 54.8% Cost of risk 0 0 n.s. Tax expense - 1
Slide 36: Investor Services: Quarterly gross operating income
Investor Services Quarterly variation of the underlying gross operating income (M€) 100 89 84 79 80 Income 69 61 61 63 59 56 51 Costs 37 30 22 23 Gross 18 18 operating income Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 Q2 2006 * Based on pro forma accounts 36
Slide 37: Treasury and Financial Markets: Funding activities
Treasury and Financial Markets (TFM) Group Treasury - Funding activities New LT issues Average 8.2 years 8.1 years life 19.1 (Bn€) 14.6 AA AA AAA AAA H1 2005 H1 2006 37
Slide 38: Treasury and Financial Markets: Fixed Income CSP portfolio
Treasury and Financial Markets (TFM) Fixed Income – CSP portfolio Average 7.3 years 8.2 years life + 13.9 - 7.4 (Bn€) 69.4 62.9 Repayments & sales New investments 92 % 92 % 31/12/05 30/06/06 Available for sale & held to maturity Trading 38
Slide 39: Treasury and Financial Markets: H1 2006 underlying P&L
Treasury and Financial Markets Analysis of H1 2006 underlying P&L FIRST HALF 2006 Variation (M€) H1 2005* H1 2006 H1 06 / H1 05 Income 237 290 + 22.1% Costs - 83 - 81 - 1.5% Gross operating income 155 208 + 34.7% Cost of risk 0 0 n.s. Tax expense - 14 - 45 x 3.2 Other items -2 -1 n.s. Net income – G
Slide 40: Treasury and Financial Markets: Quarterly net income
Treasury and Financial Markets Quarterly variation of the underlying net income – Group share (M€) 152 136 135 137 Income 117 101 Net income 81 - Group share 81 81 74 58 57 Costs 48 41 42 42 41 41 Q1 2005* Q2 2005* Q3 2005* Q4 2005* Q1 2006 Q2 2006 * Pro forma 40
Slide 41: Treasury and Financial Markets: Contribution of segments
Treasury and Financial Markets Underlying contribution of the business line’s segments Market Engineering Treasury Fixed Income and Trading (M€) H1 2005* H1 2006 H1 2005* H1 2006 H1 2005* H1 2006 Income 70 60 152 176 16 53 Costs - 24 - 24 - 29 - 29 - 29 - 28 Gross operating income 45 36 123 147 - 13
Slide 42: Focus on Central Assets (underlying)
Focus on Central Assets (underlying) (M€) Q2 2005* Q2 2006 H1 2005* H1 2006 Income 36 48 76 54 Costs - 65 - 80 - 124 - 146 Gross operating income - 28 - 32 - 48 - 93 Cost of risk -1 -3 -1 0 Tax expense 10 7 29 38 Minority interests 1 6 3 13 Net income – Group share - 20 - 34 - 23 - 69 * Pro forma 42
Slide 43: Appendices
Appendices • FSA from US GAAP (USD) to IFRS (EUR) • Recap Asset Management, Insurance and Investor Services • View on Insurance activities across the Group • Update on DBNL/Legio • Branch network in Belgium • Evolution of outstanding shares
Slide 44: FSA from US GAAP (USD) to IFRS (EUR)
FSA from US GAAP (USD) to IFRS (EUR) Variation (M$) H1 2005 H1 2006 H1 06 / H1 05 US GAAP – Net Income (as reported by FSA) 193 240 + 24.6% Fair value adjustments for economic interest rate hedges - 36.2 - 43.7 Fair value adjustments for insured CDS 13.4 - 16.9 US GAAP – Operating Earnings (as repor
Slide 45: Recap Asset Management, Insurance and Investor Services
Recap Asset Management, Insurance and Investor Services Analysis of H1 2006 underlying P&L FIRST HALF 2006 Variation Variation (M€) H1 2005* H1 2006 H1 06 / at constant rate of H1 05 exchange Income 349 439 + 25.6% + 22.2% Costs - 217 - 255 + 17.7% + 14.3% Gross operating income 132 183 + 38.6% + 35
Slide 46: View on insurance activities across the Group (1)
View on insurance activities across the Group (1) 9 Insurance gross written premiums (M€) 1,297 94 Non life 1,057 257 947 Life Branch 23 829 106 823 87 127 120 101 686 115 Life Branch 21 123 149 99 117 946 864 705 586 573 470 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Gross Grosswritten written
Slide 47: View on insurance activities across the Group (2)
View on insurance activities across the Group (2) Contribution to the pro forma underlying revenues* (M€) H1 H12006 2006revenues: revenues: 241 241M€ M€ 8.0% ++8.0 %versus versusH1 H12005 2005 By business lines By reporting entities 5% 84% 51% 44% 16% Public/Project Finance Personal Financial Servic
Slide 48: View on insurance activities across the Group (3)
View on insurance activities across the Group (3) Focus on Dexia Insurance Services (DIS) (M€) 2005 2006 Variation 2005 2006 Variation Q2 Q2 Q2 2006 / H1 H1 H1 2006 / Q2 2005 H1 2005 Total Group Insurance R evenues 108 129 19.8% 223 241 8.0% of wich Dexia Insurance Services 91 108 18.0% 192 203 5.9%
Slide 49: Performance ratios of Dexia Insurance Services
View on insurance activities across the Group (4) Performance ratios of Dexia Insurance Services H1 2005 H1 2006 9 Life • Margin on outstanding 1.7 %* 1.5 % (income life direct business/ mathematical life reserves) • Cost ratio 2.5 % 2.2 % (operating expenses, network fees included / gross written p
Slide 50: Evolution of the share leasing portfolio outstanding
DBNL/Legio Evolution of the share leasing portfolio outstanding (M€) 3,269 172 2,448 Total 1,054 147 1,868 Of which Of which 1,625 contracts Of which Not with Accepted an accepted 1,370 capital agreement an 1,489 300 1,145 repayments agreement 357 219 267 363 427 1,034 264 1,229 815 694 12 812 615 8
Slide 51: Share Leasing – Evolution of the stock of provisions
DBNL/Legio Share Leasing – Evolution of the stock of provisions (M€) IAS 37 Provision (in Liabilities) IAS 39 Portfolio provision (deducted from Assets) 497 - 13 Cost of risk (reversal) - 91 145 393 + 42 - 44 391 Utilisations Cost of risk Utilisations + 105 (allocation,…) + 103 adjustments adjustmen
Slide 52: Branch network in Belgium
Branch network in Belgium -- 30 30 % % 1,483 1,411 1,283 1,187 1,069 1,037 940 912 889 871 833 814 543 499 394 316 236 223 2001 2002 2003 2004 2005 June 2006 Employee network Independent agents network 52
Slide 53: Evolution of outstanding shares
Evolution of outstanding shares Shares cancelled at Shareholders’ Outstanding General Meeting of shares May 10, 2006 1,107,469,030 -22,096,720 Exercice of Outstanding warrants shares 227,281 1,085,599,591 Of which: 2,369,120 bought back in 2006 Treasury shares Treasury shares 20,550,020 544,931 31/1