Download - General Presentation
World Leader of Public Finance
General Presentation
June 2004
2
Contents
! Dexia within the Local Public Finance Market
! Group Financial Performances and Objectives
! Business Lines
! Appendices
Part One
Dexia within the Local Public Finance Market
4
The main markets of Local Public Finance
LT Debt O/S: ≈1,600 Bn€ ≈500 Bn€* ≈1,500 Bn€
Access: Bond Market
Bank Loans & Bond Market
Bond Market & Bank Loans
Group
* Local Authorities only
5
The PlayersThe Local Public Finance Market
Domestic SavingsBanks
L.T. lending institutions
Arrangers
Bond Insurers
Disintermediated(Municipal Bond Market)
Intermediated
Liability Driven Asset Driven
Dexia Bank Dexia Crédit Local
Investors
Dexia Public Capital Markets
Dexia Municipal Agency
Dexia Hypothekenbank BerlinDexia Crediop…
6
Market constituents – Clients’ expectations - Products
Market constituents
! Municipalities
! Regions
! Social Housing Institutions
! Health care institutions
! Schools / universities
! Charities
Clients’ expectations
! Funding
! Long lasting relationship
! Assistance to Financial/Budget management
! Access to capital markets solutions
! Optimisation of debt, and cost of debt
! Public/Private partnership
Products
! Long term Loans and Bonds
! Short term facilities
! Payment services
! Asset management
! Insurance services
! Financial engineering/advisory services
7
59 7620
53
1996 1997 1998 1999 2000 2001 2002
Dexia’s volume growth outperformed the market’s
1996 1997 1998 1999 2000 2001 2002
EuropeLT Loans O/S
493 Bn€451 Bn€CAGR: +1.3% p.a.
129 Bn€79 Bn€
CAGR: +8.3% p.a.
Group
+4.1%p.a.
+17.4%p.a
Local authorities Other local actors
1996 1997 1998 1999 2000 2001 2002
USAMuni Bonds insured O/S
1,763 Bn$
1,262 Bn$
CAGR: +4.9% p.a.
1996 1997 1998 1999 2000 2001 2002
201 Bn$
47 Bn$
CAGR: +23.2% p.a.
8
Key business model features
! Solvency of borrowers" Low risk asset weighting" Narrow margins" Low cost of risk
! Long Term" Annuity building business" Low revenue volatility
! Importance of Funding" High credit ratings needed
! Differential advantages" A “volume” business " Innovation: new products successfully marketed in a country can be exported to others
9
History:In 1996 CCB and CLF combined into Dexia
Crédit local de France (CLF)
LT Bonds
Issues
LT Lendingsto local public
authorities
Bond Portfolio
assets liabilities
Retail
Customer
Deposits
Lendings to local public authorities
Retail loans
Bond Portfolio
assets liabilities
+ BIL
Private Banking
Asset Management
Fund Administration
Crédit Communal de Belgique (CCB)
10
Dexia Primary Franchise …
Public/Project Finance
LiabilitiesAssets
Retail Deposits
Triple A Funding
11
Treasury and Financial
Markets
Financial
Services to the
Public Sector
Credit Enhancement Bancassurance
Inve
stm
ent
Man
agem
ent
Serv
ices
# Muni bonds# ABS
# Insurance# Cash management# Financial engineering
# Private banking# Asset management # Fund administration
… has been enlarged over the years
Public/Project Finance Retail Deposits
12
51%
13%
19%
17%
Public/Project Finance & Credit Enhancement Investment Management ServicesRetail Financial Services Treasury and Financial Markets
Business Portfolio in 2003Segment contributions*
Net Income 2003: 1,431 M€
* Excluding nonrecurring items
13
Main Business Aggregates (at 31.12.03)
Bn€ $ LT Loans and bonds to Public Institutions 174 $ LT Corporate and Project Finance 15 $ ST Loans 12
$ Retail Loans 26
$ Credit Spread Portfolio* 39
$ Retail and Private Deposits 64
$ Institutional clients Deposits 45 $ Long Term Bonds O/S 67 $ Short term funding 39
$ Net Par outstanding Muni Bonds 171 $ Net Par outstanding ABS 119
$ Life Insurance Technical Reserves 7
$ Assets under Management 77
Balance Sheet
Off B/S
liabi
litie
sas
sets
* Of which 9.3 Bn€ of Public Bonds
Part Two
Financial Performances and Targets
15
A different business model
4
293
34
1,000
658
570
1,000
592
35
204
89
1,000
955
1,068
1,000
623
Net income before minorities
Cost of risk
Costs
Revenues (1,000 basis)
Non Performing Loans
Customer deposits
Risk Weighted Assets
Customer Loans (1,000 basis)
Dexia Group of 9 European banks*
* BNP Paribas, Société Générale, KBC, SCH, CA SA, BBVA, Unicredito, Fortis (Banking), ABN Amro (data 2003)
B/S
P&
L
16
Return On Risk-Weighted Assets (RORWA)*
1.18%
1.51% 1.50%
1.30%1.40%
1.12%
1.54%
1.32%1.23%1.29%
1.01%
1.39%
0%
1%
2%
1998 1999 2000 2001 2002 2003
Dexia Peer Group**
* The ratio between the net income including minority interests and the average risk-weighted assets.** Peer Group: Abn-Amro, Barclays Bank, HVB, BBVA, BNP Paribas, CA SA1, Deutsche Bank, Dresdner Bank, Fortis,
KBC, ING Groep, Lloyds TSB, Nordea, Société Générale, SP IMI, SHB1 before 2002 figures of Crédit Lyonnais
17
Cost of Risk related to total net O/S commitments (in basis points)
5.7 bp*
9.8 bp*
12.2 bp*
6.6 bp
2.2 bp
7.8 bp
6.4 bp
1997 1998 1999 2000 2001 2002 2003
2.5 bp
* Excluding impact of charges for Legiolease at Dexia Bank Nederland
Credit Enhancement
Banking Activities
0.6 bp0.6 bp0.7 bp1.2 bp
0.4 bp1.2 bp
18
Cost/Income Ratio (%)
53.9 54.8
59.0 58.9 59.2
54.0
1999 2000 2001 2002 2003 2006
≤
Objective
19
9.3% 9.3%9.9%
18.7%
16.2%
9.5%11.2%10.2%
9.6%9.0% 9.3%
18.0%
16.5%
12.9% 13.2%14.0%
15.7%
17.7%
9.0%
1996 1997 1998 1999 2000 2001 2002 2003 2006
ROE
Tier One Ratio
ROE
Objective
20
Earnings per Share (€)
0.660.75
0.850.98
1.151.25
1.131.24
1.70
1996 1997 1998 1999 2000 2001 2002 2003 2006
Objective
CAGR:+9.4 % p.a.
CAGR:+9.4 % p.a.
21
Dividend per Share
0.390.43
0.48 0.48
0.53
0.320.36
0.31
0.26
1997 1998 1999 2000 2001 2002 2003
(€)CAGR:
+10.5 % p.a.CAGR:
+10.5 % p.a.
Dexia BelgiumDexia France
Dexia
22
Summary of 2003 P&L
(M€)
2002 2003 ! Evolution of underlying*
Evolution of underlying* at constant
rate of exchange
Revenues # Net Interest and Related Income # Net Commissions and Other Income # Technical & Financial Margin / Insurance
3,422 1,015 720
3,429 992 739
0.2% -2.3% 2.6%
Total Revenues 5,157 5,160 0.1% 3.8% 5.5%
Costs -3,037 -3,055 0.6% -0.3% 0.7%
Gross Operating Income 2,120 2,104 -0.7% 10.2% 13.0%
# Cost of Risk -722 -176 -75.7% -41.0% -37.8% # Losses/Gains on LT invest. # GBRR # Goodwill amortization # Corporate Income Tax # Income from Equity Accounted Co’s
-36 82 -57 -58 56
15 7
-131 -362 56
n.s. -91.6%
n.s. n.s.
-
Net income before minority interests 1,385 1,513 9.3%
Minority Interests 86 82 -4.4%
Net Income 1,299 1,431 10.2% 15.2% 18.5%
* Based on pro forma accounts, without exceptional and nonrecurring items
Part Three
Business Lines
Public/Project Finance & Credit Enhancement
• Municipal Finance• Project Finance• Structured Finance • Corporate Lending• Credit Enhancement
24
Net underlying* Income 2003: 783 M€
* Excluding nonrecurring items
This segment covers:
51%
39% 60%
1%
Geographical origin of net income*
* Underlying net income of booking centers and irrespective of transactions’ location
• Long and short-term
financing to the public sector
• Other financial services to the
public sector
• Project Finance and
Corporate Lending
Dexia NY
• Liquidity Facilities
• Project Finance
• Bond portfolio
FSA
• Credit Enhancement – Muni
• Credit Enhancement – ABS
USA(FSA + NY branch)
Other
Europe
25
Public and Project Finance: Revenue metrics
In & off B/S outstandings*
* Fully consolidated Co’s** Net interest and related income (excluding commissions and interest on allocated economic capital), related to period-end outstandings
1011
14
1317
19
162152
136125
119
15
44
24
53 bp53 bp58 bp59 bp 54 bp
0
50
100
150
200
1999 2000 2001 2002 20030102030405060708090100110120130140150160170
Short Term
Other LT
Public SectorLong Term
Bn€Net interest margin**
133140
167184
201
26
Growth of outstandings (banking activities) stems from new markets
France+ Belgium
Other Countries
USA
CAGR 2000-2003
+26.5%
+13.0%
+3.2%
+9.3%
27
(Bn€)
141.3
171.8
154.4
184.7
76.0 79.5 80.8 83.6
53.457.5
69.977.1
11.917.4
21.124.1
2000 2001 2002 2003
FSA: Revenue metrics
Net Par Outstanding
79 87 106 137 171
51
67
111
126
119
18 bp18 bp17 bp18 bp20 bp
0
50
100
150
200
250
300
1999 2000 2001 2002 20030
10
20
30
40
50
60
70
80
90
100
110
ABS
Muni
Bn$Margin*
28
130154
217
263
290
* Total revenues (excluding GICs revenues and net realized and unrealized gains/losses on derivatives) related to period-end outstandings
35 4666
78 85103
165
2226
35
4454
86
82
3
634
38
133
92
2
1
1
5
1
1
1
2
3
7
25
13
1996 1997 1998 1999 2000 2001 2002 2003
International Asset-Backed Obligations
International MunicipalObligations
U.S. Asset-BackedObligations
U.S. Muni Obligations
FSA’s credit enhancement: a high growth businessNet Par outstanding*
(Bn$)
217
263
290
29* Excludes amounts relating to FSA-insured GICs; excludes insurance of interest
154
130
105
5975
CAGR 1996-2003
+30.0%
+20.4%
+24.8%
+25.5%+67.3%
30
Public/Project Finance & Credit EnhancementAnalysis of 2003 underlying P&L
(M€)
2002*
2003 ∆
2003 / 2002
∆ at constant
rate of exchange
Revenues
1,793
1,867
4.1%
10.4%
Costs
-631
-635
0.6%
4.6%
Gross Operating Income
1,162
1,232
6.0%
13.6%
Cost of Risk
-168
-84
-50.2%
Corporate income tax
-266
-319
19.9%
Other Items
-4
-46
n.s.
Net Income
724
783
8.2%
16.7%
ROEE**
21.0%
22.8%
Allocated equity
3,659
3,663
* Based on pro forma accounts** Annualized Return on Economic Equity. ROEE = Total Net Income (before minority interests) / Allocated Equity
Retail Financial Services
31* Excluding nonrecurring items
Net underlying* Income 2003: 286 M€19%
Dexia Bank Belgium: a key player in asset gathering
43 43 44 4556 55
12 13
18 18 19
12 2
6 6
7 8 9 915 15 162 3 4 5
7 7 7
56
96
7
De
c.1
997
De
c.1
998
De
c.1
999
De
c.2
000
De
c.2
001
Dec
. 200
2
De
c.2
003
Bn€
4953
57 59
9 11 13 14
82
23
Dexia Bank alone Dexia Bank + Artesia
Life Insurance technical reserves
Mutual funds and other investment products
Deposits & Savings Bonds
Loans to Professionals & SME’s
Mortgages & consumer loans
80
22 22
79
32
Domestic market shares in Belgium (as of Dec. 2003)
Savings bonds Savings accounts Mutual funds
Insurance* Mortgages Consumer loans
Dexia market share: 25.9% 15.7% 17.1%
16.2% 15.6%
* estimated
Dexia market share: 9.2%
33
Merger of Dexia Bank and Artesia produces sizeable costs synergies in Retail Financial Services as well as in other divisions
8595
180
200
48
6050
302516
39
101
Objective Achieved Objective Achieved Objective
55
(M€)
2002 2003 2005Min. Max.
Retail Financial Services
Min. Max. Min. Max.
149
Min. Max.
2004
Objective
Other business lines34
35
Number of branches
543394
940889
204
895
2001 2002 2003 2004 2005
Employee Network Independent Agents Network
target1,483
1,283
1,099
-26%-26%
36
Retail Financial Services Analysis of 2003 underlying P&L
(M€)
2002*
2003 ∆ 2003 /
2002
Revenues
1,661
1,764
6.2%
Costs
-1,349
-1,371
1.7%
Gross Operating Income
312
393
26.1%
Cost of Risk
-40
-34
-14.4%
Corporate Income tax
-109
-110
0.9%
Other Items
27
37
37.0%
Net Income
190
286
50.9%
ROEE**
10.8%
15.8%
Allocated Equity
1,748
1,799
* Based on pro forma accounts** Annualized Return on Economic Equity. ROEE = Total Net Income (before minority interests) / Allocated Equity
Investment Management Services
37
Net underlying* Income 2003: 204 M€
* Excluding nonrecurring items
13%
Investment Management Services
Segment contributions to the underlying Gross Operating Income (2003)
22%
21%
22%
35% Private/Affluent Banking
AssetManagement
FundAdministration
Dexia Nederland
38
Recent evolution of the underlying Gross Operating Income
Asset Management Fund Administration
(M€)
Revenues
Costs
GrossOperating Income
Revenues
Costs
17 18 17 1523
56 56 55 58 56
74 74 72 7479
Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004
10 11 12
21 22
21 21 2124 23
31 32 33
45 45
Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004
1417 16
19 19
37 37 37 37 38
5154 53 56 57
Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004
GrossOperating Income
Private and Affluent Banking
* Q1 2003 to Q4 2003 are pro forma
(M€)
22
30
1622 15
202223 2422
44
53
4044
35
Q1 2003* Q2 2003* Q3 2003* Q4 2003* Q1 2004
Dexia Nederland
39
Private and Affluent Banking*
Total customers’ assets** : 28.0 Bn€
Luxembourg
By geographical area By type of management
*Excluding Dexia Nederland **at Dec. 31, 2003
Belgium
Switzerland
OtherFrance
72%
8%
9%
7% 4%
40%
19%
41%
DiscretionaryManagement
AdvisoryManagement
Withoutmandate
40
21.530.1
37.245.5
39.8 43.4
4.4
5.3
4.8
4.14.0
6.2
8.6
10.6
10.6
11.2
14.9
4.2
1998 1999 2000 2001 2002 2003
Institutional Mandates
Private Clients DiscretionaryMandates
Mutual Funds (Ret & Instit.)
Dexia Asset Management
60.9
31.8
(Bn€)
43.2
53.155.1
62.2
Assets by type of management
41
151 149
142 146 154
159
Total assets under custody (Bn€)
Other**Other**
Dec. 2002
Mandates to DFS*
Mandates to DFS*
Custody
4.67
5.24 5.38
272
314329
* Including Dexia Nederland Holding** Dexia-BIL group only; excludes other units of Dexia
# of transactions (in millions)
# of NAV to calculate in the year (x 1000)
Transfer AgentCentral Administration
Dec.2003
12 months
2002
12 months
2003
297 303
Dec. 2003
Dec.2002
Fund Administration
Dec. 2001
Dec.2001
12 months
2001
42
Mandates to DFS*
Other**
301
43
Investment Management Services Analysis of 2003 underlying P&L
(M€)
2002*
2003 ∆ 2003 / 2002
∆ at constant
rate of exchange
Revenues
1,011
914
-9.6%
-8.4%
Costs
-668
-604
-9.5%
-9.4%
Gross Operating Income
343
310
-9.6%
-6.5%
Cost of Risk
-6
-22
n.s.
Corporate Income Tax
-99
-80
-18.4%
Other Items
-1
-4
+33.3%
Net Income
237
204
-13.8%
-10.6%
ROEE**
39.1%
35.3%
Allocated Equity
614
588
* Based on pro forma accounts** Annualized Return on Economic Equity. ROEE = Total Net Income (before minority interests) / Allocated Equity
Treasury and Financial Markets
44
Net underlying* Income 2003: 263 M€
* Excluding nonrecurring items
17%
Treasury and Financial MarketsMissions and Key Figures
! Missions! Long and Short Term Funding
! Liquidity
! Financial Markets Desks (Forex, derivatives, equities, bonds…)
! In 2003! L.T. Debt Issued in 2003: 21.5 Bn€
! CSP outstanding: 38.9 Bn€
! S.T. Debt outstanding 2003: 38.8 Bn€
Credit Spread Portfolio: 51%
! Net Underlying* Income: 263 M€ Money Market: 25%
Other: 24%
45* Excluding nonrecurring items
46
Capital Markets & Treasury ActivitiesAnalysis of 2003 underlying P&L
(M€)
2002*
2003
∆ 2003 /
2002
∆ at constant
rate of exchange
Revenues
552
472
-14.6%
-10.4%
Costs
-170
-153
-10.2%
-8.4%
Gross Operating Income
382
319
-16.6%
-11.3%
Cost of Risk
-24
6
n.s.
Corporate Income Tax
-75
-60
-20.6%
Other Items
-2
-2
n.s.
Net Income
281
263
-6.6%
-1.1%
ROEE**
24.0%
28.3%
Allocated Equity
1,181
938
* Based on pro forma accounts** Annualized Return on Economic Equity. ROEE = Total Net Income (before minority interests) / Allocated Equity
Appendices
48
31/12/2000 31/12/2001 31/12/2002 23/02/20041 ALLIANZ DRESDNER 1 ALLIANZ DRESDNER 1 BNP Paribas 1 BNP Paribas 2 ING Groep 2 ING Groep 2 ING Groep 2 SANTANDER 3 DEUTSCHE BANK R 3 DEUTSCHE BANK R 3 SANTANDER 3 ING Groep4 SANTANDER 4 BNP Paribas 4 BBVA 4 DEUTSCHE BANK R 5 BBVA 5 BBVA 5 DEUTSCHE BANK R 5 ALLIANZ DRESDNER6 FORTIS 6 SANTANDER 6 ABN-AMRO 6 BBVA7 BNP Paribas 7 FORTIS 7 SOCIETE GENERALE A 7 SOCIETE GENERALE A 8 ABN-AMRO 8 ABN-AMRO 8 UNICREDITO ITALIANO 8 ABN-AMRO 9 HVB Group 9 SOCIETE GENERALE A 9 FORTIS 9 CREDIT AGRICOLE
10 SOCIETE GENERALE 10 UNICREDITO ITALIANO 10 ALLIANZ DRESDNER 10 UNICREDITO ITALIANO 11 UNICREDITO ITALIANO 11 DEXIA 11 DEXIA 11 FORTIS12 INTESA BCI 12 HVB Group 12 CREDIT AGRICOLE 12 INTESA BCI 13 SAN PAOLO IMI 13 NORDEA 13 NORDEA 13 DEXIA 14 NORDEA 14 SAN PAOLO IMI 14 INTESA BCI 14 NORDEA15 DEXIA 15 CREDIT AGRICOLE 15 ALLIED IRISH BANKS 15 SAN PAOLO IMI 16 COMMERZBANK 16 INTESA BCI 16 BANK OF IRELAND 16 KBC BANCASSURANCE 17 KBC BANCASSURANCE 17 ALLIED IRISH BANKS 17 KBC BANCASSURANCE 17 ALLIED IRISH BANKS 18 CREDIT LYONNAIS 18 KBC BANCASSURANCE 18 SAN PAOLO IMI 18 BCO POPULAR ESPANOL 19 ALLIED IRISH BANKS 19 BANK OF IRELAND 19 BCO POPULAR ESPANOL 19 BANK OF IRELAND 20 BANK OF IRELAND 20 COMMERZBANK 20 HVB Group 20 HVB Group21 BCO POPULAR ESPANOL 21 BCO POPULAR ESPANOL 21 COMMERZBANK 21 COMMERZBANK
Dexia ranking in Euroland (market capitalisation)
49
HVB GroupAbbey National
Unicredito
HBOS
Allianz **Deutsche Bank
CA SASP IMIIntesa
ING Groep**SocGen
ABN AmroKBC
UBSFortis **
Crédit SuisseAIBStandard Chartered RBOSBarclaysBNP Paribas
HSBC Nordea
BBVASantander
Banco PopularLloyds
Den DanskeHandelsbanken
-40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%
Profit Margin * (2003)
* Net Income before minority interests/Total revenue** Banking Activities only
Dexia
Average of 30 first European
Banks
50
Credit Ratings of main subsidiaries
S&P Moody’s Fitch
Dexia Crédit Local AA Aa2 AA+
Dexia Bank Belgium AA Aa2 AA+
Dexia BIL AA Aa2 AA+
Dexia Municipal Agency AAA Aaa AAA
FSA AAA Aaa AAA
51
Main Stock Indexes including the Dexia stock
& Euronext 100
& CAC 40
& BEL 20
& FTSE Eurotop 100
& MSCI
& Dexia is also included in 4 “Sustainable Growth” indexes: & DJ Sustainability Index “World”, & ASPI Eurozone, & FTSE 4 Good Europe & World, Ethibel Sustainability Index (ESI)
52
Shareholders’ base (at Dec. 31, 2003)
15.3%
14.9%
7.7%
5.7%
4.1%2.8%
49.5%
Arcofin
Holding Communal
Groupe CDC
Ethias
Staff and Management
Treasury Shares
Others
Total number of shares outstanding: 1,175,222,680
(Formerly SMAP)
53
Total Shareholder Return
2,4502,317
1,498
1,7851,810
CAC 40 EuroStoxx50 BEL 20 EuroStoxxBanks
Dexia
Value in € at 31/03/2004 of 1000 € invested*
1,1081,005
819791833
CAC 40 EuroStoxx50 BEL 20 EuroStoxxBanks
Dexia
on November 20, 1996 on September 19, 1999
* With dividends reinvested
54