microsoft powerpoint - 3 investment management services (marc

Investment Management Services

A focused European player

Investor Day2002

Marc HOFFMANNHead of Investment Management Services

Chairman of the Management Board of Dexia BIL

2

Investor Day2002

! "1. Private Banking

2. Asset Management

3. Dexia Fund Services

4. Dexia Securities

AGENDA

3

Investor Day2002

Private Banking activities

! Dexia has private banking activities in two types of markets

! Onshore markets

! AuM 2001: 9 Bn €

! 7 countries (Belgium, Spain, France, The Netherlands,

Italy, Denmark, UK)

! Offshore markets

! AuM 2001: 29 Bn €

! 5 countries (Luxembourg, Switzerland, Monaco, Jersey, Singapore)

! Growth expected by 2006 (at 2001 constant scope):

! + 10 % p.a. in AuM

! Income stability as a result of the assumed clients’ more conservative attitude in terms of investments

! The specificities of the two types of markets we operate in leads us to conduct distinct development strategies

19%

81%

Onshore Offshore

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Investor Day2002

Onshore Private Banking strategy

Onshore markets typology

Competitive advantage for domestic players with large network

Niche players

Affluent Very HNWIHNWI

Network-based strategy Upscale strategy

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Investor Day2002

A focused onshore Private Banking strategy

Ely Fund Managers

Dexia Bank NederlandDexia Banque Privée France

Iberagentes Popular Banca Privada

Dexia Private Banking Belgium


A network-based strategy Upscale strategy

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Investor Day2002

! New alliance with Banco Popular: Iberagentes Popular Banca Privada

! Shareholders

before the new alliance! Banco Popular: 25 %

! Dexia: 25 %

! 2 founders: 25 % each

new alliance 60 %

40 %

Market positioning of onshore entitiesSpain: Iberagentes Popular Banca Privada

Belgium Spain France Netherlands UK


A network-based strategy Upscale strategy

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Investor Day2002

Key success factors of IPBP

A clear goal

Become third Spanish Private Bank by 2004

A strong commercial coverage

Client acquisition

SEVILLA

177

248 30 285

63

232

36

BILBAO

PAMPLONA

BARCELONAZARAGOZA

VALENCIA

GANDIA

MADRID (2 DLG)

LA CORUÑA

VALLADOLID

MALAGA

MURCIAALICANTE

PALMA DEMALLORCA

TENERIFE

Current branches New branches

! Own network

! Client transfers from Banco Popular’s retail network

Target AuM (Bn €)

1,32,5

4,4

6,4

2001 2002E 2003E 2004E

CAGR: 69 %

2004 Market share: 6.6 %

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Investor Day2002

Positive outlook for offshore banking markets

!Persisting market attractiveness despite regulatory pressures

!Growth expectations more stable than onshore markets

!Margins remain higher

!No need of an extended network, resulting in lower operating expenses

!Market concentrated in a limited number of financial centers

12 .5 %

8 .9 %6 .5 %

8 .5 %

Ons ho re Offs ho re

Growth expectationsmade in 2000

Growth expectationsmade in 2002

30%

70%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UK dependencies15%

Luxembourg10%

Switzerland30%

US dependencies10%

HK/Singapore10%

Other (mainly Caribbean)

25%

onshore

offshore

Marché HNWI

Source: Flemings Research, UBS Warburg, Mc Kinsey, Société Générale

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Investor Day2002

Offshore Private Banking for Dexia

! Offshore contribution remains predominant for Dexia Private Banking

! Luxembourg has developed and keeps an excellent profitability

! Increase in number of clients

! Strong resistance to worsening environment

! Very good productivity

1999 2001

# clients Average AuM (Bn€)

14 1517 18

2022 23

1995 1996 1997 1998 1999 2000 2001

67%

19%

14%

Onshore

NonLuxembourgOffshoreLuxembourg

AuM 2001

51%

26%

23%

Revenues 2001

59% 58%50% 48% 48% 49% 54% 50% 47% 45% 45% 44%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

C/I ratio

+1.4%

Non Luxembourg offshore:Switzerland, Monaco, Jersey, Singapore

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Investor Day2002

! The Swiss market is more and more attractive for a number of players

! Today, the market believes in Swiss Private Banking’s perennity

! Switzerland is the main offshore private banking center

! Switzerland concentrates strong brands and upscale know-how

! Dexia Banque Privée Suisse

! AuM 2001: 3 Bn€

! PNB 2001: 47 M€

The Swiss market

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Investor Day2002

Conclusion: Private Banking strategy

Our acquisition strategy is today leveraged either through

! the potential of a large domestic retail network

or

! a niche specialisation in upscale private banking

A Focused European Private Banking Player

ONSHORE OFFSHORE

! Our offshore banking activities are most efficient

! Offshore private banking is and will probably remain predominant in our business mix

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Investor Day2002

(M€) 2001 2006 CAGR 01-06

Net banking income 468 632 6%

Costs -335 -391 3%

Gross operating income 133 241 13%

Net income 75 168 18%

C/I 71.6% 61.9%

Assets under management (Bn€)

38 61 10%

Private Banking*2006 projections

! Steady growth of Gross Operating Income: 13 % CAGR

! Net banking income grow at a slower pace than AuM due to prudent assumption of clients more conservative investment attitude

! Cost control: improvement of the C/I ratio of 10 points

! Net income growth forecast of 18% p.a. over the period

* excluding Legio Lease

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Investor Day2002

! "

1. Private Banking

2. Asset Management


4. Dexia Securities

AGENDA

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Investor Day2002

Dexia AM: a production entity servicing all the Group’s activities

! Dexia AM services the distribution networks of all Dexia business lines

! Dexia AM is also developing autonomously:

! Institutional mandates

! Fund distribution through third-party distribution networks

Dexia Asset Management

Fund Administration

Private Banking

Retail Banking

InsuranceFSA business

Public Finance clientele

Third-party networks

Institutional clients

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Investor Day2002

Expected growth in AuM 2002-2006

15 10

28

19

31

41

AuM 12/1996

Organicgrowth

Marketeffect

Externalgrowth

AuM 12/2001

Organicgrowth

Marketeffect

AuM 12/2006

84

143

(Bn €)

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Investor Day2002

Product range

! Dexia AM is present in all asset classes and is in line with the geographical reach of Dexia in Europe

! Good and stable mix of asset classes

! All asset classes have positive contribution to P&L

Global Balanced25%

Bond Funds19%

Equity Funds23%

Alternative & Structured Funds

14%Money Market Funds

17%

Sustainable Funds2%

! "Captive" private & retail distribution network is a competitive advantage

! Structure of AuM

! 39 % Institutional

! 61 % Retail

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Investor Day2002

C/I ratio

0.31 0.23

00.20.40.60.811.2

Gross operating income / AuM (%)

0.29 0.34

0 0.1 0.2 0.3 0.4

Key ratios show that Dexia AM is well positioned compared to peers

Total revenues / AuM (%)

0.42 0.44

0.25 0.35 0.45 0.55 0.65

Peers:SGAM, BNP Paribas, UBS AM, Credit Suisse AM, Vontobel, Sarasin, Unigestion, Axa AM, Julius Baër, Deutsche Bank, Dresdner Bank, Commerzbank, ING, ABN Amro, KBC, AMVESCAP, Schroders, Edinburg Fund Mngrs, Rathbones, Fideuram

Total costs / AuM (%)

0.100.13

00.10.20.30.40.50.6

Peers worst

Peers average

Peers best

Dexia AM 2002

Dexia AM 2005

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Investor Day2002

World playersWorld players

• Operate in all three zones

• Presence in retail,institutional and pension fund markets

• Comprehensive range ofservices

• Consider asset managementas global business

UBS, Groupe AXA,Merrill Lynch

Dominant US players,present in Asia

and Europe

Dominant US players,present in Asia

and Europe

• Operate in all three zones, butlimited presence outside US

• Presence in retail, institutional and US pension fund markets

• Regional business but aiming to be globally competitive

Fidelity,State Street Global Advisors,Vanguard

Public orregional players

Public orregional players

• Strong presence inlocal market

• Expertise in certainareas of asset management

• Seeking to develop geographically

• Manage business as national group

Nippon Life, KBC

Dominant European players present in

Asia or / and the USA

Dominant European players present in

Asia or / and the USA

• Operates in other zones, butlimited presence outside Europe

• Strong presence in retail markets and many institutional mandates in different Europe countries

• Regional business with a global reach reinforcing position in Europe

Dexia Asset Management,CS Asset ManagementFortis Investment Management

Dexia Asset Management in its universe

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Investor Day2002

(M€) 2001 2006 CAGR 01-06


Costs -132 -154 3%

Operating income 114 240 16%


C/I 53.7% 39.1%

Assets under management (Bn€)

84 143 11%

Asset Management2006 projections

! Steady growth of AuM: 11% CAGR

! Group networks

! Autonomous growth

! Costs under control resulting in an improvement of the C/I ratio of 14 points

! Net income growth forecast of 15 % p.a. over the period

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Investor Day2002

! "

1. Private Banking

2. Asset Management


4. Dexia Securities

AGENDA

21

Investor Day2002

Market Fundamentals

! Macro economic factors

! Growing aging population in developed countries needing to prepare for retirement

! Private pension plans growth

! Industry trends

! Consolidation trend in the industry, reflected by change in strategy for various players, resulting in strategic opportunities

! Growing cross-border distribution of financial products

! Growing outsourcing trend for asset managers

! Implications for Dexia Fund Services

! Strong potential for organic growth both in Luxembourg and at international level

! Strategic opportunities for Dexia to come out as a winner of the global industry change

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Investor Day2002

Dexia Fund ServicesA strong growth in total net assets

both in Luxembourg and at international level

126,000

170,000

196,000207,000

TN

A (B

n€)

1999 2000 2001 03/2002

15,301

25,137

35,838

62,366

TN

A (B

n€)

1999 2000 2001 03/2002

Luxembourg Other entities

CAGR + 25%CAGR + 87%

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Investor Day2002

A leading market position

! Market leader in Luxembourg for third-party administration

! Expected market growth in Luxembourg: 18 % p.a. in terms of new money

Market share (%)

Market position

Market share(%)

Market position

Number of funds Total assets

Administration 14.9 2 19.7 1

Transfer Agent 30.6 1 47.3 1

Our objective: remain leader in Luxembourg

Source: Fitzrovia 12/2001

Custody 13.9 1 12.8 3

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Investor Day2002

A strong international growth

A steady and profitable internationalisation

11%

2%2%

0%

8%

17%60%

10%

2% 1%

9%

17%61%

10%

1%

4%3%

82%

Custody Funds Administration

Transfer Agent

Luxembourg Dublin France Belgium Singapore Switzerland Spain

Geographical asset split as of 31/3/2002

18 %

13 %

Transfer Agent

39 %40 %31/03/2002

19 %23 %31/12/2000

AdministrationCustodyNon Luxembourg activity (% of total assets)

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Investor Day2002

International strategy: go where the market growth is

! DFS Dublin

! Established in 1997 (greenfield) to follow the move of money market funds from Luxembourg to Dublin

! Today one of the major service provider in Dublin

! Retained by the largest fund groups with European retail distribution strategy

! Was profitable at the end of the second year of activity

! DFS Switzerland

! Start in January 2002 (greenfield)

! Will be break-even at the end of year 1

! Comprehensive service offering: custody, accounting, transfer agent, universal ordering

! Objective: 5 % to 7 % market share acquisition by 2004

! DFS Italy

! Established in 2001 (greenfield) following the request of a large Italian fund group

! Large market potential

! Outsourcing solutions not yet in the trend but clearly identified by asset managers

! DFS Hong Kong

! Butterfield operations acquired in June 2002 to consolidate our presence in Asia, where we serve a global demand

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Investor Day2002

•Large volumes with low margin•Need to grow in “pure conservation” to face huge IT investments

•Low quality •Add side services to increase margins

Our strategic positioningThere are currently 3 “Business Models”

Industry giants

•Volumes limited to domestic market•Low margins•Unstable strategy•Globaly low returns

•“Securities processing” is a component of the business system, not the basis

•Higher margins •High quality of service•Integrated services•High returns

Followers

Specialists

Volumes

Chase

SSB

Dexia

Pictet

Bony

CAI BNP P

SG

CDC

Added value

PFPC

Industry target positioning

27

Investor Day2002

2 strategic options for Dexia Fund Services

! Pursuit of a strong organic growth

! Seize alliance opportunity to foster growth

Volumes

Chase

SSB

Dexia

Pictet

Bony

CAI BNP P

SG

CDC

Added value

Industry target positioningPFPC

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Investor Day2002

(M€) 2001 2006 CAGR 01-06


Costs -103 -163 10%



C/I 57% 47%

Assets in custody (Bn€)

99.7 172.9 12%

# of NAV's in administration

220,000 406,000 13%

# of transactions in T.A. (M)

4.6 8.4 14%

Dexia Fund Services2006 projections

! Steady growth of net banking income: 14% CAGR

! Volumes grow faster than market

! Margins grow with new value added services

! Costs under control resulting in an improvement of the C/I ratio of 10 points

! Net income growth forecast of 20 % p.a. over the period

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Investor Day2002

! "

1. Private Banking

2. Asset Management


4. Dexia Securities

AGENDA

30

Investor Day2002

Dexia Securities is a multi-local specialist servicing both Dexia and external clients

Dexia Crediop

DexiaSecurities Espana

Dexia BIL

Dexia Securities

Belgium

DexiaSecurities

France

Dexia Bank Nederland

Internal

Group Asset Management companies

Research and Sales & Trading Services

External

Institutional investors

-Insurers

-Pension funds

-Mutual funds

Professional counterparties

Corporate clients

Research, Sales & Trading and Corporate Finance Services

“Support business”

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Investor Day2002

Growth expected over the next 5 years

! We expect market capitalization to grow at an annual rate of 8.5 % over the period

! Annual market turnover equal to 1, a fairly conservative assumption

! Dexia Securities will focus on niches:

! strong expertise in local stocks (small & large) as well as a selected number of pan-European small & mid caps stocks, such as properties

! expanding activities on listed derivatives which exhibited strong resilience in the past months compared to cash markets

! such niches are prone to cross-selling activities in corporate finance areas, where Dexia maintains strong relationships

Market

Niche player

32

Investor Day2002

(M€) 2001 2006 CAGR 01-06


Costs -96 -109 3%


Net income 32 46 8%

C/I 70.6% 59.9%

Dexia Securities2006 projections

! Expected revenue growth: 6 % p.a.

! Costs under control resulting in

!13 % growth in Operating Income

!10.7 points improvement of C/I ratio

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Investor Day2002

Outlook 2001 –2006 Income statement of the business line*

-1- 51 %-40Cost of risks

767+ 14 %402Operating income

58 %51 %ROEE

931+ 11 %542Allocated equity

53 %63 %Cost / Income ratio

529+ 14 %272Net income

-858+ 2 %-765Costs

00Insurance

1,139+ 7 %803Net commissions & other income

487+ 4 %404Net interest income & related

1,626+ 6 %1,207Revenues

2006CAGR2001(M€)

* Excluding exceptional items

microsoft powerpoint - 3 investment management services (marc

Documents

dexia private banking

offshore banking activities

private banking2

cagrnet banking income

net banking incomecosts

dexia securities

spanish private bank

dexia fund services4