Preliminary information on Dexia results in the second quarter 2002

Considering the current high volatility of the stock markets, Dexia has decided to communicate, ahead of schedule, the headlines of its 2nd quarter 2002 results. At this stage, the numbers are only estimated, and could possibly be revised between now and September 12th, the date of their submission to the Board of Directors in view of their approval.

Key estimated P&L items

EUR Millions
Q2 - 2002
Q1 - 2002
Variation excluding exceptional items
Revenues (*)
Gross Operating Income
Net Income
* The allowances to the general and case reserves of FSA are part of the Cost of Risk. They were previously included as a negative element of the Revenue line. This change has been introduced to treat FSA's risk data in a homogenous way with the Dexia banking activities. 1st quarter data were restated accordingly.
  • Revenues progression confirms the group's strong resistance to a generally unfavourable business environment. In particular, the crisis affecting the insurance business has a very limited impact on Dexia revenues, as this activity (excluding FSA) represents only 7% of the total revenue.
  • Following a sizeable reduction in the 1st quarter, the general operating expenses did not increase in the 2nd quarter. For the whole year 2002, the cost base should be less than in 2001.
  • The Gross Operating Income has therefore grown by a strong 17% (+8% underlying), quarter to quarter, and the Cost/Income ratio improved, from 59.7% to 56.4%.
  • The cost of risk stood at EUR 80 million, against EUR 31 million in the 1st quarter. This increase is due to 2 main factors:
  • The deterioration of corporate credit quality, particularly in the USA, has caused FSA to review its portfolio of risks related thereto, and to increase -as indicated during Dexia Investor Day on June 21st 2002 - by EUR 39 million its general reserve covering potential losses in its portfolio of insured collateralised debt obligations (CDO's).

    The important decline of prices of stocks listed on Euronext Amsterdam has caused Dexia Bank Nederland to write EUR 32 million additional provisions related to the share leasing activity.

    Nevertheless, the cost of risk in the Dexia group stays very low:

    in the banking activities, the cost of risk during the first half 2002 represents 6.2 basis points, on an annualised basis, against 13.7 basis points for the whole year 2001, of outstanding commitments

    Concerning FSA, even if one includes the charge made during the second quarter, the cost of risk during the first half year 2002 remains very low (3.4 basis points, annualised, of total net outstanding commitments). This is due, in particular, to the relative share of the municipal business, where credit quality is excellent and has not been impaired by the turbulences of the capital markets, and also to the very good level of protection on the ABS insured.

Dexia group net income amounted to EUR 1,426 million for the full year 2001.

The detailed results for the first half 2002 will be published on September 12th 2002, at close of business, and commented the following day, at an analyst meeting.