PRESS RELEASE
13/03/2001

Results 2000

DEXIA

  • Net income: EUR 1,001 million in 2000
  • 31.5% increase in net income over 1999
  • A year of major growth for the group

Dexia"s Board of Directors met on March 13, 2001. It approved the group"s financial statements for the year 2000 and noted the initial encouraging results of the acquisitions made during the year, which bolster the Dexia group"s growth dynamic, specialization and financial performance.

I. New growth in income in 2000

In 2000, net income before minority interests increased by 30.6% to EUR 1,063 million, and net income rose 31.5% to EUR 1,001 million. Already in 1999, the increase was 25.8% over the previous year. This year again brings confirmation that the group"s sound financial base serves to support its energetic growth strategy. This result was, of course, influenced by the major operations conducted during the year, which both brought about changes in consolidation and generated non-recurring costs.

Revenues increased by 18.8% to EUR 3,759 million. This rise was in part due to the consolidation of the two new large subsidiaries as of July 1, 2000. On a comparable basis and excluding non-recurring income, net banking income would have risen 13.8%. Commission income and premium income together accounted for 31.2% of total revenues, compared with 21.9%% in 1999. This percentage is expected to increase even more in 2001, since FSA was only consolidated for six months in 2000 and will be accounted for on a full year basis in 2001.

Operating expense was EUR 2,081 million, up 21.3%, but only up 5.8% on a constant basis and excluding non-recurring expense.

Write-downs and allowances increased to EUR 233 million from EUR 134 million in 1999. In 1999, they had been particularly low owing to recoveries of provisions. At 0.09%, the net risk charge (ratio between the year"s provisions and outstanding customer loans) remained close to the level reported in 1997 and 1998 and significantly below the banking profession average. This was due to the nature of Dexia"s lending activities (loans to a particularly solvent clientele with a low risk profile) as well as to its very strict risk control policy.

Return on equity (ROE) stood at 17.7% in 2000, compared with 15.7% in 1999, representing a significant improvement.

Net income per share increased by 17.1% to EUR 11.50, compared with 16.0% in 2000.

The group"s Tier I ratio was 9.34%, versus 9.00% a year earlier.

By business, performance was either satisfactory or excellent.

In public finance, operating income before allowances totaled EUR 715 million, up 11.9%. Net income in this sector was EUR 424 million, up 4.4%. Return on economic equity stood at 19.3%.

In retail banking services, operating income before allowances totaled EUR 330 million, up 25.7%, in a very competitive environment with continued investments to restructure the network in Belgium. Net income in this sector climbed 28.2% to EUR 209 million, and return on economic equity was 14.2%, up from 12.8% in 1999.In investment management services (private banking, asset management and fund administration), operating income before allowances increased by 28.9% and net income by 29.8% over 1999. Return on economic equity stood at 53.7%, at an even higher level than in 1999 (48.8%).

Finally, capital markets and group refinancing (Dexia"s funding activities), a sector which includes FSA"s asset-backed securities insurance business since July 1, 2000, reported 23% growth in operating income before allowances and a 33.0% increase in net income, which totaled EUR 173 million in 2000. On a comparable basis and excluding non-recurring items, the rise in net income would have been 10.2% compared with 1999.

The contributions of the group"s different businesses became more balanced. Public finance accounted for 40% of net income (versus 45% a year earlier); retail banking services increased its relative share to 19% (versus 18% in 1999); investment management services accounted for 25% of the total, compared with 23% in 1999; and, finally, capital markets and asset-backed securities insurance contributed 16% of net income, compared with 14% a year earlier.

The Board will ask the Shareholders" Meeting (to be held on May 9, 2001) to approve a gross dividend of EUR 4.30 per share (EUR 3.225 net), up 10% from the previous year. The dividend payout ratio will be 41.9%, representing a slight increase over 1999.

Detailed financial information on the year 2000 is provided in the year"s Activity Report which can be consulted on the group"s Internet site.

II. A successful year in an fluctuating environment

Pierre Richard, Dexia"s Chief Executive Officer and Chairman of the Executive Board, declared:

"The beginning of the year 2000 was marked by market enthusiasm for the new economy, a shift which modified the behavior of investors and penalized traditional solid investments. It was in this environment that Dexia announced its two main external growth projects - the acquisition of FSA in the United States and of Bank Labouchere in the Netherlands - and launched its first capital increase on the market. These operations were nevertheless very well received by the market.

"In the second part of the year, Dexia"s share price continued to climb, as the announcement of half-year results demonstrated once again the quality and regularity of the group"s financial performance.

"The results for the year 2000 confirm Dexia"s dynamic of profitable growth and the group"s ability to succeed through a strategy of specialization in its prime businesses and of a strong position in its domestic market.

"All the above contributes to the creation of value, even more value."