First quarterly results 2001 Dexia

  • Net income: EUR 376 million in the first quarter of 2001
  • An increase of 41.4% compared with the first quarter of 2000
  • Net income per share up 15.4%.

Dexia's Board of Directors met on May 22, 2001. It approved the group's financial statements for the first quarter of 2001 and noted the continued increase in the Dexia group's results.

I - Further growth in results in the first quarter of 2001

Group Profit &Loss - Quaterly Data
(EUR Million)
Q1 2001
Q1 2000
Evolution in %
Q4 2000
Evolution in %
Total Revenues
1 115
Gross operating income
Total write down and allowances
Corporate income tax
Net income from companies equity method
Minority interests

In the first quarter of 2001, net income before minority interests increased by 41.7% to EUR 391 million, and net income rose 41.4% to EUR 376 million. This very satisfactory result was particularly influenced by the contribution of the companies acquired in 2000 and consolidated as of the second half of the year, as well as by certain non-recurring items. Excluding these items, the increase would have been 12.7%. Compared with the fourth quarter of 2000, net income increased by 44.6%.

At EUR 1,115 million, net banking income rose 22.8% compared with the first quarter of 2000 and 22.5% compared with the fourth quarter of 2000. Commission income and premium income together accounted for 38.2% of total revenues, compared with 32.0% in 2000.

Operating expense was EUR 542 million, up 23.2% from the first quarter of 2000 (an increase of 6.1% on a comparable basis and excluding non-recurring expense), but down 7.2% from the fourth quarter of 2000.

The operating efficiency ratio stood at 48.6%.

Operating income before allowances totaled EUR 573 million versus EUR 468 million in the first quarter of 2000, representing an increase of 22.4%.

The net risk charge totaled EUR 28 million versus EUR 33 million in the first quarter of 2000, and remained very low in relation to outstanding loans (0.06% on an annual basis).

Net gains and recoveries of allowances on long-term investments were reported in the first quarter of 2001 in the amount of EUR 52 million, reflecting the capital gains realized on the sale of the equity interest in BCL in Spain and of a part of the group's equity interest in Fortior. Capital gains had totaled EUR 10.4 million in the first quarter of 2000.

The net allocation to the general banking risks reserve was EUR 6 million, versus EUR 11 million in the first quarter of 2000.

Return on equity (ROE) stood at 23.9% on an annual basis, compared with 20.1% in the first quarter of 2000.

At EUR 3.93, net income per share increased by 15.4% compared with the first quarter of 2000, when net income per share was EUR 3.40. Excluding non-recurring items and changes in consolidation, the increase would have been 12.1%.

The group's Tier I ratio was 9.4% versus 9.3% at the end of 2000.

Business review. These very good results were reported in a market environment that was nonetheless uncertain and not very profitable. Certain of the group's businesses, particularly Investment Management Services, felt the pressure. Others, on the contrary, recorded significant growth.

In Public Finance, there was an increase of 5.4% over twelve months in outstanding long-term balance sheet and off-balance sheet loans, which totaled EUR 135.8 billion as of March 31, 2001. Different countries reported contrasting trends - during the quarter, the greatest increases were recorded in the United States, Belgium and Sweden. At the same time, client deposits in this business rose significantly (+ 48.6% in a year) to EUR 11.0 billion. In addition, the program to diversify this business by targeting employer insurance for local public government employees - of which Sofaxis in France is the principal player - was very successful, and in a year, premium income increased by 43% to EUR 142.4 million in the first quarter of 2001. Finally, the first quarter of business at FSA was the best since its creation. The gross present value of premiums originated (insurance of municipal bonds and asset-backed securities) was USD 137.8 million, compared with USD 62.3 million in the first quarter of 2000. In the first quarter, a total of USD 5,230 million in municipal bonds was insured, compared with USD 2,522 million in the first quarter of 2000.

In Retail Banking Services, despite a lackluster environment, performance was satisfactory, as customer deposits and investment products stabilized at EUR 58.9 billion (versus EUR 59.0 billion as of March 31, 2000). This result was achieved in spite of the decrease in the value of holdings linked to the decline in the equity markets. Disintermediated products marketed by the bank (mutual funds, Dexia eurobonds and life insurance) rose to represent 36.3% of total customer deposits and investment products. A year earlier, they had represented 33.9%. Customer loans increased by 11.5% in a year to EUR 14.5 billion. Finally, the strongest growth was reported in insurance. Premium income in the first quarter of 2001 totaled EUR 382.8 million (of which EUR 355.5 million in life insurance products), representing an increase of 74.6% in a year.

In Investment Management Services (private banking, asset management and fund administration), conditions were naturally less favorable in light of the weakness of the equity markets. Nevertheless, each of this sector's components demonstrated rather good resistance. In Private Banking, total client assets rose from EUR 30.7 billion at the end of 2000 to EUR 31.4 billion as of March 31, 2001. This increase was the result of a slight broadening of the consolidation base (EUR 1.4 billion) in the first quarter (Dexia Nordic Private Bank Lux and Dexia P-H Private Bank Denmark), a net positive balance of assets (EUR 0.4 billion) and a negative market impact (EUR - 1.1 billion). In Asset Management, on the other hand, assets under management contracted from EUR 62.1 billion at the end of 2000 to EUR 59.3 billion as of March 31, 2001, for a net decline of EUR 2.8 billion reflecting a market impact of EUR - 3.4 billion and a net positive balance of assets of EUR 0.6 billion in a quarter. In Fund Administration, capital managed as a custodian bank decreased slightly by 0.8% in a quarter to EUR 97.1 billion. Likewise, capital under administrative fund management declined by 3.8% to EUR 99.6 billion. Conversely, assets managed as a transfer agent increased by 1.9% in a quarter to EUR 189.2 billion in spite of a decline in the value of assets. But contrary to this rather mediocre trend in the volume of capital managed, business indicators, which are the main source of revenues, were excellent. The number of buy and sell transactions for which the custodian bank was commissioned rose 15.2% in a year. The number of portfolios under administrative fund management increased by 15.0% over the same period. The number of transfer agent registrations jumped 40.2% in a year.

And, finally, the number of accounts managed as a transfer agent climbed to 1.91 million (up 27.2% from March 31, 2000).

Finally, capital markets and group refinancing (Dexia's funding activities) reported a very good first quarter in 2001. Since July 1, 2000, this sector includes FSA's asset-backed securities insurance business. This activity recorded strong growth in the first quarter of 2001, with new asset-backed securities insurance business of USD 8,599 million, compared with USD 3,319 million in the first quarter of 2000.

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

'The first quarter of 2001 confirms Dexia's ability, through its balanced business portfolio, both to demonstrate resistance in less favorable market conditions and to continue to create value, a goal which involves ensuring strong and regular growth in net income per share.'