Profile

 
Dexia is a 94.4% State-owned Belgian-French banking institution managed in orderly resolution, as approved by the European Commission on 28 December 2012.

Mandate
 
Dexia’s mission is to manage its residual assets in run off while protecting the interests of its shareholders and guarantors.
 
Supervision
 
The Group’s parent company, Dexia SA, is a public limited company and a financial holding governed by Belgian law. As a significant bank for the Eurozone financial system, it is placed since 04 November 2014 under the direct supervision of the European Central Bank, with the support of the National Bank of Belgium.
Dexia Crédit Local is the Group’s main operational entity and issuer. Disposing of a banking license, this entity based in France, falls under the direct supervision of the European Central Bank, with the support of the French banking supervisory authority (ACPR).
 
Context
 
Historically a leader in public finance providing banking and other financial services to governments and local authorities in nearly 30 countries around the world, the acute liquidity crisis forced Dexia to launch a restructuring process at the end of 2008. This restructuring plan, implemented with State aid, aimed at refocusing the Group on its core activities, reducing its risk profile and enhancing its balance sheet structure.
Despite significant progress made in reducing the financial imbalances, the European sovereign debt crisis in 2011 had a major impact on Dexia SA. To avoid the systemic risk of a disorderly liquidation of the Group, an “orderly resolution plan” was implemented with State support in October 2011.
 



Orderly resolution plan
 
The orderly resolution plan, approved by the European Commission on 28 December 2012, calls for the disposal of the saleable commercial franchises and the management in run-off of the residual assets.

To allow for the orderly resolution of Dexia SA, State support has been provided to the Group via a capital increase of Dexia SA of EUR 5.5 billion subscribed by the Belgian (50.02%) and French (44.4%) States and via a liquidity State guarantee of EUR 85 billion granted by the States of Belgium, France and Luxembourg.

 
Key milestones in the orderly resolution
 
Autumn 2011:
- Impact of the sovereign debt crisis and rating downgrade leading to the introduction of the orderly resolution – sale of Dexia Bank Belgium (now Belfius Bank and Insurance) to the Belgian State
 
2012:
- Sale of RBC Dexia Investor Services, DenizBank, Banque Internationale à Luxembourg
- Ratification of the orderly resolution plan by the European Commission (28/12/2012)
- Capital increase of Dexia SA subscribed by the Belgian and French States (31/12/2012)
 
2013:
- Liquidity State guarantee granted by the Belgian, French and Luxembourg States (24/01/2013)
- Sale of Société de Financement Local (parent entity of Caisse Française de Financement Local, formerly known as Dexia Municipal Agency) as part of the creation of a French new local public sector financing scheme in France
- Sale of, Dexia Kommunalkredit Bank Polska, Dexia Bail, Public LLD, Sofaxis, Domiserve,   Associated  Dexia Technology Services, amongst others
- Signing of an agreement regarding the sale of Dexia Asset Management
 
2014:
- Launch of the “Company Project” to adapt the operating model to the evolving size of the balance sheet
- Sale of Dexia Asset Management and the participation of 40% in Popular Banca Privada
 
2015:
- Redemption of the remaining guaranteed debt subscribed by Belfius and guaranteed bank bonds used within the framework of the special own-use mechanism approved by the ECB
- Simplification of the Group structure and launch of significant projects to optimise the operating model
- Further reduction of asset portfolios
 
Governance and Organisation
 
Dexia has simplified and unified the governance of Dexia SA and Dexia Crédit Local in line with the new Group scope. The new Board’s composition reflects the shareholders’ structure of the group.
 
At an operational level, the Group has streamlined its organisation around two business lines, in accordance with its mission:
- an “Assets business line” which manages the run-off of the Group’s assets during the wind-down period while protecting and enhancing their value;
- a “Funding & Markets business line” which secures the Group’s liquidity at all times by ensuring and optimising funding.
 
Support lines include Risk, Finance, General Secretariat, Operations and Information systems, Communication and Brand, Human Resources and Transformation.
 
Asset portfolio

Dexia has an exposure of EUR 175 billion (EAD
1 as at 30 September 2015), representing more than 34,000 exposures and more than 7,000 debtors. The portfolio reflects the previous positioning as former leader in public financing showing a significant exposure to local public sector, sovereigns and project finance (financing of infrastructures, utilities and renewable energies). These financings are by nature long-dated, as at 30 September 2016, ~60% of the portfolio has a maturity of more than 10 years.
 
The portfolio is characterized by a good quality profile with 85% rated investment grade. Non-investment grade assets are mostly in the BB range. The portfolio is cautiously monitored by experienced teams.
 
 










 




 
(1) Exposure at default (EAD) on 30 September 2016 corresponds to the best estimate of credit risk exposure at default by the debtor.