Annual report 2006 - Dexia.com

TREASURY AND FINANCIAL MARKETS
TREASURY AND FINANCIAL
MARKETS (TFM)
2006 was the first year of TFM’s new organization, set on
three business pillars:
• Fixed Income which is involved in all credit spread activities;
• Market Engineering and Trading which regroup all competences
in the sectors of interest rates, forex and equities;
• Group Treasury which is in charge of the financial management
of Dexia balance sheet.
This new organization aims at increasing the number of
financial market products offered to the different customers
of Dexia (public finance, retail and private banking), develop
TFM’s own clientele and manage Dexia Group and the entities
balance sheets. Of note, Dexia Capital Markets has been
D E
A
rewarded for its efficiency in 2006 and has been designated
as “best lead manager of regional/ municipal bonds“ by
its peers, in the EuroWeek magazine of January 2007. This
award is good recognition of the increasing position of Dexia
on intermediation’s field, the quality of its products and the
involved teams in TFM and PPF.
A new long-term strategy for TFM (TFM+) was launched with
a view to increasing the contribution of this activity in Dexia
revenue stream. TFM+ aims at using all of Dexia’s strengths: its
very good knowledge of certain asset classes, its origination
capacity, and its know-how in balance sheet management.
For this purpose, the IT system in all dealing rooms is in the
process of being harmonized, allowing a better front-to-back
approach and more integrated transactions.
ACTIVITY
Following the high level reached in 2006, Group Treasury
activities were again very buoyant in 2006, supporting the
growth of the Group’s balance sheet. The long-term bonds
issued represented a total of EUR 29.9 billion for the full year
2006 (against EUR 29.7 billion in 2005). EUR 18.6 billion bear
the AAA signature of Dexia Municipal Agency (DMA) or Dexia
Kommunalbank Deutschland. The private placements represented
50% of the total issuance volumes in 2006, of which
70% through the AAA issuers, despite a rather difficult market
environment in the fourth quarter for the AA issuers. The
public placement activity remained important in 2006, with
almost 28% of the total issuances of the Group. In this area,
DMA made a warmly welcomed comeback on USD transactions
by top quality investors, leading to a second issue which
was largely oversubscribed. The retail-oriented bond activity
accounts for nearly 20% of the total issuances of the Group,
LONG-TERM ISSUES
(IN BILLIONS OF EUR)
MANAGEMENT REPORT
COMPTES CONSOLIDÉS
COMPTES SOCIAUX
C
B
29.7
AAA-rated AA-rated
Total
4.5 29.9
Other
3.0 DBB (1)
3.9
DCL (1)
6.7
CREDIT SPREAD PORTFOLIO
QUALITY (AS OF DECEMBER 31, 2006)
OUTSTANDING AMOUNT:
EUR 70.4 BILLION
11.8
DMA (1)
DKD (1)
A A 20.6%
B AA 26.0%
C AAA 52.1%
D BBB 1.2%
E NON-INVESTMENT GRADE 0.1%
Issues
in 2005
Issues
in 2006
(1) DMA: Dexia Municipal Agency; DKD: Dexia Kommunalbank Deutschland;
DCL: Dexia Crédit Local; DBB: Dexia Bank Belgium.
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