Annual report 2010 - Dexia.com

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2010 and early 2011 highlightsManagement reportConsolidatedfinancial statementsAdditional information Annual financial statements2010FebruaryAgreement of the European Commission to theDexia restructuring planOn 5 February 2010, the Belgian, French and Luxembourggovernments and the European Commission concluded anagreement in principle on the Dexia Group restructuring planwhich was definitively ratified by the new Commission on26 February 2010. This agreement, which falls fully withinthe dynamic of the Group transformation plan, enables Dexiato continue to develop its core business lines on its historicalmarkets, France, Belgium and Luxembourg, as well as inTurkey.More detailed information is provided in the chapter “Updateon the transformation plan” in this Annual Report (page 13).MarchDisposal of the Assured Guaranty sharesOn 11 March 2010, Dexia finalised a secondary public offeringof 21,848,934 common shares in Assured Guaranty, in itspossession since the sale of the insurance activities of FSA toAssured Guaranty. The shares sold represent all the commonAssured shares held by Dexia. The transaction generated apre-tax gain of EUR 153 million.AprilClosing of the sale of Dexia Épargne PensionDexia closed the sale to BNP Paribas Assurances of DexiaÉpargne Pension, its subsidiary specialising in life insurancein France, following the sale agreement signed in December2009.MayJudgement by the Court of First Instance inBratislava on Dexia banka SlovenskoAt the end of the hearing held on 17 May 2010, the Court ofFirst Instance in Bratislava passed a judgement ordering Dexiabanka Slovensko, the Slovakian subsidiary of the Dexia Group,to pay the sum of EUR 138 million in principal, following anaction brought by a professional client in 2008. The appealfiled by Dexia lead to the cancellation of this first instancejudgement in January 2011 (see hereafter).JuneDexia fully exits State guarantee support for itsfuture fundingOn 30 June 2010, Dexia fully exited the State guaranteeliquidity framework put in place in October 2008. Consideringthe improvement of its liquidity situation and in line with theundertakings it made to the European Commission, the Groupceased to issue guaranteed debt four months earlier thanthe agreed expiry date of 30 October 2010. The exit processwas conducted gradually, Dexia waiving the benefit of theguarantee for contracts with a maturity of up to one monthand contracts with no fixed maturity as early as October 2009.Then the Group ceased to use the guarantee for its depositcontracts, particularly interbank deposits, from 1 March 2010,finally to cease all recourse to that funding at less than oneyear on 31 May 2010 and for its medium and long-termfunding on 30 June 2010. All outstanding instruments issuedunder the government guarantee framework before 30 June2010 will continue to benefit from the government guaranteein accordance with their terms and conditions. Guaranteedoutstanding will be fully written down in 2014.More detailed information on the State guarantee is providedin the note 9.4.C. to the consolidated financial statements inthis Annual Report (page 184).Dexia disposes of its stake in SPEDexia concluded an agreement with EDF on the sale of its6.13% stake in SPE, a company operating in the energy sectorin Belgium. The capital gain on this transaction amountedto EUR 69 million after taxes. This transaction was part ofthe agreement with the European Commission providing fordisposal of this holding by 31 December 2010.Dexia sells its holding in AdInfoDexia concluded an agreement with Network ResearchBelgium, a Belgian IT service provider, on the sale of its 51%stake in AdInfo, a company active in IT services for Belgianlocal authorities. The capital gain on this transaction amountedto EUR 14 million after taxes. The transaction was part ofthe agreement with the European Commission providing fordisposal of this holding before 31 December 2010.10 Dexia Annual report 2010
2010 and early 2011 highlightsJulyCEBS stress tests confirm that Dexia does notrequire additional capital to withstand adversescenariosLike 91 other European institutions, Dexia was subject tothe 2010 EU-wide stress testing exercise coordinated by theCommittee of European Banking Supervisors (CEBS). Theconclusion of this stress test, based on different scenarios ofcredit quality deterioration (1) , is that Dexia does not requireadditional capital to withstand the CEBS two-year adversescenario, including the additional sovereign shock.More detailed information is provided in the part dedicatedto the stress tests in the chapter “Risk management” in thisAnnual Report (page 93).SeptemberDexia continues its commercial deployment andcost-cutting planDexia announced new restructuring and cost-reductionmeasures, which will contribute to strengthening Groupintegration and will enable EUR 160 million in savings to beachieved, particularly through mutualisation or optimisationmeasures relating specifically to IT functions, purchasingpolicy and market activities. These measures are reflected bythe loss of 665 full-time equivalent jobs, of which 385 inBelgium, 70 in France, 140 in Luxembourg and 70 internationally.Industrial partnership with Crédit MutuelDexia signed a letter of commitment to establish an industrialpartnership with the Crédit Mutuel group. This partnershiprelates to the commercial banking activity of Dexia Crédit Localwith its local public sector clients in France and concerns theprovision by the Crédit Mutuel group from January 2013 ofa commercial banking platform and associated functionalities.Through the industrial platform of the Crédit Mutuel-CICgroup, the Dexia Group will receive first-class banking servicesenabling it to provide its clients with an extended and highlyefficient range of services.Dexia Bank acquitted in the Lernout & HauspiecaseOn 20 September 2010, the Court of Appeal in Ghentacquitted Dexia Bank and Mr Geert Dauwe, a former memberof the management of Artesia Bank, on all the charges againstthem in the Lernout & Hauspie case.No party has filed an appeal to the Supreme Court of Appealagainst this acquittal of Dexia Bank and Mr Geert Dauwe, sothat their acquittal is definitive.More detailed information is provided in the part dedicatedto legal risk in the chapter “Risk management” in this AnnualReport (page 90).The Dexia share leaves the CAC 40The Scientific Panel of Indices, the board that decides on whichshares are included in the CAC 40, the main share index onthe Paris Stock Exchange, announced on 3 September 2010that the Dexia share would be leaving the index as from theStock Exchange trading session on Monday 20 September2010. Dexia joined the CAC Next 20, the index calculatedand published by NYSE Euronext Paris, and will remain listedon the BEL20, the main share index on the Brussels StockExchange of which it is one of the leading shares. Leaving theCAC 40 does not mean that the Dexia share is excluded fromEuro Stoxx or Stoxx Banks.More detailed information on the Dexia share is provided inthe chapter “Shareholder information” in this Annual Report(page 68).OctoberDexia announces its “Dexia 2014” strategy: a retailbank serving 10 million customersAt its “Investor Day”, held on 12 October 2010, the DexiaGroup presented its “Dexia 2014” strategy. Dexia set itselfthe objective:• to complete its financial restructuring, giving precedence toincome from its commercial franchises;• to consolidate and to develop its strong commercialfranchises, rebalancing its business line portfolio around retailbanking, tapping the growth opportunities offered by themarket in Turkey;• to reshape its operating model, seeking synergies andefficiency gains.More detailed information is provided in the chapter“Strategy” in this Annual Report (page 17).NovemberDexia sells its subsidiary Dexia banka SlovenskoDexia concluded an agreement with the Central Europeaninvestment group Penta Investments Ltd, on the sale of its88.71% stake in Dexia banka Slovensko. The transaction ispart of the agreement with the European Commission thatprovides for the disposal of Dexia banka Slovensko by Dexiabefore 31 October 2012. The transaction should be finalisedduring the first half of 2011.Turkish Post and DenizBank merge their forces forPTT cardsOn 30 November 2010, DenizBank and the Turkish Post (PTT)announced a major cooperation agreement. Thanks to thecooperation established between the two institutions, PTTcards will be equipped with Visa/MasterCard features. Throughthis project, PTT customers will have access to internationalcard payment systems and DenizBank will add a potential of3 million new customers to its client base.Management reportConsolidatedfinancial statementsAdditional information Annual financial statements(1) The exercise was performed according to the scenarios, methodology andhypotheses provided by the CEBS, detailed in the global report published onthe CEBS website: http://www.c-ebs.org/EU-wide-stress-testing.aspxAnnual report 2010 Dexia11
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