Annual report 2009 - Dexia.com

Message from the ChairmenManagement reportConsolidatedfinancial statementsWhen we joined Dexia at the height of the crisis in October 2008, we set ourselves a single objective: to save the Group andto build a sustainable future for it. Together we made clear and precise undertakings, launching an in-depth transformation ofour company. Today our undertakings are essentially on track and, at the price of all the considerable work done by everyone,we are ahead of our initial schedule.We can be proud of what we have achieved. Last February, the progress we had made with our transformation plan wasaknowledged by the European Commission, which validated our restructuring plan.We had to deal with one urgent matter: to re-establish Dexia’s liquidity situation. The task is not yet completed but we haveexceeded our targets. One half of the medium and long-term funding programme, amounting to 46 billion euros in 2009,has been realised without calling on the State guarantee. This is an extremely encouraging sign for the return of the Group’sfunding autonomy, a sign which has led us to accelerate the schedule for exit from the guarantee on our funding. As at31 December 2009, we had disposed of 16.5 billion euros of bonds, with hardly any impact on our accounts. All of these elementsare reflected by a considerable reduction of our reliance on short-term funding.We also undertook with regard to the Board of Directors to reduce our exposure to the United States with the disposal of ourcredit enhancement subsidiary FSA. The task was completed on 1 July last, when we finally disposed of 400 billion dollars ofexposure to the US market. The Financial Products portfolio which we retain after the sale of FSA has been placed in run-offand benefits from a guarantee granted by the Belgian and French States.Within the context of close consultation and with every respect for our social partners, we are continuing to implement thetransformation plan with one guiding thought: our organisation must increase its efficiency, it must be oriented towards theneeds of our clients and it must adapt to fiercer competition on all of our historical markets.We have refocused the activity in our core business lines.Annual financial statementsAdditional informationFirst of all, we focused on Retail and Commercial Banking, which posted an excellent operational performance in 2009. Therevival of deposit collection, which enabled us to collect more than eight billion euros more in 2009, is proof of the dynamismof all teams and the work we do with our clients on a daily basis. We also recorded excellent performances in Turkey.Then we redefined the framework of our Public and Wholesale Banking business line. We refocused our activity on our historicalmarkets and were able to defend our core client franchises whilst containing use of our balance sheet, and that constitutesa real success.So a great deal has been done in 2009, thanks to the commitment and support of everyone, members of staff, shareholdersand clients. And the Group’s renewed profitability over four consecutive quarters is the proof that we are going in theright direction. In 2009 we realised a net profit of 1,010 million euros, compared to a loss of 3,326 million euros in 2008.We want shareholders to benefit from this result by a distribution of new shares for an amount equivalent to approximately350 million euros.However, both the banking system and Dexia will evolve in 2010 in a persistently uncertain and difficult environment. Morethan ever, the transformation will put a strain on each of us. And the momentum we have gained must not only be maintainedbut accelerated, in accordance with the agreement with the European Commission. Relying above all on our own strengths,we will do all in our power to assist our clients without faltering whilst relentlessly improving our operational excellence.These are the conditions that will allow us to build the future of Dexia.Building a sustainable future is first of all a matter of regaining our total funding autonomy. That is our collective challenge:to free ourselves from the guarantee of the French, Belgian and Luxembourg States on all of our funding by the end of June2010.8Dexia Annual report 2009