Annual report 2009 - Dexia.com

Activity and results of the business lines // Asset Management and ServicesManagement reportConsolidatedfinancial statementsAnnual financial statementsResultsIn 2009, after a difficult first quarter marked by impairmentsand losses on insurance investment portfolios, theresults of AMS which includes Asset Management, InvestorServices and Insurance, improved constantly throughout theyear. The business line reported a net income Group share ofEUR 74 million for the full year against a loss of EUR 329 millionin 2008.Asset ManagementNet income Group share amounted to EUR 37 million in2009, more than three times higher than in 2008, whichwas heavily impacted by the financial crisis. Nevertheless, theresults of asset management were contrasted in 2009 as theyear began modestly but improved during the second halfof the year.Total income stood at EUR 179 million in 2009, up 11%compared to the previous year. This increase is due to theimpact of the financial crisis in 2008, rising performance fees(+44%) and decreasing management fees (-29%) due tolower average assets under management.Expenses fell to EUR 128 million (-11% compared to lastyear) by virtue of the active management of costs and moreparticularly staff costs, IT and marketing expenses. Thecost ratio remained low at 16 basis points of assets undermanagement.Pretax income for the year amounted to EUR 51 million,almost three times higher than in 2008.Investor ServicesNet income Group share amounted to EUR 19 millionin 2009, down EUR 62 million (-77%) compared to 2008,mainly due to a decrease in average assets under administrationand lower interest income on client deposits.Income amounted to EUR 327 million in 2009, downEUR 81 million (-20%) driven by a decrease of core businessfees and of the interest margin.Costs were slightly reduced (EUR -4 million) over the year asa result of cost-cutting initiatives, especially at the level of ITexpenses.Cost of risk and impairments amounted to EUR 6 millionin 2009, as a result of a provision related to a legal claimbooked in the first quarter.Pretax income decreased from EUR 110 million in 2008 toEUR 27 million by the end of 2009.InsuranceNet income Group share amounted to EUR 19 million in2009 compared to a net loss of EUR 420 million in 2008,which included EUR 594 million (net) impairments and losseson investment portfolios, mainly bonds and shares. In 2009,insurance activities were back to profitability after some additionalimpairments and losses in the first half of 2009, partlyoffset by capital gains and write-backs in the fourth quarterof 2009.Income was at EUR 242 million in 2009 as a result of financialincome bouncing back (including a write-back of impairmentsand capital gains) after an unfavourable evolutionin the first half of the year. The improved financial incomewas tempered in the last quarter of 2009 by profit-sharingallocation.Costs decreased by EUR 2 million to EUR 251 million in 2009due to ongoing cost control.As a result, pretax income was at EUR -25 million in 2009.Taxes were at EUR 44 million further to deferred tax assetsand a EUR 32 million one-off adjustment.Additional information82Dexia Annual report 2009