Custody boosts Dexia results
EUROPE - Assets in custody and financial management have contributed to the increased results of Dexia Bank, the Belgian/French financial group announced in its third-quarterly report.
Especially asset management and fund administration continued to grow strongly. Assets, including insurance, increased by 8% to €87.9bn.Two-thirds was due to internal growth and one-third to markets,” it said.
The business mix consisted of 71% investment funds, 24% institutional mandates and 6% discretionary private mandates.
“Asset management returns were up 7.6%, after an excellent second half year”, Dexia reported. “This due to the abolishing of performance commissions, higher volumes and management commissions.”
Dexia stated an increase of 8.2% in assets in custody to €402.4bn – of which €239.5bn as mandates to Dexia Fund Services - a rise of 32.5% compared to 2004.
Assets under central administration grew by 7.6% to €227.7bn in the third quarter. Fund administration showed increased returns of 12.3% to €209m during the first nine months.
The returns were up due to higher volumes in investment funds and exchange profits, but down because of the closure of operations in the Netherlands, and lower commissions, Dexia said.
The financial group reported new emissions of €25bn for long-term financing during the first nine months, a rise of €4.5bn compared to the previous year. “The emissions have in particular been popular with managers of bond portfolios,” it added.
Due to ‘new transactions with attractive conditions’, Dexia’s Credit Spread portfolio increased to 1.1bn at the end of September.
“We are convinced that the results over the whole of 2005 will be in line with our mid-term goals of efficiency and growth, and higher returns on own assets,” chief executive Pierre Richard said.
Dexia and the Royal Bank of Canada have recently merged their services for institutional investors into a joint venture – RBC Dexia Investor Services – in which both participate on an equal basis. After its planned start as of 2006, it will be amongst the ten largest custodians worldwide, Dexia claimed.