2007 REGISTRATION DOCUMENT

5 NotesCONSOLIDATED FINANCIAL STATEMENTSto the financial s tatements p repared in accordance with I nternational Financial Reporting S tandards as adopted by the European Union< Contents >2.f COST OF RISK“Cost of risk” represents the net amount of impairment losses recognised in respect of credit risks inherent in the Group’s banking intermediationactivities, plus any impairment losses in the case of known counterparty risks on over-the-counter derivative instruments.➤COST OF RISK FOR THE PERIODCost of risk for the periodIn millions of euros Year to 31 Dec. 2007 Year to 31 Dec. 2006Net additions to impairment provisions (1,762) (775)Recoveries on loans and receivables previously written off 329 247Irrecoverable loans and receivables not covered by impairment provisions (292) (255)TOTAL COST OF RISK FOR THE PERIOD (1,725) (783)Cost of risk for the period by asset typeIn millions of euros Year to 31 Dec. 2007 Year to 31 Dec. 2006Loans and receivables due from credit institutions 5 2Loans and receivables due from customers (1,472) (810)Available-for-sale fi nancial assets (130) 6Other assets (57) (7)Off-balance sheet commitments and other items (71) 26TOTAL COST OF RISK FOR THE PERIOD (1,725) (783)➤PROVISIONS FOR IMPAIRMENT: CREDIT RISKSMovement in impairment provisions during the periodIn millions of euros Year to 31 Dec. 2007 Year to 31 Dec. 2006Total impairment provisions at start of period 14,455 11,094Net additions to impairment provisions 1,762 775Utilisation of impairment provisions (2,409) (1,429)Impact of the consolidation of Banca Nazionale del Lavoro - 4,143Effect of exchange rate movements and other items (344) (128)TOTAL IMPAIRMENT PROVISIONS AT END OF PERIOD 13,464 14,455The main changes in impairment provisions in 2007 and 2006 are related to loans and receivables due from customers.Impairment provisions by asset typeIn millions of euros 31 December 2007 31 December 2006Impairment of assetsLoans and receivables due from credit institutions (Note 5.d) 54 92Loans and receivables due from customers (Note 5.e) 12,499 13,525Available-for-sale fi nancial assets (Note 5.c) 231 133Other assets 22 27TOTAL IMPAIRMENT PROVISIONS AGAINST FINANCIAL ASSETS 12,806 13,777Provisions recognised as liabilitiesProvisions for off-balance sheet commitmentsto credit institutions (Note 4.a) - 3to customers (Note 4.a) 202 235Other items subject to provisions 456 440TOTAL PROVISIONS RECOGNISED AS LIABILITIES 658 678TOTAL IMPAIRMENT PROVISIONS 13,464 14,45512345678910111322007 Registration document - BNP PARIBAS