2007 REGISTRATION DOCUMENT

CONSOLIDATED FINANCIAL STATEMENTS5Notes to the financial s tatements p repared in accordance with I nternational Financial Reporting S tandards as adopted by the European Union➤GEOGRAPHICAL BREAKDOWN OF THE PORTFOLIO OF COMMERCIAL LOANS AND COMMITMENTSAT 31 DECEMBER 2006< Contents >1234.a.4Quality of the p ortfolio e xposedto c redit r isk➤BREAKDOWN BY CREDIT RATINGThe internal rating system developed by the Bank covers the entireCorporate and Investment Banking (CIB) portfolio and French RetailBanking (FRB) portfolio, as well as a substantial proportion of theother divisions’ portfolios, and is gradually being rolled out to all Groupunits.The chart below shows the breakdown of CIB and FRB sound corporateloans and commitments (corporates, government agencies, banksand institutions) based on the ratings used to calculate risk-weightedassets under the advanced IRB approach. This represents almost onehalf(EUR 377 billion) of the gross amount of the Group’s portfolio ofcommercial loans and commitments as well as loans outstanding withfinancial institutions (EUR 65 billion) granted by the Group as part ofits ALM-Treasury activities, i.e., a total amount of EUR 442 billion. Themajority of commitments are towards borrowers rated as good evenexcellent quality, reflecting the heavy weighting of large multinationalgroups and financial institutions in the Bank’s client base. A significantproportion of commitments to non-investment grade borrowers arehighly structured or secured by high quality guarantees implying a higherrecovery in the event of default. They include export financing coveredby export credit insurance written by international agencies, projectfinance, structured finance and transaction financing.45678910112007 Registration document - BNP PARIBAS 141