2007 REGISTRATION DOCUMENT

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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 >➤MOVEMENTS IN THE FAIR VALUE OF PLAN ASSETS AND SEGREGATED ASSETSIn millions of euros 31 December 2007 31 December 2006FAIR VALUE OF ASSETS AT START OF PERIOD 2,225 1,808Fair value of plan assets at start of period 2,213 1,735Fair value of segregated assets at start of period 12 73Expected return on plan assets 123 100Effect of plan curtailments or settlements (1) 3Net actuarial gains and losses 15 16Contributions by plan participants 11 1BNP Paribas contributions to plan assets 122 463Benefi ts paid to recipients of funded benefi ts (120) (103)Effect of movements in exchange rates (105) (42)Effect of changes in scope of consolidation 218 33Other movements - (54)FAIR VALUE OF ASSETS AT END OF PERIOD 2,488 2,225➤Fair value of plan assets at end of period 2,474 2,213Fair value of segregated assets at end of period 14 12COMPONENTS OF PENSION COSTIn millions of euros Year to 31 Dec. 2007 Year to 31 Dec. 2006Service cost for the period 117 115Expense arising on discounting of the obligation 166 144Expected return on plan assets (123) (100)Amortisation of actuarial gains and losses 4 4Amortisation of past service cost 3 (7)Effect of plan curtailments or settlements (77) (19)TOTAL EXPENSE RECORDED IN “SALARY AND EMPLOYEE BENEFITEXPENSES” 90 137➤MAIN ACTUARIAL ASSUMPTIONS USED IN EMPLOYEE BENEFIT CALCULATIONS AT THE BALANCE SHEET DATE1234567In %Discounting rateFuture rate of salaryincreasesFrance4.11%-4.60%2.50%-5.00%31 December 2007 31 December 2006Euro zoneEuro zoneexcl. France UK USA France excl. France UK USA4.15%-4.70% 5.69% 6.00%2.00%-5.00%4.30%-4.75%4.00%-5.00%3.92%-4.13%2.50%-5.50%3.40%-4.13% 5.04% 5.50%2.00%-5.00%4.00%-4.50%4.00%-5.00%8➤EFFECTIVE RATE OF RETURN ON PLAN ASSETS DURING THE YEARIn %FranceExpected return onplan assets (1) 4.20%Actual return on plan 4.50%-assets (1) 4.70%Year to 31 Dec. 2007 Year to 31 Dec. 2006Euro zoneEuro zoneexcl. France UK USA France excl. France UK USA2.00%-6.90%3.00%-6.00%4.80%-7.30%6.00%-9.00%6.50%-8.25% 4.00%5.00%-12.00%4.50%-5.00%2.00%-6.60%3.00%-16.00%4.30%-6.30%3.50%-10.00%4.00%-8.50%9.00%-13.00%910(1)Range of values, reflecting the existence of several plans within a single country or zone.111702007 Registration document - BNP PARIBAS
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< Contents >Actuarial gains and losses arising in 2007 due to updating the assumptionsused for calculating employee benefits (e.g. discount rate and future rateof salary increases) and the expected return on plan assets reduced thevalue of the Group’s net obligation of approximately EUR 132 million.Actuarial gains and losses arising in France were not material, whileother countries reported mainly actuarial gains due to the increase inthe discount rates applied.Post-employment healthcare plansIn France, BNP Paribas no longer has any obligations in relation tohealthcare benefits for its retired employees.Several healthcare benefit plans for retired employees exist in othercountries, mainly in the United States. Provisions for obligationsunder these plans at 31 December 2007 amounted to EUR 48 million(EUR 45 million at 31 December 2006).Obligations under post-employment healthcare benefit plans aremeasured using the mortality tables applicable in each country. They alsobuild in assumptions about healthcare benefit costs, including forecasttrends in the cost of healthcare services and in inflation, which arederived from historical data.7.b.3Termination benefitsIn France, BNP Paribas is encouraging voluntary redundancy amongemployees who meet certain eligibility criteria. The obligations to eligibleactive employees under such plans are provided for where the plan isthe subject of an agreement or a draft bilateral agreement. In 2005,the Group set up a provision of EUR 43 million to cover an EmploymentAdaptation Plan to be implemented from 2006 to 2008 by BNP Paribasin France, in anticipation of the effect of demographic changes andof quantitative and qualitative changes in job requirements. A similarprovision of EUR 114 million was recorded in 2006, primarily relatingto BNL.Provisions for voluntary redundancy and early retirement plansamounted to EUR 264 million at 31 December 2007 (EUR 487 million at31 December 2006), of this total, EUR 171 million related to the Group’soperations outside France (EUR 366 million at 31 December 2006).7.c SHARE-BASED PAYMENT7.c.1Share-based loyalty and incentiveschemesBNP Paribas has set up share-based payment systems for certainemployees, including stock option and share award plans implementedas part of loyalty schemes and a Global Share-Based Incentive Plan.Loyalty schemesAs part of the Group’s variable remuneration policy, certain highperformingor newly-recruited employees are offered a loyalty bonusscheme, entitling them to specific share-based remuneration (in theform of shares or cash payments indexed to the BNP Paribas shareprice), payable over several years, and subject to the condition thatthe employees remain within the Group. Under IFRS 2, these plans arerecognised as an expense over the vesting period of the rights. Theexpense recognised in the year to 31 December 2007 related to awardsmade between 2004 and 2007.Global Share-Based Incentive PlanUntil 2005, various stock option plans were granted to Group employeesby BNP, by Paribas and its subsidiaries, and subsequently by BNP Paribas,under successive authorisations given by Extraordinary Shareholders’Meetings.Since 2005, the Group has set up stock option plans on an annual basiswith a view to actively involving various categories of managers increating value for the Group, and thereby encouraging the convergenceof their interests with those of the Group’s shareholders. The managersselected for these plans represent the Group’s best talent, including thenext generation of leaders: senior managers, managers in key positions,line managers and technical experts, high-potential managers, highperformingyoung managers with good career development prospects,and major contributors to the Group’s results.The option exercise price under these plans is determined at the timeof issue in accordance with the terms of the authorisation given bythe corresponding Extraordinary Shareholders’ Meeting. No discountis offered. Since the 2005 plan, the life of the options granted hasbeen reduced to 8 years. The plans are subject to vesting conditionsunder which a portion of the options granted is conditional upon theperformance of the BNP Paribas share relative to the Euro Stoxx Bankindex. This relative performance is measured at the end of the second,third and fourth years of the compulsory holding period. Depending onthe results of this measurement, the exercise price of the portion of theoptions subject to this performance-related condition may be increasedor their exercise may be deemed null and void.In 2006, BNP Paribas used the authorisations granted by the ExtraordinaryShareholders’ Meeting of 18 May 2005 to set up a Global Share-BasedIncentive Plan for the above-mentioned employee categories, whichconsists of stock options with share awards. Under this plan, seniormanagers and corporate officers are exclusively granted stock options,whereas managers in key positions receive both stock options and shareawards. High-potential managers and major contributors are exclusivelygranted share awards.Employees’ rights under share awards vest after a period of 2 or 3 yearsdepending on the case and provided the employee is still a member ofthe Group. The compulsory holding period for the shares granted freeof consideration is two years. Share awards were only made to Groupemployees in France.All unexpired plans involve potential settlement in BNP Paribas shares.12345678910112007 Registration document - BNP PARIBAS 171
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2007REGISTRATION DOCUMENT
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2007 Registration documentThis docu
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1 TheTHE BNP PARIBAS GROUPBNP Parib
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THE BNP PARIBAS GROUP1The Group’s
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1 ShareholderTHE BNP PARIBAS GROUPi
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2 BoardCORPORATE GOVERNANCEof Direc
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2 StatutoryCORPORATE GOVERNANCEAudi
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3RISK MANAGEMENT< Contents >3.4 Ris
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3 RiskRISK MANAGEMENTfactorsLIQUIDI
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3 RiskRISK MANAGEMENTfactorsDETERIO
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3 RiskRISK MANAGEMENTmanagement fra
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4 Consolidated2007 REVIEW OF OPERAT
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4 Balance2007 REVIEW OF OPERATIONSs
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2007 REVIEW OF OPERATIONS4 Outlook<
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2007 REVIEW OF OPERATIONS4 OutlookA
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5CONSOLIDATED FINANCIAL STATEMENTS<
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5 ProfitCONSOLIDATED FINANCIAL STAT
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5 StatutoryCONSOLIDATED FINANCIAL S
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6INFORMATION ON THE PARENT COMPANY
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6 BNPINFORMATION ON THE PARENT COMP
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6 ChangesINFORMATION ON THE PARENT
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6 BNPINFORMATION ON THE PARENT COMP
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6 SubsidiariesINFORMATION ON THE PA
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6 SubsidiariesINFORMATION ON THE PA
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7 TheSOCIAL AND ENVIRONMENTAL INFOR
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7 ClearlySOCIAL AND ENVIRONMENTAL I
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8 DocumentsGENERAL INFORMATIONon di
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8 FoundingGENERAL INFORMATIONdocume
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8 YearGENERAL INFORMATIONended 31 D
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9 StatutorySTATUTORY AUDITORSAudito
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10 PersonPERSON RESPONSIBLE FOR THE
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11TABLE OF CONCORDANCE< Contents >H
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