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 >Banque Privée AnjouIn May 2007, BNP Paribas SA acquired the entire capital of Dexia BanquePrivée France, subsequently renamed Banque Privée Anjou. Banque PrivéeAnjou manages over EUR 2.2 billion in assets, mainly for individual clientsand not-for-profit organisations.This subsidiary has been consolidated since the acquisition date. Thecontribution of Banque Privée Anjou to the BNP Paribas Group’s netincome was not material in 2007.As Banque Privée Anjou transferred all of its assets and liabilities toBNP Paribas SA on 28 December 2007, from that date it was no longerrecognised as a consolidated subsidiary of BNP Paribas.RBS International Securities Services LimitedIn June 2007, BNP Paribas acquired the entire capital of RBS InternationalSecurities Services Limited. RBS International Securities Services Limitedoffers global custody, fund administration and corporate trustee servicesto fund managers and private asset managers in the offshore markets ofJersey, Guernsey and the Isle of Man. It has over EUR 44 billion of assetsin custody and EUR 9 billion in assets under administration.RBS International Security Services was consolidated in the second halfof 2007. Its contribution to the BNP Paribas Group’s net income was notmaterial in 2007.ExelbankIn June 2007, BNP Paribas Securities Services, a subsidiary of BNP Paribas,acquired the entire capital of Exelbank. This Spanish bank offerssettlement-delivery, custody and depositary services and private bankingoutsourcing services.This subsidiary has been consolidated since the second half of 2007.Exelbank’s contribution to the BNP Paribas Group’s net income was notmaterial in 2007.Exelbank merged with the Spanish branch of BNP Paribas SecuritiesServices on 23 October 2007, the retrospective value date with regardto its acquisition by the BNP Paribas Group.8.c.2Business combinations in the yearended 31 December 2006Acquisition of Banca Nazionale del Lavoro (BNL)On 3 February 2006, BNP Paribas announced that it had entered intoseveral conditional agreements with a group of BNL shareholders,including Unipol, to acquire a 48% stake in BNL. As of 5 April 2006,BNP Paribas held a 50.4% interest in BNL, and had effectively obtainedcontrol of the company. BNP Paribas subsequently launched a publictender offer for the remaining shares held by minority shareholders.On 16 May 2006, BNP Paribas held 95.5% of BNL’s ordinary sharesfurther to the tender offer, representing a holding in excess of the 91.5%threshold set by the Italian securities regulator for a residual offer onoutstanding shares. The residual offer for the outstanding shares ranfrom 30 June 2006 to 20 July 2006. BNL’s ordinary shares were delistedon 26 July 2006. The acquisition of BNL therefore took place in severalstages: the acquisition of a 50.4% controlling interest, followed bysubsequent acquisitions of minority interests, resulting in BNP Paribasowning BNL’s entire share capital. At 1 October 2007, BNL was mergedinto BNP Paribas SA.BNL is Italy’s sixth largest bank in terms of deposit and loan volumes. Itsnetwork spans across the whole of the country, with 17,000 employeesand around 800 branches and outlets located in all major Italian cities.BNL has some 3 million private individual customers, 39,000 corporateclients, and 16,000 public-sector clients. BNL is particularly active inspecialised financing solutions such as factoring and leasing, and alsooffers consumer credit, asset management services (EUR 26 billionin assets under management), private banking and life insurancesolutions.The cost of BNL’s entire share capital held by BNP Paribas SA at the date ofthe merger amounted to EUR 9,083 million, of which EUR 9,065 millionwas paid in cash and EUR 18 million was paid in shares.The BNP Paribas Group restated BNL’s balance sheet at 31 March 2006in order to bring BNL’s accounting methods into line with those appliedby the BNP Paribas Group and to comply with the purchase accountingrules prescribed by IFRS (see Note 1.b.4, “Business combinations andmeasurement of goodwill”).These adjustments represented a negative EUR 877 million after the taximpact. They primarily concerned the following:■ the measurement of provisions for credit risk on individual loans andloan portfolios – mainly including the effect of reclassifying loans morethan 90 days past due as doubtful – as well as provisions for litigationand contingent liabilities (negative impact of EUR 536 million);■ employee benefit obligations (negative impact of EUR 325 million),primarily relating to contingent liabilities;■ the measurement of property, plant and equipment (EUR 144 millionpositive impact), the BNL brand (EUR 50 million positive impact)and the application of the Group’s rules relating to depreciation/amortisation of assets (EUR 113 million negative impact), representingin all a net positive impact of EUR 81 million;■ the valuation of market transactions in accordance with the rulesapplicable within the BNP Paribas Group (EUR 112 million negativeimpact);■ the fair value measurement of loans, securities and other assets, aswell as debt, other liabilities and insurance contracts (EUR 40 millionpositive impact);■ the tax effect of the above adjustments (EUR 293 million net deferredtax asset) and of contingent liabilities (EUR 318 million negativeimpact, including EUR 260 million recognised in the first half of 2007),representing a net negative impact of EUR 25 million.As part of the purchase price allocation, the BNL brand was recognisedseparately from goodwill. It was measured on initial recognition usingstandard practices in the banking industry for valuing this type of assetand by comparisons with other listed banks of a comparable size. Thecalculation also took into account the recent changes in BNL brandrecognition during the years preceding the acquisition.BNP Paribas did not recognise an intangible asset for BNL’s contractualcustomer relationships corresponding to account and depositagreements entered into with customers. In addition, other than businesscombinations, no transactions were identified in Italy relating to similarassets which could be used as a basis of estimation. In accordancewith paragraph 16 of IAS 38, these contractual customer relationshipscannot be identified separately from BNL’s goodwill as the bank does nothave any legal or contractual rights to control the future relationshipswith its customers, or the loyalty of the customers to the bank. In anyevent, the value of this asset is not material as the interest rates on thevast majority of the bank’s demand deposits do not result in materialeconomic benefits. The economic benefit compared with alternativerefinancing in the market is minimal due to the management costs andregulatory restrictions concerning the management of said deposits.12345678910112082007 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 >These adjustments reduced the Group share of BNL’s equity at31 March 2006 by the same amount, and gave rise to residual goodwillof EUR 2,295 million at 5 April 2006, the date BNP Paribas obtainedeffective control of BNL.In accordance with the accounting policies described in note 1.c.7,“Own equity instruments and own equity instrument derivatives”,the difference between the acquisition cost and the Group’s equityin BNL’s net assets held by minority shareholders and acquired afterthe date of acquisition (i.e. between 5 April 2006 and 31 December2006) was recorded as a deduction from retained earnings attributableto BNP Paribas shareholders in an amount of EUR 2,224 million at31 December 2007.BNP Paribas financed the BNL acquisition by means of (i) aEUR 5,467 million issue of shares with pre-emptive subscription rightsfor existing shareholders; (ii) a EUR 2,023 million issue of undatedsuper subordinated notes; and (iii) its own funds. Details of these issuesare provided in note 8.a, “Changes in share capital and earnings pershare”.12The table below shows (i) BNL’s consolidated balance sheet at 31 March 2006 prepared in accordance with IFRS before taking into account the controllinginterest acquired by the Group in its capital; and (ii) BNL’s Balance sheet at the same date after adjustments recorded to comply with applicable rules onbusiness combinations as prescribed by IFRS and with BNP Paribas Group accounting policies.31 March 2006 31 March 2006In millions of eurosAfter acquisition-relatedadjustments Prior to acquisitionASSETSFinancial assets at fair value through profi t or loss 7,730 7,541Available-for-sale fi nancial assets 1,160 1,157Loans and receivables due from credit institutions 8,705 8,705Loans and receivables due from customers 63,860 63,763Property, plant & equipment and intangible assets 2,682 2,600Non-current assets held for sale - 850Other assets 5,318 4,284TOTAL ASSETS 89,455 88,900LIABILITIESFinancial liabilities at fair value through profi t or loss 8,303 8,007Due to credit institutions 10,549 10,549Due to customers 37,085 37,100Debt securities 20,509 20,199Non-current liabilities held for sale - 784Other liabilities 8,534 6,909TOTAL LIABILITIES 84,980 83,548CONSOLIDATED EQUITYShareholders’ equity 4,434 5,311Minority interests 41 41TOTAL CONSOLIDATED EQUITY 4,475 5,352TOTAL LIABILITIES AND EQUITY 89,455 88,900345678The BNL sub-group has been fully consolidated as from the acquisitiondate. For the last three quarters of 2006 BNL contributed EUR 294 millionto the BNP Paribas Group’s net income and EUR 248 million to netincome attributable to equity holders.If the acquisition had taken place on 1 January 2006, the BNL sub-groupwould have contributed EUR 3,036 million to net banking income andEUR 395 million to net income for the full year. This acquisition led toa net cash outflow of EUR 11,490 million for the BNP Paribas Groupin 2006.The Extraordinary General Meeting of BNP Paribas SA shareholderson 15 May 2007 approved BNL’s merger into the Group, to be carriedout by BNL transferring to BNP Paribas all of its assets in return forBNP Paribas assuming all of BNL’s liabilities (twelfth resolution). Thistransaction was completed on 1 October 2007, and involved a link-upbetween the branches owned by BNL outside Italy and any BNP Paribasbranches located in these countries. In the United States, the Groupobtained an agreement in principle from the US tax authorities allowingthe transaction to benefit from tax neutrality. Under the agreement,BNP Paribas may allocate tax losses carried forward by BNL New Yorkagainst future taxable profits of its New York branch. In view of theconditions set out in the agreement and the US tax rules governingutilizations of loss carryforwards resulting from a merger and change incontrol, the Group recognised EUR 124 million in tax assets.910112007 Registration document - BNP PARIBAS 209
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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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3RISK MANAGEMENT< Contents >3.4 Ris
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3 RiskRISK MANAGEMENTfactorsLIQUIDI
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4 Consolidated2007 REVIEW OF OPERAT
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2007 REVIEW OF OPERATIONS4 Outlook<
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5CONSOLIDATED FINANCIAL STATEMENTS<
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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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2007 REGISTRATION DOCUMENT

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