2007 REGISTRATION DOCUMENT

4 Consolidated2007 REVIEW OF OPERATIONSresults of the BNP Paribas Group< Contents >4.1 Consolidated results of the BNP Paribas Group1In millions of euros 2007 2006 2007/2006Net banking income 31,037 27,943 +11.1%Operating expenses and depreciation (18,764) (17,065) +10.0%Gross operating income 12,273 10,878 +12.8%Cost of risk (1,725) (783) +120.3%Operating income 10,548 10,095 +4.5%Share of earnings of associates 358 293 +22.2%Other non-operating items 152 182 -16.5%Non-operating items 510 475 +7.4%Pre-tax net income 11,058 10,570 +4.6%Tax expense (2,747) (2,762) -0.5%Minority interests (489) (500) -2.2%Net attributable income 7,822 7,308 +7.0%Cost/income ratio 60.5% 61.1% -0.6 pt234RECORD RESULTS IN 2007Despite the strong economic downturn in the second half of the year,the Group reported record earnings in 2007. Net banking income jumped11.1% year-on-year to EUR 31,037 million, while net attributable incomecame in 7.0% higher at EUR 7,822 million.This performance was driven by a buoyant organic growth momentum,as well as the limited impact of the subprime crisis on earnings andprovisions. The Group’s business model proved its strength in 2007, withall core businesses delivering further earnings improvements on thealready buoyant performance in 2006, and BNP Paribas Capital reportingsubstantial capital gains.Operating expenses and depreciation advanced 10.0% toEUR 18,764 million on the back of this powerful growth drive. Thecost/income ratio (1) for the core businesses remained stable at 60.8%(60.6% in 2006). This reflects ongoing improvements in operatingefficiency within French Retail Banking (FRB) and Asset Managementand Services (AMS), the implementation of synergies at BNL bc, andan excellent performance from CIB, whose cost/income ratio remainedwell below the 60% target at 57.8%, positioning the division ahead ofits banking rivals.On the back of this performance, gross operating income surged 12.8%year-on-year, to EUR 12,273 million.Amid severe turmoil in the credit markets, cost of risk came in atEUR 1,725 million versus EUR 783 million in 2006. EUR 424 million ofthis amount was linked to the direct impact of the crisis in the thirdand fourth quarters of the year, which sent cost of risk higher for bothBancWest (EUR 218 million) and CIB (EUR 206 million). The remainingincrease in this item reflects lower writebacks by CIB, an increase inprovisions recorded by Cetelem due to a rise in outstanding loans toemerging countries, and greater consumer lending risk in Spain. Cost ofrisk for retail banking in France and Italy remained stable and showedno signs of deteriorating.Net attributable income moved up 7.0% year-on-year, toEUR 7,822 million. Return on equity came in at a high 19.6%, downonly 1.6 points on 2006 despite a much more challenging economicenvironment.5678Allocation of CapitalRevenue from the capital allocated to each division is included in the division’s profit and loss account. The capital allocated to each divisioncorresponds to the amount required to comply with international capital adequacy ratios and is based on 6% of risk-weighted assets. Forcapital markets activities, “market risk equivalent assets” are computed in line with the requirements of the Capital Adequacy Directiveconcerning market and counterparty risks. Additional capital equal to 0.25% of assets under management is allocated to Private Banking, AssetManagement and online brokerage. In Real Estate Services and Securities Services, additional capital is allocated in respect of operational risk.The capital allocated to proprietary equity and real estate investment activities corresponds to a certain percentage of the net book value ofthe securities or properties concerned. The percentage varies depending on the type of investment and is designed to reflect the actual risk.Capital allocated to the Insurance business is equal to the solvency requirements as determined according to insurance regulations.910(1) At constant scope and exchange rates.11882007 Registration document - BNP PARIBAS