2007 REGISTRATION DOCUMENT

2007 REVIEW OF OPERATIONSCore business results 44.2 Core business results< Contents >1FRENCH RETAIL BANKINGIn millions of euros 2007 2006 2007/2006Net banking income 6,000 5,850 +2.6%o/w interest margin 3,312 3,380 -2.0%o/w fees and commissions 2,688 2,470 +8.8%Operating expenses and depreciation (3,950) (3,811) +3.6%Gross operating income 2,050 2,039 +0.5%Cost of risk (158) (153) +3.3%Operating income 1,892 1,886 +0.3%Non-operating items 1 1 +0.0%Pre-tax net income 1,893 1,887 +0.3%Income attributable to AMS (141) (117) +20.5%Pre-tax income of French Retail Banking 1,752 1,770 -1.0%Cost/income ratio 65.8% 65.1% +0.7 ptAllocated equity (€bn) 5.9 5.5 +7.2%Pre-tax ROE 30% 32% -2 pts2345Figures include 100% of French Private Banking for the lines net banking income to pre-tax income.French Retail Banking (FRB) turned in another sparkling performance,particularly in terms of customer recruitment. Net growth in the numberof individual cheque and deposit accounts hit a record high of 230,000,bringing the total number of customers in the French retail bankingnetwork to 6.2 million.The French retail banking network reported a year-on-year increase of4.1% (1) in net banking income, 0.7% in net interest income and 8.4% infees and commissions. Growth in deposits picked up pace in the fourthquarter of the year (up 11.2%), while outstanding loans continued onan uptrend, advancing 11.6% on fourth-quarter 2006.Operating expenses and depreciation edged up 3.0% (1) , resulting in apositive 1.1 point jaws effect. Cost of risk represents 17 basis points ofrisk-weighted assets, a further improvement on the already low figureat end-2006 (18 basis points). This reflects the low structural risk onresidential mortgage loans in France, which are mostly fixed-rate andsecured by a mortgage on the property or by a guarantee from CréditLogement, a specialist mortgage agency. The improvement in cost of riskwas also driven by the effective monitoring of corporate credit risk s bythe Bank’s independent credit analysts in each Business Centre.Excluding the PEL/CEL effects , French Retail Banking reported pre-taxincome of EUR 1,671 million in 2007, up 5.0% on 2006. Pre-tax returnon allocated equity for the year edged down 1 point year-on-year, to28% in 2007.678910(1) On a comparable basis, i.e. including 100% of revenues from French Private Banking and excluding PEL/CEL effects and Dexia Banque Privée France acquiredin 2007.112007 Registration document - BNP PARIBAS 89