2007 REGISTRATION DOCUMENT

2007 REVIEW OF OPERATIONSCore business results 4< Contents >INTERNATIONAL RETAIL BANKING AND FINANCIAL SERVICESIn millions of euros 2007 2006 2007/2006Net banking income 7,955 7,374 +7.9%Operating expenses and depreciation (4,625) (4,205) +10.0%Gross operating income 3,330 3,169 +5.1%Cost of risk (1,228) (722) +70.1%Operating income 2,102 2,447 -14.1%Share of earnings of associates 79 55 +43.6%Other non-operating items 94 45 +108.9%Pre-tax net income 2,275 2,547 -10.7%Cost/income ratio 58.1% 57.0% +1.1 ptsAllocated equity (€bn) 8.0 7.2 +11.6%Pre-tax ROE 28% 35% -7 ptsThe International Retail banking and Financial Services business (IR FS)continued to enjoy fast-paced growth in emerging countries andconsumer lending. BancWest was hit by the US subprime crisis, butremains largely profitable for the year as a whole.Despite the negative currency impact stemming from a weak dollar, netbanking income for the IR FS business delivered robust 7.9% growth(9.9% growth at constant scope and exchange rates), coming in atEUR 7,955 million for the year. This vigorous performance fuelled a 10.0%CETELEMrise in operating expenses and depreciation (9.8% at constant scope andexchange rates), while gross operating income advanced 5.1% (9.0% atconstant scope and exchange rates), to EUR 3,330 million. After factoringin the cost of risk, notably higher for BancWest due to the subprime crisis,pre-tax income for the core business came in at EUR 2,275 million in2007, down 10.7% on 2006. Pre-tax return on allocated equity remainedat a high 28%. This represents a slight fall on the year-earlier figure of35%, which had benefited from an exceptionally low cost of risk.In millions of euros 2007 2006 2007/2006Net banking income 3,020 2,684 +12.5%Operating expenses and depreciation (1,675) (1,518) +10.3%Gross operating income 1,345 1,166 +15.4%Cost of risk (700) (520) +34.6%Operating income 645 646 -0.2%Share of earnings of associates 74 52 +42.3%Other non-operating items 0 36 nmPre-tax net income 719 734 -2.0%Cost/income ratio 55.5% 56.6% -1.1 ptsAllocated equity (€bn) 2.2 1.9 +16.3%Pre-tax ROE 33% 39% -6 ptsCetelem, France’s leading consumer lender, continued to expand itsfootprint in emerging countries through organic growth (new operationsset up in Russia) and acquisitions (Jet Finance in Bulgaria and BGN inBrazil, both currently in progress). Thanks to a strong sales and marketingdrive, outstanding loans was up 17.4% on 2006. The rise in provisionsreflects the increased share of emerging countries in Cetelem’s portfolio,as well as greater consumer lending risk in Spain.In 2007 Cetelem set up Personal Finance with UCB, the Group’sspecialty mortgage lender. The venture will look to exploit the increasingoverlap between consumer and mortgage lending and will develop acomprehensive, integrated offering encompassing home improvementloans, home equity loans and other personal finance solutions. Cetelemand UCB will pool their client bases, expand their product and serviceoffering to third-party distributors, and capitalise on their respectiveinternational footprints. The new Personal Finance business line will beEurope’s leading provider of personal financial solutions.12345678910112007 Registration document - BNP PARIBAS 91