2007 REGISTRATION DOCUMENT
2007 REGISTRATION DOCUMENT 2007 REGISTRATION DOCUMENT
4 Core2007 REVIEW OF OPERATIONSbusiness results< Contents >BANCWESTIn millions of euros 2007 2006 2007/2006Net banking income 1,999 2,191 -8.8%Operating expenses and depreciation (1,052) (1,104) -4.7%Gross operating income 947 1,087 -12.9%Cost of risk (335) (58) +477.6%Operating income 612 1,029 -40.5%Share of earnings of associates 0 0 nmOther non-operating items 15 1 nmPre-tax net income 627 1,030 -39.1%Cost/income ratio 52.6% 50.4% +2.2 ptsAllocated equity (€bn) 2.5 2.6 -1.2%Pre-tax ROE 25% 40% -15 pts123BancWest enjoyed a healthy sales momentum in 2007 amid marketsshaken by the subprime meltdown. Outstanding loans were up 7.5%compared to 2006, while net banking income shed only 1.2% (1 ) despitethe crisis. In the fourth quarter of 2007, net banking income edged up2.9% versus the year-earlier period, with the benefits of a normalisedEQUIPMENT SOLUTIONS & UCByield curve and the organic growth plan launched at the end of 2006beginning to filter through. Cost of risk came in at EUR 335 millionfor the year, inflated by EUR 218 million in one-off provisions linkedto the crisis.45In millions of euros 2007 2006 2007/2006Net banking income 1,590 1,462 +8.8%Operating expenses and depreciation (1,001) (900) +11.2%Gross operating income 589 562 +4.8%Cost of risk (112) (58) +93.1%Operating income 477 504 -5.4%Share of earnings of associates (10) (4) nmOther non-operating items 9 4 +125.0%Pre-tax net income 476 504 -5.6%Cost/income ratio 63.0% 61.6% +1.4 ptsAllocated equity (€bn) 2.2 2.0 +13.4%Pre-tax ROE 21% 25% -4 pts678910(1 ) At constant exchange rates.11922007 Registration document - BNP PARIBAS
2007 REVIEW OF OPERATIONSCore business results 4< Contents >EMERGING MARKETSIn millions of euros 2007 2006 2007/2006Net banking income 1,346 1,037 +29.8%Operating expenses and depreciation (897) (683) +31.3%Gross operating income 449 354 +26.8%Cost of risk (81) (86) -5.8%Operating income 368 268 +37.3%Share of earnings of associates 15 7 nmOther non-operating items 70 4 nmPre-tax net income 453 279 +62.4%Cost/income ratio 66.6% 65.9% +0.7 ptAllocated equity (€bn) 1.1 0.8 +37.8%Pre-tax ROE 42% 36% +6 pts123Emerging markets continued to deliver vigorous organic growth, with189 new retail branches opened, notably in Turkey and North Africa.The network has added 1.5 million new retail customers, bringing thetotal number of retail customers in emerging countries to 4.2 million.ASSET MANAGEMENT AND SERVICESThe Group’s acquisition of Libya-based Sahara Bank during the yearmakes it the first foreign bank to develop banking activities in thatcountry. The acquisition also gives BNP Paribas an unrivalled networkin the Mediterranean basin.45In millions of euros 2007 2006 2007/2006Net banking income 5,329 4,409 +20.9%Operating expenses and depreciation (3,369) (2,804) +20.1%Gross operating income 1,960 1,605 +22.1%Cost of risk (7) (4) +75.0%Operating income 1,953 1,601 +22.0%Share of earnings of associates 17 34 -50.0%Other non-operating items 10 (4) nmPre-tax net income 1,980 1,631 +21.4%Cost/income ratio 63.2% 63.6% -0.4 ptAllocated equity (€bn) 5.4 4.6 +17.9%Pre-tax ROE 36% 35% +1 pt678Asset Management and Services (AMS) turned in another strong earningsand profitability performance in 2007, with net banking income soaring20.9% year-on-year to EUR 5,329 million.Net asset inflows continued to perform well, including in the secondhalf of the year. The business reported net outflows of EUR 2.6 billionin the three months to 30 September 2007, but net inflows ofEUR 1.7 billion in the fourth quarter. This showing was well above theaverage for the asset management industry as a whole, which sufferedsharp outflows in the second half of 2007. Net asset inflows reportedby BNP Paribas over the full year totalled EUR 23 billion, while assetsunder management moved up 8% to EUR 584 billion. These superiorresults are attributable to the high proportion of individual customers(62% of assets under management), who tend to present a more stableprofile than institutional clients.Outside France, AMS enjoyed fast-paced expansion across all businesses.In Italy, AMS reported sharp growth in net banking income buoyed bythe success of BNL’s capital protected funds among individual customersand stronger positions in high-growth markets such as India, Brazil andSingapore.Sustained investments were required to finance this (essentially organic)growth momentum, which lifted net banking income 17.6% higher yearon-yearat constant scope and exchange rates. Operating expenses and910112007 Registration document - BNP PARIBAS 93
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<strong>2007</strong> REVIEW OF OPERATIONSCore business results 4< Contents >EMERGING MARKETSIn millions of euros <strong>2007</strong> 2006 <strong>2007</strong>/2006Net banking income 1,346 1,037 +29.8%Operating expenses and depreciation (897) (683) +31.3%Gross operating income 449 354 +26.8%Cost of risk (81) (86) -5.8%Operating income 368 268 +37.3%Share of earnings of associates 15 7 nmOther non-operating items 70 4 nmPre-tax net income 453 279 +62.4%Cost/income ratio 66.6% 65.9% +0.7 ptAllocated equity (€bn) 1.1 0.8 +37.8%Pre-tax ROE 42% 36% +6 pts123Emerging markets continued to deliver vigorous organic growth, with189 new retail branches opened, notably in Turkey and North Africa.The network has added 1.5 million new retail customers, bringing thetotal number of retail customers in emerging countries to 4.2 million.ASSET MANAGEMENT AND SERVICESThe Group’s acquisition of Libya-based Sahara Bank during the yearmakes it the first foreign bank to develop banking activities in thatcountry. The acquisition also gives BNP Paribas an unrivalled networkin the Mediterranean basin.45In millions of euros <strong>2007</strong> 2006 <strong>2007</strong>/2006Net banking income 5,329 4,409 +20.9%Operating expenses and depreciation (3,369) (2,804) +20.1%Gross operating income 1,960 1,605 +22.1%Cost of risk (7) (4) +75.0%Operating income 1,953 1,601 +22.0%Share of earnings of associates 17 34 -50.0%Other non-operating items 10 (4) nmPre-tax net income 1,980 1,631 +21.4%Cost/income ratio 63.2% 63.6% -0.4 ptAllocated equity (€bn) 5.4 4.6 +17.9%Pre-tax ROE 36% 35% +1 pt678Asset Management and Services (AMS) turned in another strong earningsand profitability performance in <strong>2007</strong>, with net banking income soaring20.9% year-on-year to EUR 5,329 million.Net asset inflows continued to perform well, including in the secondhalf of the year. The business reported net outflows of EUR 2.6 billionin the three months to 30 September <strong>2007</strong>, but net inflows ofEUR 1.7 billion in the fourth quarter. This showing was well above theaverage for the asset management industry as a whole, which sufferedsharp outflows in the second half of <strong>2007</strong>. Net asset inflows reportedby BNP Paribas over the full year totalled EUR 23 billion, while assetsunder management moved up 8% to EUR 584 billion. These superiorresults are attributable to the high proportion of individual customers(62% of assets under management), who tend to present a more stableprofile than institutional clients.Outside France, AMS enjoyed fast-paced expansion across all businesses.In Italy, AMS reported sharp growth in net banking income buoyed bythe success of BNL’s capital protected funds among individual customersand stronger positions in high-growth markets such as India, Brazil andSingapore.Sustained investments were required to finance this (essentially organic)growth momentum, which lifted net banking income 17.6% higher yearon-yearat constant scope and exchange rates. Operating expenses and91011<strong>2007</strong> Registration document - BNP PARIBAS 93
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