2007 REGISTRATION DOCUMENT

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4 Core2007 REVIEW OF OPERATIONSbusiness results< Contents >ADVISORY AND CAPITAL MARKETSIn millions of euros 2007 2006 2007/2006Net banking income 5,625 5,396 +4.2%o/w Equity and Advisory 2,769 2,402 +15.3%o/w Fixed Income 2,856 2,994 -4.6%Operating expenses and depreciation (3,588) (3,327) +7.8%Gross operating income 2,037 2,069 -1.5%Cost of risk (65) (16) +306.3%Operating income 1,972 2,053 -3.9%Share of earnings of associates 8 10 -20.0%Other non-operating items 38 44 -13.6%Pre-tax net income 2,018 2,107 -4.2%Cost/income ratio 63.8% 61.7% +2.1 ptsAllocated equity (€bn) 4.5 3.9 +16.0%Pre-tax ROE 45% 55% -10 pts1234Advisory and Capital Markets posted net banking income ofEUR 5,625 million in 2007, up 4.2% on 2006 despite significant creditadjustments in respect of counterparty risk, particularly on monolineinsurers.FINANCING BUSINESSESBNP Paribas’ world-leading derivatives house (equity, interest rate,currency, credit and commodity instruments) represented 50% of CIB’snet banking income.5In millions of euros 2007 2006 2007/2006Net banking income 2,668 2,694 -1.0%Operating expenses and depreciation (1,197) (1,146) +4.5%Gross operating income 1,471 1,548 -5.0%Cost of risk 37 280 -86.8%Operating income 1,508 1,828 -17.5%Non-operating items 51 (12) nmPre-tax net income 1,559 1,816 -14.2%Cost/income ratio 44.9% 42.5% +2.4 ptsAllocated equity (€bn) 7.4 6.3 +18.8%Pre-tax ROE 21% 29% -8 pts678The Group’s Financing businesses reported EUR 2,668 million innet banking income for 2007, down 1.0% on 2006 due to fair valueadjustments on the LBO underwriting portfolio . The Energy, Commodities,Export, Project (ECEP) business was not directly affected by the subprimecrisis. Thanks to benign market conditions (including high energy andcommodity prices, growth in international trade, increasing infrastructureneeds in emerging countries and the development of renewable energies),ECEP provided its expertise and value-added financing solutions to anever-expanding customer base in 2007.91011962007 Registration document - BNP PARIBAS
2007 REVIEW OF OPERATIONSBalance sheet 4< Contents >4.3 Balance sheet1ASSETSOVERVIEWAt 31 December 2007, the Group’s consolidated assets amounted toEUR 1,694.5 billion, up 17.6% from EUR 1,440.3 billion, at end-2006.The main components of the Group’s assets were financial assets at fairvalue through profit or loss, loans and receivables due from customers,available-for-sale financial assets, loans and receivables due from creditinstitutions, and accrued income and other assets, which togetheraccounted for 95.7% of total assets at 31 December 2007 (95.6% at31 December 2006). The 17.6% increase in total assets reflects a risein most of the Group’s asset categories, particularly financial assets atfair value through profit or loss (up 25.1%), loans and receivables duefrom customers (up 13.2%) and assets available for sale (up 16.4%).These increases were partially offset by a fall of 9.4% in accrued incomeand other assets and 5.4% in loans and receivables due from creditinstitutions.FINANCIAL ASSETS AT FAIR VALUE THROUGHPROFIT OR LOSSFinancial assets at fair value through profit or loss consist of financialassets (including derivatives) held for trading purposes and financial assetsthat the Group opted to record and measure under the fair value optionthrough profit or loss at the acquisition date. Financial assets carried inthe trading book include mainly securities, repurchase agreements andderivatives. Assets designated by the Group as at fair value through profitor loss include admissible investments related to unit-linked insurancebusiness, and to a lesser extent assets with embedded derivatives thathave not been separated from the host contract. Specifically, financialassets at fair value through profit or loss break down into the followingcategories within the balance sheet: negotiable debt instruments; bonds;equities and other variable-income securities; repurchase agreements;loans to credit institutions, individuals and corporate customers; andtrading book financial instruments. These assets are remeasured at fairvalue at each balance sheet date.Total financial assets at fair value through profit or loss amounted toEUR 931.7 billion at 31 December 2007, an increase of 25.1% comparedwith 31 December 2006 (EUR 744.9 billion). The increase was driven bya rise of 31.0% in repurchase agreements (EUR 334.1 billion at end-2007), 46.7% in derivatives (EUR 236.9 billion at end-2007), 70.1% innegotiable debt securities (EUR 83.0 billion at end-2007) and 5.4% inequities and other variable-income securities (EUR 144.7 billion at end-2007). These movements were partially offset by a 7.7% fall in bonds toEUR 127.8 billion at 31 December 2007.Financial assets at fair value through profit or loss represented 55.0%of BNP Paribas’ total assets at year-end 2007, compared with 51.7% at31 December 2006.LOANS AND RECEIVABLES DUE FROM CREDITINSTITUTIONSLoans and receivables due from credit institutions consist of demandaccounts, interbank loans and repurchase agreements.Loans and receivables due from credit institutions (net of impairmentprovisions) amounted to EUR 71.1 billion at end-2007, down 5.4% fromEUR 75.2 billion at end-2006. Movements in interbank loans account forthe bulk of the decrease (down 6.7% to EUR 48.9 billion at 31 December2007). Demand accounts remained stable, totalling EUR 15.5 billion atend-2007 compared with EUR 15.2 billion at end-2006. Repurchaseagreements fell 11.3% year-on-year, to EUR 6.7 billion at 31 December2007. Provisions for impairment remained stable, totalling EUR 0.1 billionat end-2007 and end-2006.LOANS AND RECEIVABLES DUE FROMCUSTOMERSLoans and receivables due from customers consist of demand accounts,loans to customers, repurchase agreements and finance leases.Loans and receivables due from customers (net of impairmentprovisions) amounted to EUR 445.1 billion at end-2007, up 13.2% fromEUR 393.1 billion at 31 December 2006. Loans to customers account forthe bulk of this increase (up 13.1% to EUR 403.3 billion at 31 December2007). Demand accounts climbed 13.4% to EUR 29.8 billion at end-2007. Receivables under finance leases advanced 6.6% year-on-year, toEUR 24.3 billion at 31 December 2007. Impairment provisions fell 7.6%to EUR 12.5 billion at end-2007 from EUR 13.5 billion one year earlier.AVAILABLE-FOR-SALE FINANCIAL ASSETSAvailable-for-sale financial assets are fixed- and variable-incomesecurities other than those classified as “financial assets at fair valuethrough profit or loss” or “held-to-maturity financial assets”. These assetsare remeasured at fair value at each balance sheet date.Available-for-sale financial assets (net of impairment provisions)amounted to EUR 112.6 billion at 31 December 2007, up 16.4% on31 December 2006. This increase was driven by a rise of 11.8% in bonds(EUR 73.5 billion at end-2007), 40.5% in negotiable debt securities(EUR 17.5 billion at end-2007) and 14.9% in equities and other variableincomesecurities (EUR 22.7 billion at end-2007), chiefly attributable toan increase in volumes.Impairment provisions recognised in respect of available-for-salefinancial assets remained relatively stable, slipping EUR 0.2 billion toEUR 1.0 billion at 31 December 2007 from EUR 1.2 billion at 31 December2006. Impairment provisions are computed at each balance sheet date.Unrealised capital gains on available-for-sale financial assets fell 28.5%to EUR 5 billion at 31 December 2007.2345678910112007 Registration document - BNP PARIBAS 97
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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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6INFORMATION ON THE PARENT COMPANY
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7 TheSOCIAL AND ENVIRONMENTAL INFOR
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8 DocumentsGENERAL INFORMATIONon di
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11TABLE OF CONCORDANCE< Contents >H
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