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Crédit Agricole S.A.Update of the Registration document 2011 - A03The cost of risk came to 1,164 million euros in the second quarter compared with 1,125 million in the secondquarter of 2011 which included 202 million euros linked to the European support plan to Greece and 277 millioneuros for the cost of risk associated with the subsidiary Emporiki. Restated for these effects, the cost of risk was23.8% higher, due primarily to the increase for Cariparma in Italy and the additional 84 million euro provision forAgos booked in the second quarter of 2012.Impaired loans (excluding lease finance transactions with customers) amounted to 23.8 billion euros andrepresented 4.6% of gross customer and interbank loans outstanding, representing a level comparable to that of31 December 2011. Impaired loans were covered by specific reserves up to 55.1%, compared with 54.0% at 31December 2011. Including collective reserves, the impaired loan cover rate was 70.7%, up 130 basis pointscompared with the end of December 2011.Income from equity affiliates fell by 16.2% year-on-year to 225 million euros in the second quarter of 2012. Thecontribution from the Regional Banks decreased by 14.0% to 173 million euros.Pre-tax income was 581 million euros, compared with 978 million euros in the second quarter of 2011.The tax rate remained apparently high owing to the high level of non-deductible expenses, mainly for Greece andIntesa Sanpaolo. After tax of 409 million euros (- 30.3% by comparison with the second quarter of 2011), CréditAgricole S.A.'s net income Group share was 111 million euros compared with 339 million euros in the sameperiod in 2011.Adjustment plan ahead of scheduleThe Group actively continued to implement the adjustment plan announced on 14 December 2011, with thefollowing three main focuses:- In Retail banking: overall improvement in loan to deposit ratio.The increase in on-balance sheet deposits across all Group branch networks, in France and abroad,coupled with measured growth of loans outstanding, resulted in lowering the loan-to-deposit ratio to123.7% from 128.8% at end-June 2011.- In Specialised financial services: reduction of liquidity needs and diversification of funding.Growth of outstandings was controlled both in Consumer finance and in Leasing and Factoring. CACFsold 0.6 billion euros of non-performing loans in France and in Portugal in the second quarter. In July,CAL&F sold a loan portfolio for some 300 million euros.Over the same period, new sources of funding were developed, mainly in the form of deposit inflows andsecuritisations. CACF started up a retail savings business in Germany and realised a 600 million eurosecuritisation in France in July. In June, CAL&F realised a securitisation of lease finance receivables forapproximately 1 billion euros.- In Corporate and investment banking: further disposals and control of outstandings.Disposal of loan portfolios in Financing activities continued during the first half of 2012, at low discountrates (2.2% on average since the start of the disposals). Sales of CDOs and RMBSs have alreadyexceeded the initial target, thereby helping to reduce Basel 3 risk-weighted assets.As a result, at end-June 2012, 76% of the target for funding needs reduction had been met. Concerning riskweightedassets, the plan was fully realised at end-June, with a 48 billion euro reduction in risk-weighted assets,including the transfer of the correlation book.Page 9 sur 237