1998-Paribas Annual Report - BNP Paribas

14 GOODWILL AMORTIZATION
82
in EUR million Note 1998 1997 1996
Positive goodwill 31 (96) (56) (88)
Negative goodwill 7 8 12
Total (89) (48) (76)
In 1998, amortization of positive goodwill included EUR 41 million on Cetelem and Compagnie Bancaire, compared with
EUR 6 million in 1997, reflecting Paribas’ acquisition of minority interests in these two companies in December 1997.
15 NET PROVISION FOR LOAN LOSSES AND OTHER RISKS
in EUR million Note 1998 1997 1996
Increase in provisions:
• Customers and credit institutions (603) (622) (675)
• Off-balance sheet items (18) (33) (38)
• Country risks and other provisions (344) (474) (474)
Total increases
Release in provisions:
(965) (1,128) (1,187)
• Customers and credit institutions 228 308 262
• Off-balance sheet items 13 7 15
• Country risks and other provisions 197 240 216
Total releases 438 555 494
Net increase in provisions 21 (527) (573) (693)
Receivables written-off and not covered by provisions (76) (55) (57)
Recoveries of receivables previously written-off 42 32 24
Total (561) (596) (726)
16 INCOME TAX
in EUR million 1998 1997 1996
Net income before tax, amortization of goodwill and share in net income
of companies accounted for by the equity method 977 743 706
Income tax rate applicable to French companies 33.33% 33.33% 33.33%
Theoretical income tax expense 326 248 235
Deductible dividends from non-consolidated companies (14) (8) (16)
Difference between French tax rate and foreign tax rate on foreign subsidiaries 29 15 5
Difference on items taxed at lower rates
Net impact of unutilized current tax losses
(75) (12) 17
and of use of prior period tax losses
Impact on current and deferred taxes of
the supplement in the tax rate for French companies
(5) (279) 42
(25% in 1997 and 1998, and 10% in 1996) 42 39 3
Others (2) 3 (11)
Actual income tax expense for the Group 301 6 275
Effective tax rate 30.8% 0.7% 38.9%